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Julia Lopez (Hornchurch and Upminster) (Con)
Alex Cunningham (Stockton North) (Lab)
The Minister for Transport Legislation and Maritime (Mr John Hayes)
Another opportunity to inform, another chance to perform—what is better than that, Mr Speaker? As my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) may know, the Law Commission provided a report on reforming taxi and private hire vehicle legislation, since which the sector has undergone profound and rapid change. With characteristic assiduity and determination, I will lead the response to such change, so protecting passenger wellbeing.
Julia Lopez
What discussions has the Minister had with the Mayor of London to find a workable way forward on taxi legislation in the capital that balances healthy competition with the properly enforced regulations that safeguard passengers and keep our city moving?
Mr Hayes
As I glanced at the Order Paper, as you must also have done, Mr Speaker, I noticed my hon. Friend’s change of name due to the happy event of her marriage, on which the whole House will want to congratulate her. [Hon. Members: “Hear, hear.”] She has become our own J.Lo.
My discussions with the Mayor are regular. The Government are determined to find a way forward on taxi regulation. This is not just about the capital; we need to consider the whole issue of taxi licensing. As I have said, our absolute determination is for public safety and wellbeing, but we have to balance that with consumer choice.
Alex Cunningham
Sex offenders and others banned from driving taxis by local authorities are providing the same service simply by applying for a licence to drive a minibus. Will the Minister continue the work done by me and his predecessor on closing that loophole?
Mr Hayes
I met Leeds City Council just yesterday to discuss such issues. Licensing poses real challenges, which is why I set up a working party to consider the whole matter following a Westminster Hall debate on this subject. That working party will consider the very issues that the hon. Gentleman and many others have raised and then report back to me, and it would be reasonable for us to publish its findings early in the new year.
Mr Philip Hollobone (Kettering) (Con)
I declare an interest as a member of Kettering Borough Council. The taxi drivers and private hire drivers of Kettering do a fantastic job ferrying local people around, but all these things need regulation and the council does its best. Which council does the Minister think is the best at regulating the taxi trade in small towns? How might that best practice be rolled out across the country?
Mr Hayes
I would not want to pick from among all my favourite towns. However, there are concerns about the inconsistent application of regulation and guidance, which is one of the things that the working party is considering. The key thing is that there has been a lot of change, partly as a result of modern communications and how people access information and book taxis and private hire vehicles. As Disraeli said:
“Change is inevitable. Change is constant.”
But a benevolent and diligent Government must constrain change while maintaining choice.
Mr Clive Betts (Sheffield South East) (Lab)
When the Communities and Local Government Committee considered child sexual exploitation in Rotherham, one issue was the involvement of some taxi drivers. The Government’s commissioners brought in higher standards, including the provision of CCTV cameras in all taxis. However, those rules can be undermined by taxis coming in from places outside Rotherham where the same standards do not apply. Indeed, taxis that fail the test in Rotherham can go elsewhere, get a licence and drive back into Rotherham. That is the real problem. The problem is national, but does the Minister recognise that it is particularly acute in Rotherham? When will he act?
Mr Hayes
As I said, this is not just about London; it is about places across the country. There is a case for new statutory guidance, and while I do not want to second guess the working party and its recommendations, I think we will issue some new statutory guidance early next year.
Cat Smith (Lancaster and Fleetwood) (Lab)
Following the high-profile cases of child sexual abuse in Rotherham and Oxford, taxi licensing was strengthened in those council areas. However, despite repeated calls for legislation reform, including from the Law Commission, the Government have refused to close the loopholes that allowed drivers to be licensed elsewhere and effectively game the system. Will the Minister commit to introducing national standards to ensure safety across the industry?
Mr Hayes
I welcome the hon. Lady’s question. She is right that the system is being gamed. Where a local authority tightens the system—Leeds City Council described this to me yesterday—neighbouring authorities sometimes adopt a more permissive regime. That cannot be right, which is why I want to introduce new guidance and greater consistency in how licences are issued. At the end of the day, this has to be about public safety, security and wellbeing. The whole House would want that, and we really do have to take action.
Sir Desmond Swayne (New Forest West) (Con)
Fiona Onasanya (Peterborough) (Lab)
The Secretary of State for Transport (Chris Grayling)
We want our future relationship with the European Union to be mutually beneficial. It is in the interests of both sides to maintain closely integrated aviation markets. However, it is the Government’s responsibility to prepare for all potential outcomes. The Government continue to work closely with the aviation sector to ensure the industry continues to be a major success story for the British economy.
Sir Desmond Swayne
What European destination would want to turn away planeloads of spending British tourists?
Chris Grayling
My right hon. Friend makes a good point. Those with any concerns about 2019 just have to answer the question: how many hotels in Spain would be empty if the Spanish Government choose not to continue our aviation arrangements? That is why we will continue to make good progress towards satisfactory arrangements for the future.
Fiona Onasanya
In light of that answer, can the Secretary of State give an assurance that the Government will pursue an unchanged operating environment for the aviation sector in the Brexit negotiations with the EU?
Chris Grayling
I can give the hon. Lady that assurance. We believe it would benefit all the nations of Europe to continue the freedom of the aviation sector that we have seen over the past decade and more. That freedom particularly benefits regional economies and regional airports across the European Union, in this country and elsewhere. It would be foolish for anyone to try to stop that freedom.
Lilian Greenwood (Nottingham South) (Lab)
The nine freedoms of the air guaranteed under the European common aviation area have enabled the growth of low-cost air travel, with average leisure fares to Europe falling by a third since 1993. We have already seen easyJet hedge against a no-deal scenario, but what assessment has the Secretary of State made of the implications of the UK falling back on the Chicago convention? What would that mean for the future of UK airlines, UK airports and affordable flights for UK consumers?
Chris Grayling
The hon. Lady needs to remember that aviation regulation operates at a global level, at a pan-European level—in which there is an “open skies” agreement—and at a national bilateral level. I have worked carefully with the airlines and all those involved, and I am certain that not only will aviation continue post-2019 but that everyone wants aviation to continue post-2019.
The individual case of easyJet relates to the question of cabotage within the European Union, which is clearly a matter for debate. It will be a negotiation for the whole sector because, although we have successful airlines such as easyJet operating flights within the rest of the European Union, we also have a large number of continental hauliers doing business within the United Kingdom. It is to everyone’s benefit that such liberalisation continues.
Sir Vince Cable (Twickenham) (LD)
European competition law will no longer apply after Brexit, so how does the Secretary of State propose to allocate airport slots? By auction, or in some other way?
Chris Grayling
Of course, the big question is about the expansion of slots at Heathrow airport in particular, which will be a matter for the Government both to negotiate and agree. Right at the top of our priority list in allocating slots—and we have committed to this in what we have said about the proposed expansion of Heathrow airport—is that we reserve slots for regional connectivity. One of the key benefits of Heathrow airport expansion is the global connections it will provide to cities across the whole United Kingdom. Whatever approach we take, we need protection for those regional links.
Karl Turner (Kingston upon Hull East) (Lab)
The Secretary of State may be in denial, but the Chancellor has finally fessed up to the fact that, if there is no Brexit deal, it is conceivable that flights between the UK and the EU might be grounded. Is it not time for the Government to get their finger out and give the reassurances that the aviation sector so badly needs?
Chris Grayling
I am surprised that the hon. Gentleman, an experienced lawyer, did not read everything the Chancellor said. The Chancellor said that that was not going to happen and that, therefore, he will not spend a lot of money preparing for it. The actual reality is that we are doing a lot of preparatory work for all eventualities but, of course, the reason the Chancellor said what he said is that, as he says, that is not going to happen.
Theresa Villiers (Chipping Barnet) (Con)
The Minister for Transport Legislation and Maritime (Mr John Hayes)
As I said a few moments ago, Ministers and officials from my Department regularly meet the Mayor and his representatives to discuss transport in London. These meetings cover a wide range of issues, including upgrades to the London underground.
Theresa Villiers
The London underground upgrade was stalled for years under Labour but has made big progress under the Conservatives. So does the Minister share my regret that under the new Labour Mayor at city hall we are seeing vital upgrades shelved indefinitely?
