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Christian Matheson (City of Chester) (Lab)
The Secretary of State for Culture, Media and Sport (Karen Bradley)
In a fast-changing and challenging broadcasting environment, the Government want to ensure that Channel 4 has a strong and secure future, and that it can continue to provide for audiences and support the creative industries across the UK. The Government are looking at a broad range of options, and we will set out our plans in that area in due course.
Christian Matheson
It is a shame that the review is not as fast-changing and fast-moving as the broadcasting environment. At the end of this month, the review will have taken longer than the BBC charter review, so can we now put the review out of its misery, and declare that Channel 4 works well and will not be privatised?
Karen Bradley
Unlike the BBC charter review, this is not a formal process and there is no end date at which the charter expires, as there is with the BBC, but we do need to make sure that we get this right. I want to see Channel 4 survive, flourish and prosper in what is an ever-changing broadcasting world, as the hon. Gentleman rightly says, and that means that we are working with Channel 4 to get the right deal for viewers and the whole country.
Mr David Nuttall (Bury North) (Con)
What does my right hon. Friend think the view of the Competition and Markets Authority would be if a company that already owned one broadcaster the size of the BBC wanted to own another the size of Channel 4? If she agrees that that simply would not be allowed, will she please immediately begin the process to sell off Channel 4?
Karen Bradley
I know that my hon. Friend has strong views on this subject. I assure him that we are looking at all options, and we will report to the House in due course.
Graham Jones (Hyndburn) (Lab)
As my hon. Friend the Member for City of Chester (Christian Matheson) said, the question of whether Channel 4 will or will not be privatised is one of the longest running soaps in this House. Can the Secretary of State confirm that there will not be a shareholder solution, that it will not be privatised and that it will not be for profit—that it will be not for profit? I expect that she is coming under pressure from Government Back Benchers to privatise Channel 4.
Karen Bradley
I know that the hon. Member for City of Chester (Christian Matheson) is particularly interested in long-running soaps on Channel 4, given that “Hollyoaks” is set in his constituency. I want to make sure that “Hollyoaks” and other programmes set across the UK are able to prosper so that we have a plurality of broadcasting that works for everyone.
Nigel Huddleston (Mid Worcestershire) (Con)
The Secretary of State will be aware that Channel 4 recently won broadcaster of the year at the Broadcast Awards. Does she therefore agree that if it ain’t broke, don’t fix it?
Karen Bradley
The important point is that we make sure that Channel 4 has a long-term, sustainable future. That is why we are looking at all options so that we can ensure that a station that relies very predominantly on advertising revenue is able to continue, and to provide the excellent broadcasting for which Channel 4 is renowned.
Kevin Brennan (Cardiff West) (Lab)
When the Secretary of State spoke to the Culture, Media and Sport Committee last year, she said that she would come to a decision in the “nearish future.” Now she says that she will come to a decision “in due course.” I do not know whether the nearish future is sooner than in due course, but this faffing around on Channel 4 has to stop. She has to show some leadership because the uncertainty is damaging its business and our broadcasting industry. Rather than taking a decision in the nearish future, will she now commit to doing so immediately?
Karen Bradley
I do not agree that this is affecting the quality of broadcasting that Channel 4 is able to produce. The fact that Channel 4 has committed, for example, to broadcasting the para-athletics, which is being held in London next summer, is a very positive move that we all welcome. I want to get this right, and I am working with Channel 4 and all stakeholders. I want to make sure that Channel 4 has a long-term, sustainable future, and I will report back to the hon. Gentleman as soon as possible.
Mr Philip Hollobone (Kettering) (Con)
The Minister for Digital and Culture (Matt Hancock)
We strongly support brass bands through regular Arts Council funding to organisations such as Brass Bands England. Additionally, large brass bands can take advantage of the orchestra tax relief, which was introduced in April 2016.
Mr Hollobone
Youth Brass 2000 is a young people’s brass band based in the village of Wilbarston in the Kettering constituency. Will my right hon. Friend join me in congratulating it on recently being crowned British open youth brass band champion for the fifth year running? Is it not an excellent example that other youth bands should be pleased to follow?
Matt Hancock
I am delighted to trumpet the success of the British open youth champions, who have won for the fifth year in a row. I played the cornet in a brass band when I was a boy, but I never rose to the dizzying heights of the national champions whom my hon. Friend represents. I send congratulations to them all.
Jim Shannon (Strangford) (DUP)
In my constituency of Strangford, we have the wonderful Newtownards silver band, which brings together the young and the not so young playing instruments that are also young and not so young. I understand that the Minister is keen to support that, so will he endorse the need for cross-community participation and gender balance to ensure that the brass brands of the future can succeed?
Matt Hancock
As we can see by the response in the House, there are brass bands right across the country—the Haverhill band in my constituency is a particularly good example. The hon. Gentleman’s point that brass bands, like other music organisations, can bring together people from different backgrounds across cultural divides and provide a point of unity is well made.
Jake Berry (Rossendale and Darwen) (Con)
The Minister is certainly not known for blowing his own trumpet. I am sure that, like me, he would like to congratulate the Haslingden and Helmshore band, the Water band, the 2nd Rossendale Scout band, the Whitworth Vale and Healey band and the Darwen brass band, all of which work with young people in particular. Will he take this opportunity to thank all those bands for the fantastic work that they do to get young people off the street, give them a love of music and get them performing?
Matt Hancock
I never got to the point of playing the trumpet—I was a mere cornet player—but I do want to bang the drum for all the brass bands that my hon. Friend mentioned.
Nick Thomas-Symonds (Torfaen) (Lab)
The long-term sustainability of our brass bands, including the fine Blaenavon town band in my home town, depends on affordable music lessons being available in schools. Does the Minister agree that the Government’s cuts to the devolved Administrations’ local councils have put that at risk?
Matt Hancock
People who play in brass bands right across the country should be enthused by the support for this question from both sides of the Chamber. I disagree with the hon. Gentleman. In England, where the UK Government are responsible for support, we have put £300 million into music hubs to ensure that everybody gets the opportunity to play a musical instrument. It is up to devolved authorities to do that outside England, and I wish that the Welsh Government would do something similar.
George Kerevan (East Lothian) (SNP)
The Secretary of State for Culture, Media and Sport (Karen Bradley)
The Government want to ensure the best deal for Britain on leaving the European Union and to provide as much certainty as we can. The creative industries are one of the UK’s greatest success stories, contributing more than £87 billion to the economy and more than £19 billion in exports. I am confident that that will continue when we leave the European Union, and we have been working with the industry to ensure that that is the case.
George Kerevan
I am sure the Secretary of State has her favourite rock band, so could she assure us that the Government are taking steps to ensure that increased carnet costs and work visa requirements do not kill off UK musicians’ ability to tour European venues post-Brexit?
Karen Bradley
It has been pointed out by hon. Friends behind me that we have moved from brass bands to rock bands—that was a nice segue by the hon. Gentleman. The point is that the UK music industry is a global leader—it is a leader not just in 27 European Union countries, but around the world. It is British bands that are touring around the world. I understand the hon. Gentleman’s point, and I am working closely with the industry to ensure that we get the very best deal for British music not only in Europe, but around the world.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Karen Bradley
My right hon. Friend the Chancellor of the Exchequer has committed to securing funding until 2020, which is after the UK will leave the European Union. I am working closely with the industry and across Government to make sure that we get the right deal for Britain so that we have the support needed to ensure that our creative industries flourish.
Mr Tom Watson (West Bromwich East) (Lab)
When I look at the stylish men and women on the Government Front Bench, I think that each and every one of them—except, perhaps, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Reading East (Mr Wilson)—could be models on the catwalk at London fashion week. The fashion industry is concerned that, as the UK leaves the EU, we will lose the right to protect original designs, which would have serious knock-on effects for trade showcases, including fashion week. Will the Secretary of State tell us what the Government are doing to make sure that our designers’ intellectual property rights are protected post-Brexit?
Karen Bradley
The hon. Gentleman asks a very timely question not only because fashion week is coming up, but because the Minister of State and I met the fashion industry only on Monday to discuss exactly those points. I reassure him and the fashion industry that, because the great repeal Bill will bring European rules into UK law, therefore making sure that there is no cliff edge, those rights will be protected.
John Nicolson (East Dunbartonshire) (SNP)
Last week, the Culture, Media and Sport Committee took evidence from John Kampfner and others representing the creative industries. Some of those industries employ a 40% EU workforce, and these people are now in limbo. What reassurances can the Secretary of State give that their roles and livelihoods are secure?
Karen Bradley
I pay tribute to the work of the Creative Industries Federation, led by John Kampfner, and the role that it has played in working with the Government to develop our plan to ensure that we get the right deal for the creative industries when the United Kingdom leaves the European Union. The hon. Gentleman will also know that my right hon. Friend the Prime Minister has been very clear that she wants an early settlement on the matter of EU nationals in the UK, and UK nationals living in Europe. She is working hard, as we all are across Government, to ensure that we can achieve that as soon as possible.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
We expect all sports and all clubs to take the necessary action to fulfil their legal obligations under the Equality Act 2010 so that disabled people are not placed at a substantial disadvantage when accessing sports venues. Football has the highest profile on this issue and is stepping up to fulfil those obligations, and we expect all other sports to do the same.
Dr Cameron
As chair of the all-party group on disability, people from across the United Kingdom have been contacting me with grave concerns about the lack of accessibility to sports stadiums. Will the Minister meet me and the all-party group to discuss this extremely important matter and the steps that can move us forwards?
Tracey Crouch
May I start by congratulating the hon. Lady on all that she does in championing disability rights? Her reputation on this matter is fast spreading around the Chamber and beyond.
My hon. Friend the Minister for Disabled People, Health and Work and I would be delighted to meet the hon. Lady to discuss this issue, which we care passionately about and are making progress on. It is not just the English premier league that we are talking about, but football throughout this country and across the other home nations. I urge all Members to do what they can to encourage their local clubs to be as successful as possible.
Damian Collins (Folkestone and Hythe) (Con)
Given all the wealth in premier league football, does the Minister agree that it is unacceptable that there are still clubs that do not yet have a plan to meet accessibility targets for their stadiums? Does she also agree with the Select Committee’s report that clubs that fail to do that should face legal action?
Tracey Crouch
I do not agree that the clubs do not have a plan; they have a plan, but they might not be meeting it. My hon. Friend is right that there should be legal action, but it is not for me to advance that. He will be aware that the Equality and Human Rights Commission is the body that enforces the Equality Act 2010. If insufficient progress is being made by clubs, the commission should consider using its legal powers—it would have my full support were it to do so.
Rob Marris (Wolverhampton South West) (Lab)
Tracey Crouch
I am not sure whether the hon. Gentleman listened to my answer. The Equality and Human Rights Commission is the enforcement body. If it decided to take legal action, it would have Government support. I know that he is a fan of Wolverhampton Wanderers, and that Molineux is still 62 spaces short of its own target. I hope that he will do all he can to continue to encourage the excellent disabled fans group to make sure that the club meets its target.
Mr Mark Williams (Ceredigion) (LD)
The Secretary of State for Culture, Media and Sport (Karen Bradley)
As the hon. Gentleman knows, we have committed to a comprehensive review of S4C this year. It will look at a range of issues, including funding arrangements, remit, accountability and governance. I look forward to his contributions to that review.
Mr Williams
I thank the Secretary of State for her answer. She will be aware of the huge significance of S4C to the people of Wales. When the announcement of a review was made last year, the Government wisely froze the cut to the Department’s share of S4C’s budget. The review has not yet started—it will conclude this year—so will she guarantee again to freeze any proposed cut to S4C’s budget?
Karen Bradley
The Government are committed to ensuring that S4C has a strong and sustainable long-term future in broadcasting. We will ensure that the appropriate budgets are available.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Karen Bradley
We have ensured that S4C has appropriate funding for a very long time. It was a Conservative Government who introduced S4C in the first place. The Government gave more than £6 million this year and we will be giving more than £6 million next year. That funding is in addition to the money that comes from the licence fee. I hope that that reassures the hon. Lady that we are committed to S4C.
Mr David Hanson (Delyn) (Lab)
The current projection for S4C still means a 10% cut in its funding between now and 2021. Will the Secretary of State assure me that the review will strongly look at ensuring that there is a definitive base for S4C’s funding?
Karen Bradley
We are putting together the terms of reference for the review. I look forward to the right hon. Gentleman’s comments when the review is put forward.
Stephen Kinnock (Aberavon) (Lab)
The Minister for Digital and Culture (Matt Hancock)
We strongly support the roll-out of superfast broadband, which is on track to be available to 95% of premises by the end of the year.
Stephen Kinnock
Almost one in three homes in my Aberavon constituency have broadband speeds of below 10 megabits a second. Moreover, I recently conducted a survey of my constituents in which 44% of respondents reported repeated loss of broadband service. Does the Minister agree that the future growth prospects of Aberavon will be severely constrained if this situation continues?
Matt Hancock
I will look into the figures that the hon. Gentleman mentions. Thinkbroadband, the independent body that publishes figures on this, thinks that the number of properties in Aberavon to which superfast broadband is available is much higher and, indeed, ahead of the national average. There has been a huge effort to roll out superfast broadband but, of course, there is a difference between something being available and it being taken up. It is important to ensure that people take up broadband when it is available.
Neil Parish (Tiverton and Honiton) (Con)
The hardest-to-reach rural and isolated areas across the country have still not been reached by broadband. I urge the Government to have a flexible approach—perhaps using a voucher system in some cases—and to use all technologies to get broadband out to those isolated areas.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
When they were designing the superfast broadband tender, the Government were warned that they were effectively entrenching BT’s monopoly. In designing the universal service obligation, they now appear to be making exactly the same mistake again. Will the Minister commit to delivering choice in our broadband networks?
Matt Hancock
The premise of the hon. Lady’s question is wrong. Many companies are now delivering into the Broadband Delivery UK scheme. In fact, companies that did not even exist a few years ago are now delivering superfast broadband—and much faster—right across the country.
Michael Fabricant (Lichfield) (Con)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Rob Wilson)
The Government are providing support for library authorities throughout England to deliver library services that are accessible and modern, and that meet local needs. That includes a £4 million libraries innovation fund, new wi-fi provision and support for library authorities to explore alternative operating models such as mutuals. I strongly believe that staff should have a stake in the public services they provide.
Michael Fabricant
Lichfield library is situated in a lovely old building, but it would cost more than £1 million to maintain it, so Staffordshire County Council decided to move the library into a heritage centre, which will strengthen that centre, and the old library building is now being privatised and restored. It is a win-win situation. What sort of advice on best practice does the Department give to other county councils? Perhaps Staffordshire County Council could be a model, in this instance at least.
Mr Wilson
I welcome the approach that has been taken by Lichfield library and congratulate Staffordshire County Council on its work. Local authorities need to think imaginatively about how libraries can deliver their priorities, and the ambition document that we recently published through the Libraries Taskforce challenges them to do so. Standing still is really not an option. I encourage local authorities to embrace change and to be bold in finding solutions, as Staffordshire has done.
Justin Tomlinson (North Swindon) (Con)
May I thank the Minister for being so personally engaged in supporting our efforts to protect Swindon’s vital community libraries? Will he join me in praising Councillor Dale Heenan for setting up the community library trust that has saved Covingham library and that should be expanded further?
Mr Wilson
May I thank my hon. Friend for all the efforts he is making in Swindon? I recently visited the local authority, and I was really encouraged by the desire to keep local libraries open. I join him in congratulating his local colleague and local councillor on the work he has done in setting up a local trust and keeping libraries open.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
The Secretary of State for Culture, Media and Sport (Karen Bradley)
Today, my Department published the first annual report setting out our progress against “Sporting Future”, our sport strategy for an active nation. Since the last oral questions, my ministerial team and I have held a series of roundtable meetings with representatives from various DCMS sectors. The purpose of these meetings is to identify challenges and opportunities as the United Kingdom prepares to leave the European Union.
Vicky Foxcroft
Last week, when I visited Deptford Green secondary school, a teenager from the school council asked me a question, and she started by saying, “It’s not political.” She asked me, “Why are there not more sports facilities for young girls in the area?” Female sports participation is half men’s—this was a very political question from a young girl—and is that any surprise when female role models such as Steph Houghton, England’s women’s football captain, is paid £65,000 a year, while Wayne Rooney is paid £250,000 a week? That is £12 million—
Mr Speaker
Order. I am sorry—it is a very good question, but it is far too long. Topical questions have got to be much shorter. I am sorry to interrupt, but I think we have got the gist.
Karen Bradley
I very much got the gist of the question, Mr Speaker. I do appreciate the point. We are well aware of it, and we are working across the Government to address it.
Sir Simon Burns (Chelmsford) (Con)
Karen Bradley
My right hon. Friend raises a very important point. We all know that the voluntary sector has the ability to bring greater social value to our public services, but we also know that it can sometimes face barriers when up against more established providers. That is why we announced a new programme of measures in this area in December and why an implementation group chaired by Sir Martyn Lewis and attended by my hon. Friend the Member for Reading East (Mr Wilson), the Minister for Civil Society, met for the first time yesterday to lead our work on this issue.
Louise Haigh (Sheffield, Heeley) (Lab)
Keeping our children safe online is one of the Government’s most important responsibilities. That is why section 67 of the Serious Crime Act 2015 rightly made it a criminal offence for adults to send sexual messages to children, yet the National Society for the Prevention of Cruelty to Children says that, two years on, the law is still not enforced and the police cannot enforce it. Will the Minister explain to the House why the Government are dragging their feet on this and ensure that this legislation is implemented immediately?
The Minister for Digital and Culture (Matt Hancock)
It is very good to see a member of the shadow team who has been voting with the rest of the shadow Front Bench this week.
On the important issue that she addresses, ensuring internet safety is, as she knows, at the top of the Government’s agenda. It has been a crucial part of the Digital Economy Bill, and the proposal she makes is also something we are considering very seriously.
Kevin Hollinrake (Thirsk and Malton) (Con)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
I recognise the valuable contribution that horse-racing makes to the north and, indeed, to the whole country. We remain on course to implement the reforms to the levy in April 2017, and we will lay legislation to that effect shortly.
Greg Mulholland (Leeds North West) (LD)
Tracey Crouch
I certainly join the hon. Gentleman in praising rugby league for all its efforts to make progress on this issue. Homophobia should not be allowed in sport. We share the same rugby league team, Leeds, and we wish them well this evening against St Helens.
Tim Loughton (East Worthing and Shoreham) (Con)
Tracey Crouch
I have in my constituency Chapel Down, one of the finest English wines that we sell in this country. I am certainly very passionate about English wine, for all the right reasons, and we must ensure that it is a key part of the tourism offer.
Christina Rees (Neath) (Lab/Co-op)
Manchester United should be applauded for its recent announcement on increasing the number of disabled supporters attending games by 300, but this is not a step that clubs at all levels can afford to take. What will the Minister do to support the smaller clubs that are looking to improve the experience of disabled supporters attending their matches?
Tracey Crouch
Manchester United should be applauded for this. A number of other premier league clubs are improving their offer for disabled spectators, but it is true that clubs in lower leagues find it difficult. They are working well with Level Playing Field to ensure that they meet their commitment going forward, and we as a Government do all we can to support that.
Matt Warman (Boston and Skegness) (Con)
Matt Hancock
I agree with my hon. Friend, who makes an important point. The Advertising Standards Authority, a non-statutory body, is looking into some of these issues, but it needs to look more broadly to make sure that people know what they are getting and advertising is proper and fair.
Alex Cunningham (Stockton North) (Lab)
In 2014-15, nearly £4 million was lost in fixed odds betting terminals in my constituency by those who can least afford it. I know that the Minister is aware of the concerns again highlighted last week in a report by the all-party parliamentary group on fixed odds betting terminals. May I urge her to respond positively? Let us have lower stakes for these machines.
Tracey Crouch
The Government announced a review of gaming machines, including FOBTs, on 24 October 2016. I am currently considering its findings and will publish my recommendations shortly.
Michelle Donelan (Chippenham) (Con)
Tracey Crouch
I am very pleased to hear that Oakfields has now opened. Having the right facilities in the right places and combining sports within them is not only important in driving up participation but excellent value for money.
Stephen Timms (East Ham) (Lab)
The tech sector’s No. 1 Brexit concern is that, when we leave, it will become unlawful to send personal data from Europe to UK firms unless the European Commission has declared our data protection arrangements to be adequate. What steps are being taken to secure that declaration in time?
Matt Hancock
This is a very important point. It is vital to make sure that we have an unhindered flow of data between the UK and the EU, and indeed other trading partners around the world such as the US. We are implementing the general data protection regulation in full, to make sure that we can have that unhindered flow of data.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Karen Bradley
Last week, I had the honour of meeting the team who are putting together the Mayflower 400 celebrations. I also attended an event at the US embassy last summer where I saw a replica of the Mayflower that is going to be part of the celebrations that we look forward to in 2020. It is important that as many people as possible can visit those celebrations. I had discussions with the Secretary of State for Transport on this matter only last night.
Clive Efford (Eltham) (Lab)
When the Government reduced the maximum stake on fixed odds betting terminals to £50, they accepted the principle that lowering the stake would have a positive impact on problem gambling. As part of the review, will you examine the success of that measure and, if it has been successful in dealing with that problem, will you consider reducing the stake even further?
Mr Speaker
I will do neither of those things, but the Minister might do one or the other or, conceivably, if the hon. Gentleman is a lucky boy, both.
Tracey Crouch
We have had plenty of responses to the consultation, and you will be very welcome to help to consider them, Mr Speaker. I will be making my recommendations shortly. We are looking through the body of evidence that came to us as a consequence of the review that was published in October. I expect to publish the recommendations and the findings of the call for evidence in the spring.
Nick Thomas-Symonds (Torfaen) (Lab)
The Minister for Trade and Investment (Greg Hands)
The EU-Canada comprehensive economic and trade agreement—CETA—is a good agreement for the UK. It will promote jobs and growth and benefit consumers. The UK Government are fully committed to supporting such agreements while we remain an EU member. The investment protection provisions in CETA will have no impact on UK environmental legislation. They cannot force the UK or other parties to change their laws on the environment or any on other area of public policy.
Nick Thomas-Symonds
I am grateful for that answer, but many of my constituents are worried about us maintaining our current environmental standards post-Brexit. Can the Minister guarantee that with this trade deal and, indeed, any other trade deal that the UK intends to make, our current environmental standards will not be watered down?
Greg Hands
Enshrined in CETA and many other free trade agreements is the UK’s right to regulate in these areas, and that includes key environmental protections. There is nothing, for example, in the investment court system that would force the UK to change its environmental regulations. I notice, however, that the hon. Gentleman voted against CETA yesterday, in line with the Leader of the Opposition, but he may not know that when CETA was debated in Committee on Monday, the Official Opposition were actually in favour of it.
Michael Fabricant (Lichfield) (Con)
Has my right hon. Friend heard of CANZUK, and is he encouraged by it? This is the plan being proposed in the Canadian Parliament for a Canada, Australia, New Zealand and United Kingdom trade partnership after Brexit. Does he share my enthusiasm for it?
Greg Hands
I have seen this proposal, and we are very enthusiastic about the future of UK trade with Canada. I repeat that we are currently very supportive of CETA going through. We think it is very important for the UK, for the European Union and for Canada, and we will continue to campaign for it to go through, not least in the face of the new-found opposition by Her Majesty’s Opposition.
Mr John Spellar (Warley) (Lab)
May I point out to the Minister that in the deferred Division, a majority of Labour Members voted for the trade deal? Given that Canada is such a long-standing Commonwealth friend, ally and defence and trade partner, could he answer this basic question: in a post-Brexit world, if we cannot do a deal with Canada, who the hell can we do a deal with?
Greg Hands
I thank the right hon. Gentleman very much indeed for that question. He is right that more Labour MPs—86—voted for CETA than the 68 who voted against it, with perhaps more than 100 abstaining. This agreement has been eight years in gestation. You would have thought, Mr Speaker, that the Opposition would have got their act together by now. On the point that the right hon. Gentleman made, I quote from one of his colleagues, who said:
“If we don’t support a trade deal with liberal, Justin Trudeau-led Canada, who do we support trade deals with?”
Mr Philip Hollobone (Kettering) (Con)
Post-Brexit, will CETA be transitioned into a bilateral arrangement, or will there need to be a fresh Canada-UK agreement?
Greg Hands
My hon. Friend raises an interesting point, and I think we will have to look at that when we come to it. There are a number of important aspects of CETA that we might look to replicate in a future deal, but, for the time being, while we remain a member of the EU, the UK remains strongly supportive of CETA going through.
I heard the right hon. Member for Warley (Mr Spellar) say that he was the unnamed Back Bencher referred to in the “Politics Home” article. It is good to see that he is now named, and that he is supporting the Labour party’s traditional friends in Canada, the Liberal party.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Government will lead the way in ensuring that developing countries have the opportunity to trade their way out of poverty. While the UK is a member of the European Union, we remain committed to development through the EU, including economic partnership agreements, the generalised scheme of preferences and “Everything But Arms”. We are working closely with the Department for International Development to ensure that the global trading system of the future is as fair and as free as possible.
Dr Cameron
Trade with developing countries is crucial to ensuring jobs and livelihoods, and our commitment to the sustainable development goals. Will the Secretary of State commit to fair trade principles in relation to future trade deals with developing countries to ensure that local populations can benefit sustainably and to complement the work of the DFID staff in my constituency and beyond?
Dr Fox
Let me join the hon. Lady in paying tribute to the fair trade campaign. It is very important in ensuring that farmers receive a fair price for their products, that agricultural workers receive better wages and that agricultural practices are made more sustainable. As Britain leaves the European Union, we will actually have greater freedom outside the common external tariff to be able to do some of the things she recommends.
Mr Steve Baker (Wycombe) (Con)
Whether we look at west African cocoa, east African coffee or Tunisian olives, time and again we find that the cause of unfair trade policy is the European Union. Does the Secretary of State agree with me that once we can set our own tariffs outside the common external tariff of the EU, we will be able to help those countries to trade their way out of poverty?
Dr Fox
This Government are committed to an open and liberal trading system. One of the best ways to help poor countries is to have even greater liberalisation than we have today. When we are outside the common external tariff of the European Union, Britain will have the opportunity to act unilaterally, which will give us new opportunities, as my hon. Friend rightly suggests.
Thangam Debbonaire (Bristol West) (Lab)
The 21st century offers us an opportunity to build on our pride and identity as a nation that promotes human rights, workers’ rights and environmental protection—all part of fair trade principles. How will the Government build on this part of our national identity in trade negotiations?
Dr Fox
We are already playing a full part in that. Britain played a major role in the World Trade Organisation’s arrangement that is going to come into effect in just a short time—the trade facilitation agreement. It will be worth about £70 billion to the global economy, and for some of the poorest countries, such as those in sub-Saharan Africa, it will be worth about £10 billion. We made a major contribution to that, and we should be very proud of it.
John Howell (Henley) (Con)
I have a role as the Prime Minister’s trade envoy to Nigeria. In the context of fair trade, will the Secretary of State join me in encouraging the Nigerian Government to share the benefits of trade more widely with their people?
Mr Ranil Jayawardena (North East Hampshire) (Con)
The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)
The Department for International Trade supports efforts to grow the UK space sector. We are working closely with the UK Space Agency, Innovate UK and the industry to provide sector growth. In January, I led a DIT and UK Space Agency mission to the US, where I advocated the UK as an attractive market for space sector companies. We intend to highlight progress at the UK space conference in Manchester in May. UK Export Finance offers finance and insurance to help UK-based companies in the space sector.
Mr Jayawardena
It is really great to hear that the UK is fast becoming a world leader in the space sector. Will my hon. Friend inform the House about his efforts to secure foreign direct investment into the United Kingdom to support domestic growth in this industry?
Mark Garnier
My hon. Friend is right to raise the importance of this sector. The numbers are absolutely fantastic: it has six times the average research and development investment, and it has 2.7 times the average productivity in the UK. During the past couple of years, the DIT has supported 19 successful inward investment projects in this sector, and we will continue to work with the Department for Business, Energy and Industrial Strategy to deliver the UK space innovation and growth strategy in the future.
George Kerevan (East Lothian) (SNP)
The encrypted public service channels of the new Galileo space navigation system are restricted to EU member states. What steps will the Government take post-Brexit to ensure that the UK has access to Galileo, in which we have invested?
Mark Garnier
Galileo is the satellite navigation system that is being put up by the European Space Agency and the European Union. That is one of the many things we have to negotiate over the coming years. The use of spectrum is incredibly important, because spectrum is limited. The Government will look at that among many other important things, but I assure the hon. Gentleman that spectrum is a very valuable asset for this country, and we will work with Ofcom to ensure that we get our fair share.
Mr Mark Prisk (Hertford and Stortford) (Con)
The Minister for Trade and Investment (Greg Hands)
Since 23 June, the UK has continued to attract investment from global technology companies, including SoftBank’s purchase of ARM, Facebook expanding by 50% in the UK, Google pledging to invest an estimated £1 billion, Snapchat’s new global headquarters in London and more. This Department additionally promotes and showcases the UK’s leading technology capability through our overseas network, and via our recently launched digital platform, GREAT.gov.uk.
Mr Prisk
The global market for smart city technologies is now worth something in the region of $400 billion. British firms lead the way in many of the specialisations, but we could win more contracts if there were a UK approach to a complete smart city solution. I encourage Ministers to promote greater collaboration, both among businesses and between businesses and the Government.
Greg Hands
My hon. Friend is absolutely correct and I agree with everything he said on the size of the UK capability, the size of the potential market and the need for a “Team UK” approach, which I spoke about recently when I visited his smart cities all-party parliamentary group just two weeks ago. In addition, I can announce today that two UK companies—Carillion and Zaha Hadid Architects—have secured a contract worth tens of millions of pounds to build a new headquarters in Sharjah in the United Arab Emirates, with support from UK Export Finance, which shows that the UK remains very much open for business.
Stephen Timms (East Ham) (Lab)
The No. 1 tech Brexit worry is that when we leave, it will become unlawful to send personal data from Europe to the UK unless we have achieved an adequacy declaration from the European Commission about our data privacy arrangements. Important businesses will overnight become unviable. Will that declaration be achieved in time?
Greg Hands
Fortuitously, I was in the Chamber for the earlier Question Time and heard the right hon. Gentleman ask precisely the same question of the Minister for Digital and Culture. The UK is committed to implementing the global agreement, and to ensuring that it works for the UK once we transition outside the European Union.
Mr Alan Mak (Havant) (Con)
I welcome the British Business Bank announcement of £1 billion of funding. Will my right hon. Friend ensure that the technology sector gets its fair share so that Britain’s leadership in the fourth industrial revolution can continue?
Greg Hands
I very much agree with my hon. Friend. I again praise his work on the fourth industrial revolution both in the House and beyond. He is a key advocate, not just in the UK but around the world, of ensuring that the UK takes advantage of its very great strengths in technology and its technological expertise.
Alison Thewliss (Glasgow Central) (SNP)
Figures published by the Centre for Cities show that Glasgow’s exports of goods and services to the EU were worth more than £2.5 billion in 2014. Given the importance of Scotland’s membership of the single market to the technology sector in Glasgow, will the Minister commit to considering the Scottish Government’s proposals in the “Scotland’s Place in Europe” paper to keep Scotland in the single market?
Greg Hands
I am very sympathetic to Glasgow maintaining its exports and capability in smart cities. The UK and the Department for International Trade follow a whole-UK approach, often working with key partners such as Scotland Development International. However, I would point out to the hon. Lady that Scotland remaining in the United Kingdom is more important. Some four times as much Scottish produce and capability is exported within the United Kingdom than to the European Union.
Bill Esterson (Sefton Central) (Lab)
British tech firms have been unable to go to two US trade shows, and look unlikely to be able to attend a top conference and exhibition in Singapore, owing to extensive delays by the Minister’s Department in announcing trade access partnership funding. Will he go back to the Department and confirm the funding, so that British businesses can attend trade shows and play their part in boosting our exports and economy?
Greg Hands
The Department continually reviews its products and services to ensure that it meets its customer needs and represents good value for the taxpayer. Business planning will be completed very shortly, so we will be confirming events shortly.
Simon Danczuk (Rochdale) (Ind)
The Minister for Trade and Investment (Greg Hands)
Building on my visit to Taiwan in September, we will continue to work with the Taiwanese authorities to address market access issues and to further increase our trade in this important market. The UK and Taiwan share a strongly favourable outlook on free trade and enjoy a robust trade partnership. Bilateral trade reached £5.9 billion in 2014, up 8% compared with 2010.
Simon Danczuk
I am pleased that the Minister met the Taiwanese President in September. I hope he shares my belief that as Britain reaches out to secure more trade deals, we keep in sight our foreign policy values. Does the Minister agree that increased trade with Taiwan and the UK is a win for both our economies and our liberal democratic values?
Greg Hands
I very much agree with the hon. Gentleman. The UK and Taiwan share so many commitments, including the importance of environmental protection and the importance of a free society. We also have very strong shared values of free trade, open markets and an openness to foreign investment. I had very productive talks with President Tsai in September. She is a big friend of the United Kingdom, not least because of her time as an undergraduate at the London School of Economics.
Jake Berry (Rossendale and Darwen) (Con)
Greg Hands
Yes. In terms of both trade with Taiwan and the Commonwealth, the Department remains extremely supportive of Members being involved. In relation to the Commonwealth Trade Ministers meeting, I very much hope the Commonwealth Parliamentary Association will be involved in those discussions.
Jim Shannon (Strangford) (DUP)
With trade deals in place for the likes of Bushmills whiskey and Northern Ireland pork products, will the Minister outline how he intends to use that success for other agri-food business products, such as long-life dairy supplied by Lakeland Dairies to 77 countries across the world?
Greg Hands
When I held talks with the Taiwan authorities in September, agricultural produce was very much at the centre of those talks. We talked about pork and poultry exports, and we made real progress on Scotch whisky. Taiwan is Scotch whisky’s third-largest global market and we made important progress on it being certified by Taiwan.
Mr Nigel Evans (Ribble Valley) (Con)
I know a lot of British businesses focus on the China market, for obvious reasons, but when I led a delegation to Taiwan in September, as chairman of the British-Taiwanese all-party group, I witnessed a vibrant economy. Does the Minister agree that if British businesses ignore Taiwan they are missing a trick?
Greg Hands
I totally agree. I think my hon. Friend and I were in Taiwan at roughly the same time back in September. I applaud the work he does for the all-party group. Taiwan has been a longstanding open market for UK goods and services, and we need to ensure that we work hard to remove the few remaining barriers. That was the purpose of the Joint Economic Trade Committee—or JETCO—talks in September. The message from this House should go out loud and clear to British businesses that Taiwan is a very good place for them to do their business.
Mr David Nuttall (Bury North) (Con)
Given that the UK currently receives two thirds of all investment into Europe from Taiwan, does my right hon. Friend see any reason why that will not continue after we leave the EU?
Derek Thomas (St Ives) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The south-west FoodEx directory connects food and drink companies in Cornwall with buyers across the world. Local companies can also benefit from FoodEx workshops. Cornish companies in all sectors can access the full range of Department for International Trade services. We have launched the GREAT.gov.uk website, and our experienced international trade advisers are supporting new Cornish exporters to step into the global marketplace and helping experienced exporters compete in high-growth markets.
Derek Thomas
In west Cornwall and the Isles of Scilly, a flurry of businesses have been producing food, drink and other goods. There is no doubt about the quality of their produce, but the reality is that very few of those products—food and drink—go beyond Cornish borders, let alone overseas. Will the Minister accept an invitation to meet these producers and help them to expand their markets?
Mark Garnier
As my hon. Friend knows, my family has roots in Cornwall that go back over 100 years, which I think means that we are now no longer incomers. The Secretary of State, of course, is a south-west MP and I believe he has met Cornish producers, and I am a frequent visitor to the extraordinary county that produces such fabulous produce. At the very first opportunity, I will go with my hon. Friend to meet his constituents and, indeed, people across the whole of Cornwall to explore ways in which we can push this fantastic county’s product.
Mrs Sheryll Murray (South East Cornwall) (Con)
Robert Courts (Witney) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
I launched a trade policy dialogue with the New Zealand Trade Minister last October to consider how we can strengthen our economic ties. Last month, my right hon. Friend the Prime Minister met the Prime Minister of New Zealand and agreed that preparatory work should be undertaken on the potential for an ambitious new free trade agreement between the UK and New Zealand, once the UK leaves the European Union.
Mrs Murray
I warmly welcome the early and constructive dialogue with our colleagues and friends in New Zealand. Will my right hon. Friend do all that he can to explore every opportunity for bilateral trade with New Zealand, including the natural synergies between our rural economies?
Dr Fox
I very much agree. The UK exported over £1.2 billion-worth of goods to New Zealand last year, and opportunities for our rural businesses and farmers will be a very important part of our work as we take forward the dialogue with New Zealand, which I intend to visit over the summer months.
Robert Courts
This year the British New Zealand Business Association, which exists to develop trade between our two countries, reaches its centenary. As someone who has worked in New Zealand, I have first-hand experience of the warmth that exists between our two countries. Does my right hon. Friend agree that there is hope for, and that we look forward to, a great increase in trade between our countries in the years ahead?
Dr Fox
I certainly hope that will be possible, given the freedom that we will have outside the European Union to negotiate such a free trade agreement. It is not just our two countries that will benefit; all countries around the globe will benefit from the new global Britain and our attitude towards global free trade, with all the benefits it brings, especially to the world’s poor.
Barry Gardiner (Brent North) (Lab)
The Secretary of State will know that New Zealand is a land of 30 million sheep—there are six or seven sheep for every person—so has he discussed the impact of a trade deal with the leader of the National Farmers Union? It regards the combination of a 43% World Trade Organisation tariff on sheepmeat and increased market access for New Zealand as potentially fatal to our sheep farmers. How will he protect them?
Dr Fox
As I said in answer to an earlier question, that will be an important part of our discussions. We will want to discuss how we do that with the NFU and others, but we also need to take something into account that does not seem to be mentioned very often, which is the interests of UK consumers in any trade deal that we come to.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Department for International Trade has three tasks: promoting UK exports to support a growing economy that serves the whole country; maximising opportunities for wealth creation, including through overseas direct investment to support the current account; and negotiating the best international trading framework for the UK outside the EU. In terms of investment, I can announce to the House this morning that McLaren will be opening a £50 million manufacturing plant in Sheffield that will create 200 new jobs.
Alan Brown
Given how desperate the International Trade Secretary is to negotiate a trade deal with the US, what guarantees will he give that Scottish farmers will not be undercut by chlorinated chicken and substandard beef imports?
Dr Fox
The quality of produce sold will be a major part of any negotiation, but as for undercutting the Scottish economy, I am regularly told by investors in the United States that one of the things hanging over them and depressing investment opportunities is the threat of separation.
Craig Tracey (North Warwickshire) (Con)
The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)
My hon. Friend is absolutely right to highlight the very good trading relationship we have, and hope to continue to have, with Israel. The Prime Minister announced the trade working group when the Israeli Prime Minister visited earlier this week, but it is worth bearing it in mind that the EU already has a trade arrangement with Israel, and this is something that, in the first instance, we would look to continue. I am sure, however, that there will be many opportunities to improve on that, given that that trade deal was done between one country and 28 countries, whereas a bilateral deal will be easier to negotiate.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
The Secretary of State promised that Parliament would have the opportunity to debate the important comprehensive economic and trade agreement between the EU and Canada on the Floor of the House. Unfortunately, he broke that promise and the debate was sidelined to an obscure Committee of the House earlier this week. Given that the UK will soon be responsible for negotiating its own international trade deals following Brexit, what assurances can the Minister give the House that parliamentarians will have an opportunity to scrutinise such trade deals fully in the future, and not be afforded the discourtesy we unfortunately were in relation to CETA?
The Minister for Trade and Investment (Greg Hands)
It was not an obscure Committee; it was a two-and-a-half hour debate in Committee Room 10 following the proper procedures laid out by the House. I remind the hon. Lady that, at the end of the debate, she failed to oppose CETA, yet the Scottish National party in yesterday’s deferred Division voted en masse against it. Like the official Opposition, it changed its position on something that has been debated for eight years now within the space of merely 24 hours.
Mrs Sheryll Murray (South East Cornwall) (Con)
Mark Garnier
It is good to see the far west of this country being so well represented today, on a one-line Whip just ahead of the recess. My hon. Friend is absolutely right. There are fantastic products coming from her constituency, including award-winning brands such as Cornish Orchards cider, Cornish Blue and Cornish Gouda. It is absolutely the job of the Department to go out to the rest of the world and, as I said before, to push Cornish exports far beyond the Tamar to the four corners of the globe.
Barry Gardiner (Brent North) (Lab)
When I wrote to the Secretary of State in November to ask for an investigation into his Department’s support for any British businesses engaged in corrupt practices, he replied that his Department had no power to conduct such an investigation. Last week, after the publicity surrounding Roll-Royce’s deferred prosecution, he announced precisely such an investigation. When did the powers of his Department change, when will the inquiry report back, and will he explain why he has refused to comply with the open government principles of the OECD anti-bribery convention?
Greg Hands
Rolls-Royce has made it clear that it will not tolerate improper business conduct of any sort. It continues to co-operate fully with the Serious Fraud Office, and we await the final outcome, on which it would not be proper to comment beforehand. UK Export Finance notes, and is reviewing, the statement of facts released as part of the deferred prosecution agreement with regards to Rolls-Royce, but the details of the statement are a matter for the SFO and it would not be appropriate to comment further at this stage.
Richard Graham (Gloucester) (Con)
Continuing the trend of exporting from the south-west, last week Gloucestershire-based SME Fluid Transfer International won a £6 million contract to supply aircraft-refuelling vehicles to Indonesian airports. The key ingredients were British manufacturing, a strong commitment to the market, and a very good local partnership. Will my hon. Friend join me in congratulating Fluid Transfer, and will his Department work with me to produce a short video to capture the story and inspire other small and medium-sized enterprises by showing them what can be achieved?
Mark Garnier
I am sure that my hon. Friend played a part in that deal, given that he is a trade envoy to Indonesia and given the extraordinary work that he does in some of the ASEAN countries. We shall all be delighted to help to promote investment of this kind in every way we can.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Dr Fox
It has been the Government’s clear aim to ensure that there is tariff and barrier-free access once we have left the European Union, and that is exactly what we intend to negotiate—and, of course, the Scottish aerospace industry will be all the stronger for being represented by the whole United Kingdom.
Dr Andrew Murrison (South West Wiltshire) (Con)
Does my right hon. Friend agree that company registration with the use of a Companies House-type model is important to promoting the economies of developing countries that seek foreign direct investment, and is also good news for the UK’s financial services sector?
Louise Haigh (Sheffield, Heeley) (Lab)
Dr Fox
The entire departmental strength is now some 3,000. We are adding some 50 extra staff to our trade policy group this week, and the process will continue. We will increase the numbers further in the months ahead as we look to our WTO obligations, the transposition of our EU free trade agreements, and the FTAs that we have. The current number of about 200 staff will be augmented as we proceed.
Tom Pursglove (Corby) (Con)
As the Secretary of State knows, UK steel is the best in the world. What opportunities does he envisage to promote the sale of it around the world?
Greg Hands
We take an ongoing and strong interest in the steel sector. It faces difficulties at present because of the low global steel price, but we see a good future for UK steel, and the Department looks forward to taking part in a whole-of-Government approach to ensuring that it is sold abroad.
Changes to funding for 3 and 4 year olds in Walsall South
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Valerie Vaz (Walsall South) (Lab)
A petition in similar terms has been signed by 65 people.
The petition states:
The petition of residents of the UK,
Declares that the Government’s consultation paper (Early Years Funding: changes to funding for 3 and 4 year olds 11/08/16) outlined proposals that will leave nursery schools financially nonviable, forcing them to close; notes that this funding will not cover basic costs, let alone staffing with qualified teachers; and further notes that state nursery schools have very good outcomes with regard to closing the achievement gap and supporting children with special needs, and that state nursery schools are legally required to employ highly-qualified staff, who are proven to give young children the best opportunities for academic achievement and enabling social mobility.
The petitioners therefore request the House of Commons to urge the Government to recognise the school status of State nursery schools and fund them accordingly.
And the petitioners remain, etc.
[P002011]
Closure of Cambuslang Jobcentre
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The petition of residents of Rutherglen and Hamilton West, in similar terms to those lodged by my colleagues yesterday and in respect of some morally outrageous plans, states:
“Declares that Department for Work and Pensions plans to close eight Jobcentres in the Glasgow area, including Cambuslang Jobcentre, will impact tens of thousands of people in receipt of Jobseeker’s Allowance, Employment Support Allowance and Universal Credit, and that the consequences will be severely felt by some of the most vulnerable and disadvantaged people; have concerns that these closures will result in the poorest communities not being serviced by a Jobcentre and make it even harder for those seeking employment to get support, with people running a greater risk of falling foul of the UK Government’s sanctions regime; and are further concerned that these plans will also impact Scottish workers who will be forced to relocate to other Jobcentres.
The petitioners therefore request the House of Commons to urge the Government to halt any move to close Glasgow’s Jobcentres and carry out a thorough Equality Impact Assessment and go through a full and proper consultation before making any decision on the future of the estate.
And the petitioners remain, etc.
[P002013]
Unaccompanied Child Refugees
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) (Urgent Question)
To ask the Secretary of State for the Home Department to make a statement on the Government’s decision to close the Dubs scheme for child refugees.
The Secretary of State for the Home Department (Amber Rudd)
The Government take the welfare of unaccompanied asylum-seeking children extremely seriously. That is why we have pledged more than £2.3 billion in aid in response to the Syria conflict—our largest ever humanitarian response to a single crisis.
The United Kingdom has contributed significantly to the hosting, supporting and protection of the most vulnerable children affected by the migration crisis. In the year ending September 2016, we granted asylum or another form of leave to more than 8,000 children. About 50% of the 4,400 individuals who have been resettled through the Syrian vulnerable persons resettlement scheme so far are children. Within Europe, in 2016, we transferred more than 900 unaccompanied asylum-seeking children to the UK, including more than 750 from France as part of the UK’s support for the Calais camp clearance. As Home Secretary, I am proud that the UK played such a key role in helping the French to close the camp safely and compassionately.
Yesterday the Government announced that, in accordance with section 67 of the Immigration Act 2016, we would transfer the specified number of 350 children who reasonably meet the intention and spirit behind the provision. That number includes more than 200 children who have already been transferred from France under section 67. I must make it absolutely clear that the scheme is not closed. As required by the legislation, we consulted local authorities on their capacity to care for unaccompanied asylum-seeking children before arriving at the number. We are grateful for the way in which local authorities have stepped up to provide places for those arriving, and we will continue to work closely to address capacity needs.
The Government have always been clear that we do not want to incentivise perilous journeys to Europe, particularly by the most vulnerable children. That is why children must have arrived in Europe before 20 March 2016 to be eligible under section 67 of the Immigration Act. The section 67 obligation was accepted on the basis that the measure would not act as a pull factor for children to travel to Europe and that it would be based on local authority capacity. The Government have a clear strategy and we believe this is the right approach.
Here in the UK, we have launched the national transfer scheme and we have also significantly increased funding for local authorities caring for unaccompanied asylum- seeking children by between 20% and 28%. The Government have taken significant steps to improve an already comprehensive approach and we are providing protection to thousands of children in this year. I am proud of this Government’s active approach to helping and sheltering the most vulnerable, and that is a position that will continue.
Yvette Cooper
Last week the Prime Minister said:
“On refugees, this Government have a proud record of the support…and long may it continue.”—[Official Report, 1 February 2017; Vol. 620, c. 1016.]
This week, the Government cancelled the Dubs scheme after it had been running for less than six months. The Home Secretary said that it has not closed, but will she confirm what it said in the statement yesterday: that once those 350 children are here, that is it—it is closed? Where does it say in the Hansard record of our debates on the Dubs amendment that I have here that we will help lone child refugees for only six months? Where does it say that, instead of the 3,000 that Parliament debated, we will help only one tenth of that number? Where does it say that when we get the chance we will somehow turn our backs once again? It does not, because we did not say that at the time.
The Home Secretary knows that what she is doing is shameful. Not only has she closed the Dubs programme, but she has cancelled the fast-track Dublin scheme to help those with family here. The Home Secretary did very good work in the autumn of last year to help those in Calais and to make sure we could take as many children as possible, and I commended her for it. But she also knows that most of those have family here already and were entitled to be here. She has said local councils cannot do more; the truth is that many local councils have said they can do more with more support or more time. It takes time to set up these schemes, and they should not be closed down so quickly.
There are still so many children in need of help. The Home Secretary knows there are thousands in Greece in overcrowded accommodation or homeless, or in Italy still at risk of human trafficking, or teenagers in French centres, which are being closed down now, who have nowhere left to go. The Home Secretary talked about clearing Calais; they are heading back to Calais, and back to Dunkirk: back to the mud, back to the danger, back into the arms of the people traffickers and the smugglers, the exploitation, the abuse, the prostitution rings—back into the modern slavery that this Parliament and this Government have pledged to end.
We know Britain and France can both do better. There are Eritrean teenagers here now in foster homes, after awful trafficking experiences, who are in school with a better future. We can do this; Britain can do better than this. Will the Home Secretary accept that and reinstate the Dubs programme now?
Amber Rudd
I have listened carefully to the right hon. Lady’s questions and I will try to address them all.
I repeat that the Dubs amendment that is in place is not closed. We have done what we were obliged to do, and we have correctly put a number on it. The right hon. Lady implies that this is a business of accepting the children and that it is all about numbers; I respectfully say to her that these are children who need looking after over a period. When we accept them here, it is not job done; it is about making sure that we work with local authorities and that we have the right safeguarding in place. That is why we engage with local authorities—why we make sure they have sufficient funds, which we have increased, to look after those young people.
I completely reject the right hon. Lady’s attack. The UK has a strong reputation in Europe and internationally for looking after the most vulnerable. That will continue. We have a different approach to where the most vulnerable are. We believe that they are in the region, and that is why we have made a pledge to accept 3,000 children from the region. We are committed to delivering on that. They are the most vulnerable.
I am clear, through working with my French counterparts, that they do not want us to continue to accept children under the Dubs amendment indefinitely. They specify that that acts as a draw, and I agree with them—[Interruption.] It acts as a pull. It encourages the people traffickers. I know that the right hon. Lady does not want that, and I ask her to think very carefully about the approach that she prefers.
Mr Steve Baker (Wycombe) (Con)
I am very much aware of the great shortage of resources in Wycombe, so I commend the Home Secretary for the resilience she is showing under this strident attack. Will she reassure me that the Government will remain committed to bringing refugee children here where that is appropriate and that she will have due regard to the children we already have?
Amber Rudd
I thank my hon. Friend for his question. We are always grateful for the work that local authorities do. We must not underestimate the difficulties involved, particularly in taking children who have been through war zones. We work with them to ensure that they deliver the extra work and care that those children need. He is also right to suggest that we must ensure that the children in the UK are always looked after.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Last year, I visited a number of refugee camps in Europe, including some in Lesbos. I met the Red Cross volunteers who were saving refugees from the sea, and they said to me that the worst thing was the children. The worst thing about this Government’s failure to step up to the totality of the refugee crisis is the children. In a written statement yesterday, the Minister for Immigration said:
“All children not transferred to the UK are in the care of the French authorities.”
They might technically be the responsibility of the French authorities, but many of those children are not being cared for at all. They are sleeping on the streets and in informal encampments, and they are making their way back to Calais, to Dunkirk and to the mud. Will the Home Secretary tell me how the UK plans to find, screen and process the 150 extra Dubs children, and from which countries they will transferred? What conversations has the Home Office had with the French, Italian and Greek Governments regarding taking such a small number of children? How does she live with herself when she is leaving thousands of people—[Interruption.] Members opposite can jeer, but I ask her how she can live with herself when she is leaving thousands of children subject to disease, people trafficking, squalor and hopelessness.
Amber Rudd
I share one thing with the hon. Lady: it is the children who matter most. We have a disgraceful situation on the borders of Europe, with so many people being trafficked through to Italy and, in the past, to Greece to meet their desire to come to Europe. Too often, they find themselves in the hands of the people traffickers. It is because we care in this way that we have put together our plan to take the refugees from the most vulnerable places. She says she doubts that the children in France are being looked after, but I can tell her that the children who are most vulnerable are the ones in the camps in Jordan and Lebanon. They are the ones who are really vulnerable, and they are the ones we are determined to bring over here, to give them the benefit of safety in the UK.
I would also say to the hon. Lady that I do speak to my European counterparts about the best way to help the refugees who are now coming to Europe in such numbers. The French are very clear that they are processing the children who have come out of the Calais camp, and they want to continue to do that, but one of the things that stops the children operating with the French authorities is the hope of being taken into the Dubs scheme and coming to the UK. The authorities are clear with us that if they are to manage those children and do the best thing for them—which is what I want and, I think, what the hon. Lady wants—making it clear that the scheme is not going to be open indefinitely will provide the best outcome for them.
Mr Peter Bone (Wellingborough) (Con)
I do not doubt the sincerity of Opposition Members, but this situation was a classic dilemma when I was chair of the all-party parliamentary group on human trafficking and modern slavery. If we continue to take unaccompanied children into this country, more and more will be taken from Syria and across the dreadful sea routes, with many dying, and we will be feeding and encouraging human trafficking. The right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) is sincere, but she is absolutely wrong. I urge the Home Secretary to continue to take people from Syria, but to abandon taking them from Europe, which encourages human trafficking.
Amber Rudd
My hon. Friend has substantial experience in this area having worked so hard on the issue of human trafficking. I note his point about this being a dilemma. It is not always clear what the right strategy is, but I ask Opposition Members to recognise that we are a taking a different approach. It is honest and compassionate—they do not have a monopoly on that—and we can deliver the best. I urge them to support us in that aim.
Joanna Cherry (Edinburgh South West) (SNP)
I am struggling to understand exactly what the Home Secretary is telling us. She says that the scheme is not closed, but she seems to have specified a number of 350, so that must mean that the scheme is closing once the 350 children get here. Will she clarify that? If that is the case, does she appreciate that that goes completely against the spirit of what was discussed in this House? I understand the “pull” argument, but thousands of children are already in Europe and many of them are unaccompanied and vulnerable.
Lord Alfred Dubs described what was done yesterday as “shabby” and deceitful. It seems that the Government tried to sneak out what they knew would be an unpopular announcement when they were busy avoiding scrutiny of the Brexit deal in this House. Is that the shape of things to come? Is that what comes from cosying up to President Trump?
Amber Rudd
I expected better from the hon. and learned Lady. Clearly, she did not listen to my point that taking this view is in the interests of the children we are helping. Instead, she is casting aspersions. There has been no attempt to hide anything. If there had been, today might have been the day to put out the written ministerial statement, not yesterday, because here I am to answer the urgent question—I am delighted to do so—and to provide clarity on any misunderstanding.
As for the hon. and learned Lady’s first comment about the number, the scheme is still open because we expect to transfer another 150 children. We have Home Office representatives in Greece and Italy to ensure that we can do that. In accordance with what the regulations set out, we had to put a number on it after consulting local authorities, and that is what we have done.
Dr Tania Mathias (Twickenham) (Con)
The Secretary of State says that the scheme is not closed, so I urge her to respect the House: when we voted on the Dubs amendment, we never expected the scheme to close at all. Does she agree that Britain should be leading the way? There should be more resources for local authorities. Will the Government consider reintroducing a Minister for refugees, not just for Syrian refugees, to show the importance that we give to this 21st-century problem?
Amber Rudd
I know that my hon. Friend cares a lot about this issue, just as I and this Government do. That is why we have made substantial commitments to help children from the region and to help 20,000 Syrians to come over here. I can say that we are transferring 100 people under the Syrian scheme just today. We will continue to step up and show the world that the UK is doing the right thing by helping these families and children.
I disagree with my hon. Friend and some Opposition Members on one thing. At the time of the amendment, it was made perfectly clear that a number needed to be set and that a number would be set. We have stuck to the letter and spirit of the amendment.
Stella Creasy (Walthamstow) (Lab/Co-op)
The Home Secretary says that she has talked to the French authorities and that they want to stop the Dubs scheme. An average of 50 children every day are going back to Calais and the camps. Does the Home Secretary recognise that the policy clearly is not working? What does she think will happen to those kids now that she has closed the door on them?
Amber Rudd
I ask the hon. Lady to consider why the children are going back to the camps rather than staying in the centres the French have taken them to in order to process them. Perhaps it is because they think that they will be able to move to the UK. Does that help them? It does not. What will help those children is if they have their claims processed in France, rather than going back to Calais and the mud. I am sure that she would not want that, just as I do not.
Michael Fabricant (Lichfield) (Con)
Like Lord Dubs, I have Jewish ancestry and I find it distasteful when some commentators compare the situation today with the 1930s and the Kindertransport. In those days, there was no opportunity to go to Germany or other Axis countries and assist those children who faced death in concentration camps. This situation is very different. Will my right hon. Friend condemn those commentators—thankfully, there have been none so far in this House—who compare the situation in the 1930s with today?
Amber Rudd
My hon. Friend makes a very good point. It is not the same. Perhaps the one comparison one might make is the condition, sometimes, of the camps out in the region, some of which are in a terrible situation. We should put all our effort there to make sure that we take the children that we can from that most vulnerable area.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Tens of thousands of refugees stranded in Greece, including hundreds of unaccompanied children, are living in appalling conditions and face immense and avoidable suffering. Yet last year the Government took only five Dublin children from the area and none under Dubs. What will the Home Secretary do proactively to seek out those who could benefit from Dublin transfers?
Amber Rudd
I can tell the hon. Gentleman that we have staff in the region who are looking to see which children might qualify under the Dubs amendment and which children might qualify under the Dublin regulations. We are actively looking to make sure that we do assist the children in Greece and Italy that we can.
Craig Whittaker (Calder Valley) (Con)
While the Dubs amendment is one part of the overall strategy on refugees, does my right hon. Friend agree that the UK’s record on the full strategy has been exemplary and our biggest humanitarian contribution in our history?
Amber Rudd
My hon. Friend is absolutely right. The UK has stepped forward financially and with support for refugees. We will take 20,000 by 2020, about half of whom will be children. He, the House and the country can be proud of the UK’s commitment to helping refugees and the most vulnerable.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Prime Minister never misses an opportunity to tell us that she wants to see Britain as an outward-looking player with a global vision. May I say gently to the Home Secretary that on this issue she has an opportunity to demonstrate that this country’s global vision is about more than just trade deals? Limiting our ambition to less than 1% of the desperate children who need to be helped is not worthy of that vision. Will she look at the way in which she uses the Dublin regulations? They include discretionary clauses that could be used more effectively to identify children with family links already in the UK, to ensure that they are helped.
Amber Rudd
The right hon. Gentleman raises an important point about the Dublin arrangements. Until we had an accelerated process and really leant in to identify children who qualified under the Dublin arrangements into Calais, it was not really working. The numbers of children being transferred under Dublin previously were small. We managed to transfer nearly 600 under Dublin last year, and I now feel that the Home Office and associated organisations that help us to deliver on Dublin have learnt how to make sure that it operates better in the future. I am confident that those numbers will improve going forward.
Thangam Debbonaire (Bristol West) (Lab)
A two-tier—in fact, multi-tier—system in response to refugees and asylum seekers is emerging, with incomprehensible contradictions and many vulnerabilities, especially for children. To live up to our well-deserved reputation, which we should be proud of as a nation, among those fleeing war and persecution, who see us as a place of safe haven, and to do our best for a fair share of the thousands who are arriving in Europe—desperate, but with huge potential to offer this country—will the Home Secretary commit to appointing a Minister for refugees and integration?
Amber Rudd
I thank the hon. Lady for her recommendation. I have a substantial ministerial team and an excellent Minister for Immigration. I do not see the need at the moment for additional Ministers, but of course I will keep that under review.
Alex Chalk (Cheltenham) (Con)
The UK is helping the most vulnerable children in the region, and I agree that that must be the principal focus of our effort to avoid a pull factor. However, having committed to resettlement from Europe, we should revise our approach only after very careful thought. Can my right hon. Friend confirm that this announcement follows the clear advice of our French friends and allies?
Amber Rudd
I reassure my hon. Friend that I work closely with my European counterparts, particularly in France, because many young people arrive in the camps in northern France and create an environment that is so difficult for themselves and for the local authorities. Yes, I will always work closely, particularly with the French, to ensure that our plans work with theirs.
Paul Flynn (Newport West) (Lab)
Does the Home Secretary agree that the secret to reforming the system in this country is a fair dispersal of refugees and asylum seekers? My city is happy, with some strain, to take hundreds of asylum seekers every year but there have never been any asylum seekers welcomed in the constituencies of the present Prime Minister, the previous Prime Minister or the previous Chancellor of the Exchequer. Will she look at that situation?
Amber Rudd
I am proud that my constituency of Hastings and Rye does welcome asylum seekers. The hon. Gentleman is of course right that we want more constituencies to welcome asylum seekers. Indeed, under the national transfer scheme, which allows some councils to help other councils where a lot of these children arrive, we are encouraging local authorities to step forward, on a voluntary basis, to spread the support around. The fact is that, at one point, Kent had to look after more than 1,000 children who had arrived unaccompanied. We must do more to spread that out, and I urge right hon. and hon. Members to speak to their local authorities about taking advantage of the scheme.
Mr Philip Hollobone (Kettering) (Con)
Those who traffic and abuse young children across Europe really do meet the modern definition of evil people committing evil acts. What are the British security services and police, together with their European counterparts, doing to track down, arrest and prosecute these perpetrators of evil?
Amber Rudd
My hon. Friend raises such an important point. He is absolutely right that we will always make sure that we combat human trafficking and the misery and abuse that go with it. I work closely with my European counterparts to make sure that we share information. Our National Crime Agency carefully tracks serious organised crime groups, and Europol works with us and other European partners to make sure that we work across Europe to guard against the terrible damage done by these people.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Home Secretary is a good person, so I am not here to make a personal attack on her, but what signal does she think this sends to the world in the wake of President Trump’s announcement last week, albeit in a different context? There are always those who say that we should look after our own, that charity begins at home—“Britain first”, “America first”, “France first” and so on. Does she want us to be aligned with that sentiment or a different one?
Amber Rudd
We are not saying that we are closing the door and pulling up the drawbridge. I urge the right hon. Gentleman and hon. Members on both sides of the House not to fall into the trap of suggesting that we are not a country that welcomes refugees. We are stepping up to our obligations and supporting the most vulnerable with money and refugee programmes. I do not recognise the comparison he is making, and I hope that other Members share my position.
Helen Whately (Faversham and Mid Kent) (Con)
Like several other Members of this House, I saw for myself the conditions in Calais. I thank my right hon. Friend for her work to transfer children with family in the UK from France to the UK. As she has said, in Kent we look after more than 1,000 unaccompanied asylum-seeking children. Does she agree that, when we welcome vulnerable children to the UK, we must make sure that we can give them a genuine welcome, with councils having the resources and capacity to look after them as well as British children in need of care?
Amber Rudd
My hon. Friend makes a very good point. The fact is that we are so fortunate that Kent does step up, because it so often takes the brunt and has to take the largest number of unaccompanied children. We need other councils to engage with the national transfer scheme so that we can spread that responsibility around. My hon. Friend also makes a good point about the need not to feel that it is “job done” when we take the children in. We need to have care, time, money and professional support to look after these refugees, because they are children, they are here, and we will make sure they are looked after.
Mr David Winnick (Walsall North) (Lab)
Regarding the unfortunate remarks made by the hon. Member for Lichfield (Michael Fabricant), is it not the case that what he referred to was an act of common humanity at the time, and it is no less now? It is the same, as far as children are concerned.
Amber Rudd
People will use their own language, but it seems clear to me that the most vulnerable place where there are children we can help is the region itself. We have agreed to take 3,000 of those children by 2020, and we will absolutely be sticking to that. About half of the 20,000 that are coming from Syria by 2020 will be children, and we will continue to move the children we can to take them under the Dublin arrangements.
Mr Alan Mak (Havant) (Con)
British charities are working hard on the ground in the Syria region to help young people. Will my right hon. Friend the Secretary of State continue to support their work and to tackle the people-trafficking networks that are exploiting their situation?
Amber Rudd
My hon. Friend is of course right about British charities. The British Government are the second-largest bilateral donor in the region, and we are proud of that. We work closely to make sure that part of the support that we give goes towards helping children and helping to educate them so that we do not have a generation who grow up without any schooling. We are very focused on making sure that we support the people and the children in the region, as well as fulfilling our obligations under refugee arrangements.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
I am genuinely struggling to understand how it could possibly be in the best interests of vulnerable lone children for us not to take more of them in. I just do not understand what kind of perverse global leadership this is. If we have the compassion and humanity—and, indeed, the capacity, which we do—to take in more, why are we not doing so? Will the Secretary of State please take the feeling from the House today and think about changing the decision she has made about these lone refugee children?
Amber Rudd
I respect the hon. Lady’s views, but they are different from the one we take. That is not because of a lack of compassion, though; it is basically about trying to work out what is best for those children. She has failed to acknowledge the point that several Members have made, and that I have made as well: if we continue to take numbers of children from European countries, particularly France, that will act as a magnet for the traffickers. I wonder whether she has come across traffickers, or children who have been trafficked. It is a terrible crime and such danger is done to lives. It is imperative that we take action here to protect those children and stop that crime. Part of our process, by focusing on the most vulnerable from the region, tries to do exactly that.
Nigel Huddleston (Mid Worcestershire) (Con)
We should applaud all councils, individuals and families who have stepped up to the plate to assist these vulnerable children. Will the Secretary of State clarify whether the capacity of councils throughout the country to host these children has met, exceeded or disappointed the Government’s expectations?
Amber Rudd
My hon. Friend is right that part of the proposal was to make sure that local authorities can support these children. We need to ensure that when the children arrive, it is not a feeling of “job done,” and that they are supported over the few years, however young or old they are, to make sure they have a good life here. We consulted with councils, and they came up with the number 400. I remind the House that that is not the total number that councils take in; we have an average of 3,000 unaccompanied minors arriving in addition to that, which councils generously step forward and support. My hon. Friend is right: we should all thank them very much for the work they do.
Diana Johnson (Kingston upon Hull North) (Lab)
I am very surprised that the Home Secretary did not understand the depth of feeling in the House and make a statement to the House on this announcement, rather than publishing it in a written ministerial statement yesterday. I am really struggling to understand how, if we put a cap of 350 on the scheme, that is not closing the scheme. Perhaps the Home Secretary can explain that one more time.
Amber Rudd
Under the Immigration Act 2016, we were required, by a date that is fast approaching, to name a number after having consulted with local councils. We have now done that. At some point, the scheme will close, but it is not closed yet, because we still need to transfer 150 under the amendment.
Bob Blackman (Harrow East) (Con)
My right hon. Friend has already pointed out the disparity that exists in the dispersal of these vulnerable young children. What more can she do to ensure that they are received across the country in a variety of local authorities so that they have the opportunity to have the life that we all want for them?
Amber Rudd
That is a very good question. We have been working closely with local authorities. People in my Department have made presentations across the country, and more than 400 people have attended them. We are helping local authorities to step up by ensuring that they have sufficient support each year for the young people. I hope that they see this as the right thing to do when we are experiencing so many problems from the region and refugees arriving here. We are working with local authorities on a persuasion basis and urging them to participate. The sign is that more of them are stepping up.
Ian Murray (Edinburgh South) (Lab)
When I spend time with my young niece and nephew, I often wonder what would happen to them if they were in similar circumstances. I would hope and pray that they found a country of compassion, safety and sanctuary, and that is what we want for all young children across the world. However, on that basis, can the Home Secretary tell us what discussions she and her Department have had with Lord Dubs and children’s charities before making this decision?
Amber Rudd
I can reassure the hon. Gentleman that my Department meets regularly with children’s charities and Lord Dubs.
Robert Courts (Witney) (Con)
When the former Prime Minister announced that Britain would take 20,000 Syrian refugees, West Oxfordshire district council led the way in laying out the scheme, quite contrary to what the hon. Member for Newport West (Paul Flynn) said. West Oxfordshire has taken six Syrian refugee families. I know that, because I chaired the Committee that helped to settle them in west Oxfordshire and I have met some of them. Does the Home Secretary agree that, although it is necessary that we take in as many children as we can, it is also important to ensure that councils have the capacity to help these families? We are constrained not by money, but by issues such as the availability of translators.
Amber Rudd
My hon. Friend makes a helpful point. We want to make sure that the refugees who arrive here—children, families and adults—are looked after in the best tradition of the UK. I am delighted to hear of his personal involvement. I have heard fantastic stories about local churches and local charities stepping up and ensuring that these frightened families are really well looked after. We sometimes see the real best of British values.
Mark Durkan (Foyle) (SDLP)
We are told that the scheme is not closed; it will just be capped and discontinued. Hearts seem to be closed—that is the message that is going out. The Home Secretary attributes a lot of calculation to those desperate, lonely children who are making their way back to the camps. Is it not the case that what we are being treated to is calculated indifference dressed up as a measured commitment? Will the Government do more in respect of both Dubs and Dublin?
Amber Rudd
It is disappointing that the hon. Gentleman clearly has not heard a word of what I have been saying about the efforts that the UK is going to, the generosity of local authorities, and the commitment from the international aid budget. Those are all strong pieces of evidence to show that this country and this Government are stepping up to their responsibilities.
Jason McCartney (Colne Valley) (Con)
Having been to Domiz refugee camp on the Iraq border, I am particularly proud of Britain’s biggest ever response to a humanitarian crisis, which amounts to £2.3 billion. Will the Home Secretary confirm that if communities and councils want to continue with the scheme and also to take more vulnerable young refugees in the future, they will be welcome to do so?
Amber Rudd
We always welcome initiatives from local councils to ensure that we look after the refugees and children who come over here. I urge any local authorities that think they can do more to get in touch with the national transfer scheme, which will support the councils that are, sometimes, having to accommodate too many children in their area and long for additional support.
Ms Karen Buck (Westminster North) (Lab)
French centres are closing, and there are children in Dunkirk—in today’s freezing weather—who have families in this country and were hoping to be considered. Will their needs be assessed if the Dubs scheme is not closed? If not, what does the Home Secretary expect will happen to them?
Amber Rudd
The French have transferred the young people—indeed, all the people—from the Calais camp to centres, where they were given beds and food, so that their applications for asylum could be considered. The hon. Lady is right that some camps are now beginning to form in northern France. I am in constant touch with my French counterparts, and we are helping them with money, support and advice to ensure that another camp like that does not emerge. The French are committed, and they have a responsibility to allow the people there to apply for asylum in France, which is where that should happen. We will continue to monitor where we can help and act on the Dublin arrangements.
Richard Graham (Gloucester) (Con)
The right hon. Member for Wolverhampton South East (Mr McFadden) said that there will always be some who say that charity begins at home. He is right, but the important thing is that charity does not stop at home. It never has done in this country and it never will do, which is why I applaud the Home Secretary’s comments that recognise the great work that has been done, that is still being done and that will continue to be done to help children and refugees from Syria in general. I commend the work of Gloucestershire County Council and Gloucestershire Action for Refugees and Asylum Seekers.
I regret that the hon. Member for Hackney North and Stoke Newington (Ms Abbott) made some very personal comments about the Home Secretary today. Surely it is time for all Members of this House to realise that, whatever our differences of opinion about the right way forward, everybody—particularly Ministers in the Department responsible—starts from the same position of wanting to do the best thing.
Amber Rudd
I thank my hon. Friend for those comments. It is disappointing when people do not recognise that the Government and the Opposition both share the ambition of compassion, but have a different strategy for delivering it.
Vernon Coaker (Gedling) (Lab)
Many in this House have listened to the Home Secretary with total disbelief. We cannot understand, given the intensity of the debate around the Alf Dubs amendment, which was accepted by this House, why she has come forward with what is essentially the closure of the scheme at a number well below what any of us would have expected. Does she not agree that the reality is that many children in desperate need across Europe will be left with no hope?
Amber Rudd
No, I do not agree with the hon. Gentleman. We have communicated our plan to the French and to other European countries, and we have discussed with them what is best for these children. Like so many other hon. Members, he fails to listen to my points about how these children are made vulnerable and what is in their best interest. I respectfully ask him to reconsider his very high moral tone. Although he might not agree with it, we are doing what we believe is best for those children.
Amber Rudd
The hon. Lady is chuntering, but we are doing what we believe is best. I recognise that the hon. Member for Gedling (Vernon Coaker) has a different position, but I ask him to reconsider his language.
Mr Speaker
The capacity of the hon. Member for West Ham (Lyn Brown) to chunter from a sedentary position is not in doubt and does not require proof, but she should desist. I very politely say to her that as she is a supporter of West Ham—[Interruption.] Well, I am glad she is an Arsenal supporter, but she still should not chunter. As she represents West Ham, she might find it therapeutic to blow some bubbles.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
As part of our commitments under the Dubs amendment, we have consulted local authorities on capacity. It is clear that there is capacity to support the children whom we intend to take from Calais at the same time as meeting our other commitments. I find it unbelievable that councils would be willing to take in only an average of two children each. Did the Home Office ask all local authorities individually how many children they could actually take, or did it suggest numbers to each of them?
Amber Rudd
No, we did not suggest numbers to the councils. We set out for them what the challenges were and what our payments were—those had been increased by 20% on one scale and 28% on another, so under-16s were to get £41,000 of support a year and over-16s were to get £33,000. We urged councils, we worked with them and we did presentations all around the country, and the councils came back to us with this proposed number. I repeat that accepting the children is one thing; having the capacity—and, indeed, the confidence—to look after them is what we urge local authorities to think about. I would like to give particular thanks to the Scottish authorities that did so much to accept vulnerable young women, in particular, who were moved from Calais. They are now making their life in Scotland, and we are very grateful for that.
Andy Slaughter (Hammersmith) (Lab)
Contrary to what the Secretary of State seems to believe, civil society in my constituency—and, I am sure, many other constituencies—is ready to help the Dubs children. In the past few days, I have visited my local council; St Christopher’s Fellowship, which took in about 30 of the Calais children last year; and Hammersmith and Fulham Refugees Welcome, which sources accommodation locally for refugees. They all want to do their bit, so why will the Government not let them?
Amber Rudd
We are very grateful for the work that Hammersmith has done. I would urge it to also consider taking children who are just as vulnerable from the national transfer scheme. It is not just the children from Calais who need help, but those from the national transfer scheme. I urge the hon. Gentleman to have that conversation with his council as well.
Jim Shannon (Strangford) (DUP)
The closure of the Dubs scheme will affect the most vulnerable child refugees who have been persecuted by Daesh, including Yazidis, 90% of whom are ineligible under the Syrian scheme and none of whom have been resettled in the United Kingdom. Many are trapped in countries in the Mediterranean. Given the UK’s role in Iraq over the past decade, is this where our legacy of aiding Iraqi citizens ends?
Amber Rudd
The UK position on aiding refugees from the region, which I think is what the hon. Gentleman is asking me about, is very strong. It is added to by the fact that we have one of the largest aid donation plans in the world, with our 0.7% commitment and the £2.3 billion that goes into the region. The hon. Gentleman should join me in being proud of the commitment and support, including financial support, that we give to the region to make sure we do look after vulnerable people.
Nick Thomas-Symonds (Torfaen) (Lab)
I have seen at first hand the work of my local authority in Torfaen to assist refugees, but what sort of moral and political lead does the Home Secretary think the Government are giving by doing only the bare minimum under the Dubs scheme?
Amber Rudd
I would in no way identify what the Government and local authorities are doing as the bare minimum. We are taking 3,000 children from the region by 2020. We are taking 20,000 vulnerable citizens by 2020. We are making sure that we give them the financial support that they need. I do not recognise the hon. Gentleman’s characterisation.
Alan Brown (Kilmarnock and Loudoun) (SNP)
As others have pointed out, the Home Secretary says that the Dubs scheme is not closed but the UK needs to send out a strong message against the pull factor. Both those statements cannot be correct. She also says she is still working within the spirit and intention of the Dubs scheme. If that is the case, will she confirm what she is doing to ask councils to take in more children rather than hiding behind the excuse that capacity has already been reached?
Amber Rudd
There is no hiding here. Another 150 children will be transferred over the next period under the Dubs agreement. We are working closely with local authorities to ensure that they have the support for the children they have said they will take. I would add that approximately 3,000 unaccompanied children a year already arrive. In addition to the Dubs commitment, local authorities work with us through the national transfer scheme to ensure that those children are looked after.
Louise Haigh (Sheffield, Heeley) (Lab)
What assessment has been made of the numbers of children in Greece and Italy? The charities that have been working with many of those children believed that they would be eligible under the Dubs amendment? How many of those children will now not be eligible?
Amber Rudd
I cannot say how many children will or will not be eligible until those assessments have been made, but I can say that, having accepted 200 children under the Dubs amendment, there will be another 150. In addition to that, we will continue to assess the children to see whether they are eligible for the Dublin arrangements.
Graham Jones (Hyndburn) (Lab)
We talk about numbers, but surely the only measure that matters is whether a child is vulnerable. On the bigger picture, I have been lucky enough to visit seven internally displaced person and refugee camps. There is a disparity between those camps as some have very poor standards, whereas standards are high in others. The Government seem to be doing nothing to help the people in some of the poor camps. I have visited Harran camp, north of Raqqa, which is of a very high standard and provides good education, whereas some of the other camps are exceedingly poor. What are the Home Secretary and the Government doing to help the people living in these camps and to sort out this problem?
Amber Rudd
We work closely with the organisations that run some of these camps. I absolutely recognise that they are of differing standards. However, the UK is stepping up with a financial commitment of £2.3 billion to make sure that we help to make those camps places where families can exist and children can be taught. I want the hon. Gentleman to be in no doubt that we lean in to make sure that we assist in the vast movement of people that is taking place in the region.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
As chair of the all-party group on disability, my understanding was that the most vulnerable children, including those with disabilities, were to be prioritised, so how many children with disabilities have arrived, and what are the arrangements for vulnerable disabled refugee children who are now left behind?
Amber Rudd
At the time of the clearance of the Calais camp, in particular, we were determined to prioritise the most vulnerable. That was why we immediately moved to remove a lot of girls and young women whom we believed—the evidence showed this—were most vulnerable to being trafficked. We will always ensure that we prioritise those young people who are more likely to be vulnerable. I do not have the information on the numbers of disabled people who have been transferred, but I will endeavour to get it and get back to the hon. Lady.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I know that just one Christian charity in London is housing more than 30 children, which appears to be 10% of the entire national effort. Many faith communities are willing to step up to do what we would like the Government to do themselves. If they want to do more, will the Home Secretary let them?
Amber Rudd
There is still plenty of need for support from community organisations such as churches. I, too, have met several that are doing their bit to welcome families and look after children. I urge the hon. Gentleman to get in touch through the national transfer scheme, or via my office, and we will work closely to make sure that any communities groups that think they can support families or children are able to do so.
Carol Monaghan (Glasgow North West) (SNP)
I am glad to hear that another 150 children will be coming to the UK under this scheme before it closes, but is the Secretary of State able to look the 151st child in the eye and say no?
Amber Rudd
I wonder how the hon. Lady would feel about the children who are in the camps in the region. They are not in France or Italy; they are the ones in the camps where the conditions are much, much worse. How would she feel about looking them in the eye?
Patrick Grady (Glasgow North) (SNP)
Is this not a shameful betrayal of not just the thousands of children being denied a secure future, but the tens of thousands of our constituents who signed petitions and wrote letters in support of the Dubs amendment? No one is suggesting that this country is not welcoming of refugees, but it increasingly appears that the Government are not.
Amber Rudd
I would urge the hon. Gentleman to correct any misunderstandings that anybody has. The fact is that we have stuck to the agreement in the Dubs amendment. We were obliged to put out a number, having consulted local authorities. Perhaps he would consider putting out a message to his constituents so that they are clear that the Government are stepping up their commitments, are taking 20,000 by 2020, and are looking after these children. We are proud of our response.
Alison Thewliss (Glasgow Central) (SNP)
Last week I met staff at the tech company Equator, who volunteered to create a digital classroom project for the 150 children at the La Linière camp in Dunkirk. Those children are stuck there. As everybody in this country—organisations, companies and individuals—seems to be willing to do something to help, what kind of signal does it send out when the Government are not meeting their commitments?
Amber Rudd
The hon. Lady should be clear that the Government are meeting their commitments, and exceeding them, through the aid that we give to the region of £2.3 billion, through our commitment to making sure that we bring over from the region the most vulnerable children—20,000 by 2020—and, most of all, through making sure that the children who arrive here, who are often from vulnerable areas, are looked after and given support. We ensure that local authorities have this ability. We should be proud of our response.
Mr Speaker
Before we proceed to the business question, I should like to congratulate the hon. Member for Newport West (Paul Flynn) on his 82nd birthday and on reaching the mid-point of his parliamentary career.
Business of the House
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Valerie Vaz (Walsall South) (Lab)
Will the Leader of the House give us the forthcoming business?
The Leader of the House of Commons (Mr David Lidington)
Before I answer the hon. Lady’s question, I associate myself with your congratulations, Mr Speaker, to the hon. Member for Newport West (Paul Flynn).
The business for the week commencing 20 February will be as follows:
Monday 20 February—Remaining stages of the Cultural Property (Armed Conflicts) Bill [Lords] followed by consideration of Lords amendments to the High Speed Rail (London-West Midlands) Bill.
Tuesday 21 February—Remaining stages of the Criminal Finances Bill followed by motions relating to the draft Social Security Benefits Up-rating Order 2017 and the draft Guaranteed Minimum Pensions Increase Order 2017.
Wednesday 22 February—Motions relating to the police grant and local government finance reports.
Thursday 23 February—Opposition day (un-allotted half day). There will be a debate on a motion in the name of the Democratic Unionist Party followed by business to be nominated by the Backbench Business Committee.
Friday 24 February—Private Members’ Bills.
The provisional business for the week commencing 27 February will include:
Monday 27 February—Estimates day (1st allotted day). Subject to be confirmed by the Liaison Committee.
I should also like to inform the House that the business in Westminster Hall for 23 and 27 February will be as follows:
Thursday 23 February—Debate on publicly accessible amenities for disabled people followed by a debate on the second report from the Transport Committee on road traffic law enforcement.
Monday 27 February—Debate on an e-petition relating to attacks on NHS medical staff.
Valerie Vaz
I thank the Leader of the House for his statement. May I add my birthday wishes to my hon. Friend the Member for Newport West (Paul Flynn), who is my predecessor? I bought his book, and I found it very handy when I first came into the House.
Will there be business questions on Thursday 20 July, or will that be allocated as a pre-recess adjournment day? Can the Leader of the House tell us whether there will be any progress on a debate in Government time on restoration and renewal? In the absence of my hon. Friend the Member for Gateshead (Ian Mearns), I note that the Leader of the House has allocated an Opposition day on 23 February. Is that going to be a regular occurrence, and will he ensure that the debates that have been listed by the Backbench Business Committee also have a day allocated to them?
It was 25 years ago this week that the Maastricht treaty was signed. This week, in responding to and respecting the referendum, we have voted to trigger article 50 and leave the EU. In July, the Prime Minister said, “Brexit means Brexit”. The Opposition asked, “What does that mean?” The Opposition asked, “Do you have a plan and a White Paper?” Seven months later, we had a speech at Lancaster House, and eight months later we have a White Paper—which is the speech, with a few graphs. On page 9, in paragraph 1.4, the White Paper states that the Government
“will bring forward a White Paper on the Great Repeal Bill”.
Will that be a further White Paper and, if so, when will it be published? Could the Leader of the House ensure that it is not published on the day of the Queen’s Speech, whenever that is?
Businesses wanted to stay in the single market, and there is the prospect of losing 32,000 jobs in financial services. Could we have a statement on what the Government will do to protect those jobs and secure London’s place as the No. 1 financial centre, as ranked by the global financial centres index? The EU budget is mentioned only twice in the White Paper, both times in section 8.51, which consists of 83 words. Will the Government be revealing more words and, more importantly, figures on the budget in a statement?
Could we have a definition of “frictionless” negotiations? The word appears 12 times in the White Paper. Can the Leader of the House tell us whether the concession made on Tuesday by the Minister on a vote before the final deal was an example of frictionless negotiations—that is to say, meaningless and not to be trusted?
Labour Members tabled amendments to put the case for those who voted to remain and for the country, but it was a sad day when the Government voted down all the amendments so that the Prime Minister could say that the Bill was unamended. The Prime Minister delivered for her party, but not for England, Northern Ireland, Scotland or Wales.
The Government will want to take note, in negotiations, that the Serious Fraud Office has found that Rolls-Royce admitted it used multimillion pound bribes to secure export orders and received financial support from the Government’s credit agency in 1991, when it paid a $2 million bribe to win a contract with Indonesia. There is a review, so may we have a statement on what safeguards there will be to ensure that, as the Government negotiate trade deals around the world in 730 days’ time, there will not be a repeat of this?
At Prime Minister’s questions yesterday, the Leader of the Opposition asked the Prime Minister three times whether a special deal was offered to Surrey for social care. The Prime Minister was dismissive, and did not answer the question. If there is no special deal for Surrey, why did the Prime Minister simply not confirm that? I and other hon. Members want a memorandum of understanding to secure our libraries and social care, so may we have a statement on Surrey-gate and the discussions Nick and Dave had about securing an MOU?
Turning to House matters, my hon. Friend the Member for Barnsley Central (Dan Jarvis) has had his Child Poverty in the UK (Target for Reduction) Bill talked out yet again. I have previously raised the issue of Bills being talked out, which makes Parliament look petty. How can we move forward on the Procedure Committee recommendation about a time limit under Standing Order No. 47, given that the Government response of 16 January says that they will not accept that? How can we progress this matter and break this impasse? Many hard-working Members who have worked hard on their Bills want to see them get through.
May we have a debate on early-day motion 890, tabled by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), which has been signed by 201 Members, including Front Benchers?
[That this House deplores recent actions taken by US President Donald J Trump, including his Executive Order on Immigration and Refugees, and notably his comments on torture and women; notes the historical significance and honour that comes with an invitation to address both Houses of Parliament in Westminster Hall or elsewhere in the Palace of Westminster; and calls on the Speaker, Lord Speaker, Black Rod and Serjeant at Arms to withhold permission from the Government for an address to be made in Westminster Hall, or elsewhere in the Palace of Westminster, by President Trump.]
When a person refers to a senator, Elizabeth Warren, as Pocahontas and she is then silenced by her party; when a person repeats the cry “Lock her up” of a candidate when no offence has been committed; when a person suggests women should be grabbed in certain places without their consent; when a person has consistently questioned the birthplace of a president, President Obama; when a person wants “America first”, but made his business investments anywhere but America; when a person has a key adviser who ran an alt-right website and whose appointment was welcomed by the Ku Klux Klan; and when a person forgets there were native Americans or first nations before he arrived in the US, then I—born in Aden, Yemen, of Goan Indian heritage, who may or may not be directly affected by the travel ban—and others welcome the support given to us and to the reputation of Parliament. Will the Leader of the House therefore confirm that the Government will not support any attempts to act on the letter to the Prime Minister about comments made in a point of order in this Chamber? Will he also confirm that the House of Lords will not be threatened with abolition when dealing with article 50 legislation?
Sixty-five years ago on Monday, Her Majesty ascended the throne, and this House congratulates her on that sapphire milestone. May I ask the Leader of the House for clarification: who issues an invitation for a state visit, can the Prime Minister do it without consulting anyone and who did she consult in this case, or is this a case of frictionless negotiation—“You give me a trade deal in exchange for a state visit”? We should be told.
Mr Lidington
May I first associate myself wholeheartedly with the hon. Lady’s words about Her Majesty’s sapphire jubilee? At the same time, it is important for us to be conscious that the anniversary is inevitably a time for reflection, for Her Majesty in particular, as her accession was obviously made possible by the death of a much-loved father. I think everyone in the House, whatever views they have about our constitutional arrangements, will want to share in the tributes to Her Majesty for her selfless service to the United Kingdom over all those years.
The arrangements for state visits have not changed under this Government. They are exactly the same now as they were under Prime Ministers Blair and Brown.
On the subject of restoration and renewal, I am not in a position to announce a specific date, but I can tell the hon. Lady that the Government’s intention is that there should be debate in Government time before the Easter recess.
On the hon. Lady’s question about the arrangements for business, and particularly Back-Bench business on Thursday 23 February, I am conscious that I owe something of an apology to the hon. Member for Gateshead (Ian Mearns), the Chairman of the Backbench Business Committee. It is always difficult to accommodate the various pressures on time. A date that had been planned for an Opposition half-day was lost as a result of the Supreme Court judgment and the European Union (Notification of Withdrawal) Bill, which we debated earlier this week. The Government have therefore agreed that we will protect the time for the remaining Backbench Business Committee debate on Thursday 23 February. I will use my best endeavours to ensure that we reinstate as soon as possible the Backbench Business Committee time lost.
The hon. Lady asked me about trade deals. One change since the days to which she referred is that Parliament enacted the Bribery Act 2010, which has made a profound difference to the duties imposed on the directors and managers of United Kingdom companies when they do business overseas. In addition, the terms of the International Development Act 2002 mean that aid and help for the poorest in the world cannot be used to lubricate a trade deal in the way that once might have been the case.
The hon. Lady asked about the White Paper on the great repeal Bill. That is a separate and distinct White Paper and I cannot give her an exact date, but my right hon. Friend the Secretary of State for Exiting the European Union will know that there will be an appetite in the House for Members to read and digest it before we debate the repeal Bill, which will be launched early on in the next Session after the Queen’s Speech.
The hon. Lady asked about Surrey County Council and social care. She clearly missed the public statements made by the Department for Communities and Local Government yesterday. There is no secret deal. Surrey County Council has asked whether it can participate in one of the pilot projects for the proposed 100% return of business rates to local government responsibility. That is not possible in the 2017-18 financial year but, like any other local council, including hers, it is free to apply to be considered in the 2018-19 financial year. There is no memorandum of understanding. There is no secret document.
The hon. Lady asked about private Members’ Bills. The reality is that there is not and never has been under any Government an automatic right for proposed legislation to become law, including Government Bills—when Governments enjoy only a small majority, they have to think carefully about the legislation they introduce and how they ensure that they secure parliamentary support.
I take note of the strong feelings expressed in the early-day motion led by the hon. Member for Cardiff South and Penarth (Stephen Doughty). Hon. Members are of course entitled to have strong opinions not just on what happens in this country, but on what happens anywhere else in the world. Like previous Governments of different political parties, whatever view any of us as individuals have of any leader of another country, the reality is that we have to deal with other Governments in the world as they exist, particularly elected Governments who can claim a mandate from their own people. The result of the election in the United States is a matter for the people and the constitution of the United States. We should note the fact that, despite the bitterness and the hard-fought nature of the presidential election campaign, Presidents Carter, Clinton and George W. Bush, and Secretary Hillary Clinton, attended President Trump’s inauguration. There was no challenge to the legitimacy of the constitutional process involved in that election.
On the House of Lords, the House of Lords has a valued function under our constitutional arrangements in terms of scrutinising and reviewing legislation from the House of Commons. I am sure they will do that on the Bill we have been debating this week, as they do on every other Bill. I am sure they will also bear in mind the reality of the referendum and the popular mandate that lies behind the article 50 decision.
Finally, the hon. Lady asked me at some length about Europe. I simply say this: her Front Bench supported the decision to have the referendum; her Front Bench supported the motion that endorsed the Prime Minister’s timetable for triggering article 50 before the end of March this year; and her Front Bench last night supported the Third Reading of the unamended Bill. It is therefore a little bit rich for those on the Opposition Front Bench to be giving us lectures or posting tweets saying the “Real fight starts now” when they have been endorsing, through their voices and their votes, the approach the Government are taking.
Mark Pritchard (The Wrekin) (Con)
May we have a debate on how local councils review school catchment areas? Is the Leader of the House aware that the council in my area is seeking to tear up the current catchment areas in the Muxton ward, meaning that parents who have invested in local housing to access Burton Borough school in Newport will have to look elsewhere? It will also fundamentally change the way their children get to school. May we have an urgent debate to ensure children are not disenfranchised, either today or in the future?
Mr Lidington
In terms of opportunities for a debate, my hon. Friend may wish to seek an Adjournment debate through the usual procedures. These are always very difficult decisions. I think many of us know that from time to time, because of changes in population—to state the most obvious example—local authorities need to review school catchment areas. Such proposals are always subject to a period of public consultation and I am sure my hon. Friend will, as always, be extremely forceful in representing the interests of his constituents.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank the Leader of the House for announcing the business for the week but next. May I wish the happiest of birthdays to the hon. Member for Newport West (Paul Flynn)? I think he was my third shadow Leader of the House, but it is so hard to keep pace with the revolving door of the Labour shadow Cabinet.
It has been a thoroughly miserable, frustrating and depressing couple of weeks, which have shown this House at its absolute and utter worst. The article 50 Bill ran through Parliament at breakneck speed: no amendments accepted, very few amendments actually debated and considered, no Report stage programmed and no Third Reading debate held. It was more like a medieval court than an advanced parliamentary democracy.
It is not as if we are overburdened with work. Why was the Bill rushed through at such a speed when we could have taken time to consider the many amendments that were tabled? That showed massive disrespect not just to this House, but to the many constituents who paid very close attention to our proceedings last week.
The Bill is now on its way to our friends down the corridor. Our unelected friends have been threatened with abolition if they dare mess with the Government’s Bill and do not do their “patriotic duty”, as the Secretary of State for Exiting the European Union said. I am sure they are now quaking in their ermine. I offer nothing other than encouragement to these fine tribunes in ermine, who will now pick up the case. For us, it is very much a win-win whatever the outcome. I say to their lordships: reach for the barricades and take on the Government.
We need a debate about respect for the devolved Parliaments in the nations of the UK. Article 50 was not just voted on by this House this week; the Scottish Parliament also voted on it, and the overwhelming majority of Members rejected triggering it, just as every single Scottish Member of Parliament did here, bar one. Yet we have to be driven off this cliff edge with this hardest of hard Tory Brexits, even though Scotland wants absolutely nothing to do with this madness. Time is running out for Scotland’s voice to be heard and our positions respected. I am sure that the Leader of the House saw this week’s opinion poll putting support for independence at almost 50%, so I gently say that we have options to consider if Scotland’s voice continues to be ignored.
Mr Lidington
I felt at times from the hon. Gentleman’s paeans of praise to the House of Lords that I could visualise the ermine and the coronet descending on him—that some hidden ambition was finally shining through.
The allocation of five days for a debate on this two-clause Bill that did no more than authorise the Prime Minister to trigger article 50 seems perfectly reasonable to me. That allocation of time has allowed, even this week, about half the number of Scottish National party Members to participate in proceedings, either through speeches or interventions. Listening to some of the contributions from the SNP Benches, my impression was that the atmosphere was far from being all doom and gloom. The hon. Member for Glasgow North (Patrick Grady) entertained us royally for nearly an hour this week and seemed to be enjoying himself immensely.
The reality is that the Bill has been brought forward in response to a very clear referendum decision by the electorate of the United Kingdom. It is very different from the Bills that the House debated previously to ratify various EU-amending treaties over the years.
The hon. Gentleman complains about the alleged lack of respect and attention being paid to Scotland. As the Prime Minister said yet again yesterday, the United Kingdom Government are determined to work with the Scottish Government, as well as with the Governments in Cardiff and Belfast, to ensure that the interests of every part of the United Kingdom are represented in the negotiations on which we are about to embark. That commitment is sincere: it is felt very strongly by the Prime Minister, and she has impressed it on every member of the Cabinet.
Mr Stewart Jackson (Peterborough) (Con)
Local concerns have been raised in Cambridgeshire—not least as a result of the excellent forensic work of my neighbour, my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay)—about funding decisions taken by the Greater Cambridge Greater Peterborough local enterprise partnership. May we have a debate in Government time to ensure that there is proper transparency and accountability of LEPs so that their decisions are fair, properly scrutinised and their efficacy is appropriately tested?
Mr Lidington
Members of LEPs on the whole do a good job in providing a forum for bringing local business and public authorities together and for trying to leverage private sector investment, along with public sector investment, to support such things as infrastructure projects. However, they have to pay regard to the fact that they are the custodians of public money and need to make sure that they have proper rules on accountability and transparency, as would be expected of anybody in receipt of taxpayers’ money. My hon. Friend may have the opportunity to raise these issues further at Communities and Local Government questions on Monday 27 February.
Vernon Coaker (Gedling) (Lab)
Will the Leader of the House arrange for an urgent debate on social care funding? As part of that, will he ask the Department for Communities and Local Government to publish any contact between Surrey and Ministers or aides in the Department, so that the debate can be informed? My local authority in Nottinghamshire is absolutely incandescent, as I am sure are other authorities, about the way in which, it appears, Surrey has been offered a sweetheart deal while it has been left to fend for itself.
Mr Lidington
As I have already made clear, there is no sweetheart deal, and Nottingham is also welcome to apply, as Surrey has indicated it wishes to do, for the full return of business rates finance to local authorities in the 2018-19 financial year. The DCLG statement yesterday gave a full account of what has happened. There has been a lot of fuss and complaint, but actually it is much less of a story than the hon. Gentleman believes.
Jason McCartney (Colne Valley) (Con)
May we have a debate on armed forces charities? I am honoured to be president of the Huddersfield branch of the Royal Air Forces Association. If parliamentary business had been different, I would have been at Huddersfield crematorium this afternoon for the funeral of Trevor Burgin OBE. He was 92. During the second world war, he was a bomber pilot and flew many missions over Europe. He then had a successful 40-year career as a teacher. Last year, he celebrated his platinum wedding anniversary— 70 years of marriage—with Kathleen. Will the Leader of the House please pass on the condolences of every Member and express our sympathy for the family and our support for armed forces charities? Trevor was an enthusiastic and popular member of the Huddersfield branch of the Royal Air Forces Association.
Mr Lidington
No one in the Chamber would dissent from my hon. Friend’s tribute to the late Trevor Burgin. It was particularly good that my hon. Friend talked briefly about his late constituent’s career of service, because it reminds us that behind the statistics and generalities there are stories of true heroism and a lifetime of public service and commitment. We are all aware that armed forces charities do incredibly important and good work in our constituencies, often quietly and unsung, in reaching out to people still scarred by the physical and mental consequences for their health of their time in service.
Several hon. Members rose—
Mr Speaker
Order. Over 30 Members are seeking to catch my eye. I advise the House that 36 Members wish to speak in the first of the two Backbench Business Committee debates, and 12 wish to contribute to the second. If I am to have any chance of accommodating that later Back-Bench interest we need to be moving on by, or very close to, 12.30 pm. May we please have short questions and short answers?
Daniel Zeichner (Cambridge) (Lab)
Last week, I visited the Sanger Institute, just outside Cambridge, where 1,100 people, of whom over 25% are non-UK EU nationals, are transforming our understanding of the human genome. Its senior manager has impressed upon me the gravity of the situation. Many of those people are poorly paid and would be unable to work through the tier 2 visa system. May we have a statement on this pressing skills crisis, which could damage some of the UK’s most successful research institutions?
Mr Lidington
The hon. Gentleman makes a reasonable point about his and other scientific institutions. As the Prime Minister said, the Government regard an early deal to secure the position of both EU residents already here and British nationals in other European countries as a primary objective. We want that sorted as quickly as possible.
Sir Oliver Letwin (West Dorset) (Con)
I very much agree with my right hon. Friend’s remarks about the recent proceedings on the European Union (Notification of Withdrawal) Bill. Should the other place seek to delay the triggering of article 50 beyond the end of March, will he find time for a debate in Government time so that this House can discuss possibility of either the abolition or the full-scale reform of the other place?
Mr Lidington
I am more optimistic than my right hon. Friend. I think there is an awareness among Members of the House of Lords that, in an unelected Chamber, there are conventions that apply to the way in which they scrutinise and deal with proposed legislation. I do not want to take anything away from their proper constitutional role. I think they are very cognisant of the fact that ours is the elected House and we voted in favour of the Bill by a huge majority last night, and also of the fact that behind that vote lay the much bigger vote of the people of the United Kingdom as a whole.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
May we please have a debate on the legal definition of the word “normally”? Section 2 of the Scotland Act 2016 states that
it is recognised that the Parliament of the United Kingdom will not normally legislate with regard to devolved matters without the consent of the Scottish Parliament“.
“If the Government intend to ignore the wishes of the Scottish Government and the Scottish Parliament over issues of such importance as the triggering of article 50, may we please find out what other important issues relating to the devolution agreement they intend to ride roughshod over?
Mr Lidington
I think the ears of every lawyer in the country will have pricked up at the suggestion that we have a debate on the meaning of the word “normally”. I suspect that the interpretation of the word may depend on which lawyer’s opinion is sought.
I repeat that the Government have been absolutely consistent in saying that the interests of the entire United Kingdom, from Fair Isle to the Scillies, will be fully represented in the approach that we adopt to these negotiations.
Jo Churchill (Bury St Edmunds) (Con)
Last month I hosted a reception to welcome a report published by Rural England, “State of Rural Services 2016”. It considers the growing impact of rural challenges on, for instance, health, education, welfare, broadband and transport. Last week I chaired a local meeting to discuss the impact of the loss of bus services. It is evident that the rural agenda is becoming increasingly difficult to deliver, and rural residents are understandably becoming ever more frustrated. Will my right hon. Friend grant a debate so that we can consider the challenges to rural funding and rural services more broadly?
Mr Lidington
My hon. Friend may have two bites at the cherry after the recess: Communities and Local Government questions will take place on 27 February, and Environment, Food and Rural Affairs questions on 2 March. I can also tell her that the Department for Communities and Local Government is currently undertaking a review of the fair funding formula to establish whether authorities throughout the country are indeed receiving their fair share of the overall cake.
Nick Thomas-Symonds (Torfaen) (Lab)
Although the Department for Work and Pensions office in Cwmbran in my constituency does not face immediate closure, the jobs there will be relocated to Cardiff in the next three years. Before that happens and those jobs are lost from my local community, may we have a debate on the DWP’s strategy in relation to where it locates its offices?
Mr Lidington
I shall ensure that the hon. Gentleman’s particular concerns about Cwmbran are relayed to the Secretary of State for Work and Pensions, but the principle behind these changes must be the right one. It must be right for the Department to stop paying out unnecessary rent on property that is partly empty, to use a smaller estate—particularly given the significant fall in unemployment—and to use savings partly to fund additional advice services for the people whom it is most difficult to help into work. That must be the right way of going about things.
Dr Julian Lewis (New Forest East) (Con)
This weekend, following an inquiry chaired by my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), the Defence Sub-Committee will publish a report entitled “Who Guards the Guardians?” It sets out in some detail the circumstances in which a poisonous charlatan such as Phil Shiner was able to abuse our system of legal aid and the provisions of human rights legislation to hounds hundreds of British soldiers who had served bravely in Iraq and done nothing wrong. May we, at the earliest opportunity, have a statement, resulting from consultations between the Ministry of Defence, the Northern Ireland Office and the Ministry of Justice, on what legislation will be introduced to ensure that nothing like that can happen to former service personnel who served in Northern Ireland?
Mr Lidington
As the Prime Minister made clear yesterday, we take this issue very seriously, and I can assure my right hon. Friend that when the report is published Ministers from the Departments he has mentioned will want to study it closely and consult our hon. Friend the Member for Plymouth, Moor View (Johnny Mercer) about the potential policy implications.
Mr Dennis Skinner (Bolsover) (Lab)
Exactly a month ago I asked the Secretary of State for Transport about the new High Speed 2 spur line running through Derbyshire, which means there will be two HS2s running through Derbyshire, not one—a fast track and a slow track. This new line is going to bring destruction and havoc to the village of Newton, which will result in the villagers losing their homes. I called upon the Secretary of State to intervene, but have never had a reply. Shall we have a statement about this matter? How far will the Government take it without responding to the people of Newton, who have suddenly realised that the second HS2 line is going to destroy their homes and their lives? Now, sort it out.
Mr Lidington
I know only too well the impact of the HS2 proposals on communities close to the designated route, and I undertake to the hon. Gentleman to ensure that the Secretary of State for Transport is reminded about his inquiry on this matter. It is right that the people the hon. Gentleman represents should get a proper response from HS2 Ltd, and I undertake to try to make certain that that happens.
Martin Vickers (Cleethorpes) (Con)
The Leader of the House will recall that last week I spoke about the mounting excitement in Cleethorpes in anticipation of a visit from the northern powerhouse Minister. He will appreciate that it is now at fever pitch, with the visit only 24 hours away, and people are talking about a parallel career path with the last Front Bencher to visit Seaview street, my right hon. Friend the Member for Maidenhead (Mrs May). More seriously, the Seaview street traders won a Great British high street awards award. Up and down the country, traders are facing difficulties. May we have a debate to discuss the future of our high streets?
Mr Lidington
I cannot offer my hon. Friend a debate in Government time, but I agree that this is an important issue that affects many communities, and the growth of online sales means many small retailers face challenges. It is important that retailers are able to learn from high streets that are successful and innovative in managing to keep their customers. After what my hon. Friend has said, there will probably now be a swathe of my ambitious and thrusting ministerial colleagues making a beeline for Cleethorpes at the earliest opportunity.
Alex Salmond (Gordon) (SNP)
May we have a statement on the shock and disappointment being felt across Scotland at the failure of former England captain David Beckham to gain a knighthood? This is particularly the case since he had been advised that his fawning support for the Better Together campaign in 2014 would
“play well with establishment and in turn help your knighthood.”
We can all associate with his sense of disappointment when he replied:
“They r a bunch of”
expletive-deletives,
“It’s a disgrace to be honest and if I was American I would of got…this 10 years ago.”
Surely the Leader of the House can bend one for Beckham?
Mr Lidington
I was not quite sure whether the right hon. Gentleman was speaking on behalf of Mr Beckham or whether there was some other motive there—a certain yearning for the knighthood himself. But I can honestly say to him that this is not a matter for me.
Mims Davies (Eastleigh) (Con)
The Leader of the House will know that I am keen to have another debate on international women’s day, which is forthcoming in March. Meanwhile, it is lesbian, gay, bisexual and trans history month, and given the utterly false suggestion by some Opposition Members yesterday that Brexit will mean a bonfire of lesbian, gay, transsexual and women’s rights, may we have a debate on this area around Brexit as Hampshire County Council starts to fly the rainbow flag for Hampshire Pride week?
Mr Lidington
I am glad that I can provide the reassurance that my hon. Friend seeks. The United Kingdom had a strong and proud tradition of human rights and liberal values before we entered the European Union, and that tradition will continue after we have left it. She has only to look at another non-EU country in Europe, Norway, to see that there is no bar to a liberal approach to individual rights as a result of being apart from the European Union.
Christina Rees (Neath) (Lab/Co-op)
It is currently possible for the widowed parent of a new-born baby to receive up to £119,000 over 20 years, but if a partner dies after 6 April 2017 bereavement payments will be limited to a mere £9,800 over 18 months. May we please have a debate in Government time to discuss these Department for Work and Pensions reforms, which will cause severe hardship to grieving families?
Mr Lidington
There will be questions to the Secretary of State for Work and Pensions on our first day back, Monday 20 February, so the hon. Lady will have an opportunity to raise the matter on that occasion.
Mark Pawsey (Rugby) (Con)
I do not know whether you have ever attended a speedway meeting, Mr Speaker, but that fast, exciting motor sport has always attracted a family audience. Speedway racing has taken place at Brandon in my constituency since the early days of the sport in the 1920s. Unfortunately, as a consequence of a dispute over the use of the stadium at Brandon, the Coventry Bees will start the new season this summer 25 miles away in Leicester, at great inconvenience to local fans. May we have a debate on the governance of this sport?
Mr Lidington
I am sure that if my hon. Friend were to draw his concerns to the attention of the Minister for Sport she would be only too delighted to see what is happening in the speedway world in the midlands. As he has suggested, however, the governance of the sport is a matter for the independent governing bodies of the sport rather than a matter in which Ministers should intervene.
Several hon. Members rose—
Mr Speaker
Order. Before we proceed further, I can say to the hon. Member for Bolsover (Mr Skinner), in the light of his business question, that before I came into the Chamber this morning I selected his proposed subject matter for the end-of-day Adjournment debate on the first Thursday after we return from the half-term recess, Thursday 23 February.
Ian Murray (Edinburgh South) (Lab)
May we have a statement from the Leader of the House himself—perhaps he could do it now—on how the Government bring forward Bills to this House? The fact that they did not programme a Report stage for the European Union (Notification of Withdrawal) Bill makes it quite clear that they had no intention of accepting any of the 100 amendments that were tabled by well-intentioned Members. May we have a statement on whether it was indeed the Government’s intention to ride roughshod over this parliamentary process, making the past three days a sham?
Mr Lidington
The programme motion was very clear that there was provision for a Report stage. Whether there would be debating time for one would, as always, depend on whether amendments had been carried and on how long the House wished to continue to debate the amendments in Committee ahead of a Report stage.
Mr Peter Bone (Wellingborough) (Con)
I should like to wish the hon. Member for Newport West (Paul Flynn) a happy birthday. He has been an outstanding parliamentarian. I should also like to thank him for inspiring me. I was once his constituent, and his antics drove me to run for Parliament. I thank him for that. Does the Leader of the House accept that this Parliament works because we have two Houses? Sometimes the other place does not agree with us, which annoys the Government, but that is no reason whatever to threaten it with abolition. May we have a statement from the Leader of the House to confirm that?
Mr Lidington
The Government’s position is that we completely respect the constitutional role of the House of Lords. As I said earlier, the House of Lords itself accepts that, as an unelected House, it needs to abide by certain conventions.
Paul Flynn (Newport West) (Lab)
I should like to thank you, Mr Speaker, and other Members for your very kind comments; I am less happy about the fact that I must carry for life the burden of being responsible for the parliamentary career of the hon. Member for Wellingborough (Mr Bone).
I have a suggestion that might appeal to you, Mr Speaker, given your great record as an innovator and trailblazer in this House. May we have a debate on procedure during Divisions, to enable us to enjoy more of the singing of the Scottish National party choir? The only bright spark in the midst of yesterday evening’s bleak, mean-spirited chauvinism was hearing the glorious words of the European anthem:
“Freude, schöner Götterfunken,
Tochter aus Elysium,
Wir betreten feuertrunken,
Himmlische, dein Heiligtum!”
And the essence of the European ideal:
“Alle Menschen werden Brüder,
Wo dein sanfter Flügel weilt.”
That looks forward to the great European ideal, on which this Government are now trampling, and embodies the idea that a day will come when all humanity will be one family.
Mr Lidington
It is rightly a Welshman who highlights the importance of singing. My advice to hon. Members on the Scottish National party Benches would be that we have an all-party parliamentary choir—for staff as well as Members—that meets in the Crypt every Monday evening. I know that SNP Members would be welcome to join those who already participate.
Tom Pursglove (Corby) (Con)
I am not sure how to follow that question! In the past 10 days, we have heard about Weetabix’s £30 million investment, and about the expansion of the Tayto Group, all of which is good for jobs in Corby. Of course we must never be complacent, but may we have a statement next week from Ministers on the real news, rather than fake news, about the number of jobs that have been created and the investment that has taken place in the UK economy since 23 June?
Mr Lidington
My hon. Friend makes a good point. The additional investment projects that have been announced in the United Kingdom since the referendum are a tribute to the underlying strength of the economy of this country, and that is a strength on which this Government are determined to build further.
Bob Blackman (Harrow East) (Con)
I should like to speak on behalf of the Chairman of the Backbench Business Committee, the hon. Member for Gateshead (Ian Mearns), who is indisposed with a prolapsed disc; I am sure that the whole House will wish him a speedy recovery.
The Committee was placed in an invidious position at our meeting on Tuesday, and I know that the Chairman has written to the Leader of the House about this. We believed that we had been given a full day on 23 February, and we had allocated two debates for that day. We have now been left in a very difficult position. I understand that the Budget will be on 8 March, and that it will be debated on a succession of days thereafter, so even if we fill every Thursday between now and Prorogation, we will not get all our allotted days. Furthermore, we have allocated a debate on Welsh affairs for 2 March, as close as possible to St David’s day, and a debate on international women’s day on a date prior to that day, which is the day of the Budget.
Will my right hon. Friend ensure that we get 2 March as a Back-Bench business day, and that the protected time on 23 February will be sufficient for a proper debate on the chosen subject, which is child refugees in Greece and Italy?
I should like to make one further point, if I may. There was a terrible incident in my constituency yesterday in which a young man was stabbed at Queensbury station. The whole station was closed, inconveniencing passengers, as a result of this gang fight. May we have a statement on the action that the Government are going to take to combat knife crime, so that no other individual need suffer that terrible fate?
Mr Lidington
On the points about the Backbench Business Committee, as I said earlier, what has happened in regard to 23 February is regrettable and I am sorry that that decision proved necessary. I can give my hon. Friend a firm assurance that the protected time on that day will be sufficient to allow for a full debate on the subject that the Committee continues to recommend. I will do my best to ensure that the time for a further debate that has been lost is made up as rapidly as possible. I will certainly take into careful account his remarks about 2 March, because I know how important the annual St David’s day debate is for Welsh Members from all political parties.
On my hon. Friend’s point about his constituency case, the sense of shock that came through in his question will have been shared across the House. I will ensure that the Home Secretary is alerted to that particular case, but my hon. Friend will know that the penalties for knife crime have been increased and that the police are doing their utmost to combat the sort of gang warfare that he describes.
Several hon. Members rose—
Mr Speaker
Order. To move on at 12.30 pm, I am afraid that we need one-sentence questions from now on.
Ian Paisley (North Antrim) (DUP)
Forty-one years ago, 10 Protestants were murdered by the Provisional IRA at Kingsmill. A man was subsequently charged because his palm print was found on one of the vehicles involved in the atrocity, but the Public Prosecution Service told the families this morning that that was insufficient evidence to prosecute the alleged IRA man. At the same time, soldiers are being dragged through the courts in Northern Ireland. When will we get equity of prosecutions in Northern Ireland?
Mr Lidington
As the hon. Gentleman knows, the Secretary of State for Northern Ireland has made it clear that he is working to try to address the way in which soldiers have been unfairly singled out. The Public Prosecution Service is rightly independent of political direction, so I cannot comment on the particular case, but anyone who knows anything about Northern Ireland will know that the scars of the Kingsmill massacre remain to this day.
Mary Glindon (North Tyneside) (Lab)
Residents in my constituency have been badly let down by their house builder, Bellway, which has not completed houses to standard. This week, they have been further let down because the White Paper makes no provision for a new homes ombudsman. Will the Leader of the House please raise that omission with the Housing Minister?
Mr Lidington
I will certainly ensure that the Minister is alerted, but I inform the hon. Lady that she will be able to raise that point again at Communities and Local Government questions on Monday 27 February.
George Kerevan (East Lothian) (SNP)
My constituent, Mr Christopher Bronsdon, is a victim of an anomaly in the civil service pension arrangements whereby contract and short-service employees leaving service lose the employer contributions from their pension pot. As a result, people such as Mr Bronsdon have lost £100 million in recent years, so may we have a debate on that?
Mr Lidington
The best advice I can give the hon. Gentleman is to apply for an Adjournment debate. If he wants to write to me with the details of the problem, I will pass them on to DWP Ministers.
Diana Johnson (Kingston upon Hull North) (Lab)
I was pleased that Surrey County Council spoke out about the social care funding scandal, but if it is bad there, think how much worse it is in Hull—the third most deprived area of the country—where a £45 million shortfall in social funding is forecast by 2020. After yesterday’s revelations, can all Members of Parliament outside the stockbroker belt be given the telephone number of “Nick” so that we can all text him to get the best deal that our areas need?
Mr Lidington
I am tempted to say that the hon. Lady had better make sure that she gets through to the right “Nick”, which can sometimes prove quite tricky. Nobody is pretending that the country is not facing a serious social care challenge, which is why the Government have increased funding through the better care fund and the social care precept. In the medium term, however, we need to ensure that the best, most successful local authorities are able to disseminate their achievements among local authorities that are not performing so well and that health and social care work together more closely.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Earlier on, the International Trade Secretary told me that US investors are reluctant to invest in Scotland due to the threat of Scottish independence. Can we have a statement from the International Trade Secretary to tell us who those investors are, how much money we are talking about, what the projects are, and what the UK Government are doing to ensure that Scotland is open for business?
Mr Lidington
As I said in answer to my hon. Friend the Member for Corby (Tom Pursglove), the United Kingdom’s track record since the referendum has been that we continue to attract investment from all around the world. If there are particular difficulties in attracting investment into Scotland, the hon. Gentleman might look at the recently approved Scottish Government budget, for example, which has made Scots the highest-taxed people in the United Kingdom.
Jim Shannon (Strangford) (DUP)
Mr Ali Moezzi, a prominent Iranian political prisoner, was taken to an unknown location by agents from the Iranian Ministry of Intelligence following a weekly family prison visit on 4 January. In a statement on 13 January, the British Parliamentary Committee for Iran Freedom again warned about the threat to Mr Moezzi’s life and called for international action to secure his release. Time is of the essence, so can we have an urgent statement on the matter?
Mr Lidington
To the hon. Gentleman’s good fortune, the Minister responsible for the middle east is in his place on the Front Bench. He will have heard the hon. Gentleman’s remarks and I am sure he will want to respond.
Chris Stephens (Glasgow South West) (SNP)
With industrial action today at the Equality and Human Rights Commission and with its chair advising the Joint Committee on Human Rights that the EHRC is at the limits of what it can do to discharge its statutory duties, can we have a debate in Government time on the EHRC’s funding so that victims of hate crime are protected?
Mr Lidington
The hon. Gentleman may want to seek an Adjournment debate, but the EHRC rightly operates at arm’s length from Ministers and has to make its own decisions about how to live within its means, just like every other public authority,
Mark Durkan (Foyle) (SDLP)
May we have a debate in Government time to allow the House to reflect on the full import of what the Supreme Court said about the Sewel convention, so that important questions about its future application and adherence to it are not just left to contend with the other frictions and fictions of the great repeal Bill?
Mr Lidington
There will be questions to the Secretary of State for Scotland on Wednesday 1 March, at which there will be opportunities for that matter to be raised. I am absolutely certain that there will be ample opportunity for all such questions to be debated when we get to the EU repeal Bill after the Queen’s Speech.
Peter Grant (Glenrothes) (SNP)
Given that the Exiting the European Union Committee was told as recently as yesterday that the Joint Ministerial Committee (EU negotiations) has not even begun to consider the wording of the article 50 letter, which some reports suggest might be submitted exactly four weeks today, can we have a statement on the Committee’s intended timetable?
Mr Lidington
Although Joint Ministerial Committee meetings are important, contact between UK Ministers and their counterparts in the three devolved Administrations, and between UK Government officials in all relevant Departments and officials in the devolved Administrations, continues on a daily and weekly basis. The consultation and understanding of the particular priorities of the devolved Administrations are part of the mainstream work of UK Government Departments.
Alison Thewliss (Glasgow Central) (SNP)
At the Scottish Affairs Committee yesterday, the right hon. Member for Broxtowe (Anna Soubry) called the jobcentre closure plans “illogical”. In the Scottish Parliament, the Tories called for an equality impact assessment and greater detail. May we have a debate in Government time on the DWP’s estate closure plans and a moratorium on closures until Members across the House and people across these islands can have confidence that the Government actually know what they are doing?
Mr Lidington
It is a forlorn hope that the hon. Lady and members of her party might actually take some pleasure in the massive fall in unemployment and the growth in employment that we have seen in this country, including in Scotland and, indeed, in Glasgow. It cannot be right for the DWP to spend money unnecessarily on unoccupied buildings when that money could be redeployed to give additional advice and support to people with disabilities or the long-term unemployed, who want and need that additional support to get back into employment.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
Yesterday, TSB announced the closure of its Cambuslang branch. In less than a year, all three banks in the town will have vanished. In the light of the announced Post Office partnership with UK banks to deliver day-to-day banking services, can we have a debate on the capacity and capability of the post office network to cope with an increase in service and custom?
Mr Lidington
That might well be a good subject for either a Backbench Business debate or an Adjournment debate, if the hon. Lady is fortunate in the ballot.
Patrick Grady (Glasgow North) (SNP)
Not only did the Scottish Parliament vote against article 50, but it managed to deal with all its votes and amendments in less than five minutes. Yesterday, it took us two hours to deal with 10 votes. Does the Leader of the House agree that if we had electronic voting, we would have more time for debate—even if it did mean that we had less time to sing “Ode to Joy”?
Mr Lidington
Call me old-fashioned, but it is quite a good idea that people are present in Parliament in order to vote. If we move to electronic and remote voting, that disconnects the voting decisions from the debate itself.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
May we have an important debate on mobility payments to assist children who require palliative care? There is an arbitrary cut-off in that children must be aged three, which I am campaigning to change. The cut-off discounts the needs of families caring for very young children in life-threatening situations.
Mr Lidington
The hon. Lady makes an interesting point and I am not aware of the details of that particular issue. If she would like to give me some more detail, I will take it up with the appropriate Minister, and she may wish also to seek an Adjournment debate.
Carol Monaghan (Glasgow North West) (SNP)
May we have a statement on the Government definition of a “marriage-like relationship”? My constituent, Robert Makutsa, is under imminent threat of deportation because the Home Office does not recognise Robert’s relationship with his fiancée Chloe. That is because, as committed Christians, Robert and Chloe have not cohabited before their marriage. Can the Government consider making such a statement urgently?
Mr Lidington
Individual cases are, of course, subject to an independent system of appeals under our immigration and asylum rules; Ministers do not intervene in the way that the hon. Lady suggests in individual cases. Those rules provide for tests to try to distinguish between people who are living together as a matter of convenience—as sadly does sometimes happen—and those in a genuine and committed relationship, whether within marriage or without. I encourage her to write to the Immigration Minister about the particular case.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Fair Trade Fortnight is just around the corner: can we mark it with a debate on how UK trade policy affects some of the world’s poorest peoples?
Mr Lidington
UK support for free trade can be enormously beneficial to people living in poor countries because it means that they should be able to get readier access to customers in our country without tariffs or other regulations getting in the way. Trade and enterprise have shown themselves again and again over the decades to be the best long-term guarantee of economic growth and prosperity for people in poorer countries all around the world.
Mr Speaker
I have received a report from the tellers in the No Lobby yesterday for Division 157 on the European Union (Notification of Withdrawal) Bill in respect of amendment 86. The number of those voting No was erroneously reported as 327 instead of 337. The Ayes were 288 and the Noes were 337.
Points of Order
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Louise Haigh (Sheffield, Heeley) (Lab)
On a point of order, Mr Speaker. I cannot quite believe that I am having to raise Concentrix in the House again, but after the scandal that broke around that company HMRC announced that it would never again use a private provider to deal with tax credits, especially in relation to error and fraud. But today the Government have issued a written ministerial statement saying that they will transfer tax credit error and fraud to the Department for Work and Pensions and will seek an external provider to do so. That is a disgraceful U-turn on Government policy as stated to the House. Can you do anything to ensure that a Minister comes to the House and explains why that U-turn has happened, so that they can be held properly to account?
Mr Speaker
Ministers are responsible for their own statements and subsequent adherence to those statements —or not, as the case may be. I do not seek to adjudicate on such matters. The short answer is that it is not for me to say that a Minister must come here today. We have scheduled business that is heavily subscribed. The hon. Lady, with her usual persistence and indefatigability, has put her concern on the record and it will have been heard on the Treasury Bench. Knowing her as I have come to do over the last 21 months, I rather doubt that she will let the matter rest. She may think about it during the recess and if she is dissatisfied with what is said, or not said, by the Government, she will doubtless return to it when we come back.
Peter Grant (Glenrothes) (SNP)
On a point of order, Mr Speaker. During International Trade questions earlier, the Minister repeatedly referred to a deferred Division that took place yesterday and stated on several occasions that it gave Members an opportunity to vote for or against the CETA deal. The wording of the motion on which the House divided in that deferred Division makes no reference to support for or opposition to that trade deal. I accept that the Minister was acting in good faith, but can you advise me of some way in which we can set the record straight, so that the terms on which the House divided yesterday are correctly described?
Mr Speaker
The hon. Gentleman has made his own point in his own way, and it is on the record for all—including his constituents—to see. Moreover, I understand that at the end of European Committee B a vote took place on an amendment moved by the hon. Member for Swansea West (Geraint Davies). The result was seven to five against the amendment, and the record shows that the hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) was in the minority of five. Thereafter, the motion was passed unopposed in Committee and subject to a deferred Division in the House yesterday. I am not sure that I can add anything further. I am not seeking to be obtuse: if I have missed the hon. Gentleman’s point and he insists on having another go, I will indulge him—
Mr Speaker
I probably should not have given the hon. Gentleman such an opportunity.
Peter Grant
Further to that point of order, Mr Speaker. The motion that was divided on was not actually the same motion that we were asked to consider on Monday evening. The terms of the motion as described by the Minister were different from the terms of the motion on which the House actually divided. The motion subject to the deferred Division made no reference to support for or opposition to CETA, as the Minister suggested it did on several occasions.
Mr Speaker
It is fair to say that the Chair is not responsible for what might be called textual exegesis. I have not looked at the text of the amendment or compared and contrasted that text with the words uttered from the Treasury Bench by the Minister this morning. Clearly, the hon. Gentleman has made such a close study and may well have profited by it. I do not think there is anything further that I can do today. The hon. Gentleman is, in a sense, engaging in a debating point—perhaps a legitimate one—with the Minister and it would seem that, at least today, the hon. Gentleman has had the last word—[Interruption.] “Hopefully”, says someone from a sedentary position.
Patrick Grady (Glasgow North) (SNP)
On a point of order, Mr Speaker. Given that the record has just had to be corrected to reflect perhaps understandable human error in the Division Lobbies last night, and given the number of intense votes we can probably expect on the great repeal Bill, does that not suggest that electronic voting might help to avoid some of those human errors? Can you tell us whose decision it would ultimately be to introduce electronic voting in this House?
Mr Speaker
The short answer to the hon. Gentleman, who never misses an opportunity, is that it would be a decision for the House. Let me be clear about that. A change could be agreed only by the House, and equally it could decide not to agree to such a change. I think we will leave it there for today.
If there are no further points of order and the appetite, at least for today, has been satisfied, we come to the Back-Bench motion on Israeli settlements in the occupied Palestinian territories. I warn colleagues that it is almost inevitable that we will have a five-minute limit on Back-Bench speeches, because some 35 colleagues wish to contribute.
Backbench Business
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Occupied Palestinian Territories: Israeli Settlements
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sir Desmond Swayne (New Forest West) (Con)
I beg to move,
That this House reaffirms its support for the negotiation of a lasting peace between two sovereign states of Israel and Palestine, both of which must be viable and contiguous within secure and internationally recognised borders; calls on the Government to take an active role in facilitating a resumption of international talks to achieve this; welcomes UN Security Council Resolution 2334 adopted on 23 December 2016; and further calls on the government of Israel immediately to halt the planning and construction of residential settlements in the Occupied Palestinian Territories which is both contrary to international law and undermines the prospects for the contiguity and viability of the state of Palestine.
