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Tommy Sheppard (Edinburgh East) (SNP)
John Nicolson (East Dunbartonshire) (SNP)
Stephen Gethins (North East Fife) (SNP)
The Secretary of State for the Home Department (Amber Rudd)
Immigration remains a reserved matter and we will consider the needs of the UK as a whole. Applying different immigration rules to different parts of the UK would complicate the immigration system, harming its integrity, and cause difficulties for employers who need the flexibility to deploy their staff across the UK.
Tommy Sheppard
That is a very disappointing response, infused with arrogance and complacency. Many large countries, such as Canada and Australia, have regional variations in their immigration and visa policies in order to take account of diverse and complicated local economic circumstances. Is it not foolhardy for the Government at this very early stage to rule out the prospect of doing that in the regions and nations of the United Kingdom?
Amber Rudd
I am sure that the hon. Gentleman shares my view that any policy changes should be informed by the facts and by assessments, which is why we consulted the Migration Advisory Committee to look at regional issues, and it was unequivocal in its conclusions. I urge him to look at its report.
John Nicolson
Does the Secretary of State not understand that Scotland needs more immigrants? Given that, why does she not give us the power to choose our own targets, for our own needs, for our own country?
Amber Rudd
The hon. Gentleman must surely share my view that Scotland has sufficient powers; it has its own powers to do many things—perhaps to improve its education system and its health system. Immigrants will come to a place where they see an improving education system and an improving health system. Perhaps the Scottish National party should spend a little more time applying itself to those important issues, rather than constitutional ones.
Stephen Gethins
During the EU referendum campaign, we were told that Scotland should have control over immigration. We have already been told that leaving the EU is meant to be clear in what it means, so why is it that the Home Secretary can keep commitments that will cost us jobs but not one that might create some jobs?
Amber Rudd
I am afraid I do not share the hon. Gentleman’s views about the outcome of the referendum. The fact is we have an immigration policy that works for the whole of the United Kingdom, and that is the one we will continue to support. As I said to the hon. Member for East Dunbartonshire (John Nicolson), I urge the SNP to apply itself to making Scotland an attractive place for immigrants to go to.
Stephen Crabb (Preseli Pembrokeshire) (Con)
Does my right hon. Friend agree that, while it is right that we seek to take account of different labour market concerns and demographic pressures in all parts of the United Kingdom, any separate immigration regime for Scotland —or Wales, for that matter—would undermine the coherence of the United Kingdom and risk creating softer, alternative entry points for the rest of the UK?
Amber Rudd
Of course my right hon. Friend puts it so well. Any immigration policy will take into account needs driven by industry and by our skills, but it will not be regionally based, because the fact is that people like to be able to move around, and it is right that they should be able to do so.
Jake Berry (Rossendale and Darwen) (Con)
During the Commonwealth games in Glasgow in 2014, steps were taken at the border to ensure that Commonwealth citizens visiting the UK could easily transit our borders. Will the Home Secretary look at such measures for all borders in the UK, especially as we look to the Commonwealth as a new, strong trading partner?
Amber Rudd
I share my hon. Friend’s view about how important the Commonwealth is to the UK, and I will certainly keep his suggestion under consideration.
Charlie Elphicke (Dover) (Con)
May I urge the Home Secretary to make sure there is consistency of border security and immigration policies across the United Kingdom? In that connection, will she tell the House what conversations have been had with Eurostar and Border Force to put an end to the Lille loophole, which seems to have been going on for six years? Does she agree that we cannot have a situation where profits are put before protection?
Amber Rudd
I thank my hon. Friend for raising that serious matter. We are taking forward actions immediately, this week, to ensure these things do not happen. We will be having conversations with Eurostar and Border Force to ensure certainty going forward.
Joanna Cherry (Edinburgh South West) (SNP)
May I remind the Home Secretary that it was the right hon. Member for Surrey Heath (Michael Gove) who said during the EU referendum campaign that migration should be devolved to Scotland? A starting point might be to allow EU nationals residing in Scotland to stay. Last week, the Select Committee on Exiting the European Union heard evidence from witnesses representing EU nationals living in the UK and witnesses representing British citizens living elsewhere in the European Union. Every single one of them said that it is their desire for the British Government to make a unilateral declaration of the continued rights of EU citizens in the UK. Will the Home Secretary now persuade the Prime Minister to do that?
Amber Rudd
I remind the hon. and learned Lady that nothing has changed: we are still in the European Union, and those citizens still have the same rights. In terms of their ongoing rights, the Prime Minister was very clear last week when she made her speech: she said it was going to be an early priority to give them the security they seek. I would urge all colleagues here to reassure their constituents that that is our intention, and we need to make sure that it is reciprocal for UK citizens as well.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Across Scotland, in common with other Europhile parts of the UK, there has been a huge upsurge in applications for indefinite right to remain from people such as Mrs Fabiola Power, who is Spanish by birth, but who got married and has been resident in Acton for decades. These people are dismayed that they have been rejected because they cannot prove that they have five years’ continuous service with the same employer or that they have paid into private health insurance. Will the Home Secretary revisit these rigid requirements, which penalise EU nationals such as Mrs Power, who have been homemakers, students, on short-term contracts or self-employed, and end this bureaucratic nightmare?
Amber Rudd
There is no penalising of people such as the lady the hon. Lady referred to. We continue to value the important contribution that EU nationals make to this country, and I urge the hon. Lady to follow the advice I previously set out, which is to reassure constituents such as the one she referred to that, in fact, we are doing our best to ensure that their future will be secure, and the Prime Minister says it will be an early priority to do so.
Will Quince (Colchester) (Con)
Nigel Mills (Amber Valley) (Con)
The Minister for Policing and the Fire Service (Brandon Lewis)
The Government remain committed to reforming the current police funding arrangements to ensure a fairer, more up-to-date and transparent formula.
We are currently undertaking a period of detailed engagement with the policing sector and relevant experts, including academics. Any new formula, of course, will be subject to public consultation.
Will Quince
The current formula for allocating funding to our police forces uses data that are 14 years old. Does the Minister agree that it is time to update that formula?
Brandon Lewis
My hon. Friend makes a very good point, on which I know he has lobbied on behalf of his authority. I have spoken to the police and crime commissioner for Essex as well. It is true that the data are very much out of date. That is why it was in our manifesto to deliver a fairer funding formula review. That is what we are doing, and we will deliver on it.
Nigel Mills
The Minister will know that Derbyshire’s police force is also disadvantaged by the current formula. When can it expect to have the fair level of funding that it deserves?
Brandon Lewis
Derbyshire will get an increase in funding this year. I appreciate, having spoken to my hon. Friend and other colleagues who have spoken to me on behalf of Derbyshire, that there is a feeling that the formula is not currently fairly weighted with regard to a number of areas across the country. That is why it is important that we go through this process methodically. I am not going to give a timescale now. The sector and experts are working with us on this, and I am confident that we will get to the right position to have a clear, fair and transparent formula in good time.
Mr David Hanson (Delyn) (Lab)
Does the Minister accept that the current proposed funding settlement for police forces is below the level of inflation? That means that the cost is going to fall on local taxpayers, with a 3.8% rise in my area of north Wales. Is that not just a transfer from central Government to local government?
Brandon Lewis
The Government have put in a flat cash funding protection for police funding during this spending review period, and that is a good thing to do. This situation partly results from the fact that we inherited such an awful economic legacy from the previous Labour Government, who spent money that the country simply did not have. We have to make sure that this country works to live within its means—that is an appropriate and sensible thing to do. I suggest that the right hon. Gentleman and Labour Members should look at doing that in order to have a sensible funding formula in future.
Keith Vaz (Leicester East) (Lab)
We owe a debt of gratitude to the office of the police and crime commissioner for Devon and Cornwall for having discovered the mistake that led to the pausing of the review, but that was 15 months ago, and there really is no excuse for such a delay. I appreciate that the Minister inherited this problem, but can we please have a timetable so that local police forces and PCCs can know when they can get their funding?
Brandon Lewis
l am as keen as the right hon. Gentleman clearly is to see the new funding formula review work completed so that we can get into place a fair and transparent formula, but it is important that we do this correctly and work with the sector. I thank everybody across the sector, including PCCs and chief constables from whom I have had feedback individually and in the wider groups, and whom I meet regularly. They are very happy with the process we are following and the timescale we are working to. I do not intend to rush anything; I want to make sure that we get this right.
Mr Philip Hollobone (Kettering) (Con)
Northamptonshire police are leading the way in combining the delivery of their frontline services together with the local fire brigade. Will the Minister ensure that forces that are undertaking such radical new initiatives to improve local efficiency are rewarded through the new funding formula?
Brandon Lewis
My hon. Friend highlights a really important point. Following the Policing and Crime Bill, emergency services will have the opportunity—in fact, a duty—to collaborate. Bringing together police and fire services provides huge opportunities for rewards in terms of savings by working together more collaboratively to deliver for the frontline. He is right that Northamptonshire has been a leading light in this over the past few years.
Joanna Cherry (Edinburgh South West) (SNP)
The Scottish Police Authority is the only territorial police authority in the United Kingdom that is unable to recover the VAT it pays. That has cost the Scottish public purse £75 million since 2013, and it has consequences for investment and resourcing. The First Minister and the Finance Secretary raised that with the Chancellor earlier this month. What discussions has the Minister had with the Chancellor about this very important issue?
Brandon Lewis
In terms of the work we are doing around police funding, I have regular conversations with the Chief Secretary and the Treasury more generally. I am happy to feed back to the hon. and learned Lady more detail on this issue once we have had our next round of conversations.
Lyn Brown (West Ham) (Lab)
Whichever way you cut it, the cake is just too small. More than 20,000 police officers have been cut since 2010, and now we know from the Office for National Statistics that crime is twice as high as the Government say. When will the Minister recognise that the combination of high crime and low police numbers leaves the public at risk?
Brandon Lewis
I would respectfully say to the hon. Lady, who I know would want to be giving a very clear and transparent set of figures, that what she has said is not accurate at all. The reality is that the ONS has, for the very first time, included cyber-crime and fraud in its figures. It has recorded those figures for the first time, so it is not true to say that the figures have doubled. I am just sad that Labour, when in government, never gave these kinds of figures and had that kind of thing done, which is the right thing to do. I would also congratulate people for recording more crime more generally—[Interruption.]
Mr Speaker
Order. The hon. Member for West Ham (Lyn Brown) does not have to provide us with a passable imitation of Bruce Forsyth. There is no requirement for that. She has asked her question with her usual pugnacity, and should now await the reply.
Brandon Lewis
Thank you, Mr Speaker. People can look for themselves at those ONS figures and see the reality. It is also clear, and I am proud of the fact, that I am part of a Government who have overseen a fall in overall crime since 2010.
Martin Vickers (Cleethorpes) (Con)
The resort area of Cleethorpes has suffered from a spate of vandalism and antisocial behaviour in recent weeks. Will the Minister assure me that adequate resources will be provided to Humberside police and other forces to deal with that sort of antisocial behaviour?
Brandon Lewis
My hon. Friend raises an important point about making sure that there is local accountability through the police and crime commissioners and that they look at where the crime is in their area and where they want to focus their resources, working with excellent chief constables around the country. Of course, we also have the fair funding formula, and agreement on its principles across the sector will contribute towards making it even fairer in the future.
Julie Elliott (Sunderland Central) (Lab)
The Minister for Security (Mr Ben Wallace)
Ministers recently sought views through a public consultation on whether proceeding with part 2 of the Leveson inquiry was appropriate, proportionate and in the public interest. The consultation allowed all interested parties to make clear their views and will help to inform the decision to be made jointly by the Home Secretary and Culture Secretary. Sir Brian Leveson will also be consulted formally before any decision is taken.
Julie Elliott
I thank the Minister for that response, which bore no relation to my question. More than 30 police and public officials have gone to prison as a result of the Leveson inquiry. How can it be appropriate to even consider cancelling Leveson 2, which would look at the question of police corruption and the role of politicians in it?
Mr Wallace
I thank the hon. Lady, whose question bore no relation to my answer. Let me be absolutely clear: the reason we are having a consultation on Leveson is to make sure that we get this right. Of course, if journalists or anybody else have broken the law, we take that incredibly seriously. That is why I am sure the hon. Lady will be pleased to hear that all eight of Sir Brian Leveson’s recommendations covering police and press are well under way to being implemented. The consultation was completed on 10 January and, after a pending court case, the Government will, of course, make their position clear.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
The entire House knows that the Leveson inquiry was always meant to have two parts, but the Government seem poised to break a promise, hiding behind a completely gratuitous inquiry. The whole House knows about cases such as those of Milly Dowler and the totally innocent Christopher Jeffries in Bristol, whose photo was plastered all over the tabloids as a murder suspect, as a consequence of collusion between the police and the media. Why cannot the Minister see that it would be nothing less than a betrayal of the victims of phone hacking, such as Milly Dowler and Christopher Jeffries, if this Government block the second half of Leveson?
Mr Wallace
The hon. Lady will know that the consultation finished on 10 January and there were 140,000 responses to it. I do not know about her, but it takes time to go through them. The Government also have to deal with a current court case, which makes it much harder for us to respond to the consultation until that hearing is complete. Once it is complete, I assure her that we will be happy to meet her and discuss further the Leveson recommendations.
Helen Whately (Faversham and Mid Kent) (Con)
The Minister for Security (Mr Ben Wallace)
The resettlement programme is on track to deliver the commitment to resettle 20,000 vulnerable Syrians during this Parliament. Between the start of October 2015 and the end of September 2016, 4,162 people have been resettled under the Syrian vulnerable persons resettlement scheme across 175 different local authorities.
Helen Whately
My constituents have been deeply moved by the refugee crisis and have asked me what they can do to help. I welcome the launch last year of the community sponsorship scheme. Will my hon. Friend update the House on the scheme’s progress and what more he is doing to harness the generosity of the British people?
Mr Wallace
The community sponsorship scheme was launched on 19 July 2016. The scheme embodies the commitment that the Prime Minister made when she was Home Secretary to allow individuals, charities, faith groups, churches and businesses to support refugees. My hon. Friend’s constituents are, indeed, part of that generous giving, because they want to help some very vulnerable people. A “help refugees in the UK” webpage has been developed to make it easier for any member of the public to support refugees in the UK, and to allow local authorities to focus support on the goods and services that refugees need.
Rob Marris (Wolverhampton South West) (Lab)
Mr Wallace
The hon. Gentleman makes some valid points. I will come back to him with the exact details of the timescale, and I will help to inform him about refugees from further afield than just Syria on that scheme.
James Berry (Kingston and Surbiton) (Con)
Will the Minister congratulate councils such as Kingston Council that have come forward to host vulnerable Syrian refugees, and also the families who have done so? Will he explain that it is still the case that refugees require individual housing, rather than joining a family in an existing house, for very good reasons? Lots of these people are victims of the most terrible atrocities.
Mr Wallace
My hon. Friend makes an important point. It is important, if this scheme is to work, that people do come forward. Many local authorities and, indeed, the Scottish Government have been incredibly generous in offering support and holding out the hand of friendship. We do need more, and we need more community groups to come through. I warn hon. Members that when charities and the third sector come forward, we do the correct due diligence to enable us to ensure that very vulnerable people are given exactly the support that they need, to make sure that the scheme is sustainable.
Paula Sherriff (Dewsbury) (Lab)
The Minister for Policing and the Fire Service (Brandon Lewis)
We published the latest statistics on average response times to fires in England on 19 January, and they show that response times continue to increase gradually. There were reductions in some areas, such as house fires and commercial buildings fires. Fortunately, because of the good work done by the fire and rescue service, fires and fire-related fatalities have been on a downward trend for a number of years, reaching historically low levels recently.
Paula Sherriff
I thank the Minister for his response, but continued cuts are having a profound impact on firefighter and public safety. Response times have increased, there are unsafe numbers of staff on appliances and those appliances are having to travel further afield, which means that they are reaching more serious fires. Does the Minister agree that these cuts have gone far too far?
Brandon Lewis
The hon. Lady mentioned house fires. There has been a reduction in the response times to fires in homes and, indeed, in buildings more generally. In terms of the finance issue that she raised, there has been an increase of 154% in fire service reserves over the last few years. In the fire service in her constituency, the reserve has increased from just over £7 million to some £29 million, all of which is money that can be used to find those efficiencies and provide those frontline services.
Greg Mulholland (Leeds North West) (LD)
Fire-related deaths have gone up by 15% in England and 14% in Scotland over the last year. That is clearly unacceptable, and it must surely send a signal that the cuts have gone too far. Will the Minister look at the funding and at reorganisations, which are taking fire crews further away from the areas that they need to service?
Brandon Lewis
As I said in response to the previous question, the response to house fires and building fires has improved in the last year. It is important that we all bear in mind that any death as a result of fire is unacceptable. We all want there to be no deaths whatsoever, which is why the work done by fire authorities, and the health and safety work in our homes and on products over the years, which has improved safety, is important. We must always stay vigilant, which is why people should have, and test, smoke alarms. I say to all fire authorities that they must be sure to find those efficiency savings, so that they can make sure that the money is in the frontline to deliver for people every day.
Carolyn Harris (Swansea East) (Lab)
According to the Home Office’s own figures published last Thursday, deaths from house fires are up by 18% on previous years and response times are slower. Fire crews are being deprived of resources and fire service jobs are being lost. Will the Minister now accept that the current round of cuts is putting the public at risk and demoralising hard-working, dedicated fire officers?
Brandon Lewis
As I said earlier, we need to be very clear about the actual figures. The reality is that there has been a 52% reduction in the total number of reported fires over the last few years. Fire-related fatalities are down 22%, while response times to house fires and building fires are also slightly down and improved. We need to be vigilant on this, but we also need to be clear about the facts.
Michelle Donelan (Chippenham) (Con)
The Minister for Security (Mr Ben Wallace)
The Government’s response includes law enforcement agencies taking action against online offenders, developing new capabilities to find and safeguard victims, and working with the internet industry to remove illegal images. We have led the global response to online child sexual exploitation through the WePROTECT Global Alliance, working with countries, companies and civil society organisations to develop a co-ordinated response.
Michelle Donelan
The latest Government statistics show that in 2015, over 500 children in Wiltshire were victims of online abuse and became the subject of a child protection plan. What impact is the child abuse image database having in helping to catch those who perpetrate this vile crime in Wiltshire?
Mr Wallace
The database makes it much easier for our National Crime Agency and our other assets to tackle the threat posed by paedophiles online. We are determined that the powers given to us in the Investigatory Powers Act 2016 will add to that to make sure that we catch these people. Child sexual abuse is horrific, and carries on on the internet across the country. I urge hon. Members to recommend to their constituents that a process to contribute to keeping their own children safe is to take time out to look at the Thinkuknow campaign on the National Crime Agency website, because all parents—as I do—have a role in making sure that their children know what is safe online.
Fiona Mactaggart (Slough) (Lab)
But actually, do not children need to be educated about how to help themselves stay safe online? If we had compulsory sex and relationships education, would not every school be able to make sure that every child knew how to be safe online?
Mr Wallace
May I ask the right hon. Lady to go on to the website of the National Crime Agency and look at the Thinkuknow campaign? The online tutorial is tailor-made for children and is broken down by age, so my young children have an appropriate curriculum to look at; it makes a real difference. There is even a tutorial for her, so that she may follow it and understand how she can be safe online and make sure children are as well.
Mr James Gray (North Wiltshire) (Con)
I was concerned to hear from my colleague, my hon. Friend the Member for Chippenham (Michelle Donelan), that there are 500 cases in Wiltshire. Does the Minister agree that the Wiltshire constabulary might be better spending the £1 million and deploying the 18 full-time officers currently looking into possibly bogus allegations against Sir Edward Heath, on looking into those 500 cases?
Mr Wallace
My hon. Friend will know that priorities for the police are set by the police; it is not for Ministers to interfere with the decisions they make. It is of course very important that we investigate all allegations of sexual abuse without fear or favour, and that we get to the bottom of it and put away those people who are causing such harm.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister is being far too glib. All the research shows that the best intermediary for teaching children is someone they trust in a school—that is the truth—and online work is not actually very effective. Is it not the truth that bullying and exploitation are rampant, and is it not about time that we stopped making excuses and took on the Googles and the people who allow this to be transmitted?
Mr Wallace
The hon. Gentleman misses the point: we are taking on the Googles and the big internet companies, but he should spend time in schools. In the primary schools that my children attend, they are given classes on how to stay safe online. This is not done in a silo, with just a website; it is a combination of the website with teachers and parents—everyone has a role—and that is being delivered. Our challenge in the world of the internet is to keep pace with the huge numbers of referrals that we get every month of international paedophiles who abuse the internet to exploit our children and take advantage of the latest technology, and to ensure that our law enforcement agencies constantly go the extra mile to catch them.
Several hon. Members rose—
Mr Speaker
Order. I gently remind the hon. Member for Banbury (Victoria Prentis), who nodded sagely at me to denote her interest in this matter, that on the whole it is prudent to stand, as the Speaker has many qualities but is not psychic.
Victoria Prentis (Banbury) (Con)
Mr Wallace
The National Crime Agency’s child exploitation and online protection command received an extra £10 million this year, and in November 2015 the NCA joined up with GHCQ in a joint operations cell to ensure that we tackle some of the most complicated crimes online. Those two things are just part of the whole process, and I would be happy to brief my hon. Friend further on the whole spectrum of efforts that we take against paedophiles and online abuse. The key is that we can all contribute to that online safety—teachers, parents, law enforcement agencies and community leaders— to ensure that we are aware of how paedophiles operate, and can shut them down and put them away.
Ben Howlett (Bath) (Con)
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
The Secretary of State for the Home Department (Amber Rudd)
The Government are absolutely committed to tackling all forms of domestic abuse. This morning I chaired the domestic abuse national oversight group, which oversees the delivery of important recommendations from Her Majesty’s inspectorate of constabulary. Victims who experience extreme psychological and emotional abuse can now bring their perpetrators to justice. The College of Policing has updated its guidance, and every police force now has a domestic abuse action plan.
Ben Howlett
I thank my right hon. Friend for her response; that is welcome news. In Bath, a charity called VOICES provides support to those who are victims or survivors of domestic violence, helping them to recover and thrive. What is she doing to ensure that, where there is violence against women and girls both at home and abroad, they can get similar support?
Amber Rudd
I welcome the work of VOICES in helping women and girls. We are a global leader in tackling violence against women and girls both at home and overseas. Since 2010 we have invested £184 million, and we have nearly doubled our violence against women and girls campaigns overseas from 64 programmes in 2012 to 127 in 2016. We have hosted various important international conferences, such as the global call to action on protecting women and girls in emergencies, the global summit to end sexual violence in conflict, and the groundbreaking Girl Summit.
Oliver Colvile
May I add my thanks to my right hon. Friend for her answer?
Operation Encompass, which helps fight domestic violence through the school system, began in my constituency. Will my right hon. Friend join me in praising the retired sergeant David Carney-Haworth, who set up Operation Encompass, and will she ensure that it is spread to as many police forces across the country as possible?
Amber Rudd
I am of course delighted to join my hon. Friend in congratulating David Carney-Haworth on his work. My hon. Friend has brought to our attention a really good example of local practice, and it is local practice, local initiative and local momentum that will really help the women and girls we want to reach.
Julie Cooper (Burnley) (Lab)
Will the Minister update the House on the violence against women and girls strategy, with particular reference to the promised £80 million of additional funding? How can that funding be accessed, and what are the criteria?
Amber Rudd
Yes, I am happy to update the hon. Lady on that. Some £40 million of that money is apportioned by the Department for Communities and Local Government, particularly for accommodation. We have access to most of the rest of it, and I particularly draw her attention to the £15 million that a combination of commissioners and local organisations are bidding for. She may like to access that money to support her constituents.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The SNP Scottish Government are strongly committed to ending gender-based violence, including through our proposed all-encompassing criminal offence of domestic abuse. They have also urged the ratification at the earliest opportunity of the Istanbul convention on ending violence against women and girls. Will the Secretary of State commit to a timetable for the Preventing and Combating Violence Against Women and Domestic Violence (Ratification of Convention) Bill—the private Member’s Bill promoted by my hon. Friend the Member for Banff and Buchan (Dr Whiteford)—and for that long-awaited ratification?
Amber Rudd
I am always delighted to work with the Scottish Government on this important subject. I know that they have put aside £20 million to work on the topic, and I welcome that initiative. If the hon. Gentleman would like to see me or one of my colleagues, we can discuss his proposal.
Nusrat Ghani (Wealden) (Con)
Any victim of domestic violence should receive equal support and respect, regardless of their heritage and faith. Does my right hon. Friend share my concern about the reports that the Crown Prosecution Service is dropping so-called honour cases for fear of offending Asian communities?
Amber Rudd
I share my hon. Friend’s commitment to ensuring that so-called honour-based violence is not neglected. The Government will not shy away from tackling any type of violence against women and girls, and I am certainly happy to work with her on this important matter.
Amanda Milling (Cannock Chase) (Con)
The Minister for Policing and the Fire Service (Brandon Lewis)
The Policing and Crime Bill, which has now completed its Lords stages, introduces a new duty to collaborate between the emergency services and enables police and crime commissioners to take on the governance of fire and rescue services. Thanks to my hon. Friend’s excellent efforts, it will also allow police and crime commissioners to become police, fire and crime commissioners. My officials continue to work with key stakeholder groups, and I know that a number of PCCs are looking at this model.
Amanda Milling
I thank the Minister for his response and the fact that we will be changing the name of police and crime commissioners. Where there is a strong case for police and crime commissioners to take responsibility for the fire and rescue service, such as in Staffordshire, what will be the process and timeframe for implementing this very important change?
Brandon Lewis
I know that the police and crime commissioner for Staffordshire is keen to move forward with this. Following Royal Assent, it will be for a police and crime commissioner to put forward a business case outlining a proposal. If it has local agreement, as I hope it will, it can move forward; if it does not, the proposal will be assessed by an independent group under a process to be agreed with the Local Government Association to make sure it is clear and transparent. I hope that by the end of this year we will see the first areas coming forward with police, fire and crime commissioners.
Michael Fabricant (Lichfield) (Con)
In Staffordshire, Matthew Ellis, the police and crime commissioner, has identified £10 million of savings if only the two can co-operate, as I am sure will be the case—and, incidentally, welcomed by firefighters throughout Staffordshire, as I am sure is the case in other parts of the UK. What does my right hon. Friend think the timetable will be for such mergers?
Brandon Lewis
My hon. Friend makes a good point and highlights the considerable efficiency savings that could be found through collaboration and which could allow extra money to go back into the frontline for both police and fire. On the timeframe, it will be down to the speed with which the police and crime commissioner can present a business case. If there is local agreement, I would hope to see the first police, fire and crime commissioners coming forward a matter of months after Royal Assent.
Mike Freer (Finchley and Golders Green) (Con)
The Parliamentary Under-Secretary of State for the Home Department (Sarah Newton)
I am grateful to my hon. Friend for raising such an important matter. We made forced marriage a criminal offence in 2014 to better protect victims and send a clear message that this abhorrent practice will not be tolerated in the UK. We want to see more victims having the confidence to come forward to report this often hidden crime, and that is why we are introducing lifelong anonymity for victims through the Policing and Crime Bill.
Mike Freer
I am glad that this country is leading the way on tackling violence against women and girls, but does the Minister agree that we need to keep up the pressure to eradicate child marriage, as it is a particularly pernicious form of violence?
Sarah Newton
I do indeed. The UK is a world leader in the fight to stamp out forced marriage, and I am clear that to end these crimes in the UK we must end them overseas, too. That is why we are pursuing an ambitious programme of work at an international level, including with the Department for International Development, through its £36 million programme to end child, early and forced marriage.
Christina Rees (Neath) (Lab/Co-op)
The Minister for Immigration (Mr Robert Goodwill)
The Government recognise that international students make an important contribution during their time here and help to make our education system one of the best in the world. We are in regular contact with the sector, and there is no limit on the number of genuine international students who can come here to study in the UK.
Christina Rees
International students bring academic and cultural benefits to our universities, contribute billions of pounds to the economy, support the creation of tens of thousands of jobs and enable these institutions to innovate, build links with businesses and invest even more in every student in every region and country of the UK. Will the Minister assure the House that the Government have no plans to reduce the number of international students coming to every UK university, and tell us what steps they will take to increase numbers?
Mr Goodwill
I agree with the hon. Lady absolutely. As I mentioned, there is no limit on the number of students who can come here. Since 2010, we have seen a 17% increase in the number of university applications from outside the EU, while the Russell Group has seen an amazing 47% increase.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
The whole House knows that it is vital to maintain our global reputation as an open and fair place to study, but in mid-December last year the Home Office lost a major test case against international students. The Home Office claimed that the students had made bogus claims about English language skills. What were the total legal costs in this test case against Sharif Majumder? How many other cases were initiated and had to be dropped? What estimate has been made of the potential liability arising from students who were deported on the basis of evidence-free claims, but might now have a right to sue for wrongful deportation?
Mr Goodwill
I am slightly surprised that the hon. Lady has the brass neck to refer to bogus students in bogus colleges. We had to take away the sponsorship licence from 920 colleges that were recruiting students to take bogus courses. I will certainly get back to her in writing if I can provide some of the information she asked for specifically on that legal case.
Richard Graham (Gloucester) (Con)
The Minister for Policing and the Fire Service (Brandon Lewis)
In January 2016, this Government changed legislation to the benefit of widows, widowers and civil partners of police officers in England and Wales who have died on duty. As a result, those survivors who qualified for a survivor pension will now continue to receive their survivors’ benefits for life, regardless of remarriage.
Richard Graham
I welcome the changes made after the police widows campaign, which I supported, but of course they apply only to widows who remarry or cohabit after April 2015, whereas elsewhere in the UK, police widows’ pensions have been reinstated regardless of the date of their remarriage. Does my right hon. Friend agree that police widows should be treated the same, regardless of where police officers served in the United Kingdom? Will he agree to meet me and other colleagues to discuss this further?
Brandon Lewis
I know that my hon. Friend has campaigned hard on this issue, and I would be happy to meet him and others to discuss it. He will be aware that the clear position taken by successive Governments is that changes should not apply retrospectively. As I say, I would be happy to meet my hon. Friend and colleagues to discuss the issue further.
Mr Laurence Robertson (Tewkesbury) (Con)
The Minister for Immigration (Mr Robert Goodwill)
Long-term migration statistics are produced by the independent Office for National Statistics. The most recent figures estimate that in the year ending June 2016, 113,000 non-EU nationals came to the UK to study; in that same year, 45,000 non-EU nationals who were former students left. For EU nationals, the corresponding figures are 34,000 and 18,000 respectively.
Mr Robertson
I thank the Minister for that detailed response. I accept that students are classified as immigrants internationally, but when the immigration figures are published, would it not be a good idea to state how many of the people in the figures are students bringing money to this country?
Mr Goodwill
I can confirm to my hon. Friend that these statistics are produced and presented by the ONS, and that figures for students are clearly identified separately within those statistics.
Mr Speaker
On this immigration-related matter, I would call the hon. Member for Linlithgow and East Falkirk (Martyn Day) if he were standing, but if he does not stand, I will not.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Mr Goodwill
It is certainly very important for family reunification, particularly for spouses, that rules are in place to ensure that these people are not a burden on the taxpayer. Indeed, the levels set are such that if there were a separate figure for Scotland, it would be higher, given that average incomes in Scotland are higher than those in the UK overall.
Craig Whittaker (Calder Valley) (Con)
The Secretary of State for the Home Department (Amber Rudd)
We are determined to protect children and vulnerable people. That is why today the Government have tabled an important amendment to the Digital Economy Bill. The amendment will give the police the power to go to the courts to compel phone companies to shut down phone lines being used by county lines gangs to sell illegal drugs. These gangs use children and vulnerable people to move drugs and money to and from the urban area. Once caught up in county lines, people are at risk of extreme violence, trafficking and exploitation by those behind this despicable crime. Closing the phone lines will seriously disrupt this criminality and the exploitation that is an integral part of county lines drug dealing.
Craig Whittaker
During a recent delegation as part of the all-party parliamentary group against antisemitism, it became clear that international parliamentary colleagues are concerned about the rise of hate crime, and in particular anti-Semitism from the left in UK universities. Does my right hon. Friend agree with me, and indeed with Baroness Royall when she said that Labour does not take anti-Semitism seriously, as seen by the inaction against members of Oxford University who were accused of anti-Semitism, and that this has, of course, a wider impact on hate crime in general?
Amber Rudd
I thank my hon. Friend for raising this important matter, particularly during Holocaust Memorial Week. As he will know, the Government published a hate crime action plan to drive forward action to tackle all forms of hate crime, and to enable Departments across the Government to work with police and communities. However, I completely agree with him that all organisations, including universities and political parties, have an obligation to stamp out anti-Semitism wherever it is encountered.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Recent revelations from the Public Law Project indicate that country guidance in Eritrea was altered to suggest diminished risks of human rights abuses when there was no evidence to support that, solely in order to lower the number of refugees allowed entry. In a significant case in the upper immigration tribunal last October, it was found that the new Home Office guidance on Eritrea was not credible. We know that the guidance has since been withdrawn, but was the then Home Secretary involved in the issuing of that wholly misleading guidance, and can the present Home Secretary say how many refugees may have been wrongly denied entry and how many of them were children?
Amber Rudd
The hon. Lady has raised an important part of our immigration policy, whose purpose is to ensure that we keep all countries to which we are returning people under review. Quite rightly, Home Office staff will visit appropriate countries—and, indeed, they visited Eritrea in 2014—to make their country assessments. I am confident that Home Office processes are delivered in the correct way, but the hon. Lady can rest assured that we will always keep the position under review.
Edward Argar (Charnwood) (Con)
The Minister for Policing and the Fire Service (Brandon Lewis)
My hon. Friend has made a good point about the excellent work that is being done by Chief Constable Simon Cole and his team in Leicestershire. We are working to ensure that we achieve a fair, transparent review funding formula, and that all the chief constables and the police and crime commissioners feed into it. I assure my hon. Friend that we will deliver that work as quickly as we can.
John Mann (Bassetlaw) (Lab)
The Parliamentary Under-Secretary of State for the Home Department (Sarah Newton)
The hon. Gentleman has made a very important point. Hate crime has no place whatsoever in our society. It destroys communities and people’s lives, and we are taking every possible action against it. We have the strongest legislative framework in the world, and that includes working with internet providers. I can absolutely assure the hon. Gentleman that we have agreements with internet providers, and that when hate crime is identified, they will take the horrendous stuff down.
Antoinette Sandbach (Eddisbury) (Con)
Brandon Lewis
My hon. Friend has highlighted a very good example of the use of modern technology to fight crime. I congratulate Cheshire police on their forward-thinking work. We are supporting such work through the police transformation fund when innovative ideas come from the police themselves to ensure that crime-fighting is efficient as well as effective in the future.
Nick Smith (Blaenau Gwent) (Lab)
Nick Smith
Them too, sometimes.
Off-road bikers often go where the police cannot. Will the Home Office look into the possibility of resources, agreement and licensing to enable drones to be used to help us to tackle the problem?
Brandon Lewis
I recognise the challenges involved in dealing with those who use bridle paths and footpaths inappropriately and ruin them for the majority of other people. The hon. Gentleman is absolutely right, and both he and the police deserve credit for wanting to crack down on such practices. The use of drones is another good example of modern technology. Police forces and fire brigades are sharing them, and I would encourage the hon. Gentleman’s local police force to consider doing the same. It might be possible to make a bid through the police transformation fund.
Nigel Mills (Amber Valley) (Con)
The Minister for Security (Mr Ben Wallace)
My hon. Friend is right to highlight the fact that counter-terrorism is always ongoing. In 2015, under the strategic defence and security review we committed to updating the CONTEST review, the strategy to deal with counter-terrorism both here and abroad, and I can inform my hon. Friend that that update will be published soon. In addition, the Government have committed to increasing by 30% in real terms funding to counter-terrorism in the lifetime of this Parliament.
Naz Shah (Bradford West) (Lab)
Amber Rudd
I share the hon. Lady’s view about the importance of overseas students, particularly perhaps at the University of Bradford. Some universities have seen an increase, some have seen a decrease; we have seen more students coming over from China, fewer from India. This is the market on the move, and I urge the hon. Lady perhaps to work with her university and to come back to us with any suggestions she might have to try to improve the outcome for it.
Derek Thomas (St Ives) (Con)
Brandon Lewis
I thank my hon. Friend for his question, and it was useful to meet him and colleagues last week. I also want to thank his police and crime commissioner, as well as his chief constable, for feeding into the work we are doing to ensure that the new police funding formula is fair and transparent and has input from forces right across this country.
Chris Bryant (Rhondda) (Lab)
Violence against doctors, nurses, paramedics and other health workers has been on the rise in England and Wales over the last few years. Scotland has a specific criminal offence for such violence; is it not time that we had the same in England and Wales?
Brandon Lewis
The hon. Gentleman raises an important point, and it links in very closely with the work we are doing around making sure that offences against police officers are dealt with in the strongest possible terms. The punishments are there, but we must make sure that the Sentencing Council has these things working correctly, and we are working with colleagues at the Ministry of Justice to look at this issue at the moment.
Rebecca Pow (Taunton Deane) (Con)
Sarah Newton
I am absolutely delighted to commend the work of this multi-agency Halcon One Team, which operates in my hon. Friend’s constituency. It is, indeed, a marvellous example of where the police and local agencies work together in their communities with vulnerable people, tackling environmental issues and providing young people with a constructive alternative, to avoid them being dragged into a life of crime and antisocial behaviour.
Joan Ryan (Enfield North) (Lab)
In the light of Holocaust Memorial Day this week, will the Minister join me in paying tribute to the Holocaust Memorial Day Trust and the Holocaust Educational Trust, which remind us of the worst example we have ever witnessed of where anti-Semitism can lead? In the light of the publication of the Community Security Trust 2016 anti-Semitic incident report next week, and bearing in mind the fact that last year saw the third highest annual level of anti-Semitic hate incidents in the UK, what are the Government doing to combat rising levels of anti-Semitism?
Amber Rudd
I thank the right hon. Lady for giving me this opportunity to join her in thanking the Holocaust Memorial Day Trust and the Holocaust Educational Trust for the extraordinary work that they do in reminding us all of what took place. I am one of the MPs—I am sure that there are many here—who took the opportunity to visit, and I will always remember the impact of that. I work closely with the Community Security Trust, and I made the hate crime action plan my priority. We will continue to work with the trust to ensure that we do what we can to stop any form of anti-Semitism.
Heidi Allen (South Cambridgeshire) (Con)
The Minister for Immigration (Mr Robert Goodwill)
In 2016, we transferred more than 900 unaccompanied asylum-seeking children to the UK from Europe, including more than 750 from France as part of the UK’s support for the Calais camp clearance. Following consultation with local authorities, I remind the House that the Government will transfer “a specified number” of children, in accordance with section 67 of the Immigration Act 2016, who reasonably meet the intention and spirit of the provision. This will include more than 200 children already transferred from France. We will announce in due course the basis on which the remaining places will be filled, including from Greece and Italy, and the final number.
Stephen Pound (Ealing North) (Lab)
This afternoon we have been talking about police funding in the abstract, but there is also a human cost to policing. This weekend in the Crumlin Road area of north Belfast, a police officer was shot and badly wounded. Will the Home Secretary please pass on to Chief Constable George Hamilton the unqualified support of the whole House for the work of the Police Service of Northern Ireland, and our deepest sympathy to the friends and family of the police officer who was shot this weekend, who has not been named?
Amber Rudd
I thank the hon. Gentleman for this opportunity to do exactly that. We are very lucky to have the good work, bravery and courage of the PSNI, and I will, on his behalf and that of the whole House, pass on those good wishes and thanks.
Hywel Williams (Arfon) (PC)
The French dispersal centre, which took unaccompanied children from Calais, is set to close on 10 February. What steps is the Secretary of State taking to ensure that the cases of all children who might have a right of entry to the UK are considered before then?
Amber Rudd
I thank the hon. Gentleman for his question. I spoke to my new French counterpart just this morning about the actions that we are taking together to ensure that the correct assessment of the children who would like to come to the UK continues. A substantial number of centres are still open, and we still have a number of staff out there. We will be reducing our work there, as the Calais camp has largely dispersed, but we will continue to have an interest and ensure that we work closely with the French to stop a new camp coming up.
Hannah Bardell (Livingston) (SNP)
My constituent Eann McInnes has twice tried to get his family to visit Scotland from Morocco while they sort out their visa arrangements, but twice the Home Office has frustrated the process, stating:
“The right to a family life could be enjoyed in Morocco, and does not necessarily have to be in the UK”.
However, my constituent has a genetic disorder that can be treated only in the UK. Will the Minister commit to looking into this case again, and will he meet me to work out how the family can be reunited so that they can live together?
Mr Goodwill
I would be more than happy to meet the hon. Lady to discuss that specific case and to see what can be done.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Is the Minister for Policing and the Fire Service aware of the stark warning that was given to his predecessor by the chief constable of Cumbria, Jerry Graham, about the failure of the previous funding formula to take into account
“the cost premium for the sparsity, rurality and geographical isolation of Cumbria”?
Will the Minister meet all Cumbria’s MPs to discuss this important issue before his new proposals come out?
Brandon Lewis
I am very aware of the changes and, despite the encouragement of some of the hon. Gentleman’s colleagues, I think it is important that we do this work methodically rather than rushing into it. I have been liaising with Cumbria’s chief constable, and I will be talking to him and the police and crime commissioner. Indeed, I am happy to take input from any source to ensure that we have a clear and transparent process.
Several hon. Members rose—
Mr Jacob Rees-Mogg (North East Somerset) (Con)
Mr Speaker, as the matters we are about to discuss are of the utmost confidentiality and may give succour to Her Majesty’s enemies, I beg to move, That the House sit in private.
Question put forthwith (Standing Order No. 163), and negatived.
Trident: Test Firing
(7 years, 10 months ago)
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Mr Kevan Jones (North Durham) (Lab)
(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on the test firing of a Trident nuclear missile in June 2016.
The Secretary of State for Defence (Sir Michael Fallon)
In June last year, the Royal Navy conducted a demonstration and shakedown operation designed to certify HMS Vengeance and her crew prior to their return to operations. It included a routine unarmed Trident missile test launch. Contrary to reports in the weekend press, HMS Vengeance and her crew were successfully tested and certified as ready to rejoin the operational cycle.
We do not comment on the detail of submarine operations, but I can assure the House that the safety of the crew and public is paramount during any test firing and is never compromised. Prior to conducting a Trident test fire, the UK strictly adheres to all relevant treaty obligations, notifying relevant nations and interested parties. Here, the Chair of the Defence Committee, the Opposition Defence spokesperson, and the Chair of the Public Accounts Committee were informed in advance. I can assure the House that the capability and effectiveness of the UK’s independent nuclear deterrent is not in doubt. The Government have absolute confidence in our deterrent and in the Royal Navy crews who protect us and our NATO allies every hour of every day.
Mr Jones
I thank the Secretary of State for his answer. He will know that I am a strong believer in this country’s independent nuclear deterrent. Major inroads have been made in recent decades in public transparency on nuclear issues, on which is important to maintain a consensus and support for our nuclear deterrent. That has included openness and publicity about test launches in Florida.
The Secretary of State will have seen claims in the press at the weekend that in the latest test the missile veered towards the United States. Will he confirm whether that was the case? Will he tell the House when he was first informed that there was a problem with the test and when his Department informed the then Prime Minister, David Cameron? Was it the Secretary of State or the then Prime Minister who decided to shelve the Department’s customary practice of publicising test launches and ordered a news blackout?
What discussions has the Secretary of State had with the present Prime Minister about the test, and why news of it was not relayed to Parliament before the debate on the Successor submarine programme last July?
Finally, I pay tribute to the members of our armed forces who for the past 48 years have maintained Operation Relentless and the UK’s continuous at-sea deterrent.
Sir Michael Fallon
I appreciate that the hon. Gentleman not only takes a close interest in defence but has borne responsibility for the defence of our country and supports the deterrent. However, I must disagree with his call for greater transparency. There are few things that we cannot discuss openly in Parliament, but the security of our nuclear deterrent is certainly one of them. It has never been Government practice to give Parliament details of demonstration and shakedown operations. There have been previous examples where some publicity has been decided on a case-by-case basis and informed by the circumstances at the time and by national security considerations.
Sir Nicholas Soames (Mid Sussex) (Con)
Does my right hon. Friend agree that there is absolutely no evidence of systemic failure anywhere in this system? Will he confirm that he, like me when I was Minister for the Armed Forces, has total confidence in our Trident defences as being both deadly and reliable?
Sir Michael Fallon
I can certainly confirm that. I repeat to the House that HMS Vengeance was successfully certified and passed the test that was set, and therefore rejoined the operational cycle and is part of that operational cycle today.
Nia Griffith (Llanelli) (Lab)
I am grateful to the Secretary of State for his answers; I am just sorry that it has taken allegations in a Sunday paper and an urgent question to bring him to Parliament this afternoon. Let me be clear: we are not asking him to disclose any sensitive or inappropriate detail. All we want is clarity and transparency, because yesterday the Prime Minister refused four times on live television to say when she became aware of the details of this missile test.
Today, No. 10 admitted that the Prime Minister was told about this incident as soon as she took office, yet when she came to this House on 18 July 2016 to call on Members to back the renewal of Britain’s nuclear submarines she did not say a word—not a single word. This is just not good enough. The British public deserve the facts on a matter as important as Britain’s nuclear deterrent, and they deserve to hear those facts from their Prime Minister, not in allegations sprawled across a Sunday paper.
May I ask the Secretary of State a simple question? Why was this information deliberately kept from Parliament and the British public? Who made the decision to keep this incident quiet? Was it his Department, or was it No. 10? While respecting the limits of what he can disclose, can he at least set out what investigation his Department has carried out into what happened in June? What assurances can he give that there will be no future cover-ups on important matters such as this?
At the heart of this issue is a worrying lack of transparency and a Prime Minister who has chosen to cover up a serious incident, rather than coming clean with the British public. This House and, more importantly, the British public deserve better.
Sir Michael Fallon
Let me just be very, very clear: neither I nor the Prime Minister are going to give operational details of our submarine operations or of the systems and sub-systems that are tested through a demonstration and shakedown operation.
The hon. Member for Llanelli (Nia Griffith) asked me very specifically about the Prime Minister’s knowledge. Let me again be clear: the Prime Minister has ultimate responsibility for our nuclear deterrent. She is kept informed of how the nuclear deterrent is maintained, including the successful return of HMS Vengeance to the operational cycle.
Dr Julian Lewis (New Forest East) (Con)
Is the Secretary of State telling us that nothing went wrong on this particular launch? While accepting that the nuclear deterrent needs to be shrouded in secrecy, it also needs to deter. Once stories get out there that a missile may have failed, is it not better to be quite frank about it, especially if it has no strategic significance, as, in this case, it probably has none?
Sir Craig Oliver vehemently denies that he or any other member of David Cameron’s media team ever knew about the aborted Trident test, so will the Secretary of State tell us when Mr Cameron was told about it and when he himself was told about it? Will he accept an invitation to attend the Defence Committee tomorrow morning—in closed session for some questions, if need be—to resolve any outstanding issues?
Sir Michael Fallon
As I have said, I am not going to discuss publicly on the Floor of the House the details of the demonstration and shakedown operation. All I can do is repeat that HMS Vengeance has successfully been certified again to rejoin the operational cycle. I think I have already answered on the responsibility of the Prime Minister and made it very clear that the previous Prime Minister and this Prime Minister were, of course, informed about the maintenance of the nuclear deterrent, the outcome of the test and the successful return of HMS Vengeance to the operational cycle.
Brendan O'Hara (Argyll and Bute) (SNP)
The basic rule of deterrence is that it has to be both credible and capable. After yesterday’s sensational revelations, it is safe to assume that Trident is neither. Given that one of the UK’s nuclear missiles veered off towards the United States, it is an insult to our intelligence to try to claim, as the Government have, that Trident’s capability and effectiveness are unquestionable.
An equally serious matter that arises is the deliberate withholding of information from the House ahead of the crucial Commons vote on renewal last July. It is absolutely outrageous that the House had to rely on a leak to a Sunday newspaper to find out about this incident and the subsequent cover-up. When did the Secretary of State first find out about this missile failure? Was it he who informed the new Prime Minister about the failure? Who took the decision not to inform Parliament of the incident?
Sir Michael Fallon
The hon. Gentleman is, of course, opposed to the Trident deterrent that has kept this country safe for so many years. First, let me caution him against believing everything he has read in the weekend press. Secondly, let me repeat that the Government are in no doubt about the capability and effectiveness of our deterrent and would not have asked this House to endorse the principle of the deterrent and our plans to build four new submarines if there had been any question about its capability and effectiveness.
Sir Julian Brazier (Canterbury) (Con)
Does my right hon. Friend agree that secrecy and transparency are simply incompatible, and that it is right that every British Government—as well as, indeed, every Government of our nuclear allies, the Americans and the French—have always put secrecy first in this area?
Sir Michael Fallon
I agree with my hon. Friend. As I said to the House earlier, there are very few issues that cannot be discussed openly in the House, but the security of the nuclear deterrent is clearly a prime example of something that cannot be discussed in detail.
Tom Brake (Carshalton and Wallington) (LD)
Will the Secretary of State confirm that, whether through the notice to airmen system or other warning systems, our enemies would have been aware of the failure of the test? Does he agree that for Members of this House to be able to debate effectively the merits of Trident or its like-for-like replacement, we need timely and security-appropriate information, and that we did not get that in this case?
Sir Michael Fallon
On the first point, the right hon. Gentleman may be aware that, under our international treaty obligations notice of any test firing has to be given to other countries and interested parties. In the case of the June test firing, that was done. I do not agree with his latter point. The Government would not have put the motion to the House last July had we had any doubt about the continuing capability and effectiveness of the deterrent.
Bob Stewart (Beckenham) (Con)
I remind the House that the Russians not only contemplate using nuclear weapons but practise their employment on their exercises. Is it not crucial, therefore, that we retain our own independent nuclear deterrent, to ensure that our potential enemies, such as Russia, are deterred and think twice before they even contemplate using such weapons of mass destruction?
Sir Michael Fallon
I am grateful to my hon. Friend. That indeed was the proposition put before the new Parliament last July and endorsed by 472 Members of this House against a vote of only 117—the latter number included, of course, the Leader of the Opposition.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Have the Government instigated a leak inquiry to find out the source for The Sunday Times? If not, do they intend to do so?
Sir Michael Fallon
As I said to the House earlier, I am not confirming the speculation in the weekend press, and I caution Members against believing everything they have read in the weekend press.
Jack Lopresti (Filton and Bradley Stoke) (Con)
Have the Ministry of Defence and our US partners shared information about the test firing and subsequent evaluation, because it is important to reassure our service people and the public about the validity of the nuclear deterrent?
Sir Michael Fallon
I understand why my hon. Friend asks that question, but I am afraid that I have to say to him that it takes us into the detail of the operation of the nuclear deterrent and I am not going there.
Caroline Lucas (Brighton, Pavilion) (Green)
Following on from that, the Government continually refer to Trident as the UK’s independent nuclear deterrent, yet the missile involved in the malfunction was designed, manufactured and owned by the US, with a US guidance system and leasing arrangements. It is not an operational issue to tell us whether the Secretary of State has known that the malfunction last year was reported at the time to the US President, nor whether the new President has been briefed about it, and nor who decided to cover it up—the UK Government or the US.
Sir Michael Fallon
Let me be very clear about this: our Trident nuclear deterrent is completely operationally independent of the United States. In our country, only the Prime Minister can authorise the firing of these weapons, even if they are employed as part of an overall NATO response.
Mr Keith Simpson (Broadland) (Con)
May I congratulate my right hon. Friend on the approach he has taken on this issue? The whole area of our independent nuclear deterrent is of crucial importance, and the arguments he has made very strongly about not being as open as he might perhaps at times like to be on the operational side is absolutely correct.
Sir Michael Fallon
I am grateful to my right hon. Friend. Earlier Governments in different situations—indeed, in more benevolent times—might have taken different decisions about how much information they were prepared to reveal about demonstration and operations. These are not, of course, such benevolent times, and the decision we took was not to release any information about the testing of all the systems and sub-systems involved in the return to the operational cycle of HMS Vengeance.
Mr John Spellar (Warley) (Lab)
There is no doubt about why the hon. Member for North East Somerset (Mr Rees-Mogg) wanted this to be held in private. It was not to keep our secrets from the Russians, but to save the embarrassment of Ministers and the Prime Minister. In Talleyrand’s words:
“It’s worse than a crime, it’s a mistake.”
Mr Speaker
Order. I have known the right hon. Gentleman long enough to know of his naturally pugnacious and combative spirit, but that must not elide into impugning the integrity of another hon. Member. He has had his bit of fun, but he must now wash out his mouth, withdraw those words and put a question, for which the nation will be grateful.
Mr Spellar
I certainly withdraw any implication that the hon. Member for North East Somerset (Mr Rees-Mogg) was worried about embarrassment to the Minister.
Will the Minister confirm that in Lord Hennessy’s book “The Silent Deep” there is a full description of a previous firing? How is it an operational matter or a security threat merely to ask when the Minister and Prime Minister were made aware of the problem and why they decided to keep it quiet?
Sir Michael Fallon
On the first point, I have already made it clear that, of course, earlier Governments in different circumstances took different decisions not to share details with Parliament, but to release information publicly about the completion of tests. We have to take our decision in the light of the circumstances that prevail at the time and the national security considerations.
On the right hon. Gentleman’s second question, I have made it very clear that both I and the Prime Minister are of course informed of nuclear matters at all times and in particular of the successful return of HMS Vengeance to the operational cycle.
Mr James Gray (North Wiltshire) (Con)
I very much welcome the Secretary of State’s tone and approach so far. These things should always be secret, in my view, but will he go further and speculate on why, when last year’s debate was on the renewal of the Vanguard-class submarines and had nothing whatsoever to do with Trident missiles, there is any suggestion that the Prime Minister should have announced this failure?
Sir Michael Fallon
As I have said, the Government would not have brought the motion before the House last July had there been any doubt about the safety, capability or effectiveness of the Trident missile system. However, my hon. Friend is right to remind the House that the vote, and the huge majority it secured, was of course on the principle of our deterrent and the Government’s plan to renew our four submarines.
Mike Gapes (Ilford South) (Lab/Co-op)
The essence of deterrence is uncertainty—about when, whether or if missiles will be fired. Can I take it that the purpose of the Secretary of State’s statement today is that he wishes to add to the uncertainty and therefore increase deterrence?
Sir Michael Fallon
To take the hon. Gentleman’s question seriously, he of course is right that one of the principles of deterrence is to leave one’s adversaries uncertain about the circumstances in which one would employ it. I have simply made it clear to the House today that the outcome of the tests was a successful return by HMS Vengeance to the operational cycle, but I am not prepared to go into further operational detail about the tests themselves.
Sir Gerald Howarth (Aldershot) (Con)
I welcome the Government’s approach and thank my right hon. Friend for his reassurance about the effectiveness of the Trident system. Will he confirm that there have been 160 successful firings of the missile? Surely that should reassure the British people rather more than the prospect of the Leader of the Opposition having his finger on the button.
Sir Michael Fallon
My hon. Friend is right to draw the House’s attention to the previous testing regime. The House might want to know that the demonstration and shakedown operation is critical at intervals for demonstrating the effectiveness of the deterrent. It comprises a comprehensive series of system and sub-system tests, as I have said, and it provides a period of intensive training for the submarine’s crew. It evaluates the complex weapons system involved in Trident, including the performance of the crew, and it concludes each time with an unarmed missile firing. HMS Vengeance successfully concluded that shakedown operation.
Vernon Coaker (Gedling) (Lab)
I am a supporter of the deterrent, but does the Secretary of State not understand that a leak to a Sunday newspaper, followed by, frankly, Government stonewalling, does not enhance support for the deterrent, but undermines it?
Sir Michael Fallon
I understand why the hon. Gentleman, who is a supporter of the deterrent, says that, but the security of our deterrent is absolutely paramount at a time like this. Whether he likes it or not, I am not going to respond to speculation about the tests that occurred last June or give details of the particular operations of HMS Vengeance during that test.
Dr Andrew Murrison (South West Wiltshire) (Con)
Does my right hon. Friend agree that the continuous at-sea nuclear deterrent has kept us free from aggression day in, day out since 1968, and that we owe a huge debt of gratitude to the men and women who operate it?
Sir Michael Fallon
I wholeheartedly endorse what my hon. Friend says, and I hope that that at least would be common ground. The nuclear deterrent has played its part in keeping this country safe through a series of continuous at-sea patrols seven days a week, 52 weeks a year. I join him in paying tribute to the crews of all four of our nuclear submarines.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
There is now a question about the effectiveness of our nuclear deterrent—[Interruption.] There is in terms of what is in the papers. That in itself undermines our national security. We need to send a clear message that our deterrent is still able to do its job. I urge the Secretary of State to accept the invitation of the Chair of the Defence Committee and appear before it to reassure us and the House that our deterrent is fit for purpose.
Sir Michael Fallon
Let me reassure the hon. Lady, who follows these matters extremely closely and is on the Defence Committee, that there is absolutely no doubt about the effectiveness of our deterrent. Again, had the Government any doubts about the continuing capability or effectiveness of the deterrent, we would not have brought the motion before the House last July.
Tom Tugendhat (Tonbridge and Malling) (Con)
Would my right hon. Friend agree not only that the Prime Minister was absolutely right not to discuss this issue on national television but that a 98% success rate in testing for a weapons system is phenomenal? Once it has been tested, all boats that go out are fully operational and 100% capable, and that is something for which we should pay huge tribute to Her Majesty’s Royal Navy and the sailors who serve on those boats.
Sir Michael Fallon
My hon. Friend is right to draw attention to the importance of these tests and to hint at the complexity of them and of the systems and sub-systems that are involved in maintaining the Trident deterrent. It is to the credit of the crew of HMS Vengeance that they were able to complete these tests last June, and they now take their place again in the operational cycle.
Ann Clwyd (Cynon Valley) (Lab)
Since the Minister is not prepared to confirm very much at all, can I ask him to confirm whether each test of a Trident missile costs at least £17 million?
Richard Drax (South Dorset) (Con)
It is regrettable that the phrase “cover-up” has been used, when this issue concerns our national security. Does my right hon. Friend agree that if things go wrong, the last thing we should do is give succour to the enemy by telling them that that is the case?
Sir Michael Fallon
I agree with my hon. Friend. It is important that we maintain the secrecy of our deterrent, and it is important for our adversaries to understand that we attach paramount importance to making sure the operational details of the deterrent are as closely guarded as possible.
Douglas Chapman (Dunfermline and West Fife) (SNP)
I look forward to meeting the Secretary of State tomorrow at the Defence Committee, if he is available.
Does the right hon. Gentleman agree that credibility lies at the very heart of this urgent question? Will there be an official inquiry into the malfunction and the overall credibility of how the UK would deliver its weapons of mass destruction? Will there be a further inquiry into why the Prime Minister could not answer a question on four separate occasions on “The Andrew Marr Show” yesterday? Our nation really does deserve better, as do our serving personnel.
Sir Michael Fallon
On the first point, I am pondering the invitation that I have received to answer questions again tomorrow as fully as I have been answering them today. I will give that further thought. The Prime Minister, of course, did answer questions yesterday; she did not give the answer that the hon. Gentleman may have wanted, but she did answer that question. I want, again, to be clear with the House that the Prime Minister, who retains the ultimate responsibility—and an awesome one at that—for our deterrent, is kept informed as to how that deterrent is maintained, and was informed, of course, as her predecessor was, of the successful return of HMS Vengeance to the operational cycle.
Crispin Blunt (Reigate) (Con)
As these missiles get older, there are bound to be increasing maintenance programme costs, as well as costs from emerging and as yet unforeseen threats to the system. What is the United Kingdom’s exposure to these costs of maintaining and protecting the Trident missile system this side of 2060?
Sir Michael Fallon
My hon. Friend draws attention to the relative age of the Trident system, which he has had some doubts about in the past, and he probably continues to do so today. That, of course, is one reason why these tests are conducted every four or five years to make sure that our submarines are able to fire the Trident missile when they return from long periods of maintenance. Perhaps my hon. Friend would allow me to write to him on the very specific question of cost.
Paul Flynn (Newport West) (Lab)
As an accident is the most likely cause of the nuclear catastrophe that we all fear, either because of misunderstandings between the nations, human error or technical failure, now that President Trump has his impulsive finger on the nuclear button, should not our prime cause be to persuade him not to encourage South Korea, Japan and other small nations to acquire nuclear weapons, thus magnifying the risk of war by accident?
Sir Michael Fallon
I will do my best, Mr Speaker, but it might be quite hard. I hope you will join me in congratulating President Trump on his inauguration. Let me say how much our Prime Minister looks forward to meeting him later this week and discussing the importance of our NATO alliance to both our countries, and the importance of the nuclear deterrent within that NATO alliance.
Mr Speaker
What the Secretary of State said has real merit, but I was more inclined to congratulate the hon. Member for Newport West (Paul Flynn) on the ingenuity of his question.
Several hon. Members rose—
Michael Gove (Surrey Heath) (Con)
Thank you very much, Mr Speaker.
Does my right hon. Friend agree that investment in our continuous at-sea nuclear deterrent has not only bought us peace since 1968 and the protection of western Europe, but is congruent with our position as a permanent five member of the UN Security Council; and is it not the case that the unilateralists on the Opposition Benches who are complaining today are in the position of eunuchs complaining about the cost of Viagra?
Sir Michael Fallon
I agree with all three of my right hon. Friend’s propositions.
Greg Mulholland (Leeds North West) (LD)
The Prime Minister was asked nothing that compromised security; she was asked what she knew, and her refusal to answer that four times is an embarrassment not just to the Government but to the United Kingdom. Does the Secretary of State not understand that at a time when the Government are making cuts in virtually all areas, not dealing with this misfiring will make people believe that the huge price tag of Trident is not worth it, and that needs to be addressed?
Sir Michael Fallon
We had this debate last July, when this House decided by an overwhelming majority to re-endorse the principle of the deterrent and to commit to our plan to build the four new Dreadnought submarines. I have made the Prime Minister’s position extremely clear. She has the responsibility for the nuclear deterrent and she is kept informed as to how that deterrent is maintained, including the successful return of HMS Vengeance to the operational cycle.
Richard Benyon (Newbury) (Con)
Like many of my constituents, I live in the shadow of a nuclear weapons facility, and I want to be certain that these weapons, at every stage of their development, are tested to the utmost, even to the point of failure. Will my right hon. Friend confirm that those tests should be secret, and that their not being secret gives aid to only one group of people—that is, those who mean us harm?
Sir Michael Fallon
I agree with my hon. Friend on the vital importance of keeping this work secret. Let me also pay tribute to the secret work that is done by his constituents working at Aldermaston, and indeed Burghfield alongside it, as part of the essential importance of verifying the deterrent.
Carol Monaghan (Glasgow North West) (SNP)
Having been in Florida for the 2009 DASO—demonstration and shakedown operation—firing, I know that this is not the first time there has been a media blackout to suit a particular Government’s agenda. That firing was of course carried out by my own husband. The MOD press statement says that the crew and boat were successfully tested, but what about the missile? How could the nuclear deterrent be certified for operational use when the system has catastrophically failed?
Sir Michael Fallon
The hon. Lady, who I know has family connections in this area, must not believe everything she read in the newspapers yesterday. I am not going into particular operational details except to confirm that HMS Vengeance successfully concluded her demonstration and shakedown operation.
James Cleverly (Braintree) (Con)
There is a huge difference between subjects that are of interest to the public and things that are in the public interest. Does my right hon. Friend agree that while operations relating to intelligence, counter-terrorism, special forces and, indeed, nuclear submarines are of massive interest to the public, it is not in the public or national interest to discuss them openly in this or any other place?
Mary Creagh (Wakefield) (Lab)
The Secretary of State has advised us not to believe everything we read in the Sunday newspapers, but should we believe the Whitehouse official who, while we have been debating, has confirmed to CNN that the missile did auto-self-destruct off the coast of Florida? If that is the case, why are the British Parliament and the British public the last to know about it?
Sir Michael Fallon
As I have said, we do not in this House—and nor did any previous Government—give operational details of the demonstration and shakedown operation of one of our submarines conducting a test with one of our Trident missiles.
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
Does the Secretary of State agree that the most important conclusion from this particular missile test is that our excellent submariners on HMS Vengeance proved that they can deal with unexpected technical challenges with a ballistic missile system known to be the most reliable in the world, and that that should be of enormous reassurance to the British people?
Sir Michael Fallon
I congratulate the crew on completing their test and returning, as I have said, to the operational cycle of the submarines that discharge this duty on our behalf, but I say again that I am not going into operational details.
Mr Dennis Skinner (Bolsover) (Lab)
How can this be an independent nuclear deterrent if Donald Trump, the President of the United States of America—a man who is as thick as two short planks—is given the information, but nobody on the Opposition Benches is allowed to see it?
Sir Michael Fallon
The hon. Gentleman knows very well that the nuclear deterrent that has served us so well is independent, because its operational control rests with our Prime Minister, not with the President of the United States.
Rebecca Pow (Taunton Deane) (Con)
Will my right hon. Friend confirm that the full debate that we had in this place six months ago, on 18 July, which was endorsed by 472 right hon. and hon. Members, was on the principle of our deterrent and replacing the Vanguard-class boats, not on a routine test?
Sir Michael Fallon
I can confirm that. It was an overwhelming majority and that has allowed us to proceed with the construction of the Dreadnought submarines. I had the honour to cut steel on the first of those four submarines in October 2016. I repeat that had the Government any doubt at that time of the safety capability or effectiveness of our nuclear deterrent, they would not have brought the motion before the House.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
Will the Secretary of State tell us what further Trident missile tests are planned, and will he keep the House updated on the outcome of future tests?
Sir Michael Fallon
These particular demonstration and shakedown operations take place when each of our submarines emerges from a period of long-term maintenance, so they tend to take place every four or five years. It follows from that that there is not likely to be another one in the immediate future, but, as on this occasion, we will, of course, keep interested parties informed. We wrote to the Chair of the Defence Committee, the shadow Defence spokesman and the Chair of the Public Accounts Committee.
Mr Jonathan Djanogly (Huntingdon) (Con)
In certain theatres of war, such as Ukraine, Russia has been testing and refining its electronic and cyber-warfare techniques. Although I am not blaming Russia for this incident, will the opportunity now be taken to review the system’s protections against possible electronic counter-measures?
Sir Michael Fallon
Yes. I was in Ukraine last week and we discussed this, among other matters. Of course, we are taking very good care to ensure that our deterrent is properly protected against any new technologies that our adversaries might get hold of.
Mr David Winnick (Walsall North) (Lab)
Does not the Secretary of State realise that just because the Trident programme was approved by the House as a whole, that does not mean that thereafter there should be total silence from either Members of Parliament or the media? As far as the failed test is concerned, is it not ironic that if the information had been given at the time and there had been no cover-up, there would be far less publicity, and far less of a row, than there is now? The Government should learn from that.
Sir Michael Fallon
I do not accept that. Previous Governments that the hon. Gentleman supported have not given operational details of previous demonstration and shakedown operations, which comprise the major tests of the systems and sub-systems that we have been dealing with today.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
May I commend my right hon. Friend for his reticence about getting drawn into this, and may I also commend the Prime Minister for her reticence, which was entirely appropriate given the subject at issue? Is it not rather ironic to hear right hon. and hon. Members complaining about the possible lack of credibility of the deterrent when some of them do not actually believe in the doctrine of deterrence at all? It would be unwise of the Russians or any other potential adversary to suggest that they could take the risk of invading this or that country on the basis that we might have a misfire of one of our missiles.
Sir Michael Fallon
Again, I agree with my hon. Friend. We should not forget that there were many in that particular debate who took the opposite view—the view that we no longer need the deterrent. I am particularly pleased that the overwhelming majority of Members of this House, on both sides of this House, voted in favour of renewing the deterrent that has kept us safe for so long.
Kirsten Oswald (East Renfrewshire) (SNP)
We now know, despite her refusal to answer on “The Andrew Marr Show”, that the Prime Minister did know about this. May I ask the Secretary of State what specific discussions took place with the Prime Minister about whether to disclose this malfunction to Parliament, when these discussions took place, and how it was determined that the information should not be shared? Does the Secretary of State realise how woefully inadequate his responses today have been, both to this House and to the watching public?
Sir Michael Fallon
It might well be that the hon. Lady and members of the watching public would like to know further operational details of our nuclear deterrent, but I am not going to assist them. On her specific point about the Prime Minister, this Prime Minister, like her predecessor, is kept informed about how the nuclear deterrent is maintained, and she was fully aware of the successful return of HMS Vengeance to the four-boat operational cycle.
Michael Fabricant (Lichfield) (Con)
Has my right hon. Friend followed the argument made by some Opposition Members that perhaps we would have voted differently had this information been given to us back in July? May I tell my right hon. Friend that that is not the case? We would not have been influenced by the result of one out of many tests. Indeed, is there any Conservative Member who would have voted differently had this information come out? No.
Sir Michael Fallon
As my hon. Friend knows, I have not confirmed any information today. I have been rather careful to try not to confirm any particular information today, except to warn the House repeatedly not to believe everything that was in yesterday’s newspapers. Again, he is right to remind us that the vote in July was on the principle of the deterrent and our plans to replace the current Vanguard boats with the four new Dreadnought submarines.
Hywel Williams (Arfon) (PC)
When we voted in July last year on funding Trident, unfortunately the official Opposition were split. Properly informed scrutiny of such decisions is vital to the effective and accountable operation of the Secretary of State’s Department, so is he satisfied with the level of scrutiny from the official Opposition on this matter?
Sir Michael Fallon
I have been disappointed for some time by the scrutiny of the official Opposition, but perhaps my fifth Defence shadow will improve on the record of her four predecessors—I am sure that she will.
There is clearly a balance to be struck. Parliament is, rightly, keen to know details of the expenditure involved in replacing the four submarines, and that was a big part of the debate. We will make sure that the Defence Committee and the Public Accounts Committee are kept fully informed as the boat replacement programme continues.
Mrs Sheryll Murray (South East Cornwall) (Con)
The House will know of my special interest in the Royal Navy, which many of my constituents share. After more than 160 successful Trident missile tests, is it not ridiculous for some people to claim that this system does not work?
Sir Michael Fallon
Let me reassure my hon. Friend, who takes a close interest in these matters, that the Trident system certainly does work. We are in absolutely no doubt about its capability and effectiveness.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It will come as no surprise to the Secretary of State that those of us who live within the blast zone of Faslane do not share his confidence. If he has absolute confidence in the capabilities of HMS Vengeance and of the system, what steps is his Department taking to rectify the errors in the aborted launch itself?
Sir Michael Fallon
As I have already said, HMS Vengeance completed its demonstration and shakedown operation successfully, otherwise it would not have been able to rejoin the four-boat operational cycle.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Will my right hon. Friend confirm that while Devonport dockyard in my constituency was responsible for refitting and refuelling HMS Vengeance, the dockyard is not responsible for the missiles and weaponry, as some ill-informed people might think?
Alan Brown (Kilmarnock and Loudoun) (SNP)
So far today in this mother of all Parliaments, we have had the Secretary of State at the Dispatch Box telling us that he does not believe in greater transparency and his Back Benchers agreeing with him. If this test was so successful, why did the Prime Minister not just give such an answer yesterday? Does he not understand that his just standing there and telling us that everything is okay—that everything will be okay for the rest of the duration of Trident—is not good enough, and that that is why I have constituents demanding an inquiry?
Sir Michael Fallon
The hon. Gentleman and I disagree. I do not believe in greater transparency in this House when it comes to our nuclear deterrent.
James Morris (Halesowen and Rowley Regis) (Con)
With a resurgent Russia and an unstable world, does the Secretary of State agree that nothing that we have heard in today’s exchanges undermines the clear rationale for the renewal of our continuous at-sea nuclear deterrent to secure the long-term security of our country?
Sir Michael Fallon
The security and effectiveness of the deterrent are of course underlined by the testing and shakedown programme, in which boats come out of their long-term refit and are tested again to see whether they are fit and ready to rejoin the operational cycle, which is what HMS Vengeance has now done.
Kevin Brennan (Cardiff West) (Lab)
Does not the Secretary of State’s characteristic “Name, rank and serial number—don’t tell him, Pike” approach actually make no sense at all given that, following the reports we have had, our American counterparts in Congress will certainly be given full details of what happened in the test? Does not his stonewalling do nothing to strengthen our security and everything to undermine the credibility of this House?
Sir Michael Fallon
This is our deterrent carried by our submarine. The secrecy that we—I think rightly—put around it is in our national interest.
Robert Jenrick (Newark) (Con)
Does my right hon. Friend agree that ever since Clement Attlee sought our first nuclear deterrent without a debate in Parliament, and even without a debate within the Labour party, successive responsible Governments have always treated these issues with the utmost discretion, and that we must not allow the present tortured relationship between the Labour party and the nuclear deterrent to change that?
Sir Michael Fallon
I do agree. Previous Governments have been very careful to maintain the secrecy of the deterrent; I think it is important that we keep to that.
Steven Paterson (Stirling) (SNP)
Have there been any other missile test failures of this type that the Government have chosen not to share with the House of Commons, and am I better off asking that question or watching a White House briefing if I want to get that kind of information?
Sir Michael Fallon
I am not confirming particular details of the operation and testing of the various systems and sub-systems involved. All I can do is remind the hon. Gentleman that, overall, the demonstration and shakedown operation was concluded successfully, allowing HMS Vengeance to take its part in the four-boat operational cycle.
Nusrat Ghani (Wealden) (Con)
To clear up any confusion, will the Secretary of State share with us whether there has been any change in the Government’s approach to informing the House of the demonstration and shakedown operation?
Sir Michael Fallon
No, there has not. Previous Governments have not given details of previous demonstration and shakedown operations to Parliament.
Toby Perkins (Chesterfield) (Lab)
The replacement of the Trident submarine system enjoys the support of not only the majority of Members of Parliament but, so polls tell us, the majority of people in every one of the four nations of the United Kingdom. Does the Secretary of State recognise that the way in which information is coming out—more has been revealed by the US Defence Department than in this Parliament in the past hour—massively undermines confidence in the system, which we need all the public to have?
Sir Michael Fallon
No, I do not agree, and I do not think that members of the public agree either. I think they understand that the effectiveness of the deterrent depends on the secrecy that is needed about the detail of its operation.
Oliver Dowden (Hertsmere) (Con)
Does my right hon. Friend agree that the continuing effectiveness of the system depends upon its routine testing? That testing is not a secret—in fact, the Opposition spokesperson was informed in advance. What would damage national security would be to give a running commentary on the success or otherwise of those tests.
Sir Michael Fallon
I agree with my hon. Friend. Senior Members were informed of the forthcoming demonstration and shakedown operation. As I have described, the operation involves a series of complex tests of all the systems and sub-systems involved. That operation was concluded successfully.
Neil Gray (Airdrie and Shotts) (SNP)
What the Secretary of State has been saying today is that members of the public in this country have no right to know about a nuclear missile misfiring, but the people and the elected politicians of America do. How does he believe that that brings about any trust in the system?
Sir Michael Fallon
It is our deterrent, carrying our missile, and it is for us to decide its level of security. That is why I am not going into particular operational details. Again, I caution the hon. Gentleman against believing everything that he has read in the weekend newspapers.
Henry Smith (Crawley) (Con)
May I have an assurance from my right hon. Friend that if there is an investigation into the successful certification of HMS Vengeance last year, that information will remain classified for the sake of British national security?
Sir Michael Fallon
It will remain not simply classified but top secret, as any information regarding our nuclear deterrent properly should.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Prime Minister is ultimately responsible for our deterrent, but yet again she is not here to account to Parliament or to reassure the public and our allies.
The Secretary of State has now been asked eight times who knew what when. On what date was the Prime Minister told, on what date was the former Prime Minister told, and on what date was the Secretary of State told? I am not asking for operational details; I am asking for dates.
Sir Michael Fallon
The hon. Member for North Durham (Mr Jones) addressed the question to me, which is why I am here answering it.
I have made it very clear that both Prime Ministers, who separately had ultimate responsibility for the nuclear deterrent, were kept fully informed as to how that deterrent is maintained. Both were made aware of the successful return of HMS Vengeance to the operational cycle.
Julian Knight (Solihull) (Con)
Does my right hon. Friend agree with Steve Aiken, an experienced former submarine commander, who told a goading BBC this morning that this makes absolutely no difference to the case for renewal, and that the Government are correct in not commenting on matters that could prejudice our national defence, certainly on live television?
Richard Arkless (Dumfries and Galloway) (SNP)
Given that, as the Secretary of State has admitted, the Russians had to be informed in advance of the testing, and given that they clearly would have had the capability to monitor the test, is he seriously trying to tell us that our enemies and allies can know what happened, but this democratically elected Chamber must be kept in the dark?
Sir Michael Fallon
Under our international treaty obligations, notice of a future test firing is given to other nuclear powers, including in this instance to France and, as the hon. Gentleman says, Russia, but operational details are obviously not disclosed.
James Heappey (Wells) (Con)
Without reference to any particular test and the necessary security that must surround each test, will my right hon. Friend confirm that the very point of the testing process is not only to certify the crews of Her Majesty’s submarines, but to allow Lockheed Martin to maximise the reliability and lethality of the weapons system?
Sir Michael Fallon
Yes, in essence, that is right. The system is tested to ensure that each of its complex parts and the various systems involved are fully understood and that the crew of the submarine concerned is ready to operate it. As I have said several times now, that operation was successfully concluded.
Chris Bryant (Rhondda) (Lab)
Many Opposition Members share the Defence Secretary’s commitment to the deterrent and, for that matter, his concern about national security, but the logic of what he is saying is that there was a security breach, and it happened this weekend, as American officials are now briefing CNN and British officials are secretly briefing The Guardian and The Sunday Times. Surely, according to his own logic, there must now be a full investigation.
Sir Michael Fallon
We certainly deplore the leakage of any information about the nuclear deterrent, but it is not for me to comment on what might be said by the United States Administration. This is our submarine and our deterrent, and it is our responsibility to apply to it the very highest security classification.
Jake Berry (Rossendale and Darwen) (Con)
Will my right hon. Friend confirm that no Government have ever routinely reported on operational matters relating to our nuclear deterrent, because to do so would be not only irresponsible but dangerous?
Patrick Grady (Glasgow North) (SNP)
The Secretary of State says that decisions on media publicity are taken on a case-by-case basis. Was the decision not to publicise this test taken before or after the test? Was any footage taken and were any journalists present in case a decision had been made to publicise it?
Sir Michael Fallon
The decision on what publicity to give to any particular test—these tests take place every four or five years—is taken by the Government of the day in the light of the circumstances of each test and the national security considerations applying at the time. Of course those matters influenced the decision taken last June.
Mr Philip Hollobone (Kettering) (Con)
Since we have to notify other nuclear powers every time a missile test takes place, the number will not be unknown to them, so can the Secretary of State confirm to the House that there have been 160 tests of the Trident missile system? If he can, will that not give our constituents full confidence that the system provides us with the deterrent that we need?
Sir Michael Fallon
I think that my hon. Friend is broadly correct about the number, but if I am wrong, I hope that he will allow me to write to him with the correct figure. The Government have every confidence in the Trident deterrent system. As I have said, we would not have brought the motion before the House if we had had any doubt about it.
Deidre Brock (Edinburgh North and Leith) (SNP)
Despite the Secretary of State’s refusal to clarify, it is commonly understood that the missile went the wrong way. I am no expert, but that strikes me as a major flaw; friendly fire with a nuclear weapon is not exactly what he might be looking for. Will he at least tell us whether the new Trident missiles will have better guidance systems?
Sir Michael Fallon
I am not able to confirm the speculation in which the hon. Lady is indulging regarding the route of the missile that was fired.
Robert Courts (Witney) (Con)
Does the Secretary of State agree that much as there is no doubt about the valour of the men and women of the Royal Navy who keep us safe, we must equally use discretion when talking about the weapons systems that they use to keep us safe?
Sir Michael Fallon
Absolutely. We owe it to the crews on whom a lifetime obligation of secrecy is placed that we do not break the security classification of the information surrounding the deterrent, nor treat that information in any frivolous way.
Tommy Sheppard (Edinburgh East) (SNP)
The Secretary of State has been quizzed for more than an hour, and I have not heard any Member asking for any operational details that might compromise national security. We simply want to know whether this test was successful or not. His refusal to answer that question when his counterpart across the Atlantic is answering it surely gives credence to the concerns that it was not successful and that, as well as not being a deterrent, this system simply might not work.
Sir Michael Fallon
When the hon. Gentleman reads the account of today’s proceedings, I think he will see that I have been asked for all kinds of operational details. Let me repeat to him that the demonstration and shakedown operation, of which this was one of a number of tests, was concluded satisfactorily.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Many residents of my Clydeside constituency, some of whom live within 13 miles of the base at Faslane, are extremely angry about this Government’s complete lack of transparency on this crucial matter. Can the Secretary of State assure us that any significant problem arising from any future test firing will be reported to this House at his earliest convenience, or will we have to wait for The Sunday Times to confirm it?
Sir Michael Fallon
I think that those who work on our behalf at Faslane are very much aware of the importance of the secrecy with which they naturally have to concur. I think they understand that obligation. Even though the hon. Gentleman does not, I think they, too, support the importance of the deterrent.
Mr Speaker
I shall take this point of order from the originator of the urgent question if it relates exclusively to the matters that have just been under discussion, and if it is an attempt not to continue the exchanges, but to provide some new information with which the hon. Gentleman thinks the House should be favoured.
Mr Jones
Thank you, Mr Speaker.
It has become apparent during these proceedings that US officials are now briefing more detail than has been provided by the Secretary of State today. He has hidden behind secrecy for the demonstration and shakedown, even though his own Department authorised a book by Peter Hennessy last year that gave a full description of what happens. The Chair of the Select Committee very generously suggested that the Secretary of State could come before his Committee. How can Parliament hold the Department to account on this issue if it will not even take up the generous offer that the right hon. Member for New Forest East (Dr Lewis) has already made?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. I say simply that the Secretary of State will have heard the right hon. Member for New Forest East (Dr Lewis), the Chair of the Select Committee, who is extremely diligent, extraordinarily intelligent and persistent—and I have known him a damn sight longer than the Secretary of State has known him. How the Secretary of State wants to deal with the right hon. Member for New Forest East is entirely a matter for him and his judgment, exercising it to the best of his ability. We will leave it there for now.
Industrial Strategy Consultation
(7 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
This is a hugely important moment for the United Kingdom—a moment when we must prepare a new strategy to earn a prosperous living in the years ahead. Leaving the European Union allows, and requires, Britain to make long-term decisions about our economic future. We will, of course, be ambitious in the upcoming negotiations and will secure the best possible access for firms to trade with, and operate in, the European market. While the terms of trade with other economies is important, so is the competitiveness of our own economy. That is why the Government are committed to a modern industrial strategy, whose objective is to improve living standards and economic growth by increasing productivity and driving growth across the whole country. Today’s Green Paper is part of an open dialogue to develop that strategy as the enduring foundation of an economy that works for everyone.
We start from a position of considerable strength. We are the fifth biggest economy in the world, despite having the 22nd highest population. We have achieved higher levels of employment than ever before in our history —in fact, 2.7 million more than in 2010. We have businesses, research institutions and cultural achievements at the very forefront of global excellence. For all those reasons, we attract investment and talented individuals from around the world, but there are challenges that Britain must face up to, now and in the years ahead.
The first challenge is to build on those strengths and extend excellence into the future. British excellence in key technologies, professions, research disciplines and institutions provides us with crucial competitive advantages, but we cannot take them for granted. If other countries invest more in research and development and we do not, we cannot expect to keep, let alone extend, our technological lead in key sectors, or the world-beating performance of our universities. The same goes for our record as Europe’s leading destination for inward investment, or our position as a centre of international finance.
Our competitors are not standing still. They are upgrading infrastructure networks and reforming systems of governance, and therefore we too must strive for improvement. In industrial sectors, from automotive and aerospace to financial and professional services and the creative industries, the UK has a global reputation, but the competition for new investment is fierce and unending. The conditions that have allowed UK investment destinations to succeed include the availability of supportive research programmes, relevant skills in local labour markets, and capable supply chains. If our success is to continue, those foundations must be maintained and strengthened.
The second challenge is to ensure that every place meets its potential by working to close the gap between our best-performing companies, industries, places and people and those that are less productive. For all the global excellence of the UK’s best companies, industries and places, we have too many that lie too far behind the leaders. That is why, on average, workers in France, Germany and the United States produce about as much in four days as UK workers do in five. It is also why, despite having the most prosperous local economy in northern Europe—in central London—we also have 12 of the 20 poorest among our closest neighbours. We must address those long “tails” of underperformance if we are to build a strong economy and ensure sustainable growth in living standards. To do so will provide a huge opportunity for the whole nation to benefit from improved productivity—that is to say, earning power—in all parts of the country.
The third challenge is to make the UK one of the most competitive places in the world to start or grow a business. A fatal flaw of 1970s-style industrial strategies was their dominant focus on existing industries and the companies within them—and then mostly the biggest firms. Too often, they became strategies of incumbency. It is worth noting that many of the most important companies in the world today did not even exist 25 years ago. Unlike those past strategies, our industrial strategy must be about creating the right conditions for new and growing enterprise to thrive, not about protecting the position of incumbents.
In order to meet those challenges, we have identified 10 pillars around which the strategy is structured: that is, 10 areas of action to drive growth right across the economy and in every part of the country. They are to invest in science, research and innovation; to develop our skills further; to upgrade our infrastructure; to support businesses and help them to start and grow; to improve public procurement; to encourage trade and investment; to deliver affordable energy and clean growth; to cultivate world-leading sectors; to drive growth across all parts of the country; and to create the right institutions to bring together sectors and places.
In all those areas, the Government are making strategic decisions to keep British business on the front foot. For instance, we have given the go-ahead for major upgrades to our infrastructure, such as Hinkley Point C, Heathrow and High Speed 2, and, in the autumn statement, for the biggest increase in research and development spending since 1979.
In conjunction with today’s Green Paper, we are launching a range of further measures. They include: a new approach to enabling existing and emerging sectors to grow through sector deals, with reviews taking place regarding life sciences, ultra-low emission vehicles, industrial digitalisation, nuclear and the creative industries; deciding on the priority challenges and technologies for the new Industrial Strategy Challenge Fund; and an overhaul of technical education, including £170 million of capital funding to set up new institutes of technology to deliver education in science, technology, engineering and mathematical subjects.
In a world containing uncertainty, public policy should aim to be a countervailing force for stability, not an additional source of unpredictability. So our aim is to establish an industrial strategy for the long-term—to provide a policy framework against which major public and private sector investment decisions can be made with confidence. It is therefore vital that the full development of our industrial strategy should take place with—and not just for—British enterprise. The full involvement of innovators, investors, job creators, workers and consumers in England, Scotland, Wales and Northern Ireland is the only basis on which we can produce an enduring programme of action. That is why this is a Green Paper —a set of proposals for discussion and consideration, and an invitation to all to contribute collaboratively to their development. I commend this statement to the House.
Clive Lewis (Norwich South) (Lab)
I thank the Secretary of State for advance sight of his statement, on this occasion.
Today would be a momentous day if it was indeed the day that the Conservative party finally broke free from the free-market fundamentalism that has dogged it, and the country, for decades. Will the Secretary of State tell us whether the “new, active” role for the state means that the Government are abandoning the approach of the last Prime Minister and Chancellor—and of the Secretary of State’s own predecessor, who even banned the term “industrial strategy” from the previous Department? If so, I will make it clear at the outset that we welcome that, alongside the good intentions set out in today’s Green Paper. The question is whether the details will live up to them.
For example, action on skills will be widely welcomed, given the challenges presented by automation and the pace of technological challenge and change, but this Government have already cut adult education by over £1 billion. Can the Secretary of State explain how £170 million of one-off capital spending can even begin to close the skills gap?
Nor will the Government themselves be equipped to support an industrial strategy if the Secretary of State’s predecessor’s cuts are implemented. Can he confirm that the Department for Business, Innovation and Skills 2020 project has now been thrown in the bin, along with the rest of his predecessor’s legacy?
The Secretary of State rightly sets the goal of developing a competitive edge in the industries of the future, but how does he reconcile this with his Government’s plan to privatise the UK Green Investment Bank? If the Secretary of State is serious about tackling our productivity crisis, will he go beyond piecemeal offers and finally bring investment in R and D and infrastructure into line with the OECD average? Will the Secretary of State promise a fundamental rethink of business rates, which many businesses say would help them much more than any other single measure? Does the Secretary of State agree that a successful industrial strategy must include partnership and co-operation with the workforce? Yet the Green Paper does not mention trade unions once; surely now is the time to promise that the toxic Trade Union Act 2016 will be repealed.
Steel is a critical sector for our future economy, but it is mentioned only once in the Green Paper. Will the Secretary of State commit to implementing the recommendations on procurement and supply chains contained in the all-party group on steel and metal related industries report out today?