Mr Hayes
My right hon. Friend is right to be disappointed; the Mayor has decided to pause the purchase of new trains for these lines, as she describes. As she knows, transport in London is a matter for the Mayor and it is for him to agree the investment programme for transport, but it is a disappointment and he must do much better.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Whether we are talking about the 1974 Piccadilly line trains, which are almost as old as me, or the even less reliable 1992 Central line ones, autumnal leaf fall at the moment is causing havoc for the above-ground sections of the tube in suburban locations. Does the Minister know when these old workhorses that are now past their sell-by date are going to be sent to the knacker’s yard?
Philip Davies (Shipley) (Con)
The Secretary of State for Transport (Chris Grayling)
As my hon. Friend will be aware, the Government have allocated significant resources to West Yorkshire for local transport schemes through the local growth fund, including £781 million over 30 years from local growth funding and “gain share”. In addition, I am pleased to be able to inform him this morning that £2.3 million is being allocated to Bradford Council for improved traffic management systems as part of the £244 million NPIF—national productivity investment fund—funding being announced today. Later this year, we will start consultation on the major route network, which may provide the routes to securing the Shipley eastern bypass that he is concerned about.
Philip Davies
I am very grateful to the Secretary of State for that answer and I very much welcome the new bypass fund that he is setting up, appreciating the difficulties that many motorists have in getting around. Does the new fund mean the long wait that local businesses, local residents and I have suffered waiting for a Shipley bypass may soon be at an end?
Chris Grayling
As I indicated, it is very much my hope that a number of schemes around the country will start to be brought forward for development under this fund. I would be rather surprised if the Shipley eastern bypass is not one of those brought forward as a proposal to the Government early on. As he knows, I will be joining him to see the issues around the Shipley eastern bypass and to see the possible routes shortly, and I have no doubt that he and his colleagues in his constituency will be making strong representations when I visit.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
No one begrudges the money for a Shipley bypass—certainly no one in Huddersfield does. What we are angry about in Yorkshire is the fact that this Minister has taken away the money and the promise for a trans-Pennine railway electrification. That is what we will not forgive him for. He must get his act together and invest in the north.
Mr Speaker
He mentioned Shipley but it is not sufficient simply to animadvert on Shipley. The question ought to relate to the matter.[Interruption.] Which is a bypass, as somebody has observed, very originally and wittily from a sedentary position.
Chris Grayling
It is worth putting on the record that I have not announced any changes to that programme. There is money for the trans-Pennine modernisation. I am expecting the detailed proposals from Network Rail later this year. However, it is worth saying that we are spending more money on more projects across the north of England than any Government have for decades and decades, including during the 13 years when Labour was in government. It is also worth saying that we have electrified four times as many miles of railway in the north of England alone than Labour did in 13 years in government. So I am not going to take any lessons from Labour Members about commitments to the modernisation of the transport system—in the north or elsewhere.
Mr Speaker
Ah, another pertinent inquiry on the Shipley eastern bypass I feel sure.
Martin Vickers
Many of my constituents would like to visit Shipley on many occasions, but in order to do so that they would have to travel along concrete sections of the A180, which causes great disturbance to residents in Stallingborough and other villages in my constituency. Will the Secretary of State urge Highways England to look favourably on funding improvements to that section of the A180?
Chris Grayling
I know that Highways England listens carefully to the comments made at Transport questions. My hon. Friend highlights something that is an issue in his area and throughout the country. I am clear that we need to do everything we can to ensure that the technology for future road surfaces delivers both durability and quietness.
Mr Speaker
Ah, yes! I chaired the South Lakes Pupil Parliament in the hon. Gentleman’s constituency on Friday. The children there spoke of him with great warmth and affection.
Tim Farron
That is very kind of you, Mr Speaker; I hope you will indulge me. Just like Shipley, Kendal is a beautiful northern town with severe congestion problems. It is beautiful and thriving despite the fact that it has a prehistoric road network. Is the Secretary of State aware that there is a long-stalled plan for a northern access route that would solve congestion in the town and open up the industrial estates to the north-east of the town? Will he meet me and business leaders to see whether we can move things forward and make that plan happen?
Chris Grayling
I am always happy to meet the hon. Gentleman. I am not aware of the specific scheme he asked about, but it is precisely for the reasons he outlined that I have set aside money to create the bypass fund for the years ahead. I recognise that in a number of important regional towns too many areas are congested as a result of through traffic. That is particularly true in the Lake district and the major route through Kendal to get to places such as Windermere. I will happily talk to the hon. Gentleman about that.
Mr Peter Bone (Wellingborough) (Con)
Wellingborough is very similar to Shipley—one might even argue that the two MPs are rather alike in their views—but one problem that my constituents find in getting to Shipley is that they cannot get through Isham because a bypass has not been built. Is the Secretary of State able to offer some encouragement about the Isham bypass, which would enable my constituents to get to Shipley more easily?
Chris Grayling
May I first wish my hon. Friend a happy birthday? I am slightly surprised to see him wearing a more muted tie today. Although I cannot give assurances on every individual scheme, it is very much my intention that the bypass fund is there to fill in holes in what was once the strategic network. The network was de-trucked many years ago, leaving congestion problems in many regional towns and on many important regional routes, without an obvious and clear route to secure funding to ease that congestion. In the coming months I will consult colleagues from across the House as to how best we manage the process of getting that fund and those projects going.
Diana Johnson (Kingston upon Hull North) (Lab)
As a Yorkshire MP, it is always good to see promises of investment in places such as Shipley. Nevertheless, this summer the Secretary of State said to The Yorkshire Post:
“The success of Northern transport depends on the North”.
Will he explain how, with London getting 10 times as much money for transport investment as Yorkshire and the Humber gets, that is going to happen?
Chris Grayling
I am afraid some of the figures bandied around by think-tanks in the north are simply inaccurate. We are putting more investment into transport in the north of England than there has been for decades and decades—into the road system and the rail system. We are replacing every single train in the north with either a brand new train or one that has been refurbished as new. It is a long-overdue programme. It did not happen in 13 years under a Labour Government, when there was money aplenty. Even in tighter financial times, we see it as a priority to develop transport in the north, and that is what we are doing.
Deidre Brock (Edinburgh North and Leith) (SNP)
The Secretary of State for Transport (Chris Grayling)
I meet my right hon. Friends the Secretaries of State for Exiting the European Union and for International Trade regularly—indeed, I did so yesterday—to discuss the UK’s exit from the EU. Seeking new aviation arrangements—both with the EU and with those states where we currently rely on EU-negotiated arrangements for market access—is a high priority for my Department. We aim to have the new arrangements in place well before the day of exit.
Deidre Brock
The Secretary of State obviously agrees with the absolute need for aviation agreements, through either bilateral means or an EU-wide arrangement. Will he tell us how many DFT staff have expertise in negotiating aviation deals and how many are working on deals as we speak?
Chris Grayling
I have a big team that is experienced in dealing with such things, because, across the world, we have bilateral arrangements with countries in all continents. I have experienced teams that are working on that right now. We are pursuing the necessary successor arrangements that we will need for flights to countries around the world, and there is nothing but good will and constructive discussion between us and those countries in ensuring that there is no interruption in flying.
Jim Shannon (Strangford) (DUP)
Not only is the aviation timetable agreement important, but so is the securing of routes. Will the Minister tell us what has been done to secure routes for Belfast City and Belfast International airports to make sure that Dublin does not receive, to our detriment, the routes that we should be getting instead?
Chris Grayling
Of course, the choice of routes is ultimately down to the airlines themselves, but the hon. Gentleman will know that we provide significant support for important links from Northern Ireland, and we will continue to do so. The biggest difference for Northern Ireland will come with the expansion of Heathrow airport towards which we are working at the moment, and a guarantee of slots to provide excellent connectivity for Northern Ireland, Scotland, England and Wales into countries around the world.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Scottish Government have not been able to cut air passenger duty because the UK Government have not properly implemented an exemption for Inverness airport. Given the importance of low-cost carriers to Scotland’s regional airports, it is important that the Scottish Government are also involved in any discussions. However, to allow sufficient time for EU ratification, the aviation agreements need to be concluded by October 2018. How many staff does the Secretary of State have working on these matters, and what guarantees can he provide that travel will continue uninterrupted?