Given the investment that we have made in a two-state solution, my question to the Minister is: aside from standing on the touchlines watching the players on the field and shouting advice, what more can we do while our friend and ally pursues a policy on settlements that is bound, so proceeding, to deliver a situation in which the two-state solution becomes geographically and economically unworkable? Yesterday, my right hon. Friend the Member for Brentwood and Ongar (Sir Eric Pickles) rightly challenged the Prime Minister about the need for face-to-face negotiations. He is a champion of the case for greater investment in strategies and projects to bring about the integration of Palestinian and Israeli citizens, and he is right about that, too.
Our Department for International Development employees in Jerusalem, who travel into the city daily on a tortuous commute from the areas around Bethlehem, are young people in their mid-20s to mid-30s. The only interaction that they ever have with an Israeli subject is when, during that journey, they are challenged to show their papers under the operation of what I would call the pass laws that exist to ensure that people’s ability to live, stay and work in their own city is restricted.
I entirely understand how we got to that dreadful situation: because of the obscenity of suicide bombing. Israel—no Government—could not possibly tolerate the wholesale slaughter of its innocent citizens. The key question for us is, having got to this dreadful situation, how we get back from it. It is one thing to demand, quite properly, face-to-face negotiations, but pursuing a policy in respect of illegal settlements makes those negotiations much more difficult, particularly when that policy is driven by an increasingly strident ideology.
Sir Desmond Swayne
I will give way when I have developed my argument.
On Monday night, when a Bill was passed in the Knesset retrospectively legalising 4,000 homes in illegal settlements, the Israeli Minister of Culture welcomed the result, saying that it was
“the first step towards complete…Israeli sovereignty over Judea and Samaria.”
The words “Judea and Samaria” were chosen carefully.
When President Trump was elected, the Israeli Interior Minister, no less, welcomed it by saying that we are witnessing
“the birth pangs of the Messiah when everything has been flipped to the good of the Jewish people”.
On Monday, Mr Speaker put a rather different gloss on Mr Trump’s election but, nevertheless, it is absolutely clear that a significant proportion of the Israeli political establishment is in thrall to an increasingly strident settler movement that regards Palestine as a biblical theme park—Judea and Samaria.
The more strident and aggressive outriders of the settler movement are not people we would necessarily welcome as our neighbours. I particularly refer to what is now happening in Hebron. Setting aside some of the ruses that are used to acquire property, when the settlers move in, it is actually their Palestinian neighbours who have to erect grilles and meshes over their windows, and fences around their yards, to exclude projectiles and refuse. The reaction of the security forces to protect their newly resident citizens is to impose an exclusion zone, and to cordon off and sanitise the access and areas around those properties. So proceeding, Palestinians find that they are excluded from the heart of their city and, indeed, from the environs of their own homes. It has all the appearance of what we used to describe as petty apartheid.
Secretary Kerry explained at the turn of the year why the United States would no longer pursue its policy of exercising its veto in respect of UN Security Council resolution 2334. He said that if the two-state solution were abandoned, Israel could no longer be both a democracy and a Jewish state because, as a consequence of abandoning the policy, it would have to accommodate Palestinian citizens and all their civil and political rights within the state of Israel.
Ian Austin (Dudley North) (Lab)
But did not John Kerry also say that
“this is not to say that the settlements are the whole or even primary cause of the conflict—of course they are not. Nor can you say that if they were removed you would have peace without a broader agreement—you would not”?
That was what he said. The right hon. Gentleman could have tabled a more balanced motion that reflects—look, he is sneering—all the barriers to a two-state solution, which is what I want to see.
Sir Desmond Swayne
I certainly was not sneering. I entirely accept that that was what John Kerry said—I do not dispute it for one moment. Frankly, the motion could not be more anodyne.
William Wragg (Hazel Grove) (Con)
Is now not the time, more than ever, for the United Kingdom Government to be entirely consistent and to remind the world, without any qualification, that settlements in the Occupied Palestinian Territories are illegal?
Sir Desmond Swayne
I absolutely agree. Does my hon. Friend the Member for Gloucester (Richard Graham) still wish to intervene?
Sir Desmond Swayne
Very well. I shall return to my point about John Kerry. The key question is the one I put to the Minister at the start of my speech: what can we do? I was delighted by the activism of the United Kingdom Government on UN Security Council resolution 2334.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Will the right hon. Gentleman give way?
Sir Desmond Swayne
Not yet.
I was, of course, dismayed by the subsequent inactivity of Her Majesty’s Government in respect of the Paris conference. That comes back to the question of what we do every time there is some outrageous announcement on settlements.
Sir Desmond Swayne
I will not give way.
What we do—I have heard the Minister say this from the Dispatch Box—is we make representations at the highest level. I have also said that at the Dispatch Box, and of course we do make those representations. I am certain that the Prime Minister will have made representations to the Prime Minister of Israel on Monday. I last made representations to an Israeli politician at a meeting in the Knesset with the chief negotiator with the Palestinians and Deputy Prime Minister. Halfway through that meeting, he stormed out announcing that I had launched a brutal assault—moi! As you know, Mr Deputy Speaker, I am a pussy in comparison with the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood), who is a terrier. I am absolutely convinced that his representations will be much more robust than mine but, so long as they remain representations, the Government of Israel will continue to act with absolute impunity.
The question to the Minister is: what do we do beyond representations? What else exists in his armoury to escalate the situation? I accept that that is an extraordinarily difficult question because Israel is our friend and ally. It is a democracy, and a nation in which we have huge commercial interests and with which we share vital intelligence agendas.
Sir Desmond Swayne
I am afraid that my hon. Friend has missed his opportunity.
As I conclude, may I make one gentle suggestion to my hon. Friend the Minister? He might consider giving effect to this House’s instruction that we should recognise the Palestinian state. I have heard him say that we can do that only once, and that therefore we need to choose the moment at which that will have the maximum impact. I agree with him, but he needs to consider this: it would be truly absurd if we were to delay that recognition till after the point at which the reality of any such Palestinian state could actually be delivered.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I suggest to Members that we will have to start with a five-minute time limit on speeches. If we can try to be tight, we will get everyone in, hopefully with the same amount of time.
Richard Burden (Birmingham, Northfield) (Lab)
I thank the Backbench Business Committee for scheduling this debate and congratulate the right hon. Member for New Forest West (Sir Desmond Swayne) on the way he introduced it.
Debates such as this always bring out sharply differing opinions on both sides of the Chamber—that is inevitable—but in my experience there is one thing on which there has always been consensus in the House, whatever people’s views on other issues: the best way to peace between Israel and Palestine is a two-state solution in which both peoples have equal rights to sovereignty in viable and contiguous states. Of course full and lasting peace involves more than dealing with settlements, but settlements are rightly the focus of this debate because their continued expansion, the infrastructure around them, and the demolitions that precede them, are creating, as the right hon. Gentleman said, a new physical reality in the west bank that is destroying the possibility of a viable Palestinian state ever being established. They are making physical changes to the map of the west bank, carving it up into different segments, severed from each other, so that it ends up resembling a Swiss cheese. It does not resemble anything that could, at the end of the day, be a viable and contiguous Palestinian state.
Wes Streeting (Ilford North) (Lab)
Does my hon. Friend agree that the policy of ongoing settlement expansion is not only an intolerable infringement on the rights of the Palestinians, but a long-term threat to the stability and security of Israel? People who care about Israel’s longer-term security, and its future as a democratic and Jewish state, ought to oppose that policy and support the progressive voices in Israel that are also opposed to settlement expansion.
Richard Burden
My hon. Friend is absolutely right. I am particularly pleased that he mentions the progressive voices in Israel, because they do exist. Among the most insidious things currently happening are the actions taken by some of the Israeli right, sadly supported by people in the Israeli Government, to silence the voices of organisations such as B’Tselem, Breaking the Silence and many others that have the guts and integrity to stand up and say, “This is wrong.”
Some 6,000 new units have been announced in just the past few weeks and the settlement footprints now make up more than 42% of the west bank’s land mass. Whatever the numbers, the reality is, as the hon. Member for Hazel Grove (William Wragg) said, that every single settlement built on occupied land is unlawful under the fourth Geneva convention.
If settlement building does not stop, the destruction of the two-state solution that will inevitably follow will mean the de facto annexation of the west bank by Israel. In the past week, we have seen another move towards that, with the passing of the so-called regularisation law, which retrospectively declares legal the illegal Israel settlements on expropriated private Palestinian land. I commend Israel’s Attorney General for declaring that unconstitutional and pay tribute to the judicial independence that demonstrated, but the direction of travel is clear: both that law and the massive expansion of settlements that is taking place mean that, whatever Israel calls it in theory, annexation is happening in practice.
Stephen Timms (East Ham) (Lab)
I pay tribute to my hon. Friend’s long record of work on this issue. In his view, are we now beyond the point at which a viable Palestinian state could be set up, were there the agreement to do that, or are there perhaps still grounds for some optimism?
Richard Burden
It is right that the long-standing policy of this House and of Britain to support the two-state solution endures, but let us make no mistake: the chances of that solution are disappearing.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Will the hon. Gentleman give way?
Richard Burden
I am afraid I cannot give way any more as there is not enough time. I am sure the hon. Lady will have her chance to speak a little later.
What John Kerry was getting at was that if we end up with the de facto annexation of the west bank, that gives Israel a choice. It can say either that everybody living there should have the vote and rights equal to those of its own citizens, or that they do not. If it says that they do have those rights, the future of Israel with a Jewish majority is at an end. If it says that they do not have those rights, Israel can no longer claim to be a democracy. Not only that, but if there is de facto annexation while Israel maintains a system of laws and controls that discriminate against the majority of people who live in the west bank and denies them basic democratic rights, what term can we use to decide what we are left with but a form of apartheid?
If one goes and looks at the reality of life for Palestinians on the west bank, it is difficult not to come away with the impression that what is happening there is already a creeping culture of apartheid. Is it any wonder, then, that if one talks to Palestinians today—particularly young Palestinians who have never experienced anything other than the grinding weight of occupation—they increasingly say that they see the international community’s constant going on about a two-state solution as a cruel deception for them and their lives? They say, “Actually, we are now getting to the stage where we don’t care how many states there are. We just want it ensured that we have equal rights with everybody else.”
We are left with choices about what we do about this situation, and the right hon. Member for New Forest West was right to put this to the Minister. We can either continue with the mantra that we support a two-state solution in theory, or we can do something to save that solution. I have two questions for the Minister. First, what actions—not simply words—are the UK Government prepared to take to differentiate settlements in the occupied west bank from Israel itself? Secondly, as settlements are illegal, should not there be a clear message from the Government that any trade preferences, either before or after Brexit, do not apply to settlements, and that this will be enforced? UK businesses should not collude with illegality through any financial dealings with settlements or through the import of settlement goods to the UK.
I conclude by echoing a point made by the right hon. Gentleman. Five years ago, William Hague, the then Foreign Secretary, said:
“We reserve the right to recognise a Palestinian state bilaterally at a moment of our choosing and when it can best help to bring about peace.”—[Official Report, 9 November 2011; Vol. 535, c. 290.]
In October 2014, this House asked the Government to act on that, so does the Minister agree that, with the two-state solution that we all support under threat like never before, now is the time to act on that bilateral recognition? We have to ask ourselves: if not now, when; and if not now, are not those Palestinians who believe that we talk a good story but do nothing to end their misery actually right?
Crispin Blunt (Reigate) (Con)
I congratulate my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) and the hon. Member for Birmingham, Northfield (Richard Burden) on introducing the debate.
Secretary Kerry’s speech after the adoption of resolution 2334 was outstanding in its depth and balance. Friends of both Israel and Palestine must address his central charge that the status quo is unsustainable and is both a threat to a democratic Israel and prevents a viable Palestinian state. The argument that resolution 2334, John Kerry’s speech, the Paris conference and even this motion are hollow words and simply serve to harden intransigence is transparent, self-serving nonsense. Reiterating basic tenets of international law and ceaselessly searching for peace should not be dismissed in that way.
I share Kerry’s analysis that settlements are not the
“the whole or even the primary cause of this conflict.”
I welcome his work on securing Palestinian acknowledgement that the reference in the Arab peace initiative to the 1967 lines included the concept of land swaps, and he is right that even if the settlements were removed, we would not have peace without a broader agreement.
Since Oslo, Palestinians have been betrayed by two decades of factionalised leadership; by the international community in the disastrous consequences of the implementation of the Oslo process; historically, by their Arab neighbours in the catastrophic way that they first advanced their own interests ahead of the Palestinian cause; and, also historically, by Britain in our failure to deliver the second half of the Balfour declaration.
It is also true that, for more than 100 years, the Palestinian leadership has never missed an opportunity to miss an opportunity. Today, those encouraging violence are again betraying the opportunity to present the Palestinian cause with the legal and moral authority that it deserves. However, while admitting the enormity of these issues, one should not belittle the seriousness of the settlements issue. Settlements are illegal under international law for a reason.
Ian Murray (Edinburgh South) (Lab)
I am very grateful to the distinguished Chair of the Foreign Affairs Committee for allowing me to intervene. Will he comment on what message it sends out to the international community when UN resolution after UN resolution on settlements is ignored and on what we can do to ensure that we action the one that has just been passed?
Crispin Blunt
I agree with the hon. Gentleman, who is such a distinguished addition to the Foreign Affairs Committee. As he knows, we have announced an inquiry into British policy towards the middle east peace process, and it is an issue with which we will engage in detail over the months ahead.
Dr Whitford
Having been in Gaza a quarter of a century ago when the Oslo process started, I have to ask whether we are not now in a situation in which, if we do not recognise and enforce international law, we send out the message to other countries in the world that if they cover something in concrete, we will let them get away with it. If that is so, we will pay the price.
Crispin Blunt
I agree with the hon. Lady. The implications of these settlements are catastrophic. One should not belittle the seriousness of the issue. As I was saying, settlements are illegal under international law for a reason. One cannot conquer someone else’s territory and then colonise it. The end of that era was codified in the Geneva convention in 1949, and our experience since has been of decolonisation. That it should have happened over the past 50 years at the hands of a nation born out of the moral authority of the appalling treatment of the Jews in Europe over centuries that culminated in the holocaust is deeply troubling for the admirers of the heroic generation that founded the state of Israel.
We rightly talk about all that should be celebrated in Israel, which is often described as a beacon of our shared values in a troubled region, but the truth is that Palestinians, the Arab world and the wider international community, including our own population, increasingly see Israel through the clouded prism of the settlements.
Within Israel, there is no consensus on settlements. The recent regularisation law has raised a particularly rancorous debate. It was Benny Begin, the son of a former Prime Minister and a Likud Member of the Knesset, who dubbed the law as the “robbery law”, while the head of the Zionist Union, Isaac Herzog, called it “a threat” to Israel. It is worth remembering that Parliaments cannot make legal what international law proscribes.
Richard Graham
Does my hon. Friend agree that the expansion of illegal settlements is to the despair of many people who wish Israel well and plays precisely into the hands of those who believe that there is a cynical intent never to pursue a two-state solution?
Crispin Blunt
I wholly agree with my hon. Friend.
It distresses me that, despite the formal reiteration of the British position on settlements, the recent signals from the Government—briefing against the Kerry speech, not participating in the Paris conference and receiving an Israeli Premier who has just presided over the regularisation law and who is in deep domestic trouble— suggest that they do not fully appreciate the seriousness of this obstacle to peace and the threat to the values of a nation that our history of personal, economic and security relationships makes a firm friend and ally. Friends should not allow each other to make profound and damaging mistakes, which is why I support this motion.
Joan Ryan (Enfield North) (Lab)
Before addressing the motion, I wish to condemn the rocket attack on Israel last night when Islamic State fired four rockets from the Sinai peninsula into Eilat. I expect that the whole House wants to join me in that sentiment.
Three weeks ago, I introduced a ten-minute rule Bill in support of an international fund for Israeli-Palestinian peace. At the outset, I made it clear that I opposed continued settlement building in the west bank, a policy that threatens the viability of a future Palestinian state, the case for which is unarguable. It does immense damage to Israel’s standing in the world, and, over time, it will put at risk that which is most precious about Israel’s character—its Jewish and democratic character.
I also made it clear that settlements are not the only or even the principal obstacle to peace. As the former US Secretary of State, John Kerry, who has been much quoted today, said in his final speech on the middle east in December,
“The core issues can be resolved if there is leadership on both sides committed to finding a solution. In the end, I believe the negotiations did not fail because the gaps were too wide, but because the level of trust was too low.”
Settlement building in the west bank does nothing to contribute to raising those levels of trust—in fact, it does quite the reverse—but let us be clear: trust has to be built and earned by both sides. It is unfortunate that today’s motion makes scant recognition of that fact. Therefore, let me outline some of the factors, beyond settlement building, that contribute to that lack of trust.
Mike Gapes (Ilford South) (Lab/Co-op)
Last month, I had the privilege of being on a delegation to Israel and Palestine. We met a group of young Palestinians and young Israelis on the MEET project—Middle East Entrepreneurs of Tomorrow— who are working together on IT and technology. That is surely the way to build the trust that my right hon. Friend talks about.
Joan Ryan
I absolutely agree with my hon. Friend. I, too, have visited that project, and it is inspiring. Co-existence is building trust.
I do not believe that trust is built when the Palestinian Authority pumps out an unrelenting stream of anti-Semitic incitement—children’s programmes that teach their young audience to hate Jews; the naming of schools, sports tournaments and streets after so-called martyrs; and the payment of salaries to convicted terrorists—when it is suggested, as Palestinian state media regularly does, that all of Israel is occupied territory; or when the authority continues to insist on a right to return for the descendants of Palestinian refugees to pre-1967 Israeli territory.
Joan Ryan
I will not give way just now.
I do not believe that trust has been built by the experience of Gaza—territory that Israel unilaterally withdrew from 12 years ago only to see it come under the control of Hamas, which is committed to the creation of a Palestinian Islamist state from the Jordan river to the Mediterranean sea.
John Howell (Henley) (Con)
The right hon. Lady has been talking about trust, but how would she assess the fact that when some 8,000 settlers were evacuated from Gaza, they were greeted by almost 20,000 rockets?
Joan Ryan
We all know that being greeted by that number of rockets will do anything but build trust. Hamas uses Gaza as a base indiscriminately to fire rockets into Israeli villages, towns and cities, which the hon. Gentleman was referring to, and build tunnels to carry out terrorist attacks.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Will my right hon. Friend give way?
Joan Ryan
Not at the moment, no. Hamas’s treatment of women, its political opponents, the lesbian, gay, bisexual and transgender community and journalists shows absolutely no respect for the basic human rights of the Palestinian people. Trust is not built when those international institutions, which might be expected to help foster a settlement and promote the values of peace and reconciliation, show that they cannot act as honest brokers.
The UN General Assembly ended its 2016 annual legislative session with 20 resolutions against Israel and only six on the rest of the world combined; there were three on Syria, one each on Iran, North Korea and Crimea, and 20 on Israel. There is no balance there. The UN Human Rights Council adopted 135 resolutions in its first decade of existence, 68 of which—more than half—attacked Israel. UNESCO has denied the Jewish people’s deep historical connection with Judaism’s holiest sites in Jerusalem.
As supporters of a two-state solution, we should commit to building trust with and between Israelis and Palestinians in our words and actions. In our words, we should avoid emotive language that feeds a narrative of victim and villain, recognise and encourage the need for compromise and never fail to acknowledge the complexities of a conflict that has endured for decades, the roots of which run deep. In our actions, we should steer clear of simplistic solutions such as the Boycott, Divestment and Sanctions movement, which, by seeking to delegitimise and demonise the world’s only Jewish state, is morally wrong and does nothing to follow the cause it claims to support. We should give no encouragement to those who deny Israel’s right to exist and refuse to renounce violence. Hamas and Hezbollah are no friends to the cause of a two-state solution.
We should do all we can to assist those in Israel and Palestine who are working for peace and reconciliation. That is why the greatest contribution Britain can make towards building strong constituencies for peace in Israel and Palestine is to increase our support for co-existence work—people-to-people projects that bring together Israelis and Palestinians at the grassroots level—and to back the establishment of an international fund for Israeli-Palestinian peace. The absence of such constituencies is all too apparent. Although 59% of Israelis and 51% of Palestinians still support a two-state solution, those already slim majorities are fragile and threatened by fear and distrust between the two peoples. After two decades, a significant body of evidence now indicates the impact that co-existence projects can have, despite the challenging environment in which they exist. Those participating in such programmes report higher levels of trust and co-operation, more conflict resolution values and less aggression and loneliness. Those are the kinds of measures we should support. I call on the Government to support the international fund for Israeli-Palestinian peace.
Mike Freer (Finchley and Golders Green) (Con)
I had no doubt that today would be an impassioned debate, and we have got off to a good start, hearing quite clear views from both sides of the issue.
As other hon. Members have mentioned, Israeli settlements are not the main obstacle to peace between Israel and the Palestinians by a long stretch. A No. 10 spokesman said in December that settlements are
“far from the only problem in this conflict…the people of Israel deserve to live free from the threat of terrorism, with which they have had to cope for too long”.
The narrative seems to be that the conflict we see today started in 1967, when Israel gained control of the west bank and Gaza, but I ask hon. Members to consider why violence in the region pre-dates the existence of the settlements? It is worth recalling that the west bank and Gaza were occupied before 1967 not by Israel, but by Jordan and Egypt respectively. During those occupations, they refused to grant citizenship to Palestinian refugees, nor did they surrender the territory to be used for a Palestinian state. Where is the condemnation of Jordan and Egypt? The international outcry was deferred until Israel occupied the disputed lands, at which point it became unacceptable for an occupation to take place. From that point onwards, it was unacceptable; before that, no condemnation.
Legality is not subjective. It is often said that Israeli settlements are illegal, but stating that repeatedly does not make it true—[Interruption.] I would like to reply to any inflammatory comments, but I ask hon. Members to bear with me for a moment. The west bank and Gaza remain, as they have always been, disputed territories under international law. There has never been a Palestinian state, so the territory remains ownerless. That is a strong argument for some, although it is not one to which I necessary subscribe.
Mike Freer
The whole point of the Chamber—for those chuntering from a sedentary position—is to expose and discuss those arguments, not to merely rehearse entrenched positions. What, otherwise, is the point of a debate?
Ian Austin
The hon. Gentleman is making an important point. The truth is that a Palestinian state was proposed in 1947, but it was not established by other Arab countries, which chose instead to invade Israel at the moment of its establishment. A Palestinian state could have been established at any point in the following 20 years by Egypt, which controlled Gaza at the time, or by Jordan, which controlled the west bank. He is completely right to make that point.
Mike Freer
I am grateful for that intervention. Of course, the debate is one-sided. People criticise Israel for demolishing tunnels, building walls and raising buildings, but they make no comment when Egypt does exactly the same. The international community is silent on Egypt, and only vocal on Israel. As the right hon. Member for Enfield North (Joan Ryan) said, where is the balance? I said that some people believe that the settlements are not illegal because the land is ownerless. I do not subscribe to that view, but it is important to mention because people hold that view very firmly and the issue is divisive.
Mr Clive Betts (Sheffield South East) (Lab)
Will the hon. Gentleman give way?
Mike Freer
Would the hon. Gentleman gives me a moment? As the right hon. Member for Enfield North said, this is a fundamental issue of building trust. Unless trust is built and the issue of disputed lands is dealt with, the trust deficit will continue.
Bob Blackman (Harrow East) (Con)
Does my hon. Friend agree that, as far as Israel was concerned, the trust was almost ended when the only result of removing all settlements from Gaza was a torrent—an avalanche—of rockets and missiles?
Mike Freer
My hon. and long-time Friend makes a good point. Everyone talks about Israel giving up land for peace. It has given land, but it did not get the peace.
Mike Freer
Sorry, but I have taken two interventions and time is running short.
I wholeheartedly support and hope for a two-state solution that can be established with trust on both sides, but only two parties can decide on borders and other final status issues, and those two parties are Israel and the Palestinians. Accordingly, I welcome the Prime Minister’s reiteration yesterday that direct peace talks remain the best way to secure a solution—direct talks between the two parties involved, not European conferences excluding one of the parties. As I have said before, the two-state solution we all support should be the end, not the start, of the process. I strongly believe that such debates need to focus on the whole and complex picture and should not be imbalanced by focusing on one particular aspect.
Likewise, UN Security Council resolution 2334 does not help to advance peace, as it focuses on Israeli settlements and only serves to reward Palestinian intransigence and unilateralism. Of particular concern to my constituents is that, for the first time, resolution 2334 defines East Jerusalem as
“Palestinian Territory occupied since 1967”,
including the Western Wall and Temple Mount, which are Judaism’s holiest sites. The area also includes the holy sites of Christianity, where Jesus practised his ministry. The definition implies that Jews and Christians visiting their holiest sites are acting illegally, and that is an affront to Christians and Jews alike—[Interruption.] Hon. Members are chuntering from a sedentary position.
Joanna Cherry (Edinburgh South West) (SNP)
Will the hon. Gentleman give way?
Mike Freer
No, I will not. I have given way twice. I am trying to reflect the concerns of my constituents. Hon. Members may not like those views, but it is my job to represent my constituents in an imbalanced debate, whether other hon. Members like it or not. That is the purpose of a constituency MP, and that is what I seek to do.
Mike Freer
No. I have already given way twice.
As I said, and as my hon. Friend the Member for Harrow East (Bob Blackman) said, Israel has given up land for peace, but it has not had the peace, and it is important that this Government continue to support, nudge and cajole our ally to take the right course. However, a premature declaration of statehood by the Palestinians, acting unilaterally, would put back peace, not pursue it. If we support the Balfour declaration, we must stand alongside our ally, Israel, and make that declaration work.
Ian Paisley (North Antrim) (DUP)
I must say that I do believe the point that has been made: the best way to resolve this apparently intractable problem is the same way as peace processes around the world have resolved problems—through face-to-face negotiations between people on the ground, and not through grandiose schemes that play to certain galleries and certain outside influences. That is an important starting point for any peace process ultimately to work.
Ian Paisley
I will not at the moment.
Settlements are a symptom of the conflict in Israel; they are not the cause. If anyone thinks they are the cause of the conflict, they do not understand what has happened in that land. History shows that the unilateral removal and evacuation of settlements did not generate peace at all, but inspired more rocket attacks and the deaths of more innocents in other settlements—that is what it actually did. Instead of being part of a peace process, the unilateral removal of settlements would be a piece-by-piece process—a step-by-step process towards more attacks on innocent people. So let us stop the hand-wringing and the pretence that a unilateral move on settlements will make peace—it will not. For some—not in this Chamber—it is a cover for more aggression, and for most it reflects a misguided view of what is happening on the ground. You cannot negotiate away settlements in advance.
Mrs Ellman
I support the point the hon. Gentleman is making. Would he like to contrast the failure of Israel’s unilateral decision to remove settlements and to withdraw from Gaza to secure peace with the agreement that was made with Egypt in 1979, when Israel withdrew and demolished its settlements as part of an agreement that has lasted until this day?
Ian Paisley
The hon. Lady, who has much experience and knowledge of the area, makes a vital point. If we look at the history of the area, we see that Israel has a very good track record of agreeing concessions on territory whenever peace is made. That was the history in 1979 between Sadat and Begin. When they made an agreement, what did Israel do? It gave up critical Sinai—91% of the territory it won in 1967—once peace was agreed. As part of that peace, Begin completely destroyed the Yamit settlement in Sinai. With Jordan, what was the attitude of the Israelis? When they got a settlement, both sides redeployed to their respective sides and agreed to the international boundaries.
The point made by the hon. Lady is supported by facts on the ground at the end of a peace process. I have been part of a peace process, and you cannot make a major concession at the beginning of a peace process and think that it starts at that point; you make the concessions at the end, on the basis of an agreement. That is what needs to take place.
Rushanara Ali
Will the hon. Gentleman tell the House whether he agrees that Israeli settlements are illegal? While that is not the only factor, it is critical that we address and acknowledge it. Secondly, in relation to Gaza, 800,000 children are living in what the former Prime Minister described as one of the world’s biggest open prisons. These are major humanitarian issues, which we need to confront and address.
Ian Paisley
To be absolutely clear, I am not dismissing any of the major humanitarian issues. I have absolute sympathy, concern and passion for the needs of Israeli and Palestinian children, men and women. I hope that they can live in new, harmonious, peaceful countries, but we have to get to the point of understanding how we get to that solution. The terms of reference for any negotiation should be the starting point that we want to get to a peaceful, secure Israel side by side with a sovereign Palestine. That is how we have to try to get a two-state solution, and the only way we will achieve that is through face-to-face negotiations between the practitioners on the ground.
Most Members will have had the opportunity in the last day or so to see the Women’s International Zionist Organisation project on Upper Committee corridor. Women of different races, creeds and backgrounds from across Israel and Palestine were asked to do one thing: to paint an olive tree. All those different women have given very different perspectives, but they have painted the same thing in all its glory. The important point about that experiment is that if we put people together on the ground and allow them to negotiate and do something face to face, they will ultimately get to a solution.
The message we should send out today is clear and unequivocal: only Israelis and Palestinians, sitting down together face to face, can sort this out and achieve peace in a much tortured and embattled region.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am sorry, but owing to the number of interventions we are going to have to go down to four minutes already.
Dr Tania Mathias (Twickenham) (Con)
I would like to give credit to everybody who has spoken—every speech has added to the debate. I am very grateful that there was cross-party support for bringing the debate forward.
So far, I do not think we have been straitjacketed by polarised views. If someone criticises Palestine, it does not mean they are an apologist for the occupation. If someone criticises Israeli policies, it does not mean they are against Israel or anti-Semitic. I deplore Hamas’s support for terrorism, and I deplore the building of settlements and outposts beyond the green line.
Our monitors say that the motion is “Occupied Palestinian Territories: Israeli Settlements”. That does not do credit to the full motion, which talks about the two-state solution and asks our Government to take a more active role. This is a very important debate, especially in this year of sad anniversaries—anniversaries of occupation, anniversaries of a blockade and, vitally for us and for our Government today, the centenary of the Balfour declaration. The declaration did commend the establishment of a national home for the Jewish people, but, as my hon. Friend the Member for Reigate (Crispin Blunt) said, it also uses the words:
“it being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine”.
That is where our role is critical.
It is correct that the settlements are illegal. I know there is some dispute in Israel about the Geneva convention, but the International Court of Justice, the International Committee of the Red Cross and the United Nations Security Council claim that the settlements are illegal. President Obama, Secretary of State John Kerry—he said this in December—and even Ronald Reagan also claimed the settlements are illegal.
Helen Goodman (Bishop Auckland) (Lab)
The hon. Lady is making a good speech. Does she agree that the Government are to be congratulated on supporting resolution 2334? Will she, like me, be looking to the Minister to say what action the Government are planning to take to enforce resolution 2334?
Dr Mathias
I appreciate the hon. Lady’s intervention. That is the problem with so many resolutions—2336, 242 and 181. Yes, I would look to the Minister to tell us what actions the Government are planning to take.
Worryingly, the number of settlements has increased to over 100, as has the number of outposts, to over 100. They are increasing in number, in population, and in geographical area. A matter of concern for anybody who has seen images of them are the settlements in the area just by Jerusalem, the so-called E1 area, which may split the Palestinian west bank north and south. Gaza and the west bank have been separate since 1947, yet this year there is the danger of even more fragmentation.
Bob Stewart (Beckenham) (Con)
Does my hon. Friend agree that the regularisation law passed by the Israeli Government last Monday makes a two-state solution even more difficult, because settlements that previously were illegal are now legal under Israeli law?
Dr Mathias
I absolutely agree. That is why this debate is crucial.
I completely agree with other Members who have talked about trust and communities coming together. Many Israelis and many Palestinians have wonderful projects, and I have witnessed many of them.
There is a problem where settlements and outposts are on private Palestinian land. I have been in the region during a period of conflict and witnessed many events, but the only time I saw an Uzi being fired at a school was by a settler, not by any person in military uniform.
This year is critical. Our Government have failed on part of the Balfour declaration. I am keen to hear what the Minister says in reply to hon. Members who have said, yes, now is the time to recognise a Palestinian state, but also, even if all the settlements and outposts were dismantled today, there would not be peace, because the negotiations have to proceed about matters such as borders, Jerusalem, the refugees’ right to return, and Israeli bases.
Ian Austin (Dudley North) (Lab)
I oppose anything that stands in the way of the creation of the two-state solution that I have believed in and campaigned for all my life. It is wrong, however, to suggest, as I believe this motion does, that the settlements are the only barrier, or even the biggest barrier, to the peace process. We have to look at the actions of the Palestinian Authority, too: the denial of Israel’s right to exist; the depiction of all of modern Israel as part of Palestine; the incitement to, and glorification of, violence by its media, senior officials and Ministry of Education.
Ian Austin
That is completely right. That is why the Palestinian Authority’s denial of Israel’s right to exist will not build the trust that we have discussed here this afternoon. Nor will the incentivising of terrorism through the payment of salaries to convicted terrorists.
Ian Austin
Not at the moment.
Does anyone seriously believe that the settlements are a bigger barrier to the peace process than Hamas’s terrorism and extremism? Its charter sets out its goals with an explicit rejection of not just Israel’s right to exist, but the very idea of a peace process, which it says would involve the surrender of “Islamic land”. This is an organisation that spends millions, and uses building materials, which could build hospitals, schools and homes, for tunnels and terror. It pioneered suicide bombing in the middle east, and then celebrated the murder of Israelis in bars and restaurants.
Ian Austin
Not at the moment.
Settlements do not, as has been suggested in the debate, make the prospect of a two-state solution impossible. I do not defend settlement-building, but the House should recognise that Israel has shown its willingness to evacuate settlements before—from Sinai in 1982, as part of the Camp David accords, and when it unilaterally withdrew from Gaza in 2005.
John Howell
Will the hon. Gentleman congratulate Israel, because only last month it removed 50 families from land at Amona?
Ian Austin
The hon. Gentleman is completely right to raise that important point. I am pleased that it has been raised because it has not been discussed or mentioned by anyone who has spoken so far.
It is important for the House to recognise that 75% of the settlers are on 6.3% of the land, so when people talk about the west bank being concreted over, they are factually wrong—it is not true.
Ian Austin
I will not give way any more—I have given way twice.
This issue can be dealt with through land swaps. That was accepted as a principle for building a peace process in all recent negotiations. In 2008, Ehud Olmert outlined a plan under which this could have been achieved.
I say all this because I want to argue that with compromise, creativity and concessions on both sides, the rights of both the Israeli and Palestinian peoples to self- determination and to peace can be secured. There are considerable further challenges facing a two-state solution, such as the status of Jerusalem, security, and refugees. However, it is also important to recognise, as has not been sufficiently recognised in this debate so far, that majorities on both sides still favour a two-state solution. None of these issues is insurmountable if there is a willingness on both sides to negotiate, to compromise, and to make concessions.
The solution is not one-sided, simplistic motions and calls for grand international gestures unilaterally imposed on the peoples of Israel and Palestine. In fact, grand gestures are counter-productive to the cause of peace because they suggest to the Palestinian people and the Palestinian Authority that there is a route to a Palestinian state that can be imposed from outside that does not involve face-to-face direct talks and negotiations, which is the only way this issue is going to be solved. The truth is that there is no alternative that will end the bloodshed.
Ian Austin
I have given way twice.
We should be doing everything we can to develop dialogue, to promote direct negotiations between the two sides, and to build trust instead of boycotts, sanctions and other measures that just drive people further and further apart. I want Britain to support organisations like the one we heard about earlier, which my hon. Friend the Member for Ilford South (Mike Gapes) and I visited recently in Jerusalem, that bring Israelis and Palestinians together to work to build the foundations for two viable states living peacefully alongside each other. It would have been really good if more Members had been in the Strangers Dining Room yesterday to hear about the WIZO project and what women—Jewish, Muslim and Christian women—in Israel and in Palestine are doing to work together to create the building blocks for peace. I want Britain to be doing more to promote economic development, trade and investment on the west bank, encouraging brilliant projects like one that I have been to see—the new Palestinian city of Rawabi on the west bank. I want to see Britain pushing internationally for the demilitarisation and reconstruction of Gaza.
Peace talks have produced results in the past, they have come close to a breakthrough on several occasions since, and they will have to do so again, because the only way this conflict will be resolved is by people on both sides negotiating, compromising, and working together towards the two-state solution.
John Howell (Henley) (Con)
It is a great pleasure to follow the hon. Member for Dudley North (Ian Austin) because, like him and the hon. Member for Ilford South (Mike Gapes), I have been fully involved in visits to Israel and the west bank—six over the past three years—with organisations that encourage co-operation between Israelis and Palestinians. I also chair events here where those organisations come forward and describe what they are doing. I have on several occasions been to Tel Aviv to see Save a Child’s Heart, a brilliant organisation that goes out of its way to treat Palestinian children who have heart problems. That involves fine surgery that requires a great deal of skill.
Bob Blackman
My hon. Friend mentioned Save a Child’s Heart. Will he confirm that children from other Arab countries and beyond receive life-saving treatment at the hospital in which it operates?
John Howell
My hon. Friend is absolutely right. The number of Arab children treated by the Israeli doctors at the hospital is phenomenal, and it sets a brilliant example for the whole region.
Ian Austin
I want to emphasise this point—[Interruption.] My hon. Friend the Member for Hammersmith (Andy Slaughter) is laughing and sneering in his usual way, but he ought to listen to this point, because it is really important. The truth is that we come into debates such as this one and hear a binary—[Interruption.] Madam Deputy Speaker, hon. Members can shout as much as they like, but I am going to speak.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. No one can shout as much as they like. The hon. Gentleman will be heard.
Ian Austin
Thank you, Madam Deputy Speaker. We hear a binary, simplistic, polarised debate, when the truth about Israel and Palestine is that people on the ground are working together, co-operating, talking and building the peace process that we all want to see. It is about time people listened to that argument instead of laughing at it.
John Howell
I thank the hon. Gentleman kindly for his comments. I was about to come on to that.
Madam Deputy Speaker
Order. We are having very short speeches, and the interventions have been longer than the speeches. Let us allow Mr Howell to make his speech.
John Howell
Thank you, Madam Deputy Speaker. The point I was about to make was that here we have a wonderful example of co-operation between the Israelis and the Palestinians, and yet we are focusing on one issue—settlements. I would be the first to admit that settlement expansion is counter-productive, but we have heard from speaker after speaker that settlements are not the cause of conflict. They are not the cause of the violence, which long predates the existence of settlements, in this part of the world.
If that is the case, why are we picking settlements out for discussion? Settlements are one of the five final status issues, which also include borders, the status of Jerusalem, security and Palestinian sovereignty. A whole range of issues need to be addressed if the situation is to be moved forward. I was able in a recent meeting of the Council of Europe to expand on the matter for a little longer than I have now, particularly in relation to the activities of Hamas in Gaza. As I have already mentioned in an intervention, the Israelis pulled out 8,000 Israeli settlers, including their dead, from Gaza and they have been greeted by the almost 20,000 rockets that have been launched at them.
The interesting thing about Gaza, as my hon. Friend the Member for Finchley and Golders Green (Mike Freer) has mentioned, is that the restrictions on it are being implemented by Egypt as well as by Israel. I spoke to Anwar Sadat, the leader of the Reform and Development party in Egypt, and he said, “We are not going to sort out the problems of Gaza until terrorism in Egypt stops.” That was his message for the area. Settlements in East Jerusalem, for example, account for 1% of the territory.
The motion calls for the internationalisation of the peace process, and I do not think that that is very productive. The question that has been asked on a number of occasions is: what is required? What should we do? Direct peace talks are required between Israel and the Palestinians, without preconditions. Unfortunately, the Palestinian side comes up with preconditions every time, and those preconditions usually involve the release of yet more terrorists. If we look at Israel’s record over settlements, we see that in 2010 there was a 10-month moratorium, but the Palestinians allowed nine months to slip by before they resumed peace talks; they did not take it seriously. A month ago, as I have mentioned, Israel evicted 50 families from homes in Amona. In 2005, we saw the situation in Gaza, and in 2008 Israel made a fantastic offer to withdraw from 94% of the west bank.
The issue that needs to be discussed is how that fits in with land swaps. That needs to be dealt with face to face in negotiations between the two parties. At the moment, all that Israel has got out of the process is a denial of its right to exist, an intensification of violence and demands for the release of yet more terrorists. I do not think anyone should ignore the fact that that is happening because the Palestinians are scared of their own elections. Polling suggests that they are going to lose, whether we are talking about the Palestinian Authority or Hamas, and, sadly, they are going to be succeeded by organisations that are in favour of ISIS.
Simon Danczuk (Rochdale) (Ind)
I thank the right hon. Member for New Forest West (Sir Desmond Swayne) for securing this important debate. This is not the first time I have raised the issue of Palestinian rights in Parliament; sadly, I am sure it will not be the last.
In 2012, when I was chair of Labour Friends of Palestine and the Middle East, I had the privilege of visiting the west bank for the second time. I saw at first hand the degrading and inhuman way in which Palestinians were treated by the Israelis, who had demolished or stolen their homes. I also saw the effect that that had on Palestinian businesses and farmers. The suffering and the sense of loss experienced by the Palestinian people are indescribable. The loss that they have suffered is illegal under international law—a theft of land that continues to be denounced by world leaders across the globe and condemned, quite rightly, by the United Nations. Above all else, the perpetual land grabs are not only immoral and illegal, but a barrier to peace.
Although the Palestinians must provide assurances that Israel will be able to live in peace beside a Palestinian state, the Israelis, too, must come to peace talks in good faith. How can Palestinians take a peace offer seriously when settlements continue to be built? How can Palestinians trust Israel to recognise a Palestinian state when their homes are being demolished? How can Palestinians believe in a genuine two-state solution based on the 1967 borders when Israel continues its encirclement of East Jerusalem? The settlements must stop in order to give any framework for peace a chance, and Britain must be at the forefront of that effort. Britain has a moral responsibility to the Palestinian people, given our role in the region and our betrayal of the people who lived under our mandate after the first world war.
Given the new President in the White House, our country has to play a more important leadership role. Many in this House may be sceptical about the idea that the US has ever been an honest broker in this conflict. However, despite its strong ties with Israel, the US has condemned settlements and aggression. Trump’s view of the conflict appears to be a world apart from that of the former Secretary of State, John Kerry. Trump has made potentially inflammatory remarks about moving the US embassy to Jerusalem, and he has selected a pro-settlement real estate lawyer to be the US ambassador to Israel. That has so emboldened the Israeli right that within days of the Trump inauguration, the Israeli Government announced their plans to build a further 2,500 housing units in the west bank.
Helen Goodman
Does the hon. Gentleman agree that to make it clear to the Israelis how unsatisfactory the situation is, we should adopt the same policy as we have adopted towards the Russians over their invasion of Crimea and introduce personal sanctions on those who promote and benefit from the settlements?
Simon Danczuk
I appreciate the intervention, and I have to agree that there needs to be some consistency in British foreign relations regarding our attitude towards different countries.
Let me start to conclude. I am glad that Britain, alongside the EU, denounced the awful regulation law allowing further housing units to be built. That allays some of the fears I have that Britain is turning its back on the safeguarding of human rights and the promotion of democracy. However, I worry that in this post-Brexit world, such values will be sidelined as the Government seek to secure trade deals. I know that trade was on the agenda at the Prime Minister’s meeting with the Israeli Prime Minister and I am sure many benefits can be gained from the new UK-Israel trade working group, but will the Minister assure me and my colleagues that the UK’s opposition to the new settlements in the west bank will be made forcefully? What is more, will he assure us that increased trade with Israel will not benefit those making a living out of the illegal occupation? Such small steps could make a difference.
In conclusion, Britain must live up to its responsibilities to the Palestinians. The aid we give makes a difference and it must continue, as must our criticism of illegal settlements, and our vocal condemnation must get louder if the US Administration choose to turn their back completely on the Palestinian people.
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow the hon. Member for Rochdale (Simon Danczuk), who made an eloquent speech.
The motion before us is a curate’s egg—good in parts. At its heart, there is a false assertion. As hon. Members have said, the only way in which this crisis in the middle east will ever be solved is by face-to-face negotiations between the Palestinian leaders and the state of Israel. As we all know, this area of the world has had a long history of being occupied by empires down through the ages. The Ottoman empire ruled the area until the time of the first world war, when the British mandate came in, and the reality is that the west bank was annexed by Jordan in 1950. To call it occupied territory is of course to suggest that a country once existed, but it has never existed. That is the real dilemma in this whole problem.
I absolutely think that United Nations Security Council resolution 2334 should not have been supported by the United Kingdom Government; it was wrong for them to do so. It was passed in the dying days of President Obama’s presidency, and his refusal to support Israel in its hour of need was a deliberate swipe at that country, as history will show. However, I congratulate my right hon. Friend the Prime Minister on distancing herself from John Kerry’s one-sided speech. That was a unique point in history, because it was the first time that a British Government had distanced themselves from the serving Secretary of State of our greatest ally in the world. I congratulate the Government on not sending individuals to the Paris conference, which attempted to internationalise the solution to the problem.
I want to ask the Minister about one particular issue. What is his view of the Oslo accords and the agreements that the Palestinians made with the Israeli Government? Under those agreements, it was quite clear that developments could take place in area C of the west bank—that was permitted and agreed to by the Palestinians—so to call this illegal is incorrect.
Equally, we have heard that United Nations resolution 2334 would prevent Jews and Christians from celebrating at the western wall and at the greatest Christian sites. Before 1967, the western wall was out of bounds to Jews, and the same thing would happen again were this implemented. The green line was never, ever an international line, and there has never, ever been an international agreement on the exact borders of any potential state of Palestine.
I want to talk about something that has not been mentioned thus far: the plight of the 2.3 million Jewish refugees who were forced out of Arab countries and had to flee for their lives. Some of them went to Israel, some to the United States and others to parts of Europe. They are never mentioned, but there clearly has to be a home for them. When the Israeli Government put up housing developments for Jewish people who are refugees from Arab states, we should not condemn them but congratulate them on providing those facilities.
Nigel Huddleston (Mid Worcestershire) (Con)
My hon. Friend is making very pertinent points. Does he agree that the whole point of this debate is that concessions need to be made on both sides? It would be unfortunate if people interpreted it as meaning that everything would be solved if only Israel did this or that. Substantial concessions are needed from both sides.
Bob Blackman
My concern, and that of many hon. Members, is that the Palestinians are trying to internationalise the issue—taking their case to the United Nations, and seeking help and assistance from outside—but are not getting the real issue, which is the need for face-to-face talks with the state of Israel to resolve the existing problems so that we can reach a conclusion with a secure state of Israel and a secure state of Palestine. We should always remember that the green line represents an area that would be indefensible for the state of Israel in the event of another war.
Joan Ryan
The hon. Gentleman is making a powerful speech and giving a historical analysis that has been somewhat lacking. Does he agree that in the process of trying to internationalise the process, rather than accepting that there have to be direct, face-to-face talks, the Palestinians are being misled into believing that peace can be found for them without their having to make any compromise? As the hon. Member for Mid Worcestershire (Nigel Huddleston) said—many hon. Members agree—compromise and trust building on both sides is required.
Bob Blackman
We clearly have to build trust and experience on all sides. I have had the experience of going to Israel on six occasions, and I have also had the opportunity to visit the west bank and Jordan with the Palestinian Return Centre. The reality is that the Jordanians did not build trust among the Palestinians at that time; they refused to give them status or title to their land. The problem that still remains is the difficulty of resolving those particular land issues. As the right hon. Lady has outlined, we must build trust through joint projects and by bringing people together so that there can be negotiation, with trust being built between the peoples, rather than their being separated.
It is quite clear that everyone would like the security barrier around Jerusalem to be removed, but it can be removed only when there is trust between the Israelis and the Palestinians. Once that is in place, we can achieve the dream of a two-state solution, with proper viable borders and proper security for both states.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
It is extremely important that we recognise and reaffirm the importance of two states—Israel and Palestine—in resolving this tragic conflict between two peoples who are both legitimately seeking self-determination. Together with that, there must be a very clear understanding from the Palestinians that Israel, as a majority Jewish state, is there to stay as part of the middle east, and is not, as they too often suggest, an imposition from outside the area.
The origins of the settler movement, which I do not support, are not often known or understood. In 1967, Israel survived a defensive war, and then found that it was ruling Gaza, which had previously been under the control of Egypt, and the west bank, which had previously been under the control of Jordan. There were strong movements in Israel at the time to trade that land for peace—to trade it for recognition, which is the most basic part of peace. It is tragic that the Arab League Khartoum conference held in 1967 stridently declared to Israel: no peace, no recognition, no negotiation. That gave the green light to the settler movement that followed.
Ian Austin
My hon. Friend makes a really important point. She is also showing why comparisons between Israel and Russia are utterly fatuous. In 1967, Israel was invaded, but it managed to deal with the invasion. That was when the west bank and Gaza came under Israel’s control. That is the issue that both sides ought to be sitting down to try to resolve at the moment.
Mrs Ellman
I agree with my hon. Friend.
Settlements are a problem, but they are not the only problem, and they are certainly not the only barrier to peace. In Sinai in 1979, in an agreement with Egypt that survives to this day, Israel withdrew not just from Sinai but from its settlements there. Israel unilaterally withdrew 8,000 settlers and soldiers from Gaza in 2005. It demolished its settlements and, tragically, that has not led to peace. In every attempt to make peace—there have been a number in recent years—with Palestinians and others, a solution has been found to settlements, whether that means land swaps or settlements becoming part of a Palestinian state.
Crispin Blunt
The hon. Lady’s version of history and what happened in 1967—she agreed with the hon. Member for Dudley North (Ian Austin)—is somewhat disputed. The key issue is that the settlements on the west bank are changing the physical geography. They are a physical barrier to change, rather than simply a policy barrier to change for both parties. The scale of the challenge on the west bank is that there are 400,000 rather than just 8,000 settlements. Therefore, vast political investment is needed, and it becomes more difficult every day for Israel to deliver an agreement as the settler interest becomes greater.
Mrs Ellman
I agree that the settlement policy is certainly not helpful, but it has developed because of the intransigence of the Palestinians and a failure to reach agreement.
I accept that settlements are a problem, but they are not an unsolvable one and they are certainly not the only one. One critical problem and barrier to resolving the situation is the deliberate incitement by the Palestinian Authority and Hamas. Hamas is explicitly anti-Semitic—it has talked about Jews ruling the world and made a statement about killing every Jew behind a rock—but the Palestinian Authority is not totally innocent either.
I draw hon. Members’ attention to the Palestinian campaign of incitement to violence and individual terrorism. In the 12 months after October 2015—it is not finished yet—there were 169 stabbings, 128 shootings and 54 car rammings. Forty-six Israeli civilians were killed and more than 650 were injured on the streets of Israel. Individual terrorists—they are sometimes as young as 12 and 13—are fired up with hatred to go out on those streets and kill Israelis. That includes a teenage boy pulling a 13-year-old boy off his bike and stabbing him. That is because of incitement and the creation of hatred.
Mrs Ellman
Not just now.
The Palestinian Authority has taken actions such as naming schools after terrorists. One is named after Dalal Mughrabi, who organised the 1978 coastal road massacre, when a school bus was attacked and 37 people were killed, including 12 children. That is just one example of the Palestinian Authority—not Hamas, but the Palestinian Authority—honouring terrorists, calling them martyrs and encouraging others to do the same.
I could mention the case of Dafna Meir, a nurse and mother to six children who was murdered in her home. Thirteen-year-old Noah was stabbed and critically injured while he rode his bike on the streets of Pisgat Ze’ev in northern Jerusalem. Alon Govberg, Chaim Haviv and Richard Laken were killed as they rode on a bus in Armon Hanatziv in southern Jerusalem. They were victims of what President Abbas himself called a “peaceful uprising”.
If that does not make the point enough, I remind hon. Members that, just last month, President Abbas’s party honoured the martyrdom of Wafa Idris, the first Palestinian female suicide bomber, who in 2002 used her cover as a volunteer for the Palestinian Red Crescent to enter Jerusalem in an ambulance. There, in the words of Fatah’s official Facebook page, she used
“an explosive belt…so that her pure body would explode into pieces in the Zionists’ faces”.
She did indeed kill an Israeli and injured more than 100 other people.
Mrs Ellman
I am sorry but time is running out.
Those acts are horrendous. I ask all hon. Members to consider the role of incitement and the stirring up of hatred in creating a massive barrier to peace. The solution is for both peoples—Israelis and Palestinians—to sit together in direct talks and agree a compromise and a negotiated agreement, so that there is a secure Israel and a secure Palestine, and a homeland for Israelis, Jews and Palestinians.
Mr Philip Hollobone (Kettering) (Con)
It is a great pleasure to follow the hon. Member for Liverpool, Riverside (Mrs Ellman), whose views on this issue I greatly respect. She clearly knows a huge amount about the subject. She is right about the disgusting incitement from the Palestinian side. On the other side, however, some of the language and behaviour of extremist Jewish settlers, particularly in places such as Hebron, is equally vile. We will never find a resolution to the conflict unless we deal with both sides of the argument.
I have been to Israel, the west bank and Gaza seven times. I have had the peculiar privilege of standing in Gaza looking out over to Israel, and of standing in Israel looking out over to Gaza. My late uncle served with British forces in Mandate Palestine after the end of the second world war. The Northamptonshire Regiment was instrumental in liberating Palestine, which is now Israel, from the Ottoman empire in the first world war. There were three huge battles in Gaza. Six men from the town of Desborough in my constituency were killed on the same day in the first world war in the third battle of Gaza. I had the privilege of laying a wreath on their behalf at the Commonwealth war graves cemetery in the middle of Gaza City on one of my visits.
Dr Mathias
Does my hon. Friend agree that it is extraordinary that, even during all the conflicts and intifadas, the British cemeteries in Gaza have been well maintained?
Mr Hollobone
Yes, and the elderly gentleman who maintains the Commonwealth war graves in Gaza City was awarded the MBE, of which he was extraordinarily proud. I believe he has been looking after the graves for something like 60 years.
My point was that Britain’s connection with the region goes back an awfully long way. For the best part of 30 years after the first world war, we did our best to try to come to a reconciled solution between Arabs and Jews. As a nation we failed, which was why we pulled out in 1948.
We will not solve the problem of Israel and the Palestinians this afternoon. We are being asked to agree to or oppose a motion on Israeli settlements. Yes, they are not the only issue, but that issue is the only one on the Order Paper. I support Her Majesty’s Government’s opposition to Israeli settlements.
Stephen Timms
I agree with the position the hon. Gentleman sets out. Does he agree that it would be helpful if the British Government made it clearer that British firms should not be trading with those illegal settlements?
Mr Hollobone
I hope that the Minister will address that in his response to the pertinent question asked by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne). What more are Her Majesty’s Government going to do to let the Israeli Government know that we are opposed to settlements—and that we mean it? What more will we do apart from just shouting from the touchline?
Ian Austin
What evidence is there that sanctions and boycotts, which drive people further apart, will achieve anything? Surely we should be arguing for trade and investment with the west bank—
Mr Hollobone
I am not in favour of boycotts or divestment, whatever the issue. I am in favour of Her Majesty’s Government having a robust method of action against the Israeli Government to ensure that they are clear about our policy. I voted for the recognition of Palestine and would do the same every day of the week. I am also a friend of Israel, which is a fantastic country that has brought many benefits to the world. We have heard about Save a Child’s Heart and the work that Israeli surgeons are doing to help vulnerable children from all nations around the world, including Muslim nations. Israel is a leader in the hi-tech industry and in medicine—many NHS medicines come from Israel—and a key ally in very rough and dangerous part of the world. But our friend and ally Israel now finds itself in the 50th year of a military occupation of 2.5 million people. Speaking as a candid friend, surely it is our duty to say to Israel, “You cannot go on like this.”
Hon. Members have spoken in favour of international and bilateral talks. I do not mind particularly what the talks are, so long as people start talking to each other. Clearly, we will ultimately have to end up with bilateral talks, but it is wrong to say that international talks are a diversion. The state of Israel was established as a result of international action through the United Nations. We have to be realistic. As friends of both the Israelis and the Palestinians, we have to say, “For goodness sake, how long does this have to go on?” Nowhere in the history of the world has there been 50 years of military occupation.
Both Israel and Palestine could have a fantastic future. Both are very entrepreneurial countries. Both have a lot of get up and go. Both have very civilised and educated peoples. They could be leaders to the world in how two conflicting peoples can come together in reconciliation and develop a wonderful future for themselves. Her Majesty’s Government, in the 100th year of the Balfour declaration, have a bigger role to play than they might realise. They should seize this opportunity to knock heads together and say, “How can Britain help you two, our friends, to come together?”
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. It will be obvious to the House that so far, because of lots of interventions, every speech has been well in excess of four minutes. We now have to reduce the time limit to three minutes.
Mr Clive Betts (Sheffield South East) (Lab)
I would like to draw the attention of the House to my entry in the Register of Members’ Financial Interests. Last year, I went to the west bank. My visit was paid for by Fatah UK and organised by Travel2Palestine.
It is clear that the settlements are in breach of international law. The International Court of Justice and the UN resolution in December last year found that to be the case. There should not be any argument about that; we should just accept that the settlements are illegal and work from there. The hon. Member for Kettering (Mr Hollobone) is absolutely right. The motion before us is about the settlements and we should concentrate on that. That is what we are discussing today. No one is saying that they are the only barrier to peace, but they are a barrier. Removing the settlements would not create a peaceful agreement. Nevertheless, while the settlements are there—certainly while they continue to be built—we are not going to get a peace agreement. That is the reality.
The Israelis say they want talks to begin without preconditions, but they do not. They want the precondition that they can carry on building settlements while negotiations take place. That is absolutely fundamental. For the Israelis to say that they will stop building the settlements and negotiate while no settlements are being built would be an important step forward.
The problem with the settlements being a barrier—this point has just been made—is that they fragment the land that Palestine will form as a state. It is impossible to form a geographical entity of the state while there are settlements dotted around it. That is the problem. We could partly deal with it by swaps and land swaps. The Palestinian Authority does not rule out land swaps as part of eventual settlement, but the more settlements that are built, the harder an eventual peace agreement will be to formulate. That is the reality.
Dr Monaghan
Does the hon. Gentleman agree that, given that the settlements in the west bank are illegal, there will be no peace unless Israel starts to recognise and adhere to international law?
Mr Betts
Absolutely. There cannot be a peace agreement when one side does not recognise international law. That goes without saying.
The impact of the settlements on the economy of Palestine has to be understood. Palestinian people describe their journeys to work, a distance of 6 or 7 miles, as taking two or three hours because of the checkpoints that exist by and large to protect the settlements and Israeli interests. That is the reality of everyday life for Palestinian citizens and it damages the economy. The mayor of Hebron explains that the city wants and needs to expand. It cannot expand because the area outside Hebron is in area C, which is controlled by the Israelis, who do not allow the Palestinians to build there. Hebron is constrained. It cannot expand and that destroys its economic base.
There is hate and division. Go to the checkpoints and see the hatred that is formed between young Palestinians held up at gunpoint and strip-searched in the street, and the young Israeli soldiers who are the same age. The whole process brutalises both sides and sows the seeds of hatred for years to come.
Look at the racism. I am sorry, but it is racism when, because of their race, people are treated differently on whether they can build on a piece of land, get through a checkpoint easily or have to go to a different checkpoint, or, most fundamentally, have access to water. Israeli settlements have access to water seven days a week in the summer. Palestinians have to put water tanks on their roof, because they do not have the same access. What could be more discriminatory than that?
The Government supported the UN resolution in December. What will they now do to implement it?
Tommy Sheppard (Edinburgh East) (SNP)
This is the longest-running conflict in the modern era and its solution seems further away than ever, but its very intractability is a reason why we should rededicate ourselves to trying to move the process forward. Every time the international community has considered the competing claims in the region, they have arrived at the same conclusion: that two states living side by side, one Jewish in character and one Arab in character, in peaceful coexistence is the solution to aim for. That was true when Balfour and Sykes looked at it 100 years ago; it was true when the fledgling UN considered what to do after the mandate in the late 1940s; and it was true when the Palestinians and the Israelis met in Oslo, under international support, in the last round of peace talks.
There are two fundamental truths for people who believe in the two-state solution. First, one state exists and one state does not. Trying to create and bring into existence the state of Palestine is therefore the world’s unfinished business, and we should support that. Secondly, there cannot be a two-state solution while one state is in military occupation of the lands designated for the other. At some stage, the occupation will have to end if there is to be a two-state solution.
In Oslo, it was agreed that the occupied territories would be divided into zones, with the new Palestinian Authority taking responsibility for the urban areas and the Israeli occupying force responsible for 62% of the land in area C. That, however, was envisaged as a transitional arrangement. People thought that by the end of the century that land and that responsibility would transfer to the Palestinian Authority as it emerged and became a fully-fledged Palestinian state. Not only has that not happened, but the actions of the Israeli Government since have made it even further away than it was then 25 years ago.
Dr Monaghan
Does my hon. Friend agree there is an enormous power imbalance between Israel, a state with the fourth largest and strongest army in the world, and Palestine, which is not a state and does not have an army? Palestinians have already conceded 78% of their land. International pressure is needed now. Ignoring UN resolution 2334 is not the way forward.
Tommy Sheppard
I agree, which is why the people who talk about face-to-face talks really ought to consider that this is a David and Goliath situation. In any conflict where that situation has existed and peace has been achieved, it has been with international support and an international framework. It was true with the Good Friday agreement in Northern Ireland, too. We need to listen to the Palestinians when they appeal for our help and support to try to achieve a resolution.
Over the past 25 years, the Israeli Government have, in contravention of the fourth Geneva convention, moved half a million of their own civilian population into an area in which they are in military occupation. That is why people call the settlements illegal. At some stage, they will have to be dealt with. There will need to be land swaps. Some settlers may wish to be Palestinian citizens and some may wish to take advantage of relocation schemes to go into Israel proper, but the issue will have to be dealt with. Every brick that is laid and every new apartment that is built in the settlement complex puts a solution further away. When in a hole, stop digging; that is why the resolution calls on the Israeli Government to review their policy and to put a cessation on settlement building so that peace talks can begin. To have peace talks, there has to be a ceasefire; stopping building settlements would be the equivalent.
I will finish with four asks to the Minister and the Government. The first is that we implement UN resolution 2334, particularly with regard to differentiation of the occupied territories in Israel proper. The second is—I am out of time.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The hon. Gentleman will to find another way of making his other points.
Imran Hussain (Bradford East) (Lab)
I put on record my support for UN resolution 2334, which calls for peace, denounces violence in all its forms and crucially, condemns the building of illegal settlements by the Israeli Government. Time is pressing, Madam Deputy Speaker, so although I recognise that there are many issues to discuss, I will concentrate my remarks on the illegal settlements that the Israeli Government are constructing. Those are clearly obstructing the peace process, which I am sure all Members agree needs to resume urgently.
Surprisingly, one or two Members have cast doubt on whether the settlements are illegal. The position is very clear. For the sake of clarity, let me cite the view of some authorities. The settlements have been declared illegal under international law by numerous UN resolutions, the Geneva convention, the International Court of Justice, the US State Department, the Rome statute, article 2 of the UN charter, the Hague regulations and, most importantly, by this House and Ministers of all parties. The illegality of the settlements was also reaffirmed by UN resolution 2334, which faced no opposition when it was voted on. I could cite other examples, but however we look at the situation, what cannot be contested is that the settlements are illegal.
I turn to the way in which the ongoing construction of illegal settlements obstructs the peace process. A two-state solution is the only viable option for peace in the region, but if we continue to see Palestinian land disappear under illegal settlements, the two-state solution will be dead and with it the hopes of peace for Palestinians and Israelis alike. The answer is a two-state solution—not a one-and-a-bit-state solution. Palestinians will not negotiate for that lesser deal, because it is not the one that they were promised under UN agreements, nor will they negotiate a deal on who gets what land at a time when the Government of Israel are taking chunk after chunk of the very same land away.
Time does not permit me to speak for much longer. What is paramount for peace in the region is peace between Israel and Palestine. That is what I want to see, as I hope we all do, but illegal settlements have to stop before we can reach that point or even get back on the path to it. I ask the Minister to condemn the further illegal settlements announced since resolution 2334, and will he tell me what concrete steps the Government are taking to move forward?
Naz Shah (Bradford West) (Lab)
Like many in this House who are determined to see a peaceful solution in the middle east, I welcome this timely debate, which allows us to reaffirm our support for lasting peace and to commend the Government on signing UN resolution 2334 last December. As the Palestinians have done since 1993, I recognise and accept a two-state solution and Israel’s existence. However, the last two weeks has seen that vision placed at greater risk by the acts of the Israeli Government—a democracy that does not live up to the values that it espouses. The passing of the regulation law, which even the hard-right MP, Benny Begin, described as the “robbery law”, flies in the face of the resolution and international efforts for peace.
The UN resolution could not set out more clearly the international law on settlements and settlement expansion in occupied Palestine. We as a country have been very clear that settlements are an obstacle to peace, have no legality and are against international law. We have tolerated Israel changing the physical reality on the ground. We must never tolerate any attempt to change the legal position.
In drafting and signing the UN resolution, we have committed ourselves to a number of essential positions: we call on both sides to act on the basis of international law; we reiterate that settlements and further expansion are a flagrant violation of international law and an obstacle to peace; we accept no change to the 1967 border that is not agreed by both sides; and we will do everything to encourage peace.
Passing the regulation law flies in the face of everything that we declared at the UN. It is a travesty for a Government to legislate in a land that is not under the rule of their Parliament, where the people of that land have no representation. It is a signal that the UN, the ICC and global diplomatic efforts have no impact on the actions of the current Government.
Many have spoken out in condemnation of the law, which the UN special enjoy to the middle east described as crossing “a thick red line” and by a former Israeli Minister as “evil and dangerous”. It is against the principles of democracy and Israeli law and even the Israeli Attorney General is likely to argue against it in court.
I congratulate the right hon. Member for New Forest West (Sir Desmond Swayne) on securing the debate, and I support the motion. It is high time that we moved beyond condemnations and hollow words of support. We must support moves towards accountability and demonstrate our commitment to the rule of law. Only then can we shape a different future for these children and generations to come. Celebrating Amona is disheartening. Israel was just abiding by the law—it was asked to remove occupants from Amona, and that was not to be celebrated.
Andy Slaughter (Hammersmith) (Lab)
I refer to my entry in the Register of Members’ Financial Interests; I visited the west bank last year as a guest of Medical Aid for Palestinians. I disagree with Members who have criticised the motion because it does not deal with issues other than settlements. A motion on settlements is perfectly appropriate. I believe that they are not the only issue, but they are the most important one.
As the mover of the motion, the right hon. Member for New Forest West (Sir Desmond Swayne), said, it is a relatively anodyne motion in that sense, so I hope everyone can support it. I say that for two reasons. First, the tragedy of Palestine is the occupation. The length of the occupation and the fact that it has happened are what distinguishes this from many other conflicts around the world. The settlements are the embodiment of occupation. Everything else that is wrong in the occupied territories flows from those settlements; 85% of the barrier, which is there to protect the settlements, is in occupied territory. It has been said that settlements occupy only 1.5% of the land, but they control 42.7% of the land. Palestinians in the west bank are not allowed to build on 60% of the land. There are checkpoints, detention often without trial, and appalling settler violence, with more attacks by settlers on Palestinians than there are attacks by Palestinian settlers in the west bank. We have heard about all the types of petty apartheid, separate legal systems and a military law for Palestinians controlled by the Defence Minister, Avigdor Lieberman, a settler himself, who is on record as having said that Palestinian citizens of Israel who are disloyal to Israel should have their heads chopped off. He is in charge of the west bank.
Secondly, we are at a crucial point, with 6,000 new settler units having been declared since Donald Trump went into the White House. As we have heard, there is the burglary law, as it has been described by a member of Likud, with 4,000 illegal outposts now legitimised.
In the short time I have left, let me make one point to the Minister. Despite the alternative facts we have heard this afternoon, we know that settlements are illegal. What are the Government going to do about them? Why can we not stop trading with illegal settlements? It would not be a boycott—let us not confuse one for the other. Why can we not ensure clearer guidelines for businesses to stop them doing that? Why can we not prevent financial transactions, as was done with Crimea, and why can we not have a database, as the UN asked for, in respect to all those issues? I would be grateful for specific answers from the Minister. Of course we are looking for a condemnation, but we are also looking for action from the British Government.
Mrs Ellman
On a point of order, Madam Deputy Speaker. I apologise. When I spoke, I omitted to draw attention to my entry in the Register of Members’ Financial Interests concerning my recent visit to Israel as part of a Labour Friends of Israel delegation. I would like to correct the record.
Madam Deputy Speaker (Mrs Eleanor Laing)
I am grateful to the hon. Lady for correcting the record.
Imran Hussain
Further to that point of order, Madam Deputy Speaker. I, too, omitted to draw attention to my entry in the Register of Members’ Financial Interests. I, too, visited Israel and Palestine with a delegation last year.
Tommy Sheppard
Further to that point of order, Madam Deputy Speaker. I also wish to draw attention to my entry in the Register of Members’ Financial Interests. I went on a trip to Israel and the west bank last year with the UK branch of the Fateh Movement.
Madam Deputy Speaker
It is for individual Members to decide how, and in what manner, they declare where they might have benefited, financially or otherwise, from an outside organisation with an interest in the current debate. Of course the rules are very strict about what is in the Register of Members’ Financial Interests, as the right hon. Lady has just said.
Joan Ryan
Further to that point of order, Madam Deputy Speaker. Having heard your guidance, I declare that I have made several visits to Israel and Palestine over the last year, all of which were supported and financed by Labour Friends of Israel, but from which I have made no personal gain.
Richard Burden
Further to that point of order, Madam Deputy Speaker. Not wishing to be left out, I wish to draw the House’s attention to my entry in the Register of Members’ Financial Interests regarding a visit to the west bank last year, co-organised by the Council for Arab-British Understanding and Medical Aid for Palestinians and paid for by the Sir Joseph Hotung Charitable Settlement.
Madam Deputy Speaker
Thank you. Would anyone else like to tell us of their travel experiences?
Ian Austin
Further to that point of order, Madam Deputy Speaker. I did not realise we were required to do this. I said in my speech that I had been to Israel recently. Given that everyone else has done so, I feel that I ought to draw attention to my entry in the Register of Members’ Financial Interests. I visited Israel recently. I met politicians in Israel and Palestine. The trip was funded by Labour Friends of Israel.
Madam Deputy Speaker
The hon. Gentleman mentioned that. I recall him saying it. We have now taken up the time allowed for an entire speech, but it is right that hon. Members behave honourably in these matters.
Mr Mark Hendrick (Preston) (Lab/Co-op)
As has become the fashion, I declare my visits to Palestine and Israel over the past 15 years financed by various organisations.
The focus of this debate—settlements—is narrow but nevertheless very important. Some hon. Members have sought to trivialise the issue of settlements, but while they might not be the most important issue, they are nevertheless very important. We need only look at UN resolutions 242 and 338, dated 1967 and 1973, in which the key phrase refers to the:
“Withdrawal of Israeli armed forces from territories occupied in the recent conflict”.
It is clear that the Israeli armed forces will not be withdrawn as long as settlements exist in the west bank, so it goes without saying that settlements embody a crucial part of the problem. When I first visited Palestine, 14 or 15 years ago, there were about 50,000 settlers in the west bank. When I last visited, that number had increased to about 500,000, and I understand that the latest figure is about 600,000. The situation on the ground is changing extremely quickly, and the longer the conflict goes on, the further out of reach a two-state solution will drift. So much land will have been taken that there will be very little left for a contiguous state, as I hope the Government will recognise.
As we know, settlements were the main focus of resolution 2334 passed on 23 December. We also know that the policy of the US, the UN, the EU and the UK Government, as repeated endlessly by Ministers in the House, is that settlements are illegal under international law and an obstacle to peace. I do not know, therefore, how anyone can say that settlements are not part and parcel of the solution to the problem. It is said that there should be no preconditions before talks, but clearly the UN resolutions are not preconditions; they refer to international law, so the discussions and direct talks should take place on that basis. I urge the Government to recognise Palestine and apply pressure on the US and elsewhere to ensure that a two-state solution is still viable.
Alan Brown (Kilmarnock and Loudoun) (SNP)
As others have reflected, settlements are illegal under international law and a physical barrier to the peace process, as well as a metaphorical barrier. Through the settlement and outpost system, Palestinians are being denied access to 50% of the land, which is clearly a huge issue for those who live there.
Like many others, I have visited Palestine—I refer to my entry in the Register of Members’ Financial Interests—and seen the systemic development of outposts and settlements, which, at best, are intended to control the Palestinians and, at worst, are part of the complete annexation of the west bank. The network of settlements, outposts, checkpoints and associated security buffer zones, patrolled by the Israel Defence Force, means that Israel controls access to natural resources, including grazing grounds, olive groves, water supplies and the movement of animals.
On one trip, I saw a settlement positioned, nice and bright, on the top of a hill, with plenty of green shrubbery made possible by the piped water supply. Meanwhile, the closest Bedouin village, despite having electricity pylons running past it, is not allowed to connect to the electricity. The water supply for the settlement runs through the Bedouin village, but the villagers are not allowed access to it. The school in the village is part funded by the EU but has a demolition order hanging over it. That is state intimidation by Israel.
Forced movement of people is illegal. It is sometimes dressed up as moving people on so that they might enjoy a better lifestyle, but we have seen examples of that in history and it is a false premise. We saw it with the native Americans and Scottish highlanders. They are moves done to, not for, people.
I also visited the Bedouin village of Susiya. It has been subject to demolitions for no other reason than it is deemed to be too close to an adjacent settlement. I saw its water cistern ruined by debris, including a car door forced into it, I saw the caves they used to inhabit completely destroyed, and I saw the rocky land in which they are forced to grow subsistence crops. I heard how they could no longer access their cisterns in the fields for drinking water and their animals and were forced to spend 30% of their income on water that they used to access for free.
I mentioned a school with a demolition order hanging over it. Israel has acted with impunity over demolitions because the international community has not acted. The UK and the EU have never asked for redress for demolitions, and it is time that that changed, given that 180 structures, parted funded by the EU, and therefore the UK, have been demolished, but there has been no redress. As part of a ministerial correction yesterday, I received a letter referring to a £5 million project in Hebron that had suffered demolition. When will the Minister ask for that £5 million back, and when will we take action against Israel over demolitions?
Louise Haigh (Sheffield, Heeley) (Lab)
I, too, congratulate the Members who have brought this motion to the House, given how important the issue is.
These are fitful times. As we move into the centenary year of the Balfour declaration, it is chilling to see the President of the United States openly promote those with hideous anti-Semitic views or in France to watch the rise of a presidential candidate whose party has for decades traded in the despicable sewers of anti-Jewish sentiment. That makes it all the more important for us in Britain to uphold our principles, and to speak out in a clear voice when our allies threaten them.
The departure from our steadfast commitment to a peaceful two-state solution in recent months has sent dangerous signals to the rest of the world. As the United Nations Human Rights Council found, while fenced areas of settlements cover only 3% of the west bank, in reality 43% of the territory is allocated to local and regional settlement councils. If that control is legalised, legitimised and expanded, it represents one of the most grievous blows to the prospects for peace for decades. It was therefore astonishing when our Prime Minister chose to use a balanced speech by the outgoing United States Secretary of State to signal a divergence from the position of our closest ally.
Senator Kerry spoke of a Government “more committed to settlements” than any previous Government, and of the systematic consolidation of control over the west bank that is leading towards the inevitability of one state and the near extinction of the prospects for peace. The outgoing Obama Administration reacted with understandable shock to the criticism, which stemmed not from the Foreign Office but from the Prime Minister herself. They said:
“We are surprised by the UK Prime Minister’s office statement given that Secretary Kerry’s remarks…were in line with the UK’s own long-standing policy and its vote at the United Nations”.
I have no doubt that that criticism, and the warm embrace of a new President in the United States who is determined to support existing settlements, emboldened the Israeli Government, who have announced, for the first time in decades, thousands of new buildings in the occupied territories. Our absence from the European Council in Malta, when the decision was taken to postpone a scheduled summit in late February with the Prime Minister of Israel, underscored our diminishing influence.
There can rarely have been a time in the post-war world when our moral voice has been quite so weak. I urge the Government not to jettison our historic role and credibility as a partner of peace for the sake of a quick trade deal. I urge the Minister to do what the Prime Minister could not, and condemn the land regularisation legislation that seeks to legitimise the illegitimate and will do untold damage in the long search for peace.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I am grateful for being called to speak briefly, and I am pleased to follow my hon. Friend the Member for Sheffield, Heeley (Louise Haigh).
In opening the debate, the right hon. Member for New Forest West (Sir Desmond Swayne) made most of the points that needed to be made about the settlements, and those who spoke after him added significantly to what he had said, from both perspectives of the conflict. I have received nearly 100 emails from constituents asking me to support the debate. On their behalf, I thank the Backbench Business Committee for giving me the opportunity to do so, and also thank the sponsors for securing the debate.
Like other Members who have spoken, I want to see a two-state solution, but that seems more remote than ever. I look forward to hearing the Minister not only outline—or rather repeat—the UK Government’s support for peace, but, more importantly, to explain how the Government intend to contribute to the task of helping to bring the two sides together. As has been said by the hon. Member for North Antrim (Ian Paisley) and others, face-to-face talks are the only way forward.
Settlement building by the Israeli Government seems totally contrary to any peace process. Briefing circulated by the Britain-Palestine all-party parliamentary group, chaired by my hon. Friend the Member for Birmingham, Northfield (Richard Burden), states:
“The influx of settlers into the West Bank and East Jerusalem significantly increases tension in the region”.
That includes
“Violence perpetrated by and against settlers. Freedom of movement restrictions on the Palestinian population. Detention and prosecution of Palestinian adults and children in military courts. House demolitions. Land expropriation. Restrictions on agricultural and other economic activity.”
All those matters have been referred to during today’s debate.
These decisions by the Israeli Government not only do not help the desperate situation in the area, but, in my opinion, make it worse. However, I recognise the provocation, and it is important to emphasise that that provocation is not one-sided.
As has been said, 2017 is a very significant year historically. It is the anniversary of the Balfour declaration, the UN partition and the 1967 war, among other events. Is it too much to hope that history will bear down on those involved to restart talks? I do not overestimate our role, but the UK is a significant player, both historically and diplomatically, as was eloquently articulated by the hon. Member for Kettering (Mr Hollobone). I look forward to hearing both the Minister and my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) outline how it can best play its part.
As we have heard from every Member who has spoken so far, we all want peace, but, as many have observed, it seems very far away, and, in my view, the settlement building is not helping.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
At a time when we are seeing rising anti-Semitism in Europe and rising hate crime, even in this country, post-Brexit, this debate should not be an excuse for Israel-bashing—or, indeed, the demonising of all Palestinians as terrorists. Israel is arguably a small country surrounded by inhospitable neighbours and some of the most lethal terrorist groups on earth. Its people should obviously live in peace and security, free from the fear of rocket attacks, and, crucially—as was restated during Prime Minister’s questions yesterday—as part of a two-state solution, alongside a viable Palestinian state.
Today, however, we are talking specifically about settlements. Since I spotted the title of the debate, the issue of settlements seems to have been popping up everywhere. At the time of the recognition debate in 2014, we heard about 400,000 dwellers; the figure is now 600,000. On Sunday, in the American thriller “Homeland”, the character Saul went to visit the sister with whom he had grown up in America, and who was now living in a west bank settlement. He asked her, “How can you live, knowing that your very presence here makes peace less possible?”
My interest in speaking in the debate—I am making my declaration on the spot!—was spurred on by the fact that last month I had been part of a cross-party delegation to the Holy Land, which included Members who are present today, to see for myself what was going on. While we were there, we went to the Knesset. We met representatives of the Office for the Coordination of Humanitarian Affairs—a UN human rights agency—and of the British consulate. We met Israeli members of think-tanks, and Israeli journalists. We met Palestinians, including Christians: this is not just a Muslim-Jewish issue. Some of them had lived elsewhere; one, Javier, had come back from Argentina. Some had lived in Salford, and one had lived in America. They had all come back in the late 1990s thinking that peace was around the corner, but it seemed to them now that there had been a stalemate since the Oslo accords.
We went to Nablus and Hebron, and other places that I had known about for as long as I could remember. From now on, whenever I hear “O little town of Bethlehem”, I shall not be able to get out of my mind the separation barrier with the Banksy graffiti on it; the same goes for William Blake’s “Jerusalem”. We saw armed guards, because it is a very securitised, militarised place. I shall never be able to un-see those images.
The beauty of having iPads was that we were never out of the office. I was receiving emails from constituents worried about UN Resolution 2334, which they felt was de-legitimising Israel, but also from constituents angry about the destruction of two Bedouin villages. We spoke to the governor of Nablus, who said, “Yes, this is happening—just down the road.” It was an eye-opening experience: I had seen nothing like this before.
While we were there, there were calls for the pardoning of an Israeli soldier who had shot an injured Palestinian teenager in the head. When we got back, we saw on the news—
Mr Speaker
Order. I am sorry, but the hon. Lady has now reached her finishing time.
Mr Speaker
The hon. Lady may have other opportunities. I am sorry, but that is the situation.
I now call the hon. Member for West Ham (Lyn Brown), who is not required to stand. I know that she was interested in speaking from a sedentary position.
Lyn Brown (West Ham) (Lab)
I am grateful to you, Mr Speaker, but I will stand.
According to the United Nations, a quarter of households in the occupied territories have insecure access to food, and an estimated 1 million are in need of health and nutrition assistance. The UN estimates that, overall, 2 million people in the occupied territories will need some form of humanitarian help in 2017. It summarises the situation as
“a systematic denial of Palestinian rights”,
and
“a man-made humanitarian crisis that has gone on for far too long”.
The Government have confirmed that in the past year, 1,010 Palestinian homes and other buildings have been destroyed, dismantled or confiscated in area C and east Jerusalem—the highest figure in east Jerusalem since 2000—leaving 1,476 people, including 696 children, displaced and vulnerable. I am sure we all agree that those figures are very disturbing, and speak to the pain and trauma of many families. As well as dismantling Palestinian homes, the Israeli authorities demolished 274 “humanitarian structures”: tents, shelters, and buildings housing the homeless. The UN said that that situation was unprecedented; it is unprecedented, but it is also intolerable and inhumane.
This disregard for human rights does not just apply in Gaza and the west bank. Recently, I asked a series of parliamentary questions about the Bedouin communities in Israel, and in particular the village of Umm al-Hiran near Hura. It appears that a forced demolition is taking place at this village—something condemned as
“a blatant and ugly episode of discrimination mirroring Israel’s unlawful settlements.”
As we have heard, the Israeli Parliament passed a law that legalised 4,000 Israeli settlement buildings, in direct contravention both of international law and previous decisions of the Israeli courts. The Minister knows that the new US President has expressed strong support for Israel, even going so far as to suggest that UN resolution 2334—a clear and straightforward reaffirmation of international principles—would not have been passed if it had been put forward after his inauguration.
Does the Minister think that Israel’s recent acceleration of its illegal settlement policies is in any way linked to the change of US President? Is there now geopolitical cover for settlement expansion, provided by the US? If so, what can the Minister do about it?
To date, the Government’s response has been to express concern. They have “expressed concern” for a long time about the continuing settlement policy. In answer to my questions about the forced demolition of Bedouin homes, they were
“concerned by recent reports of violence”,
and just this week they expressed their official “concern” about the land regularisation Bill that passed through the Israeli Parliament.
Stephen Kinnock (Aberavon) (Lab)
I thank and congratulate the hon. Members who secured today’s debate.
Little did we know when this debate was granted last week quite how prescient it would be. Just as the Israeli Prime Minister was flying back after his visit here, the Knesset was passing the so-called regularisation Bill. This Bill retroactively legalises over 50 illegal settlement outposts, 3,850 housing units and the expropriation of almost 2,000 acres of private Palestinian lands. In short, it legalises the illegal. I guess that, after alternative facts in Washington, we now have alternative facts on the ground, as defined by the Government of Israel.
This debate is not about being pro-Israel or pro-Palestine; it is about standing up for the values and norms that we hold dear. It is about upholding the rule of law and not shirking our responsibilities. Settlements fan the flames of discontent and grievance, driving us further from peace. They undermine the legal and moral authority of Israel, destroying the trust that will be required to reach any meaningful peace agreement. And they undermine the territorial integrity of a future Palestinian state, and the prospects of a viable two-state solution.
The continued expansion of illegal settlements does not just hurt the Palestinian people; it hurts Israel as well, because there can be no security for Israel without peace, and there can be no peace as long as there are illegal settlements. Anyone who doubts this just needs to see the situation on the ground.
I think of the father I met in Makassad hospital in the wake of the 2014 Gaza war, nursing his four-year-old son who had just lost both his legs in a rocket attack. I think of the Bedouin community of Khan Al-Ahmar, the residents living in perpetual fear of military demolitions and harassment from nearby settlers. I think of the 13,000 children from the Shuafat refugee camp in East Jerusalem, crossing multiple checkpoints, passing the wall and fearing harassment, just to get to school each day. I think of the 250,000 children across the Palestinian territories whom the UN identifies as in need of psychosocial support and child protection interventions. I think of the 10-year-old Gazan child who will already have witnessed three wars and nothing but the siege. What does the future hold for these children? What hope can we offer them?
When we boil all the issues down to their essence, the fact is that the presence of almost 600,000 Israeli settlers on land internationally recognised as occupied is what drives this conflict. Britain, as a key strategic ally, partner and friend of Israel, should be stepping up as a critical friend. That means ending direct support for settlements.
We should, in line with the UK guidelines, prohibit trade with companies and financial institutions complicit in the settlements and prohibit dealings with charities involved in illegal settlement projects. We must be consistent in our alignment with the universal principle of prohibiting trade with illegally annexed territories, as the European Union has done in the case of Crimea. That is why we must do all in our power to halt and reverse the settlements, and that is why we must support the motion.
Several hon. Members rose—
Mr Speaker
Order. The winding-up speeches need to begin no later than 3.15 pm and eight Members still wish to contribute. Colleagues can do the arithmetic for themselves.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I am grateful to the Backbench Business Committee for allowing this debate today. I visited Israel and Palestine with the Council for the Advancement of Arab-British Understanding three years ago and saw the construction of settlements first-hand. I also thank my constituents who wrote to me on this issue and supported this debate.
I believe fundamentally in the two-state solution and also that we as an international community must support progressives in Israel as well as Palestine in efforts to secure long-term peace. However, we know that Israeli settlements are illegal and contrary to international law—and, indeed, that they undermine prospects for the viability of the state of Palestine. Settlements are a barrier to trust, and they are a barrier to peace.
I want to make two brief points today: first, on the need for renewed international talks and the need to focus on the issue of children and education in Palestine; and, secondly, to recognise the contribution of associations such as the Britain-Palestine Friendship and Twinning Network here, and also those in the middle east, that do vital work.
Palestinians and Israel must know that, with so many other security issues in the world, they are not forgotten. As political solutions remain a distant hope, the prospects and welfare of children are a matter of great concern. In Gaza, there is an alarming rise in malnutrition among children, because they cannot get the food they need, and a rise in kidney disease among children, because the water is not drinkable. Because there are not enough schools for children, many of the schools are operating double or triple shifts, starting at 6 am and finishing at 6 pm. Parents worried about their children going to school in the dark are making them stay at home, which is having an impact especially on the education of girls.
In the west bank, I have heard from Save the Children that children cannot get to school safely. About 13,000 children in Jerusalem have to cross a checkpoint every day just to get to school. The increase in demolitions affects entire communities, of course, but is particularly traumatic for children who see homes and also schools destroyed. The children of Palestine and Israel today will be the leaders of tomorrow who will need to work on the solution for how they live side by side.
The Britain-Palestine Friendship and Twinning Network recently held its annual meeting in Hounslow. Its work builds an important connection between young people here and in Palestine. Building such cultural and educational links keeps a positive contact with the outside world.
I want to close my remarks with some questions to the Minister. On the basis that the UK Government’s condemnation of illegal Israeli settlement building is unchanged, what steps will they take to ensure that action is taken to stop settlements, given Prime Minister Netanyahu’s stated determination to expand them? What will the Government do to strengthen their advice to British businesses about avoiding engaging with other businesses that support settlements, so we do everything we can to stop settlements and the illegal enterprise that comes from them?
John Nicolson (East Dunbartonshire) (SNP)
I have absolutely nothing to declare, except my recent Council for the Advancement of Arab-British Understanding trip to Israel and the Palestine territories. I have been visiting those countries since the first Gulf war. Back then, Palestinian democrats warned of the rise of the fundamentalist Hamas. They argued that if Israel failed to support an independent Palestinian state, extremism would rise, the centre ground would be lost, and peace would be harder to attain.
In my previous role as a journalist, I interviewed Hanan Ashrawi and the late, great Edward Said. They had a series of reasonable demands. Said spoke of reconciliation and denounced the use of violent rhetoric. Both wanted to see a homeland for the Palestinian people, an acknowledgement of the grave injustices committed towards them—as we know, many of them were driven from their homes and into refugee camps when Israel was created—and, crucially, an assurance that Israeli territorial expansion would end. When I first visited Israel and Palestine, the settler population in the west bank and East Jerusalem was around 200,000. Today, 20 years later, there are more than 600,000 settlers.
People come from across the world to live in Israel, and for lots of reasons, but those seeking a better life in the illegal settlements gain it, alas, by the appropriation of Palestinian land and homes. Palestinian farmland is barren and dry, yet many settlements have swimming pools with illegally funnelled water. Illegal settlers consume six to 10 times more water per head than the Palestinians. Israel’s policy of creating “facts on the ground” is brutal and determined to establish so many settlements on the west bank that a contiguous Palestinian state becomes impossible. We must consider the consequences of this for Israel itself. If a viable two-state solution dies and Palestine is subsumed into a greater Israel stretching from the Mediterranean to the Dead sea, what will happen to the 5 million to 6 million Palestinians in the Jewish state with no government of their own?
An abiding memory of my first trip to Israel and Palestine is of taking tea in a refugee camp. Some of the elders got out their British Mandate of Palestine house deeds and, poignantly, the keys to their long-appropriated houses. They told me that they trusted British honour and British law, and asked why we remained so silent in the face of injustice. It was Edward Said who put it best for me. “Can you explain to me,” he asked, “why because of the evil committed against innocents in Europe 60 years ago, you in the west salve your consciences by turning a blind eye to the injustice of my family’s expulsion from our home to provide compensation for people in whose oppression we played no part?” This goes to heart of the issue. We cannot turn a blind eye to this theft any longer. We cannot allow the bitterness to pass to another generation.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I should like to thank the Backbench Business Committee for scheduling this debate. I visited the west bank and Jerusalem in January, and I should like to draw the House’s attention to what will soon appear in the Register of Members’ Financial Interests: the support of the Britain Palestine Communication Centre, the President’s office and the Palestinian Mission. Every Palestinian we met—Palestinian Authority members, elected city leaders, political activists and young people—subscribed to the two-state solution and wanted help in ensuring that it is achieved. I saw, as did other colleagues, the settlements marching across the hills over expropriated land, usually illegally. I saw the diverted roads, which Palestinians are not allowed to use, and I saw the march of the fence and the wall through old fields. I saw the occupation and destruction of the old city of Hebron, and the closed businesses there. Yes, the settlements are the issue of today, but if we want to address stone throwing and other violence by Palestinian children, we need only to look at the daily incidents of brutalisation to which they and their families have been subjected for decades.
We visited the United Nations Office for the Co-ordination of Humanitarian Affairs, which provided us with accurate, factual information showing that 43% of the west bank is out of bounds to Palestinians. Its maps show a Swiss cheese of disjointed areas of Palestinian land, with the Palestinians effectively excluded from the rest, even if they have historical ownership over it. Hours after meeting our Prime Minister recently, Israeli Prime Minister Netanyahu returned to Israel to vote on a law that allows the Israeli state to seize land privately owned by Palestinians on the west bank and to grant Jewish settlements exclusive use of the properties there. The decision on 24 January did indeed order 40 or 50 families to be moved from the Amona outpost, but in the same week, approval was given for 2,500 new dwellings on the west bank and 566 new settlement houses in East Jerusalem, taking over thousands of acres of Palestinian land.
The recent legislation imposed Israeli law on Palestinian inhabitants of the west bank, which is not sovereign Israeli territory. The Palestinians living there are not citizens of Israel and do not have the right to vote, but the Israelis living there do. Israeli civil law applies to settlers, affording them all sorts of legal protections, rights and benefits not enjoyed by their Palestinian neighbours, who are subject to Israeli military law. Palestinians should not be made to go through the indignity of negotiating over territory that should be theirs in a future state. This should be an international negotiation in which our Government should play a major part.
Joanna Cherry (Edinburgh South West) (SNP)
I was privileged to visit the west bank last year for the first and only time with the Council for Arab-British Understanding and Human Appeal, an award-winning charity. As the hon. Member for Ealing Central and Acton (Dr Huq) said earlier, it was a real eye-opener. I had no idea of the size and scale of the settlements, and seeing how big, well serviced and well entrenched they are makes plain the reality of how difficult it will be to move them.
As a lawyer, I was particularly struck by the human rights abuses in the west bank and the absence of the proper rule of law. Other speakers have talked about parallel legal systems, and I want to use the little time I have to make it clear that the settlements are illegal under international law. The international community considers the establishment of settlements in the Israeli-occupied territories illegal under international law because the fourth Geneva convention prohibits countries from moving people into territories occupied in a war. That is a legal fact. I am aware that the state of Israel maintains that the settlements are consistent with international law because it does not agree that the fourth Geneva convention applies. However, the weight of international opinion is against it. All the following organisations have affirmed that the convention does apply and that the settlements are therefore illegal: the UN Security Council, the UN General Assembly, the International Committee of the Red Cross, the International Court of Justice, and the high contracting parties. This is a matter of the rule of law.
I have been to the Israeli embassy and, as a lesbian women, I was told how fantastic Israel is on gay rights. Israel is good on LGBT rights, but the point of human rights is that they are universal. Palestinians have the same rights as Israelis under international law—or at least they should have, but they do not at present. No matter how important it is to have a state of Israel—it is important—and no matter how much of a good friend Israel might be to the United Kingdom, it is imperative that we, as democrats and people who believe in the rule of law, speak the truth and do not let the Israeli Government get away with distortion and alternative facts when it comes to the rule of law.
I have very little time left, but I want to ask two questions that my hon. Friend the Member for Edinburgh East (Tommy Sheppard), who done so much work in this area, did not get to mention. First, will the Minister give us a timetable for the United Kingdom’s recognition of the state of Palestine? Secondly, what will the British Government do to support the groups within the state of Israel that are striving to achieve peace?
Tom Brake (Carshalton and Wallington) (LD)
The settlements are illegal—that must be central to any talks. Several Members have suggested that direct negotiations should take place, but I question whether that is feasible. There is no trust whatsoever between the two parties, and the talks would be unequal, which is something that the Israelis acknowledge as they hold many of the trump cards.
What has been the UK’s contribution to the peace process? I am disappointed by the Prime Minister’s position on John Kerry’s speech—it was a depressing volte-face. It was particularly confusing given that the Foreign Secretary had said about the Paris conference that his intention was to be “reinforcing our message”. Of course, the Government attended that conference as an observer, so unless our message is that we have nothing to say, it is hard to see how the Government were in a position to reinforce their message. The Liberal Democrats, of course, support a two-state solution, and we believe that part of the way in which it will be achieved is through international co-operation such as the Paris conference. As John Kerry underlined, some unilateral actions also need to be taken. We want the Palestinians to clamp down on violence and its glorification, but the Israelis must also act unilaterally. Unfortunately, we have seen only negative action from the Israelis so far.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
We can perhaps understand the issue of unilateral action and the significance of settlements best if we ask ourselves a simple question. Can my right hon. Friend imagine any sustainable solution as long as the settlements exist?
Tom Brake
Indeed. I thank my right hon. Friend for his intervention. I am sorry that he will not have an opportunity to make a longer contribution.
The land regularisation Bill is a good example of a counter-productive initiative, as is the expansion in area C. I hope that we will hear from the Minister not the carefully scripted speech that has been written for him, but what concrete actions he will take, because the Government’s toned-down press releases have made no difference whatsoever. Umm al-Hiran has been demolished, notwithstanding any contributions the UK Government might have made.
It is clear that while the illegal settlements and their expansion are not the only obstacle to the peace process, every expansion and every attempt to legitimise their illegality is rightly seen as a slap in the face for the Palestinians and a demonstration of bad faith by the Israeli Government. Of course, any instance of Palestinian-initiated violence against Israel is clearly also seen as a demonstration of bad faith. The fact is that each illegal settlement expansion strengthens Israel’s hand and makes a two-state solution, which many senior Israeli politicians clearly dismiss, increasingly impossible.
Ministers say that Palestinian recognition will be appropriate at a time when it will have most impact. That time is now. If Ministers wait any longer, Palestinian recognition will be pointless, as a one-state solution will have been imposed.
Dr Philippa Whitford (Central Ayrshire) (SNP)
As other Members have been declaring interests, may I say that I spent two weeks last Easter with Medical Aid for Palestinians as a breast surgeon working in East Jerusalem, as well as working and teaching in Gaza? As many hon. Members know, in 1981 and 1982, I worked for 18 months as a surgeon in Gaza, so I still know the place quite well. I echo the comment by the hon. Member for Henley (John Howell) about Israeli doctors treating people from all communities. That is true, but often we could not get patients to Israeli doctors in Hadassah hospital because of curfews. I had patients who died in ambulances because of curfews. I had a 10-year-old boy turned back at Erez for us to try to work out how to get him through the night, even though we did not have the equipment.
Having worked there at the start of the Oslo accord, I was really depressed when I was there last Easter to see that, a quarter of a century on, we are further from peace than we were that morning. By the end of the day of the Madrid peace conference, despite the violence that had happened on the day, I saw young men with olive branches on armoured cars. They believed that their lives were going to change. A quarter of a century later, the international community has let them down.
Some 1.8 million people live in the tiny strip of Gaza. It is becoming unviable. It is pouring sewage into the sea and the water is undrinkable. It will be unviable by the mid-2020s. The west bank is being put in the same situation by the expansion of settlements. It is not just the settlements, but the walls that separate people from their farmland or sources of water. It is settler roads that people are not allowed to cross even to get to their olive groves or water sources.
What is the vision for the west bank? Is it that Palestinians will simply live on reservations, as happened to native Americans centuries ago? What is the vision for the outcome that even the Israeli Government want? The only thing we have is international law, and if we do not stick to that, we will have no position of right for other people who do the wrong thing. It has been said that international players should not be involved—that it should just be the Palestinians and Israelis—but that is a totally unbalanced conversation. Northern Ireland had the UK Government, the Irish Government and the American Government to bring the peace process to success, and we need to be involved.
Everyone has said that they believe in a two-state solution, so how bizarre is it that we recognise only one of those states? If we do not take action to avoid profit from settlements and annexation by concrete, we will be answerable.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
As joint vice chair of the all-party group on human rights, I approach today’s debates with human rights at the forefront of my mind. My party supports the EU position of a two-state solution and encourages Israel and Palestine to reach a sustainable negotiated settlement under international law. There can be no justification for any impediment to progress in a peace process, such as indiscriminate rocket attacks on Israel or the continued expansion of illegal settlements in the occupied territories. Israel’s settlements in the territories have been established in clear violation of law.
The United Nations Human Rights Council commissioned an independent fact-finding mission to the Occupied Palestinian Territories. The 2013 report stated that
“the impact of settlements on the human rights of the Palestinians is manifested in various forms and ways.”
The illegal settlements critically interfere with the ability of the Palestinian people to exercise their fundamental right to self-determination, and it is not just the settlements. The associated infrastructure built on expropriated Palestinian land also has a substantial impact.
Time and again, the SNP has called on the UK Government to use their influence to help to revitalise the peace process and to find a way to break through the political deadlock. The Minister has a keen personal interest in the area. Will the UK Government recognise the state of Palestine on the basis of the pre-1967 borders, affirming the equal rights of both peoples to live in sovereign, independent and secure states? The situation worsens in the territory and, as it does, the likelihood of a peaceful resolution fades. The time is right for the UK to recognise Palestine and its right to self-determination. The UK has not only a moral duty but a legal duty not to recognise, aid or assist Israel’s illegal settlements and associated infrastructure because they impede Palestinians in exercising their fundamental right to self-determination. Please, such action has to be taken. A tougher stance needs to be taken today. I hope that the Minister will take on board all the views that have been expressed.
Jim Shannon (Strangford) (DUP)
I am well known as a friend of Israel, and the premise of a friend is that they are honest, open and truthful. With that in mind, there must be fairness for all, and I fear that UNSCR 2334 adversely affects the Jewish right to fairness.
I believe in democracy and the democratic right of those who are voted into power by a majority. We all know that the settlements and, indeed, peace in the middle east are complex issues. As someone who hails from Northern Ireland and has been involved in the peace process, I have lived through my own share of complex issues. Appeasement cannot be the answer for Israel and Palestine; working together is the only answer, and that is hard to do in the current situation. Trust me, I speak from experience.
It is clear that Jewish leaders have negotiated on this land as a way of trying to bring about some semblance of peace for Palestinians and Jews alike. Much like the situation in Northern Ireland, some people see negotiation as demanding things their way or no way, and that if their demands are not granted, they will go back to violence.
I have a very real fear that we are pushing Israel into a place where it does not want to be and where we do not want it to be. I can well remember the six-day war. As a child, I remember seeing Israeli women and children on the streets defending their historical homeland. That resonated with me over the years as I watched the strife in Northern Ireland. I do not wish to see Israel again pushed into a place where its options are restricted. The heart of the Israeli people is simple. They wish to be allowed to return home in peace. There is no doubt in my mind that the Jews have a historical right, and we should play a role that helps the process, saves lives and that perhaps allows children to grow up without distrusting other people.
I fully understand the concern that the UNESCO vote seems to disregard Jewish heritage in Jerusalem, and we seem to be going through a similar issue in relation to Northern Ireland’s history. We want peace in the middle east, but it must be fair. There can never be peace without recognising that the Wailing Wall and the Temple Mount are Jewish holy sites that predate other sites. The Israelis have a right to access those places, and access must underpin the negotiations, not the presumption that the Jews are the ones to blame. The Jews want to live in peace on their own historical land. The motion in no way recognises that, which is why I cannot support it.
There can be peace in the middle east, but only through encouragement, not division. Let us start by sending the right message: Israel is a friend of this nation and we will do the right thing by it.
Mr Speaker
We will now have three Front-Bench winding-up speeches of no more than eight minutes each, followed by a brief conclusion from the right hon. Member for New Forest West (Sir Desmond Swayne).
Patrick Grady (Glasgow North) (SNP)
I congratulate all the hon. Members who worked to secure this debate and the many hon. Members who have spoken. I recognise the passion on display throughout the debate on this complex and sensitive issue, on which we all agree that nobody has a monopoly of wisdom. We heard “Ode to Joy” both last night and at business questions, and it includes the line, “Alle Menschen werden Brüder”. All people will become brethren only if we allow joy and freedom to reign, which is an important consideration.
The Scottish Government and the Scottish National party position has firmly and consistently been that peace in the region depends on there being two secure, stable and prosperous states of Israel and Palestine, living side by side. Israel and Palestine should be encouraged to reach a sustainable negotiated settlement, under international law, that has as its foundation mutual recognition and a determination to co-exist peacefully. We have consistently condemned obstacles to progress in the peace process, whether they are indiscriminate rocket attacks on Israel or the continued expansion of illegal settlements in the occupied territories.
Many Members have spoken of their personal experiences. In October, I had the privilege of visiting the Holy Land in a personal capacity, as part of the archdiocese of Glasgow’s annual pilgrimage. Although focus was on visits to sites associated with the Christian gospel and scripture, it was impossible not to be aware of the tensions and the legacy and impact of the ongoing conflict. It is worth stressing, however, that the journey itself was safe and secure. If anything, it brought home to me the massive potential for the economies of both Israel and Palestine if a peaceful settlement can be reached. The landscape is beautiful and dramatic, steeped in history, and the climate ought to make the region a holidaymaker’s dream.
Nevertheless, we did pass through the border wall between Bethlehem and Jerusalem several times—as the hon. Member for Ealing Central and Acton (Dr Huq) said, Christmas carols are never quite the same again after one has done that—and I saw young Palestinians stopped and subjected to lengthy security searches. I pay tribute to the ongoing ecumenical accompaniment programme of the World Council of Churches—co-ordinated in the UK by the Quakers—which witnesses and monitors incidents at the checkpoints. We could see settlements under construction, alongside approach roads and land connections with Palestinian towns and villages, and it is not hard to see how they threaten the contiguity of the Palestinian state. We saw parched lands and dusty streets on one side of the wall and manicured lawns and fountains on the other side. That is unjust from any perspective: in a land of such plenty, nobody should need to go hungry or thirsty. We have heard powerful testimony today about the impact of the conflict across the communities in both Israel and Palestine.
The motion and the debate have focused on UN Security Council resolution 2334, which is something of a milestone and should be welcomed as a demonstration of the potential role to be played by the United Nations. For more than 70 years, the UN has brought countries together to work for peace and security, development and human rights, and it must be supported to continue and step up its mission. The resolution makes clear that the settlements have no legal validity and, indeed, constitute a flagrant violation under international law. That surely remains the case, even in the light of the legislation passed by the Knesset to give retrospective legitimacy to the settlements. As the hon. Member for Reigate (Crispin Blunt) said, there is no political consensus in Israel on that law.
The new law is a provocative and disappointing gesture, but the response must be a redoubling of diplomatic efforts. The UN Security Council resolution does not compel Israel to concede any of its own sovereign territory, nor does it preclude any future territorial modifications with the Palestinians. What it did was to reconfirm the long-established and consistent point of international law that settlements are illegal and should stop. The destruction of Palestinian villages, about which my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) spoke powerfully, must also stop. I have heard from my constituents, powerfully and loudly, about their concern about that practice and its effect on communities.
The debate has raised several questions for the Minister. To his credit, he is one of the Ministers who does a good job of responding to the points Members make, even if we do not always agree with his responses. It would be helpful to hear from him what representations have been made to the Government of Israel about the recent legislation. Are they satisfied that the discussions our Prime Minister had with Prime Minister Netanyahu were sufficient, or is there an opportunity to go further? What steps are the Government taking to ensure that the UK adheres to the UN Security Council’s demand that, in their international relations, states distinguish between Israel and the occupied territories? Will the Minister guarantee that, after it leaves the EU, the UK will continue to make that kind of diplomatic differentiation? Does he agree that the UK should not be trading with illegal settlements?
As has been said repeatedly, a peaceful solution must be based on mutual respect and recognition on both sides. That applies not only to the people of the states of Israel and Palestine, but to their supporters and allies in the international community. Under no circumstances are attacks or abuse on the Jewish people, or any kind of manifestation of anti-Semitism, acceptable; anti-Semitism should be named as such and condemned. That also applies to violence and extremism in any form, whether directed at Palestinian, Israeli, Jewish or Muslim communities.
The Scottish Government, in line with other Governments in Europe and the EU itself, does not advocate a policy of boycotting Israel. Nevertheless, we in the SNP are clear that trade and investment in illegal settlements should be discouraged, and the Scottish Government have published procurement guidance to reflect that position.
I mentioned my visit to the Holy Land, which gave me a new appreciation for the deep history and spirituality of the people and places there. Never have I felt more keenly or more urgently the words of the psalm:
“For the peace of Jerusalem pray:
‘Peace be to your homes!
May peace reign in your walls,
And in your palaces, peace!’”
Emily Thornberry (Islington South and Finsbury) (Lab)
May I thank Members on both sides of the House for securing this debate? People watching us from the Public Gallery will see the House at its best when it comes to such debates. Many Members were very well informed indeed. I was expecting excellent speeches from my hon. Friend the Member for Birmingham, Northfield (Richard Burden) and from the hon. Member for Reigate (Crispin Blunt), but if I could pick one favourite speech it would be that of the hon. Member for Twickenham (Dr Mathias) who spoke passionately, articulately and without notes, and I commend her for that. It may be that other people watching the debate will have other favourites, but her speech was excellent. In the time that I have available, I will not try to summarise all the contributions.
The carefully drafted motion represents a consensus shared across the House. I know that there are many differences, and we have heard them today, but, actually, what unites us is so much more than that which divides us on this. It is important that we speak clearly and loudly about settlements.
Clearly, this is an important anniversary year, and the debate is very timely. When we look at the great sweep of history, from the six-day war and its aftermath to the UN partition plan and all the way back to Balfour, it is quite clear that, in many ways and in context, we seem to have come to a halt. The past few years have been very dark and very depressing with very little movement. I fear that we have been slipping backwards, and that a two-state solution is moving further and further away from us.
Clearly, settlements are a major part of the problem, but we must recognise them for what they are: they are a roadblock to peace and a violation of international law. At the same time, we cannot pretend that this conflict can be reduced to that one issue alone, as that is simply not the case. As the hon. Member for Liverpool, Riverside (Mrs Ellman) put it so well, there must be an unequivocal end to violence and incitement on both sides. In these dark and difficult times, the question is what do we do? Do we give up hope? Do we walk away?
We must be honest that the road ahead is very hard. My question is this: have the Government decided that, what with Brexit, the crisis in the NHS, the collapse in social care, the challenge of the Trump presidency and wars over the middle east, continuing to be involved in such a bitter and long-standing dispute is just one challenge too many? In many ways, that was the message that Ministers sent to the Paris conference last month when 36 countries sent a Foreign Minister, but not the United Kingdom. Our presence there was downgraded to observer status and we declined to join the communiqué, which really did not make any sense, because the objectives of the conference and the content of the communiqué were so closely aligned to the sentiments expressed in UN Security Council resolution 2334, which, I am told, the UK had a key role in drafting last December. It is as if we have been blowing hot and cold. What is going on? Are the Government losing their nerve?
The Government’s official explanation was that they chose not to attend because no Israeli or Palestinian representatives were present, but that does not make sense, because the Paris conference was not some kind of quixotic attempt to bypass the need for bilateral negotiations, but an attempt to affirm support for them. As the lengthy list of multilateral initiatives in UN Security Council resolution 2334 showed, the international community has always had a role to play in helping to facilitate bilateral talks.
For Labour, as internationalists, friends of Israel and friends of the Palestinians, that understanding is crucial. My hon. Friend the Member for Wrexham (Ian C. Lucas), who was shadow Minister for the middle east, said a few years ago:
“We have made it very clear that we will always work with partners multilaterally to advance the two-state solution agenda.”—[Official Report, 13 October 2014; Vol. 586, c. 95.]
I hope that the Minister will explain why this Government appear to lack the same co-operative spirit—or at least they lack it sometimes.
Whatever the official reason, I am afraid that the clear subtext to the decision on Paris was the election of President Trump in the United States. Many have suggested that his election was bad news for the peace process and that we should give up hope. I can understand why. We just need to consider the words of Naftali Bennett, one of the most influential Members of Netanyahu’s Cabinet. Following the election of Donald Trump, he said:
“The era of a Palestinian state is over.”
Mr Bennett’s regulation Bill seeks to legalise the construction of settlements on privately owned land retrospectively and it should be condemned.
The fact is that a one-state solution would not enjoy the support of the people of Israel or the majority of the people of Palestine. By following the settler agenda, the Israeli Government are not acting in the interests of the people of the region, and certainly not in the interests of the people of Israel. A single state, stretching from the Mediterranean to the Jordan river can be one of two things: it can either be Jewish, or it can be democratic. As the right hon. Member for Enfield North (Joan Ryan) so rightly said, it cannot be both.
As friends of Israel and friends of Palestine, there is no time for the UK to sit on the side lines. Of course I understand why the regulation Bill was pushed forward at this particular time. After all, the man who has just taken office as the President of the United States has expressed some unorthodox views, to put it mildly. He has made statements in favour of more settlements, and he is in favour of moving his embassy to Jerusalem and opposed to multilateral talks. The man he has appointed as America’s ambassador to Israel has said that
“a two-state solution is not a priority”.
Many of us worry that this rhetoric is divisive, but we have heard positive words from Mr Trump at times. He said, for example, that he
“would love to be able to be the one that made peace with Israel and the Palestinians”,
and that he has “reason to believe” that he can do that. I think we should choose to take him at his word. The difficulty is that I am far from convinced that he knows exactly how to do that. That is where we come in.
The expertise of the Foreign Office and the advice we can give the Americans in these circumstances are important. It is incumbent on us, as we wish for a two-state solution, to do everything we can to push for a path to peace. For the Government, that means making the case to Washington and Tel Aviv, and convincing them that a two-state solution is still both achievable and necessary. I hope that the Minister can assure us that his Government remain committed to a two-state solution, and opposed to anything that stands in the way of that.
I am deeply disappointed that the Government continue to fail to recognise the Palestinian state. Now is the time. I ask the Minister to comment on that. What thought have the Government put into how settlement goods could be separated from other Israeli goods, as many people do not wish to buy settlement goods? Are the Government doing any further work on that? How can we persuade British companies not to invest in settlement areas? Most importantly, I hope that when President Trump and Prime Minister Netanyahu visit London later this year, our Prime Minister will have the courage to set out those views in no uncertain terms. I look forward to hearing what the Minister has to say.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
This important debate has been constructive, informative and, at times, passionate. I congratulate my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) and others who have brought it to the House. Following your guidance, Mr Speaker, I have just eight minutes to respond. I hope the Backbench Business Committee recognises how many people wanted to speak in this debate and I hope that we have a further opportunity for debate in which I have more time to respond. I will do my best, as I always do, to write to hon. Members if I do not cover their points today.
The focus of today’s debate is Israeli settlements, but may I begin, as others have, by firmly underlining our deep friendship with Israel, its people and its absolute right to exist and defend itself? Israel is a democratic state in a difficult neighbourhood. In the year in which we mark the 100th anniversary of the Balfour declaration, which underlines our shared history, we continue to have an interest—as a nation, an ally, a regional partner and a permanent member of the UN Security Council—in understanding the challenges faced by the region, including securing a two-state solution, which we continue to support, and the issue of illegal settlements, which we are discussing today.
Mr Ellwood
I will not because I have only a short amount of time.
The debate has focused on a number of themes, which I will try to cover to my best ability. The first was the importance of a two-state solution, which, as others have said, is the only way to secure a just and lasting peace between the Israelis and Palestinians. We must all continue to work for that, no matter how big the challenges. The objective has been repeated not only by us and American Presidents, but by successive Israeli Prime Ministers and the international community. The objective has also been confirmed through a series of UN Security Council resolutions and other agreements through the Oslo accords, the Madrid discussions and the Camp David talks. To be clear: the solution cannot be imposed on the Israelis or the Palestinians, but the international community has an important role to play.
Although important, the matter of settlements is not the only issue but one of a number. The immediate removal of settlements would not immediately lead to peace. Trends on the ground, including violence, terrorism and incitement, as well as settlement expansion, are seemingly leading to a steady drift from peace and making the prospect of a two-state solution look very much impossible. It is in no one’s interests to see that drift towards a one-state solution. It is not in Israel’s long-term interests; it is not in the Palestinians’ interests; and it is not in the region’s interests.
Specifically on settlements, if we look at the map, we can see that there are now around 600,000 people living in about 140 settlements built since 1967. We can see that the west bank is being divided into three, with Jenin and Nablus in the north; Ramallah in the middle, broken by the Ariel finger; and area E1 separating Ramallah and Bethlehem from the Hebron conurbations. So the concept of a contiguous Palestinian state is being eroded, and that is a huge concern. The west bank is now a complex network of checkpoints, which is broken up, as has been said, and that makes it difficult for people to move and to enjoy a normal life.
Since 2011, Israel has approved only three urban development plans in area C. We want this to change, and we encourage Israel, as per the Oslo accords, to transfer land from area C to area B, and from area B to area A—area A, of course, is where the Palestinians have control and authority over their own security arrangements and economic prospects.
UN Security Council resolution 2334 was mentioned by a number of hon. Members. It should come as no surprise that we voted in favour of it in December, because we have long supported the two-state solution and the notion of Israel as the Jewish homeland. We should recognise what the resolution actually said. It proposed three important and balanced steps to support peace in the region, including calls for both parties to prevent the incitement of acts of violence, to build and create conditions for peace and to work together to allow credible negotiations to start. Of course, it is based on historical resolutions 242, from November 1967, and 181, which goes back to 1947.
The regularisation Bill has been mentioned by a number of hon. Members. A new and dangerous threshold was crossed with that Bill. I am pleased to see that the vote on it was very close—it was 60 to 52—and the Israeli Attorney General has made it clear that he will not support it if it goes to appeal, which I think it will. That is good, because he sees it as constitutionally unviable, and I hope that that message is heard loud and clear.
I am running out of time, but I will do my best to cover the remaining points. On the recognition of Palestine, we need the Palestinians to do more to prevent the incitement of violence. President Abbas condemns certain aspects of it, but we are still seeing schools and squares being named after terrorists. These are not the confidence-building measures we need see. There is no relationship with Hamas at all. Those confidence-building measures are the steps that will allow us to move forward, so that there can be a recognition in the long term of the state of Palestine, but they are not there yet. The younger generation has given up on its own leadership, choosing instead to try to take a fast track to paradise by grabbing a knife and killing an Israeli soldier, and that is a terrible state of affairs to be in.
The British Government continue to believe that the only way to a lasting peace between Israelis and Palestinians is the two-state solution, but there are a number of obstacles to peace, including settlements and continued violence and incitement. We remain committed to working closely with our international partners, including the new US Administration, to promote an environment conducive to peace. We continue to support both parties to take steps towards a negotiated settlement that brings peace, security and prosperity to Israelis and Palestinians.
Everyone has the right to call somewhere their home. Everyone has the right to be safe in that home. And no one should live in fear of their neighbours. We strongly believe that the middle east peace process is the best way forward to deliver these hopes. The question is whether we want a new generation of Israelis and Palestinians nurturing the seeds of hate or moving to a place of lasting friendship.
Sir Desmond Swayne
My fear is that a sufficient number of Israeli politicians have drawn precisely the opposite conclusion to John Kerry and believe that they can indeed build towards the exclusion of a Palestinian state and yet withhold civil rights within Israel on the grounds that the Palestinians must seek those civil rights in Jordan or in sub-state Bantustans. This is the 50th year of the occupation, so I am grateful to the bishops, fresh from their visit to the region, who, in their communiqué, quote Leviticus, chapter 25, verse 10: “You will declare this fiftieth year to be sacred and you will proclaim the liberation of all the country’s inhabitants.”
Question put and agreed to.
Resolved,
That this House reaffirms its support for the negotiation of a lasting peace between two sovereign states of Israel and Palestine, both of which must be viable and contiguous within secure and internationally recognised borders; calls on the Government to take an active role in facilitating a resumption of international talks to achieve this; welcomes UN Security Council Resolution 2334 adopted on 23 December 2016; and further calls on the government of Israel immediately to halt the planning and construction of residential settlements in the Occupied Palestinian Territories which is both contrary to international law and undermines the prospects for the contiguity and viability of the state of Palestine.
Football Association Governance
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Damian Collins (Folkestone and Hythe) (Con)
I beg to move,
That this House has no confidence in the ability of the Football Association (FA) to comply fully with its duties as a governing body, as the current governance structures of the FA make it impossible for the organisation to reform itself; and calls on the Government to bring forward legislative proposals to reform the governance of the FA.
A former Minister said when addressing the subject of FA reform:
“We are making progress, albeit slowly.”—[Official Report, 15 October 1969; Vol. 788, c. 570.]
That was Denis Howell speaking in 1969 in a debate on the Chester report, commissioned in 1966, which looked at the governance of football in England. Since that time, there have been numerous reviews of the governance and necessary reform of the Football Association. There was the Burns review of 2005. The Culture, Media and Sport Committee published two football governance reports, one in 2011 and another in 2013, setting out a series of detailed measures where we believed that the governance of football needed to improve dramatically. A former sports Minister, Hugh Robertson, said that he was going to prepare a Bill to legislate to reform the Football Association if it refused to deliver the necessary reforms. He described football as the “worst-governed” sport in Britain.
The Government are consulting on their sports governance code, which will apply to all national governing bodies of sport. This debate falls a few weeks before the talks between the Government and the FA will conclude. Some people may therefore suggest that this debate is a few weeks early; others may say that it is 50 years too late. We have been talking about this issue for a very long time.
Some people have questioned whether it is the responsibility of Parliament to seek to legislate on a private matter like football and sport, but I think it is the right of the national Parliament of this country to take a view on the administration and welfare of our national game, as we have sought to do, because this a matter that the people we represent care greatly about.
Keith Vaz (Leicester East) (Lab)
It is important—I speak as an MP for the home of the English premier league champions, Leicester, the city of diversity—that Parliament sends out a message on diversity. A quarter of all professional footballers are black, yet only 17 of the 92 top clubs have an ethnic minority person in a senior coaching role. Although the FA has committed £1.4 million to addressing diversity, does the hon. Gentleman agree that it is important in a debate like this that we send out the message that diversity should be an important part of any reform?
Damian Collins
The right hon. Gentleman makes an incredibly important point. I will come on to deal with the issue of diversity. Some would say that if the FA Council itself was a more diverse body that more truly reflected the modern world and the modern game, more progress would be made on supporting diversity, including encouraging and supporting more former players from minority ethnic backgrounds into coaching, and through the coaching system into the management of professional clubs. We would all want to see that.
Our constituents who are supporters of their clubs make continual representations about the effect of bad governance on the teams that they love—teams that have been driven into administration through financial mismanagement.
Mr Jim Cunningham (Coventry South) (Lab)
I am not going to rehearse all the arguments about Coventry City football club, but there should be some form of regulation. After all, the Football League is the only organisation that I know of that does not have certain rules in a way that relates to Parliament. Would the hon. Gentleman consider having Coventry’s owners, Sisu, in front of his Committee to find out exactly what is going on? There are all sorts of problems at Coventry—as I said, I am not going to rehearse them—and we really now have to get to the bottom of this.
Damian Collins
The hon. Gentleman has been a doughty champion of the fans of Coventry City football club and the people of Coventry regarding the maladministration of their club. It is tragic that a club that was in the top flight for so long has been run into the ground as it has been. The football administrators have stood back and watched that happen, and it cannot be allowed to continue. I believe my hon. Friend the Member for Daventry (Chris Heaton-Harris) has been acting as an intermediary, and I support him in his work. The Committee has spoken about that issue strongly in the past, and it may do so in the future. We speak up for supporters whose clubs are being run into the ground.
As a parent, I see what some grassroots football facilities are like, and we have had representations about that. At this time of the year, too many boys and girls are playing on heavily waterlogged pitches and at training grounds or in parks where there are no changing facilities and no amenities at all. They look at the great wealth within the game and ask how that can be true. Although we welcome the fact that the FA facilities fund invests £22 million—a lot of money for a lot of sports—in facilities, that is a tiny amount of money in football. Twenty-two million pounds would not buy a quarter share in Paul Pogba. Given the huge wealth that exists in football, we all believe it could do a lot more.
Financial scandals have affected the game, and we are concerned that they have not been properly investigated. Lord Stevens led a review into allegations of scandals and misappropriated payments in the football transfer market, and he was unable to sign off on 17 of the transfers that he investigated to say that no suspicious payments had been made. Some of those transfers then involved a future England manager. People will ask, “Why aren’t these things being properly investigated? What is wrong with the administration of financial conduct and ethics in football?
Stephen Pound (Ealing North) (Lab)
As a person of an undeniable ethnicity and gender, and probably not in the first flush of my youth, I am reluctant to intervene when people who fit into those categories are being so widely criticised. However, four years ago a report considered the football creditors rule, which seems to me one of the absolutely rotten things at the heart of British football. Has the hon. Gentleman or any of his colleagues—particularly the Minister—received any indication that the FA is taking the matter seriously? Even though it might cause short-term pain, the long-term gain for the game would be immeasurable.
Damian Collins
The hon. Gentleman makes a very important point. I have long believed that the creditors rule should be abolished. It means that when a club is insolvent, it has to pay all its football creditors, but the other creditors—the local community and the businesses it works with—do not get any money. I believe that that rule should have been abolished. The chairman of the FA said when he was chairman of the Football League that no moral argument could be made in favour of the creditors rule, but nevertheless it stands. I welcome the fact that progress has been made in putting a greater obligation on clubs to settle with non-football creditors on much better terms than was the case a few years ago, but I would like that to go further.
Football receives, as do other sports, a considerable amount of funding from the public purse, and we in Parliament are right to take an interest in how public money is spent on our national game. In the brief time that I have, I want to set out how and why I believe the FA needs to be reformed.
The FA Council—effectively, the Parliament of football—should represent football across the community, but it is not representative of modern society and the people who play the game. Of its 122 members, 92 are over the age of 60 and 12 are over the age of 80. There are eight women, and there are four people from minority ethnic backgrounds, so there are more men over 80 on the FA Council than there are women. That is not sustainable, and it does not reflect modern society. Although some on the FA Council understand the need for change, some do not. Barry Taylor, a life vice-president of the FA and life president of Barnsley, said in a letter to his colleagues on the FA Council that it “would be great” to have more women involved,
“but not just for its own sake”.
Hearing that, I do not think that he has any serious commitment to the idea of more women on the council, or that he even understands why it is necessary.
The FA Council is an important body because it has power over youth football and women’s football, and it is an important influence on the game. The FA board needs to be stronger and more independent—a more executive body. Only one of its 12 members is a woman, and there are only two independent directors. The last three chairmen of the FA—one of them, Lord Triesman, is sitting in the Gallery—have written to the Select Committee to say that reform is necessary to strengthen the board and ensure that the balance of power is held by the independent directors on the board. That was also a recommendation in the Culture, Media and Sport Committee’s report. Reform is needed to give the FA the power to resist powerful forces and vested interests in the game, particularly the power and strength of the Premier League.
The primary job of the Premier League is to promote its competition, and it does so brilliantly all around the world. However, it exerts an enormous influence over football, because of the vast amount of money it raises and the funds it puts back into the game. We need a strong Premier League—that is good for football—but we need a strong national governing body of football that is ultimately responsible for many of the sporting and ethical decisions that football has to take.
Mr Clive Betts (Sheffield South East) (Lab)
The hon. Gentleman is making a really important point. This is not just about who sits on which boards, but where the money is and the power that it exercises. Does he think there is room for a further look at the whole issue of the power and money of the Premier League, and what governance changes could be brought in to get more control over it for the good of the game as a whole?
Damian Collins
The Select Committee recommended that the FA board should have a 6:4 ratio in favour of the FA executive and independent directors, so that their voice is stronger than that of any other component parts, including the Premier League. I think that is a necessary reform.
In closing—I could speak for a lot longer, but I want other Members to have the chance to make their own speeches—it is necessary to reform the structure of the FA board to make the FA more independent and give it the power to act. We have been calling for that for years, and the Select Committee has called for it in previous reports. We now believe that legislation is the only way in which that can be delivered. That was the recommendation of the last three chairmen of the FA to the Select Committee, who said that the FA cannot reform itself—turkeys will not vote for Christmas—so there has to be external pressure and action through legislation to achieve it. In this debate, I am asking the Government, if they are unsuccessful in getting the FA to reform, to prepare a Bill to introduce during the next Session of Parliament, following the Queen’s Speech, to deliver the reform the FA so badly needs.
Several hon. Members rose—
Mr Speaker
Order. I am sorry, colleagues, but I am afraid we will have to start with a limit on Back-Bench speeches of four minutes.