We cannot limit our focus to high-tech manufacturing. An industrial strategy that narrows its focus to a few chosen sectors will let down the majority of businesses in this country and the people they employ. So can the Secretary of State tell us what this industrial strategy will do for small and medium-sized enterprises, which are huge employers, and for financial services, which are our main exporters, as well as for foundation industries, or for the retail outlets that shape our high streets up and down the country?
Finally, there is a glaring inconsistency between the noble aims of this Green Paper and the threats made by the Prime Minister to turn Britain into an offshore tax haven if she fails in her Brexit negotiations. Until now, the industrial strategy has seemingly consisted of one deal, made in secret, with Nissan. If the Nissan deal did not last six months, how can businesses be confident of the other commitments in this Green Paper?
It is often said, correctly, that an industrial strategy is a long-term project and that, if it is to work, it must outlast particular Governments. With this in mind, I can pledge our support for its broad aims from this side of the Chamber, but I feel compelled to ask whether the Secretary of State can count on the same support from his own side. When we previously debated the industrial strategy here, one of his own hon. Friends said that they had two problems with it: one was “industrial”, the other was “strategy”. I hope that he faces down such attitudes, because now is not the time for half measures. The BBC reported this morning that the Government wished to be in the driving seat but not have two hands on the wheel. I know that Conservative Members do not much like safety legislation, but that is not an approach I would recommend, especially if the Government keep making U-turns. If the Secretary of State finds himself isolated in the coming months, my party will be happy to help. We, too, are ambitious for a proper industrial strategy, but it will succeed only if the means match the ends.
Greg Clark
It is true that an industrial strategy wants to help all parts of the United Kingdom, and I look forward to engagement with colleagues from all parts of the House who wish to represent the views of their constituents. I am relieved that the hon. Gentleman has given his grudging support for this statement, given that the last time he appeared at the Dispatch Box, he said:
“Is it simply a case of ‘public good, private bad’? That is what we think on the Opposition Benches”.—[Official Report, 11 January 2017; Vol. 619, c. 319.]
That would send a disastrous signal to investors in this country, and I am pleased to be on the other side of that argument.
The hon. Gentleman asked a number of questions. Our commitment to transforming technical education has been widely welcomed by the business community up and down the country today. Also, it is highly unusual for a Green Paper to commit any funds. This is about the consultation on the direction, and the fact that the Chancellor has announced £170 million for new institutes of technology is a great step forward. The hon. Gentleman asked about increasing the level of research and development. He might have missed what I said about the Chancellor having committed to the biggest increase in research and development since 1979. I recall that the period since then has included several years of a Labour Government, so by implication this is a bigger increase than any that took place during Labour’s 13 years in office. He also asked about business rates. We are legislating this very afternoon to introduce 100% retention of business rates by local councils so that the interests of local businesses and councils can be aligned.
The hon. Gentleman asked about the workforce. I was clear in my statement that the consultation would involve employees as well, and I am looking forward to a roundtable with the TUC and its member organisations. On steel, he will see in the Green Paper an approach to sector deals. I have already met the chief executives of the steel companies and I am about to meet representatives of the trade unions again. I look forward to that being one of the deals that is being put forward.
The hon. Gentleman asked about involving small businesses. The chairman of the Federation of Small Businesses has said today:
“FSB has appreciated being part of the discussions with the business secretary…to help shape the Industrial Strategy.”
He said that the proposals
“fit well with the UK small business community.”
As far as the hon. Gentleman’s position on the fiscal arithmetic goes, he should reflect on the fact that the first foundation of any credible industrial strategy is confidence in the public finances, which were left in such a disastrous state during the time that Labour was in government. The hon. Gentleman made a point about unanimity of purpose. We are having a consultation on the industrial strategy, but I understand from reports in recent days that he is having a consultation with himself about whether he can support his own party’s position on triggering article 50. We will be looking forward to the responses to our consultation from all parts of the House as we form a strategy for the years ahead.
Mr George Osborne (Tatton) (Con)
I congratulate my right hon. Friend on the intelligent approach set out in the Green Paper, building on what has been achieved over the past six years but taking it much further in skills, science and, in particular, the northern powerhouse.
The university sector is a jewel in the British economy’s crown. The Higher Education and Research Bill will open up the sector to new entrants, just as it was opened up in the 19th and 20th centuries through the arrival of London University and the red-brick universities. The Bill now faces significant opposition in the House of Lords from people who represent the existing players in the sector. Will my right hon. Friend reassure me that he will see off that opposition?
Greg Clark
My right hon. Friend will see in the approach we are setting out a vigorous continuation of many of the measures, such as the northern powerhouse, that he championed in his time in government that are making such a big difference in the north and other parts of the country. I can confirm that with the Minister for Universities, Science, Research and Innovation, my hon. Friend the Member for Orpington (Joseph Johnson), and colleagues in the House of Lords we will drive the reforms that have proved so successful in the past when expanding the institutions that contribute to our excellence in higher education. The standard and standing of higher education in this country have never been higher, which is a reflection of the soundness of the policies that have been pursued in recent years.
Callum McCaig (Aberdeen South) (SNP)
I give this proposal a cautious welcome. It is honest in some ways in its reflection of the state of the economy. In many ways it is brutally honest about some problems, including regional disparity and productivity. Likewise, it recognises some successes, such as the automotive and aviation sectors and, on page 90, Aberdeen as an oil and gas hub. The problems are not new, so how will the Secretary of State ensure that the same mistakes are not repeated? How will he ensure that existing industries are not sacrificed in the quest to support new ones?
Will the right hon. Gentleman confirm that the allocation of new research and development money will be in addition to anything that would have come from the European Union and that he will provide long-term commitments to match EU funding? How much of that R and D spend will be outwith London and south-east England? Imagine how much worse regional disparities would have been without EU structural funds. Will he commit to long-term replacements for those funds?
On renewables and carbon capture and storage, the right hon. Gentleman will be unsurprised that I am a little disappointed by the lack of ambition in an industry that will be worth hundreds of billions, if not trillions, of dollars in the near future. Will he consider a sectoral deal for renewables? If so, will he work with the Scottish Government on how that could be done in Scotland? Access to finance is identified as a problem, and I share the concerns about the Green Investment Bank. It is short-sighted to sell it off when this key sector needs access to funding and when the bank is the perfect vehicle for that.
How will the consultation process work with the devolved Governments? However good this industrial strategy may be, we must accept that the biggest threat to the economies of both Scotland and the UK is lack of access to the single market and to skilled people that comes through our EU membership. Will the right hon. Gentleman seriously consider the Scottish Government’s plan that would see Scotland maintain its membership of the European single market?
Greg Clark
I thank the hon. Gentleman for his thoughtful remarks. I am impressed that he has reached page 90 already, which shows his diligence. He says that we are brutally honest, but if we are to look forward and have an industrial strategy that reflects the challenges we face, we need to be clear-eyed. On technical education levels and the imbalances, some areas are prosperous and some can catch up, so it is right to be ambitious in that.
The research and development money that the Chancellor announced in the autumn statement is separate from whatever might be decided on the European funds. It was independently granted and is available to universities and research institutions. The consultation on how that money is spent is part of the consultation on this exercise, and the money is for research and development. One of the points we make is that we have often been excellent at producing brilliant new ideas but less successful at commercialising them. Pushing further on how we translate good ideas into practice is an important feature of addressing that.
The hon. Gentleman mentions renewables, which of course are important in Scotland. The emissions reduction plan, which is currently being prepared, will particularly address that but, on the green economy, a chapter of the Green Paper has a big commitment to doing what we can to make sure that we obtain industrial advantage from the investments we are making in green technology.
Finally, the hon. Gentleman says that the biggest threat to the economy is the exit from the European Union. The United Kingdom has been very successful in recent years, and I would say that the biggest threat to that is if the successful alliance of our nations in the United Kingdom were broken up by the independence of Scotland.
Claire Perry (Devizes) (Con)
There is so much to welcome in this very thoughtful report, and I congratulate my right hon. Friend and his team on delivering it. Will he say a little more about how the Government’s unprecedented investment in infrastructure will deliver export growth? I am sure he will not be surprised, but he may be disappointed, to know that our export potential, particularly from our rail industry, is far outstripped by that of our neighbours in continental Europe. We are spending a lot of money. How can we turn that money into exports and jobs?
Greg Clark
From her experience in the Department for Transport, my hon. Friend knows how important it is to make connections between places—it is an important means of underpinning growth. She will be aware that, through the national infrastructure fund, funding will rise by 60% from this year to 2022, which is a huge investment, and an appropriate one to make sure that the quality of our infrastructure keeps pace with the investments that our competitors are making.
Mr Iain Wright (Hartlepool) (Lab)
I warmly welcome and support the Government’s endorsement of a long-term, interventionist industrial strategy. I hope the strategy will play an active role in ensuring that workers are upskilled and receive higher wages and that British firms can scale up and become more enterprising, more competitive and more productive.
What is different this time from previous iterations of industrial strategy, including industrial strategies for which he was a Cabinet Minister? What will be the short-term, medium-term and long-term metrics by which the success or failure of this industrial strategy will be evaluated?
Greg Clark
I am grateful to the hon. Gentleman for his welcome. He says that it is an interventionist strategy, and it is true that the Government should be engaged with the economy to make sure that we have the right conditions for success, but I also point out that openness for competition to have its full run in our economy is vital to our success. As Chairman of the Business, Energy and Industrial Strategy Committee, he will reflect that point. I look forward to the Select Committee’s inquiry on the strategy.
The hon. Gentleman asks how the strategy is different from its predecessors, and I would suggest two ways in particular. First, as he will have observed, many of the themes that I have discussed are not about investing in particular companies or subsidising particular businesses but are cross-cutting. The themes are horizontal in that they look at skills right across the economy, infrastructure —looking at the importance of place and the differences between places—science and research. These are cross-economy measures, which is a different approach from those taken in the past.
Secondly, a lot of efforts in previous industrial policy were correctly about innovation, but they concentrated just on new discoveries and new inventions. That is important—as I have made clear, we need to extend our excellence into the future—but there is a big opportunity to make differences for the companies that follow and in the regions that are not competing at the top level. If we can really increase productivity there, we can make a big difference to the whole economy. That has not been the focus of previous industrial strategies.
Sir Nicholas Soames (Mid Sussex) (Con)
May I congratulate my right hon. Friend on a bold and ambitious statement and give him a unique, once-in-a-lifetime chance to get his new training plans for technical colleges off to a tremendous start? In Haywards Heath in my constituency there is a sixth-form college that was bankrupted by Labour’s ferocious education cuts and by corporate governance that would have done credit to Al Capone. It will shortly be empty, and would be a perfect starting place for one of his excellent new colleges.
Greg Clark
I am grateful to my right hon. Friend for that early pitch. He highlights the important point that we should have throughout the country a better and more reliable ability to provide technical education to those who can benefit from it. Many jobs are available in West Sussex but are not accessible for people who do not have the right skills. Our plan will help to solve that.
Lucy Powell (Manchester Central) (Lab/Co-op)
I welcome the Government finally accepting that we have a skills challenge in this country, particularly with the long tail of under-achievement. How does the Secretary of State square that with the huge cuts faced by further and adult education over the past six and a half years of his Government? Why is there not more emphasis on what can be done to close the productivity gap by investing in childcare and getting more women back to work, which is not even mentioned in his report?
Greg Clark
I shall say two things to the hon. Lady. First, as I said to the hon. Member for Norwich South (Clive Lewis), the Conservative-led Government’s task in restoring sanity to the public finances was absolutely foundational to a successful industrial strategy. Secondly, she will be aware that this Government have been particularly innovative in extending childcare to many people who previously were not able to access it. That is an important foundation on which we build.
Michael Gove (Surrey Heath) (Con)
Does my right hon. Friend agree that many of the highly impressive propositions on technical education in the Green Paper owe their origin to the work undertaken by our hon. Friend the Member for Grantham and Stamford (Nick Boles) when he drew up the skills plan that was laid before the House in July? Does he further agree that the success of specialist maths schools at King’s College London and the University of Exeter is an example that other universities should follow if they hope to hang on to their current high level of tuition fees?
Greg Clark
I endorse very warmly the due acknowledgement that my right hon. Friend makes to our hon. Friend the Member for Grantham and Stamford (Nick Boles), who made a massive contribution. In fact, I texted him yesterday to flag up the fact that many of the proposals in the Green Paper owe their origin to him. We wish him well in his recovery.
I commend very warmly the examples of the maths schools mentioned by my right hon. Friend. To expand maths schools throughout the country so that people with a real flair for maths can be pushed further and be equipped to go even higher in their ambitions is a fantastic thing. Whether in Exeter or London, that is a good template for others to follow.
Vernon Coaker (Gedling) (Lab)
My hon. Friend the Member for Manchester Central (Lucy Powell) pointed out that one of the things that have held back industrial strategies in this country for decades has been the skills gap. There is mention in the Green Paper of an overhaul of technical and vocational education; what this country needs is a cultural change—a shift to valuing technical, vocational and skills education as highly as academic education. Until that changes, the Secretary of State will not achieve what he wants, however much we all want him to.
Greg Clark
I agree with the hon. Gentleman’s analysis. I hope he will join us in making that change and approach this matter with a spirit of optimism and determination to make the change that the country needs.
Amanda Solloway (Derby North) (Con)
I welcome this common-sense statement. Does my right hon. Friend agree that the pillars will provide the ideal opportunity to enable regions to use their assets to the best effect for a more balanced UK economy, and to further grow the midlands engine for growth?
Greg Clark
I do agree with my hon. Friend. We are one of the most centralised countries in the world, but it is patently the case that our levels of prosperity are not uniformly high. We should learn from other countries and from what has worked well when we have devolved powers and given people who know what will make a difference locally a better ability to take those decisions.
Lilian Greenwood (Nottingham South) (Lab)
The Minister is right to make upgrading infrastructure a pillar of his industrial strategy, and I welcome the investment in HS2, but how can he claim to be providing greater certainty and a clear long-term direction when the east midlands’ top transport priority—electrification of the midland main line—has been paused, unpaused, delayed by four years and now dropped altogether? Does he not understand—this follows up on the previous question—that this uncertainty damages our economy, damages the east midlands rail industry and harms the region’s potential to grow exports?
Greg Clark
I expected the hon. Lady to welcome the commitment to upgrading infrastructure across the country. This is a Green Paper that is proposing priorities for the years ahead, and I had hoped that she would welcome that and the fact that the Chancellor has provided a 60% increase in infrastructure investment, which will benefit the east midlands and other parts of the country.
Sir Oliver Letwin (West Dorset) (Con)
I strongly welcome this Green Paper, particularly three elements of it: Mark Walport’s battery review; the special sector deal for new ultra-low emission vehicles; and the considerable efforts to create a hub for autonomous vehicles. Does my right hon. Friend agree that those three together should give the UK the opportunity to become one of the world’s leading producers of the electric and autonomous vehicles that we will all be driving 20 or 30 years from now?
Greg Clark
I do agree with my right hon. Friend. An industrial strategy offers us the opportunity to align policies that reinforce each other. We have some of the world’s best researchers in energy storage, and one of the world’s most effective, efficient and innovative automotive sectors. We are one of the leaders in renewable energy through offshore wind. If we bring them together, one will reinforce the other to give us this chance to be a world leader in a set of technologies that, under any reasonable estimate, seems likely to be taken up around the world in the future.
Stephen Timms (East Ham) (Lab)
The last thing we need is 10% tariffs imposed on autonomous vehicles. The Secretary of State is right to make the point that we have been the leading destination in Europe for overseas investment, but much of that was from companies outside Europe wanting to gain access to the single market, which the Prime Minister has now told us we are going to leave. Does he believe that the UK can remain Europe’s leading destination for inward investment outside the single market?
Greg Clark
Yes, I do. I said at the beginning of my statement that, as a Government and, hopefully, a country that believe in free trade, we want to have the best possible access to the single market. We continue to be a very attractive destination, but we want to be even more attractive, which is why we have set out our commitment to upgrading science and research, building better technical skills, and improving our infrastructure. Those are investments and policies that will enhance the reputation and attractiveness of the British economy.
John Redwood (Wokingham) (Con)
When reviewing procurement, will the Government ensure that, under this new strategy, we will find all those areas where British companies can supply goods better and cheaper and give them the contracts? At the moment, we are importing large quantities of military vehicles, building materials, steel for submarines and medical equipment, all of which we could make competitively here if we had an intelligent Government customer.
Greg Clark
My right hon. Friend is right. He will see that there are various proposals on procurement that I hope will have his support. One in particular opens up Government procurement to smaller and medium-sized enterprises, which, too often, have found that the bureaucracy associated with procurement regimes has kept them off the list. That is something that we can reform.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Green Paper rightly identifies the crucial role that better connectivity to regional airports could play in growing economies and highlights the vital importance of the Emirates route from Newcastle airport, which has significantly increased exports from the north-east. What discussions is the Secretary of State having with Treasury colleagues about the impact on airports such as Newcastle of devolving air passenger duty to the Scottish Government?
Greg Clark
In the context of a Green Paper on industrial strategy, I will await the representations from the hon. Lady, but I am pleased that she acknowledges the emphasis that we have placed on connections to every region of the country—not just by road and rail, but through airports—and the importance of establishing links to other nations with which we can have good trading relationships.
Sir Alan Haselhurst (Saffron Walden) (Con)
How much priority does my right hon. Friend give to the establishment of a digital railway? Will he encourage Network Rail in its plans to bring this technology to the Great Eastern main line, and hopefully to the West Anglia main line as well, because then the new trains that are on order could be equipped to take advantage of this in advance, rather than retrospectively at greater expense?
Greg Clark
My right hon. Friend is absolutely right. That is one of the proposals in the Green Paper that I hope will have his support through the consultation.
Fiona Mactaggart (Slough) (Lab)
The Green Paper rightly focuses on productivity, but there is one area of infrastructure where Britain lags enormously behind all our competitors: the cost of childcare. Childcare costs more in Britain than it does in every other OECD country apart from Switzerland—it takes up over 40% of the average wage—yet it is hardly mentioned in the Green Paper. That is the way to liberate the talent of women. What is he going to do about it?
Greg Clark
The Green Paper invites comments and proposals, so I look forward to seeing the right hon. Lady’s response to it. As I said earlier, the Government have taken very seriously the importance of childcare in allowing women and men to return to work in good jobs, and we have made great progress. I will be interested to read her response to the consultation.
Chris White (Warwick and Leamington) (Con)
I welcomed the opportunity to join the Secretary of State on Friday for his visit to the Warwick Manufacturing Group, an institution that represents many important elements of this industrial strategy. Does he agree that the midlands can play a leading role in the development of such a strategy, as it is home to world-class research, advanced manufacturing and a skilled workforce?
Greg Clark
I agree with my hon. Friend. One of the things that I found striking when visiting the National Automotive Innovation Centre, a fantastic centre that is being built, is the fact that as well as having research and development facilities that will be available to large companies and small challenger firms, there is on the same site a school that will take in 1,000 apprentices a year to equip them with the skills the motor industry across the west midlands can benefit from. That is a very good example of how research and development can tie in with the agenda of driving improved standards of technical skills.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
If the Secretary of State is serious about building an industrial strategy that works for the whole country, and that encourages and maximises the opportunity for research and innovation, there must be space in it for the development of marine renewable energy—wave and tidal power. World-leading work on that is being done in my constituency at the European Marine Energy Centre. Will he visit and see for himself the way in which our island communities can help to build the strategy that he says he wants to create?
Greg Clark
I would be delighted to visit the right hon. Gentleman’s constituency—it is quite a time commitment, but I am sure it would be worth it. He will see when he reads the Green Paper that there are a number of sources of support for innovation. Obviously, in a competitive way, the research and development funding is available for scientists and researchers to bid for. There is also a chapter on the green economy that makes suggestions on how we can ensure that we get industrial advantage as well as keeping costs low for renewables. Both routes might be applicable for wave and tidal technologies.
Amanda Milling (Cannock Chase) (Con)
I have been calling for ambitious, bold and visionary redevelopment plans for the Rugeley B power station site to attract businesses that will create highly skilled jobs, so I welcome my right hon. Friend’s statement and the Green Paper. Does he agree that the new, modern industrial strategy will provide the framework and conditions to help deliver this vision for Rugeley?
Greg Clark
I am grateful to my hon. Friend for her question. I remember visiting that site with her, and it has great potential not just to be a home for the start-up businesses that are very important in our economy, but as a place where technical skills can be imparted to the next generation of her constituents so that they can have good, well-paid and satisfying jobs.
Julie Elliott (Sunderland Central) (Lab)
I welcome some of the things in the Green Paper on the future of industry and our strategy moving forward, but to tackle those things, we have to secure what industry we have now. On Friday, Carlos Ghosn, the chief executive officer of Nissan, said he was going to revisit the competitiveness of the plant in Sunderland. What is the Minister’s view on that and on securing the jobs that already exist in Sunderland?
Greg Clark
The decision to back Sunderland and to build the two new models here was a significant moment for the hon. Lady’s constituents and for the country. It is true that all investors, whether domestic or international, constantly look to make sure that they are competitive, and what every page of the Green Paper does is show our determination to make sure that this economy is competitive now and into the future and to take the actions that will make it so.
Richard Fuller (Bedford) (Con)
I welcome this wide-ranging discussion of Government policies at this time, even if the broad buffet of good things outlined will unleash a torrent of insatiable demands, not least from the Davos business leaders jetting back with their Government advisers to barge their way to the table. Will my right hon. Friend therefore assure me that his agenda will be set by entrepreneurs? Will he be honest about the fact that, for every sector that is favoured, other sectors of the economy will be shunned? Will he assure me that he understands that there are no magic levers in his Department saying “raise productivity” or “improve skills”? Those things eluded his predecessors, and they will likely elude him.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. What I would say to everybody is that we still have a lot of people standing, and we still have a lot of business. In order to get everybody in, can we have brevity, both in questions and answers?
Greg Clark
My hon. Friend is right. The essence of our strategy has to be to support the ability of people to compete and to make life difficult for the incumbents. There are no cosy clubs for the incumbents, and the test of our support in sectors is whether it helps new businesses to emerge. That is extremely important.
Hannah Bardell (Livingston) (SNP)
The Federation of Small Businesses reported last year that significant numbers of women are starting small businesses and enterprises. Is the Secretary of State not therefore surprised, as I am sure the rest of the House is, that there is no mention of women in this industrial strategy, no mention of inclusion and very little mention of diversity? Will he undertake to review that?
Greg Clark
Throughout this document, we want to close the gaps that mean that we do not achieve our full performance, and that is absolutely the case when it comes to the position of women at the highest levels in science, for example, and in research. As the Minister in the Department, I have been successful in the past in driving the appointments under my gift to increase the proportion of women at the top level. However, the hon. Lady is absolutely right that, when there is under-representation of people of talent, the whole economy suffers, and that should be corrected.
Stephen Crabb (Preseli Pembrokeshire) (Con)
I strongly welcome today’s statement and the consultation paper. When we visit large innovative manufacturers such as JCB, Toyota and Airbus, they all speak about the importance of the relationship with their local further education colleges. Does my right hon. Friend agree that one of the objectives of the strategy should be to replicate examples of excellence and to drive up standards in the FE sector so that even more workers and employers share in a picture of world-class skills education?
Greg Clark
My right hon. Friend is absolutely right. One of the proposals on which we are consulting is to have much better connections between local employers and further education to make sure that the skills that are being provided are those that can be taken up immediately in these industries.
Albert Owen (Ynys Môn) (Lab)
I very much welcome the statement by the Secretary of State and his indication that he will work across the country, including with the devolved Administrations. On skills and low carbon, he and I both want to see a successful lower-carbon energy sector; in particular, he mentions nuclear. One of the concerns that nuclear workers have is that their conditions are being undermined by this Government. Will he agree to work with me and meet me to discuss this issue, because we need those skills bases to build on for the future?
Greg Clark
I am grateful for the hon. Gentleman’s welcome. I should mention that I did not say to the hon. Member for Aberdeen South (Callum McCaig) that as part of our proposals we will work very closely with the devolved Administrations in all parts of the United Kingdom, and I look forward to doing so. I am always happy to meet the hon. Member for Ynys Môn (Albert Owen).
Neil Carmichael (Stroud) (Con)
I take great pleasure in welcoming the character and ambition of this industrial strategy, which is exactly the right direction of travel. I also salute the focus on technical skills. Does the Secretary of State agree that it is very important to create the right pathway through our schools system to these institutions so that we encourage young people to consider from the very start the STEM subjects—science, technology, engineering and maths—on which he has focused, because that is a combination that will lead to high wages and high skills?
Greg Clark
The Chair of the Education Committee is absolutely right. I hope that he and his Committee might make a contribution to the consultation to help us as we establish precisely that pathway, which starts in school but goes beyond people’s commencement of work, because people often need to retrain and take on new skills during their working life.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I welcome the desire to transform technical education—something of a recurring theme ever since the days of Prince Albert. In trying to help the Secretary of State to make it a success this time, may I ask him to pay greater attention to the 14 to 19-year-olds at university technical colleges like the one at Aston University? Could I persuade him to give the training levy to the newly elected regional mayors, who can then make strategic training decisions that are appropriate to the regions they represent?
Greg Clark
The right hon. Lady makes two important points. First, as others in the past have recognised, it is vital to recognise the importance of technical education and to improve it, and that is certainly our intention. On the particular proposal that she mentions, if she would care to discuss it with me, we could feed it into the consultation.
Sir Desmond Swayne (New Forest West) (Con)
Where does the crucial role of free markets sit in this strategy?
Paul Flynn (Newport West) (Lab)
Newport has suffered grievously from the neglect of steel, but it is now having a mini-revival with the reopening of the site. Steel does not travel well or cheaply. Does the Secretary of State agree that if a new prosperity for manufacturing industry is to be created, it must be constructed on foundations of steel?
Greg Clark
Steel is a very important sector, and it needs to compete in the world in which we find ourselves. The discussions that I have been having with the steel industry are based around a strategy that it is pulling together to make British steel competitive in the years ahead.
Bill Wiggin (North Herefordshire) (Con)
The New Model in Technology and Engineering, or Hereford University as it should properly be known, has received tremendous support from the Secretary of State’s Department, but will the £170 million that he has promised in this statement be too late for Herefordshire, as we only have until 28 January to apply for new funding?
Greg Clark
My hon. Friend is right to point out the prescience of his friends and neighbours in Herefordshire in making their proposal. This is a very good example of precisely the sort of reform that we need, and I think that its prospects are pretty bright.
Gloria De Piero (Ashfield) (Lab)
We heard no mention of former coalfield communities such as Ashfield that still mourn the loss of well-paid jobs in the pits. I understand that this is a Green Paper, but what new jobs or tangible differences does the Business Secretary hope to see in communities such as mine, and by when?
Greg Clark
There is very much a reference to communities such as those that the hon. Lady mentions. When I talk about parts of the country that have fallen behind the best performing places in terms of productivity, they are the areas and towns that we have in mind—that is essential. It seems to me that one of the foundations for future prosperity is to ensure that the level of skills is higher than it has been for the industries that are expanding. It is particularly in areas such as hers that that transformation can have the greatest effect.
Graham Evans (Weaver Vale) (Con)
I was delighted earlier today to welcome the Prime Minister and, indeed, the Secretary of State to the marvellous Sci-Tech Daresbury in Weaver Vale to unveil the Government’s industrial strategy for the UK. Does my right hon. Friend agree that the £556 million boost for the northern powerhouse, alongside the £4.7 billion fund for science, technology and innovation, will help to create high-skill, high-wage jobs, helping to close the north-south divide?
Greg Clark
I was delighted to be back in Daresbury, which I have visited several times with my hon. Friend.
Greg Clark
Clearly lots of good things happen in Daresbury—[Interruption.] Some better than others, it is pointed out—that is a little mean.
My hon. Friend the Member for Weaver Vale (Graham Evans) mentions two things. The first is the devolution through the local growth fund, which is making a big difference across the country by putting more funds in the hands of people with the knowledge of what is needed locally to make a difference. The second, of course, is the big investment in research and development, of which impressive facilities such as that in Daresbury will make good use.
Chris Bryant (Rhondda) (Lab)
Mobile technology is a very important part of modern infrastructure, but may I urge the Secretary of State to be cautious when he looks at Ofcom’s figures? I suspect that many of us in the Chamber have looked at its maps that say, “Yes! Universal coverage with 3G and 4G—no problems at all,” only to find that the situation on the ground is phenomenally difficult. According to Ofcom, Porth—and this building, for that matter—have perfect access to all four mobile signals, but that is not true, is it?
Greg Clark
The hon. Gentleman makes an important point. When we talk about infrastructure, digital infrastructure, whether it is mobile or broadband, is very important. For businesses that depend on it, it is about dependability and reliability, not theoretical availability. That is very important, so it forms part of our approach.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Secretary of State rightly pointed out that 1970s’ industrial strategy was flawed by the fact that it almost exclusively focused on big industry. Will he ensure that his industrial strategy does not repeat that mistake by focusing exclusively on large, mature economies at the expense of medium-sized, emerging economies? Together, they represent the future.
Greg Clark
My hon. Friend is absolutely right. That is one of the reasons why much of the proposals are cross-cutting, rather than about particular firms. It is also why there is a particular emphasis on helping small businesses to grow and new businesses to be set up.
Nic Dakin (Scunthorpe) (Lab)
Steel is a key product for all the infrastructure projects that the Secretary of State mentioned, including Hinkley C, Heathrow and High Speed 2, so I welcome his statement that there is likely to be a sector deal for steel. What does the steel industry need to do to make sure that it achieves that deal?
Greg Clark
The steel industry is already embarking on a consideration of how it can plan out its future. I have encouraged it to do that—although it needed no encouragement, because it is keen to do so—and I look forward to seeing the fruits of that during the weeks ahead.
Antoinette Sandbach (Eddisbury) (Con)
I welcome the recognition that rural broadband is particularly important for increased GDP growth. Will the Secretary of State make a commitment that no small rural business will be left behind when it comes to digital connectivity?
Greg Clark
My hon. Friend makes an excellent point. We want to help everywhere to achieve its potential. We know that the prosperity of many rural areas is held back if they do not have good digital connectivity, so that is one of the ambitions that we set out in the Green Paper.
Stephen Kinnock (Aberavon) (Lab)
Given the vital nature of steel as a foundation industry, it is pretty astonishing that it gets only one passing mention on about page 100 of this Green Paper. May I commend to the Secretary of State the report “Steel 2020”, which was produced by the all-party group on steel and metal-related industries? May I ask him to read it and perhaps come to a future meeting of the all-party group so that he can explain why steel has not been given a sector deal in the Green Paper, and why it seems to have been airbrushed out of the strategy so far?
Greg Clark
I am afraid that the hon. Gentleman talks nonsense. I have had very cordial and successful meetings with the steel industry, and it is excited about the prospects of working strategically for its future. I have had the pleasure of attending meetings of the all-party group in the past, and I look forward to doing so again.
Andrew Selous (South West Bedfordshire) (Con)
Last Tuesday, the Chancellor described the roll-out of ultra-low emission vehicles as “disappointing”. We have 87,000, and the Government want 1.6 million by 2020. Will the Green Paper lay out a reliable road map to enable us to hit that target, as it is also a key part of improving our air quality?
Greg Clark
My hon. Friend is right that there are significant opportunities in the roll-out of electric vehicles, not just in the transport sphere but in our energy systems. An electric vehicle is, among other things, a unit for storing electricity. Combining and making connections between these sectors is good for consumers, industry and the resilience of the country.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
As the Secretary of State knows, the automotive industry is a major contributor to the greatness of the industrial heartland in the north-east, yet the Prime Minister’s indication that there will be a hard Brexit has made many businesses across the country and in the north-east nervous, including Nissan in my constituency. Will the Secretary of State ensure that the consultation fully addresses those concerns, and supports the success of—and, hopefully, with regard to electric vehicles and batteries, the future expansion of—this vital industry?
Greg Clark
The hon. Lady is right to emphasise the importance of being at the cutting edge of research and development in the automotive sector. That is one of the reasons why many car companies find Britain an attractive place to base, which is important. When it comes to the discussions about Brexit, we are clear—the Prime Minister has been clear—that we want to have a free trading relationship with our friends and neighbours in Europe, and that is the way in which we will approach the negotiations.
Mark Menzies (Fylde) (Con)
As you are only too well aware, Mr Deputy Speaker, the north-west of England is very much the hub of the nuclear sector in the UK. Can the Secretary of State shed some light on what thinking he has given to ensuring that people in the north-west of England are the prime beneficiaries of the new supply chain that will be emerging in the nuclear sector?
Greg Clark
My hon. Friend is absolutely right that there are huge opportunities through the development of new nuclear, which will require the training of a new generation of nuclear engineers and technicians. It is important that that is in place. There are also opportunities, not just in this country but around the world, to use our expertise in decommissioning to earn income for the UK and to create good jobs. There are big opportunities in the sector with regard to skills and the expansion of industries.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The Prime Minister’s strategy lacks concrete proposals for Wales. Considering our £5 billion of trade and good net surplus with the EU, Wales is set to suffer most from the pursuit of a brutal Brexit. Does the Minister accept that doing nothing to counter the loss of EU convergence funding will serve only to exacerbate the already significant geographical wealth and earnings inequalities that characterise the British state?
Greg Clark
I urge the hon. Lady to read the Green Paper, in which she will see an absolutely crystal-clear commitment to making sure that all parts of the United Kingdom are able to share prosperity. That is good for those places and good for the UK as a whole.
Oliver Dowden (Hertsmere) (Con)
I welcome the Green Paper’s recognition of the vital role of the creative industries, the one sector that grew throughout the whole of the last recession. Will the Secretary of State reassure me that that extends to the TV and film industry? The recent hit Netflix series “The Crown”, which was filmed in my constituency, is a wonderful example of how jobs, investment and exports can be generated by the sector. Does he agree that that requires not only the right skills, but the requisite supply of commercial space, particularly in the south-east?
Greg Clark
I agree with my hon. Friend. The creative industries, together, have some claim to be Britain’s most successful sector in recent years—they have been growing very strongly. Sir Peter Bazalgette has agreed to work with the industries to look at what they need to build on that success in the future and to continue to create the great jobs they have produced. I look forward to that work.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I warmly welcome the Government’s new industrial strategy Green Paper, although it implicitly admits that the past six and a half years without an industrial strategy have been wasted. Having said that, the Materials Processing Institute has made a bid to be a metals catapult, and there is no mention of carbon capture and storage. Those issues are critical to the ability of any energy-intensive industries to go forward. Of real concern is certain BEIS civil servants’ views of virgin steelmaking capacity, and certain advice going to Ministers in relation to importing steel, rather than relying primarily on British-made steel, whether that is from Scunthorpe or Port Talbot. Will the Secretary of State please get up at the Dispatch Box and rule that out?
Greg Clark
I do not recognise the issue that the hon. Gentleman mentions, but if he speaks to me later, I will be able to find out more about it. I am grateful for his welcome to our approach. I argue strongly that it builds on some of the successes we have enjoyed in recent years, not least by devolving powers and funds to local areas and looking to create institutions that can conduct research and development that now has a worldwide reputation. However, we cannot be complacent; we need to continue that and build on it in the future.
David Rutley (Macclesfield) (Con)
I congratulate my right hon. Friend on his impressive industrial strategy, which works hand in glove with the Government’s Brexit plans to strengthen business confidence further. The new strategy also underpins the Government’s commitment to the life sciences. With that in mind, will my right hon. Friend accept an invitation to come to Macclesfield to see AstraZeneca’s site—the largest pharmaceutical site in the UK—to find out more about its exciting growth plans for the future?
Greg Clark
I will, indeed. Talking about the life sciences in the north-west touches on one of the themes of the Green Paper, which is the interaction between sectors and places, and how we can build institutions that can encourage smaller businesses to benefit from the presence of a range of other businesses in that sector. We have further work to do, and my hon. Friend will be expert adviser on it.
Neil Gray (Airdrie and Shotts) (SNP)
A Green Paper should set out the Government’s ambitions in a particular policy area, and the central focus of an industrial strategy should be on jobs. I asked the Secretary of State on 13 December 2016 about the disability employment gap and how the industrial strategy could help to support the Government’s ambition to halve that gap by 2020. Will he explain why the words “disability” and “disabled” do not feature in the Green Paper?
Greg Clark
The Green Paper does mention the fact that we will set out further measures on employment policies. I have agreed with the hon. Gentleman in the past that, just as I said in relation to the question from the hon. Member for Livingston (Hannah Bardell), when people’s contribution is not adequately made use of, it is a loss and an injustice for not just the individuals concerned, but the whole of the country and the economy.
Justin Tomlinson (North Swindon) (Con)
This is a very welcome and ambitious Green Paper. In Swindon, we have embraced development to attract new businesses and jobs, but to be able to reach our full potential, we need to unlock additional land and infrastructure funding quickly. How can that process be speeded up?
Greg Clark
I am keen that we should be agile and fleet of foot. It is important that land and premises are available, not least for businesses that are expanding, or those that are being founded or located for the first time. My right hon. Friend the Communities Secretary has that very much in mind as part of his reforms to the planning system.
Kelvin Hopkins (Luton North) (Lab)
UK manufacturing and exports are benefiting greatly from the more sensible and appropriate parity of sterling, but much more needs to be done to rebuild Britain’s industrial strength. Will the Secretary of State therefore give serious consideration to re-establishing the National Economic Development Council to provide a forum for employers, trade unions and Government to consult and advise on how British industry may be promoted for the future?
Greg Clark
I am interested in the hon. Gentleman’s proposal. I had not thought of reviving a body that I think was associated with a different type of industrial strategy. The council was about the big employers sitting down with Government. As some of my hon. Friends have pointed out, the approach that we want to take is more about creating conditions in which insurgents, new businesses and challengers to existing businesses have a central place. I am not sure that his suggestion would be the right approach, but I would be interested in hearing from him about it.
Mr Philip Hollobone (Kettering) (Con)
Small and medium-sized enterprises are the bedrock of local economic endeavour in Northamptonshire, and light industry, small-scale manufacturing and engineering firms are the backbone of the local economy. How can the Secretary of State best demonstrate to my constituents that his new industrial strategy is relevant to them?
Greg Clark
In a number of ways, I think. My experience of such businesses is that sometimes what constrains their ability to fulfil growing order books is a lack of skilled staff whom they can employ. The big focus on technical skills, and on improving the standard of technical education by working closely with employers, will make a big difference, especially to small and medium-sized business that cannot operate large training institutes themselves.
George Kerevan (East Lothian) (SNP)
How does the Secretary of State reconcile his commitment to innovation and insurgency with the wholesale pillage of the cream of British high-technology firms through foreign takeover, not least the current takeover by Mastercard of VocaLink and the prospective sale by the Government themselves of the Green Investment Bank to Macquarie?
Greg Clark
I regard it as a badge of pride that this country is open to overseas investment, from which we have benefited hugely. When I was with my hon. Friend the Member for Warwick and Leamington (Chris White) in the west midlands on Friday, we met the chief executive of Jaguar Land Rover, which is owned by an Indian company and has been a force for great good in the area. I want to be open to overseas investment.
John Glen (Salisbury) (Con)
I warmly welcome the rigour of the analysis underlying the Green Paper. When the Secretary of State considers the future of the aerospace growth partnership, will he think about what happens across Government, particularly at Boscombe Down with the long-term relationship between the Ministry of Defence and QinetiQ, and look for opportunities to grow such areas of real expertise?
Greg Clark
The aerospace growth partnership has been a success, and we are committing not only to continuing that now very successful institution, but to learning lessons for how other sectors might create similar institutions themselves.
Jim McMahon (Oldham West and Royton) (Lab)
I absolutely support the need for an industrial strategy, so I welcome the Green Paper on that basis, but the proof of the pudding will be in investment and whether the money is there to support the proposals. May I invite the Secretary of State to Oldham College in my constituency so that he can hear from the principal and the governing body about how the lack of funding in schools is undermining the efforts that are pointed out in the industrial strategy?
Greg Clark
I hope that the hon. Gentleman will take the opportunity, through a consultation that seeks to establish as much common ground as possible on our priorities for the future, to work with colleges and employers to ensure that the reforms that are needed are put in place so that we can equip his and all our constituents with the skills that they will need to get good jobs in the future.
Kit Malthouse (North West Hampshire) (Con)
I applaud the Secretary of State for putting life sciences front and centre of his industrial strategy and point out that the industry’s largest customer is the national health service. Will he therefore confirm that, as part of his review of procurement, the NHS’s inflexible and unimaginative procurement processes will fall within the scope of the review, not least in relation to drugs, devices, therapies and diagnostics?
Greg Clark
It is evident that this is a whole-Government Green Paper; not just my Department but all Departments are joined in it, and the Health Secretary is an enthusiastic participant and will want to be part of those conversations —advised, I am sure, by the expertise that my hon. Friend brings to the subject.
Alan Brown (Kilmarnock and Loudoun) (SNP)
When the Secretary of State met the four Ayrshire MPs to discuss the Ayrshire growth deal, we had a very positive and encouraging discussion, and we welcomed that. He suggested that the growth deal aligned with the Green Paper, and having now seen the 10 action points, I agree. Will he confirm that he still believes that the Ayrshire growth deal aligns with the industrial strategy? If so, will he also commit to working with his Treasury colleagues to secure some money for it?
Greg Clark
I strongly believe in the city deals and growth deals, and I thought the presentation from the hon. Gentleman and his colleagues showed a very good ambition, bringing together the industrial strengths and opportunities of their area, so I wish it every success. These deals need to be negotiated, but he will know that in Scotland we have a good record of making progress on city and growth deals.
Jo Churchill (Bury St Edmunds) (Con)
I welcome the statement. As the Secretary of State knows, the east of England enjoys an excellent ecosystem for life sciences. Does he agree that the strategy provides industry and business, particularly the life sciences sector, with the opportunity to bring their ideas to the door in order to truly drive their sectors and upskill our workforce? Also, may I invite him to Bury St Edmunds, which sits beautifully next to Cambridge and has both an enterprise zone and West Suffolk College, which would make an excellent institute for technology?
Greg Clark
That is an enticing invitation—it would be very nice to visit Bury St Edmunds—but I am in danger of filling my diary for the year. My hon. Friend’s points resonate with the themes of the Green Paper, which is about ensuring that we have the right institutions and skills to support the businesses of the future. The strategy will be business-led. It is not about the Government directing business; it is an invitation to business, employers and consumers to respond by saying what they need from it, rather than the Government simply saying, “This is how it’s going to be”.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
The Secretary of State briefly alluded to the importance of migration policy for the industrial strategy, productivity and innovation, so will he consult on taking over responsibility for certain parts of migration policy, seeing as the Home Office is making a mess of it? Even better, given his warm words on the importance of devolution, will he consult on devolving immigration policy so that the nations and regions can use local knowledge to determine the local skills needs?
Greg Clark
My responsibilities are broad enough and keeping me busy without my taking my right hon. Friend the Home Secretary’s job. That said, the hon. Gentleman’s question gives me the opportunity to re-emphasise that the strategy is a whole-Government approach, and of course it is important that the brightest and the best can continue to be employed here and to make the contribution they do to the whole UK economy.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
There is obviously much to be welcomed in the strategy, but may I express my particular support for the importance being placed on science investment and developing skills? To that end, will my right hon. Friend, first, seize the moment and make the case across Government for increasing spending on science and technology to 3% of GDP, which many of our competitor nations have done and which the Science and Technology Committee, which I chair, has called for? Secondly, will he please publish the digital strategy as a matter of urgency?
Greg Clark
I am grateful to the Chairman of the Select Committee for pushing us in that direction. He will see in the Green Paper that we are clear sighted about the need to invest in science and research, and this is not just Government investment; we want to create the conditions in which the private sector can invest in research and development. On the digital strategy, that is very much part of the programme that this industrial strategy is leading, and he will not have long to wait before he sees it.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I welcome the Green Paper, and the Secretary of State is right to try to position us for the jobs and sectors of the future, but what does he propose to do in the here and now? Many of my constituents working at Doosan Babcock and Chivas Brothers face redundancy. What can he do for them?
Greg Clark
The House of course knows of the situation at Doosan Babcock. Whenever any business makes redundancies, or redundancies are threatened, that is a worrying time for the employees. We are active, through Jobcentre Plus and our other agencies, in making sure that whatever opportunities are available, whether new jobs or training, are offered. In that respect, we generally have a good record, including in the hon. Gentleman’s constituency, and the Green Paper takes up that approach. It acknowledges that businesses will close from time to time, but that the most important thing is that we equip those workers with the right skills to get good jobs in the future.
Rishi Sunak (Richmond (Yorks)) (Con)
I welcome the Government’s commitment to skills. Does my right hon. Friend agree that creating a UCAS-style system for apprenticeships could realise the Government’s ambition by giving technical education greater parity of esteem with universities, making it easier for young people to find local vacancies and increasing the number of SMEs offering apprenticeships?
Greg Clark
I am grateful to my hon. Friend for his words and for his contribution, which, as he will see when he reads it, features prominently in the Green Paper. It is an excellent idea, and I hope he will promote its success in the years ahead.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Last but certainly not least from the Opposition, I call the voice of Chester, Mr Chris Matheson.
Christian Matheson
I would hope not least, Mr Deputy Speaker.
The Science, Engineering and Manufacturing Technologies Alliance has calculated that there is an annual shortfall of 50,000 skilled engineers and that this will aggregate to about 800,000 by 2020. How does the Secretary of State plan to close that gap? While he is at the Dispatch Box, will he take the opportunity to scotch the recent press reports and confirm that all the steel in HS2 will be made at UK plants, including Shotton, where many of my constituents work?
Greg Clark
On the first point, it is clear that our investment in and focus on technical education goes precisely to meet the challenge that the hon. Gentleman identifies—around the gap between the needs of employers and the skills available in the workforce. On procurement for HS2, he will know that we have changed the guidelines to enable the contribution from British steel to be viewed on a fairer basis, but obviously that is part of a process that HS2 will need to go through to procure the product.
Robert Jenrick (Newark) (Con)
Given the failed industrial policies of the post-war period—unforgiveable sums of taxpayers’ money were wasted trying to prop up and pick winners—I am reassured to hear the Secretary of State say that his approach will be a much broader and more intelligent one. With that in mind and with a view to horizontal reforms, where do tax simplification and deregulation—arguably two of the greatest supply-side reforms that helped to lift the British economy out of the doldrums in the 1980s—fit into his strategy?
Greg Clark
They are both important. The third of the three challenges I mentioned at the beginning of my statement was to make and keep the UK as one of the best places in the world to found or grow a business, and both of the policies my hon. Friend mentions are crucial to that. This country has succeeded in creating and hosting new businesses in recent years partly because we in the Conservative party have had that very much in mind.
James Heappey (Wells) (Con)
I congratulate the Secretary of State and his team on the Green Paper and welcome the recognition that the digitisation of our energy system and the inclusion of storage and demand-management technologies will improve productivity as keenly as any other infrastructure improvement. Does he agree that the UK could and should be the world leader in clean tech, and does he share my view that the south-west would be an ideal focal point for the UK’s growth in that sector?
Greg Clark
I certainly agree with the first proposition; we have an opportunity there. On the second, I would say that my hon. Friend is commendably vigorous in his promotion of the south-west, which will have a very big role to play. So, too, will other parts of the country: Cumbria, for example, with its strong nuclear cluster; and the east coast with its expertise in marine engineering and supplying offshore wind. All parts of the UK can benefit from our leadership in clean growth.
Helen Whately (Faversham and Mid Kent) (Con)
I welcome the industrial strategy paper, especially its focus on science and skills, its building on local strengths and its addressing of institutional gaps. As my right hon. Friend knows, Kent has strength in life sciences, but a conspicuous institutional gap in its lack of a medical school—an institution from which life science innovations frequently emerge. I mention to my right hon. Friend that I am hopeful that this industrial strategy might be a vehicle for Kent to seek support for a medical school, and I would be grateful to him for any encouragement he might offer.
Greg Clark
I am grateful to my hon. Friend for her words. She will know that in life sciences, one proposal is to review what the sector needs to be able to support the small and medium-sized businesses in it, so that proposal might be something to be taken up.
Mr Alan Mak (Havant) (Con)
I congratulate my right hon. Friend on the statement and on the Green Paper. As he develops the industrial strategy, will he continue to support Britain’s leadership role in the fourth industrial revolution, and the new jobs, innovations and companies that are driving forward our growth? Will he encourage them to contribute to the Green Paper consultation, which I warmly welcome?
Greg Clark
I am grateful to my hon. Friend for all the work he has done to make sure that this country does not cede to others the energy and initiative to take advantage of what is termed the fourth industrial revolution. The pamphlet that he recently wrote is full of good ideas, and I hope that my hon. Friend and his colleagues who wrote the pamphlet will respond to the consultation.
Tom Pursglove (Corby) (Con)
I commend the Secretary of State’s statement, and I commend to him the report of the all-party parliamentary group on steel and metal-related industries, which has been published today. I hope that it will be useful as part of the ongoing discussions within government. The Government have made great strides forward in public sector procurement, so will my right hon. Friend make sure as part of this work that we do everything we can to transfer some of those principles into private sector procurement, too?
Greg Clark
My hon. Friend makes a very good point. I will certainly bear in mind what he said and will read closely the APPG report that he mentions.
Matt Warman (Boston and Skegness) (Con)
Any industrial or digital strategy must rely on transformative investment in broadband infrastructure. Can the Secretary of State reassure us that this is a strategy that will address not only the problems of the last 10 years, but those of the next 20 and 30 years, so we can plan for a world web with an internet of things and the fourth industrial revolution, which my hon. Friend the Member for Havant (Mr Mak) mentioned a few moments ago?
Greg Clark
My hon. Friend makes an excellent point. Our strategy must, of course, be forward looking and must be able to create the conditions in which investors and firms can make commitments now that are going to lead to our prosperity in the future. My hon. Friend’s frame of reference is absolutely right.
Maggie Throup (Erewash) (Con)
I warmly welcome the Green Paper on the modern industrial strategy, but will my right hon. Friend reassure my constituents in Ilkeston and Long Eaton that traditional industries such as lace-making and upholstery, which contribute so much to our local economy, will not get left behind?
Greg Clark
I am interested to hear this observation from my hon. Friend. We are talking about a consultation. It is important to participate in the new industries, so that through our research and development and scientific expertise we can take our place in that respect, but of course a lot of our existing industries make an important contribution to our economy and to employment, and we want to make sure that they can prosper, too.
Marcus Fysh (Yeovil) (Con)
I welcome these proposals and note that in all 10 of the areas of focus, the Yeovil area and its aerospace cluster present outstanding and crucial opportunities to optimise our potential. Will my right hon. Friend visit my constituency and help me to promote a local centre of excellence, an institute of technology, to build local skills and actively to encourage inward investment from the likes of Boeing, so that in partnership with great local companies such as Leonardo, we can deliver the skills and jobs of the future and maintain our strategic abilities in helicopters?
Greg Clark
In my tour of the country—from Orkney to Somerset, it now seems—I will be delighted to look at the aerospace cluster in Yeovil. Companies reinforce each other by their presence, and as we know from experience across the world, when we have several companies all in the same sector, it is a source of resilience to local economies.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Last, but certainly not least, I call Steve Double.
Steve Double
Thank you, Mr Deputy Speaker. I know you have been saving the best for last.
Many references have been made to mobile technologies and electric vehicles as growth areas for the future. They both rely heavily on batteries. Will the Secretary of State therefore join me in welcoming last week’s news that large deposits of lithium have been found in Cornwall? This creates a great opportunity to build on our mining heritage in Cornwall and develop new industries around the extraction of lithium. Will my right hon. Friend confirm that this industrial strategy is designed precisely to support industries such as this one?
Greg Clark
I am interested to hear this—I had not picked up that news—from my hon. Friend. It is certainly true that the technological developments in energy storage, including batteries, provide a big opportunity. If Cornwall has an opportunity to contribute some of the raw materials for that, I am sure that this will be excellent news for the county.
Local Government Finance Bill
Monday 23rd January 2017
(7 years, 10 months ago)
Commons ChamberRead Full debate Local Government Finance Bill 2016-17 View all Local Government Finance Bill 2016-17 Debates Read Hansard Text
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
I beg to move, That the Bill be now read a Second time.
This Government have made no secret of their ambition to build a growing, international economy that works for everyone. A global Britain, however, needs local foundations. It is not enough to have world-leading, FTSE 100 exporters; we need thriving high streets, strong independent retailers and local economies that match the exceptional growth that UK plc has experienced since 2010.
The people best placed to lead that drive for growth are, of course, our local councillors. They know their communities better than anyone; they know which strengths to build on and which challenges to address; and they hold many of the levers required to deliver change. Yet in my many meetings with councillors and council leaders, I am often told that local authorities lack meaningful incentives to grow their local economies. They tell me that the system is over-centralised, that residents see no connection between the level of local taxation and the level of services they receive and that the proceeds of local growth disappear into national coffers, forcing councils to go cap in hand to Whitehall asking for funding. That is not good enough. Local authorities, local businesses and local communities deserve a better deal, and this Bill will provide it.
The Bill delivers far-sighted, long overdue changes that radically reform the way we fund local government. It ends the main central Government grant altogether, and instead allows local authorities to retain locally raised taxes. It encourages local growth and it supports local businesses.
John Redwood (Wokingham) (Con)
Does the Minister agree that a council such as mine that actively promotes growth incurs huge bills for new roads, new schools, new surgeries and new other public facilities, which are not adequately reflected in the amount of money we are allowed to retain from the taxes we raise locally or in the support we get from the central Government?
Mr Jones
I absolutely understand that local government has been complaining for far too long that the incentive to create growth is not there, particularly because of things such as the levy, which was implemented in respect of the 50% business rate retention scheme. As my right hon. Friend will know, that levy is being scrapped by the Bill.
This is not a Bill that increases spending and puts a greater strain on local taxpayers. Rather, it offers a focused package of reform that will encourage and support local growth, while we continue to live within our means. I will start with the commitment made in October 2015 that by the end of the current Parliament local government would retain 100% of locally raised taxes. In implementing our reforms, we will move local authorities away from dependency on central Government grant and towards greater self-sufficiency. Let me take this opportunity to record my gratitude for the substantial contributions made by many in local government, and in businesses, to the development of the reforms. The Bill is a major milestone in the process, and establishes the legislative framework for the reformed system. It reflects the significant input that we have received to date, and our collaborative approach will continue as we determine the detail of the implementation of the new system.
A key part of the new system will be the introduction of stronger incentives for local authorities to increase their business rate income. That will build on the current system of 50% business rate retention. Under the reforms, which we aim to implement in 2019-20, local government will retain about an additional £12.5 billion in revenue. To ensure that the reforms are fiscally neutral, authorities’ grant will be replaced by locally raised taxes for existing responsibilities, or they will be given new responsibilities. Those matters will be subject to separate discussions, and will not be dealt with in the Bill. However, the Secretary of State announced last week that the devolution of attendance allowance funding was no longer being considered as part of the business rate reforms, and I am happy to confirm that today.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
In the consultation paper that they published last year, the Government, suggested that attendance allowance might be passed down to local government—I am glad that that is not happening—and that the £3 billion public health grant, and the better care fund that is so crucial to local authorities that face a social care funding crisis, would be axed as part of the fiscal quid pro quo applying to business rates devolution. Is that still the Minister’s intention?
Mr Jones
As the hon. Gentleman will know, the Bill does not deal with the principle of what additional matters will or will not be devolved to local government. Social care funding is an extremely important issue. It is this Government who have given local authorities the opportunity to spend up to an additional £900 million on social care in the next two years, on top of the additional package of £3.5 billion to which we have given councils access. In total, we have given them access to an additional £7.6 billion in the spending review period, which is dedicated solely to adult social care.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Does the Minister accept that the Bill will significantly increase the rates demand on hospitals at a time when the health service is extremely hard pressed? For example, the rates demand on Queen Elizabeth hospital in Birmingham will rise to £7 million. If the Minister is willing to look at discretionary relief on public toilets, is he willing to look again at discretionary relief for hospitals?
Mr Jones
I am sure that, having perused the Bill, the hon. Gentleman will know that NHS hospitals do not feature in the increase to which he referred. I think he was referring to the 2017 business rate revaluation. That exercise has been undertaken by the Valuation Office Agency, which is independent of the Government. The Government have provided a package of transitional relief amounting to £3.6 billion, and NHS hospitals will be subject to the same transitional relief as other ratepayers whose business rate bill will increase as a result of the revaluation. As many Members will know, the revaluation was not designed to raise more or less business rate overall. It is a fiscally neutral exercise, which means that some business rate bills have increased and others have decreased as a result of the independent valuations made by the independent agency.
The Bill does not determine funding levels for individual councils. We continue to work with people throughout local government to deliver the fair funding review, which takes a wholesale look at councils’ relative needs and resources. We remain committed to implementing a new funding formula in time for the implementation of 100% business rates retention in 2019-20.
James Heappey (Wells) (Con)
Does the Minister agree that, although the devolution of business rates is extremely welcome, the funding gap between predominantly urban and predominantly rural authorities is already too wide? Does he agree that the review must ensure that that gap closes as soon as possible, and certainly does not widen?
Mr Jones
That, indeed, is why a rural services delivery grant was inserted into last year’s local government finance settlement, with its four-year deal. As my hon. Friend knows, this is not part of the Bill, but we are undertaking a fair funding review because local authorities in many parts of the country have apparently pointed out that the last proper needs assessment took place about 10 years ago, and that in many areas the demographic has changed completely in the intervening period. We are considering carefully how resources should be distributed across the system.
Bob Blackman (Harrow East) (Con)
My hon. Friend and I have recently shared many a happy hour debating homelessness reduction, but another issue now concerns me. Most local authorities have warmly welcomed the four-year funding settlement, but it is feared that the adjustments made to, for example, the new homes bonus have adjusted those figures. What consideration is my hon. Friend giving to adjustments to the overall four-year settlement to take account of the changes that the Department has made, which render some of these four-year settlements rather strange in comparison?
Mr Jones
As my hon. Friend says, we have spent many a happy hour debating the Homelessness Reduction Bill, which will return to the House for its Report stage on Friday. As one who is extremely savvy about these matters, as well as being a member of the Communities and Local Government Committee, he will know that the issue to which he has referred does not necessarily feature in this Bill, but does feature in the local government finance settlement, on which we have recently undertaken a consultation. We shall be responding to that consultation, and to points made by Members and local authorities throughout the country about the new homes bonus, one of which my hon. Friend has just managed to put on the record.
Richard Drax (South Dorset) (Con)
May I pick up on the point about the rural share? The 50% local share of additional business rates that are to be raised is fine in mainly urban areas, because there are more brownfield sites and areas to encourage businesses, but in seats like mine that are surrounded by every environmental designation from here to God knows where it is going to be far harder to raise this additional money, which of course local authorities desperately need.
Mr Jones
That is a valid point, and, like in the current system, going forward there will be redistribution; it will be one of the core principles within the system, because in setting up the system we must make sure there are not areas that fundamentally lose out just because they do not start from the same position as other areas in the amount of business rates collected. A number of hon. Friends have asked about rural areas and the fact that many of them are very dependent on very small businesses, many of which will be exempted from business rates completely by this Government’s £6.7 billion package on business rate relief. I can reassure my hon. Friend and other Members that the effect of the 2017 revaluation will be mitigated for local authorities, because the system will be reset to make sure areas do not lose out. Indeed, that will also be the case prior to the new 100% business rates retention system getting under way.
Mr Clive Betts (Sheffield South East) (Lab)
On the issue of redistribution, we currently have the needs assessment, and indeed the Government are going to conduct another review of needs before they start the new 100% business rates retention system. The House has information each year on the needs assessment within the local government financial settlement and, indeed, votes upon it. I understand, however, that in future we are not going to have that system; instead, we are going to have something called the principles of allocation statement, which is made and set for the rest of the period over which the system runs. The principles of allocation statement will not come to this House for approval, however. Why is the House being circumvented in this decision-making process?
Mr Jones
The hon. Gentleman is Chairman of the Select Committee and has a great deal of knowledge and commands a great deal of respect in the House on local government matters, but I say to him that we are now in a very different world from the one we were in only a few years ago, when local government collected the whole of the business rate incentive and gave it to the Government. In that sense, 80% of the spending of local government was distributed from central Government on the basis of the principles the hon. Gentleman mentions. Now we are moving to a system where by the end of this decade 100% of money within local government will be raised locally, and therefore Government will not year on year be redistributing the funding, which has been the case hitherto. The other point I would make, which has been well-recognised by local authorities in the last year on the basis that 97% of local authorities have signed up to a four-year deal, is that local authorities have asked for certainty of funding, which this system certainly will provide for them.
Dr Wollaston
I thank the Minister for giving way. He will know that the better care fund is an important redistribution mechanism, given the variable amounts that councils will be able to raise through the precept, which the Institute for Fiscal Studies estimates will raise £700 million over the next three years. Can the Minister give any encouragement on whether the better care fund will reflect the serious concerns around the problems with social care?
Mr Jones
I think my hon. Friend is referring to what we term the improved better care fund, which will go directly to local authorities. That funding has been brought forward as part of the spending review 2015. She will probably know that that funding effectively was obtained by changing the way in which the new homes bonus operates, and sharpening the incentive in relation to the way in which that system operates. As such, therefore, that additional money is not freed up quickly enough to do what she says. Although this year £105 million comes into the system, next year it will be £800 million and the year after that—the last year of the Parliament—it will be £1.5 billion. Alongside that, in this financial year we have also put an additional £240 million into the social care system as a dedicated social care grant, which again has been realised from additional savings made through the new homes bonus.
Mr Betts
I thank the hon. Gentleman for giving way a second time. I entirely accept his explanation in relation to the year-on-year arrangements, because there will not be a change every year in needs assessment as there currently is; that will be fixed for the period of a longer settlement. What is essential, however, is that right at the beginning of this new system, when the new needs assessment has been done and an allocation is agreed in the first principles of allocation statement, that comes back to this House so that we can take a view on it.
Mr Jones
As I said earlier, the hon. Gentleman commands a significant amount of respect in this House in regard to these matters, and, while he does not always realise it, there are Government Members who listen to the suggestions and concerns he raises, but I reiterate to him that we are moving into a different world, and that is why we have chosen to implement the system laid out in the Bill.
Mr Jim Cunningham (Coventry South) (Lab)
Given that the Minister is shifting the emphasis in terms of resources on to local government, how much does central Government expect to save as a result of this exercise?
Mr Jones
This situation is fiscally neutral. We expect the current expenditure of local government to be realised from the current local taxes that are raised locally, and there will be an additional £12.5 billion of spending that will also go to local authorities. As I said earlier, this Bill does not look at these items of expenditure—that is a separate principle—but we will certainly be looking to devolve additional responsibilities to local government, in discussion with local government and organisations such as the Local Government Association, which we expect to be fiscally neutral.
Mr Cunningham
The hon. Gentleman, whom I have a lot of respect for, must know that it is not really fiscally neutral, because central Government are saving money as a result of shifting the resources on to local government through the abolition of grants and so forth. Equally, he is asking local government to raise certain sums of money themselves, and we will surely reach a point where local government cannot sustain that. The important point is that central Government must be saving money—not necessarily his Department, but somewhere in the Treasury.
Mr Jones
As I said to the hon. Gentleman, an additional £12.5 billion will be going to local authorities. That will be on a fiscally neutral basis. I also point out that the whole principle on which this system is built is such that it will give local authorities the incentive to widen their business rates base and raise additional funding for providing local services as a result.
Several hon. Members rose—
Kevin Foster (Torbay) (Con)
The Minister will remember the time when we shared neighbouring councils. Does he agree that the biggest savings for the Treasury will be created by freeing and incentivising local authorities to create jobs and drive developments forward? This will allow local authorities to get people off benefits, into work and paying taxes. That will be the biggest financial benefit for the Government.
Mr Jones
As is often the case, my hon. Friend has hit the nail on the head. This is about raising local taxes that can be spent locally, but it is also about driving growth. The biggest win—and one of the most satisfying things for any of us in this House—is to see people moving into employment who were not previously working. What comes from this Bill will be a real driver for local growth.
Marcus Fysh (Yeovil) (Con)
Has the Minister looked at the Laffer curve? It is used in economics to indicate the position on the income tax collection spectrum of the optimum place to collect as much revenue as possible. We hear a lot about what this revenue can do for local government, but there is a limit on what businesses can bear, and some of the businesses in my towns are really struggling with business rates. What help can he give to local authorities to incentivise them to optimise business growth in order to optimise the collection of these taxes and the results for business at the same time?
Madam Deputy Speaker (Natascha Engel)
Order. Before I call the Minister again, I must point out that interventions are getting very long. Although we have plenty of time, it would be good if we could keep them a bit tighter. This would allow more people to take part in the debate. I call Marcus Fysh. [Laughter.]
Mr Marcus Jones
Thank you, Madam Deputy Speaker. Jones is a very popular name, although Marcus is perhaps less so. It is good to have a fellow Marcus in the House, and I am delighted by the point that he has raised. I do indeed recall the Laffer curve, albeit many years ago during my days of A-level economics. The Bill will set out a framework for local authorities to reduce the multiplier on the business rate and therefore reduce the tax rate. As he implied, that might well lead to businesses being attracted to a particular area, thereby creating additional revenue there.
Local authorities have made it clear that they want more stability and, as I mentioned to the Chairman of the Select Committee, they do not get that from the current system of annual discussions on local government funding. Councils have told us that they want longer-term arrangements, and 97% of English councils have signed up to our multi-year deal. The Bill will deliver that much-needed stability and certainty, amending the current local government finance settlement process and the related approach to the setting of council tax referendum principles. We will continue to protect local authorities from the impact of sudden reductions in income, and the Bill will provide a framework that will help councils to manage risk and ensure that they have better protection from the impact of successful appeals, so that they can focus on delivering the services that their residents and businesses need.
Kevin Hollinrake (Thirsk and Malton) (Con)
My hon. Friend talks about protecting local authorities from changes. I welcome his commitment to a fairer funding formula, but is he aware that nine of the 10 authorities with the highest spending power in the country are in London, yet nine of the 10 lowest council tax authorities are also in London? Does he agree that a fairer funding formula needs to take into account the cost drivers behind need in local areas and to be for local people, rather than simply taking into account what has gone before? Rather than being about regression, this needs to be about need and the cost of delivering the services.
Mr Jones
My hon. Friend is certainly correct in saying that we need to take a significant look at how funding is provided across the system of local government. As I have pointed out on a recurring basis, the principles for the fair funding formula do not feature in the Bill, but they are an important consideration and we are certainly taking the issues that he has raised into account in the work that we are doing alongside the Bill. We are taking soundings from local government.
The Bill also includes a range of measures to cut business rates for small businesses and local amenities so that local communities can thrive. We will take a power, following the commitment in the Budget last year, for the Treasury to set the indexation rate for the business rate multiplier. This will allow us to change the multiplier from the current rate of RPI to the significantly lower CPI measure. We will change the rural rate relief to ensure that small businesses in rural areas receive the same level of business rate reliefs as those in urban areas. This is not only fairer; it will also make a real difference to many employers across the country.
We will provide a new relief for five years for the installation of new optical fibre, fulfilling an announcement made in last year’s autumn statement. To make central Government more responsive to changing business circumstances, the Bill streamlines the administrative process of including premises on the central rating list. We will also be introducing charitable and unoccupied property relief for premises on the central list, bringing them into line with those on local lists. Much to the amusement of hon. Members when the subject came up in Communities and Local Government questions last week, we are also providing a new discretionary relief for public toilets. Councils will be able to maintain these important facilities without having to spend quite so many pennies. This Government are committed to providing the right conditions for growth. A key function of the Bill is to provide local government with strengthened incentives for growing their business rates income and encouraging local businesses to set up and grow.
Mr George Howarth (Knowsley) (Lab)
I wonder whether the Minister could clarify something for me. On the question of telecommunications infrastructure, the Bill states that the provisions will apply where
“the hereditament is wholly or mainly used for the purposes of facilitating the transmission of communications by any means involving the use of electrical or electromagnetic energy”.
My reading of that is that it confirms that the rate relief would be for the actual infrastructure used in telecommunications and that, for example, Virgin Media, which has a property in Kirkby in my constituency, would not be eligible for the rate relief under that provision. I hope I am wrong about that. Can the Minister advise me?
Mr Jones
I think that the right hon. Gentleman might be conflating the central list, and the hereditament or infrastructure, with the business rate relief, which is designed to incentivise providers to lay further networks of fibre-optic cables in the ground so that people can benefit from superfast fibre broadband across the country.
Under the current system, central Government put a levy on local growth. We have listened when councils have told us that this tax on success—this penalty for doing well—is a huge disincentive for local authorities. The Bill scraps the central Government levy for good. This means that local authorities will keep 100% of growth in business rate income between reset periods. That will be a real incentive to grow their local economies, and a great way to keep the proceeds of growth in their communities. We will also allow local authorities that set up pooling arrangements to designate specific areas where they want to boost growth. They will have the potential to keep all the growth and not lose it to the periodic reset and redistribution process.
Justin Tomlinson (North Swindon) (Con)
To unlock growth through the provision of considerable incentives, we need councillors with direct, relevant business experience. What more can be done to encourage busy businesspeople to put themselves forward for office?
Mr Jones
My hon. Friend, who is an entrepreneur, is absolutely right. This Bill and the measures being brought forward will attract entrepreneurial people to the role of councillor. Unlike in the past, when local business rates were collected locally and sent back to Government and then distributed across the country, the change will give local authorities a real incentive to be entrepreneurial and to attract the people that he and many of us want to see in local government.
Going even further, the Bill will provide real flexibility to local authorities. Councils can already provide business rates relief for parts of their area or particular sectors. As a result of the Bill, for the first time since the establishment of the business rate system, councils will be able to reduce the national business rate multiplier for their whole authority, helping them attract business and investment to their area. We are also supporting investment where it is needed to boost growth through infrastructure investment. The Bill will enable mayoral combined authorities and the Greater London Authority to raise a small supplement on business rates in full consultation with businesses to enable them to realise their areas’ growth ambitions. To recognise property owners’ wish to support the regeneration of their areas, the Bill will allow the establishment of new arrangements for property owner business improvement districts, That will enable property owner BIDs to be established across the country whether or not a business rates supplement is in force in that area, allowing a levy to be raised on those with a property interest.
Running a business is more than a full-time job. The working day does not end when the “Closed” sign goes up. There are huge and growing demands on anyone running a business of any size, and such entrepreneurs deserve to have the Government standing firmly behind them, not getting in their way. We will therefore take a power to make the business rate system more convenient, ensuring that every business can access e-billing, and we will provide guidance to ensure that bills look the same everywhere. If a business has premises in Rochdale and in Richmond, it should not have to wrestle with two completely different sets of paperwork. Finally, the Bill includes a paving measure that will help us to meet our commitment of offering joined-up access to tax bills, including business rates, by 2022. The measure will give Her Majesty’s Revenue and Customs the ability to carry out early design work and engagement to develop proposals for how that can be delivered.
For too long local government has been too dependent on the whims and largesse of Whitehall and Westminster. Now is the time to change that forever. Now is the time to help local leaders focus on growth. Now is the time to reduce the burden on local businesses. The Bill provides the framework to do all of that and more. It will realise once-in-a-generation reform that will revolutionise local government funding. I am delighted to commend the Bill to the House.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
The people of England should have more power to shape their own destiny without having to wait for the say-so of Ministers. However, the Bill is just one part of a mix of new law, funding reviews and detailed regulations, and only when all are publicly available will we know whether Ministers have merely devolved responsibility for more badly funded local services, or if serious opportunities for local initiatives are genuinely being created.
The Conservative party has too often had a hostile attitude in practice to the idea of local people being given the power to govern themselves properly. Opposition Members well remember the attacks of the late Margaret Thatcher on local councils, the introduction of the poll tax, the abolition of London local government and the nationalisation of business rates. Notwithstanding recent deals on extending local powers in some areas, local council services have been one of the hardest hit areas of Government funding in every Budget since 2010.
James Heappey
While we are reminiscing, does the shadow Minister remember that the Labour party made harsh cuts to rural councils during its time in office, which was the cause of many of the problems with the imbalance of funding that we now face?
Mr Thomas
I do not remember that. Under the previous Labour Government, I remember rural local councils being well funded and able to invest in local services, unlike the position that they face at the moment.
Devolving more financial power to local areas so that public services can be properly funded, with new business activity encouraged and vital infrastructure investment given the go-ahead, is an ambition that we would support, but the detailed implementation of the measures that the Bill paves the way for could make the difficult funding situation facing local government even worse, exacerbate the social care crisis and leave council tax payers having to foot even more of the bill for local services. If the measures are badly introduced, regional inequality could deepen and divisions between areas with a large business community and those with more entrenched barriers to growth might increase. We support the principle of 100% business rate retention, but such a policy needs to be accompanied by a redistribution formula that addresses the divide between those councils that have sizable business rates income and those that do not. It must ensure that no area of England is left behind or worse off than it is now.
John Redwood
Has the shadow Minister given any thought to what incentives might work in some Labour council areas where the business rate level is low and there does not seem to be any industrial or jobs growth?
Mr Thomas
I have given that some thought. If the right hon. Gentleman is successful in getting on to the Bill Committee, I hope that we can debate such questions a bit more.
The Bill does not answer the many questions that local councils have about how business rate retention will work in practice. In particular, there is no clarity about what additional responsibilities councils will be allocated in return for 100% business rates retention.
The Government’s record on local government will give few people confidence that they are capable of addressing such concerns. Over the past seven years, this Government and their predecessor have taken an axe to local government spending. The people of England have been left paying more council tax for worse local public services. Last month’s local government settlement only brought more of the same: Ministers forcing councils to put up council tax and make more cuts to local services.
Mr Marcus Jones
What the hon. Gentleman is saying is interesting because council tax is 9% lower in real terms than it was in 2010. Does he accept that council tax doubled when Labour was in government? That is not a record to be proud of.
Mr Thomas
I admire the Minister’s wishful thinking in coming up with that fact. I gently suggest that he looks at his Department’s spending record on local council services. This year, councils will spend some £10 billion less than they spent in 2010-11. By 2020, according to the Local Government Association, councils will face a £5.8 billion gap just to fund statutory services. Since 2010, powers have been passed to councils without the necessary funding to go with them, so it is hardly surprising that sceptics wonder whether the Government are really interested in meaningful devolution, or just in devolving responsibility for cuts.
Every local authority has a list of lost services. The doors have shut on libraries, day centres and museums. Leisure centres, swimming pools and playing grounds have closed. Rural bus services, fire safety checks and youth services have been reduced, abandoned or shut. Legal advice services have been axed and women’s refuges have been lost. Investment in parks and street cleaning has been limited. All those services are treasured by local communities and represent vital lifelines for vulnerable residents.
Kevin Foster
It is interesting to hear the shadow Minister’s list. Can he remind me exactly how much extra funding the then shadow Chancellor, Ed Balls, promised as part of Labour’s plans for government in 2015?
Mr Thomas
If the hon. Gentleman looks at our manifesto, he will see that we committed to devolving £30 billion of additional spending from Whitehall to local government.
The Government like to pretend that it is simply ineffective management that stops councils providing key basic services, and that those local councils that are not making cuts to such services are managing their resources effectively. The former Prime Minister David Cameron, perhaps inadvertently, exposed the delusion best when he wrote to the Conservative leader of Oxfordshire County Council in 2015:
“I was disappointed at the long list of suggestions…to make significant cuts to frontline services—from elderly day centres, to libraries, to museums. This is in addition to the unwelcome and counter-productive proposals to close children’s centres across the county. I would have hoped that Oxfordshire would instead be…making back-office savings and protecting the frontline.”
That lack of understanding of the consequences of his own Government’s actions received the response it rightly deserved from the council leader, who wrote back to explain that some 2,800 council employees had already lost their jobs, that the remainder had experienced pay freezes or below-inflation pay increases for a number of years, and that assets had been sold off to fund revenue costs.
Bob Blackman
Will the shadow Minister help the House by clarifying one Labour party policy? There is currently a cap on the amount by which local authorities can raise their council tax. If councils wish to raise it further, they have to call a local referendum. Does he support that cap, and does he agree that there should be a referendum if local authorities wish to raise their council tax further so that we can get the democratic view of local people?
Mr Thomas
I will address the hon. Gentleman’s interesting question in the context of Surrey County Council’s announcement last week that it will hold a referendum on a 15% increase in council tax. I wonder how he or Ministers in the Chamber will be advising people who live in Surrey, including the Chancellor of the Exchequer, to vote in that referendum.
Perhaps one can sympathise with Surrey county councillors after not a single penny of new money was put into local government to help to tackle the social care crisis. Few people in local government think that the Secretary of State’s statement last month on local government finance will stabilise the care market, enable the recruitment of extra frontline care workers, ease the pressure on NHS hospitals, or ensure that all families with loved ones who need help will see them getting the level of care they actually need.
One reason why Surrey’s decision is so striking is because it has been able to increase spending on adult social care by more than 34% since 2010-11. Some councils have had to decrease spending on adult social care by almost the same proportion over the same period. In fact, only two out of the 152 social care-providing local authorities have been able to increase their spending on social care by more than Surrey, so if Surrey says that it cannot cope with the demand for social care, where can?
Although even Oxfordshire and Surrey have been unable to protect frontline services, the impact of local government cuts has been disproportionately felt across the country. The Bill offers no guarantee that the situation will get any better. The poorer an area, the greater its needs and the more it relies on public services, which are often funded by the revenue support grant, yet this Government’s cuts have hit the poorest areas the hardest.
The Institute for Fiscal Studies has stated that those councils
“among the tenth which are most grant-reliant have had to cut their spending on services by 33% on average, compared to 9% for those…councils among the tenth which are least grant-reliant.”
We cannot even call that a postcode lottery. It is true that postcodes matter, but it is not luck or chance that determines the quality or quantity of local services; it is the actions of this Government and their decisions taken in Whitehall. That is the context in which we must consider this paving Bill today.
Before any Government Member again tries to advance the idea that local councils are set to get a significant stream of new funds from keeping 100% of business rates, Ministers have always made it clear that what they give, with great fanfare, with the one hand today, they will take away on another day—probably when fewer people are looking—with the other. The Bill will apparently be fiscally neutral.
Steve McCabe
Birmingham City Council is a perfect example of giving with the one hand and taking with the other. It has been pretty brutally treated by this Government. Birmingham gets £5.6 million from the new adult social care fund, but it is losing £5.6 million as a direct result of the changes to the new homes bonus.
Mr Thomas
My hon. Friend makes a good point. Many local authorities throughout the country have seen services such as housing similarly disadvantaged by the Secretary of State’s decision.
There is no detail of what extra responsibilities will be passed to councils, or which of the additional grants that councils currently receive for their responsibilities will be taken away. Even though councils’ statutory responsibilities are not being properly funded now, Ministers expect councils to take on even more while losing further funding.
As I have indicated, I welcome the Secretary of State’s confirmation that he will not go ahead with his predecessor’s plan to get councils to handle attendance allowance but, as I made clear in my intervention on the Minister, this merely raises the question of what will happen to other specialist funding. The House will have heard the Minister refusing to rule out the end of the better care fund, which I hope the hon. Member for Totnes (Dr Wollaston) clocked, or the end of the £3 billion public health grant. Members representing rural areas would be right to worry about the future of the rural services delivery grant, which is also flagged up for possible axing in the Government’s consultation document.
The Minister has again promised that no local authority will lose out. Does that mean that local authorities will not lose out in year one because there might be some transitional help, or does it mean that every council will be better off and able to meet its statutory responsibilities in full throughout the next Parliament? I welcome Ministers’ intention to pilot their policy approach in five areas, and it is crucial that there is a fair system of top-ups and tariffs for redistributing resources between authorities.
Ministers have indicated that the system will be similar to the one that they introduced under the 50% business rate retention scheme in 2013-14, but that is not wholly reassuring. The Institute for Fiscal Studies has considered what would have happened between 2013-14 and now if 100% of business rates had been retained instead. It found that 16 councils would have seen their funding increase by 20% or more, whereas just one council has seen such a significant increase under the 50% retention scheme. Conversely, 122 councils would have seen their funding fall, with 12 losing more than 2% of their funding. No council has lost that much under the 50% scheme. To have a fair funding system under a 100% business rate retention scheme, the system of top-ups and tariffs must be amended, so why have Ministers introduced the Bill without publishing the responses to their consultation on the detailed implementation of that measure, which closed last July, and without even a date for the publication of their fair funding review?
The Bill raises more questions than it answers. For example, how will Ministers handle the business rates income of a local authority that benefits from a major national Government decision, such as to expand Heathrow or to build a high-speed rail terminus in its authority area? The business rates of Hillingdon Council, which neighbours my council, have always benefited from Heathrow. Westminster City Council similarly benefits considerably from business rates income that arises because of its fortunate proximity to major national assets. In such cases, how will some of the inevitable growth in business rates income, which will have little, if anything, to do with council policy, be redistributed to help authorities that do not benefit from such big advantages? Ironically, although Hillingdon Council has opposed the expansion of Heathrow, it stands to benefit significantly from business rates growth while doing nothing at all to help to generate it.
We also want to explore what would happen if a major business closed or moved away through no fault of the local authority concerned. The sudden loss of a major source of business rates income would have huge implications for the future of local services, but the safety net that Ministers are proposing looks less than generous, especially when we do not know how frequently the needs of each local authority will be reassessed and the top-ups and tariffs system will be reset.
The decision to allow only mayoral combined authorities to introduce an infrastructure supplement appears petty and vindictive. If a community needs infrastructure urgently, local English leaders should not have to jump through extra hoops to put together funding just because they are not a mayor.
Too many big decisions relating to how the business rates regime will work in practice are not yet clear, and too many big decisions will remain with the Secretary of State once the new regime is in place—that much is clear. As my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Select Committee, made it clear, it therefore seems a little drastic to abolish the need for Ministers to be held accountable annually for their performance on local government finance. It appears that they will still be decisive players in deciding which parts of England benefit more from business rates and which less so. The House should be able to hold the Secretary of State to account specifically for his performance on this matter.
Local government in England and the local services that the people of England rely on have been poorly treated by the Conservative party in the years since 2010, and the Bill could make things even worse. We will give the Bill a fair wind tonight and seek to improve it, but if significant change is not forthcoming, we will have to consider afresh our approach to the Government’s handling of this issue.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. Before I call the first Back-Bench speaker, I should say that 16 Members wish to speak in the debate, so if we keep speeches to around 10 minutes or under, there will be no need for a formal time limit.
Mr Christopher Chope (Christchurch) (Con)
I am sorry that the shadow Minister’s glass is half empty. He said that the Bill had the potential to create a much better situation, as I think it has, but also seemed to be emphasising that he thinks things are going to be far worse. I am glad he is at least not going to be voting against the Bill’s Second Reading.
My hon. Friend the Minister referred to a once in a generation reform; I can recall my involvement as a Minister during the passage of the Local Government Finance Act 1988, when I took forward the uniform business rate, among other matters. I am delighted that my hon. Friend has retained the principles of the uniform business rate, which was introduced to prevent Labour councils at the time—for example, in Liverpool—from so attacking their own businesses that they drove them out of town and, in so doing, drove the jobs away as well. I am glad we are not going to be allowing councils the freedom to destroy jobs which they had prior to introduction of the 1988 legislation.
I welcome the emphasis on certainty and predictability, in which context I ask my hon. Friend the Minister to set out a bit more clearly how the reforms that he says are going to be brought into effect in 2019, including the new funding formula, are going to interact with the four-year settlement, which, as I understand it, will still be there in 2019-20. For example, we have heard from the Government that councils can increase their adult social care precept by an extra amount in the next financial year and the year after, but in the third of those years, 2019-20, they will not be able to. How are those arrangements going to interact with my hon. Friend’s laudable objective of introducing all these reforms in 2019-20?
Clause 4 is very relevant to matters of local government reorganisation. The nine councils in Dorset are meeting this week and next to decide whether they wish to go down the road of a local government reorganisation. Two of those councils, Poole and Bournemouth, seem to be supporting the idea of creating a new unitary authority with Christchurch, in the belief that were the Secretary of State unwise enough to approve such a proposal and the unitary authority was set up, on day one the residents of Christchurch would be paying £200 more in council tax at band D than the people resident in Poole or Bournemouth.
Last week, my hon. Friend the Minister responded to my written question to confirm that it is not possible for an individual principal authority to levy council tax in one part of its area at a level different from that in another. That is an important principle. I hope that my interpretation of clause 4 is correct when I emphasise that were there to be a unitary authority covering Poole, Bournemouth and Christchurch, from day one the people of Poole, Bournemouth and Christchurch would all pay exactly the same level of council tax.
The idea of excessive levels of council tax has often been interpreted as being about excessive levels of increase, but, as the explanatory notes on clause 4 make clear, the clause will allow
“the Secretary of State to make a statement of principles for determining whether council tax is excessive covering a number of years, rather than just one.”
Am I correct in my assumption that were there to be a new unitary authority for Poole, Bournemouth and Christchurch, the Secretary of State could use the powers in clause 4 to say that there should be one set level of council tax for the authority, starting from day one? I ask because later this week, in both Poole and Bournemouth, councillors are going to be invited to support the proposal for a unitary authority in the mistaken belief that they will continue to be subsidised by the residents of Christchurch for 20 years, under an equalisation/harmonisation regime. If they were disabused of that and told that from day one they would be liable for an increase of up to £200, I think minds would be concentrated and there would not be quite so much enthusiasm on the part of councillors in Poole and Bournemouth for what is being proposed, which is hotly contested by councillors not only in Christchurch but in other parts of rural Dorset.
I hope I can get some clear answers to those questions. The essence of the provision in the Bill is that if councils impose excessive levels of council tax on their citizens, there should be the safeguard of a referendum, but what is proposed in the name of local government reform in Christchurch, Poole and Bournemouth is that people in Christchurch should be expected to pay extra council tax but will not have the chance of a local referendum to decide whether or not they wish their council to be abolished and absorbed into a new one. If we can have referendums on the levels of council tax, why can we not have referendums on whether a council is to be abolished? It seems that something is rather out of sync.
In responding to this debate, will my hon. Friend the Minister be a little bit clearer about the pooling arrangements? Why are the Government taking the power to introduce mandatory pooling arrangements, and how will they work? Can all nine local authorities in Dorset be regarded as a pool for the purposes of business rate income and distribution? I do not see any problem with that. In fact, it might be quite desirable, but why must it be imposed by the Government, rather than agreed to locally?
My next point came out in the response of the shadow Minister. I am concerned that, as a result of the powers being given in this Bill, some businesses may find they are in a minority in an area and subject to significant extra supplements on their business rates. How will we ensure that a minority of businesses are not oppressed by the majority? In east Dorset, there is a business improvement district centred on a Ferndown industrial estate. When it was set up, there was concern among some businesses that they might end up paying extra for things that were of no use to them. Can my hon. Friend spell out the safeguards that will be in place to ensure that significant increases in supplements or additional business rates are not imposed on hard-pressed businesses?
I turn now to clause 9 on public conveniences. Christchurch Borough Council has been privileged to win the Loo of the Year award on many occasions, and it has a really good selection of public conveniences, as befits its age profile and its reputation as a very important tourist destination. Meanwhile, much to the consternation of the local people in Poole, Poole Borough Council has decided to close half its public conveniences. Some councils are now thinking outside the box and saying, “Why can’t we enter into joint arrangements so that public buildings can be made available for the provision of public conveniences?” [Interruption.] My hon. Friend the Minister is acknowledging that. On reading clause 9, it seems that there will be no relief from council tax or business rates for a building that partially consists of a public lavatory but that offers other facilities as well. It is difficult to speak to clause 9 without puns, but I hope that the gist of my point has come across. Why would we wish artificially to restrict a relief such as this and say that it will be available only on a free-standing, dedicated public lavatory?
Richard Drax
The matter of public conveniences of course raises some humour, but let me make this point. When I attended an Age UK event some years ago, I was told that there are 2 million people in this country who can be no more than 10 minutes away from a loo. If there is not one available, they cannot leave their house. This is a serious issue, and money is needed to provide this vital service.
Mr Chope
I agree with my hon. Friend. One reason why I am a great supporter of small local district councils is that they are accountable to the local town and the local people. It means that those local people can decide whether more money should be spent on public conveniences or on public parks. It is much better to leave those discretions to the local councils, which is why I am so strongly against the imposition of unitary authorities in Dorset.
Mr Clive Betts (Sheffield South East) (Lab)
I rise to support this Bill in principle, although much of the detail, which will determine whether it will be effective in practice, is not in the legislation itself, but will be worked out in due course.
Just in passing, I note that the hon. Member for Christchurch (Mr Chope) gave himself credit for the uniform business rate system. I noticed that he did not give himself credit for the other part of that Act when it came in at the same time.
Mr Betts
The hon. Gentleman is the last Member standing who supports that legislation.
Let me refer to the first report this Parliament of the Communities and Local Government Committee, which went into considerable detail about the Government’s proposals on business rates. As we were conducting our inquiry, the Government announced a further consultation, so this was a list of matters for the Government to consider, which I hope they are doing. We had a good deal of evidence about issues that do need consideration and resolution before the system finally comes in. I will not refer to the general issues of local government finance. My concern is that, since 2010, local government has received far more than its fair share of the austerity measures, and that local councils, such as my own northern council in Sheffield, have received more than their fair share of the cuts that local government as a whole has had to endure.