Chris Grayling
The hon. Gentleman makes his comment about air passenger duty in Scotland, but we did what the Scottish Government asked: we devolved air passenger duty and they have not cut it. I am afraid that they are discovering the realities of government. It is all very well making demands from the Opposition Benches, but when they actually have to take tough decisions, they discover that it is not all that easy. We are seeing that they are failing to deliver for the people of Scotland. When it comes to planning for aviation after Brexit, things are different, because we are planning for that and we will deliver. We will see, post 2019, that aviation continues to be the success story that it is today.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Afzal Khan (Manchester, Gorton) (Lab)
The Parliamentary Under-Secretary of State for Transport (Jesse Norman)
The Government’s plan for tackling nitrogen dioxide concentrations, which was published in July, sets out a number of steps backed with £3 billion of investment in air quality and cleaner transport. These include the tough new real-world emissions tests for new models of diesel and petrol cars.
Lloyd Russell-Moyle
What progress is being made on setting up low-emission zones in various parts of the country? How are the Government ensuring that there is a workable national framework for those zones?
Jesse Norman
As the hon. Gentleman knows, we have published the clean air plan and we are working very closely with local authorities regarding clean air zones. There is also a wider duty on local authorities that are not specifically part of the zones themselves to bear air quality in mind, and we also support them through the Department.
Afzal Khan
Encouraging the use of public transport is key to tackling air pollution. Does the Minister accept that the increase in rail fares at twice the rate of wages since 2010, and the decreased use of buses while the Conservatives have been in office, have made air quality worse?
Jesse Norman
The hon. Gentleman is correct about the importance of buses. Only yesterday, I met the chief executive of Go-Ahead buses, which is very active around the country, and we specifically discussed that matter. I have held such discussions with other operators and will continue to do so in the coming months. We also considered retrofitting and improving passenger numbers.
Paula Sherriff (Dewsbury) (Lab)
Does the Minister agree that one of the ways to reduce emissions is to encourage rail travel, but that one of the barriers to that is poor service. Travellers from West Yorkshire using Virgin are experiencing increasingly poor service due to staff shortages, and there is a suspicion that Virgin is cutting back so that it can increase profits. What are the Government doing to hold train operating companies to account?
Jesse Norman
I can only admire the hon. Lady’s ingenuity in crowbarring a point about Virgin rail into a question about road transport emissions. Obviously the rail Minister, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), is better placed to answer that, but let me draw her attention to the work that we are doing through the cycling and walking investment strategy on improving the links between rail and cycling.9
Nic Dakin (Scunthorpe) (Lab)
E10 fuel can reduce emissions from road transport. Can the Minister confirm the Government’s commitment to introducing E10 in the UK in 2018?
Jesse Norman
As the hon. Gentleman knows, we have been looking closely at this issue and will make an announcement in due course.
Henry Smith (Crawley) (Con)
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
We are investing some £80 million through our smart ticketing on national rail programme, so that all passengers have a paperless option for their journey by the end of 2018. We are also working to facilitate a rail industry pilot of smartcards on mobile phones, as well as rolling out pay-as-you-go ticketing across the hon. Gentleman’s franchise.
Henry Smith
I welcome Southern railway’s plans to introduce smart ticketing across its network. I have also put in a request for the Oyster system to extend south of Gatwick airport to Three Bridges and Crawley stations. However, will my hon. Friend please speak urgently with GTR, the parent company of Southern, as their new ticket machines at many stations, including Three Bridges, have been malfunctioning, causing passengers significant disruption and queues? That situation needs to be resolved.
Paul Maynard
I am grateful for that comment. Ticket vending machines, which are meant to be among the most straightforward of equipment on our railways, seem to cause more problems than any other type of equipment. I understand that Govia Thameslink Railway is due to visit every ticket machine over the coming fortnight to make sure that the software is updated and that the machine functions properly, although I share my hon. Friend’s concern and will be meeting the supply chain in due course to emphasise the importance of getting this right.
Kate Green (Stretford and Urmston) (Lab)
I welcome progress on smart ticketing, and also plans for new ticket machines on the station platforms in my constituency, but the Northern Rail service through my constituency has been absolutely abysmal in recent weeks. May I echo the question that my hon. Friend the Member for Dewsbury (Paula Sherriff) asked? What is being done to hold train operating companies to account when trains are overcrowded and short of carriages, and when there are cancellations and delays and people cannot even get to work on time?
Paul Maynard
I share the concern. We have continuous contact with the train operating companies at an official and a ministerial level—I frequently meet them. Where there are sustained examples of poor performance, they are escalated to what is called the national taskforce, where the train operating company must present to the wider industry what measures it is taking to reverse poor performance, and I will then meet that train operating company. I recognise the concerns around Northern. My primary concern at this stage is to ensure that new infrastructure is opened around the Greater Manchester area so that Northern can operate new rolling stock to replace the appalling Pacers, and introduce the new services that the Ordsall Chord, in particular, will enable.
Nigel Mills (Amber Valley) (Con)
Can the Minister require train operators to allow passengers who start their journey at a station that has no ticket facilities to use a print-at-home ticket, so that passengers at Langley Mill station in my constituency can actually use the cheaper advance tickets that they currently cannot?
Paul Maynard
I think that is a perfectly fair observation. We are seeking to ensure that when technology enables new forms of ticketing to be introduced, we move on that as far as possible. That includes paperless ticketing. It also includes work on barcode ticketing, which can be displayed on mobile phones. We have to do much better at ensuring that people may choose the ticket mode that works best for them.
Dr David Drew (Stroud) (Lab/Co-op)
I welcome what the Minister says about smart ticketing, but in advance of that, might he have a word with the rail authorities about how many tickets they send out? When someone pre-books, they get between eight and 10 tickets. Surely it is not beyond the wit and wisdom of the rail companies to put that information on one ticket. I hate to think how many forests we cut down for one rail journey.
Paul Maynard
I think that the rail authorities have already heard what the hon. Gentleman has said. I have noticed that I now get my seat reservation and my ticket on the same piece of paper, instead of on five. As we move towards more forms of paperless ticketing, we should have no pieces of paper at all unless we want them.
Rachael Maskell (York Central) (Lab/Co-op)
We were told £45 million, but the cost was £96 million. We were told 11 train operators co-ordinated, but it was just five working separately. We were told all passengers, but it was just season ticket holders, and full season ticket holders at that. Only 8% of those now eligible are using the system, with its scope cut, and it being overspent and massively overtime—and then the Government handed the problem back to the train operators. From this example in the south-east, can we really have confidence that the Government can deliver smart ticketing?
Paul Maynard
There is quite a straightforward reason why we can have confidence about the future, and it is largely because the south-east flexible ticketing programme did not just deliver smart ticketing across the south-east, which many passengers are now using, but put in place the architecture and computer systems that will enable smart ticketing on national rail to be a success.
Rachael Maskell
Well, it was a pretty damning report from the National Audit Office. Yet again we have a Government unable to deliver on the railways and on something as simple as smart ticketing. Labour will be at the cutting edge of rail tech, while this Government still expect people to book separate tickets from separate operators—one national chaos under the Tories, one national public service with Labour. How much longer will the Government champion fragmented ticketing on a fragmented railway?
Paul Maynard
I always get rather frustrated when people have had an answer but paid no attention to what I said—but there we go. The report from the National Audit Office was important. It contained a number of lessons, which we took on board when setting out the national smart ticketing programme. Technology is changing rapidly. We have to make sure that the schemes we put in place now meet what technology can do in a year’s time, or two or three years’ time. We will be moving fast with tickets, and tickets will be unbelievably advanced by the time the Labour party ever gets back into power.
Luke Hall (Thornbury and Yate) (Con)
The Parliamentary Under-Secretary of State for Transport (Jesse Norman)
Tackling congestion, as you will know, Mr Speaker, is at the forefront of the Government’s plans to provide a modern strategic road network that supports our growing economy. The Government are investing in the largest programme of improvements on our national roads that we have seen for many decades, as the Secretary of State said—£15 billion between 2015 and 2021 alone. In addition to providing extra capacity on the busiest motorways by making them smart motorways, the Government will improve specific parts of the network where investment can tackle congestion, improve journeys and support economic growth.
Luke Hall
I thank the Minister for that answer, and I welcome the Government’s investment in a feasibility study into finally building junction 18A on the M4. However, one of the options under consideration is to build that new junction at Pucklechurch, which would devastate the local green belt and divide two extremely historic communities. With the decision expected early next year, residents are being left under a cloud of uncertainty, so will the Minister speak to Highways England to ensure that this undeliverable and unsupportable proposal is ruled out as early as possible?