Judith Cummins (Bradford South) (Lab)
I speak in today’s debate as one of the Members representing Bradford who has, in recent months, been deeply involved in working to save my home city’s most historical sporting club. Many Members will know this proud institution—the world-renowned Bradford Bulls rugby football league club. I am pleased that after many months of campaigning, the Bradford Bulls have risen anew from administration and liquidation. I am sure the whole House will join me in wishing the club well under its new ownership.
I recognise that the Bradford Bulls are not a member of the Football Association, but of another governing body, the Rugby Football League. However, I believe most hon. Members would agree that, as a country, we face a crisis of governance not only in football, but across many of our cherished sports. Much of what has been and will be said in the Chamber this afternoon is relevant not just to football, but right across sport. Through the events of recent months in my constituency, I have learned much about governance, the role of governing bodies and, I am afraid, the weaknesses in the rules and regulations in British sporting life.
Bradford is of course home to Bradford City and Bradford Park Avenue—the latter is in my constituency—and I dare to suggest that these clubs are good role models. They are the sort of clubs the FA should be encouraging others to emulate. Bradford City has had its fair share of difficulties down the years, and the club knows all too well the trauma associated with entering administration. It has learned the hard way, as so many football clubs have done. Today, however, the club operates within its means, and financial security is the foundation of its ambition, not the first thing to be sacrificed in the search for glory. In addition, it maintains a policy of financial openness with its supporters, and it is right to do so. That strengthens the bond between the club and its fans and local community, and it ensures that everyone feels part of a common endeavour. Bradford City has been rewarded with increasing support.
In non-league football, Bradford Park Avenue has worked with Supporters Direct to move from a private ownership model to become a community benefit society. I am very pleased to be watching them play this coming Saturday. I am also looking forward to becoming a member of Bradford Park Avenue community football club at half time. Club members commit to many great objectives, but the one I am struck by is the commitment to provide sporting facilities and opportunities to all. I hope the FA will support and applaud clubs at this level of the footballing pyramid to develop the sort of approach that Bradford Park Avenue is taking to engage with its local communities. If this type of approach is strongly reflected in the plans that the FA will present to the Government in the spring, I will be heartened.
As a country, we deserve strong, representative and accountable governance in the governing bodies of all our sports. Today’s debate will identify a whole raft of failings in the governance of the Football Association. What is more shocking is not that the governance of the FA is in need of fundamental reform—that is a settled point—but that the FA leadership have been so grossly ineffective in introducing reforms in the face of criticism from the cross-party Culture, Media and Sport Committee. At best they are dragging their feet; at worst they are wilfully failing to act.
As the governing body of a major British sport, the FA is arguably above all else a public institution, even if it is a private registered company. As public institutions, governing bodies receive public funding, and they have the honour and privilege of having under their leadership the regulation and oversight of British sporting life. It is only right that we hold them to high standards.
Strong accountability is critical, not only for the sake of strong governance, but because a sports governing body has an important role in agreeing, overseeing and enforcing its rules. Sport is competitive on the field and in a business sense. The search for success and the drive to achieve and excel at the highest possible level can often mean that lines become blurred.
Jason McCartney (Colne Valley) (Con)
It is a pleasure to follow the hon. Member for Bradford South (Judith Cummins). In a previous life, I reported on both Bradford City and their run in the Intertoto cup—we had a trip to see Zenit Saint Petersburg—and the Bradford Bulls in their successful time, with grand final wins, world club challenges and Challenge cups. I welcome her passion for the sporting clubs in the great city of Bradford.
I refer to my entry in the Register of Members’ Financial Interests. I must also declare that, as a Huddersfield Town fan, I am delighted that my team is still in the FA cup, but slightly perplexed that the television companies have not picked our mouth-watering fifth round tie at home to Manchester City for live broadcast. Perhaps they will cover us in the quarter finals, when we might be playing Sutton United.
I must also put on record my thanks to the FA’s delivery partner, the Football Foundation, which has invested almost £600,000-worth of grants in my Colne Valley constituency. That includes £340,000 to Hepworth United for a new changing pavilion, and a grant of £53,000 for Honley cricket club and Honley junior football club for the refurbishment and extension of existing changing pavilion facilities. I was involved in both bids and supported both community projects.
My hon. Friend the Member for Folkestone and Hythe (Damian Collins), the Culture, Media and Sport Committee Chairman, covered much of the ground. I want to focus on the fans. I am very lucky to support a club with a wonderful owner who is a genuine fan, Dean Hoyle. He has introduced many wonderful initiatives at my club, including season tickets for just £179. On Boxing day, two parents and two kids could see Huddersfield Town play for just £12—we won as well. The Huddersfield Town Foundation provides thousands of healthy breakfast clubs at schools, and the “Keep It Up” campaign of fans has organised bike rides that have raised more than £1 million for the Yorkshire Air Ambulance and the Town Academy.
Not all fans are so lucky. Blackpool, Blackburn Rovers and Coventry fans will testify to that. That is why we need reform.
Damian Collins
Does my hon. Friend agree that there should be more representation from supporters groups on the FA Council?
Jason McCartney
Absolutely. My hon. Friend has probably read my next comment. I back the Football Supporters Federation recommendations, which include a minimum of five supporters’ representatives on the FA Council and, more crucially, a supporter representative on the board. Hopefully, that supporter representation could help to increase the diversity of the top decision-making levels in English football.
As we have heard, the Culture, Media and Sport Committee, of which I am a member, has been looking at FA governance for many years. I welcome some of Greg Clarke’s early comments—he took over as chairman of the FA last August following his successful six-year spell at the Football League. The Committee report of 2011 highlighted key concerns that, over the years, have got worse. Arguably, the most worrying thing is the disproportionate influence exerted by the Premier League over the FA owing to its wealth, but other concerns are the increased lack of clarity on the ownership of clubs and, as I have just said, the lack of progress in getting supporters more influence in their clubs. As the right hon. Member for Leicester East (Keith Vaz) said, another concern is the lack of women and black and minority ethnic representation not only on FA boards and committees, but in coaching roles. I must declare my involvement in a small FA committee working at St George’s Park on increasing BAME representation in coaching at football clubs. A lot more needs to be done.
I want a successful England football team. I want it to give us the feel-good factor that the Olympics and Paralympics have given us. Just as the lottery millions have been well distributed to nurture talent, participation and medal success, it is important that the FA should be able to do the same for football with some of the Premier League’s billions. Club ownership, safe standing, Twenty’s Plenty, kick-off times, disabled access and tackling homophobia are all issues that need to be addressed by a reformed FA. With more supporter input, I hope that will now happen.
I hope that this debate will show that we are serious about reform. The Government are serious about reform, the DCMS Committee is serious about reform and the fans are serious about reform. It is now time for the FA’s executive board and the council to crack on and deliver those reforms.
Clive Efford (Eltham) (Lab)
I congratulate the hon. Member for Folkestone and Hythe (Damian Collins) on securing the debate. I welcome this opportunity to try to influence the Minister before she concludes her discussions with the FA on its reform.
I accept that the FA needs reform. It has proven itself to be extraordinarily weak at times—as the letter from its previous three chairmen and two chief executives said, it has been unable to wield any power over the influence of the Premier League and the Football League—but we have to be clear about what we are trying to achieve. Many of the problems we are highlighting are not caused by the unwieldy construction of the council, but the weak and feeble nature of the FA board.
What do we want the FA to achieve? In England, there is one artificial grass pitch for every 42,000 people; in Germany, there is one for every 22,000 people. In England, there is one coach per 38,000 people; in Germany, there is one per 11,000 people and in Spain one per 3,000. Since 1992, when the Premier League came into being, Germany has won the European championship and the World cup, and Spain has won the World cup and the European championship twice. The council is not at fault for the lack of investment. The enormous wealth that has come into this country has not been reflected in investment in grassroots football, or the coaches and facilities that will develop our game. When we look at reform of the FA, we have to be clear about what we want to achieve.
It is not acceptable for there to be an ancient body such as the FA Council, which has representatives from the Army, Cambridge university, independent schools, Oxford university, the Air Force and the Royal Navy. The historic construction of this organisation clearly needs reform. I favour the Football Supporters’ Federation’s recommendations. We should have fans’ representatives on the board of the FA. The time has also come for fans’ reps to be on the boards of football clubs. They are an early warning system for problems that exist in our game. It is the fans we turn to when we look to save clubs that fall into difficulties. They are of the communities from which those clubs have sprung.
We have to be clear in our aims. Who are we seeking to empower? What problems are we seeking to solve? It is wrong to just say that any reconstruction of the FA will be the right thing to do. The FA board, as currently constructed, is clearly too weak to deal with the English Football League and the Premier League. The people on the council stood up to clubs that wanted to change their colours against the will of the fans. They stood up to clubs that wanted to move grounds and change grounds’ names.
Mr George Howarth (Knowsley) (Lab)
My hon. Friend is making a really powerful case. To pick up a point made by my hon. Friend the Member for Sheffield South East (Mr Betts), I accept that this is not just a question of structure; it is also one of power, and empowering fans to have some say has to be part of the way forward.
Clive Efford
Absolutely. Many fans, for instance, want to see the FA have more influence over the number of home-grown players developed in our leagues. The number is woefully inadequate. Far too many of these prêt-à-porter players are imported because there is so much wealth knocking about in the Premier League; rather than develop and take a chance on a youngster, clubs buy someone off the peg and bring them in. We do not impose the rules that are there to ensure that those players contribute and add to the game. Many fans would like to see an FA that can deal with that kind of issue, and I do not see how just changing the council will make a difference.
I support the idea that there should be more independence on the board. However, I have another concern, which I will finish on. Right across sport, people from a small gene pool move about different sports and become involved in governing bodies. We need to look beyond that group of people for some real independence at the top of our national game—in other sports as well, but particularly in football.
Andrew Bingham (High Peak) (Con)
Four minutes! Let me be clear at the outset that I want the FA to succeed. I want to be able to hold them up as an example of good—indeed, exemplary—governance across this country and beyond. I am not saying that everything that the FA does is wrong; it does many good things, which I will touch on in the time available.
The wording of the motion is strong and robust, and although it challenges the FA in the strongest terms, in many ways it echoes the frustration felt by football fans in High Peak and beyond who have written to me and to colleagues. I was going to talk at great length about my history as a football supporter, but we do not have time—I am too old.
As a member of the Culture, Media and Sport Committee, I too received the letter from the three previous FA chairmen, an ex-chief executive and a previous executive director. Collectively they delivered a withering view of the intransigence of the FA and its inability to change its governance. Those men have worked within the FA: they seem to have become disillusioned and frustrated by that intransigence and have just walked away. In their words, the FA’s decision-making structure has become
“arcane and convoluted leading to a lack of clarity about the role and purpose of these structures.”
They also claim that there are examples of “short-termism” and “vested interests”, with veiled and unveiled references to the FA’s relationship with the Premier League.
The letter reeks of all these senior figures’ frustration at their inability to get the FA to reform. As they say, the Culture, Media and Sport Committee concluded in 2011 and 2013—before my time as a member of that Committee, but when the current sports Minister was one—that the FA did need reform, yet it has not been done. It is right that we have tabled the motion for debate, and I pay tribute to my hon. Friend the Member for Folkestone and Hythe (Damian Collins), the Chairman of the Committee, for leading it, and to the Select Committee for having proposed it to the Backbench Business Committee.
I do not deny that the FA does good work, such as the good community work it does through the Football Foundation. We have benefited from significant funds across the High Peak, not least for the new changing rooms for Tintwistle Athletic at a cost of £300,000 to £400,000. I acknowledge that. The FA also acknowledges that there is need for governance reform, as the present chairman, Greg Clarke, said in his statement published on Tuesday evening.
I respect and have a lot of faith in Mr Clarke. He is combative in his defence of the FA, and I do not blame him. He says that the FA has a set of proposals to present to the Minister for her approval and I am interested to hear what she is looking for from those. However, as a fervent football supporter, I hope that Mr Clarke can resolve the matter without our having to get too heavily involved. I urge him to do so and to do so quickly.
Football is the people’s game. In recent years, as we have heard, it has had a huge influx of cash, with players earning eye-watering amounts of money, but it is still a game with 22 men—or indeed, women—kicking a football about, trying to get it into the opposition’s net. The FA is the organisation that oversees that, and it has all this growth in the football family to deal with.
On the 20th of this month, it will be the 25th anniversary of the founding of the Premier League—the juggernaut that has precipitated much of this growth. The FA has to deal with that, but the relationship has been called into question. The game is seemingly in rude health, so why is it being called into question today? There is support for the lower league. Glossop North End, in my constituency, has been in two FA Vase finals, in 2009 and 2015. In 2015, they could not sell the tickets direct and get a commission, as they did in 2009; it was done by the FA. Glossop North End got less money. It lowered the prices, but the gates were less, because of the FA. Sam Allardyce managed England for 67 days and one game, and allegedly walked away with £1 million.
Such things are destroying people’s faith in football. The FA is the governing body. It needs to address this matter, and quickly, starting with governance.
Gordon Marsden (Blackpool South) (Lab)
Football clubs are
“more than simply private assets”.
Those are the words of the Vote Football campaign, and they have been echoed by many Blackpool football club supporters who have written to me ahead of this debate. Blackpool has always had a proud football history, from the club’s famous 1953 FA cup final, with Stanley Matthews, to Jimmy Armfield, recognised internationally for his abilities as a footballer and as a commentator, and all the way through to the Cinderella story of our promotion to the premiership in 2010—a very proud moment in our history. I was privileged, along with tens of thousands of people on the promenade, to welcome home the team.
Sadly, however, the strife over the past four years between the club’s fans and owners is only too well known. It has resulted in thousands of people choosing to boycott Bloomfield Road in protest at the club’s running. That is why, incidentally, I backed the Bill that my hon. Friend the Member for Eltham (Clive Efford) introduced that would have given accredited groups such as the Blackpool supporters’ trust greater powers and influence over how their club was run. It is a melancholy set of circumstances, not simply for Blackpool, but elsewhere, particularly in the north-west, with the issues at Blackburn and, some would argue, Bolton. That, again, is why I signed early-day motion 611, along with other Members from the north-west.
It is interesting to note what the Blackpool supporters’ trust said about the governance issues. The unprecedented pursuit of Blackpool football club supporters by the management through the civil courts on matters such as defamation, libel and trespass has made the situation far more difficult. As Steve Rowland, the chair of the supporters’ trust, has said, the FA was supposed to be the overarching guardian of the association football game in this country, but too often it has become simply a money-spinning business venture. If this debate can take us forward, serious attention can be focused on reform, the fairer representation of supporters’ rights in the way clubs are run, and more stringent rules in respect of the roles of owners and directors. That is why I also support the plans to have supporter representation on the executive board and council.
These are issues that ordinary football fans in Blackpool feel strongly about. I want to quote from two letters I have had. One reads, “They’re not just businesses like any other, but company law makes no such distinction, and the FA rules no longer do either”. My constituent Stephen Bullen, who strongly believes that clubs should be run in the best interests of the community, wrote:
“The FA has committed to investing £260 million in grassroots football over a four-year period, but…is this really enough?”
Is it getting to the grassroots? Supporters have nothing but the game’s health at heart, but they are dramatically under-represented on the FA board, as we have heard. As the Football Supporters Federation has said,
“if the governance is to be truly reflective and representative of the sport…needs to value the role of ‘consumers’ and other less traditional ‘producers’.”
I know that the sports Minister is anxious to move and frustrated at the lack of progress. I have talked to her about the problems of Blackpool football club, the chasm that has opened between the owners and the fans, and how this illustrates starkly why there needs to be a much more proactive system of governance. She responded with a set of proposals, but they are not far-reaching enough, not least in their failure to contemplate Government action. Why has it taken her Department almost six years to act? The letter from the five FA executives sums it up, and that is why it is reasonable to concur with the conclusions of the Chairman of the Culture, Media and Sport Committee. As someone once said, the prospect of hanging concentrates the mind wonderfully. I wish the new chief executive well in his attempts to prove the Committee wrong, but there will be no harm in pressing the motion in the meantime.
Several hon. Members rose—
Mr Speaker
Order. I am sorry, but it must be three minutes each from now on.
Nigel Huddleston (Mid Worcestershire) (Con)
A foreign observer could be forgiven for looking at football in this country and wondering whether it can really be the case that the sport is poorly governed. After all, we have the most watched, admired and financially lucrative top division in world football, with attendances of over 90% every week at premier league stadiums.
As has already been pointed out, the Football Association performs some great work throughout the country, investing more than £65 million a year in grassroots football. My constituency is one of many that benefit from that. I think we should also acknowledge the great work that Greg Clarke is doing in trying to reform the FA. As a relatively new chairman, he has given some extremely encouraging signals about the direction in which he would like to take it in the coming years.
The problem is this. For many years, we have heard again and again from the FA that it recognises the deficiencies and challenges and intends to change—in fact, it has been talking about reform for 50 years—but change has not come, and time is running out. I have a great deal of respect for Greg Clarke, but I also have a feeling that his hands are tied, and that a sense of institutional inertia pervades the governance of football in this country.
In 2011 and 2013 the Culture, Media and Sport Committee produced reports on football governance and finance, and it has also highlighted problems with diversity.
Stephen Pound
I think it important that the hon. Gentleman is mentioning the good aspects of the FA. It is easy for us to criticise, and heaven knows the FA deserves criticism, but every day of the week work is being done by bodies such as the Fixtures Committee and the Disciplinary Commission, which oversees referees. A vast amount of tedious, boring administrative work is undertaken by the FA, and without it none of us would be able to enjoy the game that we love.
Nigel Huddleston
Indeed. As I think is clear from the tone of all the speeches that we have heard so far, we do not want to hinder the progress of football; we want to help. I agree with the hon. Gentleman that a great deal of work is being done.
Some commentators have fairly and reasonably pointed out that it is a bit rich for a largely “pale, male and stale” Select Committee to lecture another organisation about diversity. It is true that there are more gentlemen called Nigel on our Committee than there are women. In fairness, however, I would respectfully point out that we deal every day with the Department of Culture, Media and Sport and speak to a female parliamentary private secretary, who reports to a female sport Minister, who reports to a female Secretary of State, who reports to a female Prime Minister. I might add that our last two reports were on, respectively, access to stadiums for disabled people and homophobia in sport.
It seems to me that the main purpose of the motion is to fire a warning shot across the bows of the FA. On its own, it will not change the structure of football governance—we all know that—but the fact that we are having this debate will hopefully communicate, in no uncertain terms, just how important the issue is to MPs and our constituents, and will instil a sense of urgency within the FA board and council. I am well aware that the FA is coming up with its own proposals for reform, and I look forward to seeing them.
As I have said, my intention is not to hinder Greg Clarke and the FA’s own reform agenda, but to help. As a Tory MP, I am not greatly enthusiastic about Governments’ becoming involved in anything unless they absolutely have to, but let us be clear: if we have to intervene, we will. Talk without action is no longer an option.
John Mann (Bassetlaw) (Lab)
A major scandal is emerging of private companies running 16-to-18 football and other sports academies funded by the Department for Education. For example, a company called Gemeg, which operates in my area, is behind a football academy serving Worksop Town football club. We and the public were told that the company was run by Doncaster College, but when it collapsed, we found that it had been run by the College of West Anglia, which is 100 miles away. West Anglia claims that the operation took place for five months in Nottingham, but I can find no evidence that anyone ever went to Nottingham for five months. That involves 23 different students, and what I do know is that zero qualified in English and zero qualified in maths, and that the FA’s safeguarding policies in schools were being breached. I make this offer to the FA. We in my area, with the local authority, the schools and the local FA, can provide best practice in safeguarding in football. At present, the systems at the grassroots are shambolic and must be overhauled.
Let me put in a word in defence for the FA. It was the FA that took action on Anelka and the quenelle. It is the FA that has taken action on racism. It is not the FA that is responsible for football clubs not employing black and Asian coaches. It is the premier league clubs, the Football League clubs, and the league clubs in other structures that is failing to do so. The FA actually has been training people up. It is the FA’s work that has led to the huge development of women’s football.
The insidious power not least of the Premier League, but also of the other professional clubs, in running the FA for their own purposes is a fundamental weakness. We should not forget people such as Jack Tarr in my area, who drew up the fixtures that made sure that Bassetlaw has more kids playing football in schools than anywhere else in Britain. We are asking the FA and the Government to give us some of this resource. If only the equivalent of the taxpayers’ bill for policing just one premier league fixture of major consequence could be put into facilities in my area. Some 600 people watched Retford versus Worksop last Saturday, but neither club owns its own ground and neither club can get investment to develop its facilities. Give us the chance to do that. These problems run deep in football, where the money runs very thick.
On safeguarding, we should use the money as leverage. We should use it as leverage on diversity and on bringing women and girls into football. We are delivering the youths; give us the chance to develop the sport. That is the real challenge for the FA. Of course its structure is outdated, but let us have some of that money from the professional game and clubs into the grassroots.
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow the hon. Member for Bassetlaw (John Mann).
I grew up in the shadow of Wembley stadium and its twin towers. I followed my local football club and I ran a Sunday football team. I am, of course, a fanatical football fan—my father helped to set up “Match of the Day”, so I think that I can speak as a true football fanatic. I am a season ticket holder—home and away—for my favourite team.
The reality is that football in this country is in the hands of the Premier League. It has the power and the finance, and it has sold out to the TV companies, which now dictate when games are played, which days they are played on and what time they kick off. Of course, huge amounts come in as a result.
At the same time, as we have heard, grassroots football across this country is not seeing that money transferred down to it, because premier league clubs are keeping the money to themselves. The FA does not do its job in representing grassroots football, in controlling the game, and in making sure that the money flows from the top to the bottom so that we can develop the young players—male and female—right across this country who we all want to see playing the beautiful game positively and in the right way. Without a change, we face stagnation in our national game and our England football team being unable to win trophies—we would all like to see them win trophies—and we do not have the quality of football that we would all want.
Wembley stadium has always been our national stadium. It is the shrine to which we go for FA cup finals, League cup finals, internationals and other events. However, it is now being transformed, with not only Tottenham playing there for a year, but Chelsea potentially playing its home matches there for three years. That, to me, is wrong, because it is an abuse of our national stadium, which should be kept for those all-important matches that fans want to see. Turning it into a stadium for clubs to use for perhaps four years or longer, is an abuse of our national stadium and we should not allow it. However, the FA, which is in charge of that national stadium, seems to be an amateur in dealing with high finance in football. We should encourage professionalism in the FA, as well as reform to it so that the situation does not get ever worse. I will conclude with this statement: it is important that the FA understands that if it does not transform itself, Government action will be required.
Mr Clive Betts (Sheffield South East) (Lab)
I should like to put on record, as chair of the all-party groups on football and on football clubs, the fact that both groups get administrative support from the Football Association.
Back in 2005, we had the Burns report, and I met Lord Burns shortly after the report was published and had discussions with him. Over the years, I have also talked about these matters to my colleague, Richard Caborn, because the report was commissioned jointly by the Government and the Football Association. The tragedy is that it has taken an awfully long time to do very little over the years. The FA council is virtually unreformed since Lord Burns talked about it.
Some progress has been made with the FA board, which now has an independent chair and two independent members, but more needs to be done. The suggestion about having a fans’ representative on the board should be taken seriously. The problem with the FA board, of course, is that it does not really run football as a whole. There is so much power because of the money coming from the Premier League, and the professional game board still has powers that have been taken away from the FA board as a whole. If we are going to have a reformed FA board, it has to be responsible for the whole of football. It has to be the governing body for every aspect of the game. That is something that we absolutely want to see.
I do not want to belittle the Premier League. It is a magnificent global brand and it has done some good things, including introducing the £30 maximum charge for away fans, but in the end, we still have a situation in which an ordinary premier league player can earn more in two months than Sheffield City Council spends on its junior football pitches in a whole year. There is something wrong with that; it shows that the balance of money in the game is all wrong. A reformed board has to be able to divert more money into grassroots football and address the cliff edge between the premier league and the English Football League.
Also, we should not belittle everything that the FA does. It has done some great things. For example, it has done really well on the women’s game at local and professional levels, and it has tackled racism. It needs to do more on homophobia, but it has started to do so. Mr Speaker, you hosted a reception at which Graeme Le Saux spoke about what the FA was doing to tackle homophobia. It is also starting to address the issue of black and minority ethnic coaches, and the English Football league has taken important initiatives in that regard as well. We want the Premier League to do more.
In Sheffield, we run the largest junior football league in Europe, under the banner of the Sheffield and Hallamshire County Football Association. The FA is now pioneering the Parklife project, which has two schemes in Sheffield, one of which is in my constituency at the Isobel Bowler sports ground. Spades are now in the ground and the scheme will be up and running in a few months’ time. The FA is taking really good initiatives such as those, despite all the problems, but there has been too much delay in regard to its governance. In Greg Clarke, we have someone who wants to see reform and we ought to back him now. However, we must make it clear that if the FA and other footballing bodies do not back him, we will ask the Government to act instead.
Christian Matheson (City of Chester) (Lab)
I do not want to go down the route of legislation to reform football governance, but the FA is supping in the last chance saloon—it has been doing so for a long time. My hon. Friend the Member for Sheffield South East (Mr Betts) knows a lot about this subject, and I agree with what he says about Greg Clarke. Having met him, I can see that he is a man who has clarity of purpose and determination, and who wants to make a difference. He has asked for time in which to do that, and we should be willing to give him some, but only a little.
Peter Dowd (Bootle) (Lab)
Notwithstanding my hon. Friend’s comments, does he acknowledge that the Vote Football fan campaign, the Football Supporters Federation, individual supporters, grassroots organisations, parliamentarians and constituents all want change and reform? Why does he think that the FA believes otherwise? Is it not now so out of touch that there is a need for the external imposition of change?
Christian Matheson
I do not think that Greg Clarke is out of touch or that he believes otherwise. He has clarity of purpose, but the structures are inflexible and unbudging.
On the one hand we have the juggernaut of the Premier League, as my fellow member of the Culture, Media and Sport Committee, the hon. Member for High Peak (Andrew Bingham) has described it. The league is a success and it attracts the best players. Speaking of which, was it not magnificent to be at Goodison on Saturday to see Romelu Lukaku score four, Mr Speaker? But I digress. The Select Committee was told in a letter that Premier League representatives
“regularly use their position on the FA Board”
and “their financial might” to “maintain their position”.
On the other side are the elderly gentlemen, the 25 life presidents on the FA council, whom my Committee Chairman, the hon. Member for Folkestone and Hythe (Damian Collins), eloquently described earlier. They are known as the blazers, not to be confused with the Glazers, as any Manchester United fans in the Chamber will know. That description reminds me of Will Carling’s famous description of the leadership of the Rugby Football Union in 1995 as “57 old farts”. That was a coarse term, Mr Speaker, but it seemed to move things on, and the RFU has since brought its governance up to date. There are arguments against the Premier League and the so-called blazers, but for me this is about the combination of both, so it is clear that legislation might be the only way of breaking the logjam of self-interest.
If I may digress slightly, there is one area on which I disagree with my hon. Friend the Member for Eltham (Clive Efford). When the structures at the top are not right, the management below does not fall into place. For example, we know that the FA is failing to regulate both the power of football agents—I am told that the agent exam can be passed by an 11-year-old—and transfer negotiations, leaving the potential for a bung culture. The structures are not right, so the management and the enforcement below is not right.
The problems involving the great club of Coventry City and Sisu were mentioned earlier. Greg Clarke told the Culture, Media and Sport Committee that although there are fit and proper person tests for directors and officers, there is no test of whether someone actually has the ability to run a club, which is another example of management structures not being good enough. During the Select Committee session, I talked about the tentacles of offshore ownership and untraceable money, which the FA is unable to manage. I also mentioned Vibrac Corporation, which used its base in the British Virgin Islands to loan millions of pounds to Everton, West Ham, Fulham, Reading and Southampton between 2011 and 2013 despite a lack of clarity about who actually owns it. A further problem is that the FA has little control over financial matters and appears to rely on little more than signed declarations from clubs or interested parties to say that they are fit and proper, which allows the FA to avoid responsibility. Good governance depends on the right structures at the top and on allowing the management to enforce rules that have been put in place correctly.
Greg Clarke is a good man who will fight hard to achieve his reforms. He has won friends in the amateur game by visiting every county FA in England, but he needs support and I am unsure whether he has that at the moment.
Keith Vaz
I thank my hon. Friend. Leicester is the home of the English Premier League champions. My message today is one of support for the reform package that has been put forward, but I acknowledge the excellent work done over the past few years by the Chairman and other members of the Culture, Media and Sport Committee. Of course the FA needs reform. Greg Clarke, whom I know personally, was present on the most recent occasion that I was at the King Power stadium and is a former chairman of Leicester City, and I believe that he is genuine in his desire to reform his organisation. He has made it clear that if the reforms do not go through, he will relinquish his position. Given the impressive contributions that we have heard from Members on both sides of the House, it is important that reform comes sooner rather than later, but I want to talk about the importance of diversity.
Some 25% of professional footballers happen to be of Afro-Caribbean origin, but just 17 of the 92 top clubs have a BAME coach in a senior position. When looking at how football has developed over the past few decades, it is important to acknowledge the lack of diversity. I understand that Mr Clarke wants the Government to back the proposals before they are implemented, and I hope that the package will include a recognition of the importance of diversity not just at club level but at the local level.
I am delighted that Leicester has local football teams that are developing the skills of young people whom I hope will go on not only to play for Leicester City at the King Power stadium to help us retain the premier league and beat Sevilla to win the champions league this season, but to build a foundation for the future. It is through schools and local football clubs that we find the players of the future. I hope that the Government recognise that the issues are serious, as I am sure the Minister for Sport does. I invite her to come to the King Power stadium before the end of the season to see diversity in action not just through the players, but in the ownership and in how the club’s management has developed.
Graham Jones (Hyndburn) (Lab)
It has been 50 years of hurt in the English game and we are all suffering, but at least we are not Scotland.
It is not only all the issues that have been raised by hon. Members that appear to show a structure that is unfit for purpose. We have seen not just a sequence of managers but of chairmen who have not been credible or led the FA properly. It is time for root and branch reform of the organisation and some sense of the English game being managed for the benefit of all—those at the top and those at the bottom. I want to touch briefly on some of the problems, such as the coaching problems mentioned by my right hon. Friend the Member for Leicester East (Keith Vaz). There are all sorts of problems in coaching, and we have had the recent scandal. When we talk about root and branch reform, it cannot just be about the FA, the senior structures and the picking of the England manager—although they are dreadful at that—it must be about some of the other issues at the grassroots. My hon. Friend the Member for City of Chester (Christian Matheson) mentioned the funding of grassroots football, and that must also be part of root and branch reform.
My area has three clubs, two of which are well run. One is Accrington Stanley, and I give a shout for Andy Holt, who must be the best chairman in the football league. The other is Burnley, which is well run, but I shall move on.
Many people in the Chamber and outside will be aware of the problems of my club, Blackburn Rovers, and how poorly it is run. My hon. Friend the Member for City of Chester also mentioned the involvement of agents in the game, which root and branch reform must address. Three or four years ago, we had Jerome Anderson, who I think must be agent 001, who went on the television saying he was working for Blackburn Rovers. He was acting as a purchaser and advising on players, he was also an agent providing players and his son was on the books at the time, alongside other players he represented. The FA said that was not a breach. Everyone looked at that and thought, “Hang on a minute, we’ve just had half an hour’s rant from Jerome Anderson on Sky Sports.” It was clearly wrong, and the FA did nothing about it. It brings the game into disrepute.
My final point is about the owners, and I think people know what I am going to say. When we talk about a fit and proper persons test, we talk about people who perhaps should not run football clubs for financial reasons. In the case of Blackburn Rovers, it is just sheer incompetence. There is only one UK director and they have no interest in the fans or the club.
Mr Speaker
I do not know whether the Minister will be able to be on her feet by 4.50, but that is what she would like, and I know she has a fair bit to say. We will see how we get on.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I am grateful for the opportunity to speak in today’s debate. The Chair of the Select Committee set out a powerful case and I will not rehearse too many of the points that he made. We also had fantastic contributions from other hon. Members, with the exception perhaps of the hon. Member for Hyndburn (Graham Jones) who took the mick out of the Scottish game.
The motion is damning, and I have little sympathy for the FA as it was given early warning of the concerns of the Culture, Media and Sport Committee. The first report outlining its concerns was published in 2011, and a follow-up report that stated that the football authorities had not done enough on governance reform was published in 2013. We are now, therefore, six years into the process and questions are rightly being asked about why enough has not been done to address the concerns that have been raised.
In a somewhat squeezed debate, I want to focus on the lack of diversity at the top of the FA and across the game in general. In doing so, I will primarily focus on the lack of women involved in the running of the game. The draft code of governance states that 30% of members who sit on a sports governing board should be female, and the FA fails miserably in that regard as only one woman sits on its 14-person board.
The issue does not only affect the English FA, as the Scottish Football Association also has room for improvement. Scotland goalkeeper Gemma Fay—a good St Johnstone fan like me—who has been capped more than 160 times, claims that women are not represented enough at board level and has called on the Scottish governing boards to make moves to diversify their board members.
A recent survey found that only three of 70 directors at Scotland’s top football clubs are women, which proves that the imbalance exists in boardrooms right through the game. In fairness, the Scottish Football Association has been going through step-by-step reform over the past few years to become a fully representative and modern governing body. Following the McLeish report in 2010, the SFA has been going through an ongoing process of modernisation, which includes the creation of a new congress to replace the so-called blazers of the past with the first fully representative group of stakeholders.
The creation of the congress has meant that clubs and affiliates are now joined by recognised bodies such as Professional Footballers Association Scotland, the Scottish Managers and Coaches Association, the Scottish Senior Football Referees Association, the Scottish Football Writers Association and SportScotland. The congress deals with many issues, and its work includes looking at ways of increasing the numbers and influence of women in the game.
For a long time, and many moons ago, Maureen McGonigle, the founder of Scottish Women in Sport, was the only woman involved with the SFA at any senior level. She sat on the SFA non-professional game board and is the only woman to have received a long-service medal from the SFA council. She was the only woman on the council for 14 years, and casual sexism was rampant in those days. Maureen gives an example:
“One of the first dinners I went to was for the opening of the South Stand at Hampden. I was at a table with all of the Scottish FA council wives while my work colleagues were sitting elsewhere. Afterwards I wrote to Jim Farry”—
the then SFA chief executive—
“and said ‘I’m not a wife, I’m actually a worker.’ I then became the first woman to sit at a men’s table at one of the dinners. To be fair, I was always treated well within the council but they never knew how to address me. It was always: ‘Good morning gentlemen …and Maureen.’”
Despite the welcome progress that I have outlined, the SFA professional board still has no female members. It is fair to say that a dramatic increase in the pace of change is required.
It is also fair to say that two of the most impressive people currently operating in the Scottish game are women. A few weeks ago I attended a sports policy conference in Edinburgh, and we were lucky to hear from Ann Budge who, after leading a takeover of Hearts, has spearheaded a huge change in fortune for the Tynecastle club and was named Scottish Professional Football League chief executive officer of the year in 2016.
Meanwhile, the club’s Edinburgh rival, Hibernian, has an inspirational chief executive in Leeann Dempster. I was lucky to be a guest of Leeann at Easter Road a few months ago, and she was eager to discuss a community programme on which the club has embarked. Most clubs these days have a community trust, some more effective than others, but GameChanger takes it to a different level by involving more than 100 partners from the public, private and third sectors, culminating in a public social partnership between the club, business and the national health service. It is about using Hibernian’s assets to improve the lives and life chances of all in Edinburgh and the Lothians, not just Hibs fans. Leeann has strong opinions about the governance of the game, and she thinks that there are still not enough women involved, particularly at the decision-making level.
The FA has a slogan: “football for all.” It always talks about how sport should be for everyone, but how can that be the case when, at senior level, there is a glass ceiling for those who are not white and male? Furthermore, the FA chairman’s recent comments on homophobia within the game, advising against players coming out, almost serve to highlight that point. The advice not to come out because the FA cannot protect those players is inherently wrong and is an abdication of leadership on a hugely important issue, undermining some of the FA’s good work.
Instead of urging people to remain silent about their sexuality, the FA chairman should be doing all he can to ensure that football is a place for everyone. Anyone who dares to abuse a player because of their sexuality, ethnicity, religion or anything else is not welcome at football matches. Moreover, if a particular club has repeat offenders within its fan base, the club should be punished with larger fines and point deductions. That is the correct approach, and it underlines the faults within the FA.
The FA is a governing body, and it has a responsibility to clubs, players, managers and supporters to send out messages and to set the right standards for all those involved in the game. Football is massively important to all the home nations. It is our national game, and more than 12 million people play. It is woven into the very fabric of our society. Despite all that, football has to change and adapt to the modern environment in which it finds itself. This is not about the Government interfering in the affairs of the game; it is about ensuring that the FA meets its slogan about being a game for everyone. We need to open the boardroom to people from all backgrounds, and the time is long overdue for supporters and people from diverse backgrounds to be involved in the running of the national game.
Dr Rosena Allin-Khan (Tooting) (Lab)
It is clear from the speeches made by Government and Opposition Members alike that football really is close to all our hearts. Like the Minister, I grew up playing football and, like us all, I am sure, as a fan I have gone through the highs and lows of watching my team throwing away a game in the final minutes or winning spectacularly on the world stage—although for that, I suppose it depends on which team one supports. In the spirit of diversity, I wish to put on record that I am very glad that both my friend the Minister and I are women.
The purpose of this debate is unfortunately not to discuss the highs and lows of football, but to debate confidence in the Football Association. Rigorous governance and the following of proper and due process is vital for governing bodies such as the FA, so that it can work properly and in the best interests of its players, coaches, match officials, stadium staff and fans. Rigorous governance allows us to build trust—trust not only of the governing body itself, but among those who make up the game.
With rigorous governance come positive outcomes: outcomes that ensure support at a grassroots level to increase the participation of women and girls in a sport that is currently dominated by the men’s game, and outcomes that see diverse representation across all levels. Rigorous governance also ensures that governing bodies serve to the fullest extent all stakeholders, perhaps most importantly the supporters.
Keith Vaz
First, I congratulate my hon. Friend most warmly on her appointment as the shadow sports Minister. I refer to the Register of Members’ Financial Interests in respect of Leicester City football club and myself.
My hon. Friend mentions diversity. Bearing in mind her discussions with the FA, does she believe that there should be a target for ethnic or gender representation, or would she leave it to the FA to come up with its own outcomes?
Dr Allin-Khan
That is a good question. I have met Greg Clarke and representatives from the FA on several occasions, and I do believe that Mr Clarke deeply understands the importance of diversity, at every level. I truly do believe he feels that. Putting in quotas would perhaps add some value, but we need to ensure that women and people from ethnic minority groups also feel empowered to apply for jobs, not only on the field but in the boardroom. It is also important that we have role models.
Like all governing bodies, the FA has duties, one of which is governing the game with integrity. It cannot fulfil its duty unless it has strong governance, and currently it is not performing well enough. That needs to change. There is no cushioning around this point: the FA must do more. In 2011, Lord Burns said that the FA Council, at 118 members, was too large; today, the council has 122 members. As we have already heard, the council is made up of only eight women and four representatives from black and minority ethnic groups.
Not only is diversity not in the heart of the FA; it is not in its body or, indeed, even in its soul. My hon. Friend the Member for Eltham (Clive Efford) spoke of the importance of nurturing more home-grown talent. The FA has accepted those and other current failings, but it must now move on from the criticisms and make a clear path forwards on to a road of good governance. If it does not, it will only have a detrimental effect on the game.
Despite all that, we must not sideline the hard work and determination of many within the FA. My hon. Friend the Member for Bassetlaw (John Mann) made an excellent point about the work that has been undertaken to combat racism, and we must acknowledge as positives the aim to double female participation by 2030 and the Lionesses placing third in rankings of our country’s favourite teams. Some £22 million a year is invested into the grassroots game, and with more flexibility being seen in the form of five-a-side and walking football, a larger proportion of the population has the opportunity to get involved. Those are not small steps; they are ambitious, and that should not be taken away from the FA.
Nevertheless, just as the Football Association has a duty, so do we in this Chamber. We have a duty to follow due process. A process has been laid before all national governing bodies, and it must be adhered to. If not, we will be moving the goalposts—as it were—and it will be us who ensure a detrimental effect on the game of football. I do not wish to do that.
All national governing bodies have been given until April this year to lay their plans before the Government and show their reforms. That is a timetable and a process that we must stick to. We cannot single out individual governing bodies. Parliament must live up to its duty. We cannot shift the goalpost for some, and leave them cemented in for others. Having said that, we must make the Football Association aware that this is its last opportunity. In an evidence session of the Culture, Media and Sport Committee in December, the Minister stated that she believed that financial penalties—that of removing £30 million of funding to the FA as well as withholding support for a World cup bid—would be severe enough for the FA to take notice and make reforms. However, respectfully, I disagree. Further in the evidence session, the Minister stated that funding would still be given to the game of football, but through different means. This, therefore, does not have a significant effect on the game.
The hon. Member for Folkestone and Hythe (Damian Collins) quoted life vice-president, Barry Taylor, who said that the governing body is rich enough to stand alone and that it should resist change that would see a more independent board and an end to the current council’s structure. That makes it blatantly clear that funding cuts are not, and never will be, a driving factor for reform.
A World cup bid would also not be likely until 2030, which, therefore, provides no time-sensitive pressure on the FA to reform. After today’s comments by the life vice-president, I ask the Minister whether she still stands by those comments.
Many in this House today have brought forward the concept of legislation, but that must be used as a last resort. It must be made known to the FA that legislation will, without doubt, be drawn up if, in April, plans presented to the Government are not of a sufficient nature and reform cannot be seen. Does the Minister agree that if, in April, the Football Association’s plans are not sufficient, the only next step to take is legislation?
Will the Minister commit today that if, in April, the FA is unable to show significant progress towards levelling out the playing field when it comes to diversity on both the board and the council and subsequently not meeting the mandatory aspect of the governance code for “greater parity and greater diversity”, she will take action against the FA?
What I have wanted to highlight today is that we cannot, and should not, jump the gun. It is for that reason that, at this time, I cannot stand by a motion of no confidence. However, I will stand extremely firm in April. My message today is this: reform is necessary, and progress must be seen. If that is not the case, then the time for self-reform is up. We owe that to all those who participate now and those who will participate in the future.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
I thank my hon. Friend the Member for Folkestone and Hythe (Damian Collins) and members of the Select Committee for securing this Backbench Business debate this afternoon. Members have spoken with great passion and insight on a subject that we all should, and do, care deeply about. However, although this debate is important, it is, none the less, a few weeks premature for reasons that I shall explain in my speech.
We need to be careful that we do not tarnish the growth and success of English football because of concerns about governance at the FA. To do so would denigrate the hard work, dedication and commitment of the thousands of volunteers at grassroots level right up to the professionalism of the majority of coaches, players and clubs at elite level.
When I sat in front of the Select Committee recently— and indeed during this debate—Members were sceptical about the incentive to remove public funding from the FA if it did not comply with our governance reforms. That scepticism was reinforced this morning in an open letter from the FA’s life vice-president, Barry Taylor, to all 120 members of the council. He said:
“We have the money, we have the power. Let them stop the money. How did we manage to build Wembley and St George’s Park, I ask?”
The answer to Mr Taylor’s question is—with Government money. In fact, the Government bailed out the FA with £160 million of public money to build Wembley stadium. We gave it £6 million to help it complete St George’s Park. We gave Government guarantees for the 2018 World cup bid and a similar underwriting for staging the champions league finals at Wembley and the European championship semi-finals and final in 2020. Furthermore, tens of millions of pounds is given through Sport England to help the FA grow and sustain grassroots football in this country. Some £10 million is given each year to the Football Foundation charity that we partner with the FA and premier league, which has built and upgraded thousands of new grassroots sports facilities across the country. That is on top of the £30 million that the FA has had over the past four years to grow the game in other areas. Although Mr Taylor and others might not see the threat of removing public money as a serious one, they should just reflect that it is not just about the millions of pounds that they get from Sport England but all the other financial aspects as well.
Fortunately, the view of Mr Taylor is not that of the FA executive, for it knows that had it not been for Government support, hundreds of grassroots clubs would have disappeared. We would not have a national football stadium, or be able to host prestigious European matches. This Government, and previous Governments, intervened because we recognised the ambition that the FA had for football in this country, and Government share in the FA’s future ambitions. When it told us that good quality facilities and coaching were needed to support the grassroots and produce better players, we backed it, without hesitation, by committing a further £50 million over the course of this Parliament, which was over and above the figures that I have already mentioned, to its flagship Parklife project.
The Government’s intention is clear. We want to support the grassroots, amateur and professional game as a whole. In my discussions with the FA executive, its members tell me that they value their relationship with Government and that the vital public money they receive, directly or in partnership, is helping them to deliver important initiatives on the ground. However, that public money—money that, incidentally, many members of the public do not think a wealthy sport such as football should have—has to come with conditions.
The UK code of governance for sport, published last October, was not written specifically for the FA, but it is not exempt from it. The code will help to ensure that all sports governing bodies are moving in the right direction and are creating the most effective environment for their sports to thrive. It will protect public investment in sport by ensuring that transparency, controls and financial probity are a prerequisite for all organisations in receipt of public money. It challenges sports bodies to reflect on whether their current structures are effective. I genuinely do not think that we are asking sporting bodies to do more than what we would expect from good corporate governance. Frankly, what right do we have to criticise the governance of FIFA if the nation’s Football Association is not transparent in its own decision-making process? Good governance equals better decision making. Reform of the governance structures at the FA will undoubtedly permeate football at all levels.
We have heard today that the FA has lagged behind the times, that it is unrepresentative of the people who play and support the game, and that it is unable, or perhaps unwilling, to unlock the stranglehold of vested interests. I do not disagree with most of that sentiment. The FA concentrated its grassroots efforts on the traditional 11-a-side parks game. The result saw participation stagnate and, at certain times, decline. The FA was slow to recognise that people’s playing habits were changing along with their lifestyles. For too long, the FA failed to realise the true potential of women’s and girls’ football, nor what women can bring to the game off the pitch. But given that a leading member of the FA Council referred to a woman’s role in football as washing the kit while I—an FA qualified coach, manager of a girls’ team and, oh, Sports Minister—sat two seats away from him on a platform, it is little wonder there are so few women sitting in influential positions at the FA. Other areas of diversity remain a challenge for the FA, and I look forward to the Select Committee’s report on homophobia in sport, which I am sure will address the issue of how football could do more to support male gay players.
Yesterday, Members saw the open letter that the chairman, Greg Clarke, sent to the council. He knows that by the end of March, before the code comes into effect, the FA should have in place an action plan agreed with Sport England that sets out what steps the FA is taking to become compliant with the code, and the timescale for achieving each target. He says that if it does not comply, he “will have failed” and he will resign. It is true; he will have failed. But that will be as a consequence of his own board and council failing him, not because the Government have set an unreasonable challenge of achieving good governance. I accept that the FA has not wholly delivered on this promise of reform in the past, but where we are today with the mandatory code is different from where we have been before. The code acts as a yardstick against which we can benchmark all our sports governing bodies.
We should be proud of what football has achieved, but we must also reflect on what else it can and needs to improve on. We can ensure that support goes into grassroots football without going through the FA. Only 30% of grassroots football is delivered through the FA. It is up to the FA if it wishes to play Russian roulette with public money. Given the debate we have had today and the number of representations received by me and other Members, I think it is fair to say that the FA will lose. In my opinion and the opinions of other colleagues, the FA’s current model does not stand up to scrutiny. Reform is therefore required, and the governing body has every opportunity to bring that about itself.
Although I believe that today’s vote of no confidence in the FA is six weeks’ premature, it and other governing bodies should be fully aware that the clock is ticking fast, and that failure to reform will lead to not just the withdrawal of public money but further consideration of legislative, regulatory and financial options to bring about the changes needed. If we want better governance of football across the world, let it begin here.
Damian Collins
The message from this debate is absolutely clear: no change is no option. The debate on this issue has been running for too long, and the FA, to use a football analogy, is not only in extra time but at the end of extra time; it is in Fergie time and it is 1-0, down and if it does not pick up quickly and reform itself, reform will be delivered to it.
Question put and agreed to.
Resolved,
That this House has no confidence in the ability of the Football Association (FA) to comply fully with its duties as a governing body, as the current governance structures of the FA make it impossible for the organisation to reform itself; and calls on the Government to bring forward legislative proposals to reform the governance of the FA.
Petitions
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Valerie Vaz (Walsall South) (Lab)
A petition in similar terms has been signed by 65 people.
The petition states:
The petition of residents of the UK,
Declares that the Government’s consultation paper (Early Years Funding: changes to funding for 3 and 4 year olds 11/08/16) outlined proposals that will leave nursery schools financially nonviable, forcing them to close; notes that this funding will not cover basic costs, let alone staffing with qualified teachers; and further notes that state nursery schools have very good outcomes with regard to closing the achievement gap and supporting children with special needs, and that state nursery schools are legally required to employ highly-qualified staff, who are proven to give young children the best opportunities for academic achievement and enabling social mobility.
The petitioners therefore request the House of Commons to urge the Government to recognise the school status of State nursery schools and fund them accordingly.
And the petitioners remain, etc.
[P002011]
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The petition of residents of Rutherglen and Hamilton West, in similar terms to those lodged by my colleagues yesterday and in respect of some morally outrageous plans, states:
“Declares that Department for Work and Pensions plans to close eight Jobcentres in the Glasgow area, including Cambuslang Jobcentre, will impact tens of thousands of people in receipt of Jobseeker’s Allowance, Employment Support Allowance and Universal Credit, and that the consequences will be severely felt by some of the most vulnerable and disadvantaged people; have concerns that these closures will result in the poorest communities not being serviced by a Jobcentre and make it even harder for those seeking employment to get support, with people running a greater risk of falling foul of the UK Government’s sanctions regime; and are further concerned that these plans will also impact Scottish workers who will be forced to relocate to other Jobcentres.
The petitioners therefore request the House of Commons to urge the Government to halt any move to close Glasgow’s Jobcentres and carry out a thorough Equality Impact Assessment and go through a full and proper consultation before making any decision on the future of the estate.
And the petitioners remain, etc.
[P002013]
Holocaust Memorial Museum
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Sir Edward Leigh (Gainsborough) (Con)
The holocaust is one of the most difficult experiences in our history to commemorate in stone. For its sheer enormity and depravity, it defies adequate description, and transferring this into the built environment is all the more difficult. Architects across the world have attempted to tackle this task—in Israel, Paris, Washington, Ottawa and, perhaps most memorably, in Berlin, with Peter Eisenman’s Memorial to the Murdered Jews of Europe.
It is impossible sufficiently to convey the horrors of this great crime, but we have a duty not just to commemorate but to teach future generations about the holocaust. I will detail why Victoria Tower gardens are insufficient for this task, while pointing out that we have a very good solution available close by, at the Imperial War Museum.
There can be no better example of the twofold task of remembrance and education than the United States Holocaust Memorial Museum in Washington DC, which I visited recently and was very moved by. The visitor can experience solemnity and silence in a hall of remembrance, where one can light a candle, say a prayer for the dead and reflect. But this memorial is also a museum, and it is very large, with a permanent collection of over 900 artefacts, 70 video monitors and four theatres showing eyewitness testimony and historic film footage.
On arrival, visitors are given identification cards giving the name and story of a single person, whether a victim or a survivor of the holocaust. On a journey through history, they learn about anti-Semitism, the Nazis’ rise to power, the ghettos, discrimination, the frightening “final solution” decided around a conference table in Wannsee, and its implementation in Nazi-occupied Europe. The museum also teaches about the American response to the holocaust. It would be useful to detail Britain’s reaction at the time, whether it be to the Kindertransport or the well-intentioned but disastrous decision to severely cap German-Jewish emigration to the British Mandate of Palestine—always bearing in mind that we were the only nation to fight Nazism from the very first to the very last day of the war; of that we shall always be proud. Knowledge is vital—indeed, fundamental—to remembrance. We must make sure that Britons know about the holocaust in order to recall this great crime, as well as to prevent future attempts to commit anything remotely similar.
The Washington experience is the one that we should seek to emulate in a UK national holocaust memorial, but when we consider the Victoria Tower gardens site we see it is completely unsuited to the role. The US museum receives 30 million visitors a year, and it is thought that the proposed memorial here in London will receive over 1 million visitors per year. In line with this educative function, I hope that such a place of remembrance would become a must-visit site for children on school visits to London. However, Victoria Tower gardens is already a well-trafficked area that suffers from severe congestion. The traffic and access pressure will overwhelm Millbank, where there is no parking, at a location not capable of accommodating such a volume of people and vehicles, especially coaches. We want people to be able to visit a holocaust memorial museum uninhibited. We want crowds to experience this building, and so it is counter-intuitive to site it at a place that already suffers from congestion and does not have the capacity to deal with the number of people we hope will visit.
The abbey and Palace of Westminster are recognised by UNESCO as a world heritage site, and there is some danger, based on UNESCO’s rules and recommendations, that such a large-scale project in Victoria Tower gardens might threaten that designation. I urge the Government, and Westminster City Council, to turn down the proposal for a learning centre in the gardens, not least because it conflicts with the council’s monuments saturation zone. There are already 300 monuments in the City of Westminster. Last year, the council turned down an application by the Methodist Church to place a homeless Jesus—a bronze rough sleeper—outside Central hall because it conflicted with the monuments saturation zone.
We should also be worried about the precedent that this will set, not just for one of Britain’s world heritage sites, but for our royal parks. Victoria Tower gardens is part of the royal parks, and if we allow a green space like this, even for such an unquestionably useful and justifiable purpose, to be built over, then other spaces under the care of the royal parks may suffer a similar fate. This small park, fringed with large trees, is the only oasis in this part of Westminster for hundreds of thousands of visitors, office workers and local residents every year.
The scale of the learning centre—there has been criticism of it in the architectural press—raises questions about the fate of the existing memorials in the park: the Emmeline and Christabel Pankhurst memorial; Rodin’s sculpture, “The Burghers of Calais”; and the fine Gothic memorial to the Victorian abolitionist Thomas Fowell Buxton. Will these three existing memorials be overshadowed? Local residents have no objection whatsoever to a memorial on the scale of the existing memorials; they are just worried about the scale of the underground learning centre.
In addition, the plans call for building downwards beneath the ground of the park at a riverside location. The area faces serious drainage problems already, and 50 properties were flooded from underneath after the rains of June 2016. We are talking about ancient marshland that has been built up across the centuries. Subterranean construction here may significantly disrupt the local water table.
Of course, the whole area used to be surrounded by the River Tyburn and its rivulets flowing into the Thames. This was the old Thorney Island. The Thorney Island Society, which looks after the local history and preservation of the area where we are now, has expressed its anxiety in a statement:
“The Society is obviously very concerned at the loss of this valuable small park, because it is very difficult to imagine that a project of this size and importance would not dominate the space and transform it from a tranquil local park to a busy civic space. We do not object in any way to the building of a memorial, but we feel that there are more appropriate sites, already proposed as well as not yet considered.”
The society has urged people to sign the petition opposing the current proposal.
Happily, there is a solution. The Imperial War Museum is spending £15 million on renovating and improving its permanent exhibition devoted to educating people about the holocaust. The museum sits in a location that would not suffer from increased traffic and that is already conducive to tour and school coaches. It is less than a mile away from the Palace of Westminster, so it is still located in the centre of the nation’s capital. The museum’s directors have been very welcoming of the idea of having the national holocaust memorial at hand there, and they have offered a site next to the museum. Far from glorifying war, the Imperial War Museum makes the opposite point—that war led to the hatred and destruction that made the holocaust possible.
Bob Blackman (Harrow East) (Con)
My hon. Friend is making a powerful case, and I am delighted to hear that he supports the principle of a holocaust education centre and beyond. Does he not agree that schoolchildren and other visitors to the Palace of Westminster could walk to the holocaust centre, and so they could combine their visits without having to travel by car or by coach? They could visit all the facilities in one go, rather than having to travel between them.
Sir Edward Leigh
That is a perfectly fair point, but I believe that because of the severely constrained site, there might be difficulties with the sheer number of visitors. I make the separate point that we are talking about a decant of Parliament, and many services may be based in Victoria Tower gardens. There are all sorts of other problems that I think my hon. Friend should consider, although I hear what he says. After all, we are talking about the Imperial War Museum, which is very close indeed.
Given the constraints of Victoria Tower gardens, the concept proposed for the site has already had to be scaled down from an entire learning campus to a few underground rooms. I say to my hon. Friend that it will not be like the Washington DC memorial; it will be much smaller. Why should we scale it down? We think it is really important, so we should make a proper memorial like the ones in Berlin and Washington. What the architects have proposed is simply insufficient to convey the enormity of the horrendous crime we are seeking to commemorate, and it fails in its scale to respect the dead whom we seek to remember.
We would be much wiser to take our example from the memorial museum in Washington, which is a proven exemplar when it comes to imprinting the importance of the holocaust upon the minds of future generations, and a place to preserve historical recollections, but also a place to remember the dead. Given the seriousness of what we are commemorating, we need to make sure that this is done properly.
To sum up, the Victoria Tower gardens site is too small for what is needed. Further development there would threaten a UNESCO world heritage site and set a dangerous precedent for green spaces in the care of the Royal Parks Agency. Meanwhile, just a short distance away, still in the very centre of London, we have a permanent exhibition already devoted to the study of and teaching about the holocaust. There is a chance for synergy; we can build on those connections and create an integrated experience based on the example that works so well in Washington. This proposal, which is supported by me and many others, including the Imperial War Museum, will allow the United Kingdom to have a proper place to remember the holocaust and to educate future generations about this enormous crime.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Percy)
I congratulate my hon. Friend the Member for Gainsborough (Sir Edward Leigh), who is my constituency neighbour, on securing this debate—he was quite right to do so in order to raise his concerns. I also thank my hon. Friend the Member for Harrow East (Bob Blackman) for making a contribution.
I need to begin by making it clear that the decision has already been taken to select this particular site, so I cannot go too far into the specifics, or rerun the arguments about which site has been selected for what reason. Before I respond to some of the specific complaints and issues that my hon. Friend the Member for Gainsborough raised, it is important to reflect on why it is so vital for us as a nation—for all of us in the House and, indeed, the country—to build a holocaust memorial.
The holocaust may have reached its barbaric climax at Treblinka, Bergen-Belsen and Auschwitz-Birkenau, but it started in the hearts of ordinary men and women. We have seen again the madness that can sweep through peoples and nations with the killings in Cambodia, Rwanda, Bosnia and Darfur. Such killings shock our conscience, but they are at the awful extreme of a spectrum of ignorance and intolerance that we see every day—the bigotry that says another person is less than my equal, or less than a human being—and we cannot let those seeds of hate take root in our hearts.
That is why building the memorial is so important to our country. It is also why the new national memorial to the holocaust is to be located next to this place, the heart of democracy and of the values that suffered so terribly during the holocaust and in other events since. The accompanying educational centre will send out a powerful message about our values as a country. Together, we will stand up for the British values of tolerance and respect for others that I think are epitomised by this building and this Parliament. Together, we will educate every generation to fight hatred and prejudice in all its forms, and we will defend the hard-fought British liberty of freedom of religion and belief.
The plans to build a new holocaust memorial in Victoria Tower gardens have support not only from the Prime Minister, but from across the political spectrum, which is very important. The independent and cross-party UK Holocaust Memorial Foundation was set up to advise the Government on taking forward this work. The foundation’s board includes Members from both sides of the House—my right hon. Friend the Member for Brentwood and Ongar (Sir Eric Pickles) and the right hon. Member for Gordon (Alex Salmond)—as well as distinguished Members of the other place and, of course, the Chief Rabbi. There are also representatives from a variety of fields who have given freely of their time to share their knowledge and understanding.
My hon. Friend the Member for Gainsborough raised concerns about the siting of the memorial in Victoria Tower gardens. I hear his comments about museums and memorials in Washington DC and elsewhere, but important as they are, this is a unique and specifically British memorial that should chime with our values. The decision to locate the memorial in Victoria Tower gardens followed an extensive search of more than 50 sites across London, but none was considered more prominent or appropriate than Victoria Tower gardens which, as I have said, is next to this building.
My hon. Friend asked whether the memorial might not be better placed at the Imperial War Museum. This site was explicitly considered among the 50 other sites by both the Holocaust Commission and the cross-party UK Holocaust Memorial Foundation,. The promise that all parties made to our holocaust survivors was that we would create a striking and iconic memorial, and there is nowhere more striking and iconic than next to our Parliament in Westminster.
I can reassure my hon. Friend that careful consideration is being given to the impact of the memorial and the centre on the gardens. I showed him the proposed designs yesterday. They are very much outlines, but the selection of a final design will take place shortly. I assure him that preserving the park as a much-loved public amenity will be key in choosing the final design. I also assure him that residents and users of the park will be fully consulted—they are, and can already be, part of the process. As this moves to a planning application, they will be able to explain their views in the usual way. The designs have come from some of the world’s best architects and artists. They will be considered shortly by the jury, who will be mindful of the need to maintain the integrity of the park.
I assure my hon. Friend and colleagues that we are consulting local residents, stakeholders, Royal Parks, Westminster City Council and Historic England to ensure that the current character of the gardens is maintained. We would like the memorial and learning centre to be a logical and harmonious addition to the space. If my hon. Friend looks at some of the proposed designs, he will see the various ways in which the designers believe that that can be achieved. I assure the House that, within the budget for building the memorial, funding will be dedicated to enhancing the appearance and usability of the gardens for local residents, people who visit the capital and local workers who, as my hon. Friend said, use the site very much.
Victoria Tower gardens is already a well loved and much visited park in London. My hon. Friend made a lot of comments about visitor numbers, but I do not necessarily share his views about congestion. The experience of many of us who come from outside London is that people face congestion throughout the capital. I am not sure that one central London site is any more difficult to get to than another. Congestion is a problem throughout the capital and the situation might be just the same if one were trying to visit the Imperial War Museum. Many of the problems are with getting into central London in the first place.
We hope to encourage a wide range of people to visit the memorial—that is obviously a key part of the project. We envisage hundreds of thousands of people visiting the memorial to reflect, to remember the holocaust and to make use of the important learning centre. Visitors’ arrival and exit at the site will be carefully considered and planned in consultation with Royal Parks and local residents.
We intend to continue to engage local residents at every step of the way, especially now that the shortlisted designs have been submitted. That will begin apace once a final designer is selected and we move towards a planning process and application, which should be towards the end of this year.
I invite colleagues on both sides of the House to look at the shortlisted designs. There are a range of designs, some of which are more interesting than others. While I have a favourite, I should not share it with the House because the process is still open. Anyone who looks at the designs will see that they would have different impacts on the gardens. We look forward to further feedback from members of the public about the final design.
I reiterate the importance of the new national holocaust memorial and learning centre. It will serve as a reminder of the depths of depravity to which a seemingly enlightened society can plunge if it abandons its democratic values, and of the importance of constant vigilance in protecting those values. There could be no more powerful or appropriate location for such a memorial than next to the mother of Parliaments and the place that has, throughout our history—it continues to do so—stood up for the democratic values of freedom and tolerance that we hold so dear, but that were so patently and appallingly absent during the holocaust.
Question put and agreed to.
Pension Schemes Bill [ Lords ] (Fourth sitting)
Thursday 9th February 2017
(7 years, 2 months ago)
Public Bill CommitteesRead Full debate Pension Schemes Act 2017 View all Pension Schemes Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 9 February 2017 - (9 Feb 2017)
The Chair
I understand that following the debate this morning, Mr Blackford no longer wishes to move new clause 8. Is that correct?
Ian Blackford (Ross, Skye and Lochaber) (SNP)
That is correct.
New Clause 11
Asset protection for unincorporated businesses
“The Secretary of State must, by regulations, make provision to amend section 75 of the Pensions Act 1995 in order to protect unincorporated businesses at risk of losing their personal assets including their homes.”—(Ian Blackford.)
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
New clause 12—Review of actuarial mechanisms for valuing pension scheme liabilities—
“Within six calendar months from the day on which this Act comes into force, the Secretary of State must conduct a review of the actuarial mechanisms used to value pension scheme liabilities under section 75 of the Pensions Act 1995.”
New clause 13—Non-associated multi-employer schemes: orphan debt—
“The Secretary of State must, by regulations, exclude from the calculation in section 75 of the Pensions Act 1995 the orphan debt in any non-associated multi-employer scheme.”
Ian Blackford
It is a pleasure to serve under your chairmanship, Ms Buck. I thank the Committee for its assistance in taking new clauses 11 to 13 earlier than planned.
New clause 11 would help to deal with an issue facing plumbers in Scotland. Plumbing Pensions (UK) Ltd was established in 1975 to provide pensions for the plumbing and heating industry UK-wide. The scheme is managed by a group of trustee directors appointed from nominees of the Association of Plumbing and Heating Contractors in England and Wales, the Scottish and Northern Ireland Plumbing Employers Federation and Unite the union. The scheme has more than 36,000 members and assets in excess of £1.5 billion.
Under section 75 of the Pensions Act 1995, employers may, in certain circumstances, become liable for what is known as a section 75 employer debt. That debt is calculated on a buy-out basis, which tests whether there would be sufficient assets in a scheme to secure all members’ benefits by buying annuity contracts from an insurance company. Legislation specifies that a section 75 employer debt becomes payable when an employer becomes insolvent, winds up, changes its legal status or ceases to have any active members in the scheme. Although we must be mindful that the purpose of those rules is to protect pension benefits, the way they are currently framed creates problems for some stakeholders, and we are sympathetic to SNIPEF’s concerns, which I know it has also raised directly with the Minister.
The solution is not clearcut. There are several options for the Government to consider, but each has complications for pension schemes, employers and scheme members. We urge the Government to balance employers’ interests with the need to protect benefits for scheme members. The previous Pensions Minister, who sits in the House of Lords, indicated that she would look closely at how a solution to this complex issue could be reached. We need the same assurances from the current Minister that the Government will work to find a solution for the industry. They could use the Bill to bring forward such a solution.
SNIPEF aims to achieve an amendment to the section 75 debt legislation. Its main concern is for unincorporated businesses where people risk losing their personal assets, including their homes. It wants the Government to review the actuarial methods that are used to value pension scheme liabilities, as it believes that given the current economic conditions, the calculation of section 75 employer debt on a full annuity buy-out basis is inappropriate and detrimental to non-associated multi-employer schemes.
SNIPEF argues that orphan debt in any non-associated multi-employer scheme should be excluded from the calculation of section 75 employer debt. It also suggests that, provided that schemes are deemed to be prudently funded, the Pension Protection Fund should act as guarantor of last resort for orphan liabilities. SNIPEF believes that any changes in legislation should apply retrospectively to all employers from 2005. It would be helpful to hear the Government’s view on that request.
As I mentioned, SNIPEF recently met the Minister, and it has advised several MPs that he confirmed that those objectives could be incorporated in a Green Paper, but I want to use the opportunity of the Bill to address these matters. We are eager to hear whether the Government intend to include a solution in the Bill, and I look forward to the Minister’s comments.
The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)
It is appropriate, given the temperature in which we are working, that plumbers are mentioned. I only wish that some of them were in the Public Gallery to make repairs so that hon. Members would not have to wear their coats.
I joke about that, but I accept that this is a serious matter. When it was brought to my attention, it was my duty and pleasure to meet representatives of not just the plumbers but others. The Government are not ignoring the issue. Although some stakeholders have run an effective public campaign, as is their right, it was the job of the Department for Work and Pensions anyway to get to grips with this, despite the fact that MPs have contacted us individually, such as the hon. Member for Ross, Skye and Lochaber—
Richard Harrington
Thank you. I have finally got it. I shall provide tuition for other hon. Members.
This issue is important. For the record, I should remind hon. Members who are not as familiar with it as the hon. Member for Ross, Skye and Lochaber why the employer debt legislation is in place. It is to help ensure that members of salary-related occupational pension schemes receive the pensions they worked for and have been promised when their own employer cannot provide them. I think everyone would agree that that is a noble aim. Were that not a rule, it would have led to even more difficulties.
When I see representatives of those in such positions, I try to think about this key question: if they are not responsible for the debt, who is? Someone has to be responsible for it. As hon. Members will have picked up from the hon. Gentleman’s speech, people who have been working quite properly and, typically in this field, running their own businesses find themselves with—I do not know what the legal term is—a contingent liability that could be called upon. It is not as though they have received an invoice or a demand, or people have been banging on the door to repossess something, but it is understandably on their minds that that could and might happen, which is a serious matter.
Ian Blackford
That is exactly the point. We are talking about often small businesses that have done the right things in making sure their employees are protected and have adequate pension provision, but there is a sword of Damocles hanging over them with the worry and uncertainty, caused purely by this debt, that they may lose their businesses and houses.
Richard Harrington
I accept the hon. Gentleman’s point. We all agree there is a problem. I do not see how anyone could disagree with that. These people are simply in an unfortunate position, but the Government have to decide, “If not this, what?” and “What are the alternatives?” The hon. Gentleman said, as the groups involved have, that the debt should be passed to the Pension Protection Fund, which everyone would agree has been a very successful mechanism. We mentioned the Maxwell case before lunch. The PPF was intended to deal with failing schemes. It is paid for by the levy payer—by all the successful pension schemes—and I am sure they complain because it is a significant amount of money, but everyone would agree that it has been successful.
In this case, we would place an unfair burden on the PPF, because we are not talking about failing schemes. Many of them are successful and proper. That is why I mentioned a contingent liability. If it is your liability— I do not mean yours, Ms Buck, but anyone’s—it is real to you. It is not quite as real as having an invoice or a demand, but it is there all the time. I do not deny that. However, passing the debt to the PPF would place an unfair burden on the PPF and its levy payers.
Like so many issues facing defined-benefit schemes, the problem is complex and finding a solution is difficult. I accept that it is for the Government to address it. That is what we are elected and paid for. But like everything else in government, there is not an instant, easy solution. It is worth highlighting the fact that the Government have already made significant changes to the legislation in response to representations made by some employers. A number of mechanisms have been made available in employer debt regulations whereby only part of the debt or none may be payable. There are eight such mechanisms in legislation. A wide variety of circumstances can arise, because there are a lot of diverse scheme structures. The best example, which has been discussed with the plumbers and those making similar representations, is flexible apportionment arrangements, which permit an employer debt attributable to the departing employer to be shared among the remaining employers. That sounds attractive, but it is part of a triangle of previous employers, remaining employers and the PPF—it is about which of them gets kicked with this liability. Each group is obviously going to be in favour of the others getting it. I say that not to cast any aspersions or to make a value judgment, but it has to go somewhere, and in the end that is for Government to decide. On the face of it, however, that would be such a solution.
New clause 11 calls specifically for a change by regulations to the employer debt legislation in the Pensions Act 1995. It is aimed at providing protection for the owners of unincorporated businesses. Many of the plumbers who have made representations happen to be self-employed because that is the structure of their business, but they are not self-employed and running a large business. They just happen to be a business owner who is self-employed. A mandatory provision to protect one group of employers from their responsibility for an employer debt, for which there may be personal liability, again boils down to that debt needing to be met in some way by others in order to safeguard members’ pensions. It is true to say that such an approach would also conflict with existing employer debt provision that recognises the wide range of employers who participate in occupational pension schemes. It does not differentiate between different types of business structure in relation to employer debt duties.
Secondary legislation, in the form of the 2005 employer debt regulations, already includes a range of mechanisms to facilitate the management of an employer debt when an employer ceases to employ active members of a pension scheme. The regulations operate so that in some circumstances, only part of the debt or no debt may be payable. Those regulations are currently under review. We had a call for evidence about the operation of employer debt legislation in non-associated multi-employer schemes. We needed to call for evidence because there are losers and winners. It is the role of Government to try to assess interests, and some form of judgment has to be made. This area of legislation is extremely complex, and we have to check and consider things carefully.
I reiterate that we are not kicking the can down the road—it is not that we do not want to make a decision. It is a complex issue, and we are looking to consult on specific proposals in the very near future. In any case, a whole range of new proposals might come about in our Green Paper on defined-benefit schemes. If I say the release of that Green Paper is imminent, that could mean anything from tomorrow onwards, but it will be very soon.
Ian Blackford
I think the Minister will accept that I am trying to be helpful to the Government in trying to find a resolution to this situation. Let us look at the wording of new clause 11 again:
“The Secretary of State must, by regulations, make provision to amend section 75 of the Pensions Act 1995 in order to protect unincorporated businesses at risk of losing their personal assets including their homes.”
I would be content if we could get an assurance that the Government are willing to work together with us to solve this problem. The Green Paper will be coming forward, and I appreciate that the Minister has said he is prepared to look at this matter and see whether there is a resolution that can be found that would not have any unintended consequences,. I seek assurance from the Government that that will be the case. I know the Minister cannot be too prescriptive about the Green Paper at this stage, but I hope there is willingness to ensure that these issues of actuarial valuations will be taken into account in it.
The Chair
Order. I remind hon. Gentleman that he is making an intervention, not a speech.
Ian Blackford
Sorry, Ms Buck; I will sum up. I am trying to get to a consensus, so that we can work together on this.
Richard Harrington
I think I understand the hon. Gentleman’s intervention; I accept that he did not mean it to become a speech, but I think it did. He knows, because I have told him privately, that it is the Government’s intention to resolve this issue. I have stated many times that I cannot go into what will be in the Green Paper. I also cannot accept that the new clause should be included in the Bill, because we are not ready for it. We do not have a solution; there is no simple solution.
The hon. Gentleman has been involved, not actually in this issue but in many others to do with asset management and financial services, and knows that everything is more complex than it first appears. I have accepted that there is a problem, I have mentioned that there are different entities that have to deal with it, and I have accepted that we have to try to reach a solution—by consensus, I hope. However, I cannot give him that good news today; I have to resist the new clause being added to the Bill.
Craig Mackinlay (South Thanet) (Con)
It is a pleasure to see you in the Chair and to serve under your chairmanship, Ms Buck. The experience of the hon. Member for Ross, Skye and Lochaber comes through very clearly.
I hope I can offer some help to the Committee. I realise that this is a complex area, but the hon. Gentleman’s new clause does not actually encompass the extent of the problem, which goes further. Under the old rules—extra-statutory concession C16 on the winding-up of companies, which was used widely until 2012—a group of directors or owners could wind up a company using a very informal method, but that did not cease their liabilities to that company. That liability extended for 20 years afterwards. That was then formalised under section 1030A of the Corporation Tax Act 2010, which gave a statutory basis to the informal winding up of companies with assets of less than £25,000. That provision is still used very widely. Directors or owners of such companies being wound up under that statutory method could still face 20 years of future liabilities, so although the hon. Gentleman has identified a problem in the system, it does not just apply to unincorporated associations.
The effect of the section 1030A of the 2010 Act, which came into force on 1 March 2012, is that directors and owners of slightly larger companies are going down the route of a formal liquidation, which terminates their liabilities for ever more. However, hundreds—if not thousands—of old, smaller companies using the old extra-statutory concession will still be caught by a section 75 notice. This is a very wide issue that does not apply only to unincorporated associations, so I do not think the hon. Gentleman’s new clause is enough to close down his concerns on future liabilities. Personally, I accept the Minister’s assurances, but I think this is the start of a wider debate as to how those liabilities can be cut down.
In the hon. Gentleman’s new clause 12, there is a problem with determining the proper value of a pension liability. It is not as sharp as just the transfer value that is often given, and we will need in future to be a little bit cleverer in how we actuarially assess pension liabilities.
Ian Blackford
On the basis of the Minister’s response, I will certainly not push the new clause to a vote. We have received assurances that the Government will look at these issues; I hope they will not only be addressed in the Green Paper, but that there is the possibility of legislation as a result of that. I think we all recognise—there is a consensus on this—that we have to make sure we can resolve this problem for the benefit or incorporated and unincorporated businesses. On that basis, I will happily leave things as they are for now. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 2
Investment Strategy
“(1) A Master Trust, after taking proper advice, formulate an investment strategy which must be in accordance with guidance issued from time to time by the Secretary of State,
(2) The Trust must consult scheme members on—
(a) the Trust’s assessment of the suitability of particular investment and types of investment;
(b) the Trust’s approach to risk, including the ways in which risks are to be assessed and managed;
(c) the Trust’s policy on how social, environmental, and corporate governance considerations are taken into account in the selection, non-selection, retention and realisation of investments;
(d) the Trust’s policy on the exercise of the rights (including voting rights) attaching to investments; and
(e) the right of scheme members to consider non-financial issues relating to their investments and be consulted on these issues.
(3) The Trust must review the strategy at least once a year, and revise if appropriate
(4) The Trust must revise the strategy at any time if there is any significant change to the information included in it.
(5) In the event of (4) above, the Trust must consult with scheme members, and the revise the strategy in the light of comments made.
(6) The Secretary of State may make regulations with a view to ensuring that the information disclosed under subsection (1) is provided in a timely and comprehensible manner.”.—(Alex Cunningham.)
A Master Trust must include an investment strategy which outlines what the Master Trust should consult scheme members on in areas of investment.
Brought up, and read the First time.
Alex Cunningham (Stockton North) (Lab)
I beg to move, That the clause be read a Second time.
Welcome to our walk-in fridge, Ms Buck. I had a discussion with the Government Whip, the hon. Member for Winchester.
Richard Harrington
On a point of order, Ms Buck. Actually, I do not know whether it is a point of order or a point of clarification. Before we come to the hon. Gentleman’s new clause, am I correct in saying that new clauses 11, 12 and 13 were all withdrawn?
Alex Cunningham
I was talking about the conversation that I had with the Government Whip about whether we should invoke the Factories Act. He reminded me that, unhelpfully, said law does not apply to the Palace of Westminster. The Minister mentioned kicking a can, and I remember playing kick the can in the street as a young boy. Perhaps you can provide us with a can, Ms Buck, and we can have a game after we debate the next new clause to warm ourselves up.
New clause 2 continues our theme of transparency and member engagement. It is designed to improve the way that master trusts consult their members about their investment strategies and ensure that members are aware of the guidelines that trustees establish for the management of members’ assets. The new clause would modernise the approach to fiduciary—I find that word even more difficult to say than “Lochaber”—management of savers’ assets and update the statement of investment principles approach currently required of master trusts. A master trust would have to have an investment strategy and consult scheme members about that strategy and about socially responsible investment—commonly known as environmental, social and governance issues.
Until now, every occupational pension scheme has been legally required to prepare and maintain a statement of investment principles, which is expected to cover the trustees’ plans for securing compliance with their statutory duties, their policies on investments, risks and returns, and how they will exercise their voting rights. In short, it allows trustees to consider factors that they believe will influence the financial performance of their investments and consult members about those issues. As long as pension funds can show that any investment or policy decision was made on a fiduciary basis and members were consulted, they can avoid the charge that they have not considered members’ best interests.
Public opinion tends to position the average citizen as a helpless bystander in this drama, but in fact it is their money that underpins the entire system. Anyone with a pension is, indirectly, an owner of Britain’s biggest companies. The new clause seeks to create a world in which people feel that their savings give them a positive stake in the economy and a voice in how the companies in which they invest are run. Although we may hope or even expect that scheme members have a say, the reverse is true: power has become increasingly concentrated in the hands of a relatively small number of opaque and unaccountable financial institutions. As the Kay report showed, those institutions often face systematic pressures to act in ways that may not serve savers’ interests. Direct accountability to savers is a vital component of a healthy economic and financial system. As millions more savers are about to enter the capital markets through pensions auto-enrolment, now is the right time to build a more accountable system.
In June 2011, the Government invited Professor John Kay to conduct a review of UK equity markets and long-term decision making. The Kay review considered how well equity markets were achieving their core purposes—to enhance the performance of UK companies and enable savers to benefit from the activity of those businesses through returns to direct and indirect ownership of shares in UK companies. The review identified that short-termism is a problem in UK equity markets. Professor Kay recommended that company directors, asset managers and asset holders should adopt measures to promote both stewardship and long-term decision making. He stressed in particular:
“Asset managers can contribute more to the performance of British business (and in consequence to overall returns to their savers) through greater involvement with the companies in which they invest.”
He concluded that adopting such responsible investment practices would prove beneficial for investors and markets alike. In practice, responsible investment could involve making long-term investment decisions, as well as playing an active role in corporate governance by exercising shareholder voting rights.
I hope that master trusts will want to consider the Kay review’s findings when developing their proposals, including what governance procedures and mechanisms are needed to facilitate long-term responsible investing and stewardship through the funds that they choose for members to save into. The UK stewardship code published by the Financial Reporting Council also provides master trusts with guidance on good practice in monitoring and engaging with the companies in which they invest. The new clause would ensure sure that trustees are guided by the members of the scheme whose money they invest.
In recent decades, efforts to improve the way companies are run have focused heavily on making directors more accountable to their shareholders—for example, the recent introduction of a binding “say on pay”—but the job is only half done. Ownership rights are exercised largely by institutions that are themselves intermediaries. Accountability to the underlying savers who provide the capital remains weak. The logical next step must be for institutional investors to extend the same accountability they expect from companies to the savers they represent.
The UK stewardship code was introduced in the aftermath of the financial crisis to address concerns that shareholders were behaving as absentee landlords. Rather than being enforced by regulators, it is a voluntary code that relies on scrutiny from below to promote compliance, mirroring the corporate governance code for companies. The investment regulations currently require master trusts to set out within the statement of investment principles the extent to which social, environmental or corporate governance considerations are taken into account in the selection, retention and realisation of investments, but savers are left out of the loop. Just as I have argued for greater engagement with members on other issues, I believe it is needed here too.
In addition, accountability should build trust in the system even among those who do not choose to engage, thus encouraging people to keep saving. That is an important consideration in a market where just 7% of retail investors trust investment firms to do the right thing and consumers cite lack of trust as the No. 1 reason for opting out of private pension saving. Practical objections on the grounds that savers are not interested or not capable of engaging with their money simply perpetuate a vicious circle of disengagement. Savers may be put off by the language of investment, but that does not mean they are not interested in where their money goes. The onus must be on the master trusts and the wider investment sector to communicate with savers in a way they find meaningful. Likewise, savers may lack understanding of the technicalities of investment, but there are many matters on which they are qualified to comment, including the way their scheme behaves as an owner of major companies or its policy on social, environment and governance issues.
Transparency is necessary, but not sufficient for a more accountable investment system. Savers must also have the right to engage directly with decisions about their money, in the same way that shareholders engage with companies. Of course, we are not suggesting that all savers should be consulted on every decision. In our view, engagement with savers has three key elements. Savers should have the right to be consulted about investment policies, particularly those that should be firmly grounded in the views of savers, such as socially responsible investment policies. It is sometimes argued that since savers will inevitably disagree, acting on their views can prove difficult, but that objection can be refuted by example: schemes such as the National Employment Savings Trust demonstrate the possibilities of using face-to-face engagement with savers to inform the development of policy. Savers should be able to subject decisions made on their behalf to healthy scrutiny and challenge. While companies are obliged to hold annual meetings at which the board accounts to their shareholders, no such requirement extends to pension schemes.
Making capital markets more answerable to the individuals whose money they invest offers a potential lever for rebuilding trust in the City and for promoting more responsible and long-termist corporate behaviour. Such accountability must be nurtured over time by institutional investors such as master trusts, other pension savers and civil society in general. As Mark Carney said back in 2013, if it is
“finance that becomes disconnected from the economy, from society, finance that only talks to itself and deals with each other, that becomes socially useless.”
We have an opportunity here to change the landscape that sees pension savers as passive uninterested participants by engaging with them on decisions that affect their lives. When I started this speech, I said I was continuing the theme of member engagement. The new clause would extend what currently happens in relation to investment decisions, and I commend it to the Committee.
Ian Blackford
Before the hon. Gentleman concludes his speech, I wanted to ask about subsections (3) and (4) of the new clause, which state:
“The Trust must review the strategy at least once a year…The Trust must revise the strategy at any time if there is any significant change to the information”.
Can he explain what form that review would take and what role investment advisers would have, if any, in that review?
Alex Cunningham
That is an extremely difficult question to answer. [Interruption.] Everyone can laugh, but the Government talk about regulations and laying down guidance, and I hope that they would be able to provide the necessary guidance.
Ian Blackford
This is actually a very serious point. The hon. Gentleman’s new clause would require an annual review, so it is pertinent to ask how that would be conducted and what role, if any, investment advisers would have.
Alex Cunningham
There has to be a role for investment advisers, but the crux of my point is that members should have some say in the investment decisions that affect them.
Ian Blackford
Can I deduce from that that the hon. Gentleman actually has no idea how such reviews should be conducted?
Alex Cunningham
That is not exactly the case. It is clear that we need a set of circumstances in which members are properly engaged, equipped and informed. If they are, they will be able to contribute.
Craig Mackinlay
I oppose new clause 2 just as I opposed new clause 1, not least because of practicality. Let us go back to the example of NEST, which could have millions and millions of members—and I envisage that it probably will. How on earth could an investment strategy be decided by 3 million members? That would probably lead to three million and one different investment strategies.
I do not see anything in the Bill that would prevent a scheme such as the one the hon. Gentleman proposes from coming to the market if there was demand for it from several employers and members in those employers. The market could then decide, “I like the look of that scheme, with its huge member involvement.” I see no reason why such a scheme could not evolve if one was called for.
The hon. Gentleman speaks about an ethical investment policy. That is all very well, but I remind him that the Co-op bank took a similar route, and it is not exactly in great shape. I put it to him that when I go to a doctor, I like to see the doctor; I do not particularly want to see the lay members of the NHS trust as well. I feel comfortable leaving this with investment professionals, because they will be judged on their performance. If they do not achieve, employers may look at an alternative master trust.
Julian Knight (Solihull) (Con)
Surely when picking a pension fund employers interact with funds and many of these issues are raised in those interactions.
Craig Mackinlay
As my hon. Friend says quite clearly, the results will speak for themselves. I come back to the principles that I mentioned earlier: the fund has to have good returns and be well run and focused, because it has one function—to deliver good pensions. Again, I do not see that the new clause would achieve any of those principles, and if nothing else, it is unworkable because of the size of funds.
Richard Harrington
I absolutely agree with my hon. Friend; member engagement and involvement sounds very good—it is a laudable objective—but I have been around for nearly 60 years, of which I was in business for nearly 30, and I do not feel qualified to assess an investment strategy. I say that not to insult the vast majority of people, but because, although independent financial advisers and accountants may be able to do that, it is almost impossible for an individual to do so. We have to look at a way of ensuring that the investment strategy is the correct one for the majority of members, and that the regulatory system, the supervisory system and so on are in place. Hon. Members mentioned NEST, which already has more than 4 million members and 230,000 employers. This idea is very interesting but not at all practical.
I remind hon. Members that trustees play a key role in managing assets. They have overall accountability for the investment strategy. They have a legal duty; the hon. Members for Stockton North and for Ross, Skye and Lochaber—I can just about manage to say that now—used the expression “fiduciary duty,” and the trustees have a fiduciary duty to the members.
Laudable as new clause 2 is, pensions legislation already includes requirements for investment decisions to be transparent and in the best interests of members. The Government fully recognise the possible impact of investment decisions on members’ retirement outcomes. Even without the new clause, the Bill will add to those requirements. Clause 12(4)(d) already sets out that regulations made by the Secretary of State
“may include provision about…processes relating to transactions and investment decisions”,
while clause 12(2) states:
“In deciding whether it is satisfied that the systems and processes used in running the scheme are sufficient…the Pensions Regulator must take into account any matters specified in regulations”.
The new amendment would duplicate the provisions for master trust schemes that already exist under the Occupational Pension Schemes (Investment) Regulations 2005. The regulations require trustees of all schemes with 100 or more members to set out a statement of investment principles for their scheme. That statement must be made available to members on request and
“must cover…their policies in relation to…the kinds of investments to be held…the balance between different kinds of investments…risks, including the ways in which risks are to be measured”
and other key issues. The trustees must ensure
“that the statement of investment principles…is reviewed at least every three years…and without delay after any significant change in investment policy.”
Most people who are automatically enrolled into pension schemes are likely to remain in their scheme’s default fund and will not actively engage themselves in the governance of the scheme. That is why legislation makes requirements about governance and oversight of these matters, and why most schemes, including master trust schemes, need to provide a default strategy that covers similar areas.
Finally, multi-employer schemes have a legal duty under the Occupational Pension Schemes (Scheme Administration) Regulations 1996 to make arrangements to encourage members of the scheme or their representatives to report their views on matters that relate to the scheme, including areas about which the new clause proposes that the trustees should consult scheme members.
Ian Blackford
I am listening carefully to the Minister, and I broadly agree with him. Obviously there will be ongoing reviews of investment strategy, which should be communicated to members where appropriate. One way in which that could be done, as a matter of best practice for these schemes, would be for a statement of investment principles to be mailed to members as part of the annual report. That would give more clarity on the direction of travel of the fund’s investments.
Richard Harrington
As usual, the hon. Gentleman makes a very sensible suggestion, which should be considered. However, I believe that everything in the new clause is already included in legislation and that it is therefore unnecessary, so I urge the hon. Member for Stockton North to withdraw it.
Alex Cunningham
Let me first address the point about size and the ability to organise communications in this sort of situation. If Legal & General can do it, so can others.
The Minister described lots of ideas raised today as laudable. Sadly, all the ideas he supports exclude members. He rejects the idea of members being represented among trustees and the idea of member-nominated directors. His position is that everything should be left to professionals and to the marketplace, and that members may not be able to take part in or understand investment decisions. He admitted that he might not understand those decisions, but there are members out there who do, and it would be helpful if at least some of them could represent their fellow members and challenge some of the things that their trustees are doing.
One further point concerns me. An employer may opt for a particular trust but become dissatisfied with it and move. There are a very large number of employers, and I fear that a large number of them are disengaged. I wonder whether they are acting in the best interests of their employees. I will come to that during the debate on a later amendment. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 3
Annual Member Meeting
“(1) The trustees of an authorised Master Trust Scheme must hold an annual meeting open to all members of the scheme.
(2) The Master Trust must take all reasonable steps to make the meeting accessible to all members, this includes making arrangements for—
(a) scheme members to observe the meeting remotely, and
(b) scheme members to submit questions to trust members remotely.”.—(Alex Cunningham.)
This new clause requires Master Trusts to hold an Annual Member Meeting, and sets out ways to ensure members are properly given the opportunity to be involved.
Brought up, and read the First time.
Alex Cunningham
I beg to move, That the clause be read a Second time.
This new clause takes us back to our member engagement theme. It would require master trusts to hold an annual member meeting, and it sets out ways to ensure that members are properly given the opportunity to be involved in that. It is now common practice for pension funds to hold an annual member meeting. Good member communications, provided at the right time and in an accessible format, are vital if members are to engage and make decisions that lead to good outcomes during their retirements. An annual member meeting ensures that trustees and administrators can be made human and accountable.
A Legal & General master trust annual report states:
“In September last year we hosted a Members’ Forum at Legal & General’s office in London. It wasn’t just a first for us, it was the first ever for any scheme like ours. We got a lot out of that meeting, and we hope that those members who attended did so too. Our aim was to get a better understanding of the things that matter most to members, to help inform our plans for the future. We believe we achieved our aim, and the feedback we got from those members was encouraging.”
I am not here to promote Legal & General, but I commend its attitude and its work in this arena.
Trustee boards should regularly review member communications, and when deciding on the format of those communications, should take account of innovations of technology that may be available to them and appropriate for their members. That would allow the more engaged members to hear a presentation from trustees and senior executives about how the scheme has managed their retirement assets over the previous year and what plans the scheme has to deliver a strategy and manage risk into the future on their behalf. If Legal & General can organise such an event, I think others can too—even if they have vast numbers of members.
If others do not do what Legal & General did, how could they have an annual forum? We must not forget that there is no necessity to fill a hall with thousands of people in this technological age. It is possible to reach more people perhaps by combining a live meeting with an online platform, or indeed to hold the whole meeting online. A recording of the meeting could then be made available on the trust’s website, with an opportunity to give feedback.
The Pensions Regulator’s guidance accompanying its new defined-contribution schemes code of practice highlights AMMs as one way that multi-employer schemes can stay close to members. The new clause would bring master trusts into line with the normal practice in the corporate sector and among the growing number of pension schemes.
Richard Harrington
Again, I find myself having to disagree, not with the hon. Gentleman’s intention, but that this is a practical solution to what he wants to achieve. The new clause would require the trustees of an authorised master trust—it would not be there if it was not authorised—to hold an annual meeting open to all members, even if they cannot attend in person. It is clear what the hon. Gentleman wants.
As I have said—I know it is a bit of standard response, but I reiterate it—we are doing everything in the Bill to encourage member engagement and communication, especially now that the pension freedoms have been implemented. People must have the ability to assess their choice, and part of that is communication with what goes on. As we know, the Bill works alongside the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 and the Financial Conduct Authority rules that set out minimum standards for communication. Those ensure that members have access to appropriate information to make decisions about their pension saving, including an annual benefit statement and, for most people, a statutory money purchase illustration, which gives members a projection of their pension in retirement.
Documents relating to the governance of a scheme, such as the trustees’ annual report, the chair’s statement and the statement of investment principles, have to be provided on request. In addition, the Government have committed to ensuring that the pensions industry builds and launches a pensions dashboard, which is very important and would allow members to see their pension rights with different providers across the pension landscape.
Alex Cunningham
I do not have the app jargon either, as the Minister will probably realise. We have talked much about engagement and communication over the past two or three sittings. I remain concerned that there is still no real requirement on the trustees of any of the master trusts to communicate with the people whose money they are responsible for managing. We need to make communications much more practical, and I believe that if member meetings work well for some organisations, they could also work well for master trusts.
I hope that master trusts out there will learn from NEST and from Legal & General, and will understand that member meetings can happen and that they can derive tremendous benefits from their members being much more engaged. I would prefer to see a situation in which it is enshrined in the law and there is a compulsion for people to build on what is already happening out there, to repeat some of it and to see a level of engagement that we have so far not seen, but I do not intend to press the clause to vote at this stage. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 4
Master Trust Schemes: Review of Participation
‘(1) The Secretary of State must, before the end of the period of 12 months from the day on which this Act receives Royal Assent, establish a review of participation in Master Trust Schemes.
(2) The review must consider what steps can be taken to increase the participation in Master Trusts Schemes by the following groups—
(a) carers;
(b) self-employed;
(c) workers with multiple employees; and
(d) workers with annual earnings below £10,000.”
(3) One of the options considered by the review to improve participation must be changes to the terms of auto-enrolment.’. —(Alex Cunningham.)
This new clause reviews options for widening participation in Master Trust Schemes for groups currently facing barriers, in particular groups not currently covered by auto-enrolment.
Brought up, and read the First time.
Alex Cunningham
I beg to move, That the clause be read a Second time.
I was pleased to table this vital new clause, which attempts to widen access to master trust saving for those whom this Government have left excluded for too long. As it stands, the Bill does little to build on the success of Labour’s auto-enrolment policy and ensure that saving into master trusts is accessible and encouraged for the number of groups that evidence suggests are not saving adequately for their retirement.
I recognise that the Government have announced a review of the operation of auto-enrolment into master trust saving, but its scope is broad, with few specifics in the terms of reference published yesterday. It is vital that the review specifically addresses the question of how we can improve master trust saving among the groups specified in the new clause. That will ensure that the Bill delivers plans that strengthen security and dignity in retirement. The Minister may already be wondering why I am pursuing the new clause when it appears he has the matter in hand. He may have it in hand, but there is merit in naming some of the very specific groups who most need change and in implementing the recommended changes.
It is a testament to the last Labour Government that 10 million additional workers are estimated to be newly saving or saving more as a result of auto-enrolment into master trusts. It has led to an additional £17 billion of pension saving being put away, mostly by low-income workers. Nevertheless, many excluded groups remain, in part due to the actions of this Government, who increased the triggering threshold at which workers were automatically enrolled into a master trust saving scheme. According to the latest Department for Work and Pensions statistics, 37% of female workers, 33% of workers with a disability and 28% of black and minority ethnic workers are not eligible for master trust saving through auto-enrolment. Critically, those groups are over-represented among low earners, the self-employed, those with multiple jobs and carers—the areas we believe that the Government should focus on in their review, as set out in the new clause. I hope they will.
At the end of last year, the Pensions Policy Institute published a report assessing future trends in defined-contribution pension saving. It is worth quoting the following section of the report in full, as it clarifies the current situation. It states that
“the evidence so far suggests that many households will be unable to maintain their current standard of living when they reach retirement. The advent of auto-enrolment has increased the number of workers saving for retirement, with more active savers now in defined contribution (DC) pension schemes rather than defined benefit (DB). This rise in the number of pension savers is a step in the right direction, but DC plans must continue to evolve in order for them to provide savers with an adequate pension.”
The report goes on to find that the median saving of DC scheme members could yield £3,000 a year as an annuity, which is not a lot of money.
More work needs to be done to improve the adequacy of returns on DC savings, including by looking in more depth at costs and charges, as we have tried to do throughout our consideration of the Bill. Nevertheless, the top-up provided from access to master trust saving through the auto-enrolment scheme is a valuable addition to state pension provision, so it is worth while to ensure that as many low-income groups as possible have access to master trust saving.
I will start with how master trust saving for low-income groups could be improved through the Bill. Taking carers first, while those who leave or reduce their hours of employment to care for loved ones are rightly supported through the social security system, it seems unjust that they will probably miss out on the fuller benefits enjoyed by those who are able to save more into occupational pensions as a result of being able to remain in employment, in spite of the fact that carers engage in valuable labour—work that would otherwise have to be picked up by the state. It is my strong belief that the Government should try to improve the retirement prospects of carers, and master trusts, which have been set up to service large numbers of low-income savers, may be an avenue worth exploring. We would include carers as part of a wider review of groups that are excluded from pension saving.
The same is true of the self-employed. I was personally heartened by the amendment tabled by the hon. Member for Amber Valley. After more than a decade of expansion in that part of the labour market, self-employed people now make up 15% of the workforce. Vast numbers of them are at the very bottom end of the income scale, and there is much evidence to suggest that they are not saving as much as those in other sections of the workforce. Research by the Association of Independent Professionals and the Self-Employed found that four in 10 self-employed people do not have a pension. The New Policy Institute found that the self-employed are not only less likely to participate in pension saving but tend to save less as a whole when they do.
Despite that worrying evidence, there are few obvious means by which the self-employed can begin to build up a savings pot in a master trust. That is just one way in which Britain’s entrepreneurs have been let down and ignored. There is no mechanism to manage the enrolment of self-employed people in master trust schemes. Of course, the fact that there is no employer means that, like informal carers, self-employed people’s contributions cannot currently be topped up. I do not believe that it is beyond the bounds of possibility for an expert review to look into that conundrum. The Labour party remains the party of working people, including the self-employed, and we are keen to explore how they might be encouraged to save into defined-contribution master trust schemes to ensure that they have the dignified and secure retirement that we believe everyone has the right to.
Perhaps moving closer to the existing system of saving into master trust schemes, there is also the urgent question of people with multiple jobs. Under the current system, those whose earnings exceed the earnings threshold but result from multiple jobs are unable to access auto-enrolment into a master trust scheme. It seems that the only logic preventing that group from accessing savings is the administrative barrier posed by their having more than one employer. In other words, there is no mechanism either to establish total earnings to trigger access to auto-enrolment, or to determine the sponsoring employer of a person working multiple jobs. Although that issue may seem overwhelming to the Government, we believe that it warrants further attention—especially given the way the labour market is changing, with as many as 3 million people estimated to be working multiple jobs just to make ends meet.
I turn finally to access to master trust savings for low-income savers. Under the auto-enrolment policy developed by the Labour party, working people would have been automatically enrolled into a master trust scheme once their earnings had crossed the trigger level of just over £5,000, the logic being that people would begin to save towards an occupational pension at the same earnings level at which they began to pay national insurance contributions. However, the coalition Government increased the earnings threshold to £10,000, denying millions of low earners the automatic right to save towards a relatively low-cost occupational pension through a master trust.
The last annual review of auto-enrolment into master trust savings concluded that the lower earnings threshold will be £5,876 and the trigger threshold will be frozen at £10,000. Although that freeze will bring a few more workers into the scheme through inflation, we do not believe that that is happening quickly enough. Given the generational crisis that is developing in our pensions system, more needs to be done to include low earners in savings provision and encourage retirement planning.
In conclusion, we recognise that the upcoming 2017 review of auto-enrolment presents the Government with an opportunity to take seriously the problem that certain groups are excluded from master trust savings. The new clause would guarantee that the Government engaged with these vital issues and those groups in the full and proper way. To be clear, we are not trying to force the Government to implement specific policy proposals after the Bill’s passage, although in the view of our colleagues on the Constitution Committee, that would not be out of step with much of the rest of the Bill. We merely wish to place a statutory requirement on the Government fully and properly to consider as part of their planned review what steps could be taken to widen participation for some of the most vulnerable groups.
I have one very specific question about the implementation of the review’s recommendations once it is completed. We talked about this earlier in relation to another matter. Will the Minister have powers under regulations to implement those recommendations, or will we have to wait for another pensions Bill, which is unlikely during this Parliament? The new clause would help to increase the security and dignity of retirement for groups on the lowest incomes. How can the Minister possibly refuse to guarantee that the review will address these important issues and groups?
Richard Harrington
I compliment the hon. Member for Stockton North on his speech. He has quite clearly listened to all the speeches I have made since being appointed to this job. I will point out one or two facts to respectfully disagree with him—and, for once, his style, which I have not done up to now. To make this into a political matter by saying that auto-enrolment was Labour’s idea is not really fair. I may be correct in saying that Lord Turner, who chaired the Pensions Commission, was offered a peerage by three political parties and took one from the Liberal Democrats. The other commissioners were Labour and Conservative. I am not being flippant, but the spirit of our debate has generally not been party political at all.
Alex Cunningham
I accept that—okay, we are making a few political points. It was a Labour Government who brought in auto-enrolment, but this Government have successfully encouraged more and more people to invest more and more, which is a very positive thing. I place that on the record.
Richard Harrington
That is very reasonable. The hon. Gentleman’s general approach—and mine, I hope—has been not to bring party politics into the debate, because we all have exactly the same objectives.
I have one or two further points to make. The hon. Gentleman mentioned women being excluded from auto-enrolment—not by law but in practice—for different reasons. Actually, the number of women being enrolled is very impressive, although I do not have it to hand. I am pleased to say that I do not think that this is a gender equality issue.
The fundamental point is that the issues that the hon. Gentleman mentioned and that his new clause would address were mostly covered by the Secretary of State in yesterday’s announcement about the extent of the auto-enrolment review. That was not timed to happen just before this Committee sitting; it is just how things worked out. The review will look at the self-employed, who are excluded from the current system, which has gone from nought to a lot very quickly, after all. It will also look at people with multiple earnings under the £10,000 mark from different sources. Incidentally, people paid less than that—I cannot remember the exact figure, but it is just under £6,000—are allowed to enrol, and they get help from their employer and the tax system, although at that level they would not necessarily pay tax. All these things are being looked at. The review will be very comprehensive and will go far beyond what the statute calls for. I will be very pleased to look at its results.
The hon. Gentleman asked whether implementing the review’s recommendations would involve another pensions Bill, which he and Her Majesty have decided we will not be having in this Session. I cannot say, because I do not know what the recommendations are, but some things will need primary legislation and others will not.
Unless the hon. Gentleman has an urgent intervention to make, I will conclude. I have listened carefully to what he said and am glad to have included it all in my speeches, and I am glad that it will all be included in the review.
Alex Cunningham
My final intervention is to raise the very specific issue of carers. Will carers be included in the review?
Richard Harrington
The review is generally worded. It could include carers—they are not specifically mentioned, but I believe that it will include them, and I would encourage it to include them. However, to include them as a category would be a little unfair on others who may be in a similar financial position.
The hon. Gentleman’s sentiments are absolutely right, as were most things he said in his speech, but I do not think it is appropriate for the new clause to go into the Bill. It is far too early; we have been doing auto-enrolment for only a short time, and we are doing a comprehensive review. Despite his sentiments, I ask him to withdraw the motion.
Alex Cunningham
I am pleased to have those commitments on the record, particularly those relating to some of the more vulnerable groups. I appreciate that there are other groups apart from carers, as the Minister said, but carers provide a tremendous service that is probably worth billions of pounds to our country every year, so it is important that we have some form of provision for them. The new clause was always going to be a probing clause. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 7
Enrolment in Master Trust scheme: duty on employers
“Before an employer enrols in a Master Trust scheme they must—
(a) take reasonable steps to ensure themselves that the scheme is financially viable;
(b) ensure the scheme is on the list of authorised Master Trust schemes maintained by the Pensions Regulator (section 14); and
(c) take reasonable steps to ensure themselves that the scheme will meet the needs of their employees.”.—(Alex Cunningham.)
This new clause would require employers to conduct basic checks before signing up to the Master Trust scheme.
Brought up, and read the First time.
Alex Cunningham
I beg to move, That the clause be read a Second time.
It is almost as if I am doing an aerobics class; I have already warmed up, even in this cold Committee Room.
New clause 7 would provide employers with a fiduciary duty and a duty of care to members to ensure that the master trust of their choice meets the needs of their staff. The auto-enrolment process in the UK rests on the employer making the choice of scheme for those purposes. The new clause would ensure that, before authorisation, the employer is duty-bound to ensure that the master trust is fit for purpose and has all the necessary information for that choice to have a sound footing.
We need to ensure that the employer has a defined duty to carry out due diligence when choosing a workplace pension. Otherwise, many employers—through expediency or otherwise—will continue to make choices that may not be in the best interests of the scheme’s beneficiaries.
The past 20 years has seen us lurch from one mis-selling scandal to another. Pension transfers, endowments, payment protection insurance and interest rate swaps have all been subject to class actions, and to massive retrospective penalties being imposed on those found wanting in due diligence.
In the US, the employer has a fiduciary responsibility to their staff and chooses their scheme in their best interests. That means that if employers do not take due care in the choice and governance of the plan that they set up for their staff, they are liable to civil prosecution. Employers in the US take fiduciary obligations seriously, not least because scheme members are now taking and winning class actions if they do not.
A class action can focus on the choice of scheme provider, failure to establish suitable investment options and failure to monitor how funds perform as the scheme progresses. Some advisers in the UK, such as Pension PlayPen, think that the information given to employers to choose a workplace pension is insufficient, and that there is little supervision of the due diligence process by regulators, which is in sharp contrast to what happens in America.
The other day, Pension PlayPen stated on its blog:
“The common law includes the concept of an employer’s duty of care to staff, not just for their health and safety but for their financial welfare. This duty of care forms part of a social contract, the implicit responsibilities held by individuals towards others within society. It is not a requirement that a duty of care be defined by law.
An additional worry is that employers do not see this as their choice. Too often we get answers from employers ‘we did what our accountants told us to’. It is as much in the interests of accountants to ensure the employer states why they have chosen their pension as it is the employer’s.”
So what happens when the duty of care and fiduciary obligations go wrong? The only option is the courts. According to a Financial Times article last November, there has been an “explosion” of class actions in the USA on the issue of financial detriment to scheme members. These suits have not yet gained much public attention, due to the reputation of the US legal system, but it is also partly because the legal action is fragmented and spread between different courts, and cases are often settled in private with binding confidentiality clauses. What is more, pensions have the unfortunate reputation of being rather dull, even though the sums involved dwarf those of the multibillion dollar settlements seen in banking since 2008.
However, the basis of the complaints are sound and echo a warning that we have been making about the lack of transparency and engagement for members of schemes. Members may have been charged excessively high fees, the most noticeable or important point being that the investment process may be used to extract wealth.
As in other financial suits, such as PPI suits, the cases claim that financial organisations have used opaque structures, so that transactions extract money that ought to go to members of schemes. In one case, JP Morgan has been sued by a participant for allegedly causing employees to pay millions of dollars in excessive fees, through a scheme motivated by “self-interest”. The plaintiff claims that JP Morgan, as well as various board and committee members, breached its fiduciary duties by, among other things, retaining proprietary mutual funds from the bank and affiliated companies for several years, despite the availability of nearly identical, lower-cost and better performing funds.
Not all of these cases are just related to charges in the investment chain; some are also about administrative processes. A website—401khelpcenter.com—highlights that members of Essentia Health in Minnesota filed a class action lawsuit against the sponsor, claiming that the organisation paid excessive fees to their record keepers.
Craig Mackinlay
The hon. Gentleman has mentioned many times the potential for class action, particularly in the US, on various issues. Does he not believe that having the word “reasonable” twice in the new clause that he has tabled actually becomes a licence for class action, rather than closing it down?
Alex Cunningham
I certainly do not. I am not a lawyer, but I believe that the new clause is sufficient and does not open the way for such action. What I am trying to do is provide a protection for employers within the scheme, and therefore also for members.
The latest complaint was filed in January against Aon Hewitt Financial Advisors, accusing the company of breaching the Employee Retirement Income Security Act 1974, or ERISA. That is the fourth lawsuit to target the fee arrangement for services provided by a computer-based investment advice programme.
The Chair
Order. May I ask the hon. Gentleman to move away from discussing court cases in his comments?
Alex Cunningham
I am doing that now. We have a clear warning that if a company fails in its fiduciary obligation, litigation may be an option. We know from the FCA report that implicit costs are opaque and likely to be much higher than those that have been explicitly presented. We believe that it will not be long before legal teams from the US alert their operations in the UK of potential opportunities for litigation. I can see the adverts on TV now: “Problems with your pension fund? Have you been subject to high fees and transaction costs that you never knew were there?”
The most important “don’t” must be, “don’t assign a low priority to your employees’ auto-enrolment choices.” The big lesson of the litigation—albeit US litigation—is that employers must assume that they have that fiduciary duty, as do trustees, and that they always need to have auto-enrolment choices on their radar screens. It is a lesson once again that the lack of transparency in the governance process, the administration process, the investment process and the advice process will lead to the detriment of the member.
To ensure that we can help build citizens’ trust in the system, we must have transparency for employers and members. We must have the information in front of the employer choosing the scheme to protect them and their employees. I commend new clause 7 to the Committee.
Richard Harrington
I thank the hon. Gentleman for his contribution with the new clause, but I respectfully give him my opinion that he seems to be fundamentally misunderstanding the whole regulatory system of automatic enrolment. So long as an employer chooses a scheme that meets the criteria—we have been through all the criteria and the whole regulatory and legislative system is behind that—the scheme qualifies for AE. The employer —which may be a he, she or it, if it is incorporated—cannot just decide on any old scheme. There is a significant regulatory hurdle in the Bill.
The employers’ duty is met by scheme choice, because that is what auto-enrolment is. It is not like a defined-benefit type of scheme, where the employer has to ensure that the contributions are enough to be able to pay out what they are contracted to pay out in the scheme documentation. They have to make a reasonable decision based on the whole authorisation regime. I argue that asking for more would be inappropriate and burdensome for employers.
It may help the hon. Gentleman to see my point if he looked at the regulator’s website—he might have done so already—which has comprehensive guidance for employers. Under the new clause, a typical employer would be doing exactly what the hon. Gentleman says is inappropriate: they would basically be doing what their accountant or adviser tells them, because most employers, particularly the small ones, by definition do not have this kind of knowledge. They are not professionals in this area; there are there to run their own business.
I do not understand, whether from a personal or a Government perspective, how asking them to do meaningful checks after they have gone with an approved and regulated scheme would add anything to the process. It is well-meaning, but it is unnecessary and should not be part of the Bill. I sympathise with the intent. The hon. Gentleman is trying to protect members from people acting in a fraudulent way.
Alex Cunningham
Perhaps the Minister can address this very simple question: is he satisfied that employers could not be subject to legal action against them if they end up making a bad choice on behalf of their employees?
Richard Harrington
As I have explained, their choice on auto-enrolment is restricted to choosing a regulated, authorised scheme. I am not a Government lawyer, or any other type of lawyer, although perhaps I should disclose to my chagrin that I did a law degree 40 years ago.
Julian Knight
Is it not true that many of the auto-enrolment schemes are vanilla in their investment outlook? Many of them—or a high proportion—are based around direct savings accounts and passive investment funds. They are not the high-risk, high-octane investments that would perhaps need the approach in the new clause.
Richard Harrington
I absolutely agree. In fact, such schemes are often criticised for precisely that reason. They are criticised for being too conservative—in the investment sense, not the political sense—and for missing out a lot of good possible investment decisions, and the thought of that being reviewed by every single employer. I mentioned NEST and its 230,000 employers. I cannot believe that it would be fair to place such a regulatory burden on them when they are choosing from an approved list. The whole purpose of the regulation is that the schemes are approved, proper and regulated.
I am trying to see where the hon. Gentleman is coming from. I hope that he can see where the Government and I are coming from, and why I am not of the view that the new clause would be appropriate. I respectfully invite him to withdraw it.
Alex Cunningham
I accept the explanation that the Minister has provided about the employer making a choice from a regulated scheme and the protections included within that. If he is satisfied that employers will not face legal challenge as a result of the choices that they make within a regime where they must choose a scheme on behalf of their employees, and has placed that on record, I am content. I beg to ask leave to withdraw the new clause.
Clause, by leave, withdrawn.
Bill, as amended, to be reported.
Local Government Finance Bill (Seventh sitting)
(7 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
On a point of order, Sir David. On Tuesday afternoon, when I asked the Minister whether he had been privy to conversations in the Department or across Whitehall more generally about Surrey County Council’s proposed referendum on a 15% council tax increase, and what the Government might have said to the leader of the county council, he said:
“I think that the hon. Gentleman is presupposing the discussions that happened and the outcome of the situation.”––[Official Report, Local Government Finance Public Bill Committee, 7 February 2017; c. 208-09.]
In the light of the sweetheart deal agreed with Surrey County Council, I wonder whether the Minister would like to take the opportunity to correct the record.
The Chair
I have listened very carefully to the point of order. No doubt the Minister and the Government Whip have, too, but I sense that they are not very keen to comment on it. It is there for the record.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
Further to that point of order, Sir David. The hon. Member for Harrow West knows that a sweetheart deal has not been done with Surrey. I refer him to today’s written ministerial statement, and indeed to the statement made by Surrey County Council.
Mr Thomas
On a point of order, Sir David. You may not be aware that there has been some discussion in Committee about the fact that the Government have not yet published their summary, let alone the full details, of the 400-plus responses to their consultation document, which is pertinent to consideration of the Bill. Have you had any indication that the Minister might finally have got around to releasing the consultation responses, so as to better inform our scrutiny of the Bill?
The Chair
Neither I nor the Clerk has had notification. Does the Minister wish to share the position with the Committee?
Mr Jones
Further to that point of order, Sir David. It has almost become a custom for the hon. Member for Harrow West to ask that question in our sittings. I reassure him, as I have done a number of times, that we intend to publish the responses to the initial consultation. We are also looking to publish a further consultation, and we expect it to be released next week.
The Chair
I am very grateful to the Minister; that is helpful.
Clause 6
Power to reduce non-domestic rating multipliers
Jim McMahon (Oldham West and Royton) (Lab)
I beg to move amendment 30, in clause 6, page 9, line 40, at end insert—
‘(2) Before an authority reduces non-domestic rating multipliers in its area it must consult with any neighbouring authority.’
This amendment would require an authority that intends to reduce its non-domestic rating multiplier to consult any neighbouring authority before doing so.
The Chair
With this it will be convenient to discuss the following:
Amendment 48, in schedule 2, page 44, line 7, at end insert—
‘(1A) A relevant authority shall determine that the multiplier discount shall apply—
(a) to all hereditaments in its area, or
(b) only to some hereditaments in its area (defined by reference to their location, rateable value, class of hereditament or such other factors that the relevant authority determines when specifying the multiplier discount).’
See explanatory statement for amendment 49.
Amendment 49, in schedule 2, page 44, line 17, after ‘area’ insert—
‘, in accordance with that relevant authority’s determination under subsection (1A).’
This amendment, together with amendment 48, would mean that a billing authority, a county council or the Greater London Authority could apply a discount to the whole of its area or could apply to particular areas, above or below a particular rateable value threshold or to particular categories or sub-categories of hereditament.
Jim McMahon
It is a pleasure to serve under your chairmanship, Sir David. The amendment would require a local authority to consult neighbouring authorities when it wished to change its business rate base. The principle behind that has to do with not only being a good neighbour, but ensuring that local authorities cannot be played off against each other. For example, an investor or developer might come to an area with a significant end user, and set one local authority off against another to get a preferential deal; preferential deals, done in the background, are all the rage at the moment.
Mr Jones
I hear the school of thought that the hon. Gentleman is adopting, but does he not accept that the Bill proposes reducing the multiplier across a local authority area, not in one particular place in the area, or for one particular industry? Is not the line he is pursuing therefore pretty flawed?
Jim McMahon
Amendment 30 is linked to amendments 48 and 49, which would allow local authorities to set the multiplier at different levels in all or part of the area, so potentially that could happen. I will come to the reasons why those amendments were tabled, but if all the amendments were accepted—the Government may well choose to do that; we would be happy with that—there would be that provision.
A local authority could reduce the multiplier in an area. Take the example of a large warehousing, distribution, office-type business relocated to an area; say Google did not want to relocate to London, but thought Oldham was the place to be. That £1 billion of investment could make Oldham Council consider whether it was worth reducing the multiplier across the whole borough—unless, of course, Google said, “We have this agreement in Oldham, but let’s see what Rochdale, Tameside or Manchester can do for us.” It would not make sense to have that artificial competition in local areas.
Mr Thomas
My hon. Friend gives a number of examples, and we now know that Surrey has a sweetheart deal to be a business rates pilot in 2018-19. One could imagine a scenario in which Surrey County Council wanted to reduce business rates; amendment 30 not having been made, it would not have to talk to neighbouring areas, which might be a bit put out by that.
Jim McMahon
I take that point completely, but we may need to take Surry out of the equation, because there are rules for everybody and then there are separate rules for Surrey; we will need to account for that in future legislation. Obviously, if an elderly relative needs social care, Surrey is the place to be, but we must make laws for the whole country. This is about restricting artificial competition, where possible. One area may not be aware of discussions in the area next door because they may be covered by commercial sensitivity considerations. The risk of that information being released as a result of a random text message being mis-sent is very unlikely—I am sure it almost never happens—but local authorities could be set up artificially against each another.
Kevin Foster (Torbay) (Con)
I hear what the shadow Minister is saying, but his amendment 30 refers to consulting, not securing agreement. By his own logic, if an authority is not aware of something and then gets a letter, it may decide to do the very thing he is talking about.
Jim McMahon
Local authorities are independent units of government. They cannot be at the beck and call of their neighbour. Their working together constructively is important for local relationships and the local economy, and that is exactly what the amendment would provide for. “Consultation” includes an assumption that local authorities will reach out, be inclusive and share in a constructive and mature way with their neighbouring authorities. I cannot see why this small change would be contentious. Surely it is in the interests of all local government, as a family, and as a unit, that people work together to the same end. Of course we welcome investment from the private sector when it moves to an area, but that should not be used to create an artificial divide between neighbouring authorities. That is the point of the amendment.
Amendments 48 and 49 are simply about expanding the power available to some bodies to change the multiplier, so that it is available to all billing authorities, the Greater London Authority and county councils. Through these amendments, we are trying to say, “We respect every unit of local government, whether it is a combined authority with a Mayor, a metropolitan authority, a London authority, a district council or a county.” Every unit of government should have the right to affect the economy in its area.
Taken as a package, these amendments would expand the freedoms that the Government are trying to progress—freedoms that local government has largely welcomed—and make them available to all local government, in the way that it is proposed they be made available to some. The amendments would enable local authorities to act in a mature way, consult their near neighbours and, hopefully, get agreement on the best way to administer a scheme, in tune with neighbouring authorities, rather than acting against them.
I do not propose to spend any more time on this matter, although we could go on at length about it for the sake of it. These are quite minor amendments in the scheme of things. They are certainly not contentious; they are more about tidying up the offer, and expanding it to a wider group of people. The consultation required with neighbouring authorities would be similar in spirit to the way in which local plans under development involve consultation with neighbouring authorities, so it would bring the Bill into line with other legislation affecting local government.
Mr Thomas
I am grateful for this opportunity to comment on the amendments. Amendment 30 is sensible, and is made all the more so by the new context that Surrey County Council has created for our deliberations. The deal that David Hodge, the leader of Surrey County Council, has done with Nick seems to have been a particularly interesting piece of negotiation. I am told that Surrey County Council met on Tuesday to consider whether to go ahead with the referendum, and that at the beginning of the meeting, David Hodge was determined to go ahead with it. It appears that a message—perhaps a text message from Nick or somebody else—was sent to him, and the meeting was suspended. He rushed out, and there was a sudden change in approach—
The Chair
Order. This is a very interesting fleshing out of the details of the linked email, but I do not think it is entirely relevant to the amendment that the hon. Gentleman is supporting. I draw his attention to that. Not so much about Surrey.
Mr Thomas
Once again, Sir David, your timing in putting me straight is impeccable. Having given the context, I turn to why that is immediately relevant.
Let us assume that Surrey County Council wants to take advantage of the opportunity that it will have, as we now know, from 2018-19 to reduce business rates. Who might be affected by that decision? A number of neighbouring authorities close by, some within the Greater London Authority area. One thinks of Hillingdon and Hounslow. Surrey County Council might think, “We know that a third runway will be built at Heathrow. It’s a bit further away than Hillingdon, so businesses might not be immediately interested in moving to Surrey. They might be more interested in focusing on the attractions of Maidenhead or Hillingdon, which are much closer to that third runway. But if we were to reduce business rates a little, ahead of any other authority’s ability to do so from 2020-21, we might be able to get in first and attract those businesses to Surrey, rather than to Hounslow, Hillingdon, Ealing, Maidenhead or beyond.”
We are all interested in the success of Surrey County Council’s leader in bypassing the Minister with responsibility for local government finance, who is here with us, finding the really powerful person in the Department—Nick—and doing the deal, but it seems to the Opposition that although it is perfectly reasonable for the leader of Surrey County Council to want to do the right thing for his residents, if it will have a potentially adverse impact on nearby local authorities, surely Surrey County Council should have to talk to them and at least warn them of its intention.
Mr Jones
I remind the hon. Gentleman, who probably knows this but chooses not to say it, that if a particular local authority in an area that was affected by the challenges in the steel industry wanted to reduce and give a discount on the business rate to a steel plant, for example, that option already exists. Will he acknowledge that?
Mr Thomas
I accept that the option exists in certain places in certain situations. What we are seeking to do is to end the inflexibility of the provisions as they stand at the moment. I gave the example of counties and the particular problems they have in relation to this power. This flexibility would allow local authorities that do not benefit from the presence of an enterprise zone or sites with assisted area status to still offer some form of incentive to business investment.
Mr Jones
The hon. Gentleman is being very generous in giving way. He mentions the issues that counties have. Counties can give discounts, but those discounts are dealt with by the billing authority, which is generally the district in a two-tier area. Will he set out exactly what the concerns are and what the county issues are that he mentions?
Mr Thomas
I am doing my best to do so; the Minister may not be listening as well as he might like to. Let me give some additional background to the concerns that have been put to me.
Schedule 2 gives the power to districts, counties and the Greater London Authority to reduce the business rates multiplier, but as it stands it must be applied to all qualifying properties that pay business rates hereditaments in its area. I am told that authorities would welcome having more flexibility. For example, an authority may wish to reduce business rates in a particular area or to help a particular industry.
There are current powers under section 47(5A) of the Local Government Finance Act 1988, as amended by the Localism Act 2011, to grant discretionary relief to any ratepayer. However, they apply only to billing authorities —so not counties or the Greater London Authority —and are determined on a case-by-case basis, as the authority may grant a discount only if it is satisfied that it would be reasonable for it to do so, having regard to the interests of persons liable to pay council tax.
David Mackintosh (Northampton South) (Con)
Will the hon. Gentleman give way?
David Mackintosh
As someone who has worked at granting discretionary rate relief, I ask the hon. Gentleman whether he recognise, that to do this it is necessary in two-tier areas to work across both authorities? Therefore, if the billing authority wants to do it, it will of course talk to the other authority involved.
Mr Thomas
I welcome the hon. Gentleman’s intervention, but what surprises me is that he did not explain why, having so enthusiastically backed the powers in amendments 48 and 49 when the Select Committee considered the report, he now seems hesitant about following that logic. I take his point that the best local authorities will want to consult each other, but amendment 30 is intended to deal with authorities that were not so respectful of their neighbouring areas, or the economic impact on the neighbouring areas’ residents. The amendment would lock such consultation into law.
It is interesting that apparently the hon. Members for Northampton South and for Thirsk and Malton, and other members of the Select Committee, did not come up on their own with the idea of an ability to vary the multiplier. They received substantial evidence from councils up and down the land about the power. The Local Government Association, the District Councils’ Network and the County Councils Network advocated it. Indeed, the Select Committee noted that its predecessor Committee recommended a similar provision.
On that basis, I suggest that my hon. Friend the Member for Oldham West and Royton was entirely right to table all three amendments. I understand, in the light of Surrey County Council’s decision, that there may not be enthusiasm for amendment 30, but I should be interested to hear why the Minister is rejecting the advice of the Select Committee on amendments 48 and 49.
Rob Marris (Wolverhampton South West) (Lab)
I shall confine my remarks to amendment 30, which would require consultation on multiplier discounts. I get the impression from the Minister’s demeanour that he is not minded to accept it. He can intervene and tell me whether I am wrong, but until I finish speaking, when I am sure he will have been persuaded, I shall proceed on that basis. It surprises me that he is not so minded, because this sort of provision is already in the Bill.
Schedule 2 to the Bill is to do with amending the Local Government Finance Act 1988, including schedule 7 to that Act. Page 45 of the Bill sets out proposed new paragraph 6C of schedule 7. At lines 13 to 20, there is a nice little table. The new paragraph states that, where a multiplier discount is to be introduced by a specified authority, the neighbouring authorities, or related authorities —perhaps to use a term that is not in the Bill—must be notified. I concede to the Minister that they do not have to be consulted—the verb used in the amendment—and that “notify” is different. To read from the table—it is not a long one—the first “Relevant authority” is:
“A district council for a district in a county for which there is a county council”.
It has to notify, “The county council”. Next:
“A county council for an area for which there is a district council”
has to notify
“The district council for each district in the county”.
“A London borough council” that wants to apply a multiplier discount has to notify “The Greater London Authority”, which, conversely, has to notify “Every London borough council”.
As I said, one verb is “notify” and the one in the amendment is “consult”. They are different—I accept that—but they are not a million miles apart. We already have the concept, or something close to it, in schedule 2 to the Bill in the form of proposed new paragraph 6C, so it seems reasonable to think that the Government ought to accept the amendment, which would simply push the concept out from notification to consultation.
Mr Jones
I thank the hon. Members on the Labour Front Bench for their amendments, and for giving me the opportunity to address the issues and talk specifically about multiplier discounts. The hon. Gentlemen seem to have gone into things in some detail, which leads me to believe that today could be a very long day—I might need to ring Mrs Jones a little later to tell her that I will be home later than expected.
I hope that the Committee will agree that the measure on the multiplier discount is an important and positive one, which will give councils further levers to attract and incentivise local investment. The effect of amendment 30 would be to require any local authority considering the introduction of a discount to consult its neighbouring authorities before implementing a reduction. We do not believe that that is the right approach, nor do we believe that the amendment is necessary.