I welcome the devolutionary approach that the coalition Government took and that this Government are now taking, but only as far as it goes. I recognise that devolution cannot simply be about devolving powers and giving councils more control over money that Government give to them, but councils must have more ability to raise that money in the first place. Fiscal devolution is just as important, and the Committee has recognised that. This Bill, in a very small way, goes in that direction, but it still leaves us the most centralised country in western Europe.
I thought the Minister was getting a little bit carried away at the end of his speech when he called the measure “revolutionary”. I cannot really see this as a revolutionary change in local government finance. It leaves us with local authorities having to rely on council tax—I have no problem with that—which raises about 28% of local government finance. It is the only tax in central and local government that needs a referendum to increase it beyond a given amount, which is determined by the Secretary of State.
I have one little point about this proposed legislation: in future, this House will no longer be able to approve Ministers’ decisions on the threshold at which local authorities have to bring in a referendum to have a council tax increase. That is yet another power taken away from this House. I hope that, at some point, Members will have the chance to express a view on that.
On the business rate retention, it is a 100% retention of the growth in business rates—that is what the system means—with no power to determine multipliers, except to reduce them. On the supplement, in very limited cases—for mayoral combined authorities or the Greater London Authority—the business rate can be increased by a very small amount for specific projects. It would be right and more democratic if councils themselves had the ability to determine business rate multipliers at a local level, even if they did it on a joint basis with other councils. That would take us back to the system that operated before the hon. Member for Christchurch had his say and brought in the new legislation.
I do not know why Ministers are so resistant in this regard, because, in the end, if councils cannot determine multipliers, they have very limited ability to raise income from business rates. I accept that they can do it by approving development—the whole purpose of this is to give more incentives to do that—but that is limited control indeed. It still leaves us with a very centralised system.
There are some important details that we must get right. We had an enormous amount of evidence in our inquiry that showed that the appeals system is a major problem for councils. Rather than falling on the central pot, the cost of appeals potentially falls on individual councils. I understand that, collectively, local authorities are holding back about £1.5 billion in reserves to cushion against appeals. When my own local authority in Sheffield gave evidence, it said that 33% of its business rate base was subjected to appeal, which is a very high figure. We need to deal with that uncertainty for local councils.
By far the biggest challenge in this Bill is how we marry the need to give incentives for development, which I entirely accept, with the need to equalise within the system—to recognise those authorities that cannot grow their base as rapidly as others but still have needs that are high and that might grow in future. My concern is that trying to do that with one tax is a bit like trying to play a round of golf with one club. Can we really do competing things—equalise and incentivise—with the same tax, or are we going to keep some form of grant to do the equalisation, which might make the system an awful lot simpler? Equalisation is never simple, but it could become more complicated because it is now being addressed as part of the business rate system. I will leave that with Ministers to think about.
I welcome the fact that Ministers are going to be doing the new needs assessment with the Local Government Association, which I understand will have a working group. The Communities and Local Government Committee will do some research on that as well.
Let me move on to the complications with resetting in the system, which is really important. If we reset too often, we take the incentives away, but if we do not reset often enough struggling authorities will struggle for longer. Will Ministers look at some form of rolling reset— this is an interesting idea that the Committee heard in our inquiry—so that we do not have a cliff edge where we say, “Right, all the extra business development you have had in the past six years will now be stopped in the system and the whole thing will be reset.” What happens if there is a new development only six months before the reset? Why would any authority want to encourage that development when, if it waited another few months, it would fall into the new period and get the benefit of the business rate for longer? Those are some technical issues that we really need to address.
Will we have a new needs assessment every reset period, or will the needs assessment that is done at the beginning of the system last in perpetuity? If it is the latter, how is the needs assessment going to work with the reset periods? Again, I think that it would be much easier if the needs assessment were done in relation to a separate grant kept within the system. I accept that if we had a separate revenue support grant we would need to devolve even more powers to local government to absorb the money from that grant, but it might be easy to do, and it would be in the spirit of devolution then to devolve even more powers. I ask the Minister to look at our Committee’s report in that regard.
I am pleased that tenants allowance has been taken off the agenda. If we are going to devolve powers, can we make them powers that are relevant to business mainly in relation to transport and skills, which were asked for in relation to economic development? Businesses could then understand that, although they could not have an immediate say in linking the money raised from business rates to a particular project, their taxes are, in principle, related to business activities in their area. I also say to Ministers that if we are to have a new system, there are still powers under section 31 for them to give grants.
We cannot consider a whole new system without looking at social care. We have to look at a long-term, revised arrangement for funding social care. One of the real concerns—it came out during our inquiry—is that social care demands are likely to increase faster than income from business rates. If we are relying on income from business rates to fund social care in the long term, there is bound to be a growing disparity. If we build that into the system right at the beginning, the system will never succeed in doing its job. Let us have an independent look at social care, and at whether some other form of funding needs to come in to support it in the long term.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
The hon. Gentleman makes a good point about social care, because far too often one solution is plucked out of the air as the golden bullet to tackle a real funding crisis, with demand for social care services increasing by at least 5% a year across most local authorities. He is absolutely right that we need a long-term solution. Will he say how that could be incorporated into the Bill?
Mr Betts
I am not sure that we could get that into the Bill, given its long title. The Government have to think about the longer term. If they are going to completely reform the business rate system at the beginning of 2020, and the funding for the responsibilities of local councils, without addressing the fundamental problem of social care and the demand to which the hon. Gentleman rightly draws attention, with 5% year-on-year growth, they are devising a system that will fail. I do not want it to fail; I want it to succeed. I want us to give more powers and responsibilities to local councils and increase their ability to raise funds, but we need to address this problem and see it in the wider context, even if it cannot be incorporated into the Bill.
I have one final point to make, and it is a very important one. The previous Chancellor announced plans to extend small business rate relief and change the way in which the multiplier for business rates was calculated, from the retail prices index to the consumer prices index. Both those measures reduce the amount of money that local councils get from the business rate. What the Government have said so far, as I understand it, is that they will compensate councils in the current system for those changes, and no doubt they will be reflected in the amount of money taken forward for the new system for which councils will then get new responsibilities. What would happen if a Chancellor were to make some similarly drastic changes to the business rate system? How would local councils be compensated if there were no revenue support grant to do so? I think that Ministers have to address that very important point. Either the Government want to give up their powers to change the business rates system once it is set, or they will bring in changes in future, in which case how will they compensate councils if they remove their grant-making powers altogether? That point is so fundamental that I think Ministers have to address it.
I will end where I began. I support the Bill in principle, because it is a very small step towards more devolution and giving councils more powers and a little more control over the money they raise to spend on the important services they deliver. I cannot agree with the Minister that it is revolutionary, but it is a small step in the right direction. I look forward to seeing more of the detail, but in principle I support the Bill.
Mark Field (Cities of London and Westminster) (Con)
It would be remiss of me not to congratulate the Minister for Housing and Planning, who will respond to the debate, because today is his birthday. What a way to spend a birthday: having to sit around and listen to this debate. Of course, The Guardian, in its typically cavalier approach to the facts, suggested that he is only 45 years old.
I commend the Government for their more flexible approach to local government financing, which I think is broadly supported by the two local authorities in my constituency.
It is a pleasure to follow the hon. Member for Sheffield South East (Mr Betts). I share some of his concerns about the way in which local authorities might, if there is a lag in the system, try to game the system by holding back on new developments either being given permission or being built until such a time as they would qualify. I hope that that concern, along with other possible unintended consequences of this measure, will be addressed by the Minister tonight and later in our consideration of the Bill.
The City of London corporation is grateful for the provisions that will compensate councils for losses arising from valuation appeals. That has been a very significant problem for the City, particularly in the aftermath of the commercial property downturn in the late part of the previous decade, for which the corporation had borne the substantial risk under the rates retention scheme, despite the matter being entirely out of its control. Clause 2 addresses that issue, and I believe that it is very welcome. However, I should note that it comes in the form of a discretionary power to be exercised by the Secretary of State. Further information would be appreciated on how precisely that power will be used, and particularly whether full compensation will be provided for appeal losses.
It is also correct at this stage to put on the record the support that the City of London feels for the wider devolution proposals put forward by London Councils and the Greater London Authority, but it seeks to maintain the special arrangements that recognise that the City ought to retain a greater proportion of the business rate since the amount it can raise from council tax is limited by its small residential population—it has only around 7,000 inhabitants.
I am very aware that many colleagues here who are not London Members will feel, as we all probably do, that if we were starting to look at Government finance, we would not start from the position we are in now, which is an accumulation of various bits of legislation that go back many decades. I am not sure that any of us really wants to go through the rigmarole of looking at this issue entirely from first principles or that we would be brave enough to do so—perhaps only my hon. Friend the Member for Christchurch (Mr Chope) would be happy to. However, the difficulty is that if we do not, there will be what many of my rural colleagues will feel are great advantages to London. The truth about London is that it is an extremely expensive place to live, and what seems like relatively generous treatment in council tax terms reflects that high cost of living in many ways.
If I may, I will turn to the western part of my constituency, which is where we are now. Westminster City Council is seeking Government support for its West End partnership investment programme, which might also incorporate parts of the London borough of Camden. The programme aims to maintain private sector investor confidence at a time when businesses are anxious about the imminent impact of a business rate revaluation. The council would be looking for the programme to work alongside the Bill. The programme would consist of transformative works to improve the public realm, infrastructure and environment in the west end of London, such as in the Oxford Street district. That will, in turn, secure direct private sector co-finance and trigger additional investment by landowners and business occupiers.
I accept that my local authority is very unusual. Westminster contributes 3% of UK tax revenues, making the highest single contribution of any borough. It also has the highest business rates collection in the country, at £1.8 billion a year, and that will rise, it is assumed, to about £2 billion in the next financial year. Ratepayers in Westminster also contribute more business rate supplement than those in all 20 outer London boroughs combined, including £1 billion towards Crossrail, with businesses in the Oxford Street area contributing half of that. I appreciate that the capacity of west end businesses to contribute business rates and other tax revenues for other projects, such as Crossrail 2, is now highly dependent on their confidence in the west end operating environment.
Major improvements to paving, roads, lighting, traffic lay-outs and infrastructure will be required to bring the west end up to the standard expected by the firms located there and the millions of people—both UK and non-UK residents—who visit. Existing local authority and GLA funding mechanisms are simply unable to address all those problems, and I appreciate, as someone who represents two parts of this central, global city, that a mechanism cannot necessarily apply in this case and that there has to be a sense that this state of affairs is exceptional.
The West End partnership programme is resolutely designed to improve the dwell-time of visitors and, of course, their average expenditure, reversing a recently declining trend, compared with other world cities. That will not only improve onward tourism from London to other parts of the UK—that is an important point to make—but increase the number of international business visitors who trade with several global-facing sectors located in central London. Those include, for example, the Soho media cluster just south of Oxford Street east; the Harley Street medical cluster north of Oxford Street west; the knowledge and creative quarter around the northbank, or the Strand and Aldwych area; and, of course, the very significant financial services sector, which is no longer just in the City, with hedge fund land now very much in the Mayfair and St James’s area.
As far as London is concerned, it is important to stress that the supply chains and jobs often reach out to the UK regions. It is often said—I am looking at the hon. Member for Erith and Thamesmead (Teresa Pearce), whose constituency is in one of the outer London boroughs —that London gets a very good deal and that we get all the infrastructure development, whether that is the Olympics or Crossrail, but it is important to make the vital point that if a lot of that money did not come to our capital city, it would not come to the UK at all, but go to another global city. It is also the case with so much of the money that is invested that jobs are created, with contractor and construction jobs going beyond the capital. Fellow Members who walk to Victoria station or in the west end can see what is happening with Crossrail, but phenomenal numbers of jobs are going to other parts of the UK. The truth of the matter is that this investment has great benefits beyond London, so we should not look too harshly on what seems like special pleading from the capital city for future development. [Interruption.] I can see there is already another division on the Front Bench of the Labour party, given the knowing look from the hon. Member for Erith and Thamesmead. However, that is an important point to make, because the iconic and UK-wide opportunities based on central London will hinge on the outcome of the funding decision for the West End partnership programme.
Many overseas retail brands and retail concepts new to the UK will obviously be trialled in central London and then rolled out nationally. These and similar economic flows between London and the UK regions are often two-way, with London dependent on supply chains in the regions, and the regions highly dependent on London’s performance. If the capital city succeeds, there are benefits for the rest of the UK—this is not a zero-sum game. We need to make that point, and I appreciate, as a London MP, that I need to make it very robustly. However, it would be foolish to cut away London’s success, because the rest of our country would also suffer.
Westminster’s local authority believes that the programme it has in mind could create £12.3 billion of additional economic output and generate a further £2.5 billion to £3 billion in tax returns to the Exchequer simply by producing additional floor space, increasing revenues over and above existing Government projections for the business rates to be collected in our area. The private sector is prepared to invest in a very joined-up, strategic approach to the development of the west end. That will consist of cash payments from property firms and business occupiers towards public realm and road works packages.
My local authority submitted its strategic case and programme to Her Majesty’s Treasury in March 2016, and discussions are ongoing. The core of the programme would currently cost £814 million. Of that, £409 million would be required that cannot otherwise be funded from existing sources available to Westminster City Council, such as cash contributions from the private sector, GLA funding and the community infrastructure levy. The preferred funding option would result in Westminster City Council increasing local retention from 4% to 6.5%, enabling it to borrow sufficient funds to finance the entire programme over a 15-year period.
Let me say one quick word—this will probably unite Members of the House, albeit in different ways—about business rates, which are a looming nightmare for many small businesses in my constituency, and I think that that applies to much of London, but also beyond the capital. I appreciate that the Government have put together a very welcome £3.4 billion relief scheme nationally, which is designed to benefit the capital city more than other regions. None the less, the most recent consultation did not provide some London authorities with sufficient time to work out the extent to which our local businesses will be affected. I make this appeal to Ministers: Westminster City Council would like to see something more akin to the 2010 relief scheme, and it very much supports the suggestion that we break rateable value into three categories to recognise the varying abilities of small, medium and large businesses to pay business rates.
I take this opportunity to wish the Government great success with the Bill. I hope it is the first of many moves towards devolution. It has been rightly pointed out that this country, for historical reasons, has the most centralised tax base of any western European country. That cannot be a healthy state of affairs if we are to have thriving local democracy. The Bill is an important first step forward—the first, as I say, of many.
Mr Jim Cunningham (Coventry South) (Lab)
It is a pleasure to follow the right hon. Member for Cities of London and Westminster (Mark Field). I have known him a long time, and I have listened to him in many debates in the House.
I will go along with the Bill tonight and support my Front Bench, but I have to say I am a bit suspicious. I am sure the Chairman of the Communities and Local Government Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), knows what I mean by that, because, to be perfectly frank, we have been here before with Conservative Governments. I have been in local government, and we could go right back to Lady Thatcher’s years. When Governments want change, they always use a carrot. One particular carrot that was used in local government way back in the days of Lady Thatcher was local authorities being told that they would be able to keep their capital receipts. They were able to do so initially, but gradually, on a taper, that was faded out. Let us be careful about Conservative Front Benchers enticing us to go down a road that we may regret, because the strategy, as is quite clear now—the Minister as good as said it himself—is to shift the burden of certain services from central Government to local government. As anybody with any experience of local government knows, there will at some time come a point where central Government will want to cut local government spending. Once again, they will say to local government, “You’re spending too much money—you’re spendthrifts.” We have been down this road before. Nevertheless, I will cautiously go along with these proposals—subject, obviously, to our being able to amend them further down the road.
Having said that, it would be remiss of me not to talk about the situation in Coventry. Coventry suffers from the same prospect of potential job losses, library closures and reductions in youth services that we have heard about from those on my Front Bench. We could name a whole catalogue of problems. Since 2010, there has been a 40% cut in Government funding to local councils. Ministers speak of tough decisions but force impossible choices on to local authorities instead. The Government have passed the buck, quite frankly, forcing councils to scale back services as demand has increased. The funding gap currently facing local councils is massive. These pressures are especially acute in Coventry. The funding for Coventry City Council has been cut by a massive 45% since 2010—in other words, a £315 cut per person in Coventry. This reduction is expected to rise to 55% by 2020. There is no way to make up the shortfall without either cutting services or raising local taxation—council tax.
The pressures on social care create a massive gap that remains between the resources available and the funding required. Services are overstretched across the country. The precept offered by the Government cannot make up the shortfall: it is a panic measure that offers too little too late and will cement the idea of a postcode lottery where service quality depends on the affluence of residents. These pressures have been highlighted recently by Surrey County Council, which now plans to hold a referendum to increase council tax by 15%. In the early ’70s, Coventry council did the same thing, holding a referendum on increases in the local rates, as the system was then. Surrey County Council has cited the pressures on social care and children’s services. Both the Chancellor and the Health Secretary have homes in areas covered by this authority. This is a Tory-run council in one of the most affluent areas in the country, so it is an admission of failure in the policies of this Government. If funding is going to be so tight in Surrey, how bad must it be everywhere else? More must be done to integrate health and social care. In their last days, the previous Labour Government wanted to get on board with this Government, then in opposition, to create an amalgamated national care service. That was rejected, and there were various views about that. With health and social care, a failure to deliver on one means a breakdown in the delivery of both.
The 100% retention of business rates by local councils is of course welcome, because it is right that local authorities can shape their services, but this must not come at the expense of further regional inequality. Poorer regions must not suffer at the expense of richer parts of the country. Safeguards are required to prevent a race to the bottom among councils and to ensure that funding is still allocated according to need. Coventry must not lose out once these changes come into effect. I urge the Government to promise that no area will be worse off because of these changes. I also urge them to provide clarity on how this revenue would be distributed so that there is a level playing field for all authorities. I agree with the Chairman of the Select Committee that the Minister should be held accountable every year. As MPs, we are very often in the situation of knowing what our local authority needs, and we need to be able to put its case in this Chamber, not away from the Chamber, so that Ministers can be accountable.
David Mackintosh (Northampton South) (Con)
I support this Bill. I am pleased that the Government remain committed to devolution and continue to push for greater powers for local authorities so that decisions are made by local people who understand how best to help their local area. I agree that wherever possible more powers should be taken from Whitehall and given to the town hall.
As a former leader of a large district-level local authority, I understand how important it is for local councils and bodies to be provided with greater powers to manage their own finances more effectively. The ability to allow local authorities to retain 100% of business rates revenue is essential if councils are to fulfil the roles that we continue to devolve to them. It is a power that I wish I had been able to use while I was council leader. With councils expected to carry out greater duties on a day-to-day basis and also to address the key local issues, it is essential that they are able to retain this money and spend it where they think it may be necessary.
As I am sure all hon. Members agree, the business rates system is very complex. In its current form, there are very few, if any, incentives for local authorities to stimulate growth or their local economies. That is because they do not see the benefits of doing so, for only 50% of the money is ever retained locally. This new way of working will be a challenge, as we all need to acknowledge. Local authorities will have to adapt drastically to a new way of thinking and undergo a significant culture change for this implementation to be a success. I hope that this Bill will push local authorities towards greater self-sufficiency and further away from dependency on central Government.
Andrew Bingham (High Peak) (Con)
Does my hon. Friend agree that this means that a small business will work more in tune with its local authority because it can talk about the business rates, and both sides—the local authority and the business—can get a better understanding of how each other works? It also gives the local authority freedom to play around with business rates to encourage more business. We get a better dialogue, which in rural areas such as mine is really important for employment.
David Mackintosh
I am grateful to my hon. Friend for his intervention, and I agree.
With these changes in place, it will be a lot easier to show businesses and residents where and how local revenue is spent, and the direct impact of local decisions. As a council leader, it was always incredibly frustrating to try to explain the complex funding formula to businesses and to residents, and why our great efforts to regenerate Northampton and improve the local economy did not always result in the increased revenue being available to spend locally.
I am pleased that through the Bill the Government will ensure that local authorities that raise less than their competing areas do not necessarily lose out in their local areas, although this should never be an excuse not to fight for investment. As my fellow members of the Communities and Local Government Committee will remember, we recently held an inquiry into business rates where we noted that while we did not underestimate the significance of these reforms, they could lead to significant divergences in authorities’ spending power if not managed correctly. I understand that the Government are still working on the exact mechanism that will be put in place for this, but it is an essential safety net. On the other hand, I hope that councils that do receive a higher income through these proposals are encouraged to reinvest the money further to cultivate business rates revenue growth.
I agree with a point made by the Association of Convenience Stores, which noted that due to the small business rate relief, local authorities will gain little growth in business rates revenue from small businesses, meaning that local authorities are incentivised to focus on encouraging business rate growth from larger companies. Local authorities will naturally be looking to sign off on larger planning developments that will deliver higher business rate yields but which have the potential to undermine local high streets such as my very own award-winning St Giles Street in Northampton. I would be interested to hear how Ministers plan to ensure that 100% business rate retention will incentivise local authorities to encourage the growth of businesses of all sizes, not just larger developments.
This Bill continues the devolution that the Conservative party has been working towards in government. By giving local authorities this power, we are allowing them to focus on their own priorities, and to ensure that they have the facilities available to grow and cultivate their own business environment and that we continue to create a more efficient system of local government that works for everyone.
Jeff Smith (Manchester, Withington) (Lab)
It is a pleasure to follow the hon. Member for Northampton South (David Mackintosh) who, like me, brings experience of local government to the debate.
I do not intend to speak for long, but I want to echo concerns that have been raised about the Bill. Like others, I welcome it in principle. I welcome more flexibility for councils to make spending decisions closer to home. We have certainly argued for that in Manchester for a long time. My fear, however, is that the Bill will do nothing to solve the crisis in local government funding. As such, it is a missed opportunity to support local government properly.
No other part of the public sector has been hit harder by austerity than local government. I was executive member for finance on Manchester City Council during the middle years of the coalition Government, so I experienced at first hand the consequences of unfair cuts to local government spending. They are the result of the Government effectively outsourcing the most difficult decisions to local authorities, thereby putting the blame on local councils rather than taking it themselves. I therefore have a natural suspicion of this Government’s intentions when it comes to local government funding. I will not forget the role of the Liberal Democrats, either. They are not represented in the Chamber at the moment, but without their collaboration with the Tories, local government would not be in such a parlous state.
Every year Manchester faces impossible decisions about which services to close as a result of the huge funding cuts imposed on us. Since 2010, the council has had to take out more than £300 million from Manchester’s budget year on year. Between 2011-12 and 2019-20, there will have been a £600 per household cut in funding. The city council has had to reduce its staff numbers from 10,400 to 6,400. How are councils supposed to continue to deliver services properly with that level of reduction?
I warned when I was making some of these difficult decisions that their full effect would not be seen for some time. I said that it would take time for cuts to feed through the system, and I think that we are seeing that now. For example, in Manchester since 2010, there has been a reduction of £77 million in spending on adult social care, on top of an £11 million reduction in the public health grant. Is it any wonder that we now have a social care and NHS crisis when councils around the country are having to make cuts of that size? I echo the point made by my hon. Friend the Chair of the Communities and Local Government Committee that we need to look at a new way of funding social care with a root-and-branch consideration of how that might be done in future.
The most important thing to remember is that the Bill does not represent any additional funding for councils in the short term. As the Minister said, it is fiscally neutral. While I welcome some of its measures, and although I support in principle the ability of local authorities to retain business rates, there have to be safeguards for those authorities that are less able to raise such revenue. In that regard, the Bill gives rise to more questions than answers. In fact, it raises more questions than answers about local government funding in general.
There is no clarity at all about the most important issue raised by the Bill: how will the Government handle the need for a redistribution mechanism? How will a fairer funding formula operate? What is the basis for any replacement tariff and top-ups? How do we stop the poorest councils losing out? The Government say that councils will not lose out—they are conducting a fair funding review and a needs assessment—but I hope that the House will forgive my scepticism about the Tories’ commitment to fair funding in local government as the poorer cities have consistently lost out over the past six years, particularly compared with the southern shires.
Steve Double (St Austell and Newquay) (Con)
I am listening with great interest to the hon. Gentleman. Will he acknowledge that rural counties and councils have been underfunded by central Government for many years and that all we are doing is addressing the imbalance that has been in place for a very long time?
Jeff Smith
There is an issue with rural funding that needs to be looked at. We calculate that if Manchester had had a fair and equal share of funding cuts across England—not protection from cuts, but the average cut—we would be £1.5 million a week better off, which would go a long way in local government spending.
I agree with my hon. Friend the Member for Sheffield South East (Mr Betts) that the Government need to approach the abolition of the revenue support grant with caution. Councils have different dependencies on RSG. For example, Westminster would need to retain only 8% of its business rates to replace the grant that it currently receives, whereas Wirral would require 187% of its business rates to retain the same amount as its current grant, and the figure for south Tyneside is 259%. That illustrates the London problem: how do we address the much stronger ability of the capital, particularly the City of London, to raise business rates revenue? In all likelihood, that issue will be exacerbated by the proposed house price indexing, which as I understand it means that London will be able to raise £700 million more while everywhere else might raise less. Unless the Government make clear how they are going to redistribute funds, we will run the risk of poorer areas being left behind, especially those where business and industry have been in long-term decline and finding solutions is genuinely difficult. Manchester has a very well run Labour council and we are doing pretty well, but plenty of other areas around the country are struggling and will genuinely struggle to drive growth in the future.
Forgive me for wanting to see the detail before I am convinced by the Bill. We will need to see much more detail as it passes through the House as too much is unclear. For example, there is no clarity about the role of specialist grant funding. In my experience of the extremely complex world of local government finance, it is very easy for Government to make cuts under the radar via reductions in specialist grants. I have seen that happen in Manchester. It is not unusual for the Government to use such a mechanism to force difficult decisions on local councils.
I will end with some positive points. Giving local authorities the ability to reduce the national business rates multiplier has potential, but there are obvious concerns about a race to the bottom as a consequence. I am pleased that tax powers are being given to the mayoral combined authorities to fund new infrastructure projects and to stimulate growth—that has to be good news. I also welcome the multi-year settlements, which are a much more sensible way of allowing councils to plan for the future. While we welcome some of the Bill’s measures in principle, I cannot support it without being given a lot more detail and some sense that the Government know how they are going to address inequality between areas and how they are going to make sure that areas such as Manchester will not lose out in the long term.
Richard Drax (South Dorset) (Con)
It is a pleasure to take part in this debate and to follow the hon. Member for Manchester, Withington (Jeff Smith).
The Bill’s timing is unfortunate. Certainly in South Dorset, this shake-up of local government finance is regarded as part of a perfect storm. Everyone’s minds appear to be concentrated on the ongoing local authority reorganisation, but in addition we now have the question of funding, and how it will be done fairly and devolved properly. However, I entirely endorse the general thrust, as the Government are heading in the right way. Before I forget, on this great day, may I also wish a happy birthday to the Minister for Housing and Planning? I am sure that he would rather be somewhere else instead of listening to me this evening.
I endorse devolution. Local people should have more power to make local decisions—there is no division across the House on that point—but with devolution comes a responsibility, if I can put it like that, for the Government to ensure that there is fair play, whether it be in the difference between urban and rural, or in the difference between the poorer and wealthier parts of our country. As I said in an intervention, moving to the system that the Government propose for business rates raises the question of whether rural areas and the poorer parts of the country will get the funding that they deserve.
Before I move on to talk about five brief points, let me set out my other concern: as pressures on finance grow, the perception from many councillors in my constituency is that the Government are putting more of the tax-raising powers into councillors’ hands, but they are not so keen on that if they do not have the resources to ensure that everything is dished out properly and fairly. I just raise that as a concern, but overall I welcome the path that the Government are taking.
I asked around, as is my duty as an MP, to find out what officers and councillors thought of the Bill. As an MP, I must act without fear or favour, so it is my duty to mention five brief points that have been raised: the new homes bonus; adult social care; the business rates appeal; second homes; and underfunding in general. I will touch briefly on all five, starting with the new homes bonus. The significant funding change set out in February 2016 has seen the reduction of six years’ funding to five years in ’17-’18 and four years from ’18-’19 onwards. Worryingly, the inbuilt so-called deadweight of 0.25% set out in the consultation was suddenly changed to 0.4% in December 2016, nine months after the consultation closed. I ask colleagues’ forgiveness for the dryness of my words but, let us face it, this subject is fairly dry and can get rather detailed.
The scheme was designed to reward councils for building new homes, but with the deadweight, there is a risk that the incentive is removed. For example, in Weymouth and Portland, the deadweight is 108 homes, so Weymouth and Portland built 234 homes in 2016-17, but received the new homes bonus for only 126 homes. The incentive has been removed and there are no transitional measures to limit the impact. The calculations are based on band D, which disadvantages councils such Weymouth and Portland where the average property is band B. Even if the authority sees a substantial growth in the number of homes, it will not benefit from the new homes bonus to the extent that the Government might like. It is predicted that Weymouth and Portland will lose just shy of £1 million in new homes bonus between now and 2020.
The Society of District Council Treasurers has made several points about the Government’s plans, saying that they are “severe” and that they
“come so late in the budget planning process that many authorities will have little option at this stage apart from reducing reserves.”
The society adds that imposing a baseline of 0.4% is “far more drastic” than the 0.25% mentioned in the consultation. Emerging local plans that include a substantial number of new homes often face fierce opposition—nowhere is that more true than in my seat—but the plans are often made more tempting by the promise of funding from the new homes bonus. However, the reward has now been reduced in cash terms, so resistance to new homes is even greater.
I move on to adult social care, about which I have no doubt that all Members have very serious concerns. I do not like to use the word “crisis” because I think that it describes something considerably more serious than our current situation. In the view of those I have spoken to, business rates retention “does nothing” to address urgent needs. Across the country, the £240 million achieved in savings from the new homes bonus reform is going to social care as a one-off grant. This means that while social care gets one year’s resuscitation, councils of course lose out.
Taking funding from district councils in such a way forces them to review discretionary services, such as low-level support for older people and other vulnerable groups. We have talked about public conveniences and the interesting fact—I had no idea about this until I listened to a debate by Age UK—that there are 2 million people who cannot be more than 10 minutes from a public convenience. If they are further away, obviously there is a disaster, so many elderly people do not leave their homes. In effect, we are forcing them to stay in their homes and that cannot be right.
In addition, unitary authorities get all the money and two-tier councils, such as those in parts of South Dorset, have to split their revenue, so the district council loses and the county council gains. Social care is delivered through a grant that favours the northern metropolitan areas and takes away from councils such as ours. South Dorset has an increasing elderly population, which is only going to get bigger, so the pressure on adult social care is only going to increase.
Business rates appeals are increasing, and they are costly. Under the new 50% retention rate rules, local government must pay 40% of appeals and settlements against business rates. This year, a company called Perenco, which runs the Wytch Farm onshore oil platform, won a £5 million appeal, and the Ministry of Defence won two £2.5 million appeals for its two Army camps. Both organisations had appealed against Purbeck District Council. Forty per cent. of £7.5 million is £3 million, payable by Purbeck District Council directly. It tries to keep £1 million a year as a safety net, so that is three years of safety net wiped out.
On second homes, the view is that they put up house prices and reduce the number of local people living in the area. That is, again, of concern across the House. So long as a second home is available to rent for 140 days a year—if it is registered as a holiday let and liable for business rates—it avoids council tax. The system lowers the cost of home ownership for those who least need it—they live tax-free in a second home—instead of being a tax relief for a small business, as was the intention. Business rates relief on second homes makes very little difference to the district, but a huge difference to the county council and the Chancellor. At least 200 newly registered second homes in Purbeck over the last couple of years will mean a loss of £500,000 a year in revenue. At the moment, Purbeck District Council needs to assess how many homes to build, and it automatically adds 10% simply to counteract the effect of second homes.
Finally, in the view of those I have spoken to, the chronic underfunding of district councils is not addressed by the safety net. It is not addressed by the transition grant payments, which only increase uncertainty for budgets if they are recalculated every two years. It is not addressed by paying £65 million to the upper quartile of “super sparsity” local authorities. Their view is that rural services should be separately funded. Finally, it is not addressed by the top-slicing of the new homes bonus. The new homes bonus should be separately funded as well.
With those points I shall conclude. As I said to the Minister of State—again, a very happy birthday to him —I support the direction of travel, but I am a little bit concerned about much of the detail.
Mr George Howarth (Knowsley) (Lab)
It is a pleasure to follow the hon. Member for South Dorset (Richard Drax), and I am sure his comments will be listened to with great interest by Ministers.
The reform of business rates is, as many others have said, welcome in principle. The Minister made very big claims in his opening speech about the benefits that would follow from it. For example, in response to my hon. Friend the Member for Coventry South (Mr Cunningham) he used the argument that the measure would be fiscally neutral, but we have had no convincing explanation of what the mechanics of making it fiscally neutral will actually be. Indeed, my hon. Friend the Member for Harrow West (Mr Thomas) made similar points, yet so far we do not seem to have had any clear answer to those queries. For me, the two tests are: first, will the Bill enable the resources to get to the areas in greatest need, a point that others have already mentioned; and, secondly, will it be fair to council tax payers, businesses and local authorities?
Before I tackle directly some of the issues and how the Bill will work in relation to them, I need to say a few words about the wider context of local government funding and services. In Knowsley, between 2010 and 2020, the local authority’s budget was reduced by a staggering 46%—I repeat, 46%—which equates to £94.7 million in cash terms. In other words, Knowsley has already experienced the biggest cut in Government support, which is largely where those figures come from, of any local authority in the United Kingdom. It is therefore quite right for me to make known our concerns about the problem and try to relate those concerns to the Bill.
Such things do not of course happen without consequences. As the National Audit Office made clear in 2014, all local authorities in England had at that time already experienced a real-terms reduction in funding of 37% since 2010. In itself, that represented a 25% cut in councils’ incomes. We cannot sustain such cuts without their having consequences. In 2016, PricewaterhouseCoopers said in a report commissioned by Lancashire County Council that there was
“a significant risk that the cost of statutory services will exceed the financial resources of the Council.”
In other words, it predicted the real possibility that that particular local authority—I suspect this would apply to many others—might not be able to function in a legal and proper manner. Such cuts do have consequences. For example, in Knowsley, between 2015 and 2020, schools on average face a funding cut of £240 per pupil. Despite the Conservative party manifesto commitment to protect such funding, many schools in my constituency will be badly affected.
How does the Bill address those problems? Unfortunately, on the basis of what we have been told, the answer is that we do not know. The Minister talked about focus, but too many of the details are still too fuzzy for us to make a rational assessment of how it will work. We therefore need the measures to be stress-tested.
A briefing note I have received from the Liverpool city region says about the Liverpool city region pilot scheme:
“Despite submitting its formal proposals regarding the scope of Pilot Scheme to the Department for Communities and Local Government in October 2016, the City Region has still had no indication of what the Pilot Scheme will look like, or even when the details of the Pilot Scheme will be provided. This is now severely hampering our ability to plan effectively for the Pilot Scheme’s imminent commencement on 1 April 2017.”
The people who are expected to do the testing that will take place do not even know what the terms of the testing will be, and that, frankly, is a matter of great concern.
I want to move on to the question of additional funding for city regions such as the Liverpool city region. Today, I was at the launch of the campaign of my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) to be the first ever elected city region Mayor, and he made a very good fist of explaining how he wanted to use the funding. However, there is so much uncertainty about how the powers and the resources can be used, particularly in relation to infrastructure resources, that when he comes in, it will be almost impossible to say what measures and resources will be available to carry out some pretty critical infrastructure changes.
I will not say any more, but it seems to me that the two tests I set at the beginning—whether the Bill will get resources to the communities most in need, and will be fair to local government, business and communities—still have not been met, because we do not have enough detail to know how it will work in practice. I appeal to the Minister for Housing and Planning to give a commitment, when he winds up, to start talking to Liverpool city region, the council leaders who at present run the combined authority, the mayor of Liverpool and the candidates for the city region Mayor about how all this will work. At the moment, the complete lack of clarity has left people utterly bewildered, and I am sure the Minister would agree that that is not the position we want local government to be in. I hope that we can have more dialogue. As I said at the beginning, I am not opposed to the principle of the Bill, but we do need more detail, more clarity and more dialogue, and I do hope we will get that.
Amanda Milling (Cannock Chase) (Con)
It is a great pleasure to follow the right hon. Member for Knowsley (Mr Howarth). I, too, wish the Minister for Housing and Planning a very happy birthday, and I hope he gets some time to enjoy it.
I am very grateful to have the opportunity to speak in this evening’s debate. I want to focus my contribution on part 1 of the Bill, which builds on the reforms of business rates undertaken in the last Parliament by extending business rate retention from 50% to 100%. I welcome these changes as a key part of the devolution of powers and budgets, and a move away from local authorities’ reliance on central Government grants. These reforms will give local authorities greater control, responsibility and accountability. I believe that this is a great way to provide councils with something they find very important—financial certainty.
I was a local councillor before entering this place, and I know how councils set their budgets and the challenges they face when doing so. Councils plan their budgets many years ahead, which requires a degree of certainty. Having a way of protecting a certain financial position for years ahead is very much in the interest of local government, allowing councils to plan projects and services for years to come. On the whole, local government is very efficient and has for many years shown all of Government how we can do more with less. Many local authorities that deserve to be congratulated on their budget in these difficult times have protected frontline services by sharing services with other councils, investing wisely, developing their local economy and taking many other actions to rise to their financial challenges.
Various aspects of the Bill will give local authorities more control, including the ability to set and reduce the business rate multiplier, creating incentives for them to grow their business rate income. Rightly, these reforms are fiscally neutral, so with the retention of business rates will come additional responsibilities. As a consequence of devolving these powers, there will inevitably be greater accountability. The powers that local authorities will have, and the decisions they will make, will directly influence outcomes for local residents and businesses. I also know that local government relishes new challenges. There are many services that it wants to get involved in for the betterment of local communities, and so that it can bring its passion, its drive for efficiency and—it offers this above all—its direct connection with voters.
However, business rates do not always offer councils certainty, and councils can face the problem of large ratepayers closing their operations. Therefore, although I wholly agree with the Government’s plans to extend business rates retention, I wish to address the issue of protection for local authorities that are faced with significant business rates losses.
Last June, Rugeley B power station ceased operations. It was incredibly disappointing news for the employees and contractors working at the site, and also for the local community, as the power station had become home to a large number of sports clubs and recreational groups. The closure has also hit the local council, Cannock Chase District Council, hard, as it saw it lose £1 million a year in business rates. Unfortunately, it is my constituents—my local residents, business and charities—that are paying the price for the failure of the Labour-run local authority to plan for that.
Anyone who has worked in business will be familiar with SWOT—strengths, weaknesses, opportunities and threats—analysis. Given the scale of the business rates losses and the impact on the local council’s financial stability, the threat of the power station closing should have been at the top of the council’s priority list of issues to prepare for. It will have been aware that there was always a risk that a 40-year-old coal-fired power station would close and that it was coming to the end of its life span. It should have had contingency plans in place. The consequence of its not doing that is that the Labour-run council is now having to make cuts to services which will adversely affect my constituents. It should have planned sooner for that eventuality and embarked sooner on further efficiency measures. It would have been in a far better position now, instead of having to default to an argument of blaming the Conservatives for its financial woes, especially given that it is better centrally funded than its three neighbouring Conservative district councils.
That said, the impact of the business rates losses should, hopefully, be a short-term issue. The gap will be filled to some extent with the Mill Green designer outlet village, which is going to be built in Cannock. In conjunction with the redevelopment of the power station site, that should lead to business rate growth for the council in the medium to long term. In fact, I believe that with ambitious, bold and visionary plans, we could create an incredibly bright future for Rugeley based on a new industrial landscape that would serve the local community for decades to come, with highly skilled jobs for future generations. But in the short term we have a shock to manage, and it is my constituents who are now having to deal with the Labour council’s failure to balance its books in the short term.
I urge the Minister to consider transitional funding to see the council through the next couple of years, as I, for one, do not want to see any obstacles put in place to the redevelopment of the power station site and the regeneration of Cannock Chase more broadly. Although I believe that the council should and could have done more to mitigate the business rates impact of the power station’s closure, the situation raises questions about how we support local authorities and protect them from significant shocks of such a nature, particularly as we move towards 100% business rate retention.
I would like to ask the Minister three questions. First, what measures are being taken to support local authorities and protect them from the impact of power station closures, or for that matter the closure of any business that is a significant business rates contributor? Secondly, what discussions has he had with his counterparts in the Department for Business, Energy and Industrial Strategy on managing such transitions and helping local authorities as we phase out coal-fired power stations? Finally, what support can the Government give local authorities to help the regeneration of large development sites, so that they can attract high-tech businesses, which will in turn create highly skilled jobs?
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Before I call the next hon. Member, may I say that the last two speakers have been very disciplined in taking only eight minutes each? If everybody now restricts themselves to eight minutes each, I will not have to put a time limit on speeches, which will make for a much more pleasant and better flowing debate.
Melanie Onn (Great Grimsby) (Lab)
It is a pleasure to follow the hon. Member for Cannock Chase (Amanda Milling). This is an especially timely debate, because it comes just after the Prime Minister spoke to my local paper, the Grimsby Telegraph, about planned funding for North East Lincolnshire Council. When she was asked how the Government’s cuts to some of the least well-off areas of the country squared with her promise to help people who are “just about managing”, she suggested that North East Lincolnshire was receiving more than enough funding, and that taxpayers in the Yorkshire and Humber region had no reason to complain about their council tax going up.
The fact is that North East Lincolnshire Council has seen its budget cut by some £79 million since 2010—as good as chopped in half. On the ground, that has meant that recycling has been cut to a fortnightly collection, charges for bin collections have had to be introduced and have recently been increased, children’s centres have been closed and merged into new hubs, and public toilets are being closed.
On that point, may I ask the Minister to expand on clause 9, which comes under the convenient heading of “Reliefs”? Will that relief come too late if the public toilets have already been shut? I raise that point because it is a significant concern to people not only in Great Grimsby but in my neighbouring constituency of Cleethorpes, which is a big tourist area. If the relief—I am sorry to keep using that appropriate term—comes too late, those facilities will not be there for people from outside the area to come and use. As has been mentioned, organisations such as Age UK and Crohn’s and Colitis UK are lobbying hard to ensure that public conveniences are not lost. That is particularly important for parents of disabled children and young children, and for older people.
On a visit to Ormiston South Parade Academy last Friday, I was asked by the schoolchildren whether I could make sure that there were more bins near shops, because they have noticed that litter is starting to pile up. Such things might not make the front pages, but they are noticed and they really matter. Another is the increase in fly-tipping, which is a blight on all our communities. As my hon. Friend the Member for Manchester, Withington (Jeff Smith) said, the cuts have taken their time to have an impact on local communities, but that impact is really starting to be felt across the piece. It is not about Labour councils versus Conservative councils—it is affecting communities across the country.
Perhaps the worst way in which the cuts to councils’ budgets have been felt has been in the care sector, and in the knock-on effect that is having on the NHS. Government cuts to my council’s budget have caused spending on adult social care in my constituency to fall by 20%. I have given examples in previous debates of how this is forcing people to live in unacceptable conditions. It has also become clear this winter that the Government’s downgrading of the social care system is having catastrophic effects on our NHS. So-called “bed blocking”—where patients are fit to return home or move to a care home but no places or in-home support are available—is sapping hospital resources and leading to waiting-times targets being missed by considerable distances. It also resulted in the outrageous circumstance at my local hospital of a 95-year-old woman being discharged from accident and emergency at 4 am because no beds were available.
People in north-east Lincolnshire are facing an almost 10% hike in their council tax bills over the next couple of years because of the Government’s policies, and there is no prospect that that will be enough money to fix these endemic problems. The autumn statement showed an increase in business rates income to the Treasury of £2.4 billion in 2017-18, but that remains unallocated. Why do the Secretary of State and the Minister not protect people from a massive rise in council tax bills by investing the money in social care and ending the precept? To Conservative Members who think that I am making a partisan attack on the Government, I would point out that my Conservative neighbour, the hon. Member for Cleethorpes (Martin Vickers), has also gone on the record to call for an end to local authority cuts, saying:
“Many of the things that make our lives that little bit better... are being cut to the bone”.
In the interview I mentioned earlier, the Prime Minister said that cuts to councils such as North East Lincolnshire were necessary to eliminate the deficit, but that goes no way to explaining why the lowest-income areas, which are generally unable to raise enough funds from local business rates, are facing the harshest cuts, while her local authority is one of the three least-suffering councils.
Kevin Hollinrake
The hon. Lady blames the Government for the funding plight in her local authority area, but the spending power of all of north Lincolnshire is £711 per head, whereas in the top-10 local authority areas in London it is £1,171 per head. Is it not the system that is at fault and the way money is distributed, rather than the Government? It is distributed according not to need but to what has happened previously.
Melanie Onn
I do not agree that it is just about the system following what has always been. I think there needs to be a reassessment of need. It is not just about following the previous system: the £79 million of cuts has nothing to do with what happened before; it is a result of decisions made over the past seven years. As my Labour colleagues have said, we are broadly supportive of the principles in the Bill, but none the less my constituents would want me to ask the Government to make sure that my local authority is no worse off in the future than it is now.
Steve Double (St Austell and Newquay) (Con)
It is a pleasure to follow the hon. Member for Great Grimsby (Melanie Onn) and to contribute to this debate. I also wish the Minister a happy birthday—I am sure there is nowhere else he would rather be.
I am delighted that the Government, through the Bill, are continuing their agenda for devolution. The measures in the Bill will revolutionise how finances are raised and bring greater flexibility and accountability to local government. The retention of business rates, for which local councils have been asking over many years, is welcome. The developments in the Bill are particularly welcome in Cornwall, not least because Cornwall is one of the pilot areas for the 100% retention of business rates, which will enable us to be an early adapter and to contribute to fine tuning its roll-out across the country.
That is another sign, following the devolution deal for Cornwall agreed in 2015, that the Government recognise the particular challenges and identity of Cornwall. I am sure that Members across the House will be aware of Cornwall’s dramatic geography: we jut out 90 miles into the Atlantic; our foundations are built on granite; and we are surrounded by fish-bearing seas on three sides, while the River Tamar almost gives us island status. Our geography has contributed to our unique identity and independent attitude, although it also presents many challenges. We have only one neighbouring county—Devon.
Our land is rich in natural resources. Only this week, that was taken further, with the announcement of large lithium deposits, and extraction of this precious metal is now eagerly expected. With the growing global demand for lithium for the production of batteries, this stands to write another chapter in Cornwall’s long history of mining, following on from tin, copper and China clay. We hope to breed a whole new generation of Ross Poldarks—hopefully, a bit more successfully. This change will mean that the local authority will be able to benefit directly from the future growth of this new industry. It will hopefully mean that the local authority will be very supportive of developing this new industry in the near future.
Cornwall’s claim to its own independent identity in culture has been long established, and its desire for greater self-rule has been rekindled in recent times. These days, we Cornish do not march in anger on Westminster as we did in 1497 to protest at the imposition of yet another tax. That attempt did not end too well for the Cornish. No, we have learned, and we now prefer to work more constructively with the Westminster Government, but the desire for greater devolution of powers remains as strong as ever.
I wholeheartedly welcome this Bill as a key move towards devolving more powers. It is an ideal balance between being given the autonomy required to act and being accountable locally without progressing into the unnecessary and expensive bureaucracy of yet another layer of government. I do not believe that we need yet another layer of government in Cornwall, as some would like to see, but I support and I am working towards giving greater powers to the existing bodies in Cornwall. The measures in this Bill will take another step towards making Cornwall Council more responsible and more accountable for Cornwall’s future.
The current review of business rates was long overdue. The delay had led to rates being out of sync with the business community and the constantly changing landscape that businesses face. It left areas that are struggling for whatever reason further disadvantaged, putting additional unwelcome pressures on them. When a high street is blighted with empty shop space, the last thing it needs is yet more businesses pulling out because of high rates, leaving more shops empty, which can reduce the footfall and further disadvantage those left behind.
With the new measures in the Bill, councils will be able to take a more flexible approach, which has to be welcomed, by being able to adapt the local business rates to suit the needs of their communities and businesses. They can work to attract new businesses where they are needed. This freedom for local authorities to set and vary business rates according to local needs and situations, which will come in 2020, will be a key advantage. It is the local equivalent of Brexit—taking back control for the good of the local community instead of having a one-size-fits-all scenario imposed by a remote authority that all too often does not actually fit in any case.
Alongside that, there are other specific key changes in the Bill, one of which I would like to address in closing. Over recent years, I have campaigned on the importance of public toilets, which are essential in a tourist area such as Cornwall. I have to choose my words carefully here, but a few years ago when I was the cabinet member on Cornwall Council responsible for public toilets, I spent many months touring the 285 public conveniences of Cornwall. I spent far more hours than I would like to admit in some of those toilets.
In recent years, Cornwall Council has been seeking to hand over all its public toilets to town and parish councils and other community organisations. One of the biggest barriers to that is the cost of running the toilets—and a large part of the cost is that they are liable for business rates. Its seems crazy to me that public toilets are liable for rates. They are an essential public service and do not make a profit; they are not a business. Thankfully, the Government have recognised this, and from April 2018, local authorities will be able to use their “discretionary relief powers”—“relief” seems to be the appropriate term here—to remove the business rate liabilities for toilets.
My Cornish colleagues and I raised that with the former Prime Minister, David Cameron, back in 2015 when he visited the county. We have been pressing for this change since, and I am delighted to see that the penny has dropped and that the Government are now addressing this issue. That will enable councils throughout the country to drop the lunacy of charging themselves rates to provide something as basic as a toilet, as well as reducing the costs of running toilets for parish councils and other community organisations that may wish to take on that task.
I am pleased to be able to welcome and support the Bill. The measures that it contains represent another significant step in the Government’s vision of, and commitment to, the devolution of appropriate powers and responsibilities to local government.
Helen Hayes (Dulwich and West Norwood) (Lab)
It is a pleasure to follow the hon. Member for St Austell and Newquay (Steve Double), but Members may be relieved to know that I shall not be speaking about public toilets.
I support the principle of business rate retention. However, the test of the Bill must lie in the extent to which it delivers fairness across the country, and on the basis of that test, I have some concerns. My first concern is about the context of more than six years of profound unfairness to local government in which the Bill is being introduced. Local government has faced swingeing cuts, imposed initially by the coalition Government and continued and intensified by the current Government. During the period between 2012 and 2020, the average cut in spending power per household for deprived council areas will be more than five times higher than that in more affluent local authority areas. By the end of this Parliament, the average cut in those more affluent areas will be £68 per household, while for deprived areas it will be more than £340 per household.
It is one of the profound injustices of the past six years that many council areas in the greatest need—those with the lowest average incomes and the highest levels of deprivation—have faced the harshest cuts. The Government have been weakening the link between need and funding. It is disappointing that we are debating the Bill in the absence of details of the fair funding review, which would enable us to apply a test of fairness to the Bill and debate it properly, in a fully informed manner. There is no necessary connection between rising levels of need for social care, for example, and the ability to raise additional revenue from business rates through economic growth. In fact, in many areas the reverse will be the case, and it will be precisely the areas with the highest levels of need that also face the greatest challenges in terms of economic growth.
My second concern relates to the challenges currently faced by local authorities as a consequence of the cuts that they have experienced. The most acute of those challenges is in social care. A million people across the country who need care are not currently receiving any. Contracts are being handed back to councils because providers cannot make them work, and our NHS is feeling the pressure of a system that all too often does not give people the support that they need, which results in an acute health crisis.
There are pressures on many other local authority services as well. Libraries and children’s centres are being closed, park services are being cut, and those working in children’s services are struggling to keep our most vulnerable children safe. A system that is already under such pressure requires reform that is guaranteed to deliver additional resources to the areas that need it most. I am concerned about the risk that the Bill poses in the absence of the details of a redistribution mechanism.
My final concern, which I raised when the Select Committee discussed the issue, is about the loss of a democratic link between the source of funding and the services that it predominantly funds. A very high proportion of councils’ funds—up to 75% in some areas—are spent on services that protect our most vulnerable residents, but that concern is not typically uppermost in the minds of most businesses. I fear that councils may find themselves in an uncomfortable tension between voting and taxpaying residents and the businesses that will provide most of their revenue. I would welcome an assurance from the Minister that the Government will monitor the issue, and will ensure that funds for key social and community services are not eroded under pressure from a different taxpayer-stakeholder group.
The Government’s track record on fairness for local government funding is appalling. I call on the Government to publish details of the process for redistributing business rates so that we can ensure that the new arrangements are fair; to look, in the short term, at the crippling crisis facing social care and other local authority services, and redress the balance; and to ensure, over time, that the services on which our most vulnerable residents rely are not placed at further risk. This reform should be being introduced as part of a package of fiscal devolution reform for local government funding, designed to embed fairness in the system and place control firmly in the hands of local authorities, which know their communities best.
Kevin Foster (Torbay) (Con)
It is a pleasure to follow the hon. Member for Dulwich and West Norwood (Helen Hayes). The only observation I would make is that, as in many other speeches from the Opposition Benches, we heard a list of local authority funding and what happened in the last Parliament between 2010 and 2015, but I am drawn back to my earlier intervention on the shadow Minister. After nearly five years of complaints from the official Opposition about local authority funding, the then shadow Chancellor, now a “Strictly Come Dancing” star, was challenged about how much extra he would be putting in, with the plans until 2017 having been published, and the answer was nothing. It has therefore been interesting to hear some of what we have heard again tonight.
I came to this debate with high hopes, because, having read clause 9, I knew this would certainly not be a bog standard Second Reading debate.
Kevin Foster
The shadow Minister talks about transferring funding, but his party would have transferred responsibilities. When in January and February 2015 there was a direct challenge to the former Member for Morley and Outwood—it is interesting that he is the former Member—on how much extra Labour was going to put in, the answer was nothing. While there would have been a transfer, there certainly was not going to be anything extra after five long years of complaints. Perhaps that was also one reason why people did not have much confidence in the Labour party having a real programme for government and duly dealt it the electoral blow that surely had to follow, and that I suspect will soon follow again.
I want to go into the details of the Bill and explain why overall it is welcome. When I became the cabinet member for city development in Coventry—I had some quite constructive dealings with the hon. Member for Coventry South (Mr Cunningham) at that time—as part of the training scheme we were briefed on what was called the Birmingham dilemma. Previously, councillors in Birmingham had chosen to spend money on regenerating the city, but of course to do that they had had to take money out of the services they were responsible for. While the regeneration had created new jobs and brought new business rates in, they took the blame for the cut in the services that they had had to make to fund it, and they did not get the reward when a significant amount of extra revenue was generated for the national Exchequer. We were briefed on that, and on how we could balance the fact that if we wanted to start regeneration or push forward a project as a local councillor, we did not get any of the reward for doing that financially; we only got the esoteric reward of being able to point to lower unemployment figures in our area or point out that the town centre was looking a bit better following the regeneration scheme. The incentives in terms of day-to-day profit and loss, or, rather, the revenue budget, were just not there. That is why the change to give local authorities more ability to retain the business rates growth they receive and remove that dilemma from local councils is welcome.
It is particularly good that we are now moving to 100% of that growth being retained. Of course in scrutinising this Bill in detail there will need to be some mechanism for when there is a sudden windfall; to be fair, that was touched on by the shadow Minister. Through a stroke of luck, a piece of national infrastructure might be dropped off in a district council area, but that might not necessarily be a sign of taking radical decisions for growth. Likewise, however, if a community is getting a piece of national infrastructure dropped off in its area, it is not unreasonable for it to want to get a direct reward from the business rates concerned.
James Heappey
It is not always the case, of course, when a significant piece of national infrastructure is dropped into a community’s lap that the local authority keeps the business rates. It would be great if a nuclear power station did mean that, but at the moment it does not.
Kevin Foster
I am sure that some of the residents living around Hinkley Point would be very pleased if their district council got those business rates. In some areas where very large developments go ahead, that would probably involve a dividend being declared rather than a council tax being set. However, it is right that our system has balance. Certain circumstances could not possibly be affected by a local authority’s decision—a steel plant closing down, for example—so we would have to look at a situation like that from the other way round. These are the details that we need to go into, but it is absolutely right that local councils should be able to take decisions to innovate and get an actual hard cash reward for doing so, which they can then use to benefit the residents who have been prepared to support them in taking those decisions.
In looking at how we fund local government, I am pleased that we are not considering measures such as a tourist tax, which have been suggested in the past. That would be completely counterproductive in an area such as Torbay. The last thing we need to do is create additional costs for people visiting and staying in the UK, and I am pleased that those kinds of ideas have not come anywhere near the Bill.
There is an issue with social care. We have heard a lot of talk today about this in relation to urban and rural areas, but there is also a real issue in coastal areas. A lot of coastal authorities in county areas, as well as stand-alone unitaries, can find themselves taking a hit at both ends of the spectrum. For example, my local authority has a ward in which 9% of the people are aged over 85, which presents its own challenges, and at the other end of the spectrum, I have a higher than average number of children in care and one of the highest rates of teenage pregnancy. That can present unique challenges for coastal communities, regardless of whether they are unitary authorities or part of a county or two-tier structure. Perhaps we need to have a debate about how we can reflect those different challenges in relation to funding opportunities.
I also welcome the fact that the infrastructure supplements are being brought forward, particularly for combined authorities. There has been some talk about why these powers have been given instantly to directly elected mayors. I expect it is because they are directly accountable and it is they who take the decision to implement these measures. Again, I think it is right that we should look at that question over a wider area. In many cases, a local urban area that might experience business rate growth could be dependent on infrastructure coming through nearby rural areas. For example, one of the biggest boosts for Torbay’s infrastructure—the south Devon link road—is 99% in Teignbridge District Council’s area, but the road clearly has a huge benefit for Torbay. In the future, could such development projects be dealt with through this kind of arrangement, rather than having to wait decades for a decision at national level?
Overall, the Bill is welcome. This is its Second Reading, so there is clearly time for far more detailed consideration in Committee and when it returns to the House on Report. From my perspective, and from my experience in local government and seeing what is happening in places such as Torbay, I believe that the Bill sets the framework for a debate about how we can deliver a real incentive to local authorities and a clear reward for those communities that innovate and grow, but without penalising any other community.
Kevin Hollinrake (Thirsk and Malton) (Con)
It is a pleasure to follow my hon. Friend the Member for Torbay (Kevin Foster), who speaks with much knowledge on this subject. The business rates retention provisions in the Bill clearly have huge potential for our local authorities, which will be able to focus on economic growth in their area, and to grow their rates base and therefore their income. However, this is an incentive around growth rather than the whole redistribution of the current local authority funding system. Most of the revenue going into local authorities will be baked in and redistributed according to a formula whose details we do not yet know, but I am heartened to hear from the Minister that the fair funding review is being taken forward. A technical working group from the Local Government Association has now been charged with that responsibility.
The principle has to be that there is a fair funding formula wherever we live. There cannot be a postcode lottery. The previous and current Secretaries of State have been clear that that is a key part of the proposals. The Communities and Local Government Committee looked into the business rates retention policy, and our report considers the concerns and the opportunities. Overall, we were supportive of the principle of the Bill, but we recommended that an independent body should look at the funding review. I am sure that the LGA has some good people, but it is important that we have a fresh look at this, so it would be good to have someone truly independent who can sit back from where local government is today.
In addition to the Committee’s initial witness sessions, we had about an hour and a half in the House of Commons Library with some experts from the Scrutiny Unit during which they tried to explain the current system to us, but we left none the wiser. I understand that 159 measures are currently in use, so the current system and the way in which the measures combine is very complex. With so many measures, one would think that the current system would be fair, but it is absolutely not.
I am grateful to Leicestershire County Council for its detailed work—it is available on its website—on authorities’ core spending power. As many will know, core spending power involves all an authority’s revenue, taking into account the revenue support grant, council tax, business rates, the new homes bonus—everything. Opposition Members might say that this is a political argument involving the shires against metropolitan areas, but the council’s evidence did not suggest that at all. Many mets are not getting a fair deal, but many shire counties, such as the one that I represent, are not getting a fair deal either. The fairest deals seem be those of many London authorities. Nine out of 10 authorities with the highest spending power are in London, yet nine out of 10 authorities with the lowest council tax are also in London. Over the past five years, a typical council tax bill outside London has increased by £100 whereas the average bill in London has decreased. Something about how overall funding is being allocated under the current system is not quite right.
To put those figures in context, the spending per head of the local authority with the highest spending power—obviously a London authority—is £1,170. That figure falls to £770 in North Yorkshire and to £615 in York. There are many other examples, such as Kirklees, Leeds, Wigan, Bury and Wakefield, of authorities getting a raw deal. One might put that down to certain other factors, such as a correlation with deprivation, income or another demographic, but that is not the case. Areas with high income deprivation, such as Leeds or Kirklees, or with a high proportion of elderly people, such as the East Riding of Yorkshire or Dorset, often have a low amount to spend per head. The system just is not working. The 1988 centralisation of the system, under which money was to be redistributed around local authorities, was supposed to make the system fair by ensuring the equal funding of services on the basis of need, but that clearly has not worked and we have been left with a postcode lottery.
I am not picking on London, because some London local authority areas, including that of the Minister for Housing and Planning, whose birthday it is today, are not particularly well funded, but the pattern persists. To put the situation into context again, Hammersmith and Fulham is not increasing its council tax this year. It is not applying the adult social care precept, but it is providing free home care to residents and has cut the price of meals on wheels. Hardly any of those facilities are now available in my area. It is simply not fair that people in different parts of the country with the same needs are getting different levels of service.
Of course there is an impact on the provision of other services in my local area of North Yorkshire. Libraries are closing or are being moved over to community libraries. Bus services will no longer be subsidised, so some services will no longer operate. Obviously there is an effect on children’s services and, crucially, on adult social care—we have a more elderly population in North Yorkshire.
This is not an easy situation to resolve. Moving from one system to another is a zero-sum game. If the system is to be made fair today, somebody will lose out. We have to move away from a system that is clearly unfair. I understand that the system is as it is because of something called regression. Past inaccuracies and unfairness have been built one on top of one another, and it is difficult to reverse those changes.
Of course more money is coming into the system—£12.5 billion, according to the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton (Mr Jones). Some extra services will clearly be required for that money, but there is an opportunity to make the system fair. Yes, there will be more services and greater responsibilities, but some areas are getting a better deal today.
Simon Hoare (North Dorset) (Con)
Does my hon. Friend agree that, in order to ensure that the problems that he highlights are not replicated in the new system, we need to find an agreed and sensible way of measuring rural deprivation? That is often incredibly hard to measure compared with deprivation in urban areas because of the scarcity and sparsity of the population.
Kevin Hollinrake
My hon. Friend makes a strong point about simplifying the system, which I was about to address. There cannot be 159 different indicators. We know that that does not work. Leicestershire has suggested nine simple indicators, including children’s services, adult social care, highways, fire, area costs, sparsity and density. That is a simple formula that people can understand and penetrate, and it would make sure that the allocations cater for the extra responsibilities we are getting through the system. We should use those nine simple cost drivers instead of this regression, which is a model based on something that clearly does not work. We need a progressive move away from that regression towards a simple, standard, penetrable formula based not on where we live, but on a fair system with fair resources and a fair assessment of the cost drivers wherever we live.
David Warburton (Somerton and Frome) (Con)
I join other hon. Members in wishing the Minister for Housing and Planning a happy birthday.
The House has been very patient. I will not hold up our proceedings for long as I am sure the Minister wants to enjoy his birthday for a couple of hours. The House has also been very accommodating, as we are yet to hear a lot of the detail regarding the Bill. As Members on both sides of the House have said, particularly the hon. Member for Sheffield South East (Mr Betts) and my hon. Friend the Member for Christchurch (Mr Chope), there is an awful lot that we still do not really know, but overall the Bill is immensely welcome.
There will be a collective sigh of relief across Somerset and other rural areas about clause 7’s extension of rate relief to rural areas, which will go some way towards putting rural areas on a more equal footing with urban areas, although there is still so much to do in many other regards for us to achieve anything like an equal footing. Small businesses in my constituency have raised that inequality with me, as I am sure others have in constituencies across the country, so it is good that we are addressing it.
Business rates appeals have cost some £2.5 billion over the past five years and, like the Local Government Association, I am pleased that the Bill sets out how the Government will pay local authorities for the cost of appeals, which will clearly make a difference. The proviso to that, however, is that that mechanism must be in place before the 100% retention of business rates, because if it is not, surely the local authority would be liable for 100% of the cost of appeals. I do not fully understand that, but no doubt we will hear more about it—I look forward to hearing what the Minister says. The retention of the redistribution mechanism for topping up a local authority’s funding if it does not raise enough means that the Bill is extremely good news on business rates as a whole, not only for local authorities but for small businesses.
On the wider funding issues, altering the local government finance settlement so that it becomes multi-year instead of yearly will of course provide local authorities with the opportunity to plan ahead. That will give them certainty and clarity so that they can look ahead like any other business or organisation as we transition to the system in which they retain 100% of local business rates. Again, perhaps we will learn more about the details of the proposal.
In rural Somerset, telecoms infrastructure is an enormous issue. Many small businesses in hamlets and isolated areas are left behind by superfast broadband. It feels like the 10% of businesses that are yet to be connected are all in my constituency, so while the tax break incentive for infrastructure development is enormously welcome, existing infrastructure also needs improvement. We have creaking half-copper wires all over the place, so I look forward to the other elements of the £1 billion connectivity investment that was announced by the Chancellor in the autumn statement.
I have general concerns about the financial priority that is being given to areas that are planning to have a mayor. The devolution plan for Somerset is widely controversial. Under the existing plan, in which Somerset and Devon would come together, having a mayor would not seem to be the right way to proceed. I am not sure what that would mean for financial incentives, so there is work to be done.
Overall, however, the Bill is extremely welcome. It delivers on our commitment to devolve budgets and powers to local government, and it moves local government away from dependency and towards self-sufficiency. As Voltaire and Spider-Man’s uncle both said, “With great power comes great responsibility.” It is clear that the responsibility that the Bill provides will strengthen both the position and the powers of local government.
James Heappey (Wells) (Con)
I welcome the proposed devolution of business rates, so in that sense I support the Bill enthusiastically. I have no doubt that the retention of business rates will encourage local councils to be more entrepreneurial and rejuvenate economic development departments in city and county halls. In the long term, I am sure that the new focus on local economic development, and the Government’s industrial strategy, with its focus on growth in all parts of the UK, will deliver self-sustaining local authorities that deliver high-quality public services in all parts of the UK. But we are not there yet. In fact, we are nowhere near.
Per capita funding for predominantly rural local authorities is significantly below that for predominantly urban authority areas. Why? Because that is just the way it has always been. There is no rhyme or reason to it; it is simply a legacy of old funding formulae, so rural areas have continued to be at a disadvantage. That is iniquitous, and it needs to be corrected. Instead, under the settlement announced, the gap will widen further. Last year, rural MPs on both sides of the House won a concession for extra money in the rural services delivery grant that effectively ensured that last year’s cuts were shared equally between urban and rural areas, but that was just a sticking plaster that did not change the settlement for this year, or the two that follow. However, I remain ever hopeful that, like last year, some additional money can be found to provide some extra rural services delivery grant to ensure that, again, the cuts fall fairly and that rural residents are not left at a disadvantage. I am clear, though, that that will be just another sticking plaster, and that what local authorities need more than anything is certainty—certainty to borrow, invest and budget in the long term so that local public services are on a more stable footing. That means that the current review of local government funding needs to be accelerated, and accelerated urgently.
Furthermore, we should be bold in our ambition for the scale of that review. A review of local government funding is needed that fully recognises the costs of rurality; the costs of an ageing population; the other costs faced by local authorities around the country in both rural areas and urban areas; the costs of communities in which English is predominantly spoken as a second language; and the costs of pockets of high deprivation both in urban and rural areas. All those costs must be understood. We need to put in place a new funding formula for local government that is entirely transparent and entirely fair for all our constituents, whether we represent rural or urban areas.
In Somerset, we are already paying extra on our council tax to protect ourselves from flooding. We will pay extra on our council tax for adult social care. Our cost of living is rising fast, because fuel costs are going up, which impacts on rural areas more than on urban areas. In return, Somerset residents are getting their bins collected less often, the libraries are open less, youth clubs have lost their funding and bus routes are being lost.
Somerset County Council has done a great job running into this headwind, not least because it does so while carrying the enormous debt left by the Liberal Democrats when they were last in charge at county hall. That £20 million a year interest and debt repayment is a very useful reminder of why Somerset is better off under Conservative control. We should be clear that the alchemy of the Conservative administration at county hall in Taunton—just as in other county halls across the country—cannot go on forever. There must be a review that not only delivers the devolution of business rates, but, in the short and medium terms, ensures that we continue to redistribute money from London and the south-east to the rest of the UK so that local authorities in rural areas, and in the regions of the United Kingdom, can be given a financial settlement that allows them to continue to deliver high-quality local public services with the certainty that is required so that they can borrow, plan and budget for the long term.
I agree with the principle of this Bill. I absolutely agree with the devolution of business rates to local authorities. It is a great idea to give local authorities the opportunity to be more entrepreneurial, to invest in their economic development departments and to reap that return by growing on their patch the number of businesses paying rates, which allows them to do even more by way of public services. Clearly, it is the long-term future, but we should make no mistake: that system will not work immediately on its introduction. What we need in the interim is a full review of local government funding so that our county councils, district councils and councils everywhere else in the UK can operate with some certainty. We do not have to have this year-by-year cut to local public services that annoys our constituents and that means we have such full mailbags.
Peter Aldous (Waveney) (Con)
I apologise for not being here at the start of this debate. I am grateful to you, Madam Deputy Speaker, for allowing me to say a few words. I will not detain those on the Front Benches for very long.
This Bill provides a framework for a major change in the funding of local government, and it provides for the greater retention of business rate revenue by local authorities, and that principle is the right one. Ideally, money raised in an area should remain there, rather than being circulated and perhaps lost as it goes around the country. People and businesses in an area are entitled to expect their money to be spent on local services, with spending decisions made by local councillors to whom they can talk on a day-to-day basis. It is right that we are moving away from a system whereby the man in Whitehall knows—or thinks he knows—best. That is an important move by the Government, but, as is often the case in such circumstances, there are potential pitfalls along the way. I wish briefly to outline three of those pitfalls this evening, and I do so in my capacity as an MP for a county and a coastal area, and as chairman of the all-party parliamentary group for counties.
My first concern is what I will call an unintended consequence. As part of the devolution process, in order to facilitate the new business rate retention process, at present various responsibilities are being transferred from central to local government to ensure fiscal neutrality. I have no problem with that in principle, but there is a danger that in some circumstances there might be unintended consequences. An example that I have come across is in the field of supported housing. Traditionally, developers of supported housing have been able to rely on the fact that their bankers are prepared to fund much needed new schemes in the relative comfort of knowing that they will be underwritten and underpinned by central Government. It is now proposed that in future that should be a function of local government. I regret to say that the feedback I have received from many specialist supported housing providers indicates that they are very uneasy about whether the supported housing that we need will actually come forward. Practical steps need to be taken to address this concern—there might be others—if this aspect of the devolution process is to succeed.
My second concern relates to what I will call growth constraints. An underlying premise behind the move to greater business rate retention is that those authorities that promote growth in their area should be rewarded for it. Again, this is right, but the other side of the coin is that authorities that would like to promote economic growth in their area should not be penalised if, for reasons outside their control, they are unable to do so. For example, if much of a local authority area is a national park, it would not be realistic to promote a science park. Moreover, one cannot buck the market, and the success of such business park developments rests on the old adage of location, location, location. If they are not in the right location, there is nothing they can do about it; they cannot move their district, their borough or their county.
My third and principal concern focuses on the requirement for the needs-based review of fair funding to take place at the same time as the move towards full business rate retention. I am aware that that is the Government’s intention and that a consultation is due to start next month. It is absolutely vital that we keep to this. If we do not, county areas, such as the constituency I represent, will be placed at an even greater disadvantage than they are at present. The current formula does not take proper account of the demand pressures that county areas and, as my hon. Friend the Member for Torbay (Kevin Foster) said, coastal areas face. There is the adult social care time bomb that we have heard so much about, the obligation to maintain hundreds, if not thousands, of miles of local roads, and the cost of delivering services in sparsely populated, rural areas. The current formula is opaque and, after years of tinkering, no longer fit for purpose, as it is no longer directly linked to need. The needs-based review must be synchronised with the move towards greater business rate retention—they must be joined at the hip. If it is not, a large section of the population will be very unfairly penalised.
In conclusion, I commend the Government for being bold, for their ambition and for their direction of travel. I thus support the Bill, but I urge the Government to remember that the devil is in the detail and to pursue the needs-based review in a timely and fair way. Time really is of the essence in this issue.
Jim McMahon (Oldham West and Royton) (Lab)
May I join many Members on the Government side in wishing my counterpart a very happy birthday? I am sure this does not quite constitute a birthday bash, and for many it is not quite the icing on the cake either, but we wait with bated breath for the Committee stage to really get under the skin of what the Bill means. I hope we will work together then, because I think there is a shared desire to promote devolution, to see more power shift from this place down to our communities, and to really empower local areas to determine what is right for them. But the devil, of course, will be in the detail.
We welcome the move towards devolution, and so will many of our councillors, but genuine devolution means actual power, not just limited decisions being made at a local level within a framework that is tightly defined by a very centralising Government; it means areas having genuine freedoms and genuine power, and working with communities to co-produce the future they want. That is devolution, and power and the ability to effect change are what we all came into politics for. None of us wants things in our areas to be predetermined by a Government—hundreds of miles away in many cases —who do not know the ins and outs of our communities, and who really do not know local circumstances in the way we do.
It is important that we develop a plan that works for the whole country. I think many people in England look at devolution being discussed in Scotland, Wales and Northern Ireland and say, “What about England?” Now, even within England, we are seeing towns, cities and counties being pitched against each other, with large parts of England still completely without any devolution deals. The challenge for the Government is that this is about letting go as much as it is about giving a little away to local areas. It is also about doing that in a meaningful way, and we should have the confidence to give the same powers we are proposing for our mayoral combined authorities to our counties and metropolitan areas. That is real confidence and real letting-go. If the Opposition can help in Committee to table some amendments on that, which will hopefully be received in a positive way, we will, I hope, have a fair settlement for England.
But let us be honest: some of this comes down to cash as well as power. We can have ambition and a desire to make our area the best it can be, but we need funding to make that happen. We need capital to invest in growth. I do not just mean areas doing deals with the Government—providing they have access to the Government, because those that do not will not get that capital funding. I am also talking about having revenue to make sure that the skills providers, the schools system, the health system and the Department for Work and Pensions all work together to make sure we see genuine reform and genuine growth.
A lot of people say, “If you want modernisation, to see where real innovation has taken place and proven itself to be efficient, look to local government.” A lot of people in the Department for Work and Pensions, Her Majesty’s Revenue and Customs and the Treasury should look at themselves in shame because of the way they have allowed frontline services to be cut to the bone while they themselves have failed to reform from the inside.
I worry that we still see a very narrow base being discussed when we talk about fiscal devolution and local autonomy. Let us be honest: we are still talking about council services being based not on need and on people’s genuine need for support and services but on house values in 1991. We have not had the courage to bite the bullet and take forward revaluations. We have not allowed local freedoms to look at exemptions and discounts in the way that areas have asked for through the devolution deals that have taken place.
On top of that, we are still talking about a very narrow business rate base. Many of the areas that have a low tax base for residential properties have the same issue with their business rate base: lower values and lower demand have an effect on the tax base and on the amount of tax that can be generated. It is a real shame that when we talk about fiscal devolution and autonomy, we are still taking the easy option. We are using property tax because it is easy: we know how to collect it and we know how to generate it. That then creates the pot of money that local government has to use to sink or swim. Well, that is okay for an area that has a strong tax base, but for an area that does not, the alternative to swimming is to sink, and that is not good enough if we believe in fairness and a decent society.
So we will see amendments being tabled in Committee that really reflect the idea of funding based on need. It is not good enough to set one area against another. If there are instances in rural areas that should be taken into account, a fair funding model should accommodate that. Equally, a fair funding formula should take into account areas with high levels of children who need safeguarding support or people who need social care. There should not be the constant imbalance whereby areas fight with each other to get scarce resources to deliver the public services that our communities need.
Kevin Hollinrake
The hon. Gentleman makes a good point about looking at this again as a blank canvas. Does he therefore accept that if that new funding formula meant that a local authority was worse off based on such objective need, he would support legislating on that basis?
Jim McMahon
We have heard from Members on both sides of the House the deep concern that any review will mean that some areas are worse off than others. As I said, that is inevitable with such narrow tax bases, when we are looking at council tax income and business rate income and saying, “That’s it.” Given that the additional grants to local authorities are now in question, we are always going to be fighting for a scarce resource.
Devolution deals have included requests for retention of air passenger duty and the tourism tax. Okay, not every area might want that, but if we believe in devolution, local areas should be able to have some of these options. The retention of fuel duty or VAT at a local level has not even been discussed. If we want genuine fiscal devolution, we need to be more open to more taxes being raised locally and spent locally, with local people holding to account the people who make those decisions.
It is not local government that needs to change, or even the DCLG team, but the Treasury—it needs to let go. The reason air passenger duty cannot be devolved at the moment is that the Treasury has no idea how much fuel duty is generated at any of our airports, because it is paid by the airline at its head office. The Treasury has no idea how much is generated from fuel duty, because it is not attributed to every petrol station but paid at the refinery, and that does not account for how much is spent at a local level.
Mr George Howarth
My hon. Friend is making a powerful point that many of us tried to make earlier. Does he agree that on top of the fact that no redistributive mechanism is involved in this measure, there has not been sufficient testing of what the outcomes will be for us to be satisfied that it will work to the benefit of all local authorities?
Jim McMahon
That is an absolutely fair point that has been raised by not just me but very credible think-tanks and by the LGA, whose financial review stated that we need a broad review of the tax base to make sure that local authorities have a broad range of taxes and that they are resilient to future change and future shocks.
It is not good enough just to say that councils need to reform.
Mr Jim Cunningham
For very many years now, on and off, we have debated local government. Does my hon. Friend agree that we should have some sort of independent inquiry to have a good look at the needs of local government and how it should properly be funded?
Jim McMahon
I strongly believe, as would many in local government, that local government finance and the powers that are contained within local government should have constitutional protection from the interference of central Government. It cannot be at the whim of the Minister of the day, or even the Prime Minister or the Chancellor, to change the viability and sustainability of public services to such a degree.
We have made some progress with the four-year, multi- year settlement. I am pleased that the majority of local authorities have put in for that, but it was of course based on the projections of doom—on local authorities being told before the efficiency plan was submitted that they had to live within their means, but taking no account of the demand. At one point, the efficiency plans had been submitted, but there was a gap that has not been addressed through the funding settlements that are now being brought in. With the best will in the world, unless central Government bite the bullet and deal with the chronic underfunding of social care, council tax payers will continue to bear the brunt. It is absolutely wrong in a civilised country that people’s ability to receive decent social care is based on the tax base of their local authority, based on house values in 1991, and not on their need for that service.
Mr Cunningham
On social care, I met the chief executive of University hospital Coventry a couple of weeks ago. One of the big dilemmas is that people with mental illnesses are turning up at the hospital and looking for treatment when they should be going elsewhere. There is a real difficulty, certainly in the midlands, in looking after the carers in that situation. Does my hon. Friend agree that something should be done about that?
Jim McMahon
I absolutely agree with my hon. Friend, but his point goes beyond adult social care and the acute sector. Over this parliamentary Session, we have been discussing the cuts to community pharmacies and the impact that they are going to have. A lot of Greater Manchester’s Healthier Together programme is based on the preventive work of our community pharmacies, but 16 community pharmacies in my own town face closure. That is not part of the health devolution programme to Greater Manchester, but it is being held up as a place that has health devolution. That is because it is very tightly defined and the Government, with the best will in the world, just will not let go, for different reasons.
Members should not just take my word for it. During my years in local government, I had the pleasure of working with some fantastic people. I should be careful not to overstate this, given that he is one of the mayoral candidates in the race for Greater Manchester, but the Conservative leader of Trafford Council, who is also a vice-chair of the LGA, is very clear that this is not fiscal devolution, but a retention of rates that will be set centrally. If we mean it, we should all learn to let go, trust our local councils and trust local people to hold them to account.
Melanie Onn
I appreciate what my hon. Friend is saying about learning to let go and give power back to local authorities, but what about those that, because of the cuts, are finding it so difficult to operate that they are considering merging? Does he think that that will impact on the future operations of local authorities?
Jim McMahon
My hon. Friend makes a very important point about the burning platform coming down the line towards many local authorities. Local authorities that we support have had to make very short-term decisions and they have a horrible task of trying to meet growing demand, particularly for safeguarding young and vulnerable adults and children and for social care. The principle of devolution has to mean having a national framework with an answer for devolution for every part of England. It should not be about picking areas off one by one and against each other.
Jim McMahon
I will give way in a moment. Devolution also has to have fair funding at its heart. There is a fundamental difference between the Opposition and the Government on fair funding. One view says that fair funding means that everybody gets the same amount, regardless of the local community’s need, but we believe that fair funding—[Interruption.] I do not judge Government Members on their heckling; I judge them on their actions, the coalition years and the financial settlements, which are still coming through, that show that councils are having their budgets stripped away while demand goes through the roof.
Jim McMahon
I am going to make some progress, because it is the Minister’s birthday and he has cake with candles waiting at home. There are also a great deal of unanswered questions that he needs to address at the Dispatch Box.
Jim McMahon
Given my hon. Friend’s position as Chair of the Select Committee, it would be rude not to give way to him.
Mr Betts
I thank my hon. Friend for giving way and I am sorry that there are so many disappointed faces on the Government Benches. Oppositions are always better than Governments at arguing in favour of giving more powers and control to local authorities. That has happened over the years. Looking to the future, does he accept that we need to develop a local government system whereby local authorities have greater ability to raise money themselves and make their own decisions in doing so? We also have to address the issue of equalisation and recognising needs. There has to be an element of central funding, but it would be helpful if local government as a whole had the right to be given control of a specified amount of income tax, rather than have to be reliant on Governments, who can change the system and take away powers and money on a whim.
Jim McMahon
My hon. Friend puts on show his experience with a detailed assessment of the types of variable taxes that local government really needs in order to be sustainable in the long term. We are in the process of looking at local government finance in the longer term, and I make this plea: that we look a bit more broadly than the traditional council tax and business rate base; that we are open-minded about having a more varied range of taxes for local authorities to take; and that, in doing so, we ensure that local authorities are held to account and that they can work together to secure the right distribution method so that funding is genuinely based on need.
Jim McMahon
I need to make progress, because the Minister has already given notice that he wants to address a number of very detailed points that have been made. I think it is fair that we allow him to do that. Members will be sad to hear that not all of us will have the pleasure of sitting on the Bill Committee and going through the Bill in great detail.
As important as incentives are, so, too, is certainty. Yes, we should share the benefits of growth where growth can happen and where local authorities can demonstrate that they have had some role in it, but it is important to make sure that local authorities are not allowed to sink if they cannot do so for whatever reason. We have had some examples of situations in which that could be completely outside the local authority’s control. If a very large employer decides to relocate somewhere else in the world, it would be wrong for the local taxpayer to feel the brunt of that in their public services. The safety net is absolutely critical, and so is the detail, which we look forward to seeing, on tariffs and top-ups. My hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) raised the importance of not just having the tariffs and top-ups in place, but making sure that the redistribution method is transparent and has fairness at its heart.
When we talk about certainty and the future of local government, we need to bear in mind that we are not talking about institutions. Councils do not exist for councils’ sake; they exist because they provide public services for public need and public demand. We miss a trick if we do not put at the front of our mind the real impact of the cuts on local communities not just in terms of austerity, but in their effect on communities’ ability to benefit genuinely from growth and devolution.
My right hon. Friend the Member for Knowsley (Mr Howarth) was very clear about the true impact on his local community of nearly £100 million of cuts to the local council’s budget. Let us be honest: there is no way in which we can take that amount of money out of the system and expect there to be no impact on the local area. We heard the same thing from my hon. Friend the Member for Manchester, Withington (Jeff Smith). He made it clear that Manchester, which is held up as an example of an excellent authority and which is at the forefront of devolution in leading the Greater Manchester devolution deal, has had to make some terrible decisions just to balance its everyday revenue book. That cannot be right.
Looking down the line, we have a serious problem coming our way: a £2.6 billion black hole in adult social care. If we do not deal with that, it will not mean that we have £2.6 billion more to spend, to save or to give away in tax breaks; it will only push demand elsewhere in the system, as we have seen with delayed discharges and queues for A&E. That can be prevented, but only by providing the money up-front to keep people in their homes for longer, putting far more money into preventive services and making sure that we are not spending money unnecessarily—not because people do not need that service, but because they will get a better service by being well for longer at home. That is really important.
We talk about the people who are already in receipt of social care not getting the support they need, but according to Age Concern 1 million people who would have been entitled to social care in 2010 are no longer in receipt of it. We are talking about somebody’s mum, dad or grandparent. I hope that when I get to the stage of having to think about my father or mother needing that type of care, we will have got a grip on the system. As mindful as I am of that, I am also mindful of the fact that as a Parliament we have a responsibility for the 1 million people who need social care. They have worked and contributed all their lives, and when they really need that care, it is right that the Government stand up for them.
The situation is bad in Oldham and Greater Manchester, but let us just look at Surrey. I know the Conservative leader of Surrey Council, David Hodge; we worked together on the LGA. He is not a grandstander, and he is not trying to make petty points. He is raising a very real issue about the lack of funding in social care. If Surrey had to raise council tax by 15% just to keep its head above water, just look at the authorities that have had their budgets cut even more than Surrey has. Some are in a terrible situation.
I will leave it at that and allow the Minister to come in. I ask him to work with us. Labour Front Benchers absolutely believe in devolution and in sending power from this place down to our communities, and we will table positive amendments, as well as probing ones. It is not enough for the Government simply to let go a little; they need to learn to let go full stop.
The Minister for Housing and Planning (Gavin Barwell)
As several hon. Members have kindly mentioned during the debate, today is my 45th birthday. It is not a cause for celebration on my part, but what better way to numb the pain than to attend a debate on local government finance? For nearly 24 of my 45 years, I have been interested in housing and local government policy. In all that time, there has been a very strong call for local government to move away from its dependence on central Government grants.
The Chair of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), for whom I have very great respect, asked whether the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Nuneaton (Mr Jones), was justified in saying that this is a revolutionary measure. I think it is: it is a big step change in reducing the reliance of local government in this country on central Government. Will it solve all the problems? No, of course it will not. There will still be arguments about the overall level of resourcing and the distribution among local authorities. However, I remind all Members of the House to read the briefing we have received from the Local Government Association, which says that the central measure in the Bill has long been called for by local councils.
The hon. Member for Harrow West (Mr Thomas), who spoke on behalf of the Opposition, suffered a bit of amnesia on the Labour Government’s record in office on devolution. None the less, it was very good to hear that the Opposition Front Bench support the measures in the Bill in principle. He was right to say that the Bill is part of a wider package that is very important in terms of what will be devolved to achieve the fiscal neutrality of its measures, on which the Government are consulting at the moment, as well as the distribution of the funding that will ensure a fair settlement for all local authorities and the issue of providing a safety net in case any authority faces a sudden decline in its income.
I will just make a few points in that regard. The hon. Member for Manchester, Withington (Jeff Smith)—he is not in the same place as he was earlier—asked us to forgive him his scepticism. I certainly do forgive him. I think scepticism of all Governments over the years on these matters has probably been justified. However, we cannot legislate for fair funding. The relative needs of various parts of the country are going to change over time—the Chairman of the Select Committee made that point very powerfully—and we cannot legislate for that, but we are absolutely determined to get this right. At the moment, we have two approaches to taking forward the detail and making sure that we address the concerns that Members on both sides of the House have expressed. We will pilot the arrangements, and two hon. Members —my hon. Friend the Member for St Austell and Newquay (Steve Double) and the right hon. Member for Knowsley (Mr Howarth)—represent areas that are piloting reforms. We also have a very important steering group with the Local Government Association, and it is working with local government to try to get the details right.
Mr George Howarth
Although the pilots are welcome, I made the point earlier that the Liverpool city region—it is one of the pilot areas, as the Minister has said—has had no consultation whatsoever by the Government on how they want to proceed with the pilot. Does he not think that we could do with a bit more detail before we get to the Committee stage so that we can judge what the likely outcomes will be?
Gavin Barwell
The Secretary of State has just told me that he has discussed the pilot with leaders in the city region and my officials have told me that there have been some detailed discussions. It is certainly true that not all of the points have been dealt with yet, but I will happily write to the right hon. Gentleman to provide him with some reassurance.
I will deal with some of the points that colleagues have made. My hon. Friend the Member for Christchurch (Mr Chope) talked about local government reorganisation in Dorset and what the position might be there. I can tell him that it would be possible to set one level of council tax from day one, but in previous reorganisations a period has been allowed for council tax rates to equalise. He asked about the pooling arrangements set out in the Bill. We intend to consult local government about those arrangements, but the reason for the change is that the current arrangements have led to some local authorities being left out of what would have been logical arrangements, and we should not allow that to continue. He also made the point that we are looking to implement these reforms in the last year of the four-year settlement. That is true, and we made that clear at the outset when we set out the settlement.
Gavin Barwell
If my hon. Friend will allow me, I will make a bit of progress, because I have a lot of points to respond to.