Jesse Norman
I thank my hon. Friend for highlighting Highways England’s work to develop proposals that would improve access to the M4. The scheme will be vital to unlocking the potential for housing developments in that area. As he will know, the Secretary of State has seen the site for himself, and he and I are taking the issue very seriously. I will be discussing it, among other things, with Highways England when I see its chief executive next week.
Bill Esterson (Sefton Central) (Lab)
Is not the real answer to cutting road congestion, and for that matter roadside emissions, to invest in expanding rail freight capacity? For example, Peel at the port of Liverpool is investing £750 million, including in rail freight. Why are the Government not stepping up and playing their part?
Jesse Norman
I thoroughly dispute the idea that the Government are not playing their part, not least because we are heavily investing in HS2, which will run very close to that port and support it.
Robert Halfon (Harlow) (Con)
Is my hon. Friend aware that many Harlow motorists face significant problems from ever-increasing congestion and the ever-increasing number of terrible accidents on the M11? Will he investigate that to see what can be done?
Jesse Norman
We are absolutely aware of these issues and officials focus on them, as they do on issues on other strategic parts of the road network, but I would be delighted to meet my right hon. Friend to look at the issue further.
Lucy Powell (Manchester Central) (Lab/Co-op)
As has been said, reducing congestion on our roads requires serious investment in our rail infrastructure, so when will the Government give the north our fair share of rail investment and, in particular, agree to a Crossrail of the north that is fully integrated with HS2 at Piccadilly station?
Jesse Norman
As the hon. Lady will know, the Secretary of State made clear—[Interruption]—and reminds the House again that the north is seeing the biggest single investment in rail for many decades.
Stephen Hammond (Wimbledon) (Con)
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
A thorough analysis of the Crossrail 2 business case is being carried out by the Department to ensure it is a robust scheme, as is undertaken for all transport scheme proposals. Once this analysis has been completed, the Secretary of State will be in a position to outline the next steps on Crossrail 2, which will include any discussions and decisions on future plans for updating the current safeguarding directions.
Stephen Hammond
I listened carefully to the Minister’s answer. However, the delay to Crossrail 2 is causing real anxiety to constituents in Wimbledon and across south London and causing investment decisions to be delayed. Will he urge the Mayor to get on with the funding proposals so that the Department can make a decision one way or the other?
Paul Maynard
As Members have heard this morning, we have regular meetings with the Mayor. I assure my hon. Friend that one of the most common topics for discussion is how to ensure that Crossrail 2 is both affordable and fair to the taxpayer. It is really important that we do not unduly raise public expectations or, indeed, provoke undue concerns in relation to Crossrail 2 ahead of developing a fair, sustainable and deliverable funding plan.
Ian Mearns (Gateshead) (Lab)
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
The Department accepts the need to replace the Nexus fleet and is actively discussing the most appropriate method of funding this vital work with Nexus and the Treasury.
Ian Mearns
The metro system’s rail stock is more than 40 years old, and I am afraid to say that it is failing on a daily basis, causing delays for its 40 million users each year. On 17 July, nine of my right hon. and hon. Friends representing the Tyne and Wear area and I wrote to the Secretary of State about this issue. We again wrote to him on 12 September asking for at least an acknowledgement of our concerns. It may surprise you, Mr Speaker, to hear that we have not yet had an acknowledgment, never mind a reply. My patience is wearing a little thin on this. The people of Tyne and Wear deserve much better from this Government, even though they have no MPs in the area.
Paul Maynard
I am always disappointed when I hear that we do not achieve what we should in our correspondence. I am sorry that the hon. Gentleman has not had an acknowledgement; we will draft one immediately today. I assure him that I personally understand the importance of the metro system to the people of the north-east. We understand the need to replace these ageing carriages, and we are keen to ensure that we make a decision as soon as possible.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Transport spend in the north-east is only £220 per head, compared with £2,000 per head in London, and the effect of that can be felt every single day on the Tyne and Wear metro. Will the Minister commit that the investment will be publicly funded, not coming from some financially engineered private finance initiative scheme, so that the public benefits of a decent transport system can be publicly controlled?
Paul Maynard
We continue to work closely with the Treasury to make sure that we get the right funding package to deliver these carriages, which I know the network needs. In response to the hon. Lady’s concern about levels of investment in her region, I point out that we are finally completing the motorway to the north-east that Labour never built in 13 years.
Faisal Rashid (Warrington South) (Lab)
The Parliamentary Under-Secretary of State for Transport (Jesse Norman)
It is Government policy that those who benefit from the significant improvements that estuarial crossings bring should help to pay for them. Successive Governments have taken the view that tolls are justified when private finance enables key road infrastructure such as significant river crossings to proceed and to be maintained.
Faisal Rashid
I am sure that the Minister will be aware that residents in my constituency are paying in excess of £1,000 a year in toll charges for the new Mersey Gateway bridge, although the previous Runcorn bridge was toll-free and tolls are being scrapped across the whole United Kingdom. Will he honour the commitment made in 2015 by the former Chancellor, George Osborne, that Warrington residents would be exempt from these tolls? Although the Minister has previously rejected this offer, will he now agree to meet me and my constituents?
Jesse Norman
I am not aware of having rejected any previous invitation. I would be delighted to meet the hon. Gentleman and his constituents. The Government’s position is very clear. We intend that the tolls will go when the bridge has been paid for. Unfortunately, when crossings are being tolled, there has to be equality, because otherwise the untolled bridge ends up being loaded up to the point where the original purpose is defeated. The good news is that this is a major piece of new infrastructure, and that is all to the good.
Mike Kane (Wythenshawe and Sale East) (Lab)
The Parliamentary Under-Secretary of State for Transport (Jesse Norman)
The Government want to make cycling and walking the natural choices for short journeys and parts of longer journeys. In April this year, as the hon. Gentleman knows, we published the first ever statutory cycling and walking investment strategy for England. The strategy sets out our plans for increasing cycling and walking, and it identifies £1.2 billion of funding for the period up to 2021.
Mike Kane
I am due to go for a bike ride with the Greater Manchester cycling commissioner, Chris Boardman, in a few weeks’ time. As he is a former Olympic champion and maillot jaune holder, I am not looking forward to it and I am spending a lot of time in the gym. Chris is about to publish his strategy for Greater Manchester. What resources will the Minister put at Chris’s disposal, so that he can implement it?
Jesse Norman
I wish the hon. Gentleman very good luck in his ride with Chris Boardman, and I hope that Chris knows what he is letting himself in for. I have met both the Mayor of Manchester and Chris directly to discuss this strategy, and Chris has been kind enough to share it with me and my officials. Of course, from a central Government standpoint, we will do what we can to support it.
Dan Jarvis (Barnsley Central) (Lab)
The Minister for Transport Legislation and Maritime (Mr John Hayes)
The most recently published statistics on the distribution of regional transport infrastructure investment appear in Her Majesty’s Treasury’s “Country and Regional Analysis November 2016”.
Dan Jarvis
In response to a question from my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), the Secretary of State seemed to cast doubt on the existence of inequalities in regional infrastructure spend. He should know that Yorkshire and the Humber has the lowest per capita regional infrastructure investment in the country at just £190 per head, compared with £1,900 per head in London. What are the Government going to do to address that basic unfairness?
Mr Hayes
I always try to be helpful in the Chamber, and I know that the hon. Gentleman is doing his best, but a lot of what has been published about this is, quite frankly, just wrong. He may be drawing on the Institute for Public Policy Research North figures, which do not take account of the whole picture. They consider only 40% of the national infrastructure pipeline, exclude schemes that cross regions and ignore the majority of smaller transport schemes. He is a diligent constituency MP, so he will know that they do not include—perhaps he has not factored this in either—the work that is being done on local roads at junction 36 of the M62. I hope that when he stands up to speak again in this Chamber, he will welcome the Government’s commitment to his area of the north of England.
Mr Speaker
I am sure that the right hon. Gentleman is closely familiar with junction 36, about which, I dare say, we shall hear more in due course.