One of the main aims of the clause is to allow local authorities to show that they are willing to work hard and be flexible to attract business. However, local authorities already work closely together on many issues, including economic strategy. The amendment would create an unnecessary and complex additional burden on any local authority seeking to introduce a discount. That is precisely the sort of approach from which we are trying to move away.
The purpose of the power in the Bill is to provide local authorities with the tools to incentivise local growth. In exercising the power and in maximising its effect, we expect local authorities to take steps to publicise widely their intention to introduce a multiplier discount.
Clause 6 and schedule 2 already require that, in two-tier areas, the authority introducing the discount must inform the other authorities and the Secretary of State of its intention to specify a multiplier discount before 31 December in the preceding financial year—I hope that that answers the question of the hon. Member for Wolverhampton South West. Furthermore, in a two-tier area, the Local Government Finance Act 1988 as amended by the Bill and the regulations made under the Act will allow the Government to ensure that the income of a tiered authority will be protected from a discount introduced by another authority.
We consider that there is no need to make unnecessary provisions in the Bill, which is what the amendment would introduce. The Bill already strikes the right balance of providing information to those most directly affected without creating an additional formal burden.
On amendments 48 and 49, it may be helpful to the Committee for me to clarify that clause 6 and schedule 2 already allow an authority to specify a multiplier discount that would apply to all ratepayers in that local authority area. The effect of amendments 48 and 49 would be to allow an authority to apply the multiplier discount only to some properties, for example, on the basis of location, rate or value, or business type.
Although I understand the desire of hon. Members to give local authorities the flexibility to target any reductions in business rates, I do not agree that the amendments are necessary. Billing authorities already have wide-ranging powers to grant discretionary relief to ratepayers in their area. In practice, that already allows authorities to reduce business rate liabilities for a specific sector or area if they wish to do so.
Clause 6 and schedule 2 provide the ability to do something different and to reduce the overall tax rate across the area. I hope that, with the clarifications that I have provided, the Committee is reassured that the amendments are not necessary, that amendment 30 should be withdrawn and that amendments 48 and 49 should not be pressed.
Jim McMahon
I appreciate the Minister’s response, but there seems to be a conflict in the Government’s view of how local authorities should work together. The Localism Act 2011 includes a duty to co-operate, which provides that local authorities must actively engage and consult with neighbouring authorities when dealing with local plans that are going through in legislation. It seems slightly odd and contradictory that a local authority should not go ahead with a local plan that talks about the development of a place without that engagement, but that that is not a requirement when it is looking at the tax base of the same place, which could have an equal impact on the economy and development of a neighbouring authority. It seems very contradictory.
I am not sure whether the Government’s position has changed and they intend to come back to local plans and change the duty to co-operate with neighbouring authorities. Local government has been asking for consistency. What is the spirit in which local government has to maintain relationships and co-operate with their neighbouring authorities? Does that run through everything that the council does?
David Mackintosh
I wonder whether the hon. Gentleman agrees that this is taking place all the time in lots of areas with lots of different authorities. In my experience, we had a pooling arrangement, with eight local authorities all looking at business rates. In terms of the enterprise zone in Northampton, there were 11 authorities across the south-east midlands local enterprise partnership area, all of which had to co-operate and talk about business rates together.
Jim McMahon
I am pleased about that. On a daily basis, there will be council leaders, cabinet members and other councillors and officers who, through the course of their business, will engage with their neighbouring authorities and other authorities in their sub-region. That is entirely appropriate and standard as a matter of course. We are talking about a duty, where the actions of an individual authority can have a fundamental impact on a neighbouring authority. It is there in legislation already for local planning development. When the tax base of a neighbouring authority is proposed to be changed, the same duty to co-operate and consult should be in place.
Jim McMahon
That is exactly the purpose. Consistency is the word that is most appropriate for the amendment. I am not sure why the Government want to be inconsistent. The only thing they are consistent in at the moment is the power grab by the Secretary of State to retain more power—we will come on to some of the Bill’s provisions on that a bit later. What we want is for local authorities to feel empowered, in a clear and understood framework, which provides safeguards for other areas that could be affected by their decisions. That is what amendment 30 would do.
Mr Jones
It is interesting—it has been quite a theme throughout the Committee—that the hon. Gentleman keeps talking about this power grab. He will know that the vast majority of delegated powers within this just update existing powers and, where that is not the case, they are subject to the parliamentary process. Does he not accept that he is over-egging the pudding?
Jim McMahon
I do not accept that point at all, and the reason is that I do not take the headlines from the Minister; I take the wording of the legislation that is coming through, and that wording is crystal clear. We will come on to this later, but even when the infrastructure levy is being designed, central Government will prescribe the exact layout and content of the consultation document—where it should be placed, where it should be published, and how it should be published. In terms of being absolutely prescriptive and micromanaging what local authorities do, this is not central Government letting go and empowering local authorities at all, so let us have a bit of consistency on that.
Mr Jones
This is really interesting. The hon. Gentleman seems to be undergoing some sort of conversion. In my albeit short time in local government—I am sure that this was also his experience—it was micromanaged and controlled by a central Labour Government probably more than at any other time in history. Will he accept that he is now talking a completely different language from that which the Labour party talked while in government?
Jim McMahon
I am pleased that the Minister has made such a good and thoughtful intervention, taking us back to the glory days of councillors being able to operate under a forward-thinking, all-embracing Labour Government. Those were the days when we provided money for new schools and Sure Start centres, embraced culture and the arts, and opened up entry to our museums and galleries. Those glory days seem a long time ago.
The Chair
Order. Before the Minister responds, I draw the Committee’s attention to precisely what we are debating at the moment.
The Chair
Order. Before the hon. Member for Oldham West and Royton responds to the Minister’s point, I draw the Committee’s attention to the amendments that we are debating. Could Members please address their remarks to the amendments?
Jim McMahon
Sir David, your stewardship of the Committee is to be commended. The Minister abused that intervention by taking us far away from the Bill. Perhaps we can discuss the benefits of a Labour Government supporting active Labour local councils another time. He experienced that before he came to the House, but I am not sure that he learned the right lessons from his time in local government. I am sure that we will come on to that.
Consistency is important. For local government to be able to get on and do the job that it is there to do, it needs to know what the expectations are and what the framework is; and the more consistency, the better. There should not be over-prescription or micromanagement —there should not be 2,000 performance indicators. That is not what we are getting at. We need nice, clean legislation that is easy to understand and to administer and, importantly, local authorities need to be able to manage their development and their relationships with neighbouring authorities. We want to divide the Committee on amendments 48 and 49, which are important because they would create a relationship of equals.
We want to empower local government, which is multi-layered and looks different in different areas. It has the democratic right, because it is elected by local residents, to make changes to enhance the area’s economic circumstances. It is therefore right that we consider extending that power to the Greater London Authority and to county councils. Notwithstanding the natural relationships that exist, whereby district councils, as the billing authorities, will speak to their county councils, this is about ensuring that it is a relationship of equals. I hope, notwithstanding the Minister’s response, that between now and the vote, he will come to acknowledge the logic of those two amendments.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Jim McMahon
I beg to move amendment 45, in clause 6, page 9, line 40, at end insert—
“(2) The Secretary of State shall, by regulations, make provision enabling billing authorities and major precepting authorities in England to increase non-domestic rating multipliers in their areas in certain circumstances.
(3) The regulations shall specify the circumstances in which powers under subsection (2) can be exercised.”
This amendment would require the Secretary of State to bring forward provisions that enable billing authorities and major precepting authorities in England to increase business rate multipliers under certain circumstances.
The Chair
With this it will be convenient to discuss amendment 46, in clause 6, page 9, line 40, at end insert—
“(2) The Secretary of State shall, by regulations, make provision enabling billing authorities and major precepting authorities in England to increase non-domestic rating multipliers for unoccupied hereditaments in their areas, in certain circumstances.
(3) The regulations shall specify the circumstances in which powers under subsection (2) can be exercised.”
This amendment would require the Secretary of State to bring forward provisions that enable billing authorities and major precepting authorities in England to increase business rate multipliers on empty properties under certain circumstances.
Jim McMahon
The amendments are critical because there is no power without the resources to fulfil that power and responsibility. The clause cannot just be about giving local authorities a business tax break giveaway and enabling them to reduce the multiplier. Local areas must be able to balance that power to reduce with a power to increase business rates in an area of interest, and that is what the amendments seek to do.
I will give an example of how that could be administered. Let us say that Oldham Council has a desire to regenerate the town centre so that it can flourish and empty shop units can be put to acceptable use again. There will be a cost to that, because although there is a £50,000 small business rate relief in place, many units on the high street are above that threshold but nevertheless critical to how the town centre and high street function. It would be legitimate for the council to conclude that the best way to balance that is to increase the multiplier for out-of-town retailers or large supermarkets to reinvest funds back into the town centre.
Jim McMahon
In many ways the amendments are about understanding what the Government are trying to achieve in giving these powers to those at a local level. Our principle will always be that that is for local determination. That is exactly what localism and local accountability is about and it will be for the local authority, in consultation with its business community and residents, to make the case and find the right balance at a local level.
Mr Thomas
My hon. Friend will know that the Conservative party—or at least the Conservative party in Surrey—thought that an increase of 15% was acceptable for council tax. I do not know whether it thinks that a 15% increase in business rates is acceptable, but that clearly would not be acceptable to us. That is why we should again praise the contribution of Robert Evans, leader of Surrey County Council, for leading the charge against such an increase.
Jim McMahon
I should say for the record that David Hodge is the leader of Surrey County Council. He is an influential council leader, and I have thought that for a while. His stewardship as leader of the Conservative group of the LGA is well known. He is forthright and determined and does his research for meetings, and he knows how to build relationships to make progress.
The Chair
Order. Although I am very interested in hearing about Mr Hodge and his background, I do not think that is relevant to the amendment.
Jim McMahon
I suppose I went back to my local government roots and felt the need to protect that council leader somewhat, because I fear that in the light of the leaked text messages he will be thrown under a bus by the Government—politically speaking, of course. It would not be surprising for a council leader to fall on his sword to protect a Government Minister—and, of course, Nick, who we are thinking about today. Is Nick still in post? Do we know where Nick is? Has anybody seen Nick? I am concerned for Nick. Sir David, if you could find that out for this afternoon I am sure that the Committee will run much more smoothly. We will be much more settled and calm knowing that Nick is in a safe place and that he has not been thrown under a political bus.
The amendments are about the balance of the base. It could be that any authority—let us use Surrey as an example—decides that increasing its business rate base is the right thing for its area. It would have to have a discussion with the business community affected, similar to the discussion that Surrey had when it floated the idea of a 15% increase in council tax. The Bill provides for that, but it does not provide for every billing authority to have the same power as hand-selected authorities to increase the base. We are again asking for consistency and for every billing authority to have that same power.
High streets in many areas are struggling with not only vacant units but inappropriate usage. We might want a targeted intervention to encourage the types of uses that would result in our high streets flourishing. The truth is that, given the way retail is going, far more is being spent online. If current trends continue, we will be spending £1 billion a week on online retail. A high street retailer has to pay to exist before it earns £1 over the till—it has to pay to be there—and that is a significant barrier for a lot of people who are trying to make ends meet.
We need to acknowledge that the world is changing. The Bill does not do that, so perhaps we need to have a separate conversation about how we tax business and support the local economy. The measure is at least a start, because it says that there will be an ability within a property-based system to teem and lade resources across a local authority area.
Mr Thomas
My hon. Friend will remember that some 66% of businesses pay no business rates at all because of small business rate relief. If the Government were minded, as a result of our probing amendment, to grant local authorities the power to raise business rates, that power would be levied on those business giants, such as Amazon, that perhaps struggle to pay tax in other forms. The amendment is not anti-small business, which we all want to encourage; it allows for big business to perhaps be asked to pay a little more.
Jim McMahon
Let me finish this point and then I will give way. The way in which the rateable value is calculated is generally based on the rental value of the property. For bars and restaurants it is obviously based on turnover, but for retail properties it is based on the rental value. Institutional investors in shopping centres and on high streets know that they have to pay a huge business rate liability when units are unoccupied, so they are establishing leases with a notional rental value—£70,000 to £80,000 a year—and an exhaustive rent-free period in line with that. When the valuation takes place, the headline rent might be £70,000 to £80,000 a year, but when the discounts provided in the lease are taken into account, the amount charged to occupy the space might be far less—possibly just £1. The business rates, however, are based on the headline value in the lease.
There are a number of examples of people investing their life savings into opening a high street shop and starting a business, but when they receive their business rate bill they are not able to hold their heads above water because they are just over the threshold and do not qualify for small business rate relief. That is even the case when they are given preferential rental options through the landlord. We need to look at the situation in a very different way, if we accept that high streets have a role to play in the vitality of our communities.
Mr Jones
The hon. Gentleman makes some important points about high streets and town centres, and I share his concern about how retail is shifting quickly. He has talked about consistency many times this morning, but how was it consistent for him to argue against changing the multiplier to a lower indexation rate, which will create lower bills for the town centre businesses that he is talking about? He says that he wants to help those businesses, so why was he against that?
Jim McMahon
Much of what we are trying to do through these amendments is to tease out from the Minister what the Government are trying to achieve. Some elements of the Bill make complete sense and reflect what local government, the Communities and Local Government Committee and individual councils have been asking for, but other elements are less clear. We are trying to get to the bottom of what the Government are trying to achieve. That might convince us that this is absolutely the right thing to do and that we should get behind it.
Rob Marris
In terms of consistency and the situation envisaged, the Minister did not say in his intervention that, while the purpose of the provision is to get rid of using RPI, it does not specify what will take its place. Therefore, far from bills necessarily falling, a different indexation could result in them rising.
Jim McMahon
That would be delightful. Perhaps he could even say whether a Surrey index could be used. A clarification would be helpful.
Mr Jones
The hon. Member for Wolverhampton South West has been diligent on the Bill, but he is clearly off the mark. I am sure that the hon. Member for Oldham West and Royton will recall our debate on indexation and the multiplier, during which I clearly set out the Government’s intention to use the CPI measure of inflation, which is indeed lower than RPI and will save businesses more than £300 million overall in the first year.
Jim McMahon
My recollection of that response was not as clear as that. I appreciate the direct nature of the Minister’s response today, but from my recollection we were told we were moving away from RPI, and we asked to what. He was unclear about that except to say, “What else is there, but CPI?” Well, a different measure could be created.
Mr Thomas
As my hon. Friend may remember, the Minister was involved in the Housing and Planning Bill and advocated with great certainty then measures that have now been rejected by other Ministers in the Department. Surely we cannot today take his word as gospel, which is why clarity in the Bill might be more useful than his words of wisdom now.
Jim McMahon
I often agree with my hon. Friend, but I do not want to paint the Minister as having little influence over his colleagues. I am sure they listened to his sound wisdom, reflected on it and took it on board. The Minister may not be the Minister tomorrow, however, and the legislation that we are creating transcends individuals. It is about having a framework in place to govern the nation.
Getting parity, prescription and consistency is important. I go on about consistency quite a lot because I have been on the other side of the argument when national Government passed legislation that was not clear or consistent. That only leads to confusion at local level.
The difference is that when central Government are confused, local government is confused and hundreds of individual authorities are confused, and that has cost and time implications. The more we can do to create a clear framework where duplication is not required to understand where the Government are trying to get to is to everyone’s benefit.
Kevin Foster
Given what is going on elsewhere, it is welcome to see some consistency in the shadow Front-Bench Members who have shown up; they have not managed to resign yet.
I listened carefully to the hon. Gentleman’s points. Amendments 45 and 46 are about increasing business rates. Perhaps he would like to spend some time dwelling on why he thinks putting business rates up on things like retail shops in local areas would be a benefit as his amendments allude to.
Jim McMahon
The point is about making sure that the powers that are being devolved to local billing authorities can be implemented. Critical to implementation is the affordability of the measures being taken. It is okay saying local authorities can take a hit on their tax base by reducing the multiplier, but that money must come from somewhere. We have seen time after time, and we have discussed time after time, the pressures in adult social care and frontline services when local councils just do not have the headroom required to fund the reduction.
The logical thing to do is to give all billing authorities the power to be able to teem and ladle within the business rate tax base, which is what the amendments are trying to get to. Many people would find it reasonable, as we heard in our evidence sessions, that large ratepayers—the big supermarkets and out-of-town warehouses—should probably pay more to fund the vitality of our local high streets and town centres. I think most members of the public would support that.
Justin Tomlinson (North Swindon) (Con)
I have every sympathy on the point about online trading. As the former chair of the all-party group on retail, I am familiar with the issue. I understand that the amendment is a probing one and not to be pressed to a vote, but I would urge a little caution. We must be careful about who is grouped with big business. The vast majority of retailers on the high street would be classed as big business, as they are not eligible for small business rate relief. The high street is struggling. When local authorities, as highlighted in the Portas review, were given discretion on car parking charges they continually hiked them and sped up retail’s rate of decline. I just urge caution.
Jim McMahon
I appreciate that intervention. I suppose my reflection on the Portas review is similar to the reason for the amendment. It is okay to say that councils can have the power to reduce car parking charges, but fees and charges are a significant part of local government income. At a time when revenue support grant has been snatched away and local authorities are being told they will be self-sufficient, going forward, it is difficult for them to find the headroom to reduce car parking charges. I pay tribute to the local authorities that have done so, particularly when they did it in a targeted way, to support local retail.
Jim McMahon
I will just finish this line of argument. At the moment the current rules would require consultation to take place in the area where a rates increase was wanted—even for areas that had the power, and notwithstanding that there were areas without it. It would be necessary, let us say, to draw a line around the retail park that the authority might want to look at for an increase in business rates, and then consult people who were affected by the business rate increase. If it wanted to use the money generated to fund another area of town, such as the high street or town centre, that would not involve the same consultees that were involved in the part of the area subject to the increase. I think that that is the issue.
Local authorities must reflect more broadly on their area, and not on a narrow defined area, which the Bill seems geared to. That flexibility would be welcomed by local authorities. As to being consistent, this is not a case of my arguing against myself—it is about providing a framework and allowing local areas to administer it appropriately for their locality.
Mr Jones
The way the hon. Gentleman is applying his logic is to say that the more taxes are hiked up, the more revenue is received; but we must be careful with that. A good example from my constituency was when the Labour council hiked up the car parking charges and lost £350,000 in income. Does he think that that is a good example of what he is suggesting? Is that why we should not look to increase taxes in the way he advocates?
Jim McMahon
I congratulate the Minister on living in a Labour council area. There are 22 million other people in the country living with Labour in control locally, and they get to experience at first hand the benefits of Labour being in government. The Minister should reflect on his fortunate circumstances. Let us hope that other parts of the country benefit from the same thing soon.
Rob Marris
I suspect that, with all due respect to my hon. Friend, he was not aware of that example from Nuneaton. Is he, however, as pleasantly surprised as I am that for the first time in debate on the Bill the Minister has actually produced some evidence?
Jim McMahon
The Minister has provided a certain insight. I would not quite call it evidence, because I have seen nothing produced; there has not been an assessment to back up that claim, as far as I can see. We need a higher bar on what we mean by evidence than the Minister jumping to his feet in a fit of excitement.
As we progress through the Bill and explore where the Government are trying to get to, I hope that the Government will take time to use the probing amendments to reflect. If they really want to achieve localism, if they really want local councils to take responsibility for growing their economic base and their tax base, we need to recognise that within any area there will be micro housing markets and micro business markets, where that local variation and local power to deploy in a very different way in the local authority area is critical to being able to grow the economy from the grassroots up. This is not about an aggressive attack just for attack’s sake; it is about a genuine deal, and the deal would always be that a local authority would say to the public, “We want to do this over here, and it would mean increasing business rates, but we would use that money to support this initiative over here.”
I genuinely believe that many people in this country are witnessing the decline of their town centres and high streets and are in tears, because that is a reflection, a symbol, of how the town is doing more generally. When people go into their town centre, which is the heart of the community, and they see windows boarded up and “To Let” boards where local shops used to thrive, they genuinely feel that part of their identity has been taken away. Our high streets are more symbolic than just a retail space; they are part of our cultural identity. I therefore hope that the Minister will reflect on our suggestions and that, if not during this phase, we may see some of them coming forward in the near future.
Mr Thomas
I think that this amendment will come to be known as the Mackintosh-Hollinrake amendment part 2. I again draw your attention, Sir David, to the excellent report by the Communities and Local Government Committee on what 100% business rates retention might mean. I can assure you that present when the report was agreed was the hon. Member for Northampton South. The report makes very clear his support for the recommendation that the power to raise the multiplier for business rates should be introduced. He wanted, as did the rest of the Select Committee, rises capped so that they were limited to the increase in the average council tax. I do not know whether at that point he foresaw Surrey County Council wanting to increase council tax by 15%. Clearly, a 15% hike in business rates would be completely unacceptable, but it is interesting that members of the Select Committee propose that local authorities should have the power to raise business rates as
“an effective lever to stimulate and foster local economic growth.”
The reason I supported our tabling these as probing amendments was that it is important, during the passage of the Bill, to consider the sources of revenue that local authorities will have to pay for the vital public services that the people of England get from their councils. Given the huge reduction in revenue support grant that we are all familiar with English local authorities having experienced, the two principal sources of income will be business rates and council tax.
The power does exist in law to increase council tax. If that goes beyond a certain threshold—well, Ministers are varying the threshold up and down at will at the moment. There is the power to increase council tax, however, and one can go higher than the threshold if one can get the consent of one’s local residents. There is no similar power for business rates.
In the new Jerusalem that we heard the hon. Member for North Swindon set out at an earlier sitting—I am sure that by now, Sir David, you have had the chance to read his speech—he foresaw business rates being reduced and, across every local authority area that did that, great big new warehouses, out-of-town shopping centres, large businesses moving in and business rates income rising as a result. Unfortunately, in the course of—
Mr Thomas
Let me finish this point and then I will happily give way to the hon. Gentleman, whom I am delighted to see I have woken up. I hope that in the course of the consideration of the Bill to date, he and other members of the Committee have begun to understand that there is a whole series of barriers to economic growth taking place in particular local authority areas. Actually, an individual local authority may not have much scope, if any, to increase its business rates income.
Justin Tomlinson
I suspect that the hon. Gentleman drifted off during my speech, because the key point I made was about the growth of small businesses to medium-sized businesses. That not only generates business rates income and does not require big out-of-town warehouses, but crucially creates yet more jobs that are vital to local residents.
Mr Thomas
I was sufficiently shocked by the sight of a Government Back-Bench Member rising that I did pay attention, but it is possible that, as events have moved on, I cannot recollect every aspect of the hon. Gentleman’s contribution. As punishment, I will go back and re-read it. He makes a partially interesting intervention—if he will forgive me for saying so. He is right: the challenge across the country for future businesses and economic growth is to take the entrepreneurial spirit that leads to the establishment of small businesses in the first place and to turn those into medium-sized businesses and, ultimately, bigger businesses.
Increasingly, as my hon. Friend the Member for Oldham West and Royton made clear, we are seeing more of those small businesses that are successfully transitioning into medium-sized and bigger businesses not needing the size of property that would lead to the increase in business rates income in the way that this Bill implies will be the only way for councils to generate increased business rates income in the future. There is that constraint, plus those that the hon. Member for Waveney alluded to and the barriers that I set out when I took the Committee to Allerdale Borough Council in Cumbria, with the mountains and lakes of the Lake district being natural barriers to economic growth.
We are now privileged to have the hon. Member for Thirsk and Malton with us. He will be delighted that, in a spirit of tribute to him and the hon. Member for Northampton South, I am moving a probing amendment that grants—as he and other members of the Select Committee wanted—the power to raise business rates so that that is included in this legislation. I look forward to hearing the case for raising business rates from the hon. Gentlemen.
As my hon. Friend the Member for Oldham West and Royton alluded to, one can foresee the social care crisis being so severe, and the worry about individual families’ circumstances being so great, that council leaders and councillors up and down the country will not want to go beyond a 1%, 2% or even 0% increase in council tax. However, they might want to look at the big businesses based in their area and potentially increase business rates as a source of income to pay for vital public services.
In the evidence given to the Committee by the chairman of the Federation of Small Businesses, we heard of his desire to see local authorities properly funded, so that the range of discretionary services that councils can offer when they have the resources, and that help businesses, can be available. The Minister’s most recent intervention on car parking charges was interesting. The chairman of the FSB noted in his evidence to us that one reason local authorities raise parking charges is that they have few alternative ways of raising revenue.
Mr Thomas
Given that that we do not wish to put the amendment to a vote, I have not sought support for it.
I return to the contributions made to the Select Committee report by the hon. Members for Thirsk and Malton and for Northampton South, who supported the power to raise business rates. Labour Members do not go as far as those hon. Gentlemen want us to, but their enthusiasm for raising business rates returns us to a broad point: where and how does one increase the quantum of local authority funding, if one wants the people of England to have the good-quality public services that they deserve? We have noted with considerable concern the impact that the decline in revenue support grant has had on rural bus services, public services and policing. If they do not have the power to raise business rates, I suspect that more and more councils will want to increase council tax as a way to fund public services.
The motivation for amendment 46, a probing amendment, is to note the difference between what can happen to empty property rates in Scotland and Wales, and what can happen in England. Councils in England can charge up to 150% on properties that have been unoccupied and substantially unfurnished for more than two years. In Scotland, they can charge up to 200%, and the qualifying period is only a year; Wales has similar powers. It would be interesting to hear from the Minister the reason for the difference. In Britain’s best constituency, Harrow West, the old post office site in the town centre has been empty for the better part of 10 years. Perhaps if empty property rates were set at the same level as those in Scotland, the developers who own the site would have more enthusiasm for accelerating their use of the planning permission that they have for it.
Kevin Foster
It is sad to hear that the hon. Gentleman’s town centre post office was a victim of Labour’s cuts, but how does he think post offices would be sustained by an increase in their business rates?
Mr Thomas
I say gently to the hon. Gentleman that the old post office site is not vacant due to the closure of the post office; the post office transferred across to a slightly smaller site immediately opposite under a Labour Government. Sadly, that post office has now closed under a Conservative Government, and the Post Office now operates from a franchise in a small corner of the local WH Smith. Again, as part of the mentoring that we offer, I gently suggest that he might want to check his facts a little more before making interventions that are that easy to rebut.
Jim McMahon
I took a slightly different emphasis from my hon. Friend’s contribution. It was not about post offices closing and relocating; it was about a site lying vacant for so long. If a more aggressive business rate regime were in place, it might prompt the owner of the site to bring it forward for development. That is what I took from his contribution.
Mr Thomas
My hon. Friend is absolutely right. We in Harrow are increasingly concerned about the time that it is taking the developer to bring the site back into use. Perhaps the Scots and the Welsh Labour Administration have got the rate of empty property relief right. I would be interested to hear from the Minister on that. These are probing amendments, and in that spirit, I look forward to the Minister’s response.
Mr Jones
It is always a pleasure to respond to the hon. Gentleman’s amendments. Clause 6 provides a power for authorities to introduce a multiplier discount, to incentivise businesses to invest in their areas and to stimulate local economic growth. Amendment 45 would introduce a wide-ranging power for the Secretary of State to provide in regulations for a local authority to be able, under certain circumstances, to raise the multiplier for its area. I understand the hon. Gentleman’s intention, but I am afraid that I do not agree that his approach is right, or that there is a justification for giving, or a need to give, local authorities a general, unfettered power to generate additional income by raising taxes on businesses.
Local authorities already have a range of more specific powers to raise additional income from businesses where authorities are delivering a specific improvement to the benefit of the local economy, including through business improvement districts and business rate supplements. In addition, the Bill would provide for a new infrastructure supplement for Mayors of combined authorities. These powers rightly include additional measures to ensure the effective engagement of businesses, and the additional income generated goes towards delivering specific improvements to benefit local businesses. Amendments 45 and 46 contain no such assurances or protections for business. Instead, they would allow local authorities to increase business rates without such checks and balances.
Amendment 46 would give the Secretary of State a wide-ranging power to make provision for a local authority, under certain circumstances, to increase the multiplier specifically for unoccupied premises. However, owners of such properties are already subject to full business rates, subject to the exemptions that may apply. The amendments would provide local authorities with powers to add additional costs to owners, who may not be receiving any rental income. That would be unnecessarily punitive and of very limited benefit.
I am therefore certain that the amendments would not be supported by the business community, and Labour Members offered no evidence to suggest that they would be. We need to provide business with the certainty it needs over rates bills, while allowing more flexibility for local government, for example through the new multiplier flexibilities. I hope that Labour Members will recognise the balance that we have struck in the Bill for business and local government. In that spirit, I hope that they will withdraw the amendment.
Jim McMahon
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider that schedule 2 be the Second schedule to the Bill.
Mr Jones
If local authorities are to move to even greater self-sufficiency, they need the tools to incentivise and stimulate local economic growth. The powers in schedule 2 give councils the flexibility to reduce business rates across their whole area by applying a discount to the multiplier. It provides local authorities with the ability to shape local economic conditions and signal their intent to attract business investment.
Under existing legislation, only the Secretary of State has the power to set the national business rates multiplier that applies in England. This Bill changes that. The purpose of clause 6 is to introduce schedule 2 to the Bill, which amends the Local Government Finance Act 1988 and inserts new paragraphs 6A, 6B and 6C to schedule 7 to that Act.
Ordered, That the debate be now adjourned.—(Jackie Doyle-Price.)
Local Government Finance Bill (Eighth sitting)
(7 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Committee divided: - Ayes: 5 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Chair
I remind the Committee that with this it will be convenient to discuss the following:
That schedule 2 be the Second schedule to the Bill.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
The clause allows local authorities to specify a multiplier discount. The effect will be to enable them to reduce the nationally determined business rates in their area.
Schedule 2 provides two delegated powers. The first enables the Secretary of State to add, vary or amend descriptions of local authorities that can exercise this power, so that he or she can respond to changes in the organisation of local government. The second gives the Secretary of State the power to set a maximum multiplier discount that a relevant authority, as defined in schedule 2, may apply. The Local Government Finance Act 1988, as amended by the Bill, and regulations made under that Act, will allow the Government to ensure that the income of a tiered authority in a two-tier area is protected from a discount introduced by another authority.
We encourage two-tier areas to work together when setting a discount. Under paragraph 6C, the authority introducing a discount must inform the Secretary of State and other affected authorities of its intention to do so by 31 December in the preceding financial year. The list of relevant authorities under the schedule is defined in new paragraph 6A(2) and includes lower and upper-tier authorities, as well as unitary authorities and the Greater London Authority, all of which receive a share of business rates. New paragraph 6B(1) sets out how a multiplier discount must be expressed by an authority. Overall, these changes give local authorities the flexibility to attract business investment, while providing businesses with the stability of knowing that business rates will not increase beyond the national level.
Rob Marris (Wolverhampton South West) (Lab)
My hon. Friends on the Labour Front Bench, whose amendments 45 and 46 would have enabled an increase in rates, will be happy to know that schedule 2 allows that. Paragraph 6 of schedule 2, which starts on line 32 of page 42 of the Bill, amends paragraph 3A of our old friend, schedule 7 of the Local Government Finance Act 1988. Paragraph 6 goes through aspects of multiplier discount and refers, in lines 1 and 2 of page 43, to taking
“the sum of those multiplier discounts.”
I cannot see that the Bill prevents a negative multiplier discount, though I stand to be corrected by the Minister. I look around the room at all the MPs on the Committee; they all studied mathematics far more recently than I did—I make no mention of you, Sir David—but my understanding is that if there is a negative multiplier discount, the result is a positive. That would produce the effect sought unsuccessfully by my hon. Friends through amendments 45 and 46.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
For the record, let me clarify that we were not seeking to change Labour party policy in this area, so my hon. Friend is wrong, unusually, to say that we were advocating an increase in business rates. We were merely seeking an opportunity to raise the suggestion made by the Select Committee on Communities and Local Government—and particularly the hon. Members for Thirsk and Malton, and for Northampton South—which advocated in its report a power for local authorities to increase business rates if they wanted to.
Rob Marris
I am grateful to my hon. Friend for that clarification. I apologise to the Committee if I mis-expressed myself. I was not advocating one course or the other, because I believe in local control and localism, but on my reading, the amendments made by schedule 2 would allow that increase.
The Minister adverted to new paragraph 6B, which is to be inserted into schedule 7 to the 1988 Act; it starts at line 27 of page 44 of the Bill. Under new paragraph 6B(3), the Secretary of State can, as the Minister said, set a maximum. The Secretary of State spoke this morning about incentivising and stimulating, and about local authorities working hard and being flexible to attract business. He referred to tools to incentivise local growth, without, of course, producing any evidence relating to the incentives, or their prospects of success, but we have already been around the block several times on the subject of the lack of evidence, so I shall leave that.
However, while we are talking about localism, sub-paragraph (3) is another instance of a power being reserved, if not grabbed, by central Government—the power for the Secretary of State to set a maximum for a multiplier discount. That does not seem to me to bolster localism. Broadly speaking, if we go along with what the Minister says—with the idea that 100% retention of business rates and so on will incentivise local authorities to be even more pro-business, whatever the colour of the authority—we should let local authorities act accordingly and make what outside observers and indeed some residents may see as mistakes. That is what localism is about: letting local authorities take decisions and bear the consequences.
Jim McMahon (Oldham West and Royton) (Lab)
It is hard to think of a recent example, but perhaps the Government are trying to prevent a local authority from threatening to increase the rate to such an extent that there is local outcry, forcing the Government to do a back-room deal to resolve the issue.
Rob Marris
I cannot think that that could possibly happen in any county in England. However, I wonder whether specifying a maximum multiplier discount, which, as I understand it is, in lay terms, a floor below which a local authority must not go, is to do with a Government attempt to shore up local government finances. The present Government and their coalition predecessor nicked loads of money from local authorities, so local authorities without enough money might still be tempted, in a beggar-my-neighbour way, to use the powers provided generally, were it not for schedule 2, to set a multiplier discount at a very low rate.
Of course Government finances are in a complete mess, and the national debt has gone up nearly two thirds in the past six years. There are real problems with the Government finances. They are not under control, and that is reflected in local authority finances. Some local authorities might be tempted to take action that outside observers and the Secretary of State might regard as foolish. What, therefore, does the Secretary of State do? He reserves powers, under schedule 2, to set a maximum multiplier discount.
That goes against the grain of what the Government are professing to do in the Bill—bolstering localism, and giving local authorities non-evidenced incentives to be business-friendly. A local authority cannot get too business-friendly by setting out too much of a multiplier discount, because then the Secretary of State will say, “You cannot do that.” Again, there are contradictory messages. I do not say that nothing my party says is ever contradictory. On occasions it could be pointed out that things I or my colleagues have said are contradictory; that is the human condition. However, we are dealing with a Bill presented by a Government who talk about local control, and schedule 2 contains an example that shows them going in the opposite direction.
Mr Jones
I will respond briefly. The hon. Gentleman’s argument and the intervention by the hon. Member for Harrow West showed how confused the Opposition are about this area of policy. I have clearly set out how the clause would operate, and explained that the intention is to allow local authorities to apply a discount to their multiplier if they wish. To respond to the question of the hon. Member for Wolverhampton South West, the Secretary of State will have the power to stipulate a maximum increase in a business rate supplement, and we are showing some consistency for when things go the other way and an area might want to reduce the multiplier. The clause is therefore not inconsistent with the Bill.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Schedule 2
Power to reduce non-domestic rating multipliers
Amendment proposed: 48, in schedule 2, page 44, line 7, at end insert—
‘(1A) A relevant authority shall determine that the multiplier discount shall apply—
(a) to all hereditaments in its area, or
(b) only to some hereditaments in its area (defined by reference to their location, rateable value, class of hereditament or such other factors that the relevant authority determines when specifying the multiplier discount).’—(Jim McMahon.)
See explanatory statement for amendment 49.
Question put, That the amendment be made.
Mr Jones
I beg to move amendment 37, in clause 7, page 10, line 6, at end insert—
‘( ) In section 67 of that Act (interpretation: other provisions), in subsection (7), for “and (6)” (as inserted by paragraph 6A of Schedule 3) substitute “, (6) and (6B)”.’
Section 67(7) of the Local Government Finance Act 1988 provides that certain provisions of that Act apply on a particular day if they apply immediately before the day ends. This amendment extends section 67(7) to cover section 43(6B) of that Act.
Mr Jones
The Government are committed to supporting small businesses across all areas of the country. In rural areas, that will help to ensure that key amenities continue to be available to local communities.
The system of rural rate relief provides 50% mandatory relief to the only village shop, post office, public house or petrol station within a rural settlement, subject to certain rateable value thresholds. In the autumn statement, the Government announced the doubling of rural rate relief to 100%, which increases support for rural businesses. The clause brings that change into effect by amending section 43 of the Local Government Finance Act 1998 so that those businesses that qualify for rural rate relief pay no business rates at all. That will bring the rural rate relief scheme into line with the small business rate relief scheme, which provides 100% relief for eligible businesses.
The Government’s intention is for the qualifying businesses to receive 100% rural rate relief from April 2017. For the 2017-18 financial year, before this legislation is in place, local authorities will be expected to use their discretionary powers under section 47 of the 1988 Act to provide 100% rural relief, and they will receive compensation through a grant from central Government. To ensure that all eligible rural businesses receive the relief, the clause provides that the 100% relief will become mandatory. The Government intend to bring the clause into force from 1 April 2018. This is an important amendment to legislation to protect and support valuable rural businesses.
Mr Thomas
In the interests of speed, I will take the opportunity to speak to the Government amendments now, rather than in a separate clause stand part debate.
If I understand correctly, a small business in a rural area might quality for 100% business rate relief under small business rate relief, but if it also qualifies for the 50% rural rate relief, it has to be given that 50% relief rather than the 100% relief, because of the hierarchy of rate reliefs that exists. As I understand it, the clause intends to deal with that loophole.
As the Minister hinted, a rural settlements list sets out the types of businesses that would benefit from small business rate relief. Those are a public house or petrol station that is the only such business in a rural settlement and has a rateable value of less than £12,500, a food store or general store that is the only one in the settlement, and post offices with a rateable value of less than £8,500. Local authorities have the discretion to top up the 50% rural rate relief to 100%, but not all do so, presumably because of the difficult financial situation that local authorities face at the moment, regardless of their political leadership, given the cuts to revenue support that the Government have been pushing through.
I intervene in this debate to ask the Minister a number of questions. Why does the rural rate relief scheme not cover a wider range of businesses? I ask that in the context of growing concern in the countryside that rural enterprises will be some of the biggest losers in the business rates revaluation that will come into force after April 2018. There have been real concerns that livery yards and riding schools, for example, will go to the wall because of the expected increase in business rates under the revaluation. There is concern that kennels and catteries, polo grounds, racecourses and racing stables will also be among the worst hit. That is of such concern that the hon. Member for Montgomeryshire (Glyn Davies) has raised concerns. Similarly, Sarah Phillips, the director of participation at the British Horse Society, worried aloud—understandably—through The Times that increases in business rates after April would have a devastating impact on livery yards and riding schools. She went on to point out that rural businesses, which typically occupy more space, were being put at an unfair disadvantage by a bricks-and-mortar tax based on premises, not profitability. That prompts a question of Ministers as to why more rural businesses will not be able to benefit from the changes.
Indeed, the many businesses that want to install solar panels are also asking why rural business rate relief will not similarly help them. They also stand to suffer considerably from the business rates revaluation that will come into force after the next revaluation in April 2017. The problem is that, going forward, solar panels will be judged separately from business premises, and it appears that they will not all qualify for small business rates, which is the other potential opportunity for assistance. Given the solar industry’s potential to create good new jobs, why are Ministers not taking advantage of the extension of rural rate relief, perhaps to help out a number of other businesses?
When we debated clause 5, we talked about whether the retail prices index or the consumer prices index should be used. I know that you read Hansard diligently, Sir David, so you will remember that £78 billion will potentially be gained by businesses and lost by local authorities over the next 20 years as a result of the change. Perhaps if Ministers were to take advantage of the flexibility in clause 5 over whether CPI is used, which my hon. Friend the Member for Wolverhampton South West noted, they might be able to find the resources to help more businesses in our countryside to survive.
Bricks-and-mortar businesses—in urban areas, too, but in this context particularly in rural areas—are under growing pressure from the rise in online businesses. One of the great successes of the previous Labour Government, and of Britain more generally, is that we are such a hub for online technology businesses, but those businesses tend to need less space and are therefore less likely to pay high business rates, whether they are in urban or rural areas. Many businesses are saying, “Hang on a second. We have to pay huge business rates every year, and these online businesses are not being taxed in the same way. Isn’t it time for a bit more equality between these two types of businesses?”
The challenges for businesses in rural areas are sometimes even more acute. In Threlkeld, a small village just outside Keswick in the Allerdale Borough Council area, which the hon. Member for North Swindon always likes to be reminded of, there is a new coffee shop run by the community—it is a social enterprise—and a pub. We know that the pub would qualify for 100% rural rate relief, but we do not know whether the coffee shop would. As the coffee shop is part of a community hall facility, it helps the community of Threlkeld to benefit from the existence of that premise, where lots of different community activities take place. Would it be eligible for 100% rural rate relief or not? It is not a post office, a pub or a petrol station. Perhaps Ministers might listen to the concerns of businesses in the countryside a little more and do more to help them.
Rob Marris
If that community centre were classified as a public toilet under clause 9, it might get some relief—as might its users.
Mr Thomas
The last time I visited that coffee shop, which has fantastic views of Blencathra and Skiddaw—two of the great English mountains—although there were toilets there, that was not what the bulk of the premises were being used for. It would be interesting to probe whether it has the potential to get at least some relief under clause 9, but let me not test Sir David’s patience by being diverted down that particular route.
I would like to ask Ministers why, in their view, rural rate relief is so limited and whether there might not be scope for providing more assistance to businesses in the countryside, more generally and also given the rise in online businesses, which do not require such large premises. In particular, it would be good to hear what the Government will do to help the nascent solar panel industry, particularly those businesses seeking to put up solar panels in rural areas.
Mr Jones
Thank you, Sir David, for allowing me the opportunity to respond to the shadow Minister. He mentioned rural rate relief. Clearly, there is a key criterion for eligibility. The idea of rural rate relief is to ensure that key amenities are available in rural areas. He seems to have conflated it—at some length—with the business rate revaluation. As he will know, the revaluation is not a process designed to raise any more or less money for the Exchequer; it is a fiscally neutral exercise meant to ensure that rateable values reflect property rents and changes in those rents over the revaluation period.
In the 2017 revaluation, nearly three quarters of ratepayers will see either no change or a reduction in their bill. The hon. Gentleman seems suddenly to have an interest in rural areas. Most people in rural areas think that the Labour party has generally neglected them when it has been in government, but he now seems to be taking a more significant interest, which perhaps we should welcome. Rural businesses, if their rates have increased, will also be eligible for part of the £3.6 billion transitional relief scheme that we are introducing at the same time. I hope to reassure him that, in its totality, the business rate revaluation will predominantly reduce rate bills in rural areas by an average of 4.4% and in significantly rural areas by an average of 6.4%.
Mr Thomas
I would gently point out that it was not the Labour Government who sought to close hospitals in rural areas, such as the one in Allerdale Borough Council’s area that serves the community of Threlkeld, to which I referred. I suggest that the Minister is being rather complacent about the impact on some rural businesses as a result of the revaluation. Have Ministers considered extending rural rates relief so that other businesses in isolated communities can benefit?
Mr Jones
We keep taxes continually under review. As I said to the hon. Gentleman, we are not complacent. We have put in place a significant package of transitional relief in that regard. He has waxed lyrical about Allerdale. Having been up to that part of the country recently, I know how beautiful it is, but I also observed that the local economy is not just about tourism and related activities. It is also heavily based on the nuclear industry. There are many people in that area who depend on the nuclear industry for their livelihoods. I would say to the hon. Gentleman, very gently, that his party’s policy on nuclear is probably the biggest threat to that particular part of the country. [Interruption.]
The Chair
Order. I would be grateful if the Minister would stick very closely to responding to the points that were made by Mr Thomas.
The Chair
That was a very clever way of continuing the debate. I think it is best if we move on.
The Chair
That is obviously not a matter for the Chair. It is a matter for the Minister how he responds to the points that are made, but he heard the point made. It is entirely a matter for him whether or not he wishes to respond.
Mr Jones
Thank you, Sir David. There is a concern about whether the point made relates to rural rate relief. I would say to the hon. Member for Harrow West that solar panels quite often form part of a building that might be subject to business rates. There are some situations—I will not go into the details—where those solar panels will be subject to business rating because they are part of plant and equipment, and some occasions where they will not be. I would also say that because that equipment forms quite a small part of the hereditament in question, which would be subject to business rates alongside the solar panels, there are situations where business rate levels have reduced as part of the revaluation, even though the solar panels may be subject to business rates.
If you will allow me, Sir David, in the spirit of trying to move the Committee along, I would like to speak quickly to the amendments tabled to the clause. Amendments 37 and 41 are purely technical amendments, which concern a principle used in business rates known as the end-of-the-day rule. Hon. Members new to the technical details of the business rates system may believe that we are thinking about the end of the day—which could not come soon enough for many of us—but I am afraid this is slightly different. The liability of a ratepayer to business rates arises on a day-to-day basis. That means that business rates are calculated for each day based on the circumstances of the ratepayer and the property on that day. That then gives rise to the question at what point in the day those circumstances are to be taken from. If, for example, a ratepayer moved into the property at 12 noon, are they a ratepayer for half of that day, for the full day or not at all?
The relevant legislation does not leave that point to chance. Section 67 of the 1998 Act contains various provisions dealing with such circumstances. The provision adopted in section 67 is that the circumstances as they may exist before the day ends are taken to have applied for the day, and if conditions necessary to satisfy the requirements of, for example, a mandatory rate relief are met immediately before the day ends, they are taken to have applied for the day. If, for example, a charity started to use its property wholly or mainly for charitable purposes at 12 noon, it is assumed to have used the property for the whole day and is therefore eligible for mandatory relief.
The end-of-the-day principle is a familiar and accepted principle in the business rates system. The amendments will apply that principle to various measures that we are introducing in the Bill and they will clarify that the same principle applies to some existing reliefs.
Amendments 37 and, in part, 38 will ensure for the avoidance of doubt that the end-of-the-day principle is applied for rural relief and small business rate relief. In practice, those reliefs are already operating using the principle, but we want to put that beyond doubt. Amendments 38 and 39 will ensure that the end-of-the-day principle is adopted for the new relief for telecommunications infrastructure introduced under clause 8 and schedule 3. Amendment 40 ensures that the principle is adopted for charitable and empty property relief on the central rating list introduced under clause 10. Finally, amendment 41 will ensure that the end-of-the-day principle is adopted for the new administrative arrangements being introduced for the central rating list under clause 11.
Amendment 37 agreed to.
Clause 7, as amended, ordered to stand part of the Bill.
Clause 8
Relief for telecommunications infrastructure
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
That schedule 3 be the Third schedule to the Bill.
Mr Thomas
Before I open my remarks on whether the clause should stand part of the Bill, having consulted with the registrar of standards, I need to declare that my partner works for a company that certainly manages and I believe installs mobile telecoms infrastructure.
I intend to explore the Minister’s thinking on the case for the clause. In the 2016 autumn statement, the Chancellor announced that the Government would provide 100% business rates relief for new full-fibre infrastructure over a five-year period from 1 April this year. In the context of the significant concern about BT and the way in which Openreach is working, and about the profits it and other bits of the industry have been able to generate, why is that particular provision needed? I ask it as a probing question.
Clearly, there is an opportunity cost to Ministers’ decision to offer full business rates relief for five years. All of us recognise the need to speed up access to the very best broadband telecoms not only in rural areas, in the context of the previous debate, but for businesses and households in my constituency, which complain about slow access to the newest broadband infrastructure. One wonders whether it is not the money, as full business rates relief for telecoms infrastructure will not offer up huge sums of money to those installing such infrastructure. However, there is clearly an opportunity cost in other areas.
Ministers do not appear to be cracking down enough on Ofcom or BT about the speed at which the broadband is being rolled out. How does the Minister see the clause making a real difference in the context of the considerable profits already being generated by the companies operating in this area?
Rob Marris
I hope the Minister can point to this, because I cannot find it, but my hon. Friend referred to the Chancellor’s announcement that mentioned a five-year period. I cannot find a reference to a five-year period in schedule 3. It may be there and I just cannot see it, or it is somewhere else and the Minister can point it out to me.
I see in schedule 3 more than four pages and five formulae. The ever-helpful Library brief cites on page 37 documentation from the autumn statement saying that this measure
“would reduce business rate revenue by £10 million”.
For a company such as BT, £10 million is not a huge amount of money, but for everyone in this room, it is. Nationally and relatively—I stress “relatively”—it is not a huge amount of money, but we get a four-page schedule and five formulae. That strikes me as completely over the top.
We see in schedule 3—on page 46, lines 30 and 31, page 47, lines 37 to 38, and page 48, coincidentally lines 30 and 31 again—the same wording:
“any conditions prescribed by the Secretary of State by regulations are satisfied on that day.”
So here we have the Secretary of State and more regulations. Then when I look at the power to make regulations in paragraph 12 on page 50 of the Bill, it says:
“any power to make regulations conferred by virtue of this Schedule”—
schedule 3—
“includes power to make provision having effect in relation to times before the coming into force of this Schedule”.
I would like the Minister to talk the Committee through that a bit. No doubt he will say something like this happens all the time, but I am a bit uneasy about what seems on the face of it to be a retrospective power in schedule 3, paragraph 12. That is a little worrying. Even though I appreciate it may be a power that would be used or is intended to be used to lessen the tax on a particular business or set of businesses, I still find the retrospection a little troubling.
Mr Jones
The Government intend to support the roll-out of a full-fibre telecommunications infrastructure for all. Full-fibre broadband will deliver a step change in the speed, service quality, security and reliability of broadband services. It will provide important support for a more productive economy and boost the prospects for economic growth.
In the 2016 autumn statement, to which the hon. Member for Harrow West referred, the Government announced £1 billion of new funding to boost the UK’s digital infrastructure. That includes investment of £400 million in a new digital infrastructure investment fund to boost commercial finance for emerging fibre broadband providers. Alongside that package, the Chancellor announced 100% rate relief for a new full-fibre infrastructure in England. Clause 8 and schedule 3 will introduce that relief, which will apply for five years, commencing on 1 April 2017. Hence this part of the Bill will have a retrospective effect. I hope that the hon. Member for Wolverhampton South West understands the principle behind the retrospection.
Mr Jones
I will come to the cost a little later. The schedule provides powers to award rate relief to telecom networks. Some networks appear on the local rating lists held by local authorities and some appear on the central rating list held by the Secretary of State. The schedule therefore introduces the new relief for both local rating lists and the central rating list.
The powers in the schedule will allow the Secretary of State to set conditions on when the relief will apply. Through these powers, we will target the relief on operators of telecom networks that install new fibre on their networks. That will incentivise and reward those operators who invest in the broadband network.
These are concepts that we have not previously defined for business rates. The powers in the schedule will therefore allow us to develop definitions with experts in the telecoms and business rate sectors. By taking this approach we can ensure that we accurately capture in the relief only those parts of the telecoms networks that comprise new fibre. There is a distinction there because it is important—by definition, this is an incentive—that we incentivise the laying of new fibre cable. We are not looking to fund fibre cable that may have already been laid but not switched on, so to speak. I am absolutely clear that this is for new fibre.
Rob Marris
As I understand it—as ever, I am open to correction—the provisions in the clause and accompanying schedule are by nature, to use the Minister’s words, incentives: a financial incentive to encourage, in particular but not only, rural broadband and better internet connections, which we all support. It appears to be—I stress “appears”—a bung for private industry to do something that Ofcom could order it to do. Why are we being asked to do it in the Bill, rather than Ofcom just doing it by mandating companies?
Mr Jones
It is clear that the thrust of what we are trying to do, as I said at the outset, is to bring this forward as part of a package—£1 billion of new funding to boost the UK’s digital infrastructure, including £400 million in new digital infrastructure investment and a fund that is dedicated to that—to boost commercial finance for emerging fibre broadband providers. It is important that the hon. Gentleman understands that this measure is designed to widen the market in that sense.
Rob Marris
I am grateful for the Minister’s generosity in giving way. The Library briefing gives some figures on what this measure would cost each year, and I know he said he would get on to that. Are the figures for the cost each year included in the £1 billion to which he has referred at least twice, or are they in addition to it?
Mr Jones
That is a very good question, which I will write to the hon. Gentleman and the rest of the Committee on. The overall cost, which the hon. Member for Harrow West asked about—he wanted me to go into what the cost was in each of the first five years, but I am not able to do that today so perhaps I can satisfy him in writing—is £60 million over that particular period.
To pick up the thread that I was on, the powers in the schedule will allow the Secretary of State to determine the level of relief to be awarded. As I said, the Government intend to allow telecom operators 100% rate relief, but only for new fibre. That new fibre will of course form part of existing telecoms networks with existing ratings assessments. Through the operation of this scheme, we intend to ensure that relief is only for new fibre, as I have clarified to the Committee. To achieve that, the powers in the schedule will allow us to set, by a formula contained in regulations, the correct level of relief for each property, reflecting the amount of the network that qualifies for the relief. That will be based on a certificate from the valuation office of the amount of rateable value attributable to the new fibre.
Hon. Members will recognise that this is a technical area, but one in which we need desperately to ensure that the provisions are correct. Therefore, my Department will shortly issue draft regulations for consultation on how to implement the relief for new fibre. On that basis, I hope that clause 8 and schedule 3 will stand part of the Bill.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill.
Schedule 3
Relief for telecommunications infrastructure
Amendments made: 38, in schedule 3, page 48, line 16, at end insert—
“6A In section 67 (interpretation: other provisions), in subsection (7), for “43(6)” substitute “43(4B) (so far as relating to England), (4F) and (6), 45(4D)”.”
Section 67(7) of the Local Government Finance Act 1988 provides that certain provisions of that Act apply on a particular day if they apply immediately before the day ends. This amendment extends section 67(7) to cover section 43(4B) of that Act and the new sections 43(4F) and 45(4D) inserted by Schedule 3.
Amendment 39, in schedule 3, page 49, line 29, at end insert—
“10A In section 67 (interpretation: other provisions), in subsection (7), for “47(2)” substitute “54ZA”.”—(Mr Jones.)
Section 67(7) of the Local Government Finance Act 1988 provides that certain provisions of that Act apply on a particular day if they apply immediately before the day ends. This amendment extends section 67(7) to cover the new section 54ZA inserted by Schedule 3.
Schedule 3, as amended, agreed to.
Clause 9
Discretionary relief for public toilets
Question proposed, That the clause stand part of the Bill.
Jim McMahon
I get all the crap jobs. I have been told that I am not allowed to use foul language, so I am afraid most of the puns have been wiped out.
This is a straightforward clause, which hopefully addresses a long-standing request from a number of local authorities for the facility of public toilets to be recognised as important not just in areas with high levels of tourism but in urban settings. We need to look back on the history of public toilets—not too far; I will go back only to the Romans—and on the establishment of the need for public conveniences.
When people are away from their home setting and need to use a convenience, it makes sense that conveniences are provided in convenient places, which they can get to easily. The truth is, in recent years, we have seen the number of public conveniences reduce significantly. In real terms, in 2010, the spend on public toilets by local authorities was £85 million and, last year, it was only £54 million. We have seen a lot of money taken away from public conveniences, which has had a real impact, with more than 1,700 public toilets having closed down. We know what the impact of that is.
Steve Double (St Austell and Newquay) (Con)
Are those figures just for county and district councils or do they include parish councils? Many parish councils, particularly those in places such as Cornwall, have taken over the running of public toilets.
Jim McMahon
The figures come from a BBC freedom of information request last year, which went to all main local authorities. The question was not how many toilets they maintained but how many were in their areas of responsibility, so perhaps that includes toilets run by other authorities such as parish, community and town councils. I cannot confirm that from the article.
Rob Marris
As I understand it, if the parish council or whatever is a billing authority, it will benefit from the clause.
Jim McMahon
The parish council will benefit from the clause. The question was whether the data on the number of public toilets included parish councils and I cannot confirm that. Notwithstanding that, it is hard to believe that all 1,700 toilets have been handed over to parish councils. I think we can assume that, given £31 million has been taken out of their provision, a significant number of public conveniences have been taken away.
Some local authorities have recognised the impact that has had on their communities and, although they have faced difficult budget restrictions, they have tried to step up and bring the community together to try to find local solutions. For instance, we know that a number of pubs, cafés, bars and restaurants acting as community toilet providers have been recognised with a small payment from their local authority. That is one way in which there has been some impact, particularly in areas of high footfall such as tourist areas, and my own local authority does that to a good standard. However, there is a world of difference between being able to spot a little sticker displayed in the window of a community toilet provider and the community knowing where to find established facilities.
The other thing is that a number of the conveniences were in isolated locations, such as country parks, and a number of those have closed, too. At the moment, 10 areas have no public toilets, including Newcastle, Merthyr Tydfil and Wandsworth. Given the coming budget cuts, I imagine that councils will have to reflect on whether they look after children who need safeguarding protection, take care of elderly people who need social care, or maintain their toilets. Even if local authorities have a rate reduction, those toilets still have maintenance, staffing and cleaning costs, and I suspect that a number of them will fall foul of the cuts. Although this is a step in the right direction, it does not feel like a holistic strategy for providing that public infrastructure in many areas.
Campaigning organisations have taken this issue on. The British Toilet Association does a lot of work on it. We sometimes dismiss this issue, and people laugh it off because it attracts a sense of humour, but the British Toilet Association makes the case for why these facilities are important. This is about not just the number of toilets, but the quality of provision. The association is leading the way in ensuring that there is a quality standard so that people who use public toilets are not put off by poor cleanliness, antisocial behaviour or poor maintenance—for example, lights that are out. It recognises good practice through its annual awards, which it hopes will drive up standards in the industry.
I ask the Government to at least have a conversation with the British Toilet Association to find out what more can be done to come up with a holistic strategy to deal with this issue and to ensure that we do not lose any more public conveniences. Worse, in a bid to try to retain them but save money, maintenance may be reduced to such an extent that they are not welcoming and people do not feel safe in them. As a result, they may become a venue for antisocial behaviour, and none of us wants to see that.
When talking about money and numbers, at times we miss the human cost. I could have spent 20 minutes making jokes, but we have to be serious about what these public services are there for. I want to reflect on a story from a part of Manchester that my mum lives in, which used to have public toilets and now no longer does. A man called Brian Dean, who suffers from Parkinson’s disease, went out with his wife, Joan, and needed to use the toilet. The toilet they thought would be there was not—it had closed—and they could not find anywhere else to go, so unfortunately he wet himself. For that to happen to an adult who was ill was absolutely distressing for him and his wife, who was proud of her husband and had a sense of responsibility for getting him around. They said that it left them with a feeling of humiliation. We can talk about numbers and finance, and we can crack jokes, but there is a human cost. There is a reason why these conveniences are there in the first place. We have to think about how much we value this type of public service.
I am pleased to see this measure, but I think it exposes a wider issue about how local authority premises are treated in the ratings criteria. Education facilities such as an independent school, an academy or a free school outside the local authority attract the 80% mandatory business rates relief, but local authority schools do not. We see the same thing in the health service: health providers outside the public sector can attract the 80% mandatory relief, but Government health providers cannot.
We have seen this before. Even before this Bill was introduced, because of the rateable values involved, privately operated public conveniences were under the rateable value threshold and could claim exemption, but council-run facilities could not. There is a broader issue here about how the ratings assessment treats public and Government-owned buildings. We should ensure that there is a level playing field. We have debated that in relation to education facilities, health facilities and other public buildings. It strikes me that the Government have reflected and feel that these important public buildings need to be recognised in the legislation, and I am pleased. It has been a while coming; local authorities have been asking for this for some time, but it has not happened. A request was made, for instance, during the sustainable communities process, and it was not taken on board.
I recognise that we have a great deal of business to get through, so I will leave my remarks there. However, I did not want to let the issue pass without making it clear that however funny this may appear on the surface, it is actually quite important.
Steve Double
I want to make a few comments as someone with a fair amount of experience on this matter. I was the Cornwall Council cabinet member responsible for public toilets when a major review of public toilet provision was undertaken to look at—from the unitary authority’s point of view—the best way to deliver this vital service to the public. As the hon. Gentleman said, this service is important to many people. In Cornwall, it supports not only the tourist industry on our beaches and in our parks, but local people, including the elderly, people with medical conditions and people with young families, who often need to use these facilities.
Mr Thomas
Given that the hon. Gentleman is likely to have slightly better access to the Minister’s thinking than the Opposition are, will he say why he thinks Ministers are only giving discretionary relief, as opposed simply to exempting public toilets fully from business rates?
Steve Double
I am grateful for that intervention. I was going to say that I feel partly responsible for the clause. Along with my colleagues in Cornwall, I lobbied the former Prime Minister and Chancellor hard on this issue, because our experience in Cornwall was that this was a particular barrier for maintaining the provision of public toilets. From my point of view—I cannot speak for the Minister—there is not a one-size-fits-all solution across the country. In different areas, there are different challenges in maintaining public toilet provision. The discretion allows local authorities to set out whether it is a priority in their area.
Let me explain why the measure is so welcome. In Cornwall, which has a large unitary authority covering a very large geographical area, having all those toilets run and maintained by the unitary authority is not the most efficient way to do it. It is far better to devolve the provision and maintenance of those facilities down to local parish councils, town councils or other groups that are better placed to maintain them and keep them open at the hours that the community needs them—that may not be all year round, or all day. Those organisations will be better and more efficient at keeping the facilities clean and well maintained, because people can do it locally, rather than there being a centralised process like the one that Cornwall Council had, with people driving all over the county just to maintain the facilities. Devolving down the running of the facilities to local groups and councils is much more efficient and effective.
In my experience as a cabinet member, one of the biggest barriers to parish councils taking over the running of the facilities was business rates. Often, a fairly small parish council whose precept was only a few thousand pounds a year would consider taking on the cost of maintaining the public toilets, but they would find that the business rate alone on the toilets was more than their whole precept. Deciding whether it was feasible and affordable to take on the facilities was a significant challenge, even if the council recognised that taking them on would be very beneficial to the community. Putting discretion in the hands of the senior authority is sensible, because in the case of Cornwall Council, it can then decide that it sees the value of these facilities across the county. It may want to play its part in helping to maintain them and keep them open, but it may not want responsibility for their day-to-day maintenance and running. It can make the decision to grant that discretion. That would help parish councils with the cost of taking on these facilities, and perhaps enable them to afford to do so. This is a sensible and welcome move, and it has my full support.
Rob Marris
Certain houses of repute with cultural artefacts get a tax break for opening at certain times of the year to the public. My hon. Friend the Member for Oldham West and Royton did not have time to mention that the redoubtable Brian Dean, the gentleman with Parkinson’s, tried every shop in a row of shops, asking if he could use their toilet, and was refused, as is their right. Having desperately tried to avoid it, it was only at that point that he had to soil himself. That is a sad reflection on those shops, but I understand it. I would like the Minister to give some thought to whether it might be possible to structure a business rate relief for private premises, such as a coffee shop in Allerdale, that allow the public access to their toilets, in the way that we allow tax reliefs for certain houses with cultural artefacts. We put something in; there are certain things that they provide; and they get a tax break for providing that service.
As we all know, with our ageing population, it is statistically likely that there will be a rise of near incontinence and urgency. The need for access to toilet facilities among the population as a whole, and the need for those facilities to be fairly readily available, will increase. I say that as one of the patrons of Wolverhampton Mencap. Many adults with learning difficulties get a sense of urgency and need to get to a toilet very quickly. I would ask the Minister to look at a system in which private premises that were not “wholly or mainly” a public lavatory facility, as in the clause, but that had a toilet—perhaps a coffee shop—and made it available to the public for a specified number of hours or whatever got some business rate relief for providing that public service.
Mr Thomas
I rise to make two points. It was interesting to hear the contribution of the hon. Member for St Austell and Newquay on how he thought we got to this point. I commend him for his successful lobbying, but I wonder why Ministers could not have gone a bit further. There are already business rates exemptions for agricultural land, presumably because of its importance to rural communities and to the countryside that we all value. Given the growing concern about the long-term financing of public toilets, one wonders whether it is time to dwell on the question of whether public toilets should be given full business rates relief. I have to be honest; I have not looked into the issue in detail yet, but it is a question worth posing to Ministers.
I come back to the example of the Threlkeld village hall coffee shop, which I spoke about before, and which my hon. Friend the Member for Wolverhampton South West tempted me to flag up on this issue. It has toilets that are used by members of the public, predominantly when they come in to use the coffee shop, but it is the only place in the community other than the pub where they might do so. The village hall is a social enterprise. Would business rates relief be on offer to that part of the premises that has toilets, if members of the public can use them?
Mr Jones
I will deal with the hon. Gentleman’s point in a moment. First, public toilets contribute to high-quality public spaces, and are an important amenity for our communities, as has been said in this debate. They help people, particularly older people, to enjoy what our country has to offer, and to continue to live an active life. That is why we are introducing a measure through clause 9 that will allow local authorities to use their discretionary powers over business rate relief on publicly owned toilets. As my hon. Friend the Member for St Austell and Newquay said, Conservative MPs, particularly in Cornwall, lobbied the Government significantly on this issue. I am sure that he is delighted that the measure is being put into legislation.
Under current legislation, a billing authority cannot grant discretionary relief to properties occupied by a local authority. To pick up on the point made by the hon. Member for Wolverhampton South West, local authorities can grant rate relief to places where owners of private property allow the public to use their conveniences. I hope that that reassures him.
Clause 9 will amend billing authorities’ discretionary relief powers, which are set out in section 47 of the Local Government Finance Act 1988, and will give them the power to grant discretionary relief to publicly owned toilets. The clause will help councils to keep toilets open, and importantly, it will pave the way for savings by parish and town councils, which often bear the burden of maintaining such facilities. Where a billing authority decides to grant discretionary relief, the relevant business rate liability will be reduced or removed altogether.
I will pick up on a couple of points made. I did not catch the name—
Mr Jones
It is kind of the hon. Gentleman to assist me. That sounds to me like it might be a charitable organisation. If that is the case and the property is used wholly for charitable purposes, there is a fair chance that it would qualify for charitable relief, which would reduce the rating liability by 80%. It might be worth him looking into whether that is the case.
I will not go into what the hon. Member for Oldham West and Royton said about the principle of whether NHS hospitals and so on should be subject to business rates. We will debate that fully when we deliberate on a new clause. I certainly took on board what he said about the challenges in some places where there are no public toilets at all; that is a fair point. One of the places that he mentioned was Merthyr Tydfil, which he will know does not come within the remit of the Bill, as it is under Welsh jurisdiction. He will be interested to know that it is my understanding that Wales does not have such a rate relief scheme for public toilets. Perhaps the Labour Administration in Wales might want to take a leaf out of this Parliament’s book and consider implementing a similar scheme.
This is a highly beneficial clause that will support local authorities in keeping valuable public toilets open by reducing the cost of maintaining them, thus preserving important amenities not just for local people but, in many areas, for tourists and visitors. I commend the clause to the Committee.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Central non-domestic rating: other reliefs
Amendment made: 40, in clause 10, page 12, line 32, at end insert—
‘( ) In section 67 of that Act (interpretation: other provisions), in subsection (7), for “and 54ZA” substitute “, 54ZA, 54ZB and 54ZC”.’—(Mr Jones.)
Section 67(7) of the Local Government Finance Act 1988 provides that certain provisions of that Act apply on a particular day if they apply immediately before the day ends. This amendment extends section 67(7) to cover the new sections 54ZB and 54ZC inserted by clause 10.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Thomas
I rise to make a contribution that is in the same spirit as those made by the hon. Members for Thirsk and Malton, and for Northampton South, in the Communities and Local Government Committee debate on 100% business rates retention. I will raise the issues that they might feel intimidated about raising, or be reluctant to raise. That Committee heard concerns about the central list and agreed that Government and local authorities could together consider whether properties on the central list should continue to be held by central Government, and how the revenue generated could be better used under 100% retention. It made the point that it had received representations from throughout the local authority world criticising the central list’s lack of transparency and urging that the revenue from the central list be distributed among authorities. A number of councils said that the accounting was opaque, and London Councils suggested that the basis for including properties on the central list was unclear.
That was perhaps most nicely summed up by David Magor of the Institute of Revenues Rating and Valuation:
“The central list is a mystery; no one knows what the central list is spent on. Is it the Chancellor’s central pot?”
Perhaps that is how Surrey is being sorted out. He continued:
“The central list should be distributed to local government because it is part of rate income. There is no logical reason why the central list should continue in its present form.”
The Minister will by now have gone through the Select Committee report and had time to reflect on the Committee’s concerns about the operation of the central list. I express those concerns, but recognise that clause 10 seeks to ensure that properties on the list can qualify in future for charitable, empty property and telecoms relief. What impact will that have on the approximately £1.5 billion raised in business rates annually, and on the central list? Presumably, were the £1.5 billion to be depleted significantly as a result of all those additional reliefs, there might be consequences for the redistribution of resources among councils. I will not go into the concerns about other impacts on the pool of money raised from business rates, or the scale of the cuts to the revenue support grant, but it would be helpful to hear what estimate Ministers have made of the impact of clause 10 on the £1.5 billion pot.
I have received representations from the Charity Retail Association, which is responsible for representing all charity shops in England. It suggests, instead of the 80% charitable relief to which the Minister referred in discussion on clause 9, 100% relief to ensure no postcode lottery. Some charity shops get 100% as a result of the additional 20%, which is discretionary, being given to them by their authority, but not all do. The association asks for 100%. What do Ministers think of that concern?
Rob Marris
Does my hon. Friend agree that 100% relief for charities would be consonant with what someone—I cannot remember who—called the big society?
Mr Thomas
I will not go down that particular route—you might get annoyed with me, Sir David, and I would not want that to happen—but my hon. Friend makes a good point.
It is worth remembering that the central list primarily focuses on utilities or property belonging to the formerly nationalised industries. One thinks about the privatisation of the water industry, for example, where in general water companies are mostly owned by private equity investors that have taken on billions of pounds of debt, often in the form of loans from shareholders, which the chair of Ofwat as recently as 2013 suggested was morally questionable, in order to avoid corporation tax costs. One wonders whether it is entirely appropriate for such companies to benefit from reliefs in the context of concern about water companies and other privately owned utilities not paying as much corporation tax as they might. It is in the spirit of inquiry that I ask those questions.
Mr Jones
This clause, and clause 11, are concerned with the operation of one of the less well known parts of the business rate system: the central rating list. Most properties are assessed for business rates on the local rating list for the authority where they are located. In cases where a property sits over the boundary of more than one local authority, the valuation officer will place that property into the rating list they believe contains the largest part of the property by value.
Those well established and common-sense rules deal satisfactorily with most properties. However, some properties are less suited to those rules. Network properties, such as the electricity, gas, water, railway and telecom networks, may span many local authority areas. It is of course very difficult—or impossible—to say into which local list those networks should fall, and it would be equally difficult to break up the rating assessments into individual local areas. Therefore, those networks are instead placed on a central rating list maintained by the central valuation officer and held by the Secretary of State.
The clause introduces charitable and unoccupied property relief to the central list. I would like to say that these are not new reliefs; the same properties on local rating lists have been entitled to relief since business rates were first introduced in 1990. We are merely replicating those reliefs on the central list. It is of course fair that properties that would be eligible for relief on local lists should also be eligible for relief on the central list. Introducing charitable and unoccupied relief to the central list will therefore allow us to include any properties on the central list that may become eligible for such reliefs.
A couple of questions were asked. First, in relation to charity relief and whether we will look to extend that, as I said a little earlier, all taxes are generally under review, but there are no plans at this time to change the system of charitable reliefs.
The hon. Member for Harrow West asked about the cost of the changes we want to make to the central list. We are not aware of any existing properties on the central list that may be eligible for charitable or unoccupied relief. The canal network was on the central list when it was occupied by the British Waterways Board, but since it has passed to the Canal & River Trust it has been on the Birmingham local list, where it receives charitable relief. The extension of these measures to the central list will allow us, where appropriate, to move on to the central list properties that may be eligible for relief.
Mr Jones
I thank the hon. Gentleman for that question. As I said, we are looking to bring these provisions into line with the provisions on the main rating system and the main local list, but we are not aware of any existing properties that may be eligible for charity or unoccupied reliefs at this time. On that basis, I will leave it there in the hope that clause 10 will stand part of the Bill.
Question put and agreed to.
Clause 10, as amended, accordingly ordered to stand part of the Bill.
Clause 11
Central non-domestic rating lists
Amendment made: 41, in clause 11, page 15, leave out lines 7 to 9 and insert—
“(8B) In relation to England, a hereditament falls within a description or class on a particular day if (and only if) it falls within the description or class immediately before the day ends.”;”—(Mr Jones.)
This amendment makes it clear when a hereditament is to be regarded as falling within a description or class for the purposes of Part 3 of the Local Government Finance Act 1988.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Thomas
I have some brief questions on clause 11. According to the explanatory notes, Ministers are apparently worried that maintaining the central list would give rise to an increasingly heavy process and regulatory burden. It would be good to hear an example from the Minister to understand the justification for that concern. The fear, rightly or wrongly, is that it could affect the business rates income of a local authority adversely if a large property were moved on to the central list from the local list. What estimate, if any, is there for the likely annual impact on the central list and what arrangements for consultation between the local authority and the Department would there be before a property was moved off the local list and on to the central list?
New section 52A(2), which clause 11 inserts into the Local Government Finance Act 1988, allows separate rateable values for separate types of property to be attributed to separate types of property in the future. Can the Minister give an example of when and how that new power might be used?
Mr Jones
Clause 11 is concerned with the administration of the central rating list. The central list mostly comprises network properties that span many local authority areas and so are less suited to being on local rating lists. The list itself is a public document and is readily available to view on the Valuation Office Agency’s website. It includes ratepayers such as Network Rail, BT and National Grid together with their rateable value. It is clear and transparent which ratepayers and networks appear on the central list and what they pay in business rates. The rates bills on the central list are collected by my Department and directed for the benefit of local government.
When the system was first introduced in 1990 there were fewer companies than now operating a smaller number of large utility networks and infrequent changes were needed to the central rating list. However, we increasingly find that we have to make several minor administrative regulations a year just to maintain the accuracy of the existing central rating list. New operators also continue to join such sectors with new properties and it is proving increasingly difficult to keep pace with these changes using the existing system of regulation. As a result, some of the new network properties, and especially those in the telecoms sectors, have been assessed on the local rating lists instead of the central rating list. The choice of which local list to place such networks on is difficult and often the subject of challenge. In turn, that has created uncertainty and instability for local government revenues. As such, the current operation of the central rating list does not provide us with a solid foundation on which to move to 100% business rate retention.
That problem has been recognised by local government. The sector has called for reform in this area. Therefore, the Government intend to devise and operate a transparent policy for which properties should be appearing on the central rating list and then apply that policy consistently from the outset of the 100% retention scheme. That will provide certainty for both ratepayers and local government and is a reform that has been welcomed by local government.
Mr Jones
Amendments 42 and 43 are minor and technical amendments that clarify the drafting of clause 12. Clause 12 enables the Government to require billing authorities to offer the option of electronic billing to all ratepayers. That provision covers both the electronic service of notices and the issuing of documents, to reflect the fact that under the relevant legislation, business rate bills can incorporate both demand notices and accompanying documents.
The amendments clarify the drafting of clause 12 by making it clear that, while notices are served on a ratepayer, any documents are issued to. These are very minor changes that simply improve the drafting of the provision and do not alter the effect or policy outcome of the clause.
Jim McMahon
I have a quick question on this measure. I recognise that these are, by and large, drafting amendments, but I want to briefly probe the clause. My point also talks in some way to clause 14. Is it the intention at some point to move on from simply electronic billing, which feels quite old-fashioned already—utility companies have been doing that for quite a long time—to online accounting, where companies can log on to an account that has all their property information contained in one place, regardless of local authority?
Mr Jones
Without moving ahead to debate clause 14, as the hon. Gentleman will know, that clause is a paving provision, which provides the scope for Her Majesty’s Revenue and Customs to develop a new system in that sense. What it does not do is allow that system to be implemented; it would probably need primary legislation to be implemented. I hope that I can therefore reassure the hon. Gentleman that there is no hidden agenda in relation to clause 12.
Amendment 42 agreed to.
Amendment made: 43, in clause 12, page 15, line 39, after ‘served’ insert ‘or issued’.—(Mr Jones.)
This amendment makes a minor drafting change.
Clause 12, as amended, ordered to stand part of the Bill.
Clause 13 ordered to stand part of the Bill.
Clause 14
Provision of digital etc services by HMRC: preparatory expenditure
Question proposed, That the clause stand part of the Bill.
Jim McMahon
May I ask the Minister a question about confidence in IT systems? Back when I was a council leader, we were implementing what we call My Account, the principle behind which was to bring together a range of different data held by the local authority in different datasets and different IT systems into one place so that residents could log on, see their interactions with the local authority, pay bills, raise issues and, we hoped, get a more tailored service. In a neighbourhood—Oldham, for instance, has brought together seven townships, so people have a very localised identity—a tailored service would bring out local libraries, community centres or events in that area. A similar IT system was implemented by Transport for Greater Manchester. As London has its Oyster card, the Get Me There card in Manchester was designed to be a single card that could be used on different modes of transport across different operators.
With both projects, there were two lessons. First, they showed that we should never believe what an IT salesman offers—usually salesmen will say what we want to hear, but the technology does not always follow. Secondly, they showed just how complicated it is to bolt together different IT systems. The patches needed to get the different systems to talk together can be very complicated, extremely time-consuming and, as a result, extremely costly. IT data coders are not the cheapest labour to employ. Given my own experience and reflections on IT systems, and given Government experience across political parties—no elected politician has wanted an IT system to fail, and we trust professionals to get on and do the job promised, although sometimes that works and often it does not—what confidence does the Minister have that we can genuinely move towards a system for HMRC that provides the type of functions proposed in the Bill?
Mr Jones
The hon. Gentleman raises a very important matter. There has been a catalogue of challenges with IT projects down the years, most notably the NHS supercomputer, which reportedly cost the Government of the day about £13 billion and never worked. We had IT challenges with regard to police and fire control centres—again, the system never worked and was finally aborted. We do have to be careful and cautious, as the hon. Gentleman points out. The measure in the Bill, however, will not lead to a full-blown programme, but will enable HMRC to carry out the early design work and engagement to develop proposals for how that particular principle of providing digital services can be developed. Given the spirit of my explanation, I hope the hon. Gentleman is reassured that this is about early design and engagement rather than entering into a full-blown IT project which, as he rightly pointed out, can often be challenging.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Power to impose infrastructure supplements
Question proposed, That the clause stand part of the Bill.
Mr Thomas
I support the clause, but will the Minister give some clarity on what seems to be an unfolding situation with a vital piece of national infrastructure: Crossrail 2? According to a report in yesterday’s Evening Standard, Government insiders—we do not know whether they were called Nick on this occasion—revealed concerns about stumping up half the current £30 billion, claiming that Ministers were going cold on the idea. The remainder of the approximately £32 billion cost would be funded by London fare payers, taxpayers and London businesses.
We know that the previous Chancellor, before the current Prime Minister sacked him for incompetence, gave a green light in last year’s Budget but, sadly, without a detailed plan for funding, timing or legislation. You will know, Sir David, that Crossrail 2 would increase the capital’s rail capacity by 10%, bringing an extra 270,000 people into central London while cutting journey times at the same time.
In the context of London’s expected rising population of 1 million over the next 10 years, more investment in London’s infrastructure is clearly hugely important. Data have been released to try to persuade Ministers to continue with the previous Chancellor’s commitment, with the suggestion that without Crossrail there will be a meltdown at a minimum of 17 stations across the tube network. In the context of clause 15, can the Minister give any reassurance to a former Member of this House, now our excellent Mayor of London, Sadiq Khan, that the Government will continue to stump up their 50% for Crossrail 2?
Mr Jones
The Government are paving the way for the election of combined authority Mayors. They will be the focal point for delivering real economic benefits across their areas. Six areas are preparing to elect Mayors in May. This means that, subject to parliamentary approval, a third of people in England will have a directly elected Mayor, like the Mayor of London, on the principle that they will create jobs, improve skills, build homes and make it easier to travel across their areas.
While I am on that point and in response to the hon. Member for Harrow West, the business rate supplement for Crossrail is expected to generate income of about £4.1 billion towards the total estimated cost of that project of £15.9 billion. It is difficult for me to comment on speculation and supposition, particularly from an unnamed and unverified source, so I will not enter into that today, apart from saying the Government have positively supported the Crossrail 2 project from the outset.
The Mayors will work with partners across their areas to bring a louder voice, strong co-ordination and clear accountability for local people. They will be responsible for driving economic growth and regenerating their areas. We are devolving specific power and budgets to help them to achieve just that. One key way that Mayors will deliver on that is through strategic investment in infrastructure. Each mayoral combined authority has a long-term investment fund of up to £36.5 million a year. To boost that investment, we want to give Mayors a powerful fiscal tool to raise up to 2p in the £1 to invest in infrastructure that will benefit local businesses and the broader community. The clause sets out that relevant authorities can impose a settlement and confirm who will be subject to it and for what kind of project it can be used.
Mr Thomas
I beg to move amendment 29, in clause 16, page 17, line 5, at end insert”, or
(c) any other billing authority.”
This amendment would enable any billing authority to impose an infrastructure supplement on non-domestic ratepayers in its area.
Having made clear my support for the power to impose an infrastructure levy, I come to the question of who should be allowed to impose it. It appears that Ministers are determined that only authorities with a Mayor should be allowed to do so. That seems to us to be a grotesquely unfair act of discrimination against local authorities that need investment in infrastructure but have decided for their own local reasons that a Mayor is not a suitable way forward for them.
One thinks in particular of the authority of Cornwall, which the hon. Member for St Austell and Newquay will know has done a deal with the Government without needing to elect a Mayor. Cornwall Council made representations to the Select Committee on Communities and Local Government, on which the hon. Members for Northampton South and for Thirsk and Malton sat. Cornwall Council felt that it would be at a disadvantage if the provision were introduced and it was not allowed to benefit from it.
In addition, the Select Committee received evidence from the Chief Economic Development Officers’ Society. It is worth bringing attention to the significant bit of that evidence. CEDOS said:
“In the move to 100% business retention, it is essential for all areas, as far as possible, to have a level policy playing field on which to drive economic growth. In our view, the intention that only areas with elected city-wide mayors will be able to add a premium to business rates to pay for new infrastructure is fundamentally at odds with this. We believe this power should be available to all areas with the provision that a majority of all businesses should agree, which we think is a reasonable one.”
The Select Committee went on to urge the Government to consider with local authorities whether, by placing areas without a directly elected Mayor at a disadvantage, the proposal conflicts with the aim of 100% retention.
I can think of a number of areas—I return to the example of Allerdale Borough Council—that need significant investment in infrastructure from time to time and where the power to introduce an infrastructure levy could make a significant difference to economic growth in the area. Let us take the example of flooding. In the past, Allerdale Borough Council has had a number of significant floods in its area, and it has been fortunate to secure grants to help with flood prevention measures. However, given the pace of climate change, one could easily imagine a scenario in which funding for further work is required to prevent flooding and to allow businesses to operate effectively. Without the infrastructure investment, the local authority might become less attractive to businesses. It is not impossible to envisage a situation in which businesses wanted to move out of the area. Indeed, one area that was the victim of significant flooding in Allerdale is the area that most large businesses are attracted to as a base.
I offer that as an example—as far as I know, Allerdale Borough Council does not have a Mayor and has not done a devolution deal with the Government, but it will have infrastructure needs. Surely it should not be left at a disadvantage compared with authorities that have a Mayor.
Rob Marris
To give my hon. Friend another example, over in East Anglia, Waveney might suffer from coastal erosion.
Mr Thomas
My hon. Friend makes a good point; it is a shame that the hon. Member for Waveney is not here to help us to think about the impact on coastal areas. When we talk to businesses—as the Opposition do regularly—infrastructure investment is one of the areas that they continue to cite as crucial for future economic growth. We are all aware of the regional inequality in this country and the need to try to generate further economic growth at a faster pace outside London and the south-east.
I am not surprised that the Chancellor of the Exchequer would want to go to Manchester, which is one of the leading districts where Labour authorities are leading the charge to help businesses. However, one needs to recognise that the advantages that Manchester has pursued—rightly, in terms of a levy for the purposes of investment in infrastructure—would also benefit authorities elsewhere in the north, the north-west and the midlands, and no doubt in Cornwall, Northamptonshire and other areas. This is a question of fairness and equality and of investment in areas that do not have a Mayor. I look forward to the Minister’s attempts to justify why authorities that do not have a Mayor should be denied the opportunity to benefit from this type of infrastructure investment.
Jim McMahon
This amendment is one of the most important to the Bill. A number of amendments have been crucial for obtaining information from the Government, but this one is absolutely critical to equality and the ability to grow our local economies.
The town that I represent is part of a combined authority. It has been part of joint working across Greater Manchester since 1986. I was the first leader of the council to sit on the new combined authority that had additional powers from Government; that combined authority is due to elect a Mayor in May. It is playing the game in the way that the Government set out, but that does not mean that every town in that area is able to develop its local economy in the way that it ought to.
Let me give an example. We already agree across 10 boroughs on the priority projects for the city region. The bar is set quite high: the question is, what will benefit 2.6 million people and the wider economy? More localised infrastructure investments never quite make it up the list of priorities, because they do not benefit the wider city region significantly enough, though they are extremely important locally. I am talking particularly about the remediation of brownfield sites that have been lying derelict.
Mr Jones
Is the hon. Gentleman advocating for the directly elected Mayor of Greater Manchester combined authority being able to levy an additional business rate supplement for infrastructure, while an individual authority in the Manchester city area could layer a supplement on top of that, without further safeguards for local businesses?
Jim McMahon
I am not suggesting that at all. I am saying that differential devolution is being proposed—there is some devolution to Mayors in combined authorities that is not on offer to other billing authorities—and that does not create a relationship of equals. For instance, in Greater Manchester the Mayor would be able to introduce a 2% infrastructure levy; if the local authority had the same power, that would create a more level playing field and allow a mature debate about how that might be teemed and ladled. For instance, it might be agreed across Greater Manchester that 1.5% could go into the central pot for the city region and 0.5% retained locally for more localised infrastructure investment. Alternatively, under the provisions of the combined authority order, Oldham could choose to opt out of the combined authority. It could decide that the city region was not working for it, give the required notice period and come out. However, it should not then be disadvantaged by not having the retained powers that the Mayor has, when at that point, the Mayor would not be representing the area, while directly elected councillors would. That equality is what we are trying to get to.
My hon. Friend the Member for Harrow West, the shadow Minister, has gone into detail on the number of areas that have perhaps not got over the line and agreed to a Mayor, but there are more than 20 million people living in areas that are not even part of any mayoral discussion. Apart from the areas that have deliberately chosen not to have a Mayor, there are many areas that do not have the access to Government to even have that conversation. Are we saying that their economies are less important because of that? It strikes me as an odd approach, if we believe in localism and growing the economy locally, because let us be honest, the days of an employer opening a massive factory that employs 5,000 people in a community are long gone in many areas. Economies will grow from small and medium-sized businesses developing in the community, and hopefully growing in scale. However, if we do not plant the seeds to enable that, then I am afraid that we are saying that towns such as Oldham, which have weak economies that have not been rebuilt, will be left behind, and that is not good enough.
I can begrudgingly accept that the Mayor is a means to an end—I do not think that having a Mayor should be a requirement of a combined authority deal, although that is the game being offered and many areas are playing it—but I absolutely believe that local freedoms and local economic development powers should be available for every corner of the country, not just the hand-selected parts that have direct access to Department for Communities and Local Government civil servants and Ministers. I put it strongly: this is coming not just from Labour Members, but from a lot of Conservative council leaders, who are sick of this very urban/northern/midlands view of economic development. They feel that their area is being left behind by their own Government.
Jim McMahon
I absolutely agree. I attended the District Councils Network conference, and exactly the same message was coming from our district councils, which are billing authorities as well. They are saying: “We accept that the Government want to grow the city regions. We accept that that will be a priority, and we do not begrudge that. What we begrudge is being left behind and having no solutions for our localised economies.”
Throughout this process, the Government, almost on a point of principle, have refused every amendment suggested, regardless of its merit, the logic or the evidence base referred to. This amendment would galvanise support for the Bill from right across the House and across local government. It is the right thing to do. It would offer every part of the country the chance to grow and develop in line with local circumstances, and it would show everybody that the Government were serious about letting go.
I plead with the Minister; this is what council leaders have told us they want. Of all the amendments that he might want to make concessions on, this is the easiest one to give away. It is the most logical, and would galvanise support across every political shade of local government.
Mr Jones
I thank the hon. Member for Harrow West for his explanation of amendment 29, which would add all 326 billing authorities to the definition of a relevant authority in subsection (1), and would mean that an infrastructure supplement could be levied by billing authorities, and not just mayoral combined authorities and the Greater London Authority. Hon. Members will understand that we cannot support the amendment for several reasons. In preparing these measures, the Government’s view was, and continues to be, that the settlement should be made available in the areas in which it can have the greatest impact. Furthermore, major infrastructure investment needs to be considered at a city or a county-wide scale. The settlement should therefore be operated at a level that reflects the functional economic geography of the area.
Jim McMahon
The point is raised wherever we go around the country that that approach makes sense in urban areas, where the economy is centred on the city centre and moves outwards, but county areas, for instance, are completely different. They do not have central economies; they have very complex economies that do not respond in the same way, which is why we tabled the amendment. This measure would benefit more Conservative council leaders than Labour council leaders. We are not pleading for Labour authorities in isolation; we are pleading for common sense and logic.
Mr Jones
The hon. Gentleman takes a very benevolent view to Conservative local authorities, which is quite a departure from the view he sometimes takes, but I take his point on board. I will explain the situation relating to county areas, which the hon. Gentleman is speaking for, in a moment.
Mayoral combined authorities and the Greater London Authority have strategic oversight of their functional economic areas and their needs. Mayors of such authorities will therefore be best placed to engage with businesses to assess what type of infrastructure could help to grow their economies and deliver infrastructure at a significant scale. That can make a real difference. When someone exercises power over a large geographical area, we have to have someone whom the public throughout the entire region can hold accountable. No individual council leader, MP or anyone else has been elected across the scale of a whole combined authority area. That is why the elected Mayor is the best option, and the best way to deliver accountability.
Jim McMahon
I do not necessarily want to find holes in every element of the Minister’s argument, but there is a gaping hole in this element of it. There are some areas that sit outside combined authorities but are covered by a directly elected Mayor.
Mr Jones
There are, of course, non-constituent members of combined authorities that do not elect Mayors, but as the hon. Gentleman knows, they are not full members of a particular combined authority and would not therefore benefit automatically from things such as gain-share payments, which combined authorities have been provided with, and they would not generally be subject to the infrastructure levy and the business rates supplement, which can be provided for by a directly elected Mayor.
Jim McMahon
With all due respect, that is nonsense. Is the Minister saying that the Mayors of Doncaster, Hartlepool, Bristol and Salford, who are directly elected and cover the whole of their geography and the whole of the billing authority area, cannot have the same powers as a Mayor covering a wider area? The argument that has been put forward is about democratic accountability. Well, democratic accountability also applies to those areas, and some of them may choose to be part of a combined authority. Let us have fairness and a level playing field, and let us give the same powers to all directly elected Mayors, whether in a combined authority or a local authority. That would at least be a compromise position.
Mr Jones
I hear what the hon. Gentleman says, but I was talking about a combined authority area, not an individual authority area.
We must not lose sight of the other options available to councils for delivering additional benefits to and growth in their areas, though we seem to have done so to an extent in this debate. For example, business improvement districts may be established in every area of England. The Bill also includes provision for property-owner business improvement districts throughout England, not only in London. Going back to the point about elected Mayors in individual authorities, we already have provisions enabling the introduction of a business rates supplement to the levy for investing in projects that promote economic growth and development. Councils already work with businesses using existing resources to deliver a positive economic environment. The local growth fund is another mechanism used by local enterprise partnership areas and local authorities in that regard.
Having reflected on the points that I have made, I am not sure that I will completely convince the hon. Member for Oldham West and Royton, but I encourage the Opposition to withdraw the amendment.
Mr Thomas
It is a little surprising that we did not hear from hon. Members representing Cornwall, which will be discriminated against. There has been a devolution deal for their authority that did not include a Mayor; they were not aware at the time that they would miss out on this.
Steve Double
I note with interest the hon. Gentleman’s dig at Cornwall, but Cornwall is incredibly proud to be the only rural area that has had a devolution deal with the Government. We see that as a sign of the Government’s support for and confidence in Cornwall. The deal is not the end of the story. We do not know where it will take us, but in Cornwall, rather than putting down the devolution deal we have been granted by the Government, we celebrate it.
Mr Thomas
I am not doing down devolution at all; I am merely representing the concerns of the hon. Gentleman’s council, in a way that he is not doing, about its exclusion from the ability to levy the infrastructure supplement. I would applaud his representing his constituents and his council’s concerns properly, and his wanting to see the devolution deal that his council has negotiated enhanced in the way that we are suggesting.
The Minister has made an attempt to justify the exclusion from the measure of all authorities that do not have a combined authority and a Mayor. I have to say that it was not a convincing performance. Given the number of representations that we have heard from county councils and district councils that are frustrated with the insistence of the Secretary of State and the Minister that there has to be a Mayor before they may have this power, we will speak for them in a way that the hon. Member for St Austell and Newquay will not speak for his constituents. We will speak for councils in Swindon in a way that the hon. Member for North Swindon will not. We will speak for the residents of Torbay, who need investment in infrastructure, in a way that the hon. Member for Torbay will not.
Justin Tomlinson (North Swindon) (Con)
To be clear, Labour does not speak on behalf of the people of North Swindon, because I gained the seat, and Labour lost control of the council when it put up council tax by 43% in only three years. That disgraceful situation has meant that we have had a blue town since 2003.
Mr Thomas
When the residents of Swindon hear that there was the opportunity for investment in infrastructure but the hon. Gentleman voted against it, I suspect that a red Swindon will be closer. We will vote for equality—we will press for a Division on this amendment.
Question put, That the amendment be made.
Mr Thomas
I beg to move amendment 44, in clause 17, page 17, line 25, leave out paragraph (a).
This amendment would enable funds raised through the infrastructure supplement to be spent on housing.
In introducing the power to introduce an infrastructure supplement, clause 15 states:
“The purpose of imposing an infrastructure supplement is to raise money for expenditure on a project that the authority is satisfied will promote economic development in its area.”
Amendment 44 is completely in line with that stated purpose as it deletes clause 17(3)(a), which explicitly prevents relevant authorities from spending the sums raised through an infrastructure supplement on housing.
Given the fanfare that accompanied the long-awaited housing White Paper earlier this week, it might surprise some observers that, while Ministers claim to be bold and radical in tackling the housing crisis, they are failing to take this opportunity to enable mayoral combined authorities and the Greater London Authority to invest in housing, which would in turn promote economic development. Sadly, it is all too familiar for those of us on this side of the Committee who know that Ministers’ rhetoric does not always match reality.
Committee members know that I like to be pithy and get to the point, and I have checked the dictionary so that I can be precise in my use of language on the amendment. The Oxford English dictionary defines infrastructure as:
“The basic physical and organizational structures and facilities (e.g. buildings, roads, power supplies) needed for the operation of a society or enterprise”.
There is nothing in that that makes me think that housing might be excluded from any appropriate definition of infrastructure spending. Increasingly, businesses see housing as vital to their future growth.
There may be some Committee members who, for some reason, do not take an interest in London’s affairs. They might not have come across a wonderful business membership organisation called London First. Its mission is to make London the best city in the world to do business in. As a London MP, I have always known London First to do an excellent job in reflecting its members’ priorities. Of the two major campaigns that London First is currently running, one relates to the urgent need for action to expand airport capacity in London and the south-east, and the other is a campaign to double house building in the capital to 50,000 homes a year. As London First explains,
“the capital has a serious housing shortage that is starting to limit its competitiveness. Substantial increases in house prices and rental costs mean people from all walks of life are struggling to find accommodation.”
It worked with the Confederation of British Industry and the Federation of Small Businesses to develop the campaign. It is worth dwelling on several of the key findings of their survey of members. Some 68% of the members who responded to the survey were worried about the impact that a shortage of housing and high prices is already having on their ability to recruit and retain staff; 75% were concerned about the future impact that rising housing costs will have on their ability to recruit and retain staff; and 70% believe that the housing crisis will affect London’s future economic success.
Mr Jones
I thank the hon. Gentleman for his explanation of the amendment. I do not agree with all he said, particularly in relation to the White Paper and our record in recent years on building new council housing, bearing in mind that more council housing has been built in the past seven years than was built in the 13 years of the Labour Government. That said, the amendment would remove the reference to housing in the list of exclusions at clause 17(3), allowing funding raised for the infrastructure settlement to be spent on housing.
We are clear that the supplement should deliver direct benefits to local businesses and as such should be focused on delivering infrastructure that will create a better economic environment. The supplement expenditure should also be additional—that is, spent on infrastructure that otherwise would not get built. That will be crucial in engaging with businesses locally and securing their support for any such proposals.
Clause 15 makes clear that the supplement must be spent on infrastructure that will promote economic development. That will enable Mayors to invest in a wide variety of projects—for example transport, digital and broadband—that have the potential to make significant improvements across an area, and to support broader investment that will best serve the local business community.
The Mayor is directly elected, as we have discussed, by the local people and so has a mandate to decide what best serves the interests of the community. In many cases, we would expect the infrastructure delivered through the supplement to have a beneficial impact on housing delivery anyway. Crossrail, which was funded by a business rate supplement, as we have discussed, will enable an additional 57,000 new homes to be built and help create £5.5 billion of additional value to residential and commercial real estate along its route between now and 2021.
The hon. Gentleman may wish to note that the Government already support housing infrastructure in a range of ways, including the £3 billion home building fund, which provides loans to house builders of all sizes. We also give capacity funding to local authorities to support the delivery of large housing sites and housing zones, and we have recently announced a £2.3 billion housing infrastructure fund. This is grant funding for local authorities to support housing delivery on sites where viability is marginal and it has the potential to unlock up to 100,000 units in the areas of greatest housing need.
Jim McMahon
On that point, does it not go against the spirit of localism and devolution to expect local areas to come to the Government with a begging bowl for housing funding?
Mr Jones
All I can say is that we are damned if we do and damned if we do not. If we do not offer up significant funding streams to support projects for local areas, Opposition Members criticise the Government. When we do offer up significant funding—the £2.3 billion in the housing infrastructure fund is indeed significant—we are again criticised, so I am not sure what the Opposition want. I would encourage areas, as I hope the hon. Gentleman will encourage his area, to look to the fund to unlock new housing that is badly needed across the country.
Having reflected on the points that have been made, I am not convinced that amendment 44 is worth supporting. I therefore ask the hon. Member for Harrow West to withdraw the amendment.
Mr Thomas
I have heard what the Minister has said. I have also heard the response of my right hon. Friend the Member for Wentworth and Dearne (John Healey), who speaks on housing for Her Majesty’s loyal Opposition, who described the housing White Paper, quite accurately, as less a White Paper and more a white flag. That encapsulates the reality of the Conservative party’s approach to housing. The Minister has missed an opportunity by rejecting amendment 44 out of hand, but I do not seek a Division on the amendment at this point, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Rob Marris
This is a somewhat confusing clause, because it is entitled “Use of money raised by infrastructure supplements”, but what it goes into, in subsection (3) for example, is what the money cannot be spent on. Now, I understand that. I listened to the Minister—as an aside, I have to say that I was not convinced by what he said about housing and I hope he will reflect on it, but I understood what he said. This is part of the forbidden list, which runs to six factors in subsections (3)(a) to (f). However, to come back from that a bit, we have a problem, in that clause 36—definitions and interpretations—does not tell us what infrastructure is. I hope the Minister can tell me, either now or later, where in the Bill the definition of infrastructure is, because I cannot see it—it might be there, but I cannot see it. At the moment, we seem to have a Bill that does not say what infrastructure is and says only what the money cannot be spent on.
I am aware that clause 33—we will get to it later, Sir David, but I have to refer to it now, as it is very germane—refers to the guidance that can be given by the Secretary of State on what money can be spent on. The Minister gave us a little indication a few moments ago, because he referred to infrastructure projects—the use of the money that would be permitted under clause 17—to create, to quote him, “a better economic environment”. He then said something that, again, I cannot see in the Bill—he may correct me; it might be there, and if it is not, it sounds as if the Secretary of State would be minded to have it in the guidance. The Minister said that the projects would have to be “additional”, and that the money would be spent, to quote him again, on something that would “not otherwise get built”.
The Minister, like me, is a Member of Parliament for the west midlands, although I am in the urban core of the west midlands, directly under the combined authority. Nuneaton is in Warwickshire, which is a bit hokey-cokey about the combined authority, with its local enterprise partnership and so on, but Wolverhampton is squarely in there. As a west midlands MP who is astute about what is going on, the Minister will be aware that a subject of political debate in the mayoral elections for the West Midlands Combined Authority is whether it should buy the M6 toll road.
Jim McMahon
The points raised by my hon. Friend the Member for Wolverhampton South West are absolutely key to the freedoms that Parliament says it is keen to give away to local government. Clause 17(3)(a) to (f) lists the items the money and infrastructure supplement cannot be used on. I would welcome an intervention from the Minister if he can provide clarity. This feels as if he is trying to tell local authorities that, however tight their budgets, they cannot use the supplement to fund council services that should be funded elsewhere, which is why it refers to social services, education services, services for children and health services as opposed to schools, health centres or day care centres.
Will the Minister clarify whether this is “services”—the revenue element of service provision in the public sector—or a restriction on building capital projects such as new schools and health centres?
Mr Jones
I pick up on the point also made by the hon. Member for Wolverhampton South West about the definition of infrastructure. The hon. Gentlemen are quite rise to raise that. First, we are leaving to the Mayor’s judgment what type of project might deliver appropriate infrastructure that promotes economic development. The term “economic development” is key.
As we have said, in making that economic development happen we have talked about transport infrastructure, digital networks and so on and so forth that will deliver those types of economic benefits and economic growth. To reiterate, we are leaving it to the Mayor’s judgment. We can safely say, in that context, that we would not expect the type of project the hon. Member for Oldham West and Royton is suggesting, such as a children’s centre, to be funded.
Jim McMahon
The way the Bill is worded will only make lawyers wealthy and councils frustrated, because subsection (3)(a) is very clear that the money cannot be used for housing—we know what a house is—but paragraphs (b) to (f) are less clear, including with regard to social services. There is a difference between facilities and service provision within those facilities. The restrictions on what the money can be used on in the Bill include social services, education services, services for children and health services, but not building schools, Sure Start centres, youth centres, day care centres or healthcare centres.
I sought clarification from the Minister about exactly what that means. The response was that it will be up to the Mayor; there will be local discretion. However, there is not local discretion—there is an explicit list excluding what the Mayor will not be able to spend the money on. Is there an in principle objection to using the supplement funds for revenue costs? There is a degree of logic to that; it is not the supplement’s intention. However, owing to the way the Bill is worded, I suspect that any council or Mayor could take the infrastructure supplement and go on a school building programme. I think many communities would welcome that. Many communities would probably not welcome the inability of that same Mayor to provide housing with that fund, or even, as part of a wider development, to potentially provide gap funding for a housing requirement as part of a mixed-use development.
For a Minister who has tried to promote economic growth to restrict Mayors in that way makes no sense whatever. I ask him to go back and speak to the civil servants, and to clarify before the next sitting—maybe even in writing—whether subsection (3)(a) to (f) is intended to restrict the revenue use of that infrastructure supplement, or the intention is that it is not to be used to build such facilities. Do the Government intend to come back with an amendment to clarify the wording?
Mr Jones
Elected Mayors of mayoral combined authorities will have a strategic overview of their areas, so will be well placed to deliver projects that have a significant effect on local economies. The infrastructure supplement provides a unique opportunity to deliver infrastructure investment at a significant scale to benefit local businesses and communities. As I said earlier, that will be infrastructure that would otherwise generally not be built. Clause 17 sets the parameters for how many ways can be used to help to ensure that that is achieved.
Naturally, the supplement can only be spent on the project for which it has been levied. The sums received can be used to pay off loans secured to pay for the project to which the supplement relates, which may well answer one of the questions asked by the hon. Member for Wolverhampton South West on the west midlands and the idea of some sort of involvement in the Birmingham northern relief road, which I think he was referring to.
Rob Marris
I was specifically referring to the M6 toll. If the M6 toll is taken over and is made free, that will create economic development through the west midlands urban centre proper because it will take pressure off the current M6; it is not a question of a northern relief road. The Minister has mentioned again stuff that would not otherwise get built. I am getting the message from him, but I cannot see that in the Bill.
Mr Jones
When I say Birmingham northern relief road, I mean the M6 toll. That was its previous name when the project was brought forward and delivered under the Margaret Thatcher Government during the late 1980s and subsequently built during the 1990s with private finance, as the hon. Gentleman will recall.
The point is about a Mayor of a particular combined authority area. I think most businesspeople in the west midlands will think that Andy Street is the right man to undertake that role, because of his extensive knowledge of the business world and how to get the west midlands economy moving. If he were elected Mayor, he would have to decide whether it was worth while to undertake projects such as opening that toll road to general traffic, which would have an economic benefit.
Mr Jones
No, I will make some progress. So I hope that clears that point up.
As we have said, the money raised cannot be used to provide existing council services, such as social care. The clause provides a list of areas of expenditure that are excluded from the infrastructure supplement, and it includes provision for the Secretary of State to amend that list through regulations. Any such regulations would of course be subject to the affirmative procedure. There are also provisions to enable the Mayor of London to channel funding through the Greater London Authority’s functional bodies, such as Transport for London. The rest of the clause recognises that projects may have other funding streams, including from lower-tier authorities.
The hon. Member for Wolverhampton South West insinuated—I think when we debated amendment 44—that I may not be interested in housing in terms of infrastructure. I reassure him that I am interested in housing, which is extremely important. That is why the Government have set out significant measures in our White Paper that we are looking to consult on. He mentioned reflecting on the debate about amendment 44. I reflect on all the clauses that we debate, but to be clear, the arguments that were put forward did not convince me that it was worth supporting that amendment. I clarify that so the Committee and the hordes of people who no doubt will read Hansard understand that the Government are absolutely committed to delivering new housing. On that basis, I ask the Committee to support clause 17.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 33 to 36 stand part.
Rob Marris
Clause 33 relates to guidance and, according to subsection (2)(a), that will cover:
“the kinds of projects which may, and may not, be regarded as appropriate ones in relation to which to impose infrastructure supplements”.
Will the Minister give us some idea as to when the guidance is likely to be issued by the Secretary of State and its legal force? In the Bill we have had “direction”, in a different context, and “regulations” used. This is “guidance”, but how strong is guidance? If the Secretary of State gave guidance that school buildings were not to be included in an infrastructure supplement but the Mayor of a combined authority wished to include them and could make an argument that they were infrastructure, who would get their way?
Mr Jones
Clause 33, as the hon. Gentleman rightly said, will require Mayors to have regard to any guidance that the Secretary of State provides in relation to infrastructure spending. The Bill sets out a wide range of requirements that must be applied to the development of an infrastructure supplement, including who can impose a supplement, restrictions on what it may be used for, the consultation that must take place and what should be included in the prospectus. In addition, the clause provides that the Secretary of State may issue guidance to assist Mayors and businesses in the process. The type of guidance that I would expect to be issued by the Secretary of State would be statutory guidance, so there will be a formal guide for the particular Mayor in a particular area to work to.
Question put and agreed to.
Clause 32 accordingly ordered to stand part of the Bill.
Clauses 33 to 36 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.— (Jackie Doyle-Price.)
Pension Schemes Bill [ Lords ] (Third sitting)
(7 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 10 - Question accordingly negatived.
Alex Cunningham (Stockton North) (Lab)
I beg to move amendment 30, in clause 28, page 20, line 14, after “charges” insert
“, including any caps on these charges,”.
This requires members to be informed about caps on charges.
Good morning, Mr Rosindell. The amendment is straightforward: it would ensure that members are given accurate information, particularly where caps have been placed on the charges alluded to in the clause. As the Secretary of State has yet to determine costs and charges throughout a pension scheme—not just administration but investment and transaction costs—we have yet another delay in ensuring that scheme members are delivered the efficiencies that they deserve. We are also dependent on the Secretary of State bringing forward secondary legislation on the continuity strategy, which means yet more delay.
I am in danger of repeating myself, but scheme members really ought to get more information about the issues that affect their pensions. We have to start somewhere, and I maintain that the Bill remains a good place to do that. As I have said elsewhere, the Government support a cost-collection template in the local government pension scheme, which prompts the question: why do they not use that for master trusts instead of going down the road of yet more consultation?
I know from experience this week that the Minister is unlikely to be sympathetic to the amendment. Assuming that we are in that place again, what consultation is he planning with scheme members on the need for greater transparency and how they think they ought to be informed and given the opportunity to be active rather than passive scheme members?
The Secretary of State said last week:
“We plan to consult later in the year on the publication and onward disclosure of information about costs and charges to members. In addition to the Bill, other things are clearly required to give greater confidence in the pensions system.”—[Official Report, 30 January 2017; Vol. 620, c. 756.]
I had hoped that we could go some way to implementing at least some measures to help to fill the communication deficit, but now we will have to wait even longer. Trust members would have a little more confidence in this Government if they took this opportunity to take action on costs and charges and the need to share information about issues such as caps.
I conclude with a final question for the Minister. The review is under way. Is he satisfied that he will have the powers under the Bill or any other piece of legislation to accelerate the drive for greater transparency, or will we have to wait for another pensions Bill, which I understand is unlikely during this Parliament?
The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)
I can do no better than to echo the sentiments of the Opposition spokesman in welcoming you back to the Chair, Mr Rosindell, which is a pleasure indeed. I wish that I could accept the amendment with such enthusiasm—
Richard Harrington
—but we support the sentiments behind it. As with many things in the Bill, both sides want the same thing; the question is how things are achieved. The explanatory note to the amendment says that it
“requires members to be informed about caps on charges”,
which I understand, but the Government argue that that would duplicate provision elsewhere, so it is unnecessary.
I have said before that the Government agree with the principle that members should be able to see the costs and charges that affect their pension pot. Since April 2015, regulations have required trustees to report information about costs and charges in a chair’s statement, which must be shared with members, so that provision is there. Those regulations impose a charge cap where a scheme is used for automatic enrolment and contributions are invested in a default arrangement, as defined in the charges and governance regulations. To be clear, the cap is an annual one of 0.75%, or an equivalent combination charge, of the value of the member’s rights. That applies to master trusts in exactly the same way as it applies to other pension schemes.
The Government recognise that more needs to be done to increase transparency. We will be making regulations requiring charges and transaction costs for money purchase benefits in occupational pension schemes to be given to members and to be published. We have to get it right, and we are consulting. The hon. Member for Stockton North said that he thinks it is just another consultation, but it will happen this calendar year.
The purpose of the implementation strategy is for the Pensions Regulator to have scrutiny as part of the approval process.
Alex Cunningham
Before the Minister draws to a conclusion, I would be interested to know whether the regulations will outline exactly what chairs will be required to do to report on issues such as the cap.
Richard Harrington
Sorry—I was distracted when the hon. Gentleman asked his question.
Alex Cunningham
I will repeat it; we all get distracted at times. Will regulations outline what will be required within a chair’s statement to ensure that such things as caps are properly reported on?
Richard Harrington
I will answer that question in the same way as I have up to now: the consultation is looking at the way to disclose. I cannot give the hon. Gentleman the undertaking he seeks, but I fully expect that to be the case.
In answer to the other question, about whether the results of the consultation will require primary legislation, I can clearly say that they will not require another Bill. As to whether there will be another pensions Bill, the hon. Gentleman obviously has access to information on the Queen’s Speech that I do not have. I certainly do not think it is the position—it may be, but I do not think anyone knows at this stage.
I ask the hon. Gentleman to withdraw his amendment. That is not because I believe it is silly or anything, but because it is not needed. The charges in the scheme will be tethered to any cap that applied, and that information is already available to members.
Alex Cunningham
The Minister teases me a little with the idea that we might have a second pensions Bill this Parliament. I do not think he really believes that will be the case.
I recognise what the Minister has said. The very fact that he believes that the information will be included in regulations is a positive response, and for that I am grateful, but again we are back to the issue raised originally by the Constitution Committee. It said that there was a tremendous reliance by the Government on secondary legislation in the entire Bill.
Richard Harrington
I remind the hon. Gentleman of the affirmative nature of the regulations. That will allow scrutiny and discussion.
Alex Cunningham
Indeed. That is exactly why I am confident that what the Minister is saying will come to pass. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 ordered to stand part of the Bill.
Clauses 29 to 31 ordered to stand part of the Bill.
Clause 32
Pause orders
Alex Cunningham
I beg to move amendment 31, in clause 32, page 22, line 33, leave out paragraph (d).
This removes the provision that gives the Master Trust the ability to stop making payments to members of the scheme.
The Chair
With this it will be convenient to discuss the following:
Amendment 36, in clause 32, page 22, line 44, at end insert—
“(f) a direction that further contributions or payments to be paid towards the scheme by or on behalf of any employers or members (or any specified employers or members) are collected and held in a separate fund, until the conclusion of the pause order;”.
The amendment provides the Pensions Regulation with an alternative to stopping payments to the schemes under subsection 5(b) of a pause order.
Amendment 37, in clause 32, page 23, line 11, at end insert—
“(7A) The Secretary of State may by regulations set conditions on the terms of a separate fund, used for purposes under section 5(f).”.
This amendment is consequential to Amendment 36.
Alex Cunningham
Our amendment 31 would remove the provision that gives the master trust the ability to stop making payments to scheme members in the event of a pause order following a triggering event. Our biggest concern with the clause is that, while the pause order is in place, there is a significant impact on the members of the scheme through no fault of their own. We understand that there may be circumstances in which a master trust should no longer collect contributions from an employer, but it is unacceptable that elderly, vulnerable people who are dependent on their pension do not receive it. It is our duty to ensure that pensioners do not pay the price for a problematic situation arising in a master trust, and that their quality of life is not adversely affected.
I think of the 80-year-old lady who trusted that her workplace pension would be safe and would look after her in retirement, but whose payments do not arrive when she expects. She is concerned, but decides that it must be an administrative error and that the payment will probably arrive the next day—but it does not. She does not have a computer to check the company website, and she may have spent hours on the phone waiting in a queue to inquire as to why she has not received her pension.
Amendment 28 called for not just employers but members to be told of triggering events. When we debated that amendment, the Minister said we could create unnecessary anxiety for scheme members before their lives were impacted. I accepted that point, and listened carefully to what he said about communication with a member when they were affected. A pause order resulting in the halting of payments is extremely significant. That woman may no longer have a workplace to go to; maybe the employer has ceased to exist and bears no responsibility to communicate with previous employees. She has not been informed about the triggering event that caused the pause order that has led to her not receiving the money she relies on to get by. The Minister knows the financial impact on such a person; I wonder what he would say to her.
The primary function of a master trust is to facilitate the collection of contributions and the payment of pensions. If a pause order has been issued, why can the master trust not still pay out? It may well be that the pause order lasts for only 48 hours, or even a week. Perhaps it is not unreasonable to expect people to be able to get by for a short amount of time, but pensioners could have no warning that they may not receive payments for an unspecified period. As it is, the Bill allows a pause order period of up to six months, and includes powers to extend that period.
What will happen to people and their livelihoods if they cannot access their pension? What provisions do the Government plan to put in place to ensure that those affected by a pause order will not face difficult and testing financial circumstances? We could have a widespread crisis on our hands—especially if it is a large master trust—that could impact on countless people and their families. I do not believe the Government have properly considered what would happen in those particular circumstances. I appreciate that requiring a master trust to pay out when there may be concerns about accuracy and record keeping could be problematic, but if the pensioners’ pot is protected, surely the income stream can continue?
That was also debated in the other place, without resolution. There was mention of exceptions, such as for ill health, but I am interested to hear the Minister’s view on continuing payments. If there has to be exceptions for some groups, who would be protected in those circumstances? I understand that a pause order allows the regulator to go in and make sure that the situation is sorted, but that is a difficult situation, and there will remain much uncertainty among members who see their incomes dry up.
We are back to communications again. Will the Minister advise the Committee on what information he believes should be shared with members, and when? Is it at the point of impact—when payments stop? Members must be at the heart of auto-enrolment, and they must trust that the system actually delivers for them. Stopping their payments will discredit the entire process. Opt-out rates could soar and trusts could be undermined.
Turning to the amendments tabled by the Scottish National party, we firmly believe that the Government need a plan to ensure that pensioners do not miss out on receiving their pension for an unspecified period, but we also believe that payments into schemes should not simply be halted. As a result, we welcome the SNP amendments that make way for a separate fund for contributions to be paid into during the period of a pause order, thus protecting the long-term interests of the member who had contributed.
Richard Harrington
I wish to make it clear, without punning too many times on the word “pause”, that we did pause after the intelligent discussion in the other place, so I will go into some detail on why we will not be accepting the amendments, two of which were tabled by the hon. Member for Stockton North and the third by the SNP.
First, amendment 31 would remove an important provision that allows the regulator to issue a pause order, which temporarily prevents benefits from being paid out from a master trust scheme to scheme members. Such an order can be made only in very limited and specific circumstances. I will briefly set out what those are.
Alex Cunningham
I appreciate the Minister allowing me to intervene so quickly. He says that pause orders can be made only in very specific circumstances, which he is about to outline. Will he acknowledge that they could last for up to six months, and perhaps be extended even beyond that?
Richard Harrington
The hon. Gentleman is correct, but of course it is at the discretion of the regulator, which will be dealing with all the circumstances. It could also be a very short period—that is the intention. I hope he agrees that the regulator has to have flexibility to deal with the specific circumstances of a particular case.
The scheme would have to be in a triggering event period, which means that one of the key risk events, which I explained previously, has occurred in relation to the scheme, the obvious one being that the scheme funder has become insolvent. Alternatively, the order could be made in relation to an existing scheme if it has submitted its application for authorisation and the decision on that application is not yet final. To satisfy the criteria, further conditions must be met. The regulator has to be satisfied that if a pause order is not made, there is or is likely to be an immediate risk to the interests of members in the scheme or the assets of the scheme.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I am listening carefully to the Minister. We all understand the circumstances that would end up with a triggering event and what he describes as the potential insolvency of the scheme funder, but we have all been keen to make sure that in those circumstances the assets of the plan holders are protected. I want to tease out with him that scenario where we believe that the funds are protected. On the basis of the fear and alarm that could be spread when people see that their pensions are not being paid, I have a predilection for making sure that both payments into funds, whether it is a new fund that is created in the short term, or payments out of funds are maintained. There is a threat to confidence in master trusts and auto-enrolment if there is a pause in payments being made. On the basis that it always should be the case that the fund assets are protected, although I understand that there are certain circumstances where the regulator may want to take particular action, we have to be careful to scope out exactly what those circumstances might be.
Richard Harrington
The hon. Gentleman tries to tease things out from me and I am afraid I have to tease him back by saying that it is impossible to state the particular circumstances of every case. I was going to say later, in response to SNP amendment in this group, that no one wants to cause panic among members. There are many triggering events and there will be cases where the regulator might need to issue one of these pause orders, but they will be sorted out hopefully quite quickly; that is the idea. I do not see how, in those circumstances, writing thousands of letters to people would not cause precisely the kind of panic and lack of confidence that we are all trying to prevent.
I will return to that point. As with everything in the Bill, this is not a question of one side making stupid points and the other making sensible points; this is about trying to envisage different circumstances that might arise. It is my duty and my job to make sure that the regulator has flexibility, although I quite understand the hon. Gentleman’s point of view.
Ian Blackford
I absolutely understand and have no reason in principle to believe that the regulator may not have to have such a power. However, I am trying to understand what kind of event might lead to such action taking place if it is the case that plan holders’ assets are protected. Is it to do with any particular costs of administration for delivering all this? I am not clear what kind of event might lead to such action having to be taken.
Richard Harrington
It has been mentioned that, for example, suspicions of fraudulent activity might, in extremis, be such an event. Alternatively, the regulator might not yet be satisfied with respect to the administration of the scheme. The pause order clause is intended to apply in extremis. I am certain that most things will be taken care of in the normal course of things, but we felt that the regulator needed that power in extremis. That does not necessarily mean that the sky has to be falling in. A pause order might be used to concentrate people’s minds on resolving the situation quickly. Nevertheless, the power is there. It can be used
“during a triggering event period…if…the Pensions Regulator is satisfied that making a pause order will help the trustees to carry out the implementation strategy.”
The order is designed for quite particular and limited circumstances. I know that we keep using sledgehammer and nut analogies—on Tuesday I mentioned kernels— but I really believe that if it did trigger the kind of communication that the Opposition referred to, it might cause a major panic, which is something that we have to avoid and that the system exists to resolve.
Alex Cunningham
To extend the nut analogy, for a pensioner who may be losing £40 a week from their pension for up to six months, a pause order is not a tiny nut; it is a large coconut. It has a major impact on their lives.
Richard Harrington
I quite agree, and of course there are checks and balances within the system: the pause order can be exercised only on a determination by the determinations panel, and then there is a higher level of scrutiny. In a small administrative matter, it would be totally irresponsible for the regulator to suddenly decide on a pause order with the exact effect that the hon. Gentleman alludes to, either on pensioners receiving benefits or on people working as normal and paying contributions that come out of their weekly or monthly statements.
I totally agree with the hon. Gentleman’s intent, but I think it is important to look beyond the general definition of a pause order and into the specifics, which I hope I have explained, albeit briefly. I ask him to withdraw the amendment; he makes an important point, but I think we have attended to the detail necessary to ensure that what he fears, and we all fear, does not take place.
As we have heard, amendment 37 is consequential on amendment 36, so I will discuss both SNP amendments together. The hon. Gentleman has stated that he supports them, so at least it will be on the record that the Opposition and the SNP actually agree on this subject. [Interruption.] That was teasing, to use this Committee’s terminology. I withdraw any teasability if I have caused offence.
Critically, amendment 36 would allow the Pensions Regulator to issue a pause order containing a direction that any paused payments into the scheme are to be
“collected and held in a separate fund, until the conclusion of the pause order”,
and amendment 37 would allow the Secretary of State to make regulations about the fund. On the face of it, it seems sensible to have a separate fund set up, but it would be extremely difficult in practice. Employers would have to negotiate with their employees to obtain their permission to take deductions from their pay and pay them into a different entity. That money would not actually be being paid towards a pension scheme; it would have to go to a solicitor’s client account, for example, or to another account that had been set up, instead of to the pension itself. There are tax implications and many other implications. That would cause fear, because people would think, “What is happening to my existing pension money? I am having to pay it into an emergency account.”
Craig Mackinlay (South Thanet) (Con)
On that point, may I ask what the sponsoring employer’s position would be under a pause order? Would the sponsoring employer be in contravention of his auto-enrolment obligations, having been forced to stop paying towards a master trust that is set up or is part of the employees’ contributions arrangements?
What would happen to the employer in terms of his obligations under auto-enrolment? Is it envisaged, if a pause order is in place, that he would have to keep the money within the business until the situation is resolved, and then that money be passed over to the same fund, if it is cleared to continue in operation, or to a new fund that stands in its place?
Richard Harrington
My hon. Friend raises a very good point that we have considered. Having been an employer for many years and supervised payroll systems, I understand that that would be the obvious thing to do: simply hold on to the money. Provided it was kept within a business but earmarked for that, I do not think anyone could say that the employer would be in breach of their legal duties for auto-enrolment.
Of course, then a problem arises. It sounds appallingly administrative and technical, but it is the sort of thing that lawyers make a lot of money out of. If it were paid into a non-pension fund emergency account, which I believe could be an unintended consequence of the honourable amendment tabled by the hon. Member for Ross, Skye and Lochaber, it could mean that the money is not being paid into a pension fund. What happens to its legal status, the tax and everything else? It is very much in extremis and complicated.
I am not regarded within the pensions trade as a great voice for employers, as I think everybody in the House would agree, but this would represent a significant burden for employers. I ask hon. Members to bear in mind that employers will not typically have been responsible for this problem—they will not typically have been responsible for the events leading to the pause order being made. From their point of view, they have simply been complying with their duties under auto-enrolment, as my hon. Friend the Member for South Thanet said.
I do not believe we can place them in a situation where they risk being unable to comply with their legal duties or where compliance becomes a significant burden. As I have said, this is very complicated and the tax and payroll implications are not certain. I think we would all agree that in these rare and very limited circumstances, the solution presented in the Bill is the most simple for employers to comply with. Given the very limited impact on scheme members and the low likelihood of this situation arising, I believe that is the right solution.
Alex Cunningham
The Minister keeps talking about short periods of time when there might be an impact. Has the Department given any consideration to the impact of loss of income on members of the scheme and on the social security system? What would happen to ensure that people affected by the loss of income due to a pause order are compensated by social security in the event of their qualifying for benefits because they no longer have a pension income?
Richard Harrington
The hon. Gentleman makes a very good point about social security implications. I cannot answer that question. I will have to give it some thought and I am happy to correspond with him on that subject. I think it is interesting and, although not directly relevant to this point, it is an important implication.
Hon. Members will be delighted to know that I have just remembered that employers are excused from AE duties during the pause order period. From the hundreds of pages of the Bill it had to get to the front of my mind, and it has. I thank the hon. Gentleman for triggering that recollection. I do think that everything has been taken into consideration. I hope that my explanation has been sufficiently comprehensive for the amendment to be withdrawn.
Ian Blackford
It is a pleasure to see you back in the Chair, Mr Rosindell. I know that, in the interests of brevity, we are considering this slightly the wrong way round, in that I will speak to the amendment that the Minister has already responded to.
We all share the desire to ensure that the plan holders’ funds are protected in both the accumulation and decumulation phases. We are concerned about the impact of a pause order on a member’s savings, as there are no mechanisms in place that allow ongoing contributions to be collected and held on behalf of the saver. I know that the Minister has said that there are issues about where the funds would go and what kind of protection would be given, but those are exactly the kinds of things that we have to resolve in this Committee. It is clear that any additional contributions that savers make at a time of a pause order have to be protected properly, but surely it is within our gift to architect that properly.
It is unacceptable that a member should be penalised, and in effect lose wages in the form of employer contributions, due to events that are out of their control. The Society of Pension Professionals has also said that it will be necessary to ensure that the period of effect of a pause order cannot start before the trustees receive notification of the pause order. That would mean that any contravention could occur only after the trustees are in receipt of the order. The society argues that without that notification, the trustees could be in breach of a pause order through no fault of their own if a direction is not complied with during the period between the date the regulator makes the order and the date the regulator notifies the trustees of it. That could happen, for example, if new members joined the scheme in that period contrary to a direction under clause 32(5)(a). The Government should clarify whether they intend to take action to protect savers.
Richard Harrington
Mr Rosindell, before we end our debates on this clause, I would like to make a point of clarification regarding an error on my part. In previous sittings, when I was referring to the regulations generally, I said that they are subject to the affirmative procedure. However, I made a mistake in referring to clause 28 in that context, because the negative procedure applies there. I apologise for that. Obviously, it was not done on purpose. I hope that Members will forgive me.