The Chair of the Communities and Local Government Committee, the hon. Member for Sheffield South East, said that he would like authorities to be given the freedom not just to reduce the multiplier but to increase it. That would certainly be the easy way to raise more income, but Conservative Members believe that the way to raise more income is to grow the local economy, and we are trying to provide incentives for local authorities to do that.
The hon. Gentleman made the crucial point that if resetting were done too often, the incentive for growth would disappear, but if it were not done regularly enough, there would be a danger of authorities falling behind. I can confirm to him that we will look to adjust the needs baseline every time we reset—that is a crucial part of the reforms. We may also need to look at the mix of measures that have been devolved to make the package fiscally neutral, because as he said, demand for services may grow more quickly than the income from the tax base. Those issues will have to be looked at each time.
My right hon. Friend the Member for Cities of London and Westminster (Mark Field) spoke powerfully about the unique constituency that he represents, for which he is such a powerful advocate in the House. He talked about the huge potential for income there, but also the real challenges that his local authorities face.
My hon. Friend the Member for Northampton South (David Mackintosh) made a good point about ensuring that there is an incentive for local authorities to help small businesses, from which they might not get a business rates income. The Government’s hope, and I am sure that of his local authority, is that small businesses will grow to become medium-sized and larger businesses, so that the incentive will still be there in the longer term.
My hon. Friend the Member for South Dorset (Richard Drax) made an important point about the appeals system for business rates. At the moment, local government bears a significant part of the risk of appeals. One of the reforms in the Bill that the Local Government Association has welcomed deals with that issue, so that the risk does not sit with individual local authorities. Clearly, with 100% retention that risk would be significantly increased, so we have sought to address the issue that he is concerned about.
My hon. Friend the Member for Cannock Chase (Amanda Milling) raised the issue of the safety net and referred to an example in her constituency that I believe she has raised with Ministers a number of times. At the moment, in the 50% retention system, there is a safety net at 92.5% of assumed income. As part of developing these reforms, the Government will need to give thought to what the arrangement should be under 100% retention. She is absolutely right to flag up the importance of protecting authorities that face a sudden large loss in their income.
Amanda Milling
Given that the intention is to phase out coal-fired power stations between now and 2025, what will the Government do to work with local authorities that will face closures over the coming years?
Gavin Barwell
There are two issues here—making sure that the arrangements that we have in place cater for circumstances in which there is a significant loss in a local authority’s business rates income from one financial year to the next, and giving advance warning of the timing of closures so that local authorities have time to prepare appropriately. Perhaps my hon. Friend may wish to have discussions with the Under-Secretary of State, my hon. Friend the Member for Nuneaton, as the proposals go forward.
Mr Jim Cunningham
The Minister mentioned the fact that the Government want to grow local economies through the measures in the Bill. One problem as a local economy expands is the shortage of housing. If the private sector cannot cope, why do the Government not take the shackles off councils and allow them to borrow to build council houses, so that they can take the pressure off mortgages?
Gavin Barwell
The hon. Gentleman tempts me on to my pet subject. If his argument is that we need to build more homes in this country, I absolutely agree with him, and so does the Secretary of State. There will be a White Paper shortly with a package of measures to encourage all sectors to build more homes, but I point him to the announcement that the Chancellor made in the autumn statement of a further £1.4 billion for the building of affordable housing. The commitment of the Secretary of State and myself on that issue is clear.
The hon. Member for Great Grimsby (Melanie Onn) and my hon. Friend the Member for St Austell and Newquay referred to the measures on rate relief for public toilets. Indeed, there was quite a lot of toilet humour during the debate. Because I am not at home for my birthday, my children are watching, so I will keep it clean. I simply point out one thing to the hon. Lady. She asked whether, if public toilets were closed, the relief would still apply—whether they would still be liable for rates. The answer is quite complicated: they might still be rateable—so there is a potential for a charge—but unoccupied properties with a rateable value below £2,000 do not pay business rates, so they might fall below that threshold. If they are above it, the powers in the Bill would be applicable. I hope that that gives her the detail she was looking for.
My hon. Friend the Member for Torbay (Kevin Foster) spoke powerfully about the pressures on coastal communities and made a plea that, as we look at the fair funding review, we make sure that those particular pressures are taken into account. I know that other hon. Members will share his concern, and I thought he made his points very forcefully.
My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) spoke incredibly powerfully and showed a real understanding of the detail of local government finance. I have heard it said that when Einstein published his general theory of relativity, for a number of years only two or three people around the world understood it. I think the local government finance system is similar in that regard, but it sounds like my hon. Friend is one of the two or three. He talked about regression—the fact that the formula is not based purely on an assessment of need but takes past spending patterns as a proxy for what is needed—which means that to some degree the political decisions of different authorities have an impact. I think he was arguing that we move away from that, which is absolutely something we can look at as part of the fair funding review.
My hon. Friend the Member for Somerton and Frome (David Warburton) spoke powerfully about the importance of the measures on a rural rate relief. He is a great champion for rural communities, and we are pleased to include this measure; it will ensure that rural small businesses get the same treatment as small businesses in other parts of the country.
My hon. Friend the Member for Wells (James Heappey) spoke powerfully not just for his own constituents but for rural communities across the country in trying to ensure they get a fair deal from the fair funding review. The House considered this issue last year, and I know that he and the Secretary of State feel strongly about it, but we need to get the detail right and ensure that the formula takes account of the needs of all communities, whether inner-city areas, suburban areas such as the one I represent or rural communities, and ensure that they all get a fair deal out of the system for determining finance.
The final Back-Bench speech was from my hon. Friend the Member for Waveney (Peter Aldous). He made several points but one in particular bears repeating: about the importance of implementing the fair funding review at the same time as we extend business rates retention to 100%. It is clearly essential in those circumstances to ensure an equitable distribution of the income that local government as a whole raises through that tax. That was an important point.
The hon. Member for Oldham West and Royton (Jim McMahon), who wound up for the Opposition, made two points that are worth my picking up on briefly. He spoke rightly about making sure that the system prevents those communities from sinking that, for whatever reason, cannot raise additional funding from growth and might therefore find themselves deprived of income, which could become a self-replicating cycle. The Government want to address that in several ways. For one, we want to make sure that we get the system for local government funding right, but it will not have escaped the House’s attention that earlier we heard about an industrial strategy from a Government determined that all parts of our country benefit from the economic growth we are delivering. It is again worth looking back at the record of the Labour Government and their failure to do that. We do not intend to repeat that mistake.
The hon. Gentleman made one final point about local government finance. I want to make it absolutely clear to him that nobody on the Government Benches thinks that every single community in the country should have the same level of funding per head. We absolutely recognise that funding should be based on need. Let me give him a statistic: his own local authority has a spending power, per dwelling, of just under £1,900. In the Prime Minister’s community, that figure is just over £1,300, so his constituents are getting a spending power that is nearly 50% more to reflect the fact—quite rightly—that there are extra needs in his community. I want to make it absolutely clear on behalf of the Government that we are committed to a fair system that reflects need.
It is probably worth putting on the record some of the other things that the Bill does that have not received the same attention in the debate. The pooling arrangements and the possibility for groups of local authorities essentially to replicate enterprise zone policy is a really important measure. Some mention has been made of the powers in the legislation for the Greater London Authority and for mayoral combined authorities to levy a 2% supplement on business rates, if local business has been consulted, to fund new infrastructure. Again, this tempts me into my role as the Minister for Housing and Planning, but the Secretary of State and I are both convinced that if we want to see not just economic growth, but the housing that we desperately need, putting in place the right infrastructure is absolutely critical.
As constituency MPs, I suspect we have all quite often experienced how the resistance to building new housing in our communities is driven by a perception that over the years new housing has not been accompanied by the necessary infrastructure, so people have found it harder to get an appointment with their GP or to get their children into the local school, and found that their local trains are overcrowded or their roads are more congested. It is vital for the Government to tackle this problem, and make sure that we get infrastructure in place that will not only fuel economic growth, but help to deliver the housing that we so desperately need.
Kevin Foster
I appreciate the explanation that the Minister is giving. When people first hear about the idea of infrastructure, they instantly think of roads and railways. Will my hon. Friend confirm that it will be slightly wider than that, including, for example, a good provision of superfast broadband services?
Gavin Barwell
Absolutely. We want the definition of infrastructure to include looking widely at all the different things that can help to drive economic growth. In the industrial strategy Green Paper published today, getting the right digital infrastructure in place is a key part of trying to ensure that we get the broad-based economic growth that the country needs. Again, we should aim for the best connections not just in core urban areas, but right across the country, so that all communities can benefit from that technology.
James Heappey
I am grateful. Clearly, the challenge in making sure that business rates are being retained and that they are sufficient to fund all local services is to grow the tax base locally. Does the Minister agree that focusing on growth deals that aggressively target those areas where the business rate base is smallest might be a good thing to do over the next two years?
Gavin Barwell
I know that the Secretary of State is really keen to work with communities right across the country to get these growth deals in place. We absolutely recognise that if we want to drive economic growth, the role of local communities—local councils, local businesses and local enterprise partnerships—is critical. The Government giving additional freedoms to help make that work possible can play a huge role.
One other measure that has not been touched on is the provision to change the inflation indicator for business rates from RPI to CPI. As the Association of Convenience Stores says in its submission, this will lower annual rate increases for businesses, providing a reduction in the burden of business rates that businesses are going to experience.
In conclusion, local government is a crucial part of our democracy. Many Members, including myself, but going right up to the Prime Minister, have served as councillors before coming to this House to serve as Members of Parliament. All of us know just how important the work of councillors is to the local communities that we have the privilege to represent. For too long, councils have been forced to rely on us here in Westminster and have lacked the levers and incentives required to drive growth and investment in communities, and those communities have suffered as a result. This Bill presents a historic opportunity to change that forever. A global Britain can only be built on a strong local foundation. This Bill will help to provide that, and I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Local Government Finance Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7),
That the following provisions shall apply to the Local Government Finance Bill:
Committal
1. The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 21 February 2017.
3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
4. Proceedings on consideration and proceedings in Legislative Grand Committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and up to and including Third Reading.
Other proceedings
7. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Chris Heaton-Harris.)
Question agreed to.
Local Government Finance Bill (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Local Government Finance Bill, it is expedient to authorise—
(1) the payment out of money provided by Parliament of any expenditure incurred by the Secretary of State in consequence of the Act; and
(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Chris Heaton-Harris.)
Question agreed to.
Local Government FInance Bill (Ways and Means)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Local Government Finance Bill, it is expedient to authorise—
(1) the payment of sums to the Secretary of State in respect of non-domestic rating, and
(2) the payment of those sums into the Consolidated Fund.—(Chris Heaton-Harris.)
Question agreed to.
Deferred Divisions
Motion made, and Question put forthwith (Standing Order No. 41A(3)),
That, at this day’s sitting, Standing Order No. 41A (Deferred divisions) shall not apply to the Motion in the name of Secretary Sajid Javid relating to the Local Government Finance Bill Carry-over. (Chris Heaton-Harris.)
Question agreed to.
Business without Debate
(7 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Sex and Relationship Education
(7 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mrs Maria Miller (Basingstoke) (Con)
Four Members have already told me that they wish to intervene, so I hope that others will bear with me. I think that that will probably be as much as we can contain within the time available.
Children have their first mobile phones when they are nine. Many have smartphones, with unlimited and sometimes unfettered access to the worldwide web and everything it has to offer, so we should perhaps not be surprised that by the time they leave primary school, most children will have seen online pornography and one in five will have had to deal with cyber-bullying. By the time that they finish secondary school, six in 10 will have been asked for a digital nude or sexually explicit image of themselves, usually by a friend. As a result, many will have discovered that private digital images of themselves can be passed on to thousands of people at the touch of a button. Removing such images from the worldwide web is all but impossible, which leads to difficult conversations with family, future employers and friends.
When the Women and Equalities Committee was preparing its report on sexual harassment in schools, we took evidence from children themselves, who told us that sexual harassment had become a normal part of everyday life. Women are called bitches, sluts or slags, and one in three 16 to 18-year-old women say that they have experienced unwanted sexual touching at school. Over the past three years, 5,500 sexual offences have been recorded in UK schools, including 600 rapes. Is abusive behaviour from the online world seeping into the offline world? Perhaps; I do not know.
The facts might look pretty stark to the Members who are present tonight. After hearing them, they might be less surprised to learn of the latest Barnardo’s research findings that seven in 10 children believe that they would be safer if they had age-appropriate classes in sex and relationship education at school. More than nine in 10 specifically said that it was important for them to understand the dangers of being online, especially when sharing images.
Fiona Bruce (Congleton) (Con)
I understand and share my right hon. Friend’s concern about there being improved relationship education in schools, particularly for younger children, but does she agree that many parents would be concerned—I would be extremely concerned—if teaching sex education to primary school children were compulsory?
Mrs Miller
My hon. Friend is right that parents need to have a voice in all this, and I am sure that any consultation carried out by the Government would take that into account. Research published today by Plan International UK shows that eight in 10 adults in this country want sex and relationship education for children at school, but my hon. Friend is right that it has to be age-appropriate. In primary schools, for the most part, we are talking about making sure that children understand what a good and healthy relationship looks like.
Jim Shannon (Strangford) (DUP)
I congratulate the right hon. Lady on raising this matter. Further to the point made by the hon. Member for Congleton (Fiona Bruce), it is crucial, as I have said previously, that parents have control and oversight of what happens to their children, especially when that pertains to outside influences. Does the right hon. Lady agree that parents first, as well as the Government, must consider that when thinking about any changes in sex education?
Mrs Miller
The hon. Gentleman is right that parents have a pivotal role, but so do schools, and I was about to come on to that.
Mrs Miller
I am now, I fear, going to break my rules by allowing my hon. Friend to intervene.
Sir Peter Bottomley
I am grateful to my right hon. Friend for giving way. Many of us did not get much from our parents, and many of us did not pass much on to our children, but the truth is that celibacy is the only thing that we cannot inherit from our parents, and many parents are too embarrassed to talk about these things to their children. Does she agree that it would be a good idea if parents and teachers discussed what children ought to know, and considered whether parents or teachers, or both, should talk to them about it?
Mrs Miller
As always, we hear pearls of wisdom from my hon. Friend, who knows that involving parents in decision making, and in determining ultimately what children really need to understand, at whatever age, is exactly the right way to proceed.
I know the Minister well, so I am sure that she will remind us that some of the best schools already teach children about mutual respect and self-respect, and about what makes a truly loving relationship. They go beyond what is currently compulsory—the mechanics of sex and the biology of reproduction—and tackle relationships and the context of a sexualised online world, because we need to help young people to make better and informed choices in those early years. However, it is surely clear to both me and her that many schools do not take that approach. Why should we sit by and allow children in those schools to lose out?
As I said, research published today by Plan International UK shows that eight in 10 adults think that teaching sex and relationship education should be compulsory in all schools, regardless of their status. We need children to be able to make informed choices. We need them to understand that sexting is illegal, and that it could affect their mental health, leave them open to extortion and perhaps limit their future career choices. We need them to understand that pornography does not reflect reality, and that bullying behaviour online is just as unacceptable as bullying behaviour offline. To be honest, it might be more accurate to call it relationship and sex education, because what children need more than ever is to understand what a healthy relationship really looks like. What they see and experience online is, for the most part, not that.
Dr Tania Mathias (Twickenham) (Con)
My right hon. Friend makes excellent points about sexting and unwanted touching, but does she agree that nowadays, given the insidious nature of early emotional abuse, it is vital that every child in school can understand the signs that it is happening?
Mrs Miller
My hon. Friend, who has a great deal of expertise in this area, is absolutely right. It is important that we give children the right information at the right time—that is what I am calling for.
Many of the reputable operators in the internet and mobile communications world understand the real downsides of their products, especially for children, and they are increasingly trying to fit parental controls to sort this out. However, at the moment those controls are only as good as we parents are, and about 40% of parents use them. Parents are conscious of the problems, but children use the internet for an average of more than 20 hours a week. Parents cannot look over their children’s shoulders at every moment and many simply feel out of their depth.
There are reasons for optimism. In a recent debate on the Children and Social Work Bill, Ministers clearly indicated that thinking was under way. The Government have already acted to show that they can work with the online industry. We should all applaud the work that David Cameron did to outlaw child abuse images online. He showed that the internet industry can act when it wants to. We can also welcome the work that the Government are doing to put in place effective age restrictions for online pornography websites.
Caroline Lucas (Brighton, Pavilion) (Green)
I congratulate the right hon. Lady on securing this debate and the excellent work that her Committee has done in this area. Does she agree that it is significant that there is now such strong cross-party support for moving in this direction? Five Select Committee Chairs have now said that this is an important issue. Does she also agree that the statutory nature of her proposals is essential, because that will mean that children will get good sex and relationship education and personal, social and health education? We need the teacher training to be done well so that we can get good teaching.
Mrs Miller
The hon. Lady makes an incredibly important point. We need consistency but, as I pointed out earlier, we do not have that at the moment. Placing provisions on a statutory footing would provide such consistency.
The internet has changed everyone’s lives. For some, it has normalised sexualised behaviours, which children can find it difficult to respond to. I see the Barnardo’s research as a cry for help. Parents have to take overall responsibility, but schools have a pivotal role to play in helping more children to understand what a good relationship is and to make better decisions.
Simon Hoare (North Dorset) (Con)
My right hon. Friend makes a cogent and compelling case. When we are discussing schools in this context, will she clarify that we are talking about not only local authority schools, but the growing academy sector? It is important that academies are included in such provisions.
Mrs Miller
I am sure that one of the many challenges for Ministers will be to ensure that every child can have the right sort of support and teaching. I do not underestimate the challenges that that will present, but I agree with the essence of what my hon. Friend says.
We can pretend that what we are talking about today does not affect children, or that parents have all the specialist knowledge that children need. Alternatively, we who are entrusted to shape our communities can do something different and act to clean up the internet, to support parents, and to give children the understanding that they need to make informed choices. Today’s debate is supported by leading charities including Barnardo’s, the Terrence Higgins Trust, the Children’s Society, the National Children’s Bureau and Plan International UK, as well as by the guides, the scouts and Liberty. They all want sex and relationship education to be compulsory. At the moment, schools are relying on guidance that was agreed more than a decade ago when the internet was still out of most children’s reach. They have failed to adapt to what children need, and it is little wonder that Ofsted recently judged 40% of schools to be inadequate in their teaching of SRE.
Who are we to ignore children calling for change? Children have only one chance of a childhood. We know the damage that is being done by cyber-bullying, sexting and the underage viewing of extreme pornography, and we have an obligation to act. I therefore have a question for the Minister, my friend from Hampshire: how will the Government respond to the seven in 10 children who want change? What are the Government doing, and when will that change happen?
The Parliamentary Under-Secretary of State for Women and Equalities (Caroline Dinenage)
I should like to start by congratulating my right hon. Friend—and, indeed, my real friend—the Member for Basingstoke (Mrs Miller) on securing this really important debate. I share her view on the importance of children and young people having access to effective, factually accurate, age-appropriate sex and relationship education. This is a subject that the Government take very seriously, and we have welcomed the extremely helpful input of many Members across the House and, not least, of my right hon. Friend’s Women and Equalities Committee. We also welcome the ongoing scrutiny of the Children and Social Work Bill. The Government are committed to exploring all the options to improve delivery of sex and relationship education and personal social and health education and to ensuring that we address both quality of delivery and accessibility in order to support all children in developing positive, healthy relationships and being able to thrive in modern Britain.
The Government welcomed the Women and Equalities Committee’s comprehensive report on “Sexual harassment and sexual violence in schools” that was published in September 2016 and contained several recommendations, including proposals relating to SRE and PSHE. I was honoured to take part in an evidence session as part of that inquiry. I emphasise that we are in full agreement that sexual harassment and sexual violence in schools—no matter what form they take—are absolutely abhorrent and unacceptable and should not be tolerated.
Neil Carmichael (Stroud) (Con)
I am grateful for what the Minister is saying. Does she agree that the debate about SRE is intrinsically linked with PSHE? This is about life skills and enabling young people to deal with the challenges they will face later, by having the capacity to understand what they are facing.
Caroline Dinenage
Yes. My hon. Friend is absolutely right. We want to enable young people up and down the country to face the challenges of the modern world. We have given a great deal of consideration to the recommendations that arose from the Women and Equalities Committee’s inquiry. In our response, which was published on 9 November 2016, we committed to work with stakeholders, including teachers, parents and pupils, to produce a framework that gives schools sufficient support to produce their own codes of practice, setting out a whole-school approach to inclusion and tolerance while combating bullying, harassment and abuse of any kind.
Despite the usefulness of the Committee’s important evidence sessions, we recognise that the scale and scope of the problem are still not yet fully understood. To improve both our understanding and that of schools, we have also committed to build our evidence base—a work programme that is currently being developed by the Government Equalities Office. That sits alongside a commitment to provide best practice examples of effective ways to work with boys and girls to better promote gender equality and respond to incidents of sexual harassment and sexual violence. Additionally, we have put plans in place to set up an advisory group to look at how the issues and recommendations in the Select Committee’s report can be best reflected within existing DFE guidance for schools, including “Keeping Children Safe in Education” and our behaviour and bullying guidance.
There is more that we need to do. The Secretary of State has made it absolutely clear that we need to prioritise progress on the quality and availability of SRE and PSHE. In making that progress, we must of course look at the excellent work that many schools already do as the basis for any new support and requirements.
Stella Creasy (Walthamstow) (Lab/Co-op)
There is general agreement across the House that this is the right thing to do. Likewise, it has been recognised that with Brexit coming down the track our capacity is limited to pass legislation to ensure that every school does this. New clause 1 of the Children and Social Work Bill would require every school, both maintained schools and academies, to provide age-appropriate, inclusive relationship education—the very education that we all want to see happen. Given that and the time constraints—that Bill is almost on Report—will the Minister commit tonight to back new clause 1 or to come back with something exactly like it on Report? There is no time left to ensure that we make good on our promise to those children.
Caroline Dinenage
My right hon. Friend the Secretary of State has been clear that we will set out plans to move forward as part of that Bill.
The existing legislation requires that sex education be compulsory in all maintained secondary schools. Academies and free schools are also required by their funding agreement to teach a “broad and balanced curriculum”, and we encourage them to teach sex and relationship education within that. Many schools choose to cover issues of consent within SRE, and schools are both able and encouraged to draw on guidance and specialist materials from external expert agencies.
Tracy Brabin (Batley and Spen) (Lab)
On that point, a Terrence Higgins Trust report found that 75% of young people had not learned about consent and that 95% had not been taught anything about LGBT relationships. Even the UN is calling for SRE in UK schools to be statutory. Does the Minister agree that it is time that the Government respond to that request and make SRE statutory?
Caroline Dinenage
Yes, the Government are looking at it as we speak. We will set out our next plans for inclusion in the Children and Social Work Bill, but we have to get this absolutely right. It needs to be done sensitively, carefully and with cross-party support. This has not been updated for the last 16 years, and my personal opinion is that respect for oneself, respect for others, healthy relationships, consent and all the other things that we really value as part of SRE and PSHE are things that we must also ensure we embody in a whole-school ethos, not just something we teach for half an hour on a Tuesday.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Will the Minister give way?
Caroline Dinenage
In a moment. The existing legislation also means that Ofsted publishes case studies on its website that highlight effective practice in schools, including examples of SRE as taught within PSHE.
Caroline Dinenage
I will not make the hon. Lady keep standing up and sitting down.
Luciana Berger
I am incredibly grateful to the Minister. I echo the point that the time really is now. We have been discussing the issue in this House since the measure was not included in the Children, Schools and Families Act 2010. Will she confirm on the record this evening that, on Report of the Children and Social Work Bill at the start of February, the Government will either move their own amendment or support new clause 1 to ensure that we have statutory SRE in every single school in our country?
Caroline Dinenage
As I have already said, we are currently considering all the options and are committed to updating the House during the passage of the Children and Social Work Bill. The Minister for Vulnerable Children and Families will definitely be bringing the measure forward as part of the Bill, but the key is getting it right, not rushing it through just to satisfy loud voices on either side of the House.
Sir Peter Bottomley
Just to translate, my right hon. Friend the Member for Basingstoke (Mrs Miller) is talking about compulsory SRE. I would call it comprehensive SRE. Do the Government have any idea of how many young people miss out on effective sex and relationship education? Will the Government try to ensure that the number of young people who are missing out will be reduced to virtually zero within a few years?
Caroline Dinenage
The biology of sex and relationships is compulsory in schools, but we want to see a much broader look at healthy relationships, respect for oneself, respect for others and issues around consent. Those are all things that we have to look at very carefully as we move forward, which is why we are encouraging schools to use the Ofsted case studies as a resource while they tailor their own programmes to meet the specific needs of their pupils.
In addition, in 2014 the PSHE Association, Brook and the Sex Education Forum produced a supplementary guidance document on sex and relationship education for the 21st century, which provides valuable advice on what are, sadly, the all-too-modern issues that my right hon. Friend the Member for Basingstoke has already mentioned, such as online pornography, sexting and staying safe online. That useful guidance provides teachers with the tools to support pupils on those challenging matters, developing pupils’ resilience and ability to manage risk.
As we have heard today, social media and interactive services are hugely popular with children and young people. They can provide fantastic opportunities for them to express creativity, to learn digital skills and to improve their educational attainment but, like all forms of public communication, they come with a level of risk. The Government expect online industries to ensure that they have relevant safeguards and processes in place, including access restrictions for children and young people who use their services.
We have published a guide for parents and carers of children who use social media, including practical tips about the use of safety and privacy features on apps and platforms, as well as conversation prompts to help families begin talking to their kids about online safety. We have also funded the UK Safer Internet Centre to develop new resources for schools, including cyberbullying guidance that helps them to understand, prevent and respond to this issue, as well as an online safety toolkit to help schools to deliver sessions through PSHE on cyberbullying, peer pressure and sexting.
We are also talking directly to young people about healthy relationships. The Government Equalities Office jointly funded a £3.85 million campaign with the Home Office to launch the second phase of the “This is Abuse” campaign, called “Disrespect NoBody,” from February to May 2016. The campaign encourages young people to rethink their understanding of abuse in relationships, including issues such as sexting. It also addresses all forms of relationship abuse, including coercive and controlling behaviour, and situations including same-sex relationships. Some of the campaign materials contained gender-neutral messaging, and others depicted male victims of female perpetrators. It was targeted at 12 to 18-year-old boys and girls, with the aim of preventing them from becoming the perpetrators or victims of abuse in relationships.
As I said, we are actively considering calls to update the guidance on SRE, which was issued in 2000. The feedback we have received indicates that the guidance is already clear that young people should be learning what a healthy relationship looks like. However, we do not consider the guidance we produce to be static, and we fully recognise that there will continue to be changes to update it. We are looking at the issue extremely carefully. As I have said, it is essential that we do not rush things. We need to adopt a fresh and responsible approach and listen to a range of views from young people and parents alike.
Lilian Greenwood (Nottingham South) (Lab)
The Minister is rightly setting out the useful advice, guidance, toolkits, resources and campaigns that are available, but does she agree that all those things, valuable as they are, are not an alternative to ensuring that every single school in this country provides high-quality SRE to all our children and young people?
Caroline Dinenage
Absolutely. I agree that we need to equip all our young people to face the challenges of the modern world and everything that it throws at them. We know that SRE is an evolving and vital area of education, so we need to ensure that we have guidance that is fit for children growing up in modern Britain.
Our aim is to secure the very best teaching and learning in our schools on these issues, as a matter of priority, alongside providing the clarity for schools on what should be delivered that I know Members wish to see. We recognise that this is a really important issue, and will continue to explore all effective means to remove sexual harassment and sexual violence from young people’s lives. My hon. Friend the Minister for Vulnerable Children and Families has committed to update Parliament further during the passage of the Children and Social Work Bill. I know that he will do his utmost to achieve outcomes that keep young people safe and supported to gain the skills they need to develop healthy and positive relationships.
Question put and agreed to.
Petitions
Baverstock Academy
Norfolk Island
Road safety in Southampton Itchen
Westminster Hall
(7 years, 10 months ago)
Westminster HallRead Full debate Read Hansard Text
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Non-recyclable and Non-compostable Packaging
(7 years, 10 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
David Mackintosh (Northampton South) (Con)
I beg to move,
That this House has considered e-petition 167596 relating to the banning of non-recyclable and non-compostable packaging.
It is a pleasure to serve under your chairmanship, Mr Bone. The petition’s aim is clear. Regardless of the potential challenges posed in achieving it, I am sure we all support its aspiration. The environmental impact of packaging is a significant and growing concern for consumers, Government and retailers. It is not an issue only here in the UK, but I believe that the people of the United Kingdom have an especially keen sense of responsibility towards our environment and the finite resources of the islands we call our home.
The challenges in achieving the aim set out in the petition break down to a number of key areas: innovation in packaging materials to increase recyclability; the incentivising of manufacturers and retailers to use a larger percentage of recyclable and compostable materials; greater uniformity from council to council on the materials that can be recycled; and a general reduction in excess packaging.
Manufacturers and traders have a legitimate need to ensure that their products reach consumers in a satisfactory condition and that perishable goods are adequately protected to prevent them from spoiling. It is important to recognise that protective packaging plays an important part in preventing damage to the goods that people have purchased, which they rightly expect to find in a good condition. None the less, there is agreement among consumers, legislators and industry that the total use of recyclable and compostable materials is a goal that should be pursued.
Personally, I am concerned about the excessive use of packaging. I am sure we have all at times been baffled by the amount of unnecessary packaging that fills up our recycling bins; I will not be the only person here who is frustrated by that as a consumer. Although there has been a general improvement over the years as the public’s sensibilities have changed, producers could do much more to limit further the use of packaging materials. Of course, consumers also do not want to see any increase in price, and that is a challenge.
We all, I am sure, actively engage in delivering leaflets in the run-up to local and general elections, which usually fall a few weeks after Easter. I am always struck by how much Easter egg packaging there is in recycling bins, and the situation is similar shortly after Christmas. We have to question seriously the excess packaging used in many products.
The recent introduction of the 5p charge for plastic bags was an example of a Government initiative that has worked well to reduce the use of non-biodegradable carrier bags in the UK. That was a consumer-facing initiative, however, and it may be that similar initiatives could be introduced to help encourage the same sort of changes in the manufacturing and packaging industries.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the hon. Gentleman agree that producer responsibility is at the heart of this issue? The very best suppliers of anything, from fresh vegetables to the most complex white goods, do very well on recyclability and the way they think about the end use of packaging and wrapping. Is it not time that we made producers conform to the highest standards, not the lowest?
David Mackintosh
I agree with the hon. Gentleman. The issue will be driven by consumers, and producers need to take a role, but we as legislators also need to look at the issue and debate it from time to time. I look forward to the Government’s response later today.
As the petition states, there is a specific problem with the amount of plastic being used. In some parts, it cannot be recycled. Almost all types of plastic can or should be recycled, but some are less likely to be recycled because of the issues of cost and the local sorting infrastructures in place. An example of that is black plastic, which for technical reasons is generally discarded as landfill. Industry estimates suggest that that amounts to between 26,000 and 60,000 tonnes each year.
Although the packaging and retail industries are already making efforts to modify materials to improve recyclability, significant improvements can clearly be made if retailers are incentivised to use alternative materials. I understand that the packaging industry is developing new materials that will increase the number of options open to manufacturers. I am pleased to note that much of that work is being driven by retailers. The packaging and retail industries are working together to push those innovations forward. Initiatives such as Pledge4Plastics, the “New Plastics Economy” initiative and the industry-led Plastics 2020 Challenge and plastics industry recycling action plan are playing a key part in that. It is encouraging that major brands, including Coca-Cola, Danone, Mars, Unilever and Sainsbury’s plc, are leading by example and supporting such initiatives. Government at all levels has a responsibility to encourage progress, not least in these times when local government needs to look for cost savings and efficiencies.
The media also have a role to play. I am pleased that tomorrow, Sky will be launching an initiative right across the corporation known as Sky Ocean Rescue. Tomorrow, it will be showcasing the documentary “A Plastic Tide”, which looks at the amount of damage caused by the plastics in our oceans. There are some startling facts. It is estimated that there are 5 trillion pieces of plastic in the world’s oceans, with 8 million tonnes of plastic ending up in the ocean every year. The average UK household uses one rubbish truck’s worth of single-use plastics each year. Every minute, an equivalent amount is dumped into our oceans. Some 40% of all plastic in Europe is used only once. A plastic bottle is estimated to take 450 years to break down into microscopic pieces. Plastic bottles are the third worst plastic polluter of the ocean. The Ellen MacArthur Foundation calculates that by 2050, the plastic in the world’s seas will weigh more than all the fish.
The Government are clearly committed to an increase in recycling and a reduction in the amount of waste going to landfill. It is positive that targets for plastic packaging are set to increase until 2020 and that the Government are consulting on increasing targets for other materials. Through the Waste and Resources Action Programme, the Government are supporting the sort of material development and usage that I have just mentioned. The guidelines issued in October regarding what can and cannot be accepted for recycling were a helpful step forward.
Mr Sheerman
Does the hon. Gentleman agree that if we were working at the highest level of the best local authority in terms of recycling achievement, we would be in a much happier and more successful place? Has he looked? I own up to this: my constituency of Huddersfield is under Kirklees Council, which has a terrible record on recycling. Many local authorities are poor recyclers. Is it not time we took action against underperforming local authorities?
David Mackintosh
I am grateful to the hon. Gentleman for his intervention. I agree that the difference between levels of recycling under different local authorities across the country is shocking. It makes it hard for people to understand the regimes involved, and it lets off the hook those retailers or producers that say they do not have to conform because some local authorities do not conform.
I know from my experience as the leader of a local authority that councils are committed to increasing recycling and are already under huge pressure to reduce landfill. As the hon. Gentleman said, recycling does vary across the country. Recycling policy is set at local government level, and there are a number of legal and financial obligations that make it central to the policies of all councils. Will the Minister pledge, when she sums up later, to raise the matter with Ministers in the Department for Communities and Local Government so that we can look at the issue right across Government?
Inconsistency in the types of materials that can be recycled by councils is clearly an issue. If that was resolved, it would give greater clarity to the manufacturers and to those local residents who wish to recycle more. When I raised the matter over the weekend on my social media pages with my constituents, I was pleased by the level of support people gave to doing more to recycle and to looking at how we can ban non-compostable and non-recyclable waste in the future. In fact, a Twitter poll that I carried out showed 80% in favour of banning those materials.
The main issue is one of infrastructure and cost. It may be that proper analysis of how individual councils recycle across the whole of the UK would provide valuable information that could help to identify the best and worst performing areas and inform the Government of possible solutions. There has to be a reasonable balance between reducing the use of non-recyclable and non-compostable packaging to an absolute minimum for the benefit of our environment and still allowing manufacturers to adequately package their goods to prevent damage and spoiling, and to keep costs down.
As well as reducing landfill, the petition talks about non-recyclable and non-compostable rubbish that ends up in waterways. As we have already heard, that can include our oceans. As an MP with both the River Nene and the Grand Union canal running through my constituency in Northampton, I often see the awful situation in which waste is dumped into waterways. Keeping them tidy and clearing them up involves huge difficulty and cost.
Scott Mann (North Cornwall) (Con)
My hon. Friend is making interesting points. Recycling is one thing, but reuse is the next step. We have seen some great initiatives such as the 5p carrier bag charge, which has meant more people reusing them and fewer bags going into landfill and the sea. Would he welcome a similar scheme for plastic bottles, with consumers encouraged to reuse those in supermarkets?
David Mackintosh
I am grateful to my hon. Friend for his intervention. I know he does a lot of work in this field in his own constituency and he works incredibly hard to raise the issue here in the House. He raises an important point and I am sure the Minister has listened to that. As he said, we saw the impact of the plastic bag charge; the 5p has made a huge difference. Clearly, we should look at other measures and other opportunities moving forward.
When rubbish has been dumped, the blame lies with the people who dumped it into the waterways and other places in the first place. However, different types of packaging would go some way to helping to compost or break it down, and it is right that we look at the issue today. There is agreement across Government, industry and retailers to move towards increasing recyclability, and those elements are already working together to move that forward. I hope we can consider today how that work can be encouraged further, and even accelerated, in a way that prioritises our environment while remaining sensitive to the specific needs of manufacturers and retailers and the challenges faced by local authorities.
The petition was signed by 75,000 people. They care about this issue and want it looked at again to protect our environment—for us, and for future generations. I look forward to the Minister’s response and what we can do to make improvements for the future.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I was not going to speak, but I am a passionate parliamentarian; if I may say so, Mr Bone, you and I both are pretty passionate in the Chamber. You know that I have been a long-time supporter of recycling, reuse and remanufacture. It is important to get the Opposition on the record as being absolutely positive about what we are discussing today.
I have been an honorary fellow of the Chartered Institution of Wastes Management for some years. I also chair Policy Connect, where we have a very special focus on the reuse of resources. For many years, I chaired a charity called Urban Mines. Everyone who worked for it was an urban miner: what people used to regard as rubbish flowing from our towns and cities was seen as a new resource that could be mined, rather than digging holes in the earth’s crust and taking virgin material. I have a long history on this issue.
I am passionate about the misuse of our planet’s resources. Not only do we misuse the stuff that we use in packaging, but, as the hon. Member for Northampton South (David Mackintosh) said in an excellent speech, we then pollute our urban and rural environment and kill animals. We kill hedgehogs and badgers and all sorts of rare breeds by our misuse and by casting plastic and metal and all sorts of packaging on to our countryside. Even more importantly—this was brought out beautifully in the hon. Gentleman’s speech—we are now polluting our marine environment to such an extent that our grandchildren will probably live to see the end of fish as a regular part of our diet. That is the truth. How dreadful!
Mr Sheerman
I will not take any interventions. I simply wanted to get what I have said on the record, Mr Bone, and to be very well behaved for a change.
Mark Pawsey (Rugby) (Con)
It is a great pleasure to speak under your chairmanship, Mr Bone. I thank my hon. Friend the Member for Northampton South (David Mackintosh) for securing this important and timely debate. I am chairman of the all-party group for the packaging manufacturing industry. I spent 25 years in the industry supplying packaging items, mostly to the food service industry. I agree with some of the points made by my hon. Friend, but I regret to say that a great deal of what is contained in the e-petition is not practical.
On a day when the Secretary of State for Business, Energy and Industrial Strategy is in the main Chamber launching the Government’s industrial strategy policy, it is important to remember the importance and magnitude of the packaging industry in the UK. It employs 85,000 people, makes up 3% of all manufacturing that takes place in the UK and achieves sales of £11 billion. It is a highly innovative industry that responds to consumer preferences, and it takes its responsibilities very seriously.
I will mention various bodies and publications, but I want to draw attention to the Industry Council for research on Packaging and the Environment—INCPEN—a research organisation that brings together food manufacturers and packaging companies to ensure that policy on packaging makes a positive contribution to sustainability. Its members include food manufacturers such as Britvic soft drinks and Diageo; food retailers such as Sainsbury’s and Tesco; and packaging manufacturers such as LINPAC and DS Smith. I recommend to all of those who are interested the INCPEN publication that explains why products are packaged in the way that they are.
I referred to the packaging industry’s innovation, which leads to a discussion about why we need packaging. My hon. Friend the Member for Northampton South drew attention to some of the reasons, but it is important to state at the outset that the demand for packaging arises purely from the demand for the products contained within. Nobody goes to a retailer looking to buy boxes, cartons and cans. What is in the containers is important and generates demand—the packaging is simply a delivery mechanism for food and the other goods.
Packaging has to do a lot of tough tasks. First, it has to protect the contents from hazards, particularly in respect of food items. We have gone from the era when much food was served in open packs and the traditional grocer cut slices of ham and put them in a paper bag, which could then be taken home and exposed to the atmosphere. Most of the food that we buy these days is sold in sealed packs, which protects the food from whatever hazards may be in the environment. Even if the food falls out of the carrier bag on to the floor, the food is protected from the hazard of contamination.
Importantly, packaging should provide easy access to the product. We have all seen examples of poor packaging that makes it difficult to access the product, but we have gone to an era of peel-back labels so that people can get hold of the products. We also ask our packaging to tell us all about what we are buying. There is a mass of information on the packaging that arises because our food is packaged in the way that it is. When people bought slices of ham in an old-fashioned retailer, they did not know the nature of the product unless they asked the retailer, whereas in the supermarket we can easily and readily see exactly what we are buying. Finally, packaging needs to make the product that we intend to buy attractive at the point of sale so that the consumer will be interested in buying it.
Within that, we ask packaging to minimise the amount of food waste. We have very low levels of food waste as a consequence of the very effective packaging our food is sold in. About 3% of our food is wasted. Some may say that that is 3% too much. Not only might that food otherwise have gone to those in need but, more importantly, the disposal of food waste presents real problems for the environment—if it goes into landfill, it unavoidably generates methane gas. Therefore, it is worth pointing out just how effective a tiny amount of packaging can be in preventing food waste. We waste some 3% of our food, but in economies such as Russia or India, levels of food waste are as high as 40%. Only 1.5 grams of plastic—a tiny amount—wrapped around a cucumber will keep that cucumber fresh for 14 days by preventing moisture loss. The item of packaging therefore performs an incredible task, preventing the need for the cucumber to be disposed of in landfill.
My hon. Friend the Member for Northampton South gave the example of Easter eggs as a product that might sometimes be thought of as over-packaged. That arises, however, because of how we want to give one another chocolate over the Easter period. If we wanted simply to give one another so many grams of chocolate, we could buy a slab of chocolate and hand it over. We do not do that. We choose to buy an Easter egg. That is where consumer choice comes in.
We are asking a huge amount of such packaging. The thin chocolate egg is itself very fragile, so in addition to making the product attractive, the packaging has to prevent the Easter egg from being broken.
Mr Sheerman
The hon. Gentleman is making some good points about good packaging, but many of the people I represent are furious about bad packaging. What does he have to say about innovations in packaging such that we now have those coffee things for a Nespresso which cannot be recycled at all, or coffee cups that are totally unrecyclable—totally unnecessarily, because they could be recyclable, but no one knows what to do with them. What are his packaging friends going to do about that?
Mark Pawsey
The hon. Gentleman could start me off on coffee cups, but I will deal with them later in my remarks. We are talking about consumer choice, and we need an informed consumer. To go back to the Easter egg example, if we wanted only to give people a bit of nice chocolate, we would simply give them a chocolate bar. We do not do that; we choose to give them an Easter egg. In the same way, people choose to buy the Nespresso-type coffee because that is how they like their coffee. We need to find alternative delivery mechanisms that do not give rise to the same level of packaging waste.
David Mackintosh
Does my hon. Friend agree that other countries in Europe give Easter eggs in different ways? It is therefore incumbent not only on the consumer to want that to change, but on producers to look at different ways in which to market eggs.
Mark Pawsey
The packaging industry is doing that. It is highly innovative and the amount of material that goes into the average Easter egg pack has been reduced. The process, which I will talk about later, is called light- weighting: using the least amount of material necessary to keep the products safe.
Frankly, from the packaging manufacturers’ point of view, because their material is relatively expensive, there is absolutely no point in over-packaging, and no point in creating too much or in making the plastic or board out of too thick a gauge—that would add cost unnecessarily. I acknowledge, however, that over-packaging exists. There are interesting pictures of internet delivery companies that have delivered something the size and shape of a ruler, but it has been wrapped, put in a box and put in another box before being delivered. There is some crazy over-packaging, but my point is that there is no incentive to over-package because of the cost of the material. Many of the internet delivery companies look hard at their policies to ensure that they do not over-package.
My favourite example of what, on the face of it, looks like over-packaging is orange segments in a plastic container on a supermarket shelf. I remember seeing a photograph of that with a little Post-it note stuck on to say, “Wouldn’t it be really nice if nature were able to make some kind of outer skin to make the plastic packaging unnecessary?” I thought that was witty and clever, and it made a point. Another interesting point about that product is that it might be targeted at a consumer without much manual dexterity who would find it difficult to unpeel an orange and for whom it might be much more convenient to buy the pieces of orange in a plastic container. If there were no demand, that product would not be there, but it is a good example of over-packaging.
We often talk about the resource that goes into packaging without thinking much about the resource that goes into manufacturing the product contained in the packaging, and which could therefore be more efficient. INCPEN itself drew attention to the fact that packaging accounts for only 10% of the average energy resource used for food products, although some items are less efficient. Meat, for example, which is probably the least efficient method of food manufacture, could have much better figures. Nevertheless, the packaging element as a proportion of food cost is relatively small.
I hope I have set out some ways in which the industry acknowledges the existing situation and is therefore innovating and effecting change. I will now move on to the content of e-petition No. 167596, which starts with this country’s recycling record, although this country actually has a very proud one. In 2000, just a little more than 10% of all household waste was recycled; by 2016 that figure had risen to 43.9%. It is certainly true that between 2015 and 2016 the recycling rate fell away slightly, but a bit of that was because we have done the easy stuff. We have picked the low-hanging fruit, such as Coke cans and plastic milk bottles, which are being recycled, and we now have to deal with much harder things.
An example of a sector in which recovery and recycling are difficult is plastic film. When we buy our microwave meal, we have the moulded plastic container with a film on top. The film represents a relatively low proportion of the waste—about 10%—but it is not as easy to collect. The other problem with laminates, or plastic films, is that they are often contaminated with food. If we clean our waste before putting it out for recycling, it is relatively easy to clean the container—we can easily clean the food residue out of a container of, for example, lasagne, but it is difficult to get the food residue off the film. We will therefore probably find 10% of plastic material very difficult to recycle, although the e-petition assumes that we will manage to get to everything.
The hon. Member for Huddersfield (Mr Sheerman) mentioned paper cups. A multilaminate is difficult for the industry to recycle. It is made up of various levels of different materials—a paper cup is made up of an outer of board with a plastic lining on the inside. When we are recycling, we put paper in this bin and plastic in that bin. Where do we put the paper cup, which has a plastic lining on the inside? One of the challenges for the recycling industry is to separate those two materials before they can be recycled.
The industry takes seriously the low rate of recycling for paper cups. Therefore, in recent months the coffee companies and retailers, the cup manufacturers and the people who make the board have set up the Paper Cup Recovery and Recycling Group. They are doing very good work in bringing that together. In fact, as I am sure the Minister will be interested to hear, one of the pieces of advice I have given them is: “You need to get your house in order. If you don’t, and you don’t demonstrate that you can do more work to get more cups recycled, lots of people in Parliament will get on their high horses and make life difficult—you will be obliged to do it. So you have got a choice: either do it through voluntary agreement, or be told to do it.”
The producers have the responsibility for recycling—that is in legislation—but they are also happy to do it. To pick up on the point made by the hon. Member for Huddersfield, they accept that that is their responsibility.
Gavin Robinson (Belfast East) (DUP)
There is obviously a benefit to incentivisation. That used to happen with glass bottles, which people got 10p for returning. Does the hon. Gentleman believe that the coffee companies that sell reusable cups in the hope that people will bring them back and fill them up should similarly incentivise the use of those cups by reducing what they charge? That might encourage people to change their mindset and not discard everything that they are given but retain and reuse things.
Mark Pawsey
In certain instances, that is the right thing to do. For example, where a coffee company serves coffee for consumption on the premises, a reusable cup that is then properly disinfected and washed is entirely the right thing to use, but not many coffee companies are happy to serve their coffee in a cup that has not been cleaned properly. If someone takes a reusable cup around with them, how does the coffee company know that that cup has been cleaned properly? What happens if a consumer, having presented a dirty cup and been provided with coffee by a coffee supplier, falls ill because the cup had not been cleaned properly? One of the great things about disposable packaging is that people use a unique, fresh product every time. It is the most hygienic way to serve coffee. I agree with the hon. Gentleman in respect of a restaurant environment, but I will not carry a cup around with me for takeaway coffee, and if I were to present a cup to a coffee supplier, I would want to be satisfied that it had been properly and thoroughly cleaned.
The e-petition refers to packaging that goes to landfill. We need to understand why goods collected by local authorities that were intended to be recycled sometimes find their way into landfill. That is in part to do with poor communication between local authorities and waste providers. My hon. Friend the Member for Northampton South referred to the variation between local authorities. As waste collection is a devolved matter, we leave it to local authorities to determine the right thing to do in their area. As a Conservative, I am a great believer in devolving power down to the lowest available level. That engages people more effectively, but recycling rates vary as a consequence. In 2014-15, South Oxfordshire had a recycling rate of 67.3%, but the rate in Hammersmith and Fulham was 20.7%. That may reflect the different challenges in rural environments, where people are perhaps more likely to comply, and more gritty urban areas.
When we recycle plastic, it has to go through a sorting system, because there are various grades of plastic, and it then has to be cleaned and disinfected and put into granular form so it can be reused. One problem with the relatively low oil price is that virgin material has been less expensive than recycled material. What incentive has there been for manufacturers to use recycled material? As oil is traded in dollars, the recent fall in the value of the pound may mean that the economics change somewhat, but those economics exist. Why would a manufacturer take the risk of using recycled material, which may contain contaminants, when virgin material is available at a lower price?
The petition also refers to packaging making its way into our waterways. My hon. Friend the Member for North Cornwall (Scott Mann), who is no longer in his place, is concerned about the marine environment. The question that we need to address is: how does that packaging get where it does? Litter is simply packaging that happens—usually after it has been used—to be in the wrong place. It should of course not be in the waterway, at the side of the road, on the footpath or on the football field. How does it get there? It gets there because of human behaviour—because as a mass of people, we do not do the right thing. I did some travelling last summer. I went to Japan, and I was astounded at how clean the city of Tokyo was, despite it having no bins. There is a culture in Japan that if someone consumes something in disposable packaging, they take that packaging home with them and put it in their household waste. This is a behavioural issue; clearly, we need to effect a change in our behaviour. That really starts at school with getting a message across to our young people.
Lots of innovative projects encourage people to reduce their litter. A social action organisation called Hubbub carried out a five-month experiment to reduce litter in Villiers Street here in London that included different types of bins. Hubbub wanted people to put drinks cartons and cans in the appropriate containers, and one of the innovative ways it got them to do that was by encouraging them to vote. It put two footballers’ names on the bins and asked, “Who’s the best footballer?” People put their rubbish in one bin or the other, thereby casting a vote for their favourite soccer player. We need more innovation like that. I know of a bin that has been used to encourage young children to put more litter in the bin. It is in the shape of an animal, it has an opening on the front and when packaging is put into its mouth, it burps. The children find that funny, so they are encouraged to use it. We must effect an attitude change. Notwithstanding what the petition says, it is not the packaging industry’s fault that packaging often ends up where it should not be. We can all agree that it ends up in the wrong place.
My hon. Friend the Member for North Cornwall mentioned the 5p levy on carrier bags. That has certainly reduced the number of carrier bags in circulation—of that there is no doubt—but Keep Scotland Beautiful recently conducted a survey and found there were more carrier bags littered on the streets than there were before the introduction of the 5p levy. Some people talk about a levy on coffee cups. I am not at all certain that that 5p levy has been particularly effective.
What are the solutions? The first is to ensure that we deal properly with packaging waste and make it easier for people to recycle. But recycling is a good thing only if it delivers a net gain. It concerns me that we often drive material around the country to recycling centres without sufficient regard for the environmental impact of those journeys. The hon. Member for Huddersfield referred to packaging as a resource. It can of course be a source of energy. Household waste is used to generate the heat that enables the cement company based in my constituency to manufacture cement. That strikes me as a much better use of the calorific value of packaging than sending it to landfill.
I have spoken about the challenges of using recyclable material, and I want to address what the petition says about compostable packaging—packaging made from material that might at some point in the future break down. Over the past 10 years, compostable packaging has been used in the food service sector by operators that believe they are doing the right thing, but compostable plastic—if I can use that term—looks exactly the same as PVC material, so how do people know which bin to put the compostable material in? If that material ends up getting into the plastic waste stream and being sent for recycling, it is effectively a contaminant. The reverse also applies: we do not want plastic to find its way into the compost stream. Clearly, there needs to be effective separation in the waste stream. Compostable material can work in closed environments such as schools and colleges, or even festival sites, but ensuring that people put used products into the right container across the board is a real challenge.
If composting is to be the solution, we need to understand the process by which the compostable material breaks down. There are those who think that a compostable bag can simply be put on a compost heap or in the compostable waste stream and it will break down in days. That is not the case. It will hang around for some time. The time taken for it to break down depends on the composition of the material and the temperature of the composter in which it is put. Some litter groups are concerned that the attitude of, “This product is compostable and will break down,” will lead to even more litter being thrown from the car window, because of users’ belief that it does not matter as it will break down and return harmlessly to nature. It does not.
The petition refers to “big business” but, as I have said, both small and large packaging companies respond to consumers’ needs and what consumers want. If we want change, we need to get the message across to them. The call for action in the petition is to “ban all non-sustainable packaging”. I do not know what the authors have in mind by that, or how it would be banned. If we do not know what it is, we cannot do that. I have already spoken about the challenges of using compostable materials.
We need to make sure that alternatives are available, and the industry has done a huge amount. I have mentioned light-weighting. There is now significantly less resource in a plastic Coca-Cola bottle made of PET; it has been reduced by 25%. The advantage is that through the weight reduction, Coca-Cola has saved $180 million over two years through the distribution chain. It has managed to reduce the weight of the glass bottle by 50%. There is no incentive for the manufacturer to put more material in the product than necessary.
The sentiments in the petition are well intentioned, and the industry is striving towards the same things, which everyone wants. I saw on a truck going around Parliament Square this morning the message, “Reduce, reuse and recycle”, and we certainly want more of that. The industry supports it and takes the issues covered by the e-petition extremely seriously.
Mary Glindon (North Tyneside) (Lab)
It is an honour to serve under your chairmanship today, Mr Bone. There may not have been many contributions to the debate, but they have all been relevant and informative. I thank the Petitions Committee for putting the debate forward and the hon. Member for Northampton South (David Mackintosh) for his opening remarks, including his stark comments about the future of the oceans and what our not tackling the issue will mean to future generations. We must agree that my hon. Friend the Member for Huddersfield (Mr Sheerman) is passionate and knowledgeable about every issue on which he speaks. It was good to hear his interventions challenging some of people’s conceptions about recycling. It is good to follow the hon. Member for Rugby (Mark Pawsey), who chairs the all-party group for the packaging manufacturing industry, of which I am a member. He gave us the other side of the coin, and was very positive about why we have packaging.
The petition calls for a ban on the use of all non-recyclable and non-compostable packaging, but the Government, as shown by their response, clearly do not share that view and argue that it is ultimately for businesses to decide what packaging materials to use. My party takes a different view from the Government’s. We realise that the problem is complex, but believe that the Government could make more direct interventions. When the last Labour Government were in power, recycling rates quadrupled. It is worrying that the latest figures show that, across the UK, household recycling rates fell from 44.9% in 2014 to 44.3% in 2015.
As waste policy is a devolved issue, perhaps the Government could look for lessons from the Labour Administration in Wales, which is the only part of the UK to have met the EU’s 50% recycling target. In 2010, the Welsh Government committed to the principles of a circular economy in their “Towards zero waste” strategy. Since then, recycling rates in Wales have increased dramatically from 44% to almost 56%.
Regulations introduced in 2007 by the Labour Government placed a legal obligation on UK businesses to increase the amount of packaging waste that is recycled and reduce the amount that goes to landfill, but last year those regulations were substantially watered down, as the Government claimed that there was a need to reduce regulatory burdens on producer businesses. The Producer Responsibility Obligations (Packaging Waste) Regulations 2007 and the Packaging (Essential Requirements) Regulations 2003 have been important in ensuring that where businesses make or use packaging, a proportion of it can be recycled and the amount of packaging is not excessive for keeping products safe, hygienic and acceptable to the customer—something that the hon. Member for Rugby spoke about eloquently.
The regulations apply whether items are packaged in the UK or abroad, but there are plenty of examples, particularly in this age of online shopping, where it is clear that they are not adhered to. I am not a great one for shopping online, but in my limited experience of doing so, as well as shopping in stores, I have noticed how much excessive packaging there seems to be, which leads me to agree with Dr Colin Church of the Chartered Institution of Wastes Management, who, in recent comments on the fall in recycling figures, pointed out that perhaps the packaging recovery note compliance scheme is in need of revision.
Experts and organisations agree that the biggest problem discouraging the public from recycling is uncertainty and confusion about what can and cannot be recycled. Indeed, perhaps that is one of the reasons for the popularity of the petition, even if the public do not think its ultimate aim can be achieved. That confusion has already been discussed in the debate. I hope that different local authorities’ inconsistent approaches to what can be recycled will be addressed to some degree through the work done by WRAP, recyclers, waste management companies and local authorities on developing national recycling guidelines. Those were published last autumn. However, as with the plastics industry recycling action plan, which was launched in 2015 with the aim of co-ordinating action across the supply chain to improve recycling rates, it relies on a voluntary approach. It is not clear whether those initiatives will deliver the necessary improvements within the timescales required under the regulations. WRAP will keep the guidelines under review, but it would be helpful if the Minister commented on the progress of those initiatives.
Although 80% of a product’s environmental impact is determined by decisions made at the design stage, there is little incentive for businesses to take environmental issues into account at that stage. That must change and a number of proactive steps could be taken to encourage businesses to make more efficient use of resources in designing new products. For example, to help make eco-friendly products more appealing, the Government could set variable rates of VAT based on recycled content.
Much more action is surely needed if the Government and EU target to increase the rate of plastic packaging recycling to 57% by the end of 2017 is to be considered realistic. As has been mentioned, a new global action plan announced by the Ellen MacArthur Foundation was launched at the World Economic Forum last week. It has been endorsed by industry leaders and aims to increase the global reusing and recycling of plastic packaging from 14% today to 70%. That and other initiatives are a welcome step forward. Given the involvement of companies such as Coca-Cola, Unilever, Mars and the People’s Postcode Lottery, I sincerely hope that the work done under the global plan will have a great influence in the UK.
The impact of Brexit on much of the work of the Department for Environment, Food and Rural Affairs is still not clear. The most immediate questions relate to the EU’s circular economy package, which will include updates to key directives on waste disposal and packaging. Some of the details of those changes are still to be negotiated, and once finalised, will need to be implemented at national level. While the Government have said that existing EU law will be carried over by the great repeal Bill, it is not clear what will happen to EU laws that have been passed but not yet implemented in UK law at the time of our leaving. Will the Minister give a specific answer on whether the circular economy package will be implemented before we leave the EU? Will she tell us how we will enforce those laws outside the current EU framework? Will she also say what additional plans the Government have beyond the circular economy package to bring the UK closer to those ambitious recycling targets?
Embracing the circular economy is something we should all agree on. We need to see more action from Ministers if they are genuine about recycling across the UK and if they take seriously the views of the people of the UK, as expressed in the petition.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
It has been a very interesting debate on the petition, which was created by Teja Hudson and secured more than 74,000 signatures. It was chosen for debate by the Petitions Committee, and was introduced by my hon. Friend the Member for Northampton South (David Mackintosh) with his usual aplomb. My hon. Friend the Member for Rugby (Mark Pawsey) extensively shared his professional experience, which has helped to inform the debate.
Packaging is critical in allowing the sale and distribution of products in a safe, secure and hygienic manner. It allows us to eat a huge range of fresh food at any time of year and to extend the shelf life of products. As we have already heard, a cucumber can now remain edible for 14 days thanks to plastic wrapping. Packaging has also become key to supporting our lifestyles, in which we enjoy products in a convenient, consumer-friendly and appropriately portioned format. It allows retailers to provide us with a choice of products, and allows us to make choices about what products are right for us based on the information on the packet, through labelling and similar.
As a result of significant change in our lifestyles, and to both our purchasing and consumption preferences, the amount and types of packaging has increased dramatically in modern times, alongside the need for responsible disposal. Technically, most packaging is recyclable. As my hon. Friend the Member for Rugby pointed out, the challenges are more evident for certain products than for others. Nevertheless, the essay question becomes, “Why is it that our recycling rates are not sky high?”
Businesses are encouraged to reduce waste in the first place by using appropriately sized packaging. Our regulations require businesses to ensure that packaging does not exceed what is needed to ensure that products are safe, hygienic and acceptable for both the packed product and the consumer. Those regulations apply to those responsible for the packing or filling of products into packaging, and to those importing packed or filled packaging into the UK from elsewhere.
Christmas presents and Easter eggs have been discussed extensively. While some of the packaging for Easter eggs is clearly for branding purposes, a considerable amount is functional. A hollow chocolate egg is somewhat fragile, and the packaging allows for a product to be presented to the consumer intact. Of course, many brands of egg are available, but the challenges of packaging, for example, a Dairy Milk egg are quite different from the challenges of packaging a Creme Egg, which is solid and has substance inside.
Our regulations already place a legal obligation on UK businesses that make or use packaging to ensure that a proportion of the packaging they place on the market is recovered and recycled. Each activity throughout the packaging supply chain, from the original producer to the packager to the retailers, carries a different proportion of the responsibility to reflect the potential impact that a producer may have. For example, sellers of goods have 48% of the responsibility for recycling packaging, with packers or fillers having 37%. Those regulations create an incentive for companies to use less packaging, and to ensure that their packaging can be recycled at the end of its life, because it reduces their costs of complying with the regulations. In 2014, almost £20 million of revenue from the obligations paid by businesses was used specifically to help plastics recycling. Our targets for plastic packaging recycling are set to increase by 2020, which should provide a further incentive.
Why is our recycling rate not sky high? Consumers need to be able to dispose of waste responsibly, and many do so at home, while on the move and while at work. As we have heard, plastics come in all shapes, sizes and formats. While all councils are required to offer recycling of plastic bottles, several councils inform us that it is not economically worth while for them to collect and recycle some formats, such as yoghurt pots or ready meal trays. They also inform us that local reprocessing infrastructure may be limited; that the type of reprocessing needed could create different environmental impacts that outweigh the resource efficiency benefits; and that there may be a lack of end markets for some types of recycled materials. There is also the problem of contamination, which can make the contents of an entire recycling bin unfit for recycling.
Mark Pawsey
Does my hon. Friend agree that fluctuations in the exchange rate may now provide additional incentives for manufacturers to use recycled material, as it will be proportionately less expensive?
Dr Coffey
I agree with my hon. Friend. However, we both worked in industry for some time, and the idea that a strategy could be changed based on temporary changes in exchange rates is unlikely, owing to the required amount of capital investment. Nevertheless, if there is an opportunity appropriately to design products so that it does not matter whether virgin or recycled materials are used, I am sure companies will take advantage of those short-term measures to do so.
A great deal of work is being done by some local authorities to improve their recycling facilities and collection, and I congratulate those that are doing well, but I challenge the view that recycling in densely packed urban areas is difficult, or that local authorities cannot do more to improve recycling rates. We know that they can, and that many are delivering high levels of recycling and are actively exploring what can be done to extend services, even in challenging circumstances. My hon. Friend the Member for Rugby referred to energy from waste. I caution against some of what he said. In environmental terms, it is generally better to bury plastic than to burn it. The opposite is true of food—it is better to burn it than bury it. We need to be careful about what incentives we push.
I will try to come to some of the shadow Minister’s questions—if I do not cover them in my speech, I will ensure I refer to them before the end. I reassure her and my hon. Friend the Member for Northampton South that a lot of work has been done over the past 20 years to improve the recycling, and the recyclability, of packaging. We have largely worked through the Waste and Resources Action Programme—WRAP—for many years to increase the quantity and quality of materials collected for reuse and recycling, including through campaigns like Recycle Now and through implementing the Courtauld commitment.
We continue to work through WRAP to develop and deliver activities to support the use of recycled materials in new products, and to encourage activities to stimulate its demand. Its industry advisory group recently published a framework for greater consistency in recycling. The vision is that, by 2025, packaging will be designed to be recyclable where practical and environmentally beneficial, and will be clearly labelled to indicate whether it can be recycled. Actions from that framework aim to identify opportunities for rationalising packaging, and for more and steady end markets for recyclable packaging, and to help local authorities to recycle a greater variety of materials, particularly plastics.
The hon. Lady referred to what is happening with that programme. WRAP is working with a number of local authorities. My top priority in the Department is air quality and my second is tackling urban recycling. It matters that we try to encourage more of our councils. She referred to Wales, which has taken a regulatory approach in this regard, but we are not yet persuaded of that. I do not want just to apply a stick to councils, but for all of us—it does not matter which party we represent—using fewer resources in the first place and being able to recover, recycle and reuse them is the right thing for our environment. There are other incentives and we want to encourage not only businesses to play their part, but councils to make the process as easy as possible for householders.
One of the biggest things I have learned since coming to my role is how much our recycling rates are due to organic waste. Much of it is due to garden waste. People do not think that putting their garden clippings out is part of recycling, but that is how it is counted, and it is where we saw a drop last year. Nevertheless, we want to continue encouraging councils to extend the number of products they will recycle by making it as easy as possible.
It is ultimately for businesses to decide what packaging materials they use to supply products to customers, and for customers to make choices on the products they buy. I am delighted to see the recent pledges by a number of multinational businesses to significantly improve the recyclability of their packaging. As has been outlined, more than 40 companies have signed up to a global action plan to rethink and redesign the future of plastics, starting with packaging. The recent report from the Ellen MacArthur Foundation analysed the problem well and will help to galvanise companies into further action on this issue.
I used to work for Mars and I am pleased that it is part of this initiative. The hon. Member for Huddersfield (Mr Sheerman) referred to coffee capsules. The report stressed that they are part of the 30% of packaging that is challenging to tackle. Nevertheless, I hope that Nestlé, which makes some of the finest products in the world, will apply some of the finest brains to make sure that it addresses the issue. Otherwise, we need to increase consumers’ awareness that Nespresso capsules, which are marketed by the gorgeous George Clooney—I know he is a married man, Mr Bone—are not recyclable today.
Unilever gave a commitment to ensure that all plastic packaging will be fully reusable, recyclable or compostable by 2025. I commend it on that and I note its commitment to reduce packaging weight by one third by 2020. It has made a commitment to use at least 25% of recyclable plastic content in its packaging by 2025. It would be good to see even more than that.
These commitments and future products will need to be matched with the right recycling infrastructure, the right consumer buying and recycling behaviour, and the right end markets for recycled materials. We will continue to work on our policies to encourage all these things, and to encourage others to do the same. I am pleased that waste is one of the six infrastructure priorities being focused on by the National Infrastructure Commission; I know that senior waste industry figures also welcome that. It will help to inform our longer-term policies but, most importantly, we should all be striving for less waste being produced in the first place.
Most of what I have discussed refers to packaging that can be recycled and I am conscious that the petitioners also referred to compostable packaging and the use of bioplastics. While attractive on the surface, this is a considerably more complex issue. Biodegradable materials must be properly disposed of if the benefits of such technologies are to be fully realised. If biodegradable packaging is put in the domestic waste bin, it is likely to end up in landfill and break down to release methane, which is obviously not good from a carbon emissions point of view. If biodegradable packaging is mistakenly recycled with other plastics, it has the potential to damage the quality and integrity of the new products made from the recycled plastic—for example, damp-proof courses in houses.
However, biodegradable or compostable plastic that degrades fully without causing harm in the natural environment would clearly be desirable. My colleagues at the Department for Business, Energy and Industrial Strategy are currently seeking input to help to shape a UK bioeconomy strategy, including how standards for new materials, such as bioplastics, could be used to help promote growth and innovation in the bioeconomy.
Reference has been made to litter, which is part of the petition’s message, by speakers today. The Government are developing a litter strategy for which my noble friend Lord Gardiner is the responsible Minister. As was indicated in the House last week, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is personally interested in the issue of marine litter, and I am sure there will be opportunities during the development of the strategy to address such matters.
Another question raised today was the EU and environmental law. I assure the hon. Member for North Tyneside (Mary Glindon) that our intention is to bring existing EU law into UK law on the day we leave the European Union.
On the circular economy package, as my right hon. Friend the Prime Minister laid out several times, while we are members of the European Union we will negotiate in good faith; I am approaching the negotiations on the eventual outcome for the circular economy in a way consistent with that. On the timing, it is likely that we will still be in the European Union, which will mean that we are required by directive to introduce it into law, but we are approaching the matter in good faith while negotiating quite hard on behalf of the United Kingdom and what we think is achievable and realistic. First, we must agree a definition of “recycling”. There are many different views.
On additional plans for recycling targets, I have laid out some of the work by WRAP, but I am conscious that, as I visit more and more councils and discuss air quality regularly, another issue is their approach to achieving their recycling targets.
The hon. Member for Belfast East (Gavin Robinson) referred to the coffee cup incentive. Several retailers offer an incentive for people to use reusable cups. I must be careful not to endorse one company’s products, but in my constituency a company, Frugalpac, which I have visited in my capacity as an MP, does well and there may be other sources of coffee cups for retailers. I am pleased that Frugalpac seems to have created technology to make recycling easier.
There are regulations on producer responsibility. We will be looking at that in future.
We have referred to the circular economy negotiations. The Government are absolutely committed to hit the 50% recycling target. When we leave the European Union, I genuinely believe that what the hon. Member for North Tyneside refers to as the circular economy and we call resource efficiency could be a genuinely competitive advantage for UK plc. My hon. Friend the Member for Rugby has referred to that. Some companies are already showing a lead. The best companies are achieving these things because it is good for the company, good for consumers and good for the environment.
We have seen a tremendous transition over the past decade from a throwaway mindset to one that focuses on extracting the value from resources more than ever before, but we must continue with this trend, finding new and innovative ways to extract even more value from our resource assets and protect the quality of our environment. Companies, consumers and the environment will benefit. That is the triple crown for which we all strive.
Mr Peter Bone (in the Chair)
I invite David Mackintosh to wind up in the hour and three quarters we have left.
David Mackintosh
Thank you, Mr Bone. I will be brief. I thank you for chairing this debate and the 75,000 people who signed the petition. We have had a passionate debate, not least because of the hon. Member for Huddersfield (Mr Sheerman). He is no longer in his place, but he is a passionate supporter of trying to change things.
We had knowledgeable input from my hon. Friend the Member for Rugby (Mark Pawsey), who is chair of the all-party group on packaging manufacturing. Although we disagreed on Easter eggs, I was pleased to hear from him—not least about the variation of rates of recycling among local authorities.
The hon. Member for Belfast East (Gavin Robinson) touched on the reuse of coffee cups, which is a valid discussion. I am grateful for the input from the hon. Member for North Tyneside (Mary Glindon), who talked about recycling rates in Wales particularly. I am grateful to the Minister for outlining her approach and continued commitment to developing this theme and the Government’s approach to the litter strategy. She outlined her approach to local authorities and their recycling rates, and even managed to mention George Clooney.
I am pleased that we have debated this issue today.
Question put and agreed to.
Resolved,
That this House has considered e-petition 167596 relating to the banning of non-recyclable and non-compostable packaging.
Written Statements
(7 years, 10 months ago)
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Industrial Strategy Consultation
(7 years, 10 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The Government are today publishing a Green Paper: “Building our Industrial Strategy”.
This signals a new and collaborative approach to industrial strategy in the United Kingdom, helping to deliver an economy that works for everyone.
We are working from a position of strength. We have built an open, dynamic and competitive economy since the financial crisis, with a record number of people in work. We have more businesses than ever, industry sectors that are world leading, a strong science and research base, and have seen significant growth.
But there are challenges that the United Kingdom must face up to now and in the years ahead. Specifically we must:
Build on our strengths and extend excellence into the future;
Close the gap between the UK’s most productive companies, industries, places and people and the rest; and
Make the UK one of the most competitive places in the world to start or grow a business.
“Building our Industrial Strategy” sets out our approach to addressing these challenges in order to attain our objective: to improve living standards and economic growth by increasing productivity and driving growth across the whole country.
In order to endure, our strategy should reflect the considerable contribution of a wide group of people and bodies who share our ambitions. That is why this is a Green Paper—a set of proposals for discussion and consideration, and an invitation to others to contribute collaboratively to their development. I have placed copies of the document in the Libraries of the House.
[HCWS429]
Local Growth Fund
(7 years, 10 months ago)
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The Secretary of State for Communities and Local Government (Sajid Javid)
In the last Parliament, £7.3 billion of the Local Growth Fund was awarded to Local Enterprise Partnerships (LEPs) through the first two rounds of Growth Deals. At Autumn Statement, the Chancellor announced the regional breakdown of a further £1.8 billion of the Local Growth Fund. Today I am pleased to announce the individual awards that LEPs in the Northern Powerhouse will receive. LEP Funding Award (£m) North Eastern 49.74 Cumbria 12.66 Tees Valley 21.81 York, North Yorkshire and East Riding 23.68 Lancashire 69.76 Humber 27.94 Leeds City Region 67.45 Liverpool City Region 71.95 Greater Manchester 130.08 Sheffield City Region 37.83 Cheshire and Warrington 43.28
This flexible funding sits alongside £475 million for Local Transport Majors and £2 billion long-term funding for housing transactions through the Home Building Fund. This was the most competitive round yet, and allocations were made based on a bidding round that took place last year. This honours our manifesto pledge to agree an expanded set of deals to empower the towns, cities and counties across the country to fulfil their potential and create an economy that works for all. The expanded deals will provide LEPs in the Northern Powerhouse with the power and funding to support local businesses, unlock housing where it is most needed and develop vital infrastructure to allow places to thrive. The funding will also be used to create jobs, equip a new generation with the skills they need for the future and attract billions of pounds of private sector investment. This investment is Government stepping up, not stepping back, building on our strengths to boost national productivity and growth.
This adds to the £2.9 billion we have already invested in growth deals in the Northern Powerhouse in previous rounds, providing targeted financial support to locally-determined projects in order to unlock growth.
This is part of Government efforts to build a Northern Powerhouse to help the great cities and towns of the North pool their strengths and take on the world. Step by step we are making the Northern Powerhouse a reality with over a million businesses involved, foreign direct investment up by a quarter and 187,000 jobs created in the past year alone.
We will announce the allocations for LEPs in other regions over the coming weeks.
[HCWS428]
Grand Committee
(7 years, 10 months ago)
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Health Service Medical Supplies (Costs) Bill
Monday 23rd January 2017
(7 years, 10 months ago)
Grand CommitteeRead Full debate Health Service Medical Supplies (Costs) Act 2017 View all Health Service Medical Supplies (Costs) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-II Second marshalled list for Grand Committee (PDF, 70KB) - (23 Jan 2017)
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, in the event of a Division in the Chamber, the Committee will adjourn for 10 minutes from the sound of the Division Bell.
Amendment 1
Lord Warner
“Duty to have regard to the life sciences sector and access to new medicines and treatments
In discharging, through the provisions established or amended by this Act, its responsibility to secure best value for the National Health Service in purchasing medicines and medical supplies, the Government must have regard to the need to—(a) support a flourishing life sciences sector within the United Kingdom economy; and(b) to ensure patients have speedy access to new medicines and treatments approved by the National Institute for Health and Care Excellence.”
Lord Warner (CB)
My Lords, Amendment 1 is in my name and those of the noble Lord, Lord Hunt of Kings Heath, and the noble Baroness, Lady Walmsley. First, I welcome the Minister to his first health Bill as a Minister. I am sure that the noble Lord, Lord Hunt, will have a great deal of sympathy with his position of having copped the Committee stage of a Bill in which he had had no previous involvement, because I did exactly the same to him when I left office and left him with the Mental Health Bill—having made, of course, an extremely brilliant speech at Second Reading to introduce the Bill.
I sympathise with the Minister’s position, but that does not mean that we will not probe forcefully on a Bill that is definitely a curate’s egg which does not seem to have left the Commons in as improved a state as it might have done. I am afraid that earlier this morning I separated Amendment 1 from Amendments 2 and 4. I hope that that has not caused too much trouble. I wanted to focus in this amendment on life sciences and the PPRS scheme and on their importance.
Amendment 1 is very straightforward. At the start, the Bill lays a clear duty on the Secretary of State, in discharging the Bill’s provisions, to have regard to supporting a flourishing UK life sciences sector and ensuring that patients have speedy access to NICE-approved new medicines and treatments—a subject to which I think we will come back on a number of occasions. As I made clear at Second Reading, the Department of Health Minister with responsibility for the pharmaceutical industry does have to balance a number of factors, and not just get the cheapest drugs for the NHS. This is what I had to do when I had those responsibilities, and the position is the same today, as I understand it. These factors involve the safety and value for NHS money of medicines, but they also involve helping the UK life sciences industry to grow and flourish and securing speedy access for patients to new drugs that have been approved by NICE.
It is clear that the Government have not done a spectacularly good job with their consultation on the Bill in showing that they understand this balancing act. They certainly have not convinced the pharmaceutical industry—hence this amendment at the start of the Bill. Suspicions have understandably been raised by the inclusion of elements in the Bill that were not in the 2015 consultation on the Bill, including enforcement powers for future voluntary pricing schemes that operate outside the statutory scheme. There is also the issue that the range of products covered by the Bill seems to have been extended, along with the disproportionately bureaucratic information requirements that have now found their way into the Bill.
We will come to many of these issues later, but I will focus here on safeguarding life sciences and the PPRS. Why is this so important? I will start with the life sciences issue. The pharmaceutical industry invests more than £4 billion a year in R&D—more than any other sector. It employs 62,000 people, with a geographical spread that is well outside London and the south-east. Pharmaceutical manufacturing employees have the highest gross value added of any high technology industry, at more than £330,000 per employee. One in four of the world’s top prescription medicines was discovered and developed in the UK. It is a very important and powerful industry for this country.
All this will be put at serious risk by Brexit, as the Prime Minister seems to recognise in the new industrial strategy that she announced today. We know the UK will lose the EMEA through Brexit, but Brexit also poses many other risks to the UK life sciences industry, which could lose market access for its products and see a flight of researchers and research. At such a time the last thing the sector needs is a piece of ill-considered legislation imposing unnecessary regulatory burdens—again, something the Prime Minister said in her industrial strategy that she wants to reduce.
As I made clear at Second Reading, I am not saying that the Government should not act to prevent the NHS being blatantly ripped off under the statutory scheme when a branded good comes off patent, as happened with Flynn Pharma and a Pfizer anti-epilepsy drug. The ABPI has never challenged action in cases of this kind. However, the broad wording of the Bill goes well beyond closing this loophole. It gives the Government the power in the statutory scheme to replace a list-price discount system with one in which a company repays the Government a percentage of net sales, with as yet no clear indication of what this level will be. The industry’s concern is that this will create a precedent that could be easily applied to the voluntary PPRS scheme. Ministerial assurances that this will not happen are simply not the same as legislative safeguards. My reading of the Bill is the same as the ABPI’s, namely that this legal precedent could enable a future Government to unilaterally apply the same approach to the voluntary scheme when a PPRS period ends. This would end a negotiated way of setting prices and encouraging research and innovation that has worked well for industry and successive Governments for more than 50 years.
The second leg of Amendment 1 covers the issue of speedy patient access to new drugs. We will come to this matter later on other amendments so I will say little now, except to remind the Committee that we already have a poor record on the take-up of new approved medicines. For every 100 European patients who can access new medicines in the first year they are available, just 15 UK patients have the same access. Even when NICE has approved drugs and treatments, NHS take-up still lags behind. The first page of Friday’s Times showed the sector’s concerns, with one-fifth of new drugs being rationed and drug companies now openly saying they will no longer launch new drugs early in the UK. Whatever we do with other parts of this Bill when we come to them, I urge the Government at this time of great uncertainty for UK life sciences to put at the beginning of this Bill a statement of intent and reassurance of the kind embodied in Amendment 1. I beg to move.
Baroness Walmsley (LD)
My Lords, I support this amendment and compliment the noble Lord, Lord Warner, on his comprehensive introduction of it. I have no intention of repeating everything he said. However, I have a few points. I, of course, support the Government’s intention to try to make sure that the health service is not ripped off, but point out that a very large fine has just been imposed on Pfizer by the competition law regulations in relation to the case mentioned by the noble Lord, Lord Warner—so even without this Bill, that is working and we must bear that in mind.
What I am particularly concerned about is the potential effect on the life sciences sector, particularly—as the noble Lord, Lord Warner, said—in the light of Brexit. There are dangers to our markets and to our researchers. Our research is going elsewhere and researchers from other EU countries coming to us are all in danger because of the Prime Minister’s determination to take us out of the single market and the customs union, which I do not believe is what the public voted for.
The particular issue that concerns me is that although we were told in some of the meetings we had that there had been consultation and there will be more consultation before elements of the Bill are implemented, parts of the industry tell us that they are very concerned that they were not consulted. They do not feel that the level of consultation before the Bill is implemented is anything like good enough. We have to support our life sciences industry. We are very good at life sciences. It is one of the things that we can lead—and have led—the world on, but we must make sure that it is not in danger.
The other point is on access to treatments—not just drugs but other treatments. I am told by GPs that rationing is already in place, either by these referral management companies—private companies—that are being placed between the GP and his or her recommendation and the consultant, or by the consultants having pressure put on them to refuse consultation over certain patients referred to them by GPs. We already have rationing and we need to make quite sure that we are not affecting our pharmaceutical industry. We must ensure that our industries involved in research, medical implements, treatments, machines and devices and all those things that we are so good at inventing are not damaged by the Bill. It is really important that we have a statement of intent in the Bill. It will place on the Government the responsibility to make sure that they consider this terribly important sector. I have not had a chance to read the industrial strategy yet, but I would be surprised if the money follows the intent. I do not think that we will be able to look to that for any comfort, so we need this amendment.
Lord Young of Norwood Green (Lab)
My Lords, I hesitate before speaking about this amendment because I do not profess any particular knowledge of this area. I have not participated before on the Bill because I have been ensconced in dealing with the delights of HS2, but I have a couple of points to make. I am certainly sympathetic to the amendment, but something the noble Baroness, Lady Walmsley, said worried me. She said that even without the Bill, action is being taken. That does not mean that we do not need the Bill.
My first point is that it took quite a while for this to be exposed. It took the campaign from the Times to bring this to the forefront. Surely one of the questions we ought to be asking is why this was not exposed through the audit processes of the NHS in the first place. These were not small increases: they were staggering. One epilepsy drug that started off for a few pounds went up to something like £67. They were staggering increases—so that is one question for the Minister.
There are clearly differences of opinion about how effective the Bill is at getting the balance right, and that will be tricky. I can understand that listening to the arguments today. Nobody wants to stop the innovative, essential approach of successful British drug companies. That is on one side. But on the other, we have to ensure that the health service and the cost of drugs are protected.
A letter to the Times on Saturday caught my attention. It talked about the importance of clinical pharmacology and focused on the safe, effective and economic use of medicines. A recent report by PricewaterhouseCoopers stated:
“Each £1 spent to hire additional clinical pharmacologists has the potential to reduce NHS costs by almost £6”.
Apparently, there are only 72 clinical pharmacologist consultants working in the NHS. The British Pharmacological Society recommends that it needs a total of 150 by 2025. Without urgent action, therefore, the impact of waste is set to increase, and that surely ought to give us cause for alarm. Again, I am only giving notice to the Minister; he might not be able to give me all the answers to these questions.
Baroness Finlay of Llandaff (CB)
My Lords, I support this amendment. I have a real concern that the whole process of pricing and costing of drugs is very poorly understood. I was lucky enough to hear a lecture at the weekend by Jack Scannell, an economist who understands quite a lot about drug pricing. He pointed out that there are four reasons why drugs are expensive: one is cost; one is perceived value; another is power; and the fourth is the prize that they can deliver. It is all in a paper that he wrote about the four reasons why drugs are expensive, two of which he labelled as false: the cost and the so-called value. The reason is that a company will start to explore different chemical substances that might have an effect; 90% of these never progress but remain in various test tubes and are stored. One day they might be of use.
The problem then is that, even if they develop something and take it through the different trials, there are fairly arbitrary examples of where the benchmark is set in different sectors. A clear example of this came up with the drug Campath, which came from Cambridge. It was developed for leukaemia, but was found to be remarkably effective for multiple sclerosis. The drug company then withdrew the drug because it was being prescribed off-licence: it was not licensed for multiple sclerosis. It took the trials through, licensed it for multiple sclerosis under a new name—Lemtrada—and the price was much higher because the benchmark of prices for multiple sclerosis was much higher than that for drugs for leukaemia. The chemical was the same. Actually, when a drug goes out and is priced, it really is, in a way, a guess on behalf of the pharmaceutical industry at the outset.
Another problem arises that relates to the importance of having trials in this country. Trials have to be done on the population to which the drugs are going to apply. It is quite interesting that with different healthcare systems, clinicians see patients at different stages of disease, so with a late diagnosis, you might have a much larger disease burden requiring treatment than you would have had if there had been an earlier diagnosis.
If the trials are conducted in this country, therefore, within the NHS and the real care system—the real world in which these drugs are going to be used—and as near as possible on the very population on which they are going to be used, you get the most accurate results. They can guide NICE in determining how effective a drug really is.
If you have a study on a population with a very early diagnosis, and therefore a relatively low disease burden, you might get a false impression of efficacy, which could lead NICE to believe that the drug was being actually more effective than it will turn out to be in our population. The converse is also true.
That leads me to stress the importance of supporting a flourishing life sciences sector, because we need to be developing drugs in this country, within the care setting in which they will be prescribed and for the population to whom they will be supplied. Any attempt at pricing must, importantly, not disincentivise the pharmaceutical industry to develop the 90% of drugs that go nowhere to find the 10% that will go somewhere.
I hope that the Government will take the new clause very seriously, because it signals an important intention up front in the Bill.
Baroness Redfern (Con)
My Lords, I declare my interests as recorded in the register and formally welcome my noble friend Lord O’Shaughnessy as the Minister this afternoon. Although the Bill is modest in size and has few clauses, it will deliver an important role in securing better value for money not only for the NHS but for patients.
Pressures on the NHS increase year on year because of our ageing population, new technology, and development of new procedures with advanced drugs, resulting in an increase in spending over the past five years of 20%. We spend more than £15 billion a year on pharmaceutical products, and we are acknowledged by those companies to be a reference market for many other countries that do not have such a large or well-organised supply chain as we do.
Patients request access to innovative and cost-effective medicines, so the Bill delivers value for money and does not support the drug companies, which have a commanding monopoly position, to push up their prices. I am pleased to see a strengthening of the ability to collect data on the cost of medicines, medical supplies and other related products from across the supply chain, which the Bill would amend by extending the provisions of the 2016 Act.
The statutory scheme has delivered significantly lower than expected savings for the NHS, with concern as to whether competition in the market is sufficient to control prices, so with new powers to be established under the Bill, there will be opportunities for more competition for unbranded generic medicines and to apply price controls for companies that are members of the PPRS. Particularly when companies can charge unreasonably high prices for unbranded generic medicines when competition does not keep the prices down, the Bill closes a current loophole in the legislative framework.
Clause 6 requires information from more producers and companies but, importantly, any information that they supply which may be commercially sensitive cannot be disseminated beyond the prescribed bodies. We may therefore be better informed on a more consistent basis, particularly to assess whether the supply chain as a whole or a specific sector provides value for money for the NHS. The world is changing, and personalised medicine is an important development for us all—but, again, it needs to be delivered both effectively and affordably.
At all times, we must make sure that the UK is seen as an attractive place for the life science sector—research being seen as a vital component in the sustainability of the NHS, as we have heard from previous speakers. To balance the control of the price of medicines and innovation for pharmaceutical companies, there should not be a lack of motivation to invest in the extensive R&D that we all want. In order to stimulate continued investment, it is appropriate for the industry to see a stable marketplace here as significant and important.
If we are to create a level playing field for drug companies, should we not be trying to do the same for patients? I therefore ask my noble friend whether one measure to tackle the issue could be ring-fencing possible rebates or a percentage from the sector to invest in improving access to medicines and treatments—particularly when we read that a fifth of new drugs face rationing under tighter NHS cost-cutting plans. With a budget impact threshold, that has the potential to slam the brakes on the most effective new treatments and technologies just before they get to patients.
Finally, although we promote innovation, that is not only a priority in the NHS for the Government but for many other stakeholders in the industry. As I said, the Bill is modest in size but it carries the opportunity to ensure that this country is not left behind in access to the newest and best treatments, and that it delivers best value for money.
Lord Lansley (Con)
My Lords, I am pleased to have the opportunity to contribute in Committee. I join in welcoming our noble friend the Minister to his new responsibilities on the Bill. I also draw attention to my interests as recorded in the register. I think only one of them might be regarded as specifically relevant to the Bill, although it is a company which would not benefit directly from it.
As the noble Lord, Lord Warner, said, Amendment 1 raises quite a number of issues, which we will have the opportunity to return to on further amendments. If I may be so bold, the structure of Amendment 1 would insert a clause which is really designed to express hope and intention, rather than to provide a statutory provision having any effect. Some of the other amendments would have the necessary statutory effect to back up some of the intentions encapsulated in Amendment 1, but it does no harm to realise what we are trying to do.
On the amendment’s first limb of supporting,
“a flourishing life sciences sector”,
it is a very apposite day as that is one of the clear intentions of the consultation on an industrial strategy. Listening to the reports this morning, it was clear that in so far as there is a focus on sectors where this country has a comparative advantage—I think we were discussing comparative advantage in the Chamber only last week—pharmaceuticals and life sciences is clearly one of those areas.