Simon Hoare (North Dorset) (Con)
May I urge my right hon. Friend to be very granular when making such sub-regional assessments, to ensure within a regional context that rural areas, not just urban areas, secure the funding that they need?
Andy McDonald (Middlesbrough) (Lab)
This week, the OECD argued that addressing the regional productivity divide between high-productivity areas, such as London, and lower productivity regions can be a key channel for fostering long-term growth and sharing prosperity. Does the Minister not accept that the Government’s cuts to rail upgrades will entrench regional transport inequalities and damage business by embedding the regional productivity divide?
Mr Hayes
Let us try to find common cause, shall we? It is absolutely right that we look at regional investment inequalities, and it is absolutely right, too, that we do not regard all investment in the south of England as good, while ignoring the rest. The Government are not doing that; that is the point. The Government are rebalancing investment across the whole kingdom, for we recognise that. I could be tiresome—[Interruption.] I know that that is hard to believe, but I could be, if I were to list the series of investments we are making in rail and road across the north. Rather than tiring you, Mr Speaker, or the House, we will set them out in a note, which we will distribute afterwards. Perhaps, then, the hon. Gentleman will also try to find common cause. To start with, he might want to look at the transport investment strategy that we have published, which is a starting point for learners in this field.
Andy McDonald
The Secretary of State has claimed that cancelling upgrades means affected areas will be spared disruption and that electrification is no longer necessary because the same benefits will be achieved with bi-mode trains reliant on diesel. Is his policy to provide regions across our country with second-rate railways, and is not the reality that his claims about the wonders of polluting diesel are, like digging for victory, a load of tripe?
Mr Hayes
Again, I simply say, let us look at the facts. We are investing in rail in the north. After all, this Government are investing in Transport for the North to do exactly what he describes. It is true that we need to look at a range of technologies to achieve what we want, but the answer to the hon. Gentleman’s question is: new trains, faster routes, more rail, more road investment—what is there not to like about that?
Luke Graham (Ochil and South Perthshire) (Con)
The Minister for Transport Legislation and Maritime (Mr John Hayes)
I am up again—and up for it, by the way.
As my hon. Friend knows, transport powers are devolved in Scotland. Nevertheless, investments are being made by the UK Government in rail and road on both sides of the border help to bind our kingdom together—united forever.
Luke Graham
I thank my right hon. Friend, but what specific plans does he have to improve north-south rail connections other than High Speed 2, including the east coast main line, to ensure we truly are a connected kingdom?
Mr Hayes
For such a specific question, a specific answer is required. Investments in the east coast and west coast franchises will bring great benefits to the people of Scotland. An additional £2.7 billion has been given to the intercity express programme, providing 500 new carriages, increasing the number of seats by 20% and reducing journey times between many of the great cities of our united kingdom.
Martyn Day (Linlithgow and East Falkirk) (SNP)
The port of Grangemouth in my constituency handles 80% of Scotland’s container traffic. Will the Minister advise us what discussions he has had with his Scottish counterpart regarding any post-Brexit delays at borders and traffic chaos or road jams in the Grangemouth area?
Mr Hayes
I was in discussion with my Scottish counterpart just this week—not on that subject, but we do communicate regularly. The next time I have the opportunity to speak to that gentleman, I will certainly raise the matter that the hon. Gentleman has raised in the Chamber today.
Steve Double (St Austell and Newquay) (Con)
The Minister for Transport Legislation and Maritime (Mr John Hayes)
All the Christmases are coming together, Mr Speaker.
My hon. Friend will be pleased that we announced in July that we were awarding Cornwall County Council £5 million in addition to its normal funding towards a project that will target carriageway treatments to improve the quality and longevity of 53 sites on Cornwall’s rural roads. All works will be completed by April 2018.
Steve Double
I thank the Minister for that answer, but in rural areas such as Cornwall it is important to maintain not just the condition of the road surface but the verges and overhanging trees in particular. I recently visited a local bus company, Roselyn Coaches, which is spending many thousands of pounds a year repairing its buses because of damage caused by overhanging trees. Does the Minister agree that local authorities such as Cornwall County Council must use their powers to cut back trees and keep our buses running?
Mr Hayes
As I said in my first answer, we are doing our bit. My hon. Friend is assiduous in keeping Cornwall County Council on its toes. It is its responsibility to ensure that carriageways are properly cared for in the way he described, and it is not easy to keep such a flat-footed Lib Dem council on its toes.
Mr Speaker
The right hon. Gentleman’s performances in the Chamber are always a source of great excitement—especially for the right hon. Gentleman.
Matt Warman (Boston and Skegness) (Con)
The Secretary of State for Transport (Chris Grayling)
Before I respond to any topical questions, may I take this opportunity to express my thanks, and I hope those of the whole House, to all those involved in the repatriation of passengers affected by the collapse of Monarch Airlines? It was a huge effort across government, but particularly by the Civil Aviation Authority, and we all have good reason to be thankful to the team involved.
Matt Warman
Boston is a growing port and a growing town. New housing developments have preserved a route for a Boston distributor road, with which I know my right hon. Friend is familiar, but what will he do to help us to deliver the expensive but vital bridge in the middle of the distributor road, which we cannot of course ask housing developers to fund entirely?
Chris Grayling
Indeed, as my hon. Friend knows from my past visits to Boston, I am well aware of the importance of the Boston bypass project. The town is situated on an A road with a congestion problem and is one of those for which I would expect to see proposals come forward for the bypass fund. We will look very carefully at the bridge issue, and I am very happy to talk to him about that.
Alan Brown (Kilmarnock and Loudoun) (SNP)
You may not be aware of this, Mr Speaker, but just last week there was another great train robbery: £600 million was removed from Scotland’s rail budget because the Tories ripped up a long-standing funding formula. For the sake of Scottish rail users, will the Secretary of State get together with the Treasury and give Scotland the correct funding?
Chris Grayling
This is an historic moment: the Scottish National party is opposing a funding allocation that uses the Barnett formula. I was under the impression that it regarded the Barnett formula as sacrosanct. However, when the UK Government use the Barnett formula, it complains. The SNP cannot have its cake and eat it.
Mr Peter Bone (Wellingborough) (Con)
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
I was more than happy to meet a cross-party delegation of Northamptonshire and Bedfordshire MPs this week to discuss this very issue. We have located the information that my hon. Friend desires, and I will place it in the Library and write to him.
Holly Lynch (Halifax) (Lab)
Chris Grayling
There is a two-stage programme of modernisation for rail in the north, despite the nonsense that the shadow Secretary of State was talking earlier. Initially, we are replacing every single train in the north. We have modernised the Calder Valley line and are about to launch the modernisation of the main trans-Pennine route between Leeds and Manchester.
Of course we have done other things, such as electrifying the railway line from Liverpool to Manchester and creating the first ever link between Manchester Victoria and Manchester Piccadilly. A whole range of things is happening. What we said at our conference and will be confirmed at the Budget is that we will set aside funding to create the links between HS2 and Northern Powerhouse Rail. I am now waiting for the detailed Transport for the North proposals for Northern Powerhouse Rail. In the short term, we modernise the trans-Pennine route, and in due course we will build Northern Powerhouse Rail to ensure that we have those better links for the future.
Rebecca Pow (Taunton Deane) (Con)
The Parliamentary Under-Secretary of State for Transport (Jesse Norman)
I am grateful to my hon. Friend for the question. As she says, the Government made available £2.3 billion precisely for such schemes, as part of the national infrastructure fund. I would be delighted to have a good look at the scheme with officials and ministerial colleagues at the Department for Communities and Local Government. I direct her attention to the £12 billion that has been committed over the period 2015 to 2021 through the local growth fund, through local enterprise partnerships, to support local strategic projects.
Nick Smith (Blaenau Gwent) (Lab)
How is the Secretary of State holding Volkswagen to account for its emissions scandal?
Jesse Norman
To answer on my right hon. Friend’s behalf, I should say that the answer is in so far as the situation allows us to. As the hon. Gentleman will know, we have not ruled out legal action of our own. We are waiting for the German legal authorities—under European law, given the origin of these technologies—to make their decisions. Once they have done that, we will take a final view. But we have been extremely clear about our view in general about how the company has behaved.