Regarding the amendment itself, I have adequately covered the points that have been raised, and I reiterate the Government’s position that we reject the amendment.
Alex Cunningham
It is quite heartening in some ways that we can all make mistakes.
The Minister has talked several times during his response to the amendment about the short period that the pause order will probably apply. I remind him again that that period could be six months, during which a scheme member may not receive their income.
Richard Harrington
I reiterate that that is a maximum period. There will be very few cases of this type and the regulator will be on it every minute of every day; it is not the case that it will be forgotten about for five months and then dealt with in the final month. It is for the Government and the regulator to put in a long stop and to answer the questions, “What if this happens? What if that happens?” and so on. However, I am absolutely certain that if we were to be in front of a Committee such as this one in years to come, I would be amazed if the process took anything like six months.
Alex Cunningham
I certainly understand the Minister’s point of view, but in the event of one of the large master trusts failing—perhaps one that has a million members—in 10 years’ time, a considerable amount of could pass before any resolution could be found. For that reason, we must take some action in this area.
The Minister also said that the regulator needs flexibility. Well, that does not offer any financial flexibility to the scheme member. The hon. Member for Ross, Skye and Lochaber—I nearly messed up as well and I should not mess up that constituency name, should I?—repeated the point I made in my original speech. If the pot is protected and is safe, why on earth can the benefits not still be paid out to the member in these circumstances? The Minister spoke about checks and balances, but checks and balances do not deliver income for the person who depends very specifically on what is probably a small amount of income. I have talked about the impact that that could have on the social security system.
Therefore, because resolution could take up to six months and it could be a major master trust that is affected, with the impact felt by many people, I intend to press the amendment.
Richard Harrington
It is absolutely true that the pause order can be extended, but the regulator closely supervises the scheme in this period. If the hon. Gentleman accepts that the role of the regulator in this matter is, in effect, to take it over, it is very hard to envisage this taking longer and longer. I certainly cannot see it happening with no one even bothering to communicate with the members, even in the case of a disaster happening, such as the hon. Gentleman mentioned, which I obviously do not think will happen, to the administrators of such a scheme. We have given the matter considerable thought and I ask him to withdraw his amendment.
Alex Cunningham
I am afraid I have to disappoint the Minister. I am not going to withdraw the amendment. The bottom line is that there is always a real possibility—a quite long word with an extremely long meaning—that there could be a failure in the system, and that failure could result in a loss of income to some of the most vulnerable people in our society. For that reason, I intend to press the amendment to a Division.
Ian Blackford
I will support the amendment. We have to feel satisfied that there are reasoned arguments why a pause order should be made and why payments should not be paid to pensioners. I am certainly willing to listen to further arguments, but I do not think a clear case has been put for why it should be made, except in very extreme cases of fraud and so on, and that case has not been made. Equally, in terms of retaining confidence, I wish to press our own amendment on the basis that it is important that plan holders continue to make payments, even in a triggering event. I want to test the will of the Committee and press our amendment to a Division as well.
Question put, That the amendment be made.
Richard Harrington
Clause 34 provides for a prohibition relating to member charges during a triggering event period. Trustees must not increase charges above the level set out in the implementation strategy, introduce new charges on members or impose charges as a consequence of a member leaving or deciding to leave the scheme during a triggering period.
Regulations under clause 34 will set out how the charge levels in the implementation strategy are to be calculated. The Government intend that those levels will reflect what members paid towards the normal running of the scheme before the event happened. The charge levels will be calculated by looking back at previous charges in the scheme, and controls will be built in to protect against cases in which schemes increase charges shortly before a triggering event, so a scheme would not be able to get away with that one before the extra scrutiny.
The effect of these measures is that members will not pay any more during a triggering event period than when the scheme was operating normally. That will protect the members; even though a scheme itself is likely to incur additional costs, the money to pay them will not come from members’ pension pots. I hope that everyone will agree that that is most important. It will preserve the value of members’ rights during a triggering event.
The clause also restricts the charges that can be imposed by a master trust, proposed by trustees or employers, to receive members under the continuity option 1. Such a receiving scheme—a new scheme—will be prevented from increasing charges above the levels set out in a statement that it will give the regulator before the transfer happens, or from imposing new charges to meet the costs incurred by the transferring scheme. That means that members can join another scheme and continue to save in another pension without their pot being depleted to pay for costs incurred as a result of that happening. The clause keeps normality of charges and prevents schemes from taking advantage of a triggering event, and protect members’ pots and maintains their value.
Alex Cunningham
I wish to ask a couple of question on clause 34 as I again return to the theme of transparency. The Minister outlined the purpose of the clause, and we welcome the protection of members from administration charges beyond those set out in the implementation strategy during a triggering event period. The clause makes clear the responsibilities of both trusts transferring members out and those receiving them.
The Minister listened carefully to my previous contributions on costs. With regard to this clause, I would like a better understanding of what those administration costs actually cover. Do they cover investment transactions, for example? Assuming that they do, will the Minister confirm that subsections (1)(c) and (2)(a) afford members protection from additional transaction costs as a result of the transfer of their funds out of a master trust and into a new one?
Richard Harrington
I thank the hon. Gentleman for his constructive comments. I can do no better than remind him of what I have already said: our whole purpose is to ensure that everything remains the same so far as all charges are concerned. He is right about the regulations and the devil being in the detail. That is precisely because we do not want the kinds of loopholes that could exist. If I may mix metaphors briefly, we do not want a chink of light that people can drive a coach and horses through. It is clear that—to be a bit pompous and draw on my O-level Latin from 1973—ceteris paribus, they have to remain as they were.
Question put and agreed to.
Clause 34, as amended, accordingly ordered to stand part of the Bill.
Clauses 35 to 38 ordered to stand part of the Bill.
Schedule 2 agreed to.
Clause 39 ordered to stand part of the Bill.
Schedule 3 agreed to.
Clause 40
Interpretation of Part 1
Amendments made: 19, in clause 40, page 28, line 15, at end insert—
“‘pension scheme’ has the meaning given by section 1(5) of the Pension Schemes Act 1993;”.
This amendment defines “pension scheme” where it is used in Part 1 without further qualification. The definition in section 1(5) of the Pension Schemes Act 1993 catches both personal and occupational pension schemes.
Amendment 20, in clause 40, page 28, line 35, at end insert “, and—
‘(2A) The reference in section 11(3) to activities that relate directly to Master Trust schemes is, in its application to a Master Trust scheme which provides money purchase benefits in conjunction with other benefits, to be read as a reference to activities that relate directly to the scheme as a whole.’”.—(Richard Harrington.)
Where a Master Trust scheme is a “mixed benefits” scheme (providing money purchase benefits and other benefits), clause 1(2) provides for Part 1 to apply only to the “money purchase benefits” aspect of the scheme. This produces an unintended effect for clause 11(3), as it would require the scheme funder’s activities to relate only to the money purchase benefits aspect of each of the Master Trust schemes referred to which is a mixed benefit scheme. This amendment prevents that effect from arising, by saying that even for mixed benefit schemes, a “scheme” in clause 11(3) means the scheme as a whole.
Clause 40, as amended, ordered to stand part of the Bill.
Clause 41
Regulations modifying application of Part 1
Question proposed, That the clause stand part of the Bill.
Alex Cunningham
The clause allows the Secretary of State to adjust the range of pension schemes to which part 1 of the Bill applies, either to extend the regime or to disapply it in whole or in part. As it stands, the clause is an extraordinarily wide provision. This almost turns on its head the normal approach, which is to determine policy first and then to legislate. We accept the importance of having flexibility to deal with the changing models that an agile sector might bring forward, but in scrutinising this legislation we need to have the opportunity to test the boundaries of that flexibility.
It appears that we will not now get further details of the regulations before the Bill leaves the House, despite what the Constitution Committee has said to the Government. As I mentioned earlier, that is a real shame. I therefore have a few questions for the Minister. The Minister in the other place suggested that the clause would be used to disapply some or all of the provisions for a mixed-benefit master scheme. Given the amendments tabled in this place in relation to mixed-benefit schemes, can the Government outline how exactly this clause will be used? Which schemes will be carved out of the regulation, to borrow a phrase from the Minister?
I know that additional voluntary contributions and non-associated multi-employer schemes were raised in the other place, but can the Government also confirm whether they plan to carve out schemes on an individual scheme basis or exclude them on a broad scheme basis through the application of more general principles?
Richard Harrington
I thank the hon. Gentleman for his comments, which I will answer. The overall principle is to allow the flexibility that accepts that master trusts, which have grown tremendously over the past couple of years, do not fit into a one-size-fits-all formula. It is certainly not a case of saying this is the scheme’s rule; it is basically optional whether someone is in it or not, because it can be carved out. I know that the hon. Gentleman understands that and respects the principle. Again, it comes down to how it will be applied. We want to make it specific. We have had some useful consultations with master trusts and others on this subject. The regulations will give us the flexibility to ensure that we can deal with the existing situation and see what examples have been thrown up. More importantly, there will be the flexibility to change. The clause makes provisions to modify part 1 where it applies.
We have tried hard in a complex area to ensure that all relevant master trusts are in the scope of the authorisation regime. That is the point of the part of the Bill that we have been discussing up to now. As I have said, things change and the industry moves quickly. That is why we are calling for a type of flexibility that would not on the face of it seem necessary because the Bill regulates master trusts, which we all agree is the right thing to do—there is no question about that. The industry has shown that it is very flexible and can change. The provisions will be designed so that the regulations can be disapplied if they are not relevant. We intend to ensure that the whole system for authorisation, which we have discussed at length, applies in a proportionate way.
The scope of the power was discussed extensively in the other place. We have made it clear—this is the critical point, if the hon. Gentleman will bear with me—that we intend to continue discussions with the industry and also with the regulator to develop secondary legislation. It is not as though civil servants, however good they are, have sat in a room and just designed regulations. We have asked for time after the Bill to make sure they reflect the way in which the industry has developed. The passage of the Bill, from concept to now, could be near equivalent to the time that master trusts have grown in the first place. I hope that the hon. Gentleman will bear with me. We have indicated that we intend to consult on regulations under clause 41(1)(b) in relation to mixed master trust schemes, where the only money purchase benefits are those related to the additional voluntary contributions. It is technical and much of it is common sense, but it has to be done right, otherwise there will be unintended consequences of institutions and members of schemes being caught when it is perfectly well dealt with elsewhere. I know that the hon. Gentleman would not want that to happen.
Another example would be the provisions in clause 41 for regulations
“which provide for two or more pension schemes to be treated as a single Master Trust”.
Again, that is in certain circumstances. Those circumstances would be common control, common rules or schemes provided by the same service provider. It is easy to say that common sense will prevail, but we need the flexibility to ensure that the framework is there for those specific, albeit exceptional, cases.
I believe strongly in the clause and think it necessary that the significant regulatory powers included in it have the potential to alter the scope of the regime. Members will want to debate and approve the making of such regulations. That is why, as I have mentioned several times—albeit once incorrectly—that these are subject to the affirmative procedure; they will not be done on new year’s eve at five minutes to twelve without anybody noticing. The purpose is not to hide this from Parliament or anybody else, but to ensure that we get this important provision in the Bill absolutely right.
Question put and agreed to.
Clause 41 accordingly ordered to stand part of the Bill.
Clause 42
Power to override contract terms
Question proposed, That the clause stand part of the Bill.
Alex Cunningham
On Second Reading, the Secretary of State, in answer to the hon. Member for Tonbridge and Malling (Tom Tugendhat), nailed his colours to the mast on transparency and pension freedoms, not that we have seen much of the former displayed in recent days. He said:
“Transparency is a key area. Hidden costs and charges often erode savers’ pensions. We are committed to giving members sight of all the costs that affect their pension savings. He asks for more detail. We plan to consult later in the year on the publication and onward disclosure of information about costs and charges to members. In addition to the Bill, other things are clearly required to give greater confidence in the pensions system. Greater transparency is clearly one of the steps forward. I completely agree with him on that.”
I agree completely with the Secretary of State on that. He also said that he was determined
“to remove some of the barriers that might prevent people from accessing pension freedoms”.
He said:
“The Financial Conduct Authority and the Pensions Regulator indicate that significant numbers of people have pensions to which an early exit charge is applicable. The Bill amends the Pensions Act 2014 to allow us to make regulations to restrict charges or impose governance requirements on pension schemes. We intend to use that power alongside existing powers to make regulations to introduce a cap that will prevent early exit charges from creating a barrier for members of occupational pension schemes who are eligible to access their pension savings.”
We remain disappointed that this grand commitment to transparency has not yet found its way into the Bill, but we are reassured that the Government seek to protect scheme members from prohibitive costs and exit charges.
The Secretary of State said that he had consulted the industry on the issue.
“The measures proposed in the Bill have been developed in constructive consultation with the industry and other stakeholders, so we have confidence that they are proportionate to the specific risks in master trusts and will provide that necessary protection.”—[Official Report, 30 January 2017; Vol. 620, c. 756.]
In the light of that statement, we seek assurance from the Minister that legislation proposed in subsection (2) allowing breach of contract in that way will not leave the Government open to challenge from the industry, something that would cause unnecessary upheaval for both schemes and members. With that in mind, will the Government tell us what consultation took place with providers and advisers and confirm that they are content that this part of the Bill is not open to challenge? If a legal case is brought against a master trust for breach of contract, is the Minister satisfied that it will have a defence under the clause?
Finally, what consideration have the Government given to the interests of members who, in the event of a legal challenge, will be unable to draw down money from their pots?
Richard Harrington
As hon. Members will be aware, what we are now discussing is not restricted only to master trusts; the rest of our discussions today have been. It is a bit of a change. We are now talking about all occupational pension schemes.
The clause will cap exit charges and member-borne commission, which is the sort of thing we all want. Like most of the measures in the Bill, it relates to what we all accept is a problem; in this case it is exit charges—where they come from, who pays them, how they are calculated and so on. The hon. Gentleman refers to protecting members, which I perfectly understand, but that is the point of the legislation. I say that in case anybody reading about the Bill in Hansard or elsewhere thought that the Opposition were trying to protect members and the Government were not. The intention of the Bill is to protect members. I have laboured that point—I hope that the hon. Gentleman will excuse the pun on his party’s name—because it is fundamental.
The clause amends the existing legislation—the Pensions Act 2014—to allow regulations to be made that enable a term of a relevant contract on charges to be overridden if that contract conflicts with a provision in those regulations. I emphasise that the power will allow for a contract to be overridden only if it conflicts with a provision in the regulations, which will ensure that relevant contracts are consistent with regulations and will provide certainty to the parties involved.
At this point it might be helpful if I clarified that the clause is distinct from previous clauses in the Bill that refer to charges, which all relate to the proposed master trust authorisation scheme. The discussions on charges and capping before now were specific, whereas this discussion is general. We intend to use the clause alongside existing powers in the 2014 Act to make regulations clearly to cap or ban early exit charges. Those charges are any administration charges paid by a member for leaving their pension scheme early when they are eligible to access pension freedoms, which in the past they would not have faced at their normal retiring date.
I mentioned early exit charges before in a different context. Cynical commentators might say that providers impose those charges to take advantage of a situation—a kind of last hurrah—because they know they are going to lose the value of a pension. The industry’s converse argument, which I have some sympathy with, is that they calculate the value of a pension over a period of years, and early exit means that value may then be x years minus 10. That is not a ridiculous argument, but the Bill makes it clear that the Government do not have much sympathy for it.
As has been mentioned, the Financial Conduct Authority will make rules to ensure that the cap or ban on early exit charges in personal and workplace pension schemes, which they regulate, will comes into effect on 31 March 2017. That has already been approved by Parliament through amendments to the Financial Services and Markets Act 2000, which broadly allows for a contract to be overridden. The consultations we undertook on early exit charges and member-borne commission showed that the charges generally arise in contracts between trustees or managers of certain occupational pension schemes and those who provide administration services to the scheme.
Our existing powers in schedule 18 to the Pensions Act 2014 enable us to make regulations that override any provision of a relevant scheme where it conflicts with a provision in those regulations. For example, we have used that power in relation to the appointment of service providers in the scheme administration regulations. The reason we are taking this new power is that the existing power does not extend to the contracts under which these charges arise. That is why clause 42 contains a power to allow the overriding of a term of a relevant contract that conflicts with a provision of the regulations under schedule 18. What is a relevant contract? It is defined as one between a trustee or a manager of a pension scheme and someone providing services to the scheme.
The regulations that we intend to make will apply to charges imposed from the date the regulations come into force, even where these arise under existing contracts. We expect the regulations to come into force in October this year, so it is not a long difference. It is a difference for legislation reasons, but on the scale of things it is not a lot.
Richard Harrington
If the hon. Gentleman would bear with me, I will answer the question asked by the hon. Member for Stockton North before giving way, unless it is really urgent.
Ian Blackford
My point is in relation to new clause 8, which I have tabled. I want to be clear that the Minister is saying that there will be no exit charges for anyone exiting a master trust, whether a new saver or someone who is currently in a master trust plan. If the answer is in the affirmative, I would be happy not to press new clause 8, because it would be superfluous.
Richard Harrington
I will come to that point in a minute, if I may first respond to the question from the hon. Member for Stockton North—I am not ignoring what the hon. Gentleman has just said, but I think that the answer will become apparent.
There was public consultation in 2015 that concluded in August. Since then we have had various discussions with providers and other industry bodies; we are really trying to get everyone involved. Again, we do not want to be unfair to one side or to create loopholes that should have been anticipated. I think that the hon. Member for Stockton North will accept that this area is complex.
Alex Cunningham
I appreciate the Minister’s answer to my question. I also asked for the Government to confirm that the people they have consulted are content that this part of the Bill is not open to legal challenge.
Richard Harrington
It is very hard to talk about legal challenge because the legal profession in the United Kingdom has provided that itself in many cases where legal challenge was not intended by the Government. All that I can say is that we do not expect legal challenge on this issue.
Legislation introduced to challenge capping contract schemes has already been passed, so it is creating parity. I hope that I am not misleading anyone by saying that we do not expect that. We have done our due diligence and no one thinks that there will be a legal challenge, but I am afraid that I cannot give the hon. Gentleman a categorical assurance, because that is what the legal system exists for. I am sure that very clever counsel might read this one day and think, “Ah, ha! I’ve thought of something.” There is nothing that we know of.
Alex Cunningham
With those considerable caveats, I assume the same applies to any legal case brought against a master trust for breach of contract and that they would have a defence under this clause.
Richard Harrington
If I may, I will answer the question from the hon. Member for Ross, Skye and Lochaber concerning new clause 8 and the point about no exit charges from a master trust. I confirm that when a master trust is closing the scheme cannot levy a charge for leaving. I believe that responds to his question, unless I misunderstood it.
Ian Blackford
No, I do not think it does. To be absolutely specific: in any circumstances of any exit of an individual from the master trust there would be no exit fee. If the Minister is responding to that statement in the affirmative, I would happily withdraw new clause 8, if that is permissible.
Richard Harrington
When the master trust is closing it cannot levy a charge. That is as clear as I can be. Perhaps we can discuss the point in more detail. I am not trying to mislead the hon. Gentleman and he knows that, I hope.
The pensions market is continuously evolving and modernising and that extends to charging practices. It may be necessary to alter the charges requirements at pace to reflect any changes in the pensions market that may disadvantage members. I revert to the point I made to the hon. Member for Stockton North: that is the purpose of the whole exercise; we are doing it for that reason. That is why we intend to consult on the draft regulations later this year. I am aware that people outside the House, and sometimes hon. Members, groan when a further consultation is announced, as though the Government are doing it to kick the can down the road. I can assure them that that is not the case. We intend to get it right and public consultation is very important.
The regulations would also be subject to parliamentary scrutiny, as I have explained, through the negative procedure. The Delegated Powers and Regulatory Reform Committee was content with that approach because it would allow future legislation to be amended quickly to provide the member protection that the hon. Gentleman and I both want.
Before I conclude on this clause, I will address the point made by the hon. Member for Ross, Skye and Lochaber. I have learned the name of his constituency now and look forward to visiting. He was satisfied by my answer to his earlier question but he wants to know what happens if the master trust is not closing. In that case, the normal exit charge protections apply; there is no difference. I believe that is a clear answer to his question.
Alex Cunningham
There is one area that the Minister has not addressed. As he said, we are all here to champion the member, but Opposition Members might just go a bit further in some of those protections. I did pose the question about elected members and what consideration the Government had given to the interests of members in the event of a legal challenge who would not be able to draw down their benefits.
Richard Harrington
I have already made it clear that the Government do not expect legal challenges. It is a bit of a circular argument but in the legislation the regulator exists to protect members, so I cannot accept his point on this matter.
Question put and agreed to.
Clause 42 accordingly ordered to stand part of the Bill.
Clauses 43 to 45 ordered to stand part of the Bill.
Clause 46
Short title
Amendment made: 21, in clause 46, page 31, line 3, leave out subsection (2)
This amendment removes the privilege amendment inserted by the Lords.—(Richard Harrington.)
Clause 46, as amended, ordered to stand part of the Bill.
New Clause 1
Membership of Master Trust Schemes: Member Trustees
‘(1) By a date to be set by the Secretary of State in regulations, approved Master Trust Schemes must ensure that at least half of the trustees of the scheme are Member Trustees.
(2) Member Trustees must be individuals who are—
(a) members of the Master trust scheme; and
(b) not members of senior management of a company that is enrolled in the Master Trust scheme.
(3) Member Trustees must be appointed by a process in which—
(a) any member of the scheme who meets the condition in subsection is to apply to be a Member Trustee;
(b) all the active members of the scheme, or an organisation which adequately represents the active members, are eligible to participate in the selection of the Member Trustees, and
(c) all the deferred members of the scheme, or an organisation which adequately represents the deferred members, are eligible to participate in the selection of the Member Trustees.
(4) Member Trustees should be given sufficient time off by their employer to fulfil their duties.
(5) For the purpose of this clause “senior management”, in relation to an organisation, means the persons who play significant roles in—
(a) the making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or
(b) the actual managing or organising of the whole or a substantial part of those activities.’—(Alex Cunningham.)
This new clause ensures that where named individuals hold the position of Trustee in a Master Trust, at least half of those Trustees must be Member Trustees. “Member Trustees” are members of the trust themselves and must not hold a senior management position in an organisation which participates in the Trust.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss:
New clause 6—Member-nominated directors—
‘(1) By a date to be set by the Secretary of State in regulations, all companies that are trustees of a Master Trust Scheme where all the trustees are companies must ensure that at least half their directors are Member-nominated directors.
(2) “Member-nominated directors” are directors of the company in question who—
(a) are nominated as the result of a process in which at least the following are eligible to participate—
(i) all the active members of the occupational trust scheme or an organisation which adequately represents the active members, and
(ii) all the deferred members of the occupational trust scheme or an organisation which adequately represents the deferred members, and
(b) are selected as a result of a process which involves some or all of the members of that scheme.’
This new clause will ensure that where companies hold the position of Trustee in a Master Trust, at least half of their directors are Member-nominated directors. “Member-nominated directors” are active or deferred trust members who have been selected by other members of the scheme.
Alex Cunningham
New clauses 1 and 6 take me back to my central theme for the Bill, which is putting members first by introducing member-nominated trustees and directors for master trusts, or member governance of their money. I remind the Committee that all the investment risk lies with the members and not with the sponsor or the provider; they should therefore have representation at the decision-making level.
The Pensions Act 1995 introduced the requirement for company pension schemes to have member-nominated trustees, or MNTs. If the scheme’s sole trustee is a company including the employer, rather than individuals, scheme members will have the right to nominate directors of that company, who will be member-nominated directors, or MNDs. In those circumstances, my references to MNTs apply equally to MNDs. Member-nominated trustees of pension schemes have been a part of UK pensions since the emergence of occupational pension plans in the middle of the last century.
Under the Pensions Act 1995, following the Goode report, a rule was introduced that a third of trustees had to be nominated, although companies could opt out of that rule. The Goode report came out of a series of scandals and corporate collapses in the late 1980s and early 1990s that led to losses to occupational pension funds. In particular, Robert Maxwell, the proprietor of the Mirror Group Newspapers, was subsequently exposed as having stolen millions of pounds from his employees’ pension schemes. In the Pensions Act 2004, the rule was made compulsory. The Secretary of State has the power to raise the threshold from one third to one half, and Labour is committed to implementing that. Many pension funds already have one half of trustees nominated, even though the law requires less.
Given the steady growth in numbers and the formalisation and establishment of member trustees in our pension system, the Association of Member Nominated Trustees emerged in September 2010 to provide support for member trustees. It is adamant that master trusts must be obliged to have member representation on their boards. It is no surprise that master trusts are lobbying against that, but they are mostly profit-making entities, so it is in their own best interest that they have member representation in order to win the confidence of scheme members.
After the Robert Maxwell scandal, the Government legislated to ensure member representation on pension scheme trust boards because they recognised that that would be a powerful way to prevent unscrupulous scheme sponsors from repeating Maxwell’s behaviour. That argument is no less relevant to master trusts. Defined-contribution schemes managed by master trusts owe fiduciary and other duties to their beneficiaries, and trustees are required to act in the best interests of their members. Trust-based schemes are subject to trust law and regulated largely by the Pensions Regulator. If the scheme’s sole trustee is a company rather than individuals, scheme members would have the right to nominate directors of that company.
Ensuring effective governance for pension schemes remains a challenge. While trust-based schemes benefit from a clear governing body in the form of the trustees, there is a clear absence of member-nominated trustees in the majority of master trusts. Improved governance must include MNTs, packaged with improved training and facility time to dedicate time to the job. Master trusts and independent governance committees lack scheme member input into the investment process, and they need an overhaul. Since the pot belongs to the member and the scheme-sponsoring employers bear no investment risk, there is an argument to be made that governance by scheme members should prevail in number terms over employers.
While some companies choose to operate a trust-based defined-contribution scheme, most new auto-enrolled members will not be saving into one; instead, the vast majority will be saving into a master trust or a group personal pension arrangement. In such schemes, member representation on governance boards is far more rare. With one or two exceptions, we are not aware of any master trust or independent governance committee that has taken the step of putting in a member or finding a mechanism for electing members or appointing members to governance boards.
The benefits of member representation in the trust-based world have been examined. One benefit is the increased diversity that MNTs can bring. Having a member perspective adds diversity, and diversity prevents the risk of group-think within boards. That is because of a range of different member perspectives, experiences and areas of interest. It is also comforting for members to feel that they have some stake in the management and stewardship of a pension scheme. Ian Pittaway, chair of the Association of Professional Pension Trustees, said:
“They’re brilliant in so many areas, they ask difficult questions that other people might be frightened to ask, they’re great on member issues, whether it’s changing benefits or a death-in-service case or something like that. Every board I chair is enriched by having members on it and it would be a very sad day if we sat there with just professionals running the scheme in a very arm’s-length way.”
The AMNT’s 700 members are trustees of about 500 pension schemes with collective assets worth approximately £700 billion. It stated:
“We believe that member representation is crucial in the governance of Master Trusts. It will give greater assurance that these trusts operate, and are seen to operate, in the members’ interests and that the scheme members can have confidence in them. The importance of giving members representation on the trustee board has been borne out by research by The Pensions Regulator and Share Action, which demonstrate that diversity is a key benefit of the trustee model. This view is widely supported in the pensions industry.”
In the DB world, as long as a scheme was well governed and well administered, the member would end up with a reasonable replacement ratio. In the DC world, however, a member’s outcome depends on a host of factors that are beyond members’ control. Most members do not have a say in which scheme they are enrolled into, and even if they believe a scheme is not the best possible fit for them, they are unlikely to be able to transfer without losing their employer contributions. A worrying feature of the UK is that people who bear the risk are not freely able to exercise choice.
Better member representation could help to reassure members that they are enrolled in schemes that are well governed by boards that have their best interests at heart. That would also help solve the thorny issue of getting people to save more. The figures for auto-enrolment show low levels of contributions, and we need members to feel willing to increase their contributions.
Member representation may face some resistance. For a master trust with 20,000 clients and 900,000 members, running an election could be challenging. Some master trusts, however, have had success with elections. The Pensions Trust, which started life as a DB master trust but has now expanded into DC, has a board made up of 50% member-nominated trustees and 50% employer-nominated trustees. Those representatives are elected from the pool of companies that use the trust. The AMNT believes that employer support is necessary to enable member trustees to fulfil their roles with appropriate time off. There are clear issues with governance in both trust-based and contract-based DC workplace pensions. In the past the Office of Fair Trading has highlighted a lack of member engagement, along with higher charges and a lack of review, as the main challenges for the DC schemes. As auto-enrolment is extended to smaller employers, the need to address those challenges is becoming more pressing.
We need a clear route into better member representation. Most in the sector agree in principle that it can only be beneficial to the DC landscape. The Bill has nothing on a mandatory requirement for MNTs, but seems like a logical place in which to include them. To place an emphasis on member representation and perhaps change some of the barriers to an effective system, therefore, the Government should act now.
Some say that as larger master trusts cater for thousands of employees, the vast majority of them would not be represented on the trustee board. Others say that democracy is too expensive, but the scale of the master trusts should not be a barrier. USS, the universities superannuation scheme, has more than 250,000 members and nearly 400 employers. The plumbers and mechanical services (UK) industry pension scheme has more than 36,000 members and more than 400 employers. RPMI has more than 500,000 members and more than 100 employers. All those have member-nominated directors nominated by representatives of the members and pensioners of the schemes. If schemes on that scale can do it, so can master trusts.
Richard Harrington
I would like to make the point that, in the trustee system that has evolved, trustees have a duty to act in the best interests of all members, as the hon. Gentleman stated. I certainly agree that one of the strengths of the trust-based system for occupational pensions is that there are different sorts of trustees. I have been a trustee of a pension scheme myself, so I accept that argument.
The hon. Gentleman’s mention of Robert Maxwell and that scheme is very relevant to my life now, because many of my constituents in Watford call themselves the Maxwell pensioners. Most of the system of regulation, including this Bill, came about because of that and other examples.
I respectfully remind the hon. Gentleman that in many of the cases that the Pensions Regulator has dealt with, there have been plenty of member trustees, and they have been ignored, not listened to, not felt to be relevant or just bamboozled, so it is not a perfect system anyway. As he knows, the whole reason for the Bill is that master trusts, which are hugely complex, have evolved over a very short period in a very sophisticated way. They are not the same as individual trust-based pension schemes, which is why we need this extra legislation.
Alex Cunningham
I accept the Minister’s explanation that member trustees are being ignored, or that their views are simply being set aside, but I would suggest that is why we need proper procedures in place, whether for master trusts or other pension schemes, to ensure that member trustees are given the proper training and understanding and the time to do their job to the best of their ability, so that they are not ignored.
Richard Harrington
I agree. That relates to a general regulatory issue, as well as the specific ones we are talking about today. I remind the hon. Gentleman that master trusts are subject to scheme administration regulations, which require that schemes used by multiple employers must have three trustees. The majority of those trustees have to be independent of anyone who provides services to the scheme. We are not just saying, “Forget member trustees; they should all be representatives of the scheme.” All trustees, whoever they are, have got the same fiduciary duty to all members. I am sure that the hon. Gentleman is aware of that, but I think that is very relevant in resisting his new clauses. It is very important that all trustees know that, and I believe they do.
Although master trusts are exempt from the existing requirements for member-nominated trustees, they are subject to all other regulatory obligations. As I said, the scheme administration regulations ensure that the majority of trustees are non-affiliated trustees. The authorisation criteria in the Bill subject all trustees to a fit and proper person tests assessed by the regulator. Facts to be considered in that test include how the people running the scheme are connected with other companies or people.
The new clause appears very attractive on the surface, because it appears that it is just saying, “Members are great and can stop all bad things from happening. They need to be represented, and the way to do that is by making sure they are directors or trustees.” I would not want the hon. Gentleman to think that we are against member-nominated trustees, because we are not, or that we think that member-nominated directors are inappropriate in master trust schemes. He mentioned the universities superannuation scheme, which is very complex and sophisticated, and certain things work for it. I have met staff of that scheme. I believe that the Bill will address the points he made.
I hope that hon. Members are sufficiently reassured that we are ensuring that trustees act in the best interests of members. I have explained why the Government are of the view that the new clause is unnecessary, and I respectfully urge the hon. Gentleman to withdraw it.
Alex Cunningham
The Minister appeared to agree in part of his speech that member-nominated trustees are a good idea, even if he feels that in many cases their views have been ignored in the past. He has left me a little confused as to whether he supports member trustees, though certainly not in the context of master trusts. Well, I do, and I referred in my speech to organisations that also support the idea of empowering members and ensuring that they have the time and training to fulfil that role. Therefore, I will not withdraw the new clause and will press it to a vote.
Ian Blackford
The proposed new clause contains a principle that I think we would all like to encourage concerning member engagement. There is the issue of democracy and the fact that these are members’ funds, and I think that we all get that point. The salient point for me is that addressed by other hon. Members: trustees are to act in the best interests of their members. We all recognise the duty and obligations that trustees must have. It is important, whether they are independent or member trustees, that they are aware of their responsibilities.
The key matter, in what is becoming a very complex world, rightly with increasing regulation, for which we understand the reasons, is that trustees can discharge their obligations and duties. Although I would encourage member trustees to be involved, and it is important that they are given adequate training, I would find it difficult to support the compulsion in the proposed new clause that member trustees must make up 50% of the board. That would be the case in an ideal world.
Alex Cunningham
I did not say 50%. That was an example. We would need a situation in which we can have some member trustees.
Ian Blackford
Reference has been made to member trustees making up 50% of the board, which is something I could not support. I can support the general principle that member trustees should be represented, that there should be elections and that they should be able to take the time they need to devote to this and get proper training, but I cannot support at this stage having compulsion as part of that, on the basis of the responsibilities that trustees have to represent all member interests.
Craig Mackinlay
I can understand the laudable aims of the hon. Member for Stockton North, but where such boards have had member participation, the reality has not always been a fantastic success. I had an oblique interest in the Maxwell pensions fiasco because I belonged to a firm of chartered accountants appointed to look into that big mess, so I have some experience of that. I was also a member of the Joint Committee that looked into the BHS pension schemes, which also had member participation. That really did not come out as a great success. There was no issue of fraud, but were those employee members really tough enough to stand up to an overpowering sponsoring employer?
What we have is different from the occupational pension scheme arrangement, for which I think it is good, right and proper for its members to participate. We are considering master trusts, in which thousands of employers may be involved. I am sure that there may be only a few hundred master trusts that would bother to adhere to the new clause’s regulations after they come into place. The National Employment Savings Trust is probably going to be the biggest master trust for some time to come, with possibly millions of employees involved, and I cannot understand how on earth we could have an election process involving millions of people and different employers.
Alex Cunningham
Legal & General, one of the largest insurance companies, manages to do that in order to communicate properly with its members. While I am on my feet, I also make the point that the hon. Gentleman says that having member trustees has not been a fantastic success. Does he therefore believe that the views of members should be excluded? I remind him that in master trusts it is the members who bear all the financial risk—no one else—so why should they not have some control or some say over their funds?
Craig Mackinlay
I do not disagree with what the hon. Gentleman says; ultimately, it is the employees’ funds, and it is important that they should take the greatest interest in them. I think that employee involvement in occupational schemes has generally been worthy and a great success, but I am more concerned about the practicalities of how the form of democracy he advocates could possibly work when there will be millions of employees in a single master trust.
Julian Knight (Solihull) (Con)
With regard to the potential for an administrative nightmare, is it not also true that companies will switch between different master trusts? If the requirement of having elections and so on is put upon them, that will make administration even more difficult, if not impossible.
Craig Mackinlay
I thank my hon. Friend for outlining further the complexities of what the hon. Member for Stockton North is proposing. What we are looking for from master trusts is that they are well run, safe and that they actually perform for the pensioners of the future. With the greatest respect, the administrative costs of what he is proposing could actually outweigh any positive parts that he thinks will come out of it, so I cannot support his new clause.
Ian Blackford
I know that the hon. Member for Stockton North has stated that he is not asking for a majority of trustees to be elected, but that is exactly what new clause 1 calls for—it calls for at least half of the trustees of a scheme to be member trustees. I just wanted to clarify that point. For that reason, I cannot support the new clause.
Question put, That the clause be read a Second time.
Westminster Hall
(7 years, 2 months ago)
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Smart Metering: Electricity and Gas
(7 years, 2 months ago)
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Stephen Metcalfe (South Basildon and East Thurrock) (Con)
I beg to move,
That this House has considered the Sixth Report of the Science and Technology Committee, Evidence Check: Smart metering of electricity and gas, HC 161, and the Government response, HC 846.
It is a pleasure to serve under your chairmanship, Mr Turner. It is good to see some fellow Committee members here for what I am sure will be an interesting debate for us, and hopefully for the Minister and shadow Minister.
By way of background, the Government’s smart metering implementation programme requires energy suppliers to offer smart electricity and gas meters to all homes and small businesses in Great Britain by 2020. The idea behind smart metering is that the meter communicates directly with the supplier using wireless technologies, removing the need for meter readings or estimated bills and allowing price information to be transmitted to the home. Through an in-home display, the customer can see in pounds and pence how much electricity or gas is being used, nearly in real time.
The smart meter roll-out is a major project, with total costs of nearly £11 billion and projected benefits of around £16 billion. Millions of people already have some experience of the roll-out of smart meters, and millions more will be offered one in the next few years. It should be no surprise, then, that the Select Committee on Science and Technology was not the first to look at smart metering. Colleagues on what was then the Select Committee on Energy and Climate Change examined the beginnings of the smart meter roll-out in 2013 and again in 2015, and the Public Accounts Committee held an inquiry in 2014. Their work provided an excellent foundation for the Science and Technology Committee’s scrutiny.
My Committee’s report was published on 24 September 2016. It was the output of a short inquiry concentrated specifically on the evidence behind the smart metering policy, rather than on exploring the roll-out’s progress from a value for money or project management perspective as other Committees had done. The inquiry took place under the direction of my predecessor as Chair, my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood), to whom I am grateful for all her work in guiding the Committee so well before she was promoted to Government. We received the Government’s response at the end of November, shortly after I became Chair.
This debate is timely. A few months after our report, the Government published an updated cost-benefit analysis of the smart meter roll-out that shed further light on the issues explored by the Committee. We were pleased by the publication of that document, as it fulfilled our recommendation that an update to the 2014 figures should be provided. However, the analysis included some concerning figures and information that I am sure will feature prominently in this debate. In my remarks, I will focus on three of the report’s recommendations in particular: first, the need to act with greater urgency to address some of the technical limitations of the early first-generation smart meters; secondly, the need for the Government to be clearer about the national benefits of smart metering, as opposed to those for the individual consumer; thirdly, the need for excellent consumer engagement to realise the benefits of smart metering before, during and after installation.
We learned during our inquiry that the roll-out began in 2013 with a foundation phase of smart meters built to a specification known as SMETS 1, if Members will excuse the ugly acronym. The latest quarterly figures from the Department for Business, Energy and Industrial Strategy show that there are now more than 4 million such meters in homes across Britain. We are now moving towards the mass roll-out phase, which will use meters described as SMETS 2. However, SMETS 2 meters rely on the implementation of a piece of national infrastructure, the Data Communications Company, which has been delayed several times in going live.
During our inquiry, we heard that the early SMETS 1 meters had some unfortunate technical limitations. One relates to interoperability among suppliers: customers who switch their energy supplier after installation run the risk of losing the meters’ smart functionality. Depending which supplier they switch from and to, the meter could revert to being a “dumb”—or, perhaps more kindly, a traditional—meter. Last year, The Daily Telegraph reported that more than 130,000 smart meters were now operating in dumb mode as a result of switching.
It appears that it might be technically possible to modify the early meters to work with the national communications infrastructure—the phrase is “adopt them into DCC”—to ensure that smart functionality is retained when the customer switches supplier. The DCC has been commissioned to undertake a feasibility project to assess the options, but at present, the Government merely have an ambition to sort it all out by 2020. The problem is that the scale of the task of adopting the early meters into the DCC is growing by the day.
As the Minister will know, the DCC finally went live in November, but the delays mean that suppliers will still be installing SMETS 1 meters for some time to come while the DCC undergoes testing. The latest cost-benefit analysis suggests that 8 million SMETS 1 meters will be installed in total during the roll-out, far more than the 5.4 million estimated during our inquiry and double the 4 million installed so far. In fact, the DCC estimates that there could be more than 10 million SMETS 1 meters, affecting more than 6 million households. From a consumer point of view, that means that 6 million households, or around one in five, will effectively have to choose between smart and switch. If they switch supplier to get a better deal, they risk losing smart functionality, but if they stay with a bad tariff, they get a better idea of what their bills will be and are more able to take action to reduce them.
I am sure that hon. Members will agree that it is a difficult choice. Those who wait for SMETS 2 can have it all, but until the problem is solved, those with SMETS 1 meters will be forced to choose. The most extreme scenario is the early adopter who received a meter in 2013 but must put up with the situation until 2020, or perhaps even longer if the Government’s ambition is not met. I am sure that we would all agree that seven years of waiting for the full benefits of smart is a long time. I would not blame someone in that situation for being somewhat unimpressed with the roll-out.
Our report recommended timely action, not least because the problem was known at the very start of the programme. The Government’s response to us was essentially that it is a work in progress, but we know that the scale of the problem has grown. In his remarks at the end of this debate, will the Minister address the need for greater urgency to prevent a poor experience for up to 6 million households? Moreover, will he consider setting a hard deadline by which suppliers must take necessary steps for their SMETS 1 meters to work with the DCC system?
The Government also told us that they had put in place protection
“to ensure consumers are appropriately informed that they may lose smart services”.
Effectively, it is a condition of suppliers’ licences that they provide that information at the point of installation, and when the supplier gains a customer through switching. However, in a Citizens Advice survey last year, just 3% of consumers said that they had received information about the limitations of SMETS 1 before installation and only 13% thought that their meter functionality would be affected if they switched. Is the Minister confident that customers are receiving information about the limitations of SMETS 1 and that they understand that information?
The second theme that I would like to explore is the need to better communicate the national benefits of smart metering. Put simply, one of the advantages of the communications link between the supplier and the meter is the scope for offering time-of-use tariffs. Some hon. Members may be familiar with the idea of economy 7 meters, which have a day rate and a night rate. Smart metering enables a concept that is broadly similar but much more flexible. Broadly speaking, if suppliers can incentivise customers to run their dishwashers while the sun is shining or their washing machines when the wind is blowing, they can take advantage of renewables without the network cost of having to store the electricity until it is needed. As a result, they may be able to avoid having to build a new fossil fuel plant. As we know, there is a problem with peak demand; if we can smooth out electricity use and lower the peak, we will not need quite so much fossil fuel capacity in the energy network to keep the lights on.
There is also an element of future-proofing. In coming years, we may all be driving electric vehicles. The first thing someone will do after coming home from work will be to begin charging the car so that it is ready for the morning commute the next day, which could mean a huge spike in demand in the early evening. Smart meters could pave the way for smart charging—charging in the sense of replenishing the battery—to balance the total demand on the network, and hence the price, against when cars need to be charged. They may not need to be charged straight away to get to 100% capacity by 8 o’clock the following morning. Optimising when they are charged may mean being able to avoid having to fire up gas plants to deal with the evening surge in demand.
That is my very general description, with no numbers attached, of some of the national benefits of the smart metering project. The Committee concluded that, without a proper description,
“there is a risk that the project will become viewed solely as an inefficient way of helping consumers to make small savings on their energy bills.”
When the Committee published its report, the estimated saving for the average dual fuel bill through smart metering or through the behaviour change that it prompts was £26 per year by 2020—about 50p per week. That is the national figure, although I accept that for some people the saving may be considerably greater because they have used the installation of a smart meter to change their own habits at home. The latest assessment downgrades that benefit to only £11 per year by 2020. Surely that is a harder sell to a consumer if the Government cannot explain why smart metering is good for the country too and why it is a valuable investment for the future.
The Committee was clear that the national benefits of smart metering need to be communicated
“alongside emphasising savings for individual customers.”
Unfortunately, the Government dismissed that recommendation on the basis that successful smart metering projects in other countries
“have messages focussed on benefits that are immediately relevant to consumers and not complicated by references to longer-term benefits.”
Will the Minister confirm whether that is still the Government’s view?
We asked the Government to provide us with more information on the national benefits. Disappointingly, that information took the form of a list of three items, which were,
“reduced need for new generation capacity to be built…more efficient use of existing generation assets… and…avoided investment in transmission and distribution networks.”
I think we would all agree that there is a distinct lack of specifics there. Perhaps we are wrong and the national benefits are not of any significance, but if so, the analysis needs a rethink.
If hon. Members had time last week, which I suspect they did not, they may have watched an ITV documentary on smart meters, which concluded that
“the only ones who are sure to benefit are the power companies themselves—and to millions of hard-pressed bill payers, that will sound all too familiar.”
Is it any wonder that reporters are focusing on the tensions between benefits to the individual and to the suppliers, when there appears to have been little attempt to communicate the much wider national benefits of smart metering? If the project is considered only in such simple terms, the Government may have millions of annoyed consumers on their hands. I ask the Minister to address in his remarks the need to explain the national benefit as well as the saving to individual households of £11 a year.
The final theme that I would like to highlight from the report is the need for consumer engagement in order to realise the benefits of smart metering. Witnesses to our inquiry told us that “fit and forget” was not an appropriate approach, because the smartness lies not in the technology itself but in what can be done with it. We told the Government that there must be no compromise on consumer engagement in the rush to meet the roll-out deadline of 2020. If suppliers skimp on their obligations to get as many meters on the wall as possible, consumers will not have the confidence to make use of the information that they provide. I was encouraged by the Government’s response:
“The Government agrees with this recommendation. Consumer engagement is at the heart of the smart meter roll-out in Great Britain. It is central to ensuring consumers realise the benefits of smart metering…The Government is…carrying out further work to assess the provision of post-installation support for vulnerable and pre-payment consumers and will seek to ensure good practice is shared across industry.”
Will the Minister tell us a little more about how that work is going?
Does the Minister think that there is adequate aftercare for consumers? What form is it taking? After all, a new gadget can be quite intimidating for some people. If that gadget ends up in a drawer, it has all been a waste of effort. Vulnerable and pre-payment customers have the most to gain from smart meters, but they strike me as the ones who are most at risk of being neglected after installation. What does the Minister think is the minimum standard of aftercare that we should look for? Is he confident that it is being delivered at the moment?
To allow other hon. Members plenty of time to speak, I will draw my remarks to a close, although the Committee’s report explores many other interesting themes that I am sure will be touched on in the debate. I will conclude with the words of one of the Committee’s final recommendations, which might provide a helpful segue into many other aspects of the project:
“The Government has invested in trialling smart meters and in studies of their impact. Smart Energy GB is also making use of evidence in understanding consumer behaviour. Despite the growing evidence base underpinning the project, there are a number of areas where the Government clearly believes there are misconceptions and misunderstandings about the utility, impact, and security of smart metering. The Government should reflect on these in the context of the mass rollout and consider how best to communicate with consumers on some of these topics.”
Today’s debate could serve as a helpful way of communicating with Members and the wider public on these topics, given that people may already have concerns about the smart metering programme. I look forward to contributions from other hon. Members and to the Minister’s response, which I am sure will address many of the concerns that have been raised.
Mr Andrew Turner (in the Chair)
Members have about 10 minutes each. I call Patricia Gibson to speak.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Thank you, Mr Turner, for calling me to speak, and I also thank the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) for introducing this debate.
I have always been very supportive of the programme to install smart meters. I always believed that smart meters gave consumers control over, and information about, the energy they are using, in near to real time. Smart meters enable the transmission of readings for the amount of gas or electricity being used in each property, as well as the transmission of information from suppliers to consumers, such as current tariff rates. What could possibly go wrong? An in-home display, or IHD, connects with the smart meter and shows consumers exactly how much their bills will be. The Government’s smart metering implementation programme requires energy suppliers to offer 53 million meters to homes and small businesses in Great Britain by 2020. For all these reasons, I was always very supportive of this initiative.
I had understood that high levels of satisfaction with smart meters had been recorded and that consumers were using the technology to help them to gain some control over their energy consumption. I believed that smart meters supported households as they tried to change their behaviour and conserve energy, which would be good for the environment as well as the purse.
Smart Energy GB found that 82% of smart meter users had taken at least one step to use less energy, that 80% of smart meters were checking their IHD regularly and that 81% of users said they would recommend smart meters to other people.
Smart Energy GB’s campaign seemed to be creating a positive shift in the levels of understanding of smart meters and the propensity to have them installed. Research suggested that the number of people who understood in detail what a smart meter was, what it did and what it could do had risen to 33%, and of those people 71% said that they would be interested in having a smart meter installed if they did not have one already.
However, like the hon. Member for South Basildon and East Thurrock, who spoke before me, I have learned—with some concern—that the Science and Technology Committee has found that the Government do not appear to be clear on the benefits of smart meters. The Government listed 11 different objectives for the project, including saving customers money on energy bills, and yet the amount of money saved by individual consumers is, it seems, expected to be small.
The Committee’s report said that the Committee would continue to monitor the implementation of the smart meter programme. I am very interested in longer-term monitoring of it, because the contradictory pictures that are emerging are confusing for consumers. I have been deeply alarmed by some of the findings of the report, which has pointed out that the cost of providing smart meters, some £10.9 billion, is being borne by consumers through their energy bills—an average of £215 per home, including installation costs.
Concern has also been expressed that the smart meters currently being installed are not of the highest specification in terms of function and data security. Indeed, the Committee took evidence that
“the smart meter network is being installed before its requirements as an Internet-connected energy system have been fully determined”.
In addition, in March last year the Financial Times reported that GCHQ had “intervened” in smart metering security and that the agency had discovered glaring loopholes in meter designs. That poses real questions, and consumers need to be reassured that their data and security are robustly protected in the course of this roll-out.
In Scotland, the priority of the Scottish Government is to press the UK Government to ensure that the programme is delivered to the greatest number of Scottish consumers at the lowest possible cost, while enhancing the benefits to the most vulnerable in our communities and those at risk of fuel poverty.
Concerns have also been addressed that the smart meter roll-out may be hindered by a lack of focus and clarity about its purpose. At the heart of this programme, we need consumer satisfaction and a genuine, hard commitment to tackling fuel poverty. If the documentary referred to by the hon. Member for South Basildon and East Thurrock is correct that the biggest beneficiaries of smart meters are the power companies themselves, that would be most alarming.
Of course we want consumers to be more energy wise, to be more informed and to have greater control over their energy use, and we want to use all the means at our disposal to tackle fuel poverty. However, this report by the Science and Technology Committee on the costs and benefits of smart meters for consumers can only be described as alarming. It is to be hoped that the recommendations of the report are acted upon as soon as possible.
If smart meters genuinely empower consumers, help them to save money and help to tackle fuel poverty, we await longer-term independent analysis, which will help to illustrate these things unequivocally. I hope that analysis is forthcoming. Consumers are waiting; we are all waiting.
Derek Thomas (St Ives) (Con)
I am glad to have the opportunity to talk about smart meters. I remember when we did the inquiry; it was something that I thoroughly enjoyed and learned a great deal from. I thank my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe), who is the Chair of the Science and Technology Committee, for introducing the debate today.
There is no doubt that we should welcome the roll-out of smart meters, and we do welcome it. There is a genuine opportunity to bring an end to physical meter reading. I live down a very long lane and twice a year some very delightful gentleman finds his way down to where I live, to read the meter. I will talk a little about how successful that has been later on.
I am not looking to put people out of jobs, but where technology helps us to get accurate information and manage our energy use, as well as to provide data that can help to manage the nation’s energy supply and planning, it needs to be welcomed, and I think the smart meter roll-out is welcome.
As we have heard, smart meters have clear benefits. Their introduction has the potential to help consumers to reduce their energy consumption, shift their energy demand away from peak periods, which the Chairman of our Committee referred to earlier, and improve customer choice. Choice is a particularly interesting angle; if smart meters allow people to switch suppliers quickly and to access better tariffs, they must be welcome.
All of these measures will help constituents in west Cornwall and on the Isles of Scilly. We already know that 80% of smart meter owners are taking steps to reduce their energy consumption. According to Smart Energy GB, individuals are turning off lights, switching off the heating at certain times and changing the way in which certain household appliances are used, all in a proactive effort to engage with their energy usage.
I was pleased to hear the hon. Member for North Ayrshire and Arran (Patricia Gibson) mention fuel poverty. My concern is that once people on limited budgets realise how much energy different appliances use, they will start to behave in a way that is harmful to them—particularly older people during winter months. So we need to be very careful about how we communicate with people and empower them to get the best out of their homes.
The smart meter roll-out on its own is not really good enough. I know that this is a slightly separate issue, but the Government must consider how we can improve the efficiency of people’s homes, particularly those of vulnerable people. Otherwise, the smart meter roll-out might actually be detrimental for those households.
Dr Sarah Darby of the Environmental Change Institute has said that smart meters are effective, smart systems that bring together every-day human intelligence and technical ingenuity. We are beginning to hear about some problems with the roll-out, and I am glad that we conducted the inquiry last year. We are well into the programme for 2020. As an elected representative in my first Parliament, I recognise that 2020 is coming around very quickly; it keeps me on my toes every weekend. Far more important, however, is the roll-out of the smart meter programme.
Technological advances should always benefit the consumer; it is really important that that is clear, otherwise we will never get proper engagement. However, the delay in the data communications company’s go-live date has put these benefits at risk. Originally, the company was meant to go live in autumn 2015; in reality, it was late in November 2016—more than a year later—and it was even later for the north of England.
That delayed start has meant that the 2020 deadline for the roll-out of smart meters across the country is rushing up on us. It has created an impractical timetable for suppliers. I am particularly concerned about the smaller energy suppliers. We are trying to encourage them into the market, yet we have created quite a challenge for them to supply their customers with smart meters. The delay to stage 1 of the roll-out has placed the availability of SMETS 1 meters under strain, as purchasing was done on the knowledge that their installation would have been completed a year earlier. I have been speaking to the smaller suppliers, and they are talking about the massive difficulty they have in sourcing the meters and the qualified competent engineers to fit them. There is now a need to extend the roll-out period for SMETS 1 meters to meet the delay in the go-live date and to address the functionality concerns about the SMETS 2 meters, which are being used for the mass roll-out of the scheme.
The lack of planning for the launch and the deadline for the roll-out of smart meters has increased costs and uncertainty for suppliers, who still have to meet the legally binding deadline of 2020. We know full well that if costs increase for suppliers, those costs will only ever go to the consumer. I am always referring to people struggling on limited budgets to meet their energy bills. The strict timetable has also meant that there is less time to test and learn the system, which could lead to greater problems down the line and has meant that many promised benefits for consumers cannot be delivered.
Additionally, part of the changes to the DCC functionality has removed the ability of consumers to switch between credit and prepay modes. In the inquiry, I remember talking about those with prepay meters and the kind of revolution that smart meters would bring for them. Prepay customers pay more for their energy, and they pay up front. Some of the people I meet have no choice; they are in properties that belong to other people. When I talk to social landlords, they see the roll-out of smart meters as an opportunity to help their tenants to reduce their bills and manage their finances more easily. What we are finding is that they are not able to switch between credit and prepay modes. The meters cannot deliver in the way we expected. That is a disadvantage for millions of prepay meter customers across the country as they cannot gain access to the market.
Dr Sarah Darby’s definition of smart meters also pointed to the importance of shaping human behaviours. We have already heard about that today. Improving energy use practices and consumer’s energy know-how are essential to ensuring that the full benefits of smart meters are realised. Data from the “Smart energy outlook” show that awareness of smart metering and its benefits rose by only 7% in the past year. That needs to be improved, and that is despite Gaz and Leccy. Gaz and Leccy are enormous role models for my children. We watch their adverts regularly. If you do not know Gaz and Leccy, Mr Turner, you must go home and do the research. It will add value to your life. I share an office with three other MPs, and they have spent considerable time in research, watching Gaz and Leccy. They are fantastic adverts. They are absolutely worth watching, and they help to get across the point that we are not in control of the energy we use. However, if we are seeing only a 7% increase in awareness, despite that brilliant media campaign, we are not getting the information out in the way we should. Unless consumers understand the benefit of smart metering, we are not going to win the battle.
I was a builder before I came here. I used to do barn conversions. For many years, in every barn conversion I completed, a smart meter was installed, but often concerns about how the data would be used meant that it was never used. Instead, it was just left on the side. Because it was not integral to the structure of the building, it would just be unplugged. Customers would tell me, “I don’t want my energy supplier knowing when I am making a cup of tea or when I’m getting out of bed or when I’m doing this or something else.” There is a real need to make customers aware of what data are collected, why they are collected, for whose benefit and how they are used. That is a battle we have not yet fully dealt with or addressed.
Smart metering will improve the temporal resolution of energy data, but it will still not differentiate between heating and other energy demand, nor will it show where in the building energy is used so the need to address energy efficiency in the home remains.
There are some connectivity issues with smart meters, and I want to talk about my experience. We did the inquiry last year. I explained that the gentleman walks or drives down my lane a couple of times a year. On an unusual occasion I met him, and he said, “Do you know, your meter is still showing ‘blank’”—I had an old-fashioned meter—“so I have not been able to take a reading for four years?” I said, “Okay. What can I do about it?” He said, “I don’t want to tell you this, because it will put me out of a job, but you ought to put a smart meter in.” I applied for a smart meter and had one fitted. The energy company had estimated how much energy I had used in the past four years. I disputed it and, with the help of my children, managed to reduce the estimate. The energy company gave me a new bill that was considerably less, although that is a matter for another debate altogether.
The smart meter was fitted. Once a month, I have to go outside and take a photo of my smart meter and send that photo over broadband to the supplier, because I do not have connectivity. My smart meter is not connected to anything, because I do not have mobile phone signal. That will be a challenge if we are going to provide 20 million smart meters—or however many we are supplying; it is quite a lot—by 2020.
I am the local MP and, interestingly, the local BBC presenter recently emailed me to say that he had a smart meter fitted, and he has to do exactly the same thing. It is a bit worrying if we are to win public support for smart meters if the local MP and the local BBC presenter have meters that do not work. Clearly, this is a private meeting, so I am not telling the world that my smart meter does not work, but I do enjoy telling the story.
Graham Stringer (Blackley and Broughton) (Lab)
I have no idea where the hon. Gentleman lives in Cornwall—he is clearly not getting a signal—but it is a much more general problem. At the present time, the smart meters are not functional in tall buildings. Does he consider that to be as big a problem as the one facing those living in the remoter parts of Cornwall?
Derek Thomas
The hon. Gentleman is absolutely right, and I thank him for that intervention. I raised the issue because I am wedded to the idea of getting smart meters. If we get them right, they are a fantastic thing, and we should be ambitious, but the roll-out will be flawed and difficult to recover if we cannot deal with the connectivity issues. The issue is not just for the Minister; it is for the whole of Government to recognise the challenge of giving each of us the best available modern-day technology. I will move on, because I am probably taking too long.
The roll-out of smart meters will undoubtedly help my constituents in west Cornwall and the Isles of Scilly, but there is work to do to convince them of the benefits and how smart meters can help them manage their energy better and in a different way, so that we do not place such a demand on, dare I say it, fossil and nuclear power. In Cornwall, we generate more energy than we use, such that wind turbines are turned off. If we get it right, and we learn to store energy, we will get people moving to electricity and away from oil for heating. We will be able to be much smarter about the generation and use of energy.
Smart meters have an important part to play, but the Government need to look at the challenge of delivering the programme by 2020. There is a real need for an independent review of the safety, cost and deliverability of the roll-out of smart meters. We must consider the pressure that suppliers are under to find and retain qualified engineers, to source the meters that will do the job and to ensure that they are fitted in a way that helps rather than hinders the consumer. The 2020 deadline is too ambitious. The cost and expertise required for installing smart meters has been underestimated, and if we stick to the current deadline, the impact on consumer experience will undoubtedly be negative. That is a shame, because this is a once-in-a-lifetime opportunity to get it right.
To conclude, it is clear that the intentions behind the roll-out of smart meters are good. I am absolutely a fan of the ambition, but we have to accept that the timetable is over-ambitious and potentially harmful to consumers. We therefore must use caution, re-evaluate the timetable and draw on the words of Benjamin Franklin—we must prepare properly, or prepare for smart meters to fail. I did not write that last bit, and I am not sure that it is the best bit of my speech. Thank you very much, Mr Turner.
Graham Stringer (Blackley and Broughton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Turner.
I think there is something in the pathology of Government in this country—civil servants and Ministers —that means that we do not seem to learn from every new IT or technology project that goes wrong; we just wait for the next one to come along and that goes wrong. I think it was as long ago as 2000 that the then Minister of State in the Cabinet Office, Sir Ian McCartney, produced a special report, which, from memory, covered 12 IT projects that had gone wrong at horrific cost. Everybody said what a good report it was—which it was—but have Government learned from that? No. One could go through NHS recordkeeping, the Home Office, national insurance record systems, Libra—there are a whole series of IT projects that have put huge costs on the public accounts.
There are some real difficulties with smart meters, and I agree with the hon. Member for North Ayrshire and Arran (Patricia Gibson). We have good reason to be alarmed, however sensible it is to be in support of people having more real-time information about the energy they are consuming. Who could disagree with that as a reasonable objective? But let us look first at the Government’s cost-benefit figures, which the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe), the Chair of the Select Committee on Science and Technology, referred to.
Written evidence to the Committee said that the process the Government had used to get a cost of £12.1 billion and a net benefit of £4 billion was intellectual slosh, when compared to eight other international studies, and asked some fairly fundamental questions. Why, when Texas has 350 pages of regulations to cover its smart meter system, does our system have 7,000 pages? I have not only had the pleasure of taking part in the Science and Technology Committee’s report; I also sat on the Select Committee on Energy and Climate Change with the shadow Minister, my hon. Friend the Member for Southampton, Test (Dr Whitehead). We asked just how many pages there were on the SMETS 2 meters, and it was a huge number of pages. One has to ask why there is no comparison. Why is it that in Italy and Spain the individual cost of meters is about half the price that they are in this country? The hon. Member for North Ayrshire and Arran pointed to one of the reasons. There are 11 objectives and in anything with 11 objectives, things will get lost.
One of the major objectives, however it is stated, is to stabilise the energy network. It can be destabilised because we are using intermittent sources of energy, such as photovoltaics and wind farms. When there is a big change in the wind or sunshine, that can destabilise the network. Smart meters can help to stabilise that. That is one objective. It is a national objective, the costs of which have been put on the individual energy consumer. I do not think that is fair. The German assessment—one of the eight other studies referred to—found that there was really only a benefit of moving to smart meters when individual consumption was more than 6,500 kwh per annum. That means there would only be a benefit for 10% of consumers.
There is a great deal to be worried about, including the background, the assessments and the principles. The incompatibility between the SMETS 1 and SMETS 2 systems, which has also already been referred to, is a real problem that is yet to be solved. An even bigger problem is that when Ministers were asked by the Energy and Climate Change Committee—my hon. Friend the Member for Southampton, Test may well have asked the question—what will keep the costs of the project down, because the Government have no control over that, the answer was “competition”. When British Gas are the near-monopoly supplier of the meters, that is not good enough.
The costs are going up, there is no compatibility between SMETS 1 and SMETS 2 meters, and if someone changes energy supplier, the meter will not work, so all the benefits of knowing the level of consumption disappear. That points to a fundamental flaw in the design. The meters should have been supplied, owned and paid for by the network supply companies, not directly by the electricity suppliers. If competition is what is going to keep price down, but a customer cannot move easily and get the benefit of a smart meter, it simply will not work.
I would almost guarantee without asking that every person in this room has a smartphone—we meet some people without smartphones, but very few indeed. In a common-sense world, a sensible system of trying to get immediate information—I accept it would not work at the moment in the more remote parts of Cornwall and perhaps Scotland—would be for someone to get the information directly to their smartphone and to have the control on their smartphone as well. That would solve the problem of the system not working if they changed supplier and of having to go somewhere to look at the meter.
I was in the British Embassy in Finland nearly 17 years ago, when a representative of Nokia showed me how he could close the curtains in his house and change which electrical appliances were working. Yet we started 10 years later, putting in systems that are less good than that Nokia system was then. We have to answer the question of why the system we are putting in is essentially obsolete, and chunky. It does not seem sensible.
One point that has not yet been made is that of security. We had a private briefing from GCHQ, which was quite reassuring, but we also got contradictory evidence from the Royal Academy of Engineering, which told us:
“The smart meter network is being installed before its requirements as an Internet-connected energy system have been fully determined”,
and that
“the threat of cyber attacks—either to gain information, ‘steal’ electricity or disrupt supply—is real and pressing…Disruption to energy and gas supplies at a massive scale is possible, either from cyber attack or errors in software.”
It went on to say that those are not the only threats to the system, and that it could be threatened by rogue programmers.
I think the idea of having complete knowledge of the energy that one consumes is a desirable objective, but we are doing this in a way that will be not appreciated by the consumer and will probably cost them money. I have one final question for the Minister. There has been a large assessment of this scheme, and I understand that there were four years of freedom of information requests before the document was published. Will the Minister put it into the House of Commons Library? If he will not, will he explain why?
Carol Monaghan (Glasgow North West) (SNP)
It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) for securing this debate. I have learned this afternoon that there are two things I need to see: first, the ITV documentary, if I can get it on catch up; and, secondly, Gaz and Leccy, which I have not seen, but then again I do not watch television—that is my excuse and I will stick to it. It is interesting that the documentary said that energy companies have so far been the biggest beneficiaries of smart meters. That fact was reflected in the comments of several hon. Members.
Smart meters were billed as transformational—they were going to revolutionise the way we use and monitor energy—but, a number of years into the smart meter roll-out, it seems that the benefits to consumers are limited and amount to a few pounds a year. The cost of the roll-out—£10.9 billion, or £215 per household—certainly seems far greater than any of the benefits. The hon. Member for Blackley and Broughton (Graham Stringer) talked about the different price in parts of Europe where similar schemes have been rolled out at a much lower cost. We need to look at that.
There are great benefits to using smart meters. Up-to-date billing allows consumers to spread the cost of their energy use, which can be very important in tackling fuel poverty, and the real-time usage information allows consumers to monitor what is going on. One of the things we do with our smart meter at home—these are the great games that we play as we do not have a television—is to see how we can reduce the house’s energy consumption by going round switching things off and seeing what difference it makes. It is incredible to see the difference that switching on a kettle can make. Things such as that can make consumers think more carefully about how they use energy, so it does have benefits. Meter data can be used to smooth demand on the grid, as the hon. Member for South Basildon and East Thurrock spoke about in detail.
There are lots of challenges to the roll-out. The fact that the mobile phone network is being used to relay the information to the energy companies is problematic in some areas, and completely restrictive to the point of not working, as we have heard, in others. We know that that is a problem in rural areas—the hon. Member for St Ives (Derek Thomas) said that he has to take a photograph and send it to the energy company. The roll-out will obviously be more challenging in rural areas—I am thinking about the highlands and islands of Scotland in particular. It is easy to install a lot of meters in an area of high population density, but it is more difficult when people are scattered widely across an area.
The hon. Member for Blackley and Broughton mentioned flats and offices. That is an ongoing issue, which has to be looked at far more seriously than it is at the moment. The lack of qualified installers means it will be a challenge to reach the 2020 target, which the hon. Member for St Ives spoke about. I visited Scottish Gas’s training centre in Hamilton near Glasgow a few months ago. I saw smart meter installers being trained, and I looked at the equipment they use. Scottish Gas has lots of apprentices, and they are being trained not only in installation but in customer service and engagement. I am not sure every consumer gets service as good as those installers are being trained to provide.
A number of hon. Members mentioned the issue of data. Obviously, data can be used by energy companies to monitor consumption, but in our inquiry the Science and Technology Committee looked at the issue of who, other than the energy companies, is able to access the data. We asked whether, for example, somebody would be able to see that a person’s energy consumption had dropped, and therefore infer that they were not at home or on holiday. My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) raised the issue of GCHQ’s intervention in smart meter technology.
We know that certain demographics are more reluctant to engage with technology—I am thinking of elderly people in particular. Some of these meters are extremely user-friendly, but that is not always the case. The hon. Member for South Basildon and East Thurrock talked in great detail about the difficulties with SMETS 1 meters—first-generation meters. The problem is not just the incompatibility of those meters. There is also the issue that some of the new meters being installed are of a far lower standard than others. There is great variety in the meters that are being installed. The ones that I saw at Scottish Gas were all-singing, all-dancing, and could probably make a cup of tea as well, but the meter I have got is far less interactive. There is a real danger—we have seen this happen—that after a short time people toss the meter, or at least the display unit, in a drawer or a cupboard somewhere.
Dr Tania Mathias (Twickenham) (Con)
I agree with all the hon. Lady’s points. I do not think this issue was covered in our Committee’s report, but is she concerned that the cost of a second meter falls on the customer? The report shows that there is not enough advantage for the customer, compared with the energy companies.
Carol Monaghan
Absolutely. As I said at the start of my speech, the energy companies are the biggest beneficiaries of the smart metering programme. If a customer has to pay another £250 for a second meter because they have changed suppliers, it makes changing too costly. The hon. Member for Blackley and Broughton talked about the use of smartphones as a display, instead of using the units. Perhaps that is something for the future.
Fuel poverty was mentioned by a number of speakers, including my hon. Friend the Member for North Ayrshire and Arran and the hon. Member for St Ives. The hon. Gentleman talked about vulnerable consumers seeing the amount of energy they were using and possibly being unwilling to heat their homes. That is a danger, but the biggest danger in that case is possibly the cost of energy and fuel poverty, rather than the meter.
To finish, I have a few questions for the Minister. First, what support will there be for people who have first-generation meters that could be obsolete even before the 2020 roll-out? Secondly, what will the Government do to increase consumer engagement, to make people more energy savvy and allow them to see how best to use their meter? Thirdly, will the Minister reassure all of us that the 2020 target for smart meter roll-out must not be met at the expense of the consumer?
Dr Alan Whitehead (Southampton, Test) (Lab)
I congratulate the Science and Technology Committee on its excellent report, which has been the subject of our discussions this afternoon. I also congratulate the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) on his success in obtaining the debate and on his presentation of the Committee’s concerns, which started an exceptionally well-informed debate about smart meters and their roll-out. I add a caveat, however: the problem is that the more we are informed about the subject, the more questions arise about what has happened, what will happen and what is going on with smart meter roll-out.
A number of those questions arise from what the Select Committee characterised as the multiplicity of aims set out by the Government for smart meter roll-out, and from the dissonance between what are presented as the benefits of the roll-out and what the various benefits actually are. Across this Chamber, I think we would say that those benefits from smart meters are real and considerable over a period time, but they are not necessarily cast as much for the public’s benefit as they are presented.
We do not need to look at a television documentary to tell us where and how the benefits fall, because the Select Committee report provides a helpful breakdown, derived from the 2014 impact assessment of the smart meter balance of benefits. The report sets out, perhaps more widely than in some of our discussion, what range of benefits occurs to what section of the industry and to consumers as a result of the smart meter roll-out.
For example, the Select Committee report sets out the estimated total benefits of smart meters, once they have been installed completely: more than £5 billion accrues to consumers from energy saving and micro- generation; but supplier benefits—the big six energy companies and others—come in at £8 billion, arising from avoided site visits, fewer inquiries and other such things related to the management of energy supply. The benefits also spray out to the rest of the energy industry: network benefits from reduced losses, reduced outage notification calls, fault fixing and so on come in at an estimated £1 billion; and generation benefits from avoided investment in generation from peak shifting through time-of-use arrangements and so on are getting on for another £1 billion.
That picture of the estimated benefits—based on Government figures—clearly shows that the consumer benefit is a fraction of the overall figure. The entire cost of the smart meter roll-out, however, will clearly be borne by that first group I mentioned, the consumers. I worry a little that that continues to be obfuscated in any presentation of what is happening with smart meters.
For example, the 2016 impact assessment—which by the way considerably downgrades the total benefits available and substantially increases the amount for the costs engaged in the system, in particular for DCC—insists on stating:
“Energy suppliers will be required to fund the capital costs of smart meters and IHDs. They will also pay for the installation, operation and maintenance of this equipment plus the communications hub (which links the smart meters to the supplier via the DCC).”
I imagine that that paragraph looks okay from the Government point of view, because it emphasises that the Government are not paying. At the other end, however, consumers are.
Consumers will probably pay somewhere between £130 and £200 on their bills to recover the costs of the installation of a smart meter on their property. Just this week two of the big six companies announced sky-high increases in their bills. They stated that the increase is as a result of the price surge in rising wholesale energy prices and—admitting this, I think, for the first time—the Government’s smart meter policy. They specifically state that of the 10% increase, a substantial element is because of the smart meter policy.
Among other things I would like to hear from the Minister this afternoon—it would save me some time, because I sent him a written question on this precise issue, so perhaps we will short-circuit the reply process—is, what are energy companies doing about their recovery of money from smart meters? If what is being said about the recent price rises is an accurate depiction of where the increases come from, at the very least energy companies are seeking to recover the cost of smart meters up-front in tariffs, rather than spreading it over a longer period. If that is the case, the £100 increase on the fuel bill as a result of price increases by the two companies can be depicted as a recovery of between £30 and £40 of smart meter costs in that price alone, which looks like a substantially greater amount of recovery than should have been the case given the spread out nature of the installation of smart meters and what is meant to be the recovery of costs over a period of time.
Has the Minister had any discussions with the energy companies about their policy for the recovery of the cost of smart meter introduction? How will they do that and what will be the impact on bills, bearing in mind that we know that consumers will be paying for it?
I have a great deal of sympathy with the point that my hon. Friend the Member for Blackley and Broughton (Graham Stringer) made that it does not seem right for consumers to bear the whole cost of the introduction and roll-out of smart meters in the way that has been described, particularly given that the benefits are spread across the industry.
The other point that worries me on the basis of better information is the progress of smart meter roll-out. The Select Committee drew attention to that issue, but it is also apparent from the most recent impact assessment, which came out in late 2016, and the announcement at the end of 2016, which the Chair of the Select Committee pointed out, that DCC had finally gone live-ish at the end of November. I make two points about the significance of DCC going live. First, it announced that it had gone live on precisely the last day before it would have started paying penalties for not going live. It announced that it was going live in only two out of the three areas that it operated in, and that it would go live in the third area a month later.
Secondly, the going-live document contained pages and pages of “workarounds”—in English, that means “things we haven’t resolved yet”—and those appear still to be substantially outstanding. I understand from talking to people who rely on DCC going live to get going with SMETS 2 meters in a coherent way that a good proportion of those workarounds and the way things are presently configured render it difficult reliably to go live on those meters. So, to paraphrase a phrase that we have heard recently, is DCC going live actually DCC going live? Are there still issues with DCC, and particularly SMETS 2 roll-out, that we need to look at?
Finally, one of the consequences of roll-out not having started very quickly and SMETS 1 meters having been rolled out that may well be obsolete and need to be replaced in the second phase of roll-out is that in the 2016 impact assessment, there is a curve for roll-out—not just the roll-out itself but the speed of the roll-out—with a gradient that bears no resemblance to the gradient of the curve in the 2014 impact assessment. Contrary to previous suggestions that about a million and a bit meters per year would be installed between 2017-18 and 2018-19 before the finishing date of 2020, it is now suggested that 2.5 million meters should be installed per year. The industry says that it will be impossible to do that over that period.
All that adds up to the suggestion that the hon. Member for St Ives (Derek Thomas) made that it may be time for a review of what is going on, so that we are clear that we can achieve the roll-out on time and it will have the expected benefits for customers, on the basis of a fair distribution of costs and benefits.
Mr Andrew Turner (in the Chair)
I call the Minister, who has until 2.58 pm.
The Minister for Climate Change and Industry (Mr Nick Hurd)
It is a great pleasure to serve under your chairmanship, Mr Turner. I hope that you have got something out of the debate. At the very least, we have had an introduction to Gaz and Leccy, courtesy of my hon. Friend the Member for St Ives (Derek Thomas).
I congratulate the Chairman of the Science and Technology Committee, my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe), his Committee and its previous Chairman for an extremely useful report and debate. He described our commitment to ensure that every household and small business is offered a smart meter by the end of 2020 as a “major project”. I think he rather underestimates it, and we need to bear that in mind.
It is absolutely right and a central part of a functional democracy that Select Committees and Opposition parties probe, prod, ask tough questions and even, in our view, tip over the line into spreading alarm. That is how we operate, and it is entirely right, particularly when we are faced with a project on this scale, not least as the past is littered with good intention and bad execution, as the hon. Member for Blackley and Broughton (Graham Stringer) pointed out. I therefore entirely welcome the challenge that we have heard during the debate, but I urge hon. Members not to lose sight of the context.
We are talking about an upgrade of a significant part of our infrastructure—a 100-year-old technology that means that far too many people receive bills on which their consumption is estimated. We do not tolerate that in the supermarket, so why on earth, in 2017, should we tolerate it at home? Our energy system is absolutely functional to a smart and prosperous economy, so why should people continue to be dependent on a technology that is so out of date? That is the context: it is about upgrading out-of-date infrastructure as part of a bigger transformation and transition process in our energy system.
I think there is cross-party agreement about the opportunity and need to move to a smart system that is more flexible and ultimately cheaper, and which our constituents feel they have more control over. I do not think there is any real resistance to the direction of travel, but the debate sits in that important context. Hon. Members have posed tough questions and challenges, which I will do my best to respond to, but those who know anything about system change and consumer behaviour change should recognise that some of the momentum is genuinely encouraging, and we must not lose sight of that. Almost 5 million customers now have smart meters, and the economic analysis continues to suggest that they will have a net benefit of £5.7 billion. We do not obfuscate about that in any way, and that analysis is regularly updated.
[Robert Flello in the Chair]
The Chairman of the Select Committee talked about the benefit to consumers. I know the point he was trying to make, but we are all aware that consumers are concerned about costs. Evidence from British Gas surveys suggests that consumers with smart meters save 3% or so on their energy bills, which, in my experience, is material, and I think he also knows that those savings will grow as we move towards 2030.
One important piece of information that has been missing from this debate is that consumers like smart meters. Surveys suggest that something like eight out of 10 people with smart meters would recommend them to their friends. There are of course big challenges around implementing them—how could there not be?—but we are driving hard a process that our constituents like and which is an important part of upgrading the country’s infrastructure.
I will do my best to address the issues that have been raised, particularly by the Chairman of the Select Committee, whose points were valid. He quite rightly presses us on the need to tackle the technical limitations, which are real. A conscious decision was taken to proceed with SMETS 1, because first-stage smart meters do deliver some benefits and were an essential part of the process of getting a supplier system moving and helping to prepare for installation. Of course, we do not want our constituents to trade off the opportunity to get a better tariff against the opportunity to retain smart functionality. That is clear.
I assure my hon. Friend the Member for South Basildon and East Thurrock that the DCC has begun the project to enrol the SMETS 1 smart meters from 2018 in order to make them usable by all energy suppliers rather than just the one that initially installed them. This is an issue I feel strongly about and the Government will be watching extremely carefully. There has been a consultation. Nothing I have heard gives me cause for alarm at this stage but it is extremely important that we end up at a destination where the early smart meters are usable by all energy suppliers and constituents do not face trade-offs between tariff and functionality.
My hon. Friend pressed me on national benefits and the need to make a broader case than the simple proposition, “This will save you money.” That is an interesting debate, and it is the same kind of debate and challenge that I am wrestling with, as Minister for Climate Change, in engaging people with climate change. Do we try to frame it in language that talks simply about things that are closer to home and more relevant to our constituents, or do we try to put it into a bigger picture of public good? Most of the advice suggests that when trying to propose something to a consumer or our constituents, it is better to focus on the issues and concerns most directly relevant to them.
I would draw a distinction between, as it were, a marketing proposition to a consumer and our constituents and the need for this place, with its processes of accountability, transparency and scrutiny, to be clear about what we are trying to do and what the wider benefits are. That is entirely valid. My hon. Friend wanted more information about the system benefits, which are a clear part of the net benefits analysis, and I think they are real. They fit into the broader strategic thrust that the Department is now leading on, in moving towards a smarter system. He may be aware that we put out a call for evidence recently and we are receiving information on that. That information about how smart meters fit into a broader strategic thrust to make the system more smart and flexible will be transparent and open to accountability and scrutiny.
My hon. Friend asked about consumer engagement. He is entirely right about that, because ultimately smart meters must be a fantastic consumer experience; otherwise, these things will sit in drawers and get ignored—everything that the contributors to the debate have rightly pointed to. That is why we mandated the setting up of Smart Energy GB and mandated energy suppliers to engage with their consumers before, during and after installation. Smart Energy GB is working with trusted third parties, including Citizens Advice, National Energy Action, the National Housing Federation and Age UK, among many others, to ensure that customers can access advice about the roll-out. I should add that we are conducting our own research into consumers’ experience about the service they get after installation, which is a point he made specifically.
Dr Mathias
I am concerned about the exaggeration of the benefit for customers. In the Select Committee we found that we have one of the smallest variations between peak and standard demand of almost any country in the world. I put it to the Minister that we should be honest with consumers and say, “No, it is the companies and the Government, in policy making, who will benefit from this most.”
Mr Hurd
I am not sure that is entirely right. My hon. Friend is right that the benefits are not restricted entirely to consumers, but that has been made public; we have been open about that. Missing from the debate is an acknowledgment that suppliers face costs associated with installing the meters, which need to be recovered. Yes, there are system benefits, but this is not something that does not benefit our constituents and consumers. We want less cost in the system and a smarter system, and if the meters contribute to that, that is good. I come back to—not estimates, but actuals, if we believe it—the large British Gas survey of their customers, who are achieving 3% savings. That is not immaterial, particularly because, as she well knows—she is close to her constituents’ concerns—we are in a climate where people are concerned about rising energy costs, as we saw the other day.
Dr Mathias
This is not what we investigated, but, as the Minister knows, the direct debit monthly bills for customers with smart meters still use estimates.
Mr Hurd
We need to move on from estimates—that is part of the point. We do not make purchases or pay estimated bills in other areas, so why should we in this area? The whole point is to move to a system where we can pay for what we use. The point I am labouring is that the actual data, not the estimates or predictions, suggest that people are saving money now, and not in an immaterial way. If the projections are right, that will grow.
I want to say something briefly about privacy and reach, which I know from having tackled this in a previous debate is a particular concern for many communities in Scotland. Suppliers must take all reasonable steps to reach all households in Great Britain, islands included. Privacy has been an important issue from the start; in fact, I remember constituents raising it with me. Let me assure the House that a robust privacy framework is in place. The central principle of the framework is that consumers have control over who can access their consumption data and only authorised parties can access consumption data through the Data Communications Company.
I hope that I have addressed some of the principal concerns. Let me address a point made by my hon. Friend the Member for St Ives and others, questioning the ambition and pace. We hear that point, not least from suppliers, and we tend to hear it from those suppliers who are performing less well than others. I think the House is savvy enough to know that some of the motives behind such questioning and challenge may be mixed. Our position is that we recognise that the situation is challenging, but we are driving system change and it needs to be driven hard. We review the situation and will continue to do so and to listen.
I do not see any argument at this stage that the Government should send a signal of weakening ambition. Far from it. Actually, given the prizes attached to this, if we want to get it right—a lot is work in progress in tackling some of the thorny, difficult issues that underlie it—it is not right to send any signal of slipping ambition. For that reason, I come back to my main point, Mr Flello —it is good to see you in the Chair. This is not a trivial issue; it is a fundamental piece in the broader picture of how we upgrade our critical energy infrastructure to deliver a better system for our constituents.
Stephen Metcalfe
Welcome to the Chair, Mr Flello. I thank the Minister for his words and for some of his assurances. Forgive me if I failed to recognise the scale of the challenge. I do not; I get that it is a huge undertaking. However, he will agree that the role of the Science and Technology Committee is to provide challenge where possible. We all recognise that there are huge potential benefits to be found through smart metering. We want those benefits to be available as quickly as possible and for them to be rolled out in a way that we can all understand.
We heard praise and concern in all the contributions. I have a long list of people, which I will not have time to go through, but they covered issues around fuel poverty and who actually gains: the consumer or the supplier? The one issue I had not imagined would come up this afternoon was using a smart meter as a replacement for a television, running around the house, seeing what to switch off. However, from my experience, I know when someone has left their straighteners or a television on in the house, because the meter goes into the red, and we do benefit from that.
We all want this programme to work, and with enough effort I am sure we will get it to work. We will continue to keep an eye on it, and I am sure that the Minister will also—
Robert Flello (in the Chair)
Order.
Motion lapsed (Standing Order No. 10(6)).
State Pension: Working-class Women
(7 years, 2 months ago)
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Ian Blackford (Ross, Skye and Lochaber) (SNP)
The hon. Lady is giving a graphic account of the difficulties that Mrs Tenniswood and many other women have faced. Mrs Tenniswood has paid national insurance contributions for 42 years. Is it not the case that somebody in her situation was doing that under the impression that that was a contract with the Government—an entitlement to a pension? The hon. Lady has described how Mrs Tenniswood has had to write and ask for her pension statement, but the Government should have communicated with Mrs Tenniswood. That failure of communication has not allowed people the time to properly prepare, which is the real damage caused by the changes.
Chi Onwurah
The hon. Gentleman is quite right—there is a sense of a broken contract between the state and hard-working citizens. The failure to give adequate notice means that the changes could not have been planned for. The consequences of many life decisions that WASPI women have taken are now that they face many years of reduced income that they could not have anticipated.
Mrs Tenniswood’s experience is far from unique. One woman told me that she has a neck injury and spondylitis —two debilitating diseases that would exclude her from many jobs. She said:
“I do not want to be forced to work until I drop.”
Why should she be? Another woman told me that she had recently been diagnosed with osteophytic lipping in her hips. She said:
“I am not so mobile as I once was. I cannot possibly carry on getting in and out of a car with the chemist’s deliveries—”
that is her job—
“30 to 50 times a day.”
Nic Dakin (Scunthorpe) (Lab)
I congratulate my hon. Friend on securing this debate. Constituents of mine have been in exactly the same position as Mrs Tenniswood, so her case is not exceptional, but unfortunately very much the norm. These women have paid in year after year and then, when they come to take back something that they thought they would receive, it is not there. Not only that, but they cannot get other entitlements that are linked to the age of retirement, so it makes things very difficult for them. Sometimes, if they fall on hard times, the Department for Work and Pensions deals with them in a way that is demeaning, which also does not help.
Chi Onwurah
My hon. Friend is absolutely right. As I said, part of the debate is about dignity in old age. It is also about the contract with the state. In fact, he has anticipated what I was going to say. In the case of Mrs Tenniswood, one bureaucratic letter took away the certainty that she had had for most of her working life in a very hard trade. The belief that the state would provide her with a pension in her old age—one she had earned—was torn to shreds.
Because Mrs Tenniswood is working class, her life expectancy is lower. In Newcastle, the gap in average life expectancy between inner-city Byker and more affluent South Gosforth is 12.6 years, and the gap is rising under this Government. This pattern is repeated across the country. Owing to the health inequalities from which we still suffer, working-class women are on average expected to die seven years earlier than their peers from more affluent backgrounds. When Mrs Tenniswood finally receives her pension, she can expect to have less time to enjoy it than other women of her age, and she is likely to have a worse experience of old age.
A quarter of Newcastle’s neighbourhoods are in the 10% most deprived in the country. In Newcastle, we are more likely to die earlier from cancer, heart disease and strokes. We suffer from the diseases of our industrial legacy, such as asbestosis. Heart attacks are responsible for 1,100 premature deaths in the north-east every year, which is higher than the national average because of the income disparity. Such inequality is replicated in regions across the country. Data from the Office for National Statistics tell us that, compared with women who live in more affluent areas, working-class women will live for 19 years longer in poor health. So they live shorter lives and a higher proportion of their time is spent in poor health before they die. That is also true of working-class men; I recognise that. They also suffer from significant health inequalities, but, as we have heard, they have not had their expectations of retirement overturned without any attempt to ease the transition.
Our pension system, and the wider system of social security of which it is a part, was founded on the principles of reciprocity, justice and fairness. I fail to see anything just, fair or reciprocal in the treatment of the WASPI women by the Department for Work and Pensions. The Government have rejected many opportunities to deliver a fair settlement for WASPI women, and by accelerating the changes they have embedded unfairness. To add insult to injury, they insist on ignoring and trivialising the issue.
Last week the Minister, who is with us today, refused to use the phrase “working-class” in what passed for an answer to my question on the subject, and argued that
“we are all working now.”—[Official Report, 2 February 2017; Vol. 620, c. 1171.]
I take issue with that premise. In Newcastle, unemployment stands at 5.4% of the economically active population, which is almost twice the national average, and that figure is rising year on year. The figures are even bleaker for older adults. Nationally, the employment rate for people aged 50 to 64 is only 70%. Last Thursday—the same day I asked the Minister my question—the DWP published a guide to help employers hire older workers, noting that three out of four retiring men and two thirds of women have not worked for five or more years. So we are not all working now. Perhaps the Minister was not informed that that was a priority for her Department: hardly an example of joined-up Government.
Irrespective of whether the Minister believes that we are all working now, the conditions that we work in are not equal. Perhaps the Minister should consider that not all women were so fortunate as she was, staying in full-time education until the age of 22—[Interruption.]—Twenty-one. The Minister corrects me. And immediately starting work as a researcher for an MEP who happened to be her father. I do not want to make assumptions, so perhaps the Minister will clarify whether she considers the job working for her father, or a subsequent one as chief executive officer of the National Pony Society, to have been manual labour.
One of the women who got in touch with me told me:
“The Conservative Government has never had pocket money, just blank cheques—they have no idea about the real world.”
I will leave it to others to decide whether that is a fair depiction, but it is obvious that the Government have not done enough to help the women. Talk of a Government who work for working people would be laughable were it not such a serious subject.
Whenever such issues are raised, we are told that we live in a country with a social security system that prevents changes such as the change in pension age from leading to hardship. If the Government seriously believe that our social security system—gutted under Tory changes since 2010—is providing adequately for the women, perhaps it is true that
“they have no idea about the real world.”
However, I will give the Minister the opportunity to demonstrate her understanding of reality by asking her: first, does she acknowledge the existence of working-class women? Secondly, does she acknowledge that although many more of us may be working now, working-class women, who often face the challenges of poverty predominantly in manual trades, have specific experiences? Thirdly, does she acknowledge that working-class women were more likely to start working earlier, and to work in jobs that take a higher toll on the body? Fourthly, does she acknowledge that working-class women are more likely to die younger and to suffer more ill health in retirement? Fifthly, does she acknowledge that they are more likely to be more dependent on the state pension, not having benefited from subsidised work pensions? Does she agree that those five factors make it much more likely that they will not benefit from their retirement to the extent that more privileged groups do, and that the state pension changes are therefore more unjust? Will she commit to considering transitional arrangements for WASPI women? Will she commit to working with the Treasury to announce a solution to the dire predicament in which so many women have been left in the forthcoming Budget?
I called this debate on behalf of all women whose lives have been blighted owing to the ill-considered and discriminatory nature of the changes. As I started with the example of a constituent, I would now like to end with the experience of another working-class woman who, to my great regret, did not live long enough to be a constituent of mine: my mother.
My mother was born in the 1920s in the depths of another great depression when there was no national health service. She grew up in Newcastle in great poverty. Of her six siblings, only one survived into adulthood. Five died of the diseases of poverty: diseases that, in the absence of the national health service, destroyed the lives of so many and had consequences much later in life, causing health inequalities that the health service cannot eradicate—certainly not one as underfunded as the NHS is now. I am sure that that childhood poverty influenced her life expectancy. She died before her 70th birthday, but had lived—cheerfully—with ill health and disability for two decades previously.
It is absolutely iniquitous to imagine that my mother would have had perhaps just three or four years of pension —and that in great ill health—because the Government cannot recognise a fundamental injustice, and, indeed, do not even recognise the existence of working-class women. The debate is, however, not about my mother’s experience, or even Mrs Tenniswood’s experience; it is about the experiences of tens of thousands of working-class women whose lives and retirement have been blighted by changes that were ill-advised and poorly implemented, and in which they and their experiences were not considered.
I want to close my remarks with a small selection of quotations from the appeals that I received. One woman said:
“Stress has made me so ill, physically exhausted and mentally struggling to survive”.
Another said:
“Being too disabled to work is humiliating enough without being made to suffer further humiliation at my age. Hopes, dreams and careful plans to enjoy our retirement shattered. Savings all gone, future bleak! No letter, no notice.”
This came from another woman:
“I am at times very depressed as it felt like I had done a prison sentence for 44 years then, just before my release date, it was extended another six years.”
I came into politics to fight for people like those women, but I am not simply fighting on their behalf. I am fighting with them, side by side.
Another WASPI woman said:
“My mother welded fan blades for Ford Dagenham and it was women who all stood shoulder to shoulder that achieved equal pay for women.
Nothing is ever impossible if women are united in their cause.”
I believe that to be the case and I plead with the Minister to heed the voices of the thousands of working-class WASPI women who are crying out for justice.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I thank the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) and congratulate her on bringing the debate forward today. We are again focusing on the effect of the state pension age on working-class women. The motion of course concerns those women who were informed, with little notice, that the pension they expected to receive at 60 had moved further away from them, upsetting their plans for retirement, and perhaps interfering with caring responsibilities, or disrupting plans to spend time with grandchildren or allow sons and daughters to enter or re-enter the workforce. As has been pointed out, those women, whom the motion refers to as working-class, can most easily be identified as women doing demanding physical jobs for low pay. They are jobs requiring good health; perhaps there is an expectation that workers will stand or be on their feet for long hours, or perhaps physical strength is required.
As we have heard quite graphically, many women in their 60s cannot easily do such jobs. When we are in our 60s, like it or not, we are past our physical best. We expect to be able to take our lives a little easier after a lifetime of work—and why should the women in question not expect that, given that their contract with the state was, “Pay in and you will get paid out at 60”? Any change to that has to be planned well in advance. The women were not paid that courtesy or afforded that justice. This is the sixth or seventh debate—I have lost count—on the injustices done to the women affected by the changes. They are angry, because those controlling the levers of power seem not to be listening, because those with the power to put things right are stonewalling them and those speaking up for them, and because they are having to fight, organise, march, demonstrate and agitate to win back what was so wrongfully and cruelly taken from them, in some cases with shockingly—appallingly—little notice.
I believe that the women are right to be angry. I suspect that many of those taking part in the debate are angry on their behalf. Amid all the important and tragic things on the political agenda—all the carry-on about Brexit, the use of EU nationals as bargaining chips, the turning away of child refugees from war-torn countries, and nuclear missiles that do not appear to project in the direction in which they are fired—the women are determined that their voices will not be drowned out. The UK Government appear to believe that if they sit tight, the women will go away. They will not; they have nowhere to go. They need their pensions so that they can live with dignity and some kind of peace of mind. It is not pin money that they seek; it is their rightful pension, which they need to pay their bills, put food on the table and keep a roof over their heads. The Government hope and believe that they will go away. Where should they go—and where can they go, without justice?
Thousands of pounds have been robbed from those women, who must have seemed an easy target for the austerity agenda. If the Government want to equalise pensions, fine. No one here is arguing against that, but it should have been done properly, by which I mean that the Government should have given all the women fair and proper notice. That is it. It is not complicated and it should not be controversial. As it is, women who have worked all their lives, often suffering pay discrimination relative to their male counterparts, are in the appallingly cruel situation of being denied the dignity and financial support that they need and deserve in retirement—the pensions that they contributed to.
If those contracts with the state can be so easily disregarded or altered without proper notice, what does it say about citizens’ relationship with the state? I am sure that if a private pension provider had behaved as the Government are doing now, the pensions ombudsman would have something to say on the matter. It looks as if the only recourse to the women who have been robbed of their rightful pensions is through the courts. It is a disgrace that they have been left with that option in the face of an intractable, stubborn and heartless lack of movement from the Government. I wish all the women well in their fight for justice, and I and my party will stand beside them as long as justice is denied them.
The dispute is not about affordability, as the UK Government often like to pretend. The women contributed to the state, paid their taxes and did all the things that they believed they should as good citizens. If every global organisation, every business and every individual in the UK paid their taxes—instead of which, so many of them do all they can to avoid it—there would be more money to go round. Instead, as too often happens, ordinary citizens at the bottom of the heap are punished, while those who actively avoid contributing to the Treasury appear to be protected. People are alienated from politics. They feel that the system is always stacked against ordinary, hard-working, decent folk who go quietly about their business. There is no starker example of that than the treatment of women born in the 1950s.
The WASPI women will not be quiet. They will continue to raise their voices to cry out against the injustice, and we in the Scottish National party will cry out with them. These women will not allow their quest for justice to be dismissed. Wasps can sting and the Government need to watch out. All that is required is for justice, decency and honesty to prevail, and the argument will end. It is not too late for the Government to do the right thing—giving the women the pensions they are due; no more, no less. Then let us put the whole sorry, awful business behind us, so that they can enjoy their well-deserved retirement, after a lifetime of work.
Alison Thewliss (Glasgow Central) (SNP)
I had not intended to speak this afternoon, Mr Flello, because I expected the debate to be over-subscribed. I am sad that more hon. Members are not here to speak on behalf of working-class women. I have looked into the figures, and I understand that 2,410 women in my constituency are affected by the changes. The figure for the whole city of Glasgow is 23,100 women. That is no small number; it is a huge number, in a city that has had heavy industry and long-standing economic deprivation. Those women have worked damn hard for that money and they deserve the pension they thought they would get. I am hugely disappointed that successive Governments did not do more to notify them. Those who got in touch with me at my surgeries and through my office spoke of their shock that they were not told that they would not have the life they had planned for their expected retirement after working so hard in so many heavy industries for low pay, sometimes with pay discrimination. They were shocked not to be told and to find themselves without the retirement they had expected.
The number of women who have been in touch with me is nowhere near 2,410. We can all do more every day to make sure all the women affected know that we are on their side and fighting for them. I pay tribute to the WASPI campaign in Glasgow, which is doing so much to achieve that. I was proud to go to the demonstration in George Square last year, but there were not 23,000 people there that day. This is the tip of the iceberg. The women are finding out not from the Government, but through the WASPI campaign, social media, their families and friends and their own networks. That is the sad thing. The campaign is great, but it demonstrates how much these women have been let down.
One woman I must mention—or I will be in serious trouble—is my mother-in-law. She has worked all her life and has had the goalposts moved not once but twice, with loss of access to her pension for six years. She had planned and worked hard for her pension and it is hugely disappointing that the Government have left her in this situation.
Ian Blackford
One thing that annoys me is that the Government keep saying that no woman has suffered an increase in their pensionable age of more than 18 months. That is patently not true. As my hon. Friend has just said, some women have seen a six-year increase in their pensionable age. The Government should start telling the truth.
Alison Thewliss
My hon. Friend is absolutely right, and I commend his campaigning on this issue. Women have been cheated and it is entirely unfair. The Government expect many of them to seek work. I met a constituent outside Bridgeton Jobcentre a few weeks ago when campaigning against its closure. She was 62 and she was in absolute pieces because she had been called to the jobcentre. She had moved between employment support allowance and jobseeker’s allowance. She is not fit to work. She had been through a traumatic experience. Her daughter had died. She has poor physical and mental health and she told me about her pension age, which has added insult to injury. She has been through enough in her life. She deserves peace of mind and time to enjoy the retirement she should have.
Instead, at the age of 62, the Government expect that woman to go out and seek work, which, given the condition she is in, is pretty unlikely. Having spoken to her, I cannot see that many employers would consider her a good employee prospect, given her circumstances and the experience she has had in life. What employer will say, “Yes, we will take her on. She may be here for a couple of years, if that, because her health is poor, so she might not be here for long.”? Sadly, she is not a good prospect. She has worked all her life and she is tired. She is done and she deserves the time and peace she thought she would have. She deserves a dignified retirement.
Life expectancy in the east end of Glasgow is significantly lower than in other parts of the country and other parts of Glasgow. On the train from Bridgeton to the west end, there is a huge gap of eight to 10 years in the life expectancy of people on the same train line because the heavy industry and its legacy has meant that some women have suffered ill health all their lives. Some have suffered as a result of the industries their husbands worked in. Women were expected to launder their husband’s clothes and have suffered asbestos-related conditions. That has not been recognised well enough. These women have worked very hard and they deserve a dignified retirement.
Mims Davies (Eastleigh) (Con)
I congratulate the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) on securing this important debate. I, too, have WASPI women in my constituency with poorer health and shorter lives who are worried about their future and have health inequalities or caring issues. The Government have looked at transitional arrangements and want to provide dignity in old age. However, I am slightly concerned that the tone of this debate is writing off women at the age of 62 from having hope and opportunity. I have met some great women in my constituency surgeries who, with help and support, have found opportunities. I am looking for some balance in the argument, much as I have great sympathy with many of my constituents.
Alison Thewliss
The hon. Lady is correct. Some women are able to work, want to work and do work. Some do not want to retire, but want to keep working, and that is great for them. I knew women when I was a councillor for eight years before becoming an MP who want to work, are part of their community and want to contribute. That is fine if they are able to, but not all woman are able to. We must think of them and look after them all the more, because they have given so much during their lives.
Chi Onwurah
The hon. Lady is making an excellent contribution, but my intervention relates to the previous one. I have had two jobs that I have really enjoyed—Member of Parliament and engineer—and I hope to continue working into my seventies. Does the hon. Member for Eastleigh (Mims Davies) agree that my mother’s generation and the WASPI woman generation did not have our opportunities? Most of the Members of Parliament here are women. The previous generation did not have the opportunity to build up the sort of pension fund that we have and they did not have the opportunities for careers that give fulfilment without manual effort late in life. We should recognise that.
Alison Thewliss
The hon. Lady is absolutely correct. Some women have had opportunities stifled throughout their lives. They were not given the chance to go off and have the careers they wanted. My grandmother was forced to leave school. I have her school report and she was one of the brightest in her class, but her family said she had to go out and work and not stay on at school or go on to further education.
That has been the life path for many women. It is what they have done. During their working lives they have not spent as much time as they would have liked with their children, but they saw their retirement as an opportunity to get that back, to look after their grandchildren and to enjoy that experience instead of being forced to go out to work at all hours to try to bring in a wage. The Government should at least acknowledge the impact of that, particularly on families in poorer areas where childcare is not as available or is too expensive. These are women who were hoping to make a contribution to their families, providing childcare so that their children could go out to work and bring in an income.
We need to think about the contribution those women have made to society in the round and the debt we owe them. I urge the Government in the Budget in a few weeks to see what transitional arrangements can be put in place and what can be done to give those women the fair retirement they deserve.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
It is a great pleasure to serve under your chairmanship, Mr Flello. I thank the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) for securing this debate and putting across vividly the impact on women in her constituency. My hon. Friends the Members for North Ayrshire and Arran (Patricia Gibson) and for Glasgow Central (Alison Thewliss) spoke about the human cost of what has happened and the fact that so many women have been denied what is rightfully theirs.
I dearly wish that none of us were here today because the case has been made time after time, and it is time that the Government started to take notice. The phrase, “doing the right thing” has been used, but when reflecting on all that has gone on, not just all our debates but the 245 Members of Parliament who have lodged petitions on behalf of the WASPI women, the Government must respond to the pressures those women have been under.
What we cannot get away from is that the women rightly feel let down and that they have not had adequate communication. The point has been made, and no one disagrees that equalisation should take place, but it must happen fairly. This affects so many women— 2.6 million throughout the UK and 243,900 in my own country of Scotland. Many of those women are working-class and have faced particular pressures. There is an opportunity here today for the Government to admit that a wrong has been done and that effective notice was not given of an increase in pensionable age, and to recognise that the process of increasing pensionable age must be slowed down. It must be slowed down before it is too late.
I want to pick up on the issue of a pension being a right. Frankly, I am sick fed up of hearing the Government say that this is not a right but a benefit. They cannot get away with weasel words, because that is all they are, Minister. All these women, including many of the women sitting here and the women from Newcastle upon Tyne Central, have paid 42 years-worth of national insurance contributions. If that does not give them a right to a pension, I do not know what does. It really is about time that the Government accepted their moral and ethical responsibilities and stopped hiding behind the language that this is not a contractual obligation.
As my hon. Friend the Member for North Ayrshire and Arran said, if what has been done had been done by private pension providers, you can bet your boots that the ombudsman would have been involved. You can bet your boots that those pension providers would have been taken to court, so for once, when you stand up this afternoon—I appreciate that you are not the Pensions Minister and are here in another guise. I apologise for using the word “you”, Mr Flello. I am asking the Minister to recognise that this is not about benefits. It is about women who have paid in, and it is about time that they got their just rewards.
We often hear that the issue is affordability, and the point was made about austerity. The Government cannot run away from the fact that there is a national insurance fund and that fund is sitting, in year 2016-17, with a surplus of more than £30 billion. We have heard about mitigation, and different proposals have been made. We in the SNP have tried to contribute to that by commissioning our own research—the Landman Economics report, which was published last year—and it has been ridiculed and brought into question by the Government.
I have always made it clear that our favoured option, option 2 in the report, which calls for the slowing down of the increase in pensionable age, which would take a further two and a half years, would cost, in the lifetime of this Parliament—I stress “in this Parliament”—an additional £8 billion, but the Government have told us that we are wrong and the figure is £30 billion. The Government should sit down with me and go through our calculations, which are based on the Treasury model. They need to stop traducing the SNP and admit that the £8 billion figure is correct and that they can meet that cost out of the surplus that they have today in the national insurance fund. I say that because the payments into the national insurance fund have come from these women. This is about their entitlement and the fact that in the course of this Parliament, the Government could easily meet that obligation. When will the Government start to listen and actually do the right thing?
Thanks to freedom of information requests, we learnt that the DWP began writing to women born between April 1950 and April 1955 only in April 2009 and did not complete that process until February 2012. It wrote to women to inform them about changes in legislation going back to the Pensions Act 1995, but they had taken 14 years to start the formal notification process. It was 14 years after the legislation had been passed before the Government bothered to write to people. Taking 14 years to begin informing women that a pension that they had paid for was to be deferred is quite something. Can we imagine the outcry if a private pension provider behaved in such a manner? There would be an outcry in this House. Considering that entitlement to a state pension is based on national insurance contributions, the Government have an obligation to act in a fair manner. They have changed the entitlement to something women have paid in for with an expectation of retiring at age 60, and when the goalposts were moved, the Government could not get round to informing the women in a timely manner.
A woman born on 6 April 1953, who under the previous legislation would have retired on 6 April 2013, would have received a letter from the DWP in January 2012 with the bombshell that she would now be retiring on 6 July 2016—three years and three months later than she might have expected, but with only 15 months’ notice. We are talking about 15 months’ written notice that what she thought was a contract the Government had willingly ripped up. That is exactly why the Government have a duty to act: women born in the 1950s have not been fairly treated.
The lawyers Bindmans have published a guide to DWP maladministration in the WASPI women’s case, and let us be in no doubt that it is maladministration that we are talking about in this instance. The paper is a damning indictment of a failure to communicate effectively and directly with the women involved. It refers to the events that led to a change in women’s pensionable age, beginning with a White Paper in December 1993 that stated:
“In developing its proposals for implementing the change the Government has paid particular attention to the need to give people enough time to plan ahead and to phase the change in gradually.”
There is not much there I would not agree with, but when we accept the need for people to plan ahead, we need to write and tell them. The intent was there in the White Paper in 1993, yet it was 2009 before the Government acted.
Then there is the issue of phasing in gradually. I would not define that as increasing women’s pensionable age by three months for each month that now passes. The pensionable age will increase by three months in the month of February and by another three months in March. That is not gradual. It is scandalous that women’s pensionable age is increasing so rapidly. It is not within the spirit of what the Government outlined in their original White Paper.
In October 2002, while giving evidence to a Select Committee, the DWP suggested that the role of the state was
“to provide clear and accurate information about what pensions will provide so that people will understand how much they can expect at retirement before it is too late to do something about it”.
How does the statement
“before it is too late to do something about it”
equate with the 15 months’ notice that women were given? It was far too late, and the DWP must accept that women were not given appropriate notice, and must put in place mitigation. I might add that it was stated that the lead-in time in the original White Paper in 1993 allowed plenty of time for people to adjust their plans, but people can do so only if they are aware of it.
We also had the DWP public policy statement from March 2002, which stated:
“It is widely accepted that the department has a duty to give information or advice to inform the public about any new policies and developments that may affect them and crucially keep them informed on a continuing basis on their rights and responsibilities. It would be unreasonable for the department not to do this.”
I could not agree more. Where, then, were the letters to the women to inform them of the changes? This was 2002. The DWP has to take responsibility for that failure to communicate and, crucially, for the lack of time that women have had to prepare for an increase in their state pension age. Rather than recognising that women deserved to be communicated with directly, the DWP issued leaflets headlined “Equality in State Pension Age”. Can anybody in this Chamber remember those leaflets? No? I did not think so. I do not recall seeing them.
Ian Blackford
It is interesting that a Government Member is actually laughing about this, because that defines what the problem is. There are women who are really struggling, and the Government laugh. You should apologise and you should accept responsibility for this and stop demeaning the women—
Robert Flello (in the Chair)
Order. The word “you” refers to the occupant of the Chair.
Ian Blackford
I apologise, Mr Flello, but you can understand the anger that the women feel. A Member of Parliament on the Government Benches laughing when we are discussing this important issue is beneath contempt, and the Member should actually stand and apologise to the women who have been affected by this, rather than sitting there smugly as he is.
As I mentioned, it is no surprise that women were unaware of the changes because when the DWP commissioned research in 2004 it highlighted that only 2% of respondents mentioned that they had been notified of changes to the state pension age via a leaflet. Perhaps the hon. Member for Rugby (Mark Pawsey) wants to rise and try to defend that—quite frankly, it is indefensible. It is an insult that the Government at the time thought that changes affecting a woman’s retirement age could be dealt with by a leaflet. That is an abrogation of responsibility and each and every Member who refuses to do something is culpable.
We should all receive an annual statement from the DWP on our expected entitlement, just as we do from private pension providers. Why has that not been happening? Do the Government not know where we all live? [Laughter.] It is a fair question. Why were the women not written to? Why have we not had an answer to that question? Why did it take all the years that it did? The case is not defensible—it is shameful—and the way the Government still refuse to accept responsibility is shameful.
The failure to communicate was highlighted by a DWP publication in 2004 called “Public awareness of State Pension age equalisation”, which found that only 43% of all women affected by the increase in state pensionable age were aware of the impact on them. If the Government accept that women were not informed in a timely manner and therefore did not have time to react, why do the Government not accept their responsibilities?
We also know—you couldn’t make this up—that the Government sent out 17.8 million letters to men and women between May 2003 and November 2006 on automatic state pension forecasts but, wait for it, they did not contain any information about the state pension age. That is quite remarkable. Letters were written, but they were just the wrong letters—they did not have the important information. They said, “To find out more about the state pension age for women, please see ‘Pensions for women: your guide’. See page 10 for details on how you can get a copy of this guide.” That is no way to convey information. The Government should have communicated accurate, clear and transparent information. That was another massive failure to communicate.
At some point, rather than hand wringing, the Government have to take responsibility, because 2.6 million WASPI women have been let down. I am going to wind up because I realise that time is pressing. Research in 2011 by the English Longitudinal Study of Ageing found that by 2008 only 43% of women affected by the change were aware of it. Just think about this: over half of women who were expecting a pension at age 60 were going to be denied that. I cannot imagine the shock when they realised that they were not going to get what they thought was rightfully theirs. It is not the women who are at fault; they have paid in, expecting a pension. It is the Government who have let them down and it is the Government who have a moral and ethical responsibility to do something about it.
Robert Flello (in the Chair)
Order. May I gently suggest to hon. Members that, while I appreciate that there has been other business in the Chamber, we are on the wind-ups and Members really ought to be here for the debate rather than coming for the wind-ups? I will allow my hon. Friend a very brief intervention on this one occasion, because I am sure he has been in the Chamber previously up until now, but I remind Members that they really need to be in for the entirety of the debate.
Mr Jim Cunningham
I will be very brief. I apologise, Mr Flello; I was actually over in the Chamber because there were some important debates there as well and I cannot be in two places at once even if I would like to be. This is a timely debate because next month we will have the Budget. If the Chancellor can find billions for high-speed rail and other issues, surely he can find a couple of billion to give these women a decent life.
Ian Blackford
That is a very good point. We can find the money for high-speed rail. We can find, at the drop of a hat, £170 billion or more for Trident renewal. We are even due to debate the renewal of this place. If I were given a choice, I would want to make sure that the WASPI women were compensated and not that £7 billion was spent on reforming this place. That can wait, but the WASPI women need their money and they need it today.
The DWP told the Select Committee on Work and Pensions last year:
“Until 2009, direct communication with people affected by increases in state pension age was very limited.”
The Government must reflect on that and on the fact that women have not been properly informed. The Pensions Minister, in a parliamentary answer to me on 23 November last year, stated:
“The Government has committed not to change the legislation relating to State Pension age for those people who are within 10 years of reaching it. This provides these individuals with the certainty they need to plan for the future. We recognise the importance of ensuring people are aware of any changes to their State Pension age”.
We have put an option to the Government that is affordable and is about doing the right thing. The Government should agree with us. Frankly, I do not want to see any of us back here again. It really is about time that when the Minister rises today, she recognises the wrong that has been done. For the love of God, do something—do the right thing.
Robert Flello (in the Chair)
Order. May I remind the Front-Bench speakers that in 90-minute debates it is customary to make 10-minute speeches? I am being more generous because we are not so pushed for time, but 10 minutes is expected and not what we just had. Thank you.
Carolyn Harris (Swansea East) (Lab)
I thank you, Mr Flello, for your excellent chairmanship—very stern, but firm. I thank my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) for securing this vital debate, which is so essential for securing a dignified retirement for some 2.5 million women. Her speech was factual, relevant and presented the arguments succinctly. I also congratulate the hon. Members who are here from the SNP for their elegant speeches and the contribution they have made today.
The injustices currently being experienced by women born in the 1950s at the hands of the Government are a travesty and it is right that they are discussed here today and at every other given opportunity. We must not allow this Government to turn a blind eye. Today it is especially poignant that the debate focuses on working-class women who are feeling the effects of this injustice so acutely. Many of the women have no savings and are likely to be working in physically demanding jobs. I am of an age that means I need to work a lot longer than I originally intended, but I am very fortunate—I have a clean job that involves a lot of sitting down. When I was in my 30s I was a dinner lady in a special school. That involved lifting children and young people, to allow them to go to the bathroom or have their lunch, and all the other things that have to be done for children with special needs. I could not do that job today; I physically would not be able to do it. There are women today doing heavy jobs, not for the luxuries of life but to live life.
There are those of us on this side of the House who are passionate about helping these women, and indeed there are also some on the Government Benches who lobby for fair play and justice for them. However, our efforts to date have been frustrated by the Government’s reluctance to engage in productive dialogue. At the end of last year, Labour’s suggestion to extend pension credit to those who needed it was turned down by the Secretary of State and his Pensions Minister. That would have extended support to hundreds of thousands of the most vulnerable women.
Our suggestion that the Minister set up a special proactive helpline for the women affected to ensure that they all had access to the social security system, which is claimed to be sufficient to meet their needs, also went unheeded. Perhaps the Minister needs reminding of the hardship that the poorly managed changes that this Government have put in place have caused to more than 2.6 million WASPI women. The Minister argues that the social security system will step in to support women struggling to make ends meet as a result of the changes. May I remind the House that that is the same social security system that this Government have spent seven years savaging, with swingeing cuts to universal credit and employment and support allowance alongside sharpened conditionality measures in a punitive and discredited work assessment system?
In our work to support the WASPI women and WASPI Voice we have heard from many women who have been left in dire straits by the pension age changes but cannot obtain sufficient social security support. I hear every day, as I am sure many Members do, of hardship cases that are beyond belief—women going to food banks, women losing their homes, women being forced to move in with their children because they cannot afford to live in their own homes. One woman whose pension age was moved back and could no longer afford to pay the rent has spiralled into debt and is on the verge of losing her home. Another is struggling to keep her sick husband out of care so that they can hang on to their family home, without the state pension income that she was planning to use to keep them both going in her retirement.
By now, most Members of this House will have heard of similar cases—repeated reminders of the Government’s failure. Thankfully, an army of campaigners are now planning to work with us to keep the pressure on the Government. Those groups stand shoulder to shoulder in the message that this Government have got it wrong and should reconsider. The two main campaigning groups, Women Against State Pension Inequality and WASPI Voice, both agree with equalisation of the state pension age; where they differ from the Government is on the means by which that should be achieved.
Lessons must now be learned from the failure to communicate the changes to state pension timetables to those affected. However, that does not go far enough as a means of redress. Fair transitional arrangements should be put in place to support the most vulnerable. The Opposition have suggested plans, but the Government have dismissed all suggestions of measures for amelioration. One of the WASPI campaign groups has decided to mount a legal action against the Government; its representation is preparing to pursue maladministration complaints against the Department for Work and Pensions. Labour proposals call on the Government to extend pension credit to those who would have been eligible under the 1995 timetable, so that women affected by the chaotic mismanagement of equalisation will be offered some support until they retire.
Chris Elmore (Ogmore) (Lab/Co-op)
I beg your indulgence, Mr Flello; I have been serving in a Bill Committee as the Opposition Whip. On the point about fairness, my hon. Friend will be aware that last week, on the Floor of the House, I asked the Prime Minister about my constituent Dianah Kendall and the impact of the state pension age changes on her life. The Prime Minister’s response was that no woman would wait longer than 18 months, but the reality is that many women will wait five, six or even seven years. That does an utter injustice to what she said on the Floor of the House.
Carolyn Harris
I repeat my previous comments about chaotic mismanagement; it obviously goes to the top.
Our proposals would make hundreds of thousands of WASPI women eligible for up to £156 a week, but we will not stop there. We are developing further proposals to support as many WASPI women as possible. We are considering proactive ways to support the most vulnerable now. The proposals will be financially credible, based on sound evidence and supported by WASPI women.
It was disappointing that the Government did not use the opportunity provided by the autumn statement to do anything to support those women. It was equally disappointing that our amendment to the Pension Schemes Bill, which would have implemented our pension credit proposals immediately, was unsuccessful. My party believes in standing up for the most vulnerable, which is what we are doing today and will do tomorrow, the day after, next week and next year. We will continue to support the WASPI women in this fight. I made a personal promise in the Chamber to raise this issue at every opportunity, and I stand firm in that commitment. My party and I call on this Government to stop burying their heads in the sand and do the right thing by these women. Give the women affected the respect that they deserve: act now and rectify this injustice.
The Parliamentary Under-Secretary of State for Welfare Delivery (Caroline Nokes)
It is a pleasure to serve under your chairmanship, Mr Flello. I congratulate you on having chaired this debate in a fair and exemplary manner, and for allowing those Members who were busy elsewhere in the House this afternoon the opportunity to speak, even if just briefly in an intervention. Important debates have been taking place this afternoon, and important work has been done in Bill Committees.
It is only right that I should take this opportunity to thank the hon. Members for Ross, Skye and Lochaber (Ian Blackford) and for Swansea East (Carolyn Harris) for being here. I know that they have been much occupied with the Under-Secretary of State for Pensions, my hon. Friend the Member for Watford (Richard Harrington) in the Pension Schemes Bill Committee, which explains why I am here instead of him. I thank the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) for opening the debate and hon. Members from all parties—and all parts of the British Isles, with the exception of Northern Ireland—who have contributed. It is most unusual for the hon. Member for Strangford (Jim Shannon) not to be present.
In recent decades, there has been a huge shift in how people spend later life. We are living longer, staying healthier for longer and leading far more active lifestyles, regardless of our age. More and more people are proving that age need not be a barrier to achieving great things. Some of the Olympians whom we sent out to Rio last summer were among the oldest athletes on record. I, for one, celebrate the fact that age increasingly places no bounds on those wishing to achieve new goals, try new things and play an active part in society.
The new state pension was introduced as a key reform to the UK pension system. The Government recognised that the pension system needed to change in response to the demographic and behavioural shifts of recent decades. For most people, we know that work is beneficial. It not only provides an income and a bedrock for saving, giving people greater control over their lives but crucially, the evidence shows that for most people, being in work can be immensely beneficial for both physical and mental health. The social and cultural benefits of remaining in work are sorely under-recognised. This Government’s pensions strategy does not focus only on the benefits to people. We know that the skills, experience and talents that older workers bring to organisations are invaluable. Older workers still have an incredible amount to offer.
It is also true that the living standards of pensioners have risen significantly, but we must remember that not all pensioners are in the same position. More than 1 million pensioners rely solely on the state for their income. That is why we introduced the triple lock in 2011 and have committed to continuing it over this Parliament. As well as guaranteeing increases to the state pension, we have fundamentally reformed it. Under our reforms, people will have a much better idea of what their pension will be, bringing more certainty and clarity where previously there was confusion. That design is integral to the Government’s ambition to provide a better foundation on which people can plan and build for a secure retirement. We want to make life easier and more comfortable for people in retirement.
Ian Blackford
How can people plan and build for retirement with 15 months’ notice of an increase in their retirement age?
Caroline Nokes
The hon. Gentleman will of course know that I am referring to the new state pension. That is exactly why we are introducing it, so that people have more certainty and clarity than previously. As well as being simpler, the new state pension will give more to many of those traditionally less well served in the past. By 2030, around three quarters of new pensioners will get a higher state pension than if the old system had continued. More than 3 million women will get around £550 more each year. It is estimated that women reaching state pension age in 2016-17 will receive more state pension on average over their lifetime than women ever have before. We have also created new pension freedoms that mean that savers have more control over their money and can use it in ways that suit them. In the new pensions marketplace, we are helping people make the right decisions for them through things such as Pension Wise, which provides free, impartial information.
I am pleased that Members from all parties agree that it is right that we have equalised the state pension age for men and women. It is part of the DWP’s wider objective of eliminating gender inequalities in social security provision.
Patricia Gibson
Does the Minister believe that the women whom we are debating were given sufficient notice to make correct and proper plans for their retirement?
Caroline Nokes
If the hon. Lady will give me time, I will come to exactly that point later in my contribution.
It is important that we all recognise that the age at which we receive the state pension must rise. Life expectancy continues to rise, and it is a key priority for this Government to ensure the long-term sustainability of the pension system. For that reason, the Government have introduced regular reviews of the state pension age. The issue is also likely to feature heavily in the Cridland review, which will be published in the coming months.
We recognise that employment prospects for women have changed dramatically since the state pension age was first set in 1940, especially for the women affected by the acceleration of the state pension age. Alongside the age increases under the new state pension, we have made huge progress in opening up employment opportunities for women and older workers. Since the 1970s, women have seen repeated increases in employment rates in later life compared with their male counterparts. The number of older women aged 50 to 64 who were in work in 2016 stood at more than 4 million, which is a record high. Approximately 150,000 more older women are in work than this time last year.
Carolyn Harris
Does the Minister acknowledge that women who are currently in work may be there not because they want to be, but because they have to be?
Caroline Nokes
The hon. Lady makes a valid point, but I would argue that there are also many men, and indeed many younger people, who have to be in work. We want to encourage more people to be in work and to play their part in society. As I said earlier, work is an important part of wellbeing. Work in itself provides emotional, physical and mental wellbeing effects.
The rate of employment for women aged between 60 and 64 is more than 40%—another record high. [Interruption.]
Caroline Nokes
Well, I might if there were not a little private chat going on at the front of the Chamber. Still, I acknowledge that the hon. Lady is no part of that, so I give way.
Chi Onwurah
So far, the Minister’s contribution has not really reflected what this debate is about. I remind her that I asked her five specific questions and that I observed that this is a debate about working-class women. She has yet to use the word “working-class”; I hope she will before she sits down.
Caroline Nokes
I draw the hon. Lady’s attention to the specific title of the debate, which I believe I am covering: “That this House has considered the effect of state pension changes”. I have dealt with the new state pension thoroughly, and I hope that we will all acknowledge that we have indeed had a significant change with the introduction of the new state pension.
Ian Blackford
On a point of order, Mr Flello. I suggest, with regret, that we have not actually discussed the motion in front of us today. Unless the Minister does that in the short time that she has available, when we come to the appropriate point in the debate I will have no option but to move that we have not considered this matter.
Robert Flello (in the Chair)
I am not totally convinced that that was a point of order. Let us see how the debate continues.
Caroline Nokes
I hope you will forgive me, Mr Flello, if I take the opportunity to ask you for some advice. Do I have another 18 minutes or so? I certainly have several pages still to get through.
Robert Flello (in the Chair)
Indeed, although I would like to be able to call the mover of the motion for a minute or so at the end.
Caroline Nokes
Sixteen minutes, then.
In addition, independent research by the Institute for Fiscal Studies has shown that employment rates for women aged 60 and 61 have increased as a direct result of the changes in state pension age.
Ian Blackford
I must respectfully ask the Minister whether she has any idea of the disrespect that she is showing to the WASPI women by refusing to directly address the point that we are discussing. It has been pointed out that women have not been given effective notice. What are the Government going to do about it?
Caroline Nokes
I thank the hon. Gentleman for making another intervention, but he will be aware that I have 15 minutes in which to come to that point, and I have really only just begun.
The Government recognise the particular barriers that women face to remaining in the workplace and we have been quite clear that more action is needed to address them. For instance, we know that women with more children tend to take longer career breaks, which can impact on their retirement income. We also know that giving women the opportunities they need to continue working in later life, whether in a full-time or part-time role, is the best way in which we can help mitigate some of that impact, while of course making provision for those who may be unable to work or may have difficulty working. It is interesting to note that someone who draws on their pension pot at 65 instead of 55 and continues to receive average earnings for those extra years of working could increase their pension pot by half as much again. That is why we plan to do everything we can to change attitudes towards employing older female workers.
On a recent visit to the jobcentre in Eastbourne, I was struck by something that was said to me by a work coach who I met there. It was her view that women aged over 50 and seeking work were the most optimistic of the people she worked with and tried to place into jobs. It was that cohort who were the most open-minded and enthusiastic about trying new roles and learning new skills. My hon. Friend—and, indeed, neighbour—the Member for Eastleigh (Mims Davies), who is no longer in her place, raised absolutely that point. Actually, older women have the most flexibility and, as work coaches have said to me, the most open-minded attitude to trying new roles and being prepared to take on new challenges regardless of age. That is immensely encouraging. It tells me that what the Government are doing through the fuller working lives strategy, which the hon. Member for Newcastle upon Tyne Central mentioned earlier and which was published last week, is the right course of action.
I have seen at first hand the value that offering older workers a new opportunity can have; it can truly transform their lives. I am proud of the commitment that I have witnessed from work coaches up and down the country. The hon. Lady might also recognise that the claimant count in Newcastle, which she referenced earlier, is down by 28% since 2010. The female employment rate in the UK now stands at 69.9%—a near-record high.
Ian Blackford
On a point of order, Mr Flello. May I ask for your guidance on whether what we are hearing from the Government is indeed in order, given the subject of this debate?
Robert Flello (in the Chair)
Again, I do not think that that is a point of order; it is a matter for the debate.
Caroline Nokes
Hon. Members raised the increase in life expectancy. It has been experienced by all over the last few years, but it differs by occupation type—the hon. Member for Newcastle upon Tyne Central was certainly right to point that out. Women aged 65 who worked in higher managerial and professional occupations are expected to live more than three years longer than those in routine or manual roles; for men, that difference is greater, at four years. However, women in manual occupations have a similar life expectancy at 65 to men in professional occupations. Life expectancy also varies across regions—the hon. Lady was correct to point that out—but it would be wholly impractical to vary state pension age across the country.