A number of noble Lords talked about the strength of our research base in this country and, as the noble Lord, Lord Warner, said, the proportion of new discoveries that have emanated from our research base is striking. It is considerably in excess of our relative importance as a market. We are only about 3% of the global market in pharmaceuticals but we have more than 10% of the new chemical entities—and as my noble friend Lady Redfern said, we often represent up to 25% of the international reference pricing. That is one of the reasons why there is a noted sensitivity on the part of the industry about its strength in the UK.
Where the life sciences sector is concerned, from my experience around Cambridge—in my former constituency and where I live—we probably have the strongest cluster of life sciences in Europe. As was raised by the noble Baroness, Lady Walmsley, when you talk to the industry at the moment its principal concern is simply its capacity to recruit and retain some of the very best researchers and staff. It is often specifically about retaining them and is all to do with the current situation relating to our future relationship with the European Union.
The sector recruits staff from all over the world, way beyond the European Union, but is only too aware of the reaction there has been among its staff—something like 15% of whom are on average from elsewhere in the European Union—to the prospect of our leaving the EU. It is one of those classic situations: if Britain had never been in the European Union, staff attracted from elsewhere within it would have come here understanding under what circumstances they came. Having had the expectation of being EU citizens enjoying access to all the British circumstances, they find the prospect that those might be taken away from them very difficult. It is very important for us to be clear about not only accrued rights but the circumstances in which people come here.
Lord Warner
Will the noble Lord clarify something for me? The point of my amendment was, in a sense, not any particular PPR scheme but the principle of a PPR scheme, which is a negotiation between government and the industry. No one is arguing that the PPR scheme should be set in stone for ever and a day. What the industry is concerned about is that Government are getting ready to impose a system as an alternative to a negotiated system. The amendment is not meant to enshrine a particular PPRS but to encourage the idea of a negotiated deal with the sector. Does the noble Lord accept that that is a good principle?
Lord Lansley
The short answer is yes. We should aim for what is a price paid by the NHS to the industry for the medicines that it uses that is reflective of value and is designed to promote innovative medicines—that is, as we will discuss in a later amendment, those that meet unmet need or add substantially to therapeutic benefit and are not the “me-too” drugs that are very similar to existing medicines but have a slightly different method of operation or delivery. Paying for what innovation gives by way of therapeutic benefit is where we want to be.
However, the amendment is right in the sense that one has to do that alongside supporting the life sciences sector. That is where freedom of pricing at introduction is important. I have accepted the principle of a PPRS which delivers a budget to the NHS and delivers freedom of pricing to the industry. We are not legislating precisely for the structure of the PPRS, but let us assume that those are continuing features. However, through the operation of the rebate or some other means, it seems perfectly possible to incorporate some of the criteria that will be the subject of our discussions on a number of amendments, as is reflected in the second limb of the amendment.
Baroness Finlay of Llandaff
The noble Lord referred to me-too drugs. I hope that he agrees that it is important to recognise that such drugs have often been developed in parallel. They do not take a molecule and just copy it; they develop a new molecule or delivery system, often to minimise side-effects and to maximise efficacy. But they also have a production cost behind them. They are not just copies of something previously produced and marketed differently; they have innovation behind them as well.
Lord Lansley
I understand that. There is a perfectly good argument for the benefits that are derived from incremental innovation. Not every innovation is a step change compared to what has gone before, so that is a perfectly valid point. One objective that we should arrive at, as I hope my own Amendment 10 will later reflect, is that the structure of value has to understand what those benefits might look like. New medicines will come through that are similar but are significantly better, for example in terms of compliance for patient populations, because they are administered differently. One might say, “Well, it’s a very similar drug”, but one has to look at what the overall benefit might be, which is part of the value.
Baroness Masham of Ilton (CB)
My Lords, cost-effective medicines which work for patients are vital, but some orphan drugs will cost more. Why are there differences in the pricing of drugs in Scotland and England? Someone must be making a lot of money.
Lord Hunt of Kings Heath (Lab)
My Lords, that is a very interesting question. The exchange between the noble Lords, Lord Lansley and Lord Warner, has been very helpful in focusing on the full intent of the amendment. As it is the first day of Committee, I remind noble Lords of my presidency of the Health Care Supply Association and GS1, the barcoding association.
The amendment is essentially about the life sciences sector and the relationship to it of the pharmaceutical and medical devices and technology industry. However, inevitably, as the noble Lord, Lord Lansley, has shown, it is very difficult not to talk also about issues to do with PPRS and access, and I suspect that those other issues will be dipped into in a number of debates.
First, let me say that the Opposition are strongly in favour of closing the loophole that the core part of the Bill attempts to do. We clearly want to see the NHS get value for money and a good deal out of price negotiations with the different parts of industry it deals with in relation to the matters covered by the Bill. My noble friend Lord Young asked some very pertinent questions. The Minister in passing raised the issue of clinical pharmacology. This is a clinical profession that most clearly enables the health services and, indeed, Ministers to understand the true cost effectiveness and value of new medicines.
The UK is a world leader in clinical pharmacology but, because decisions about the appointment of clinical pharmacologists are made by the NHS, we are at risk of losing the whole profession. I was very disappointed that Health Education England proposed to reduce the number of training posts in its most recent consultation. We were very pleased to have a meeting with the Minister’s predecessor, the noble Lord, Lord Prior, on this, and I very much hope that the Government will be prepared to have a look at it.
This debate is about the contribution of the life sciences sector to this country. Briefly reading the consultation passed today on the industrial strategy I noticed that the introduction talks about the UK benefitting from an,
“open economy: pro-competition rules, flexible labour markets, less intrusive regulation”.
The question that one really wants to put, particularly as this is a sort of declaratory amendment is, if that is so, if—as the noble Lord, Lord Lansley, has suggested—the issue of life sciences post Brexit deserves a great deal of consideration, why have the Government brought what is clearly an overbearing regulatory Bill to your Lordships’ House? If ever I have seen an example of gold plating, this is it. We understand the need to close the loophole but I do not understand and I do not think we really saw a case made at Second Reading for why the Department of Health is determined to intervene in this sector in such a wide-ranging way. It is interesting that your Lordships’ Delegated Powers Committee has already pointed out the open-ended nature of the Government’s approach.
It is impossible to look at the health of the life sciences and the health of the pharmaceutical, medical devices and medical technology industries in this country without looking at the crucial issue of access. I know the Minister’s department is in denial about this and feels that access can be constantly reduced and will have no effect on investment in these sectors. I simply do not believe that that is so. The noble Lord, Lord Lansley, rightly said that this is one of the sectors that we want to protect and enhance—but I believe we are at real risk of losing its pre-eminence in this country.
I understand that the Secretary of State is shortly to go to North America to sweet talk the boardrooms of US pharma. I know the noble Lord, Lord Warner, has been there. I have been there, too. I am sure that the noble Lord, Lord Lansley, has, too. The idea that the Secretary of State will not talk about access is naive. Access is a crucial part of investment decisions by these companies in the UK. The noble Lord, Lord Lansley, referred to the proportion of new chemical entities and top 100 medicines globally that have been developed in this country. I understand that it is now down to 14%. That is healthy compared to 3% turnover, but when I was the Minister responsible we were in the 20% to 25% range. So we have a horrendous decline in the influence of the UK sector. My fear is it is going to decline even further in the years ahead.
We will come back to the 2014 PPRS agreement. Potentially, the industry would have funded the widespread use of innovative medicines in the NHS. Between them, however, the Treasury, the Department of Health and NHS England have completely messed this up. We have ended up with the worst of all worlds, in which rationing in the NHS has reached appalling levels: CCGs are making some of the crudest rationing decisions that I have ever seen.
The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)
My Lords, I thank the noble Lord, Lord Warner, for his amendment and for the opportunity it has provided to have this discussion. I had a feeling that this one might lead to a wide-ranging debate that would probably go well beyond the remit of the Bill. Indeed, I had that sense when I had meetings with him and other noble Lords. I am grateful to the welcome that has been extended to me and I have been looking forward—if that is the right phrase—to having this opportunity to discuss the Bill.
It is worth stepping back for a moment as we start. I do not know whether the noble Lord, Lord Warner, will agree with the characterisation of this amendment by my noble friend Lord Lansley that it is more of a statement of intent than a concrete desire to change legislation. But, given that that is a decent characterisation, it is worth reprising what the Bill is trying to achieve. There is widespread support for many elements of the Bill.
We need to ensure that we have the right level of information to provide for three things: first, an accurate reimbursement of community pharmacies; secondly, information for price control schemes—and there are a variety of them, as we discussed—and, thirdly, the ability to get value for money and to ensure that, in relation to those instances that end up in the CMA, we are able to do something about them beforehand, because it takes a long time to get to that point. While it is important that that sort of back-stop provision is there—the big stick at the end of the road—ultimately, we do not want to get to that point, as it is an admission that we do not have the system right and have not controlled prices earlier on.
If those are the shared aims of the Bill, it is also important that we will the means. We cannot just say that we do not like these things and then not do anything about them. The question in regard to willing the means—and that is the main question about the Bill, and was so at Second Reading, when I listened as a Back-Bencher—is whether the provisions of the Bill are proportionate. That is the right question; “proportionate” can mean all sorts of things in different contexts, but it can mean proportionate in terms of the burden on firms, proportionate in terms of what it delivers in savings to the NHS, and so on. That is what sits behind many of the amendments that have been tabled by noble Lords, and we will have lots of opportunities to discuss them.
I think it is worth pointing out that the Bill does not introduce any new information requirements to the medical supplies industry, but rather clarifies the requirements and offers reassurances that provisions will be enacted only through regulation, which is a consultative process. Section 260 of the NHS Act 2006 already provides the Secretary of State with the power to make the medical supplies industry keep and provide information —the conception is that this has been extended to that industry. This power has not been used but, as we will discuss later, the instances where unjustified price rises have come about have happened in unbranded generics. That is one reason we are now acting as we are—because we did not have the power in advance. Of course, one can never anticipate all circumstances and instances in which that might happen.
I mention that only by way of a mini Second Reading debate and to reprise the purposes of the Bill and give background. It will also, I hope, give noble Lords an understanding that I know what the pressure points are and understand the balance that we have to draw between the two. As several noble Lords have pointed out, and following historical precedent, my particular policy brief does hold both the responsibility for a flourishing life sciences sector and for medicine pricing and regulation. I am acutely aware that those are two sides of the same coin and can be in tension with one another. The goal is to have a win-win situation in which the NHS gets good prices, new drugs come through the system and the life sciences industry feels that the United Kingdom is a place where it wants to do business. Pricing is one part of that, but there are lots of other factors, such as the ability to carry out clinical trials, R&D, the environment and so on.
While the Government agree with the underlying principles behind the amendment and the two arms of the legal duty, we are not convinced that a legal duty is the right approach. We recognise the vital role that the life sciences sector has in our economy. Thanks to the research and development efforts of the life sciences industry, which contributes £56 billion and tens of thousands of jobs to the UK economy every year, our understanding of diseases and the best way to treat them has improved dramatically over the past 20 years.
As several noble Lords have referenced, the Government launched today a UK-wide industrial strategy, which is a critical part of the Prime Minister’s ambition to build an economy that works for everyone. It is not about picking winners but about making sure that we play to our strengths and build on the comparative advantages that we have. I am therefore grateful for the opportunity to talk about the commitment to the life sciences industry, which I know was one of the intentions of the noble Lord, Lord Warner, in tabling the amendment, and to re-emphasise the Government’s commitment.
The UK has one of the strongest and most productive life sciences industries in the world. Technology and commercial pressures are transforming the field of healthcare technology and the Government’s ambition, as set out in the life sciences strategy of 2011, is to anticipate and react to these changes while building on existing strengths. Innovation, funding for scientific research, aligned regulatory systems and access to the best people and talent all have a role in supporting a flourishing life sciences sector that goes beyond the prices paid for medicines and medical supplies.
In the context of the industrial strategy that was launched today, there will be a sector-specific life sciences industrial strategy to follow in due course. That will be an opportunity to make sure that we are able to address the concerns that exists in the life sciences industry, which are not peculiar to the Bill but are around, for example, the pricing environment and Brexit, which is a continuing concern. It may not always be popular to say so but it is the view of the Government that Brexit offers a number of opportunities as well as challenges. We will be seeking to make the most of those in our own regulatory system and in how we can provide exactly the kind of fertile ground that the life sciences industry needs to flourish in this country. There is a deep commitment to making that work.
I turn now to the second arm of the duty: making sure that the Secretary of State has regard to ensuring that patients have speedy access to NICE-approved medicines. We believe that this duty is also unnecessary. As noble Lords will know, NICE technology appraisals provides robust, evidence-based guidance for the NHS on whether drugs and other treatments represent a clinically effective and cost-effective use of NHS resources. NHS commissioners are legally required to fund treatments recommended in NICE guidance, usually within three months of the final guidance. This legal requirement is also reinforced in the NHS constitution as a right to NICE-recommended drugs and treatments.
We recognise that there is a remaining challenge in encouraging practitioners to use NICE-recommended treatments. The latest data from the innovation scorecard shows that the rate of uptake and utility of new medicines recommended by NICE are increasing. I acknowledge the picture indicating that we are lagging behind where we should be, so there is no complacency on that point. We are working to improve the scorecard to make it a more effective, accessible and useful tool to identify unjustifiable variation in the uptake of innovative new products.
The Government and their arm’s-length bodies are also taking forward a number of actions to improve access to, and uptake of, new medicines. The Medicines and Healthcare Products Regulatory Agency—the MHRA—has initiated an early access to medicines scheme, providing a platform to bring drugs that do not yet have a licence to patients at a much faster rate than before. The scheme is making a real difference, as 25 promising innovative medicine designations and 10 positive scientific opinions have been awarded by the MHRA since the launch of the scheme in 2014. We also have the NHS test beds programme, which is supporting the testing and uptake of innovations across the NHS, and the accelerated access review, which has been published and which the Government will respond to as part of their industrial strategy.
I would also like to take the opportunity to address a number of points raised by noble Lords during this very informative and useful discussion. We will no doubt come back to these things on other amendments. We have talked about CMA fines and what we might do further upstream. There was a question mark over changes to the statutory scheme and whether there had been proper consultation. There will be further consultation on the implementation of the statutory scheme later this year, in addition to the consultations that have taken place. I should also point out that I intend to meet all the relevant industry groups, which I have not had the opportunity to do yet, to make sure that I hear first-hand about their concerns. I am endeavouring to do that in between Committee and Report so that we have the opportunity to have that personal dialogue—one that will reflect on the decisions we make today and on Wednesday about what the right approach is.
As the noble Lord, Lord Young, said, there is a case for action here. The question is always whether what we are doing is proportionate, so I thank him for that support. I was not aware of the issue about clinical pharmacology and will certainly look into it. If he and the noble Lord, Lord Hunt, would like a meeting about this to help me understand that better, I would be delighted. It is clearly an important part of having the right approach.
The work on antimicrobial resistance is being taken forward with great gusto by my colleague the Chief Medical Officer, Dame Sally Davies. She generously gave me a copy of her own book to read about that the other day—which I dutifully did, quickly, so that I could answer questions on it. We are putting forward a candidate to run the World Health Organization, Dr David Nabarro, who is deeply committed to this. We obviously hope that his candidature will be successful. I reassure the Committee that that work very much goes on.
The noble Baroness, Lady Finlay, asked about the nature of the pricing and control scheme. I am grateful to her for sharing her knowledge in a personal meeting. There is a tension between getting the right deal and disincentivising investment in the life sciences. It is always a fraught point—as my noble friend Lord Lansley said, every time we have one of these negotiations the balance is slightly different—but I am aware that it is an important balance to strike throughout.
I am grateful to my noble friend Lady Redfern for her support for the Bill and for the importance of driving value. We will have an opportunity to discuss ring-fencing shortly. I do not want to get ahead of myself on that, but we will address it. I had the great pleasure of working for my noble friend Lord Lansley when the Conservative Party was in opposition and I know that he has been very committed for a long time to value-based pricing and getting a good deal. I am grateful for his knowledge on that. Again, we will have the opportunity to talk about those things in a group of his amendments, so I do not want to spend any more time on that.
The noble Baroness, Lady Masham, asked particularly about pricing differences in England and Scotland. I think that we will address that at a later point. There are differences in how drugs are priced according to packs versus units, the starting point and so on. The picture is quite good when you look at it in the round for particular products, but I would be delighted to discuss that with her further, if she wants.
Finally, on the questions raised by the noble Lord, Lord Hunt, I have tried to express again why we think that the Bill is necessary. The noble Lord talked about the open-ended nature of the Bill, which we will look at in amendments at the end of the process. Clearly, we do not want a declining UK sector or rationing. That involves, first, a proper life sciences industrial strategy, which we will have. I would like to think that that is not just the preserve of the governing party but something to which all parties would want to contribute. I look forward to working with noble Lords, who have tremendous experience in this area, to gain their ideas to help us with that.
We also need to drive access through the system. That is one part of an industrial strategy. It cannot be done just by diktat. We rightly put clinical decision-making at the centre of our system, but there are things that we can do beyond what we are currently doing to improve access, which I would be delighted to talk about and work on further with noble Lords as we draw out that life sciences strategy.
I apologise for the slightly long contribution, but I wanted to take the opportunity to respond to noble Lords and to set the scene. While we support the principles of the amendment on the duty, I do not believe that the aim is best achieved through having a legal duty. I ask the noble Lord to withdraw the amendment.
Baroness Finlay of Llandaff
Let me thank the Minister for that comprehensive reply and for his openness in discussing things with us all. He talks about having discussions with the industry. I hope that he is aware that there is a move by the industry to consolidate into three major hubs, or potentially four. The fourth would be the Oxford-Cambridge-London axis, the other three being those in Boston, in California and in Basle in Switzerland. We are at a critical time, because a lot of change is going on—hence the motivation for so many of us to support the amendment, as we are aware that things are potentially fragile.
Lord O'Shaughnessy
I thank the noble Baroness for that point, with which I completely concur. This is obviously a big moment in time, for several reasons. Our current price regulation systems for pharmaceuticals run until the end of 2018 and, in 2019, we will leave the European Union. These things are bundled together and co-dependent; making the right decisions on each of the factors will have a knock-on effect on the rest. I very much understand the point. As I said, my job has the tension of both responsibilities, including health, and the trick is to square the circle.
Lord Warner
My Lords, I am grateful to the Minister for his response but I was not convinced and I am not sure that the industry will be convinced. Over time, the industry is seeing the legal requirement to implement NICE being watered down by NHS England in effect introducing a cost-control system on top of the legal requirement. It is seeing the Government fixated with cost rather than innovation and patient interest. Companies are seeing their investment drop and their involvement in this country being called much more into question by their boards. That is the issue. It is not about whether the Minister can convince me or this Committee; it is whether he can convince the outside world in this sector. At the moment, I am inclined to pursue this on Report, but in the meantime I beg leave to withdraw the amendment.
Lord Hunt of Kings Heath
“( ) After subsection (1) insert—“( ) In exercising functions in relation to the controls on the cost of health service medicines established under this section, the Secretary of State must ensure that any payments made by manufacturers or suppliers to whom the scheme relates which fall under subsection (1)(b) are utilised solely for the purpose of reimbursing the National Health Service for expenditure on medicines and medical supplies.””
Lord Hunt of Kings Heath
My Lords, in moving Amendment 2 and speaking to Amendment 4, I will inevitably go over some of the same ground, but I will try to make my remarks briefer than I would have done. I just want to pick up what the noble Lord, Lord Warner, said. The Government have a hell of a job to do to convince these boardrooms, which are no longer much based here. Even the two British companies essentially take global decisions. A lot of work has to be done to convince them that, in the current situation, continued and improved investment will be worth their while.
The Minister may not know this, but there has been great reluctance on the part of his department to talk properly to the industry on these issues, because of this absurd idea that access is a matter that it will not discuss. He may also not know that NHS England is being obdurate about being prepared to discuss these matters in an open way with the industry. I have been astonished by the difficulty that these huge companies have had in getting through the door of NHS England to discuss these matters. This is a serious issue. We would not pursue it unless we thought that we were reaching a critical point in the future of a hugely important sector. I have a sense that because the funding of the NHS so dominates everything that the department does, it then cannot talk about access because it is seen as a cost pressure. I understand that, but it is such a short-term view. We are at risk of making the wrong decisions.
My two amendments are the nearest I can come to the creation of a ring-fenced fund, as suggested by the noble Baroness, Lady Redfern, given the constraints on drafting amendments. That is essentially what I aimed to do: to say that the rebates are for investing in new medicines, devices and technologies. That is the heart of what we seek to do because I still believe that the 2014 PPRS agreement was a golden opportunity to get the best of all worlds—a brilliant life sciences sector, industries investing in R&D and NHS patients getting speedy access to these new developments. But we have not got there yet and that is why this debate is so important.
The Minister mentioned a number of encouraging developments, including the rapid access review, but he must know that there is a general cynicism among anyone involved in earlier discussions about the outcome being a pale shadow of what it could have been. We know that it will really cover only a limited number of medicines and treatments. Equally, the Minister mentioned NICE. It is true that there is an order, which I introduced way back, because of concern that primary care trusts were not implementing technology appraisals effectively enough. But we are seeing a chipping away at even that rather imperfect approach to try to get the NHS to do what legally it should have done, which is enthusiastically to embrace NICE’s technology appraisals.
The department has allowed NHS England to ride roughshod over it in relation to NICE. The latest consultation by NICE, imposed on it by NHS England, to put an arbitrary cap on NICE decisions, coupled with the introduction of a threshold for rare diseases of the £100,000 figure, is putting a triple jeopardy into the system. When it is investing billions of pounds in a new drug, the industry has the NICE process to face; it then has to face the arbitrary imposition by NHS England of these further restrictions; it then gets down to clinical commissioning groups, which in recent months have made some extraordinary decisions in relation to rationing in general and specifically on some of these new medicines. It is very worrying indeed.
I think that the noble Lord, Lord Lansley, hopes the Government might give an outline of their strategy for future voluntary agreements with industry—if there are to be such agreements in future—that embrace the issues of investment, access and value. I am sure that that is very sensible. In the meantime, I am convinced that the only way in which the NHS will start to invest properly, so that its patients come at least somewhere near to the kind of access that we see in other European countries, is by some ring-fenced money being found to finance it. There is no chance of access being improved on the current funding arrangements. NHS England, whose approach is simply to look to control budgets, seems to have no interest whatever in the issue of access. My amendments suggest one way in which we might do that. Ultimately, what I think we all want to hear from the Government is whether they will take a new approach to negotiations which would be about cost-effectiveness and value for money, of course, but takes access almost as its No. 1 aim. I beg to move.
Lord Warner
My Lords, I support these amendments, to which I have added my name. I do not want to go over again what has just been said, but the issue of access is critical. It is why companies have invested in this country. They criticised NICE when it was first set up; they were highly hostile but have been wooed over, have stayed with the game, played in it and continued to make products which are of great benefit to NHS patients. However, having jumped that hurdle they now see a new one, which is driven not by cost-effectiveness but by cost—a straightforward capping of expenditure at an arbitrary figure of £20 million. The noble Lord, Lord Hunt, was a little critical of NHS England. I would be if I thought that it was only NHS England but I do not believe that the Government are not behind this, putting pressure on it. We already have a massive difference of view between the Conservative chairman of the Health Select Committee and the Prime Minister over how much extra money has actually been put into the NHS. The noble Lord, Lord Lansley, winces, but such measures are being introduced basically to stop the NHS carrying out a legal obligation to implement NICE recommendations. I totally support the amendments in the name of the noble Lord, Lord Hunt, because they are a way of trying to ensure that, where repayments are made, they go back to where they should be, which is in the NHS and helping patients to access new drugs.
Baroness Finlay of Llandaff
I have added my name to the first of the amendments. I would have added it to the second, but there was not room—there were already four names there. I strongly support them. The debate so far has related to the pharmaceutical industry, to pharmacies—that is, chemists in the community—and to the NHS but these amendments go to the heart of it, which is access for patients.
One problem with what will feel to a patient like almost arbitrary rationing is that they will know that they have a disease or condition and that there is a drug which, if they lived in other parts of the world or had more money, they would be able to access and which, for one reason or another, they cannot. We must recognise that any costing system for medicines is relatively arbitrary and does not cost in all the social costs of disease progression, or of more severe versus less severe forms. Nor does it factor in the cost to the whole family of the distress somebody feels when they need medication and cannot access a drug which has gone through an appraisal process and whose criteria they can see they fit.
I hope that the Minister will look sympathetically at the principles behind this amendment. If you save money but do not put it back into access to medicines, you are effectively bleeding that area to plug other gaps or deficits in the NHS. As for the patient with the condition who knows that there is medication that probably would help them, although they are well aware that they could be a non-responder, no one should underestimate the anguish to them and their families, or the knock-on effect on society in the long term of failing to ensure access to effective medications.
Lord Lansley
May I say a quick word on these two amendments, which would have the same effect in relation to the voluntary and statutory scheme? I understand the debate that we have just had, but it seems to me that we are likely to have a more productive discussion to this effect on the next group. The purpose of these amendments is simply to say that the money that is generated through the rebate must travel back to pay for medicines. The consequence of any such scheme would be that, whereas at present the Treasury together with NHS England and the Department of Health agree a budget based on the Treasury’s assumption that there will be a drugs bill and that bill will be controlled at that level by virtue of the rebate, the Treasury would be obliged to say that the drugs bill could not be controlled. We know that the rebate does not necessarily correspond to the prior assumption of the level, so the amount of money available to fund medicines would be variable, particularly if it was applied to new medicines, as in Scotland. There would therefore be, from the industry’s point of view, nothing in principle to prevent it from pricing up products that fall within the scheme to which the rebate is applied, with the impact that that would increase the money available to supply additional medicines, knowing perfectly well that there would be no overall budgetary control. At the end of the day, there has to be budgetary control. It is only by virtue of the fact that the rebate is not automatically recycled into additional NHS expenditure that the budget can be controlled. In the absence of any such control, I cannot see how the amendments would work.
Lord Hunt of Kings Heath
Surely it is the other way round. The NHS could up its intake of new medicines willy-nilly, knowing that the industry would have to pay a rebate to the department. In essence, industry would be paying for the uptake of new medicines. The problem is that the Treasury discounts the figure. It makes an estimate of what the rebate is likely to be in the next financial year and builds it into the baseline budget, which is based on minimal growth.
Lord Lansley
The position is that the PPRS is a deal based on a budget. If you want to construct something that does not have a budget limit, you could certainly do so, but I do not think that the amendments would have the effect that was looked for. As for another way of doing it, this is where we get on to what in my view is the real debate. I am not sure that I have ever believed that there should be a fixed drugs budget in the NHS. We have a health budget and we should aim for the NHS to derive the greatest possible benefit to patients from the budget that it deploys—not the drugs budget but the total health budget.
Lord Hunt of Kings Heath
That is very interesting. It has always struck me that when you chair a board of an NHS foundation trust, for instance, there is a philosophy that says that spending on doctors and nurses is a good thing but spending on drugs is a bad thing. It is a ludicrous position. I agree with the noble Lord, Lord Lansley, that there is a big problem. Spending on drugs is seen as a cost pressure, so automatically everyone’s emphasis is on keeping that spending down, whereas a rather more sophisticated approach would take the view that, if you have spent your money on drugs that have had a hugely positive impact on the throughput of patients, cost-effectiveness and efficiency, that might be a good investment. The question when we come to the next group is whether our current arrangements have come to the end of the road and whether we need to move on to something rather more sophisticated.
Lord Warner
What we set up a long time ago was, effectively, NICE to be the arbitrator, and we controlled the flow of technology appraisals into it. I used to sign off a limited number of drugs that would go into the NICE process. We have that system, which has now been legally enshrined. It is also open to NICE to withdraw drugs from use, as it has from time to time, or to change procedures. We have a system enshrined in our law in which the NHS is required to commit to introducing NICE-approved technology appraisals, so the idea that we should let the Treasury arbitrarily reduce and control the small bit of that total NHS budget on those grounds seems bizarre. I agree with the noble Lord, Lord Lansley: we have ended up obsessing about this relatively small part of the NHS budget when we have set up a system to ensure that the NHS gets value for money through the NICE appraisal process. We are getting into a strange situation, which is why we are scrabbling around to make amendments to try to make a pretty crazy system slightly less crazy.
Lord Lansley
There is a risk of going on about this, but the structure of the amendment in the context of the PPRS as presently constructed is illogical, because the PPRS is constructed around budget control. The point, however—we will no doubt come back to this, not least on the next group—is that we should be thinking about how we can arrive at a negotiated price for the NHS to buy medicines which may well be marketed initially or globally at a given price, but the amount that the NHS should pay should reflect value. I have said it before and I will keep coming back to it.
I would not be as disparaging of the current consultation between NHS England and NICE at the noble Lord, Lord Hunt. It could have the effect that he describes: adding additional jeopardy because one has to meet not only all the normal criteria for an effective medicine but the NICE threshold, and NHS England might step in with hobnailed boots and say, “But we are not going to make it available and you must change the funding direction”. But it might recognise reality. The consultation, in my view, may have the effect of avoiding arbitrary post hoc rationing of medicines, because the NHS should be up front, negotiating price discounts on medicines, regardless of the rebate. That means engaging with the industry at an early point.
If the industry understands the consultation properly, it will understand that the budgetary impact for the NHS under current circumstances cannot be ignored. The best way to deal with that is not to go through all these processes and then find, at the end of the day, that the NHS cannot afford it, or that NICE has to say no through the application of the threshold. Rather, it is to use the pharmaco-economic evaluation and the health technology assessment properly alongside NHS England and say: “Here is something that is valuable and we want to be able to use it, but we must recognise the budgetary impacts”. There may well therefore be some risk-sharing processes or discounting processes to enable the product to be available to the NHS at an early stage and to give industry and the NHS all the information they need subsequently to be able to make sure that they have got the pricing right.
Lord O'Shaughnessy
I thank noble Lords for these amendments and for the discussion that has followed. I will come back to the issue of budgetary control raised by my noble friend Lord Lansley. I do not think it is enough simply to say that it should not be a factor. It is a factor and I will talk about how that interacts with the current system in my response.
Our concerns with these amendments are twofold—one is a matter of principle and the second is a matter of practice. In my short period in the office I have already had an opportunity to talk about ring-fencing on at least one occasion. Noble Lords understand that the Government’s policy is not to ring-fence with budgets set by politicians but rather to give money to the NHS and its constituent parts and to trust clinical judgment on commissioning health services in response to the regulatory regime that is set up to hold them accountable. I have not yet heard from anybody who disagrees with that fundamental principle.
Amendments 2 and 4 are unnecessary, therefore, because all the income and savings from the PPRS and the statutory scheme are already invested in NHS services. As the noble Lord, Lord Hunt, said, the anticipated income from the PPRS and the statutory scheme are put into the NHS baseline. That baseline is the figure above which we will be spending the additional £10 billion by 2020-21. That money is already in the baseline and it is there to be used with the discretion of clinicians within the system.
The Health and Social Care Act 2012 requires the Secretary of State to promote the autonomy of NHS England and clinical commissioning groups. This includes their decisions as commissioners about priorities for funding. That is because it is a fundamental principle of the NHS that funding should be allocated according to clinical priorities based on the judgment of clinical commissioners. That might include new treatments but it might include scaling up older, effective treatments or investing in staff. The proposed amendments would result in the income received from a voluntary or statutory scheme being used solely for the purposes of reimbursing the NHS for medicines and medical supplies. It is perhaps worth highlighting to noble Lords that the NHS spent over £15.2 billion on medicines in 2015-16—far in excess of the cumulative income received from both schemes.
I come to a couple of points raised by the noble Lord, Lord Hunt. The first, as I mentioned, is on budgetary control. The second is that if additional money were spent, it could be recycled back into funding for innovative drugs. I am not sure. I have not had the opportunity yet to consult with the boards of life sciences companies, but I am not sure that there is an open-ended commitment there either to continue spending money in the NHS. There is a need for budgetary control on both sides. I appreciate—and it is a strong theme in this debate and was in the previous debate—the need to do something about access. The ability to access drugs and to access them quickly is both good for patients—because clearly those drugs are being approved because they are an improvement largely on what has gone before—and also good for life sciences. If we are in the game, as it were, of trying to find a win-win out of the changes we make now or in future, clearly access will be a clear part of that.
My noble friend Lord Lansley touched on a practical objection. It is the potential unintended consequence of ring-fencing the income from schemes specifically for certain types or categories of medicines. The income from the PPRS and the statutory scheme can fluctuate, so allocating the income to a specific area, such as new medicines, brings risk. This could potentially disadvantage patients by making treatment dependent on income from medicines pricing schemes, thereby producing inequities. At the moment the Department of Health manages that risk. The proposed changes would move that risk on to the NHS—which, as we know, is already under a great deal of pressure.
I understand the intention behind the amendments, but I am not convinced that the Government predetermining clinical decisions and clinical priorities for spending on medicines and medical supplies is the right way to go. We believe that the current PPRS is designed to incentivise companies to bring new medicines to market. Companies with mainly new medicines in their portfolios pay less than companies with mainly old medicines, and as part of the PPRS, the Government have made a number of commitments around NICE decisions and the funding of NICE-approved products in order to support access to new medicines.
Lord Hunt of Kings Heath
My Lords, I am grateful to the Minister and other noble Lords who have spoken. We have had a very good debate. Obviously, as I made clear at the beginning, I am not wedded to the words of the amendment. It was not the amendment that I wished to bring to your Lordships’ Committee. Clearly, the issue is access and the use of the rebates. I understand the issue about risk and, of course, any considered system in which there clearly needs to be budgetary certainty.
Equally, we need to see much faster uptake of new medicines and, indeed, new technology and devices. A similar argument could be made about new technology as well because, again, we are terribly bad at investing in our own companies even though we have highly successful medical technology and devices industries. They have the same issue of the NHS being incredibly reluctant to invest in their new developments. This has been a long-term problem: the noble Lord, Lord Warner, and I dealt with it 15 or 20 years ago and it has been a problem with the NHS right from the start. The problem is that we are now seeing this connected to the success of the UK’s economy as well, which is why—one way or another—we have to find a solution to this problem.
Turning to CCGs, it is reported on a regular basis that they are making rather bizarre decisions: arbitrary decisions about restricting access to certain treatments that clearly are entirely budget-based and seem to have no value as clinical decisions. I am very worried about the fact that we are now starting to see the legitimisation of very crude rationing of access to services by patients.
This has been a useful debate. Access is crucial and it is clearly not happening at the moment. I hope that between now and Report we can have further discussions and an understanding of what the Government are trying to do to seek to increase access. Having said that, I beg leave to withdraw the amendment.
Lord Hunt of Kings Heath
“(3) In exercising functions in relation to the controls on the costs of health service medicines, the Secretary of State must ensure that any medicine covered by a voluntary or statutory scheme that requires payments calculated by reference to sales of that medicine shall be made available to all NHS patients if recommended by a qualified NHS clinician.(4) An amount calculated under subsection (1)(b) may only be calculated using the same methodology as an amount payable by any member of a scheme made under section 261 of the National Health Service Act 2006 (voluntary schemes for controlling the cost of health service medicines) is calculated.”
Lord Hunt of Kings Heath
My Lords, I will speak to the second part of Amendment 3, as I think we have comprehensively covered the first part in our debates on the first two groups. I am not looking to the Minister to respond to the first part. The second part of my amendment seeks clarification on the relationship and equivalence between the voluntary and statutory schemes. It provides a further opportunity to debate the future of a voluntary PPR scheme, because, clearly, it might be argued that the Bill is setting a precedent for determining in legislation the nature of a voluntary scheme. It would be helpful if the Minister set out in very broad terms the kind of approach he wishes to be taken in the future—in either a statutory or voluntary scheme—looking at the issues we have talked about in relation to pricing, access and value for money.
In many ways, the voluntary PPRS approach has served government, patients and the industry pretty well over the years. There is no doubt, as the noble Lord, Lord Lansley, referred to, that it has provided certainty to government, alongside giving the industry flexibility on the prices it sets, because it acts as a marker to many other countries. However, the actual price paid is very different from the notional price set. What comes to my mind is that this is not very transparent and very few people understand the system. One does begin to wonder whether it is still serving its purpose and whether we need to think about a new approach that is neither the voluntary PPRS approach we have at the moment nor the statutory approach we have in mind for companies that have not signed up to the voluntary system. If anything, there is the issue of equivalence, which companies wish to know about in terms of the two schemes, but it would be helpful to know where we are going in relation to future negotiations, and the amendments from the noble Lords, Lord Warner and Lord Lansley, will address this. I beg to move.
Lord Lansley
The purpose of Amendment 5, in my name, is to recognise that the Government have brought forward legislation to do a necessary thing, which is to address the discontinuity between the voluntary scheme and the powers available under the statutory scheme. As such, where companies were operating under the statutory scheme with a pre-existing discounted price, often in the hospital sector, the effect of the statutory scheme imposing a given price cut did not impact on their effective price to their customers. Therefore, they did not make a contribution, in that sense, to the budgetary control that was being looked for. The purpose of the legislation is to bring equivalence to the voluntary and statutory schemes. But if we are creating equivalence between the voluntary and statutory schemes, we should be clear that the legislation does precisely that. The noble Lord, Lord Warner, quite accurately referred to this issue at Second Reading, if I recall. There are companies under the statutory scheme—Gilead is a particular example—with products that would, under the voluntary scheme, not have a PPRS control applied to their pricing because they would not contribute to the rebate as they have been introduced after December 2013. Under the statutory scheme, however, they are required to contribute.
As I understand it, the objection to bringing the two schemes to an equivalent place is that under the statutory scheme, as things stand, there are relatively few products and a significant proportion of them have been introduced since December 2013. Therefore, under the statutory scheme, the effect on the rebate of the rest of the companies would be excessive. That can be dealt with. The powers are available. If we legislate in the form that I propose, the Government can modulate the rebate between the two schemes in order to arrive at a similar result for those companies that have to contribute to the rebate and apply a common percentage. As a matter of principle, if we are legislating for the two to be equivalent, it is desirable to do so.
I am slightly worried about Amendment 3 because it assumes that there is a voluntary scheme. We do not know. There may or may not be a voluntary scheme. But a voluntary scheme will not always be in place at the point at which the Government, in order to protect the NHS, may require there to be one. I do not think that we should be in that position. There would be a flaw in the powers available to set a methodology for a rebate under a statutory scheme. In Amendment 6, which the noble Lord, Lord Warner, has not yet had a chance to speak to, he clearly understands that there needs to be a relationship between these two, but I fear there is a risk of gaming on that amendment because the industry may say that if it does not agree a voluntary scheme there cannot be a statutory scheme. Therefore, there is no scheme, and I do not think that that we want to get ourselves into that position. It will not surprise the Committee that I can see reason for my own amendment even if I am not necessarily in favour of everyone else’s.
Lord Warner
My Lords, I reassure the noble Lord, Lord Lansley, that I see excellent reasons for his amendment. If the purpose of the Bill is to achieve equivalence between the two schemes, the Bill should secure that. At the moment, it does not. The industry does not think that it does. I am not sure, technically, whether the noble Lord’s amendment secures it, but I think it does. If it is not quite right, no doubt the Government can amend it. I tabled Amendment 6 to push the Government a little more on their commitment to a voluntary scheme. That is its purpose. We have had a good canter over that particular area. As I said when we discussed Amendment 1, I was not totally convinced by the Government’s position, but I want to set out briefly why this is important.
The scheme has stood the test of time as a basis for a relationship between an industry and government where that industry has a much bigger set of customers and a much bigger presence outside the UK. We have actually punched above our weight in securing the presence of that industry in this country, partly through the NHS, but partly because a system was imposed on the industry in terms of the research-based drugs industry. There was a negotiation. Amendment 6 is not meant to say in any way that a particular type of PPRS should be enshrined in legislation for all time. It is trying to get the Government to say, clearly and unequivocally, that for the foreseeable future, there will be some form of voluntary scheme in which a negotiation takes place in an open and transparent way with this particular sector in order to keep this sector being attracted to setting up, doing research and developing pharmaceuticals for the population at large and for the NHS in particular.
Amendment 6 is trying to get out of the Government rip-roaring support for the foreseeable future, a little stronger than the Minister said earlier on, for a voluntary scheme that presents an opportunity for government and the sector to agree the basis on which they operate in a life sciences industry producing drugs that can be made available quickly and speedily, when proven, to the NHS and its patients.
Lord O'Shaughnessy
My Lords, I thank noble Lords for their amendments. The noble Lord, Lord Hunt, skipped over the first part of Amendment 3. For the sake of completeness, I shall dwell on it briefly. The amendment would circumvent an important part of the checks and balances around prescribing systems. It would basically do away with the NICE process by going straight from licence to availability with clinicians, which we do not think is the right approach.
The second part of Amendment 3 would link the payment mechanisms for the statutory and voluntary schemes, and Amendment 5 would require us to secure equivalent terms for both schemes. The Government’s intention is for the two schemes to deliver a broadly equivalent—I emphasise “broadly”—level of savings as a proportion of the total sales covered by each scheme. However, to require the terms of each scheme to be the same, which is what the amendments denote, would be inappropriate and would severely restrict the scope for the two schemes to operate in a complementary manner. The idea of equivalence is too strong and would involve there being similar processes, whereas the alignment approach outlined in the Bill would allow for similar outcomes, which is ultimately what we are driving at and would not undermine the complementarity of the two approaches.
The voluntary scheme is a matter for negotiation with industry. As such, there is scope to include a range of measures that reflect the priorities of both sides. To give an example, the current voluntary scheme, the PPRS, includes a range of provisions developed through negotiation with industry that sit alongside the payment mechanism. They include price modulation, which enables companies to put prices up and down as long as the overall effect across their portfolio is neutral. This has commercial value to companies, who may be willing to accept a higher payment percentage as a result.
To give another example, while new medicines in the PPRS are excluded from the PPRS payments, the PPRS payment percentage level is set to achieve the agreed level of savings across both old and new medicines. This means that each company’s share of the income due to the Government will vary depending on the balance of new and old products in their portfolio, with companies which have mainly new products paying less than companies with mainly old products—there is obviously value in that for encouraging innovation.
However, it would be very challenging to replicate this model in the statutory scheme, as many fewer companies are affected by the statutory scheme regulations than are members of the PPRS. As a result, there is a smaller pool of companies with older products. To achieve the same level of savings overall from the statutory scheme as from the PPRS while exempting new products would require an extremely high payment percentage—I think that my noble friend Lord Lansley conceded that point. This provides an example of where minor differences in terms may be required to deliver an equivalent level of savings across the two schemes overall. The detail of how a future statutory scheme would work will be subject to further consultation that will take place this year.
The freedom to be able to negotiate the voluntary scheme has been valued greatly by both industry and government. We would intend that any future voluntary scheme is established through negotiation in this way, but linking the payment mechanisms as described in the amendments would inevitably place a restriction on that freedom.
Amendment 6 would mean that the Secretary of State’s powers to operate a statutory scheme would be permitted only while a voluntary scheme was in operation—a point that has already been raised. It is clear that the noble Lord, Lord Warner, is keen to retain a voluntary scheme in future and we know that industry values the agreement, which began 60 years ago in 1957 and has been of benefit to both government and the life sciences sector over that time.
The current scheme, the 2014 PPRS, and its predecessors show how government and industry can work together to develop solutions on a voluntary basis for the benefit of patients. Like the noble Lord, I am keen to continue the collaborative and productive relationship that the Government currently have with the pharmaceutical and life sciences industries. With the life sciences industrial strategy coming up, and reflecting on the debates that we have had, it is clear that there is a lot more we can do to enhance that relationship.
However, the amendment would have the effect of giving industry no incentive to agree a voluntary scheme, as there would be no fallback to a statutory scheme in the event of failing to agree a voluntary scheme. Without a voluntary scheme in operation, there would be no scheme to control the cost of medicines—so it would in effect tie one hand behind our back in any negotiations.
The statutory scheme and the PPRS both include provisions for controlling the maximum price of medicines, and these prices are the starting point for negotiation of supply contracts between the NHS and suppliers of medicines. As I think all noble Lords would recognise, removal of both schemes would risk significant price rises.
I am sympathetic to the noble Lord’s intention in tabling this amendment and welcome the opportunity to reassure him and other noble Lords that the Government are committed to continuing a collaborative approach to future medicines pricing arrangements. We firmly believe that it is beneficial to collaborate with industry to develop the successor arrangements to the 2014 PPRS. This legislation should provide the widest possible range of options in order that the best arrangements, whether voluntary or statutory, can be put in place for the benefit of NHS patients.
However, the amendment would have the opposite effect by removing a key incentive for industry to collaborate, and would bring significant risks to the control of the cost of medicines. I ask noble Lords not to press their amendments.
Lord Hunt of Kings Heath
My Lords, one of the benefits of Committee is that one can draft imperfect amendments, have them corrected by Members of the Committee and then, if necessary, come back with better amendments on Report. I have never worried about the absolute wording of amendments, because whatever happens, in the end, the Government have to come back at Third Reading to correct everything. So we can relax about that.
It has been a helpful debate, with a helpful response from the Minister. He has used the term “broadly equivalent”; he has also said that the Government are committed to a voluntary scheme in future and, I think, recognises the flexibility that it gives. However, we still have much to discuss about the nature of the future relationship and potential agreements.
I also worry about most people’s current lack of understanding of what the negotiations mean and of the actual prices paid. I wonder whether we have reached a point where we need to move to something that is more understandable and transparent. I think that what the Minister said about the future of the voluntary scheme will be welcomed, I am sure that it has been a helpful debate, and I beg leave to withdraw the amendment.
Baroness Wheeler
“( ) The Secretary of State must make or maintain legal exemptions for low cost presentations of health service medicines covered by a statutory scheme.( ) “Low cost presentation” means any health service medicine with a reimbursement price of less than £2 per unit or with sales to NHS England totalling less than £450,000 per annum.”
Baroness Wheeler (Lab)
My Lords, we tabled Amendment 7 to probe the Government on why, in their new draft regulations, with 25 pages just on the branded medicines proposals, they seek to alter the current arrangements for exempting low-cost presentations from the price-reduction requirements of the statutory scheme. As the Minister will know, the existing regulations specify as an exemption a low reimbursement price of either under £2 an item or low primary care sales to NHS England of less than £450,000 a year. The provision has been there to protect the commercial viability of low-revenue or very low-cost medicines. It therefore seems somewhat counterintuitive to remove this safeguard at a time of such significant uncertainty for the pharmaceutical industry, particularly in the face of what could be a highly disruptive withdrawal from the EU.
Under paragraph 11, the proposed revised regulations give the Secretary of State the power to exempt a manufacturer or supplier where he considers that an exemption is necessary to ensure adequate supplies of medicines for health services purposes. This changes the current arrangements to give the Secretary of State a discretionary power that he may use in certain circumstances, rather than the automatic exemption that currently operates for £2 per item or a £450,000 annual sum. The current provision is important in maintaining adequate supplies to the health service of the medicines in question.
We are concerned about the significant impact that the removal of the current arrangements will have on manufacturers producing the common, low-cost generic branded medicines in question, such as those for hypertension. Although it is not always the case, the producers of such low-cost medicines are often small businesses operating on small margins. If they are not exempted from paying a rebate on those medicines, many will struggle to maintain current low costs, resulting in a consequent rise in costs for those medicines.
It is also important that the regulations accompanying the Bill maintain a specific exemption from the statutory scheme in the case of supply shortages, as currently. Amendment 8 would therefore formally place this duty on the Secretary of State. This is particularly important given the concerns of GPs and other health professionals, who have voiced frustration about having to prescribe “second choice” medicines because their preferred drug is out of stock. Representative bodies have also expressed their concern about the removal of the current exemption.
The amendments do not call for anything new but for some of the current regulations to be maintained and—where the Secretary of State believes that there is a case for it—strengthened. I look forward to hearing from the Minister the Government’s reasons for seeking to change the current regulations. Has any work been undertaken to assess the potential impact on the future availability and cost of the medicines that will be affected, and on future supplies? Is this designed to save costs—and, if so, what is the expected level of savings to the NHS?
Noble Lords may feel that there is a case for debating the long-term place of such exemptions in the regulations, but now is clearly not the time to pull the rug from beneath the producers of low-cost medicines, or medicines at risk of supply shortages. Instead, it is important that the status quo is maintained until such time as the Government can be clear about the consequences and the benefits of any change. I beg to move.
Lord O'Shaughnessy
My Lords, I thank the noble Baroness, Lady Wheeler, for raising important issues through these amendments, both of which relate to the operation of the statutory scheme. I will turn to each separately.
Amendment 7 would set an exemption for low-cost presentations, defined in primary legislation as those presentations,
“of less than £2 per unit or with sales to NHS England totalling less than £450,000 per annum”.
This is similar to the exemption that exists in the current statutory scheme for presentations with a reimbursement price of less than £2.
Officials have continued to have constructive discussions with industry representatives and stakeholders throughout the consultation and since publishing the illustrative regulations. Through these discussions, my officials have been listening to views on the illustrative regulations and refining the policy approach for a future statutory scheme. I am sympathetic to the arguments that companies make in relation to these types of low-cost presentations, which could not only lead to direct savings to the NHS when compared to more expensive treatments but incentivise companies to lower prices further to meet the threshold. I reassure the noble Baroness, Lady Wheeler, that as a result of the discussions with industry, my officials are already considering a policy approach for low-price presentations.
However, the Government are not convinced that it is appropriate or desirable to have such an exemption set out in primary legislation. Setting out specific thresholds in primary legislation would be inflexible and would limit the Government’s ability to adjust them to account for the economic circumstances at the time. I can, however, commit that an exemption for low-price presentations will be included as part of the forthcoming consultation on the operation of the scheme, which will take place this year. I hope that this provides the noble Baroness and other noble Lords with the reassurance that the Government will fully consider this and take it forward.
Turning to the second amendment, Amendment 8 would place a legal duty on the Secretary of State to make provisions which “ensure adequate supplies” of those medicines in the statutory scheme. The production and supply of medicines is complex and highly regulated, involving materials and processes that must, rightly, meet rigorous safety and quality standards. These complex factors stretch far beyond those that relate specifically to medicine costs. Difficulties in ensuring supply can arise for a number of reasons including manufacturing problems, supply and demand imbalance and issues related to raw materials and regulatory action as a result of, for example, manufacturing site inspections. It is also important to remember the impact of a globalised pharmaceutical industry, which can mean that factors around the world can directly impact supplies of medicines to the UK.
However, I reassure the Committee that the Government recognise the vital importance of ensuring adequate supplies and actively manage and respond to supply issues on a daily basis. The Government have also carefully considered the supply issues in developing policy and regulation. We consider that in most cases, the ability to increase prices, as provided in the illustrative regulations, is the right way to address short or long-term supply problems, where these circumstances are dependent on UK pricing. We also recognise that there may be exceptions to this approach, which is why we included in the illustrative regulations a provision in Regulation 11 allowing the Secretary of State to exempt companies from price controls in the statutory scheme,
“where he considers that an exemption is necessary to ensure adequate supplies of that presentation for health service purposes”.
I understand and am sympathetic to the intention behind the amendment and concerns relating to the supply of medicines in the statutory scheme. However, given the complexities in the provision and supply of medicines, we believe that exemptions for supply issues are best dealt with by exemption, rather than a comprehensive and broad duty. In responding to both amendments, I hope that I have provided the Committee with the assurance that we recognise the concerns and will address them in both primary legislation and the illustrative regulations. I ask that the noble Baroness withdraw her amendment.
Baroness Wheeler
My Lords, I thank the Minister for his response and for the focus that he says that he will give in future to constructive consultation with the industry. There was a feeling that it was not being consulted on these issues, and his reassurances about that are welcome. Obviously, supply in the industry is complex and I will look at what the Minister said. We are concerned about the industry’s fears about the cost of deleting these provisions and we were certainly not advocating putting them into statutory requirements but making sure that the regulations dealt with this issue adequately. For the most part, I thank the Minister for the response, and I beg leave to withdraw the amendment.
Lord Hunt of Kings Heath
“Report on use of payments made under schemes
The Secretary of State must prepare and lay before each House of Parliament a report covering each financial year during which this Act is in force, detailing how the payments made by manufacturers or suppliers under the schemes established or amended by sections 1 and 3 have been used to re-imburse the National Health Service for expenditure on medicines and medical supplies.”
Lord Hunt of Kings Heath
My Lords, I shall speak also to Amendment 10A, which was inserted at a late stage, and Amendment 14. This comes back to the theme of transparency. My amendments cover the use of payments made under the reimbursement scheme. They cover the pricing and availability of medicines and other medical supplies, research and development and the duty on the NHS to promote innovation. Given that we have already had an interesting debate and that these matters are very important to both patients and the life sciences sector, is the Minister sympathetic to the idea of regular reporting on how this is going—the impact on patient access, payments and reimbursement in a way that would allow parliamentarians in particular and the public to be kept up to date?
I am not wedded to the wording of any of the amendments, but it would be helpful to know whether the Minister is sympathetic to regular reports, which would be helpful to noble Lords and Members of the other place. We could get to grips with what is happening and see the impact in terms of access, reimbursement and investment in life sciences. I hope that the Minister will give a positive answer on this. I beg to move.
Baroness Walmsley
My Lords, I am in favour of this group of amendments. The Government plan to introduce new regulations and duties on the industry at a very difficult time, so the Minister cannot be surprised that the industry is concerned and that parliamentarians would like to take the opportunity to hold the Government to account based on what happens after the Bill becomes an Act.
For some of the things that we have been talking about, I have been told that the Government already have powers but have not used them—they are just refining and clarifying them and making them more proportionate. Of course, that makes the industry worry that they are planning to use them, even though they are not saying so. We need to know what will happen to all these issues of availability, access, proper supply and cost to the NHS once the Bill has passed. In the interests of transparency and post-legislative scrutiny, will the Minister accept that the Government should report back to Parliament?
Lord Warner
My Lords, I have added my name to Amendment 14, but I also support in principle Amendments 9 and 10A in this group. Each of these amendments does something slightly different and they need some consolidation. They are, however, a reflection of a deep sense of unease over where the Bill is taking us and a strong wish to monitor its consequences. The Government are imposing a lot of requirements on the industry for information. The quid-pro-quo is that we would like a lot more information from the Government on how this has worked in practice.
There seem to be three features that that kind of reporting back should cover. The first is the scale of payments made; the second is the use to which the money has been put; and the third is the impact of the Bill on the access to new medicines of NHS patients. It would not be right to try to draft this off the tops of our heads, but it would be helpful if the Government would accept that there should be some kind of monitoring of key issues around the Bill that are then reported back to Parliament and the public on a regular basis—let us say annually—and if we could get together with the Government to help draft something for Report in this kind of territory.
Lord O'Shaughnessy
My Lords, I am grateful to noble Lords for raising the issue of reporting requirements. We will address at the end the issue of access and my sympathy to reporting requirements, but I first want to deal with the amendments as they stand.
Under the current PPRS, the Government regularly publish information relating to the operation of the voluntary scheme. Of course, for a future statutory scheme I draw attention to the regulations that we have already discussed, in which there are annual reviews of the regulations and a requirement to publish a report on each review. The illustrative regulations require an annual review that will: set out the objectives of the scheme; assess the extent that our objectives have been achieved; and assess whether those objectives remain appropriate. These requirements will be tested through the consultation on the regulations and we will, of course, take account of those views. I totally accept that reporting is a critical principle, but believe that setting out the requirements in primary legislation is too restrictive because of the potential to change from year to year what the priorities are within a sector and within the NHS.
Turning to the specifics of Amendment 9, I reassure noble Lords that the content of annual reviews would not be restricted to reviewing objectives. They must also be able to address key issues arising during the year that might affect the operation of the scheme, so there is flexibility there. We also intend for the annual review to be published and put before Parliament, so there is the opportunity for that to be seen and discussed. On the details of what it is proposed to report—in particular, how the payments are used—to achieve the specific aims of the amendment, the department would need to ring-fence the funds and monitor where the payments are used. I do not want to rehash our discussion about ring-fencing. I take seriously the point that noble Lords make about driving access to innovative drugs but we do not think this is the right way of doing it.
Nor do I believe that, through these means, it is right to address matters relating to the NHS duty to promote innovation. This Bill is ultimately about controlling the cost of medicines and medical supplies. The NHS Act 2006 puts duties on the Secretary of State to take into account both the need for medicinal products to be available for the health service on reasonable terms and the costs of research and development, which is a big factor in innovation. By taking into account these factors, the Secretary of State is looking at the needs of the industry to support the R&D base as is necessary to support the development of innovative medicines and technologies.
The NHS duty to promote innovation is different. It is about promoting innovation in the provision of health services and there is an extremely broad agenda that goes well beyond medicines. We have already said that we all want to make the UK the best place in the world to design, develop and deploy life sciences products. We do not believe that the Bill will have a negative impact on our doing so. We have also talked about the accelerated access review, so I will not go over that.
Turning to the specifics of Amendment 10A, the supply of medicines is highly complex, and pricing is one part of it. Other issues of course include rigorous safety and quality standards. Difficulties faced in the take-up or availability of medicines can be influenced by a number of reasons which are nothing to do with pricing. There can be manufacturing problems, such as batch failures; changes in guidelines, such as antibiotic switches; and raw material problems, as well as regulatory changes.
For example, in 2015, there was worldwide withdrawal of a branded antipsychotic injection, Piportil, due to a global shortage of the active pharmaceutical ingredient. Sanofi was unable to find an alternative source of this ingredient and had to discontinue the product. I set that out to illustrate the point that it is not always easy to link changes in pricing to issues of availability or access: there are other things to take into account. That is why we do not believe that we should set out, either in primary legislation or beyond the commitments made in the illustrative regulations, specifically to assess the impact on availability, access and so on.
Leaving all that aside and returning to the recurring theme of the debate, I understand the desire for greater transparency, which is undoubtedly the right approach to access. We must think about how we can improve access to innovative medicines for NHS patients and, in doing so, improve the operating conditions, if you like, for the life sciences industry—the win-win situation to which we keep returning. I would be happy to meet noble Lords either individually or collectively to think about what more we could do, whether through the Bill or looking ahead to the life sciences strategy, to ensure that we deliver on this promise. I take very seriously the warnings that many noble Lords have issued; the Government absolutely want to address this. On that basis, I ask noble Lords not to press their amendments.
Lord Hunt of Kings Heath
My Lords, I am grateful to the Minister. On the two arguments he put forward against the amendments, he said, first, that primary legislation would be too restrictive and what one might need to report on one year, one would not in another. The three amendments cover payment, supply, R&D and innovation. I do not think that there would be any year in which it would not be appropriate to report on them. He also said that duties in existing legislation cover some of these areas, and that where they do, such as the duty on innovation—presumably in the 2012 Act—they go wider than the intent in the amendments. I fully accept that. None the less, there is a strong argument for progress being monitored and for Parliament to be involved in that. However, I am grateful to the Minister for agreeing to have further discussion about the core issue of access, and I hope that we may take this forward. In the meantime, I beg leave to withdraw the amendment.
Lord Lansley
“Price control: criteria
After section 264 of the National Health Service Act 2006 (statutory schemes: supplementary) insert—“264ZZA Price control: criteria(1) In determining the prices of medicines under sections 261 and 263 of this Act, the Secretary of State must have regard to the criteria listed in subsection (2), insofar as the prices concerned relate to a new chemical entity, or a new indication for the use of an existing medicine.(2) The criteria are—(a) the prospective therapeutic benefit to patients;(b) the extent to which the therapy meets an as yet unmet need;(c) any wider social benefits which would accrue from the medicine’s use;(d) the desirability of making licensed medicines available to clinicians and their patients, for use where they are the most clinically appropriate treatment; (e) the desirability of promoting innovation in new therapies; and(f) affordability for the National Health Service, including any evaluation of the relative benefit of the medicine compared to other treatments available.””
Lord Lansley
Amendment 10 is intended to insert into the Bill some of the criteria that I hope would form part of a value assessment for pricing of medicines. The difficulty is that, as things stand, the structure of the two schemes is not designed to take account of those criteria. It is not a value assessment but a budgetary control process. We are, to that extent, looking at an amendment the purpose of which is to put into the legislation criteria applicable to the design of a future PPRS.
I have in the past—in a debate in my name in another place, back in December 2014—expressed the view that we could redesign the existing PPRS to reflect the value of medicines. That would be done by modulating the extent of the rebate payable, such that medicines that were relatively costly in relation to their determined value under such a system would pay a higher proportion of the rebate than those that appeared, on the basis of this assessment, to be charged at something more relevant to the implied value. That is in the existing scheme and I see no prospect of it being revised during its present life through to the end of 2018. An amendment of this character would clearly be designed in relation to a future PPRS.
Lord O'Shaughnessy
My Lords, I am very grateful to my noble friend Lord Lansley for this amendment and I pay tribute to his considerable expertise in this area. We had the opportunity to discuss some of this when we met. I also recognise that the amendment’s purpose is to start thinking ahead to what comes next. It is not so much to define right here and now what is required but to do something which I think he has been trying to do for a long time: to broaden the discussion about how we price value into medicines and bring that broader discussion to bear. I recognise the intention. It clearly is important that we think of these things in the broadest possible sense for the benefit of the most people possible.
Amendment 10 would require the Secretary of State to have regard to factors such as therapeutic benefit to patients, meeting unmet need, wider societal benefits, the promotion of innovation in new therapies and NHS affordability. I would like to draw noble Lords’ attention to the legal duties that already exist, which the Government believe currently achieve the intention behind the amendment. Section 266(4) of the NHS Act 2006 already requires the Government to bear in mind,
“the need for medicinal products to be available to the health service on reasonable terms”,
and,
“the costs of research and development”,
when limiting the price of medicines—something we discussed in the last group. Section 233 of the Health and Social Care Act 2012 requires NICE to have regard to,
“the broad balance between the benefits and costs of provision … the degree of need … and … the desirability of promoting innovation”.
In reading out these sections, I am beginning to understand that these Acts are often very, very long. I am thankful for small mercies that our Bill is not, yet.
As part of the NICE clinical and cost-effectiveness assessments, NICE already considers factors such as therapeutic benefit to patients, unmet clinical need and the promotion of innovation, and has recently consulted on new affordability considerations. The point here is that some of the factors that my noble friend is concerned about are already taking place but within the NICE process as part of that assessment.
The Government’s priority is to make sure we get the best possible results for all NHS patients with the resources we have. We will continue to look at how to promote better access to effective medicines through NICE recommendations and guidance to the NHS. In developing that guidance, NICE takes account of all health-related costs and benefits, including the benefits to carers. As I am sure my noble friend will recall, in 2014, NICE considered changes to its methods to better capture the wider costs and benefits to society of new drugs and treatments, sometimes known as value-based pricing. It is only responsible to report that, during the consultation, some significant concerns were raised; for example, about the potential implications for products that offer limited life extension without associated gains in quality of life for those with terminal illnesses. The consultation highlighted a significant diversity of responses, demonstrating that this is a complex issue. The point here is to say that there may be a way through, but we do not yet know what the right way forward is. It is critical that stakeholders continue to have confidence in NICE’s work, and we agree with NICE that these issues require very careful consideration before making changes to the way that we assess medicines.
My final point is on freedom of pricing, an issue that has been raised and which this amendment would have an impact on. Noble Lords will be aware that the Government, when setting prices for new medicines, currently operate a system of freedom of pricing for medicines that are a new active substance. This means that the maximum NHS price approved and published by the Secretary of State is that proposed by companies. NICE will then assess the product and consider whether it is clinically and cost effective. The PPRS allows a company to propose a discount to the maximum price.
We know that this system of freedom of pricing for new active substances is of great value to the life sciences industry, providing commercial flexibility, which is important in a context where other countries may reference the maximum NHS price in their own pricing arrangements—something we know to be of huge value. It does not prevent the NHS securing substantial discounts, which indeed it does, and these form part of the overall assessment of value undertaken by NICE. The amendment could, however, have the effect of removing the principle of freedom of pricing, which has been an important pillar of medicines pricing agreements for years. It would require the introduction of assessments akin to clinical and cost effectiveness when determining price, as opposed to determining through NICE whether it should be used. Such an approach would largely replicate the factors that NICE considers as part of its clinical and cost-effectiveness assessments.
I want to make one final point on the current scheme and looking ahead. The PPRS commits the Government to maintaining the basic NICE threshold and take-up periods until the end of 2018. It is my belief that the right time to look at whether the sorts of factors that my noble friend has raised should be taken into account in medicines funding and pricing arrangements is as part of discussions on a new medicines pricing system, where it can then be looked at in the round. That opportunity will arise when considering what should happen when the current PPRS expires. I would be very happy to explore with him proposals on what any new scheme could look like. I look forward to productive dialogue and to benefiting from his wisdom in the months ahead. On that basis, we believe that the amendment is unnecessary, although we sympathise with its intention. I therefore ask my noble friend to withdraw it.
Lord Lansley
I am grateful to my noble friend for that thoughtful and helpful response. I will say three things. First, thank you for the opportunity to be consulted as the future PPRS structure is developed. I very much appreciate that.
Secondly, on freedom of pricing and introduction, it does not necessarily follow that putting into the legislation the criteria that Ministers should take into account in so far as they exercise their powers has a direct impact. That might be done, as I described, through the mechanism of modulating the rebate, which would not impact on the freedom of pricing and introduction.
My third point is that I did not invent value-based pricing. I may have advocated it for some considerable time—probably 10 years now—but it was advocated before I took it up by the OECD in a wide-ranging report on pharmaceutical pricing internationally and by the Office of Fair Trading in its review of the previous PPRS.
Lord Hunt of Kings Heath
My Lords, I think it goes back even further, to an Oxera report on value-based pricing.
Lord Lansley
The noble Lord is absolutely right about that. There is a history to this. The reason why there is a history is, first, that this is an eminently desirable place to arrive at, in that it would give us tremendous transparency in pricing. At the moment, it is extremely difficult to discern the pricing structures in the industry from the point of view of the payers. Secondly, it would enable us—and this is the objective—to arrive at the point where we could give patients the access to the medicines that are most appropriate to them.
Lord Hunt of Kings Heath
This is very interesting and rows back to a point that the noble Lord made earlier. One issue is the capacity to negotiate with industry. My understanding is that the pharmaceutical industry has made some approaches to NHS England to look at elements of what the noble Lord is suggesting. There is a sense that, at the moment, there simply is not the capacity to negotiate the kind of sophisticated agreement that he seeks.
Lord Lansley
Without repeating what I said earlier about the consultation being conducted jointly by NHS England and NICE, I think that that is precisely the point. These two organisations need to be brought together. There is a degree of sophistication in the NICE processes that needs to be allied to the affordability and therapeutic benefit considerations as seen by NHS England. I freely admit that NHS England is still developing its role.
In relation to specialised health commissioning, I think that it is tremendously positive for it to be able to see the needs and advantages of commissioning all these specialised services on a national basis, as opposed to the patchwork and inconsistencies that we used to see. In that sense, it is only discovering what the commissioning pressures and costs look like—but that will enable it to move on to understanding what that means in terms of the relative benefit and, by implication, affordability of getting into negotiations with companies.
We need to arrive at the point where NHS England can engage up front with industry about the potential cost and pricing of medicines and obviate the need for NICE to go through the long process of the introduction of additional thresholds. As we discussed, there is an issue about the introduction of an additional threshold for highly specialised technologies. We do not want to go to that place with additional thresholds and a variety of arbitrary figures. We should be able to arrive at a point where industry can engage up front with an expectation of understanding what kind of discounting or price it is likely to be able to attract from the NHS because it is able to have a serious discussion about relative value.
I have been dragged back into another, longer conversation. I entirely take my noble friend’s point that there are references to these criteria for Ministers to take account of elsewhere, but there is a risk that the PPRS can be constructed as a budgetary control mechanism without regard to those criteria—notwithstanding that Ministers have a responsibility for them in other places. Even if it were constructed in terms of cross-reference to ministerial duties elsewhere, we could still continue to look at whether this part of the legislation—the statutory basis for the scheme—should cross-refer to the criteria that should be brought to apply. But I take my noble friend’s comments in good part and I am happy on that basis to withdraw the amendment.
Baroness Finlay of Llandaff
In light of the noble Lord’s remarks, I wonder how he sees there being flexibility. The problem with establishing a value-based price, however one works it out, is that we do not have a crystal ball. A product may be used for a whole lot of different indications. One example is Rituximab, which was developed for lymphoma but is now widely used for at least seven other indications. Some of those are chronic conditions, so there is long-term use.
Obviously, the company produced a product and a price was fixed estimated on a certain amount of use, but then its sales went up hugely. That represents an enormous profit. In the system that the noble Lord envisages, how much flexibility would be built in to allow for volume sales and a dramatic lowering of the production costs? That has happened with a lot of things that were initially expensive to produce, but where production costs dropped dramatically over time. We must not inadvertently get locked into pricings that over time become inappropriate.
Lord Lansley
There is a risk of making this debate too extended, but the amendment is not about the whole structure of pricing but about what criteria should be taken into account. In the context of a PPRS scheme such as the present one, the point I made previously was that it would be possible, for example—and this is only an example—to modulate the rebate by reference to any gap between the price charged to the NHS by a company and the value as disclosed by a comparative assessment.
Of course, if there are a number of different indications, the value may vary according to those indications, but that is no problem in itself because all you are doing is trying to understand to what extent a company would be required to contribute a lot to the rebate because there was a big gap between the price charged and its relative value. Some companies may contribute virtually nothing to the rebate because there is no disclosed gap between the price charged to the NHS for a product and its relative value. That is merely an example of how a scheme could be adapted using this sort of value assessment. I beg leave to withdraw the amendment.
Lord O'Shaughnessy
“( ) Section 260 (control of maximum price of medical supplies other than health service medicines) is amended in accordance with subsections (2) and (2A).”
Lord O'Shaughnessy
My Lords, this group of government amendments would ensure that, as is the case with the power to control the cost of health service medicines in the NHS Act 2006, the Secretary of State would be required to consult representative bodies before making legislation to control prices of medical supplies.
The NHS Act 2006 contains provision for the Secretary of State to control the cost of both health service medicines and medical supplies. It also contains a requirement on the Secretary of State to consult with the industry body before any cost control scheme for health service medicines is made. There is, however, no requirement to consult before making price controls on medical supplies. The amendment would introduce this requirement.
An amendment was tabled in Committee and on Report in the House of Commons, with support from Labour and the SNP. It would have had a similar effect, but it was not consistent with the existing provisions for health service medicines in the NHS Act 2006. Representative bodies in the medical devices sector have expressed their support for the amendment. I believe that it would improve the Bill by ensuring that appropriate consultation takes place before the introduction of any scheme to control the price of medical supplies. Therefore, I hope noble Lords will be prepared to accept this amendment.
Lord O'Shaughnessy
“(2A) After subsection (1) insert—“(1A) Before making an order under subsection (1) the Secretary of State must consult any body which appears to the Secretary of State appropriate to represent persons who manufacture, distribute or supply medical supplies falling within subsection (1).””
Lord Hunt of Kings Heath
My Lords, we discussed at Second Reading the general concern that the Bill extends amendments aimed at the provision of health service medicines to provisions relating to medical supplies. Subsequently, the Minister has written to us to explain that,
“section 260 of the NHS Act 2006 already provides the Secretary of State with powers to control prices of medical supplies and to require companies to provide information on any aspect of their business. Clause 5 of the Bill ensures that the enforcement and territorial provisions for any scheme concerning medical supplies are aligned with those for health service medicines, including changing non-compliance from a criminal to a civil offence … While the Government is currently not using its powers to control prices of medical supplies … it is important that we continue to have these powers”.
I have to say that, so far, I am not convinced. Will the Minister confirm that the section of the NHS Act 2006 to which he referred is essentially a consolidation measure, which merely restates the provision introduced some years before? Indeed, with the help of the Library, I can say it seems that the measure was first introduced in 1977. There seems to be no reference in Hansard as to the reasons that it was then introduced, although it is thought that it was part of the debates on the Bill on the status of private patients in the NHS. Looking back to those happy days, one can only imagine the debates that we had. The point is that the power has never been used: it was legislated for 40 years ago and it has never been used.
I start from the premise that, if a provision introduced 40 years ago has never been used, the first question is: should it be needed at all? So far, I have heard no convincing argument that it should. With this provision having never been used, even though on the statute book for 40 years, the Minister should not be surprised that the companies concerned are suspicious of the Government’s motives for doing what they are doing. This is particularly the case because there was so little consultation with the medical technology industry, as an example, prior to the publication of this Bill.
As just one example of this, at Second Reading in the Commons, the Health Secretary said that his officials had consulted stakeholders across the supply chain, including those from the medical devices sector. My understanding, however, is that the continence-stoma industry, and its relevant trade associations, was not consulted about the potential impact of the Bill. It is unclear why the Government want to do this in relation to medical supplies. If ever there was an example of gold-plating of legislation, this is it. I hope that the Government will be prepared to modify those provisions.
If the Government really want to extend this beyond medicines to medical supplies, surely they can find a way to remove the open-ended provisions and set a threshold to trigger them. At the moment, we have no information. There was none in the impact assessment. Given that the Government are supposedly interested in light-touch regulation, it is difficult to understand why Ministers have not removed this clause from the Bill and the section from the 2006 Act. It is very difficult to see what they are getting at here.
Lord Warner
My Lords, I am very interested in this part and added my name to that of the noble Lord, Lord Hunt, in opposition to the clause. He sparked my interest by accusing me of taking through the 2006 Act. Only on further reflection with my ageing brain did I find that I had not taken it through the House when I was a Minister because it was a consolidation Act. As far as I can recall, it went through both Houses of Parliament without any direct consideration, because there were no amendments to any of the legislation covered by the Act.
The noble Lord, Lord Hunt, in a very Sherlock Holmes manner, has been pursuing where this all came from. As far as I can see, it came from 1977, after a period in the Callaghan Government when there was great excitement about the relationship between the NHS, private practice and the private sector, following my period as private secretary to Barbara Castle. It comes from that generation. As the Minister and his officials indicated in a helpful meeting that we had, it has never been used. We are talking about a provision that comes not just from a long time ago but from a totally different context. We have Whitehall picking up a piece of legislation which it thinks may be useful and slotting it into the Bill with an amended purpose.
As the noble Lord, Lord Hunt, said, the medical devices sector does not think that there has been adequate consultation. It cannot understand what the Government are up to on this. The only justification it seems to have been given is that the department is modernising—whatever that means—a particular piece of old legislation. Modernisation is one of the words that one treats with a certain amount of caution, particularly when it affects public services. We are very unclear why the devices sector has attracted the attention of the Department of Health.
We are clear what the mischief is on the medicines side that the Government are trying to address. We are not clear what the mischief is on the devices side—medical supplies—that has caused the Government to go rootling around in the archives to find a bit of legislation that enables them to place a considerable requirement on the devices sector, which has been quietly minding its own business with a kitemarking system and the usual tendering processes for selling its products to the NHS.
I think we need to be a lot clearer than we are now as to why the Government need this modernising legislation. I remember that when I was a Minister one of the things I was trying to do was reduce the regulatory burden on the NHS and the health sector. I confess to having slipped up a bit in that I totally missed this 1977 regulatory burden. I wish I had spotted it, because we could have struck it out of the legislation while we were tidying up other things. Having got that off my chest and owned up to it, I would really like to know why the Government want this gold-plated provision on regulating a sector which, as far as I can see, has not caused any great problems. Perhaps the Minister can tell us why they have suddenly gone in for this attention and whether they have actually been neglectful of the sector. Has it been ripping off people a great deal for the past seven or eight years? Should we have acted sooner?
Baroness Walmsley
My Lords, I think you only want to modernise something when you are planning to use it. Therefore, I hope the Minister can understand the level of suspicion and worry that we have been hearing from the sector. I understand that the Government want to make the penalty for not complying with the information requirements more proportionate—that is fair enough. But if the Government are not planning to use those powers then why do they want to make that small but fairly significant change?
I am not aware of any competition law action against companies providing medical supplies to say they have abused the system or overcharged. I am aware that an awful lot of the companies producing medical supplies are fairly small and would fall below the £5 million level and therefore not be affected by this. However, some companies that provide a lot of equipment and supplies do come within the scope of what the Government are trying to do, but they are, in fact, very competitive. It is a very competitive market already and, as far as I know, the prices charged are affected by competition. Therefore, to my knowledge, the NHS is not being ripped off. I have asked the Minister whether he has any evidence to the contrary. I have not heard anything yet, but perhaps he will be able to give us something this evening.
Lord O'Shaughnessy
I thank noble Lords for the debate on Clause 5. I am also grateful for the tour d’horizon or history lesson on how this has all come about. It feels as though it has slipped through many nets, for which there are multiple responsibilities around the room.
I will first address the point about consultation. Noble Lords will appreciate it when I say that, personally, I have not had the chance of undertaking that consultation but it is something that I am committed to doing. Whatever has gone before, I can at least give the reassurance that I will meet the relevant bodies in the next few weeks and discuss their concerns ahead of Report. At least in a forward-looking way, I can provide that reassurance.
As everyone has stated, the critical point here is that the 2006 Act gives the Secretary of State the power to control the price of medical supplies and to collect information about medical supplies. What Clause 5 does is to ensure that the same enforcement and territorial extent to provisions apply to controlling the cost of medical supplies and health service medicines. It does not give the Secretary of State any new powers to control the price of medical supplies. There are currently inconsistencies in the enforcement and territorial extent provisions. For example, a contravention or a failure to comply with the current provisions in the 2006 Act for medical supplies can result in a criminal offence. By contrast, the equivalent penalty for medicines is a civil financial penalty. Clause 5, therefore, aligns the enforcement provisions for medical supplies with those for medicines and, in so doing, makes them more proportionate, as the noble Baroness, Lady Walmsley, has pointed out.
With respect to the territorial extent, the power to control the prices of medical supplies in the NHS Act 2006 currently extends only to England and Wales. Clause 5 would extend the power to control the prices of medical supplies to Scotland and Northern Ireland. That would be consistent with the territorial extent of the powers to control the costs of health service medicines. That is an important point.
A number of noble Lords asked why the Government need the powers to control the prices of medical supplies when they do not currently use them nor have ever used them. That is a perfectly reasonable question to raise and one that occurred to me, too. We do not have any immediate concerns about the pricing of medical supplies. It is true that the market for medical supplies is very different from the market for medicines. It is innovative and competitive, and new medical supplies are generally faced with competition much more quickly than is the case for new medicines. However, I remind noble Lords that until recently we did not think that we needed the powers to set the price of unbranded generic medicines. We thought that competition in the market was working well and keeping prices down. When we realised that the market was not functioning as well as we thought with respect to certain products, and we were faced with companies charging unreasonably high thresholds where they had no competitors, we realised that we did not have sufficient powers to intervene when needed. That is of course one of the reasons for the Bill.
A question was asked about thresholds and when such a provision could be triggered, which is a reasonable question. The two examples I can give are when we had evidence from existing data that there may be an issue with pricing—for example, the reimbursement price that we set in primary care is increasing without an obvious reason—or when there is effectively a bottom-up complaint where patients, clinicians, commissioners or industry raise concerns because it is not obvious what is driving a price rise. I want to minimise the need for future primary legislation on medical supplies pricing controls. The Government should have the ability to intervene, but only when the market is not working well. Whether it is for medicines or medical supplies, it is right that those powers exist but are used only when necessary and proportionately. On that basis, I ask the Committee to agree that Clause 5 stand part of the Bill.
Lord Hunt of Kings Heath
My Lords, I am grateful to the Minister for his response. I also thank him for his consultation and willingness to meet bodies before Report, which I am sure will be very welcome. I understand the first argument, which is that there is a need to ensure consistency in relation to this Bill and the 2006 Act. I fully understand that. I also understand the change from criminal to civil penalties. But we then come to the issue of whether this provision should be in statute at all. The Minister himself has acknowledged that this is a different market, with competitive tendering. It is very competitive. We can see no evidence that this measure has been used for 40 years, and as far as I can see there is no evidence to suggest that it will be used any time soon.
The Minister said that it was not thought that the switch from branding to generics would arise in relation to medicines, and therefore that we should look into a completely different sector and say that because something might happen in the future we need to have this overarching provision in the Bill. But that is not the right approach. It has become clear that there are two courses of action. One is to take this out of the 2006 Act altogether, which at the moment I rather favour. We should not regulate for something that might happen in the mystical future.
I, too, was a better regulation Minister and it was drummed into me that if you do not need it, get rid of it—and if you do not need it, do not legislate in the first place. In his heart of hearts, surely the Minister realises that this is unnecessary. The alternative approach is to take the threshold he suggested and put it in the form of an amendment so that we have some reassurance on the face the Bill that it will not be used inappropriately. Those are two particular options.
In my tour d’horizon, as the noble Lord said, I came across the comments made by the noble Earl, Lord Howe, in 1999 when my noble friend Lady Hayman was taking one of the many health service Bills through your Lordships’ House. The discussion was not about devices but about the PPR scheme, because the then Government had taken powers in relation to prices. The noble Earl, Lord Howe, said that the Government had,
“arrogated to themselves sweeping powers to bring the current voluntary scheme to an end and to control the price of any drug at will. Lower medicine prices are appealing but too much of that will kill the golden goose”.—[Official Report, 9/2/99; col. 118.]
If the noble Earl, Lord Howe, were here arguing for this Bill, I think that he would have reflected that the case had not been made for non-health service medicines to be involved. We need to find a way forward between this stage and Report, otherwise the persuasive argument will be to remove the offending sections from the 2006 Act.
Lord Warner
Perhaps the Minister will consider the Bill’s definition of “medical supplies”. It states that it,
“includes surgical, dental and optical materials and equipment (and for this purpose ‘equipment’ includes any machinery, apparatus or appliance, whether fixed or not, and any vehicle)”.
That seems to take the Government into any bits of kit—not just ordinary devices as we normally understand them. It covers ambulances and all sorts of fixed equipment in the NHS. Is the Minister really saying that the Department of Health needs a power to cover that range of subjects—I presume that it includes scanners—where competitive tendering may be used, and that the Government reserve the right to intervene in that? That is what the Bill seems to say.
Lord O'Shaughnessy
On that specific point, there are number of things—for example, supplements, cosmetics and foods—that fall outwith the categories of health service medicines or health service medical supplies but are sometimes provided or prescribed by the NHS. The intention of the part of the Bill to which noble Lords draw attention is to capture such items when they are provided by the NHS for the benefit of patients—but not in general.
Lord Hunt of Kings Heath
Perhaps I may continue, my Lords. My noble friend will move an amendment on this later on, but the Bill states:
“‘Health service products’ means any medicinal products used to any extent for the purposes of the health service continued under section 1(1) and any other medical supplies, or other related products, required for the purposes of that health service”.
So it is a draconian regulatory power. Having said that, I think that we have had a very good debate. I am sure that we will come back to this on Report.
“Specials
After section 260 of the National Health Service Act 2006 (control of maximum price of medical supplies other than health service medicines) insert—“260A Specials(1) When commissioning the production of ”specials”, National Health Service clinical commissioning group, hospital trust and community pharmacies must seek no less than three quotes for non-tariff items, at least one of which should be from a National Health Service manufacturer.(2) Unless there are over-riding reasons not to accept it, the cheapest quote must be selected.(3) When setting the tariff price for “specials”, NHS England, in its tariff-setting process, should seek prices from National Health Service, as well as private, manufacturers.(4) For the purposes of this section, a “special” is an unlicensed batch of a medicine prepared or extemporaneously dispensed.””
Baroness Finlay of Llandaff
My Lords, I will now move into a very different area, but one that is integrally related to the Bill: that of “specials”. Concerns relating to specials and obtaining them have been brought to my attention by the British Association of Dermatologists, the Royal College of Ophthalmologists, the Royal College of General Practitioners and others—so the issue goes more broadly than simply dermatology.
Specials are unlicensed medicines manufactured or procured specifically to meet the clinical needs of an individual patient. They may be put on the skin; they may be alternative ways of making a medication that can be ingested when there are swallowing difficulties: for example, in babies fitted with a fine-bore nasogastric tube, and so on. The most frequently prescribed specials are made in small batches, but sometimes there are only one or two patients at any one time in the country who need this particular preparation.
Baroness Walmsley
My Lords, I hope that the Minister will accept the common-sense amendment of the noble Baroness, Lady Finlay. The amounts of money that the NHS would save on specials may not be in their billions but, as my granny used to say, “Look after the pennies and the pounds will look after themselves”. I am sure that other noble Lords will have heard that from a couple of generations back. It seems crazy if there is no opportunity for the Government to stop this. It sounds like exploitation to me and a fairly simple change to the Bill could stop it in its tracks.
Baroness Wheeler
My Lords, we very much support the intention behind this amendment and commend the noble Baroness, Lady Finlay, for her determined and dogged campaigning in highlighting this issue and trying to persuade the Government to recognise the problem. In a Bill designed to close loopholes, this is a particularly important one to address. At the same time, it would obviously save the NHS a substantial amount of money. A BBC investigation six years ago estimated a potential saving of £70 million a year just for England, so it is hard to see why the Government should not want to take urgent action now.
We have heard from the noble Baroness, and from the excellent work undertaken on this issue by the British Association of Dermatologists and other organisations, of the overall costs and substantial savings that could be made on unlicensed medicines. Addressing this issue would be to the benefit of the NHS and the many patients in community and primary care who are denied access to special order medicines because of the way in which the current procurement system operates. The anomaly is that if they were in hospital, they would have stood a good chance of being given the drug.
We have also heard how the current system can result in some suppliers charging hyperinflated costs for specials, particularly when chemists do not buy direct from a specials manufacturer but via a wholesaler which adds its costs to the price. This results in the NHS having to pay the chemist the wholesalers’ rather than the manufacturers’ price, because there is no price tariff on the unlicensed specials. Moreover, prices for specials in the primary care sector are set by reference to the Association of Pharmaceutical Specials Manufacturers, which covers private companies that generally manufacture only smaller and therefore much more expensive quantities of drugs. The whole system, which has one much cheaper and cost-effective system for hospitals and another for community and primary care, surely needs to be urgently addressed.
I ask the Minister whether consideration can be given to the Competition and Markets Authority being asked to investigate suppliers. Why have the Government not looked at and learned from the Scottish system, which takes a whole-market approach in the way that the noble Baroness proposes should operate here? We understand that the Government have proposed a six-month review of the existing and proposed arrangements, but we do not feel that this adequately recognises the urgency and scale of the problem. In the Commons, the Minister, Philip Dunne, acknowledged that the Government have existing powers to address the issue, so why is it not being addressed?
The amendment contains the important provision to require NHS England, as part of its tariff-setting processes, to seek prices from the NHS as well as private manufacturers—the whole market—and we fully support this. If the Minister would at last take the important step of recognising and acknowledging the problem, then work could commence on the procurement process required to bring the new system into effect.
Lord O'Shaughnessy
My Lords, I thank the noble Baroness, Lady Finlay, for the work that she has put into investigating this issue, for her amendment and, indeed, the intent behind it, which is to save the NHS money and provide a better bang for our buck. That is something that everyone would support.
I say first that it is the Government’s priority to make sure that we get the best possible results for all NHS patients with the resources we have. That is what the Bill, in its entirety, aims to do. This amendment seeks to save the NHS money on specials by requiring CCGs, hospital trusts and community pharmacies to seek no less than three quotes for non-tariff items, at least one of which should be from an NHS manufacturer and, where possible, to select the cheapest quote. It also requires NHS England to take into account prices of NHS manufacturers when setting reimbursement prices. A special is a medicine manufactured or imported to meet the specific needs of a specific patient. By nature they are bespoke, and therefore they do not have the same economies of scale during manufacture and distribution as licensed medicines. Due to the bespoke nature of specials, the costs associated with manufacturing and distribution will never be as low as the often relatively cheap components that make up the special. I say that by way of background for those who are perhaps not as familiar with the subject as the noble Baroness is.
I turn now to the idea of setting tariff reimbursement prices and including data from NHS manufacturers. In England, reimbursement prices for the most commonly prescribed specials are listed in the drug tariff. Those prices are based on sales and volume data, which the department currently obtains from specials manufacturers under a voluntary arrangement. The new provisions in the Bill would make reimbursement data more widely available and more accurate—which would clearly be a benefit in making sure we get value for money with specials. By setting a reimbursement price, we encourage pharmacy contractors to source products as cheaply as possibly because it allows them to earn a margin, which in turn creates competition in the market and, as a result, lowers reimbursement prices. Since these reimbursement arrangements were introduced in 2011, we have observed that, in England, the average cost for specials listed in the drug tariff decreased by 39% between 2011 and 2016.
In setting that out, I do not disagree with the idea that there are instances of wild variation. Indeed, I ask the noble Baronesses, Lady Finlay and Lady Wheeler, for any examples and evidence that they have. I would be keen to see them, to better understand instances where it has happened.
Basing reimbursement prices on selling prices from more manufacturers than we do now, which the Bill would allow us to do, would make our reimbursement system more robust. For specials, we currently rely on information from those manufacturers that have signed up to our voluntary arrangement. There have been talks with NHS manufacturers to provide information on a voluntary basis. However, we have not been successful so far in securing data from NHS manufacturers that we are able to use. The Bill would enable us to get information from all manufacturers, including NHS manufacturers, for the purpose of reimbursing community pharmacies—that being, of course, one of the main aims of the Bill. Once we receive data from NHS manufacturers, we will be able to assess whether it is appropriate to include it in calculating reimbursement prices. We are actively looking to see whether we can include data as part of our reimbursement price setting, and the Bill will help us to get it. Consequently, we do not need the amendment.