Robert Courts (Witney) (Con)
Jesse Norman
I have two things to say. First, we very strongly support community transport operators in general. Secondly, we have been under some pressure to clarify the rules regarding local transport operators who are tacitly operating commercially. I am sure that that is not the case in Oxfordshire, but it is in other parts of the country. If my hon. Friend’s transport authority has a difficulty, he is welcome to get it to talk to my officials and/or the Community Transport Association.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The Shipping Minister will be aware of huge concerns regarding a time lag of almost an hour on a number of occasions between distress at sea and the tasking and launching of an RNLI boat. What can the Minister do to ensure shorter response times in that golden hour, particularly at Maritime and Coastguard Agency level? After all, RNLI men I know have told me that they would prefer 10 false alarms than to be late at the scene of a real distress call.
The Minister for Transport Legislation and Maritime (Mr John Hayes)
This a very serious matter, and the hon. Gentleman and I have met to discuss these issues. I take a very clear view that we must be rigorous in the way that we deal with them. There have been disasters, such as the Louisa disaster in his constituency. The first thing to do is to offer commiserations to all those involved. As he knows, I have spoken to the chief inspector of the marine accident investigation branch. I have asked for his view, as quickly as possible, on the very issues the hon. Gentleman raises. I will keep in close touch with him and other Members when I hear that view.
Stephen Hammond (Wimbledon) (Con)
Chris Grayling
I expect to set out our further plans on the rail industry very shortly.
Justin Madders (Ellesmere Port and Neston) (Lab)
Further to the question from my hon. Friend the Member for Warrington South (Faisal Rashid), who was right to point out the impact of the new charges on the Mersey Gateway will have on his constituents, as well as the charges that are being introduced on the existing Silver Jubilee bridge, will the Minister tell us how many existing crossings, which were previously free, have had charges introduced on them in the past 10 years?
Jesse Norman
I would be happy to write to the hon. Gentleman with that information, but one concern is what the cost to local authorities would be. When we ran the numbers, as part of the wider decision, it became clear that the five local authorities involved would have to pay an extra £350 million to £400 million. That is an important further consideration.
Mr Laurence Robertson (Tewkesbury) (Con)
Chris Grayling
We welcome open-access applications. They have made a real difference to many towns and cities around the country. It is clear that open access should happen where there is capacity for it to take place, so that it fills in gaps and puts in competition. The Office of Rail and Road is very careful in judging when it can permit open access and when it cannot. It looks very carefully at every proposal, and we welcome them.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Further to the question from the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) about the potential late tasking of lifeboats, will the Minister meet me, parliamentary colleagues and the coastguard to ensure that the launch protocols the coastguard uses are not adding undue delay in the tasking of lifeboats in emergencies?
Mr John Hayes
I am very conscious of the sinking of the Solstice off the hon. Gentleman’s constituency. I have met him, too, and I know how much he cares about this issue. I care about it, too, so yes of course I will do that. Furthermore, let me be absolutely clear to him, the hon. Member for Na h-Eileanan an Iar and the whole House. In respect of looking at these matters with assiduity, we will leave no stone unturned. If there can be improvements, there will be improvements.
Ms Esther McVey (Tatton) (Con)
Paul Maynard
I certainly can. I was pleased to meet both my right hon. Friend and the mid-Cheshire rail line promotion group in her constituency back in August. Since then, we have been liaising with Transport for the North. She will be aware that one of its key strategic corridors is the Wales and the west stretch in the north-west. It is looking at how the mid-Cheshire rail line scheme fits into its strategic proposals, and I hope to hear more in due course.
Norman Lamb (North Norfolk) (LD)
To return to community transport operators, many are concerned, including North Norfolk community transport, that the new ruling will push it under, with the loss of absolutely vital rural community transport links. What is the Minister doing to ensure that that does not happen? What is the timescale for the consultation? When will it actually come in, because the uncertainty is very dangerous?
Jesse Norman
I fully recognise the concern. As the right hon. Gentleman will know, the Department is being very careful. There will be no rapid over-enforcement. We will give people as much chance as possible to show that their activities are not commercial in the required sense. We will launch the consultation later this autumn and then take it from there.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
In the same vein, I recently met Basildon community transport, which expressed grave concerns and is already pointing at a neighbouring community transport operator closing because of the uncertainty. Will my hon. Friend agree to meet me, Basildon community transport and the Community Transport Association to clarify the situation?
Jesse Norman
Yes, of course. I have met the Community Transport Association to discuss this at length, as my officials have been doing for some time, and other community transport entities. I would be delighted to meet my hon. Friend and his constituents.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Domestic air travel is surely an integral part of the UK’s transport infrastructure. In their planning for Heathrow expansion, how much have the Government budgeted to increase the number of domestic routes to London from Scotland, Northern Ireland, the north and the south-west?
Chris Grayling
I hope that this is not a question of our budgeting, because I hope that the links will provide strong commercial opportunities. Governments seldom fund airline routes except in specific cases, such as our recent decisions over the air link from Northern Ireland to Stansted. I hope, however, that the opportunities created by the expansion of Heathrow airport for the regions around the country will mean a thriving trade and attract airlines to take those slots.
Kevin Foster (Torbay) (Con)
I know that the Rail Minister will share my excitement at the prospect of the first new station in the bay since world war two at Edginswell. Will he agree to meet me and the local council to see how we can take this forward and what the prospects might be for new stations funding?
Paul Maynard
I am aware that it was one of the unsuccessful bidders in the most recent round of the new stations fund. We make a point of giving positive feedback whenever we can to help make sure that future bids have the maximum chance of success, so I am more than happy to meet my hon. Friend and his council to discuss how we can maximise the opportunities.
Chris Bryant (Rhondda) (Lab)
The service on the Treherbert line is shockingly bad. Trains are regularly cancelled. When there should be four carriages, there are often two. Obviously, there is to be a new franchise, let by the Welsh Government, but we need more investment in the rail network, and that is down to the Westminster Government. We have 6% of the railways in this country in Wales. Why do we only get 1% of the investment?
Chris Grayling
In Wales right now, we have the biggest electrification programme in the country coming soon; we have new trains coming to Cardiff, Swansea and Pembroke Dock; we have a big investment programme funded by central Government in the valley lines; and I am now looking at what changes we can make to the north Wales line, where there is a real need for improvement.
Grenfell Tower
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
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John Healey (Wentworth and Dearne) (Lab)
(Urgent Question): To ask the Secretary of State if he will update the House on Government action following the Grenfell Tower fire.
The Secretary of State for Communities and Local Government (Sajid Javid)
It is now just over four months since the tragedy of Grenfell Tower. Since then, the Government, the local council and the wider public sector have been working hard to ensure that everyone affected by the fire gets the support they need and that all tall residential buildings across the country are safe.
Since I last updated the House on 5 September, the number of households seeking rehousing has risen to 202. As before, this increase has been caused by members of larger households choosing to be rehoused separately. The local council has now secured more than 200 suitable local permanent properties. Negotiations are under way on others, and by Christmas it expects to have more than 300 available. As of this week, 112 households have accepted an offer of either temporary or permanent accommodation. Of these, 58 have moved in, 44 into temporary accommodation and 14 into permanent accommodation.
The Government are determined that everyone who needs support gets it regardless of their immigration status. We have previously established a process to grant foreign nationals who were resident in Grenfell Tower or Grenfell Walk 12 months’ leave to remain in the country with full access to the relevant support and assistance. Last week, the Immigration Minister announced a dedicated route to permanent residency for the survivors. This policy will allow them to apply for free for two further periods of two years’ limited leave. After this time, they will be able to apply for permanent residence.
Meanwhile, our work to ensure the safety of other tall buildings continues. A total of 169 high-rise social housing buildings in England feature some of the aluminium composite material cladding, and our programme of testing has identified 161 that are unlikely to meet current fire safety standards. The particular focus of current efforts is now on supporting remedial work on those 161 buildings. We are also improving our understanding of the situation for the privately owned high-rise residential buildings with ACM cladding, so that all such buildings can be as safe as possible.
We have made clear to councils and housing associations that we expect them to fund measures that they consider essential to making buildings safe. However, if councils have concerns, they should get in touch with us. We will consider the removal of financial restrictions if they stand in the way of essential work. To date, 32 local councils have expressed concern to us in principle. We have liaised more closely with seven of those, and one of them has now submitted supporting evidence for consideration by my Department.