The fuller working lives strategy aims to increase the retention, retraining and recruitment of older workers by bringing about a change in the perceptions and attitudes of employers and by challenging views of working in later life and retirement among individuals. As part of the strategy, the Government are taking account of the fact that people change jobs over their lifetimes. It is now extremely unusual for people to stay in one career throughout their entire working life.
Patricia Gibson
Does the Minister have anything to say to the women who are watching today, in the Gallery or at home, about the lack of notice that they were given and about how that has upset their retirement plans and put them in dire financial straits?
Caroline Nokes
I reassure that the hon. Lady that I will come to that point.
The fuller working lives strategy adopts a very new approach: it is led by employers, who rightly see themselves as the ones who understand the business case and can drive change. Specifically to support older claimants, the Department for Work and Pensions has introduced older claimant champions from April 2015 across each of its seven Jobcentre Plus groups. It plans to roll the initiative out to each of the 34 districts. These champions will work with work coaches and employers to raise the profile of that age group and highlight the benefits of employing older jobseekers. In addition, the Government Equalities Office continues to work with the Women’s Business Council to tackle the outdated assumptions that some employers make about women, particularly mothers.
In “Building our Industrial Strategy”, our Green Paper published last month, the Government set out how we will test ambitious new approaches to encourage lifelong learning to help adults who want to upskill or move around the labour market during their career. However, we recognise that some women may wish to continue to work and are unable to do so, so we continue to spend £90 billion a year on working-age benefits in this country. The welfare system provides a safety net for those of working age, and there are a range of benefits tailored to individual circumstances. The system is designed to deal with the problems, such as unemployment, disability and coping with caring responsibilities, that affect those who are unable to work and are therefore in most need as they approach their state pension age.
Ian Blackford
I suggest to the Minister that she should stop wasting everybody’s time and concede that she is not going to do anything, so that the WASPI women can get on with legal action and take the Government to court.
Caroline Nokes
I am sorry that the hon. Gentleman has become so frustrated. He will be conscious that I could still fill another nine or 10 minutes or so. There are some very important points that I would like to make and I am sure that people will want to hear them. If he continues to chunter—[Interruption.]
Caroline Nokes
Thank you, Mr Flello.
As I was saying, that is why we continue to spend £90 billion a year on working-age benefits to assist those in this country who are unable to work. For those seeking work, people in receipt of working-age benefits can access a range of support from Jobcentre Plus and tailored support from the Work programme.
Specifically, the evidence is clear, and we as a Government are clear, that work is the best route out of poverty. That is why this Government’s approach has been about recognising the value and importance of work, to make work pay and to support people into work, while protecting the most vulnerable in society.
Our reforms are transforming lives. Today’s labour market statistics show that we continue to have a record number of people in work—over 2.7 million more than in 2010. The number of workless households is down by 865,000, and the percentage of households in the social sector where no one works has fallen from 49% to 38%, which is a decrease of nearly 350,000 households.
We have made a real difference for women, with more than 1 million more women in work since 2010 and the highest rate of female employment on record. The gender pay gap is also at its lowest level since records began, and there are now 1.2 million women-led small and medium-sized enterprises, which is more than ever before. We are rightly proud of our record but recognise that there is more to do.
We had to equalise state pension age to eliminate gender inequalities in social security provision—it is the right thing to do—and we had to accelerate this process due to increases in longevity, in order to protect the long-term sustainability of state pension provision in this country.
We know that whenever things change, there have to be dividing lines, and I understand that the changes are most stark for those closest to the line. That is no different in this case. We understand that and the Government listened to the concerns expressed at the time. Therefore, a concession worth more than £1 billion was introduced, despite the fiscal situation, to lessen the impact of the changes on those worst affected. The concession reduced the delay that anyone would experience in claiming their state pension and benefited almost a quarter of a million women.
However, going further than that simply cannot be justified, given that the underlying imperative must be to focus public resources on those most in need. I have listened to Opposition Members, and I have heard and understood their concerns. However, let me be clear—we are making no further concessions on this issue. As well as being unaffordable, reversing the Pensions Act 1995 would create an anomaly, whereby women would be expected to work for less time than they work now, and it would be discriminatory to men. It is not practical to implement.
John Cridland’s independent report on state pension age will consider wider factors that should—
Chi Onwurah
I certainly thank the Minister for finally coming to matters that are relevant to this debate and the people here. However, does she recognise the point that because the women we are discussing today started work earlier—at the age of 15, which is long before she or I started work—they are the generation who are working longer than any other generation? When she says that giving a further “concession” would mean that they ended up working for less time than other women, does she not recognise that they have worked, and are working, for longer?
Robert Flello (in the Chair)
Just before I call the Minister to continue, may I suggest that she perhaps speaks for only a couple more minutes?
Caroline Nokes
The hon. Lady also needs to reflect that these women are also living longer; we are all living longer.
As I was saying, the Cridland independent report is coming forward and will be published in March. It is part of the Government’s review of state pension age, which is due in early 2017.
Caroline Nokes
I will not give way again; the Chairman has made it very clear that he wants me to conclude my remarks.
A number of points have been made today about communications; in particular, the hon. Member for Ross, Skye and Lochaber has been quite forceful on this subject. He made the point that there were about 14 years between the decision being made and letters starting to go out. When he refers to “this Government”, I remind him that for the bulk of that time my party was not in Government, and if he wishes to lay the blame for a lack of communication, he might do well to direct it somewhere else.
We have continued this country’s long record of raising the living standards of pensioners, through our commitment to the triple lock and our reforms of the state pension, and we are revolutionising the world of private pensions through auto-enrolment, which is for everyone. However, we want continue our work aimed at providing older workers with greater choice and greater security in retirement, which is at the heart of our fuller working lives strategy. The results speak for themselves. We not only continue to increase the employment prospects for women above the age of 60 drastically, but the new state pension provides people with greater freedom and greater choice, and dignity in retirement.
Chi Onwurah
Thank you, Mr Flello, for calling me to speak again, and I congratulate you on your excellent chairing of this debate—if, indeed, we can call it a “debate”.
I thank the hon. Members from the Scottish National party and from my own party, in particular the shadow Minister, my hon. Friend the Member for Swansea East (Carolyn Harris), for their contributions, and for highlighting the experiences of so many hundreds of thousands—indeed, millions—of WASPI women; the poverty they have experienced and, indeed, the betrayal that so many of them feel at the tearing-up of the contract between state and citizen.
While I thank the Minister for including some relevant parts in her contribution, they were relevant only inasmuch as they made clear the Government’s total lack of understanding of the experience of WASPI women, and that no further “concession”—as the Minister chose to call it, whereas I would call it basic justice—would be offered.
I also observe that the Minister went through her entire contribution without mentioning “working-class women”, which is in the title of the debate. These women have worked the longest and suffered the greatest indignities in facing challenges that the Minister and I know nothing of, with regard to discrimination, poverty and lack of opportunity. That the Minister, from her privileged position, should nevertheless refuse to offer any kind of support or consideration to the great women of this country, who have worked so hard and deserve so much more from this place, I find absolutely unbelievable. Indeed, Mr Flello, I will sit down before I am forced to be disorderly in my condemnation of the Government’s position on this issue.
Question put,
That this House has considered the effect of state pension changes on working-class women.
The Chair’s opinion as to the decision of the Question was challenged.
Question not decided (Standing Order No. 10(13)).
Written Statements
(7 years, 2 months ago)
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Government Transformation Strategy
(7 years, 2 months ago)
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The Minister for the Cabinet Office and Paymaster General (Ben Gummer)
Today the Government are publishing the “Government Transformation Strategy 2017 to 2020”. This strategy sets out the Government’s objectives to harness digital (the technologies, culture, skills and tools of the internet era) to transform the relationship between the citizen and state.
The “digital by default” services developed under the previous strategy have helped to establish the UK as a global leader in digital government. However, the opportunity to transform Government further, as well as the need to be able to respond quickly to new or changed priorities, mean that our current approach to digitally enabled transformation of Government needs to be accelerated and expanded.
The Government transformation strategy defines our vision and ambition for a Government that is “of the internet” rather than simply “on the internet”. It sets out how Government services, and other interactions with the public and businesses, will be improved and enhanced—both in terms of providing service to citizens and in gaining (and keeping) their trust. Digital is the best way of achieving this.
The strategy sets out five pillars for the future direction of Government:
Create shared platforms, components and reusable business capabilities: continuing with Government as a platform, reducing duplication, cost and increasing efficiency across Government.
Make better use of data: ensuring that Government data is properly managed, protected and (where non-sensitive) made available and shared effectively. To accelerate the transformation of Government, and ensure we retain public trust and confidence in our use of data, we will appoint a new Chief Data Officer for Government.
Business transformation: developing end-to-end services that meet the needs of their users across all channels, in co-ordination with a fundamental rethink of back-office operations.
Grow the right people, culture and skills: continuing to ensure that we have the right people, with the right skills and training, employed in the right place working in the right way.
Build better tools, processes and governance for civil servants: transforming the inside of the civil service to become an organisation that is digital by default.
One of the most important and challenging aspects of delivering transformed online services is identity assurance—establishing that the user is who they say they are and not someone pretending to be them. Gov.uk Verify, the Government’s online identity verification service, went live in May 2016. We will continue to enable individuals to prove their identity online and to access Government services securely and safely. To achieve this, we will work towards 25 million people having a gov.uk Verify account by the end of 2020.
This strategy also sets out the evolving role of the Government digital service to support, enable and assure transformation delivered by Government Departments. It provides the direction of travel and does not in and of itself constitute any additional spending commitments.
I will place a copy of this strategy document in the Libraries of both Houses.
[HCWS469]
European Union Finances Statement
(7 years, 2 months ago)
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The Chief Secretary to the Treasury (Mr David Gauke)
I am today laying before Parliament, the “European Union Finances 2016: statement on the 2016 EU Budget and measures to counter fraud and financial mismanagement” (Cmd 9400). This is a routine annual publication. It is the thirty sixth in the series. The statement gives details of revenue and expenditure in the 2016 European Union (EU) Budget, recent developments in EU financial management and measures to counter fraud against the EU Budget. It also includes a chapter and annex on the use of EU funds in the UK while we remain a member state.
[HCWS476]
Local Government Funding
(7 years, 2 months ago)
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The Secretary of State for Communities and Local Government (Sajid Javid)
Further to the points raised in the House yesterday on Surrey County Council and local government finance, I would like to take the opportunity to put some facts on the record.
Surrey County Council’s budget and council tax is a matter for the council. Surrey’s elected councillors voted through their 2017-18 budget on 7 February, based on the draft local government finance settlement. Surrey County Council has been clear that its budget decision—setting a level of council tax which is not above the referendum threshold—was its alone.
As part of the statutory draft local government finance settlement consultation, the Department for Communities and Local Government discusses local government funding with councils across the country, of all types and all political colours. This happens every year, and necessarily involves councils making direct representations to the Government.
DCLG will publish the final settlement later this month, and the House of Commons will then vote on it. This is entirely transparent, and detailed funding figures for every council are published as part of that process.
While the final settlement has yet to be approved, the Government are not proposing extra funding to Surrey County Council that is not otherwise provided or offered to other councils generally. There is no “memorandum of understanding” between Government and Surrey County Council. In the draft settlement published in December, Surrey’s core spending power is forecast to rise by 1.4% from 2015-16 to 2019-20. We believe this provides a sustainable base on which the council can plan ahead and allocate their £1.7 billion a year budget.
We are, however, conscious of the medium and long-term pressures that all councils face from a growing and ageing population. The Government are therefore delivering broader reforms to local government finance—through bespoke devolution deals, the integration of health and social care, a fairer funding review, medium and longer-term reforms to support adult social care, and the move, from 2019-20, to 100% business rates retention across the country. All these reforms have been discussed in recent weeks with Surrey and other councils from across the country as part of the local government finance settlement process.
The Local Government Finance Bill that Parliament is at present considering will legislate to deliver the reforms to business rates. A number of pilots are already taking place from April 2017 in combined authorities and unitary councils across the country. These will take place in Liverpool, Greater Manchester, west midlands, west of England, Cornwall and Greater London. The Government plan to undertake further pilots in 2018-19, in areas without a devolution deal, including two-tier council areas. The nationwide roll-out will then take place across England in 2019-20.
Surrey County Council informed the Government that it wished to become a pilot area. The Secretary of State for Communities and Local Government told it that this was not possible for 2017-18, but said that, subject to due process and meeting the necessary criteria, it could participate in the 2018-19 pilot. All other councils will be free to apply to participate in these pilots, and the Government invite them to do so. The Department for Communities and Local Government has already held discussions about the 2018-19 pilots with several councils and it will be publishing more information shortly.
The Government’s wider reforms to local government funding will make councils less dependent on money from Whitehall, ensuring all councils have strong incentives to support local jobs and local firms, and directly benefit from the proceeds of a growing economy.
[HCWS470]
Rotherham Metropolitan Borough Council
(7 years, 2 months ago)
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The Secretary of State for Communities and Local Government (Sajid Javid)
On 26 February 2015, the then Secretary of State for Communities and Local Government (Eric Pickles) and the then Secretary of State for Education (Nicky Morgan), having considered the report of the inspection by Dame Louise Casey CB and advice note from Sir Michael Wilshaw (HM Chief Inspector of Education, Children’s Services and Skills), concluded that it was both necessary and expedient for them to exercise their intervention powers as Rotherham Metropolitan Borough Council was failing to comply with its best value duty. Due to the extent and the gravity of the failings in the Council, the then Secretary of State for Communities and Local Government decided that the intervention should be broad and wide ranging. He directed that Commissioners should exercise all executive functions of the authority, as well as some non-executive ones, including licensing, until the Council could exercise them in compliance with its best value duty. A team of Commissioners was appointed to exercise these functions.
On 11 February 2016, my predecessor returned certain functions to the Council, including education, housing and planning. He was satisfied with the progress made and that the Council was able to exercise the identified functions in compliance with the best value duty. Returning these functions was the start of building effective and accountable political leadership and represented a clear milestone on the road to recovery. On 13 December 2016, I announced the return of licensing functions to the Council. I am pleased now to be able to report on further progress made.
In his 10 November 2016 progress report, Lead Commissioner Sir Derek Myers provided robust evidence to support his recommendation for economic growth, town centres, external partnerships and grounds maintenance to be returned to the Council. Additional information provided in December 2016 gave me sufficient assurance on the return of audit, and adult social care and NHS partnership.
The Commissioners will continue to have oversight of these six service areas to ensure continued compliance with the best value duty. With the exception of adult social care and NHS partnership, where Commissioners will have the power of direction, the other five service areas will be returned to the Council with the Commissioners having the power of advice.
Today, I have written to the Council to say that I am now ‘minded to’ return these service areas to the Council but will seek representations before making a final decision. I am placing a copy of the documents associated with these announcements in the Library of the House and on my Department’s website.
[HCWS475]
Sporting Future: Annual Report
(7 years, 2 months ago)
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The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
I am today publishing the first annual report on the Government’s sport strategy “Sporting Future: a New Strategy for an Active Nation”.
Sporting Future set out a new Government vision to redefine what success looks like in sport by concentrating on five key outcomes—physical wellbeing, mental wellbeing, individual development, social and community development and economic development. It was a bold new strategy for an active nation. It marked the biggest shift in Government policy on sport for more than a decade. Much has been achieved so far, and this first annual report sets out the steps we have taken towards making sure absolutely everyone can benefit from the power of sport.
Investment in sport and physical activity is now focused on the five key outcomes. Funding is being opened up to organisations who can demonstrate how they will consistently deliver some or all of those shared goals.
Progress has been made against the three major outputs described in Sporting Future—engagement in sport as a participant, volunteer and spectator; maximising international and domestic sporting success and the impact of major events; and supporting a more productive, sustainable and responsible sport sector across the board.
I am grateful to all those who are working to make Sporting Future such a success. The annual report is being deposited in the Libraries of both Houses and is available at:
https://www.gov.uk/government/publications/sporting-future-first-annual-report.
[HCWS472]
Service Museums
(7 years, 2 months ago)
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The Minister for the Armed Forces (Mike Penning)
My noble Friend the Minister of State in the House of Lords, Earl Howe, has made the following written statement:
Further to my written ministerial statement of 15 October 2015 (HLWS241), I am today announcing the publication of the findings of the review of the three service museums: The National Museum of the Royal Navy, the National Army Museum and the RAF Museum. Periodic reviews of non-departmental public bodies (NDPBs) are part of the Government’s commitment to ensuring, and improving, the accountability and effectiveness of public bodies.
The review concluded that the service museums support the heritage objectives of the Ministry of Defence and the functions performed are still required. The review recommended that the service museums should be retained as NDPBs of the Ministry of Defence.
The review was carried out with the participation of a wide range of internal and external stakeholders and I am grateful to all those who contributed to this review.
The Review of the Service Museums report has been placed in the Library of the House. It will also be available on the Government website at: www.gov.uk.
[HCWS473]
General Affairs Council: February 2017
(7 years, 2 months ago)
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The Minister of State, Department for Exiting the European Union (Mr David Jones)
The General Affairs Council (GAC) was held on 7 February in Brussels under the Maltese presidency.
The agenda covered follow up to the December European Council; preparation for the March European Council; and Commission communication on next steps for a sustainable European future. The UK permanent representative to the EU represented the UK.
A provisional report of the meeting and the conclusions adopted can be found at:
http://www.consilium.europa.eu/en/meetings/gac/2017/02/07/.
Follow up to the December European Council
The Maltese presidency presented the EU’s key priorities and progress, stating that further work was needed in all areas. The Commission added that member states should not lose sight of making progress on relocation and the common European asylum system.
Preparation for the March European Council
The presidency presented the draft agenda which includes: jobs, growth and competitiveness, which would take stock of single market strategies; security, where leaders would examine decisions taken at December’s European Council; and a place-holder for external relations. The presidency announced that external migration would be added. The UK supported the addition of migration following the discussions at the Valletta summit, welcomed the opportunity to return to security and noted the importance of jobs, growth and competitiveness and external relations.
Commission communication on next steps for a sustainable European future
The Commission introduced its communication, in which it set out a vision for a more sustainable future in line with the UN sustainable development goals and Agenda 2030. It includes empowerment of women; energy transformation; a digital single market; and lifelong learning. There will be Council conclusions in June to progress work in this area.
AOB
Portugal presented conclusions of a conference on the future of the European monetary union held in Lisbon in January. The conference, attended primarily by representatives from southern European countries, called for the EU to work together to promote growth and convergence across eurozone countries, backed by a socially sustainable increase in public and private investment.
[HCWS477]
Commercial Spaceflight
(7 years, 2 months ago)
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The Secretary of State for Transport (Chris Grayling)
We intend to publish a draft spaceflight Bill later this month, dedicated to commercial spaceflight in the UK. This legislation will be fundamental to enabling small satellite launches and sub-orbital flights from the UK, ensuring the UK is well placed to take advantage of a growing global market. The Government’s intention is to introduce this Bill formally early in the next Session, following a period of scrutiny and engagement with industry and other interest groups.
The space sector is vital to the future of the UK economy, with a strong record of creating high-value jobs and generating wealth across the country. To help the creation of the space launch market in the UK, the UK Space Agency is inviting commercial space consortia to apply for grant funding to take the action that will make our ambitions a reality.
Together, the proposed legislation and grant funding announced today will have the potential to enable commercial spaceflight from a UK spaceport by 2020.
[HCWS471]
Ministerial Cars
(7 years, 2 months ago)
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The Minister of State, Department for Transport (Mr John Hayes)
My noble Friend the Parliamentary Under Secretary of State for Transport (Lord Ahmad of Wimbledon) has made the following written statement. Department No. of GCS departmental pool car services at (31/3/16) Departmental pool car services Pre-booked service Total charges (all services) Attorney General’s Office (formerly Law Officer’s Department) 1 £82,221.67 £0.00 £82,221.67 Cabinet Office 3 £181,486.50 £6,172.25 £187,658.75 Government Chief Whip 0 £25,435.49 £3,076.25 £28,511.74 Leader of the House of Commons 1 £73,233.74 £0.00 £73,233.74 Department for Business, Innovation and Skills 1 £84,797.79 £4,512.45 £89,310.24 Department for Education 1 £87,837.30 £24,899.33 £112,736.63 Department for Communities and Local Government 2 £172,334.20 £2,260.35 £174,594.55 Department for Culture, Media and Sport 1 £82,449.30 £292.50 £82,741.80 Department for Energy and Climate Change 1 £83,199.54 £1,907.25 £85,106.79 Department for Environment, Food and Rural Affairs 1 £94,646.45 £9,689.11 £104,335.56 Department for International Development 1 £22,172.98 £6,052.50 £28,225.48 Department for Transport 2 £171,639.84 £4,472.05 £176,111.89 Department for Work and Pensions 0 £0.00 £0.00 £0.00 Department of Health 1 £84,353.29 £75.00 £84,428.29 Foreign and Commonwealth Office 0 £0.00 £705.00 £705.00 HM Treasury 2 £202,226.95 £37,397.27 £239,624.22 Home Office 2 £171,392.96 £27,703.94 £199,096.90 Ministry of Defence 0 £0.00 £0.00 £0.00 Ministry of Justice 0 £0.00 £1,555.00 £1,555.00 Northern Ireland Office 0 £0.00 £11,736.03 £11,736.03 Scotland Office 0 £0.00 £593.70 £593.70 Wales Office 0 £0.00 £3,342.76 £3,342.76 20 £1,619,427.99 £146,442.74 £1,765,870.73 Methodological note: The charges recorded in this statement reflect the service model which came into effect in April 2012 as part of the reform programme. This provides departmental pool cars which are a shared resource for a Department to use as efficiently as possible. In addition, the car service offers a small pre-bookable service utilising any spare capacity. These charges do not necessarily reflect the total spend on car services as some Departments have arrangements with other providers. The Treasury has two Cabinet Ministers. The former Chancellor used the Government Car Service to supply a driver and vehicle for his protection package whereas the PM, Home, Foreign, Defence and Northern Ireland Secretaries of State used the Metropolitan Police. Such charges are not included in the table.
I am publishing today details of the charges incurred by Departments for the use of official Government cars provided to Ministers by the Government Car Service during the financial year 2015-16, which are in the attached table.
Official transport is provided so that Ministers can carry out their work effectively and securely, including working on sensitive and confidential Government documents while travelling.
We are committed to continuing our focus on reducing the cost to the taxpayer of the provision of secure ministerial cars. The Government Car Service has reduced its running costs by three quarters since 2010. We continue to be committed to reducing the cost to the taxpayer of the provision of secure transport.
To assist public scrutiny, equivalent figures for the £6.7 million charges to each Department under the last Labour Government can be found at 28 October 2010, Official Report, column 23WS.
https://www.publications.parliament.uk/pa/cm201011/cmhansard/cm101028/wmstext/101028m0001.htm#10102827000372.
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Fraud, Error and Debt Measures
(7 years, 2 months ago)
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The Secretary of State for Work and Pensions (Damian Green)
We are committed to ensuring an effective and accurate benefit system, as part of creating a welfare system which is fair to those who use it, and fair to the taxpayers who fund it. An important part of this is recovering money owed to the Government through overpayment of benefits.
Fraud and error in the DWP benefits system is historically low, and at 1.9% is lower than in 2010. Claimant error and official error are at their lowest level ever, and we are protecting taxpayers’ money by recovering a record amount in overpaid benefits. For 2015-16 around £1 billion was recovered jointly by the Department and local authorities, an increase of £70 million since 2014-15.
Using DWP powers to recover tax credits debt
In order to build on this success, today, I can announce that from April 2018 the Department for Work and Pensions (DWP) will recover a segment of HM Revenue and Customs (HMRC) tax credits debt associated with people whose tax credits claim has ended. This is debt that has been subject to recovery by HMRC but where repayment has not been secured.
The claimants who have these historic debts will have previously been contacted numerous times by HMRC and invited to start a voluntary repayment plan. They will also have had the opportunity to appeal and challenge the debt.
From April 2018 DWP will begin to try to recover this debt using a wider range of methods. Where people have not voluntarily made arrangements to repay, this may, as a last resort include recovery directly from earnings. DWP has greater powers than HMRC in this regard.
This initiative helps deliver the Government’s commitment to reform the benefits system and switch to universal credit. During transition HMRC will continue to administer financial support for those with ongoing entitlement to tax credits.
Using data and analytics to identify potential fraud and error
Many people rely on the benefit system for support—it provides a vital safety net for people who are out of work, people with disabilities, those who are carers, bringing up children, retired, or on low incomes. So it is vital that we protect it from the very small minority who try to claim taxpayers’ money they are not entitled to.
According to the most recent fraud and error national statistics around £110 million is lost annually to DWP as a result of fraud and error relating to undeclared partners. The most up to date information (financial year 13-14) suggests around 1.5% of income support (IS) expenditure is overpaid annually as a result of a partner not being declared appropriately.
We will engage with an external data provider to identify benefit claimants thought to be most likely to have an undeclared partner more effectively. We expect that this will provide more and better evidence to enable us to identify high risk cases. The data provider will not have any contact with claimants directly or any decision making authority. All cases will be progressed through the existing DWP fraud and compliance processes.
We expect to award a contract for around 18 months and will evaluate its effectiveness in order to inform decisions about whether this type of data matching provides a useful indication of undeclared partners for future use in the universal credit system.
[HCWS474]
Grand Committee
(7 years, 2 months ago)
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Arrangement of Business
(7 years, 2 months ago)
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The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, I should remind your Lordships that if there is a Division in the Chamber the Committee will adjourn for 10 minutes.
Historical Statues and Memorials
(7 years, 2 months ago)
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Lord Oates
To ask Her Majesty’s Government whether they will publish guidance to encourage the protection of existing historical statues and memorials and promote the establishment of new memorials that reflect the broader history of the United Kingdom.
Lord Oates (LD)
My Lords, I am grateful for the opportunity to open this debate. In doing so, I declare a non-pecuniary interest as a patron of the charity Memorial 2007. I thank in advance all noble Lords for taking part in this debate.
The history of our country is passed down to us through many different channels—in the content of the history books in our libraries, in the syllabuses taught to students in our schools and universities, in the events we choose to commemorate and in the events we choose to forget. Its physical embodiment is found in the statues and monuments that stand in every city, town and village across the country. In many cases the judgment that history makes on the people commemorated by these statues and monuments is less favourable than the view that their contemporaries took or that they themselves sought to propagate.
In other countries, as history has turned, there has been wholesale destruction of monuments that no longer found favour. It was true in France after the revolution, in Germany after the Second World War and in many parts of Europe after the collapse of Soviet communism. Lacking a violent domestic upheaval in our own recent history, there has been no great disruption of our monuments. Inevitably, therefore, a fair number of history’s villains, rendered in stone or bronze, are scattered across our towns and cities. There are those who argue that the most egregious of these villains should be removed. When I first tabled this Question, a debate was raging over whether the statue of Rhodes at Oriel College, Oxford, should be removed. The controversy that followed exemplified the emotional significance afforded to these physical manifestations of our history.
I am no fan of Cecil John Rhodes; I have spent enough time in southern Africa and read enough of its history to be in no doubt about the greed-fuelled violence he unleashed on that part of Africa, the legacy of which, tragically, remains to this day. But we cannot pretend he did not exist, or that his actions were not ultimately backed by British arms and sanctioned by British law. He is part of history; he cannot be wished away any more than any other cruel period in our history can be wished away. He is of course not alone. At the public entrance to this building stands a statue of Oliver Cromwell, whose violent suppression of the English Levellers, the royalists and the Catholic Irish is well documented. London and other cities are littered with statues to slave owners. They stand alongside buildings constructed with the riches accumulated through the slave trade and close to monuments to assorted imperialists and racial supremacists of the 19th and 20th centuries. The truth is that our history is so closely entwined in these things that to pretend we can disentangle it by removing a statue or two is to delude ourselves.
We should not try to deny our history in that way but we seem determined to deny it in another. Ten years ago, a national service of remembrance was held in Westminster Abbey to commemorate the bicentenary of the Act that abolished the transatlantic slave trade. The service culminated in the Queen laying flowers, first to honour all who worked for the abolition of the slave trade and afterwards to honour those who were enslaved. The flowers to honour the abolitionists were laid at the statue of William Wilberforce that stands in Westminster Abbey, but there was no statue or monument to honour the millions of enslaved Africans—to bear witness to the vast numbers who died in appalling conditions in the camps on the African coast, on the slave ships crossing the Atlantic or at the hands of brutal overseers in the plantations. There was no statue to the millions more who survived the horror of the slave ships to suffer the unspeakable physical and psychological violence of slavery, and no statue to the courage and fortitude of those who survived and resisted. Instead, the Queen had to step outside the abbey and place her flowers on a paving stone in the forecourt, which is inscribed with generic words in tribute to the innocent. I was struck by this at the time: why was it that 200 years since abolition, there was no national memorial in our capital city to honour the millions of African people enslaved or murdered in the transatlantic slave trade? Why was there no monument to remind us that the capacity for unspeakable brutality towards innocent people is not reserved to one nationality, or to one time in history? It is in all of us and it must be guarded against by all of us at all times. History teaches us that lesson, but we have to be willing to learn.
When I was appointed to this House, I tried to find out why this part of our history seemed to have been passed by, and in doing so I came across two formidable women who are here today. They are trustees of a charity called Memorial 2007, which was established to bring into being a monument to honour the countless millions of enslaved African people and their descendants, to give voice to their history and to gain recognition that it is also all of our history. Through their fortitude and determination and against many obstacles, they secured a site for a memorial garden and sculpture in Hyde Park. They held a design competition, commissioned a sculptor and—just recently—gained planning consent for the project from Westminster City Council. They are now raising funds to make the enslaved Africans memorial a reality. The project got its inspiration from a pupil of one of the trustees. On a visit to the Tower of London, the pupil asked, “Where is our history, Miss?”. Nowhere is that absence truer than in the history of the transatlantic slave trade, for while there are statues and monuments to slave owners and white abolitionists alike, there is no representation of the history of the enslaved African people. There is no representation that testifies to the determined advocacy of black abolitionists, such as Olaudah Equiano. In all the self-congratulation over abolition, we lost sight of the real story: the central part our country played in 300 years of the brutal enslavement of millions of our fellow human beings. In losing sight of that story, we failed to learn the lessons that history has to teach us.
The Question we are debating today is a wide one and I recognise that noble Lords will want to raise a range of issues relating to this subject, but I hope the Minister will be able to address some specific issues regarding the enslaved Africans memorial in her response to this debate. First, I hope she will be able to put on record her and the Government’s support for this long-overdue monument. Secondly, I would be grateful if she could indicate whether the Government are willing to provide the sort of technical assistance to Memorial 2007 that was afforded to recent projects, such as the Ghandi statue. Thirdly, the Minister may be aware that following the difficulties with the Diana memorial, the Royal Parks now require a maintenance endowment over an extended period. In the case of the proposed enslaved Africans memorial, this amounts to nearly £1 million. I would be grateful if the Minister could look at this and consider whether the Government might be able to review this requirement, or take on this part of the cost. Finally, I hope the Minister can give guidance to public authorities and grant-giving bodies that they should consider the diverse historical experiences of our country in their decisions.
I do not believe that we should attempt to deny our history by tearing down existing statues and monuments, but we should bear true witness to that history by ensuring that the monuments of our capital city and our country begin to reflect a rather wider and more inclusive history. In 1682, as the historian Madge Dresser notes, William Goodwyn proposed a public statue in London which would have prominently acknowledged the injustice suffered by enslaved Africans under British rule. Some 335 years later, that call has not been answered. It is now time—well past time—to put that right.
Lord Cope of Berkeley (Con)
My Lords, my involvement with memorials is as a trustee of the War Memorials Trust. First, I want to wish a fair wind to the proposals that the noble Lord, Lord Oates, and his colleagues are working on. I hope they are successful.
There are a number of museums about the slave trade, particularly in various port cities in our country, which tell people about the appalling effects of the trade in considerable detail. They are in their way memorials to what took place and to those who suffered. A discussion about memorials versus museums echoes the discussions, particularly after World War I, when local people thought about whether they wanted a war memorial carved in stone in their area or whether an amenity of some kind was more appropriate. Different communities took different decisions. We all know of war memorial hospitals, playing fields, village halls and so on.
I come originally from Leicester, where we have not only a fine memorial arch, designed by Edwin Lutyens, but also the University of Leicester, which was founded as a college in 1921, specifically as a war memorial. It proudly proclaims in its motto, “Ut vitam habeant”—so that they may have life. Its website describes the university as,
“a living memorial for those who lost their lives in [the] First World War”.
The War Memorials Trust supports war memorials that are in need of restoration, both of the stone kind and of an amenity kind—although not the University of Leicester, simply because it is outside our scope. We are assisted in this now by the Government’s First World War Memorials Programme, which we run for them with Historic England and the equivalent bodies in other parts of the UK. If any noble Lords or others know of a war memorial of either kind that seems in need of a bit of TLC, please let us know and we will do what we can to help, with both advice and, sometimes, grants.
Unfortunately the memorial suggested by the noble Lord, Lord Oates, would not qualify, both because it is a new memorial—we are specifically about the conservation of existing memorials—and because I do not think it could exactly count as a war memorial under the definition used for legal purposes. Nevertheless, I wish his project well. It deserves the support of all in this House.
Baroness Lawrence of Clarendon (Lab)
My Lords, I thank the noble Lord, Lord Oates, for organising this important debate. Memorialisation is possibly the most eternal form of art. Whether it is of events or ways of life, it has for millennia been used to capture the essence of who we are. In part, it is historical record, but it is also the presentation of history—the source of our common understanding of where we come from. This understanding underpins the foundation of our society and, as such, has a dynamic and forward-looking impact. This is especially important in a country such as the United Kingdom, which through its connections to far-flung places has a particularly complex history that combines a wide variety of actors, communities and cultures, not all of which are acknowledged.
Like the noble Lord, Lord Oates, I should like to set out the importance of memorialisation in the context of the enslaved Africans memorial, which I wholeheartedly support. A few years ago, I was born in Jamaica; or—and not to age myself—the British colony of Jamaica, as it was known then. When one thinks about Jamaica, one thinks of its vibrancy, spirit and honour, and the strength of the people. All that is true, but what is also true is not often recognised in this country, which is that Jamaica is a country born out of suffering. In 1655, when British forces captured Jamaica from the Spanish, the population of the island was just 2,500. Between 1670 and 1680 the slave population never exceeded 10,000, but the British could see the potential of sugar cane to generate enormous wealth for the Government. However, labour was needed. By 1800, only 120 years later, more than 300,000 Africans had been enslaved and forced to work on the Jamaican plantations. Thousands of British families grew rich on their backs and hundreds of great homes were built using the wealth generated by slavery. Ports and cities were developed on the spoils of the slave trade. The work of the enslaved generated the prosperity that made the Industrial Revolution possible. We are also enjoying the benefits because modern Britain is built on the legacy of the slave trade.
The scale of the wealth created for Britain by the transatlantic slave trade is matched and exceeded only by the suffering it inflicted, yet while we rightly celebrate its abolition and those who campaigned for it, we do not recognise or honour the people who were ripped from their homes and enslaved. This is hugely important to our country. We may think of slavery as part of history, but the attitude that it embedded in the mindset of all people continues to follow us to this day, and its legacy is felt in the systematic racial discrimination that continues to feature in our society. Yes, we have made great progress, but until we face up to our past and discuss it openly and without blame, we will struggle to heal fully.
Memorialisation is particularly important for the descendants of the enslaved. Marcus Garvey once said—
Baroness Seccombe (Con)
I must remind the noble Baroness that this is a timed debate and the allocated time for speeches is three minutes.
Baroness Lawrence of Clarendon
I shall just finish. I recommend the proposed enslaved Africans memorial in Hyde Park because it would become a vital part of this country’s self-perception and history. It would honour those who have been missing from our history for too long and help us to recognise the complexities on which our society has been built. We would also return roots to a group of people who have not known their history. In doing this, together we will create a society that is more cohesive and just in the future.
Lord Addington (LD)
My Lords, I congratulate my noble friend Lord Oates on bringing this matter to the attention of noble Lords. Creating new memorials to reflect our broader history would be a very good thing. As I walked through London on my way here today, I looked at the various memorials because I knew that I would be speaking in this debate. I saw a great many men who had had fairly undistinguished military careers gazing heroically down roads, either on horseback or on foot, and they seemed to reflect when the buildings behind them were put up. That tells us quite a lot about the people who built them but only a little about the people represented. I would hope that our new memorials will reflect people who do not have the money to support the building of memorials rather than more statues that are about paying off a relative and the wish to impress someone. We should be encouraging people who are not in that position, and in doing so we would be doing ourselves a service.
The noble Lord, Lord Cope, mentioned war memorials. They are probably an incredibly good example of where we should be going because they represent groups. Individuals may be recorded on them, but they represent groups. If we concentrate on groups and stop trying to reflect the “great men” school of history, we can do no better than look to our war memorials. Then we will be approaching this in the right way. If the Industrial Revolution changes a place, it changes the way a group and a society are structured. If we say that the slave trade affected groups, memorials to them should show how that group was affected.
Such statues are slightly more difficult to put up than those of one person standing on a horse and looking heroically down a shopping precinct, but we have to start thinking about this. We should really start thinking about it when we start building. That is the easy time to do it, when there is money around. I hope the Minister will be able to indicate that anybody building a new project might be encouraged to think about what they would like to record.
Viscount Falkland (CB)
My Lords, I have been looking at statues in various countries and cities for many years. I apologise for using a French word, but I am what is known in France as a flâneur; in other words, I wander around with no particular aim looking at things, and statues are among my favourites. The theme of my speech in the brief time I have at my disposal will not exactly follow that of the noble Lord, Lord Oates, but I thank him for the opportunity to talk about statues. I will talk uniquely, because of the time, about London and the House of Lords.
As a flâneur, one realises that those who commission statues and monuments and those who create them put great thought into them. Generally, they have to be attractive; they have to be historically relevant, which they are normally are—they are mostly historical in London. I doubt whether any of your Lordships would be able to guess how many people in one normal day stop and look at a statue at all. Statues are quite inappropriate now to the way in which people conduct themselves in streets and public places. Most young people are now connected with some electronic device. They pass by; traffic moves very quickly—it was not intended when a lot of statues went up.
However, there are some marvellous statues. Before I move on to the House of Lords, I urge everybody to become a flâneur for a moment and cross the road to look at the statue of Churchill. It is a remarkable and exceptional statue, because not only does it remind us of that great man but it has energy and it is about art as well as anything else.
As you come into the House of Lords, you will pass the statue by Marochetti—it is a bravura statue—of Richard the Lionheart. Why it should be Richard the Lionheart I do not know. I think Marochetti rather preferred the Black Prince, but that never happened—although I think a model was made of the Black Prince and I think the Queen has one of the several copies that remain. As you come into the House of Lords, you will see numerous statues—just under 300. Some of them are outside; some of them are inside. Most demand attention and indeed they get it. You might say that in the House of Lords the statues that we have are working statues, because every day we have people going down the route allotted to them, so the statues are examined on a day-to-day basis, quite unlike anything outside.
I think I have probably reached the end of my three minutes and that is really all I have to say. I hope the noble Lord will again put down this subject for debate when we might have a little more time for it, allowing for something relatively flippant compared with the noble Lord’s speech and we can all indulge ourselves on our particular line. It has been refreshing to have an opportunity to speak on the subject.
Lord Finkelstein (Con)
I thank the noble Lord, Lord Oates, for holding this debate and for his eloquent and persuasive speech, backed equally eloquently and persuasively by the noble Baroness, Lady Lawrence. It was a compelling case that he made.
I start with a quiz question: what do General Smuts, Winston Churchill, Viscount Palmerston, David Lloyd George, Nelson Mandela, George Canning, Abraham Lincoln and Mahatma Gandhi have in common? There are two possible answers, neither of which will win you the points. The first is that they are all commemorated by statues in Parliament Square. The second is that they are all men. Every statue in Parliament Square is of a man. The fact that this point is very simple and very obvious does not rob it of significance. In my view, it is simply wrong. I would go so far as to say that it is a national embarrassment.
I want to make a simple proposal. I am proud that we should commemorate outside our Parliament the end of apartheid, the fight for Indian independence and victory in the American civil war. We should pay tribute to the great struggles for freedom and it is an appropriate place to do so. But let us also pay tribute in an appropriate place to our own great struggles for democracy. Of these, surely one of the greatest is the struggle to win votes for women. Let us have a statue in Parliament Square for Dame Millicent Garrett Fawcett. Let us have a statue for the woman who led the peaceful democratic campaign for change; the woman whose leadership of the National Union of Women’s Suffrage Societies changed minds and won votes—its work was the heart of the movement, with 25 times the membership that Mrs Pankhurst boasted. Let us have a statue for the woman who was there from the first petition to the final victory for the cause; who took up campaigns to curb child abuse by raising the age of consent; who fought to criminalise incest, combat cruelty to children within the family, end the practice of excluding women from courtrooms when sexual offences were under consideration and to stamp out the “white slave trade”. How can this country have no proper monument to celebrate the life of one of its greatest pioneers and leaders? How can it be that so many people are unaware of one of our most successful and important political leaders, somebody who produced work of real consequence that has changed the nature of Parliament, and rightly so?
The feminist campaigner Caroline Criado-Perez has launched a drive to see justice done in Parliament Square and justice for Millicent Fawcett. I proudly join my cause to hers. On Millicent Fawcett’s statue, let it say, “This is Dame Millicent Fawcett, champion of the weak, defender of children, tribune of the great women’s campaign”.
Lord Bilimoria (CB)
My Lords, I am proud to be vice-patron of the Memorial Gates on Constitution Hill, an initiative spearheaded by my noble friend Lady Flather, who pioneered and persisted in raising the funds, helped by others, to make this memorial possible. It was inaugurated by Her Majesty the Queen in 2002. Every March, we have a commemoration ceremony on Commonwealth Day. I chaired that ceremony for six years and continue to be a member of the Memorial Gates Council. To quote Her Majesty the Queen’s Commonwealth message to the 53 member states:
“We are guardians of a precious flame, and it is our duty not only to keep it burning brightly but to keep it replenished for the decades ahead”.
The Memorial Gates have flames burning above them. On one of the pillars of the gates is a quote from the poet Ben Okri:
“Our future is greater than our past”.
Inscribed on the roof of the pavilion next to the Memorial Gates are the names of the VC and GC recipients from the countries that are represented there. Five million people from what was then India, south Asia, Africa and the Caribbean served in the First and Second World Wars. We would not have our freedom today without their service and sacrifice. On that roof are the names of three recipients of the Victoria Cross from my father’s battalion, the 2nd 5th Gorkha Rifles Frontier Force. My father became commander-in-chief of the Central Indian Army. He was president of the Gorkha Brigade and he led his battalion, the 2nd 5th Gorkhas, in the liberation of Bangladesh in 1971. I was proud to have been brought up with two of those Victoria Cross winners, Gaje Ghale and Agansing Rai. The third, Netrabahadur Thapa, was awarded posthumously.
Memorials are there to inspire the future and our youth. It gives me such pleasure to see schoolchildren attend our ceremony every year. What are the Government doing to encourage, promote and support education programmes in schools on all our memorials. I thank the noble Lord, Lord Oates, for initiating the debate and I wish him well in the creation of the monument to enslaved African people. There is a Sikh memorial at the National Memorial Arboretum, as there is a Gurkha one. But although there is a Gurkha memorial in London, there is no Sikh memorial in London. Does the Minister believe we should have a Sikh memorial here?
Before I conclude, one of my proudest achievements as a Member of your Lordships’ House for the past 10 years was being a member of the Joint Committee of both Houses that put up the statue of Mahatma Gandhi in Parliament Square. It is only the 11th statue. I never cease to find people in front of it when I walk through or drive around Parliament Square, because Mahatma Gandhi’s message is for the world. Once again, what are we doing to promote the message of Mahatma Gandhi and the individuals there to educate, because memorials are there to commemorate, to remember and to inspire? I conclude by reading those famous words on the Kohima war memorial:
“When you go home tell them of us and say for your tomorrow we gave our today”.
The Lord Bishop of St Albans
My Lords, I add my thanks to the noble Lord, Lord Oates, for this debate, and in particular for the work he is doing on the memorial to those who have been enslaved. We look forward to hearing more about it as it develops. I am pleased that he has focused our minds not just on existing memorials, but on what we ought to be doing as we look to the future, especially for the urgent need to celebrate the wide diversity of people and events that have contributed to our national life, many of which are underrepresented in our public spaces.
As levels of social capital and civic engagement continue to decline across communities in western Europe, there is an urgent need to think about how we can retell, reboot and celebrate our common stories and our public spaces through memorialising and celebrating people and events. For example, St Albans, where I live, is where the first meeting of the bishops and barons took place in 1213, which was to lead two years later to the sealing of Magna Carta. Yet this seminal event is not celebrated in any public space in the city. I have been encouraging people to think about how we might do that. I hope we may be able to. This is a great lost opportunity to educate and talk about the roots of our human rights, which started in very early stages there.
A second example in the city is Samuel Ryder, the mayor of St Albans, businessman and lifelong Methodist who set up the Ryder Cup, which was invented in nearby Hertfordshire. In 2011 our local district council agreed planning permission for a statue to commemorate him, but five years on, as is so often with these projects, funding is difficult to secure. Our experience is that a lot of these projects take a long time to get going. You have to build groups of people to get support, planning and so on. While I commend the existing memorials grant scheme, would the Minister encourage Her Majesty’s Government not only to extend it beyond 31 March 2020, when I think it will come to an end, but see whether we can extend its remit to help local community groups as we think about how we develop this area further?
Lord Suri (Con)
My Lords, it is a pleasure to speak in this debate, which is extremely important, especially given the large number of upcoming services that will commemorate and respect those who laid down their lives for our freedoms in the two world wars.
When I walk around the ancient area of London, where we are fortunate to work, both inside and outside the Palace, I have numerous memorials and statues to pay my respects to. From the square outside to the memorials on Whitehall and through to Trafalgar Square, I can pay my respects to men who built up this country. However, I have noticed what I feel is a glaring omission. Empire builders—men such as Churchill and Montgomery—are well represented, but there is very little recognition of those who fought for the UK from certain parts of the empire. I wish specifically to talk about the Sikh community, to which I am privileged to belong.
After the defeat of the Sikh Empire in 1849, Sikhs were recruited en masse into the British Army and formed its elite fighting forces, becoming heavily represented in the officer class. One early incidence of their extreme valour came when 21 Sikhs of the 36th Sikhs fought 10,000 Afghans at a border post for several hours, fighting till the last man and allowing other troops to regroup and retake the fortress. All troops received the equivalent of the Victoria Cross in India—the Indian Order of Merit—and established the reputation of Sikhs as a fearless martial race. This House and other places rose to pay homage to the fallen—as rare an occurrence then as it is now.
The bravery and sacrifice of Sikh communities continued through the world wars, when they had voluntary conscription rates higher than any other community across the empire. In World War I, Sikhs constituted some 20% of the Indian army, despite being just 1% of the Indian population at the time. Some 83,000 of these men became casualties during the fighting in France and north Africa, with a further 109,000 being seriously wounded. Earl Mountbatten of Burma, who commanded Sikh regiments, said, “In a fight, a Sikh will go on to his last breath, and die laughing at the thought of Paradise, with the battle-cry of ‘Khalsa ji ki jai’ as he falls”.
The first Viscount Slim, commander of the 14th army, also expressed reverence for the Sikhs he commanded, saying, “It is no exaggeration to record that the armies which possess the valiant Sikhs cannot face defeat in war”.
At the extremely bloody Battle of Neuve Chapelle some Sikh regiments lost 75% of their men during a single engagement, which was important in testing German defences and formulating a new tactical plan for trench warfare.
Baroness Seccombe
My Lords, I fear the noble Lord has exceeded his allocated time, so I ask him to conclude.
Lord Suri
I shall say just one thing more. We must move on with the knowledge that the greatness of this country was achieved by a wide array of communities and resolve to create a proper memorial here in London, the former imperial capital. They deserve nothing less. It is a great shame that significant memorials exist in India and France but not here. As the noble Lord, Lord Bilimoria, said, if the Minister is committed to the establishment of new memorials that reflect the broader history of the UK, this is the right place to start.
Baroness Lane-Fox of Soho (CB)
I, too, thank the noble Lord, Lord Oates, for initiating this debate. As always when I do not know a noble Lord, I went to Wikipedia to see what I could find out—the collective wisdom of the internet always impresses me. The noble Lord is the fifth most influential Liberal Democrat, he may be interested to hear. I also learned about the people he went to university with. The depth of information never ceases to amaze me on that website. Noble Lords may not realise that Wikipedia, the internet’s main historical resource, is 90% created and curated by men. I am going to build on what the noble Lord, Lord Finkelstein, said, because we do not do much better IRL, as my godchildren would say—in real life.
My friend, the campaigner Caroline Criado-Perez, already mentioned by the noble Lord, Lord Finkelstein, did an incredible audit of the statues of this country and created a database. Of 925 statues, 71 were of women, 29 of which were of Queen Victoria. There were 498 statues of non-royal historical men and only 25 of non-royal historical women. There were 43 statues of men called John. How do you become a statue if you are a woman? It helps if you are naked and it helps if you are an allegorical figure, although the allegorical figure of History was ripped down because somebody decided that she should be a bluestocking, heaven forbid, and it was decided that that was not a good idea. Half of all female statues are allegorical figures, such as Justice, nine represent Art, while there are 45 male allegorical figures.
This, to my mind, is unacceptable. You cannot be what you cannot see. Quite apart from not reflecting our broad and wonderful complex cultural history, it is depressing to think that young women walking around our country cannot see the pinnacles of achievement that have been reached by people from all walks of society and all parts of life. Men dominate all the statues of scientists, businessmen and politicians. Why not start with my own heroine, Ada Lovelace, the computer engineer? I support the noble Lord, Lord Finkelstein, 100%, but I would go further. I urge noble Lords to sign Caroline’s petition to put Millicent Fawcett in Parliament Square but I also urge the Minister to consider a profound redressing of the gender imbalance at a time when it feels so crucial that we give more examples of different ways of being to young women all over the country.
Baroness Berridge (Con)
My Lords, remembering is an important but undervalued part of life. As technology causes us to live in moments of distraction and being elsewhere, memorials help us to value the past and be in the present, and to reflect. They are statements of who we are, what and who has shaped us and what we value.
I am grateful to the noble Lord, Lord Oates, for bringing to my attention the memorial for enslaved Africans that thankfully now has planning permission from Westminster City Council. It is so long overdue in London, as that grotesque trade is part of the history of this city. The British Museum and the National Gallery, which attract so many visitors, were begun with collections from families who had profited from plantations worked on by African slaves. For many that I have met, their family history—their own “Who Do You Think You Are?”—ends with a ship that had left Elmina Castle in Ghana. Records end, but soon they will have a place to go once this memorial is built.
I pay tribute to the role of the BBC and its recent history project and accompanying series “Black and British”, written and presented by historian David Olusoga and with an imaginative original score by the young up-and-coming black British composer Segun Akinola. The history of black people goes back to Roman times, with black soldiers guarding Hadrian’s Wall in the third century, and the project placed plaques in various locations recognising the black British people who had lived there.
Historic England maintains the National Heritage List for England, the apparently only official and up-to-date database of all nationally protected historic buildings and sites in England. Could the Minister, taking on a theme from this debate, outline whether an assessment has been made of this list to ensure that any other gaps, such as the enslaved Africans memorial, have been identified? Do we, and should we, have a proper memorial to the “Windrush”, which arrived in Tilbury 70 years ago next year? Whatever happened to Danny Boyle’s replica that was used in the 2012 Olympic opening ceremony, to great effect?
We need to think about what new memorials we need but also which need taking down or delisting. Perhaps we need some temporary memorials on appropriate anniversaries, the equivalent for memorials of the fourth plinth in Trafalgar Square—perhaps a plinth here in Parliament or Parliament Square.
Some of the most important memorials in the UK are war memorials, both local and national. The Commonwealth War Memorial Gates at Hyde Park Corner are majestic, as the noble Lord, Lord Bilimoria, outlined, but the contribution of the Commonwealth and today’s black and minority ethnic soldiers is in my view not prominent enough at the annual Cenotaph service, when the nation comes together publicly. I hope the Minister will consider that point and look at reviewing that as well.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been a very good debate. I cannot reflect all the views in the very limited time I have, so I will leave it to the Minister to sum them up.
There are three points that I should like to make. First, what we are talking about is very often the old adage that history is written by the winners and that therefore somehow the memorialisation of that history is also what we are arguing against. Secondly, it is clear from those who have argued already today that there are gaps—the suffragettes and suffragists, for example; slaves, as pointed out by the noble Lord who introduced the debate; and women more generally. Maybe your Lordships’ House should take on the responsibility of carrying out a regular and critical review of those gaps and making recommendations that might be taken up by everyone, including the Government, and how we might do that. That is possibly a thought for the usual channels to take forward.
I support the noble Lord who moved the Motion in getting answers to the questions that he asked, with particular reference to the question of what the Royal Parks might do about the request for £1 million to ensure that a memorial, once built, is maintained. Under the new structure the Government will have a lesser role in this, and I would be interested to know what the Minister thinks about what will happen to that request because it is genuine.
Thirdly, the HLF is probably the agency that has most responsibility in this area. It would be interesting to know what proportion of the grants it currently gives goes to memorials. I am also personally interested in our taking up some of the ideas that the noble Baroness, Lady Lane-Fox, mentioned, about how intangible memorials might be supported. That might be a way of getting out of always focusing on statues, because they are not always the right way forward.
I understand from my quick research that the HLF has already funded the Gomersal Colliery Memorial Project in Yorkshire, which centres on miners’ sculptures, complemented by personalised paving slabs and opportunities for former miners to get together to recall memories, but I do not think—although I would have thought there was a case for it—it supports the memorial, run by Carousel, to the history of the Paralympic Games, which would be another way of trying to pick up an issue that has not been given sufficient regard. Also, the Tolson Memorial Garden in Huddersfield celebrates the work of service men and women who have lost their lives since the end of World War II. It is part of a museum but, again, it is intangible work. Then there is the work of the Woodland Trust, which is thinking imaginatively about ways to memorialise using the natural environment. That is something that might slip between the various agencies. Perhaps the Minister might respond on that.
At the end of the day, the need to fund these operations is only as strong as the ideas that come forward. There is a broader context here about who drives it. I have suggested that the House of Lords might have a role but we will need to think very widely when we do that and get across the issues that have been raised today in this good debate.
Baroness Buscombe (Con)
My Lords, I thank all noble Lords who have taken part in this interesting and far too short debate, particularly the noble Lord, Lord Oates, for introducing it. I have also learned a new name to describe myself: like the noble Viscount, Lord Falkland, I am something of a flâneur. I have always loved looking at statues. The sad thing about life today is that we walk around with our heads down a lot of the time, not necessarily on the phone but we do not look up and there is so much to see in all our cities.
This nation’s many great statues and memorials form an increasingly studied and enjoyed aspect of the public realm. There are more than 1,300 mentions of statues on the National Heritage List for England, which gives a sense of their ubiquity. They are the embodiments of our great history and include some of the highest examples of the sculptor’s art. The recent dispute over the statue and plaque in Oxford to Cecil Rhodes, referred to by the noble Lord, Lord Oates, shows that some statues are capable of generating a great deal of controversy. Historic England’s next exhibition, “Immortalised”, in 2018, will be on the subject of who is remembered in monuments and why. It is a topic attracting more and more attention generally.
The listing system ensures that proper care and protection are afforded to buildings and structures, including statues and memorials, of special architectural or historic interest. Policy on the listing of buildings is currently being revised and will shortly be published as the updated Principles of Selection for Listing Buildings. It will be complemented by Historic England’s range of listing selection guides. These set out its approach to the identification of buildings for consideration for listing and include its Commemorative Structures Listing Selection Guide.
Historic England’s first exhibition at Somerset House in 2016, “Out There”, was on the topic of post-war public art and was very well received, coming just days after the unprecedented grade 2 and grade 2* listing of 41 post-war public sculptures. Several of these pieces are by well-known sculptors and include: Henry Moore’s “Knife Edge Two Piece” near the Houses of Parliament, Barbara Hepworth’s “Winged Figure” on John Lewis in Oxford Street, and Elisabeth Frink’s “Horse and Rider” in Piccadilly.
Historic England built on this by the publication of new guidance on the care of public art. In considering whether to grant listed building consent or planning permission for development which affects a listed statue or memorial, local planning authorities are required to have special regard to the desirability of preserving the structure or its setting or any features of special architectural or historic interest that it possesses. In addition to receiving statutory protection through inclusion on the National Heritage List for England as listed buildings, statues and memorials can also be locally listed by local planning authorities.
As well as publishing guidance on the selection of statues and memorials for listing, Historic England has produced guidance on caring for cemetery monuments and war memorials. As part of the four-year First World War centenary commemorations, the Government have made funding of £4.5 million available to conserve and protect war memorials. Here I pay particular tribute to my noble friend Lord Cope, who does fantastic work as a trustee of the War Memorials Trust. Led by Historic England, in partnership with Imperial War Museums, the War Memorials Trust and Civic Voice, the project is working with the public to record, research, conserve and list war memorials across Britain to ensure that they are protected and the people they commemorate are remembered.
Historic England has pledged to nominate an additional 2,500 war memorials for inclusion on the National Heritage List for England. This campaign will potentially triple the number of listed memorials, which are thus ensured long-term protection. They include many with fine sculptures by noted artists such as Charles Sargeant Jagger and Eric Gill. Civic Voice is running workshops in local communities, teaching local people how to record the condition of a memorial, how to apply for grant funding and how to get the memorial protected, ensuring a legacy of trained volunteers. Communities and schools across the country are getting involved in this important project and I entirely agree with the noble Lord, Lord Bilimoria—we need to encourage schools and young people in general to get involved in this work and to understand the meaning and value of our memorials and statues. Since the 1990s, there has been a surge in the number of new memorials and statues erected. Recently, attention has been drawn to the imbalance in the number of statues of women. I am happy to say, particularly in response to the noble Baroness, Lady Lane-Fox, and my noble friend Lord Finkelstein, that Historic England is engaged in discussions with the Greater London Authority about a proposed new statue of a suffragette in Parliament Square, so there is progress.
Recently, several statues in London with resonance for the black community were listed, including the statue of Nelson Mandela in Parliament Square. However, it must be said that some areas—particularly in London—are becoming anxious that the number of recent memorials is leading to an overcrowding in public spaces. The City of Westminster is one such area and has issued guidance about the process that applications for new memorials should go through. There is a desire to encourage the erection of any new statues outside the core zone of Westminster. Removal of the requirement to seek approval from the Secretary of State for Culture, Media and Sport before erecting a statue in London places local planning authorities firmly in control of this process.
It is right that many organisations, trusts, charities and commercial organisations are able to freely propose, fund, develop and deliver memorials and statues marking a great variety of historical moments. It would be quite wrong for government somehow to orchestrate and curate which memorials should be proposed. Government does not have sole responsibility for the many new memorials that are rightly created. Of course, government supports memorials to mark particular events. We are delivering a new national memorial in honour of British victims of overseas terrorism, as well as a memorial to the victims of the 2015 attacks in Sousse and at the Bardo museum in Tunisia. Memorials have also been created in honour of the victims of 9/11, the 7/7 bombings in London and the 2002 Bali bombings.
Government also supports a new suffragette memorial, and a memorial is being created by the independent Iraq/Afghanistan Memorial Project charity to honour those who served in the Iraq and Afghanistan wars. So, in some circumstances, government supports new memorials, but it is not for it to determine which memorials go ahead, and it is certainly—with limited public funds—not possible for central government to fund all new memorials. There is a tradition of funding new memorials through public subscription. Government supports this and experience has shown that there are often other funders—including the private sector—who are happy and willing to fund new memorials. That said, the Government offer support through the Memorials Grant Scheme, which allows charities and faith groups to claim a grant that is equivalent to the VAT paid on the eligible costs of erecting, maintaining or repairing public memorials. The scheme is administered by the DCMS for the whole of the UK.
On the proposed memorial to commemorate enslaved Africans, the idea of a permanent memorial in London to remember the enslaved and their descendants was first mooted in 2002. We have heard all about this from the noble Lord, Lord Oates, and the noble Baroness, Lady Lawrence. As a result, the charity Memorial 2007 was formed. Its goal was to erect a memorial on a site in the rose gardens of London’s Hyde Park. Following the success of Memorial 2007 in securing planning permission for the proposed memorial from Westminster Council in November 2016, the Royal Parks has indicated that it is open to discussion about locating it in Hyde Park, should Memorial 2007 raise the necessary funds, including those necessary for the memorial’s maintenance.
Since the establishment of Memorial 2007, the Government have taken some important steps to mark the bicentenary of the abolition of the slave trade, including the opening in August 2007 of the International Slavery Museum in Liverpool. The Government provide funding to the museum, which examines aspects of historical and contemporary slavery and is an international hub for resources on human rights issues. My noble friend Lord Cope talked about the different ways in which events that have taken place in our lives are remembered, such as by the creation of amenities and museums. That museum has a focus, as referenced by the right reverend Prelate the Bishop of St Albans, on human rights and the Magna Carta.
The Government also support the National Maritime Museum in Greenwich, which also includes a permanent exhibition, and we are delighted that the St James Heritage Quarter of Toxteth, Liverpool, is recognising its historical connection to the transatlantic slave trade. Both the Prime Minister and Home Secretary have endorsed their campaign to establish a living memorial to the victims of this dishonourable and abhorrent chapter of our history. The Government fully appreciate the tremendous efforts of Memorial 2007 over the past decade, and in particular those of its chair, Miss Oku Ekpenyon MBE, with whom they continue to work.
I also pay tribute to those in the Sikh community and what is perhaps still outstanding in that regard. I assure my noble friend Lord Suri and the noble Lord, Lord Bilimoria, that the Government fully recognise the outstanding military contribution of Sikhs. We very much welcomed the construction of a permanent memorial to Sikh soldiers at the National Memorial Arboretum, the year-round centre for the remembrance for the whole of the UK. I understand that government was approached for assistance in identifying a central London site for this new memorial. However, as a great many people and organisations are interested in establishing memorials, the general rule is that it is for those bodies to raise the funding and work with the local planning authority to identify a suitable site.
That said, there is of course the National Memorial Arboretum, which brings me to the point referenced by the noble Lord, Lord Stevenson, and something which I personally feel quite strongly about. Living amenities and living memorials—also referenced by the noble Viscount, Lord Falkland—are in a sense for the future. The Woodland Trust has been working to create a new generation of living memorials, which not only commemorate and celebrate the past but contribute to the future. Like the noble Baroness, Lady Lane-Fox, I too have done some digging with the Woodland Trust on this. There have been a number of debates in your Lordships’ House recently about the loss of ancient woodland and the loss of more trees as demand for housing grows. Perhaps the planting of trees is a brilliant way to respond to that, in memoriam of different things that have happened. For example, there is the Wilberforce Oak, under which it is said William Wilberforce met the Prime Minister, William Pitt, to take up the case for the abolition of slavery. Back in 2007, there was a rather special example. Two schools in Portsmouth planted trees to remember the blood that was shed to ensure that slaves remained free after the abolition of the slave trade.
An amazing number of things are going on across the United Kingdom by which we mark different events in different ways. However, I assure all noble Lords that the Government take very seriously their continuing commitment to the historic built environment, including its statues and memorials. Again, I thank all noble Lords, and particularly the noble Lord, Lord Oates, for taking part in this important debate.
Mental Health: Young People
(7 years, 2 months ago)
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Baroness Massey of Darwen
To ask Her Majesty’s Government what action they plan to take in the light of the Association for Young People’s Health briefing There for you which discusses the role of parents in supporting young people with mental health problems.
Baroness Massey of Darwen (Lab)
My Lords, I am delighted to have secured this debate on the very important and pressing issue of young people and mental health, and the importance of parental support. The report is called There for You—an apt title, as I shall discuss. I am grateful to the Association for Young People’s Health, of which I am a proud patron, for presenting the results of its recent survey so cogently.
I am very happy to see that the noble Lord, Lord O’Shaughnessy, is responding to the debate. I am aware of his interest in young people and we have often discussed their well-being in relation to character education and the links to personal, social and health education and life skills education. My noble friend Lord Patel also has a fine track record in supporting the development of initiatives in mental health. Many noble Lords speaking today have a variety of perspectives on this, so I look forward to a lively debate.
I will talk about some of the report’s background and proceed to repeat points made by parents. I will then seek the Minister’s acceptance of these points and his support. I recognise and appreciate that much has been done in recent years in recognition of young people’s mental health needs. I salute Norman Lamb MP for his tenacity and excellent work on this. The Prime Minister, of course, mentioned mental health last week.
I hosted the launch of this report. There, I talked to many parents who have the experience of supporting a son or daughter with mental health needs. They expressed agonies of feeling helpless, guilty, angry and sad at the lack of support. Many had sought private counselling as there was nothing available in the state system. The report estimates that 36% of parents are in this position. We must remember that young people are not just teenagers, but include children of primary school age and younger. These children may show disturbing behaviour—I do not mean just naughty behaviour, which is perfectly normal, but distress, which needs deciding upon and doing something about if it is not to become more serious.
Some of the parents had formed local parent groups. The question occurred to me: what if you cannot afford to get help? What if you do not have, for whatever reason, the initiative to set up a group? It seems that you just get left behind, feeling more and more distressed. I will give two moving quotations from the report. First, a parent said:
“It must be incredibly hard for a young person who’s in crisis themselves to then look at the one person they trust, who is sitting on the floor sobbing … thinking I have no idea what to do, and nobody’s helping me”.
Secondly, a young person said that,
“if they were to empower my mum … then I would feel more empowered too”.
These are real cries for help.
The report is part of a wider parenting project and reflects a survey of parents’ networks co-ordinated by Young Minds, which also does excellent work on the broad aspects of young people and mental health. A thousand parents were involved—not parents who had no voice at all, or those who are perhaps less engaged with their young person’s mental health problems, but it is a starting point for finding out what parents think. A fuller profile of the parents taking part is given in the short report.
The need for such research and action is clear. Half of all adult psychiatric disorders start by the age of 14. Only a quarter of young people referred to specialist services will be seen. Only 0.7% of the total NHS budget is spent on mental health services for the under-18s. Things are simply not changing fast enough, despite all the excellent recommendations and reports. I ask the Minister: how might this be improved? Self-help is good, but it is not sufficient. Parents and young people need a better deal. It is so much better to treat such problems early, rather than wait. Costs, as well as human misery, inevitably increase the longer there is lack of support.
Parents say that there is a problem of waiting times for treatment. They are often left alone to cope. They may have to take time off work, or go part-time or give up work. They struggle to find help or they may feel that they have something to offer but get sidelined. Many parents I talked to said that they needed more guidance on how to offer help to the young person in need. Dealing with a young person in crisis can leave a parent feeling helpless, guilty and under-confident. Parents and families—such problems affect the whole family—are desperate. Parents in the survey made suggestions about how things could be improved.
I will recount some of their ideas. The first is the development of parent support groups. Parents are dealing with the stresses of their children’s lives constantly. Of course, parenting has its joyful aspects, but come a crisis, parents and families often need help rather than having to cope on their own. Support groups are one way of helping. When I was chair of the National Treatment Agency for Substance Misuse some years ago—the noble Lord, Lord Patel, will remember that—support groups for users, parents, grandparents and families were prominent in aiding recovery and, frankly, keeping people sane. Some of those groups were supported by local authorities. Support could include practical advice, with a dedicated worker to provide support. Would that not be a way of helping parents with children and parents struggling with crises, especially mental health crises? Support could include practical advice on where to go next in finding a CAMHS worker, for example, or other consistent key workers. Consistency is really important here. Having someone with professional expertise alongside them would be a boon to parents.
Secondly, parent support workers attached to schools were suggested as another means of helping parents. Such a person might, for example, manage the interface between services such as CAMHS, the school and the home. I certainly advocate a role for schools here. I have long been convinced that much stress is created in schools by overtesting and overpressurising. That is what children say. There is still no requirement for schools to develop coherent programmes for delivering ways of coping, such as personal, social and health education, character education, life skills—whatever we call it, children need it.
Thirdly, parents stressed the need for and importance of early intervention—help before the breaking point. A triage-based service for all levels of mental health issues is important, not just when they become crises. Parents also suggested that out-of-hours support such as telephone helplines could be important. They thought that parents could help design services and delivery. Involving those dealing with problems is always a better way of getting things right—my words, not theirs.
In reflecting on the results of this extremely helpful and powerful survey, I do not underestimate factors such as socioeconomic status, poverty and family situations. But any child, from any stratum of society or any family, can develop mental health problems. We must recognise that, and act on developing the valuable role that parents can play as partners in such situations. There may be some costs involved, but nothing extraordinary. In pure cash terms, the savings would be enormous in the long run. In terms of distress, they would be even more enormous.
Will the Minister reassure us that the Government have their eye on this, and will he personally intervene to encourage initiatives to help parents and young people? I know that he knows it makes total sense.
Baroness Chisholm of Owlpen (Con)
My Lords, I thank the noble Baroness, Lady Massey, for initiating this debate. Mental health is coming out of the shadows and into the light. This generation will benefit from the greater awareness that their parents and grandparents were denied. It is a largely taboo subject for older generations, and because of this, physical health is talked about far more openly than mental health—for instance, we talk about children’s allergies but not their self-harming.
Conversations about mental health issues should be about hope and support, not shame and confusion. As parents, we recognise when a child is physically unwell, but mental health is far more complicated. Differentiating between normal problems experienced by children and the kind of behaviour that could be the first signs of a mental disorder is difficult, yet we know that early intervention is the first step towards effective treatment. As the noble Baroness, Lady Massey, said, half of all lifetime cases of mental illness begin by the age of 14. Parents have a vital role in contributing to support and solutions for successful outcomes. Those who develop good communication skills are more likely to pick up problems.
However, for parents to be able to give the support required, they in turn must be listened to and supported. Parents can feel sidelined. Building resilience in the family brings a better chance of helping a young person in the long term. Making parents part of the solution can help reduce the need for crisis intervention. They have a critical role to play in joint decision-making. It can be devastating and bewildering to realise that something is seriously wrong, and that can be after parents have been struggling for months. Their first port of call is usually the GP. Here they should find heightened awareness, information, advice and options available so that the right decisions can be made about supportive treatment, yet most GPs have very little mental health training. Is this going to change?
Schools have a vital role. Teachers are a large part of a young person’s life. Some 65% of primary school children were in contact with NHS mental services for the year ending June 2016. We must focus on prevention, and parents and schools are central to that. Studies have shown that school-based counselling services have a positive impact on learning. Will the Minister confirm that funding for this counselling will continue?
Oliver Goldsmith Primary School in Peckham is delivering a new programme, funded by the South London and Maudsley NHS Foundation Trust, called CUES-Ed. The programme teaches children to recognise the signs when things are not right, and behavioural techniques to help them to manage their mood. However, this is rare. What training are teachers getting in dealing with mental health problems among schoolchildren? The time has come for joined-up decision-making and care between healthcare professionals, parents and teachers. We must ensure that there is access to effective treatment, that services are tailored and responsive to their communities, that children get the help they need and that parents are included so they are part of the solution. Our children have the right to timely treatment, just as they would get with a physical health problem.
Baroness Lane-Fox of Soho (CB)
My Lords, I too thank the noble Baroness, Lady Massey, for her leadership on this issue.
There is no greater advocate for the change that the internet has enabled than me. I see its benefits on a daily basis and have worked my whole working life within the sector. However, even I do not believe that we have yet understood, and developed the frameworks to help our children deal with, both the benefits and the destruction of this incredible revolution.
There is so much to be positive about. I see my nephews playing multiplayer games and building incredible things, connected to children they have never met before across the world. I see my godchildren playing chess in complicated ways with players they have never seen before in countries all over the world. However, it is hard to ignore some of the data and studies that also show how this technology is affecting children in a negative way. The BBC says that 62% of children on its websites are looking for mental health-related data. I look at this issue from a different angle: the number of children who are using some of the networks that were never intended for them. I declare an interest as a director of Twitter. Although we do not have so many children on our network, Facebook says that 52% of eight year-olds sign up to Facebook, despite an age limit of 14. I am not against social networks—quite the opposite—but there are reasons why they are age-appropriate.
The positives of this amazing technology must be countered by an understanding from parents and teachers about what their children are really doing. I had a small absence from your Lordships’ House as I now have seven-month-old identical twin boys, and this issue is front and centre as they see me with my iPhone or my iPad—probably too much—and immediately their faces turn towards it. I find this world hard to navigate; how it must be if you are living in one of the 1 million families in this country who do not have basic digital skills, I dread to think, let alone if you are a teacher who may themselves be struggling with understanding this complex new world, yet you are responsible for a class of children who may be at varying degrees of usage and attention in the classroom.
I feel strongly that we must create new ways of thinking about this problem. It starts with schools but it must also be led by parents. I pay tribute to my noble friend Lady Kidron who has done a lot of work on children and their rights, but we need to go further. I am keen to understand how we could use more creative thinking and I urge the Minister to consider this. Some amazing people around the world are looking at the issue, and I cite Danah Boyd, who is based at Stanford, as a world-leading expert. I would love to see how parents can be given comfort and reassurance in these uncertain times so as to make sure that the benefits continue to outweigh some of the dangers.
The Lord Bishop of St Albans
My Lords, there are few more urgent issues in modern Britain than the state of mental health among our young people, and I thank the noble Baroness, Lady Massey, for tabling this important debate. Referrals to specialist mental health services have risen dramatically in recent years as increasing social pressures on our young people threaten the mental health of a generation. Issues around body image are one area of particular concern, fuelled in part by the rise of social media. I want to take this opportunity to pay tribute to my friend the right reverend Prelate the Bishop of Gloucester for her important work around body image and self-worth.
One statistic that has caused me concern, and which I have already mentioned in the House, is the rise in self-harm among young boys and girls. Some 20% of British 15 year-olds report some form of self-harm, while in the past five years hospital admissions associated with self-harm have gone up by nearly 93% among girls and 45% among boys. It is notable that of the parents who participated in the report mentioned in the Question put by the noble Baroness in tabling this debate, 59% said that their child self-harmed.
The charity selfharmUK, located in my diocese, does amazing work helping parents, youth workers and teachers understand and respond to the issues around self-harm. But for many who do not have access to such resources, parents in particular, knowing how to respond can be very difficult. It is all too easy to panic and thereby sometimes make the situation even worse. What seems to me to be absolutely essential is readily available support and training for parents, teachers and youth workers about how to help children who are struggling with self-harm and similar mental health conditions. I was very moved, as I am sure were other noble Lords, by the comments made in the past week by the broadcaster Mark Austin in the Times about his struggle to understand his daughter’s anorexia. Can the Minister therefore inform the House what steps, in addition to the welcome mental health training for teachers announced by the Prime Minister last month, Her Majesty’s Government will take to make sure that parents and youth workers are able to access proper resources and support when it comes to understanding mental health in young people?
Lord Farmer (Con)
My Lords, our young people live in a culture that seems to value them for their outward appearance, their achievements and eloquence on social media and, grotesquely, their sexual allure at an even more tender life stage. They are under a significant amount of pressure and need reliable, loving foundations to thrive. Parents have a primary and indispensable role to play in providing these, so I thank the noble Baroness, Lady Massey, for securing this important debate.
As a sponsor-governor of the Ark School in Camberwell, I know about a whole-school approach where anti-bullying policies are not just words on a page but part of a culture that prizes nurture, encouragement and mutual support, all of which are vital. Equally, on-site counselling and therapy when children are clearly struggling with specific issues is needed. However, my heart sinks when the solutions to young people’s mental health problems are deemed to begin at the school gate given that much support, and in many cases the underlying contributors to their difficulties, is to be found at home. While there is an important parenting dictum that says, “Don’t take all the credit, don’t take all the blame”, another aspect of our culture which erodes so many young people’s sense of well-being and good mental health is the pervasiveness of contingent commitment in adult relationships—the sense that, “I will be there for you only as long as my needs are being met”.
The noble Lord, Lord Giddens, who will contribute to the debate later, describes how this transition in the ethics of personal life flows from living in a society with a high divorce rate, yet the toll this takes on our children’s mental health means we must not treat current levels of instability in parental relationships as inevitable. In the past, many children had to face the world alone because of the death of one or more of their parents, but today’s high level of family breakdown can feel like a much more intentional wound. Professor Brad Wilcox’s new research shows that we have more children living in unstable families than anywhere else in the developed world. Researchers at the Institute of Psychiatry showed that experiencing family fracture and separation from a parent in childhood are risk factors for later serious mental health disorders. Finally, US research found that low-conflict separation can also cause great harm. Children blame themselves and assume that relationships are fundamentally unreliable. Strong, stable families lay the foundations for life. Family breakdown has implications for population-wide mental ill health—we ignore this at our children’s peril.
Will the Minister let us know what the Government are doing to strengthen and stabilise families? Does he agree that every government department has a role to play in tackling our big cultural problem of family breakdown?
Lord Cashman (Lab)
My Lords, I too wish to place on record my thanks to the noble Baroness, Lady Massey. I welcome the briefing There For You. It is eloquent, and the parents involved in the survey are hands-on, informed and know how to connect. But what about those who do not? What about those who are not connected and who, in fact, feel disconnected from where to seek help or advice? These are the groups that we need to target and, I would argue, prioritise—those who are unable to recognise or cope with the reality that their child may have a mental health problem. We need to remove the stigmas and barriers around discussion. In that respect, some of us need to come out and admit how all of us, to a greater or lesser degree, battle with mental health problems that our friends and colleagues so rarely understand or acknowledge as a health issue. We need to deal with the causes of mental health problems, both physiological and psychological.
In that regard, I wish to say a few words about young people who are overlooked and often fall through the safety nets we try to construct: lesbian, gay, bisexual, trans and intersex youths. The 2014 What about YOUth? survey of 15 year-olds presents deeply worrying facts that have, sadly, been overlooked by the Department of Health and the Department for Education. The research revealed that 31% of lesbian and gay 15 year- olds and 39% of bisexual 15 year-olds had low life satisfaction, compared with 12% of heterosexuals. Of those who had been bullied in the period under question, 74.5% were lesbian and gay and 81% were bisexual, compared with 53.4% who were heterosexual. These are 15 year-olds, crying out for help but help is not coming their way. These young people are crying out to be understood, especially among their own community and within their social structures. That is why we need comprehensive sex education that is mandatory, not something that schools or religious organisations can opt in or out of, so that people are not bullied or mistreated but are understood.
We need action plans to prevent the damage that is inflicted upon young children from a very early age. That harm affects us all. Parental support is not always there for LGBTI children because, for that to happen, the child would have to come out to their parents or teachers, and sometimes they are not ready or able to do so. If you put religious adherence in to this mix, the damage is toxic. Young people are shut out from families and religious communities and cast aside. There are some organisations doing great work in challenging circumstances, such as FFLAG, of which I am a patron. However, they are underresourced and always in demand. Schools Out is another, and is working hard to educate, particularly in this LGBT History Month. I urge the Minister to work cross-departmentally with these organisations and others to ensure that no child suffers.
Lord Hastings of Scarisbrick (CB)
My Lords, I, too, am deeply grateful to the noble Baroness, Lady Massey, for allowing us to debate this issue. I am very grateful to the noble Lord, Lord Farmer, for framing the very remarks I would have made myself so I shall admit to needing to refer to similar matters.
This debate has given me the opportunity to reflect on what it means to be the parent of an adopted child who came from a severely drug-disabled parent and therefore spent the early months of his life in an incubator without contact with adults and then developed significant distress disorders, which we live with now in his adult years. That led me to look at the detail of the research and to realise that mental disorder is often picked out as being about the distress that a young person or individual may feel, rather than necessarily being about a strict form of behaviour. Anxiety and distress lie behind the statistics from Young Minds, which I found very painful, of the high levels of male and female suicide—tragically, the girls are slightly beaten by the boys. That led me to reflect on how as parents we have responded to the needs of our youngest son.
In my son’s distress and confusion, and very often in his pursuit of answers, more than just parents have been necessary to assist him. As I looked at the report, I realised that there may well be a limitation on how we understand the role of parenting as defined as those who have a direct birth or adoptive responsibility. In our case, the wider community of parents—those from the church community, the local garden centre, the café and the Outward Bound community; those connected to the school; those who have been adoptive uncles and good friends in the wider area and those whom he can drop in on in the shops—those people do not fit the category of “parent” but they are parenting. They are providing a context of security, a relationship and a place of identity, and it is that network of identities that gives security to young men and women who long to find a place in which they can reveal their minds and hearts and release their distress. I hope that we will begin to move away from the liberal consensus that defines security only in relation to those by whom a child is cosseted for their protection to a more open approach to allow our communities, as would be the case in more traditional societies in other continents, to love a child in a community.
Baroness Redfern (Con)
My Lords, I thank the noble Baroness, Lady Massey, for securing this debate. I declare my interests as in the register.
Parents and carers play a huge part in supporting any young person, especially, as we have heard, one who is struggling with mental health difficulties. Parents have more personal, intimate knowledge than a professional would, and therefore can greatly support their child’s recovery. Maternal instinct can quickly pick up changes in a young person that the young person may not be aware of. Motivating a young person even to take their medication can be very challenging in many instances, as can supporting them in attendance of classes. Attendance at school or college offers greater independence in managing their mental health and providing continued support as they become an adult.
It is important for parents to be able to take time to care for themselves, too, and they need help, support and reassurance that they are doing the right thing. The question is: where would we be without our carers in the NHS system? Many parents and carers have no mental health qualifications. They are not mental health professionals. Sometimes it is hard for them to know when they, too, need extra support. In many cases they can feel isolated. That is where organisations such as Young Minds come into play, as well as other organisations such as parent support groups.
Time is of the essence for assessments and referral times. As we know, in many cases early intervention prevents a young person falling into crisis. This debate provides an opportunity to raise the profile of and highlight our young people’s mental health issues, keeping them to the fore. Mental health training for teachers and staff is to be welcomed but I would like to see a much more co-ordinated approach to training, developing strong links with schools, communities and mental health staff, and hope to see a reduction in rollout time.
I shall give two brief examples. The first is of a young person’s esteem using Snapchat. She took 15 images before she could make a choice. She self-harmed and wanted to change her body image so she enhanced the snap chosen, giving herself a tan, using soft focus, et cetera, giving a much better outward appearance until she felt better about herself. The second example is of a young person suffering from loneliness, sleeping intermittently, desperately wanting to answer a text quickly if sent very late at night, or even during the night, so as not to miss out or be left out the next time.
Finally, I feel that by debating issues of young people suffering mental health problems we are making sure that mental health problems are everyone’s problems. Much more needs to be done.
Lord Giddens (Lab)
My Lords, I shall make some remarks about anorexia and obesity in children and young people, subjects that I have spent a chunk of my academic career studying. Anorexia has the highest death rate of any psychiatric disorder. Childhood obesity, as we all know, has taken on the characteristics of a huge epidemic: 20% of children aged 10 and 11 are obese in England and Wales. They seem separate conditions, almost opposites, but they are very closely linked. Both should be categorised as in some part mental disorders and are becoming so. The link is obsession-compulsion in relation to food and the body. Bulimia is like a bridge between the two in the experience of some young people.
There is a kind of unbelievable historical reversal going on here. Being fat was a characteristic of rich people and affected a tiny proportion of people in history. Anorexia was not even diagnosed until the late 19th century and was only known in the activities of saints fasting for the glory of God. Then about 50 years ago we had an amazing generalisation, not just in this country but across the world, of these linked conditions. To me, the main driving force is the advent of supermarket culture from about the 1950s and 1960s. This was the time when one had to decide what to eat in relation to how to be and we found an invasion of the body by compulsions and addictions.
I became interested in anorexia one weekend when I picked up two colour supplements of the Sunday papers. One had a starving teenager in Africa and the other had a starving teenager in the United States in the midst of an abundance of food. I thought that these conditions must be totally different, and so they are. We can be sure that these do not have genetic origins and the family and the peer group are plainly important influences. The family has a double role, obviously, because it can be causative in mental disorders as well as therapeutic. The work of the AYPH, which we are discussing today, is valuable here and slots into wider academic research.
I have a couple of quick questions for the Minister. Are the plans to combat eating disorders announced in January 2016 still on track? What happened to the waiting time targets for teenagers with eating disorders? Finally, what progress has been made with the conclusions of the document Childhood Obesity: A Plan for Action, which also came out in 2016?
Baroness Fall (Con)
I thank the noble Baroness, Lady Massey of Darwen, for securing this important debate and for drawing our attention to the pivotal role that parents play in supporting young people with mental health problems. We bring our children into a complex and difficult world, in which the lines between private and public are blurred and which operates 24/7 in 360 degrees through the likes of Facebook and Instagram. Our children never get a day off. Of course, older generations have always gazed with incomprehension at their children, bemoaning the lost values of their youth, and we are no different. Nor are we unusual in wanting to do our best for them, not just because as parents it is our duty, but also because we have an obligation as a society to care for our young. They are, after all, our future.
I am deeply troubled by the serious rise in mental health issues among children and young people in Britain today and the often inadequate help they are receiving, which puts enormous strain on them and their families. A lightning review by the Children’s Commissioner in May last year stated that as many as one in 250 children were referred to what is known as CAMHS by professionals. Of those, 28% were not allocated a service at all and 58% went on a waiting list. These are children in desperate need of help, who are often being turned away or asked to wait a long time for treatments, left with no one else to turn to but their parents. Parents often try to do all they can to help, but they are not trained specialists and can feel alone and overwhelmed by the responsibility and at times frightened for the safety of their child.
The recent paper “There for you” says:
“The practical impact on parents can be extensive. In order to care for their young people, many have to take time off work, go part-time, take unpaid leave, or resign from jobs entirely”.
There seems to be a corrosive combination of factors at work: a rising demand for help; frozen health budgets; a system of tough thresholds, which means that many referrals are turned away altogether; and long, painful waits for those who are lucky enough to get referred. Too often, by the time help is at hand the situation has deteriorated and the child may face no other option than being admitted to hospital. That is a terrible outcome for everyone. Taking the child out of their social environment, away from their families and friends, can make recovery times far longer and more painful and puts enormous pressure on parents, given that many of these places and sought-after beds are in hospitals miles away.
We have a serious problem, but one that I hope we are finally waking up to. I commend the Government’s recent intervention in this area and look forward to hearing more when their Green Paper comes out later this year. I especially welcome their focus on training teachers in schools, although I hope that that is extended to primary schools, where mental health issues so often begin.
However, diagnosis is one thing; treatment is another. We will never get to the heart of this problem while there are still rigid thresholds, rejected referrals and unacceptable waiting lists. We must try to intervene earlier and more aggressively. I also wonder whether we should not be looking for more creative solutions, working together with schools and the voluntary sector—perhaps in setting up drop-in clinics where parents and children might seek support from outside the system.
I welcome the concerns echoed across the Committee today and ask that we keep our eye on the ball, for we cannot afford to let things go on as they are.
Baroness Tyler of Enfield (LD)
My Lords, I congratulate the noble Baroness, Lady Massey, on securing this vital debate. Parental and family relationships have a huge impact on children’s mental health. This debate is all the more timely, taking place during Children’s Mental Health Week. Recent research revealed that up to two-thirds of children aged 10 and 11 worry all the time, with concerns about family and friends topping the list of causes of anxiety. Figures released last week show that more than 50,000 young people turned to ChildLine last year because of a serious mental health problem. In the light of these very worrying figures, it is hard to overstate the importance of the role of parents in supporting children with mental health problems.
In the time available, I can make only two key points. First, parents are a vital support and often a lifeline to children with mental ill-health. Given that parents spend more time with their child than anyone else involved, they have a crucial role in advocating on behalf of and supporting their child through difficult times. However, as the results from the “There for you” survey show, too often parents feel unprepared and ill-equipped to support their child and consequently struggle to play the vital role that they would like to. Indeed, the YoungMinds parents’ helpline found that 41% of parents said that they felt excluded from their child’s treatment, with other parents saying that they felt confused and isolated. We have to acknowledge that for a variety of reasons, some already mentioned, some parents are simply unable to provide the support that their children need. Obviously, there is a particular issue for children in care. Another specific concern that I want to highlight is perinatal mental health. More than one in five mothers develop a mental health illness during pregnancy or in the first year after birth. The knock-on effect of a mother’s perinatal depression on the mental health of her child can be severe.
My second point is that, as the noble Lord, Lord Farmer, reminded us, the quality of parental relationships has a significant impact on children’s well-being. Children growing up with parents who have low parental conflict, whether together or separated, enjoy better physical and mental health, better emotional well-being and higher educational attainment. Conversely, research indicates that parents who engage in frequent, intense and poorly-resolved conflict put their children’s mental health and long-term life chances at risk. In a recent survey of more than 4,000 children, family relationship problems were reported by CAMHS clinicians as being the biggest presenting issue.
We must promote greater involvement of children and parents in children’s treatment and do all that we can to ensure that effective resources are available to parents. I pay tribute to the free confidential parent helpline run by YoungMinds and its Parents Say network, bringing together parents to form a vital support network. Policy solutions and interventions need to take account of the wider family relationship in which children live and are supported. I urge the Government to prioritise support for parental-couple relationships in wider government policy, to reduce one of the often unspoken root causes of children’s mental health problems.
Lord Patel of Bradford (Lab)
My Lords, I am grateful to my noble friend Lady Massey for giving us the opportunity to debate this important and pressing issue. She has great expertise in the care and welfare of children and young people, which is evident in all the contributions that she makes to the House. It has been an interesting debate and noble Lords have raised a number of important questions. I look forward to the Minister’s response; given the challenging environment, I do not envy him.
The Government pledged £1.25 billion for improving children’s mental health services and £250 million to improve CAMHS provision for each year of this Parliament. However, in spite of these commitments at a national level, those funds are not reaching children’s mental health services and disinvestment is taking place at local level. The Government would argue that there have been no reductions in funding; in essence, that is correct, as there have been no direct cuts from central government. However, we know that the NHS is underfunded and social care is in crisis. The cuts to CAMHS budgets are the result of reduced funding to the NHS and local authorities, which then make cuts to local services and staffing levels. The impact of all this, as so graphically highlighted by a number of noble Lords, is that children and young people and their parents are unable to access services when they most need them.
In January this year, the Government announced that they would be publishing a Green Paper on children and young people’s mental health. Will the Minister give us an indication of when this will be published? I understand that the Green Paper will contain new proposals for improving services across the system and increasing the focus on preventive activity across all delivery partners. I warmly welcome this, but with a note of caution.
I have four questions for the Minister. First, will he assure us that the proposals will be adequately funded? Secondly, as the Government will not interfere with local decision-making or ring-fence money, how can he assure us that any national funding is used as intended by the local commissioning groups? Thirdly, I welcome the focus on preventive activity across all delivery partners—education, health, social care and the voluntary sector—which I believe is a crucial part of the solution to developing a good quality of care, a point echoed by the noble Baroness, Lady Chisholm. Are the Government proposing to issue guidance that will direct these partners to develop new ways of delivering children and young people’s mental health services that are collaborative and integrated? They should look at innovation, given the point raised by the noble Baroness, Lady Lane-Fox, around technology—I think that the noble Baroness, Lady Fall, mentioned that, too.
Fourthly, any new proposals must involve service users. Will the Minister assure us, in the spirit of the report “There for you”, that the people who use services and their families are placed firmly at the centre of any plans in a meaningful, not tokenistic, way, in order to ensure that their voices are listened to, heard and acted on, especially those very vulnerable young people whom my noble friend Lord Cashman highlighted in his speech? It is vital that we build a sustainable future for children and young people’s mental health services. To do anything less risks failing an entire generation of children and young people.
The Parliamentary Under-Secretary of State, Department of Health (Lord O’Shaughnessy) (Con)
My Lords, I pay tribute to the noble Baroness, Lady Massey, both for bringing about this debate and for the work she has done over many years in promoting the issues of mental health and mental well-being. I am extremely grateful to all noble Lords for this well-informed and passionate debate, and will try to respond in my speech to as many questions as possible.
I also welcome the report from the Association for Young People’s Health, and thank the parents in the YoungMinds network for their courage and honesty in discussing the very difficult issues they face in raising children with mental health problems. Parents deal with so much, often under the radar, and they deserve our praise and admiration. As the noble Lord, Lord Hastings, said, the concept of being a parent, in the sense of parenting as an activity, goes much wider. As my noble friend Lady Redfern said, mental health problems are everyone’s problems.
We must be clear, as noble Lords have been very clear today, that there is a real and growing problem with mental illness among young people in this country. It is estimated that around one in 10 children and young people have a diagnosable mental health disorder. That is three children in every class, a fact worth reflecting on for a moment. A new report out today from the Varkey Foundation paints an alarming picture of young people’s mental well-being in this country as compared to other countries.
When I was growing up, self-harm was a problem, but on a very small scale. However, over the last 10 years the figure has increased by 68% and, as the right reverend Prelate the Bishop of St Albans, said, it now affects boys as well as girls. Around 8,000 children under the age of 10 have severe depression—another heart-rending statistic—and the number of 15 and 16 year-olds with depression nearly doubled between the 1980s and the 2000s.
As the noble Lord, Lord Giddens, said, eating disorders are some of the most dangerous mental illnesses, and their prevalence continues to rise. There are multiple, sometimes competing, explanations for why this might be so, which several noble Lords have discussed today, whether family breakdown, as my noble friend Lord Farmer mentioned, the increased use of drink and drugs, the appalling rate of mental illness among children in care, or the effects of consumerism, as the noble Lord, Lord Giddens, set out. This means that a broad-based approach is needed. There is, unfortunately, no silver bullet. But there is hope.
While the trends have largely been negative in terms of the prevalence of mental illness, a sea-change in attitudes is taking place. As the noble Lord, Lord Cashman, described so eloquently, this has particular impacts on certain groups, particularly on minorities, whether according to sexual preference or ethnic minorities. Through concerted efforts by medical professionals, parents, young people themselves, campaigners, politicians and even the Royal Family, we are at last confronting the stigma of mental illness. It is finally becoming acceptable to admit mental health problems without it connoting some kind of personal weakness, as my noble friend Lady Chisholm, pointed out.
Government policy has both led and evolved in response to this change. I am very proud to serve a Prime Minister who is deeply committed to ending “burning injustices”. What greater injustice could there be than to receive inferior healthcare because your needs are mental, not physical? The previous Conservative and Liberal Democrat Government legislated to create parity of esteem for mental and physical health in 2012, and since then the Government have introduced the first mental health waiting time targets and have begun to roll out a series of initiatives—supported by an additional £1.4 billion—to support those suffering from mental illness, including support for young people suffering from eating disorders and to support perinatal mental health, which the noble Baroness, Lady Tyler, highlighted as being so critical.
However, it is important to acknowledge that there is much more do to. There are concerns that funding is not getting through to the front line, as the noble Lord, Lord Patel, said—and as other Peers have said in other debates—and it must be admitted, as my noble friend Lady Fall pointed out, that the performance of child and adolescent mental health services is patchy. Care also needs to be delivered closer to home wherever possible, as my noble friend pointed out. The Government are aware of these criticisms and are working hard with NHS and local authority partners to address them.
The report we are discussing today revolves around the role of parents, and some of the quotes in it are, quite frankly, heart-breaking. They lay bare the helplessness and frustration that many parents feel. As some noble Lords may know, I have spent the last few years working in education and in schools we always talk about parents as being the “first educators”. That is relevant here because in health we can think of them as the “first carers”—the first line of both defence and action, as the noble Baroness, Lady Tyler, pointed out. Government policy must be geared to strengthening parents’ ability to provide the love and support that makes young people more resilient, and to arming them with the skills and knowledge needed to identify and respond to the signs of mental illness when it occurs. The noble Baroness, Lady Massey, asked for my personal support in making sure that there is increasing support for parents through government policy and I am happy to give it.
There are some good examples of government policies that are working in this area. The Department for Work and Pensions supports parenting classes aimed at reducing family conflict, which has been raised as an issue. The Department for Education supports the YoungMinds Parents’ Helpline and the MindEd website, which provide parents with guidance on a range of parenting issues related to mental health. There is also the Family Test, which was introduced by the previous Government and which my noble friend Lord Farmer was instrumental in bringing about.
The NHS England Five Year Forward View for mental health has put mental illness at the forefront of NHS reforms. The noble Lords, Lord Cashman and Lord Giddens, asked about waiting time targets for eating disorders; these will be in place from April 2017. There is more funding, but there are challenges, as we know, in getting it through to the front line. I will respond to the question of the noble Lord, Lord Patel, later.
I think we have also launched today the next stage of piloting the single point of contact, which will benefit children in 1,200 more schools. The voluntary sector is doing pioneering work in this area, whether through Place2Be’s counselling services or through the proposals for a new national parenting trust emerging from the Legatum Institute, where I used to be a senior fellow, and which will provide parent support groups to help parents in a very challenging time of life.
I am delighted that the Government have committed to creating a joint Department for Education and Department of Health Green Paper on children and young people’s mental health. The aim is to publish it this year. I am also clear that this will succeed only if it boosts parents’ ability to support their children to deal successfully with mental illness. It is essential to involve parents in that policy-making. Mental health is being transformed in this country through local transformation plans which have parents and young people themselves taking part in the design of policies.
I take the opportunity to respond to some of the specific questions noble Lords have raised. My noble friend Lady Chisholm asked about mental health training for GPs. That is something NHS England is working on actively with the Royal College of General Practitioners. She will also be aware, I hope, of the Prime Minister’s really important and signal announcement, which outlined that there would be mental health training for mental health first aid in secondary schools. However, I very much take the point of the noble Baroness, Lady Lane-Fox, who talked about that going into primary schools too.
The noble Baroness, Lady Lane-Fox, also talked about the impact of social media and social networks. My oldest child is nearly nine years old and I am frankly terrified by the prospect of her joining social media. There is a kind of fascination with devices and everything that goes beyond it. You try to explain to them that there may be more bad out there than good, but they are desperate to be part of it.
The Prime Minister announced initiatives on digital mental health services, but clearly there is much more that we can do through the Green Paper and she was quite right to point out that businesses need to take responsibility, too, whether that means the social media businesses themselves—I can imagine that she is a forceful advocate for that on the board of Twitter—or other businesses. The Prime Minister has asked the noble Lord, Lord Stevenson, and Paul Farmer from Mind to carry out a review on mental health in the workplace.
The right reverend Prelate the Bishop of St Albans asked about support for parents. Some 90% of the local transformation plans that I have mentioned have parenting and early years programmes. Clearly, for this to be an effective strategy, it must involve getting to parents and families early, before problems arise, so that parents and young people, as they get older, have the skills they need to spot and deal with mental illnesses as they arrive.
My noble friend Lord Farmer asked what else the Government are doing to support families. There is a troubled families programme and, since 2010, there has also been the healthy child programme, which provides health visitor support in the home. As well as that, there is the Family Nurse Partnership, which provides targeted support for young mothers who are vulnerable.
The noble Lord, Lord Cashman, highlighted the issue of LGBTI people suffering from worse mental health. I admit that is something I was not aware of prior to this debate. I am grateful to him for raising it. I understand that in general there is a problem in mental health, in both prevalence and treatment, when it comes to equalities issues, which fall under my brief. That is something I will certainly look into. It is critical that we reflect that in policy.
The noble Lord also raised mandatory sex and relationships education and PSHE. That is a debate I engaged with when I was on the Back Benches. I do not want to reprise the whole argument now, not least because I am in a rather different role, but the issue is one of quality, not necessarily making something compulsory if it is not very good. We need to focus on making it good, then the argument to make it compulsory may be easier to make.
I hope I have answered the questions asked by the noble Lord, Lord Giddens, on waiting times targets. I apologise: it was my noble friend Lady Fall who made the point about this applying to primary schools. She also asked about drop-in centres. I hope she will have noticed that in the Prime Minister’s announcement on mental health there was rather an interesting and innovative idea about supporting crisis cafés and drop-in centres, which are precisely the kind of informal setting that it might be easier for a young person to access to get the support they need.
There is so much more that could be said on this subject. I hope I have given noble Lords confidence that the Government are taking this seriously. We have this wonderful opportunity of a Green Paper. We have to develop it. I do not know what a pre Green Paper is called, but we are in that phase. It feels to me that there is a large and important bucket that can be filled with brilliant ideas. I have some more ideas for how we might do that, but I hope this is the first of many debates on this issue. I am absolutely open to all Peers to discuss ideas they may have to make that a real milestone in mental health services, mental health treatment and building resilience in this country. I look forward to working with noble Lords to make sure parents play a central role in that strategy.
Syria
(7 years, 2 months ago)
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Baroness Cox
To ask Her Majesty’s Government what is their assessment of recent developments in Syria.
Baroness Cox (CB)
My Lords, I am profoundly grateful to all noble Lords who are speaking in this debate and to those, such as my noble friend Lord Wright of Richmond, who have expressed their support but are unable to be present. I am also grateful to another former British ambassador to Syria, Peter Ford, who has provided invaluable briefing.
My concerns arise from a visit last September in response to invitations from the Melkite Patriarch, the Grand Mufti and leaders of Christian and Muslim communities in Aleppo. Our programme was arranged by friends in Syria and was not organised by the Government. We met many Syrians in Damascus, Aleppo, Maaloula and Latakia, including representatives of Muslim, Christian and Yazidi communities; members of government and internal opposition parties; civil society organisations such as the senior council of doctors in Aleppo; IDPs in Latakia who had fled for their lives from ISIS and ISIS-related militias; and survivors of ISIS attacks in Maaloula.
We also met President Assad, a meeting for which we received vehement criticism in the media and by the FCO. We stand by our decision to meet the President, not because we are uncritical but because only by meeting can one raise concerns and learn about current and proposed policies.
Many noble Lords will have seen newspaper coverage this weekend condemning Assad for atrocities—including the killing of 13,000 people in Saydnaya prison—citing a report attributed to Amnesty’s Beirut office. Time permits me only briefly to address three issues related to those allegations.
First, the fact of torture in Syrian jails is well known, is cause for genuine concern and is in no way condoned, but there is a serious asymmetry in these reports. There is no mention of the conditions under which Syrian soldiers and many civilians are held by Islamist militants or of the atrocities perpetrated by those militias, including torture, beheadings and slaughter of civilians by suicide bombs. When we were in Syria, a suicide bomber attacked the checkpoint at Homs, killing more than 30 people, presumably including families burned alive in their cars in the queues. Secondly, these reports are accepted uncritically as true. However, in 2014, photographs of an oddly similar number of corpses were proven to be a farrago of half-truths. The third issue is timing. The report, apparently a year in gestation, emerges now, when it can do maximum harm to the chances of success of the peace process emerging out of the recent talks in Astana.
The report by our group which visited Syria is widely available and I want to highlight our priority concerns, which are still relevant despite the seismic changes which have taken place since September. First, everyone to whom we spoke in Syria was deeply disturbed by the UK Government’s commitment to regime change. But Her Majesty’s Government retain their unabashed commitment to a transition culminating in the departure of President Assad. Transition is therefore just a euphemism for regime change.
Leaving rights and wrongs to one side, it is delusional to pretend that Assad will have to step down. Following the recovery of eastern Aleppo, he is now in a commanding position on the battlefield, with domestic and external support bolstering his position. HMG should realise that were Assad to do as they wish, the first to suffer would be the Syrian people. Everyone whom we met was deeply afraid that Assad’s departure would cause implosion of the regime, leading to catastrophes similar to those in Iraq and Libya. I ask the Minister why Her Majesty’s Government are not listening, for example, to the faith leaders in Syria, both Christian and Muslim, almost all of whom are urging the international community to engage with the Syrian Government.
Secondly, there is widespread, understandable dismay and anger over the UK continuing to provide opposition Islamist militias with practical assistance, including training, equipment, help with propaganda and diplomatic support. Helping to sustain the armed opposition can only prolong the suffering of the Syrians to no purpose whatever. So many people told us: “War is terrible. People die from shelling on both sides. But here, you die from shelling or you die from shelling and beheadings. And we don’t want the beheadings”. I therefore ask the Minister why the UK is continuing to support the Islamist “rebels”, when the consistent word from the Syrians, who have suffered under their brutal tyranny, is that the “moderates” no longer exist and the vast majority of these groups have extreme ideologies and no intention of creating a democracy in Syria.
Thirdly, there has been widespread dismay over the long-standing reporting by the BBC and other Western media which is perceived to be very biased, focusing on the suffering resulting from military offences by the Syrian and Russian armies, with no comparable coverage of the suffering inflicted by ISIS and other Islamist military offensives, including the use of cluster bombs and chemical weapons. The latest case of indiscriminate abuse of an innocent population has been largely ignored by the western media. It is the month-long poisoning by diesel fuel, and later the complete cutting off, of the water supply to Damascus by so-called moderate jihadists between late December 2016 and late January 2017. Water supplies were restored only after the Syrian military diverted significant forces from other fronts and retook the Wadi Barada springs from the jihadists in a major military attack.
The bias in media reporting seems to be intent on demonising President Assad and his Government and drawing a veil over the atrocities perpetrated by the Islamist forces. On 13 December the House of Commons held an emergency debate on Aleppo. The Foreign Secretary underlined condemnation of the offensive against eastern Aleppo, the importance of protecting civilians and an ongoing commitment to bring about a political settlement in Syria. That statement by the Foreign Secretary raises many questions. Why do the vast majority of civilians from east Aleppo chose to flee to government-controlled areas if they are all so terrified of the Government, apart from a small minority who joined the evacuation of terrorists to Idlib? Why, after months of lamenting the plight of 300,000—a grossly exaggerated figure, by the way; it turned out to be 130,000—civilians in east Aleppo, has there been so little media coverage of what had actually been going on?
Reverend Andrew Ashdown, who organised our September visit, was in Aleppo as the city was liberated. He visited areas of east Aleppo including the Jibrin registration centre and other reception centres, as tens of thousands of refugees from east Aleppo fled to government-controlled areas. I quote from his report:
“The voices of the civilians emerging from ‘rebel’-controlled East Aleppo were absolutely consistent—of the brutal murder and execution by the ‘rebels’ of anyone who opposed them; the killing of men, women and children who tried to flee; regular torture and rape of civilians; the withholding of food to civilians, or selling food at exorbitant prices; the withholding of medical aid to those in need even when they begged for assistance; telling civilians that they would be killed by the army if they fled to government-controlled areas; and, that if they did not adhere to the ‘rebel’ ideology, they were not real ‘Muslims’ but were ‘infidels’ and deserved to die. Also those refugees who fled from East Aleppo who knew of the widely acclaimed ‘White Helmets’ (many didn’t) repeatedly said that ‘they only helped the terrorists’. They were all visibly delighted to be free, and were being given food, medical assistance and shelter on arrival. The narratives of these people directly contradict all that the western media were reporting for months previously”.
In the last month, efforts at restoring facilities, opening schools and making areas of eastern Aleppo habitable have already begun. Many people are asking why no one is reporting these positive developments in post-conflict situations in east Aleppo.
Her Majesty’s Government’s position is coupled with an insistence on maintaining sanctions. These greatly harm Syrian civilians, who cannot obtain medical supplies such as prostheses, more than they harm the Government. It is also sometimes claimed that Assad is not really fighting ISIS. To that, I say: tell that to the brave defenders of Deir ez-Zor, the people of Palmyra or the inhabitants of Damascus and the Homs countryside, for whom all that stands between them and beheadings are the government forces.
I take this opportunity to record that the people of Syria are profoundly grateful to Russia for taking ISIS seriously and assisting them by defending their people against its barbarities. I ask the Minister: what is Her Majesty’s Government’s position with regard to the Astana talks, which appear to be the only current initiative likely to deliver a policy capable of defusing the present situation?
In conclusion, I open this debate with a heavy heart and with deep sadness because I have seen a glimpse of the suffering of the people of Syria under the onslaught of ISIS and related Islamist jihadists. I am all the more sad because I have seen that suffering exacerbated by UK polices of support for the jihadists, and I am deeply saddened by Her Majesty’s Government’s continuing commitment to regime change, by whatever name, which is profoundly dreaded by the people of Syria. Will Her Majesty’s Government reconsider their entrenched position, which has exacerbated the suffering of the people of Syria, and allow the people of Syria the democratic right and the dignity to choose their own future? If that involves re-electing President Assad, that is their right to do so and a right that we should respect.
Lord Risby (Con)
My Lords, I congratulate the noble Baroness, Lady Cox. She is absolutely right to highlight the extent of the humanitarian horror of the Syrian crisis. I applaud her for her efforts on behalf of the Christian community that is left there, and in essence agree with her vision. I personally mourn the death of a great friend, the Archbishop of Aleppo, who disappeared and was presumably killed.
In 2000 I attended the funeral in Damascus of President Hafez al-Assad, representing the Opposition. It was the first time that I met his son Bashar, and there were great hopes that he would modernise the economy. Indeed there was some progress, and the new President fully protected the minorities. However, when minor demonstrations broke out in Syria, and after some hesitation, President Assad ruthlessly cracked down, and the rest is history. It was a grotesque misjudgment and wholly unnecessary. Had we and others taken out his capacity to rain cluster bombs, barrel bombs and chemical weapons on his population by bombing his airfields, he would have been forced to the conference table. We never did, though, and our support for opposition groups was limited and sometimes wholly counterproductive.
As a result of the Russians moving in substantially in 2015, Assad is now on his way back to controlling the country. It is a tragic and ironic situation that the man who had so much to do with the destruction of his country should now be seen as part of the solution. It now appears to be recognised even by us that he is there to stay, as expressed by the Foreign Secretary. However, I immediately praise Her Majesty’s Government, who have so generously committed money to good humanitarian efforts to alleviate the plight of the refugees. We can be truly proud of the generosity, added to by private funding and care. I was very pleased personally to help in raising money for relief.
However, we are where we are, and we have to face the clear reality. When a recent meeting took place in Astana, it was essentially led by Turkey, Iran and the Russians, whose influence and role in Syria is now decisive. I therefore ask the Minister if she is in a position to clarify what the next stage will be. I understand that additional meetings in Geneva were planned, but may have been postponed to cement a ceasefire. Do we know if the anti-Assad opposition is to be involved? This would be appear to be essential to make progress, and of course it would be under UN auspices. President Trump has advocated, with the support of Saudi Arabia, the establishment of safe zones to provide some degree of security for refugees. Do we agree with this? I understand that he has commissioned a report to be ready by April.
Of course there will simply be no progress without the agreement of Russia and indeed President Assad himself. The Foreign Secretary reiterated his view that President Assad ideally should go, but we now have to accept the new reality of his staying. Indeed, all I can say in retrospect is that all of us should pray and yearn for this unspeakable horror and heart-breaking situation to end.
Lord Alderdice (LD)
My Lords, I also thank the noble Baroness, Lady Cox, for tabling this debate. She spoke about her concerns that arose both during and subsequent to her visit to Syria. My own interest and concerns with Syria go back considerably longer, and long before the war. When I went to see if there was at the time any possibility of rapprochement between Israel and Syria, it was clear that there was. I came back and told the Prime Minister, Tony Blair, but when he sent out Sir Nigel Sheinwald, what was engaged in was the kind of finger-wagging diplomacy that informed the President that if he did not do what Britain wanted, it would be the worse for him. I mention that because it seems to me that the attitude of Her Majesty’s Government to Syria and the regime there has been part of the problem rather than part of the solution, going back a very long way. To come to the view in almost any conflict, particularly in the Middle East which I know quite well, that there are good guys on one side and bad guys on the other, simply lines you up with one side or the other so that you become part of the problem rather than part of the solution.
When the war itself broke out subsequent to a failed attempt at revolution—indeed, apart from in Tunisia, none of the attempted revolutions in the Middle East has been positive and successful—I urged Her Majesty’s Government not to engage militarily or make any intervention. Of course, the House of Commons subsequently made doing so impossible. However, I agreed that support should be provided for our allies on the front line, Turkey, Jordan, Lebanon and Iraq, because without supporting them the situation would get worse. The Government were not able to engage militarily because of the decision of the House of Commons, but that did not mean that we have not engaged through military training, materiel and intelligence operations which have merely made the situation worse. I recall having discussions in 2012-13 with some of my Liberal Democrat colleagues and one of them saying to me at the time, “John, you say it could be worse, but I don’t believe it could be any worse if we were to intervene”. I replied by saying, “Not only could it be worse, it will be much worse because what we are seeing is a descent into chaos that will not be restricted just to the Middle East”.
We are already some years into a third global conflict and we are merely contributing to the difficulties around it. It is not really a Sunni-Shia fight because there are Sunnis on both sides. We are contributing to something which, if we are not careful, will ensure that Christians who have been living in communities in the country for two millennia will be driven out.
My question for Her Majesty’s Government is in many ways a simple one. When will the Government understand that the policy they have been following through several Governments has failed? Continuing with it is not going to help the situation either for the people in the region or for this country because of how it is perceived in the wider region and indeed by some within our own communities. I have just a little hope, given the Statement made recently by Prime Minister Theresa May that it was not for the United Kingdom to engage with the use of force in order to change the way other people run their countries, that perhaps some reflection is beginning to take place in Her Majesty’s Government.
Lord Hylton (CB)
I was an eyewitness in Jazira in north-east Syria in May 2015, Diyarbakir in Turkey in November of that year, and in government-controlled Syria in September 2016. I met the Jazira canton administration, all the political parties, young people learning democratic theory and practice, as well as refugees from ISIS. In Diyarbakir I saw military damage to the historic mosque at Sur and learned of the bulldozing of cemeteries where militants were buried. Since then, MPs, mayors, lawyers and journalists have been arrested and tens of thousands of state employees dismissed. Last September, along with others including my noble friend Lady Cox, I visited the four main Syrian cities. I am amazed that Her Majesty’s Government refuse to visit Jazira and Kobane. How can they understand the political and humanitarian situations without direct contact? In Turkey, they fail to address the causes of civil unrest and armed uprising, which have lasted with only short intervals since 1984. Our Government have asked for proportionate measures, and Turkey has replied with field guns and bulldozers, besides aiding and abetting Islamist fighters in Syria.
Of course there have been atrocities on all sides, yet the western media still place all the blame on the Assadists. No one can deny that outside states have helped many foreign jihadis to enter Syria and provided arms and explosives in large quantities. For these reasons, I welcome the ceasefire agreed by the Assad Government with Russia, Turkey and Iran, although of course it leaves the war against ISIS quite unresolved. I would urge the Minister when she comes to reply to say all she can on that subject.
The conclusion I draw is that all have lost the war, though Assad and his allies have won most of the battles. He has the support or the acquiescence of most Syrians. All the religious and ethnic minorities prefer him to a possible extreme Islamic Government. All are war-weary; they want to get on with their lives and fear chaos or Islamist dictatorship. For those reasons I urge our Government to re-establish at least some level of diplomatic representation in Damascus.
Baroness Morris of Bolton (Con)
My Lords, I also add my thanks to the noble Baroness, Lady Cox, for giving us the opportunity to discuss the recent developments in Syria. Whatever the Government’s assessment of what is happening there, in a country of shifting alliances and international power play there are no easy or simple answers. There is one constant, though: the misery being endured by the proud Syrian people. I will confine my remarks to the efforts being made to secure as meaningful and sustainable a future as possible for those dispossessed by this awful tragedy.
Just over a year ago, the world met here in London for the second Syria donor conference, where the huge generosity both in hard currency and in spirit towards those fleeing terror was enormously welcome and much needed. One of the key objectives of our Government, whose commitment to this appalling situation is something of which we should all be proud, is that alongside aid and refuge we need to put in place practical solutions that give Syrian refugees and their families not just hope, but a sense of purpose and a chance to rebuild their shattered lives, and which supports the countries in the region to which they have fled.
One of the ways we are doing that is through the Business Taskforce, set up by David Cameron and being not just continued but actively supported by the Prime Minister and her Government and chaired by two Secretaries of State, my right honourable friends Liam Fox and Priti Patel. Here I declare my interests as a member of that task force and as the Prime Minister’s trade envoy to Jordan. The task force is charged to secure,
“an ambitious package of measures that would spur economic growth and enable … Syrian refugees across the region to work”,
and study. Those are the very people that are needed to rebuild Syria, when this tragedy is one day—soon, I hope—over.
As well as the enormous sums of money being donated by the Government—to date, £2.3 billion—and the generosity of the British people, so rightly highlighted by my noble friend Lord Risby, a great deal of time, effort and innovative thinking is being put into practical solutions to further these aims. If we support refugee families in the region—who are the very people needed to rebuild Syria, as I said—that will not only build economic capacity in the countries that have so generously offered them refuge, but reduce the risk of too many people gambling their lives in hazardous journeys to Europe and, if they make it, an uncertain future.
The Lord Bishop of Coventry
My Lords, I thank the noble Baroness for securing this debate. My main reason for speaking is to draw your Lordships’ attention and, especially, Her Majesty’s Government, to a recent report by the World Council of Churches, The Protection Needs of Minorities in Syria and Iraq. It is a serious piece of field study that has gathered the first-hand views of some 4,000 people, over 2,000 of them Syrians from minority communities: Christians, Yazidis, Druze, Turkmen and many others. I was in Baghdad and Irbil last month as part of a World Council of Churches delegation to test the findings of the report with community leaders and members, as well as with UNAMI and locally based NGOs, and confirm the soundness of its recommendations. I have every reason to believe that the report’s analysis of the Syrian situation is as credible as we found its Iraqi analysis to be. Therefore I ask the Minister that the Government engage with this robust report.
It was quite an uncomfortable visit for a British person to take part in, because of the great sense among the minority communities of our own culpability in the chaos in Iraq. I can well imagine the strength of feeling that was expressed in the noble Baroness’s visit to Syria. The research showed that despite the manipulation of sectarian tension in Syria by government and armed opposition, there still remains greater confidence among minority communities—including even Christians—in Syria than in Iraq that they have a future in their land, although that confidence is diminishing. The report argues that protecting the minority communities and preserving their place in Syrian society needs to be mainlined into the humanitarian response. This requires a differentiated approach to the particular security, economic and social needs of diverse communities, based on accurate assessment tools that capture distinctive ethno-religious vulnerabilities.
Those needs are large and complex; critical among them is housing. It is not only the horrific damage to the property that is the problem but the loss of property, either through being forced into selling at low prices by stronger communities or by confiscation by malign activities. Sensitive processes of property reallocation will need to be found. That is only one example of the restoration of the diversity of Syrian society that will be needed in the years ahead—a task too great for its own resources to bear. Will the Minister therefore confirm that Her Majesty’s Government are committed to the long-term pursuance of a just peace for all Syria’s people, forging an international coalition of reconstruction—physical and psychosocial—to work with whatever political settlement emerges to ensure a safe Syria for all?
Baroness Berridge (Con)
My Lords, whatever the position of Her Majesty’s Government vis-à-vis President Assad, I hope it is uncontentious to say that a future for Syria that protects and respects religious minorities is essential. This should be part of Her Majesty’s Government’s strategy overall, and of our refugee policy in particular.
In 2010, the population of Syria was 21 million. According to the US State Department’s international religious freedom report, Sunnis made up 74% of the population, other Muslim groups 13%, the Druze 3%, and various Christian groups constitute the remaining 10%, although there were estimates even at that time that due to migration it may have dropped to 8%. There were also around 100,000 Yazidis and a small population of Jews. Five years later, in 2015, the same source reported there are now just under 18 million people in Syria; 74% of the population remains Sunni Muslim, the other Muslim groups still amount to 13%, and the Druze are still there at 3%. However, reports of Christians fleeing the country as a result of the civil war suggest that the Christian population is considerably lower than 10%. There is no reliable information to confirm the continued residency or the current size of the Jewish population. Media reports suggest that the figure for Yazidis is higher, as many Yazidis from Iraq have fled into Syria.
There is therefore a disproportionate decline among Christians in the population of Syria. Accordingly, among Syrians outside of the country there will be a proportionate increase in the number of Christians. That is not surprising, as they have no regional ally. Sunnis have the support of Turkey and Saudi Arabia, and Shias the support of Iran. In addition, the attacks on Yazidis, Christians and Mandaeans by Daesh have been of particular ferocity, and there is a growing intolerance in the local population. This is why it was not religious preference but a statement of particular vulnerability when the 2015 Conservative manifesto pledged to defend freedom of religion or belief for all but made a specific commitment to support persecuted Christians in the Middle East.
The United Kingdom statistics on the Syrian vulnerable person resettlement scheme state that between September 2015 and September 2016 we have taken 64 Christian Syrians out of a total of 4,175, or 1.5%. The United States has taken 19,336 Syrian refugees over the last three years: 108 Christian Syrians and 46 Yazidis. That is 0.55% Christians and 0.24% Yazidis.
Her Majesty’s Government rely on the Office of the United Nations High Commissioner for Refugees to assess refugees against the vulnerability criteria. However, at the end of last year, DfID produced its own assessment of the effectiveness of that UN agency. The categories are very good, good, adequate and weak. DfID rated it as good on matching the UK priorities index, but only adequate on the organisational strengths. Will the Minister at the very least confirm that this agency has tracked the religious minorities in the region so we know where they are, and will she please invite the new commissioner for this office to come to the United Kingdom Parliament to explain the disparity within these statistics?
Lord Alton of Liverpool (CB)
My Lords, representatives of the international charity Aid to the Church in Need, of which I am a trustee, have just been in Aleppo. They learned that the Christian community there has fallen from around 250,000 to barely 30,000, and that in Syria as a whole from around 1.8 million before the war to an estimated 300,000 now. As my noble friend Lady Cox said in her eloquent and compelling speech, ISIS has waged a bestial campaign of genocide against Christians and other minorities for nearly three years. The terror group has carried out its slogan: “We will break your crosses and enslave your women”. As His Royal Highness the Prince of Wales warned in his Christmas broadcast, such ancient communities face total annihilation. I ask the Minister: how can we make the protection of minorities and the re-creation of the plural, diverse communities that existed in places such as Aleppo in Syria and Mosul in Iraq before these events a greater priority?
In April 2016, by 278 votes to zero, the House of Commons officially designated ISIS as responsible for genocide against various religious minorities. I press the Minister to say what specific actions arose from that resolution of Parliament to help those who are cruelly suffering. In particular, on an issue that was raised with the noble Baroness yesterday during Questions, is the United Kingdom willing to encourage the chief prosecutor of the International Criminal Court to investigate fighters not currently being prosecuted from signatory nations to the treaty of Rome? Has there been any progress concerning the role that the Iraq Government might play in pursuing an investigative mechanism for crimes committed by or against their people in Syria? Will the Minister also tell us what progress has been made in severing ISIS supply lines to Raqqa and in securing its liberation?
My first visit to Syria was in 1980, as a young Member of the House of Commons. Our ambassador was Patrick, now the noble Lord, Lord Wright, and we met the previous President Assad. If we can have a diplomatic presence in Pyongyang and Sudan, the leader of which has been indicted for genocide by the International Criminal Court, why, as my noble friend Lord Hylton asked, do we not have a senior diplomatic presence in Damascus? Why is that still the case, in the light of the changed policy position of Her Majesty’s Government following the evidence that the Foreign Secretary gave last week, referred to by the noble Lord, Lord Risby? Prioritising persecuted religious minorities such as Christians and Yazidis, and upholding our highest ideals in offering refuge to genocide survivors—as I proposed in an all-party amendment in your Lordships’ House exactly a year ago—will serve justice and ensure that the perpetrators of these crimes face their Nuremberg moment.
Lord Naseby (Con)
My Lords, I pay tribute to the noble Baroness, Lady Cox, and support her views. I start by asking my noble friend: when will Her Majesty’s Government recognise the reality of the situation after six years of war? Assad, his Government and his people dominate all the cities, towns and most of the countryside. They are, of course, assisted by their long-term ally, Russia, and by Iran and Hezbollah, because they are Shia Muslims. Our Government have failed from the start to understand and recognise that this was, frankly, no more than the fourth Shia-Sunni war in that troubled country.
On top of this is the policy of the Arab spring, which we all know and recognise. In my judgment, the failure of that policy in Libya, Egypt, the Maldives and now Syria shows that we should never have interfered in the first place. Do Her Majesty’s Government recognise that France, our closest ally on so many issues, now has an embassy in Damascus? The information I have is that it is not just one man and a dog but a full technical support team. Is it ready for the rebuilding of Syria? From what I can see, we appear to be sitting on our hands, thinking of war crimes and worrying about what our allies in the Arab world would think of us. Are we going to go back to Damascus? If not, the whole of the United Kingdom’s Brexit approach in the Arab world will be somewhat undermined. If our policy is to deal with Daesh—my colleague on the other Benches clearly raised this issue—surely we have to have the Syrian armed forces alongside, at least working or communicating with us. Are we once again waiting for somebody to say something? Are we waiting for President Trump to give his views on what we should do? Surely we have enough experience of the Arab world to decide for ourselves.
We all know that peace is coming. We all know Assad is staying and, yes, we all want to see elections. Above all, we also want to see Syria rebuilt again. Frankly, Her Majesty’s Government should take the initiative and look for the equivalent of the Marshall plan, as in Europe after the Second World War. That way, we can bring back these poor refugees from the Middle East who are sitting in the cold and get them out of the camps and back into their own country. If we do not, Syria will be a living hell, just like Libya is today. Surely, we should let the Syrians themselves settle their own structure and we in the West should stop interfering, but we should give some generous aid in rebuilding and have that presence in Damascus—on the ground—so that at last, for once, our English and United Kingdom firms will also benefit from any Marshall plan equivalent.
The Earl of Oxford and Asquith (LD)
My Lords, I welcome the comments of the noble Baroness, Lady Cox, on the facile narrative that underlies much of the western media reporting. As she has noted, in Syria, we have for several years collectively promoted a demonised portrayal of one side and a highly romanticised version of its opponents. That leads to my general theme—that of legitimacy.
For several years, the British and the United States political leaderships have maintained that this war is largely a matter of a dictator killing his people. It is the accepted line whereby western Governments have sought to promote the policy of regime change to their public. By contrast, what has most impressed me on my visits to Syria recently is the overwhelming and objective evidence of deliberate programmes of assault by ISIL or Daesh, by al-Nusra, as it was, and by other, largely external, forces. It is an assault aimed at dismantling the Syrian state, and the very concepts of Syrian society, identity and culture. This is why it is so crucial to focus on getting hold of genuine facts, evidence and contributions from Syrian citizens and representatives of civil society. They know, none better, what destruction has been inflicted by the militants on their educational infrastructure, for example, deliberately to ensure that ignorance and illiteracy prevails in what is being called a lost generation of students. They know and have seen what is being done to their women, who are carted around the streets of Aleppo in cages for public humiliation—and worse—by the groups we call moderates. They know that those moderates seldom control or influence an area or constituency larger than the extent of this debating Chamber, whatever they may claim in Geneva as they negotiate with our diplomats.
This assault on the structures of the state is, for Syria, an existential war for its identity. The British Government have repeatedly said that Assad can have no legitimacy among his own people. That is a judgment that I believe history will show to be suspect and one which will in due course be put to the test, if there are elections. I have seen little evidence of a craven personal loyalty to Assad in Syria, but there can be no doubt that where the Syrian Government and army have established enduring control, there is order, health provision, schooling and none of the takfiri horrors that the armed militants impose. These are public goods that are welcomed with respect and command large support.