Baroness Finlay of Llandaff
I am grateful to the Minister for his very full reply, which I intend to study in detail. While he has made several points, I have ongoing concerns about leaving this unaddressed in the Bill. In light of what he said, I still do not understand why some manufacturers quote different prices for Scotland and England. Their production costs are exactly the same, so why are they quoting higher prices for England? It does not make sense. England is then paying a higher price than Scotland.
The dispensing fee that goes to the community pharmacists is the same, irrespective of the price paid. I worry that the bureaucratic burden of the clinical commissioning group refusing to pay for something because it seems inordinately expensive is a short-term view in the interests of immediate budget containment, and does not take a long-term view over the life course of an illness that could be contained by using something specifically designed for that patient so that, in the long term, there could be a decreased cost to the NHS. I remain concerned.
I have absolutely no intention of there ever being delays in accessing things in an emergency, but only where a patient is not in an emergency situation. In the community, the pharmacist often does not have things in stock anyway and has to order them. The patient or their representative has to come back the following day or 48 hours later, when something has arrived. I am not convinced that the bureaucratic burden would be that great. I can see that three quotes may be too many, but an alternative quote might be a way forward. In the meantime, I beg leave to withdraw the amendment.
Lord Lansley
“Price control: exemptions
After section 264 of the National Health Service Act 2006 (statutory schemes: supplementary) insert— “264ZA Price control: exemptionsIn controlling maximum prices of any health service medicines and medical supplies, including amounts payable to the Secretary of State under a voluntary or statutory scheme, the Secretary of State may not set a maximum price in respect of any product for which the cost of that product to the National Health Service has been determined through an open and competitive tender process.””
Lord Lansley
Amendment 16 takes us to an issue that was the subject of consultation prior to the introduction of the Bill: whether the Government should take powers to control prices in circumstances where there has been an open and competitive process—for example, a tender process. We know that one reason why the legislation is required is because it does not follow that because products have become unbranded generic medicines they are necessarily available on a fully competitive basis in the marketplace. We have seen examples of that. In explaining the purpose of the Bill, it was stated that:
“The government’s intention is to use these new powers where due to a lack of competition in the market, companies charge unreasonably high prices for unbranded generic medicines”.
That is understood. There can be circumstances where there is a lack of competition.
Quite clearly, however, there are circumstances where the products available and the prices set are themselves the product of an open and competitive process, such as a tender process; for example, in relation to blood products being supplied to the NHS. There may well be a degree of market dominance in some of those, even though some of the complex medicines may be generic. For example, I know a company that produces medicines in circumstances where it has to use opiates, and the availability of those opiates might be limited.
None the less, if the NHS can procure on the basis of a tender that is open and competitive, why should the Government leap in and try to amend it? I understand that the response to that is to say that companies can take account of the rebate in the prices that they set. But surely when one enters into a tender, the companies concerned may not be in symmetrical positions in relation to the implications of the rebate. Some companies are indifferent to the rebate because they are not affected by it and other companies are affected by it. The nature of the rebate over a period of time and the extent of it may be variable, and they may make completely different assumptions about what that process looks like. So it seems, on the face of it, that a much cleaner approach to the Bill would be exemption from the price control mechanism in those circumstances where clearly the mischief that the Bill is intended to remedy does not apply: that is, in an open and competitive process. I beg to move.
Lord Hunt of Kings Heath
My Lords, this is helpful. Medicines have been referred to, but I would have thought that it could be helpful with other medical supplies. I have had a letter from the British Healthcare Trades Association. It says, in relation to other medical supplies:
“We cannot think of any procurement scenario in our sector where products, on an ongoing basis, are not subject to tender or tariff procedures. The price is tested at entry and reviewed at regular intervals, and the terms and conditions pertaining to the contract or tariff arrangements will include requirements for provision of information”.
That deals with the issue of information. So the noble Lord has put forward a very interesting suggestion and I hope that the Minister might be sympathetic to it.
Lord Warner
My Lords, I too am sympathetic to this amendment. I have a linked amendment, Amendment 33, which is about introducing a trigger before information is required. Both amendments, I think, are intended to curb the enthusiasm of Secretaries of State to intervene in a market situation where things are working reasonably well. So I have every sympathy with the amendment of the noble Lord, Lord Lansley, and I hope that the Minister will consider it sympathetically.
Baroness Walmsley
I too have a great deal of sympathy with the amendment, but I just wonder what the definition would be of an “open and competitive” process—perhaps it would be defined in regulations. Does the noble Lord agree?
Lord Lansley
That is a helpful suggestion. It might not necessarily be defined in regulations, but one might contemplate that the Secretary of State would issue guidance as to what constituted such a process.
Lord O'Shaughnessy
I thank my noble friend for his amendment and am very happy to show sympathy with it, as other noble Lords have done. I will start by stating that the Government’s view is clearly that competition and market forces are the best way of delivering value. Wherever possible, we should ensure that competition is there, that it works and that it involves as many participants as possible. In many instances, that is the way to drive better value. That being the case, my first priority is to look at ways of improving how markets operate, before reaching for the lever of regulation. That principle is guiding our work on the pricing and cost control of medicines and medical supplies.
For that reason, I understand the sentiment behind the amendment. The underlying assumption here is that if the NHS tenders for a product in a competitive market, the tender should always secure the NHS the best possible deal, and that there should be no need for further government intervention. However, while that is the case sometimes, it is not always the case. I will give a couple of examples. The department or the NHS may conduct tenders for a number of reasons, including security of supply. Furthermore, EU procurement rules —of course, that may change in future—which have been implemented into domestic legislation pursuant to the Public Contracts Regulations 2015 mean that, for contracts for products over a certain value, the NHS has to tender such contract opportunities in accordance with the requirements specified in the procurement rules.
Where there is a sole supplier of a particular product, or other factors such as supply or specificity of products apply, a tender exercise in itself is unlikely to result in significantly lower prices. For example, the department has run competitive processes for von Willebrand factor. This is used to treat patients with a genetic deficiency in the quality or quantity of this protein, which causes problems with blood clotting. Although there are six or seven products that may meet our tender specification, they all have a different concentration of von Willebrand factor, so they are not easily interchangeable. This means that, in practice, the suppliers of such products do not compete on price, knowing that clinicians need access to all the products to select on clinical need and that the department will make awards on this basis.
Lord Lansley
I am grateful to my noble friend for his interesting response. Like the noble Baroness, Lady Finlay, I want to take it away and think about it. I probably felt kind of comfortable with what my noble friend said in relation to branded medicine. I thought it was specifically in relation to unbranded generic medicines that the issue was, perhaps, most likely to arise. However, I can see that he is identifying circumstances where there might be a tender process, and that the fact of it being a tender does not necessarily mean that it is open and competitive on price. I therefore see why the amendment does not do the job. However, I can still see where there might be a risk, none the less. There might be open and competitive tender situations where the companies concerned feel that they are in subsequent jeopardy that the price that has been determined competitively might be overridden by the powers that are available to Ministers. We just need to see whether, perhaps in further discussion, we can find some way to give companies an assurance that that would not be the case, whether statutorily or otherwise. I would very much value my noble friend’s assurance that we will have that conversation. On that basis, I beg leave to withdraw the amendment.
Baroness Wheeler
Baroness Wheeler
My Lords, this important group of amendments to Clauses 6 and 7 covering England and Wales is intended to reduce the scope of the burdensome information requirements under the Bill by excluding medical technology and supply sectors from its provisions. The Bill itself is inconsistent throughout on how it refers to this key part of the industry, variously referring to the producing of medical supplies, of health service supplies or of health service products. This gives fuel to the widespread assumption that the medical supplies parts of the Bill were a hastily drawn-up afterthought addition to its main purpose.
Our amendments in this group—excluding Amendment 19—remove all references to “health service products” in these clauses and substitute the “health services medicines” reference consistent with the other parts of the Bill applicable to the pharmaceutical industry. Despite extensive questioning and probing of Ministers by noble Lords and in the Commons and today’s explanation from the Minister in our earlier debates we have still to hear any evidence-based justification for these heavy-handed information and disclosure requirements. Both the ABPI and the ABHI have voiced strong concern at the onerous information requirements under the Bill and draft regulations and the potentially huge impact on SMEs across both sectors.
We were encouraged at Second Reading when the noble Lord, Lord Prior, in response to the widespread and deep concerns put forward, told us that,
“the last thing in the world we want to do is to build a bureaucratic edifice … or to gold-plate regulations, information requirements and the like … we are absolutely open to all ideas and suggestions on how we can reduce the regulatory and bureaucratic requirement on companies that supply the NHS”.—[Official Report, 21/12/16; col. 1685.]
Just to remind noble Lords—a point underlined earlier by my noble friend—the Bill currently requires,
“a person who manufactures, distributes or supplies any UK health service products”,
and in England it is applicable to,
“any medicinal products used to any extent for the purposes of the health service continued under”
proposed new Section 264A(1),
“and any other medical supplies, or other related products, required for the purposes of that health service”.
In other words, millions of products and thousands of small, medium, large and very large businesses.
Within Clause 6, information may be required on:
“the price charged or paid by the producer for products … the price charged or paid for delivery or other services in connection with the manufacturing, distribution or supply,”
of those products,
“the discounts or rebates or other payments given or received … in connection with the manufacturing, distribution or supply”,
of those products and,
“the revenue or profits accrued … in connection with the manufacturing, distribution or supply”,
of these products. These are the current draconian provisions and the only response so far to the Government’s insistence that they are open to ideas and suggestions is to promise to consult the medical supplies sector after the legislation has been passed.
We will not go into the issue of the dreaded Section 260 of the 2006 Act, which already contains powers to get price control and information powers over the companies concerned, but we have still to hear a convincing argument as to why it cannot be used as a basis for seeking any further information that is required. We are told that the new provisions clarify, modernise and streamline and now, in the noble Lord’s words, “make the provisions much clearer than they currently are in the 2006 Act”, but Ministers have still to explain exactly how this is the case.
To remind the Committee, the impact assessment makes the astonishing admission that the costs of these provisions have not been quantified for manufacturers, wholesalers and dispensers. Can the Minister tell the Committee whether any further work has been done on this? Surely proposals that stand to impact tens of thousands of businesses should be part of the evidence base before the Government decide to proceed with legislation? It is crucial that the Government accept our amendments and delete the medical supplies industry from the scope of Clauses 6 and 7; only then can they have the meaningful consultations with the industry that should have taken place before the introduction of the Bill. As noble Lords have underlined, it is not acceptable for Ministers to seek to change primary legislation to give the Government new information powers when the details and impact of the new powers will emerge only in future.
Finally, Amendment 19 in this group seeks to address the huge burden that the new information requirements will place on thousands of small businesses across the country. Bearing in mind that the Government have done no work on the potential impact on SMEs, this amendment would at least introduce a threshold limiting the businesses affected to those companies with a total workforce of more than 250 employees or with annual revenues of more than £50 million in each of the preceding three fiscal years prior to the information request. This is based on the EU threshold in relation to procurement. However, given our upcoming withdrawal from the EU, it seems sensible to specify a roughly equivalent amount in pounds. The value of the pound is, of course, currently subject to ongoing fluctuations. If the Government are inclined to act on this amendment, the Minister and his colleagues may wish to give some thought to an exact figure ahead of Report.
The potential impact of the proposed powers on SMEs is significant and could come with a significant unseen cost to domestic businesses and, as a result, to patients. A small firm such as Mediplus, with 55 employees and a turnover of approximately £6.5 million, already has to meet a range of requirements to demonstrate that it is providing value for money. The Bill would increase the time and cost of demonstrating compliance with regulations without any discernible improvement in final outcome. Increasing the bureaucratic burden on SMEs could force firms to consider how they bring products to market, which could have only a negative impact on the NHS and its patients.
The Government have indicated that they would exempt businesses with a turnover of approximately £5 million. The noble Lord will appreciate that, although that sum sounds large, it is very little in comparison with the revenues of the larger pharmaceutical firms which the Bill aims to regulate. The Government’s proposed exemption will still subject a company such as Mediplus to an increased regulatory burden. As noble Lords keep pointing out, all this is completely counterintuitive, given the Government’s supposed commitment to deregulation, and can only risk the viability and innovative streak of very small businesses, which we should be supporting in the current climate. I beg to move.
Lord Warner
My Lords, I have added my name to the set of amendments and strongly support what the noble Baroness, Lady Wheeler, said.
The Minister is new to this legislation. He has joined the party a little late on the Bill. I ask him to stand back and look at some of the terminology used in it. It skips lightly through about four different terms: health service medicines, medicinal products, medical supplies and health service products. It zigzags in and out of those terms throughout the Bill. It then gives a set of definitions at the end which, on the most generous interpretation, overlap with each other. So we are imposing new obligations on a whole set of people in and around the NHS and the pharmaceutical industry without being very clear which group of products we are most concerned about. We are taking powers in the Bill to put obligations on all suppliers of those products to keep a lot of information in case the Government should at some point in future call on them to provide it. That does not seem to me a sound basis on which to legislate when we are trying to reduce the regulatory burden on not just small but medium-sized companies. We always talk about the small companies, but Amendment 19 is useful because it involves reducing the burden on medium-sized companies as well.
The impact assessment then adds to the problem by giving no idea of the impact of these provisions on those companies. At least these amendments narrow the focus to where there is an acknowledged problem—medicinal products—which is where the Bill started. If you read the Long Title, it looks as though it started as a Bill about medicines to which someone has tacked on “and related issues”, or similar words. I suspect that the Bill started off trying to deal with a genuine problem but has grown just in case it might be helpful to have some other provisions. Then, to add unnecessary complexity, it has moved around on what products are to be covered to the point where we are putting obligations on a very large number of organisations in case the Government come calling for information.
That is why I shall return to this subject when we come to Amendment 33, which tries, at the very least, to put some obligation on the Secretary of State to show that he has good reason for requiring the information sought in this Bill. That is a debate for another day, but the Minister should look very carefully at whether the Bill has a confusing set of definitions and a use of words that is going to cause a lot of confusion for the world outside.
Lord O'Shaughnessy
My Lords, I thank noble Lords for their many amendments in this group. They cover two very important aspects of the Bill and I am grateful for the opportunity to provide further clarification.
I will look first at the issue of small and medium-sized enterprises. As noble Lords will understand, the medicines sector is very diverse, with companies ranging from the largest global enterprises with multiple interests to very small companies that manufacture specials on a bespoke basis. The Government have no intention to put unnecessary burdens on companies, and especially not on SMEs. The information that we would require them to keep, record and provide would not be more than companies are currently required to keep for tax purposes. For routine collections, we know that they are not an excessive burden on companies. We heard the director-general of the British Generic Manufacturers Association say at the evidence session for the Bill in the Commons that:
“Providing those data is not a big issue for the majority of our members because it is run from their invoicing system”.—[Official Report, Commons, Health Service Medical Supplies (Costs) Bill Committee, 8/11/16; col. 7.]
For non-routine collections, the illustrative regulations specifically make provision for SMEs, defined here as companies with a UK turnover of less than £5 million, which can provide information in the form of pre-existing information such as invoices. This is the method by which we currently collect information from pharmacies, and we know that the process places barely any burden on them. We will consult the industry on the definition of an SME and will look also at the different definitions—I am aware that multiple definitions are being used across government. We would rely on the information provisions in the Bill to be able to obtain information to operate any price and cost control schemes. This definition of an SME would make it impossible to obtain information from certain companies and, therefore, it would be much harder effectively to operate our voluntary and statutory schemes. The amendment has the effect, therefore, of limiting applications of pricing controls set out in this Bill to large companies only.
We have considered carefully the application of the statutory scheme to small companies. Our consultation last year proposed that the exemption threshold for the new statutory scheme should be set at £5 million of branded health service medicines sales. This maintains the current statutory scheme arrangement and aligns, as we are trying to do throughout the Bill, with the current PPRS. Most industry responses agreed with this proposal, and the illustrative regulations published to aid discussion of the Bill show how it would be incorporated into the operation of the scheme.
It is also important to note that this bespoke definition is focused on the level of sales rather than company turnover, ensuring that only those businesses that make branded health services medicines sales of more than £5 million a year to the NHS will be included in the schemes. On that basis, any company, including those which fall within the EU definition of an SME, will be included in the scheme only if their sales reach this threshold. Not only does this align with the current PPRS and the Government’s broader aims to support SMEs but this bespoke definition ensures that the focus is kept on sales of branded medicines to the NHS. More details are set out in the illustrative regulations for the statutory scheme that have been published alongside the Bill.
There would, however, as a result of this amendment, be additional impacts to the reimbursement of community pharmacies and GP practices, which is one of the core purposes of the Bill, and to the collection of information. Community pharmacies purchase the medicines they supply against NHS prescriptions. The drug tariff sets out a reimbursement price that they will be paid for the majority of medicines. The Government have voluntary agreements in place with manufacturers and wholesalers of unbranded generic medicines and specials. They provide us with information on their prices and volumes, which informs our reimbursement prices. As a consequence of these arrangements, the Government have been able to reimburse community pharmacies more robustly for the products covered by the arrangement.
If SMEs, whether defined as set out in the amendment or under any other definition, were excluded from the requirement to provide information, then not all manufacturers and wholesalers would be included. Reimbursement would be based on large company data alone, with the risk that the prices being paid by small and medium-sized enterprises would not be reflected in the reimbursement prices, to their disbenefit.
In order for the reimbursement system to work effectively, appropriate data are needed from all parts of the supply chain, both large and small companies. If the prices charged by larger companies were generally lower, and these would be the only prices used to inform reimbursement prices, we would be systematically underfunding community pharmacies. This in turn could drive them to purchase products from the large companies only. The effect of this could be that small companies go out of business leading to less competition.
The third purpose for collection of information is for the Government to be assured that adequate supplies of healthcare products are available and on terms which represent value for money. We recognise that this non-routine provision of information is somewhat different from that associated with reimbursement and running our price and cost control schemes, and this is exactly why we have made provisions for SMEs.
I hope that I have assured noble Lords that the burden on SMEs has been considered carefully. We have provided bespoke definitions for both the price control schemes and the information provisions, in order that requirements are placed only on relevant companies for essential information. Broader definitions would risk both the price control schemes and critically the reimbursement mechanisms failing to work as well as they do now, let alone how they could work in the future.
I turn now to the other effect of the amendment, which is to limit application of the information-gathering powers to medicines and remove medical supplies or other related products from the scope of the clause. In response to the noble Lord, Lord Warner, I will look at the use of language and definitions subsequent to our debate today and provide reassurance that that is being done in the appropriate way and not to create confusion.
The 2006 Act gives the Government powers to control the price of medical supplies, as we have discussed at length, to collect information on medical supplies and to take enforcement action in the event of non-compliance. The Bill changes the 2006 Act in relation to medical supplies by reducing the enforcement penalties from criminal to civil, and aligns medical supplies provisions with those for medicines.
Clause 6 of the Bill brings together in one place all of the information requirements underpinning the provisions within this Bill. Without that information the provisions cannot apply to those companies. Removing medical supplies and other related products from this clause would therefore mean that we would not have the necessary information to put in place and operate a price control scheme if we wanted to and take specific action against instances of unwarranted price rises that come to our attention, although I appreciate that noble Lords have concerns that those two things will never happen in reality. Finally, it would impede our ability to put in place more robust reimbursement arrangements for medical supplies provided by community pharmacies for all the reasons that I touched on in the context of small and medium-sized enterprises. That is very important information to have to ensure that reimbursement happens properly.
It is right and proper for the Government to have effective powers to gather information regarding medical supplies and other related products in order to improve our understanding of the costs across the supply chain and ensure that those are providing value for money and that we are properly reimbursing community pharmacies. The medical supplies industry is made up largely of SMEs, and my comments earlier reflect my very real concern to ensure that we ask only for essential information that does not provide an additional burden on such companies. On that basis, I ask the noble Baroness to withdraw the amendment.
Baroness Wheeler
My Lords, I thank the Minister for his response. Quite honestly, at this late stage, I will not go into the debates that we have already had on the issue of inclusion of non-medicines in the scope of the Bill or of the burden on SMEs. But it is hard to see from the Minister’s response how the Government can say that they are open to ideas and suggestions on how they will reduce the regulatory burden on the medical supplies industry and particularly on SMEs. The Minister knows that we remain to be convinced on this whole area. I hope that we can have ongoing discussions on this matter before Report. We will certainly return to this issue, but meanwhile, I beg leave to withdraw the amendment.
House of Lords
Product Recall
(7 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Kennedy of Southwark
To ask Her Majesty’s Government what assessment they have made of the case for improving the product recall system and manufacturing standards for white goods.
Lord Kennedy of Southwark (Lab)
My Lords, in asking the Question standing in my name on the Order Paper, I refer Members to my declaration of interests.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)
My Lords, the Government consider product safety to be paramount. We have set up a specific working group on product recalls and safety to look at further options to improve the safety of white goods and the recall system. The working group brings together key stakeholders from a range of trade associations and consumer groups, the fire service and trading standards professionals.
Lord Kennedy of Southwark
My Lords, the London Fire Brigade attends, on average, one fire every day caused by white goods where there is no fault on the part of the householder. We have seen a death in Wealdstone and, more recently, a devastating fire in Shepherd’s Bush caused by a Whirlpool tumble-dryer. Does the Minister agree that Whirlpool’s advice issued in Australia, which was not to use the product, and its advice until recently in the UK that, “You can use it but don’t go out or go to bed” are unacceptable? Will he agree to meet the chair of the London Fire and Emergency Planning Authority, Dr Fiona Twycross, London Fire Brigade officials and me to discuss this matter and ensure that we can improve safety, save property and avoid injury and death?
Lord Prior of Brampton
My Lord, the noble Lord knows that trading standards has the main responsibility in this area, rather than the Government directly. I am certainly happy to arrange a meeting with my colleague Margot James in the other House with him and whomever he wants to bring to talk about the whole recall system in more detail. I note that the deputy director of the London Fire Brigade sits on the working group that is looking at recalls more generally.
Lord Razzall (LD)
I accept that the noble Lord, Lord Kennedy, clearly makes a good point, but I am sure he appreciates, as no doubt the Minister will confirm, that if the Government insist on us leaving the single market, in future any manufacturer selling goods into the European Union will have to accept any new European Union standards, which we will have had no role in determining.
Lord Prior of Brampton
Clearly, if we carry on selling products into the European Union—as we will—we will have to comply with the standards in the European Union, as we do in any other market in the world.
Baroness Gardner of Parkes (Con)
My Lords, I declare an interest in that my daughter has an interest in one of those flats that was burnt out in Shepherd’s Bush. She tells me that that could have been avoided by people just fitting a part—I think costing 10p—in front of the vent that was accumulating the dust. Suppliers of these white goods should be providing information about how essential it is to clean the filters.
Lord Prior of Brampton
My Lords, I bow to my noble friend’s expertise on the subject of laundry but there is no doubt that the instructions on these machines talk about cleaning the filters and removing the lint from the filters. That is clearly important. However, there is a problem in this particular machine that does require modification. There is no doubt that if everyone registered the product when they bought it, many of the recall problems that we are facing would be addressed. But only 47% of those who buy these tumble-dryers actually register the machine in the first place.
Lord Campbell-Savours (Lab)
My Lords, how does the Minister respond to the idea of a single register of UK product recalls, as proposed by Andy Slaughter MP in an Early Day Motion in the other place?
Lord Prior of Brampton
My Lords, there is no doubt that recall can be improved and this issue is being considered by the working group, which has given its interim findings to my honourable friend in the other House, Margot James. It is due to give its final report in March, when we will be able to respond more fully to the noble Lord’s question.
Sudan
(7 years, 10 months ago)
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Baroness Cox
To ask Her Majesty’s Government what assessment they have made of recent developments in Sudan.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, we remain concerned by the situation in Sudan, particularly the humanitarian situation in Darfur and the Two Areas. We welcome positive steps, such as extension of the unilateral ceasefire by the Sudanese Government and conclusion of the first phase of the national dialogue, coupled with assurances that this process remains open to the participation of opposition groups. We welcome our frank engagement on human rights, on which we need to see more progress.
Baroness Cox (CB)
My Lords, I thank the Minister for her sympathetic reply. Is she aware that I have just recently returned from the Nuba mountains? I saw there first-hand evidence of the Sudanese Government’s continuing destruction of homes and schools in military offensives and aerial bombardment of civilians who have been forced to live in caves with deadly snakes. I met a girl who had been bitten by a cobra and a father whose five children had been burnt alive when a shell hit the cave in which they were sheltering. They have no healthcare, acute shortages of food and there has recently been a measles epidemic in which at least 20 children are known to have died. Will Her Majesty’s Government urgently reconsider the obligation to provide cross-border aid to save the lives of these innocent civilians, as the people of the Nuba mountains and Blue Nile cannot accept aid from the Khartoum Government, who are killing them?
Baroness Anelay of St Johns
My Lords, humanitarian assistance is indeed a high priority for the UK and the international community, as is finding a lasting peace settlement. As part of the peace process, the US reached an agreement with the Sudanese Government on humanitarian access to the Two Areas. We believe this offered a real opportunity to provide support to the people of the Two Areas and to allow the current ceasefire to be made permanent. We were therefore disappointed that at a meeting of the troika envoys in Paris last week, the secretary-general of the SPLM-North—the opposition forces—rejected the offer. We remain in direct contact with organisations on the ground in the Nuba mountains, including with the SPLM-North itself. It is not suggesting to us that there has been a resumption in fighting. However, I am very grateful for the information provided by the noble Baroness in her report, which I have read. I reassure her that we will continue to monitor the situation closely and raise breaches of the ceasefire, when they occur, with the Government of Sudan.
Lord Sheikh (Con)
My Lords, the United States has agreed to lift sanctions which previously applied in Sudan. Will we now consider trading with Sudan and strengthening our educational and trade links with that country?
Baroness Anelay of St Johns
My Lords, we will continue to provide support to UK companies to understand the opportunities and challenges of operating in Sudan. However, we have been clear with the Government of Sudan that the current conflicts, human rights abuses and business environment remain obstacles to a sizeable increase in interest from British companies. We continue to urge them to make progress on these issues. The UK will continue to support the UN targeted sanctions for Darfur, as well as the EU arms embargo that remains in place across Sudan.
Baroness Kinnock of Holyhead (Lab)
My Lords, in South Sudan tens of thousands of people have been killed, there are 2.2 million displaced people, 4.6 million need food aid, and the economy has been absolutely destroyed. Despite this awful misery, South Sudan has been largely forgotten by the rest of the world. Does the Minister share the view that another Rwanda is looming, and accept the UN Secretary-General’s warning of a potential genocide in South Sudan? What will our Government do to ensure that the term “never again” has real meaning this time?
Baroness Anelay of St Johns
My Lords, I perfectly understand the valuable reasons why the noble Baroness asks that question today—but perhaps she was unable to see that the Question on the Order Paper changed, and therefore South Sudan is no longer part of today’s Question. However, I reassure her that it will be on the Order Paper to be asked next week, and I will certainly address it at that stage. She is right to raise those questions. Indeed, some from South Sudan have fled to Sudan itself, and we are trying to assist with aid there.
Lord Chidgey (LD)
My Lords, the United States sanctions placed on Sudan because of the humanitarian and genocidal crimes in Darfur, the Nuba mountains and South Kordofan and Blue Nile states have apparently been lifted by executive order from the past United States President, in response to supposed positive actions. I think that the Minister acknowledges that the abuses have continued pretty well unabated, with humanitarian access still blocked, the indiscriminate slaughter of civilians, the refusal to rein in sexual violence throughout Darfur, and attacks by militia forces in South Kordofan and the Blue Nile. Apart from providing potential business investment opportunities, what positive relief has the Sudan dialogue and Khartoum process given to the oppressed and abused minorities in that region?
Baroness Anelay of St Johns
My Lords, there were several important points there. May I in response point out that when the US promised to lift economic sanctions it was on the basis of a raft of conditions, which will be assessed by July? The first condition is a ceasefire across the country. The noble Lord raised Darfur and the Two Areas, on which I thought I had already responded. The opposition forces there say that there has not been a breach. We are aware, however, of reports of clashes in Nertiti, Darfur. The problem is that we have not been able to verify those with people on the ground, because of the difficulty of access—but I assure the noble Lord that we shall continue trying to do so.
Lord Howell of Guildford (Con)
My Lords, has my noble friend noticed that the Chinese have about 8,000 troops in the peacekeeping force in Sudan—in southern Sudan? Might this not be an opportunity to review our own peacekeeping contribution, and indeed the mandate under which those people have to work, and also, in the longer term, to strengthen our security links directly with the Chinese Government?
Baroness Anelay of St Johns
My Lords, my noble friend is right to raise the question of the importance of being able to discuss with China the whole issue of security round the world—and indeed its contribution to the peacekeeping forces. I would again point out that the peacekeeping forces are in South Sudan and this Question is about Sudan—but I can reassure my noble friend that we are looking carefully at how the UK’s contribution to peacekeeping in South Sudan is being developed accordingly, including providing a stage 6 hospital there.
Lord Alton of Liverpool (CB)
My Lords, would it not have been better if on 13 January, when Minister Tobias Ellwood welcomed the lifting of sanctions against the Republic of Sudan by the United States, he had said what the noble Baroness has said to the House this afternoon and made the following abundantly clear? When a regime is led by people who have been indicted by the International Criminal Court for genocide and crimes against humanity, and has been responsible, as we heard from my noble friend, for indiscriminate bombing of hospitals, schools and homes, the unlawful killing of civilians, the abduction and rape of women, the looting and destruction of entire villages, the alleged use of chemical weapons in Darfur, details of which I have sent to the noble Baroness, and the forced displacement of an estimated quarter of a million people—what the White House itself once described as a “stain on our soul”—surely it cannot be a case of business as usual.
Baroness Anelay of St Johns
My Lords, I agree with the noble Lord; indeed, it is not a case of business as usual because what is unusual now is that the Government of Sudan have agreed to a series of markers of progress they must make to maintain the removal of some of the sanctions that the US has imposed. The US has clearly set out how those sanctions will be lifted. As ever, the noble Lord raises a vital point about the International Criminal Court, international justice and the fact that al-Bashir himself is subject to an order under the ICC. I discussed those matters with members of the ICC when I attended the states parties meeting at the end of last year in The Hague, including with the South African Justice Minister, and I will continue to do so.
The Lord Bishop of Durham
My Lords, i recognise that improvements between the Anglican Church of Sudan and the Sudanese Government have occurred but it remains the case that, after over a year, there are two Sudanese pastors, one Czech aid worker and a Sudanese civil rights activist still in al-Huda prison in Omdurman under the death penalty. Human rights activists say that there is no case at all. What contact have Ministers with the Government of Sudan regarding these prisoners and the treatment of Christians more generally?
Baroness Anelay of St Johns
The right reverend Prelate is right to raise these disturbing cases. We were pleased to hear about the release of the Reverend Kwa Shamal but remain very concerned about the fate of the three men who remain in detention charged with a number of crimes, including espionage and waging war against the Government. Together with our international partners, officials from our embassy in Khartoum regularly attend hearings. The next hearing is expected to be held on 29 January. It has been delayed. In addition, the UK embassy officials are in close contact with the lawyers representing the defendants. We will continue to monitor the case closely.
Lord Collins of Highbury (Lab)
My Lords, I return to the question of impunity. Despite the best efforts of many Governments, including our own, we know that there has been extraordinary violence and breaches of human rights. What are the Government doing to ensure that we monitor and report human rights abuses and violations? How can we bring the people responsible to justice?
Baroness Anelay of St Johns
My Lords, we monitor human rights abuses through a wide range of sources, particularly with the NGOs which provide humanitarian aid across the region, and through the contacts that our own and other embassies have. This is a case where the international community must, and does, co-operate. However, as the noble Baroness, Lady Cox, pointed out, in some areas it is exceedingly difficult to get accurate information.
NHS: Debt
(7 years, 10 months ago)
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Baroness McDonagh
To ask Her Majesty’s Government why debt has increased in NHS trusts in 12 months from £894 million in 2014–15 to £2.45 billion in 2015–16.
The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)
The NHS is facing pressure from the ageing population, increasing demand and changing expectations. In addition, there are the costs of new drugs, treatments and safer staffing requirements. All these factors have an impact on NHS trust budgets. To address this, the NHS leadership bodies have developed their own plan to deliver financial sustainability for the NHS. The Government are supporting that plan by investing a further £10 billion a year in the NHS by 2020-21.
Baroness McDonagh (Lab)
I must start by apologising to the Minister, but I do not recognise reality in that Answer. The Government have cut £1.8 billion from social care during this period, which has led to the escalation of the £2.5 billion in NHS debt. I do not know whether it is a case of incompetence or ideology, but the Government have set about providing us with the most expensive and worst system of care for the elderly in the western world. Will the Minister use all his powers of persuasion to do what the Chancellor wanted to do last year and persuade the Prime Minister to put more money into local authorities for social care? It will save lives and money.
Lord O'Shaughnessy
The noble Baroness’s Question is about debt in NHS trusts. I think that referred to deficits, and the facts I have given her are absolutely right. It did increase, not least because of important increases in staffing in response to the Francis inquiry, following events at Mid Staffordshire. Regarding the social care budget, there are a million more over-65 year-olds than there were in 2010 and social care is of course under a lot of pressure. That is why the Autumn Statement outlined additional money for social care. There is £900 million extra over the next couple of years, the precept is rising faster than previously and we have the Better Care Fund, so money is going in, but I accept that there is pressure on the system. That is something we are all working to address.
Lord Maude of Horsham (Con)
My Lords, will my noble friend reflect on the contribution that could be made to addressing the problem of overspending by NHS trusts, which has contributed to the growing deficit to which the Question refers, by reviving the programme of health service mutuals? Under the coalition Government, some tens of thousands of health service workers put themselves into not-for-profit social enterprises—staff-led and staff-owned—which showed a dramatic improvement in productivity and quality, and cut costs. A revival of this process, which has been slightly stifled, I suspect, by the attitude of the NHS establishment, could make a major contribution to improving productivity in the health service.
Lord O'Shaughnessy
I thank my noble friend for that point. I know he was a passionate advocate of mutuals when he was in government, not just in the health service but elsewhere. They can make a huge difference to productivity. Improving productivity in the health service is obviously one way in which we will meet our ambitious targets, as well as reducing demand on the most expensive bits of the system. I shall certainly look at the ideas he has suggested. Through the sustainability and transformation plans, the NHS has a number of routes to drive extra efficiency in the system, and I am sure that mutuals can play a part. I would be delighted to meet him to discuss that.
Baroness Boothroyd
Order. That is a very good way to begin the week. My question is brief and very much to the point, and concerns the transportation of patients to and from hospitals. We are all aware that many patients often have to go to major hospitals—travelling 20 or 30 miles—on a daily, weekly, fortnightly or thrice-weekly basis. The cost must be horrendous; is this part of it? Can the Minister give any indication of the cost of transporting patients to and from hospitals?
Lord O'Shaughnessy
I will write to the noble Baroness with specific details of cost. It is certainly true that if you have to go to or be taken to a distant hospital for care, that is more expensive both in transport and setting terms. Part of the transformation that the NHS needs to make is that more care should be delivered in primary settings and in the community, which by definition will be closer to home.
Lord Reid of Cardowan
My Lords, first, I apologise to the noble Baroness; I thought it was the Liberal Benches. Has not the noble Lord missed the point of the Question? In the first sentence of his first answer, he said his first challenge was an ageing population. Is it not now obvious to even the most obstinate that cuts in social care have a knock-on effect on the ageing population in putting pressure on the NHS? It is not just that the deficits have trebled; 27 hospitals have now declared that they cannot provide comprehensive care, and more than 50 hospitals are asking for outside assistance every day of the week. The situation is getting worse every week. Will he not take the advice of my noble friend and urge his colleagues to reverse the cuts to social care in the Budget, which are not only affecting care provision but having a disastrous effect on provision through the National Health Service?
Lord O'Shaughnessy
It is certainly the case that one part of the system impacts on the other parts, whether that is primary, secondary or social care. There is no denying that and I do not seek to do so. On the picture the noble Lord paints of worsening deficits, in fact, the picture in 2016-17 is considerably better than it was in 2015-16. It has been helped not least by the sustainability and transformation plans. We are putting £1.8 billion into trusts, 95% of which have accepted control totals to get a hold of that financial sustainability. Extra funding is going in. There is a big increase this year for the NHS budget, which will help, as will the extra money for social care; but of course the challenges are there.
Baroness Walmsley (LD)
My Lords, is the Minister aware that 96% of hospitals say that they employ fewer registered nurses than they themselves have planned for safe staffing of the wards, and some of them employ more healthcare assistants than they had planned for? What does the Minister say to those who suspect that hospitals, in an attempt to deal with their deficits, are employing too few registered nurses for safe staffing of the wards and/or putting less qualified people on the wards?
Lord O'Shaughnessy
Clearly, trusts have a responsibility to make sure that they have the staffing right. There are more nursing places available and more coming through training, as we talked about in the House the other day. There has been a general uplift in staffing numbers because of the safety requirements post Francis, especially as we seek to leave the European Union, which will mean that that source of nurses and staff in general will change. We have to train more of our own staff, which is why we are increasing the number of doctor and nurse training places.
Community Rehabilitation Companies
Lord German
To ask Her Majesty’s Government what changes they propose to the operation and effectiveness of community rehabilitation companies.
Baroness Buscombe (Con)
My Lords, we are currently conducting a comprehensive review of the probation system to make sure that it is reducing offending and reoffending, cutting crime and preventing there being future victims. We will set out our plans for the probation system, including community rehabilitation companies, after the review concludes in April.
Lord German (LD)
My Lords, I welcome the Minister to the Dispatch Box in answering, I think, her first Question on this brief. She will be aware that the recent joint report from the prison and probation services, on their inspection of through-the-gate resettlement services, was highly critical. It raised some big red flags about the way this new service was rolling out. Can the Minister tell the House what changes the Government are making and whether they want to avoid taking the wrong turn at such an early stage of this new development, by listening to and hearing what those inspectors have said—and by taking action? What steps are being taken?
Baroness Buscombe
I thank the noble Lord for his question and for his kind words. Yes, I can say categorially that part of our comprehensive review of the whole probation system is about listening and having conversations with all involved to ensure that we get it right. In connection with the through-the-gate services, we accept that there are pockets of good practice but also that the quality of those services is not as consistent as we want it to be. As the inspection report notes, there is the potential for great change and help for offenders in their transition from custody into the community. We are carrying out this comprehensive review of the probation system, including through-the-gate services, to make sure that our reforms are delivered and delivering improved outcomes for offenders and communities. However, it is of course early days.
Lord Beecham (Lab)
My Lords, I join the noble Lord, Lord German, in welcoming the Minister to her first Question Time and I look forward to many more exchanges. A report last month by Her Majesty’s Inspectorate of Probation on the service stated that,
“services have deteriorated of late, largely due to the poor performance of the London Community Rehabilitation Company”—
which is owned by the US company MTCnovo, an organisation we have had some problems with in the Prison Service, and—
“are now well below what people rightly expect”.
The report cited a lack of awareness of domestic violence and child safeguarding issues, unmanageable workloads, with inexperienced staff and lack of contact with offenders. In January, a report on Stafford and Stoke, run by RPP, stated that public safety was an issue, despite having been raised in an earlier report, and caseloads were too high. Another CRC, Working Links, in Wales and the south-west, is failing targets and has already been fined £145,000. Will the Secretary of State use her powers to intervene and take these and any other failing services back into public control?
Baroness Buscombe
I thank the noble Lord for his question and for his kind words. In connection with the performance of the London CRC, we have taken steps to make sure that all offenders are being seen by the London CRC and that appropriate enforcement action is taken where offenders have breached the terms of their supervision. Contract management activity had already identified problems in London prior to HMI Probation’s findings, and we were working with the provider to address these. However, we accept that improvements are required, and we are working closely with London CRC to improve their performance. There is a wide range of options within contracts to tackle poor performance and we will take whatever action is required to ensure that offenders are properly supervised and that the public are protected.
Lord Laming (CB)
My Lords, does the Minister—who I also welcome—accept that concerns about the size of the prison population will go nowhere unless the courts have available to them community service and probation supervision orders, in which they have confidence that people will be seen, supervised and held to account over the basics of work and non-offending?
Baroness Buscombe
I agree entirely with the noble Lord. That is why it is important to think about this in context. Transforming Rehabilitation has already radically reformed our probation system; its whole purpose is to improve support to offenders and reduce reoffending. For example, all offenders sentenced to custody now receive at least 12 months statutory supervision and support from probation after release. This includes approximately 45,000 prisoners serving sentences of less than 12 months, who previously received no supervision at all. All offenders released from prison receive a through-the-gate resettlement process, helping them to find accommodation and employment and to build a life free of crime.
However, it is important to accept that these are early days. This was introduced only in May 2015. We could have sat back then and looked at how things were progressing. We are not doing that. We are saying we need a comprehensive reform of the whole system, to make sure that it also works seamlessly with the prison system.
Lord Dholakia (LD)
My Lords, one of the priorities for CRCs must be to ensure that a low level of offending behaviour in the past should not be an obstacle to securing jobs for those discharged from prisons. Employers often turn down applications because of offences that have no relevance to the jobs for which candidates are applying. What initiatives is the Minister taking to ensure that employers play an important non-discriminatory role here?
Baroness Buscombe
My Lords, I agree entirely with the noble Lord. Helping prisoners, while they are in prison, to train, retrain and think about how they can get work when they are released, is the most important priority in reducing reoffending. That is why, for example, under this new system, 12 weeks before a prisoner is released, the CRC is contracted and must, as a minimum requirement, spend time with each individual prisoner, thinking about how they can help with their housing—which is also critical—as well as retraining, apprenticeships and jobs. We welcome companies such as Timpson and Halfords, which focus on giving jobs to prisoners, to give them a second or, if necessary, third chance in life and help reduce reoffending.
Higher Education and Research Bill
Monday 23rd January 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Higher Education and Research Act 2017 View all Higher Education and Research Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 76-VI Sixth marshalled list for Committee (PDF, 214KB) - (23 Jan 2017)
Baroness Wolf of Dulwich
“Power to restrict enrolments
(1) If the OfS has reasonable grounds for believing that a registered higher education provider is in breach of an ongoing registration condition with respect to the quality of the higher education provided by the provider, or to its ability to implement a student protection plan which forms a condition of its registration, the OfS may place quantitative restrictions on the number of new students that the provider may enrol.(2) The Secretary of State may by regulations make provision about the procedures for imposing such restrictions and about rights of appeal.”
Baroness Wolf of Dulwich (CB)
My Lords, this amendment stands in my name and that of the noble Baroness, Lady Garden.
Before explaining why this slightly technical-sounding amendment is the way it is, I should like to explain that I tabled it because quite technical issues are central to the purpose of the Bill and to the Government’s commitment to preserve and raise the quality of the higher education system, ensuring that students throughout the country and the system get a fair and quality deal from the institutions that they attend and to which many of them now pay a great deal of money.
One of the slightly curious aspects of the Bill is that the sanctions which it mentions, and which can be brought to bear by the Office for Students when an institution appears not to live up to its promises and commitments and to the requirements placed on it, seem to be either rather draconian or very restricted. The sanctions are either a draconian response of withdrawing degree-awarding powers or university title, or a whole range of fines, which might be in response to a fraud, on which there is a whole schedule allowing powers of entry. However, what is striking about the sanctions is that they are very different from the way in which, for example, the regulators in the health or school sectors tend to approach their task, which is much more about maintaining or improving something as a going concern—that is, how they might work with it.
I have raised the issue of certain powers, which we understand from the Minister are seen as not as relevant under the proposed new regime as they were under the old one, both because closing down an institution in which students are studying should be seen as an absolutely last resort—I think we all share the Government’s determination that institutions should be of high quality and serve their students—and because a bit of history is in order.
In recent years we have seen a very large increase in the number of institutions in this country that provide higher education. Some have been universities, where numbers have increased, and many have been alternative providers, where numbers have increased enormously. Some of the alternative providers have degree-awarding powers and some award higher national diplomas or certificates, but many of them also have tier 4 sponsor status, which allows them to enrol students from outside the EU. Between May 2010 and September 2016, no fewer than 968 institutions had their tier 4 sponsor status withdrawn. That is a fairly terrifying number, because all those institutions had students in them, who were studying and had paid money—and, basically, they had their education and their plans pulled out from under them.
As part of this recent history, there was also a somewhat fraught hearing with the Public Accounts Committee, which I seem to remember was not happy with the way that the Government had been regulating these institutions, and an NAO report. Following that, BIS, as it then was, took additional powers, which included imposing student number controls on alternative providers. One of the other things that has happened in the last few years is that student number controls for universities have been lifted, so universities can recruit and enrol as many students as they wish. I am not implying that an alternative provider is a bad thing—actually, I am strongly in favour of greater diversity and of an open, diverse and innovative sector—but, in a spirit of risk-based regulation, we have to take account of that recent history.
Baroness Garden of Frognal (LD)
My Lords, I have added my name to the amendment moved by the noble Baroness, Lady Wolf, which is self-explanatory. She has set out very clearly the reasons behind it: to ensure that the OfS can place restrictions on the number of new students a particular higher education provider may enrol, if it has reasonable grounds for believing that the provider is in breach of a registration condition.
Given that the Bill aims to improve the student experience, it is particularly important that, if a higher education provider is falling short in the provision it should be offering, the OfS should, as part of its duty, have powers to intervene to prevent cohorts of new students being enrolled. The registration conditions in the Bill are important but, as the noble Baroness, Lady Wolf, set out, it is important that the OfS should have a range of sanctions available if a particular provider is not abiding by the registration conditions, and that those sanctions should be proportionate. On the amendment’s second paragraph, it is only right that that there should be regulations setting out the procedures, but only right too that rights of appeal for any such sanction should be added to the clause.
Lord Watson of Invergowrie (Lab)
My Lords, as the noble Baroness, Lady Wolf, set out very clearly, her amendment would allow the OfS to place,
“quantitative restrictions on the number of new students that the provider may enrol”,
if it has,
“reasonable grounds for believing that a registered higher education provider is in breach of an ongoing registration condition with respect to the quality of the higher education provided … or to its ability to implement a student protection plan”.
She went into some interesting and rather unfortunate detail about what can happen when colleges or providers get into serious difficulty.
The amendment has echoes of Amendment 142, moved by the noble Lord, Lord Lisvane, last week, which sought to replace the words,
“it appears to the OfS”,
with,
“the OfS has reasonable grounds for believing”,
relating to the power to impose monetary penalties in Clause 15. Restrictions on new students would be a new power following the provisions of Clause 15. In effect, it is another form of monetary penalty, which we support in principle, although we would be concerned if it were left open-ended. As soon as a breach is shown to have been brought to a conclusion, we believe the restriction should be lifted so as not to harm existing students, who are blameless but could be affected—as the noble Baroness, Lady Wolf, graphically explained—to their detriment through the institution either being closed, or having fewer resources.
I read closely the Minister’s response to the noble Lord, Lord Lisvane, from our debates on Wednesday. I cannot say that he made a convincing case for rejecting the rather stronger words in that amendment. He basically stated that as the wording in the Bill is used in other legislation—he quoted the apprenticeships Act of 2009—there was therefore no reason to change it. He did not come up with any other reason, despite the noble Lord, Lord Lisvane, saying in moving the amendment that “it appears to” was but one of the options available and one of the lower ones at that.
Although the words “it appears to” are used in other pieces of legislation, few use the formulation in the context of a decision to take enforcement action, which is what raises concern with this Bill. The noble Lord, Lord Lisvane, stressed that the aim was to raise the legal threshold before the OfS was entitled to take action. In doing so, he was supported by the noble and learned Lord, Lord Judge, one of whose cases was quoted. It seems at least odd that the Government feel that their lawyers, who I suggest probably do not have the noble and learned Lord’s expertise and experience, know better on this matter. The same applies to some extent to the amendment in the name of the noble Baroness, Lady Wolf. Having had time to reflect, perhaps the Minister will—if not today, before Report—come to the view that it is appropriate to raise the standard required of the OfS in such situations.
Viscount Younger of Leckie (Con)
My Lords, the Bill creates the conditions to improve the overall quality and diversity of the higher education sector, creating a level playing field through a risk-based approach to regulation. Clause 6 enables the OfS to impose specific, ongoing registration conditions on a provider. The practical effect of this is that the OfS will assess the compliance of all higher education providers with the appropriate conditions and will adjust its regulatory approach accordingly. This is central to the risk-based approach to regulation that the OfS is being established to provide.
In practice, we envisage that, if the OfS considers that an institution or an element of an institution, such as its financial sustainability, poses a particularly high risk, it can add, change or tailor the registration conditions applicable to that provider to address that risk. I hope I can reassure noble Lords that the Bill already provides for the OfS to set a student number control condition in cases where it is appropriate and proportionate; for example, an institution that the OfS considers may be in breach of registration conditions that relate to quality of provision could have a student number control imposed by the OfS as an additional specific registration condition, if the OfS believes that such action is reasonable and proportionate. The OfS may also exercise this power if it considers that there is a risk that the provider is recruiting more students than its student protection plan can properly cater for.
I am in complete agreement with the noble Baronesses, Lady Wolf and Lady Garden, about the importance of providing the OfS with the tools it needs to ensure the quality of higher education provision. However, given the powers already conferred on the OfS through Clause 6, it is unnecessary to include in the Bill one example of the conditions that could be imposed. Indeed, including one example of such a condition might appear to exclude other conditions which might be more appropriate in the circumstances of a particular provider, including those which have no plans to increase their student numbers. However, I appreciate the noble Baroness, Lady Wolf, raising this and I hope I can provide some further reassurance for her, focusing particularly on overseas providers, which she mentioned. Our plans will speed up and streamline process without lowering standards. In order to become eligible for degree-awarding powers, any provider must register and pass rigorous entry requirements. It is a high bar which only high-quality providers will be able to meet. We welcome overseas providers which meet this test increasing choice for students. Providers that cannot meet the rigorous entry criteria will not be able to become registered or obtain access to degree-awarding powers or university title.
The noble Baroness, Lady Wolf, asked what sanctions are available to the OfS. I start by saying that the best principles of regulatory practice will be adhered to. These include transparency, accountability, proportionality, consistency and, where issues are targeted, targeting only cases where action is needed. Specifically, the escalated suite of actions and sanctions available to the OfS includes: putting in place a support strategy or issuing a direction for a provider to take specified actions; imposing additional specific ongoing registration conditions—for example, as I mentioned earlier, student number controls; or imposing a monetary penalty. We envisage that most often this will be used where a breach has occurred but has now been remedied, but it can also be used alongside a suspension. Also—and by the way, this is as a last resort—the OfS can order deregistration. To further reassure the noble Baroness, this will be where all other efforts have failed or it is clear that imposing monetary penalties or suspensions will simply not be sufficient to deal with the provider. I hope that, with those reassurances, the noble Baroness will withdraw her amendment.
Baroness Wolf of Dulwich
I thank the Minister most sincerely for what he has just told us and for—I do not want to call it a gloss—the additional information he has provided. I am extremely relieved to know that it is clearly the intent of the Government that the OfS should have a wide range of actions and get deeply involved not merely in risk regulation but in avoidance of catastrophe, which I have alluded to. I am extremely grateful to the Minister, I am delighted to have had the points of fact he has just given us placed on the record, and I beg leave to withdraw the amendment.
“( ) During the specified period the OfS must have due regard to the general desirability of keeping confidential the fact of, and reasons for, its intention to impose a monetary penalty on a provider, until it has issued a notice to the provider under sub-paragraph (1).”
Baroness Brown of Cambridge (CB)
My Lords, Amendment 144 in my name and that of my noble friend Lady Wolf, and the others in this group, Amendments 148 and 153, concern confidentiality during ongoing investigations by the Office for Students. I ask the Minister to consider that the OfS should be required to maintain appropriate confidentiality during ongoing investigations, because of the risks to the reputation of an individual provider. Such risks have huge implications for the provider’s students and graduates, as well as for its staff and the rest of the sector. There are risks of publicity in cases where, for example, an allegation or complaint may not be upheld. As we know, reputations are much more easily lost than they are restored. The reputation of a provider is critical to its students and graduates.
Will the Minster consider that the OfS should have a duty for its proceedings to remain confidential and to ensure that it will not announce that it is considering taking action against a provider until it has made a decision to do so, and until the provider has had the opportunity to respond to the points made in the initial notice from the Office for Students? I hope that this will be uncontroversial, because it will be of benefit to students as well as providers in the sector as a whole. I beg to move.
Lord Watson of Invergowrie
My Lords, we support the amendments in this group in the names of the noble Baronesses, Lady Brown and Lady Wolf. It is appropriate that until the OfS has issued a monetary penalty notice to a provider, has issued a notice to suspend a provider’s registration, or has issued a notice to remove a provider from the register, the OfS should keep its intentions and the reasons for them confidential, as already stated by the noble Baroness, Lady Brown.
Confidentiality is an important factor in situations such as these and it is necessary to protect against that all too common suspicion that there is no smoke without fire. Even if exonerated, an institution may never completely recover its reputation, and the ensuing stigma could have serious effects on its ability to attract students, academics and research funding. There could be significant risks in such situations, not just to the reputation of the individual provider but to the higher education sector as a whole. For that reason, these amendments are necessary.
Baroness Goldie (Con)
My Lords, I first apologise for my voice. I have a heavy head cold and my remarks may be more impenetrable than usual.
I agree with the noble Baroness that it is important to protect provider reputation in the early stages of an OfS investigation while evidence is being gathered. We recognise that even the knowledge that the OfS is considering sanctions could have a detrimental effect on a provider in a number of ways. I hope I can reassure your Lordships that the Bill already contains safeguards to protect the interests of providers in the circumstances outlined, and that it is moreover highly unlikely to be in the interests of the OfS to disclose that it is considering sanctions.
When the OfS is considering action as a result of a perceived breach of registration conditions, the primary objective is generally to achieve compliance. I am sure your Lordships agree that the desired outcome, for the benefit of students and the provider alike, is that the provider takes the actions necessary to ensure compliance with the conditions of registration that have been placed on it. Providers are expected to be given guidance and time to enable them to take corrective action or make further representations to the OfS. Only in very serious circumstances would we expect sanctions to be imposed. Disclosing details of possible sanctions during this sensitive period, when the OfS has yet to decide to take action, and when discussions, representations, remedial action and evidence-gathering may be ongoing, would not generally be either appropriate or helpful.
I assure your Lordships that under the Bill, in Clause 2, the OfS must have regard to the principles of best regulatory practice and act in a proportionate, accountable and consistent manner. As the noble Baroness is aware, there are many regulatory bodies covering a wide range of areas of activity in the UK which do indeed implement and deploy that best practice. As such, the OfS, like any other public body, would not look to disclose information prematurely or unnecessarily that could have an adverse effect on a provider before a decision was taken. To do so would not be in accordance with regulatory best practice. Let me be clear: if a decision has been taken to impose a sanction, we would expect the OfS to consider making it a specific condition of registration that a provider’s governing body advises students promptly and accurately of the OfS’s sanctions. The OfS itself may also look to publicise the details if appropriate, especially where this may be in the interests of students.
I hope that this reassures the noble Baroness and I ask her to withdraw this amendment.
Baroness Brown of Cambridge
I thank the Minister for her reassurance that we have a common intent in how the Bill expects things to work and how these amendments try to ensure that things work. I hope she may consider adding a few extra words to the Bill, but I am very pleased to hear the reassurance and, in light of it, I beg leave to withdraw the amendment.
Baroness Goldie
(a) an appeal under paragraph 3(1)(a) or (b), or a further appeal, could be brought in respect of the penalty, or(b) such an appeal is pending.”
Baroness Goldie
My Lords, I shall speak to the government amendments and wait to hear from the noble Lord, Lord Judd, before responding to his amendment. These government amendments relate to the various appeals processes contained in the Bill in relation to a decision by the OfS to deregister a provider, impose a monetary penalty, vary or revoke degree-awarding powers or revoke a university title. The amendments address points of inconsistency and are intended to ensure a smooth and clear appeals process. I emphasise that the amendments clarify and put beyond doubt various procedural points, including that no decision can come into effect while any appeal, including a further appeal, can be brought or is pending; that a provider may appeal against the decision itself, the date on which it comes into effect or both; and that a provider may appeal, in relation to degree-awarding powers and university title only, the exact sequencing of a decision, an appeal and any order which brings the decision into effect. These amendments further align the various appeals provisions across the Bill. They are not a change of policy but simply to try to iron out inconsistencies. I beg to move.
Lord Judd (Lab)
My Lords, I am very interested to find my amendment surrounded by government amendments, and I am not quite sure whether to interpret that as good will from the Government towards my amendment or what. Due process sounds an awfully boring phrase, but it is often terribly important. My amendment is very brief and to the point and is about due process. I should remind the Committee that I am involved in the governance of three universities—the LSE, the University of Newcastle and the University of Lancaster. The rights to appeal in the Bill are somewhat patchy. In particular, there is no right to appeal against a decision not to register an academic provider or to challenge the suspension of registration. Decisions over the registration, suspension or deregistration of academic institutions represent significant examples of the exercise of discretionary power by the Office for Students. It seems only right that in the exercise of these powers the Office for Students is properly accountable, and my amendment seeks to ensure that. It is not right that it should be accountable to an appeals process for decisions about removal from the register and yet will not have the same accountability for decisions to suspend or not to register. This conforms to the norms of public law that bodies should be properly accountable.
Baroness Deech (CB)
My Lords, I support the noble Lord, Lord Judd, and ask the Government whether they have fully considered the appeal and legal implications of this new structure. There is already quite a body of education lawyers. I have no doubt, subject to correction by noble and learned Lords, that every single significant decision in the Bill will be appealed when it comes into force. The awards of gold, silver and bronze will immediately spark judicial review, as will the metrics used for the teaching excellence framework. Grant and non-grant of title are mentioned in the Bill. Registration, validation, numbers of students, access—every single vital decision is unprotected, quite rightly, from appeals and, in particular, judicial review, which could bring a whole system to a halt.
There is already a student complaints system which will, I am sure, expand, given the promises that will have to be made under the new structure being brought into effect by the Bill. Have the Government thoroughly considered all the areas in the Bill that will be open to judicial review and how institutions and the OfS will cope with it?
Lord Watson of Invergowrie
My Lords, it seems to me that my noble friend Lord Judd’s suggestion would be a very useful addition. The comments of the noble Baroness, Lady Deech, just now support that.
In response to the previous group of amendments, the Minister stated that under Clause 2(1)(f) the OfS must give due consideration to “best regulatory practice”. Surely, offering somebody the opportunity to appeal a decision, which could have pretty far-reaching consequences, cannot be described as anything other than best regulatory practice. On that basis, I hope the Minister will accept the amendment in the name of my noble friend Lord Judd, along with the Government’s amendments, because it is undoubtedly a question of best regulatory practice.
Baroness Goldie
My Lords, I note that a similar amendment to that proposed by the noble Lord, Lord Judd, has been tabled in relation to the provisions on degree-awarding powers, which we will come to in future sessions.
The appeals provision in the Bill has been drafted to cover specific scenarios where the OfS makes a decision that deprives providers of a status powers or imposes a monetary penalty. I understand the sincerity behind the amendment tabled by the noble Lord, Lord Judd, but he is proposing something additional: extending the appeals provisions to unsuccessful applications to join the OfS register.
I was interested to hear the noble Baroness, Lady Deech, say that her apprehension is that the justice system would become overloaded without this amendment. The Government’s contention is that extending the appeals provisions to unsuccessful applications could achieve that very consequence, which would be undesirable and could also encourage ill-prepared applications. But let me provide some reassurance—
Lord Watson of Invergowrie
It is not about just unsuccessful applicants but situations where a registration is suspended, having already been given.
Baroness Goldie
I thank the noble Lord for his intervention. I might observe that there is a distinction: suspension is a temporary compliance measure. Although there is no formal right of appeal, the Office for Students is required to notify an institution of its intention to suspend registration and allow 28 days for the institution to make representations. So there is a process, which means that the institution at risk of suspension has a right of comment and an opportunity to take remedial action.
Lord Watson of Invergowrie
I realise that the Minister is a lawyer—that is understood—but she seems to be making a significant distinction. It is not just about having a right to comment, saying “I wish you hadn’t done that”. This is about the right to appeal a decision—building an appeal and trying to have it overturned.
Baroness Goldie
I cannot claim to be a lawyer— I am a very long since defunct lawyer—but what I am endeavouring to do, without reference to legal parlance, is to draw a distinction between the scenario I have outlined, where we understand that appeals could be competent and would be important, and that outlined by the noble Lord, Lord Watson. We think there is a difference between the scenario I have outlined and suspension, which by its very nature is an interim process—either it will be dealt with or it will not be dealt with.
I will try to provide some reassurance. Where the OfS proposes to reject an application to the register, or indeed to suspend a provider’s registration, the provider is afforded a minimum period of 28 days to make further representations to the OfS before the final decisions are taken. In these circumstances, I asked the noble Lord, Lord Judd, to consider not moving his amendment.
Lord Judd
My Lords, the Minister has not altogether reassured me. There is a very important principle in justice that it should not only be done but be seen to be done. There is also an anxiety that it would not be possible to have new applicants who challenged the established order because they were bringing a completely new or fresh approach. If they are refused recognition, surely the normal practice of law is that they should be able to appeal against that decision. I do not see why the Government should resist that, because it is in everyone’s interest that everyone can understand why the applicant was refused. Otherwise, anxiety might begin to build up about what was really happening, along with the anxiety that the Government were backing some of the existing club, as it were, in excluding new members. I am still anxious about the principle of justice in this context, but I will consider very carefully what the Minister has said. At this stage, I shall not move my amendment.
(a) an appeal under section 20(1)(a) or (b), or a further appeal, could be brought in respect of the decision to remove, or(b) such an appeal is pending.”
“(11) Where subsection (9) ceases to prevent a removal taking effect on the date specified under subsection (6), the OfS is to determine a future date on which the removal takes effect.(12) But that is subject to what has been determined on any appeal under section 20(1)(a) or (b), or any further appeal, in respect of the decision to remove.”
(a) a decision of the OfS to remove it from the register under section 18;(b) a decision of the OfS as to the date specified under section 19(6) as the date on which the removal takes effect.”
Viscount Hanworth
Viscount Hanworth (Lab)
My Lords, Amendment 166A and the allied Amendments 168A and 173 propose that the body that is to judge the quality of the teaching and the standard of assessment in universities should be independent of the Office for Students. Amendment 173 declares that no members of the body should also be members of the Office for Students.
These amendments are overshadowed by my noble friend Lord Stevenson’s amendments that give a detailed remit to a proposed independent office of quality assurance. No doubt he will speak persuasively to those amendments with his customary wit and wisdom, but in effect, they propose re-establishing the existing Quality Assurance Agency, or the QAA, under another name and on a different constitutional basis. This raises the question of why the role of the independent QAA should not be perpetuated. This is not a rhetorical question; it is a genuine request for a response from the Government.
However, I will not hesitate to suggest that, as it stands, the Bill will allow the quality assurance regime to become subject to much closer oversight and control from the Secretary of State than has been the case hitherto. If that were to be the case, I am bound to say that it would be likely to have very deleterious consequences. I should be honest at this point about declaring that, notwithstanding the respect that it has acquired, the effect of the existing QAA regime has been deleterious.
I can imagine that when it was first established, there was thought to be a need for a formal centralised system of quality control. This I would like to dispute. Despite many impressions that may have been fostered by the campus novels of the 1960s and the 1970s, universities were well regulated as regards both the quality of their teaching and their standards of assessment. As I mentioned at Second Reading, this was achieved largely through the system of external examining, whereby universities appoint persons from other institutions to monitor their examination procedures and to assess their methods of teaching.
The detailed findings of the external examiners were private to the institutions concerned, albeit that any lapses in standards would quickly become common knowledge throughout the university sector as a whole. The system of external examining not only served to keep the teaching within academic departments up to the mark, but also ensured a degree of uniformity in the standards within particular academic disciplines throughout the sector. With the advent of the formal quality assurance regime and with the duty to publish the findings of external examiners, a great pressure arose to ensure that any publicity would be good publicity. The quality assurance officers within individual institutions worked assiduously to this end and they often imposed upon the external examiners, asking them to amend any comments that seemed to be critical. Thus the purpose of the regimes of external examining has been utterly subverted. This is only one of the many ill effects of a formalised centralised quality assurance regime that I can instance; there are many others.
In view of these experiences, I have some misgivings regarding the prescriptions of my noble friend Lord Stevenson. Nevertheless I am bound to support them on the grounds that they emphasise the need for academic independence and that they tend to remove matters of quality assurance from the direct influence of the Secretary of State. I hope that in replacing the existing Quality Assurance Agency by a newly founded system there will be some regard to its failures and some recognition of the qualities of the pre-existing system that I have described. I beg to move.
Lord Stevenson of Balmacara (Lab)
My Lords, I have a significant number of amendments in this group. I thought that for the convenience of the House, I should introduce them at this stage so that the debate can be as full as it can be. I support the comments made by my noble friend Lord Hanworth. He is right in describing where my amendments would take us. I do not specifically say that I would rule out the continuation of the existing QAA. Indeed, this group is wide enough to allow a number of different interpretations and some of the amendments do concern the status quo ante. However, the amendment at the heart of this group would create a new independent body. This would probably be best achieved by transmogrifying the QAA but it does not require that.
The new clause in Amendment 170A sets up a body called the Quality Assurance Office, which has come largely from discussions and debates around the sector. It has gained considerably by comments made by the Council for the Defence of British Universities, an organisation that has attracted a lot of attention from Members of your Lordships’ House and more widely in the sector. I am grateful to it not only for its ideas and discussion but also for some of the drafting in these amendments.
Amendment 170A therefore sets up a new body. Amendment 201A sets out the functions of that body. It is a key point that it would be independent of the Office for Students and of the Secretary of State, with a focus on responsibility for qualities and standards. Amendment 213A inserts a revised schedule setting out the detail of QAO which replaces that which appears in the Bill for a committee to deal with standards. Amendment 217A sets out how the QAO will be funded. We are thus presenting a complete package. It would be relatively easy for the Minister to respond by saying that he accepts every word of it. I am sure that as I sit down I shall hear him say exactly that.
To be serious, the reasons for these amendments are in two groups. The first group is about the creation, in the Office for Students, of what I think is primarily a regulator. I say that partly because that is how it has been described by the Minister, although in his recent letter he tries to backtrack a little from that in saying that it is not a regulator as one would understand the term “regulator” since it will not acquire with its establishment any of the functions currently given by the code of regulators. This is neither one answer nor another. We shall have to come back to this problem. What we know is that the regulatory structure in higher education is becoming more complex because of the requirements in the Consumer Rights Act 2015 which made the CMA responsible—although there were powers before that—for obtaining undertakings from universities and higher education providers in order to ensure that they were operating with the proper integrity required of bodies offering services to those consumers who wished to take them up.
So we have a rather complicated field. The letter from the Minister dealt in part with this, but it does not quite answer all the questions. I hope we will get some more information from him during this debate. Either today, or at some future date, we will know that the Office for Students is indeed a regulator. However, in the Bill as currently drafted, it has responsibility for setting up committees or, in some cases, direct functions relating to quality assessment and fair access; the statistical underpinning of these areas and validation. Indeed, it is appointed as validator of last resort. This would be a situation which is unparalleled in the regulatory framework: a body which is not only responsible for the health, existence and support of the bodies which it is regulating, but also has the power to deregister them and shut them down. At heart, it is an all-singing, all-dancing model which has been tried in other areas and just does not work. Such a body is not right in principle and will not work in practice. That is the first strand—what the Bill is trying to set up is not the most efficient and effective way of operating in this sector.
Baroness Garden of Frognal
My Lords, I will speak to Amendments 171, 202 and 213 in my name. Amendment 171 proposes that the chair of the quality assessment committee should be independent of government and party politics and builds on the remarks of the noble Viscount, Lord Hanworth, on the importance of independence. There are concerns that, throughout the Bill, the Government will have powers more than is healthy in the affairs of higher education institutions. It is important that the chair of the QAC should be a non-party-political appointment.
Amendment 202 brings us back to a may/must debate—so beloved of your Lordship’s House across a whole swathe of legislation. Here we propose that the OfS “must consult”, rather than “may consult”, about whether there is a body that is suitable to perform the assessment functions. This should not be a matter of choice. Amendment 213 adds additional conditions to any directions given by the OfS to a designated body, such as ensuring that the powers of the OfS to give directions to a designated body do not adversely impact on that body’s suitability to carry out assessment functions, must be compatible with other duties, and must not relate to operational activity without previous concerns having been raised. These measures are designed to safeguard the authority and autonomy of the universities while acknowledging the duties of the OfS. I hope they will be seen as helpful additions to the Bill.
I support the arguments put forward by the noble Lord, Lord Stevenson, for the quality assurance office. Without doubt, with the new measures in the Bill, we need a really robust quality assurance system, and I think the measures proposed could provide that.
Baroness Warwick of Undercliffe (Lab)
My Lords, I support an independent quality assessment process, and I believe it is right that an organisation independent of the Office for Students should undertake this role. Most importantly, it needs to be a body that has the confidence of the sector to undertake assessment of quality on behalf of the OfS. As others have said, I would like to see a continuation of the co-regulatory approach to quality assessment, which would allow the QAA to continue in its current role. It is important to ensure that the relevant stakeholders, including the OfS, the Secretary of State and the sector, respect the principles of co-regulation.
Sector ownership of the QAA, with HEFCE and other devolved bodies as essential stakeholders that also fund and direct some of the QAA’s activities, has until recently been highly successful. It has ensured sufficient buy-in from the sector and the academic community, while providing processes for assuring the public about standards and quality that are seen as world-leading outside the UK. Also, the UK is a member of the European Higher Education Area, which is quite separate from the EU, and its standards and guidelines require that the body responsible for quality review be entirely independent of the Government.
I am rather anxious that a body appointed on a statutory basis would be for England only, so would undermine a UK-wide approach to quality. I hope that in his reply the Minister will address both those points. I also reiterate a point that has been made by others: I certainly would not want to see a quality assurance system that was vulnerable to political interference and would undermine the sector’s own vital role in quality assurance.
Lord Deben (Con)
My Lords, I am sure that I am not the only one for whom the particular solutions that have been presented are not ones that we wish to support wholeheartedly. However, the reason for them is, I think, one that would attract support across the House. We live in a society where the dangers to our liberal system become daily more obvious, so we should not do anything that would enable those who would use the system for anything other than the free, liberal debate of which our universities are so central a part. We do not want a system that could in any way inhibit that.
One difficulty of discussing these issues is that no one is suggesting that this Government, or these Ministers, are of that kind. But a lot of things have happened over the past two or three years that have led many of us to be much more worried about those fundamentals that we have taken for granted. Therefore, I hope that the Minister will understand that there will be a considerable lack of ease if he cannot assure us about the independence of that part of the structure which ensures both quality and independence. As I say, I am not entirely delighted by the various suggestions as to what one might do, and I am concerned about the proliferation of bodies, groups and persons; I am never quite sure how such things can be totally divorced from party politics, but I certainly think we ought to try. I hope that the Minister will understand that there is an underlying concern, which may demand a different answer, but which must be assuaged, because we live in times when none of us is any longer willing to risk any of the things that we hold so fundamental and so dear in our liberal society.
Viscount Younger of Leckie
My Lords, Clause 23 establishes powers for the Office for Students to assess the quality and standards of higher education. It updates and modifies the current duty on HEFCE to do this.
I should like to say a few words about standards. As the Committee will know, we have already had a useful debate about the inclusion of standards in Clause 23. I reiterate that the intention here is not to weaken or undermine current sector responsibilities and ownership in relation to academic standards. I recognise noble Lords’ concerns. I have been listening, and continue to do so carefully, considering the points that have been raised.
These amendments touch on the importance of co-regulation and how that will be supported through the roles of the designated quality body and the quality assessment committee. They all give welcome recognition to the value of having an independent quality body to undertake the assessment functions under Clause 23, with effective independent oversight built into the quality system. That is why under the Bill the OfS must establish an independent quality assessment committee to provide quality oversight, and is given powers to designate a quality body which is independent from government. I hope that reassures my noble friend Lord Deben. The functions of the OfS and the quality body in this area are overseen by an independent quality assessment committee. Clause 24 will ensure that the majority of its members are not members of the OfS, while offering it the flexibility to draw on the expertise of individual OfS members.
I wish to address the points raised by the noble Viscount, Lord Hanworth, who was supported by the noble Baroness, Lady Garden. The general theme was that we needed a body which was independent, like the QAA. However, amendments to create a new body on a statutory footing, solely responsible for quality assessment without any links to the OfS, would remove the important ability for the system to operate as one and abolish the system of co-regulation, which has endured for almost two decades, by removing any possibility of a truly independent sector-owned body, such as the QAA, from the regulation of quality; instead creating a statutory body whose chair and chief executive are appointed by the Secretary of State. I reassure noble Lords about the independence of the designated quality body. Although the OfS, in having ultimate responsibility for the register of higher education providers, has to retain appropriate oversight and contact with the designated quality body, the Bill is specific about how this relationship can work; for instance, granting information powers in certain instances will also allow the OfS to give the designated quality body directions which can be general only, such as when advice may be required to fit with the registration cycle. This is only on the condition that it does not undermine the quality body’s expertise.
The noble Lord, Lord Stevenson, raised an important point about the independent quality regulator. I thank him for the amount of work and thought that have gone into his huge number of amendments. The body already has to be independent of the Crown and individual higher education providers but it has to have the confidence of a broad range of higher education providers—tests it would be unlikely to meet if it was not independent. There are safeguards in the Bill which allow it to operate independently on an ongoing basis, including that the quality assessment committee will advise on the work of the OfS and quality body; that the body must have the confidence of the sector to be considered suitable, as the noble Baroness stated; and that directions from the OfS can only be general. Therefore, Clause 23 is key to maintaining a high and rigorous bar for entry into the system, while reducing the burden on those high-performing providers. I reassure the Committee again that there are safeguards built into the quality system that allow an effective co-regulatory approach to function without oversubscription from government, which noble Lords have made clear that they want. With this balance in mind, I therefore request that Amendment 166A be withdrawn.
Viscount Hanworth
My Lords, I do not believe that the speakers in this short debate will be entirely reassured by what the Minister has told us. It is clear that there is work to be done in this area of the Bill. I trust that the Minister will take the opportunity to react to what he has heard today and bring something back to us on Report. Therefore, I beg leave to withdraw the amendment.
“( ) At least one member of the Committee must, at the time of their appointment, be engaged in the representation or promotion of the interests of individual students, or students generally, on higher education courses provided by higher education providers.”
Lord Stevenson of Balmacara
My Lords, this is a further development about quality assessment—this time, focusing on the committee. First, picking up on the remarks made at the conclusion of the previous debate by my noble friend Lord Hanworth, I agree with him that some issues remain in the mind after the Minister responded to that debate. I suggest to the Minister that it might be helpful if we could have a little more detail, when he has had time to reflect on the debate, on how “independent” is defined. If he is correct in saying that the OfS has the responsibility for assessment of standards, but that an independent committee of the OfS is set up in order to maintain the threshold standards in the institutions and the quality of the teaching that is provided in those institutions, it needs to be clearer than it is to me—and I think to many people—how exactly that independence is to be guaranteed. In conventional terms, if you are a member of a committee of a body, you are subject to the rules and regulations of that body. It seems to me on that basic analysis that the independent committee is not independent but a creature of the OfS operating in an independent way but not totally independent. These matters are perhaps too abstruse to debate today. I would be grateful if the Minister might focus on this in a letter, and I look forward to receiving that from him.
Moving to Amendment 174—and to Amendment 203, which is primary in this group—I will not speak to the clauses stand part because the issues raised there are reflective of the earlier debate and the clauses would have had to be removed, I think, had those amendments been accepted. The focus of this group is the familiar issue that if we are having an independent body within the OfS, but separate in some magical way from it, it should have its own focus and functions. We suggest in Amendment 174 that at least one member of the quality assessment committee should be representing the interests of students. We also think that the interests of staff, and higher education staff more generally, should be engaged as well. I beg to move.
Baroness Goldie
My Lords, I thank the noble Lord, Lord Stevenson, for his contribution. This debate is on clauses that lay the foundations for a risk-based, co-regulatory approach to quality assessment. That is important, as the noble Lord has rightly conceded. As set out in the higher education White Paper, we believe in the principle of co-regulation, which the BIS Select Committee also endorsed strongly in its report earlier this year, saying:
“We believe it essential that the quality assurance of universities should remain administratively and visibly independent from Government or the new regulator”.
Turning to the amendments, I thank noble Lords for raising the importance of having staff interests fully represented in the quality system. That does matter. I turn first to the amendments concerning student representation on the OfS quality assessment committee. First, I reassure noble Lords that students are at the heart of our reforms. The OfS will bring together the regulatory levers that will enable us to improve quality and allow students to make informed decisions. For that reason, we listened to points raised in the other place and amended Schedule 1 to the Bill to ensure that at least one member of the OfS board must have experience of representing or promoting the interests of individual students or students generally.
The quality assessment committee will play a similar role to the current quality, accountability and regulation strategic advisory committee, established under the Further and Higher Education Act 1992, which advises HEFCE about the way it undertakes its quality assessment functions. HEFCE’s committee currently includes direct student representation. Students are also represented on the QAA’s board of directors, the QAA has a student advisory board, and students are included in review and scrutiny processes for DAPs. I assure your Lordships that we see no reason why such student representation would not continue in future. We would not want to reduce the future flexibility of the OfS or the designated quality body to respond to future changes in the nature of the sector. It is better to allow the OfS discretion over the membership of the quality assessment committee. To be clear, we would expect this to include people who can represent students, unless there are some very strong arguments for not doing that.
On the amendments to Schedule 4 regarding the views of higher education staff, again, I hope I can reassure your Lordships that, given the way the sector currently engages its staff, we would absolutely expect higher education staff to be involved in consultation. These amendments would introduce unnecessary additional complexity. I realise that that is possibly not the consequence of the changes but I will try to reassure the noble Lord, Lord Stevenson. We would expect higher education staff to be actively engaged through their provider or by directly engaging with the OfS in any consultation. Of course, the OfS is not precluded from adding to the list of people it consults.
Amendments 204 and 205 return to the theme of standards, on which we have already had a thought-provoking debate. Noble Lords will recall that the Government have set out that this is an issue on which we are actively considering the views that have been raised in this House. I will therefore be brief in summarising that under no circumstances do we want to undermine the prerogative of providers in determining standards, but we want providers to meet the standards that are set out in a document endorsed and agreed by the sector, currently embodied by the frameworks for higher education qualifications.
The standards should be those that are set with the sector, rather than prescribed narrowly within legislation. The amendment limits the standards to be embraced in the consideration of whether a quality body is appropriate to be designated, so that rather than referring to standards applied to higher education in general, it refers to the standards of higher education provided for the purposes of registration—a narrower definition. Our legislation is deliberately not this narrow because of other important functions the designated quality body would undertake under Clause 23, such as baseline checks for degree-awarding powers. Amendment 205 seeks to amend Schedule 4 to clarify that the definition of standards that applies is that within Clause 13. I reassure the noble Baroness that this is already the case under Part 3 of Schedule 4. For these reasons, I ask that Amendment 174 be withdrawn.
Lord Stevenson of Balmacara
My Lords, I thank the Minister for her comments and for engaging so fully with these issues. I look forward to reading exactly what she said in Hansard. That is not because I could not understand her—she was very clear—I just want to reflect on how she made them and the way they came across.
It strikes me as ironic that a set of reforms aimed at putting students at the heart of the system is still struggling to try to keep students away from the points at which they can have the most impact on the key bodies and committees that will run the whole system. I am sure that this is more “small p” political than something that will in any sense organisationally be defendable, but it is wrong. The same approach applies to the question of whether the interests of staff should be involved. It is fine to consult people, but if they are intimately involved and care about it, seeing themselves at the centre, you will get much more out of them. I beg leave to withdraw the amendment.
Lord Lipsey
“( ) The scheme introduced under subsection (1) must be laid before and approved by a resolution of each House of Parliament before it may come into effect.”
Lord Lipsey (Lab)
My Lords, I start by apologising for the absence from this debate of the noble Lord, Lord Bew, who has been delayed on his flight from Northern Ireland by weather. He was very keen to be here and will greatly regret that he has missed this debate.
I have four amendments in this group, beginning with Amendment 187. I can describe them most concisely as a range of options to de-fang the National Student Survey as an ingredient in the TEF. The options range from requiring parliamentary approval of the scheme proposed under Clause 25, to an independent inquiry into the statistical validity of NSS data and, finally, the nuclear option—that the Committee does not agree to Clause 25 standing part of the Bill.
I shall start where we left off in an excellent debate touching on these issues last Wednesday. That debate had a rather wider proposition at its heart: that the link between the TEF and the ability of universities to raise fees should not come into being straight away. They would be given time for the TEF—and the statistical ingredients and metrics within it—to be properly got right. I sympathise very much with that view, but it is not the question today.
In the debate last Wednesday, a majority were certainly critical of the metrics being used—of whether the things the National Student Survey asks students are indeed a good way of measuring the quality of teaching in an institution. Some pretty key difficulties were raised. For example, there seems to be very little correlation—or no correlation, according to a paper by the Royal Statistical Society— between the scores achieved in the NSS by an institution and the quality of its degree results. That seems a bit worrying to many people. Those who defended the NSS did not actually argue that it was perfect—the noble Lord, Lord Willetts, was very frank. It is not perfect. They made the reasonable point that if we wait for perfection on this earth we get nowhere very much, and therefore argued that we should include these metrics.
As I said, I shall not go over that argument again in detail this afternoon, though we shall probably come back to it on Report. However, I have to be absolutely clear: my worries about the NSS are not primarily related to whether the metrics are good metrics for deciding teaching quality, or whether they are the best available, or any of those things; they are pretty well purely statistical. When the NSS survey results are compared, they do not reliably reflect the opinions of students in differing institutions as to the quality of the teaching they are getting. These are statistically flawed results, as well as, arguably, being flawed as metrics.
I am in danger of going on all night and being extremely boring. I know the Committee will have a limited appetite for a great deal of statistical discourse—although if there is anybody who shares my nerdish love of these things, they should read two documents by the Government’s own ONS on the statistical basis. They should also read the excellent document by the Royal Statistical Society, which analyses this matter in detail.
I shall just mention one or two problems that are relatively easy to comprehend. The response rates to the NSS vary greatly between different institutions. It is perfectly clear from what we know that the non-responders are not the same as the responders and, in particular, that ethnic minorities are greatly under-represented in the responses. This can have a terrific effect on the results. Let us suppose that in one year there is a 70% response rate, giving a result of 60% satisfied. If that 70% response rate had gone up to 100%, the whole of the remaining 30% might have been satisfied or all of the non-responders might have been not satisfied. So the true result could vary by 30% each way—60% in total—from the result given by the NSS. There are particular problems with sample sizes in small institutions such as my own—Trinity Laban. Music students are our biggest group of students—there are 112 of them—and the statistical margin of error for that number is very large.
Lord Willetts (Con)
My Lords, I rise to briefly comment on the interesting and important observations we have just heard from the noble Lord, Lord Lipsey. I completely support his commitment to using statistics with integrity. There are issues about the NSS. I would argue—as I did in Committee last week—that the NSS itself is changing and increasingly has genuine questions about student engagement and academic experience. For example, I know from speaking to many vice-chancellors that how their university does on the metric of academic feedback is something they pay a lot of attention to; it reflects genuine concern among students sometimes when they do not get essays back in time and they do not get prompt feedback.
I would like, however, briefly to comment on the noble Lord’s specific point as to whether the use of the NSS, as proposed in the TEF, meets the required standards. He briefly gave a quote from the ONS on its views, saying that it would not be right to use the raw NSS data. I would like to assure him that, to my understanding, the TEF does not use raw NSS data. Using raw data simply means taking all the universities and seeing how they stand. Instead, the way in which the TEF is being constructed is to benchmark universities against similar universities. Using his own example of students from ethnic minorities, it would be possible to compare groups of universities that all have roughly similar proportions of students from ethnic minorities, so the data that will be used are not raw data. Universities will find themselves being assessed and compared with a peer group. That itself, interestingly, raises a new set of questions, but at least it means that the TEF is not exposed to the charge which the noble Lord, Lord Lipsey, has levelled this afternoon.
Baroness Blackstone (Lab)
My Lords, I find myself in agreement with the noble Lord. There is a slight danger that this will become a club of former higher education Ministers. However, as a vice-chancellor and former Minister, I found that the National Student Survey was a rather useful device—in a rather broad-brush way, admittedly—for telling us something about what students perceive about their own experience as undergraduates. It is not done for graduate students. I am somewhat at loggerheads with my noble friend Lord Lipsey, and I am sorry about this because normally we agree on many things. I would say that a 70% response rate that—if I understand correctly—my noble friend was quoting to be unacceptable, is a rather high response rate in most surveys of this kind. It is sometimes possible to do deep dives and find out a bit more about the group that had not responded to see whether they are in any way different in their views or backgrounds. I had not read the critique that he quotes by the ONS and the RSS. It is important that the Minister comes back and tells us whether the Government have looked at those criticisms. If not, why not, and will they in future?
I have a lot of concerns about the TEF and how it should be done. The Government are taking on a very difficult and complex task. I am not sure whether they realise how difficult it is to get reliability and validity in the responses provided. I look forward to hearing what Professor Chris Husbands, who has a lot of expertise on this, will say. I would also like to hear his response to the criticisms and comments of the ONS and RSS.
We cannot entirely take out and ignore what the NSS tells us about students’ experience. There is only a small number of questions about teaching, but there are some. There are many other questions about things that are relevant to the successful completion of their courses, including how they are assessed and examined. I hope we can look at this in a bit more depth and not completely rule out the contribution that a rethought NSS can make to any assessments of how our universities, and departments within them, are teaching, and whether it meets the kind of quality that we expect it to meet.
Lord Storey (LD)
I shall speak to Amendment 197, which would ensure that the TEF has to be reassessed before it is introduced. We welcome a focus on teaching. It is vital that any student in a higher education establishment gets the highest level of teaching. Given the fees they pay, it is not acceptable for students to be in a lecture of more than 100 students where the lecturer is unable to inspire or inform those students. It is not acceptable to have the practices that go with poor teaching, whether it be poor marking of dissertations and essays, or late return of those pieces of work. Teaching quality has to be at the heart of the university experience for young people.
Our concern is that employment outcomes do not give an insight into teaching excellence, nor does retention. We have had this discussion on previous amendments. I am not totally averse to a student survey—it is about the questions that it asks. If it asked questions that challenged the student to think properly about their teaching experience, about how they were challenged and how the subject was put across to them, rather than easy tick-box answers, that would be a proper student survey. The student survey would have to be a very small part of the metrics.
As I said, Amendment 197 would ensure that the TEF has to be reassessed before it is introduced. It follows an amendment tabled by Paul Blomfield in the Commons on Report. He stated:
“Amendment 50 reflects concern over the reliability of the metrics used to measure teaching excellence”.
He emphasised many times in Committee, that,
“we all welcome the Government’s focus on teaching excellence, and we can all work effectively together on the principle of the teaching excellence framework. However, the metrics on employment outcomes, on retention and on the national student satisfaction survey have been identified by the Government themselves as a proxy for teaching excellence.
The amendment simply seeks to add to the Bill a requirement that the metrics used by the Government to determine teaching quality should have a demonstrable link to teaching excellence. This was the unanimous recommendation of the then Business, Innovation and Skills Committee … We all agree that employment outcomes do not necessarily demonstrate teaching excellence. There are also enormous regional variations in employment outcomes and salary levels. The Minister will know that someone who comes from the right family and goes to the right school and university could have an awful teaching experience but still get a decent job. The converse is also true. People who do not come from the right family and who do not go to what many see as the right university could have an excellent teaching experience but not command such high salary levels. So employment outcomes are a crude and almost perverse proxy measure of teaching excellence. I would therefore welcome the Minister’s observations on why this simple amendment to introduce a demonstrable link between the metrics and teaching excellence would not strengthen the Bill and will not be accepted by the Government”.—[Official Report, Commons, 21/11/16; cols. 626-27.]
Baroness Lister of Burtersett (Lab)
My Lords, I have a few questions stemming from annexe B, which the Minister circulated last week but which unfortunately I did not see until after our debate. I apologise that I was not able to attend the briefings that officials provided; I might have got the answers then. My first question relates to the point made by my noble friend Lord Lipsey. The note that was circulated said that the assessment framework stresses to assessors that they should not overweight the NSS, but of course the only metrics on actual teaching quality—this follows on from the points just made—relate to the National Student Survey. My noble friend suggested looking, therefore, at individual submissions from providers for that evidence of teaching quality, but those submissions are going to be up to only 15 pages for a whole institution. I would be grateful if the Minister would give us some indication of what kind of evidence it is anticipated that providers will present in those submissions that will focus precisely on the quality of teaching.