John Healey
The terrible tragedy of Grenfell Tower was a national disaster. At such times, people look to the Government to lead and to act. The survivors, and the relatives of at least 80 people who lost their lives, deserve no less. I do not doubt the Secretary of State’s good intentions, and I pay tribute to the work of the frontline staff, volunteers and local groups who helped immediately after the fire and are still helping to support the survivors; but, more than four months after the fire, the facts are these.
Only 14 of more than 200 Grenfell families have new homes. Fewer than one in 10 of the country’s 4,000 other high-rise tower blocks has been tested by the Government. The Secretary of State has refused any Government funds for essential fire safety work on other high-rise blocks. Can he confirm that 152 Grenfell households are still in hotels, although the Prime Minister said on 17 July:
“I have fixed a deadline of three weeks for everybody affected to be found a home”?
The Prime Minister told the House on 22 June:
“We can test more than 100 buildings a day”.—[Official Report, 22 June 2017; Vol. 626, c. 169.]
Can the Secretary of State confirm that, in fact, the Government have tested the cladding on fewer than 300 high-rise blocks? On 20 July, he told the House that the Government would
“make sure that they have the support that they need.”—[Official Report, 20 July 2017; Vol. 627, c. 1025.]
Can he confirm that he told the Communities and Local Government Committee last week that there would be no Government funding for councils or housing associations for essential retrofit fire safety work?
Grenfell survivors have a deep mistrust of those in power who failed to respect social housing residents for so long. When Ministers make pledges but fail to act, or fail to ensure that others act, that fuels a wider lack of trust and confidence. The buck stops at the top. Will the Secretary of State now, four months on, secure the extra homes that are needed for all the Grenfell families, provide the Government funds that are needed for urgent remedial work and to retrofit sprinklers, and set a date to come to the House to tell us that every other tower block in the country is safe—not “as safe as possible”, as the Secretary of State said earlier—for the people who live in it?
Many of the Government’s decisions, reviews and inquiries are good, but they will not be good enough until the Government get a grip, and get these fundamental problems sorted out.
Sajid Javid
I know that the right hon. Gentleman cares as deeply about helping the survivors of this terrible tragedy as I do, and as the entire Government do, and it is a real shame that he should try to treat it as some kind of political points-scoring opportunity. He knows exactly what the situation is, not least because I updated the Select Committee—whose members included his colleagues—just last week. The Committee had an opportunity to go into many of the issues in detail, as a Select Committee should, and I am sure that the right hon. Gentleman followed all that. This is not what the victims of the tragedy want to see, and it not what the country wants to see. They want to see all of us working together to do whatever we can.
The right hon. Gentleman asked me about housing. I have talked about that before, but I am happy to say again that the victims of what was easily one of the most terrible tragedies ever to have taken place in our country are people, not statistics. We must work with them and listen to what their needs are. For example, there were 151 households at the start, with Grenfell Tower and Grenfell Walk—the two buildings—taken together, but we are now working with 202 households. That has happened because some of the survivors have asked to split where there are larger families or for other reasons, and we have listened to that. We have listened to every single case, and not one request has been turned down. That, of course, means we have to find even more permanent and temporary accommodation, but that is not our consideration; our consideration is the needs of the victims themselves.
It is right that every family should be properly assessed for their housing need, and should be listened to. Every single family has been offered an assessment by professional housing officers. Some of them have met a number of times, because if they change their mind we need to listen to them. Literally only a handful have not yet had that meeting, but that is at their request, because they are not ready; they will typically be a bereaved family who are not ready to engage. They would rather not go through that process now, and we have listened to them, too.
After the assessments, we have tried to determine—obviously the council was leading the work—whether the survivors wanted to be back in an apartment block again, or if they want a house, and whether there are any other needs. Some families say they do not want to live in the borough, but would prefer to move closer to family elsewhere. All of that is being listened to; we are trying to action all of that and listen to it.
There can be a time lag when families have identified a property—as I have said, 112 families have accepted offers of temporary or permanent accommodation. That lag occurs between acceptances and moving in, because every family has been offered a moving-in package so they can choose the décor, the furniture and any other things that will make their life comfortable. That has been listened to, and of course that will take time.
That is how we are treating these people: as real people and survivors, not as statistics. I know the right hon. Gentleman is not saying that they are statistics, but sometimes it does come across like that. I urge him to work with us, and to listen to what work is actually going on.
The right hon. Gentleman also asked me about the building test. I have given the House an update on the numbers, and a fuller update was given last week at the Select Committee. He asked particularly about the speed of the tests. The Prime Minister rightly said previously that the testing facilities can test up to 100 samples a day. They were specifically testing the samples of ACM—aluminium composite material—cladding that were sent in, and they were done at the speed that they were sent in; the testing facilities can only operate at the speed at which the samples are sent in.
Those tests have subsequently been superseded by the more comprehensive systems tests, which test the whole ACM cladding system. As the right hon. Gentleman knows, that was tested during the summer and it gave a fuller result. I have just shared the numbers of social buildings and private buildings tested so far, and following on from those results, both the interim and remedial action plans that have been put in place.
Finally, the right hon. Gentleman asked about council funding. He rightly said that I have stated before that I will make sure that all councils have the support they need. That is exactly what I and this Government are doing. Councils are rightly expected to carry out all essential works, and they will determine, as the legal owners of the properties, what is genuinely essential work; and if they cannot afford it, that should not be a reason not to do the work. Whether they are interim measures or the final remedial measures, the work must happen, and if the councils need support through financial flexibilities, we will provide that. Again, I gave a fuller account to the Select Committee, so perhaps the right hon. Gentleman will take another look at that.
Bob Blackman (Harrow East) (Con)
I commend my right hon. Friend on keeping the House updated and the comprehensive nature of the updates he has given to the Communities and Local Government Committee.
Given the terrible traumatic circumstances that the victims of Grenfell Tower have been through, is it not much more important that they have a home they can call their own, and that we take the time to achieve that, than that we rush to push people into homes they do not want?
Sajid Javid
I thank my hon. Friend for his comments. He is right: we must take the time that survivors ask of us. We cannot rush any survivor into making a decision with which they may eventually be uncomfortable. Even in circumstances, which have arisen, whereby survivors have accepted a property offer, moved in and then changed their minds and said, “Actually this is not what I wanted”, we should listen to them. We should work at their pace—that is the right thing to do.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Reacting to incidents such as Grenfell is always challenging. After the Prime Minister’s comments yesterday, there are more questions about the Government’s handling of the fire and its aftermath. In Scotland, a working group is reviewing evidence on fire suppression measures, including sprinklers to ensure the safety of residents in high-rise buildings. Sprinklers are only one of a range of risk-reduction measures, but we are reviewing them. The Government dismiss them, telling one council:
“The fire safety measures you outline are additional rather than essential.”
Why do the Government seem to deem any risk-reduction measure as additional, not essential?
Ninety-two households have yet to be found new homes, despite rehousing being a priority. After four months, hundreds of people are still living out of suitcases and hotels and it is simply not good enough. It is time to stop the words—people need action. Will the Secretary of State guarantee that permanent homes will be found for everyone before Christmas?
Sajid Javid
I remind the hon. Gentleman that a full, independent review of building regulations and fire safety rules and regulations has been set up. That is one way in which we can make changes and learn lessons from the terrible tragedy.
The hon. Gentleman talked about what is essential and non-essential for fire safety. As I said a moment ago, we expect councils and housing associations to take expert advice, certainly from their local fire and rescue service, but it is then for the council, not the Government, to determine what is essential.
Mr Philip Hollobone (Kettering) (Con)
What is the formal final total of fatalities? How many victims remain unidentified?
Sajid Javid
Obviously, the police conduct that work independently, but I can give my hon. Friend the latest number: 80 people are missing, presumed dead. That is the latest information that the police have, but they have committed to keeping people updated.
Mr Clive Betts (Sheffield South East) (Lab)
I, too, thank the Secretary of State for coming to the Select Committee meeting and answering questions so thoroughly last week. I want to return to the point about the essential fire safety work that other councils have got to do on their tower blocks. The Secretary of State has talked about extra flexibilities, probably extra borrowing, for those councils, but he has ruled out any money from the Government to help fund the work. Does he realise that many councils may have to defer or cancel other essential maintenance work on properties, putting the lives and health and safety of other residents at risk? Will he reconsider and recognise that this is a national problem, and that the Government should at least share responsibility with local councils to deal with it?