It is often said that Assad would not survive were it not for Russia, Iran or Hezbollah. I myself have seen no evidence that either Russia or Iran has an unshakeable, personal loyalty to President Assad. They support the existence of a coherent Syrian state. If another figure, hypothetically, were to replace Bashar al-Assad, Russia and Iran would undoubtedly continue to uphold the state. But what we have really been implying all along is that we want not simply Assad’s departure but some kind of popular movement—fomenting a resistance to illegitimacy that we endorse—that will effect regime change. This is not going to happen. It is an illusion we should not continue to entertain. I think of Ariel Sharon’s warning to President Bush after the last Iraq war that if Bush intended to go about the same dismantling of Syria as he had effected in Iraq, he would create an explosion throughout the Middle East.
I have gone on too long already. We need to engage in a thorough, probably painful reappraisal of what the structures of Syrian statehood should be, which we will support, and the conditions of their legitimacy that we can recognise.
Baroness Nicholson of Winterbourne (Con)
I thank the noble Baroness, Lady Cox, most warmly for giving us a chance to mourn for Syria. This war will end, yet I suggest the conflict will remain. As the right reverend Prelate said, this is a very difficult war. It is very unlikely that, when the bombs stop, the people’s minds will change immediately and become peaceful towards each other. We will have a society where the torturers and the tortured perhaps live side by side. Physical reconstruction begins immediately. That is the easy bit. But the conflict remaining is the thing we should think about.
I turn to Mr Attlee’s noble words in the preamble to UNESCO’s constitution, and remind colleagues that,
“since wars begin in the minds of men, it is in the minds of men that the defences of peace must be constructed”.
I offer a model that has been proved to work. Next door to Syria, not far away in Baghdad in the middle of the war in 2004, the AMAR Foundation, which I have the honour to chair, began to work on health for all. Why? Because this is the opposite of the inequality of men and races in ISIL’s doctrine. We go for the common welfare of mankind here today. Peace in the minds of men can be best reflected by helping the tortured person in physical and mental pain.
We began immediately in July 2004 in Al-Suwaib, where there had been no health anywhere ever. It was a completely confused society—violent, bullying, war, nothing at all. By February 2005 we had 12,000 patients. We moved on to the next centre, keeping that one going. By 2010 we had 30,000 patients. The second was Al-Jahadi. In June 2005 we had another 30,000 patients. They were all new builds—25 across the whole of Baghdad, with 500,000 medical consultations every year by 2010. We worked closely with and were financially supported by the 1st Cavalry Division, General Chiarelli, General Joe Anderson, General Odierno, General Mattis and General Petraeus. There was no interference, just support and understanding. The US military, like the British military, understands that at the end of the story it is hearts and minds, not bullets and bombs.
The creation of a peaceful and productive society has resulted in this. Compare Baghdad with Mosul and tell me that all these revolutions in Baghdad are just not happening. All those medical centres are still working. Indeed, the AMAR Foundation now has 1 million patients over the whole of society. On top of that, you add all sorts of other things as you build, train and replicate. You add culture, the education of humanity, the wide diffusion of culture, chess, music, dancing and writing. You train, teach and enhance. I tell noble Lords that by building on the base of terror and destruction, you can create peace, love, harmony, smiles and joy. I recommend this model.
Lord West of Spithead (Lab)
My Lords, civil wars are dreadful. We lost 800,000 in the English Civil War. To put that in context, that would be 9.1 million people killed if we had a civil war like that today. UK policy has prolonged the Syrian war. It has failed. It needs a rethink. Assad is loathsome, yes, but he is a fact of life on the ground. The other players are just as bad. There are no good guys in this sort of situation. At least Assad’s regime was secular. Our failure has allowed the Russians to become the powerbrokers in the region. We absolutely must change our policy or the war will go on and people will die.
Lord Collins of Highbury (Lab)
My Lords, I will be brief, as I want to leave as much time as possible for the Minister to respond—and obviously in three minutes we have time to ask only a few questions. I thank the noble Baroness, Lady Cox, for initiating this debate. It is our responsibility to try to create the conditions for the people of Syria to decide their own future. Every act of genocide or crime against humanity needs to be investigated and the people responsible to be held to account for their actions. Impunity must be challenged; we cannot have a situation where years and years of crimes against humanity are ignored. I accept that there are two sides to this equation but, as we have heard in the debate, the sides are very complex—it is not just the people of Syria who are involved in this crime.
I have heard coverage on BBC Persian news and in the Afghan media about Iran coercing Afghan refugees to fight on behalf of—and in favour of—the Assad regime in Syria. Many are young children; the youngest I have heard about was 16. The Iranians promise these Afghan refugees citizenship and money and then send them to fight in Syria. Can the Minister tell us whether these claims have been investigated by the British Government?
I am also very aware of the need for humanitarian support, and I have supported the Government’s actions in the region. I particularly want to hear from the Minister about what more we can do to support the host nations and to save their economies and societies from collapse from the weight of refugees currently in those countries. One obvious matter on which we need to hear the Government’s assessment is the progress of talks and the parties being brought together—we know that there can be no settlement without the Russians and the Iranians, but the Saudis need to be involved as well. We know that this conflict has wider implications.
However, at the end of the day, we cannot allow this situation where the crimes that have been described in this debate go on without action—we cannot allow impunity to be the watchword for the future in the Middle East. I hope that the Minister can assure us that work will continue to collect and retain evidence so that we can ensure that justice will be done in the end.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, I congratulate noble Baroness, Lady Cox, on securing this debate. Working for a solution to the crisis in Syria remains a top priority for the Government. We recognise the realities of the situation across the whole of the Middle East and the implications of the displacement of so many millions of people, as well as the generosity of counties such as Lebanon and others which have hosted those forced out of their own country. The conflict has now lasted nearly six years and caused appalling human suffering, as noble Lords have graphically set out today: over 400,000 people have been killed, half of the country’s pre-war population has been displaced and millions of Syrians are in need of urgent humanitarian help.
The military offensive against eastern Aleppo before Christmas was one of the worst episodes of this terrible conflict. For over five months, more than a quarter of a million people were besieged and cut off from food and medical supplies as the Assad regime and its Russian and Iranian backers blocked access to humanitarian convoys. I was asked about Iran and the way that it recruits people to fight in Syria. I will certainly follow that up—I had not seen that particular newspaper report, but I will make inquiries. In Aleppo, every hospital in the eastern part of the city was put out of action by air and artillery strikes—it is only the Assad regime and its backers that have access to air and artillery strikes. Hundreds of civilians were killed. As the UN has shown, in October last year, there were 400 casualties in that one month alone.
That is across the range; I am not picking out particular groups, rather I am adding to the descriptions given by noble Lords about the impact of what happened. Ultimately, tens of thousands of people were forced to leave the city. All this was justified by the regime and its backers in the name of fighting terrorism. We reject that explanation, and indeed even Russia’s own figures show that terrorists accounted for only a tiny fraction of Aleppo’s population. The real targets were the moderate opposition forces. Far from combating terrorism, the actions of the regime, Russia and Iran have served only to fuel it and worsen the suffering of the Syrian people.
In reality, the regime and its backers are responsible for the vast majority of deaths and civilian suffering in Syria. I am not going to go into the detail of what happened in the prison highlighted in the Amnesty report, but any form of torture is wrong. Tens of thousands of people disappeared from their families and the streets into Assad’s clutches, and goodness knows what happened to them. The fact is that the UN and the Organisation for the Prohibition of Chemical Weapons have confirmed that the Assad regime has used chemical weapons. I understand that Daesh may have done so as well, but it is wrong for anyone to use them.
Even after the fall of eastern Aleppo, some 700,000 people remain in besieged areas across the whole of Syria, the vast majority of them trapped by pro-regime forces. The UK’s policy has always been to support a sustainable, Syrian-led political settlement to the conflict while doing everything we can to help and protect civilians in the country. We are not and never have dictated to the Syrian people what they should decide as to the outcome and what should happen to Assad, rather we have expressed our view that he has failed to protect his people. He has military backing from Russia and Iran, and without it he would be nowhere. Moreover, he does not care for his people as a leader should. That is our view and it is what we have always said. Any process to rebuild the country must be Syrian-led. I also take very much to heart the words of my noble friend Lady Nicholson. She said that even after a treaty has been signed, conflict remains afterwards, so it is about rebuilding. I agree with her that conflict remaining is what we should be thinking about today. There can be no military solution to the conflict; you can win a war, but you do not win a peace.
Recent developments have confirmed our assessment that the only way to bring back stability to Syria and thereby address the terror threat which is here and present with us today in the UK, and to allow the millions of refugees to return home, is a political settlement which ends the civil war so that we can then start to rebuild. As the Foreign Secretary has consistently said, it is our view that there can be no sustainable peace in Syria while Assad remains in power. Strange things have been said in the debate about the Foreign Secretary saying that Assad must stay. No, he has not. He has reaffirmed our belief that Assad cannot lead the country but that it is for the people of Syria to decide. That has underlined all our work throughout the peace negotiations. Those negotiations would include, in our view, the right of the 11 million people who have been displaced as a result of conflict to take part in free and fair elections. It may be some way off, but let us hope that we can all help Syria to reach that point.
My noble friend Lady Berridge raised in particular the question of displaced Christians and minorities. We are not in a position to track exactly how many and from which minority or faith have been moved and to where, mostly of course because as people have travelled and their groups have fragmented, no records have been kept either in the refugee camps or indeed where they have now settled in western Europe and beyond. As some noble Lords have reminded me on previous occasions, some people are scared to reveal their ethnicity and their minority status. We should think of that very carefully indeed when we think about rebuilding. I understand why my noble friend raises these points. It is right for noble Lords to ask about Syria surviving as an entire country. If Syria is to survive as an entire country, not with a little bit picked off by Assad because he likes that bit and does not like the rest but as a country in which Syrians are able to determine their own future, it needs to continue to adhere to its history of respecting different ethnicities and different religions. Over the last few months, it has been my privilege to meet senior faith leaders who represent a wide range of orthodox Christian faiths. They are very brave people. Having come here to give their views, they go back to Syria to tend to their flocks.
At the UN Security Council, we have consistently advocated for action to bring about an immediate ceasefire and enable humanitarian access for all those in need in Syria. At the Human Rights Council, the UK has led efforts to monitor human rights violations and abuses committed in Syria and to call for accountability for those responsible. My Whip is very kindly saying that I have only two minutes left. I think that I have a little more, but not much more. As she is my mentor, I normally obey her immediately.
In October we proposed, and secured the adoption of, a Human Rights Council resolution which mandated the UN commission of inquiry to investigate and report on violations and abuses during the siege and offensive against eastern Aleppo. We continue to support the important work of the UN commission of inquiry.
Humanitarian support was raised by many noble Lords. I say merely that it is vital that we all support that. I was very interested in what my noble friend Lady Morris said about the Business Task Force. That is a very practical way forward.
As regards recent progress, it was right for noble Lords to concentrate their minds on Astana and the progress that has been made there with the ceasefire. The ceasefire is not a political solution. It is valuable in itself. It would have been so much more valuable if, as a result, Assad had allowed humanitarian access, but still people are being starved. Those taking part in the Astana process recognise that the real progress is to be made by the Geneva talks. I welcome their recognition of that. The UN special envoy, Staffan de Mistura, has announced that he plans to reconvene talks between the Syrian parties in Geneva this month. We fully support those efforts.
I was also asked whether we should have an embassy in Damascus. I have answered that question in some detail on the Floor of the House. The simple answer is that we have no reason to trust Assad. To establish such an embassy would be a sign that we felt that he was the way forward. Our view is that he is not and that we must allow the Syrian people to make that decision. What decision the Syrians reach, we should then follow. It is as wrong to dictate to the Syrian people that they must keep Assad as it would be to dictate to them that they should get rid of him. We should listen to the people. We are a democracy. Let them be one.
Sudan
(7 years, 2 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Hussain
To ask Her Majesty’s Government what is their assessment of the situation in Sudan in the light of the threat posed by Islamic extremists in the surrounding countries.
Lord Hussain (LD)
My Lords, I have had the opportunity of visiting Sudan and South Sudan a couple of times in the last few years. During my visits to Khartoum, Darfur, Merowe, Juba and Rumbek, I had an insight into Sudan’s environment and culture. It is a vibrant, open culture with males and females working side by side in schools, colleges, universities, the media, politics and all other aspects of life. A visit to the Republic of Sudan completely changes the perception held by many in Europe and other western countries. I was particularly impressed by the large female representation in the parliament and the education from diverse cultures. The role of the arts and music in Sudan’s culture shows a moderate face of contemporary Islamic society that is unique to Sudan.
However, Sudan has long been beset by conflict. Two rounds of the north-south civil war cost the lives of 1.5 million people, while the continuing conflict in the western region of Darfur has driven 2 million people from their homes and killed more than 200,000. Sudan is taking significant steps to improve its relations with the breakaway state of South Sudan. The presidents of both countries are talking to each other more often. Both countries are co-operating with African Union efforts to resolve the outstanding disputes between them. The Government of Sudan are engaged in a process of national dialogue with more than 100 political parties and rebel groups and are committed to developing understanding and consensus among all the parties on national issues. We learned that armed confrontation between the rebels and government forces has reduced significantly.
African Union-United Nations Mission in Darfur representatives in Al-Fasher were not able to verify any aerial bombardments by the Sudanese air force taking place in the six months prior to our visit to Darfur. That does not mean that they did not take place, but UNAMID could not confirm any. In an answer to a specific question about getting access to reports of aerial bombings, the UNAMID representative said after a careful calculation that approximately 2% of the time, access is denied by government forces.
Decades of civil war have resulted in the breakaway of South Sudan into a separate country and the loss of 75% of oil revenue to Sudan. Oil was the main source of income for the country. Despite huge potential in the exploration and production of oil, gas and minerals including copper, silver and gold, the people of Sudan have suffered enormously under sanctions imposed by the United States which effectively barred Sudan from carrying out any trade with most European countries. The effects of those sanctions are visible in health, education and many other sectors.
On the question of extremists and the terrorist threat, one of the challenges Sudan currently faces is how to interrupt the networks and cells of groups which operate across the region and prevent them using the country as a transit area or destination for their operations. The Horn of Africa is one of the most unstable regions in the world because of war and civil conflict. Somalia suffered from a long and devastating civil war that left the country very underdeveloped. Ethiopia and Eritrea fought a bitter war over their border which resulted in tens of thousands of casualties on both sides and the situation yet to be resolved. South Sudan, the world’s youngest country, is in a real crisis with a bloody ethnic conflict still going on.
A number of terrorist groups are quite visible and active in the countries around Sudan. To the west, Boko Haram’s activities are increasing in Nigeria and other west African countries; Daesh has a highly visible presence in Libya; al-Qaeda is active in the Maghreb region, and Daesh and other extremists operate in the Sinai peninsula in Egypt. The Somali Harakat al-Shabaab al-Mujahideen movement is roaming the Horn of Africa, although Kenya and Uganda witnessed the deadliest attacks by al-Shabaab several years ago. Conflicts and political instability produce an atmosphere conducive to the growth of extremism, but factors such as underdevelopment, lack of access to education and employment, and marginalisation can all fuel the tendency towards violent extremism.
Sudan has been the victim of terrorist attacks in the past. An extremist group attacked and killed two US embassy staff in Khartoum in January 2008, and several Sudanese police officers were killed in a raid on a terrorist training camp in eastern Sudan in December 2012. Sudan was one of the initiators and founders of a very important regional structure comprised of security agencies on the continent known as the Committee of Intelligence and Security Services of Africa. Among other things, CISSA is tasked with strengthening co-operation in countering terrorism and extremism by providing information and analyses on the security threats posed by extremist groups and suggesting possible courses of action.
Since 2000, Sudan has engaged in close co-operation with the United States in countering terrorism. This co-operation has been acknowledged and appreciated by the US itself in an annual report issued by the Department of State on international efforts to counter terrorist activity. Sudan has constantly featured in these reports as working closely with the United States in combating terror. More recently, the executive order issued on 13 January by the then President Barack Obama, in which he announced the easing of US economic sanctions on Sudan, referred to the actions taken by the Government of Sudan in addressing regional conflicts and jointly countering the threat of terrorism as one of the main factors behind the decision. Sudan’s experience in combating religious radicalisation through rehabilitating and reintegrating extremists into the mainstream has attracted much attention as being effective in addressing some of these issues.
Christopher Shays, a former Member of Congress who chaired the National Security Committee of the Government Oversight Committee, and Richard Swett, who is also a former Member of Congress and former US ambassador, attested to this fact in their article “Enough already on Sudan sanctions”, published on The Hill website on 23 January 2017. They stated:
“Sudan has been among the most stable and consistent partners of the U.S. intelligence community in the war against terror in this century as the State Department has annually reported”.
One of the factors Sudan counts on in its counter-radicalisation efforts and in fighting extremism is to invoke the Sufi background from which Islam in Sudan derives its moderation and tolerance.
I am glad that in recent months the British Government have taken some positive steps towards a policy of engagement with the Government of Sudan. We have seen senior-level exchange visits, most recently by the Foreign and Commonwealth Office and the Department for International Development led by FCO Permanent Under-Secretary Sir Simon McDonald and DfID Permanent Secretary Sir Mark Lowcock. I was pleased to hear Sir Simon say:
“Relations between the peoples of Sudan and the UK are deep and historic, and our meetings over the last two days reflected that breadth. In addition to Sudan-UK bilateral interests, we also discussed human rights, conflict, migration, humanitarian and development assistance, economic matters, and the situation in the region. I am confident that our bilateral relations have a positive future”.
On that note, I have two questions for the Minister. First, in the light of the positive engagement by the Government of Sudan with regional countries and the USA in relation to deradicalisation and rehabilitation of extremists, will our Government use their good relations with the new American Administration to lift permanently the remaining sanctions imposed on Sudan? Secondly, what are the Government doing to establish stronger economic ties with Sudan?
The Earl of Sandwich (CB)
I will be the first to extend thanks to the noble Lord, Lord Hussain. I also declare an interest as a long-standing member of the All-Party Group for Sudan and South Sudan. I have come to respect the Sudanese people over many years, since working with NGOs back in the 1970s, mainly visiting refugee camps and health projects. I have also been on formal parliamentary visits.
Sadly, the country has been torn into pieces by three civil wars for most of its independent life. As a group, we get regular information from intrepid travellers, including our own noble Baroness, Lady Cox, and many other contacts in Sudan, on the tragic effects of aerial bombing and attacks on civilians. We are currently preparing a report on the UK’s relations with Sudan, and I propose to touch on one aspect of this relationship.
Although I am a critic of some of the policies of the Government of Sudan—the GOS—I am also encouraged that the GOS can take criticism, and on occasion even listen to it. We should not judge other nations too much, because they too have to follow their own traditions. I recognise that Sudan has to defend itself from enemies, but at the same time there are international rules prohibiting human rights abuses and violence against people who correctly choose to follow those rules. Clergy, students, journalists, activists and individuals who speak out are always at risk of imprisonment and even torture.
I have long worked with NGOs, and I feel it almost personally when Sudanese or any other NGOs are persecuted. They are part of the fabric of civil society, and to me they belong to the future of any nation, working to promote the rights of women, the role of students and improved conditions for the poor and the oppressed. Every religion understands this as charitable work, and in Sudan there are many voluntary agencies and faith organisations.
To their credit, in the last three years the GOS have made a new attempt—for the benefit of the outside world as much as that of Sudan—to set up a national dialogue, theoretically to draw in the many groups that might be termed the opposition. Even four neighbouring heads of state, with varying experiences of democracy, were invited to a recent conference. But the dialogue has consistently failed to attract key opposition parties such as the National Umma Party, which, along with the international community, insists that any dialogue must depend on a peace settlement in Darfur and the Two States.
The Government of Sudan’s disregard for the work of the United Nations over many years is astonishing—witness the most recent report from the UN panel of experts, which conducted 10 missions but was unable to obtain visas to enter Sudan. The panel complained about aerial bombardment in Jebel Marra, which is primarily against the Abdul Wahid branch of the SLA, but it was unable to investigate allegations of crimes against civilians and displaced persons.
Washington may be softening its approach to Sudan, but it still maintains economic sanctions and insists on progress with peace negotiations. The EU takes a similar stand, and the UK can hardly do less. In their own strategic dialogue with the GOS, we all expect Her Majesty’s Government to ensure that standards of human rights are maintained, and the views of civil society are fully taken into account. I am sure we will hear about that in the reply to the debate.
The Khartoum process, on which we intend to report fully in two weeks’ time, is a labyrinthine EU exercise, which the Brexiting UK may ultimately prefer to avoid. Intended to rein in so-called terrorism and migration towards the Mediterranean, it may have the unexpected consequence that our country will be more closely identified with police, border guards and soldiers than with the Sudanese people, or the migrants.
Lord Ahmed (Non-Afl)
My Lords, I thank the noble Lord, Lord Hussain, for securing this timely debate. Undoubtedly some noble Lords will address the threats posed by Islamic militants in the countries that surround Sudan. Its physical location places it at the heart of Africa.
The importance of an ally such as Sudan in the war on terrorism has always been clear. It was Sudan that identified, arrested and extradited Ilich Ramírez Sánchez—Carlos the Jackal—to France in 1994. It is also a matter of record that Sudan offered to arrest and extradite Osama bin Laden to Washington—an offer refused by the Clinton Administration, with disastrous consequences. Sudan has signed and enforced all relevant international anti-terrorist protocols. Sudan has co-operated on counterterrorism issues for two decades. As early as November 2001, US Deputy Secretary of State Richard Armitage stated that Sudanese co-operation on counterterrorism was “really terrific”. Sudan’s importance in the war against terrorism has intensified in the past few years. In 2012, Jean-Claude Cousseran, the former head of the French equivalent of MI6, said:
“Africa will be our neighbourhood Afghanistan”.
It is right that we look at the threat posed to Sudan by extremists in the surrounding countries, but we must also address the elephant in the room. We must look at the role played by British foreign policy in enabling the terrorist threat faced by Sudan and other African countries. British foreign policy in this respect has been nothing short of disastrous.
In 2011, the new coalition Government chose to unpick one of the few foreign policy successes of the Blair years—the containment of the Gaddafi Government in Libya, the abandonment of their nuclear programme and Tripoli’s wholehearted co-operation on counter- terrorism. Her Majesty’s Government chose to wage war against the Libyan Government in support of several anti-government Islamist militias with al-Qaeda affiliations.
In an article in the Guardian, I warned at the time that it was a dangerous assumption to believe that the Libyan rebels were all Facebook idealists. In their more candid moments, Western political and military leaders admitted at the time that they knew next to nothing about the gunmen for whom NATO was acting as a de facto air force and whom they were militarily equipping.
As clearly documented in Paul Moorcraft’s 2015 study, The Jihadist Threat, Her Majesty’s Government’s Libya policy demonstrated another clear contradiction. The United Kingdom has some of the most draconian anti-terrorist legislation in the world. While it is illegal for a young Briton of Pakistani descent to as much as look at a jihadist website in his bedroom, the British authorities turned a blind eye to the hundreds of young Britons of Libyan descent travelling from Britain to undergo jihadist military training and political indoctrination in training camps in Libya, Egypt and eastern Tunisia that were no different from those in Afghanistan. Many of those British citizens then went to fight with al-Qaeda-aligned militias against Gaddafi forces. The Daily Mail ran an article with the headline:
“Why do so many Libyan rebels seen on TV speak with British accents?”.
When I asked in a Written Question in mid-2015 whether Her Majesty’s Government were aware of any British Libyans who took part in overthrowing Colonel Gaddafi, and whether any of them had since returned to the United Kingdom, the Government stated that,
“we do not hold any information on this matter”.
The reality is that British foreign policy continues to create and enable not just our enemies but extremist forces that Governments such as that of Sudan will have to confront.
Baroness Goldie (Con)
Can the noble Lord move on so that I can answer the Question?
Lord Ahmed
We must learn with regard to British foreign policy toward Syria.
Lord Sheikh (Con)
My Lords, Sudan lies at the heart of a troubled region. A number of terrorist groups are visible and active in the region, including Daesh, Boko Haram, al-Shabaab and al-Qaeda. It is of course imperative that we do all we can to support the Sudanese in this respect. However, we must also build our relationship with Sudan more widely. Issues such as poverty, lack of education, lack of employment opportunities and wider community underdevelopment can fuel the marginalisation and frustration of young people, which can lead to the formation of extremist ideology. It is therefore only right that we seek to help Sudan improve its stability and provide opportunities for its people.
Last year, I led a delegation from your Lordships’ House to Sudan. Following our visit, we have established the APPG for Sudan, and I am the co-chairman of the group. The APPG has met Tobias Ellwood and formed an excellent connection with the FCO and our ambassador in Sudan. As someone who regularly promotes bilateral trade, I believe that much can be gained by both sides from increasing trade links with Sudan. I am pleased that a trade mission from the Middle East Association visited Sudan in December, and that a further mission, organised with the co-operation of our ambassador to Sudan, is scheduled for April. However, our Government should now send a trade mission to Sudan. There is also a keen interest in Sudan in establishing educational links between academic institutions. Following our delegation, Sudanese links are already being established with two major universities in England.
I welcome the fact that the United States has now agreed to lift the economic sanctions previously applied to Sudan. This is due to Sudan’s progress in improving humanitarian access, ceasing hostilities and enhancing co-operation on counter-terrorism. On that note, we must bear in mind the steps that Sudan has taken, and continues to take, towards combating the extremist threat. Sudan has developed an effective re-education and rehabilitation programme to reintegrate former extremists into mainstream society.
We should also acknowledge some of the good work already taking place between the United Kingdom and Sudan. We are the second-largest humanitarian donor to that country. We support health and medical programmes, many of which help children and displaced persons. Our APPG is sending a delegation of women parliamentarians to Sudan to look at issues relating to the health of women in Sudan.
Sudan still faces a number of challenges to do with extremism and other matters. We must, however, acknowledge the progress already made and help Sudan advance further. Adopting a hostile and isolationist policy towards Sudan will only make the country more vulnerable, threatening its people and the wider region. We should engage with Sudan and establish greater links, to the benefit of both countries and to help establish peace and stability in the region. Finally, I ask the Minister: what progress is being made on trade links with Sudan?
Lord Alton of Liverpool (CB)
My Lords, like my noble friend Lord Sandwich I am an officer of the All-Party Parliamentary Group for Sudan and South Sudan, and a former chairman of that group.
The implication of the Question from the noble Lord, Lord Hussain, is that Sudan is an island of moderation surrounded by Islamists. In reality, the reverse is true. In 2015 the report by the United Nations Panel of Experts on Sudan warned that the regime was providing “fertile ground” for Islamist extremists in neighbouring nations. For 30 years the regime has waged war on its own people. That is why the International Criminal Court has indicted Field Marshal Bashir on charges of genocide, war crimes and crimes against humanity. It is a scandal that he can travel with impunity and without fear of arrest to face those charges.
When I first visited South Sudan 20 years ago during the civil war, I saw schools, clinics, homes and churches that the regime had bombed, where between 1.5 million and 2 million people perished. That is why the country was torn in two. Later I travelled to Geneina in Darfur, where I saw a fraction of the 2 million who have been displaced and met the loved ones of some of the 200,000, mainly Muslim, people murdered. This is not history: last year there were more than 100,000 newly displaced people in Darfur and 3.2 million long-term displaced nationwide. Meanwhile, the aerial bombardment continues in South Kordofan and Blue Nile, and humanitarian access is still denied. Furthermore, I have sent the Minister Amnesty International’s report on the alleged use of chemical weapons in Darfur. I hope that the noble Baroness will address both issues in her response.
Consider also the life sentence and other lengthy sentences given to three Christians only last month. Will the Minister tell us what we are doing about this travesty of justice? What have the Government of Sudan done to implement the recommendations in the 2016 universal periodic review? What have we done to urge the Government of Sudan to implement the religious freedom protections codified in their interim national constitution, especially in the light of the 2016 USCIRF report listing Sudan as a “country of particular concern” for engaging in systematic and egregious violations of freedom of religion or belief? In this context, unlike the noble Lord, Lord Sheikh, I am appalled. However, according to the noble Lord, Lord Price, in answer to a Written Question from me earlier this week,
“the UK will consider opportunities to promote trade with Sudan”.
He should recall Churchill’s warning that it is dangerous to feed crocodiles if you hope that they will eat you last.
There are two faces of the Government of Sudan. They claim to have disavowed the worst forms of extremist ideology but, as academician Suliman Baldo said, the Sudanese Government have become adept at engaging in intelligence sharing with important international partners while tolerating Salafist groups internally. The International Crisis Group says that Sudan tolerates radical Islamists and, most recently, supporters of IS when it is politically advantageous to do so. Extremism comes from within Sudan and from the highest levels: Field-Marshal Bashir has said it is his ambition to turn the entire country into a sharia state. Extremist groups operate with the approval of Sudan’s religious scholars committee, while the journalist Gill Lusk says the regime uses,
“the Salafist … and other splinter groups both as deniable policy instruments and as bargaining chips”.
In the long term, the fight against extremism in Sudan will depend on an inclusive, democratic transformation that is sustained by a free and active civil society. It is that development we should be supporting, rather than propping up an indicted regime. Sudan is playing a dangerous double game, to which the international community should be wary of falling victim. Beware the crocodiles.
Baroness Tonge (Non-Afl)
My Lords, I congratulate the noble Lord, Lord Hussain, on securing this debate and declare an interest as a founder of the All-Party Group for Sudan and South Sudan, along with Hilton Dawson MP. I am now a member of the All-Party Group for Sudan.
My first experience of Sudan—indeed, my first experience of a developing country—was as a very new MP in 1998. In south Sudan, I lay on the floor of a tent in a village compound at night and listened to the sound of drums, which I was told were warning of another attack from the north by militia who travelled down on the train to Wau to terrorise the south, sent by the Sudanese Government. They were the “baddies”, I was told. The message I got was that it was a simple fight for independence. I think not. I have since learned that the Sudanese Government were right in their scepticism that the south could form a stable government —I shared that view, and the Nuer and the Dinka have demonstrated that in recent years.
That is not the only problem for the Sudanese Government, with rebel tribes and individuals trying to wrest power from the Government all the time. It is a huge and diverse country. Sudan has problems to face both within its own country and from neighbouring countries and the terrorism they export—others have pointed that out during the debate, so I will not repeat it. I add only that there are other counties that deserve our censure, far more than Sudan perhaps. These are countries we happily trade with and enjoy friendly relations with—Saudi Arabia heads my list at the moment, currently causing famine in Yemen and hundreds of thousands of deaths. Why is the Foreign Office not speaking out about this?
I want now to say something completely different, as a tribute to Professor Hans Rosling, the Swedish statistician who made statistics fun and bearable. He died two days ago. It was he who first explained to me, with his wonderful graphics and bubblegrams, the clear link between maternal health, family planning, smaller families, and more girls accessing education and being able to contribute to their country’s economy, which then grows. The clear link has been made between women’s reproductive rights and economic progress. Sudan has indeed listened to Han Rosling’s message and, for this reason, should be encouraged. According to the World Health Organization, maternal mortality has more than halved in 10 years, and the under-five mortality rate and neonatal deaths have also declined. All these rates are, of course, still very high—they started from that high level—but the plan to further reduce them was devised by the Sudanese Government in 2013 and it is to be encouraged and commended. Despite laws in the Sudan banning both FGM and child marriage, they still contribute to maternal deaths and morbidity but the Sudanese Government are trying hard on these issues. Led by the wonderful Ahfad University for Women, which is near Khartoum, and many women parliamentarians—I think their percentage is in fact higher than we have here—a lot of progress is being made for women in the Sudan but, as I say, there is a long way to go. We should be helping Sudan in every way we can, not condemning the Government.
Baroness Cox (CB)
My Lords, I too thank the noble Lord for this opportunity to discuss issues related to Sudan and the relation of Islamist extremist nations with Sudan, and vice versa. Given that it is widely believed that neighbouring Islamist regimes support President Bashir because of his commitment to make Sudan a unified Arabic, Islamic nation, it is not irrelevant to focus on his Islamist extremist policies of the ethnic and religious cleansing of indigenous African peoples and Christians, traditional believers and Muslims who do not support his Islamist ideology. I would also mention that in Nigeria, it is widely believed that Sudan supports the Islamist Boko Haram.
I have recently returned from a visit to Sudan, and obtained first-hand evidence of the implementation of its genocidal policies. The Government of Sudan are blatantly violating conditions required by the United States for the lifting of sanctions by their total disregard of the ceasefire with continued fighting in Darfur, including the attack in Nertiti by the Sudanese Army under the command of Colonel Mohamed El Tayeb. The best estimate is that in that attack, 16 civilians were killed and some 72 to 75 civilians were wounded.
This is an intentional policy. On 22 December 2016, President Bashir delivered a speech at the military Merowe archery festival, in which he vowed to continue seeking a military solution for the internal conflicts and bragged that the unilateral cessation of hostilities would terminate within a week, irrespective of Khartoum’s declaratory policies. That has been proven true in Blue Nile, with the fighting in January 2017 a direct continuation of clashes started in early December 2016. There was no pause or reorganisation of Sudanese armed forces—that is, the ceasefire did not exist for them operationally. On 9 January, while we were in the region, the Sudanese army launched a major offensive on the SPLA-North forces in Arum, Blue Nile state, and villages were bombed sporadically.
In the Nuba mountains, there are numerous reports of continuing missile attacks on civilians, creating such terror that families have been forced to flee their homes and live in snake-infested caves with no medical care and acute shortages of food. Three weeks ago, I climbed one of those Nuba mountains to meet families hiding in those caves. I met a girl who had been bitten by a cobra; a woman dying of malaria with no treatment; and a man whose five children had been burnt alive when a shell hit the place where they were sheltering. People would not be living and dying in these appalling conditions in Sudan unless forced to do so because of continuing military offensives by Khartoum.
This highlights the crisis of humanitarian need: UN officials acknowledge that because of the ongoing disagreements over humanitarian access points,
“the civilians in the war-affected areas continue to suffer”.
The UN now estimates that over 600,000 people are in dire need of humanitarian assistance in the southern and western parts of the Nuba mountains and in Blue Nile state. This raises the issue of the continuing, urgent need for cross-border aid, an issue I have raised repeatedly with Her Majesty’s Government. But nothing has happened so far and people continue to die because of a lack of food and healthcare.
The international community has the responsibility to protect and to provide. It is manifestly failing on both counts by allowing the Government of Sudan to continue to slaughter their own civilians with impunity and by failing to ensure the provision of life-saving medicines and food for hundreds of thousands of civilians. Will Her Majesty’s Government at last take urgent action to ensure cross-border aid, and to end the impunity with which the Government of Sudan are continuing military offensives despite their alleged commitment to the ceasefire?
Baroness Uddin (Non-Afl)
My Lords, I thank my noble friend Lord Hussain for initiating this debate at a time when our own Government are rephrasing their relationship with Sudan. I express my gratitude to my noble friend Lord Ahmed for his remarkable and long-standing commitment to the people of Sudan and for introducing me to that beautiful country with immeasurable potential. We have a long history with the Sudanese people that they have not forgotten. During our visits, we met a number of women parliamentarians and, together with the noble Baroness, Lady Hussein-Ece, who is not able to take part today, through the wonderful team at IPU we were able to organise a successful visit of six powerful women parliamentarians to our Parliament. I do not need to labour the importance of such exchanges to noble Lords but both these visits provided a great insight into women’s presence in the political, business and education sectors. While we cannot overstate the impact of international sanctions as barriers to women’s equality and well-being, women across Sudan are successfully working within those constraints to advance women’s rights. The impressive work of the British Council should also be noted here.
On our last visit we were able to see staff and students at the University of Khartoum, meet families in Darfur itself, witness an architectural excavation in Jebel Marra and meet UNIMID peacekeepers. On neither of these visits did we witness an Islamic state; clearly the President of Sudan has failed for 20 years to Islamise the whole country. What I was not prepared for was the effect of the crippling sanctions on the Sudanese people themselves, with basic healthcare not available, from maternity provision and eye drops to diabetes drugs and asthma pumps. I visited a hospital unannounced, having chosen it out of three or four, and I was utterly shocked—I was almost in tears— at how empty the building was. It did not lack patients, thousands of whom lined its corridors, but the medicine cupboards in the treatment rooms were bare. I therefore welcome the latest pathways to lifting international sanctions. The people of Sudan deserve to be free of these constraints and suffering that are not their fault. After two decades, it is time.
Britain should take a lead in this new era of co-operation as China and Saudi Arabia are already present in the region with investment. Crucially, the increasing threat of terrorism in Africa and the Middle East, with the presence of Daesh, al-Qaeda and Boko Haram among others on Sudan’s border, have rendered compelling the need for international actors to encourage Sudan in its anti-extremism drive and its threat against its neighbours. Sudan is now at the forefront of countering irregular migration and human trafficking, and we can achieve peace and reconciliation and the protection of human rights only if we assist Sudan post-sanctions with the necessary skills and resources.
Given the current theatre of conflict and wars, which as we have witnessed have brought nothing but death, destruction and enmities, I no longer believe or accept that continually and complacently adding further to these conflicts does any justice to the people of Sudan or our own regional presence and interest. Sudan is an important strategic partner in fighting terrorism and radicalisation, and is managing significant numbers of incoming families from South Sudan, Libya and elsewhere. It does not call them refugees. Let us not be self-righteous about individual countries when we so often suffer from selective amnesia about the impact of our own history. Today we know what has happened to minorities in many Gulf and Middle East conflicts.
As negotiations progress, I wish to see us work with the Sudanese Government to ensure that they embody human rights and the rights of minorities at their core. We can do that only if we are at the forefront of the partnership to rebuild Sudan. We should do so alongside the impressive Sudanese diaspora, many of whom see this as a glimpse of hope. I am glad that through the APPG on Sudan we aim to continue to strengthen our ties with the many professionals who are willing to utilise their talents and skills for a safe and secure Sudan.
Lord Collins of Highbury (Lab)
My Lords, I thank the noble Lord for initiating this debate. Sudan is a country that has a more or less constant history of civil wars, military coups and human rights abuses. As the noble Lord, Lord Alton, pointed out, President Bashir has been indicted under the International Criminal Court. We all hope that Sudan is on a road map, and we have of course heard about the African Union’s road map. Can the Minister tell us more about how that road map might lead to greater peace and security in a country that deserves far better?
We have heard in the debate about the recent visit to Sudan—just a few weeks ago—by Sir Simon McDonald from the FCO, who was accompanied by the DfID Permanent Secretary, Sir Mark Lowcock. In their exchanges with the Government of Sudan, and also with opposition leaders whom they had the opportunity to meet, we are told that they raised the question of human rights and migration, and humanitarian and development assistance. What is the Government’s assessment of those discussions in relation to human rights abuses? What assurances did they get on how these might be addressed?
We have also heard in the debate about bringing Sudan back more formally into the international community. We heard recently that President Trump had included Sudan in his ban on visitors to the US; what is the Government’s assessment of the impact that the ban might have in terms of giving succour to the terrorists? The Home Secretary described the ban as a “propaganda opportunity” for ISIS. As we have also heard, DfID spends nearly £50 million a year in Sudan. I hope that the Minister can tell us what the Government’s assessment is of the impact of that aid in transforming the country economically and, more importantly, in terms of civil society and defending human rights.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, I also join in congratulating the noble Lord, Lord Hussain, on securing this debate. As he made clear, extremism is a global problem. In all its forms it attacks the fundamental values that bind us together as a global community and undermines our efforts to build a better, more tolerant world. The UK Government are committed to working with our international partners to tackle the threat posed by extremism both here in the UK and overseas. Today I will therefore reflect on the current situation in Sudan and the region, which has been set out by noble Lords—I would say set out clearly, but there is disagreement among noble Lords about some of the major parts of the detail, but hearing these differences is part of the importance of debates such as this. I will also reflect on the work of the UK Government as we try to help that country tackle extremism.
Sudan forms part of the fragile Sahel region, which is blighted by internal conflict, weak governance, violent extremism, and the spillover of conflicts outside its borders—most notably, as we were reminded, from Libya and Nigeria. Continued instability there poses a threat to security in the wider north and west Africa region. Currently, the main terrorist threat in the Sahel is from al-Qaeda in the Islamic Maghreb. A number of other terrorist groups also operate in neighbouring Egypt, primarily targeting Egyptian state and security officials, and in Libya. In particular, of course, we have to mention Daesh.
In Sudan itself, the long-running conflicts in Darfur and the Two Areas have created a dire humanitarian situation across the country, with approximately 5.8 million Sudanese in need of humanitarian assistance. I pay tribute to the work of the noble Baroness, Lady Cox, in this respect. She has been consistent in the assistance she is trying to give to the country. It is important for the Government of Sudan to be committed to the international proposal for improving humanitarian access to the Two Areas. They most recently expressed support for that when the Foreign Minister, Ghandour, spoke in a meeting with the UK special representative to Sudan on 24 January. We continue to urge the SPLM-North to agree to these proposals to guarantee medical supplies brought directly to the areas under its control as a way to unblock the whole system and obtain a broader agreement for long-term access. As I have mentioned recently in the House, there was an opportunity for an agreement whereby USAID would have delivered humanitarian support, but it was SPLM-North that walked out of the talks, which was disappointing.
There has recently been a reduction in the level of armed conflict between the Government of Sudan and armed movements. That is encouraging, but I understand the concerns of noble Lords. We fully support the peace process led by the African Union High-Level Implementation Panel. It is vital that all sides reach agreements on the permanent cessation of hostilities and unrestricted humanitarian access to the conflict areas. Sudan’s national dialogue has the potential to solve this matter. We were pleased to hear that the next stage will remain open and inclusive for all Sudanese political parties, and we urge all sides to commit to it fully.
We are concerned, however, by the arbitrary arrest and detention of human rights defenders and opposition party members in Sudan. We have raised our concerns with the Government of Sudan and will continue to do so. The noble Lord, Lord Alton, rightly raised concerns about the three Christian men who were sentenced on 29 January. We continue to work closely with human rights lawyers working on cases relating to freedom of religion or belief, and we will continue to raise cases of concern directly with the Government of Sudan as part of our ongoing human rights dialogue. It will not surprise the noble Lord to hear that we are in contact with the Czech Republic, because of course it is one of its nationals who has been sentenced. Clearly, we are extremely concerned by the results of those trials.
Sudan’s central position between east and west Africa means that it has historically been a crossroads between these two regions, as well as Libya to the north. It is not just a crossroads for ordinary traders; it is a key facilitation hub for organised criminality, such as smuggling and trafficking in people. These routes are highly susceptible to exploitation by terrorist groups. We have been working with our international partners and other regional Governments to help to defeat terrorism and bring stability to the Sahel. In the past, the Sudanese Government have failed adequately to co-operate or confront the problem of Islamic extremism and human trafficking. That is why it is crucial that the UK engages with the Sudanese Government to encourage them to work more closely with the international community. I believe that progress is being made.
Questions were asked about the lifting of US sanctions. It is clear that progress has been made—national dialogue is an important development and no one should ignore it, and the ceasefire is holding to the main part. There is an issue about Nertiti—I understand that—but there is a problem with getting evidence on it. In the Two Areas, we are hearing from the SPLM-North that there is no breach of ceasefire. So let us recognise the progress made by the Government of Sudan when we can. The fact is, however, where the Government of Sudan have begun to show that they are willing to co-operate with the international community to counter violent extremism, the international community has to re-evaluate its position. The previous US Administration did that and made progress with temporarily lifting some of its more damaging economic sanctions. If made permanent, the lifting of US sanctions is considerably likely to strengthen Sudan’s economy, which in turn could increase the resilience of the country to violent extremism.
I am advised that yesterday, the United Nations Security Council unanimously extended the mandate of the UN sanctions regime on Sudan, including the panel of experts. I say again that there is some sign of progress. While the panel has faced obstacles from the Sudanese Government, it has now received visas to travel to Sudan to monitor the implementation adherence with sanctions. We will continue to urge the Government of Sudan to co-operate fully with the panel of experts and to adhere with the UN sanctions regime. I feel that it will not only be the Government watching that—noble Lords here will monitor it very carefully with some of their excellent contacts.
We can also play our part, but we have made it clear to 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 the Government of Sudan to make progress on all the issues raised by noble Lords today around threats to the human rights and security of all people in Sudan. It should not be some ethnic groups that have the ability to prosper—it is for all.
I assure my noble friend Lord Sheikh that we are working towards promoting and protecting good governance, the rule of law and human rights as the best way to ensure our collective security. Our work is focused on two areas. First, on ending conflict and, secondly, on improving resilience. In that way, there must be room for us at some stage to work further with the Government of Sudan to make sure that the national dialogue works, is open to all and that we see an improvement in human rights. It is only that improvement that will enable further engagement. Our strategic dialogue provides an important platform for us to discuss areas where we would like to increase co-operation with the Sudanese Government, such as countering violent extremism and migration. We will continue our conversation on these issues at the next dialogue in Khartoum in March.
Radicalisation within Sudan is another issue of concern. Extremist groups could seek to exploit vulnerable communities in order to incite political unrest and anti-western sentiment. Here too we are taking practical action. We are working with staff, students and graduates at the University of Medical Sciences and Technology in Khartoum to raise awareness of the issue and suggest options for tackling the risks. As part of our engagement with the university and its alumni, we have also continued to provide outreach material on countering violent extremism to students, staff and parents, and supported the visits of expert speakers to Sudan from the UK, including the imam to the British Armed Forces.
In conclusion, violent extremism is a growing concern in many parts of the world. That includes the Sahel and extremist groups operating in the region which continue to pose a threat to Sudan. It is important that the noble Lord, Lord Hussain, worded his Question for Short Debate to put Sudan within the wider context of threats around the region, so that instead of focusing only on Sudan, we consider the Question against the background of threats that Sudan faces and how we need to build resilience across the region. We are encouraged by the new willingness of the Sudanese Government to co-operate with international partners on these vital issues. Through our strategic dialogue with the Government of Sudan we will continue to promote further co-operation. By working together, we will overcome intolerance and build peaceful and prosperous societies for all our citizens. It takes all of our energies in government to do it; I know we can count on the energies of noble Lords here to join in that work.
Education: Maintained and Independent Schools
(7 years, 2 months ago)
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Lord Lexden
To ask Her Majesty’s Government what assessment they have made of the progress of partnership work between maintained and independent schools.
Lord Lexden (Con)
My Lords, I declare at the outset my interest in the subject of this debate. I am a former general secretary of the Independent Schools Council—the ISC—which both accredits, and works on behalf of, some 1,300 of the 2,500 independent schools in our country today. Although more than 80% of pupils being educated in the independent sector attend ISC schools, it should be noted that there are more than 1,000 other schools in the sector which prefer to go their own way. I am also president of the Independent Schools Association, one of the ISC’s constituent bodies. I thank all noble Lords who will be contributing to this debate.
I sought this debate primarily to provide an opportunity for the further discussion of partnership work between ISC and maintained schools, which featured quite prominently in the debates in 2015 on what is now the Charities (Protection and Social Investment) Act. At the Report stage on that measure, which took place on 20 July 2015, important commitments were given on behalf of the ISC and the Government by my noble friend Lord Bridges of Headley. I thought it would be useful to revisit those commitments and review progress.
I would also like to comment briefly on the proposals relating to independent schools in the Government’s remarkable consultation paper, Schools that Work for Everyone, which was published last September, and on the ISC’s response to it. The document’s remarkable features include poor drafting that invites stern rebuke from the nation’s English teachers. Its opening sentences embodies a tiresome party political catchphrase:
“This consultation sets out the Government’s ambition to create an education system that extends opportunity to everyone, not just the privileged few”.
The Government cannot possibly believe that the aim of education reformers since the 19th century—Liberal, Labour and Tory—has been to fashion a system that serves the interests of only a privileged few.
Partnerships between the two sectors of education have existed for a long time. When I arrived at the Independent Schools Council in 1997, exactly 20 years ago, I found a well-established tradition of encouraging work with maintained schools and local communities. An annual audit was published. It occasionally got a small paragraph in the press. For the first time, the Government started to show interest. In 1998, the then Labour Minister of State for School Standards, Stephen Byers, established an advisory group on independent/state school partnerships which awarded modest grants to specific projects involving schools in both sectors.
I circulated a paper in 1998 on behalf of this group. It stated: “The general perception has been, for far too long, of two education sectors working separately towards the same goal—the success of their pupils. Since all schools are in the business of trying to secure the best education for their pupils, each sector has a wealth of skills and expertise from which the other could benefit”. The stress that was laid on the value that both sectors can derive from partnership was—and remains—crucial. It became one of the themes of Labour education policy.
What we lacked over the years was really authoritative, detailed information about the extent of partnership work. The need for it emerged clearly during the debates in 2015, to which I have referred. Some noble Lords, who felt strongly that not nearly enough was being done, pressed for legal compulsion, particularly in the spheres of music and sport, where much is now being done in partnership but where undoubtedly still more could be achieved. Facts were required. As Dr Mark Bailey, High Master of St Paul’s School, has said recently:
“It’s an area of education that is particularly vulnerable to wide generalisations and a lack of full understanding”.
In July 2015, the ISC committed itself to developing a website which would, for the first time, provide a platform where partnership work could be exhibited, and to which schools in both sectors could contribute. The website, entitled Schools Together, was launched in January 2016; 1550 projects now appear on it. Furthermore, the ISC is, as it promised in 2015, now gathering fuller information than ever before from member schools—information that it is sharing with the Charity Commission. For its part, the commission has produced fuller guidance on public benefit and now requires partnership work to be reported to it in greater detail.
In all this, it is essential to bear one point above all in mind: independent schools vary so greatly in size, in income, in areas of particular expertise and much else besides, that uniform obligations in respect of partnership work could not be laid equitably upon them. As the ISC has put it in its response to the Government’s consultation paper:
“We have found that successful partnerships rest on strong local relationships and freedom for schools to support them according to their particular circumstances and capabilities”.
That has always seemed to me the right approach. I hope this Government agree with it.
One further commitment was given in July 2015. My noble friend Lord Bridges announced that the Charity Commission would carry out a research project so that discussion could be based,
“more solidly on a better understanding of what is actually the case”,—[Official Report, 20/7/15; col. 974.]
where partnership work is concerned. He added that the research would be published and debated in the House. The Minister will no doubt report on the progress of this important work when he comes to reply.
I have spoken disrespectfully about certain aspects of the Government’s consultation paper. I do not have undivided admiration for the section of it which sets out proposals for independent schools. Though proper acknowledgement is given to existing partnership work, the proposals are expressed in the language of intimidation, not partnership, which is astonishing from a Tory Government. The message is unambiguous: work hard to add,
“extra capacity to the state sector”,
and create masses of free places in your own schools, or your charitable status will be at risk. Nowhere is there any recognition of the fact that the total annual benefit arising from charitable status is some £150 million, while ISC schools, some of which do not even have charitable status, devote over £850 million to means-tested bursaries and fee remission.
The ISC has replied to the Government in the language of partnership. It has proposed jointly funded free places and consortia of schools to help create more good places in the maintained sector. Discussions between the ISC and the Department for Education are in progress. I hope they reach a satisfactory conclusion.
Back in 1997, the Labour Government set out three guiding principles: first, “the high standards being achieved in independent schools must not be compromised”; secondly, “change must be voluntary”; and thirdly, “there must be no imposition from above”. The Government should stick to those well-tried principles.
Lord Parekh (Lab)
My Lords, I thank the noble Lord, Lord Lexden, for securing this debate and for introducing it so well.
The Prime Minister has spoken often about creating a meritocratic Britain. By this she means that a good education should be within the reach of all our children. It is therefore a scandal that nearly 90% of our independent schools are rated good or outstanding and 80% of them outstanding, but only 20% of state schools are regarded as outstanding. This leads to a waste of talent because state schools do not produce outstanding children. It leads to a shortage of skilled labour and, more importantly, to resentment and frustration among a large number of state school pupils who feel that they are not getting their due for their talent.
It is striking that it is the threat of Brexit that has alerted us to the enormity of this danger and, as the Prime Minister said, now that Britain is about to embark on a new adventure it is time to rethink all the old certainties. It is unfortunate that a question of this magnitude should come up in this context, which is polemical, polarises the country and does not allow us an independent assessment of the two concepts of schools.
When we talk about independent schools it is also worth bearing in mind that there are about 2,300 and 50% of them are pretty small—with fewer than 150 pupils—which educate between them just under half a million pupils aged five to 15. The partnership between state schools and independent schools has to be seen in that context. So how do we improve state schools? Various Governments have come and gone and floated all kinds of ideas and we have more or less agreed that if we are going to improve state schools we will have to think in terms of allocating more resources to them, with better teachers, greater autonomy and leadership at the top, and increasing parents’ say in how they are run. Independent schools can and do contribute to this, but not for the reasons that are generally cited. The reason cited is that independent schools get charitable status; they get relief from business rates and therefore, as a kind of contractual quid pro quo, they should give something back to the state which has given them so much.
I do not think that argument particularly works or is even particularly valid. The independent schools if pressured could say that they are not interested in accepting the business rate relief and the charitable status. What do you do then? Go back to square one? They might say that the concession they are getting by virtue of not having to pay business rates is so small that it is not worth the bother. What do we do then? Are they completely exempted from all the obligations that they have to state schools? I suggest that to couch the argument in terms of a contractual quid pro quo is dangerous for both independent schools and state schools.
We should rather think in the following terms. First, independent schools by virtue of the fact that they are outstanding and getting wonderful results have certain moral obligations to their fellow citizens. I emphasise the importance of moral obligation because it cannot be denied that those schools that have the resources and the capacity ought to be able to contribute to those which have fewer resources and less capacity.
I also think of the argument articulated in the language of enlightened self-interest. If the distance between state schools and independent schools remains as large then there is going to be resentment and constant hatred for independent schools, and that is not the climate in which independent schools will be able to function. There is also crude self-interest, because independent schools are increasingly becoming homes for the children of foreigners. I was told recently that the number of overseas nationals, especially Chinese and others, whose children are admitted to our schools, either here or in their campuses abroad, is much larger than it used to be—about 33% larger over the past five years. If this is the situation they are going to be reduced to then it is rather important that they should think in terms of collaborating with state schools in our country.
The question therefore is to articulate why it is important that the two sets of schools should be able to co-operate. I think they can co-operate at various levels, as the noble Lord, Lord Lexden, pointed out, and I want to add one or two other ideas. They can lend their staff, especially in minority subjects; provide access to facilities—for example, in science labs, sports facilities, or music; extend a larger number of scholarships than they have done so far; provide teaching, coaching and career advice; and share best practices. These are some of the ways that independent schools can help state ones; there are many others.
Let us remember one important thing. The two sets of schools are never going to be complete partners. Rivalry is built into their structure. Independent schools are in the business of recruiting fee-paying pupils, and fee-paying schools are decidedly what state schools are not. Given that there is this rivalry and that independent schools are going to be looking for children who are prepared to pay, why should they raise the standards of state schools? If the standards are raised to a high level, why would anybody want to go to independent schools? On the continent of Europe, in France and Germany, very few students go to independent schools, because state schools are considered sufficient. I am not saying that it is in the interest of independent schools to impoverish or keep state schools parasitic on them, but I emphasise that there is a relationship of patron and client. It is not a relationship of equals, but has an element of rivalry. Consistent with that, we should certainly think of collaboration between the two, but not raise our expectations too high.
Lord Addington (LD)
My Lords, when I put my name down for this debate, I wondered whether I was getting into very deep water. I can now confirm that I am at least up to my waist. When we talk about independent schools assisting the state sector, we are talking about something that has happened, or where there has been a far higher degree of interaction than most people realise. I do not know whether it is an advantage, but I have the experience of knowing how, for instance, the private, independent providers have assisted in things such as provision for those with special educational needs. It is also worth noting that certain independent schools have been a resource that has been used, even though that was often in state boarding schools, for those with severe problems who are identified and can get through—and have done a pretty good job in many cases. That is probably because the state system has not provided for those problems.
How do we develop a relationship where somebody is providing a service—and charging, to an extent—for somebody not doing so? As has already been mentioned by virtually everybody today, there is a degree of clash here. Many of the smaller schools that did it have disappeared as provision got slightly better in the state sector. That is a conflict. More specialist providers, for people who have failed within the state system, still have a role—the recovery centre, effectively. How do we take that expertise and use it?
Another subject is sport, although the noble Lord, Lord Moynihan, has beaten me to that. It is something of a scandal that, if you want to win an Olympic medal, you can up your chances by going to an independent school. It might be that most of the sports that are attracting the mainstream and are easy to access do not have very high Olympic status—football being the classic with rugby league following rapidly. If you have schools that are not going on to that pathway, how do we provide support and help? If we are not going to start sending people on sporting excellence education pathways, how do we provide the assistance? Asking the independent schools, “What are you doing that identifies here?”, and trying to bring that identification process into the state system would be very interesting. We also need to identify that some of these answers will not be readily available if you are in a state school. In the sporting world, you will be much better off if that independent school talks to the school and the local sports clubs. You are not identifying someone with raw talent; technically, you are identifying someone who enjoys training. That is much more important in the modern sporting environment. Roy of the Rovers kicking a ball around the pitch has gone, certainly if he wants to be an international-quality sprinter.
How can we bring the expertise in this environment forward to help in this sector? If we are to take over and help to run schools, which from what I have read has not been a totally successful experience so far, how can we get this expertise brought in? To go back to special educational needs, for instance, are those with less severe needs better dealt with by the independent sector? What if they go to a state-run school that is bigger, with more people, and is being told to be more flexible, perhaps by allowing better technology into the classroom? How does that fit into a classroom? I will not go into a diatribe about SATs and the English-language testing that goes on for dyslexics at the moment—I shall save that delight for the Minister on another day—but how do you build flexibility into the current very regimented system? How do you apply that?
These are difficult tasks. If we find a way forward, that is great, but if we cannot, what are we doing? Are we encouraging the independent sector simply to offer more bursaries? That might help some individuals, but will it help the majority of schools? No. How are we to get that interaction and expertise through? If the Minister has good examples of pathways that bring in expertise in general fields to the places where we know we do not do that well—in the state sector especially, as the independent sector does better—I am all ears.
It is the identification of how to apply the extra information and expertise to these schools that will be very interesting. If we do that, I hope we will establish a path that in a short time does not need the independent sector. That brings us right back around to the competition level. I speak with some knowledge on this: you do not go to the independent sector if you think you will get the service in the state sector. Good state schools often have very careful application processes for getting you in there—that is, where you live and house prices. If we can ensure that we have this identification pathway going through, we are doing something good here. If we do not, it will be window dressing.
Lord Lingfield (Con)
My Lords, I thank my noble friend Lord Lexden for instigating this debate. I remind noble Lords of my education interests in the register.
I entirely support independent schools giving assistance and advice to schools in the state sector. My noble friend and other noble Lords have given examples of good practice in this area. However, I have several concerns. I would want to be sure that independent schools did not feel under pressure to join in. My noble friend’s speech today has caused me some anxiety, because charitable status could be in danger if schools do not co-operate with the Government’s wishes. Some are fearful that the reporting procedures could lead to the construction of a league table of achievement in the help they are able to give to the state sector.
At the moment, in principle, the removal of charitable status means that a school’s assets could be sequestered and given to another charity. That is unlikely to happen, as we know, but such a threat is still felt by independent schools to be in the air.
Charitable status brings with it certain fiscal advantages—usually cut-price local taxes, exemption from corporation taxes and the ability to obtain gift aid on donations towards certain charitable ends, although not of course on fee income. However, that is not the huge subsidy that some newspapers seem to imagine; independent school governors estimate that those tax advantages account for about 3% of income. There can be few schools which do not spend this on pupils from homes that cannot afford fees. Nationally, charitable status brings independent schools an annual notional tax saving of some £100 million; however, research suggests that they spend more than £260 million on bursaries—bringing it to the sum that my noble friend mentioned.
Independent schools have to tread carefully when assisting state schools. First, they have to reassure fee-paying parents that such a charitable effort is worth while and the cost of it unlikely to diminish their own children’s education; secondly, they have to be extremely careful not to give the appearance of patronage. However, if handled carefully, all this can be extremely beneficial. I have seen wonderful projects involving the teaching of reading by independent school sixth-formers at local primaries, from which the older students gained as much as the younger ones. A good number of cadet units in independent schools have been instrumental in setting up CCF companies in local secondaries. In several cases these now meet as joint forces.
We have heard a great deal in the past, although little today, about charitable independent schools being able to prove public benefit. A landmark judicial review quite properly defined such benefit rather more liberally than the then chairman of the Charity Commission had promulgated. It is true, however, that the modern conception of charity somehow sits uncomfortably with independent schools, which are often seen, usually unfairly, as the preserve of the wealthy. This was guyed really rather well by Ian Hislop in a spoof charity appeal in which he said, “A gift of only £50 will buy a boater for Henrietta”.
On 12 September last year, I asked the Minister whether independent schools that wish to do so will be able to opt out of charitable status and thereby demit the 3% or 4% of their income. His reply was that they will. This is good news, and I suggest that the law could assist those who so wished to opt out by allowing them to keep their current assets and be given the status of what I believe in Scotland are public trusts with no tax advantages. I asked because the governing bodies of independent schools—I was for some years the chairman of one—tend to take a very long-term view. Many of them have survived for hundreds of years by so doing. Threatened in the not-too-distant past by the Charity Commission, some have told me that they fear that threat will someday come again and that they would value being able to opt out, even if it meant the loss of fiscal advantages. Most charitable schools in the independent sector will doubtless wish to remain as charities, with the advantages and possible disadvantages brought by this, but those that do not should, in my view, have the option.
There is one great gift that schools in the private sector can give to the state sector, a gift that costs them nothing. It is the example they set, especially in the use of their independence. Each is a separate, autonomous corporate body; even those schools in groups such as the Woodard Foundation retain their clear individuality. Decisions about financial priorities, staffing, curriculum, buildings and plant are made by the governors and professionals on the spot, without reference to any local or national bureaucracies. This was the freedom that first the grant-maintained schools movement of the 1990s and then its successor, the academies programme, promised state schools and there is no better way of raising standards in them. There is every possible good reason for state and independent schools to work closely together, but it must be made very clear that such arrangements are purely voluntary on both sides.
Lord Wallace of Saltaire (LD)
My Lords, I declare my interests: I am chair of a musical education charity, Voces Cantabiles Music, and my wife is a director of a multi-academy trust in Bradford.
I became involved in this issue partly because I had to answer for charities and I worked with charities when in the coalition Government, but I also followed the noble Lord, Lord Moynihan, in tabling an amendment to the charities Bill in 2015. The noble Lord, Lord Moynihan, has asked me to give his apologies today as he is unfortunately not able to be with us as he has to leave for a foreign visit this afternoon.
Since then, the situation has moved on. The Prime Minister made an astonishingly strong speech last September:
“Through their charitable status, private schools collectively reduce their tax bills by millions every year. And I want to … enact a tougher test on the amount of public benefit required”.
She noted that,
“these schools have become more and more divorced from normal life”,
with a rapidly rising percentage of pupils with rich parents from overseas countries.
Paragraph 7 of last September’s consultation document, referring to independent schools, states:
“We should expect these schools to assist the state-funded sector more directly … by building capacity in the sector”.
A later paragraph states that,
“these requirements will be built into existing agreements, so that … the ability to … maintain the key benefits associated with independent schools’ charitable status, is explicitly linked to doing more”.
If a Labour Government had said that, the Daily Mail and the Daily Telegraph would have been all over it, but I note that this was a Conservative Prime Minister, and I agree with her. The Independent Schools Council has depicted this as a threat: I would call it much more a reminder. If a school is a charity, it should be fulfilling charitable purposes. A great many of our best independent schools were founded as charities and have moved some way from their original objectives at their foundation.
Independent schools have responsibilities, apart from being charities, to the well-being of this country—their corporate social responsibility, if you like—and to their communities. The best independent/state school partnership I have seen, in York, is partly because the independent schools in York are Quaker and have a very strong sense of their social responsibility and of their responsibility to their community in particular.
I am conscious that there is a great deal of variation across England. The situation of independent schools in London and south-east is very different from that in Yorkshire and the north of England. I am also conscious that the partnerships I have seen and heard of depend very much on individual leadership. A good person pushing something does extraordinarily well and then when he or she retires things very often fall away. It is a patchy record, but I welcome the Government’s encouragement of more active engagement. I hope the Minister takes that fully on board.
There is resistance on both sides. We have seen that, and I have heard from people in independent schools about unfortunately or unintentionally giving the impression of being patronising. I have heard from left-wing teachers in state schools that they do not want anything to do with the independent sector, et cetera, but in a number of places, partnership now works extremely well. The one I know best is Westminster Grey Coat—a foundation of two state schools and three independent schools—in which the director of the foundation says very strongly that they have mutual benefit and learn from each other all the way across. I was at Emanuel School the other week for the foundation’s sixth-form essay prize, in which the boys from Westminster City School, a state school, won more prizes than any other school. It was very impressive and pleasing. That is precisely the sort of thing one should be citing.
Social awareness and social integration within our divided national community are part of what this is all about. There is no single model. Different forms of co-operation will fit different communities and different circumstances. The best model is certainly not to sponsor academies or to offer free places, although in some areas where sixth forms are in short supply, experimenting with providing free places for sixth-formers might be part of the way forward. Jointly funded bursaries are not a priority either, although, again, in rural areas for able students one might perhaps experiment. Fundraising for bursaries at independent schools is part of the way forward. Those that have endowments are, in a number of cases—Eton College being the most striking one—funding a number of scholarships of this sort and perhaps more should be done in this way.
There is excellent best practice from, for example, Rugby, Eton, York and Wimbledon: specialised teaching; extra subjects and topics, such as “masterclasses” in York, which I have sat in on; shared music, drama and sport; shared school governorships, as in the model of Rugby and others; and sharing of teaching best practice. This could develop further, with shared careers advice, shared attachments to local employers for work experience, and so on. But, as the noble Lord, Lord Lingfield, said, there is resistance from parents and governors in what one might call the second division of private schools—I will not name the schools where I have heard this. They say that they have paid good money to buy educational advantage and they do not see why others should share it for free. It is a sentiment that I have heard particularly in Yorkshire, which would probably not surprise noble Lords.
There is a schools partnership across Bradford, but when I was talking to head teachers at state schools there, they said, “That’s fine; if a private or grammar school wants to come and join us it is welcome—but it had better ask first”. In fact, independent schools in the north of England are not as well plugged into this network as one would like. I regret that we do not have as much evidence as possible on what is going on— I look forward to the ISC survey coming out.
I was upset, I have to say, when talking to the head teachers of a number of state schools, to hear them saying things such as, “If I had the spare capacity or the spare money for this, I would love it, but I am more concerned about how I prevent my school going bankrupt in the next three years and how I avoid losing half a dozen teachers because of the squeeze on our budget”. Of course, there are similar pressures on a number of independent schools, particularly those outside the south-east, and boarding schools.
I conclude from this that we are in a changing situation—the structure and situation of independent schools are themselves changing—but we nevertheless want to encourage partnerships of this sort as much as possible. I am glad to see that the Government are doing this and that charitable status—charitable schools—is a part of this. But it is not the only part, because we expect all schools to share the responsibility for what happens in their communities and in our society as a whole.
Lord Watson of Invergowrie (Lab)
My Lords, I too thank the noble Lord, Lord Lexden, for sponsoring this debate and pay tribute to him for the pithy way in which he introduced what has been an interesting debate. I may surprise quite a few people, not least in my own party, when I say that I believe that independent schools are currently doing quite a good job in terms of partnership work with maintained schools. That is not to say that more cannot be achieved because it always can, but given that 1,112 schools out of 1,280 members of the Independent Schools Council are already engaged in partnerships in varying forms with state schools, then that at the very least demonstrates a willingness to engage. That engagement is of course by both sectors because, as the noble Lord, Lord Lexden, said, there is value that both can derive from these partnerships.
The facilities that private schools have can be of particular benefit; by that I mean not just the recreational facilities referred to by noble Lords, but teachers specialising in the creative arts, from the performing arts to fine art, music tuition to film and media. All too rarely do maintained schools, or academies for that matter, have anything like the range of subjects available in the independent sector and it is right that in return for the benefits of charitable status, private schools should make a contribution in whatever way they can. It is to be hoped that the traffic is two-way in a physical sense also. While there are benefits for state school pupils attending classes at independent schools in subjects that are perhaps not available in their own school, it must also be of value for teachers in independent schools to visit publicly funded schools not just to impart knowledge and skills but to gain a better understanding of the conditions under which their state sector counterparts operate.
There has been an increase in the amount of crossover activity since the passing of the Charities (Protection and Social Investment) Act 2016, referred to by both the noble Lord, Lord Addington, and the noble Lord, Lord Wallace of Saltaire. That legislation has led to an increase in the extent to which independent schools engage with local communities and state schools to share resources, expertise and facilities. It has also resulted in the development of a website called Schools Together which promotes and encourages partnership working between schools. It now has the added benefit of being a resource to which any school, state or independent, can refer if they want to gain a clearer impression of what kind of joined-up activities can be established.
That was then, but it is fair to say that to a significant extent the landscape changed with the publication last September of what the noble Lord, Lord Lexden, pointedly called the Government’s “remarkable” consultation paper, Schools That Work for Everyone. He talked of the paper’s stated ambition to create an education system that serves not just the privileged few, and I think he exposed the vapidity of the document’s title. I agree with him, but I have a more fundamental complaint about the consultation paper—its very title. I have raised this with the Minister before: to name it Schools That Work for Everyone is a cruel deception because not once in its 36 pages do the words “special educational needs and disabilities”, appear. So whoever it works for, it is not everyone.
The consultation paper was remarkably strident about the independent sector in referring to what was expected of it, adopting a tone that I think everyone noticed was markedly different from that of the aforementioned Charities Act, when the Government were much more sympathetic to private schools. Perhaps the change in approach had its roots in the fact that for the first time ever we have a Prime Minister and a Secretary of State for Education who were both educated at comprehensive schools. Yes, the Prime Minister attended a grammar school, but she was in the privileged position—even though I suspect it may not have seemed that way to her at the time—of experiencing a school making the change from a grammar school to a comprehensive.
While acknowledging that partnership working was under way, the consultation paper came up with the hitherto unknown idea of telling independent schools with the capacity to do so to sponsor academies or set up new free schools and be responsible for ensuring that they were rated good or outstanding within a certain period. Alternatively, they could offer a proportion of places with fully-funded bursaries to those whose families are unable to afford the fees. The Independent Schools Council showed an ability to think outside the box and proposed the creation of up to 10,000 free places in independent schools every year for children for whom those schools would not otherwise be an option. As in many similar situations, though, there was a catch: it would be a jointly funded bursary scheme to which the Government would contribute no more than the cost of a state school place. The independent school places will be available across the age groups and will be non-selective except in terms of ensuring that a child can cope with the independent school’s expectations, although what that may mean was not explained.
Sceptical as to its ability to establish new schools, which of course is not an area in which it has expertise, the ISC offered to,
“work with ministers, regional schools commissioners and others in putting together consortia of suitable and willing independent schools to help co-sponsor new state-funded schools”.
On the basis of the ISC’s proposal, the cost to the taxpayer would be £5,500 per child, roughly the amount that state schools receive annually for a pupil. However, average private school fees are around £15,500, so funding would be subsidised by the private sector by around £80 million a year. That is a sizeable amount to target at state-educated children and should not be dismissed lightly, but it raises the question of just who would benefit from the plan. It sounds remarkably similar to the assisted places scheme in the 1980s and 1990s which required children to pass ability tests. As a result it did not help poor children so much as bright children who happened to be poor. The ISC claimed that the scheme would be non-selective, but if so, how will children moving from the state sector to the independent sector be chosen? Bright children tend to do well wherever they are educated, and creaming off the top of the state sector, as grammar schools do, achieves little more than those left behind being denied the benefit of learning beside and gaining from their more able classroom colleagues. That is why comprehensive education was introduced and despite its current problems, many of which I remind the Minister could be solved by adequate funding, its benefits far outweigh the disadvantages.
We recognise that the Independent Schools Council has made meaningful proposals in this regard, but we remain sceptical about the contention that independent schools can have much of a direct impact on standards of education in state schools. Private schools are academically successful largely because they educate the children of the wealthiest section of society who have enormous social capital. Private schools can afford to sustain small class sizes, have the benefit of substantial resources to support their pupils’ education, and pay staff salaries with which the state sector often cannot compete. There can be no comparison with the challenges that state comprehensive schools face, particularly those serving the most disadvantaged communities.
For that reason, while it is understandable that the Prime Minister and the Secretary of State believe that the independent sector should be asked to justify the benefits of their charitable status, we believe that establishing new schools or sponsoring academies is not the way to do so. On the other hand, partnership working should continue to expand, to the benefit of both sectors.
The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)
My Lords, I am very pleased to answer this Question for Short Debate. It is timely that the Committee considers this matter. There has been considerable progress, but the Government want a lot more partnership between state schools and the independent sector. We want that growth to reflect a new attitude towards the role that the independent sector can play in educating our nation’s children. As a Minister, I have seen many excellent examples of such partnerships, and the successful ones always contain some key ingredients: enthusiasm on both sides; staff willing to play their part; mutual benefit, as the noble Lord, Lord Wallace, said; and a focus on outcomes for pupils. Although partnerships can have other benefits, such as helping a school to meet its charitable status and its public benefit test, the primary aim of partnership must always be improvement in pupil outcomes.
We live in a highly divided and immobile society. Alan Milburn tells us that we live in the most socially immobile society in the developed world. As the Sutton Trust has told us repeatedly, 7% of the population is educated privately and gets nearly 60% of the top jobs in our country. As has already been mentioned, they are massively overrepresented in sport, in our Olympians, in music and in many of the top professions. What is more, because those pupils have these top jobs when they grow up, they are much more likely to exercise their perfect right to send their own children to private schools. It means that the vast majority of the people at the top of our big employers in this country have no direct or indirect experience of the state sector at all. This has undoubtedly contributed to a situation where, historically, our state sector has lagged behind, because a considerable proportion of customers who would otherwise have been highly demanding, vociferous and influential have been absent.
It cannot be right that we have such a divided society. This is not just, or mainly, about money. It is about all of us—independent schools, universities and employers—doing more to build a much more integrated and united society, as the noble Lord, Lord Wallace, said. That is why our consultation paper, Schools That Work for Everyone, starts from the expectation that all children in England will have a good school place, and that the independent sector, among others, will play its full part in achieving our aim, both by improving access to schools for those unable to pay full fees and by widening its partnership activity. In the consultation paper we put forward some suggestions as to how that should be encouraged and achieved. We have had an enthusiastic response. We will be publishing a full analysis of responses and setting out the Government’s preferred way forward in the spring. I cannot anticipate what the document will say. However, I shall identify some of the themes we intend to pick up from the responses. It is only right, however, that I acknowledge the degree of partnership which is already taking place.
What we include in the term “partnership” is very wide. At one end of the spectrum are small-scale partnerships, sometimes fired by a single teacher’s enthusiasm, which might allow for pupils from a maintained school to take a subject otherwise unavailable. We funded start-up costs for several of these at primary level in 2014-15. Many partnerships are much more ambitious—for example, the wide-ranging and highly impressive partnership I have seen for myself at King’s, Wimbledon. At the other end of the spectrum are initiatives which affect or create whole institutions—for example, the creation by Eton College of Holyport free school, which is partly boarding; the support by Brighton College of the London Academy of Excellence in Newham, and now by Highgate for LAE 2 at Tottenham; and Harris Westminster. Only this morning I visited Lancot Challenger Academy, Dunstable, in the Challenger MAT. To champion character in the state sector, it has been working with schools such as the Royal Grammar School in Newcastle, Ashford School and Shrewsbury School to build capacity in this vital area of school life. Many academy sponsors, to pick up on the point made by the noble Lord, Lord Addington, are bringing many of the curricular and extra-curricular practices of the independent sector to their schools.
As my noble friend Lord Lexden said, independent schools provide many bursaries. I saw this myself when for many years I was a trustee of the Eastside Young Leaders Academy in Newham, an after-school club looking after, at any one time, more than 100 black boys and now some girls right on the edge of exclusions from school. We were approached by Patrick Derham, who was then the head of Rugby School, to take two of our boys as boarders. We initially thought that this was a bit of mission creep but we thought, why not? It was a great success and the academy has now sent more than 100 boys and girls to private schools around the country.
I am very keen to encourage local authorities to use both independent and state boarding schools for pupils on the edge of care. We have an active programme under way in the department, very ably run by Colin Morrison, called the Boarding School Partnerships. It encourages local authorities to do this because they can often be fully funded by bursaries. On the point of the noble Lord, Lord Addington, we have approved nearly 50 new, special state schools, backed by good sponsors under the free schools programme.
As my noble friend Lord Lexden and the noble Lord, Lord Watson, have mentioned, so greatly has the Independent/State Schools Partnership grown that it now has its own website. With seed corn funding, we set up this website so that information on projects would spread and help generate further initiatives. As my noble friend has said, as of last week, the Schools Together website has nearly 1,600 projects on it. Although not all are involved in both state and independent schools, we welcome them all.
Each year, however, the Independent Schools Council conducts its census and asks its member schools, which educate around 85% of pupils in the independent sector—although they are only about half the schools, as my noble friend mentioned—about the partnership work they do. The results of the 2017 census are not yet available, but I imagine they will show a further advance on the 1,100 ISC schools that in 2016 were in some form of partnership with the state sector.
As my noble friend Lord Lexden and the noble Lord, Lord Watson, mentioned, the Charity Commission will have access to the ISC’s 2017 census data about the extent of partnerships later this year. These data will enable analysis of whether partnership activity has increased since the guidance was revised and the Schools Together website was created. Before commissioning research, the Charity Commission will review its plans in the light of any changes made by the Government following their consultation on the document Schools that Work for Everyone.
The partnership between state and independent schools is alive and well. Some people have understandably asked why, in that case, Schools that Work for Everyone not only asked independent schools to do more but suggested that if they do not various sanctions might be deployed.
It is worth setting out some of the principles on which we are considering responses and the best way forward. First, it remains our position—set out in debate last year on the charities and social investment Bill—that a partnership works best when it is the result of genuine enthusiasm, co-operation and willingness on both sides, and meets needs on both sides. This means that in taking forward the consultation proposals, we are looking for ideas and responses that will encourage and support partnership to make it grow in volume and effectiveness. Secondly, although many independent schools are engaged, that is not always the case. We want to ensure that whatever system we arrive at brings pressure to bear on those schools that have the capacity and capability to do something but, for whatever reason, do not see it as part of their role. Despite the excellent work already going on and what my noble friend Lord Lexden said, there clearly are schools that could do something or more but do not. The independent charity sector enjoys many freedoms and privileges and it is only right that all schools within it should recognise their wider obligations to society.
Finally, my noble friend Lord Lexden said that independent schools vary considerably in size and capabilities. We are naturally conscious that some independent schools genuinely do not have the capacity to enter into useful partnership with a state school. They may have poor standards or facilities or could be under regulatory action designed to improve them. It is right that such schools concentrate on putting their own house in order and we do not intend to do anything to push them into pointless partnership arrangements before they are ready.
In closing, I assure your Lordships that we want to build on what has already been achieved and enable the independent schools sector to play the greatest possible role through sensible co-operation and partnership, so that we really do have schools that work for everyone.
House of Lords
Hospital Beds: Availability
(7 years, 2 months ago)
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The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)
My Lords, the most recently published figures—for the last Thursday of December 2016—reported that 6,191 people who were occupying hospital beds were ready to return home or transfer to another form of care.
Lord Dubs (Lab)
My Lords, I thank the Minister for that reply. I am extremely puzzled because the official NHS figures I have been looking at suggest that, in November, there were 200,000 people blocking beds. What is more significant, all the experts say that the actual number of bed-blockers is three times the size of the official figure. Bed-blocking means that people are not given the best possible care and beds are blocked for others who could be admitted. Surely we have to solve this problem quickly.
Lord O'Shaughnessy
My Lords, the figures that the noble Lord is referring to are across the whole month. He may be aware that new figures have been published today, which show that an increasing proportion of delayed transfers is due to the availability of social care packages. He will also know that this reflects the changing nature of the patient demographic, which is becoming older and frailer. I agree with him that this needs addressing urgently, which is why the Government took action in the Autumn Statement to increase social care funding. We need to address the wide variation in the rate of delayed discharge from local authority to local authority. As the Prime Minister has said, in the long run we need a more sustainable solution.
Lord Skelmersdale (Con)
My Lords, although all Governments have made great strides in recent years in combining health and social care, is it not now obvious that the only way to complete this process is to have a unified budget?
Lord O'Shaughnessy
I thank my noble friend for that question. He is quite right that integration of services is the main thrust of policy and has been under successive Governments. This is happening in two ways. First, the Better Care Fund is pooling health and social care budgets at local authority level in order to achieve what he is asking for. Also, NHS England is producing sustainability and transformation plans, several of which are moving towards what is called an accountable care organisation, whereby a single grouping takes responsibility for all the healthcare needs of a population, rather than it being split into different services.
Baroness Walmsley (LD)
My Lords, integration is of course very important, but has the Minister ever met anybody in the health service who does not believe that you will never fix the pressures in the health service until you put more money into social care? That means helping areas with low-value properties, not just those with high-value properties, such as in leafy Surrey.
Lord O'Shaughnessy
The noble Baroness is of course quite right about the need for more money. I re-emphasise that an additional £7 billion or more for social care is going to councils during this Parliament. Councils have the ability to raise council tax, although the leverage obviously varies from place to place. This is why the Better Care Fund was created—to provide extra help to areas that do not get the same income from council tax increases as the better-off places.
Lord Crisp (CB)
My Lords, a year ago, the Royal College of Psychiatrists published a report which showed that about one-fifth of adult mental health beds were occupied by people who were ready for discharge or who should not have been admitted in the first place. They were only admitted because there were no adequate facilities in the community. Could the Minister tell us what the figure is today and what is being done about mental health specifically?
Lord O'Shaughnessy
The noble Lord is quite right to raise the issue of mental health. I do not have the specific figure with me but I will write to him with it. We know that there has been a historic disparity between the two services. This was recognised by the Prime Minister in a very important speech she gave a few weeks ago, setting out some of the ways in which the Government are doing more on this. However, there is clearly a lot more to do.
Baroness Gardner of Parkes (Con)
What is the situation of people providing care at home on behalf of councils? Many carers I know are called out at 10 or 11 at night to receive someone who has just been sent home from hospital. However, they are not really trained themselves; they are trained only by the care agency. Is it not time that we provided them with proper training, particularly as so many of them have come from the Philippines and other such places and we are not sure what the future holds for them?
Lord O'Shaughnessy
My noble friend is quite right that there has been an increasing prevalence of domiciliary care, which involves carers caring for patients in their own homes. Making sure that those patients can get home at a good time that works for them and those who support them is clearly a critical part of dealing with this delayed discharge issue.
Baroness Wheeler (Lab)
My Lords, the Minister was talking about care workers rather than carers. He has focused on social care but Nuffield Trust research shows that the proportion of discharge delays due to the unavailability of social care has grown by 84% in six years, but also that 57% of delays occurred because of problems in the NHS itself. This is because of a lack of local NHS community or rehabilitation services, and of the availability of home support therapies or access to diagnostic and other services. Are STPs going to be able to tackle this, given the scale of cuts that will need to be made? Is the Minister confident that last year’s NAO report, which warned that the Department of Health and NHS England rely “too easily” on differing local circumstances as a “catch-all excuse” for not improving NHS performance, is being addressed?
Lord O'Shaughnessy
The noble Baroness is quite right that there is increasing pressure on the health service. There have been 3.5 million more hospital admissions in the last 10 years and 2.4 million more A&E attendances in the last five years, so there is huge extra pressure. The number of acute beds has been dropping for a long time but at a slower rate in more recent years. Clearly, making sure that the right level of community care is available—step-down or interim care between hospital and home—will be incredibly important, particularly with a growing and ageing population.
Viscount Waverley (CB)
My Lords, surely enough is enough. Is it not high time for an unfettered look again at the health service—bottom-up rather than top-down, and therefore undertaken not by a royal commission, perhaps, but by an independent body such as the Academy of Medical Sciences?
Lord O'Shaughnessy
A number of investigations and reviews into the future of health and social care are taking place. I quite agree with the noble Lord that a royal commission is not necessary. What we all need to do in government and through the arm’s-length bodies involved in healthcare is to make sure that we are providing the 2.7 million staff, who are doing a brilliant job every day in supporting our health and care services, with the money and assistance they need to continue to deliver world-class healthcare.
Lord McColl of Dulwich (Con)
My Lords, does the Minister agree that it is not so much a question of old people getting older, because old people have always got older; rather, the difference in the last 30 years is the grotesque increase in the number of young people getting fatter and fatter?
Lord O'Shaughnessy
There are some long-term public health challenges, involving not just obesity but alcohol. But there is also good news: fewer people are smoking. I think that sometimes, young people—I do not know if I count any more—
Lord O'Shaughnessy
No? I do here. If we look at what are sometimes called transgressive behaviours among the under-20s—obesity, smoking, drinking and so on—they seem a lot healthier and more sensible than I was in my youth.
Religious Literacy
(7 years, 2 months ago)
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Lord Singh of Wimbledon
To ask Her Majesty’s Government what steps they are taking to combat religious extremism and to promote a cohesive society by enhancing religious literacy at all levels of government.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, the Government are challenging all forms of extremism through our counterextremism and Prevent programmes. We are working closely with faith groups to understand the impact of policies and to improve religious literacy in government. The Home Secretary and the Communities Secretary hosted a round table for representatives of all faiths last November.
Lord Singh of Wimbledon (CB)
I thank the noble Baroness for that Answer, but there are still concerns. The Government paper on the hate crime action plan contained no mention of non-Abrahamic faiths. That suggests something about the religious literacy there. Does the Minister agree that democracy implies being attentive to the legitimate concerns of all sections of the community, not those of a single religious or other majority? Does she further agree that teachings and practices that go against human rights must be robustly challenged, but that we need to know something about what we are challenging before we can do that? Programmes like Prevent cannot be effective without such knowledge. One final point is that I have put the basics of Sikh teachings on one side of A4, and that can be done for other faiths as well. Should that not be essential for religious literacy in government departments?
Baroness Williams of Trafford
I missed a little of the noble Lord’s question, but I think I have enough to go on. He said that the hate crime action plan did not specifically refer to non-Abrahamic faiths, but the tenets of the action plan cover points on hatred on the basis of religious belief, disability, sexuality and so on. It is therefore implicit within it that, for example, Sikh communities are included. As for the understanding of religious literacy within both government and wider society, both the Home Office and DCLG engage widely and often with faith communities. Shortly after the referendum, I myself met people from different faiths, including Sikhs, in Manchester to discuss religious literacy, the outcome of the referendum and the corresponding hate crime attached to it.
Lord Foulkes of Cumnock (Lab)
My Lords, will the Minister confirm that there has been no violence and no torture, and no wars have been waged, in the cause of humanism?
Baroness Williams of Trafford
I do not think I can accurately answer that without looking at my history books.
Baroness Warsi (Con)
My Lords, can my noble friend tell us whether the Prevent strand of the Government’s Contest strategy is part of their counterterrorism strategy or their counterextremism strategy? Can she also say whether there is a religious literacy element to the training given to Prevent co-ordinators? If there is, would she be happy to place a copy in the Library?
Baroness Williams of Trafford
My Lords, the central tenet of the Prevent strategy aims to protect young people who might be vulnerable to both extremism and terrorist preaching either online or in their communities. Actually, it is a protection mechanism, not a targeting mechanism, as I am sure my noble friend will be aware. It is a protective element to help prevent some of the external forces to which our young people are subjected in a negative way prevailing.
The Lord Bishop of St Albans
My Lords, just three weeks ago I spent half a day in an immigration removal centre and so gained an up-to-date insight into some of the complex and sensitive issues that are being dealt with there. Concerns continue to be raised about the level of religious literacy among some of the asylum caseworkers. Is the Minister content with the level of training that they are getting in religious literacy and, if not, what can be done to improve it?
Baroness Williams of Trafford
The right reverend Prelate raises a very important point about the detention estate. Certainly an awful lot of time and effort has gone into the training of staff in terms of the sensitivities around LGBT detainees; in terms of his important point about religious literacy, I will go back and check on just what training is given in that area.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, it is the turn of the Liberal Democrats.
Baroness Hussein-Ece
Does the Minister agree that last weekend’s Visit My Mosque initiative, which hundreds—indeed, maybe thousands—took advantage of, was a very good and positive example of promoting greater understanding, community cohesion and tolerance in our society? Does she think that we should have more such initiatives from all faiths to bring people together and establish a more understanding and truthful dialogue?
Baroness Williams of Trafford
The noble Baroness raises a really good point about community cohesion. There was a mosque event just near to me last weekend and I had reported back that it was incredibly successful. In fact, the same community holds a summer fair, to which all their neighbours are invited and which is a great initiative—so yes, I would encourage more.
Brexit: Consumer Rights Policy
(7 years, 2 months ago)
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Baroness Hayter of Kentish Town
To ask Her Majesty’s Government what plans they have to protect consumer rights after the United Kingdom leaves the European Union.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)
My Lords, we are working with a range of stakeholders to understand the impact that withdrawal from the EU will have on consumers. We will work to ensure the best possible outcome for UK consumers. Wherever practical, the great repeal Bill will convert current EU law into domestic law to give consumers as much certainty as possible.
Baroness Hayter of Kentish Town (Lab)
My Lords, the EU has been good for consumers: we have the European health card—there are some 26 million in the country—safe food and products, because of the European rapid alert system; lower mobile roaming charges; and compensation for delayed flights. But despite what the Minister says, none of those can be entrenched in the great repeal Bill, because they depend on our negotiations with the remaining 27. Regrettably, consumer interest does not appear in the 12 negotiating principles in the Government’s White Paper. Will someone in the Minister’s department or another department undertake to set up the same meetings with consumer reps as are taking place with industry, so that consumer interests can be embedded into our negotiations for our relationships with the EU 27 after we leave?
Lord Prior of Brampton
My Lords, the great repeal Bill will incorporate consumer protections in the European Union into UK domestic law, wherever it is practical. Noble Lords may shake their heads at that but of course it is “wherever practical”; if we were to say that we would incorporate it where it is impractical, the noble Baroness would be the first person to point it out—this is a perfectly common-sense approach. In terms of ensuring that consumer interests are properly represented, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy is having regular meetings with consumer representatives and we will ensure that consumer interests are properly represented in the negotiations.
Lord Dykes (CB)
My Lords, is not the Minister being, unusually, a little complacent in his answers? The total apparatus of EU protection and consumer laws is more extensive and robust than in any single member state, with very few exceptions. If it all has to be unpicked through the very questionable repeal Bill process, it will take a long time anyway. If we end up bringing all these things back in—which we will have to do—then we might as well stay in the single market and under the consumer protection laws, instead of favouring a dodgy view of national sovereignty that last existed in 1910.
Lord Prior of Brampton
I do not underestimate the complexity of the Brexit negotiations, which is why we all accept, I think, that the implementation of those negotiations will be phased over time. However, in a number of areas of consumer protection the UK regulations are stronger than those in the EU.
Baroness Crawley (Lab)
My Lords, online scams and internet fraud are rapidly increasing, as my colleagues in trading standards know only too well. Will the Minister tell the House what protection will be offered to UK consumers buying faulty goods across borders once we are no longer part of the EU and no longer involved in developing the EU’s digital single market?
Lord Prior of Brampton
My Lords, the noble Baroness raises an interesting point. It is going to be difficult. I cannot foresee the outcome of the negotiations; all I can say is that we understand the issue she raises. We have already demonstrated through our support for the alternative disputes resolution and the extra money we are putting into the Chartered Trading Standards Institute that this is an issue that we take very seriously.
Lord Hannay of Chiswick (CB)
My Lords, will the Minister say when he will share with the House what is practicable to be included in the great repeal Bill and what is not? Will he also share the result of the inquiries that he says the department has been conducting about the value of this, and has he, by any chance, read the previous Government’s balance of competences review, which went into great detail on this sector?
Lord Prior of Brampton
The noble Lord asks when we will share the issues around practicalities. That will emerge during the negotiations.
Lord Prior of Brampton
Of course it will emerge over the next two years. It would be absurd for me to stand here to explain where all the issues that might arise over the next two years will arise. As the Prime Minister has said, the Government will keep Parliament fully informed of developments throughout the next two years.
Lord Foster of Bath (LD)
My Lords, the EU is currently planning the digital content directive, which will give EU-wide protection to consumers on digital content. Unfortunately, the current draft conflicts with UK consumer rights legislation. Since, after we leave, we will have to continue to sell into the EU, can the Minister assure us that the Government are putting all their resources into getting this right, to end the current legal uncertainty?
Lord Prior of Brampton
I can assure the noble Lord that we are doing everything we can to clarify the situation. He mentioned the consumer rights legislation. The Consumer Rights Act is generally recognised by consumers here as an extremely good piece of legislation, and we will be working to have as much of a free market within Europe as we can.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend not think that it is very sad, and a counsel of despair, that with all the expertise in this House and the other place, it is not possible for this Parliament to devise a scheme that will protect the rights of British consumers?
Lord Prior of Brampton
My noble friend is right: there are legitimate concerns over such a big change. However, we should be relatively optimistic that we can sort them out in the best interests of British consumers.
Lord Hain (Lab)
My Lords, will there need to be a separate agreement on air flights into European Union countries to replace the existing one within the single market, which allowed Ryanair, EasyJet, British Airways —all the British carriers—to fly millions of people in over the years cheaply, successfully and easily? Unless a separate agreement is negotiated with the European Union we will not be able to do that.
Lord Prior of Brampton
My Lords, there is such a mutuality of interest in continuing the existing arrangements that it would be very surprising if we could not negotiate an agreement. I cannot tell the noble Lord whether we will need a separate agreement to do that but I will write to him.
Crime: Firearms
(7 years, 2 months ago)
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Lord Harris of Haringey
To ask Her Majesty’s Government, in the light of recent seizures, what is their estimate of (1) the number of illegal firearms in circulation, and (2) the percentage of firearms illegally imported into the United Kingdom that have been seized in the last year.
Lord Harris of Haringey (Lab)
My Lords, I draw attention to my policing interests and beg leave to ask the Question standing in my name on the Order paper.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, offences involving firearms, excluding air weapons, have fallen by 31% since July 2010. The National Ballistics Intelligence Service regularly assesses the volume of illegal firearms in the UK, but this information is operationally sensitive and is not suitable for release. The National Crime Agency and the police continue to conduct specific operations to disrupt the threats posed by illegal firearms.
Lord Harris of Haringey
My Lords, I am grateful for the Answer given by the Minister and intrigued by the fact that on 21 November, in response to another Question on this point asked by my noble friend Lord Rosser, she said:
“Without doing the maths, I cannot give the noble Lord the figures off the top of my head. However, I will certainly write to him with accurate figures”.—[Official Report, 21/11/16; col. 1724.]
I assume from the Answer she has just given that she cannot share the figures that she wrote to my noble friend. Can I put it to her that, if there were 126 illegal arms seized in 2014-15—these are the figures she gave on 21 November—445 seized in 2015-16 and 800 in just four weeks as a result of this joint exercise by the counterterrorism police and the National Crime Agency, this is a situation in which there is an explosion of the problem of illegal firearms and that the Government should do a great deal more?
Baroness Williams of Trafford
What the noble Lord points out is not an explosion in the problem but a revelation in the solution, because that four-week operation showed us that a new approach to intelligence collection and sharing is the way forward. The operation that I think he is referring to—Operation Dragon Root—yielded excellent results.
Lord Paddick (LD)
My Lords, most of the illegal firearms smuggled into the UK are from Europe. Can the Minister explain how UK law enforcement agencies can continue to exchange information and intelligence with EU countries about gun smuggling after Brexit without complying with EU data protection laws, which are set and regularly updated by the EU? What are the Government going to compromise on—security or sovereignty?
Baroness Williams of Trafford
I think that I have déjà vu here, because the noble Lord asked me that the other evening when we had a three and a half hour debate on the subject of security and policing between the UK and the EU. As I explained then, and will explain now, co-operation will be not just absolutely key going forward but one of the top priorities for this country.
Lord Selkirk of Douglas (Con)
Is the Minister aware that, in the past, amnesties have been used in different parts of the United Kingdom but under very strong conditions, as in the context of weapons which have been used to commit a crime? Can any possible amnesties be looked into with great care, as all the circumstances need to be taken fully into account?
Baroness Williams of Trafford
My noble friend is absolutely right that amnesties have been used in the past—most recently in Northern Ireland, if I am not mistaken—and that great care needs to be taken around such an approach.
Earl Attlee (Con)
My Lords, of the 800 seized firearms referred to by the noble Lord on the Labour Benches—
Earl Attlee
It is my great friend the noble Lord, Lord Harris of Haringey. How many of those firearms were seized from one registered firearms dealer?
Baroness Williams of Trafford
I have all sorts of facts and figures but I do not have that one, so I will write to my noble friend on that point.
Lord Rosser (Lab)
Does the Minister agree that figures on the numbers of illegal firearms seized each year are not very meaningful without an estimate of the percentage of firearms illegally imported into the UK that are seized each year? Is she able to tell us whether we are seizing most firearms that are illegally imported or only a very small percentage?
Baroness Williams of Trafford
That is a very difficult question to answer in reference to the first Answer that I gave. However, I can give examples of seizures, for example through Operation Dragon Root, during a specific period of time. In the October operation, there were 282 confirmed arrests and the recovery of 833 firearms, as I think the noble Lord, Lord Harris, pointed out. There were also seizures of 169 other weapons, 4,385 rounds of ammunition and over £575,000 worth of cash.
Baroness Warsi (Con)
My Lords, the operation that my noble friend referred to was indeed a success, and I am sure that the whole House will pay tribute to the police units that were involved. Will my noble friend explain what thinking is being done in government at the moment to reconcile what was an effective national operation against what is a much more localised agenda of policing around the PCCs, who probably would not prioritise such operations?
Baroness Williams of Trafford
What my noble friend is referring to has not only a national element to it but also an international element in terms of the multiagency approach. Of course the NCA has regional operations as well, but in terms of keeping the country safe from a national and international point of view the national agencies are very often involved.
Lord Campbell-Savours (Lab)
Is there not a distinction between a collector who holds illegal weapons and a criminal who holds illegal weapons, and do the stats that the Minister has produced actually draw that distinction?
Baroness Williams of Trafford
There is most certainly a difference between a collector and a criminal, and we discussed this at length in the Policing and Crime Bill. In terms of the arrests and the rounds of ammunition, they certainly will be criminal activities. In terms of the other weapons, there possibly is a distinction. I will try and disaggregate that for the noble Lord, although I will not promise as I did to the noble Lord, Lord Rosser.
Child Refugees
(7 years, 2 months ago)
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Lord Dubs (Lab)
My Lords, I beg leave to ask a Question of which I have given private notice.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, we have not closed the scheme to transfer children under Section 67 of the Immigration Act. The announcement yesterday specified the total number of children that will be transferred pursuant to Section 67, as required by the legislation. Over 200 children have already arrived in the UK under this provision and more children will continue to be transferred from Europe up to the specified number of 350.
Lord Dubs
My Lords, I must confess that I am slightly puzzled because, if the Government say that there is a specified number of children, then after that total has been reached the scheme has been closed. I remember—it was not long ago—that the Prime Minister, when she was Home Secretary, told me that the Government were prepared to accept the amendment, and on the same day the then Immigration Minister said to me that the Government would accept the letter and the spirit of that amendment. In arbitrarily closing down a scheme without any good reason for doing so, I believe that the Government are in breach of their own commitments.
Baroness Williams of Trafford
My Lords, the scheme is not closed. As the noble Lord said, we will be accepting up to the limit of 350 but at this point in time the scheme is not closed.
Baroness Williams of Trafford
More children will come. The scheme is not closed. We have to appreciate, and I think noble Lords generally have appreciated, that the capacity of local authorities is limited.
Baroness Williams of Trafford
Noble Lords might rubbish that but the capacity of local authorities is limited. We have relied on their good will. It has been an entirely voluntary approach from local authorities, and of course I encourage more local authorities that think that they might have places to come forward. I refer noble Lords to what this Government have done. Up to September 2016 we have provided in this country refuge or other forms of leave for more than 8,000 children. I am very proud of that.
Lord Cormack (Con)
Will my noble friend accept that the concern that has been expressed this morning is not confined to the other side of the House?
Baroness Williams of Trafford
Sorry, I thought my noble friend might say something else. Yes, I accept the concern but I can only reiterate what I have already said.
Baroness Sheehan (LD)
The implication of the Government’s actions, if we go according to the letter of the amendment—Section 67 of the Act—is that local authorities have reached the end of the road and have no further capacity. However, that reasoning is palpably faulty. There are many people who have expressed an interest in helping, as well as churches, other faith groups and local authorities. I know several people who have indicated their willingness to help to a local authority but have had little response. Obviously the Government are quite uninterested in taking in more children.
Baroness Williams of Trafford
My Lords, that is absolutely wrong. We have had informal expressions of interest, and if the noble Baroness has the names of those individuals and church and community groups I encourage her to contact us so that we can get matters in train.
Baroness Morris of Bolton (Con)
My Lords, I declare an interest as a member of the business task force that was set up after the Syrian donor conference to provide jobs and help families and the dispossessed in the region, to prevent them making the perilous journey to Europe. The Government have to be congratulated on the work they are doing there. When the number of 450 is reached, will the Government still look at the discretionary clauses under Dublin which allow countries to take in the most vulnerable people? I am particularly thinking of mothers with babies and the victims of traffickers.
Baroness Williams of Trafford
Yes, the people to whom my noble friend refers in the region are the most vulnerable people on the globe. We do not close our doors to people who genuinely seek refuge in this country. Up to September last year, we gave asylum or other forms of leave to 8,000 children.
Lord Reid of Cardowan (Lab)
Will the Minister explain to us where the figure of 350 came from; what consultations and calculations underpin it; and whether her request that others volunteer from the local authorities means that, if such representations and offers are made, the Government will revise that figure of 350?
Baroness Williams of Trafford
The noble Lord asks a valuable question. We do not stop consulting local authorities. Of course if local authorities or community sponsorship groups were to come forward, we would certainly consider that. The figure of 350—in fact, it was 400—came from local authorities. We have revised it down to 350 because, if some of the family cases break down, the children will need local authority care and we need some capacity to provide it. Our consultation with local authorities is ongoing.
Lord Alton of Liverpool (CB)
My Lords, the Minister will recall that last month I raised with her the disappearance of unaccompanied children. Figures from Europol that I first raised in your Lordships’ House in June showed that 10,000 children had disappeared on the continent and that hundreds were disappearing here in the United Kingdom. One of the reasons why I was proud to be a signatory to the amendment moved by the noble Lord, Lord Dubs, was the disappearance of those unaccompanied children. Last week, I sent the Minister a statement from ECPAT UK, the organisation established to protect children, which said that it is shocking that the Home Office says it has no evidence. Where do we stand on these missing unaccompanied minors?
Baroness Williams of Trafford
I presume the noble Lord refers to children both at home and abroad. Obviously, if a child is in Greece, Italy, France or wherever, it is the responsibility of that Government to safeguard that child. I said to the noble Lord that I did not have evidence of disappeared children in this country. That is not to say that in future that may not happen, but at this point we have had no representation from local authorities to say that children are disappearing. Obviously, if that were to be the case, we would follow it up with some urgency.
Lord Rosser (Lab)
My Lords, yesterday my noble friend Lord Dubs in this Chamber asked the Government,
“to confirm the news that we have heard about the Government intending to bring to an end the scheme under Section 67 of the Immigration Act”,
namely, the Dubs amendment. In response, the Government told the House:
“A Written Ministerial Statement will underscore that, far from doing that, Section 67 of the Act … stands”.—[Official Report, 8/2/17; col. 1715.]
Why was no reference made yesterday by the Government to any cap of 350 when that response was given to the very specific question from my noble friend Lord Dubs?
Can the Minister also respond to a question about the Written Statement? It says:
“Local authorities told us they have capacity for around 400 unaccompanied asylum-seeking children until the end of this financial year”.
What capacity have local authorities told the Government they have for unaccompanied asylum-seeking children in the 1917-18 financial year on the basis that the current level of government funding is continued?
Baroness Williams of Trafford
My noble friend referred the House to the Written Ministerial Statement in which the figure of 350 was iterated; clearly, the WMS was laid not long before Questions began. I cannot remember the second part of the noble Lord’s question.
Lord Rosser
I am happy to repeat it because it is a quote from the Government’s own Written Statement:
“Local authorities told us they have capacity for around 400 unaccompanied asylum-seeking children until the end of this financial year”.—[Official Report, Commons, 8/2/17; col. 10WS.]
What capacity have local authorities told the Government they have for unaccompanied asylum-seeking children in the next financial year, namely 1917-18, on the basis that the current level of government funding is continued?
Baroness Williams of Trafford
I think the noble Lord means 2017-18. Obviously, as I have said to noble Lords, the Government are in constant consultation with local authorities on a range of things, including this. The scheme is entirely voluntary. We do not want to force local authorities to do things that they may not have the capacity to fulfil. Children are of paramount importance.
Business of the House
(7 years, 2 months ago)
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Baroness Evans of Bowes Park
That Standing Order 40(1) (Arrangement of the Order Paper) be dispensed with on Tuesday 21 February to enable the debate on the second reading of the European Union (Notification of Withdrawal) Bill to resume before oral questions.
Richmond Burgage Pastures Bill [HL]
Thursday 9th February 2017
(7 years, 2 months ago)
Lords ChamberRead Full debate Richmond Burgage Pastures Bill [HL] 2016-17 View all Richmond Burgage Pastures Bill [HL] 2016-17 Debates Read Hansard Text
University of London Bill [HL]
Thursday 9th February 2017
(7 years, 2 months ago)
Lords ChamberRead Full debate University of London Act 2018 View all University of London Act 2018 Debates Read Hansard Text
Joint Committee on Human Rights
The Senior Deputy Speaker
That Baroness O’Cathain be appointed a member of the Select Committee.
Lord Foulkes of Cumnock (Lab)
My Lords, I have had some correspondence with the Clerk of the Parliaments. I had not realised that at some point this House agreed that any mistakes that are made in relation to room bookings represent a breach of the Code of Conduct. In other words, if a Member books a room and is not present for the whole of the period of that booking, they are then in breach of the Code of Conduct and can be reported to the Standards and Privileges Committee.
This is quite astonishing and I do not know when it got through, how it got through, and whether other noble Lords realised what was happening. I think we should be far more careful when we look at these Motions. We should have an explanation of why they are being put forward from whoever is moving the Motion—whether it is the Senior Deputy Speaker, the Chief Whip, the Leader of the House or whoever—so that we know exactly the implications. It would be quite astonishing if, just because of an inadvertence in relation to room bookings, a Member was in serious breach of the code. Could that be looked at again?
The Senior Deputy Speaker (Lord McFall of Alcluith)
Could I say to the noble Lord, with the utmost courtesy, that this is nothing to do with the Motion that I am proposing just now, which is about a change to the membership of the Joint Committee on Human Rights? However, as always, outwith the Chamber, I will have the most fruitful engagement with the noble Lord at any time.
Privileges and Conduct Committee
The Senior Deputy Speaker
That the 5th Report from the Select Committee (Process for publishing Commissioner reports; Commissioner and police investigations; Minor amendments to the Code) (HL Paper 99) be agreed to.
The Senior Deputy Speaker (Lord McFall of Alcluith)
My Lords, this report contains various recommendations for changes to the Code of Conduct for Members of the House of Lords and the Guide to the Code of Conduct. First, it recommends a more streamlined process for publishing reports from the Commissioner for Standards when she finds that a Member did not breach the Code of Conduct or where remedial action has been agreed. In those cases, it is recommended that her report and evidence should normally be published only on the parliamentary website and not sent to the Committee for Privileges and Conduct. This is similar to the process in the House of Commons. The commissioner would have discretion to submit a report to the committee if a case involved a particularly serious allegation or if it gave rise to matters of wider interest or relevance. In these instances, the Committee for Privileges and Conduct would report the case to the House.
The second proposal is that the commissioner should be able to continue an investigation into an alleged breach of the code alongside a police investigation. Under the current guidance, the commissioner has to suspend her investigation whenever the police are investigating a related complaint. The committee proposes that the commissioner should be able to continue an investigation in those circumstances but would not finalise a report until the criminal process had concluded. This would allow her to take into account any relevant issue arising from that process. Under the proposed new guidance, the commissioner would always suspend her investigation if the related proceedings become sub judice.
Finally, the report proposes several minor amendments to the code and the guide to reflect developments in practice and to clarify uncertainties. I beg to move.
Lord Foulkes of Cumnock (Lab)
My Lords, I sincerely apologise to the Lord Speaker, to the Senior Deputy Speaker and to the House for raising my point under the wrong heading. However, if the noble Lord had the powers that I think he ought to have as Lord Speaker, he could have corrected me immediately. I would have sat down and would not have spoken inappropriately. We are now on the appropriate Motion and I thank the Senior Deputy Speaker for introducing it, which I appreciate very much indeed.
However, I go back to the point that where there are breaches of conduct, and Members do things that are clearly unacceptable to the House and bring it into disrepute, of course what the Senior Deputy Speaker says is absolutely right. But, as I say, the issue of minor breaches in relation to the booking and use of rooms has come to my attention, and I have had correspondence with the Clerk about it. For instance, if you book a room and hold a press conference in it when you were not supposed to hold one there, or if you book a room for an hour and you leave halfway through, that is a breach of the Code of Conduct and you can be reported to the Committee for Privileges and Conduct. That seems to me to be using a sledgehammer to crack a nut. It should be dealt with in some other way, not as a breach of the Code of Conduct. I do not know when it slipped through—these things go through on the nod, and sometimes you get confused about what is going through and when. Can the Senior Deputy Speaker take this particular point back to the committee to have another look at it?
The Senior Deputy Speaker
I thank the noble Lord for his eloquent repetition of his previous point. Yes, I will look at that and take it back. I repeat my willingness to have a discussion with him outside this Chamber.
Lord Campbell-Savours (Lab)
Perhaps I can follow up the statement that the Senior Deputy Speaker made. He stated that the inquiry that was carried out by the commissioner—as I understand it—could be carried out coterminously by the police. In other words, both inquiries could be taking place at the same time, subject to the criteria that the noble Lord referred to. Does that mean that there could be, during the course of an inquiry, discussions between the police and the commissioner about a matter that was the subject of an investigation? To what extent would that be then allowed to influence an investigation by the commissioner?
The Senior Deputy Speaker
It would allow the police to continue their investigation, but there has been experience in the past where the commissioner has had to pause an investigation because of a concurrent police investigation. In one case—I am trying to remember off the top of my head—that was 16 months. The commissioner was not able to go back it for that time. So the proposal is that the commissioner looks at the issue and collects evidence and when the police report they have a fresh understanding of what has been happening can pursue it further. Previously the commissioner had to suspend their investigation, perhaps for 16 months, and then go back and find that the information was a bit dated and that people could not recall things as sharply. For that reason we discussed this with the commissioner and the new proposal was put forward.
Viscount Simon (Lab)
I have just one further question, purely for clarification, following my noble friend’s question. If a room is booked for one hour and the meeting takes five minutes, does the Member have to stay there for 55 remaining minutes?
The Senior Deputy Speaker
I would not think so. If anything, common sense prevails in this House—and I will make sure that that is undertaken.
Lord Rooker (Lab)
If it is no longer accepted that police inquiries should always take precedence, could the Senior Deputy Speaker confirm whether the police are satisfied with this change?
The Senior Deputy Speaker
As far as I know, yes, but I will investigate that further and I will write to the noble Lord on that point.
Code of Conduct
The Senior Deputy Speaker
To resolve that the Code of Conduct for Members of the House of Lords be amended as follows:
In paragraph 19, in the second sentence, leave out “goes” and insert “is normally published only on the Commissioner’s webpages. The Commissioner has discretion to submit a report in such instances.”
Leave out paragraphs 26 and 27 and insert:
“The Sub-Committee on Lords’ Conduct keeps the Code of Conduct and the Guide to the Code of Conduct under regular review. Recommended changes are reported to the House and take effect when agreed by the House.”
Commonwealth Development Corporation Bill
Thursday 9th February 2017
(7 years, 2 months ago)
Lords ChamberRead Full debate Commonwealth Development Corporation Act 2017 View all Commonwealth Development Corporation Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 10 January 2017 - (10 Jan 2017)
Lord Bates
That the Bill be now read a second time.
(Money Bill) Relevant documents: 14th and 15th Reports from the Delegated Powers Committee
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, this is a short, two-clause Bill. It is a necessary piece of enabling legislation to ensure that the CDC is able to continue investing in the world’s poorest countries to create jobs, support local businesses and stimulate economic development. No country can defeat poverty and end aid dependency without sustained economic growth and a thriving private sector. Strong profitable businesses are needed to create better jobs and generate the tax revenues required to deliver improved public services.
There is, however, a huge unmet demand for capital in developing countries. In the poorest and most fragile countries, there is a long way to go to create the right conditions for investors to have the confidence to meet and fill this gap.
In 2015, the UN agreed the sustainable development goals, which are the focus of the Department for International Development through its UK aid strategy. The financing required to achieve these goals is estimated to be $2.5 trillion dollars a year through to 2030. This far outstrips what can be funded through traditional aid-funded programmes and public finance. This is where the CDC comes in.
The CDC was founded back in 1948 and has enjoyed support from successive Governments. It is wholly owned by the UK Government and is a development finance institution, deploying patient public capital to achieve an objective of doing good while not losing money.
The CDC has a portfolio of £4 billion invested in more than 1,200 businesses in more than 70 countries. In 2015, businesses backed by the CDC helped to create 1,030,000 new jobs in Africa and southern Asia. Over three years, these businesses have generated more than $7 billion in tax revenues to the countries in which CDC has invested.
The CDC invests long term to achieve development impact. It has a higher risk appetite and can take a more patient view of financial returns than private investors, but by demonstrating that responsible investing in difficult markets can be commercially viable, it helps to crowd in the private finance that the poorest countries desperately need.
In 2015, the CDC helped to mobilise an additional $832 million of capital from private investors. Over the years, it has made ground-breaking investments in unproven markets, planting the first seeds for industries that have since become mainstream, such as tea exports in Kenya and mobile telecoms in Africa. As an investor, the CDC sees the potential of the people of a country rather than its problems.
The NAO completed a value-for-money study of the CDC last year. Its report highlights the transformation that the CDC has undergone over the past five years, following the agreement of a new strategy and investment policy with DfID in 2012. The CDC now invests only in Africa and south Asia—two regions that account for 80% of the world’s poor. It is the only development financial institution to have this narrow a geographical focus. It now targets the sectors that create the most jobs in an economy. CDC investments in the energy sector are providing the investment needed to improve access and power economic growth in Africa. In the financial sector, the CDC has enabled microfinance institutions and retail banks to advance loans to support small businesses in agriculture and manufacturing in south Asia.
While the CDC continues to invest through funds, it has now built up its capacity to make direct investments and do debt deals alongside equity. It has also tightened controls on costs and cut average salaries by over 25% over five years. It has become a leader among its peers in transparency: it was the first development financial institution to sign up to the International Aid Transparency Initiative and provide full information on the name and location of all its investments.
The Bill is focused on one issue only: raising the limit on the level of financial support that we can provide to the CDC under the CDC Act. The Bill is needed because the current limit, set 17 years ago, has been reached. The Bill will raise the cumulative financial limit by £4.5 billion to £6 billion. It also introduces a delegated power to raise the limit further via statutory instrument, to an upper limit of £12 billion.
To be clear, the Bill is not a commitment to provide this level of financial support to the CDC, nor is it a target to be achieved in a set timeframe. No new capital will be provided to the CDC without a new strategy and business case setting out the market demand, value for money and how development impacts are to be achieved. Both will be published and Ministers held to account in the usual way. Furthermore, after ministerial approval the CDC would be able to draw down the capital only when needed in response to market demand.
The Bill passed its stages in the other place unopposed, reflecting the cross-party nature of its objectives, but not without careful scrutiny. In Committee in the other place, expert witnesses gave oral evidence and several noble Lords—including the noble Lords, Lord Boateng and Lord Stern—provided helpful written submissions which have been taken into account.
There was a healthy debate in the other place, responded to by my honourable friend Rory Stewart, but I would argue that that genuine interest and concern is best addressed through the CDC’s strategy rather than via primary legislation. Work is under way to finalise the CDC’s new five-year strategy. It is critically important to get this right and address the issues raised during the Bill’s passage by NGOs, Members of both Houses and the National Audit Office.
We need to capture better the full development impact of the CDC’s investments. We need to ensure that the CDC’s policy on the use of offshore financial centres is reviewed regularly and meets the OECD’s high standards in this area, and that it pilots new approaches to deepen development impact still further.
The passage of the Bill is an important step to enable the CDC to continue playing a central role in the delivery of the UK’s international development objectives: to boost economic growth and eradicate extreme poverty by 2030. It complements other approaches through which the UK is playing a leading role in the international development market, including in our responses to humanitarian disasters, global epidemics and pandemics.
The CDC is a great British organisation with a proven track record and a clear development focus. The Bill will help the CDC to continue its pioneering work, creating opportunities and bringing hope and opportunity to the poorest people in the world. It is an institution of which British taxpayers can be rightly proud. I beg to move.
Lord Judd (Lab)
My Lords, I thank the Minister for that clear introduction to the Bill. I am glad he is in the post that he is in, because he is a man who has taken our responsibilities in this sphere very seriously during his life. I am also very glad indeed that the noble Viscount, Lord Eccles, will be speaking in the debate, as he made a distinguished contribution to the history of the CDC when he was leading it.
I declare an interest because, for a short while in the mid-1970s, I was the sponsoring Minister for the CDC and I took great interest in it. What I liked about the CDC in those days was that it took very seriously the issue of the development of human capacity. When I visited, the staff took great pleasure in telling me how they were developing hands-on capacity.
That was important to see in the context of the Conservative Party’s own record. I was frankly rather impressed in the 1960s, when the Conservative Government took the initiative in setting up government machinery to meet third-world commitments. They called the department the Department of Technical Cooperation. Indeed, I do not mind telling the House that I spent a certain amount of time at our party headquarters trying to argue that it was a good title; if we were going to have a great emphasis—as we did, thank God—on the central role of overseas development in our programmes, then we ought to look seriously at the title the Conservatives had used. I never felt that the Ministry of Overseas Development quite got to the heart of the concept as the notion of technical co-operation did. I saw the CDC as fulfilling the spirit that says, “Nothing will succeed unless we are developing human capacity”.
I am therefore rather sad that, given the history of the CDC, it has now gone down the road of becoming, in effect, just another merchant bank. It seems to me that the emphasis, originality and creativity that was there has been lost. I do not believe that responsibility for this development can be laid entirely at the feet of the party opposite. Whether it was inadvertent, or however it happened, we were not as vigilant on this point as we should have been.
The Minister has explained the origins of the Bill. It is true that in the informed constituency in this country—a very real and good one on these matters—there is and has been a certain amount of concern. Here I declare an interest as a former director of Oxfam. We are well blessed to have the quality of NGOs we have operating in this sphere, and we should take their concerns very seriously.
What are those concerns? Some are centred on the real development impact of the CDC as it is today and whether recent reforms have adequately improved its effectiveness. It continues to face challenges relating to transparency, monitoring and reporting on its development impact, as well as on routing its investments through tax havens. The Bill provides us with our first opportunity since 1999 to shape the legislative framework for government oversight of the CDC and update it to clarify the purpose of public funding for the CDC, a suitable level for future public funding and the conditions under which it is to be provided and utilised; how the CDC will address the UK Government’s priorities for aid, such as transparency, value for money and achieving development results; and how the CDC can improve its investment standards—for example, on the use of tax havens.
More specifically, concerns have been centred on an overconcentration on the higher rates of returns on its investments. A focus on large formal enterprises, the use of narrowly defined impact indicators, and minimal investment in sectors such as agriculture and manufacturing raise concerns about its development impact for ordinary human beings. The National Audit Office’s recent review of the CDC reported that it,
“remains a significant challenge for CDC to demonstrate its ultimate objective of creating jobs and making a lasting difference to people’s lives in some of the world’s poorest places”.
That observation cannot be cast lightly aside.
As for transparency, the CDC was assessed as poor, with 22.5%, in the Aid Transparency Index, and there have been no major improvements in its transparency since then—or none that I can detect. I acknowledge that the Government and the CDC itself take these concerns seriously but, as late as 2013, 75% of the CDC’s investments were routed through jurisdictions that feature in the top 20 of Tax Justice Network’s financial secrecy index.
During deliberations on the Bill in the other place, Ministers failed to provide a clear and robust case for why the CDC required the level of additional funding and whether it had the capacity and opportunities to invest it effectively. This therefore remains a major question, especially as in DfID’s business case for the £735 million in funding committed to the CDC in 2015 it stated that the CDC had assessed that it had the capacity to invest an additional £1 billion and would require additional funding from DfID only in 2019.
I conclude by putting specific questions to the Minister. I do not want to overdo it, but I repeat the points because I have very great respect for the present Minister and I am sure he will take these questions seriously. First, why have the Government introduced the Bill before publishing the CDC’s investment strategy for 2017-21? Why does the Bill allow the Government to utilise the ceiling of £6 billion to £12 billion for funding the CDC, given that in 2015 it assessed it could invest an additional £1 billion for the Government? Why have the Government not included in the proposed Bill standards that the CDC should meet in order to address the Government’s commitment to transparency, value for money and tracking development results, as well as on issues such as the CDC’s use of tax havens for its investments? How will the CDC be asked to improve its functioning and contribution to development results as a condition of future funding increases? How will the CDC be asked to improve its transparency and reduce the volume of investments it routes through tax havens as a condition of future funding? Finally, how have DfID’s investment plans for the CDC been informed by assessing other options for investing these resources and comparing their value for money and potential for development impact?
As somebody who worked in this sphere for a good deal of my life and who continues to work in an honorary capacity in many ways since becoming a Member of this House, I have difficulty with the term “development impact”. I believe the real heart of the challenge of our co-operation with communities across the world is their empowerment. It is about their taking control themselves. It is about enhancing their capacity. “Impact” suggests it is us bringing something to the country, which we are then evaluating. Our evaluation needs to concentrate far more on how the local community appreciates and benefits from what happens.
My other point, and it is not a popular one in the age of the market, is that in real human terms very often the real effect of this co-operation will not be judged until perhaps decades later. The constant pressure to produce immediate evidence of impact sometimes distorts lasting effective development. I ask the Minister to consider these matters seriously and I look forward greatly to his reply.
Baroness Northover (LD)
My Lords, I, too, thank the Minister for introducing this Bill. It is a privilege, as ever, to follow the noble Lord, Lord Judd, with his long commitment to development and huge experience in this area. The CDC has, of course, played an important part in our development efforts in recent years, particularly since its remit was redrawn in the early days of the coalition and under the stewardship of its current CEO, Diana Noble. It is vital that we promote economic development. That is what will transform societies and pull people out of poverty. We have seen that around the world. Investment in the green revolution in agriculture in India was later to underpin India’s growth in other parts of its economy. The CDC, refocused on poorer countries and frontier markets, has helped in that regard.
Even before that refocusing, it has been a significant contributor. A key investment, of course, was that in M-Pesa in Kenya, to which the Minister referred, kick-starting a transformative method of ensuring that the un-banked were brought within the financial sector. I know that the CDC later regretted that it had no equity stake in the project given the profits now flowing in Kenya and elsewhere, which is a shame. When it is criticised for supporting some developments, it is important to look behind that work and see what skills are being imparted or jobs created. I have seen what it looked to do in Nepal and northern Nigeria in very difficult markets, but finding markets elsewhere easier. Where the CDC leads, it is often then easier to secure other private investment, which is especially important where it is operating in the truly difficult frontier markets.
But we are looking at the CDC as it is now, and even here there have been criticisms as to whether it is sufficiently poverty-focused, for example. I recall the concern in the 2000s about where its focus was. Was it any different, it was asked, from other private equity businesses as it invested in the growing markets of China and India? Andrew Mitchell and Alan Duncan, with their experience in both development and banking, did much to refocus what the CDC did. Diana Noble, as its chief executive, has transformed the organisation most impressively and there is a constant check on how transformative it is in some of the most challenging places. But, of course, she is standing down.
When I was DfID Minister, I was impressed that the CDC had not had its funds topped up in decades because it had so successfully reinvested what it was earning. There was then a relatively small top-up, certainly small compared with what we are looking at here. Did the CDC ask for this increase, and what does it plan to do in terms of attracting staff to manage such increases? What we see here causes me considerable concern, especially as the Bill enables the Secretary of State to increase the amount yet further by secondary legislation. That does not seem wise because I also remember the controversy when there were moves to sell the CDC off, early in Labour’s years in government, and Actis was spun off. Those involved, largely employed by the CDC, profited enormously. Suppose that down the track the Government decided to sell off the CDC. Would we not regret having filled its coffers? It would certainly make it more saleable.
Suppose we were to have a Secretary of State who thinks that this should be the main vehicle for aid money? There is plenty of scope for that. What about all the vital areas that DfID needs to support if we are to improve human development in the poorest countries? Human development underpins the ability of all economies to grow. To meet the SDG of eradicating extreme poverty by 2030, leaving no one behind, that growth needs to be underpinned and to be equitable, including women and girls as well as men and boys.
Suppose the Secretary of State altered the terms on which the CDC invested? What then? It is not at all clear that its funds would be used for addressing the SDGs as the ODA commitment surely means we must do. The Minister will know as well as I do how widely drawn the ODA is, but up until now DfID has been commendably focused on the poorest. Suppose that changed? It is all very well saying that the CDC would have to produce a robust business case, but suppose in the future the need for business cases was dispensed with? They have existed in their present extended form only for less than five years, and even then, having gone through a number of them when I was a DfID Minister, I can say that they are labour intensive and not always as useful as one might want them to be.
Suppose the business case continued, but the parameters that the Secretary of State laid down changed. For example, although in order to count as ODA, benefit needed to be seen in developing countries, it was decided that a close second must be to benefit British investors. The Minister will know exactly what I mean. What then?
This Bill hugely increases the potential capital for the CDC to £6 billion, with the Secretary of State able to increase it further to £12 billion by regulations alone. This is quite an increase from £1.5 billion.
I realise that we have no chance to amend this Bill, as it will go through all its stages here today. Much as I admire what the CDC is doing, I do not think that issuing this relatively blank cheque for a Secretary of State or for a future CDC under a new CEO is wise. The noble Lord says that the CDC will have a new strategy. Surely those in the Commons and the noble Lord, Lord Judd, are right in saying that we should have seen that first.
I know that the Minister will have the situation of the poorest people in the world in his mind. I look forward, therefore, to hearing what he has to say in response to my concerns and what safeguards will be built in, in terms of scrutiny of what the CDC does.
Lord St John of Bletso (CB)
My Lords, I, too, warmly welcome this Bill. When the new world order appears to be more disorder and one of the key themes of the World Economic Forum in Davos is rising inequality and the threat this poses to economic and political stability, the Bill comes at an opportune time.