My second question relates to the statement immediately following—that the assessment framework mitigates the risk that courses could be dumbed down to encourage providers trying to gain the NSS. The document says that, to ensure that does not happen, the Government have included rigour and stretch as one of the criteria for the TEF and explicitly warned assessors that this may be inversely correlated with the providers’ NSS scores. I am delighted: I think it is absolutely right that rigour and stretch should be included. I remember teaching a course on theory and concepts in social policy and I think the students felt they were being stretched like elastic bands and did not always appreciate it. I think it is really important that we stretch students to think critically and assess what they are being taught, but how is this going to be assessed? It is not clear to me. It is very important but how is it going to be assessed?
My final question is: how frequently will this assessment process be carried out? We heard last week about the gold, silver and bronze system and many of us had problems with it. The Minister was not really able to satisfy our concerns. Although the Minister presented bronze as if it was the equivalent of a bronze medal in the Olympics, noble Lords here saw it as the equivalent of failure, because there is nothing underneath it—no kind of “tin” assessment or anything. If someone is classified as bronze, they may well want to try to climb out of bronze into silver as soon as they can. How quickly will it be open to them to have another go and be able to show that they have improved the quality of teaching and can then be reassessed as silver or gold? Has the Minister had the chance to reflect on what was said about the gold, silver and bronze categorisation last week? All we got was the answer that the Government think this is right. That smacked to me a bit of “I told you so” and there was no real explanation as to why, if bronze is the lowest, it will not be seen—to the outside world at least, and to potential students, here and overseas—as something to be avoided.
Baroness Deech
I am glad to support the noble Lord, Lord Lipsey. I have the National Student Survey in front of me. It raises profound questions about what higher education is and how it has become perverted, in that we see the student now as a consumer, because the student is paying at least £9,000.
I draw attention to some statements in the survey. One says that the workload on the student’s course is manageable. We ought to think about what that means: manageable for whom, whether you are a lazy student or an avid one? Another says that the course does not apply unnecessary pressure on the student. I am not sure about that either. There is another that says that all the compulsory modules are relevant to the student’s course. Even now, 50 years after completing a law degree, I am still pondering whether Roman law was really relevant to my course, but I yield to those who thought it was. That was long before we joined the European Union, which in a way made Roman law and the continental system more relevant. These questions would be better addressed to someone going on a package holiday. I am not sure that as it stands this student survey should play a part in the most profound questions that we face—about what a university is, what sort of young people we wish to turn out and by what process. So I hope that the survey will not be included, or that if it is it is thoroughly revised, bearing in mind the outcomes for which we are looking.
Baroness Wolf of Dulwich
My Lords, I support the comments of the noble Lord, Lord Lipsey, on the National Student Survey, and will speak to Amendments 194 and 201 standing in my name. Before doing so I would like to underline that we are talking about the use of measures to give ratings. With respect to the comments made by the noble Baroness, Lady Blackstone, I think that there is a huge difference between what is useful internally and what is suitable for a high-profile, high-stakes national rating system. In my first amendment I have suggested, or requested, that any measures used should be criteria-referenced, and therefore provide a substantive rating and indication of attainment or degree of attainment. I am slightly alarmed that this is even at issue, and take issue with the noble Lord, Lord Willetts, when he suggests that benchmarking is the way forward.
I have an example from the rail regulator. We can be told what proportion of trains are late, which is a substantive measure: we can have a target—which in fact it has—which says that it is reasonable that there should be X per cent, and then you fall this far short. We can be told whether a given rail company is doing better or worse than the others. This year it is really pretty easy for everybody to do better than Southern, but does that mean that they are all doing well? I do not think that you can conclude that.
If you have benchmarked or relative measures, the problem is that all that you are being told is how people stand relative to each other. We might have a system in which the quality of teaching was excellent across the board, yet in which half the institutions would by definition be below average; or we could have a system in which all the institutions were doing rather poor-quality teaching, yet in which half of them would be above average. That is not the sort of system that we wish to use. We would not wish to imply to students that that gave them helpful information. A measure that is bad does not become good by being made relative; and a measure that is good is good in its own right, not simply by being turned into something in which you rank people on the curve. That is an important aspect of how the Office for Students approaches the sorts of ratings that it gives and the way in which it conceives of them.
Lord Willetts
Does the noble Baroness accept that her objection is the opposite of the one raised by the noble Lord, Lord Lipsey? His objection was that these are raw data that cannot be trusted. As a result of that concern, they are being benchmarked, and that indeed raises the valid questions which she has raised.
Baroness Wolf of Dulwich
I think the noble Lord, Lord Lipsey, meant a number of things, but I am not saying that raw data are the problem. I think he was also referring to aspects such as whether you have a decent sample size. Benchmarking is not the answer. I am somewhat alarmed that it seems to have become a major part of what is under discussion.
My second amendment is something that is not an exceptional ask in the world of regulation. Before elaborating, I have a request for the Minister. If at the end of this debate he does not think that the Office for Students can and should report on whether its statistics meet the UK Statistics Authority’s code of practice, will he explain why? Most regulators which I know that are involved in collecting statistics for information and regulation proudly boast on their websites that their statistics meet the code of practice.
Things that we can be proud of in this country are the UK Statistics Authority and that we have a record of knowing what makes a good-quality statistic and of making sure that among public bodies and for public purposes we do our very best to meet those criteria. One thing we know, for example, is the importance of sample size. We know about the importance of the reliability of measures. We know that in many things it is quite difficult to get a valid measure and that it is just as well to say that we cannot measure them properly.
Another thing we know is that the quality of statistics can change over time and that you have to keep looking at them. One thing that has clearly changed over time is the degree to which one can assume that a standard that was used in one time and place has been carried over to another. Many of us in these debates have been standing up for the quality of university education. It is pretty clear that in North America, this country and many other countries over time there has been grade inflation and that the proportion of people getting higher-class degrees and higher marks cannot be fully explained by harder working students, miraculous teaching or any other splendid innovation. There has been a slippage. One of the reasons there has been grade inflation and one of the reasons why we need to be very careful about this—this is why I raise the point quite clearly—is that students like easy grades. Since student satisfaction is quite important for promotion, particularly in North America, it has also been studied a great deal. We know that student satisfaction judgments and scores rise the more easily instructors, lecturers and examiners grade. We also know—these are statistics that I use a great deal in my teaching because students like them—that lecturers and professors get higher student satisfaction scores if they are good looking. This applies to both men and women; it is completely gender-neutral.
So there are things we know about specific statistics, and we also know more broadly that there are things we need to look at to know whether statistics are valid, reliable and fit for purpose. As the noble Lord, Lord Lipsey, has indicated, there are aspects of student satisfaction measures which require careful attention before they are used for something as important and high-stakes as a rating of teaching quality issued by the regulator.
The final thing I want to say about the importance of observing a code of good practice—and I have no reason to suppose that the Office for Students will not, but it would be nice to have reassurance that it will—is that you cannot add up completely unrelated statistics to make a meaningful total grade. This is often described as “apples and oranges”. Apples and oranges are relatively easy to add up, but trying to take a large number of different measures with different levels of validity—different levels of reliability in terms of whether you would get the same thing if you measured it again; different types of statistics, some with clear numbers attached and some judgmental—and adding those all up into a single judgment is a pretty dicey affair, at best. It is interesting that it is something that on the whole has not been done in research. It has always been done at a much more disaggregated level. However, it is also something which we need to be very careful about because, among other things, it risks not informing students but misleading them.
I find it very strange that, at the same time as saying that we want to give maximum information to students, we are also saying that the Government in their wisdom—or the Office for Students in its wisdom—are going to pull it all together into a single-rank order which cannot be unpacked. What is really useful to students is to have lots of different information on different aspects, so that they can look for the things that they most want.
Is there any reason why we should not expect the Office for Students to follow the code of good practice that we already have in this country and which many other regulators follow? I also suggest that, once again, we only use statistics which actually have substantive meaning. That in itself makes it extremely unlikely that a gold, silver, bronze all-encompassing, all-singing, all-dancing rating is going to fit the bill.
Trident Missile Test
(7 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, I shall now repeat in the form of a Statement, the Answer to an Urgent Question given in another place by my right honourable friend the Secretary of State for Defence on the test firing of a Trident missile.
“On 20 June, the Royal Navy conducted a demonstration and shakedown operation, designed to certify HMS “Vengeance” and her crew prior to their return to operations. This included a routine unarmed Trident missile test launch. Contrary to reports in the weekend press, HMS “Vengeance” and her crew were successfully tested and certified as ready to rejoin the operational cycle. We do not comment on the details of submarine operations, but I can assure the House that, during any test firing, the safety of the crew and public is paramount and is never compromised.
Prior to conducting a Trident test fire, the UK strictly adheres to all relevant treaty obligations, notifying relevant nations and interested parties. On this occasion, the chairman of the Defence Select Committee, the opposition defence spokesperson, and the chair of the Public Accounts Committee were informed in advance.
I can assure the House that the capability and effectiveness of the UK’s independent nuclear deterrent is not in doubt. The Government have absolute confidence in our deterrent and the Royal Navy crews that protect us and our NATO allies every hour of every day”.
That concludes the Statement.
Lord Touhig (Lab)
My Lords, immediately on crossing the threshold of No. 10 on 13 July, the Prime Minister wrote four identical letters to the commanders of our Vanguard fleet, instructing them what to do in the event of the Government ceasing to function and this country being subject to a nuclear attack. That is the measure of how important we think our nuclear deterrent is.
With reports that a test missile launched in June failed, the Prime Minister was asked four times on live television yesterday when she knew about this and she would not answer. This morning, No. 10 confirmed that she was told about the test when she took office. Frankly, if the Prime Minister cannot face up and answer an honest question about the very basis of our nuclear deterrent, we must ask whether she is up to holding that high office in the first place. At the end of the day, it all comes down to character.
Today’s Statement says:
“We do not comment on the details of submarine operations”.
That is strange because I have an MoD press release, dated June 2013, in which we are told that HMS “Vigilant” was awarded a trophy for successfully completing a similar test to the one we are talking about today. More than that, the press release also tells us that the crew prepared for the test for six months. It gives the date of the test and tells us where it took place. It tells us that it was the 10th test in a row and how long our nuclear deterrent is at sea. Also, in the last hour or so, a spokesman for the White House has confirmed that the missile was successfully diverted and destroyed off the coast of Florida.
The Government’s policy of no comment on these matters because of national security is in chaos—it is a shambles—and deserves to be thought through all over again. It is nonsense. Previous tests have been filmed and broadcast. Why was this one kept secret? I do not wish to compromise our national security—none of us wants to do that at all—but can the Minister confirm that the cause of this failed missile launch has now been identified and resolved, and that Britain’s nuclear deterrent is fully operational?
Earl Howe
My Lords, I am sorry that the noble Lord saw fit to criticise my right honourable friend the Prime Minister. As I am sure he would expect, the Prime Minister is routinely updated on matters of national security. This DASO happened before she assumed office but she will have been briefed on a range of nuclear issues while Prime Minister.
I turn to his point about tests made in the past. There is no set approach to communicating the outcome of demonstration and shakedown operations; that is decided on a case-by-case basis, informed by the circumstances of the time. Nothing should be read into the fact that the outcome of this particular test was not publicised.
The noble Lord asked about the test itself. If the premise of his question was to accept the validity of the weekend press reports then I cannot accept that premise. As I have said, this was a successful operation, following which HMS “Vengeance” and her crew returned to operational service for deployment on nuclear deterrent patrols, which was the purpose of the exercise.
Lord King of Bridgwater
I apologise to my noble friend. I understood from the clerk that in an Urgent Question we go backwards and forwards across the House.
I do not think I am the only Member of your Lordships’ House who was extremely disappointed by the line taken by the noble Lord, whom I thought normally rather a responsible spokesman on defence for the other side. I think it was a disappointment to many of us.
I think the Prime Minister was rather overzealous in her interview to preserve in this case the long-standing principle of not commenting in detail on our nuclear activities. As the Secretary of State for Defence in another place has made clear, he and the Prime Minister are kept regularly informed, as I was in my time, about the progress and activities of our critical nuclear deterrent.
The current situation is why we have tests. There have been problems before. As was made clear in the Statement, problems arise and are dealt with. The important thing is to maintain at all times the credibility of our deterrent, and anyone who seeks to undermine it or suggest that it is not working does great damage to our country. No one would be more interested in a running commentary on the activity of our deterrent tests at present than the Kremlin, Pyongyang and maybe Daesh. We need to maintain our last line of defence and its credibility. I strongly support the Statement that my noble friend has repeated here today.
Earl Howe
My Lords, I am very grateful to my noble friend, who has immense experience of these matters. I say again that this was a successful operation. There are very few matters that cannot be discussed openly in Parliament or outside it, but this is one of them. Noble Lords will, I hope, appreciate that it is appropriate and right for government to maintain secrecy on detailed matters relating to our nuclear deterrent.
Baroness Jolly (LD)
My Lords, we on these Benches support the use of a deterrent, and the whole point of a deterrent is that people do not know, blow-by-blow, what happens when and how and where. However, it has been argued today that it could be a waste of taxpayer resources to have a nuclear deterrent, which depends on credibility for its deterrent effect, if there are doubts about its effectiveness. Does the Minister agree that the confusion surrounding this test will erode public trust in the credibility of the nuclear deterrent? Would the Government agree to make sure that Parliament and the public are kept updated on non-sensitive information?
Earl Howe
My Lords, I can only repeat that we have absolute confidence in the operation of our independent nuclear deterrent capability and that the effectiveness of the Trident nuclear system—should we ever need to employ it—is absolutely assured. I would add only that I often reflect on the importance of not believing everything one reads in the press. This is a classic example of the application of that principle.
Lord Hennessy of Nympsfield (CB)
My Lords, I declare an interest in that I witnessed the launch in question from the survey vessel two and half miles away from where the missile came out of the sea. I put it to the Minister, with great respect, that it would make it much easier for those of us who very powerfully support the independent deterrent, and the building of the four “Dreadnought” submarines in the successor class, to make the case generally in the country when we are interviewed in the media if the Minister could assure us that a full analysis has been successfully made of whatever went wrong—I have no knowledge at all of the nature of what went wrong—and that remedies have been put in place. I understand that every particle of a D5 missile is riddled with the highest security classifications, but in this case, such an assurance could be possible and would be very welcome.
Earl Howe
My Lords, the most important assurance is the one that I have already given: this is a system in which we have absolute confidence. It has never been the practice of government to give Parliament details of submarine operations or of the systems and subsystems that are tested during a demonstration and shakedown operation. But I hope I have said enough to reassure noble Lords about our deterrent and its reliability.
Lord West of Spithead (Lab)
My Lords, in naval parlance, this is a complete pot mess. A very successful DASO, which proved that “Vengeance” and her crew are well capable of being part of the CASD rotation, was carried out, but because of the way it was handled it has failed to reassure us all. I have spent my life fighting for Trident and I understand all the complexities and all the security issues. For 20 years, we have shot and sent out films of every single DASO and made an announcement about it. We did not do it this time, and consequently we are in a position where we have embarrassed our own Prime Minister—which is not very clever—and have given succour to those people who do not like the deterrent, do not understand why we need it and want to find some way of attacking it. That is what we have achieved. Does the Minister not agree that our failure to handle this openly has caused huge problems? It has given succour to those who do not like the deterrent, which our nation needs, and has embarrassed our Prime Minister. It has made a complete mess and was handled badly.
Earl Howe
My Lords, I do not agree with that. I can say only that we assess the approach to communicating or not communicating the outcome of a DASO in relation to the circumstances of the time. It is true that past tests have been commented on publicly, but I put it to the noble Lord that the circumstances back then were different from the circumstances now. Nothing at all should be read into the fact that the outcome of this test was not publicised. If a Question had been put down immediately after the test took place last summer, we would have given the same Answer.
Industrial Strategy Consultation
(7 years, 10 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)
My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy. The Statement is as follows:
“Mr Speaker, this is a hugely important moment for the United Kingdom: a moment when we must prepare a new strategy to earn a prosperous living in the years ahead. Leaving the European Union allows—and requires—Britain to make long-term decisions about our economic future. We will, of course, be ambitious in the upcoming negotiations and will secure the best possible access for firms to trade with and operate in the European market.
While the terms of trade with other economies are important, so is the competitiveness of our own economy. That is why the Government are committed to a modern industrial strategy. Its objective is to improve living standards and economic growth by increasing productivity and driving growth across the whole country. Today’s Green Paper is part of an open dialogue to develop this strategy as the enduring foundation of an economy that works for everyone.
We start from a position of considerable strength. We are the fifth biggest economy in the world despite having the 22nd highest population. We have achieved higher levels of employment than ever before in our history—in fact, 2.7 million more than in 2010. We have businesses, research institutions and cultural achievements at the very forefront of global excellence. For all these reasons, we attract investment and talented individuals from around the world.
However, there are challenges that Britain must face up to now and in the years ahead. The first is to build on our strengths and extend excellence into the future. British excellence in key technologies, professions, research disciplines and institutions provides us with crucial competitive advantages, but we cannot take it for granted. If other countries invest more in research and development and we do not, we cannot expect to keep, let alone extend, our technological lead in key sectors or the world-beating performance of our universities. The same goes for our record as Europe’s leading destination for inward investment or our position as a centre of international finance. Our competitors are not standing still. They are upgrading infrastructure networks and reforming systems of governance. Therefore, we, too, must strive for improvement.
In industrial sectors—from automotive and aerospace to financial and professional services and the creative industries—the UK has built a global reputation, but the competition for new investment is fierce and unending. The conditions that have allowed UK investment destinations to succeed include the availability of supportive research programmes, relevant skills in local labour markets, and capable supply chains. For continuing success, these foundations must be maintained and strengthened.
The second challenge is to ensure that every place meets its potential by working to close the gap between our best-performing companies, industries, places and people and those which are less productive. For all the global excellence of the UK’s best companies, industries and places, we have too many that lie too far behind the leaders. That is why, on average, workers in France, Germany and the USA produce around as much in four days as UK workers do in five. It is also why despite having the most prosperous local economy in northern Europe—in central London—we also have 12 of the 20 poorest among our closest neighbours. We must address these long tails of underperformance if we are to build a strong economy and ensure sustainable growth in living standards. To do so is a huge opportunity for the whole nation to benefit from improved productivity —that is, earning power—in all parts of the country.
The third challenge is to make the UK one of the most competitive places in the world to start or to grow a business. A fatal flaw of 1970s-style industrial strategies was their dominant focus on existing industries and the companies within them—and then mostly the biggest firms. Too often they became the strategies of incumbency. It is worth noting that many of the most important companies in the world today did not even exist 25 years ago. Unlike in the past, industrial strategy must be about creating the right conditions for new and growing enterprise to thrive, not protecting the position of incumbents.
To meet these challenges, we have identified 10 pillars around which the strategy is structured—10 areas of action to drive growth right across the economy and in every part of the country. They are: investing in science, research and innovation; developing skills; upgrading infrastructure; supporting businesses to start and grow; improving procurement; encouraging trade and inward investment; delivering affordable energy and clean growth; cultivating world-leading sectors; driving growth across the whole country; and creating the right institutions to bring together sectors and places. Across all these areas, the Government are already taking strategic decisions to keep British industry on the front foot; for instance, the go-ahead for major upgrades to our infrastructure, such as Hinkley Point C, Heathrow and High Speed 2, and, in the Autumn Statement, the biggest increase in research and development spending since 1979.
In conjunction with today’s Green Paper, we are launching a range of further measures. These include: a new approach to enabling existing and emerging sectors to grow through sector deals, with reviews taking place regarding life sciences, ultra-low-emission vehicles, industrial digitalisation, nuclear, and the creative industries; deciding on the priority challenges and technologies for the new Industrial Strategy Challenge Fund to focus on and the other opportunities we can address using the £4.7 billion increase in research and development funding; and an overhaul of technical education, including £170 million of capital funding to set up institutes of technology to deliver education in science, technology, engineering and mathematics subjects.
In a world containing so much uncertainty, public policy should aim to be a countervailing force for stability, not an additional source of unpredictability. So our aim is to establish an industrial strategy for the long term, to provide a policy framework against which major public and private sector investment decisions can be made with confidence. It is therefore vital that the full development of our industrial strategy should take place with—and not just for—British enterprise. The full involvement of innovators, investors, job creators, workers and consumers in England, Scotland, Wales and Northern Ireland is the only basis on which we can produce an enduring programme of action. That is why this is a Green Paper—a set of proposals for discussion and consideration, and an invitation to all to contribute collaboratively to their development. I commend this Statement to the House”.
Lord Mendelsohn (Lab)
My Lords, I welcome the launch of the Government’s Green Paper on industrial strategy. There is much to go through and be positive about and much to scrutinise. I hope there will be other opportunities to have meaningful debates on this matter. There are considerable questions about the Green Paper, which I hope the Minister can answer. It is clear that there is much for us to do to maintain our economic position. Whether or not it has novel ideas is no test of a good industrial policy. There is much to be gained by doing more of what was being done—just doing it better. Much of this has a familiar feel. Seven of the 10 pillars of the industrial strategy were key parts of the Government’s productivity plan, Fixing the Foundations—the words “cut and paste” crossed my mind.
However, on this side of the House we are glad that some of the approach—particularly the sector plan—does represent a new way to support the development of our economy. We are keen to observe the development of this strategy: how the Government will deal with the obvious issues around picking winners and national champions, and how this approach will evolve. We are pleased that the Government are looking to support the automotive industry. A sector deal would undoubtedly be useful here. The Government have been very coy about the view that they did much to encourage the most recent announcement of investment by Nissan—the so-called secret deal. However, I am sure the Minister can confirm that there was, in fact, no deal and that the investment announced was planned for a timescale that would not be adversely affected by our relationship with Europe. Will the Minister confirm that the message from Nissan reminded the Government that, in common with other Japanese companies, it would review its position in keeping with the Japanese Government’s 15-page letter? Given the current plan for exit from Europe, and its inconsistency with their desired approach, a sector deal is the only way to ensure a viable car industry in the medium to long term.
I am also pleased to see that the pharma industry and the life science industry get a special mention. Can the Minister confirm that the Government will defend the UK base against US industry’s ambitions in any potential trade deal with the United States?
The Green Paper was accompanied by the re-announcement of existing commitments of resources. The funds for science and research are very important and, as I understand it, recover our position since the cuts started to set in in 2010. None the less, the focus on supporting science, technology and innovation is to be strongly supported. Additionally, the support for technical education is welcome, and the work of the noble Lord, Lord Sainsbury, in promoting this crucial requirement for our economy should be acknowledged.
As with many areas of this plan, there is a case for scepticism about any further education proposals that do not address the severe capacity issues in the sector. Can the Minister provide a clearer idea of how the development of this strategy will be able to call on new resources, what the expected timetable is for outlining further elements of the industrial strategy, and how it will dovetail with the budget process?
The Green Paper suffers from two of the perennial problems we always face with government business policy announcements. There is a terrible lack of objectives, and there is no clear road map or sense of desired outcomes. Instead, a series of good and reasonable measures, worthy as they are, do not make a plan that is likely to have real impact or be effective and efficient. Can the Minister tell us whether any concrete objectives or goals that can reasonably be measured will be set in this process?
Secondly—the Statement just did this again—the Green Paper glosses over a huge imbalance in the economy. Our huge reliance on the service sector is not meaningfully addressed in this industrial strategy; nor is the acute problem of the size of our manufacturing industry and its disproportionate decline. While any industrial strategy must look to the long term, our immediate future relies on how well our services can perform. I would be grateful if the Minister could outline how the service sector is expected to be part of, or to be assisted by, the industrial strategy. This is especially important in areas where, in support of the industrial strategy, we are looking at reinforcing our research and innovation, such as in robotics and artificial intelligence, and many others that are likely to have a major impact on employment requirements in the services sector.
There are, of course, some areas in which we had been expecting something new and different in the industrial strategy. We had hoped for greater ambition on broadband and mobile capacity, signalling a change to the currently pedestrian goals in the Digital Economy Bill. We had also expected slightly more about how we see effective markets and competition, and the culture of business. Crucially, are there any plans to create tougher oversight of foreign investment in the United Kingdom? Does the Minister agree with the sentiment that,
“A proper industrial strategy wouldn’t automatically stop the sale of British firms to foreign ones, but it should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain”?
I am sure he does: those were, of course, the words of the Prime Minister previously. Can the Minister account for their omission from the Green Paper?
There is much to welcome in starting a conversation about an industrial strategy, and there are some positive ideas here. But this is not yet a plan, and on this side of the House we hope that, over time, one will emerge. This is a first step. Martin Luther King said:
“Faith is taking the first step even when you don’t see the whole staircase”.
The Government would do well to remember the old adage that setting goals is the first step in turning the invisible into the visible. An effective industrial strategy will need that.
Lord Fox (LD)
My Lords, the Prime Minister’s decision to adopt a new active role for Government in industry is welcomed on these Benches. The Green Paper’s 10 pillars have most of the right words, and they identify many of the areas of concern that have been voiced in many debates over the past few years. I trust that we will have an opportunity to debate some of those aspects in more detail. I shall focus on just two of those elements—skills and cultivating world-leading sectors. I remind your Lordships of my published interests.
First, the Green Paper is right to identify skills as a central issue to future prosperity and productivity for the country, and a cash boost for technical and STEM education is, of course, welcome. However, it should be put into the context of a 7.5% reduction in schools’ per-pupil funding by 2020 and the cash-freezing of the adult skills budget until 2020—a £30 million real-terms cut next year. Thus, £170 million for new institutes of technology is all very fine but irrelevant given some of the wider cuts affecting all our young people. Therefore, can the Minister please tell us whether the Government plan to reverse their cuts to the education budgets for four to 19 year-olds? Also on skills, the Government continue to ignore the benefit and value that we gain from workers and scientists from the European Union working in this country. They continue to treat these people and their families as a bargaining chip. Could the Minister at least acknowledge the personal anguish being caused to these people, many of whom are already contributing greatly to the success of the industrial sectors that he seeks to bolster?
Secondly, the Green Paper’s support for the coalition’s sector strategy is very welcome. Here I disagree with the noble Lord, Lord Mendelsohn, in that a bit of cut and paste is actually a good thing as these strategies have to span more than one Parliament to be successful and take root. Therefore, they depend on a long-term approach. It is good news that the Government are continuing to run those strategies through. However, the idea that any Government can have a reasonable strategy for British industry while recklessly withdrawing from the single market is not credible.
Last week, the Prime Minister confirmed her intention to exit the single market, yet, extraordinarily, the Green Paper fails to refer to either the single market or the customs union, although a few euphemisms such as “turbulent times” creep in. The Government’s idea seems to be to negotiate individual sectoral agreements for “frictionless trade”—their term. Not every sector can benefit from this, or we would still be in the single market, and not every sector can expect the negotiations to succeed. Therefore, as these negotiations start, the Government will have to decide which sectors will be top of their list for trade deals. Conversely, some will be at the bottom. The Prime Minister has said that the industrial strategy is not about picking winners, but the Brexit negotiations will inevitably pick losers. Can the Minister please tell the House which sectors will win and which will lose?
Lord Prior of Brampton
I thank both noble Lords for their interesting comments. I agree with the noble Lord, Lord Fox, that if this industrial strategy is to have real strength, it will have to be spread across Parliaments. As part of the consultation process it will be interesting to hear whether noble Lords have any ideas on how we can do that and how we can institutionalise some cross-party agreement around productivity. I do not know whether anyone else read the speech given by Andy Haldane from the Bank of England in the north-east a month or so ago, which I think was entitled Red Car, Blue Car. He reminded us that the US economist, Paul Krugman, noted:
“Productivity isn’t everything, but in the long run it is almost everything”.
I think that most people would agree with that. Particularly in an economy such as ours with high levels of employment, if you want to increase wealth, you have to increase productivity.
It is true that we are building on the past. I pay tribute to the work done by previous Governments in this field. But despite what has been done in the past we have to accept that productivity levels in this country are low; worse than that, they are much lower in some parts of the country than in others. Although productivity may be just an economic concept, the consequence of that is that wage levels are much lower in some parts of the country than in others. In the East Midlands, for example, the average wage is £480 a week, whereas in the south-east it is £670 a week. No one, on either side of the House, can be happy with that degree of inequality. If we are to address that, we have to address productivity. Therefore, if there is a familiar feel to our Green Paper, I make no apologies for that. We are building on the past but we must do a lot better.
I think that both noble Lords support the very significant growth in R&D spending, and that there will be broad support across the House for the two horizontal parts of this industrial strategy: R&D and innovation spending, and the focus on technical skills. That is not to say that we are not doing anything now but we could do a lot more. We have huge strengths in our university sector, but we are less strong on how we commercialise some of that research. I was horrified to learn that 14 to 16 year-olds today are no more literate or numerate than people aged between 45 and 55. There has been no real improvement in teaching basic literacy and numeracy for 20 or 30 years, which is quite an indictment of our education system. Therefore, putting more resource into education at all levels—primary school as well as later on—particularly into the STEM subjects, is extremely important. Skills are very important.
Reference was made to coming out of the single market. I do not think that is a debate we can usefully have at this point. Of course, we will do everything we can to retain as much frictionless access to the single market as possible. It is a very important market for many industries. However, other markets are important as well and we need to develop them. That is very much a part of the industrial strategy.
The noble Lord, Lord Mendelsohn, referred to life sciences. I absolutely confirm that they are important. The pharmaceutical, med tech and biotech industries are extremely important. British research is absolutely at the forefront of world research in cell and gene therapy. As far as Japanese investment is concerned, we will do everything we can to encourage inward investment from Japan and other parts of the world. The automotive industry would be only a pale shadow, were it not for the big Japanese investments that came here in the 1980s. We fully recognise that and are working very closely with Toyota, Nissan and Honda to ensure that they remain and continue to invest in the UK. The advanced manufacturing unit at Warwick is doing extraordinary work in automotive and advanced manufacturing, and the Green Paper contains a commitment to develop an institute for battery technology. Finding a way to store energy economically and efficiently would give us a huge competitive advantage as we develop the industrial strategy. However, this is a Green Paper; it is out for discussion for the next three months. I was asked about the timing. The consultation period will last for three months. The plan is to produce a White Paper by September, which will feed into the Autumn Statement. That is the broad timing. I look forward to engaging with many noble Lords as we develop the Green Paper into a White Paper over the next six months.
Lord Howell of Guildford (Con)
My Lords, if this is feedback time, as I gather it is, will my noble friend accept from me the feedback that our energy policy is in a terrible mess and certainly not working for everyone? Our energy costs are still much too high compared with those of our competitors. Our costs of carbon reduction per tonne are much too high and reliability is severely compromised, certainly in the next two or three years. Therefore, will he take back to the authors of the Green Paper that if we can get an energy policy that is far more efficient, works for everyone and combines affordability, reliability and low-carbon targets much more effectively than now, we will make some progress with this strategy?
Lord Prior of Brampton
I completely agree with that. It is made very clear in the Green Paper that we must have a low carbon energy policy, but an affordable energy policy. Affordability is critical. It is no good going to Port Talbot or Scunthorpe and telling steel workers there that they must bear the cost of a green energy policy with their jobs. We have to be able to put high energy industries into a competitive position, particularly within Europe.
Lord Kinnock (Lab)
My Lords, I commend the relatively short, three-month consultation on the Green Paper. Do Government intend to take responsive rapid action to that consultation, not so much in the form of a White Paper, but with effective implemented action? That is a matter of the greatest possible urgency, given the seriousness of the situation in our manufacturing industries particularly. For instance, will the Government heed today’s all-party report on forging a future for the British steel industry, emulate the examples shown by other European Governments, and act effectively on energy costs, business rates, and procurement, to ensure a real, new vitality for the steel industry, avoiding the possibility of a lingering death for this crucial British foundation industry and its 575 companies? Without effective steel, a strategy is much more a hope than the prospect of a reality. I would greatly regret that, but I hope that is a point of urgency in the mind of the whole Government.
Lord Prior of Brampton
I am pleased that the noble Lord thinks that three months is a good short time for the consultation to take place. We are not standing still over that time; we are going ahead, as he knows, at Hinkley, with the new runway at Heathrow, and with the £170 million committed to institutes of technology.
I entirely agree with the noble Lord. I have a long- standing and emotional commitment to the British steel industry. When I joined British Steel in 1980, I think we were producing 17 million tonnes of steel per year, so times have changed over the past 20 or 30 years. We are not in the business of propping up failing industries, but we are certainly in the business of supporting competitive industries like the steel business.
Lord Ashdown of Norton-sub-Hamdon (LD)
My Lords, there is no point in having skills if we give away industrial capacity. The Government will know very well, because I have raised it several times, that there is deep concern about the lack of Government commitment to maintain Britain’s only standalone helicopter production facility in Yeovil. I have asked the Government repeatedly, here and elsewhere, to use the opportunity of the industrial strategy to make it clear that they wish to see that preserved. Everything else is mentioned here: Airbus, Rolls-Royce, Bombardier, Boeing, BAE Systems, GE Aviation, GKM, Solihull, Loughborough—all points north and east, but not a word about helicopters, or the commitment that we now need. Does the Minister realise how much disappointment, and indeed anger, there will be in the Yeovil community for that? Will he give a commitment that in the so-called refresher industrial defence policy that is about to be published this very dangerous omission will be corrected?
Lord Prior of Brampton
My Lords, I was not aware of the omission to which the noble Lord has drawn my attention. I think I am meeting someone from Yeovil in the helicopter business tomorrow, as it happens. Certainly, we will be using procurement. One area in which we have not been as clever as they have been in America, for example, is using defence procurement and other parts of government procurement to support competitive British industries. I will investigate the omission to which he has drawn my attention with regards to helicopter manufacture at Yeovil, and will try to understand why that is the case.
Lord Elystan-Morgan (CB)
My Lords, for many years successive Governments assiduously and conscientiously pursued what they called policies of regional development. Will the Minister undertake, despite all the difficulties and complications that now exist, that such policies will not be ruled out of court in the situation in which we now find ourselves?
Lord Prior of Brampton
My Lords, the current jargon is to use “place” instead of “regional policy”, and place plays a large part in this industrial strategy. The issue was raised by the noble Lord opposite about the objectives. It is a very good point, and one I should have addressed earlier on. What are the objectives of the industrial strategy? I have in mind a decent working man in a place like Hartlepool, who ought to be commanding a decent wage of £30,000 to £35,000 a year, who is currently working for £7.50 an hour picking stock in a warehouse. That will be the true measure of whether this industrial strategy is a success—whether we can bring back decent, well-paid, skilled jobs to all parts of the country.
Lord Kirkhope of Harrogate (Con)
My Lords, I thank my noble friend very much for that presentation. I welcome this Green Paper, and I bear witness as someone from the north-east of England originally, and now from Yorkshire, to how the north of England has had to adapt to technology and to the changes in de-industrialisation and engineering over many years. I ask my noble friend about the support of the Government, not only in financial terms, which is suggested by their contribution to technology institutes of £170 million, as he has mentioned, but also in their enthusiasm, which has often been lacking in many Governments, towards those who pursue careers in engineering, innovation and new technology. That is what we need—more encouragement and acceptance, as other European countries do to a lot of their own subjects. Let us be more enthusiastic while we work on this Green Paper in the consultation process. That would be most helpful. Does my noble friend agree?
Lord Prior of Brampton
I agree 110% with that. For generations we have downgraded people who do technology, engineering, and the like; whereas we have paraded people who do PPE at Oxford, and the like. We have got it slightly wrong. We should do anything we can to encourage young people to go into technology, engineering, natural sciences and the like. Of course, the changes in technology that we are witnessing now, and will continue to witness over the next 10 years, will fundamentally change our society, whether in artificial intelligence, in robotics, in cell and gene therapy, or in battery technology—this is the future. The more we can encourage people to go into these technological areas and also encourage them to be entrepreneurial at the same time, that will be good not just for them but for our economy as a whole.
Lord Soley (Lab)
I welcome the further endorsement of Heathrow’s expansion. As the Minister will know, the Government keep saying it quietly, so I hope it will happen. But my question really relates to the wider aerospace industry. It is an incredibly important part of British industry, with very advanced technology—the second most advanced in the world, and still the second or third largest in the world generally. What troubles me, and what troubles me about other industries such as the car industry, is that increasingly parts are exported and re-exported. I wonder how much thought in this Green Paper is going to be given to the complexity of arrangements not just with Europe—but obviously with Europe at the moment—in terms of exports and re-exports in order to produce a finished product.
Lord Prior of Brampton
The noble Lord is referring, I think, to the integration of supply chains, which have now become very global. Certainly, that is particularly true in areas such as satellite technology. Having easy ways of trading with other countries with non-tariff barriers is critical to that. Space technology is exactly the kind of industry that the UK should be fully a part of. It is interesting—you look around the world, and the USA is clearly leading in many of these areas, but if you look at other countries you often find that our technology is very strong. That is not to be complacent. Look at Israel, Switzerland, or Singapore—and look at Ireland, which has done a fantastic job in attracting many of the world’s best companies. If they can do it in southern Ireland, why can we not do it in Northern Ireland, or in the north-east, or the north-west?
Lord Hennessy of Nympsfield (CB)
I add my welcome to this, the ninth industrial strategy since I have been on this earth. In the debate on the Autumn Statement that we had before Christmas I suggested that we were waiting for the eighth, but the noble Lord, Lord Mandelson, got in touch with me and said that I had forgotten his, for which I profoundly apologise. I read them all recently, in the build-up for this great day, and worries about productivity, which the Minister has stressed already, are at the heart of all of them. Can the Minister identify—in his own view, not a collective one—where the magic is in this Green Paper that was absent from all the others? What is there in this Green Paper that will bedazzle economic historians in the 2050s at the foresight the Government showed this day?
Lord Prior of Brampton
That is a good question, and I am sure that the answer will emerge over the next three months of consultation. To be realistic, there is no magic in these things. If you look around the world at countries which have got their industrial strategy right, whether it is Germany and technical education, Singapore and advanced manufacturing, or Switzerland and advanced pharmaceuticals, I am not sure that there is any magic. It is a combination of great research, great technical skills, efficient capital markets and an efficient competition policy. Actually, the UK has not done that badly. Let us not do ourselves down too much. If you look at science, between Oxford, Cambridge and London it is fantastic—absolutely world-class—and we do world-class things in many parts of the UK. However, on the noble Lord’s point, we need to refine this industrial strategy over the next three months, and the six months until the White Paper comes out, so that we are absolutely clear about what really makes a difference. That takes us back to the objectives that the noble Lord, Lord Mendelsohn, mentioned earlier on. We must have very clear objectives.
Lord Scriven (LD)
My Lords, pillar 9 is about driving growth across the whole country, which is welcome. However, it will take more than words—it will take actions. What change will be made in infrastructure investment where, at present, on the DfT figures, investment in transport infrastructure right up until 2021 will be £1,870 per head in London and only £280 per head in the whole of the north? Based on this strategy, how will this change?
Lord Prior of Brampton
I cannot answer that directly now, but if I can, I will consider it and write to the noble Lord. However, the total commitments for rail infrastructure investment—I cannot tell him exactly which part of the country relates to—is £88 billion, for example, so we are looking at a massive infrastructure investment in rail. I hope that I do not have the decimal point wrong on that figure but, if I have, I will write to him. We are looking at a massive investment in physical and digital infrastructure. The critical thing is that we use that purchasing power to direct it towards great British companies which are investing in quality and in their workforce.
Lord Cormack (Con)
My Lords, does my noble friend agree that any industrial strategy that is to be successful must not neglect the rural economy—farming, horticulture, and the service industries? Would it therefore not be deeply unfortunate if, during the next six months, as we develop our strategy, we inadvertently undermine many of our rural industries by the swingeing increase in business rates that threatens them? Will my noble friend please bear that carefully in mind?
Lord Prior of Brampton
We will certainly bear that in mind. Clearly, the rates of tax, whether that is corporation tax, business rates or any other costs to business, are critically important. I take on board his comments about the importance of the rural economy.
Baroness Donaghy (Lab)
My Lords, I am glad that the Minister seems to be enjoying his new brief, and I welcome the new Green Paper and its wish list. However, I am a bit concerned about research and development. The same announcement as that in the Green Paper was made last autumn—they are identical—and that is in the context of a 50% cut in research and development since 2010. Therefore, to announce an increase when there has been a real cut over a period of five years seems to be not a good start to the discussion on research and development. The Minister himself has said how important research and development is. Will this be a real increase, and will it be sustainable?
Lord Prior of Brampton
My Lords, that is a very good question. My own view is that it is one of the great, long-term, sustainable, competitive advantages we have. When John Kenneth Galbraith went to India in 1948 to give advice on setting up a pharmaceutical industry there, he was asked, “How do we do it?”. He replied, “Build a university and wait for 200 years”. There is some truth in that. We have some great universities here, which are a source of huge, long-term, competitive strength.
Lord Stoddart of Swindon (Ind Lab)
My Lords, there may be nothing magical about industrial strategy, but it is important that that strategy is not obstructed by bureaucracy. I hope that we can be assured that there will be no bureaucratic obstruction of the plans.
To return to the question of electricity, if we are to have a successful strategy, it is essential to have cheap electricity for industry. At the moment, we are faced with the building of a power station at Hinkley Point, which will charge £95 per megawatt, and the Swansea Bay scheme, which will cost £90 per megawatt. What will the Government do to ensure that these prices do not affect industrial ability?
Lord Prior of Brampton
I hope that I can assure the noble Lord that we will not obstruct—or rather, we will try not to obstruct—the industrial strategy. I am reminded of that old lie, “I’m from the Government—I’m here to help you”. I keep in mind that we will try not to build in too much bureaucracy. We have an ambition to reduce the cost of red tape by £10 billion over the course of this Parliament. Of course, electricity prices are critically important, particularly to industries such as the steel industry and indeed to all energy-intensive industries, so that will be very much part of the industrial strategy, as it emerges over the next three months.
Lord Marlesford (Con)
To follow on from what my noble friend Lord Howell and the noble Lord, Lord Stoddart, said about energy policy, how can the Government quote Hinkley Point as an example of affordable energy policy when it will cost £20 billion to construct but with a level of subsidy for its output which, at the end of its 40 years of life, will raise that £20 billion to £100 billion? That is paid by the consumer, whether industrial or domestic, and the cost of a gas-fired station with the equivalent output over the same period would be £3 billion.
Lord Prior of Brampton
I should make it clear that I was not quoting Hinkley as an example of our affordable energy policy but as an example of our infrastructure policy. We need to have a mix of different energy sources.
Higher Education and Research Bill
Monday 23rd January 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Higher Education and Research Act 2017 View all Higher Education and Research Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 76-VI Sixth marshalled list for Committee (PDF, 214KB) - (23 Jan 2017)
Lord Lucas (Con)
My Lords, to pick up on the recently finished speech of the noble Baroness, Lady Wolf, I thoroughly agree with the three main points she made. First, producing a mixed indicator, as the Government propose, would not be useful to students or others looking at the quality of a university or a course. It would be like composing a meal out of mincemeat, cornflakes and cleaning fluid. Each of those things is useful in its own right, but mix them together and they have no function. Keep them separate, as the noble Baroness advocated, and you get some very useful data on which students can judge in their own terms the quality of a university.
Secondly, let these things be criterion-referenced. We have a real problem at the moment in GCSE—we are saying that every child should get English and Maths, but we are making that impossible, because we make these exams harder as students do better. About 30% are required to fail in order to meet the requirements of Ofqual. We have to be careful about this when we are looking at a bronze, silver or gold indicator. If we do not make these indicators criterion-referenced, we are saying that, whatever happens— however well our universities do—we will always call 20% of them bronze. In other words, we will put them into an international students’ “avoid at all costs” category. That seems a really harmful thing to do. If these criteria mean anything —if there is a meaning to any of the elements going into the TEF—we should be able to say, “We want you to hit 60%.” Why not? Why do the criteria have to be relative? They do not mean anything as relative criteria. They must have absolute meanings and they must be absolute targets.
Thirdly, this really adds up. The noble Lord, Lord Liddle, made it clear that gold, silver and bronze indicators—this big step change between the three grades —are not suited to a collection of imprecise measures. You do not know whether an institution that you have placed towards the bottom of silver is actually bronze or, worse, whether something in bronze is actually in the middle of silver. It is not that exact. You have to do what the Government do elsewhere in education statistics—for example, in value added on schools—which is, yes, to publish a value, but publish a margin of error too. That way, people get to learn that you might be saying: “This is actually 957 on your scale of 1,000, but the error margin is somewhere between 900 and 1,010.” You get used to the imprecision, to understand that this is not precise, so you can put a proper value on the information you are being given.
Lord Watson of Invergowrie (Lab)
My Lords, I am speaking to the proposal, in the name of my noble friend Lord Stevenson, that Clause 25 should not stand part of the Bill.
That clause refers to the Office for Students taking over HEFCE’s current administrative responsibilities to deliver the TEF on behalf of the Secretary of State. I say in passing how disappointed I am that so many in your Lordships’ House, whom I thought would come to hear this debate on TEF metrics, have now departed. Perhaps that was not the reason they were here after all. Those of us who are ploughing through the Bill until all hours of the night realise that this is an important topic. The fact that we have had so many speakers on it is a clear reflection of that.
As the Minister will be aware, there is widespread concern across the sector at the use of proxy metrics, including statistics on graduate earnings, in an exercise that was supposed to be about teaching quality. On the face of it, there is some logic to the metrics. It is difficult to imagine an excellent course, the teaching, support and assessment for which the students think are rubbish, and that a large proportion of the students do not complete; or that hardly anyone who completes it manages to find employment or get a place on a postgraduate course.
Where metrics are used, they have to be much more securely evidence-based than those suggested. Last week in Committee, our Amendments 196 and 198 would have obliged the Office for Students to assess the evidence that any proposed metric for assessing teaching quality is actually correlated to teaching quality, and ensured that, prior to making that assessment, the OfS consulted those who know first-hand what is needed to measure teaching quality: academic staff and students. The Minister did not comment on that point, so it remains one on which I should like to hear his opinion. The importance of ensuring the statistics used are reliable and evidence-based cannot be overstated. They must earn and retain the confidence of the higher education sector—and that involves academics, students and administrators.
In her Amendment 201, the noble Baroness, Lady Wolf, seeks to ensure the quality of the statistics used by the OfS, and this should be a basic requirement. I support my noble friend Lord Lipsey in questioning the validity and value of the National Student Survey. The survey merely asks students about their perceptions of teaching at their institution. By definition, these perceptions are subjective and cannot involve comparing institutions. I heard what the noble Lord, Lord Willetts, said, when he suggested that similar institutions could be compared in terms of their ethnic make-up and students’ economic background. That kind of benchmarking sounds improbable at best because, even if suitable comparators could be found, the question is, how would the outcome be weighted?
It sounds as though gold, silver and bronze categories would be created before the metrics had even been measured. As I said, that sounds improbable to me, and I agree with the noble Baroness, Lady Wolf, that benchmarking is surely not the answer. Linking institutions’ reputations to student satisfaction is likely to encourage academics to mark more generously and, perhaps, even avoid designing difficult, more challenging courses.
With academics increasingly held accountable for students’ learning outcomes, students’ sense of responsibility for their own learning—something I thought was a core aspect of higher education—will surely diminish. We are now entering an era where students dissatisfied with their grades can sue their universities. Improbable as that sounds, only last week the High Court ruled that Oxford University had a case to answer, in response to a former student who alleged that what he termed “boring” and “appallingly bad” teaching cost him a first-class degree and the opportunity of higher earnings.
This may be the shape of things to come. Last year, nearly 2,000 complaints were made by students to the higher education Ombudsman, often concerning contested degree results. Nearly a quarter were upheld, which led to universities being ordered to pay almost £500,000 in compensation. Does anyone seriously believe that the introduction of the TEF metrics will lead to a reduction in such complaints?
Metrics used to form university rankings are likely to reveal more about the history and prestige of those institutions than the quality of teaching that students experience there. The Office for National Statistics report, on the basis of which the TEF is being taken forward, made it clear that they were told which metrics to evaluate, leading to the conclusion that these metrics were selected simply because the data were available to produce them. It is widely acknowledged that students’ experience in their first year is key in shaping what they gain from their time at university, yet the focus of the proposed metrics, of course, is mainly on students’ experiences in their final year and after graduation.
The ONS report was clear that the differences between institutions’ scores on the metrics tend to be narrow and not significant. So the majority of the judgment about who is designated gold, silver or bronze will actually be based on the additional evidence provided by institutions. In other words, an exercise that is supposedly metrics-driven will in fact be decided largely by the TEF panels, which is, by any other description, peer review.
Although the Minister spoke last week about how the TEF would develop to measure performance at departmental level, the ONS report suggested that the data underpinning the metrics would not be robust enough to support a future subject-level TEF. Perhaps the Minister can clarify why he believes that this will not be the case—the quality of courses in a single university tend to be as variable as the quality of courses between institutions. As I said in Committee last week, this would also mean that students’ fees were not directly related to the quality of the course they were studying. A student at a university rated gold or silver would be asked to pay an enhanced tuition fee, even if their course at that university was actually below standard—a fact that was disguised in the institution’s overall rating.
Learning gain—or value added—has been suggested as an alternative, perhaps better, measure of teaching quality and is being explored in other countries. At a basic level, this measure looks at the relationship between the qualifications and skills level a student has when starting their degree programme, compared to when they finish—in other words, a proper, reliable means of assessing what someone has gained from their course of study.
The BIS Select Committee report on the TEF metrics published last year recommended that priority should be given to the establishment of potentially viable metrics relating to learning gain. I hope the Minister will have something positive to say on that today, or, failing that, on Report. We do not believe that the metrics as currently proposed are fit for purpose; more importantly, nor do many of those within the sector who will be directly involved with the TEF. That should be a matter of some concern for the Minister, for his colleague the Minister for Universities and Science, and indeed for the Government as a whole.
Viscount Younger of Leckie (Con)
My Lords, when we last met, and as the noble Lord, Lord Lipsey, said, we had a useful and wide-ranging debate on the TEF, and I value a further debate on this important subject.
The Conservative manifesto committed that we will,
“introduce a framework to recognise universities offering the highest teaching quality”.
During last Wednesday’s debate, I was pleased that, as the noble Lord, Lord Watson, noted, all noble Lords who spoke were in favour of improving teaching quality and of having a teaching excellence framework in some form.
Before discussing the specific issues raised today, I should like to clear up what appear to be some misapprehensions about how the TEF will operate. Before doing so, I should say that I will write to the noble Baroness, Lady Wolf, who raised a number of detailed points. I think it is best if I address those specific points in another letter. I should reassure noble Lords that I have just signed a letter relating to our previous day in Committee, and that should arrive on their doorsteps shortly.
It is important that when we discuss the TEF we do so in the context of the framework that has been set out, in detail, by the Government. To be clear, this framework has been designed over the past year and a half with the sector, through two consultations, and using the input of experts such as HESA and the ONS.
First, the TEF is not only—not even primarily—about the NSS, as I think the noble Lord, Lord Lipsey, acknowledges. The NSS is just one of three principal sources of metrics data being used, and we have explicitly said that the NSS metrics are the least important.
Secondly, the TEF is about much more than metrics. Providers submit additional evidence alongside their metrics, and this evidence will be given significant weight by the panel. The work of the panel will be driven as much by judgment as by metrics, ensuring that the distinctive character of institutions, as well as the diversity of missions and approaches across the sector, are recognised in the ratings awarded. Furthermore, final decisions on TEF ratings will be taken by a peer review panel, not by Ministers or civil servants.
We also consider it vital that judgments are based on a combination of core metrics, with additional and qualitative evidence, wedded together by expert peer judgment. It is for providers to determine what and how to teach, and excellent teaching can take many forms. However, great-quality teaching, defined broadly, increases the likelihood of good outcomes. In our consultation, over 70% of those who responded welcomed our approach to contextualising the data and provider submission.
I reassure noble Lords that we are not naive about the use of metrics. Chris Husbands, the TEF chair, has noted that the approach that the TEF takes is realistic about the difficulty of assessing teaching quality. He said:
“It does not pretend to be a direct audit of the quality of teaching. Instead, it uses a range of evidence to construct a framework within which to make an assessment—looking at a range of data on teaching quality, learning environments and student outcomes”.
Turning to Amendments 187, 197 and 190, that is why the development of the TEF, including metrics, is a phased process of development. Our consultation on the metrics included a table of the potential unintended consequences and our proposed mitigations. We will continue to collaborate and work with the sector to make further improvements, learning lessons from the initial, trial year. The aim is to instil and gain the confidence of the sector, and I believe we have made a very positive start. As Dame Julia Goodfellow, president of Universities UK, said:
“The government’s response to the Teaching Excellence Framework consultation demonstrates that it has consulted and listened to the university sector”.
I am concerned that some of the amendments in this group add a level of process which could reduce the incentive to make further changes to the scheme or the metrics by requiring that they are laid before Parliament as they change. This reduction in flexibility is not required by other schemes supported by many noble Lords, such as the research excellence framework.
I now turn to amendments to prohibit the use of the National Student Survey. We are listening carefully to concerns on the NSS, but we cannot ignore the only credible, widely used metric that captures students’ views. We are not using the general satisfaction ratings in the TEF; rather, we are using specific questions related to teaching quality. My noble friend Lord Willetts highlighted that point. However, as the noble Lord, Lord Lipsey, acknowledges, we recognise the limitations of the NSS and have taken steps to mitigate these, including directing TEF assessors not to overweight the three NSS-based metrics and making them aware that NSS scores can be inversely correlated with stretch and rigour. Looking at three years-worth of data will mitigate concerns about the effects on small providers. It will also help to address the concerns of the noble Lord, Lord Lipsey, about spikes created by a non-response. The need for care when interpreting results for small providers has been drawn to the attention of the TEF assessors. However, overall the panel will be encouraged in its assessment to reward and recognise quality wherever it finds it, without being bound by guideline distributions of gold, silver and bronze.
Lord Watson of Invergowrie
My Lords, the Minister said there are no quotas, but unless my memory fails me, when we discussed the TEF, he said he thought that gold and bronze would have roughly 20% each and the rest would be what he termed “in the middle”. I understand that they are not firm quotas, but it seems that the Government have a fairly clear idea of what they expect the outcome to be.
Viscount Younger of Leckie
I will have to check Hansard, but I believe I was speaking about the current system and how it is working now. I should stress that there is no quota and it could well be that these percentages are different when operated under the TEF. There is no particular expectation. I believe I was answering the question about how it might be likely to be very different.
Baroness Lister of Burtersett (Lab)
I thank the Minister for answering my third question, but I had two other questions specifically on the measurement of teaching quality. Can the Minister answer them in his next letter, which we are so eagerly awaiting?
Viscount Younger of Leckie
Yes, of course. I reassure the noble Baroness that I will add her points and I will look at Hansard again closely on the issues that she has raised and address them.
Lord Blunkett (Lab)
Would the Minister be kind enough to ask his staff to include me in his letters? Although I have not spoken in this debate, I would be very grateful if he could include me in the communication.
Viscount Younger of Leckie
That is easy to answer and of course I will include the noble Lord in my reply.
Lord Patten of Barnes (Con)
Can my noble friend briefly tell us what one calls a university not rated as gold, silver or bronze? What category is it in? How do you define it? Is it “tin”? Is it “unsatisfactory”? How do you describe it?
Viscount Younger of Leckie
I will include my noble friend in my letter and I will clarify that. The TEF is voluntary, so there will probably be some providers who are outside the TEF. I will follow that up and write a full letter that will include my noble friend.
Lord Jopling (Con)
On this same point, what has caused the problem is the Minister saying last Wednesday that,
“a bronze award is clearly seen as a badge of high quality, just as it will be in the TEF”.—[Official Report, 18/1/17; col. 276.]
Following on from my noble friend’s question, would it be helpful to the Government and the Minister if we were to table an amendment on Report to insert some grades below the bronze level?
Viscount Younger of Leckie
I answer my noble friend by saying that much of this has been addressed in all the consultations that have taken place. We believe that we have come up with the right approach. The consultation included a number of ways in which the ratings could be used and we have come up with this approach. One idea proposed a rating system with 10 criteria and another proposed four. We believe that this is the right approach, having consulted the sector.
Lord Lipsey (Lab)
My Lords, I thank all noble Lords who have taken part in this very good debate. I also thank noble Lords who resisted taking part, because I will not be terribly late for my favourite event of the year, the Gold Medal Showcase at Trinity Laban, where our musicians compete at a level you would not believe if you were not in the room.
First, I want to refer back to the debate that I was having with the noble Lord, Lord Willetts, where there was a contribution from my noble friend Lady Blackstone. It became practically academic at one point and I am reminded of Henry Kissinger’s remarks about why academics’ debates generate so much heat. The answer is because there is so little at stake. There is much more at stake in this one than in that one but, being of an academic disposition, as is the noble Lord, Lord Willets, I did want to refresh my memory of the ONS report. He pointed out that the quote I used included the word “raw”. He used that to suggest that it was not as critical as I thought. However, the ONS said it straight; it said that “the differences between institutions at the overall level are small and are not significant”. No doubt we can debate further in the common room afterwards.
This debate about the ONS and the RSS, seems to lend powerful force to some of the amendments in my grouping this afternoon. One of them calls for a statistical inquiry into the validity of the NSS and the noble Lord, Lord Willetts, and I could spend happy hours giving evidence to the statistical inquiry. In the end, this is not a matter of opinion on whether it is a good survey, it is a matter of fact. Facts need to be established and we should not be moving into a lower world where expert opinion no longer counts. That is the route to the forms of degeneration we are seeing throughout the world.
If I might be allowed one more minute, I should like to address the remarks of the Minister. We have been listening to the Minister throughout this debate and I have found his remarks this evening very helpful. Indeed, he made two crucial and valuable points. First, he made it perfectly clear that the submissions made by institutions—I hope I am summarising correctly—and the general case that their teaching is good, is more important than the metric based on the NSS. This is of great importance and deals substantially with many of the fears that have been bugging me. It is very easy for numbers to trump words, because they seem concrete, real and true and words can seem less so, but what he has said—I am sure the panel will take it very seriously—is an extraordinarily important breakthrough.
I am also glad about what the Minister said—though he was a little elliptical—about the distribution of awards between gold, silver and bronze. It will be very helpful if the number of institutions that fall into the bronze category is smaller than has sometimes been suggested and is confined to those institutions where there are well-attested problems. We do not want a fifth of our universities categorised as bronze, shunned by students in later years and deprived of the extra resources they need to improve their performance. If a few outliers are so categorised, so be it. That may be necessary for a successful TEF, but it is important that the numbers be kept down and I took the Minister to hint that they were.
There is one more thing that I would have liked him to say—and I do not mean in my fantasy world, where everything that the noble Baroness, Lady Wolf, and I said was made real. I would have liked him to say that, in view of the concerns about the soundness of the TEF, we are going to postpone—not end—the link between the TEF and fees, but there are some weeks between now and Report. There is some time for bodies such as the ONS to reflect on our debate this evening and perhaps give us further advice on their opinions of the metrics. There is also some time for Ministers to understand that, when they show flexibility on how this policy should be implemented, it is not weakness; it is strength, because it will lead to a stronger TEF that works in a way that every noble Lord who has spoken wants it to work. I beg leave to withdraw my amendment.
Lord Lucas
Lord Lucas
My Lords, in moving Amendment 207 I shall speak to the other amendments in the group. The amendment covers a point I have made before—that it is essential that the whole sector should be represented in these organisations, not just the bits that the old universities like.
Amendment 392 would extend the Secretary of State’s access to information to anything they may be required or interested to know under any enactment, rather than just under the Bill.
Amendment 395 would appoint HESA—I suspect it is HESA being talked about at this point—to take an interest in people who intend to become students, not just people who become students, because a lot of the data they produce will be used to inform people as to whether to pursue a course, which is not really of much interest to those who have already taken that decision. It is important that HESA should focus on the students-to-be as much as on people who are already students.
Amendment 400 is an alternative to Amendment 207. I do not blame the current HESA regarding the provisions of Amendment 401. It is a trap that UCAS has fallen into of putting money and its constituent institutions ahead of the interests of students. This is a difficult thing with all such bodies, such as Ordnance Survey and others: the money tends to become the focus of what they are doing. It needs government to pull them back to focus on the interests of the country as a whole and, in this case, of students in particular. As long as the Office for Students has power to keep a body on the straight and narrow in this regard, I shall be quite satisfied that the Bill does not need this additional wording.
The anti-competitive conditions in Amendment 403 again look at the way UCAS has become a constraint on the way individual universities reflect students. Anti-competitive behaviour should always be subject to the very closest scrutiny by government to justify it. I would like to know that the OfS can keep its eye on that.
Amendment 407 goes with Amendment 395. I beg to move.
Baroness Goldie (Con)
My Lords, I thank my noble friend for drawing attention to a range of concerns relating to how the designated bodies will operate. I offer my assurance that we share the intention that legislation must support these bodies to be responsive to the needs of current and prospective students, and representative of the whole sector. I am happy to discuss these amendments further when we meet—although, given my state of health, I quite understand if he wishes to postpone that pleasure.
The role of the designated data body is to provide reliable and robust data on the sector for students, prospective students, the OfS and the sector itself. It will gather and make available source data, but it will not to be the sole source of information. The designated body functions most closely resemble those currently carried out by the Higher Education Statistics Agency—a sector-owned body that collects and publishes official data on higher education. I should clarify that the role currently under discussion is not related to the current role of UCAS. The designated body functions do not extend to running an admissions service. I reassure my noble friend that it is absolutely the Government’s intention that the interests of prospective students will be taken into account in the new system. The Bill already allows for this.
Amendments 398, 401 and 403 would create additional conditions for the designated data body to put the interests of students above that of higher education institutions and the commercial interest, and to ensure that data collection is not anti-competitive. The Government support the broad thrust and intent of the amendments, but believe that the current drafting is sufficient. The new data body will have a duty to consider what would be helpful to students and prospective students. However, it would not be in the spirit of co-regulation to direct the order of interests of the body.
I assure my noble friend that there is no intention to give the designated body a monopoly over data publication. We have a wide range of organisations involved in providing information for students, including specialist careers advice services aimed at mature students and career changes. We would not want any reduction in this choice for prospective students. While the Bill gives the designated body the right to receive information from providers, it does not give the body any right to prevent providers sharing those data with other organisations.
On Amendments 207 and 400, the Bill already requires that the persons who determine the strategic priorities of the designated data and quality bodies represent a broad range of registered higher education providers. The quality and data bodies are designed to be independent of government, so it would not be right to prescribe the make-up of a board in the way these amendments do. Rather, the bodies should have the ability to take a view on the mix of skills they require for the challenges they face.
The Government have confidence that they have the right balance here. In these circumstances, I therefore ask my noble friend to withdraw Amendment 207.
Lord Lucas
My Lords, I am very grateful for the answer my noble friend has given me and for her offer of further conversations if there is anything, on reflection, I think she has not covered completely. I beg leave to withdraw my amendment.
Baroness Wolf of Dulwich
“( ) The amount of a fee payable under subsection (2)(a) by an institution or provider— (a) must be calculated by reference to costs incurred by the designated body in the performance by the body of functions under section 23(1) in relation to the institution or provider, and(b) may not be calculated by reference to costs incurred by the designated body in the performance of any other functions or in relation to a different institution or provider.”
Baroness Brown of Cambridge (CB)
My Lords, I speak on behalf of the noble Baroness, Lady Wolf of Dulwich, who is unwell. She does not intend to move this amendment and Amendment 217 but—if I have permission to add one sentence—they are about the costs of the regulatory structure. The same wording arises later in the Bill on the Office for Students. We will have a chance to discuss this on Amendments 420, 421 and 423.
Lord Addington
“( ) In preparing, revising or implementing the provisions of a plan which relate to equality of opportunity, the governing body may take regular advice from bodies representing minorities nominated by the Equality and Human Rights Commission, about appropriate steps to improve ethnic and gender diversity representation and representation of an appropriate range of disability groups.”
Lord Addington (LD)
My Lords, in moving Amendment 226 and speaking to the other amendments in this group in my name and those of my noble friend and the noble Lord, Lord Stevenson, I draw the Committee’s attention to matters to do with disability. There is not much in the Bill focused on this, except for access. When we talk about access, getting those with disabilities through the university system must be a fairly high priority, as they are a large group. Indeed, it is reckoned that 20% of the school population have a special educational need, many caused by a disability. So to draw a little attention to it is justifiable at this point.
I feel a little mean bringing this again to the Minister but we are still waiting for guidance about what universities are supposed to do about their changed and enhanced responsibility for dealing with those with disabilities. I am sure most of the Committee will have heard my speech on this on a previous day, but we have a major shift in that responsibility. Effectively, there are four bands reckoned to be a disability, although we cannot discuss it that clearly at the moment. Those in the first two are now the responsibility of universities. The guidance which was supposed to tell universities what those duties are and what is supposed to happen has still to be published, and we are now into the second term of the new regime. Indeed, when I asked a Written Question on this three months ago, the Minister said they were waiting to get the thing published. It is not his responsibility but I am afraid the person with the ball gets the tackle; it is just the way it falls. We need some guidance about what the Government’s thinking is, so a series of probing amendments is appropriate at this point.
The amendments are really attempts to extract information. At the heart of Amendment 226 is an attempt to find out what is going to happen. I do not defend the wording that closely; at this stage the debate is more important than the actual wording of the amendment. Amendment 227 looks to a precedent set within the rest of the education sector and brought forward in regulations last year, when the initial teacher training facility accepted that it must take on a higher degree of knowledge and expertise in dealing with special educational needs. The vast majority of the students who go into our university sector will come through the school system. If you have a degree of teaching, preparation and help for them at one level, merely dumping them out at the other side is something that we should not be doing, particularly as the university is supposed to be picking up this activity. Okay, it is only the bands judged to be of less severity, but if the lecturers—those doing the teaching at higher, university level—do not have some knowledge, they are going to make mistakes in their job of implementing this. The school system has proven to us that it is quite possible to have a duty and insufficient knowledge to carry it out. Let us avoid that here; let us get something in place.
Baroness Brinton (LD)
My Lords, my name is attached to the amendments submitted by my noble friend and I have one that I believe complements his amendments. I remind your Lordships’ House of the amendment on the role of the Director for Fair Access and Participation, when we were debating—and I used as an illustration—the responsibility of the director for ensuring that the responsibilities regarding disabled students were being appropriately delivered by institutions.
It is worth reminding ourselves, going back nearly two years to when the Government began their consultation on the cutting of funding for disabled students’ allowance and transferring some of the funding to institutions, that at the time this was heralded a great thing for better targeting disabled student support. Many of the specialist organisations that work with disabled students provided evidence to the contrary at that consultation. The National Deaf Children’s Society gave a case study of Isla, a young woman at the University of Edinburgh who asked the disability office repeatedly before she arrived for support. The case study says:
“She arrived early for lectures and asked tutors to wear the loop-system microphone, but found that microphones rarely worked or tutors forgot to use them. In a laboratory session she asked to be allowed to sit near the front so she could lipread, but the tutor was not supportive”.
Isla said:
“She said to me, ‘Well, you’ll just have to sit through it for this tutorial, this lab, but for the next time I’ll have you down the front’. Next time I went in, she still hadn’t changed it. I was raging. I was like really angry”.
The case study continues:
“As time went by, Isla realised that she was missing out on most of the content of her course. She dropped out at Christmas”.
Isla said:
“We had a couple of big papers coming up. I had started them. I had no idea where I was going with it. I e-mailed my tutor and said, ‘Look, I’m not coming back. I can’t. I can’t hear anybody, so I can’t’. He said, ‘I’m sorry to hear that’. That was it”.
That may be one example but I know from my time working in an institution some years ago that a lecturer refused to wear a microphone so a deaf student could hear, on the grounds that she might record the lecture and so infringe his personal copyright. I am pleased to say that the university dealt with that matter expeditiously. Putting the responsibilities on universities and reducing funding cause problems. That is why I support the comments made by my noble friend that we are now two terms into the new system and there is no clear guidance for institutions. That is deplorable and lies at the hands of the Government.
I want to go back a step from that to our responsibilities as a state. The United Nations Convention on the Rights of Persons with Disabilities is very clear about the responsibilities that we have as a state and as education institutions to provide support for students. It notes a:
“Lack of disaggregated data and research (both of which are necessary for accountability and programme development), which impedes the development of effective policies and interventions to promote inclusive and quality education”.
It also notes that there are:
“Inappropriate and inadequate funding mechanisms to provide incentives and reasonable accommodations for the inclusion of students with disabilities, interministerial coordination, support and sustainability”.
I worry that we are moving into that world at the moment where we do not quite know what is going on between institutions and the department. But the department has already handed over the responsibility for the support of disabled students to institutions.
The convention goes on to say at paragraph 12(i):
“Monitoring: as a continuing process, inclusive education must be monitored and evaluated on a regular basis to ensure that neither segregation nor integration are taking place, either formally or informally”.
Isla’s story is segregation writ large. Later on the convention talks about implementation at a national level. This is the responsibility of the Government, even if they choose to devolve the power down. Paragraph 63(d) speaks of:
“A guarantee for students with and without disabilities to the same right to access inclusive learning opportunities within the general education system and, for individual learners, to the necessary support services at all levels”.
Paragraph 63(g) speaks of:
“The introduction of accessible monitoring mechanisms to ensure the implementation of policies and the provision of the requisite investment”.
Finally, on my personal favourite topic of training, paragraph 73 says:
“Authorities at all levels must have the capacity, commitment and resources to implement laws, policies and programmes to support inclusive education. States parties must ensure the development and delivery of training to inform all relevant authorities of their responsibilities under the law and to increase understanding of the rights of persons with disabilities”.
With the introduction of the new system, there are some real concerns among student assessors about the arrangements for professionals under the new quality assurance framework for the non-medical helper support funded through the DSA. Higher education providers are reporting that it can be difficult to find interpreters for sign language due to the new requirement for freelancers and agencies to have to register with the DSA-QAG. This is an important issue and we are already getting comments, such as this anonymous quotation from a discussion forum of student assessors trying to help deaf students before Christmas:
“Already running into problems finding support that meets QAG requirements – I’m already starting to draw a blank for some students who need e.g. specialist note-taker, language support tutor as agencies – despite listing this in their range of support on the QAG site – are saying they can’t recruit people who meet the required qualifications (as set by QAG). Anyone else having this problem? Any possible solutions on the horizon??”.
The silence from the department is deafening. Unfortunately, the impact for students in our system means that it is not working. That is why I repeat my earlier statement, when we discussed the role of the Director for Fair Access and Participation, that there must be a specific role for monitoring support for students with disabilities. These are probing amendments, but they pick up the point about monitoring and evaluation to ensure that our students are not deserted by this nation state in contravention of the United Nations convention.
Baroness Lister of Burtersett
My Lords, I support these amendments and would like to speak briefly about the very important points that have been made. For a number of years I chaired the disability and additional needs committee at Loughborough University, and was very aware of the importance of adequate support for disabled students and how difficult it is when that support starts breaking down. I am very out of touch with it now but I was shocked by what was said about the guidance, and I hope that the Minister will be able to give a firm assurance that there will be no further delay in issuing that guidance.
I have a broader point to make about equal opportunities, as some of these amendments go beyond disability. The staff body is as important as the student body. I am prompted to say that by a report, which I think I read last week, about the complete absence of senior black staff in universities. If there are no senior staff and very few lecturing staff, and all the black members of staff are cleaners or porters, what kind of signal does that send to young black people who might be thinking of going to university, if they see those institutions as purely white ones? When we talk about equality of opportunity and access for students, we must bear in mind what is being done in relation to staff in the examples and role models that are being provided.
The Archbishop of York
My Lords, the amendment is asking the bodies concerned to seek advice from the commission and those who advise that tells them it would be good to do it this way. Because of its permissive nature, I hope the Minister will see this as helping. As somebody from a minority ethnic group, I have always benefited from the human rights commission. The advice that I have just mentioned is not intrusive; it is a good thing. Universities should hold before themselves, in all their aspects, a mirror, to see whether their leadership, in different places, reflects the nature of the university. Noble Lords know that the Church of England has finally overcome the question of women as bishops in the representative route, but we still have a big job in terms of minority ethnic bodies. Given what was said in the Stephen Lawrence inquiry, I feel it is quite appropriate. However good they are, institutions need to be aware that, within their set-up, they could unwittingly be discriminating against people. The amendment, which is permissive and not difficult, simply asks for bodies to give advice to improve gender diversity as well as ethnic groups. I hope we all would say that that is good advice.
Lord Stevenson of Balmacara (Lab)
I thank all noble Lords who have contributed to this interesting debate. The metaphor of holding up a mirror to current practice and making sure that what is reflected is not a distortion of what is happening on the ground is very powerful. The noble Lord, Lord Addington, has done excellent work in this area and is an inspiration to us in insisting that we look at these points and think harder about how policies are going to be developed and how monitoring and training will support them. We owe him a great debt of thanks.
The noble Baroness, Lady Brinton, took the argument away from the specific question of what is happening in the Office for Students and how things should be done, and looked at it in the context of our responsibilities under the UN convention. That is very important. In reading out her quotation, she pointed out that the UN does not have a problem with “must”. Our parliamentary draftsmen shy away from “must” and always insist on “may”. The convention clearly says “must”, so there are is no way of ducking this responsibility. The Government are responsible for policy, monitoring, training, funding and development; for ensuring that the project is capable of reflecting correctly what we do; for ensuring that there are none of the perverse incentives to which the noble Lord, Lord Addington, referred; and for ensuring that we can operate in an appropriate way for a civilised society, caring for all students and making sure that access is available to all.
Our Amendment 236 is of the “change ‘may’ to ‘must’” type. I thought that, as I was not getting very far with “must”, I should try “should”, but the intention is exactly the same. This is something the OfS should—that is, must—do. It should not just identify; it should also give advice on good practice. If we do not work together, we will never achieve this aim.
Viscount Younger of Leckie
My Lords, I am grateful to noble Lords for raising important issues relating to access and participation plans and disability. This Government are deeply committed to equality of opportunity, and I agree with many of the comments made by the noble Lord, Lord Stevenson. That is why Clause 2 introduces a duty on the OfS to consider equality of opportunity in connection with access and participation in higher education. This applies to all groups of students. No such duty applied to HEFCE.
In order to be approved, access and participation plans will need to contain provisions to promote equality of opportunity. This makes clear our commitment to this important consideration. Questions were raised by the noble Lord, Lord Addington, and the noble Baroness, Lady Lister, about where we are on guidance on disabilities. I hope noble Lords have read my letter of 18 January, but I confirm, as I confirmed in that letter, that I expect this guidance, for which noble Lords have been waiting for some time, to be published imminently. I also reiterate my offer to meet the noble Lord to discuss this issue further.
Amendment 226, tabled by the noble Lord, Lord Addington, and the noble Baroness, Lady Brinton, seeks to specify that governing bodies of institutions may take advice from bodies nominated by the Equality and Human Rights Commission in developing the content of their access and participation plans. I support the intention here. We expect higher education providers to consult to help ensure that their access and participation plans are robust. I listened carefully to the sobering anecdote about a student experience from the noble Baroness, Lady Brinton. This is the very issue for which we are seeking solutions. We are in agreement about that. Indeed, OFFA currently sets out its expectation that universities consult students in preparing access agreements, and we anticipate that this will continue for access and participation plans. Given the autonomy of institutions and the wide-ranging support already available—for example, the Equality Challenge Unit supports the sector to advance equality and diversity for staff and students—I believe it is unnecessary to place this requirement in the Bill.
Amendment 228, proposed by the noble and learned Lord, Lord Wallace, seeks to include providing training for staff in awareness and understanding of all commonly occurring disabilities. Ensuring a fair environment and complying with the law are matters which providers need to address in meeting their obligations under the Equality Act 2010. This amendment would mean including a level of detail not consistent with the other, broader provisions and may overlook other underrepresented groups. For these reasons, I believe this amendment is unnecessary.
The noble Baroness, Lady Brinton, and the noble Lord, Lord Addington, proposed Amendment 229, which would mean that provisions requiring institutions to specify the support and advice they provide for students with disabilities may be contained in regulations about the content of an access and participation plan. We absolutely agree with the principle behind this amendment. The Equality Act 2010 imposes a duty to make reasonable adjustments for disabled persons, which includes an expectation to consider anticipatory adjustments. In addition, the Equality and Human Rights Commission has a supporting role in providing advice and guidance, publishing information and undertaking research. Given the wider context, this amendment would introduce a level of detail into the Bill that is inconsistent with the other broader measures. It may also risk being seen to overlook other underrepresented and disadvantaged groups.
The new clause proposed in Amendment 235, tabled by the noble Lord, Lord Addington, and the noble Baroness, Lady Brinton, would require the OfS every two years to commission a review of the support for students with disabilities or specific cultural needs. This is an interesting proposal, and I remind the noble Lord and noble Baroness that the Bill will require the OfS to produce an annual report covering its delivery against all its functions. Critically, this includes the duty regarding equality of opportunity set out in Clause 2.
Baroness Deech (CB)
Will the Minister clarify what is meant in Amendment 235 by “cultural needs”? I understand religious needs, but I cannot think of any cultural needs that have to be attended to. We certainly do not want to see universities providing, for example, gender segregation.
Viscount Younger of Leckie
It is a generic term. In my next letter, I will address that point. I am certain that it requires a proper and full answer.
Amendment 236 seeks to ensure that the OfS “should” identify good practice and give advice to higher education providers. Let me reassure the noble Lord that we expect this to be a key function of the OfS. HEFCE and OFFA already do this as part of their existing roles, and we expect that will continue in future. We believe that the Bill as drafted will deliver the policy intent on the issues raised, so these amendments are unnecessary. I appreciate the fact that noble Lords have raised these issues, and I ask the noble Lord to withdraw Amendment 226.
Lord Addington
My Lords, I thank the Minister for his reply and thank the most reverend Primate the Archbishop of York for pulling me up and reminding me about a bit of the amendment that I wrote myself, so I should have referred to it. I am glad to hear that the guidance is coming out. I have not received the letter yet, but it does not really matter. The fact that the guidance is coming is good. The fact that we have been waiting for it for this long is not. We are going to get it half way through an academic year, and in the vast majority of cases it will not be possible to implement it until next year. In certain cases, we are not preparing but patching up. We need to look at some of these issues in more detail. In fairness to the Minister, he was hearing about some of the specific points for the first time today. I look forward to arranging a meeting to see how this issue is progressing. I hope that bouncing between the Minister’s incredibly busy diary and my diary will be slightly more successful.
There are groups who do not know what is going to happen. They have been let down and have bad practices. I hope we can have clarifying amendments at the next stage, rather than confrontational ones, so we can find out exactly what is going to happen. At the moment, we are repairing trust and making sure this works slightly better—in a way we all thought the law was supposed to be working.
Viscount Younger of Leckie
My Lords, before the noble Lord sits down, can I clarify a slight misconception? The noble Baroness, Lady Deech, asked a question about cultural needs, which I attempted to address. In fact, it was the noble Baroness, Lady Brinton, who raised the concept of cultural needs, not the Government. I am very happy to discuss this with the noble Baroness, Lady Brinton, outside the Chamber.
Lord Addington
I think it was actually in my amendment. I am not wedded to this. It was a probing amendment. If the Minister does not like those terms, it does not matter to me at all. I beg leave to withdraw my amendment.
“( ) requiring the governing body of an institution to take, or secure the taking of, measures to enable students to undertake courses on a part-time basis where appropriate.”
Lord Stevenson of Balmacara
My Lords, I think we can be brief on this one. It is a continuation of the debate that started two or three days ago to try to put flesh on the bones of the ideal which the Government say they have—and we certainly share—which is that higher education in future should be less regimented and less dominated by the three-year traditional degree taken full-time by students who come straight from school. We should try to open up the provision that is available in higher education, and made by higher education providers, to ensure that equal parity is given to those who wish to study part time, and in particular mature students who very often need to be more flexible in what they do. At the moment, they are disappearing too fast from the statistics, and we need to try and get them back.
This issue has been raised before in terms of the hierarchy of government policy in relation to the Office for Students, and is now down at the level of access and participation plans. The amendments seek to ensure that the governing bodies of institutions can and will take measures to enable flexible provision and allow students to undertake part-time courses, particularly to suit those who may be mature. I beg leave to move.
Baroness Garden of Frognal (LD)
My Lords, I have tabled Amendment 237 in this group, which complements the words of the noble Lord, Lord Stevenson. With the collapse in part-time student numbers, this would ensure that the Office for Students has a duty to ensure that equality of opportunity is not neglected for those whose only opportunity to study is via part-time provision and at a later stage in life. It would also provide an assessment as to whether the Government’s new initiatives, such as the extension of maintenance loans to part-time students, are having the desired effect of boosting current numbers.
We remain concerned throughout the Bill that the opportunities for mature and part-time students should not be neglected. Putting them in the Bill will ensure that their contribution to higher education is fully considered.
Baroness Goldie
My Lords, the Government agree that part-time education, distance learning and adult education bring enormous benefits to individuals, the economy and employers. Our reforms to part- time learning, advanced learner loans and degree apprenticeships are opening up significant opportunities for mature students to learn.
As part of the Bill, the OfS must have regard to the need to promote greater choice and opportunities for students, and to encourage competition between providers where it is in the interests of students and employers. By allowing new providers into the system, prospective students can expect greater choice of HE provision, including modes of provision, such as part-time and distance learning, which can increase opportunities for mature learners.
As was noted during our debate on 11 January, we know that in 2014-15, 56% of students at new providers designated for Student Loans Company support were over the age of 25, compared to 23% at traditional higher education providers. This is alongside the other practical support that the Government are already giving for part-time students, including providing tuition fee loans where previously they were not available. We have recently completed a consultation on providing, for the first time ever, part-time maintenance loans and we are now considering options.
Lord Stevenson of Balmacara
My Lords, I am grateful to the Minister—I am sorry she is struggling to get through. It calls, I think, for an early night. We should make sure that she gets tucked up in bed with a good scotch—I perhaps should not say these things—in order that she recovers and comes back on Wednesday in good form. I listened to her very carefully and think she has reached out to us on this point. I beg leave to withdraw the amendment.
Viscount Younger of Leckie
My Lords, in moving these government amendments, I look forward to potentially hearing contributions from the noble Baroness, Lady Garden, and the noble Lords, Lord Storey and Lord Stevenson, about the amendments that they have proposed in this group. However, I believe the amendments we have tabled will have a similar effect to that which their amendments seek to achieve. The Bill is not as clear as it could be on exactly what types of providers can apply for what type of degree-awarding powers, and what awards this then entitles them to make. I believe this is why noble Lords tabled Amendments 242 and 243.
The simplest way of dealing with the issues at play here is for me to explain the purpose of the government amendments. We listened carefully to the discussions in the other place and, as the Minister for Universities and Science promised, we have reflected on and re-examined how Clause 40 may have been read as impacting on the further education sector. Although there are over 30 government amendments in this group, most of them are consequential and there are really just two main areas that we seek to address. First, we want to remove any doubt that institutions within the further education sector can continue to apply for powers to award foundation, taught and research degrees. We believe that the amendment to Clause 40(1)—whereby what was subsection (1)(b) has been removed—will achieve this. Under that amendment, the definition in Clause 40(3) of a “taught award” clarifies that this may include a foundation degree. Removing what was Clause 40(1)(b) should help to remove any impression that providers in the further education sector that obtained powers under this route could not go on to obtain powers also to award higher-level degrees. As before, a further education provider must also be a registered higher education provider before it can apply for authorisation to grant awards under Clause 40.
Secondly, these amendments should remove any doubt over which providers can award foundation degrees. While we wish to retain the current position where only higher education providers that are also further education providers may apply for powers to solely award foundation degrees, it should nevertheless continue to be the case that institutions that can award taught degrees should also be able to award foundation degrees. It remains the Government’s policy that a provider that wishes to be authorised to award foundation degrees only should be required to provide a satisfactory progression statement. We believe it is important that the provider in question can demonstrate that it has in place clear progression routes for learners wishing to proceed to a course of higher-level study on completion of the foundation degree. The amendment to Clause 43 is therefore to ensure that, were a variation of a provider’s powers to result in it being left with the powers to award only a foundation degree, that provider would need to be able to satisfy the Bill’s requirements in respect of a progression statement. I beg to move.
Lord Storey (LD)
My Lords, I thank the Minister for his comments. I am speaking to Amendment 243 in this group. We welcome the government amendments. I agree very much that there needs to be clarity. There is a need to ensure that certain procedures within the Bill are applied fairly and proportionately and accommodate smaller providers of higher education such as further education colleges. It is also the case that the recently published BEIS post-16 skills plan includes proposals for colleges to make their own technical education awards, and it is important that there is joined-up thinking in this area. Unlike universities, colleges that offer foundation degrees are currently unable to provide both a foundation degree and a certificate of higher education to provide a flexible level 4 qualification option for students. The amendment would remedy this.
Lord Stevenson of Balmacara
My Lords, I am grateful to the Minister for introducing his raft of amendments. He is right that on the area we are talking about we meet in the middle. I am glad that his amendments, which outnumber ours by about 100 to one, were tabled, because what we had tabled would certainly not have been sufficient to achieve what he has outlined.
It is good that this is being done in pursuit of a vision of higher education provision that is inclusive rather than exclusive and which is open to many institutions to offer the various types of degrees and qualifications that they think is appropriate, with the aim, as picked up today in earlier amendments, that other modes of study, such as full-time and block release, are not excluded in any tally. With that will come the responsibility to ensure an effective credit accumulation system that allows those who have credits banked in the various styles and approaches that different institutions have to cash them in, as it were, against other higher education provision, to ensure that they arrive at a satisfactory conclusion with the degree that they have been studying for through this flexible route.
I have three worries that I wonder if the Minister could respond to in the short time available before we must break for the dinner business. Maybe this will mean that yet another letter will emerge from this process, and I have no objection to that. The first is that we have heard announcements today about various different types of institution that will focus on technology and technological achievement. These are to be welcomed, but it is not clear that provision has been made for that in the Bill. The Minister may not have been able to adapt the thinking announced today into the mode that would apply to the Bill, but I would be grateful if he could confirm whether or not it is the Government’s intention to try to bring forward anything that might be a consequence of the proposals made today. I agree that we are in a three-month consultation period but the Bill will last a lot longer, and there may not be another higher education or even further education Bill along in the next year or two. It would be a pity to miss the bus, as it were, on this occasion, so some clarification at least about the thinking would be helpful. We would certainly wish to work with the Minister if there were some suggestions about changing the framework here, although maybe he will be able to confirm that that is not the case.
Secondly, the question about who has what powers to do what is confusing. I want to assert what I think is the intention behind this term, and if the Minister is able to confirm it then so much the better. I also have a question embedded in this, which is where I will end. The intention of these amendments, as it was in our proposals as discussed in Amendments 242 and 256A, is twofold. First, it is to remove any doubt that institutions in the FE sector can apply the powers to grant taught and research degrees in addition to foundation degrees, as in the current system. Secondly, it is also to remove any doubt that institutions that are not in the FE sector, and which have been granted degree-awarding powers, can also award foundation degrees—in other words, institutions can provide the whole suite of qualifications.
However, it also seems to be the case that the Government are trying to say that only an institution in the FE sector can apply for the powers to award just foundation degrees, which seems perverse. If the Government accept my opening premise that we are trying to open up the system to make it more flexible, why is it only in the FE sector that you can find these foundation degrees? Is there something special about them that restricts Oxford University, Edinburgh or anyone else with the ambition and the wish to try to make as seamless a proposal for students wishing to enter university as possible to be prohibited from offering a foundation degree because they are not in the FE sector? That seems odd and slightly against what the Minister was saying as he introduced the amendment.
There seems to be a proposition buried in the amendments: that we are opening up everyone to offer the sort of courses that allow any student—full-time, part-time or mature, of any persuasion, type or arrangement—who wishes to come forward for degrees to be able to do so in the way that has the fewest institutional barriers. This particular restriction, that only FE providers can offer foundation degrees if that is all they want to offer, seems to go against that. I look forward to hearing from the Minister.
Baroness O’Neill of Bengarve (CB)
My Lords, I am beginning to feel like a broken record but I am still very unclear on what an “English higher education provider” is. I understand that it is meant to be an inclusive category, and that may have its merits. I have now read the Introduction to the Higher Education Market Entry Reforms—which I find a slightly angled title, let us say—and the factsheet on degree-awarding powers.
To put it very simply, I am still not clear what there is to prevent entryism into this market by institutions that we would not normally think of as higher education providers or teachers. I shall give some examples. I have hesitated to do so far thus far because one does not wish to spoil the cheerfulness that attends the thought of new providers. However, let us imagine that a large-scale publisher—this is not at all an implausible way of expanding—sets up a wholly-owned subsidiary that offers degrees in England. I do not mean degrees in publishing but, rather, degrees of various sorts, as is profitable. Are they able to become an English higher education provider by that route?
Let us be a little more far-fetched. Suppose the Communist Party of China thought, “A bilingual university in London to which we can send people and where we will have very good access for our highly intelligent and well-trained academics would be an extremely good thing”. It too would then be providing higher education in England. Because in each case the institution is a wholly owned subsidiary, its students would qualify to receive tuition grants. However, I am not clear whether, if such institutions go bankrupt and the parent company is outwith the jurisdiction, there is any chance of recovering the assets of the one-time university.
Finally, let us imagine that it is neither of the above, but so-called Islamic State that seeks to set up a university. That might rather appeal to it. What is to prevent that? We need to know about the governance of these institutions. The fact that they are providing education in England just tells us that this is one of their markets; it does not tell us about the standard of governance.