Clearly, addressing poverty is critical to addressing global inequality. We have moved from the millennium development goals to the sustainable development goals and the role of the private sector has been recognised as a central part of achieving this agenda. Many of the major development initiatives in Africa have come from foreign aid agencies, local and international NGOs and publicly funded multilateral financial institutions. So I wish to focus my few remarks in support of this Bill on the key role that the CDC has played and continues to play in some of the most challenging countries in Africa.
During the last 15 years, the growing Africa-focused private equity community has had a unique opportunity to play its role in what is becoming a development relationship. Private equity has been good for African economic development. It has helped to promote a healthy business sector, as well as creating jobs and alleviating political instability, while taking pressure off Governments to be universal problem solvers. Here, certainly, the CDC has played its role in the development of the private equity industry, particularly in the last two decades. It was an early investor in the 1990s, while the DFIs still focused on debt. Since then, the number of private equity funds has grown from around a dozen Africa-focused funds managing some $1 billion, to well over 200 firms managing over $30 billion. The CDC has played an incredibly important role in poverty reduction, working with these private sector companies and investors to create sustainable growth in its target countries.
As the Minister mentioned in his introductory comments, the CDC is now a transformed institution. From 2012, when the CDC invested some £200 million a year in a broad geography from Latin America to south Asia to Africa, with a staff complement of 50, it has now well over 250 staff. It is investing and will continue to invest more than £1.2 billion a year, focused on Africa and south Asia.
I do not agree with the noble Lord, Lord Judd, that the CDC has become just another investment bank. There have been some notable success stories. While the humanitarian response to tackling the Ebola crisis in Sierra Leone, Liberia and Guinea was very successful and essential, the CDC made a valuable contribution in rebuilding many affected businesses by providing much-needed SME loans. As the Brookings Institution rightly mentioned in its recent Foresight Africa report, with many millions of young Africans entering the labour market every year, job creation remains a top agenda item. Here I agree entirely with the noble Baroness, Lady Northover, that human resource development must be a core focus.
The potential threat of climate change has put many parts of Africa at risk of disasters such as floods and droughts. Many Governments continue to face corruption and violence, and global political uncertainty has complicated peacekeeping efforts, aid disbursement and overall investment. Among the many challenges facing sub-Saharan Africa are not just unemployment but lack of infrastructure, food insecurity, inadequate access to education and healthcare and, of course, to clean water, in all of which the CDC is playing a key role. Often the public sector is ill equipped to tackle these challenges, and this is where the private sector can play a critical role. The CDC, with its well-respected 70-year track record, has made a very important contribution in identifying and nurturing management teams and companies that have provided and continue to provide solutions to many of these problems.
Sub-Saharan Africa suffered one of its worst years in terms of foreign direct investment last year. This was due partly to the fall in commodity prices, particularly the oil price, as well to other concerns, including those of international investors about collapsing local currencies, and was exacerbated by high levels of corruption and lack of accountability. Although technology has continued to transform the continent with the introduction of broadband and many other innovative, transformational technologies, the many challenges that Africa faces are unlikely to be solved in the short to medium term. This will obviously impact negatively on the lives of millions of the poorest people. That is why it is important that the CDC continue to provide much-needed capital and mobilise other international private capital to co-invest in well-run businesses with high levels of integrity and high social and environmental standards. I stress the importance of long-term capital in this regard. These projects can range from building schools to the establishment of hospitals, agribusinesses, renewable energy, ports and logistical infrastructure. While these are all needed in most countries in sub-Saharan Africa, the CDC has not shied away from going to some of the most challenging areas. Here I mention some of the agribusinesses in which the CDC has invested in northern Nigeria, which have had a transformational impact on many of the people there.
A good example of the CDC’s work is the development in Virunga in Eastern Congo. The CDC has helped to construct a hydropower plant that has already transformed the lives of many of those in the area who were living in desperate conditions, through providing jobs and training to former child soldiers who became socially excluded adults. This will in all likelihood have an added benefit of reducing the erosion of natural resources in the parks, which includes the rampant problem of wildlife poaching.
I warmly support the Bill, which provides much-needed long-term additional funding to the CDC, but as it is a money Bill that will not be deliberated on further in your Lordships’ House, it is important that a firm business plan is in place outlining the medium and long-term road map for the CDC, with appropriate checks and balances. In this regard I was reassured by the Minister’s comments in introducing the Bill.
Finally, I acknowledge the leadership, commitment, dedication and vision of the CDC’s chief executive, Diana Noble, who will sadly retire in June this year, and pay tribute to the able chairmanship of Graham Wrigley.
Lord Flight (Con)
My Lords, I congratulate the noble Lord, Lord Bates, on his excellent introduction to the Bill. I declare my interests as set out in the register. I greatly welcome the Bill and wish to speak out in support of it and the CDC. What it has done over the last five years or so is no mean achievement, making successful investments in parts of the world that are difficult to operate in. It has been a civilised and professional body; references to merchant banks are not entirely fair, because it has focused on need just as much as on commercial attractions.
The CDC has also become very capable of investing and managing third-party funds in Africa and India. I hope that that may develop as a new part of its business. As I understand it, it operates in three separate parts. There has been private equity investment, largely in east Asia and Africa, amounting to some $3 billion. A professional fee of, I think, 0.25% is paid for the management of those assets. The Bill will significantly increase the scope here. The second area has been direct equity investment, again in south Asia and Africa, of the order of $1.2 billion, and thirdly debt investment of some $400 million. As has been pointed out, the increase in the size of those investments over the last five years has arisen from their success rather than from additional funding.
The Bill is about significant increases in funding for the CDC—an initial increase from £1.5 billion to £6 billion, and then a route is provided with delegated powers for the Secretary of State to go up to £12 billion. That is a substantial increase, but it is not widely realised that the CDC and its associates are wholly government-owned. This is not the Government funding third-party entities; they are funding another limb of government to operate effectively on a commercial basis. It is still a government entity.
I am a member of the Delegated Powers and Regulatory Reform Committee, which, as noble Lords will be aware, has opined that the Bill inappropriately delegates power without demonstrating the need for it. Personally, I have mixed views. I understand the point but I repeat my own: that this is government advancing funds to another part of itself. I tend to think that is justifiable, and that the case for increasing the funding has also proven itself, so I do not see the need for primary legislation to authorise the additional funding.
The key point is that the CDC’s record, particularly over the last five years, stands for itself. I remember times when there was criticism of it, and it is extremely heartening to see how successful it has been, in very difficult territory.
Lord Boateng (Lab)
My Lords, I declare my interest as chair of the Africa Enterprise Challenge Fund. As such, I have had the opportunity to see the work of the CDC in support of agribusiness in Africa and renewable energy. I am bound to say that I welcome this Bill; I welcome, too, the Minister’s championing of the CDC within the department. I think that it will benefit from his attention. Frankly, if truth be told, the CDC has not in the past benefited from any ministerial champion at all, which has been part of its problem. The noble Baroness, Lady Northover, happily gave it some of her attention but, certainly in my time in government, it must be said that it did not have any champions.
We must also recognise that, at one time under the Labour Government, the CDC was being fattened up to be privatised—that was the reality. It was therefore given a mandate of making as much money as it could, but no target at all in relation to its contribution to the eradication of poverty or to development. We have to be frank: we need to learn the lessons of the past in order to ensure that we do not repeat the mistakes of the past in the future. The good news is that, for the past five years, a process of reform of the CDC has been under way, which has seen a renewed focus on the reduction of poverty and is to be warmly welcomed.
My noble friend Lord Judd, whose knowledge of these matters is, in my experience, unparalleled, was exactly on point when he suggested that, going forward, it is absolutely vital that the CDC continues to focus on empowerment and enablement on the African continent; ensuring that small and medium-sized business can grow and link to global markets; and improving value chains across the continent. This is about saying that we will stand alongside Africa as it develops its own agribusinesses and manufacturing capacity, because it is in these areas that there is currently a marked deficit on that continent.
Real gains have made in the past decades in terms of economic growth—six or seven of the top 10 fastest-growing economies in the world now are to be found in Africa, which is a tribute to entrepreneurs there. There have been vast improvements in terms of governance—the recent successful transitions of power in both Nigeria and Ghana are examples. Across the continent, there has also been a renewed focus on the part of African Governments on creating enabling environments in which it is possible for business to flourish.
This creates a real opportunity for the CDC to get alongside those businesses. One particular aspect of Africa’s development on which I seek to concentrate—including the potential role of the CDC—is the role that small and medium-sized enterprises can and must play in the continent’s development. In Africa, they contribute to around 40% of GDP and to some 50% of employment overall. In some sectors, their level of job creation can be even higher. For example, informal and formal SMEs together account for about three-quarters of total employment in manufacturing. However, the reality is that it is very difficult indeed for small and medium-sized enterprises in Africa to obtain funding from the banks. That is because in the main the banks are risk-averse and do not understand the sectors—the agrisector in particular—in which SMEs are emerging. Significantly, SMEs also suffer from very high interest rates. That is the fact of the matter on the ground, on the continent.
To address that, the CDC has seen it as part of its mission to support those businesses through supporting banks. So, taking the example of a recent investment it has made, it has supported the dfcu Bank in Uganda, which focuses on tackling the lack of long-term funding for SMEs in a country—Uganda—where they contribute around 70% of GDP. A bank such as that could not hope to obtain on the open market the sort of funding that the CDC can give it, on the terms that the CDC can give it. If you were simply applying market judgments and the bottom line to support for banks that work with SMEs, you would not be able to raise capital. The CDC, with its focus, is able to do so.
The CDC needs to be encouraged to focus on and address market failure. That, after all, is the justification for putting public money into it—I cannot think of any other. We are putting public money into something that addresses the failures of the market so that markets can work better for the poor, and to support development. As all sides of the House agree, the long-term and medium-term solution to Africa’s problems does not lie in overseas development assistance but in the development of a sustainable private sector and the capacity within Africa to generate, through tax revenues, sufficient money to do all the things that we expect the state to do in our own country. We want enabling states; we certainly want states that encourage and support a private sector that can create wealth and provide employment. That ought to be the focus of the CDC in the future.
I ask the Minister to ensure that this House has an opportunity to discuss the future strategy of the CDC—that an investment strategy is not adopted without consideration of views from all sides of this House—because, as today’s speakers list shows, there is real expertise in the Chamber. That expertise can encourage, support and spread the word about the importance of investment in this area, and all that investment can do.
I end on this note: we are in a challenging time for global security, and the best protection for any of us in the world is job creation. Africa has the fastest-growing population of young people in the world, and if there are young people in Africa who do not really have an opportunity to gain sustainable livelihoods, whether in urban or rural areas—Africa also has the fastest rate of urbanisation in the world—they will fall prey to those who would exploit them for their own purposes.
In northern Nigeria we see a classic example of this. Boko Haram exists because young people feel disaffected, cut off from relevant educational opportunities and the prospect of getting sustainable livelihoods. The great work that the CDC is doing in that area—creating real job opportunities with real employment and providing real added value—is a classic example of the sort of response that we ought to be making to today’s challenges. I wish the CDC all the very best with its task and hope that the Minister will continue to champion it in his department.
Lord Bruce of Bennachie (LD)
My Lords, I am very pleased to follow the noble Lord, Lord Boateng, and I agree with much of what he said. I draw the House’s attention to my entry in the register of Members’ interests. I have a particular interest because when I chaired the International Development Committee in the House of Commons, we carried out an inquiry published in 2011, before the change in strategy. The noble Lord anticipated some criticisms of the Labour Government, which I did not want to make too forcefully, but he was right that the corporation was being looked at for privatisation. Douglas Alexander got it focused more on poverty but it really took Andrew Mitchell and a wholesale review to come to a strategic change.
One recommendation in our report was to split the fund. The Government did not agree, but did split the corporation’s objectives from being just a fund of funds to separating funds and direct investment and going back to some of the traditions of the early days of the CDC when it invested directly in companies and enterprises, not just through funds. That has obviously had an impact over the last few years and is becoming a more significant part of the portfolio, but it is still very small. I hope that the new strategy will help to explain how we can achieve more of that and find ways to fill the market failures in those gaps to make the transformation. The reality is that I do not believe that any country has significantly lifted its people out of poverty without having a vibrant private sector. The role of development finance funds of the CDC’s kind is extremely important in helping that to happen.
My noble friend Lady Northover identified a number of concerns, which I hope that the Minister will directly address. There have been reservations expressed that we are going for a quadrupling, and then a further doubling, when we do not have a strategy nor yet a clear indication of how that money will be spent. The Minister rightly says that there is a huge demand for a huge amount of money; the question is how much of that would be more appropriately met by an organisation such as CDC, as opposed to the wider market. Given the sort of criticisms that the sector currently faces, the Government need to be careful about putting substantial additional funds into CDC—although I would not put it in these terms—without being absolutely clear that there will be proper accountability, proper results and a proper strategy. If they are not, they will find the sort of heat that they have experienced in the popular press being turned on them for exactly this. It would be extremely unfortunate if that were to happen and we must make sure that it does not.
The reality is that we need to invest in projects that are riskier and offer a poorer return, because those are precisely the projects that the private sector, and by definition the market, will not address. The CDC has shown that they are there and can generate a return. The question is whether there will really be £12 billion of that kind of investment available over the next few years.
The Secretary of State has said that she wants the focus of UK aid to be on trade and investment. That is a kind of mantra across the Government, who are desperate to demonstrate that we can get agreements on trade and investment. But there is a consensus in this House, which I hope is not under challenge, that our aid and development focus should be on poverty reduction. That is our fundamental objective. The noble Lord, Lord Boateng, mentioned the importance of creating jobs and livelihoods. Quite terrifyingly, the forecast of job requirements in Africa alone is not in the millions or even the tens of millions. Hundreds of millions of jobs will have to be found in a relatively short time, which is really quite a scary thought because, if those jobs cannot be found, there will be an awful lot of idle hands looking for something to do—and I fear that those things may not always be positive and constructive. There is no doubt at all that we need to do that.
The other thing I will talk about is the mix of our aid budget and focus, because this is a big increase in one particular component of DfID’s spending. The Minister gave me a reply earlier this week relating to the Government’s humanitarian response. He said that our spend over the last three years has gone from £826 million to £1,266 million—that is, from 12% of total ODA to 17%. Everybody understands why that has happened and there is clear public support for that. Nevertheless that is an increasing proportion of the budget which, by definition, is not available for other aspects of development spending. There have been indications of cutbacks in some development programmes, partly because of that pressure.
The second thing is that the depreciation in the value of the pound—on average 20%—means that the purchasing power of our aid budget has been correspondingly reduced and so there is less scope. Those people who seem to think, because of our commitment of 0.7%, that somehow DfID and our development budget is awash with funds are not really facing up to the pressures of impending famines as well as of traditional development.
There is a clear synergy between the role of development and the role of private sector investment. Clearly investors, whether they are indigenous to a country or outside it or in partnership, benefit from having an educated, healthy workforce and decent infrastructure investment. The two things fit together. Indeed, one of the reasons that many enterprises are reluctant to invest in developing countries is a lack of those things, coupled with problems of governance and corruption that make them difficult places to do business. If the CDC and development can work together to make that environment more conducive, the private sector will be able to take more of the burden on itself and help to address the development needs. We can look to countries such as China, India and Vietnam that have demonstrated how that kind of partnership can lift millions of people out of poverty over a relatively short period of time.
There is a clear need to ensure that extra money going into the CDC is not at the expense of development programmes. I completely agree that the objective in the end is for countries to have the capacity and the resources to run their own services and be free of aid, but we should not cut off that aid prematurely before they have actually established that degree of viability. That would be a point of concern for me. I know it is unpredictable but it would be helpful if the Government and DfID gave us a little bit more guidance on their strategic objectives in terms of how much they feel is reasonable for humanitarian support, how much is going into development and how much is going into the private sector. It would help us to get a clearer idea of the strategy behind it.
Just as a general comment, the people in the sector whom I meet, whether they work for private contractors, NGOs or organisations generally working with development, feel very beleaguered at the moment. They feel under sustained attack—not all of it justified or even accurate—not only from the popular press but also from the more serious media with an inadequately robust response and defence from DfID as well as across the Government. Much more can be done to explain how transformational UK aid is and how effective we are at delivering real results, giving people the good-news stories that are out there of how, thanks to our intervention and the partnerships we build both from our own expertise and that of the country we are operating in, we are helping to make a real difference.
People who say aid does not work are simply ignoring the facts. We have reduced poverty, we have massively delivered on health objectives, we have got more children into education and we are beginning to raise the quality of these services. We have set ourselves an ambition of ending absolute poverty by 2030—no mean commitment—and to do that we will have to maintain our level of commitment but we also have to explain it much more fully and clearly.
Therefore, while the CDC has a role to play, its changed focus over the past five or six years makes it better equipped to spend more fully. I still have reservations about whether there are enough of the right kind of projects to absorb this extra spending, and I would be interested to see the strategies around how that could be done. I support what we are trying to do, but it is important that we show how the CDC fits in with the strategy of development, humanitarian response, building resilience and capacity and helping, as the second-largest bilateral donor in the world, to lead the way to end absolute poverty by 2030. This has to be a contribution to that.
The Earl of Sandwich (CB)
My Lords, it is a pleasure to follow the noble Lords, Lord Bruce and Lord Boateng, with their historical experience of the CDC, and I am much looking forward to the speech of my old noble friend Lord Eccles, who has seen the CDC almost from the beginning.
I was surprised that this Bill was made a money Bill, considering the huge questions raised by the expansion of the DfID programme. I know we have limited powers in this House, but I tried to complain. I went to the Chief Whip, who agreed to talk to the Lord Speaker, but I decided I could not take it any further. A central issue in the Bill seems to me whether, in handing over such a large proportion of our aid to the private sector and to one particular body, we may be bypassing some of the core principles that have governed the aid programme over many years.
I know that the CDC has changed considerably under new management. I have discussed this directly with the CEO, Diana Noble, quite recently. My noble friend Lord St John made a very strong case for the CDC. I accept that it has responded to radical change. To take only one example, in 2015 more than 1 million jobs were indirectly created by the CDC in Africa and Asia alone. I also have great admiration for the Minister of State in another place, Rory Stewart, whose work with the voluntary sector is well known, as is the experience of our own Minister, but having read Mr Stewart’s replies to the debate in the Commons, I am not yet convinced that the CDC has embraced poverty reduction, which, incidentally, is not quite the same as job creation.
The Minister used the words “doing good while not losing money”. That does not seem to be an adequate description of our international development programme, because poverty reduction has been the focus of our aid programme for some time. We abolished tied aid a generation ago, and the failures of huge projects such as Pergau and Narmada marked the end of large-scale UK investments during the 1980s. Since then, successive Aid Ministers have listened to criticism and have won public support for more programmes which demonstrate people’s participation, meet the needs of the very poorest in society, create partnerships and bring non-governmental organisations directly into the planning and execution of projects. The noble Lord, Lord Judd, mentioned that. I was encouraged to hear the Minister say that there is still room for improvement, presumably in the direction of the very poorest. That is precisely the dilemma the CDC faces.
As someone familiar with some of the UK’s best NGOs which are working alongside the poorest and in partnership with DfID, I have seen this work at first hand and I know that it brings real benefits to society. I do not need persuading that the private sector, and the CDC in particular, can be an effective channel to the poor. In fact, business is a good route for the voluntary sector to follow. For instance, the business model in which women create their own credit and loan scheme, originated with the Grameen Bank and other microcredit organisations, is still widely respected. The noble Lord, Lord Boateng, mentioned SMEs in Africa, which are another important channel.
When it comes to investment decisions, which are not risk free, and due diligence at a higher level of management, there comes a point when must priorities change. Pay scales rise and the interests of the corporation itself may take over from those of the beneficiary. This is a built-in dilemma which was discussed in some detail yesterday in the Public Accounts Committee which I attended. Investment really belongs to a different tradition, and this is why the CDC is being kept separate from the mainstream aid programme. One might be forgiven for asking whether it needs to focus on the poor at all.
Additionally, there is the issue of accountability. Does the CDC really know how its funds are being used on the ground and where they are directed and, even more importantly, can it monitor progress and impact at a later date? Fortunately, we now have really good watchdogs in the form of ICAI, the NAO and DfID itself, not forgetting the IDC, other Select Committees and occasionally our own EU Select Committees which have occasionally covered the EU aid programme. The CDC is very closely scrutinised.
On the whole, the CDC comes out well from various reports and audits. It has responded to recommendations and its transformation is much admired. There are some criticisms worth mentioning, some of them highly technical, which were examined, inevitably in much more detail, in the Commons debates, and I am sorry that we cannot do that today. For example, the NAO found that the development impact target measures prospective impact rather than actual impact. The noble Lord, Lord Judd, raised this point. There are also recruitment and retention challenges. The CDC may be on the right track, but it still has to demonstrate that it can make a lasting difference to the lives of the poorest. ICAI reports have come out with similar comments, although they recognise the growing role of foreign direct investment in development. My noble friend Lord St John made that point.
Finally, there is also a problem of public information. Far too little is known about the CDC programme, while DfID projects are much more visible, and this creates discrepancies. ICAI last year pointed out the anomaly that the CDC is moving DfID back to BRICs and middle-income countries. While DfID has scaled down its aid programme in India, the CDC’s investment there amounts to one-quarter of its portfolio. Is the tail wagging the dog? Does this mean that India suddenly again becomes a developing country and not a middle-income country? Should not the public be aware of this, because many people have argued that the poorest in India should always be a priority? I also believe that the CDC should arrange visits, perhaps through the CPA as well as the IDC, so that more MPs and others can go out to see the work it is doing because it is so important.
I am sorry to strike a discordant note during the passage of this Bill, but while I recognise the value of the CDC’s work, I shall need more convincing that it is really about poverty. The noble Baroness, Lady Northover, mentioned the CDC’s effect on DfID, which is important. The SNP and others put down several amendments on these matters, but I think Her Majesty’s Government have still skilfully avoided the answer. The CDC apart, with the future loss of EU channels of funding and the fall in growth rates and commodity prices in Africa, DfID already faces a considerable challenge in rethinking its responsibilities to the developing world.
Viscount Eccles (Con)
My Lords, I worked for the CDC from 1981 to 1994. As the noble Lord, Lord Judd, said, for nine of those years, I was its chief executive. There is one other coincidence: my noble friend Lord Flight now lives in a house in which I lived for a while and in which Lord Reith, who was a most successful chairman of the CDC in the 1950s and 1960s, had also lived. I do not know whether there is any message in that coincidence, but it is interesting.
I would like to concentrate on the period from 2010, on which the debate is concentrating. My period is irrelevant, except that I endorse what the noble Lord, Lord Judd, said about technology transfer and capacity building. A development finance institution such as CDC does not have a role unless it is involved in both technology transfer and capacity building and, therefore, the creation of greater human capacity for people to do things that they did not know how to do before. I could tell your Lordships many stories about how CDC has achieved that in the past, but I would like to concentrate on the period from 2010.
Before doing that, I want to refer to some comments made by the noble Lord, Lord Boateng, about the period before 2010. We are all talking about CDC, but that is inaccurate. It is, in fact, the CDC Group. In 1997, the decision was made in the manifesto that a Bill would be put before Parliament which would have the purpose of changing CDC from being a loan-financed public corporation to becoming an institution with share capital which would then become 75% private and 25% continuing to be owned by the Government.
That is the 1999 Act that we are talking about amending today. It set up the possibility of CDC, then renamed the CDC Group with a shareholding, becoming 75% private owned and 25% retained by the Government. That did not happen. I will not go into the story of why it did not happen, although I am pretty familiar with it. I will just say that I believe that the 1999 Bill was a mistake and that there should never have been a campaign to take any part of the CDC out of public ownership. It should always have remained in public ownership. Although I sit on this side of the House, I can assure your Lordships that, when I was chief executive of CDC in the days of Margaret Thatcher, I was completely consistent with my board that it would be wrong for CDC to seek to be privatised; it should stay in public ownership.
That is where CDC is today and that is why what has happened since 2010 is of very great interest to Parliament. It is a great pleasure to find that Parliament is again debating CDC. Although years ago, CDC was quite frequently debated in Parliament, there was a big gap from about 2004 until 2010 when, frankly, the general opinion was, “Sweep it under the carpet and don’t talk about it”.
From 2010, under the Secretary of State, Andrew Mitchell, a decision was made by the coalition Government to see if they could put CDC back on track. It had become, as I think a noble Lord mentioned, a fund of funds. As a fund of funds it was no longer a development finance institution. The chain of accountability to Parliament was broken by CDC becoming a fund of funds and that needed to be restored. That was spotted by the coalition Government and, as has been said, they made arrangements to appoint a new chief executive, Diana Noble, who has done an extremely fine job, and a chairman, Graham Wrigley, who, in my opinion, has also done an extremely fine job. They have been getting the CDC back on track.
While the Bill is extremely welcome, we need to keep close attention on the business plans of CDC. It is a very important duty not only of DfID but also of Parliament to understand where CDC is going. As your Lordships will understand, it takes a very long time for the things that have been brought into CDC’s portfolio to work out. The usual time before a CDC investment is realised may be about 10 years. We are still living with a great deal of what CDC invested in as a fund of funds before 2010, which is going to take quite a long time to work its way out.
In the strategic future, the question which has been raised by many noble Lords is what proportion of the CDC portfolio is going to be directly invested. Only a direct investor can encompass innovation and going to places where the private sector will not naturally go. Several of those places have been mentioned, including northern Nigeria and the Congo. We can all think of many places in Africa where the fully private sector will hesitate to go. These are the places into which CDC in—it is true—70 years has always been willing to go and had the capacity to go without making serious mistakes.
With a small exception in the period between 1999 and 2010, CDC always made a surplus of income over expenditure throughout the years. When we authorise this increase in capital, we should not worry that CDC will lose that money. If it is true to its past, it will not. It will keep that money and use it as a revolving fund which will enable it to do more and more economic development.
As a condition of that economic development, I come back to the transfer of the knowledge of technologies such as from—I do not know—a generic pill manufacturer. That would be a very beneficial thing to be happening to a greater extent in Africa. However, anyone investing in that would need to know about pharmaceuticals and how to set up and manage a factory. It is very important that, when a strategic plan comes, we can see that CDC has proprietary technology of its own. It has always had some and still has—power generation and mobile telephones are two examples of where CDC has had technology and has deployed it.
The people in CDC are also very important. The staff has been built up recently from, I think, 50 when it was just a finance house to about 250 today. Within the capacity of staff employed by CDC, we need people who understand businesses and how to set up and manage them, as well as people who know how to finance them.
I welcome the Bill and believe very strongly in economic development, not only in financial rates of return but also in what I would call, not development impact, but economic rates of return, in which the social as well as other effects are measured. CDC going forward in that way, rebuilding itself as it has already done with very considerable success, will get even more into the forefront of being out there, doing things that the fully private sector is not in a position or not ready to do. As it goes forward, it will leverage in money from less certain people, because they know that if they come in alongside CDC, it is likely to work and to work well.
Lord Shutt of Greetland (LD)
My Lords, it is a great pleasure to follow so many noble Lords who have had experience of these matters over very many years and particularly of the splendid historical context in which we see the CDC. This short Bill is twice as long as another little Bill that we will have when we return after the recess. We may have a couple of hours now, but of course there are five whole days so far in the weeks that follow, although there could be more. We have no opportunity to amend this Bill, as money is at stake.
We know that there are two basic aims: to quadruple the resources available to the CDC and then, by order, to double them on top of that. Because we cannot amend the Bill at all, it is an act of faith as far as we in this place are concerned. We have to have faith that the funds will be properly used. I do not wish to detract at all from the concerns that have been expressed by so many noble Lords, and look forward to hearing about a sound business plan and strategy.
I have only two points to raise. First, when the resources available are increased, will the CDC, where appropriate, have the opportunity to invest beyond the continent of Africa and the countries of south Asia? I do not think there are any legal constraints on this. It is not in the text of the Bill, and the title says “Commonwealth”, but it certainly seems that investment goes beyond Commonwealth countries. Will the new resources allow investment elsewhere?
The second point, which may not come as any surprise to the Minister, is about the British Overseas Territories. It is government policy that their reasonable needs are the first call on the UK aid programme. For each aided territory, DfID’s objective is to assist it in reaching self-sufficiency. The extension of the potential CDC resources would be but a pinprick for the CDC but could be highly significant for dependent territories such as Montserrat and the St Helena group of islands. I have a particular interest in St Helena, having made two visits there. Even with the delays, the availability of the airport there for mainstream use is keenly awaited, which we hope will happen during this summer. We know that there are detractors around, so it is important just to mention that there have now been several medivac flights of small aeroplanes, and six people are alive now who might not be had they had to wait three weeks to get a boat to Cape Town.
However, St Helena still needs the infrastructure to cater for airborne visitors. When I was there three and a half years ago, two very significant developments were about to happen, but they have not taken place. It would be a proper use of CDC resources to assist with some of these developments in order to take St Helena away from DfID dependency, whether by investment, loan or even guaranteed support.
Baroness Flather (CB)
My Lords, I have no personal relationship with the CDC, although not for want of trying. I went to see Diana Noble but was dismissed—metaphorically, not literally—because she left after 20 minutes. I was trying to find out what it does and how it works, but got nothing. However, that is not the reason why I am speaking today. I was not pleased, but that is not the important part.
I wrote to the noble Baroness, Lady Verma, when she dealt with DfID issues to ask her some questions about the CDC. She did not answer them, but just repeated what the CDC had told her to say. I then wrote to the noble Lord, Lord Bates, and I must thank him, in front of all your Lordships, for writing to me properly and giving me a lot more information. But there are some issues which worry me. The noble Baroness, Lady Northover, and my noble friend Lord Sandwich made the point about poverty reduction. It is difficult to see how some of the investments I have found out about through research, which I will talk about, fulfil the objective of reducing poverty.
The other point which worries me very much is the need for a proper independent review of the CDC’s work. I think most of your Lordships have taken on board what it says, and may know more about its work in depth than I do, but since the Harvard review, which looked at 2008 to 2012, there has not been a proper independent review. Any organisation which receives government money should have regular independent reviews. Some of the things said about the CDC have not been very encouraging. The shadow Minister for Development, Mary Creagh, has said that,
“the government’s own aid watchdog gave their private sector aid spending an amber-red rating and warned that ministers lack targets and a clear focus on reducing poverty”.
Maybe that will be dealt with in the new measures we will read about. She went on:
“Ministers must ensure this new investment in the CDC is transparent, focused on helping the poorest people in the world and delivers value for money for British taxpayers.”
I think it does, but I do not know how much it does for the poorest people. There was also a certain amount of criticism about gated communities, shopping centres and luxury properties in poor countries. According to the Global Justice Now advocacy group:
“CDC have a track record of ploughing money into dubious ‘aid’ projects like the Garden City luxury housing and shopping complex in Kenya and a luxury hotel in Lagos, Nigeria”.
There are issues about the work of the CDC because we do not get outside reviewers to look at it. The noble Lord, Lord Bates, said that the National Audit Office looks at it but that is not quite what I had in mind. It has to be looked at by people who are involved in development, not national audit. Even if it spends its money properly, I doubt whether it manages to keep all of it clean, because I am sure it has to grease some palms in some of the countries it is working in—although the less said about that, the better.
It worries me that there is no real review of the CDC’s work. Let me go through some of its current investments. It has now invested $6 million in Bridge International Academies, a company that runs fee-paying schools in Kenya. That is all very well, but why does it have to invest that much money in fee-paying schools? What people need instead is non-fee-paying schools, or schools where the fees are so small that they can manage to pay them. This deeply concerns me.
Rainbow Children’s Hospitals is a corporate hospital chain in India that provides mother-and-baby care and fertility treatment. The question was asked whether India is a middle-income country or a poor country. India has more poor people than many other countries, but there is so much money that Christine Lagarde said in her lecture two years ago that the Indian billionaires could remove poverty overnight. I do not see why the CDC has to invest in the corporate sector in India. There is a lot of money for money-making in India. People do not give money for the poor or for poverty reduction, but they are very happy to invest in the corporate sector.
Finally—and the worst of all—there is Narayana Health, a corporate multi-speciality hospital chainI have made some enquiries about Narayana. It is not just a hospital chain but one of the biggest conglomerates, and does all sorts of things. Its hub is in southern India and is almost like a small town. Why are we giving it money? I do not understand why we are giving money to Narayana Health, which is one of the richest organisations. I do not want my tax money—if it is my tax money—to go to Narayana Health. It has been given $48 million. It does not need money. It has more money than it can spend.
To me, these things are very worrying. I would like somebody to take a much stronger interest in the CDC’s investment policies: which countries it is investing in and what the return is. It invested in another chain of fee-paying schools, saying, “This is very good because you only pay $6 a month to get your child in there”. Although $6 seems nothing to noble Lords sitting here, it could mean a lot to a really poor person in Africa. Will they be able to find $6 to send their child do school? So I ask the Minister please to make sure that the money is being spent for poverty reduction as well as job creation. Just creating jobs will not change a country entirely. Poverty reduction has to be a priority.
Baroness Sheehan (LD)
My Lords, I add my thanks to the Minister for introducing this Bill to your Lordships’ House. Having listened to the speeches of other noble Lords, I am also reminded—if I needed reminding—yet again about the wealth of experience, and the breadth and depth of geographical knowledge, that exists in this House. I thank everybody who has contributed to my knowledge in this area.
This is a Bill that seeks to divert the policy of a government department quite significantly. It is a Bill that was neither trailed in the Conservative Party manifesto, nor mentioned in the Queen’s Speech. Moreover, it has been hastened with unseemly speed to its place on the statute book. Indeed, the passage of the Bill through the Commons gave rise to a good number of complaints from NGOs and think tanks that they had not been able to meet the very tight timescales made available to them and had had their submissions to the International Development Committee’s inquiry committee rejected. The Bill has been designated as a money Bill, so we in your Lordships’ House have no means by which to amend it or add conditions and safeguards—in short, no means to carry out our responsibility to give it proper scrutiny and make refinements which the Government may in time have come to appreciate. This is a pity, because taxpayers’ money—quite a lot of taxpayers’ money—is being moved from under the jurisdiction solely of Governments to an organisation which is not wholly accountable, given that it invests through funds of funds, as the noble Viscount, Lord Eccles, pointed out. That money is then outside of accountability through the Government and through DfID.
I am not the only one who thinks that the Bill’s designation as a money Bill is inappropriate. The noble Earl, Lord Sandwich, agreed with me, as did the report of the Delegated Powers and Regulatory Reform Committee, which said:
“We consider that the Bill contains an inappropriate delegation of power unless the Government can provide a convincing explanation of the need for this Henry VIII power”.
The Government did respond, but not convincingly. The need for development aid confronts us daily on our screens. Surely this is not the time to open up another line of attack for the vitriolic campaign that the Daily Mail and other rags are waging against the Department for International Development. That is what I fear this Bill will encourage. As we have seen, the CDC is vulnerable to attacks. In making this momentous and generous increase in the budget of the CDC, the Secretary of State risks exposing the entire 0.7% of GNI available for aid, yet again, to another round of attacks from parts of the media. She could have given herself some ammunition to rebut the attacks by putting some safeguards into the Bill, but then she has hardly been beforehand in rebutting any of the attacks levelled at her department. I know to his credit that the Minister is supportive of the 0.7% ODA, but will he convey to his boss that her history of attacks on DfID during the EU referendum campaign and her record of failing to defend the department on becoming its head are not reassuring?
I move on to why I think this Bill would have benefited from some refinements. It seeks to allow the CDC a massive increase of £4.5 billion to its overall spend to raise the ceiling to £6 billion, with an option to increase it further by another £6 billion by secondary legislation to a total of £12 billion. This raises eyebrows as the CDC has a chequered past—historically coming under heavy criticism in the really bad old days. Before 2012, the CDC spent 100% of its budget through funds of funds in projects that could hardly be described as pro-poor, including as they did, the arms trade. Nowadays, one-third of the CDC’s investments are made in other intermediary funds—funds of funds—a third are syndicated with other funds, co-invested; and a third are direct investments. We hope that the proportion of direct investments which give greater accountability to taxpayers will increase under the new strategy, once that is published.
First, let me address the problems posed with respect to transparency in the reporting of data. This is important because we need to be sure that ODA invested in the CDC can be traceable and accountable to taxpayers, in line with DfID’s international commitment on aid transparency. It is true that reporting has improved; however, a full two-thirds of the CDC’s investments remain opaque.
The CDC needs to take this on board and push for greater transparency in the deals it does with intermediaries, be they co-investees or other funds. These deals are rarely published with clarity, giving rise to allegations of secrecy and nefarious goings-on. It must publish what it funds. This has become even more imperative given that, since 2014, all capital transfer to the CDC is now reported as ODA by DfID to the OECD credit reporting system, but not all CDC investments are eligible as ODA.
The International Aid Transparency Initiative standard in 2012 rated the CDC as poor—a point mentioned by the noble Lord, Lord Judd—and asked it to publish what it funds. Why can it not publish country-by-country data? Neither DfID nor the CDC publishes data that give us a complete picture of how public money is invested. We do not know who is accountable: DfID or the CDC. This is unsatisfactory, and some clarity from the Minister on this question would be appreciated.
Given that 100% of the capital transfer from DfID to the CDC will now count as ODA, it is essential, to avoid controversy, that CDC projects demonstrate that they are focused on ending poverty. Closely linking its performance framework, evaluation and reporting, strategies and policies to the International Development Act 2002, the International Development (Gender Equality) Act 2014 and the UN sustainable development goals would go some way to countering media attacks. However, the recent NAO report on the CDC’s development impact framework does not include indicators for development impact achieved. Moreover, the CDC is not formally required to report on that. Why not?
Will the Government change their current reporting structure so that the CDC is subject to and compliant with the International Development Act 2002—surely not a big ask? Measuring impact is so important, and a really hot topic in the sector. The CDC has £5 million put aside to invest in a research project to develop a methodology to measure impact, yet that money lies unused. That is inexcusable.
The CDC’s preference for using job creation as a measure of impact is crude. Nor is it readily verifiable, as its intermediaries and co-investees can choose to provide no back-up data for their assertions. The CDC itself must not remain silent when it is attacked in the press. It is imperative that it defends itself, and to do so it must have facts and figures at its fingertips. It is no longer enough to say that it is in the business of job creation: that is only one indicator and is, moreover, unqualified. To be more meaningful, we need to know the quality of the jobs, pay and working conditions of employees, gender and age of the workforce and whether any training or education is delivered.
I move on to the criticism that the CDC has come under because of its use of tax havens. I hear what Diana Noble, the CDC’s CEO—for whom I have great regard, incidentally—says in defence of their use: that it is sometimes unavoidable when co-investees will not commit to a project where they believe there are not sufficient safeguards for the money or to avoid double taxation. My response is that the use of tax havens leads to the diversion of tax revenues from the poorest nations in the world—revenues that could be spent on health, education, clean water and so on—and all efforts must be made to put in place extra precautions and lend expertise to develop more robust financial practices that move that agenda forward. Development is, after all, the key word. These precautions may eat into profit margins, but profits at the CDC are still well above the 3.5% agreed with Ministers—for example, last year’s profits were 16%. The Prime Minister cannot on the one hand promise a crackdown on companies’ use of tax havens and at the same time sanction their use by a government-owned company.
The CDC must be careful to guard against scandal. It must not appear in the press for the wrong reasons. Every deal must meet the Daily Mail resilience test. Will it stand up to allegations of propping up corrupt leaders? Can a luxury mall be justified—for example, would the project struggle to attract investment elsewhere if the CDC were not to invest in it? Can the project withstand allegations of “public money, private profit”? The CDC’s remit is to invest in private enterprises that would typically struggle to attract investment elsewhere, as stated in its mission statement. Does it really need to invest in high-end private education or for-profit private health? These highly profitable enterprises, targeted at the well-off, usually in middle-income parts of a country, are justified, the CDC says, because the country is overall a low-income country. The CDC would do itself a favour if it were to cease investing in such businesses and stick to its objective: invest to contribute to economic growth for the benefit of the poor.
That is not to say that investing in health is wrong—far from it. The health sector is a key area where the impact of aid is clear and one that the public can connect with—very important—so the economic benefits of spending on health are strong, estimated to exceed cost by a factor of 20 in lower or middle-income countries. However, recently published figures for UK bilateral aid show that health has dropped from being the largest area of spending to fourth place. There is a trend of moving away from social development sectors into areas such as economic development and infrastructure, which may not always be pro-poor. That is something we must guard against. Each has its place, but we must ensure that one important sector does not lose out in place of another—a point my noble friend Lord Bruce made far more ably than I can. The CDC’s investment in health can be targeted so that it is demonstrably pro-poor.
In drawing my remarks to a close, I highlight the lack of strategy. The current strategy ended last year. During the Bill’s passage through the Commons, the Minister, Rory Stewart, said in his response that the amendments addressing the points I have highlighted were all valid, but that they were best addressed through internal governance and the forthcoming investment strategy rather than primary legislation. We were told by the Minister that this already much-delayed strategy would be with us by last December. It is now February, and we have had no sight of the new strategy which will guide the investments under which up to £12 billion of taxpayers’ money will be spent. This is unsatisfactory.
We must add to that the fact that the current CEO, Diana Noble, is due to leave shortly and the CDC will be under new leadership. I congratulate Ms Noble on her work for the CDC over the past five years. It cannot have been easy. The changes she has wrought have moved the organisation in the right direction. However, as I have outlined, this is very much work in progress. The appointment of a new head of the organisation will inevitably mean a different way of doing things but, without knowing who the new head will be or what the CDC’s vision for 2017-22 will look like, we are being asked to give our consent to a blank cheque.
I confess that I feel uncomfortable about doing that. However, the Bill’s passage is assured. I hope that the Government and the CDC will take on board not only my comments but those made by others in your Lordships’ House, and ensure that the CDC does not become the weak underbelly of DfID and leave itself open to attacks from those elements in the media which have never understood the imperative for the 0.7% commitment of GNI towards international aid.
UN figures tell us that more than 65 million people across the world have had to leave their homes to seek safety and to try to meet basic human needs for both themselves and their families. If we are to deter even more of them, in their desperation, from exposing themselves to the risks of dangerous journeys across continents, then we must work to ease their misery in their own countries. This is a moral imperative that benefits us as much as them.
Lord Collins of Highbury (Lab)
My Lords, in this House there has been strong support for the 0.7% aid target and Britain’s role in international development. There is also a broad consensus around the role of the CDC, as we have heard in this debate.
Job creation is one of the best ways to reduce poverty; it is important that the Government have a development investment arm that will help poorer countries to create new and innovative jobs. However, the focus for such work must be on the poorest, least developed and lowest-income countries, and on ensuring that the work is consistent with the sustainable development goals agreed by the UN.
As we have heard, the CDC made significant changes following the 2008 National Audit Office report and—as the noble Lord, Lord Bruce, reminded us—following the 2011 International Development Committee report, in line with recommendations to move towards a focus on the alleviation of poverty. This shift in focus is a major achievement of Diana Noble. She has done a terrific job and will be sorely missed. The changes were reviewed recently by a further NAO report released just before the Second Reading of the Bill in the House of Commons in November 2016.
The report was mostly positive. It noted that the 2012 to 2016 investment strategy shifted the CDC’s investment focus, which is clearly welcome. It noted that the CDC had exceeded the targets agreed with DfID relating to financial performance and development impact. However, it also said that the CDC should do more to measure the development impact of its investments. This would not only provide a better basis for investment decisions, but increase the transparency of the CDC.
Poverty alleviation is absolutely central if we are to make a success of the SDGs and Agenda 2030. As the noble Lord, Lord St John of Bletso, said, the adoption of SDGs has resulted in an international consensus that the private sector needs to play an even greater role in delivering a sustainable future for everyone, by integrating the aims of the goals into its business practices.
Developing countries currently face an annual investment gap of $2.5 trillion to achieve the global goals by 2030. The goals can be achieved only by working with the private sector, including with DFI organisations such as the CDC. The CDC states that it is committed to helping to achieve the global goals by focusing on those where it can have most impact: goal 7 on affordable and clean energy—as we have heard, we know there is an infrastructure need, particularly in Africa—as well as goal 9 on industry, innovation and infrastructure, and goal 8 on decent work and economic growth. Noble Lords have made the point that the CDC is investing in areas where labour standards are a key issue for its investment. In the most difficult countries, I know it has even built in proper workplace representation, which is vital in terms of delivering on our SDG objectives.
We are told that the ending of extreme poverty by 2030 is central to the CDC strategy. The 2012 to 2016 investment plan has, as we have heard, expired and we are yet to see the 2017 to 2021 investment plan. Like many noble Lords, I am disappointed that Parliament is being asked to raise the investment threshold before seeing the plans for the next four years of investment.
In terms of measuring the development impact of its investments, I ask the Minister whether he can assure the House that in the new investment strategy a more robust approach to measuring development impact will be implemented. Like my noble friend Lord Boateng, I also hope the Minister will be able to reassure us that Parliament—this House in particular—will have the opportunity to debate and consider the new investment strategy. There is no doubt that the CDC has become more transparent, but more can still be done to ensure that money is being spent as well as possible. One way this could be achieved is to allow the Independent Commission for Aid Impact to play a bigger role—for example, by carrying out a regular assessment of CDC investments, allowing scrutiny so that we can ensure the full effectiveness and value for money of the programmes in which the CDC invests.
We should be proud. The CDC has been a world leader among development finance institutions in publishing details of its investments since 2012 under the International Aid Transparency Initiative. But it would improve transparency further if it published similar details on its entire active investment portfolio, including those investments made prior to 2012. That would enable greater scrutiny of the CDC’s entire portfolio and hopefully provide assurances to the public that all CDC investments are focused where they need to be—on the goal of poverty reduction.
My noble friend Lord Judd and the noble Baroness, Lady Northover, as well as other noble Lords, highlighted two particular areas of concern: first, the volume of the Government’s proposed new investment for the CDC and, secondly, the CDC’s continued use of tax havens. Regarding volume, a critical issue, which noble Lords have raised, is whether the CDC can absorb this funding—does it have the capacity to deal with it? I hope the Minister will be clear today about the schedule for this spending. What is his idea of the number of years over which the increase would be spent before we might require another Act to increase it even further?
On tax havens, it is disappointing that, despite the Government’s stated objective in cracking down on tax evasion, the CDC continues to use them, including the Cayman Islands and Mauritius. I met the chair and the chief executive of the CDC recently and raised this concern with them. They responded in the way that we have heard about in this debate, by stressing the importance of stable financial arrangements for investments. In some countries—this is pretty obvious—it is clearly not possible to set up arrangements within their legal structures to ensure that the right duties and controls are in place.
Surely a way for the Government to address legitimate concerns would have been to include on the face of the Bill standards for the CDC to meet, in terms of the commitment to transparency, value for money and tracking development results. Since this opportunity has been missed, I ask the Minister whether the CDC will be asked—in the strategy that I hope your Lordships’ House will have the opportunity to debate—to improve its transparency and reduce the volume of investments it routes through tax havens.
While I believe that it makes sense to increase the CDC’s investment threshold, we need to ensure, as with any area of government spending, that every penny is going where it can have the greatest effect—the right places and the right people delivering value for money for the taxpayer. One way in which to achieve that would be to ensure that we could have regular scrutiny and proper debates in Parliament on the CDC’s activities.
Lord Bates
My Lords, I begin by thanking all noble Lords for their contributions in what has been a thoughtful and fascinating debate that has ranged quite widely over a number of different headings. Broadly, I have categorised those—although there is a significant overlap—into: the CDC’s role in the private sector, which the noble Lord, Lord Boateng, referred to with practical examples, as did my noble friend Lord Flight with other examples, and it was also referred to by the noble Lord, Lord St John of Bletso, and my noble friend Lord Eccles; the CDC development strategy and where this Bill fits into that, which was focused on by the noble Lord, Lord Collins, along with the noble Lords, Lord Shutt and Lord Judd, the noble Baroness, Lady Northover, and the noble Lord, Lord Bruce; and, finally, the question of parliamentary scrutiny that should rightly be afforded to such an important area of public expenditure and investment, which was the focus of the noble Earl, Lord Sandwich, and the noble Baronesses, Lady Flather and Lady Sheehan. I shall take that as my rough template to draw some strands out of the initial remarks.
The first point to make, however, is that, obviously, I echo the comments made by a number of Members during the debate recognising the significant level of expertise resident in this House that can be brought to bear in scrutinising and helping to shape strategies in future.
On the strategy, the noble Lord, Lord Collins, was absolutely right to take us back to the sustainable development goals and Agenda 2030. When we look at a Bill, we look at a particular strategy in isolation, and I want to try to place this Bill in the wider context, which is that of the sustainable development goals. Goal 8 has been mentioned, but essentially it is goal 1 that we are after, the eradication of poverty, which is the mission of DfID. The noble Baroness, Lady Northover, and the noble Lord, Lord Bruce, referred to that. We have made good progress on that goal. In 1990, those living in extreme poverty numbered some 2 billion; as of 2015, that number had reduced down to 705 million—almost to one-third, at a time when global population had gone up. In many ways, that heartened and strengthened the view—because a significant proportion was drawn from the commitment to the millennium goals—that global concerted action and focus could deliver significant change, if it was co-ordinated. That was why the UN Secretary-General set up the high-level panel of which the former Prime Minister David Cameron was a co-chair, which then led to the sustainable development goals.
The sustainable development goals, which have as their target eradicating extreme poverty by 2030, with a number of successor goals to that, are very much at the heart of what we do. Because we now view development activity through the lens of the UN sustainable development goals and have our commitment—which continues to be reiterated, as perhaps it needs to be—to the 0.7%, which has been secured through legislation and our manifesto commitment, we seek to match the 0.7% with the goals. Our strategy across government for implementing the goals will be set out in a new Agenda 2030 strategy document, which will be published in the next couple of months.
I am providing a protracted introduction because my opening remarks perhaps did not quite cover the context that this Bill fits into. We have the sustainable development goals as a focus, we have a plan which is coming and we have a UK aid strategy, which sets out the importance of economic development and of jobs, which are sustainable goal 8, as well as the eradication of poverty, which, rightly, was number one. It talks about partnerships and working together. The UK aid strategy then fits into and drives the single departmental plan of the Department for International Development as the prime lever for doing this.
The noble Baroness, Lady Flather raised a point on data, and one of the most important elements in the sustainable development goals is, to the delight of mathematicians and statisticians, the incredibly complex data that will be required to track progress towards those goals. That is set by the United Nations Statistical Commission, and the Office for National Statistics will have responsibility for collating data from across government—including the Government Statistical Service and many other sources—and uploading those so that we can better track our progress. That rests in the single departmental plan, which is published.
Off the back of that, last week we published our economic development plan, which recognises the importance of private sector investment in infrastructure. Gradually, this has all been built together. All of that is then scrutinised and overseen by the Independent Commission for Aid Impact, ICAI, by the Select Committee on International Development, by the NAO, whose report has been referred to, and by the Public Accounts Committee—the noble Earl, Lord Sandwich, referred to attending the PAC meeting yesterday, where the Permanent Secretary gave evidence.
So that is the context in which this Bill needs to be set. We are arguing that it is not all about economic development; economic development is part of what DfID does—in the current year, economic development sits in an envelope of roughly £1.8 billion out of a £12 billion spend. So we are talking about funding within that envelope on economic development.
Then we come to the question of the CDC Bill itself. The argument was that, because several years had elapsed since the Act had been passed and the cap had not been moved during that time, it was right that, given that economic development was going to play a more significant role in addressing the sustainable development goals, we look at raising that cap.
Of course, the UK Government are the shareholder, so when we talk about hiving off funds, as my noble friend Lord Flight said, we are hiving off funds to ourselves. It is taxpayers—it is ourselves—who are the owner and shareholder, and we have the ultimate power as the shareholder, without wishing to worry current holders of posts, to appoint the board and appoint the chief executive. We can have a quite significant impact. I want to reassure noble Lords on that, because there was some concern in that regard.
On the CDC and its strategy, I took on board the point that was made. We are now drilling down: we have gone through the sustainable development goals and the cross-government approach to delivering on aid; we are now into economic development and we have the economic development strategy; and now we are saying that it is right that there should be an investment strategy for CDC, which should be published and discussed initially with the shareholder—namely, Her Majesty's Government.
When that was being discussed, we felt there were two alternatives: to publish the strategy alongside the Bill, or to allow the Bill to make its progress through the House and do the House the courtesy of listening to its scrutiny of the Bill. Some comments, such as the ones mentioned by the noble Lord, Lord St John of Bletso, have made a profound difference, and others, such as those brought to our attention by the noble Baroness, Lady Flather, perhaps less so. We chose to let it go through the House and for the wisdom and expertise that exists in this House to be incorporated into the final strategy that is published.
At the same time, when agreeing our process on this, we had a couple of choices regarding parliamentary scrutiny, and I want to address this quite directly. There was a debate about whether we put in £12 billion, which was what we assessed looking forward. The noble Lord, Lord Collins, referred to the estimated $2.5 trillion funding gap, so this is significant but, in terms of the need, it is not vast. It is also fair to say that the amount we allocate, as a percentage of overseas development assistance, to capital in financial institutions is significantly less than countries such as the Netherlands, Germany, France and the USA. We asked whether we should go straight to £12 billion or have an interim stage. I suppose the conclusion was that we could take this in cycles, so the initial plan will be for the next four years and then there will be a successor plan for the following five years, which will be published and discussed. Off the back of that, there will then have to be an affirmative resolution, before your Lordships’ House and the other place, to give permission for that investment to occur. We considered that point very carefully and came to the conclusion to do it in two steps. That was the rationale behind that.
The noble Baroness, Lady Sheehan, and the noble Earl, Lord Sandwich, asked about the CDC Bill being certified as a money Bill. I would like to say it was part of a strategy, but of course we have no control over that. The certification of a money Bill is the preserve of Mr Speaker in the other place, and I do not think he would take any advice from Her Majesty’s Government on this or probably any other matter. He certifies it and it is what it is, and we must work within that.
I was struck by the points made and the quality of the debate. Noble Lords suggested it would be useful to have a debate on the strategy when it is published. There will be a number of other strategies around at a similar time on a sustainable development goals—sorry, let me just clarify that there will be an affirmative resolution before the House of Commons only, which will have the opportunity to comment on this second step. On whether there should there be an opportunity for your Lordships’ House to discuss this, that would be for the usual channels to agree, but I will be very sympathetic to it on the basis of the discussion we have had this morning.
I have set out the broad headings, so let me turn in the time that remains to some brief responses to specific questions that I have not covered in my general remarks. The noble Lord, Lord Collins, asked whether there would be full disclosure of the CDC’s investments on its website. I can reassure him that a full list of investments, including the legacy investments, can be viewed on the website.
The noble Baroness, Lady Flather, and the noble Earl, Lord Sandwich, raised the point about measuring the CDC’s contribution to poverty reduction. The contribution is clear, as it is made through jobs, local taxes and infrastructure.
However, this economic development and investment have to be seen alongside the work we are doing with our multilateral partners in the development banks. The World Bank operates in a lot of these countries and international finance institutions in some regions have been mentioned, such as the Caribbean Development Bank. We also have a UK Caribbean Infrastructure Fund partnership. We use many different vehicles and direct investment is just one.
We also have a huge commitment, rightly so, in education—which the noble Baroness, Lady Northover, oversaw as well during her time as Minister. It is true that no one has ever got out of poverty by aid alone and therefore trade is required, but it is equally true that, as well as economic development, you need education. Without the skills and the workforce, then I am afraid it is not going to happen. We have a major programme in education, which then feeds into economic development and our work with our international partners in respect of that.
In terms of independent evaluations, there was an evaluation commissioned in 2015 by a team from Harvard. It reviewed the CDC’s investment for the period 2008 to 2012 and concluded that the CDC’s investments had been transformational—a point made by my noble friends Lord Flight and Lord Eccles and the noble Lords, Lord St John of Bletso and Lord Boateng—such as in the work of the Africa Enterprise Challenge Fund particularly with small and medium-size enterprises.
My noble Friend, Lord Eccles, asked about the proportion of the CDC portfolio that is now direct. The noble Lord, Lord Bruce, referred to the report on this from when he chaired the Select Committee. The CDC has built up its capacity and moved significantly from operating as a fund of funds to operating more directly where it could exert greater control and measure the results. In 2015, 67% of new commitments by value were direct investments, and we expect this ratio of about two-thirds direct to one-third through funds to continue.
The CDC was set a great challenge, and many noble Lords rightly paid tribute to the work of the current chair and current—and outgoing—chief executive, Diana Noble. I certainly echo that. The CDC’s staff are immensely high-quality and combine private sector expertise with a compassion for the world and a determination to ensure that we improve our performance in relation to the poor.
There was a criticism that the CDC has gone for easy wins. Perhaps that applies to a bygone era, as the noble Lord, Lord Boateng, referred to, when it was perhaps being “fattened up” for privatisation. When we decided during the coalition Government, when Andrew Mitchell was Secretary of State, that we wanted this to be a long-term public vehicle as part of our economic development strategy, we narrowed the focus. We said, “Where are the poor people?”. The answer is that 80% of that 700 million-plus that I mentioned still living in extreme poverty are in Africa and south Asia. Therefore, that should be the focus of our attention.
What is the greatest need in those areas? Is it for financial sector instruments? That may be part of it, but I agree with the noble Lord, Lord Collins, that the greatest need is for jobs and better jobs in those areas. So we said that the focus should be on the areas of greatest poverty and on job creation as being the objective. That is a fair area to head for.
Baroness Flather
I was trying to say, with some of the examples that I gave, that they do not need money: they are already very wealthy and they have jobs that they are giving to people. There has to be something focused on the areas where there is not enough money.
Lord Bates
That is right. The noble Baroness refers specifically to India, which is of course itself a signatory to the sustainable development goals and the eradication of poverty by 2030. That will have to be its focus.
A number of other questions and particular points were raised. I will review the record, particularly with reference to the points made by the noble Lord, Lord Judd, at the beginning, and where there are gaps or I can add anything, if it will be convenient for the House, I will write to noble Lords. I reiterate my commitment to continue to engage with the House as the CDC progresses with its strategy and we finalise the new business case.
Lord Judd
I am grateful to the Minister for what he has said and the fact that he will write to me, although it is a pity that, because this is a money Bill, we do not have the opportunity to go into these things in Committee. However, will he agree with what has been said by quite a number of noble Lords in this debate, that the CDC, which of course has a lot of admiration, must remember that job creation and the eradication of poverty are not synonymous? Job creation can play an important part, but the eradication of poverty is a greater issue. We must not let one become a substitute for the other.
Lord Bates
I defer to the noble Lord’s great experience in this area. He is right. He is also right to say that it must not be perceived as an imposition. This must be something that comes from the ground up. It must be about strengthening capacity within the countries. That is why education, healthcare and all the other things that we are doing in terms of infrastructure are so critical to the overall success. I accept that.
The CDC is the oldest development finance institution in the world. It is a great British institution that reflects the values of the British public, who consistently demonstrate their concern for and generosity towards the poorest. We will make sure that we can all continue to be proud of the life-changing, pioneering work that this institution does. With that, I ask the House to give the Bill a Second Reading.
Bill read a second time. Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time and passed.
Immigration (Health Charge) (Amendment) Order 2017
Baroness Vere of Norbiton
That the draft Order laid before the House on 20 December 2016 be approved.
Baroness Vere of Norbiton (Con)
My Lords, the House will be aware that the immigration health charge was introduced in April 2015 and is paid by non-European Economic Area temporary migrants who apply for leave to enter for more than six months, or who apply to extend their stay. The charge, which is set at the competitive level of £200 per annum, per migrant, and at a discounted rate of £150 per annum for students and youth mobility scheme applicants, ensures that migrants make a fair and proportionate contribution to the National Health Service in a manner commensurate with their immigration status, subject to limited exceptions. Those who pay the charge and are granted leave to enter or remain in the UK currently receive NHS care in the same way as a permanent resident, subject to the same clinical need and waiting times, for as long as their leave remains valid.
In setting the level of the charge, careful consideration has been given to the range of health services available without charge to migrants, the valuable contribution that migrants make to our country and the need to ensure that the UK remains an attractive destination for global talent. Indeed, there is no evidence at present to suggest that the charge has deterred the brightest and best from coming to the UK. In 2015, the Government estimated that the introduction of the health charge could raise as much as £1.7 billion, at 2015-16 prices, over 10 years—an average of around £170 million per year. Performance in the first year of the policy was, I am pleased to say, broadly in line with these estimates.
In its first year of operation, the immigration health charge collected £164 million for spending on the NHS. Of that amount, £140.1 million was made available for spending on the NHS in 2015-16. The remainder will be made available to the NHS in 2016-17. This year, the Home Office has transferred £120 million for spending on the NHS and is expected to make a further transfer of income to the NHS before the year end. Income from the charge is shared between the NHS in England, Scotland, Wales and Northern Ireland to spend as they see fit.
The draft order before us today amends the principal order—the Immigration (Health Charge) Order 2015—in two areas. First, it removes the exemption from the health charge for intra-company transferees. Secondly, it creates a new and explicit exemption for victims of modern slavery. It also makes a number of minor and technical changes. Intra-company transferees are employees of multinational employers who are transferred to the UK either to take up a role that cannot be filled by a UK recruit, or for training purposes. It is the only route within tier 2 that is exempt from the health charge.
In 2015, the independent Migration Advisory Committee conducted a review of a number of potential changes to the tier 2 route. It was asked specifically to look at the case for applying the health charge to users of the tier 2 intra-company transfer route. While partners to the review pointed out that a large proportion of intra-company transferees may be in receipt of private healthcare, the MAC noted that they nevertheless have access to the NHS, whether they use it or not, and indeed there may be instances where they do need to make recourse to it—for example, for a GP referral to a private consultant. The MAC also noted that contributions to a universal service are not made on the basis of whether an individual makes use of that service, and that, for example, UK residents can opt for private healthcare without paying less tax to reflect their lower use of the NHS.
The MAC therefore concluded that it could not see a good reason why intra-company transferees should be exempt from payment and recommended that this group pay the health charge in line with other users of the tier 2 route. The Government accepted this recommendation and the draft order amends the principal order to that effect. The increased cost to intra-company transferees of paying the health charge is small, relative to their expected income over the duration of their stay in the UK. By applying the health charge to intra-company transferees, we estimate that an additional £136 million to £205 million could be raised for the NHS over the coming 10 years.
The second area of significant change is the explicit exemption from the health charge for victims of modern slavery. Where a victim of modern slavery has been trafficked, they already fall within an exemption on the face of the principal order. Where they have not been trafficked, the charge is waived. However, the recent review into the first six months of operation of the charge recommended that, rather than waiving the charge in these circumstances, an explicit exemption should be set out on the face of the principal order. The Government have now addressed this important point. The draft order makes it clear that all victims of modern slavery—whether trafficked or not—applying for leave under modern slavery policies fall under an explicit exemption.
Turning to more minor changes, the draft order also amends the principal order to make it clear that applications for further leave to remain as a visitor are exempt from the charge. This is a minor, clarifying amendment that does not change the status quo. The Government have been clear from the outset that all applications for visitor visas do not attract the health charge.
The draft order strengthens the wording of the principal order to ensure that migrants granted temporary leave following a reconsideration of their application or an otherwise successful challenge to a refusal of leave must pay the charge when requested to do so. It also makes it clear that those granted an additional period of leave on appeal must also pay a health charge for that additional period. These amendments are in line with the Government’s general policy that temporary migrants should make a proportionate contribution to the NHS through payment of the charge, irrespective of the process by which leave is granted.
Finally, and in order to provide certainty for those migrants whose applications are already in train, Article 4 provides for transitional arrangements. The amendments introduced through this draft order will not apply to an immigration application submitted to the Home Office before the order comes into force.
The Government believe that it is only right and fair that migrants—including intra-company transferees—should contribute to the extensive and high-quality range of NHS services available to them during their stay, in line with their temporary immigration status. It is also right and fair that victims of modern slavery should not pay the charge. I am delighted that this draft order makes this explicit. I beg to move.
Baroness Walmsley (LD)
My Lords, I welcome the noble Baroness to her new role. We welcome the exemptions and clarifications that she has just outlined. I should like to use this opportunity to express some concerns and ask some questions about the Government’s policy of charging foreign nationals for the use of the NHS, and how this will work.
It is right that those who are not entitled to the free use of our NHS should pay for their treatment—or it should be paid for by their insurance or their Government. Some hospitals have already introduced the policy successfully but, irrespective of its merits, the focus on collecting the equivalent of 0.5% of the NHS’s annual spend reflects the Government’s skewed priorities. It ultimately serves to mask the main challenge facing the health service—a lack of cash.
The principle that those not eligible for free NHS care should pay up front for non-urgent treatment is sound. However, there must be clear safeguards in place to prevent profiling of people who have surnames that sound “not British”, and to protect vulnerable people such as the homeless who cannot prove their right to treatment by providing the correct documents. We must also guard against any temptation to extend this policy to urgent treatment. How do the Government plan to ensure that this does not happen?
Health tourism should be properly addressed, but it is not particularly significant in terms of the overall funding of the NHS. The recent government announcement cannot mask the refusal to address the serious failures of care which are now routine across the NHS as a result of impossible financial pressures. Only this week we have heard about increases in waiting times for operations, and in unexplained deaths among those with mental health problems. One hospital trust in Kent has halted all non-urgent operations until the end of the financial year. The Government need to tackle important problems such as staff shortages and retention and a lack of social care. Recent statements reflect a warped sense of priorities. I hope that my right honourable friend Norman Lamb MP’s cross-party meeting with the Prime Minister last week will lead to a genuine consensual process to deliver a long-term settlement for the NHS and social care.
Ultimately, the NHS must not lose the humanity and compassion that are the hallmarks of an institution of which this country is rightly proud. Doctors do not see their jobs as being border guards or revenue collectors. Can the Minister assure us that clinical staff will never be expected to collect money? This would completely change the relationship between doctor and patient. Can she also assure us that hospital administrators will get funding for extra help, and if they do, will the policy be cost-effective? Talking of capacity, I heard a Minister on the radio recently whom I felt was actually encouraging people to come from abroad to use our NHS—as long as they paid for it. As waiting lists and queues in A&E and for GP appointments get longer, I would have thought the last thing we should be doing is encouraging more customers from abroad. Can the Minister say whether hospitals are charging a full cost-recovery amount—or more, or less? Does the hospital keep the money, or does it go straight to the Treasury like the rebate on drugs?
Lord Rosser (Lab)
My Lords, this is the first opportunity I have had to welcome the Minister to her new role. I thank her for the explanation of the purpose and thinking behind this order which we support. It brings into effect amendments to the Immigration (Health Charge) Order 2015. That order led to an annual immigration health charge, introduced, as the Minister said, on 6 April 2015, being imposed on non-EEA nationals applying for leave to enter or remain in the UK for a limited period. Those who pay it can access NHS services free of charge, apart from payments in respect of treatments or prescriptions for which UK residents have to pay.
The Minister has set out the reasons for making the amendments provided for in this order which, in essence, remove the immigration health surcharge exemption of intra-company transferees and their dependants, extend the human trafficking exemption to include victims of modern slavery and provide greater clarity in the interpretation of some rules in the Immigration (Health Charge) Order 2015.
I have two brief points. One of the amendments in respect of ICT workers has emanated from a recommendation of the Migration Advisory Committee. Are there any committees or other bodies looking at issues that might lead to further amendments to the Immigration (Health Charge) Order 2015? Or have we now reached the stage where the Government can confirm that they have no reason to believe that further amendments will be needed in the foreseeable future—and certainly not prior to our departure from the European Union?
In the House of Commons the Government said, as the Minister has reiterated today, that the immigration health charge collected £164 million for spending on the NHS in its first year of operation. These amendments could provide an additional minimum amount of £136 million for the NHS over 10 years. Can the Government give an assurance that the money raised from the immigration health charge represents additional money for the NHS which would not have been available had the charge not been in existence? The money raised must not simply be used to enable the Government to reduce the amount they provide to the NHS by the sum raised by the health charge.
Baroness Vere of Norbiton
My Lords, I thank noble Lords for their contributions. I shall address the specific issues raised where I am able to do so.
I say to the noble Baroness, Lady Walmsley, that I do not think this is a case of skewed priorities. It is, indeed, right and fair that we look to overseas visitors to make a contribution to the cost of the National Health Service when they use it. The noble Baroness seemed to imply that this was not a particularly large problem. However, overseas nationals using the NHS cost the NHS £2 billion a year, which I do not think is an insignificant sum. Non-EEA migrants cost the NHS £950 million a year. Again, that is not an insignificant sum. The cost for non-EEA temporary migrants, for example, amounts to £800 per person per year, which is quite a lot.
As regards the other issues raised by the noble Baroness, I am responding on behalf of the Home Office, not the Department of Health. Therefore, I hope that noble Lords will forgive me if I refer certain issues to the Department of Health for that department to answer their questions on those issues. However, I can address certain issues. The surcharge is collected by the Home Office but the NHS is currently, and will be, responsible for ensuring that charges are collected from the right patients. However, there will also be safeguards to ensure that no vulnerable patient is denied care when they need it.
The noble Lord, Lord Rosser, asked whether there were any other committees or bodies that might make further changes to the order. Removing the exemption for intra-company transferees was a recommendation of the Migration Advisory Committee, as was mentioned. The Government are not aware of any forthcoming committees or commissions that will make recommendations in connection with the surcharge. However, as with all government policies, the health charge is kept under regular review. The noble Lord also asked whether this money was additional cash for the NHS. I can confirm that the surcharge brings in additional money to the NHS to be spent in England, Wales, Scotland and Northern Ireland. The surcharge is an important source of new income for the NHS, which is shared by the NHS across the country using the Barnett formula.
The amendments bring intra-company transferees in line with other temporary migrants and provide an important clarification in respect of victims of modern slavery. The health charge helps the NHS remain sustainable, with migrants making a fair contribution to our health services while ensuring that our country remains the destination of choice for the brightest and the best. On that basis, I commend the order to the House.
Immigration and Nationality (Fees) (Amendment) Order 2017
Baroness Vere of Norbiton
That the draft Order laid before the House on 11 January be approved.
Baroness Vere of Norbiton (Con)
My Lords, the purpose of this order is to make minor technical changes to the Immigration and Nationality (Fees) Order 2016, which remains in place and continues to set out the overall framework and maximum amounts that can be charged for immigration and nationality functions, as agreed by Parliament last year.
The order before your Lordships’ House does not itself set fees; they are set by regulations which are updated annually. The regulations for 2017-18 fees are due to be laid before Parliament in March. The minor technical changes made by this order include bringing fees for entry clearance to the Channel Islands within the scope of the 2016 order. This change is being made following the extension of provision in the Immigration Act 2014 to those jurisdictions by way of Orders in Council, the effect of which will be to enable the Secretary of State to set fees in relation to them.
The order also makes express provision for the Secretary of State to charge for an approval letter in respect of applications for entry clearance to the Isle of Man as a tier 1 exceptional talent migrant. It will ensure that the scope of the charges set under the Immigration Act 2014 for above-basic Border Force officer services, such as attendance at premium airport lounges, or port-owned fast-track services, is broadened for the future, for example to cover above-basic services provided at sea. The order also permits a charge to be set for providing information in addition to the current services that include providing advice, training and assistance. We consider that this charge will better reflect the nature of the information and advice services we provide.
To be absolutely clear, this change does not affect existing Home Office basic status checking services, for example those provided to employers or landlords in the UK, which will continue to be provided free of charge. It does not affect in-country services, for example calls to employers’ or landlords’ helplines, or the nationality helpline, which will continue to be charged at local rates. Nor will it affect the availability of information for sponsors and educators. This order makes provision for international services only. Customers using these services are able to access more detailed information over and above the basic level of the service which is available online. This is a standard, free-to-use service available on GOV.UK in all cases.
We are also seeking to change the way in which fees for some information and advice are structured, adding scope for a fixed fee in addition to the per-minute fee currently provided for in the 2016 order. This is to accommodate likely changes to the overseas contact centre services, where a new service provider, who will assume responsibility for the service in May 2017, may offer and charge for webchat and email services in the future. The proposed maximum amount that can be charged for these new services is based on the per-minute rate set out in the 2016 order. To be clear, under the new contractual arrangements there are no plans to increase the per-minute fee for accessing telephone services overseas.
Lastly, the order will also update the description of an electronic visa waiver so that it accurately matches the process and policy intent, as set out in the Immigration Rules. This service enables visitors from Oman, Kuwait, the UAE and Qatar to travel to the UK without a visa.
I emphasise that we are not seeking to change the overarching framework for immigration and nationality fees, or the maximum fee levels that were agreed by Parliament and set out in the 2016 order. As I have already mentioned, the next set of immigration fees regulations, which are due to be laid in Parliament in mid-March, will come into force in April. They remain completely within the parameters agreed by Parliament and in line with the impact assessment published with the 2016 order.
It is important that we strike a good balance between the economic interests of the UK and the need to maintain a sound immigration system. Be assured that this Government will ensure that fees for immigration and nationality services enable the UK to retain its position as an attractive destination to work, study and visit. I beg to move.
Lord Rosser (Lab)
I thank the Minister once again for explaining the purpose and thinking behind the second order we are considering this afternoon. The order makes changes to the Immigration and Nationality (Fees) Order 2016, which sets out the maximum amount that the Secretary of State may charge for the provision of certain immigration and nationality-related services and products. In particular, this order extends certain provisions of the 2016 order to the Channel Islands and the Isle of Man. The powers that this order will give the Government in relation to the Channel Islands and the Isle of Man have until now been exercised by the Government under the terms of other fees regulations and powers.
In extending certain provisions of the 2016 order to the Channel Islands, this order, among other things, sets the maximum fee which the Secretary of State may charge a person who applies for entry clearance to the Channel Islands, with the actual fees to be set in subsequent regulations. As I understand it, though, in setting such a maximum fee—and, indeed, the maximum fee in relation to the approval letter in connection with entry clearance to the Isle of Man—the level of that fee must be consistent with the Home Office’s current laid-down approved charging policy. On the assumption that my understanding on that score is the case, I have no questions or queries to raise on the order.
Baroness Vere of Norbiton
My Lords, I thank the noble Lord for his contribution, and I can confirm that that is indeed the case. As I said earlier, we aim to set out shortly the individual fee levels for 2017-18 in regulations to be introduced by the negative procedure. This amendment to the 2016 fees order does not increase the maximum amounts that can be charged for any immigration or nationality service. The Government believe that those who use and benefit most from the immigration system should contribute more to the cost of the system, reducing the burden on the taxpayer. It remains the Government’s ambition to move towards a border, immigration and citizenship system that is fully funded by those who use it. I commend the order to the House.
Brexit: Financial Services (European Union Committee Report)
(7 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Falkner of Margravine
That this House takes note of the Report from the European Union Committee Brexit: financial services (9th Report, HL Paper 81).
Baroness Falkner of Margravine (LD)
My Lords, I am delighted to introduce this European Union Committee report. In doing so I congratulate the noble Baroness, Lady Neville-Rolfe, on her recent appointment to the Treasury and on her role as Minister in charge of “EU exit financial services”. I hope to have a very positive interaction with her in the future.
In the wake of the referendum of 23 June last year, the EU Select Committee agreed to undertake a series of short, co-ordinated inquiries into the implications of Brexit for various policy sectors. The Financial Affairs Sub-Committee began by looking into the impact on financial services. The committee took evidence from nine panels of witnesses—21 in total—during September, October and November 2016 and received written evidence. We are extremely grateful to all those who contributed to our work.
At this juncture it is customary for a chair to thank the members of the committee, but I do so today with particular emphasis, because we all, as a committee, worked at a frantic pace to produce this report in a timely manner so that the Government might take our views into account in setting their strategy for Brexit and financial services. So far we have not had sight of their response. I also want to single out for particular thanks the committee clerk, John Turner, who with depleted resources—as our policy analyst had been recruited by the Treasury—heroically managed to get us to this point. He was periodically assisted by Pippa Westwood, on loan from the EU Select Committee, and we owe her thanks as well.
From the outset we were aware of the huge importance of the financial services industry to the UK economy. The UK is the world’s leading exporter of financial services, with net exports in 2013 of $71 billion. The industry employs more than 1.1 million people—double that if related professional services are included—and contributes around 7% of UK GDP. The implications of a change to our trading status with the EU are potentially enormous. The consultancy Oliver Wyman estimated that £40 billion to £50 billion of the sector’s annual revenues—around a quarter of the total—were related to its business with the EU.
The relationship between UK-based financial services providers and the EU is underpinned by a system of so-called “passports”, which grant rights to do business across borders. This system is not as straightforward as it first appears: passporting rights are provided for by different pieces of EU legislation, affecting the provision of different services, and their use does not map onto the business models of firms in a straightforward manner. Unpicking the reliance on passports is therefore complicated—we were told that even the firms themselves did not have firm grasp of their own reliance on passporting—but it was clear that UK-based firms were likely to suffer from loss of access to the single market and the passporting rights that came with it. That has become more evident since our report was published.
As we were undertaking our inquiry it was not clear what model of engagement with the single market the UK would seek. The Prime Minister, in setting out the UK’s negotiating aims on 17 January, and in the subsequent White Paper of 2 February, said that the UK would seek a free trade agreement to allow for,
“the freest possible trade in goods and services between the UK and the EU’’,
but she ruled out,
“membership of the Single Market”.
This would also rule out any automatic passporting rights: they would need to be negotiated as part of the bespoke agreement she is aiming for.
If the UK were unable to negotiate a bespoke deal on access, it would have to fall back on third country equivalence provisions. However, we found that these were,
“patchy, unreliable and vulnerable to political influence”.
They are patchy because they do not cover the full range of activities in which businesses engage: a bank might be able to rely on provisions under MiFID II for its investment activities but could not carry out traditional banking services because the relevant legislation underpinning that, CRD IV, does not include equivalence provisions. Third country equivalence provisions are unreliable because financial regulation is liable to change: as EU legislation evolved, the UK would have to adapt its own regulation in order to remain equivalent, and be assessed to be so every single time. They are vulnerable to political influence because the European Commission has a role in deciding whether a country is equivalent.
We concluded that any bespoke deal should seek a deal to bolster the current equivalence arrangements, to cover gaps in the regime and to ensure the continuation of equivalence decisions as regulation develops. There was, and still is, considerable uncertainty over the level of access to the single market that the UK will retain. Our witnesses were consistent in advocating a transitional period during which businesses could plan for and adjust to the new circumstances. We were told that a “cliff edge”, with regulation and market access changing suddenly and without sufficient warning, would represent a grave threat not only to the business interests of the firms involved but to financial stability more generally. So the “new deal” scenario might prove extremely damaging.
I therefore welcome the Prime Minister’s reassurance that the Government will seek a “phased process of implementation”. An early declaration on this transition period by both parties—the UK and the EU—would help allay the fears of businesses and possibly prevent them moving operations out of the UK on the basis of a worst-case scenario. I draw noble Lords’ attention here to the advice prepared by PricewaterhouseCoopers for the Association for Financial Markets in Europe, which found that it would take banks between two and four years to put in place contingency plans for a hard Brexit.
The UK has been Europe’s dominant financial centre for some time. It has been particularly dominant in recent years in derivatives clearing through central counterparties. In April 2013 the UK accounted for half the world’s turnover of interest rate derivatives, and one-third of foreign exchange derivatives. It was even more dominant in euro-denominated interest rate derivatives, accounting for nearly three-quarters of world turnover.
This has drawn unwelcome attention from our EU partners. In 2011 the European Central Bank launched its location policy, which would have required euro-denominated trades to be cleared in the eurozone. The Government successfully resisted this at the European Court of Justice, but it is possible that the scheme could be revived—with appropriate legislative changes. It was notable that the President of France, François Hollande, made such a suggestion on 28 June, just five days after the referendum.
So the political incentive is there, and so are the legal means, with some tweaking. But would it be wise to remove London’s ability to clear euro-denominated trades? Clearing works through counterparties posting a margin, or collateral, with the clearing house. Because this is done centrally, the margin can be netted across multiple trades in multiple currencies, reducing the amount of collateral required. Research by Clarus Financial Technology suggests that disaggregating the euro component of one clearing house’s operation—LCH.Clearnet’s, for example—would cost the financial services industry $77 billion in additional margin, which would then not be available to lend to the real economy.
Our witnesses expressed doubts about whether a clearing operation comparable to that in London could be migrated to another European city. Some suggested that New York was the only plausible alternative location for such a service. Of course, any revival of the location policy would also apply to New York. This suggests that the benefits of the UK’s clearing system currently enjoyed by businesses throughout Europe would be lost or greatly diminished. Ultimately, it would not be in the EU’s economic interest to repatriate euro clearing. We hope that pragmatism will prevail.
This leads me to my final point. The real economy in the EU benefits from the financial services provided in the United Kingdom to an extent that militates against any large-scale attempt to prevent UK-based firms doing business with the EU. We heard a lot in our inquiry about the financial services “ecosystem”: the various services provided in the UK that interconnect in such a way that the effects of unpicking the ecosystem would be unpredictable. Unless another European centre could replicate that system, real businesses in the EU would lose out.
London has recently been ranked as the world’s number one financial centre again. Nowhere else in the EU comes close. Luxembourg is 12th and Frankfurt is 19th. We were not convinced that another EU location could step up and provide the services as efficiently and effectively as the UK currently does. If the economic argument trumps the political one, the EU should be willing to do a deal—but deals are ultimately dependent on rationality as well as goodwill. We hope that the UK Government will approach these negotiations with enormous goodwill and pragmatism, as the costs to the real economy of both the UK and the EU—and to real people’s lives—could be very high indeed. I beg to move.
The Earl of Caithness (Con)
My Lords, I thank my friend, the noble Baroness, Lady Falkner, for her introduction and the rest of the committee for its work. Sadly, I am no longer on that committee so I did not take part in this report; but I declare my interest, which is that I remember the 1950s and 1960s very well and do not want our grandchildren to live under such years as we lived under when Britain was going downhill rapidly. One reason why Britain has turned that corner is the financial services, which are the whole subject of this report.
Although the noble Baroness has said that London is the world’s leading financial centre, it has no divine right to be. It was not when I was a child, but it has now got to that position—and there are many countries interested in taking it away. Our change in status as we go from within to outside the EU is undoubtedly an extra threat to the dominance of London, and another undermining factor. The other side of the argument is of course that the EU has lost a major player in its financial discussions. Britain was always at the forefront. When I was a Treasury Minister, we were at the forefront of changing regulations in Europe—we took the lead because nobody else had the experience to do so. The capital markets directive, led by my noble friend Lord Hill of Oareford, and how that has changed direction is just one example of Britain’s influence no longer being in the right place.
We made our decision on 23 June and we must now make the best of it. This report will help the Government to achieve that. I was particularly pleased to read paragraphs 109 and 110, which refer to the transitional period and trying to avoid a cliff edge. As the noble Baroness has just said, the Prime Minister has been firm on that and given a positive lead, which is to be welcomed. Third-party equivalence and passporting are also important. In paragraph 56, the committee tells us that the Government are,
“analysing the difference between the opportunities afforded by passporting and third-country equivalence”.
It would be helpful if the Minister told us where the Government have got to with that.
Paragraph 58 refers to possible regulatory divergence between the UK and EU, and indeed between the UK and US. I thought this was a very good point to make because, since the report was published, we have all seen in the press what has been happening. We have a new President Donald—in fact we have two President Donalds: one in the EU and one in America. President Donald in America has made it absolutely clear that it is “America First”—and, indeed, America second and third—with the rest of the world about fourth. He has been backed up by Patrick McHenry, the Republican vice-chairman of the House Financial Services Committee, who wrote to Janet Yellen at the Federal Reserve, warning her that:
“Continued participation in international forums such as the Financial Stability Board, the Basel Committee on Banking and Supervision and the International Association of Insurance Supervisors is predicated on achieving the objectives set by the new Administration”.
That is worrying.
Let us take away the froth: we all know that America has always put America first in international negotiations, but what worries me is America not standing by its international obligations. Can the Minister say whether there was any indication in the Prime Minister’s meeting with President Donald of the USA—President Trump—that the US will not stand by those international obligations? If it does not, it is serious not just for the UK but for the EU and the rest of the world. Sir Jon Cunliffe at the Bank of England has said:
“It is important that we have proportionate, highest quality regulation – robust and in line with best international standards … The UK – in order to be a successful financial centre, you need good regulation … robust regulation and … regulators that have credibility and experience”.
Those are very wise words from Sir Jon, with whom I had the pleasure of working when I was a Treasury Minister. Abiding by those international obligations is so important. Sir Jon is also quoted in paragraph 51 of the report:
“If we want globalised financial services, we all have to have confidence in each other’s regulatory and supervisory machinery”.
That encapsulates it extremely well.
It is not just a trade negotiation between the political parties that is important, but agreement between the regulators. Can the Minister confirm that the intention is that provisions on international regulatory co-operation in financial services supervision will be included in all future trade agreements, both with the EU and other states, and that this would be an additional requirement in the future mission of the Financial Conduct Authority and Prudential Regulation Authority?
I turn from the report specifically to a wider view of financial services, because if we are no longer members of the EU, we will have to increase our trade around the world. There is no doubt that there is a new world financial order. Europe, the old aunt to the world, is getting even older and more irrelevant. In a recent report PwC said that by 2040, the E7—Brazil, China, India, Indonesia, Mexico, Russia and Turkey—could be double the size of the G7, which comprises the UK, Canada, France, Germany, Italy, Japan and the US. That will certainly change the dynamics. PwC went on to predict that, whereas in 2016 five countries in the world top 20 of projected GDP rankings, based on purchasing power parity, were in Europe, by 2050 there will only be three, all at a lower level than now.
One might think that gives us a great opportunity in dealing with the E7, but then comes the crunch. TheCityUK has done a lot of work on service trade restrictions and produced an index. It is interesting that, on that indexed basis, the E7 countries—which are going to be double the size of the G7 countries—are the most restrictive with regard to accountancy, commercial banking, insurance and legal services. We will have a tough job breaking into those markets. We have a lot of work to do, and if the US is not working to the international standard it will be even harder. I agree, therefore, with what the noble Baroness and her committee say in their report. If the City of London loses its status as the world’s premier financial centre, it will not be to other countries in Europe but to overseas—to New York, Singapore and China.
Can the Minister also comment on currency devaluation, through which we have the potential to really mess up the world and our financial services? We have been told that the euro is undervalued and the American dollar overvalued. Does the Treasury think that a currency devaluation between countries will start, which would be hugely damaging to us?
I will comment briefly on what I call “language and perception”. Language is hugely important in Europe. Phrases such as “common ground” and “a good compromise” are perfectly acceptable in Europe, while here they are portrayed in the press as wishy-washy and as Britain giving everything away. It is not as the press portrays it: it is 27 countries all having to give something and take something to reach a good compromise. I am greatly concerned that language will play a big part in our negotiations, and I hope the Minister is fully aware that this could be a major problem.
As for perception, a lot of people are influenced by it. If the perception is that Britain is not doing as well as before, that will compound our difficulties. One need only look at today’s papers: it is predicted that 30,000 jobs will be lost—that is the headline, the bad perception. That, however, is 0.5% of the people working in the financial services industry, and although the figure comes from the Bruegel think tank, it is at the worst end of TheCityUK’s projections, which thinks, at the other end of the scale, that as few as 3,000 jobs could go. Perception is of major importance.
We have no idea where we will end up at the end of our negotiations with the EU. I hope that the press and both Houses of Parliament will let the Government get on with the negotiations and do the best job we can. One good thing about Brexit is that if it all goes wrong, we have nobody to blame but ourselves.
Lord Desai (Lab)
My Lords, it is a pleasure to follow the noble Earl, and I also thank our chairman, the noble Baroness, Lady Falkner, for guiding us through this extremely complex subject. The more I study the problem of Brexit, the more complicated it appears to be, and I am sure that no one, when they ventured into this territory, knew exactly how complicated it was.
As the noble Earl also said, the City has seen both good times and bad times. The 1950s and the 1960s saw an involuntary exit from the sterling area. I do not know whether noble Lords remember the sterling area, but it was not a great thing after India had become independent and various former colonies began to have their own monetary policy. The City was lucky in then having the Eurodollar market—a result of the folly of American taxation policy—and soon after, when the US renounced its dollar-gold link, a huge market in foreign exchange transactions sprang up and the City was ready for that market.
At about that time—in 1971-72—we entered the European Economic Community, as it then was. In a sense, therefore, we entered the European Economic Community at a time when the City had recovered from its gentle decline and got into totally new activities for which it had, or soon got, the expertise. We know, therefore, that the City can suffer a shock and respond to it.
At the same time, we have to decide among ourselves—or, I hope, the Government will—what is the maximum loss that we could suffer. One of the best negotiating tactics is to figure out the worst-case scenario that we could face, and then find out if there is any way of avoiding it. The worst-case scenario is, obviously—as I said—that if there is not a good deal, we walk away with no deal. A no-deal scenario would mean no passporting, no equivalence and starting from scratch. We should mentally work out what that would mean for the City. Among our witnesses, some were, I would say, rather complacent, saying, “Oh, we are just so good that they will have to come to us”. They say that our eco-system—I was fascinated by that word, because I am sure that most of those people do not like any of this global warming stuff, but they use the word—is so fine and beautifully calibrated that our sheer competitive advantage will make them come to us. I am not so sure about that; it would mean that we do not need to worry about passporting or equivalence and we would still come out on top on sheer competitive advantage. Just as we are willing to suffer an economic loss for the sake of our sovereignty, they are capable of suffering economic loss through their reluctance to come to London. We must not assume that they are going to be terribly rational and will come to us. I keep hearing that, and I doubt it very much.
One advantage for us is that the regulatory system of financial markets is global and not confined to the EU: the EU melds in to the regulatory system headed by the Bank of International Settlements, the IMF, and so on. We have played a major part in the architecture of that system, so, in or out, we shall continue to be relevant to the architecture of the global financial system. To that extent, we ought to be able to put it to the EU that, in or out, the rules that we all have to obey are pretty common, and they are almost the equivalent of equivalence. We all have to follow certain global rules, so there cannot be too much of a disruption between us and them in the area of financial regulation.
I am not worried either that although we may establish equivalence in today’s terms, in the future they might change—and then what will we do? I do not think they will change arbitrarily, independently of the global system, because we will all have to dovetail with each other in that system. The technology is changing so fast that we all have to be ready as new products and technologies come up. The framing of financial regulations will therefore have to be a fast, global and innovative process, and I am sure that we will play our part in that.
Can we work out what we prize most within our interests in keeping the financial centre in the front? It might turn out that immigration is a crucial topic. It might be that our need to access the best talent internationally, and therefore have flexible immigration rules, will be more central to our position on the financial sector than anything else. In agreeing to whatever we agree with the EU, one thing that we ought to remember is to retain the flexibility of admitting highly skilled global experts in the financial markets, and not make the mistake of going overboard in restricting immigration by not distinguishing between those who are likely to be helpful to us and those who would be less helpful.
In the final analysis, we will have to be ready for the worst-case scenario—a repeat of the sterling area scenario, as it were—and to hope that new markets spring up for us while the damage is minimised. At the same time we ought to try as far as possible, consistent with our general aims of a hard Brexit, not to lose an advantage which we could retain.
Lord Shutt of Greetland (LD)
My Lords, I too pay tribute to my noble friend Lady Falkner of Margravine, who has steered us through several of our deliberations over the last year or so. The report, like all those which come from our EU committees, is based on the evidence. What those of your Lordships who have not been on the committee are getting is what we have heard from other people and the questions that we have been able to put to them.
There is no doubt that financial services are a highly significant sector of the United Kingdom economy. We are told that they employ 1.1 million people, two-thirds of whom are outside London. It seems to me that 1.1 million jobs are likely to support 4 million United Kingdom citizens. On any basis that is significant, serious and important. I have three points to make in my contribution, which really concerns livelihoods. I will come to these in order because I want to speak of some of the people who came to see us.
First, on 19 October a man by the name of Simon Kirby, the Economic Secretary to Her Majesty’s Treasury, came to see us. The noble Lord, Lord Desai, asked him about clearing and said:
“We have had conflicting evidence about what will happen to clearing houses”.
The response from Simon Kirby was:
“There is a lot of noise about clearing. The whole of Europe, the UK included, would be worse off if that particular part of the financial services that London offers was dismantled and redistributed across Europe”.
In a further question, the noble Lord, Lord Desai, talked about clearing and Simon Kirby said:
“It is an element of the negotiations. Is it the most important element? Probably not, but it is … significant”.
That sounded complacent to me.
On 2 November we then had a visit from Xavier Rolet, the chief executive of the London Stock Exchange Group, and I quoted Simon Kirby’s evidence to him. We were aware that Xavier Rolet had earlier indicated that 100,000 jobs were at stake if clearing were to relocate. He confirmed that,
“we stand by our estimate of 100,000 jobs”.
When I pressed him a little further as to where these jobs were, he said that he would,
“provide a more detailed estimate”.
That was to happen “reasonably shortly” and so it did, in that on 11 November we had further written evidence sent from Xavier Rolet, together with an EY report that had been prepared for the Stock Exchange. He said that the report estimates that up to 232,000 combined financial and non-financial jobs throughout the UK could be lost. This was a detailed 44-page report, which sets out where those jobs are. Those 232,000 jobs suggest to me that we are talking about the livelihoods of 1 million people.
The last thing that we had was not presented to our committee but—as things keep moving—was the White Paper from Her Majesty’s Government on 1 February. Perhaps it is better to call it a grey book. In its section 8 on pages 42 and 43, there are a few paragraphs about financial services. Paragraph 8.25 says:
“In our new strategic partnership we will be aiming for the freest possible trade in financial services between the UK and EU Member States”.
So Simon Kirby’s complacency has now moved to an aim. Where is the determination? Will it come from the noble Baroness, Lady Neville-Rolfe, who I now congratulate on her new role?
Lord Butler of Brockwell (CB)
My Lords, I declare my interests as noted in the report. After the figures of potential job losses given by the noble Lord, Lord Shutt, I hope to cheer the House up a bit. I have come to think that since the report which we are discussing was published in December, the impression it gave about the problems presented by Brexit for the UK’s businesses and financial services is perhaps too pessimistic.
As a member of the sub-committee which produced the report under the courteous and skilful chairmanship of the noble Baroness, Lady Falkner, I believe that it correctly reports the importance of our financial services to the UK economy; the unreliability of the equivalence and passporting regimes which enable UK financial institutions to provide services to the rest of the EU; and the need for a regime to ensure that UK financial services do not face a cliff edge when the UK leaves the EU. All that is correct, but the reason why I have become more optimistic is that this report is understandably UK focused. It is about what UK businesses want and need and not so much about what EU businesses want and need. When the issue is considered from the EU perspective, more grounds for optimism emerge. The reference to avoiding a cliff edge implies that there is a sharp fall on the other side of the cliff, but when the interests of the EU partners are taken into account, I wonder whether that implication is correct.
The report received many representations from outside—for example, from the British Banking Association—which urged the need for a transition period to avoid the cliff edge, which has already been referred to. It is widely recognised that the phrase “a transition period” has two meanings. It can mean an extension of the period in which existing arrangements continue to apply while a new bilateral agreement is negotiated. It can also mean a period after a new bilateral agreement is reached before it comes into effect so that businesses on both sides have time to adjust to the new arrangement. Certainly a transitional period—in both senses of the phrase—is better than a cliff edge, but a rapid agreement respecting the mutual interests of both sides is better than either. The refrain that we most insistently hear from businesses is that they want certainty and they want it as soon as possible.
A report by an official working group for the European Parliament’s Committee on Economic and Monetary Affairs, seen by the Guardian newspaper, warns of the importance of the London market to the EU partners. According to the Guardian, it says:
“The exclusion of the main European financial centre”—
that is, London—
“from the internal market could have consequences in terms of jobs and growth in the EU. It is in the interest of EU 27 and the UK to have an open discussion of this point”.
It is relevant that, while 5,500 UK firms benefit from passports for trading financial services in the EU, more than 8,000 EU firms benefit from passports for trading into the UK. It does not follow that we can take equivalence and passporting regimes for granted but I believe it does follow that the EU partners have an interest in not using them in a vindictive manner.
I do not go along with TheCityUK in its view reported last week that Brexit will enable London to become more attractive to worldwide businesses by tearing up those parts of the EU regulatory regime which UK firms find finicky and burdensome. It will still be necessary for the UK to retain harmony with EU regulations. This may involve conforming to regimes and requirements which we will have no formal role in formulating but it does mean that we will have a mutual interest in keeping close to each other. Since the UK has often been a leader in formulating effective regulation, this is likely to be in the interests of both sides. Certainly, when the UK’s approaches have differed from those of our EU partners in the past, it has not been because the UK has been less rigorous.
Those are important issues for companies but there are also important issues for individual citizens. One illustration is the provision of insurance. It would be tedious for UK motorists if they had to start applying for green cards again or pay extra insurance for trips to Europe because it is no longer recognised that UK insurance policies provide the same minimum cover as their EU counterparts, but it would also be tedious for European motorists if their policies were no longer accepted in the UK. A similar point applies to the European health insurance card.
The old injunction against cutting off one’s nose to spite one’s face is particularly apt in both the UK’s and the EU’s approach to these matters. In all these areas we must hope that the negotiations take proper account of the mutual interests of both sides and are not driven by ideology.
Viscount Eccles (Con)
My Lords, it is very usual to say how pleased one is to follow the previous speaker but I find myself in a slight embarrassment because I so completely agree with the noble Lord, Lord Butler, that I am not going to be able to put it without repetition and nothing like so well. I congratulate the sub-committee and its chairman on this report. It is a very useful document and needs to be studied with great care. It has been slightly overtaken since the days of the referendum by the 12 principles and the White Paper. Nevertheless, that gives us a theme which is “exit from” and “a new partnership with”. I 100% endorse everybody who says that we need and want a new and productive partnership with the EU and this needs to be negotiated with the best possible will on both sides.
I hope we can achieve an agreement within the two years. There I very much agree again with the noble Lord, Lord Butler. I do not see the argument that two years is never going to be enough as a positive one. I regret that people keep saying two years is not enough. The important thing about the two years is to reach an agreement and then to be clear, because we have a new partnership, on how we are going to handle all the changes that will inevitably follow after two years, and changes would have followed whether we remained a member or not.
Within those two years there is nothing more important to negotiate than financial services. In considering the negotiation we should take very careful account of the present position. As the noble Lord, Lord Desai, said, the background is very complex and quite troubling. After all, 2008 is not so long ago and many things happened then which were unexpected. Although we have made much progress since then, there is still a great deal of risk out there in the world as a whole. Indeed, I think we would be incorrect to think about financial services in the way that we might think about the effect of the single market on, say, the building of aeroplanes or the production of motor cars. The European context does run there to a large degree but it does not run in financial services because they are truly global.
In the G20, which is representative of two-thirds of the world and 85% of its economic activity, we have got six members of the EU and the European Union itself, and based in the Bank for International Settlements there is the Basel Committee, again with nine EU members and the EU and the Financial Services Board. Much of what has been done which applies to Europe, which has 7% of the world’s population, has been achieved by these international institutions. The European Union, some of its members and ourselves have been very deeply involved in all that.
So far, so much the better as a result of all those efforts since 2008, but this is not a time to disrupt the progress. It is not a time in which either the 27 or we have an interest in disrupting the processes which have been going on. That highlights the partnership, the need for it to be approached positively and the need for it to work.
Just as a note of dissent, there is the question of the dealing and settlement in euros. If you look at that on its own, changing the rules in the way that has been suggested is nothing more nor less than a trade barrier and would be very disruptive. It cannot be in anybody’s interest to generate that disruption.
On passporting and equivalence, I hope that the effect of the great repeal Bill will be that on the day we exit, we continue to abide by all the law and regulation which has come to us through the European Union. Logically, that means that equivalence is there. I cannot quite see what the argument against it would be. If we get to that day, the question then becomes: what do the deals say about the way in which we and the 27 approach any changes that they or we feel are necessary? In that sense, we would have a “transition period” that would never cease, because we are going to need to have arrangements for dealing with changes as they take place. I am more optimistic than some other people who approach this problem. I join the noble Lord, Lord Butler, in that optimism.
Lord Dykes (CB)
My Lords, it is a pleasure to follow the noble Viscount, Lord Eccles. I have always respected the sensible approach he has to these practical matters of markets and business. I add my thanks to the other speakers in this debate, particularly the very distinguished, competent and professional chairman of the committee, the noble Baroness, Lady Falkner of Margravine, and her colleagues who produced this excellent report. This is a complicated area, but the report is not too long.
Unusually, I do not agree with my noble friend Lord Butler who said that he feels very optimistic, in contrast to this report. The report is realistic, but it espouses a not irrational, not excessive, but sensible and proper degree of pessimism about the difficulties we will see in the future.
There are many warnings in this excellent report, and I shall quote briefly two significant parts of it.
“We conclude that, if the current passporting regime is not maintained”—
and we cannot assume that it is necessarily going to be—
“the Government should seek a deal to bolster the current equivalence arrangements for third country access, to cover gaps in the regime and to ensure the continuation of equivalence decisions as financial services regulation develops”.
More fundamentally:
“Negotiations on the UK’s new relationship with the EU are likely to take longer than the withdrawal negotiations under Article 50”.
That is a very serious problem. The report also states:
“A transitional period will therefore be needed in relation to financial services following the completion of the Article 50 process, when the UK leaves the EU. This may need to be adapted and extended in the light of subsequent negotiations on a new long-term relationship with the EU. This will enable firms and others such as regulators to adapt to any new business conditions”.
There has been a lot of coverage in the press of the Article 50 Bill, which has now successfully passed its Commons stages and will come to us when we resume after the mini-recess that is just about to begin. It is very interesting to observe how the intelligent commentaries in various parts of the press—but not all of them, unfortunately—are coming increasingly to the conclusion that it would be much better to maintain the status quo in the relationship between the new separate UK total market—financial and other markets, including physical markets—and the rest of the EU.
I was therefore very impressed when the Prime Minister in her Lancaster House speech outlining her plans and the details said:
“I know that this—and the other reasons Britain took such a decision—is not always well understood among our friends and allies in Europe. And I know many fear that this might herald the beginning of a greater unravelling of the EU.
But let me be clear: I do not want that to happen. It would not be in the best interests of Britain. It remains overwhelmingly and compellingly in Britain’s national interest that the EU should succeed. And that is why I hope in the months and years ahead we will all reflect on the lessons of Britain’s decision to leave”.
Astonishingly it has not been noticed by many people, but in the first paragraph of her Sunday Telegraph article on 8 January the Prime Minister emphasised that the Brexit decision was only part of the reaction as a result of those who voted no in the referendum. The rest of it was a general disaffection with the state of people in the British economy, their feeling of job insecurity, older people feeling they were being left out—although pensions have been more generous in recent years—and, of course, 16 and 17 year-olds were grumbling because they were not included in the voting system this time round.
There was an astonishing mixture of things in an advisory, opinion-giving referendum. We have to bear that in mind. I make no criticism of the Prime Minister; she was not herself elected and she could not be under the system. She took over from the previous Prime Minister, Mr Cameron, whose vote was less than one-quarter of the total voting population. I believe that Theresa May knows that the more she thinks about it, the more she has to sustain the very good relationship that we ought to have with the EU.
Sixty per cent either abstained or voted against the referendum result. That meant that the total amount of the population will have enormous second thoughts. Those second thoughts are developing. We see the post coming in and more and more emails, particularly on the financial sector and worries about the famous London market. I declare an interest tangentially as a member in those days of the London Stock Exchange and a partner in a big institutional firm. We were not part of the financial markets, as such, although we were indirectly. We were all very proud of what the city has achieved and of the London financial markets becoming the leading market in the world. It is a tremendous asset. It is ironic that the very market that has sustained and cultivated the success of the euro itself as a currency—the main market in the world—is in a country where a good number of people have become increasingly psychologically afraid of the euro, because we were driven out of the exchange rate mechanism in humiliating circumstances in 1992. That has lingered as a feeling.
Since the war, there have been eight devaluations of Britain’s currency—three by government action and five in the marketplace. The recent one when the referendum result was announced was modest, and not too bad against the dollar and the euro. That is not a good background for us to be too overoptimistic about our ability to do what we were intending to do for those who did vote in the referendum and voted just about Brexit and nothing else.
I think there was also a blending and mingling of all those emotions, not least the fear of immigrants. Theresa May as Home Secretary was responsible with others for not bothering to invoke some of the articles of the Rome treaty—the TFEU as it now known—that gave some restrictive possibilities to limit the number of immigrants as if there was no reason to have a free-for-all, which we seem to be accepting, including from Romania.
The definition of optimism given by the noble Lord, Lord Butler, is, I think, a little esoteric for the purposes of this debate. It reminds me of the lovely old Hollywood joke: the true definition of optimism was a 98-year old man who got married for the seventh time and deliberately bought a new house near a school—that kind of optimism, maybe. We have to face up to the realities of this difficult matter.
In the debate last autumn in the Moses Room on the single currency, I noticed how the noble Earl, Lord Caithness, praised the euro for being a successful currency. It is now the second world reserve currency after the US dollar. It is getting closer and closer to the US dollar. The European Union, of course, has a much lower overall national or international debt coefficient than the United States. As noble Lords know, the difference is $19 trillion for the federal Government in the USA and $12 trillion for the European Union with 500 million people.
There is a lot to be working for. In this feeling that we have a lot of negotiations to come, I wish the Minister very well in terms of the details and add my congratulations on her new post. The conclusions are more and more to do with somehow leaving the European Union in a formalistic sense, but keeping all the relationships going—the markets, the physical relationships and the acquis communautaire. Of course, it will be put into what is going to be the repeal Bill, if it comes along. I do not use the adjective “great”, by the way, because I have my doubts about it. Therefore, we are ending up with the same kind of bureaucratic input that people who did not like Europe were madly complaining about when they said that the European Union was far too bureaucratic and heavy. All those instructions, regulations and requirements will be inserted into the repeal Bill if we maintain the status quo in all the markets in Europe that we are suddenly so keen on.
The whole thing is becoming more and more shaky as an approach for a mature Government in a mature Parliament in a mature country. This country needs to recover the self-confidence we had as an upstanding and successful member of the European Union, whatever the future structure and decisions may be. The Article 50 Bill has only just started. There is a long, painful and bumpy road to come. No one can predict how it is going to turn out, but I think the second-thought syndrome is becoming increasingly powerful.
The Earl of Kinnoull (CB)
My Lords, it is a pleasure to follow the noble Lord, Lord Dykes, with his lovely clarity of expression and thinking all round. I declare my interests as set out in the register, particularly in respect of Hiscox insurance group and Schroders plc. I warmly join in the many congratulations for the noble Baroness, Lady Falkner of Margravine, and her committee and staff on producing in double-quick time a carefully thought through and thought-provoking report.
I will confine my remarks to three high-level areas and not descend into the detail. The first is people. There has been a lot of debate and comment from all parts of the House about the 3 million people from the EU 27 who are here in Britain. A strong moral case has been made, saying that the uncertainty they are living with should be made certain.
There are probably two other things relevant to this debate to think about, the first being the need to engender a good atmosphere as we begin the negotiations. I should also have said that I am a Member of the European Union Select Committee, and in that capacity visited Strasbourg a couple of weeks ago for three days. We met 17 MEPs from more than 10 countries and were able to talk about a lot of issues, both on and off the record. What was interesting was how many of these people had friends and relatives living in the UK and how they too felt the uncertainty, in a slightly vicarious way. It would be good to address that, which would help to engender the very positive atmosphere we will need at the start of what will be complex and long-lasting negotiations.
The second and possibly harder-hitting point is the old City adage that capital follows talent. In my commercial career, I have seen that adage acted out time and again. The Minister has a tremendous commercial career behind her too, and a wonderful, sharp and seasoned brain. I am sure many here are thinking what I am thinking: that it is jolly good news that she has appeared at this time for our country in this role. She will be a great help. I have managed financial services businesses, including in continental Europe, for a number of years, using passports of course, and in Bermuda using the equivalence regime. Everything that one did was about trying to manage the talent and keep them attracted to and retained in the business, and when new talent was needed, to attract it. Anything that damages the ability of businesses to attract and retain talent is definitely not in our national interest, and I worry enormously that the uncertainty that people from the EU 27 in the financial services sector are living under at the moment is doing just that. That therefore needs to be coped with, and I would very much welcome the Minister’s comments on that line of thinking.
The second line of thinking, again born out of my business experience, concerns the mindset we should have going into the negotiations. Our mindset should be very much about having regard to the interests of the 500 million in the EU 28—including the United Kingdom—rather than to the narrow interests of the 65 million in the UK. In my experience with repeat order customers—the EU 27 are most certainly repeat-order customers of UK plc—at the end of every transaction one needs to achieve equity in the consideration that has passed between the parties. Everything is about communication, and again, it would be extremely helpful to make sure that our own people who are engaged in the negotiation at every level have that mindset.
I saw as well during our three days in Strasbourg that a number of what one might call macho statements by political commentators and politicians were being reported through the British press and other media. The lingua franca in Strasbourg and Brussels is of course English, so everyone reads the British press and watches the BBC and CNN, for example. Those statements were being faithfully reported, and it is not helpful to the sentiment there if it is seen that we are not having regard to the 500 million but solely to the 65 million. Again, I would appreciate some comments on that.
When we come to the negotiation, there are certain sectors where we have an incredibly strong hand, and we should not play that hand ungenerously. One is the reinsurance sector, which I am very familiar with, where we have the strongest hand. So we should act generously and be seen to be doing that, because that will help us in sectors where possibly we have a weaker hand.
The third area I want to talk about is the cliff edge and the very helpful paragraphs in the report about that, beginning at paragraph 100, and the transitional arrangements. Again, I am happy to report from Strasbourg—where the cliff edge came up—that there was a generally warm feeling towards the transitional arrangements on the part of MEPs. They are just MEPs, but I do feel that their warmth is probably reflected in their countries. I am going to mix metaphors in an appalling way now, but there was certainly a feeling that the cliff edge cuts both ways. They too felt that this was important.
I want to sound a warning bell, again born out of business experience. As the noble Lord, Lord Butler, said, businesses hate uncertainty. Using just an interim arrangement, with the ability to push a horrible negotiation down the road for two or three years, is possibly damaging to business as well. We should try to sort out everything we possibly can in these two years, putting into a transitional arrangement only those things that have to be put there. If we do not, we will cause damage to business.
I cannot resist talking about optimism, because others have. Regarding the bits that I know—the insurance sector and to a lesser extent the fund management sector—I am in the Butler camp. For those sectors, good and sensible deals can and probably will be done, and I feel reasonably optimistic. I do not at all underestimate the very many hard yards ahead. I commend again the noble Baroness, Lady Falkner of Margravine, for her tremendous report.
Lord Tunnicliffe (Lab)
My Lords, I too would like to express my sincere thanks to the noble Baroness, Lady Falkner, her committee and the members of the EU Financial Affairs Sub-Committee for producing this report as well as to all those who have spoken in this afternoon’s debate. I am grateful to the committee for looking at this issue first of all. Having read the report, I think it is clear this decision was a wise one, given the number of knowledge gaps that undoubtedly exist both in government and industry, and the lack of a strong evidence base which will be required.
In the months following the referendum, the overriding concern has been on what our future relationship with Europe and the rest of the world will look like. In that, there has been an implicit assumption that we have a sufficient knowledge, capacity and basis upon which to make such decisions. The people of this country voted to leave the European Union, and it is our duty to facilitate that. That being said, it will be a process that goes against all the natural instincts of the Houses of Parliament. We are not as institutions good at making a lot of difficult decisions quickly. It will be a strain. That is why reports like the one we are debating today are vital prisms through which we can explore such complex issues. But even such reports, produced and debated in such a short period of time, have to be considered in the current political climate. I wonder, for example, how different this report would have been if we had heard from the Prime Minister prior to its publication.
It will come as no surprise to noble Lords that I am interested in process. I am interested in the mechanics of the system. This report confirmed my suspicions that at present we are not sufficiently prepared for the monumental task of extracting ourselves from the European Union. I do not doubt the determination of the Government in wanting to maintain a strong and vibrant financial service sector here in the UK. However, I doubt whether they have the strategy to achieve this. I fear that, instead of a clear plan, the Government are clinging on to the notion that our position as a global leader in financial services is unshakeable.
Many noble Lords this afternoon have discussed this issue, and there has been a general conversation about being sensible, about this being two-sided and about Europe needing us as much as we need Europe. There have been conversations in Strasbourg and the rest of Europe where that impression has come across. The problem is that the negotiations will not necessarily be conducted by rational people looking at economic advantage; they will be conducted, dare I say, by politicians, who on occasions have been known to be irrational—indeed, tragically irrational.
Our lack of knowledge is well illustrated by passporting, which has become the issue to be discussed whenever Brexit and financial services are mentioned. Passporting is obviously related to equivalence—and, separately, the cliff edge—and those seem to be the key areas of concern. Why has passporting caught the imagination of so many people? Because it perfectly exemplifies our relationship with the EU. Passporting has become integral to the way in which banks operate. As Douglas Flint, group chairman of HSBC, told the committee,
“Everyone is affected by passporting rights to a greater or lesser degree”.
It also cuts across the most significant debates we will have about Brexit—notably, our membership of the single market, which the Prime Minister has confirmed Britain will no longer be a member of, as well as equivalence and regulatory divergence.
Despite all this, it appears that our knowledge of the system in which we are operating is limited. Before we can make a decision about where we want to go, we surely need to figure out what we have been doing and where we are. As the report states,
“It is striking that some firms do not themselves appear to be aware of their reliance on the current passporting arrangements”—
the implication being that they do not have a full picture of the reciprocal impacts that passporting has on both the UK and EU financial markets. I for one believe this to be a startling realisation. There is a responsibility on the Government and industry alike to rectify this deficit as quickly as possible.
In a Written Answer to my noble friend Lady Hayter on 24 January, the Minister stated that:
“Government ministers have met with a full range of institutions from across our financial services sector”.
It is encouraging that such conversations are taking place, but I wonder whether the noble Baroness could go into more detail than she has provided on meetings that related specifically to passporting rights. Do the Government share the view of the EU Select Committee about the awareness of passporting access across the industry? If so, I would be interested to hear how the Government intend to resolve this problem.
Given that the Prime Minister has made it clear that she has no intention of Britain remaining a member of the single market, could the Minister outline what implications the Government believe that will have for our ability to maintain passporting rights, and whether it will be a priority for the Treasury in the negotiations?
That brings me to the evidence base more generally. I appreciate that not all communications, let alone the detail of those communications, will or should be available for scrutiny. What I am asking for—and I believe that I am justified in doing so—is evidence that the Government are building the robust analysis and filling the gaps which the report made clear are so apparent. Can the Minister say whether, further to the request by the EU Financial Services Sub-Committee, the Treasury is modelling the effect of different scenarios on the deal that will be struck between us and the EU?
Related to that, will those models take into account the executive order signed by President Trump, which seeks to review the working of the Dodd-Frank Act? I know that the Government have been keen not to comment on the domestic policy of the US, but surely when minimum standards of financial regulation are at risk we have a responsibility to advocate measures which were designed to protect consumers.
Indeed, the report warns of the challenges associated with possible regulatory divergence between ourselves, the US and the EU. The UK has played an integral role in the design, implementation and management of financial service regulations. Do the Government intend that we continue to work with our European partners on regulation setting?
We have heard today some of the more intricate matters that the Treasury will have to consider. However, the point that I am trying to make is that, if we do not understand the basics of the overall industry, we will not be properly prepared to discuss the parameters of a debate on, for instance, as mentioned by a number of noble Lords today, our continued position as the European clearing centre, or—we have heard less of this, but it is important to London—as a hub for fintech development. Too often these basics are overlooked.
We must not confuse the mass of detail that we have for understanding the industry as a whole. The report left me with the impression that we do not have the necessary understanding of the industry to enter these negotiations, that the industry does not have a complete understanding of itself and that the Government have yet to find the tools with which to fill these knowledge gaps. I hope the Minister’s response will put my concerns to rest.
The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)
My Lords, the noble Baroness, Lady Falkner of Margravine, and her committee have produced an excellent, clear report. I thank her, and others, for the warm welcome they have given me in my challenging new role. I join others in thanking her and members of the committee—some of whom, along with others, have spoken with great clarity today—for their work. I especially thank the clerks, who have done a really good job at great speed.
It is obvious that financial services will be an important component of the EU exit discussions and it is helpful to have a comprehensive document covering all the issues at this exact stage—as well as to have this debate before we submit our government response to the committee. This debate is especially useful to me, as only last week I was given responsibility within the Treasury for EU exit on financial services. I can reassure noble Lords that I have a long history of working with, and operating in, the EU and I believe that we can build a strong new partnership on financial and economic matters.
The links between the UK and our nearest neighbours in Europe are numerous and long-standing, as the Prime Minister said when she highlighted financial services as a priority. Above all, it is in our interest for the EU to flourish and we will be aiming for the freest possible trade in financial services between the UK and the 27 member states.
I am especially grateful to my noble friend Lord Caithness, who gave us the benefit of his experience at the Treasury and an insight into the global future. This underlined to me the importance of maintaining the UK’s pre-eminence in financial services. Having, like him, operated for many years in the EU, working with EU partners, I very much agree about the importance of language. Notions such as seeking common ground are good concepts in negotiation.
The noble Earl asked about the risk of currency devaluations. He will remember that Treasury Ministers have to be very careful about what they say regarding currency. However, since the financial crisis, the Government have strengthened the domestic financial stability policy framework and, as the Governor of the Bank of England noted, the UK financial system has passed several tests over the past year. The Treasury, the Bank, the Prudential Regulation Authority and the Financial Conduct Authority will continue to monitor any risks closely. That is very important and reassuring.
As a glass-half-full person, I was glad to hear the noble Lord, Lord Butler of Brockwell, sound more optimistic than he did at the time the committee produced its report. My noble friend Lord Eccles and the noble Earl, Lord Kinnoull, felt the same. The noble Lord, Lord Butler, is right about the interest that the EU has in a sensible outcome. He may well know that four-fifths of EU 27 capital market business is conducted through the UK, and he is also right to say that we need to keep close to each other.
One key issue that the report discusses is that of access to EU markets. I listened with great interest to the noble Lord, Lord Dykes, who said how important it was to remain a confident country in this time of change. The Prime Minister helped us here with her speech at Lancaster House, in which she made it clear that we would not seek membership of the single market. Instead, we are seeking a new strategic partnership with the EU that complements the needs of our industries, including the needs of financial services companies and their customers.
That means that we are working closely with firms to understand what issues Brexit raises for them and what a good outcome might look like. Our work so far shows that the answer to that question varies enormously according to whom you ask. Many firms, for example, across banking, asset management, insurance and payment services, which currently trade across borders, benefit from passporting rights, but that is less true of firms that provide retail financial services chiefly within the UK, such as domestic insurance firms and high street retail banks.
We are working to understand the needs of the wide spectrum of financial services interests in the UK. That includes, for example, the car companies, which provide lease financing for most new cars bought in Britain today. It means understanding the interests of the wider financial and related professional ecosystem—a word that others have used—including accountants and lawyers, as well as thinking about the interests of consumers of financial services, including the less well-off or those who might be misled. I liked the example given by the noble Lord, Lord Butler, about car insurance for travellers in Europe.
As the report rightly notes, various elements of EU financial services legislation contain equivalence provisions, some of which can offer a basis for firms from third countries to provide services across the EU. We have heard calls from our stakeholders on this and studied the industry analysis proposing these equivalence regimes as the basis for future market access.
The noble Lord, Lord Tunnicliffe, asked about the depth of discussion on passporting rights. The simple answer is that at nearly every meeting on financial services interests there is a discussion of passporting rights—but, as with equivalence, different people are talking about different things. We need some flexibility in our negotiations, but I reassure this House that in our new strategic partnership we will seek the freest possible trade in financial services between the UK and the EU. In the Prime Minister’s words, it will be on the basis of a “bold and ambitious” free trade agreement.
As the committee’s report noted and our debate today has illustrated, this is an exceptionally complex set of issues. For this reason, I am determined that consultation with our industries and stakeholders should continue throughout the negotiating process, which will enable us to improve our evidence base and understand the impact of different scenarios. Those themes from the report were picked up by the noble Lord, Lord Tunnicliffe. The noble Lord also asked about Dodd-Frank. It is frankly early days on that. Our simple aim is to secure the future of a sector responsible for 7% of GDP and over 1 million jobs.
A second area of enormous significance to the sector is to avoid a so-called “cliff edge”. As the report highlights, this will be important to a large number of industries across the entire EU. For financial services firms, this is of particular importance because of the deeply integrated market for financial services and long-established regulatory coherence. To pick up on the points made by the noble Baroness, Lady Falkner, we want to give businesses enough time to plan and prepare for the new arrangements that will be in place. We want the change from where we are now as EU members to our new relationship with the rest of the EU to be as smooth and orderly as possible. It is in recognition of this that the Prime Minister has made it clear since the committee reported that a phased process of implementation will be sought.
I understand the noble Baroness’s point about the need for an early agreement on phasing to help allay the concerns of the financial services industries. We also believe that such a phased process of implementation can be in the mutual interest of the UK and the EU. Inevitably, the details of the timing of the implementation period will have to be discussed through the process of negotiation with our EU partners.
A third priority that many noble Lords touched on, including the noble Lord, Lord Desai, and the noble Earl, Lord Kinnoull, and which I think is extremely important, is access to talent. The noble Earl, Lord Kinnoull, warned that capital follows talent. I certainly remember that from my time in business. For some, it is the overriding issue. Fintech firms, for example, tell us they rely on drawing from an international talent pool. Europe leads on fintech, much of it here in London, and we are committed to staying at the cutting edge of financial innovation. Let me highlight the statistic from the report that is so telling on talent: of the 1 million or so people who work directly in our financial services, 60,000 are EU nationals and 100,000 are non-EU nationals. To respond to the noble Earl, we recognise that the ability to attract and look after highly qualified staff and transfer them easily between the UK and the EU is a key issue, including for insurance.
In future we must ensure that we can control the number of people coming to the UK from the EU. We are considering the options for our future immigration system very carefully. As part of that it is important that we understand the impacts of different options on different sectors of the economy and on the labour market. Companies are not only discussing with us how we keep attracting new talent; they want to know what it means for the international staff they already have and value. It is a priority for the UK to be able to guarantee the rights of EU citizens already living in Britain, and the rights of British nationals living in other member states, as soon as possible. That must be agreed on a reciprocal basis and we stand ready to sign up to this and to do so soon if it can be agreed with our EU partners.
I turn now to the international dimension. My noble friend Lord Caithness asked about the Prime Minister’s meeting with President Trump in the United States. The trip in January was very positive. I felt very proud of the Prime Minister. Obviously I cannot comment on the private detail of the conversation but the Prime Minister set out that there is a shared commitment to economic co-operation and trade between the United States and the UK. The UK has always been a leading voice for free trade in the EU and globally. That will continue. I always say that trade is in our DNA.
The Government agree with the committee’s assessment of the UK as a global financial services hub and the depth of capital market activity it fosters—to the benefit of Europe as a whole, its pensioners, its businesses and its public sector bodies and their customers. The UK and the EU have a mutual interest in ensuring that specialist activities, such as clearing do not end up in New York. The noble Lord, Lord Shutt, talked about possible job implications. I will say two things. First, I saw Mr Xavier Rolet today. He is one of the first experienced leaders in this industry that I have had the pleasure to consult. He gave me a copy of the EY report.
Secondly, as the committee’s report identifies, many firms in the UK, in the rest of Europe and internationally benefit from London’s multicurrency clearing structure. The Chancellor himself has pointed out that any changes to the structure could force up the cost of clearing, with a substantial cost to the European economy and to firms in the 27 member states—and cost is an important motivator. We will look at the committee’s recommendations on clearing very carefully in responding to the report.
My noble friend Lord Caithness asked about financial services regulatory co-operation in future trade deals, which was a very good question. The Prime Minister has said that the UK will be free to strike trade deals around the world after exit because of the approach that we have taken. That includes financial services. Trade deals involving non-tariff barriers, which have been mentioned, such as regulation, are also important and can be part of discussions on any new trade deal.
As the noble Lord, Lord Desai, said, we have played a major part in the architecture of the international financial system. We agree that we need to ensure that the UK, with its expertise, experience and eye for detail, continues to have influence over international standards with a voice on things such as the Basel Committee, the Financial Stability Board and other international fora such as the International Organization of Securities Commissions and the International Association of Insurance Supervisors. These international bodies could not be more important.
A priority of the Government is to consult external expertise extensively at this time and I am grateful for the vast amount of input that we have already had at every level in the Treasury and in DExEU. We are not talking just to those businesses with whole new Brexit strategy departments and consultants. We are also talking to those with none and to start-ups, supply chains and other stakeholders. We are also engaging outside London, where, as the noble Lord, Lord Shutt, said, we have large numbers of financial services jobs. There are, for example, around 140,000 people in this sector in Scotland, Northern Ireland and Wales—think of Standard Life or Virgin Money in Edinburgh, Legal & General in Cardiff, and Citi in Belfast. Indeed, next week I will visit Wales in my new role and hope to meet some financial services stakeholders.
We will keep up this process of listening to expert views from a range of standpoints as the negotiations kick off and progress. I hope not to be criticised by this House for lack of vigour. I know that many noble Lords have expertise in these areas. I therefore take this opportunity to invite them to contact me if they have advice to proffer.
I have focused my remarks largely today on two things: the needs of our varied financial services sector as we leave the EU, and how we are researching, understanding and analysing those needs. While some are more optimistic than others, there is a wide measure of agreement today that we need to secure the freest possible market access, the smoothest possible transition, and the ability to recruit and retain the best and the brightest. This matters to those people whose jobs depend on this industry—more than 1 million people in this country. It matters to the wider UK economy. Financial services contribute around £66 billion a year in tax and represent a growing percentage of our exports. It matters to our partners across Europe—and, of course, we are a gateway to the world of international finance.
It has been a pleasure to debate this perceptive and timely report. I again express my appreciation to the noble Baroness, Lady Falkner of Margravine, and the team that she chaired so expertly, for their conclusions.
Baroness Falkner of Margravine
My Lords, this has been an extremely fruitful debate and I am particularly grateful to the Minister for giving us, in the absence of a formal government response, a clear line of vision about how she is proceeding with her role. I particularly want to thank those noble Lords who spoke in this debate today who were not members of the committee—the noble Earls, Lord Caithness and Lord Kinnoull, the noble Viscount, Lord Eccles, and the noble Lord, Lord Dykes. We have benefited greatly in this House from hearing from them as well.
The tone of the debate touched on optimism and pessimism. As all Select Committees should do—and I believe do—we followed the evidence. When our interlocutors were extremely concerned about their future businesses, workforces and livelihoods, we reflected that in the debate. Frankly, we did not encounter too many voices cheering the impact of Brexit on financial services from the rooftops.
Where I entirely agree with the optimists is about the durability of the City of London to innovate, reinvent itself anew and adapt. Voltaire picked this up in the early 18th century when he was in London—enriching himself on the back of the City of London. He exhorted the French to move in the same direction. “Nobody understands commerce like the English,” he said. As I reminded the House today, President Hollande is, somewhat belatedly, trying to take France in that direction.
In conclusion, it is people who are at the heart of this. It is not fashionable to defend bankers, nor to say that the financial services sector does a very good job in liquidity and capital markets. Our committee saw how important it was that the livelihoods of people in this country and in the European Union should continue to benefit from that most essential commodity—capitalism.