Lord Stevenson of Balmacara
The noble Baroness is campaigning vigorously and with her usual persistence on a very interesting point. The letter dated 23 January that was delivered just as we were sitting down to enjoy ourselves this afternoon—I think we are going to have to start numbering them so we can keep track of which letter is which—has a little section on this, to which I think she was referring. Can the Minister possibly explain what this means?
“It is the Government’s policy that a provider that has a physical presence in England, and that is delivering courses in England, can be an English higher education provider even if it is delivering other courses in another country, provided that its activities are principally carried on in England. There has never been an agreed measure for identifying where the majority of a provider’s activity might be. But there are a number of sensible measures (or combinations of sensible measures) that should make it reasonably clear, including the number of students studying courses in each country, and/or where the provider has its administrative centre(s)”.
With the greatest respect to the Minister, this is just throwing more marbles on to the road for our poor horses to trip up and fall over on. I am not going to quote the stuff about massive open online courses, which has been raised by the noble Baroness and is an issue, because that is completely bonkers.
Viscount Younger of Leckie
I appreciate the contributions from noble Lords in the very short debate after I introduced the government amendments. As we are now proposing that a foundation degree award is covered by the definition of a taught award in Clause 40(3), this puts holders of foundation degree-awarding powers in the same position as holders of taught degree-awarding powers—which I assume was the intent behind noble Lords’ amendments. In addition, we plan to set out in guidance the relationship between degree-awarding powers and powers to award other higher education awards such as certificates of higher education. I hope that this will help to further clarify the position for providers. We anticipate that this guidance will be subject to consultation. I do not wish to dwell on Amendment 256A any further, as we have covered the argument in our discussions on the previous group, where I trust that my noble friend Lady Goldie offered some reassurance.
However, I will address a small number of the points raised. The noble Lord, Lord Storey, raised some issues about the post-16 skills plan and how this joins up with our proposed reforms. I confirm that we are carrying out two reform programmes, in higher education and technical education at the same time, which he is probably aware of and which gives us the best opportunity to ensure that they are complementary and for young people to benefit from the changes as soon as possible. This is not about diverting people from academic education into technical education or vice versa; we simply want everyone who can benefit from a tertiary education—whatever that might be and whatever their talents lead them to—to have the chance to do so.
I will address the points raised by the noble Lord, Lord Stevenson. One point focused on the clarifications of our framework in relation to these amendments, while another was on the responsibility of powers. I think it is best to write a letter on that. I was interested in the points raised about entryism by the noble Baroness, Lady O’Neill, particularly on the position of overseas providers who might want to come in. The noble Lord, Lord Stevenson, has received the letter I have just written, in which I thought that we had addressed those issues, but I suggest that we have a meeting with the noble Lord and the noble Baroness, and indeed any other noble Lord who might wish to join in, to offer full and final clarification.
Iran: Human Rights
(7 years, 10 months ago)
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Lord Clarke of Hampstead
To ask Her Majesty’s Government what assessment they have made of the current human rights situation in Iran.
Lord Clarke of Hampstead (Lab)
My Lords, I thank the Minister and those noble Lords who have put their names down to speak for being present for this short debate. I and many others think this is a very pressing issue for us to address as a nation.
The appalling human rights situation in Iran continues to deteriorate, with the authorities there increasing the pressure on political prisoners, prisoners of conscience and activists, and at the same time increasing the number of executions and public hangings. Reports during this last month include mention of continuing barbaric punishments, as has been the case for so many decades. The punishments include amputation of limbs, public hangings and public floggings. It is clear that the condemnatory resolution of the United Nations General Assembly adopted on 19 December is being ignored by the despotic rulers in Tehran. We should not be surprised by the mullahs adopting the position that they always have; they have been doing it all these years. There have been 60 or more resolutions in various United Nations committees and councils, but every one of them is ignored by those people in Tehran.
Two weeks ago, the United Nations special rapporteur for human rights in Iran, Ms Asma Jahangir, stated her alarm over the health of several prisoners of conscience in Iran who have been on a prolonged hunger strike contesting the legality of their detention. She also expressed deep concern over the continuous detention of human rights defenders in the country, who she said have been tried on the basis of vaguely defined offences and who were heavily sentenced following trials marred by due process violations. Ms Jahangir urged the authorities to immediately and unconditionally release all those who had been arbitrarily arrested, detained and prosecuted for exercising their rights.
The hopes of the international community that things would improve, raised when the so-called moderate Hassan Rouhani took over the presidency in 2013, were quickly dashed. The following year he was saying that executions were, “God’s commandments” and,
“laws of the parliament that belong to the people”.
He quickly appointed Mostafa Pourmohammadi, one of the main perpetrators of the 1988 massacre of political prisoners in Iran, as his Justice Minister—a murderer.
It is well worth recalling what was said at the 71st session of the UN General Assembly last October. Speaking about the increase in executions in Iran, the special rapporteur said:
“The right to life is still under heavy assault in Iran today”.
Iran continues to execute more individuals per capita than any other country in the world. Human rights organisations estimate that between 966 and 1,054 executions took place in 2015 alone—the highest rate in over 20 years. At least 420 executions were reportedly carried out between January and October 2016. More recently, since 1 January, there have been 40 executions.
The authorities continue to execute juveniles, showing their contempt for the commitments they have signed up to in the case of juveniles. The ratification of the Convention on the Rights of the Child by the Iranian regime is itself testament to the disregard they have for human life, even if it means killing children.
I recognise the efforts made by our own Government, as they have given support to the various calls for an end to the evils of the mullahs’ regime. This evening I call clearly on the Government to join other nations in calling for those clearly identified as being responsible for the 1988 massacre of the 30,000 victims to be tried in the International Court of Justice. The international community has a duty to speak out against those who callously and wantonly condemned the 30,000 human souls to death.
While the political bickering between the various factions in Tehran goes on, especially following the death of Rafsanjani two weeks ago, and becomes more intensified, the Iranian people, particularly the younger generation with its desire for fundamental freedoms and civil liberties, continue to pose the greatest threat to the ruling theocracy. The protests inside the country continue with little or no coverage by media outlets in the West. During 2016, thousands of popular protests and rallies took place in spite of the repressive security measures by the authorities to prevent such expressions—just expressions of a desire for human rights and a people wanting to see an end to the theocratic and inhumane rulers in Tehran.
Many of the gatherings of protesters start off with a call for an end to the appalling living conditions endured by many. Protests about poverty and unpaid salaries grow quickly to loud calls for an end to the regime, the release of political prisoners and an end to the widespread corruption and oppression in that country.
The president-elect of the National Council of Resistance of Iran, Mrs Maryam Rajavi, has proposed a 10-point plan. There is not time this evening for me to go through the 10 points but I am confident that the Minister and the Government are aware of Mrs Rajavi’s 10-point plan. It seeks nothing more than what we take for granted in our lives: the right to speak out and the right to protest. I am not being critical in any way of what has gone on, although I could say something about the lack of effort when the nuclear deal was being done, when human rights were not even mentioned by the negotiators. However, I do not hold the Minister responsible for that.
It is now 30 years since a young man came into my office in Clapham and showed me pictures of young men hanging from gibbets—impromptu gallows, cranes similar to those used four months ago in the football stadium when they executed those people. It is 30 years since he showed me those pictures and it stays in my memory and always will—to see young men dangling in the air because they had dared to speak out about that in which they believed.
I also remember the young lady with whom some years ago I had a telephone link from Camp Ashraf. She was a young girl of 16. We got on quite well considering her English was good and my Farsi was absolutely rubbish. I went home and said to my wife that it had been a wonderful evening, being able to speak to a young lady suffering with lots of people in Camp Ashraf. About three weeks later I asked my colleagues in the National Council of Resistance of Iran how she was getting on and heard the terrible news that she was among the 50-odd people massacred in one of the raids on Camp Ashraf—raids perpetrated by the Iraqi Government on behalf of the mullahs in Tehran.
Many expressed great joy and relief when last year the successor to Ashraf, Camp Liberty—if ever anything was misnamed it was Camp Liberty, which was in my view a concentration camp—finally closed and the residents were taken in by the Albanian authorities. The world owes a great deal to Albania because, in contrast to all the other nations which ignored the problem, it took people in and gave them a new life, ending the uncertainty, the living in fear and the daily persecution that they had suffered.
The international community continues to be misled by the Iranian authorities. Witness to this feeling is the so-called Iranian nuclear programme agreement. The discussions on that agreement do not include the dreadful human rights record. We shall regret that.
You could speak about the number of people and go on and on. Only today we saw the news of somebody’s appeal having been rejected, so a young mother will be deprived of her family life for another five years. In asking the Government this Question, all I can say is: please, pursue those responsible for historic crimes against humanity. It may just have some effect on these people who rule by fear and oppression.
Lord McInnes of Kilwinning (Con)
My Lords, I am grateful to the noble Lord, Lord Clarke, for bringing this important matter before the House, and for giving the Minister the opportunity to update the House on progress that the Government are making in trying to improve human rights in Iran. It is a great privilege to follow the noble Lord, Lord Clarke, after his heartfelt and commanding speech on the human rights being abused in Iran.
It is a great shame that we still need to debate this subject this evening. I am sure that after July 2015 many of us hoped that not only would diplomatic relations be properly re-established, but that the Iranian Government would have time to reflect properly on the egregious human right abuses taking place in Iran. These result in a great stain for such a great country that, for two millennia, was known for its pursuit of civilisation. It is important that we distinguish between the great Iranian people and the current apparatus of the state. The two are very different. As the noble Lord, Lord Clarke, has already said, the people in Iran crave improvement in their human rights and are prepared to put their lives at risk to protest against abuse of those human rights.
Any passing interest in Persian or Iranian history would tell your Lordships that the Iranian-Persian civilisation was based on the diversity that any great state or nation requires. Yet we see under the current state apparatus that diversity is viewed as a threat rather than something to be celebrated. Each religious minority is picked upon and forced from the public sphere. Jews are forced to keep a low profile or emigrate. Sufis—whose tradition was a central tenet of and came from the Shia religion—are persecuted. The Baha’i—in many ways the most oppressed religious minority in present-day Iran—are pursued from the public sphere. Christians, whether Armenians, Assyrians or converts meeting in house churches, are again forced to keep a low profile and suffer discrimination. Ethnic minorities—Arabs, Azeris, Kurds—find it difficult to gain access to higher education. All these groups are minorities, but minorities that add up to a majority overall in the Iranian state, a state where gender and sexuality are the determinants of how the state views one, judges what one is worth and determines the punishment one must face if going beyond what is expected in the public or private sphere.
It would be easy for those from that state apparatus in Iran to claim that we are nothing more than cultural imperialists who fail to understand the religious and cultural context of human rights in Iran. How, though, can that be the case when Iran signed the Geneva Convention in 1957, when President Rouhani himself was elected on a platform of reform, and when the Iranian parliament discusses the need to reduce capital punishment and the use of the death penalty but the state apparatus refuses to allow the restoration of human rights throughout the country?
That state apparatus has enforced a false theology that does not reflect traditional Shia Islam or the diversity that existed under various regimes in the past. As the noble Lord, Lord Clarke, said, in the past five years we have seen a massive increase in the use of capital punishment, reaching a peak of over 1,000 deaths in 2015. The UN rapporteur reported in March 2016 that 160 juvenile offenders were on death row. That is despite a change in 2013 to the penal code to discourage judges from sentencing juveniles to the death sentence.
Torture, flogging and stoning to death have become, and remain, key elements of the penal code. This is the very torture, as executed by the then state apparatus through SAVAK, which was an important component in creating the circumstances of the 1979 revolution in the first place and it continues. In the last month, concern has been raised by the UN special rapporteur on human rights; and the Supreme Leader, Ayatollah Khamenei, has been written to by his uncle, who reprimanded him on the poor human rights record for those imprisoned for involvement in the green movement. In the last 24 hours we have seen the danger of the failure of the Iranian state to recognise dual nationality, in the case of Mrs Zaghari-Ratcliffe. When the Minister responds, will she address this issue in particular?
I also hope that the Minister will be able to reassure the House that the Government will continue the excellent work for human rights that they have pursued directly with the Iranian Government on a bilateral basis and through the United Nations. While we will inevitably be drawn first to those suffering in Iran who have a connection to the United Kingdom, we must not forget the ordinary Iranians, whose only wish is to enjoy the same human rights as their ancestors were able to enjoy under so many different regimes in the past. The UK has a unique place in being able to speak for these people. For too long Iran was able to use diplomatic isolation as an excuse to avoid scrutiny. That can no longer be the case. As we move forward, I ask that her Majesty’s Government use all avenues open to them to improve human rights in Iran.
Lord Carlile of Berriew (Non-Afl)
My Lords, I congratulate the noble Lord, Lord Clarke of Hampstead, on obtaining this debate and opening it so well. He and I have made common cause on these issues for many years. There are not many opportunities to debate them and we are fortunate tonight to be able to do so in the presence of the noble Baroness, who is a senior Foreign Office Minister and who will, no doubt, be willing to answer a number of the questions put in the course of the debate. It has also been an absolute pleasure to follow the noble Lord, Lord McInnes, who gave a lot of colour to the historical aspects. These make the issues we are debating so depressing, because abuses in Iran have gone on for so long.
I hope that the House will indulge me for a moment in reflecting on the fact that I am speaking for the first time from this Bench. I hope it is proper for me to thank the House authorities, the Convenor of the Cross Benches and his staff for their guidance so that my move to this Bench could be made in compliance with the customs and practices of your Lordships’ House and with as little fuss as possible. I thank colleagues in this House for their courtesy in a difficult time, and I include in that members of the Liberal Democrat group which I left to come to this Bench.
Policy towards Iran has changed with the relaxation of the United Kingdom’s previously severely critical approach towards the regime. It is a matter of judgment whether one believes the asserted commitment to the deal designed to inhibit the proliferation of nuclear weapons and their development in Iran. In so far as trust has been reposed in the Iranian theocratic regime, I hope that this is justified, though personally I doubt it. I would welcome hearing from the Minister what evidence there is to corroborate whatever confidence our Government have in the integrity of the regime on the nuclear issue or, for that matter, any issue. I have followed Iranian affairs quite closely for a number of years and I have seen absolutely no evidence to support the view that the regime is truthful. Indeed, it appears to be as unfamiliar with the concept of truth as it is with the concept of trust.
One of the benchmarks of trust is the attitude of the Government concerned to human rights. Theirs is a Government with a plainly threadbare approach—even a scorched-earth one—to human rights. There is international evidence in abundance, not least from the United Nations, to support that view. Others in this debate have already spoken about this human rights record. I will provide six headline points, though I could have made 66. First, trials take place in Iran without legal representation, even in capital cases. That would be unbelievable about any modern state if it were not, unfortunately, true. Secondly, defendants are convicted, and lose their appeals, without being told the charges they face. The concept of appealing against a conviction and losing the appeal without ever even seeing the charge is just an abomination in the modern world. Thirdly, children are subject to the death sentence, which can be carried out when they reach 18 years old—well outside international human rights norms and treaty requirements. Fourthly, in a gruesome peculiarity of their law, girls in Iran can be sentenced to death at nine years old, whereas boys can be sentenced to death at 14. Obviously, no juvenile should be sentenced to death in any state—it is barbaric—but the extraordinary disparity between boys and girls is one of the many examples of a total disregard by the Iranian Government of international obligations, juristic norms and equality of the sexes.
Fifthly, Iran imposes its laws and violence wherever it can spread its influence. The noble Lord, Lord Clarke, referred to Camp Ashraf. The Iranian Government have been responsible for multiple missile attacks at that camp and its successor, Camp Liberty, on innocent, unarmed and in many cases elderly refugees from Iran to Iraq, killing many. I have been to Albania and spoken to many of those refugees and the story they have to tell justifies the use of the word horrific. The role of Iran in Syria is extremely questionable at best. My sixth point is: who is in charge of justice in Iran? As the noble Lord, Lord Clarke, said, the Justice Minister is Mostafa Pourmohammadi, who was instrumental in the 1988 massacre of no fewer than 30,000 political prisoners. Justice in Iran is supervised by a war criminal. How on earth can we pay any credence to a Government who have a war criminal as their Minister of Justice?
I turn briefly to some specific cases, specifically those of the dual nationals Nazanin Zaghari-Ratcliffe and Kamal Foroughi, which have been mentioned already. Mrs Ratcliffe has been taken away from her family; she has a two year-old who was not allowed to leave Iran to live with her father, Mr Ratcliffe, in the United Kingdom. Without going into the facts further, I ask the Minister whether the Government can confirm that they have not only been protesting against what has happened to Mrs Ratcliffe but calling for her release in their discussions with their Iranian counterparts. It is extremely important that that should be done. Failure to call for her release may indeed be a misuse, at least, of administrative action. I ask whether the Foreign Secretary will make a public statement calling for Nazanin Zaghari-Ratcliffe and the 77 year-old Kamal Foroughi to be released.
I remind your Lordships that Kamal Foroughi is a British Iranian serving an eight-year sentence in the notorious Evin prison in Tehran on charges of espionage and possession of alcohol. He was arrested in 2011 and kept in solitary confinement, then convicted at an unfair trial at which he was not properly represented. He did actually see the charges brought against him—the day before the trial. The authorities have barred him from legal advice and much contact with his family, and he has been denied consular assistance. According to Iranian law, a prisoner can be released after serving a third of their sentence, yet he has been in prison for more than five years. That is typical of the arbitrary and inexcusable way in which these cases are treated. Again, I ask the Minister whether she will take up this case and call for his release.
My final point is that the 10 recommendations in the UN special rapporteur’s report of 30 September 2016 have been ignored. What are the UK Government going to say and do about that?
Lord Judd (Lab)
My Lords, I am grateful for the opportunity to speak in the gap. I am a member of the All-Party Parliamentary Group on Human Rights, and I was determined to get here to say a word in support of my noble friend Lord Clarke, who has been a long-standing champion on this issue, and whom I salute without reservation in that context.
It is true that apparently, so far, progress is being made on the nuclear issue. We cannot discount that because to succeed on the nuclear issue will have immense human consequences in terms of the dangers that would otherwise be there. It is also essential to recognise that there are large numbers of courageous people within Iran who are doing their best to stand up for decency and the things that matter. We must be careful that, in criticising from outside, we do not undermine their effectiveness as they bring pressure to bear. They are very brave people indeed.
I want to underline what has already been said. The human rights record remains deplorable. Iran is one of only four countries in the world to conduct some executions in public. Hanging is, of course, the most common means—and very questionable forms of hanging, too—although recently we have also heard of shootings. The number of executions in 2016 was unbelievable: between 400 and 500. Amendments to the penal code allow judges to use their discretion not to sentence children to death, but they still execute children when they reach 18.
Many detainees accused of capital offences, as the noble Lord, Lord Carlile, underlined, are denied access to legal counsel during the investigative phase when in detention. Indeed, in February 2016 the entire adult male population of a village in southern Iran was executed for drug offences—and this news came from the Vice-President for Women and Family Affairs in Iran itself.
Prison conditions, and the treatment of prisoners in solitary confinement, are indescribably bad—and sometimes, in solitary confinement, amount to torture. We must be firm. It is no good believing that we can have a lasting, effective relationship with Iran if we prevaricate. We must leave the Iranians in absolutely no doubt that their conduct on human rights is totally unacceptable.
Baroness Northover (LD)
My Lords, I know that the noble Lord, Lord Clarke, has had a long interest in Iran, as have a number of other noble Lords and our colleagues in the other place. The noble Lord, Lord Clarke, has given us a very disturbing account, as have other speakers. I know that there is an almost constant presence in Parliament of an organisation that flags to parliamentarians its case in relation to Iran.
I pay especial tribute to someone not speaking tonight: the wonderful noble Baroness, Lady Afshar, whose wisdom on the subject of her home country is, in my view, second to none in this House, and whose debate on the subject in December I read with great interest. Unlike some noble Lords, she welcomed the lifting of sanctions on Iran, for the benefit of the Iranian people. Nevertheless she herself pointed out:
“I fear that in my own birthplace I would be put in prison and maybe the UK Government would not be able to help”.—[Official Report, 8/12/16; col. 945.]
Like others, she is very concerned about the abuse of human rights in Iran. She pointed out that Iran signed the Geneva Conventions in 1957 and voted in favour of the Universal Declaration of Human Rights. Nevertheless, as has been said, we hear of acts of torture, and the extraction of apparent confessions without a lawyer present. The noble Lord, Lord Carlile, made the point that trials may be carried out without legal representation.
Amnesty International notes that the rights to freedom of expression, association and peaceful assembly, as well as freedom of the press, remain heavily curtailed in Iran, with hundreds of activists, journalists, human rights defenders, women’s rights advocates, trade unionists, lawyers, student activists, and members of ethnic and religious minorities being detained and given increasingly harsh prison sentences. The noble Lord, Lord McInnes, spelled out so many groups who are vulnerable in Iran. In December’s debate the noble Lord, Lord Collins, flagged the especial vulnerability of LGBT people. It was shocking to read what the noble Baroness, Lady Kennedy, said in that debate about what she described as the “wretched” situation of Shirin Ebadi, the human rights lawyer who was given the Nobel Peace Prize and who is now unable to return to her country, or continue her work and family life there.
In August 2015 the Ministry of Information and Communications Technology announced the second phase of “filtering” of websites deemed to have socially harmful consequences, and the authorities continued efforts to create a “national internet”. In June 2015 a spokesperson for the judiciary said that the authorities had arrested several people for “anti-revolutionary” activities using social media.
Amnesty has also recorded the execution of at least 73 juvenile offenders between 2005 and 2015, including at least four in 2015. According to the 2014 report of the UN Secretary-General on the situation of human rights in Iran, more than 160 juvenile offenders remain on death row.
Another issue raised by Amnesty is prisoners’ access to medical care. It reports that political prisoners, including prisoners of conscience, are denied adequate medical care—a key human right under international law. In some of the cases there is also evidence that that denial is being used as a means to extract “confessions” from political prisoners or to intimidate or punish them.
Then there are the cases that we have already heard about, of the British-Iranian nationals. One whom my right honourable friend Tom Brake has been supporting is Kamal Foroughi, to whom the noble Lord, Lord Carlile, also referred. Another who is particularly in the public eye at the moment is Mrs Zaghari-Ratcliffe, whose specific case I will raise at Oral Questions on 2 February, and whose appeal against her five-year sentence has been declined, as we heard yesterday. I note recent ministerial engagement in this case. Can the Minister confirm to the House that the Government have asked for Mrs Zaghari-Ratcliffe’s release? The noble Lord, Lord Carlile, also made this point.
There has, of course, been much international engagement over Iran’s nuclear programme. As the Foreign Secretary himself said, we know that conflict in the Middle East, especially in Syria, owes much to proxy conflict between Iran and Saudi Arabia. However, the noble Baroness, Lady Ashton, when she was the EU’s High Representative for Foreign Affairs and Security Policy, surely did much commendable work in helping bring Iran back into the global fold. We are now in uncertain times with the election of Donald Trump, who has made his opposition to the deal with Iran very clear. Might we hope that Iran might address some of the issues we have mentioned today as it seeks not to be sanctioned and ostracised once again? It may well hear the lack of sympathy for the regime expressed in this debate. That may mean that Iran should be looking to improve its record on human rights. The UK Government must not hold back in defending their citizens when they are caught in the Kafkaesque situation in which they now find themselves.
Lord Collins of Highbury (Lab)
My Lords, I, too, thank my noble friend for initiating today’s debate and keeping these issues very much in the public arena. His record on standing up for the rights of oppressed people throughout the world is second to none. Certainly, his record in doing so as a trade unionist is one of which I am particularly proud.
As the noble Baroness, Lady Northover, said, it is just over a month since we last debated Iran and its human rights record. Sadly, little has changed apart from one significant change which has been referred to in the debate—namely, the developments in the case of Mrs Zaghari-Ratcliffe. We heard only yesterday that a court in Iran has rejected an appeal against her five-year prison sentence, originally handed down in September by a revolutionary court. Although official charges were never made public, she was accused of allegedly plotting to topple the Government in Tehran. According to her husband, the appeal was dismissed in a secret hearing of an Iranian revolutionary court on 4 January, but announced only yesterday. He added again that the precise charges against her remain secret, although apparently two new accusations were made at her appeal. One was that she had been head of recruitment for the BBC’s Farsi service when it was launched in 2009. The other charge, apparently, was that she was married to a British spy.
Monique Villa, the chief executive of the Thomson Reuters Foundation, said that Mrs Zaghari-Ratcliffe had never worked for the BBC Farsi service and that her husband,
“is not a spy but a reputable accountant”,
and that she is fully convinced of Mrs Zaghari-Ratcliffe’s innocence.
As was mentioned in the last debate, we have heard that the Prime Minister raised strong concerns about the case directly with the Iranian President in August. Have any further representations been made at the level of Heads of Government? Can she confirm whether the UK Government have called for Mrs Zaghari- Ratcliffe’s release in all discussions with Iranian counterparts?
As we have heard in the debate tonight, the problem is that Iran does not recognise dual nationalities, meaning that those detained cannot receive the consular assistance and access that we would normally expect with British citizens. As we have also heard in the debate, other dual nationals are in prison in Iran. We need better to understand what the Government will do to represent our country’s citizens who are deserving of our fullest support. I hope that the noble Baroness will outline those actions tonight. I also hope that she will support a meeting between the Foreign Secretary and the families of Mrs Zaghari-Ratcliffe and Kamal Foroughi to update them on exactly what action the United Kingdom Government have taken to date and on their upcoming plans.
In the last debate, the noble Baroness, Lady Goldie, reminded us that since the UK reopened the embassy in Tehran in 2015 and upgraded our diplomatic ties to ambassador level, we have seen the relationship between the two countries grow stronger. In addition to the FCO designating Iran as one of its human rights priority countries, the noble Baroness assured the House then that the Government were using the improved relationships as best they could to urge respect for human rights. As we have heard in the debate, the key to bringing Iran back into the international community, with all the obligations and responsibilities which that entails, was the Iran nuclear deal. The new, improved diplomatic relations with Iran have also enabled a dialogue not possible before on tackling security concerns around al-Qaeda and Daesh.
Whatever the gains of such an improved relationship, they must not be at the expense of our responsibility—as my noble friend Lord Judd said—to challenge Iran’s obligations under international law on human rights. We need to hear from the Minister, as the noble Lord, Lord Carlile, suggested, what steps the Government are taking in our improved relationship to highlight abuses of human rights. The Foreign Secretary has made it clear that he is determined to ensure that human rights remains a key element in the United Kingdom’s foreign policy. We need to understand that engagement works and we need to make clear our position. We must not make concessions on human rights.
As my noble friend Lord Clarke highlighted, sadly the truth is that, since July 2015, opponents of the regime have continued to be executed, religious minorities continue to be persecuted and, as I said in the last debate, LGBT communities have been victimised and murdered with impunity. The additional challenge, highlighted by the noble Baroness, Lady Northover, now faced by the Government is that in the US presidential campaign President Trump repeatedly dismissed the joint comprehensive plan of action and the nuclear deal. In the forthcoming meeting with President Trump, which the Prime Minister will be undertaking shortly, I hope that the questions of human rights in Iran are raised, along with the role of engagement and improved diplomatic relations in addressing them. Our responsibility is to remind our longest standing and strongest ally of the needs to uphold those international obligations. As we have heard in the debate, following the United Nations General Assembly’s adoption of the resolution on human rights in Iran at the end of last year, and the earlier renewal of the mandate of the UN special rapporteur, we need to ensure that that pressure is constantly maintained. What representations have the Government made to the Iranian authorities to allow greater access for the UN rapporteur to undertake their duties properly?
We have heard that there are no fair trials, certainly not to international standards of fairness. The regime persistently attacks and harasses lawyers—and this is something I want to highlight—who act in defence of political activists or those fighting for minorities. At the end of the day, we need—and this is a responsibility of all of us in this House—to ensure that we expose those constant violations and that everyone fully understands exactly what is going on in Iran.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
I congratulate the noble Lord, Lord Clarke of Hampstead, for securing this debate. The fact that it is the second on Iran this year does not mean that there are too many. It is important that this House holds both the Government of this country and the Government of Iran to account on the issue of human rights and how we press the Government of Iran to improve their responses on human rights.
First, I intend to set out our assessment of the human rights position in Iran, and then I will turn to the consular cases, which are much in people’s minds and hearts at this moment. The human rights situation in Iran, as noble Lords have made clear, continues to be of serious concern—certainly of serious concern to the British Government. It is clear that the Government of Iran could and should do more to improve the rights and freedoms of its citizens. The United Kingdom has consistently pressed Iran to improve its human rights record, both through bilateral engagement and with our international partners, including through the UN and the EU. We continue to do so. This is vital to ensure that human rights in Iran continue to be given prominence in discussions, and also to maintain pressure on Iran to abide by its international obligations. Last year we strongly supported the renewal of the mandate of the UN special rapporteur and, in December, we welcomed the UN General Assembly’s adoption of the Resolution on Human Rights in Iran. I am pleased that the resolution passed with an increased number of votes in favour—in part due to UK lobbying efforts.
The noble Lord, Lord Collins, raised the specific issue of what the Government have been doing to follow up on the matter of support for the UN special rapporteur. We continue to call on Iran to allow the UN special rapporteur access to the country to carry out the mandate and for Iran to move towards ending the death penalty, providing equal rights for women, and ending discrimination against ethnic and religious minorities. Those are indeed the areas of concern that have been raised by noble Lords.
First, on the continued and extensive use of the death penalty, the British Government are firmly opposed to the death penalty, in all circumstances and in every country. We regularly raise this issue with Iran, bilaterally and through action with the international community. We are also, as noble Lords have said, particularly concerned about the number of executions of individuals who were minors when convicted, which continues despite Iran being a signatory to international conventions that prohibit juveniles being sentenced to death.
The noble Lord, Lord Clarke, among others, raised the issue of alleged executions in 1988. What I can say is that at the moment the UK is in the position of having very little corroborated evidence of the reported massacre of political prisoners in 1988. I certainly hear what noble Lords have said. I have in the past expressed at the Dispatch Box that if there was corroborated evidence, we would be able to take action. At the moment, the Iranian Government have repeatedly denied that it took place, although noble Lords have graphically set out what they and certainly many people believe took place.
The treatment of women in Iran is another important area of concern. The special rapporteur’s October 2016 report highlights continuing unequal treatment of men and women. It is absolutely clear that women continue to face discrimination—travel restrictions being one example. Married women need the consent of their husbands to leave the country. They cannot obtain or renew a passport if their husbands refuse to sign the required paperwork. This is surely completely unacceptable in the 21st century.
Like the noble Baroness, Lady Northover, we too are concerned by continuing restrictions on freedom of expression. Dissent is not widely tolerated, and the Government control the majority of newspapers, as well as TV and radio channels. They systematically block access to information and restrict free speech on the internet. Last month, restrictions were placed on the most popular social media platform, Telegram. The most followed users now have to seek official permission to operate. There have also been reports of Telegram channels being hacked by the Iranian cyberpolice. If true, this is a clear attempt to silence and intimidate independent voices within the country. The UK, along with our EU partners, has already placed sanctions on the Iranian cyberpolice following reports of other hacking activity carried out by them.
Sadly, as my noble friend Lord McInnes set out so clearly this evening, the Iranian state also continues to discriminate against certain religious groups and minorities. That includes continuing persecution of followers of the Baha’i faith. Last November, many businesses owned by followers of the Baha’i faith closed temporarily to observe their holy days. The Iranian authorities’ reaction was permanently to close down 100 of these businesses. This discrimination is completely unacceptable. An inclusive, free and fair society is in the best interests of everyone in Iran. I was pleased to join other distinguished panellists for a discussion on this very subject at a UK Baha’i community event last year. Christians face similar types of discrimination. There have been reports of house church leaders and Christian converts being arrested or harassed by security services, and of Church property being confiscated. These actions by the Iranian authorities are not commensurate with a free and open society and they must stop. The UK has clearly and repeatedly made known our views on this.
The noble Lord, Lord Collins, referred in particular to the issue of LGBT rights in Iran, and I am pleased that he did so. We are profoundly concerned by the continued persecution of lesbian, gay, bisexual and transgender people in Iran. We repeatedly call on Iran to fulfil its international and domestic obligations to protect the human rights of all Iranians, including members of those communities.
On UK dual nationality consular cases, like many Members of this House, the Government are, of course, deeply concerned for the welfare of several UK-Iranian nationals currently detained in Iran. The Iranian Government do not recognise dual nationality, and on that basis continue to reject our repeated requests for consular access. In answer to my noble friend Lord McInnes, who properly raised this matter, the consequences of that is that it hobbles every opportunity to be able to learn exactly what charges are being faced, what the evidence is and how we can best help people—or even how we can meet them. That does not stop us asking, but it certainly gives the Iranian Government the opportunity to block our efforts.
My right honourable friend the Prime Minister and my right honourable friend the Foreign Secretary have both raised our concerns with their Iranian counterparts. In answer to the noble Lord, Lord Collins, the Prime Minister has not raised these matters subsequently, other than on one occasion last year, but they were raised by the Foreign Secretary again this morning and on multiple occasions by our ambassador in Iran. When my noble friend Tobias Ellwood met the Deputy Foreign Minister responsible for consular issues in Tehran last week, he reiterated our request for consular access to all detained British Iranian dual nationals. He also requested that detainees receive appropriate medical treatment and access to lawyers.
I recognise that this is such as very difficult time for all the families of detainees, let alone for the detainees themselves. The FCO is in regular contact with the families and we will continue to provide support. Tobias Ellwood has met family members and reassured them that the Government are making every possible effort and that we will continue to raise these cases with the Iranian Government at every possible opportunity.
On the condition of Mrs Zaghari-Ratcliffe, naturally we were hugely disappointed to hear the outcome of Mrs Zaghari-Ratcliffe’s appeal. Tobias Ellwood called Iranian Deputy Foreign Minister Ravanchi earlier today to express our concerns at the outcome. FCO officials are in regular contact with Mr Ratcliffe and have met him in person on multiple occasions since Mrs Zaghari-Ratcliffe’s arrest in April last year. Tobias Ellwood met Mr Ratcliffe on 28 November to discuss her case. He will meet Mr Ratcliffe again shortly to provide an update on his—that is, Tobias Ellwood’s—visit to Tehran on 18 January this year. FCO officials are also in contact with Mrs Zaghari-Ratcliffe’s family in Tehran and Tobias Ellwood met them during his visit to Tehran. Consular officials stand ready to assist Mrs Zaghari-Ratcliffe’s family with any support they require. We also stand ready to assist Mrs Zaghari-Ratcliffe’s family to bring her daughter Gabriella back to the UK should they wish to do so.
I was asked particularly about the matter of calling for release. The noble Lord, Lord Carlile, who is learned in law, will know that, as of yet, the process of appeal is not yet finalised. The family have yet to reflect on whether they wish to take any further legal action—that is, if further legal action is possible. We stand ready to support them in consideration of those matters. As is the case in this country too, one does not call for release until one is aware of the circumstances of evidence and proof and, finally, of the disposal of the case. That is all so obscure because of the judicial system in Iran—perhaps the court system might be a better way of describing it—which provides great uncertainty to those who are within it, both during the process of trials and subsequently.
We are also very concerned for Mr Foroughi’s health and we have raised this with the Iranian authorities. Indeed, my honourable friend Tobias Ellwood raised this case with the Deputy Foreign Minister just last week in Tehran. Throughout all this, it is vital that we continue to uphold the human rights of all the citizens in Iran with our international partners. We must never forget—and this Government do not forget—that the nuclear deal has within it an ability to hold Iran to account that is separate from the matters of the dual nationals. We will not forget them and, I know, neither will this House.
Higher Education and Research Bill
Monday 23rd January 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Higher Education and Research Act 2017 View all Higher Education and Research Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 76-VI Sixth marshalled list for Committee (PDF, 214KB) - (23 Jan 2017)
“( ) The OfS may not authorise a provider to grant research awards under subsection (1) unless it has first consulted—(a) UKRI; and(b) such other persons as it considers appropriate.”
Baroness Brown of Cambridge (CB)
My Lords, this amendment stands in my name and that of my noble friend Lady Wolf. It leads a group of amendments that concern the powers of the OfS, under Clause 40, to authorise higher education providers to grant degrees. This is an important group of amendments, including things as diverse as probationary degree-awarding arrangements and ecclesiastical licences, as well as the focused area covered by the amendments in my name—that of powers to grant higher and research degrees. I would like to talk about that very specific area and I want to make two points.
First, the expertise in relation to the specific requirements for higher and research degrees lies most strongly with the research community, which is more closely and obviously linked to the research councils and UKRI than to the OfS. Indeed, research councils have significant experience of research degree success criteria, as they provide much of the PhD funding in UK higher education institutions and have established the very successful doctoral training centres.
Secondly, the majority of the OfS’s work with new providers will relate to undergraduate provision of various forms by a diverse range of providers, many of whom will not offer, or aspire to offer, research or higher degrees. Therefore, this will be a relatively niche activity and perhaps quite a rarely used power for the OfS.
For those two reasons, it seems to me that it would be both valuable and appropriate for the Office for Students to be required to draw on the expertise in UKRI, and indeed to reach a joint agreement with it when granting powers towards higher and research degrees.
Amendments 244, 264A and 485B in this group, as well as Amendment 509, relate to the OfS and UKRI being required to work together to grant higher and research degree-awarding powers—something that appears logical and uncontroversial, and I ask the Minister to consider including this in the Bill. I beg to move.
Lord Norton of Louth (Con)
My Lords, I have Amendment 251 in this grouping. In opening, I stress that I do not have a problem with alternative providers in HE. I chair the Higher Education Commission and we are presently undertaking an inquiry into alternative providers. They are numerous and the nature of their provision varies enormously. I heard from some of them earlier this afternoon. Some cater to thousands of students, others to a small number in what are essentially niche subjects.
What is important is that arrangements are in place to protect students. Last week we discussed the provision for student protection plans. At issue here is the giving of degree-awarding powers and the need to ensure that such powers are conferred on bodies that have the proven capacity to maintain the required standards of a UK degree, and to do so for as long as they have such powers.
There is considerable concern about provision for “probationary” degree-awarding powers. If a probationary period is to mean anything, it is that the continuation of degree-awarding powers is not guaranteed at the end of the period. What happens at the end of the three-year probationary period if such powers are not continued? What happens to students still at the institution? What worth attaches to the degrees of those who have already graduated? Furthermore, what is the risk to the UK HE brand if probationary degree-awarding powers are conferred on bodies with no established track record of delivering high-quality education? My amendment seeks to protect the position of students and of the HE brand, by ensuring that the OfS may not authorise a provider to grant degrees, unless the provider has validation arrangements in place.
I appreciate that confining the provision to validation by existing HE institutions runs the risk of imposing uniformity, with established institutions not being too keen on validating innovative teaching methods and possibly not fully appreciating the value of the alternative provision. The way round that is to ensure that there is an independent validating body. Clause 47 enables the Secretary of State to authorise the OfS to be the validator of last resort, but I recognise the problem of allowing the regulator to have such a power. It is not a power that should be vested in the regulator. I would rather see an independent body, akin to the old CNAA, created. That deserves serious consideration. I thus favour amending this clause along the lines of Amendment 251 and the other amendments in this group, along with the later removal of Clause 47 and its replacement by a provision that would create a body equivalent to the old CNAA. That, to my mind, would inject the necessary protections while not deterring new entrants to the field.
Lord Kerslake (CB)
My Lords, I speak in favour of Amendments 251, 252, 259 and 260. In doing so, I very much echo the thoughts of the noble Lord, Lord Norton of Louth. These amendments would remove the probationary powers provisions and put a higher test before universities could award degrees. I tabled these amendments because the Government have seriously underestimated the risk to the reputation of the university sector in what they are doing. Collectively, we need to safeguard this reputation and to require that the OfS or a separate body—as has just been proposed—has the necessary confidence that the organisation to which it is granting degree-awarding powers has the capability to do this on an enduring basis.
I ask noble Lords to put themselves in the position of a student, either in this country or abroad, who comes across the word “probation”. They might wonder what the word means and look at the dictionary here. What the dictionary says is that it relates,
“to a process of testing or observing the character or abilities of a person who is new to a role or job”,
or,
“relating to the release of an offender from detention subject to a period of good behaviour under supervision”.
I venture to suggest that not many students would be reassured by that definition and by the prospect of undertaking a degree at the end of which it would be possible for the whole institution to be found inadequate in its requirements, which must be a possibility under the very definition of these provisions. The term “probationary” is wrong and the concept of “probationary” is wrong. We should, instead, insist that anybody in a position to award degrees is able to do so with an enduring capability. This is a crucial point and it is unfortunate that we are coming to it so late in the evening, because I believe it to be fundamental.
The question your Lordships might ask is: what problem is trying to be solved? I am strongly in favour of new market entry and improving the validating process where it needs improving, but where is the body of evidence that justifies the introduction of probationary degrees? I cannot find it. I have looked carefully at the documents produced on Friday by the Minister, which were very helpful. Page 7 of the factsheet on the validation process refers to “anecdotal evidence”. I suggest that we as the House of Lords should not take our decisions on the basis of anecdotal evidence.
Lord Murphy of Torfaen (Lab)
My Lords, I shall speak to two amendments in my name, which are probing amendments. Since they refer to the awarding of ecclesiastical degrees by the Holy See, I am bound to declare my interest as the holder of a papal knighthood.
I will say a word about church universities. The Catholic Church has 16 higher education institutions, including five universities, which are classified as church universities. These are part of the so-called Cathedrals Group. There are 16 universities in the United Kingdom with Catholic, Anglican and Methodist foundations. All are based on ethical principles. They are rooted in their local communities and in Christianity. They have a common commitment to social justice. An example of that is St Mary’s University, Twickenham, with its Centre for the Study of Modern Slavery.
Some 5% of all UK students—about 100,000—study in such universities. That is the equivalent of the total number of higher education students in Wales. They are specially connected to teaching. Some 30% of all primary and 16% of all secondary teachers have been trained in church universities. Roughly half of all those students in this country studying theology and religious studies are in church universities.
My amendments refer specifically to Roman Catholic ecclesiastical degrees. These are academic degrees—bachelor’s degrees; licentiates, which are equivalent to master’s degrees; and doctorates—recognised by the Catholic Church. They are used throughout the world, particularly with regard to philosophy, theology and canon law. They are often necessary qualifications for office within the Church throughout the entire world. The Holy See is a full member of the European education area and in this country two faculties which award degrees from the Holy See in philosophy and theology are at Heythrop College. In this country they are awarded in parallel with degrees; at Heythrop it is in parallel with degrees from the University of London.
Legislation in 1988 criminalised the awarding of degrees which did not have the authorisation of an Act of Parliament or a royal charter. Any degrees which did not have those foundations after 1988 were in fact criminal. Heythrop College of course, because it was founded before 1988, was exempt from that legislation, but the reason for these probing amendments is that the future of Heythrop College is in some doubt and, were it to close, the faculties which offer philosophy and theology would have to be transferred to other higher education institutions run by the Catholic Church and, under current legislation, would therefore be illegal. These two amendments would allow those degrees to be awarded if the Minister, when he replies, is gracious enough to accept them.
Baroness Garden of Frognal (LD)
My Lords, in the absence of the noble Baroness, Lady Wolf, who is unable to introduce it herself this evening, I shall speak to Amendment 269, to which I have added my name. I support all the amendments in this group that have already been spoken to. This amendment creates a new clause which confirms the role of the Advisory Committee on Degree Awarding Powers within the designated quality body to provide independent, expert advice before degree-awarding powers and university title are conferred, or creates a committee of the Office for Students which fulfils much the same function as the current Advisory Committee on Degree Awarding Powers where no body has been designated. This provides independent, expert scrutiny and advice to the OfS.
The Bill amends the Further and Higher Education Act 1992 to give the newly created Office for Students the ability to give and remove institutions’ degree-awarding powers and to award or remove the use of university title. This power currently sits with the Privy Council, which acts on the basis of guidance and criteria set out by the department for business, with advice from the Quality Assurance Agency. It is important that any new higher education providers awarding their own degrees, or calling themselves “university”, meet the same high requirements as existing universities. Appropriately robust market entry standards serve the interests of students by minimising the risk of early institutional failure or the need for intervention by the OfS, and we are not reassured that this is currently the case in the proposals put forward by the Government. Of course, we support new providers in the system, but we need particularly to scrutinise the fast-track private providers, as proposed in the Bill.
We propose a new clause legislating for a degree of independent oversight of the OfS in awarding degrees and university title to provide checks and balances on these very important decisions. In practice, this would require the OfS to take the advice of an independent specialist committee within the designated quality body or, where no quality body is designated for the OfS, to set up a statutory committee along the lines of the existing Advisory Committee on Degree Awarding Powers. I look forward to hearing the Minister’s response to the various amendments in this group.
Baroness Warwick of Undercliffe (Lab)
My Lords, I strongly support the comments made by the noble Lords, Lord Norton and Lord Kerslake. I preface my contribution to this debate by reiterating my concerns about the Government’s proposals to make it easier for alternative providers to award degrees and subsequently to achieve university title. I have not been reassured by any of the Minister’s explanations or by the detailed letters he has so courteously sent us during our debates over the last two weeks. The Government want to further diversify the sector. Yes, we need to reach potential students with different offerings and different types of courses, and in parts of the country that are poorly served. Of course, I support that, but not at the risk of selling these students a pig a poke.
There are enough examples from the States in particular which should give us pause for thought. There is one very familiar name, which I will not mention, but the closure of one of the largest for-profit providers, Corinthian Colleges, has left 16,000 students without certificates or degrees. The risk that the same could happen here does not seem even to be acknowledged by the Government. The Government’s commitment to diversifying the sector will be undermined by introducing this additional risk for students, because the loss of reputation will send a very negative ripple across the whole sector and abroad.
Students are at the heart of the Bill, yet it is students who will suffer if private providers that are going to be given the benefit of the doubt with probationary DAPs cannot deliver, or go under. A recent QAA report highlighted the importance of new entrants working closely with existing providers through the well-established validation procedures. On the whole, these validation arrangements have worked very well and we have not been offered any convincing evidence to the contrary. Indeed, my noble friend Lady Cohen, whose university has successfully gone through this process, said that it worked well and that they learned a lot from it. Of course, if the Bill can improve these validation relationships for the benefit of students, so much the better.
I can understand that potential entrants to the market are frustrated that they have to prove themselves against strict criteria. But it is surely far better for students, and probably in the long term for the providers themselves, that there are high standards for entry which minimise the risk of institutional failure. Why do we need to fast-track? It is not as if we are desperately short of universities. There are around 130 well-established institutions; nor are we short of alternative providers. Nobody seems to know the exact figure, although I hope the Bill’s provisions on registration will correct that. The DfE thinks that there are about 400 which receive some sort of taxpayer funding. A much smaller number has been awarded degree-awarding powers. So far these providers have made a limited contribution to diversity. They are focused largely on law, business and finance, and BPP, we were told, is going into nursing. They are mostly in London and the south-east, rather than in the so-called cold spots, where provision is limited or non-existent. That is scarcely surprising as they need to be in the more lucrative markets to satisfy shareholders of the business’s viability. I do not see that that is changing, even if these new arrangements are introduced.
Finally, who really benefits from probationary DAPs? It is not students, who are essentially paying to be guinea pigs for a new provider; but possibly not even new providers, who may find the label “probationary” more of a challenge when recruiting students and staff than they might as new institutions with robust validation arrangements. I urge the Government to think extremely carefully about this. In doing that I support Amendments 251, 252 and 259.
The Lord Bishop of Durham
My Lords, my friend the right reverend Prelate the Bishop of Portsmouth is unable to be in his place this evening, but in his place I bring before your Lordships Amendment 268A. I endorse all the general comments made by the noble Lord, Lord Murphy of Torfaen, about the Cathedrals Group of universities. While I am not armed with the expertise, his amendments appear to make sense for the particular purpose.
I am sure that almost all noble Lords in the Committee are aware that the Archbishop of Canterbury has possessed the power to confer degrees since the Ecclesiastical Licences Act 1533. Certainly the landscape of higher education has changed in the almost 500 years since then, when the only other English degree-awarding institutions were Oxford and Cambridge. The Higher Education and Research Bill that we are rightly considering so carefully is very welcome in recognising that changing landscape and legislating to ensure that the sector continues to evolve as successfully as it has done so far.
Amendment 268A deals with a particular corner of that landscape and it may help to indicate briefly how this power is exercised. Lambeth degrees, as they are often informally called, are now issued in one of two distinct ways. The first is following examination or thesis, under the direction of the Archbishop’s Examination in Theology, usually referred to as the AET. Since 2007, the AET has been offered as an MPhil research degree, with the opportunity to extend to a PhD. These research courses are offered at a level that meets QAA requirements but at a reasonable cost and with user-friendly access. Although allocated research supervisors will be fully qualified to offer guidance and criticism, the emphasis is on individual research, requiring a high level of self-motivation and commitment to study. Students on the AET have access to the Office of the Independent Adjudicator and although, as one document rather charmingly puts it,
“the Archbishop is not a university”,
this provision is included within the current HEFCE register.
Lord Lucas (Con)
My Lords, I rise briefly to support my noble friend Lord Norton’s amendment, which would be the ideal. Certainly, we have to move away from where we are in this. I do not find the idea of validation by the OfS satisfactory, with all its conflicts of interest, but universities which set and mark their own degrees are used to that sort of conflict. This sector seems plagued with such conflicts, but I would rather do without them. We have to get to a point where universities acting as validators are not permitted and are in some way controlled by the OfS—if we do not have the arrangement that my noble friend proposes—so that they do not indulge in competitive behaviour in the way that they have in the past. It is an extremely unsatisfactory process at the moment. Validation can last for three years only. That is not in the interests of students. They must have longer-term arrangements with the universities and the universities must be held to them, if that is what we are to go on with.
One can look at examples such as the London College of International Business Studies—a 150 year-old institution, one way and another—which has its degrees validated in Switzerland. It has gone to the altar three times with UK universities, each time being left in the lurch, although it got a QAA pass in the course of one of them. It is now engaged to the Open University and has high hopes of it. I wish it good fortune, but that is not a fair way of asking an organisation to get degree-awarding powers. There has to be good behaviour and consistent behaviour on behalf of the universities.
We also need to solve the problem facing Cordon Bleu. It is an institution operating in 20 countries, awarding degrees in most of them, and extremely highly respected. It cannot come to the UK because, under the validation arrangements currently in place, the validating institution gets a complete licence to use the validatee’s IP to do whatever it wants. Indeed, we have seen one of Cordon Bleu’s competitors pillaged in that way by a UK university. All its IP was taken and used to run that university’s own degrees. That cannot be permitted as a relationship between someone seeking validation and someone offering it.
Whatever we do, we must improve where we are. I am not particularly impressed by what is in the Bill at the moment, but I very much hope that between us we can reach something that will support the entrance of good organisations to degree-awarding in this country in a way that takes account of their quality and the good reasons that they have for thinking they might be allowed to award degrees. However, as others have said, the legislation must absolutely protect the reputation of degrees in this country. We cannot have a situation where substandard organisations get to award degrees.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been a very interesting debate. It has shone a light in strange places that I did not think we would ever get to. As a not very good Scottish Calvinist, I am probably the least able to contribute to the debates that were organised by my noble friend Lord Murphy and the right reverend Prelate. However, they make good points and I hope the Minister will be able to help to move that debate forward.
I do not like the idea that my noble friend Lord Murphy’s institutions have to act illegally but be forgiven in the courts when they are finally taken account of. We should get ahead of the game and try to sort this out.
We started with the question of how research awards needed to be done jointly between UKRI and the OfS, if that is the body. This is something we will come back to, so it is no disrespect to say that we need not spend too much time on it now, particularly as the principal proposers of Amendment 509 are missing, in one case because of fog and in the other, I think, because of Cambridge. I cannot remember which is which—your Lordships can probably guess. It is therefore probably better if we pick that up when we come back.
That leaves the central issue posed by the noble Lord, Lord Kerslake, which is how we can find a structure in a system that has institutions of the highest quality by all accounts that can provide the assurance, support and effective answers to any of the questions raised by new challenger institutions, without those challenger institutions feeling that their operations and ways of working will be squished in some sort of force majeure that will be offered by the established club.
The amendments are very interesting. The words that have been used to attack the concept of probationary degrees need nothing further from me; I think that is right. That is not the way the Government should go on this. We are looking at a way of making sure that the quality assessment—the ability to come to an enduring decision about an institution that wishes to seek degree-awarding powers—is done in a way that reflects its ability to fulfil the necessary requirements in terms of capacity, financial security, academic capacity and the rest, but does not interpose somebody else’s view about what the institution should be doing on top of that.
The right reverend Prelate suggested that some of the stuff he was talking about had been going on since 1533. That puts in perspective people’s worries about a four-year period during which tests are made of whether institutions coming into the system are able to cope. Certainly, my discussions, which were mentioned by others, suggested that people who had been through that process found it valuable, so it would be very stupid to throw it away without further consideration.
I went down memory lane with the noble Lord, Lord Norton of Louth, because I started my career in academic administration with CNAA. It was bureaucratic and a little heavy-handed but it worked very effectively. It is interesting that the final vestiges of CNAA still exist in the Open University. Maybe that is where we might want to look, as a future amendment suggests, before we start trying to create something that will not stand the test of time or advance higher education in the UK, and may indeed cause problems, many of which have been raised in this short debate.
Viscount Younger of Leckie (Con)
I am grateful to the noble Lords for the opportunity to speak to this important group of amendments. Once again, I acknowledge the experience of noble Lords who have contributed to this short debate, including my noble friend Lord Norton, who has chaired the Higher Education Commission.
It is vital that the OfS and UKRI are empowered to work together. Hence, Clause 106 ensures that the two organisations can co-operate and share information in relation to any of their functions, including granting research degree-awarding powers. UKRI will play a key role in developing research degree-awarding powers’ criteria and guidance, including for postgraduate research degrees, and it will work closely with the OfS to design the process for assessing applications and in its operation. We will make this explicit in the published government guidance on degree-awarding powers. The Secretary of State will also have powers to require this co-operation to take place if the OfS and UKRI do not do so of their own accord. UKRI will be responsible for all research funding, including postgraduate research. It will support postgraduate training and doctorates, as the research councils do now.
I do not agree that legislation is the right route to formalise the detail, due to the risk of unintended consequences. Instead, a memorandum of understanding between the OfS and UKRI will be produced. This will provide detail on how oversight of the sector’s interests as a whole will be maintained, including how the two bodies will work together in respect of postgraduates.
Turning to the amendments relating to the OfS granting time-limited or probationary degree-awarding powers, the current system has protected quality successfully and, as I hope I made clear in my earlier remarks, we are not proposing a complete overhaul. Reference has been made to factsheets, and we have set this out in more detail on a factsheet specifically on degree-awarding powers and university title, which we published last week. I hope noble Lords have found it helpful.
However, I make it clear that this does not mean we should be satisfied with the status quo. Under the current regime, new and innovative providers have to wait until they have developed a track record before operating as degree-awarding bodies in their own right, no matter how good their offer is or how much academic expertise they have. To develop that track record, they are usually reliant on finding another institution to validate their provision and must negotiate a validation agreement, which can be one-sided and sometimes prohibitively expensive. My noble friend Lord Lucas asked about validation arrangements. I agree with his points about the problems with validation. We will come to that in more detail in a later debate, so I hope he has some patience for that.
We strongly believe that the sector needs to have at its heart informed student choice and competition among high-quality institutions. This incentivises institutions to raise their game, with the potential to offer students a greater choice of more innovative and better-quality courses. The noble Lord, Lord Kerslake, claimed that the shift to full-time undergraduate degrees was not due to validation and a lack of innovation. I quote to him Paul Kirkham, who he may know is vice-chair of Independent Higher Education:
“I can see essentially only one ‘product’ in the higher education world that has real currency—the three year, full-time, on-campus undergraduate university degree, almost exclusively priced at a single point. This is a high cost and inflexible approach that, with in excess of 50% of the population wishing to engage, cannot be the only solution”.
Our plans for probationary degree-awarding powers mean that high-quality providers do not need to rely on incumbents and can be permitted to award degrees in their own name from the start—subject to close supervision.
Lord Kerslake
I just wanted to come back on this issue of the shift in proportion between full-time and part-time degrees. Could the Minister confirm that the significant cause of that shift is the falling off of part-time degrees and that that is related not to the issue of validation but to the change around funding arrangements? We must be clear about the causes of changes here, or we are likely to find the wrong solutions.
Viscount Younger of Leckie
There can indeed be quite a full debate on the causes of the changes and I hope that in previous debates I have acknowledged the changes in the marketplace. Our aim as a Government is to address these changes. I think that we are all on the same page on that. I am happy to speak to the noble Lord, Lord Kerslake, further on that particular issue—in other words, concerning the issues that are leading up to our reforms.
Lord Norton of Louth
My noble friend has dealt with the point about a body that is awarded a degree-awarding power on a probationary basis and then does not have that power granted at the end of the probationary period, where for current students a student protection plan would be in place. However, if it is a degree-awarding body it may have already awarded degrees. What value does he think would attach to those degrees?
Viscount Younger of Leckie
Again, I can speak to my noble friend outside the Chamber, but surely there is no change to the current situation. In an extreme position where a provider fails, a student who has a degree from that failed provider would have to take that with him or her. There is surely no change and no reflection in terms of what we are trying to do here.
Baroness Brown of Cambridge
I thank the Minister for his detailed answer, and the other noble Lords for their important contributions to this debate. I feel slightly embarrassed as the leader of the one of the most specific areas of amendments to be the person responding on behalf of all those who have contributed.
I thank the Minister for his assurance that it will be explicit in the public guidance about UKRI and the OfS that they must work together in the area of research degrees and that this will feature in the memorandum of understanding on how they work together. That is extremely positive. I should still like to see in the Bill that they must work together rather than that they can work together. However, I thank him for his assurance that this will be explicit in guidance.
I am sure that the right reverend Prelate and the other noble Lord who spoke about the ecclesiastical issues will be happy with the agreement to meet the Minister to take those key areas forward. There is still a significant concern in the Committee, which I share, about the probationary degree-awarding powers, protection for students and whether the evidence is that it is the inability to find a validation partner that is stopping innovation in the system. I am delighted that the Minister has offered further meetings to continue this discussion. I am sure it will come up again as we discuss the validator of last resort, and may well also come up on Report. However, in the light of the detailed response from the Minister and the offers of meetings, I beg leave to withdraw the amendment.
““foundation degree only authorisation” means authorisation under subsection (1) to grant taught awards where foundation degrees are the only degrees which the provider is authorised to grant.”
“(4) An order under subsection (1) which would give a provider foundation degree only authorisation may be made only if—(a) the provider is an English further education provider,”
Lord Lisvane
Lord Lisvane (CB)
My Lords, the amendments in this group which stand in my name and the names of my noble and learned friend Lord Judge, my noble friend Lady O’Neill of Bengarve and the noble Lord, Lord Norton of Louth, do three things. Amendment 265 would require the Secretary of State’s approval before the OfS could make an order authorising the grant of degrees. What is proposed in the Bill would replace the powers conferred upon the Privy Council by Section 76 of the Further and Higher Education Act 1992. Indeed, I like Amendment 266, tabled by the noble Lord, Lord Stevenson of Balmacara, even more than I like mine, as his would maintain the status quo. I do not like the idea of delegating law-making powers to bodies other than Ministers. The Delegated Powers Committee noted that such delegations were not unprecedented. For example, I am aware of a delegation under Section 42 of the Wildlife and Countryside Act 1981, and under the Communications Act 2003. However, the existence of precedents does not necessarily make the principle acceptable. When powers are delegated to Ministers, those Ministers are within the reach of Parliament. Under the Bill, the OfS will be, for practical purposes, beyond Parliament’s reach.
The series of amendments starting with Amendment 277 and ending with Amendment 298 deal with the power to vary or revoke authorisations. They take this power away from the OfS and would give it to the Secretary of State. Amendment 511 would make any SI made by the Secretary of State subject to the affirmative procedure. Those would still be Henry VIII powers, and unwelcome on that account, but they would at least be exercised by Ministers. The Delegated Powers Committee, of which I am a member, said in its 10th report of this Session that:
“There is nothing on the face of Clause 43 which limits the way in which the OfS is able to exercise the powers, leaving it wholly to the discretion of the OfS when and in what circumstances the powers should be exercised”.
The committee recommended that the powers should be subject to parliamentary scrutiny and that the affirmative procedure should apply. That would be achieved by these amendments.
Amendment 301 would remove the possibility of a decision on appeal being remitted to the OfS by the First-tier Tribunal, and this issue arose in the group of amendments led by Amendment 142 which we considered last Wednesday, when I argued that such a provision could allow the OfS to be in effect a judge in its own cause. The Minister promised me a written explanation of a similar power in Clause 20, which he has now provided with his letter today. The heart of his explanation is that this power to remit allows the OfS to remake its decision with the benefit of the tribunal’s judgment. He also confirmed that remitting a decision does not rule out a further appeal. I am very grateful for this explanation, which entirely meets the points that I made on that specific provision.
The second clutch of amendments in this group begins with Amendment 344 to Clause 53 and ends with Amendment 360 to Clause 55. The purpose of these mirrors those to Clause 43 but here the subject is the revocation of authorisation to use the title of university, which would no doubt follow the withdrawal of degree-awarding powers as provided for in Clause 43. Once again, the issue is the ability of the OfS to revoke such an authorisation by order, even if it was provided for in an Act or a royal charter. As with Clause 43, this is—if I may employ the expression—Henry VIII on stilts, however improbable a mental picture that may conjure up. As with Clause 43, I do not believe it is acceptable to delegate to the OfS such significant law-making powers in the sector which it is to regulate.
In two of his now growing series of helpful letters—those of 21 December and 11 January—the Minister told us that the Bill does not allow the OfS to take away royal charters. However, it seems to me that the powers given to Ministers by Clause 110, to amend or revoke provisions of a royal charter, are merely consequential upon a decision taken by the OfS. So if the OfS is the prime mover, the fact that it is the Minister who has to exercise that power is a distinction which may not be a practical difference. To complete the picture, Amendment 512 would make Clause 53 SIs made by the Secretary of State subject to the affirmative procedure, again as recommended by the Delegated Powers Committee. I beg to move Amendment 265.
Lord Watson of Invergowrie (Lab)
My Lords, I shall speak to Amendment 266, in the name of my noble friend Lord Stevenson, which I am pleased to hear that the noble Lord, Lord Lisvane, liked. Indeed, given the comprehensive manner in which he opened the debate, I have little to add.
Clause 40(10) provides for the OfS’s power to make an order authorising degree-awarding powers to be exercisable by statutory instrument. As the noble Lord, Lord Lisvane, said, it is unusual, to say the least, for the power to make statutory instruments to be conferred on organisations or people other than Ministers. I hope the Minister can explain to noble Lords why this departure from accepted practice is justified.
Amendment 266 would require the statutory instrument first to be approved and made by the Privy Council as an Order in Council. Many universities have degree-awarding powers that were awarded by the Privy Council, so the question for the Minister and the Government is: why take that away? In this amendment we are not asking the Minister to do something; we are asking him not to do something. We say that there have been no examples of universities clamouring for change, so why not leave things as they are?
My noble friend Lord Stevenson will speak in more detail about the Privy Council on a later group, but I want to stress now that it is an independent body, completely impartial and well respected. That is something not to be cast aside lightly. This is the established process for introducing new universities, and the current system has worked well over many years. We do not believe the case for such a radical change as handing all powers to the OfS has been made, but if the Privy Council is to be replaced, its replacement should be as rigorous as the Privy Council, and at least capable of building a reputation as strong as its reputation. The OfS cannot as things stand, and may not ever, achieve that status. It is essential to ensure scrutiny by the Privy Council of the power to grant awards.
The noble Lord, Lord Lisvane, as a member of the Delegated Powers and Regulatory Reform Committee, understandably quoted from that committee’s report on this part of the Bill. He commented, I think, on paragraph 30; I want to highlight what the committee said in paragraph 28, commenting on Clause 43, which enables the OfS by order to vary or revoke degree-awarding powers. Although exercised by statutory instrument, these powers would not be subject to parliamentary scrutiny. The DfE had sought to justify this to the committee, but the committee’s response was unequivocal. Paragraph 28 says:
“We are not in the least convinced by the Department’s reasons. We do not believe that the requirement for detailed consideration by the OfS, and the existence of a detailed procedure including rights of appeal, are incompatible with an order under clause 43 being subject to Parliamentary scrutiny … There is nothing on the face of clause 43 which limits the way in which the OfS is able to exercise the powers, leaving it wholly to the discretion of the OfS when and in what circumstances the powers should be exercised. We therefore recommend that the powers should be subject to Parliamentary scrutiny and that the affirmative procedure should apply”.
There is nothing I can add to that—an opinion reached after due deliberation by a committee with no political axe to grind. I imagine the Minister may feel more than a little uncomfortable at the fact that he and his department are effectively ignoring the judgment of noble Lords. They do not deliver such verdicts lightly, and I believe that the Minister and his team need to revisit the report and reconsider their position on the manner in which the OfS is to be permitted to act on varying or revoking institutions’ degree-awarding powers.
Viscount Younger of Leckie
My Lords, my noble friend Lady Goldie has asked me to apologise to the Committee as she has succumbed to her bad cold and I will be in the hot seat for the rest of the evening.
I entirely agree that we need to ensure that the processes around the award, variation and revocation of degree-awarding powers and the award and revocation of university title are sound and fit for purpose. I will explain why we believe the Bill does just that. However, we will continue to listen and reflect on whether there are further improvements that we can make to these processes. I say that at the outset.
I shall deal with the amendments to Clause 40. At the moment, we have a lengthy process for the award of degree-awarding powers, which involves the Privy Council seeking advice from the department, which in turn seeks advice from HEFCE and the QAA. This is unduly complex, and through our reforms we are seeking to streamline the process without lowering standards. This is why, under our plans, the OfS would run the whole process from application through to award. Decisions on degree-awarding powers would be taken by the OfS, as an independent, arm’s-length body, on the basis of published criteria set out in guidance, and should be made after having consulted relevant bodies such as the designated quality body. It is therefore only logical that the OfS would also make the order that grants degree-awarding powers. Adding the Secretary of State or Privy Council approval would, under the new regime, have little benefit other than complicating the process.
I turn to the amendments that would ensure that orders varying or revoking degree-awarding powers and revoking university title have to be made by the Secretary of State, who would also deal with the processes of variation and revocation. Giving order-making powers to persons and bodies other than the Secretary of State or the Privy Council is not unprecedented—for example, Ofcom has order and regulation-making powers. The OfS, as an independent regulator, is best placed to make an assessment as to whether degree-awarding powers or university title should be awarded, varied or revoked. It will have much better insight into the provider in question and the sector as a whole than the Secretary of State ever could. Therefore, our intention is that these decisions are taken by the OfS on the basis of published criteria set out in guidance, the detail of which the department intends to consult on.
Let me provide some further reassurance that these powers are not intended for everyday use. We intend that the OfS and the new quality body will work with providers to address any emerging problems early on. Removal of degree-awarding powers or university title is therefore likely to be a rarely used, but necessary, safeguard for quality in the system. In addition, the OfS would always, in accordance with its general duties listed in Clause 2, have regard to important factors, which includes the need to promote quality. These are additional safeguards to ensure that the OfS’s powers are not abused. Any decision to subsequently revoke degree-awarding powers or university title will be regulatory decisions. We think it is right that they should be taken by the regulator, not a Minister. However, we recognise the significance of these powers and have therefore made sure that there are appropriate safeguards in place. These are set out in Clauses 44, 45, 54 and 55. They include the OfS having to notify the provider of its intentions and to give reasons; the OfS having to give the provider a chance to respond and take account of that response before making a decision; and, as the Committee will know, a right of appeal to the First-tier Tribunal. This safeguards against any undue interference with the institutions’ autonomy. We believe that an appeal to the First-tier Tribunal provides for the most independent review of a case.
I address a point raised by the noble Lord, Lord Lisvane, about providers with royal charters. I will explain how the process would work in that case. We do not envisage a scenario where the use of powers in Clause 110 would result in the revocation of an entire royal charter which established the institution. The Secretary of State can amend royal charters where appropriate so that the charters operate smoothly, but only where they reflect any changes made by the OfS to degree-awarding powers or university title contained in the royal charter—for example, a revocation of university title. This is not a general power to amend but must be linked to changes made by the OfS in relation to degree-awarding powers and university title. Importantly, I reassure noble Lords that any amendments or revocations made by the Secretary of State would be subject to parliamentary scrutiny via the affirmative procedure, which I think, and hope, that the noble Lord, Lord Lisvane, mentioned and acknowledged. If we were to introduce parliamentary scrutiny for the orders on top of this already very strong, but also lengthy process of appeals, as suggested by Amendments 511 and 512, we would further delay the implementation of any decision, and thus potentially put students at risk. It would also introduce unnecessary complexity into the system: how would parliamentary scrutiny work alongside an appeals process and what if they reached different conclusions? Again, I emphasise that we have designed the processes in such a way that there is no need for Ministers to get involved. It will be a regulatory process, instigated by the regulator and decided by the independent judiciary.
While I understand the intention behind these amendments, I believe that the controls and protections in place are adequate and therefore the amendments are not necessary. However, as I said at the beginning, I will reflect on any further improvements that could be made. In the meantime, I ask the noble Lord to withdraw the amendment.
Lord Watson of Invergowrie
I understand that the Minister will reflect on this, and no doubt the department is preparing its response to the Delegated Powers Committee’s report. I wonder whether the Minister will take the content of this short debate and feed it into that process, so that it might carry some weight in deciding the government position.
Viscount Younger of Leckie
Indeed, the noble Lord makes a good point. I am sure that will be taken into account in terms of any further improvements we might wish to make.
Lord Norton of Louth
Before my noble friend sits down, could he just clarify on the first amendment of the noble Lord, Lord Lisvane? Under Clause 40(10), the OfS can make an order exercisable by statutory instrument and,
“is to apply to such an instrument as if the order had been made by a Minister of the Crown”.
Am I therefore right in believing that, under Clause 113(3), if it is a statutory instrument, it could be prayed against? If that is the case, does that not put the Minister in a difficult situation?
Viscount Younger of Leckie
My noble friend is very adroit at raising some complicated issues. I should answer the question but also go into some detail as to the different scenarios that might occur. I respect the quality of advice that he gives.
Lord Lisvane
I am very grateful to the Minister for his careful and detailed reply. The noble Lord, Lord Norton, is on to a good point there. If it is an SI Act 1946 statutory instrument, the Act contains the praying procedure. It would indeed put a Minister perhaps in rather a difficult position, having to defend the case, while having, as it were, abrogated responsibility. That is no doubt something about which we will hear, perhaps in a further edition of these exciting letters.
I do not quarrel with the proposition that the OfS will be best placed to make the assessment, but that does not necessarily mean that the OfS should be able to engage in the law-making process. I fancy that we have once again encountered what we encountered last Wednesday: two reasonable people can disagree about something without either of them being unreasonable. Issues of policy and principle arise in this group of amendments which might well benefit from being reconsidered on Report, but in the meantime I am very happy to beg leave to withdraw the amendment.
“(3) But in the case of a foundation degree only authorisation, the references in subsection (2)(c) and (d) to degrees are to foundation degrees only.”
“Automatic review of authorisation
(1) The OfS must consider whether to vary or revoke an authorisation given under section 40(1)—(a) if the ownership of the registered provider is transferred,(b) if the owner of the registered provider has restrictions placed on its degree-awarding powers in relation to another registered provider under its control or ownership, or(c) for any other reason considered to be in the interest of students enrolled at the institution or the public.(2) A decision taken under subsection (1) to vary or revoke an authorisation shall be carried out in accordance with section 43.”
Lord Stevenson of Balmacara
My Lords, I can be quite brief. This is a bit of a fishing expedition—I am sorry, I should recall that: it is a probing amendment. The point of it is that we have to anticipate how new providers will enter the market and what sort of form and format they will take. This is not an acknowledgement going back to the question asked by the noble Baroness, Lady O’Neill, about what these bodies are and how they are constituted, but it raises the same issues. We already have at least one relatively new provider, whose ownership is quite clearly based outside the UK, and the question arises whether the change of ownership could raise any questions about previous decisions taken by the regulator or other body in respect of the degree-awarding powers or the register to which this institution might be attached. We do not know the answer to that yet, because the situation has not yet emerged, but it raises issues about probity and the ability of an institution to survive, if the ownership places new restrictions on it.
Viscount Younger of Leckie
My Lords, I shall be brief as well. It remains our policy that degree-awarding powers cannot be transferred or sold. As now, if a holder of degree-awarding powers was involved in a change of ownership, it would be expected to inform the OfS and demonstrate that it remained the same cohesive academic community that had been awarded those powers originally. We need to maintain flexibility to adapt to changing circumstances, so it is appropriate that these matters are covered through guidance, in the same way that the process operates currently. I hope that with that extremely short explanation, the noble Lord will withdraw his amendment.
Lord Stevenson of Balmacara
That was a little briefer than I had anticipated, but I will look at it carefully. In the meantime, I beg leave to withdraw the amendment.
“( ) When applying section 40(4) and (5) in the case of such an order, the reference in section 40(5) to a foundation degree granted other than by virtue of section 41(2)(c) or (d) (honorary and staff degrees) is to be read as a reference to a foundation degree granted other than by virtue of whatever is the equivalent of section 41(2)(c) or (d) in the case of the provider.”
“( ) A statutory instrument containing an order under subsection (1) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”
Lord Watson of Invergowrie
My Lords, I am moving the amendment in the name of my noble friend Lord Stevenson. The amendment intends to establish the principle that a statutory instrument containing an order to revoke an institution’s authorisation to grant degrees must be an affirmative statutory instrument. We believe that such a draconian action as revocation—which in some circumstances is potentially fatal to the institution concerned—should not simply be left to the OfS to issue as a statutory instrument. I take on board the points the Minister made in respect of group 13 a few moments ago, when he talked about the OfS being an independent body. That also applies to the Privy Council, but it has been written out of the equation. It should not be possible for such a statutory instrument to be made unless a draft has been laid before and approved by a resolution of both Houses of Parliament.
In response to an earlier amendment before the dinner break the Minister stated that requiring the affirmative principle would delay a decision that had been recommended by the OfS. If that is the case in certain situations, so be it. If ever there was a case where the maxim “Better to get it right than to get it right now” applied, this is it. Depriving an institution of degree-awarding powers is sufficiently important for Parliament to have its say, and any delay that results is surely justified in terms of due process.
I made my remarks on the importance of retaining the Privy Council in the debate on the group containing Amendment 266, and I shall not repeat them. However, I shall again draw to your Lordships’ attention the fact that the Delegated Powers and Regulatory Reform Committee made a further comment on Clause 53, which impacts on this group. I will not repeat what the noble Lord, Lord Lisvane, said at that time. But the committee made it very clear that it took the view there were significant new legislative powers being given to the OfS that are not subject to any limits to their exercise, and that there should be parliamentary scrutiny with the affirmative procedure applying. I think that is a very important point to make. I know that the Minister is considering this and other aspects of the committee’s report but, in the meantime, I beg to move.
Lord Judd (Lab)
My Lords, I speak to my Amendment 298A, which is on the Marshalled List. At this stage of the proceedings, as an older Member of this House, I must be allowed to make an observation. We have gone a long way down the road I predicted. We are trying to make the best of this legislation. We are trying to engage in damage limitation, which becomes almost a cause. As an older man, I grieve at how far we have drifted from the concept of a university as an international community of scholars awarding degrees, based on the distinction of the university. This is a sad road we have taken, and we are dealing with the consequences: the commercialisation and marketing of the whole concept of universities and higher education. I have great difficulty in coming to terms with this language of markets and of students as consumers, as distinct from students as contributors to a community of scholars. It is a sad situation, but we are in the situation we are in, and we have to try and make it as acceptable as possible.
Under my last amendment, I talked about fairness, justice, transparency and accountability, and this amendment is about exactly the same theme. I talked previously about decisions not to register or to suspend, and now I want to talk briefly about why it is that there are no rights of appeal against the OfS refusing to authorise providers to grant degrees. Apparently, by this legislation, rights of appeal are allowed only when the OfS decides to vary or revoke such an authorisation. However, the decision to authorise or not in the first place is a significant decision and a significant exercise of power, which will determine whether a provider could enter the market—here I go using the word myself—or not. There seems no justification to deny a right of appeal where the OfS has decided not to grant authorisation.
There must be transparency and accountability. I absolutely understand and relate to the noble Lord, Lord Lucas, when he says that we cannot have institutions below the grade granting degrees. If we go down that road, there will be a temptation for people who are just opportunist money-makers to get into the money-making business by awarding degrees. We know this, so we have to have safeguards—of course I understand that. But I also understand the Minister when, in the logic of his position as he sees it, he says we cannot rule out the possibility that there will be newcomers to the field who will bring something new, fresh and challenging and who ought to be taken very seriously. I understand the logic of that point, and my amendment tries to take that point on board.
We cannot have an alienated public who think that there are high-handed university administrators and regulators, as well as universities themselves, making these strategic decisions without having to explain to those involved, let alone the wider public, why they have come to particular conclusions. Indeed, I can see a case for saying that, if what I advocate comes to pass, it will be a very educative experience for the public, because there will be an explanation of why a particular authorisation cannot be allowed. I think that the amendment and the principles behind it matter, and I am aware that I am becoming a collaborator in damage limitation.
Lord Liddle (Lab)
My Lords, I rise to speak to Amendments 282A and 347B, which stand in my name. I declare an interest as the pro-chancellor of Lancaster University.
I am learning a lot tonight about parliamentary procedure and affirmative resolutions, and about the relationships between independent regulators, Secretaries of State and Ministers, and I congratulate the noble Lord, Lord Lisvane, on carrying out such a good exercise in educating me. The questions posed by these amendments are very important. My noble friend Lord Judd is right: if you are to have a much more liberalised system with free entry, you have to have regulation and procedures so that it operates in a fair way.
The purpose of my amendments is simple. I would like to see the OfS be under a statutory obligation to set out its reasons for all the decisions that it has taken. I would like Parliament, once a year, to be able to debate a report which looks at whether, having set out a common set of principles by which the rules should operate, the regulator sticks with it. I think that that is a necessary addition to the ad hoc business of affirmative statutory instruments, and that it would be a sensible addition to the Bill.
Lord Norton of Louth
My Lords, I have great sympathy with what the noble Lord, Lord Liddle, has just said. On the lead amendment, Amendment 282, which seeks to make such an order subject to the affirmative resolution procedure, I revert to a point that I made a few moments ago. As I read it, the order-making power in subsection (5) would presumably be subject to being prayed against. I would have thought that if any authorisation was revoked, it would be likely to be highly controversial and therefore might well trigger the order being prayed against. However, that would create the same situation, because the revocation would be by the OfS but the defence would have to be by the Minister, who would be somewhat detached from the whole exercise. I am not sure how that is addressed, and I look forward to my noble friend’s comments.
Viscount Younger of Leckie
My Lords, I am grateful for the opportunity to explain the provisions on the revocation of degree-awarding powers and university title. I make it absolutely clear that these powers are not intended for frequent use, as I have mentioned before. We see them as a rarely used but necessary safeguard for quality in the system. We know that these powers are significant and that is why we have endeavoured to include strong safeguards, including a right of appeal to the First-tier Tribunal. We have listened carefully and will continue to reflect on whether there are further improvements that we can make, and we will no doubt discuss this matter further on Report.
Our higher education system is world-class and university title and degree-awarding power are valuable assets. It is the responsibility of those that have obtained these prestigious titles to uphold their reputation. However, without powers to hold such providers accountable, we risk undermining the reputation of our universities. Let us consider the impact if a university’s quality and standards were to drop to a wholly unacceptable level, to the extent that it was widely known that its degrees were not comparable to others and the provider in question had done nothing to address this. Would we really want such an institution to continue to benefit from the prestige of a university title?
Lord Adonis (Non-Afl)
My Lords, I can see that under Schedule 1 the OfS must prepare a report on the performance of its functions during each financial year in any case. Given the magnitude of the decisions to which my noble friend Lord Liddle referred, it would be a very straightforward and simple amendment to require that annual report to have regard to the exercise of the functions under this clause.
Viscount Younger of Leckie
I note the point the noble Lord, Lord Adonis, has made and that will definitely be part of our general reflection.
I now turn to the processes and safeguards. The OfS, as an independent regulator, will be best placed to make decisions on whether to vary or revoke an authorisation to grant awards or revoke a university title. However, there is a statutory process that must be followed. Clauses 44 and 54 provide that the OfS give appropriate notice to the governing body of the provider, set out its reasons why it considers it necessary to take the step of variation or revocation and must have regard to any representations made by the provider before proceeding. I agree that the OfS should be able to draw on all relevant information, including from other parties. Clause 58 enables that already.
Turning to Amendments 282 and 347A, we want to move to a system where quality, rather than the age of an institution, will be the yardstick and where the OfS has powers to vary or revoke degree-awarding powers and to revoke the university title of any institution, no matter how they were obtained. This is essential to achieve a level playing field among providers.
Amendment 282 would unlevel the playing field for revocation of degree-awarding powers. We included a right of appeal for any revocation decision because we felt that this was the most appropriate and independent review, and that it would therefore be the best way to safeguard the interests of the provider, including its institutional autonomy. An appeal to the First-tier Tribunal is an opportunity for a provider to present evidence to support its case. It provides for a politically neutral and objective judgment of the merits of the case. I see the logic behind these amendments and we value the expertise of Parliament, as well as the important scrutiny functions. However, on matters of regulation, we believe such scrutiny and safeguards are better provided by the courts, rather than by Parliament. The regulatory framework will apply to all providers equally. If we accept this principle when it comes to other rights and obligations, I find it difficult to justify treating a provider that got its degree-awarding powers in the 1970s—such as the University of Buckingham, for example—differently from one that gets them in 2020.
Before I finish, let me briefly address the amendment of the noble Lord, Lord Judd, which would allow for appeals against unsuccessful degree-awarding power applications. There currently is no such provision and the appeals provision in the Bill has been drafted to cover scenarios where the OfS makes a decision that deprives providers of a status or powers, or imposes a monetary penalty. I can provide some reassurance: we expect that there will continue to be internal complaints mechanisms similar to those run by the QAA at present. The amendment is therefore not needed.
I am afraid there is no time to address the thoughtful points raised by the noble Lord, Lord Judd, on the path universities are travelling down. I say only that there is undeniably an important, international market where we are in the business of attracting students who realise that they have a choice. We have to be realistic and remember that.
As I said, we appreciate the need to get the safeguards right. While we feel we have struck the right balance, we will continue to reflect on any areas of improvement. In the meantime, I ask the noble Lord, Lord Watson, to withdraw Amendment 282.
Lord Watson of Invergowrie
My Lords, I thank the noble Viscount for his response and noble Lords who have participated in this short debate. It has been quite lively, with some interesting points made. On the points made by my noble friend Lord Liddle that the OfS should set out its reasons, allowing Parliament to debate its report annually, there seems to be no rational reason why that should not occur, because it does for several other regulators—although, is the OfS a regulator? That debate is continuing. I heard the noble Viscount say that he will consider that and we will return on Report, but whether the reports would be dull or refer to events that had happened frequently is not quite the point. We are all grateful to my noble friend Lord Adonis for drawing attention to Schedule 1’s requirement for an OfS report and welcome the Minister’s willingness to consider that before we move on to Report.
The noble Viscount—a man we are increasingly coming to recognise as the man of letters—said that Amendment 282 would “unlevel the playing field”. I am not sure whether that is a new verb added to our language, but none the less, as I understand it that compares existing providers with new arrivals. I do not see that it would necessarily do that. He mentioned the University of Buckingham. Yes, that has been there some 50 years outwith the system, because it was not part of the mainstream for many years, but the argument we had on the new providers needs to be separated from the situation of those that have held degree-awarding powers for a long time, rather than those that have recently got them and may be deprived of them for good reason, inasmuch as it could be said they should not have had them in the first place. That may be correcting an award that was done earlier than would have been appropriate.
The internal complaints mechanism to which the noble Viscount referred also needs to be looked at again. He said in response to my noble friend Lord Judd that there is an appeal provision against the decision of the OfS to vary or revoke degree-awarding powers, but not for those trying to have those powers granted. This impacts on a discussion we had earlier when the noble Viscount used terminology along the lines of, “It’s different if they’re in the system”, as opposed to being outside, and that they have to be treated differently if they already have the powers, as opposed to just seeking them. There is a basic justice issue there of an individual or organisation having the right to appeal against a decision that affects them adversely. A provider without degree-awarding powers would by definition not be part of the internal complaints mechanism to which the noble Viscount referred. I do not think he has answered my noble friend’s point. Again, I am sure this is something to which we will want to return on Report.
I welcome the fact that the noble Viscount has taken on board the points made. I look forward to returning to them. On that basis, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, I remind the Committee that if Amendment 290 is agreed, I cannot call Amendment 291 because of pre-emption.
Amendment 290
(a) an appeal under section 45(1)(a) or (b), or a further appeal, could be brought in respect of the decision to vary or revoke, or(b) such an appeal is pending.”
“(10) Where subsection (8) ceases to prevent a variation or revocation taking effect on the date specified under subsection (6), the OfS is to determine a future date on which the variation or revocation takes effect under the order to be made under section 40(1) or 43(1).(11) But that is subject to what has been determined on any appeal under section 45(1)(a) or (b), or any further appeal, in respect of the decision to vary or revoke.”
The Deputy Chairman of Committees
My Lords, I remind the Committee that if Amendment 297 is agreed, I cannot call Amendments 298, 298A or 299 because of pre-emption.
Amendment 297
(a) a decision of the OfS to vary or revoke, by a further order under section 40(1) or an order under section 43(1), an authorisation given to it;(b) a decision of the OfS as to the date specified under section 44(6) as the date on which the variation or revocation takes effect.”
“( ) vary the date on which the variation or revocation takes effect under the order to be made under section 40(1) or 43(1);”
Lord Lucas
“( ) The OfS may propose conditions on validation arrangements between two registered higher education providers in order to protect the student interest including—(a) referring registered providers to an appointed arbitration panel to resolve disputes related to existing arrangements, and(b) giving guidance to registered providers on existing arrangements.”
Lord Lucas
My Lords, when I talked earlier about the need to give the OfS some axis in making sure that validation arrangements work well, this was what I meant. I beg to move.
Lord Stevenson of Balmacara
That is the second speediest moving of an amendment I have heard so far in Committee. I will be almost as brief, since we have alluded to the fact, if we have not specifically mentioned it, that the answer to a lot of our problems about the validations issue, which will come up in both this and the following group, where there is a clause stand part, and the power of validation of last resort being given to the Office for Students is to pick up the fact that the CNAA, of blessed memory, still exists, in rump form, in the Open University. That is where all its functions and assets were transferred—not that it had very many assets, I am sure—at the time of its dissolution, around the time that the polytechnics were given their degree-awarding powers and we abolished the binary line, effectively. So we have a situation in which it would be possible, I think, to obtain a validator of last resort at very little cost and certainly at no considerable worry in terms of new structures or arrangements. It would certainly resolve one of the issues that is devilling the question of the powers of the OfS, and I very much hope that this amendment will be considered very carefully.
Baroness Garden of Frognal
My Lords, in the absence of the noble Baroness, Lady Wolf, I will speak to Amendment 311, in her name and mine. We support the option of identifying a central validation body. The current system of awarding bodies works well, although it is recognised that protectionist practices are sometimes adopted on both sides. We therefore agree that validating bodies should commit to competition, diversity and innovation, although that should not mean that all comers must be validated. Expertise in validation lies in the objective and impartial appraisal of an institution’s capacity to deliver and maintain appropriate standards of quality and student experience.
While the precise terms of such an arrangement will be decided between the provider and the OfS, the amendment would require any such arrangement to make specific provision for the national validating body to be able to refuse to validate a qualification if it has concerns about the quality of higher education provided. There is much merit in the proposal of the noble Lord, Lord Stevenson, for using the Open University as a validator of last resort. It is a body with very wide-ranging expertise and would be a respected body for the task—much more appropriate than the Office for Students itself.
Viscount Younger of Leckie
My Lords, in view of the very brief comments made by noble Lords in this extremely short debate, I shall also keep my comments short. I am happy to write to noble Lords if they feel that my comments are too short.
I understand that my noble friend Lord Lucas’s amendment is born of a wish to protect students, but I reassure him that there are already strong protections in place. I also reassure noble Lords once again that on our student protection plans our policy is to ensure that students’ interests are protected if a provider’s validation agreements break down.
I will comment a bit further on providers declining to validate on quality grounds. We expect that the OfS’s commissioning process should be open and transparent, so that providers clearly understand what would be expected of them if they agree to extend their validation services to other registered providers in this way. In all cases we expect the commissioned provider would need to be assured of the quality of the provision that it agrees to validate. The OfS’s commissioning process should therefore allow providers to decline to enter into validation agreements on quality grounds. So we believe that this amendment is not necessary. I therefore ask my noble friend to withdraw Amendment 305.
Lord Lucas
My Lords, I thank my noble friend for that brief reply. Perhaps he might enlarge on it when we meet, if not in a letter afterwards. I beg leave to withdraw the amendment.