Sajid Javid
I thank the hon. Gentleman for his work through the Select Committee and the scrutiny that he and his colleagues provide. Last week was a welcome opportunity to meet the Committee and discuss this and other issues.
The hon. Gentleman asked specifically about funding and whether the funding requirement could delay other work. Given that each council’s situation is different, I cannot give a general answer for all councils. I said to the Select Committee, and it is worth repeating to the House, that I have set out a process for a full, top-to-bottom review of social housing, not just of the rights of tenants and how they are treated—the redress systems—but of our approach as a country to social housing, which has not been looked at for a generation. We will set out our thoughts in a Green Paper and discuss them with the Select Committee and any other colleagues who want to talk about them. That is an appropriate way in which to consider the wider issues, including renovation, around social housing.
Stephen Hammond (Wimbledon) (Con)
I thank my right hon. Friend for coming to the House again today. He obviously recognises that the fire at Grenfell has implications for the wider area. What are the Government doing to listen to residents’ concerns and how are they addressing their needs?
Sajid Javid
I am pleased that my hon. Friend has raised that point. He will know that in London in the wake of the tragedy we have asked councils to check the quality of buildings, not just the fire safety, but other matters. For example, cracks so big that you could put your hand into them were discovered in the walls of the Ledbury estate tower blocks in Southwark. All those issues, including structural matters, need to be looked at.
My hon. Friend the Minister for Housing and Planning has had a series of meetings and will travel across the country to meet and listen to social housing residents. There is also the Green Paper and the review that we are carrying out.
Tim Farron (Westmorland and Lonsdale) (LD)
Following the fatal fires at Shirley Towers in Southampton and Lakanal House in Camberwell, coroners recommended retrofitting sprinklers in high-rise residential buildings to prevent deaths. Will the Secretary of State therefore explain why the Housing Minister recently wrote to Nottingham City Council to say that the sprinkler system that it requested was additional rather than essential? The Government should be doing everything in their power to prevent such tragedies, so should they not launch a separate formal review into the wider neglect of social housing? The failure to use the Grenfell inquiry to examine wider neglect is an act of neglect in itself.
Sajid Javid
The hon. Gentleman refers to the coroners’ reports following the two previous tragedies, and he is right that in both cases the coroner asked social housing providers to consider the provision of sprinklers. It was recommended that the then Secretary of State write to housing associations and councils to pass on that recommendation, which is exactly what the Secretary of State did at the time.
As for the wider funding issues, I have already answered that question.
Alex Burghart (Brentwood and Ongar) (Con)
The whole House will agree that it is important that those who have been directly affected by the fire have their voices heard, so will the Secretary of State update us on what meetings the Government have had with the victims?
Sajid Javid
My Department, which has been leading the Government effort, has been heavily involved right from day one of this tragedy, as have several councils—not just the Royal Borough of Kensington and Chelsea. London boroughs came together quickly under what is a called a gold command, and all councils have been involved in working with and listening to the victims. Over the summer, a majority of the victims came together to set up Grenfell United under their own initiative, and there have been regular meetings with the group’s committee. I met the group at a meeting to which every survivor was invited, and the victims Minister and the Prime Minister have also met the group.
Helen Hayes (Dulwich and West Norwood) (Lab)
I was troubled to hear the Secretary of State tell the Communities and Local Government Committee that councils would be expected to reprioritise in order to complete essential fire safety works post-Grenfell. Will he confirm whether it is my constituents living in temporary accommodation and desperately waiting for a new home or those waiting for much-needed major works who should be reprioritised? Can he not see that, unless the Government provide grant funding for essential fire safety works, the long-term impact of the tragedy across the country will be a deepening of the housing crisis? We owe it to the victims and survivors to do better than that.
Sajid Javid
As we discussed at the Select Committee, councils are expected to do whatever work is necessary to keep people safe, including interim measures and final remedial measures. They will get support from the Government in the form of flexibilities that will allow them to do that work. The hon. Lady referred to other work, and I believe that I have answered the question about how that should be considered in a fuller review, because that issue is bigger than the essential work. We need to look beyond the essential work to see what else needs to be done by the Government to improve social housing more generally. I am sure she would welcome the steps that the Government have taken towards that, such as the commitment to put an additional £2 billion into social housing that was announced just a couple of weeks ago.
Rebecca Pow (Taunton Deane) (Con)
I was pleased to hear the Secretary of State’s comments about social housing and to hear that, as recommended by Sir Martin Moore-Bick, the Government are looking more closely at social housing issues. Will the Secretary of State update us on the first steps that are being taken to put something in place?
Sajid Javid
My hon. Friend refers to the Green Paper on social housing that we are already working on. One of the key ways in which we will develop that paper is by listening to people who already live in social housing—not just those in one area. London is important, but we want to listen to people from across the country about the issues they face in terms of the quality and type of social housing. We want to hear about redress and how to ensure that we can have a better system, so that we can listen and take action when residents come up with issues.
Clive Efford (Eltham) (Lab)
Can the Secretary of State imagine a situation in which so many thousands of people were in potential danger that would not be treated as a national issue for the Government? We have a Secretary of State who is trying to wash his hands of responsibility. The commissioner of the London fire brigade says that retrofitting sprinklers in tower blocks
“can’t be optional, it can’t be a nice-to-have”.
Does the Secretary of State agree with the commissioner, and will he work with local authorities to retrofit sprinklers in tower blocks?
Sajid Javid
With respect, I do not think the hon. Gentleman has been listening to my responses. As I have said, and I repeat it again for his benefit, it is for property owners—local councils and, in some cases, housing associations—to determine what is essential, after taking the advice of their local fire and rescue service, the local experts. Once they take that advice, we will listen to their determination.
Robert Halfon (Harlow) (Con)
I welcome the work my right hon. Friend has set out. He mentions the social housing review; should not that focus on our need for dramatically more social housing? Will he lobby the Treasury for tax incentives for housing associations, and will he liberalise planning rules so that we can build social housing for the 21st century?
Sajid Javid
I am pleased that my right hon. Friend raises that point. He highlights the importance of social housing, which is a significant part of the total housing delivery in this country. That is why we want to provide more support for housing associations and ambitious councils that want to build more homes—one reason we recently announced the additional £2 billion. We listened to the sector when it said it wanted more certainty on rents from 2020 onwards, and we have provided that.
Fiona Onasanya (Peterborough) (Lab)
The Secretary of State has talked about financial support through financial flexibilities, but I would be grateful if he specifically confirmed, or even agreed, that what he is referring to is a loan and that financial provision needs to increase because budgets have been cut.
Charities have raised more than £24 million for the survivors of this horrific tragedy. How do they access that money, and how much of it has already been accessed?
Sajid Javid
First, on flexibilities, in some cases it may well be a loan. If a council’s housing revenue account borrowing limit is increased, that will be an additional loan, but in some cases councils have approached us to ask for a one-off authority to make a transfer from their general fund reserve—in that case, it will not be a loan.
I am glad that the hon. Lady highlights the charities. Charities raised more than £20 million of funding immediately after the tragedy, and they continue to raise money. I commend their work, which will really help the victims of this tragedy. More than half the money has been distributed so far. Of course, distribution is not a Government job—it is up to the charities—but the Department for Digital, Culture, Media and Sport has tried to co-ordinate for the charities so that they can work together to ensure that they help victims in the best way.[Official Report, 1 November 2017, Vol. 630, c. 1MC-2MC.]
Simon Hoare (North Dorset) (Con)
I commend my right hon. Friend and the Department for their granular approach to this tragedy—that seems the right approach. Finding the truth and identifying justice is crucial. Will he update the House on the progress on the inquiry?
Sajid Javid
My hon. Friend raises one of the most important issues following this tragedy: the need to seek the truth and justice for the survivors, their families and their friends. Of course, he will know that that work is rightly being led through an independent public inquiry—a judge-led inquiry—and that work has begun. It is not for me to comment on how it is progressing or on the final timing of it, but it is right that this has been set up. The judge will get the co-operation of everyone he needs it from, be it Government, my Department or others. The police work and the police inquiry are going on separately, and I expect the police to continue to give public updates on that.
Jack Dromey (Birmingham, Erdington) (Lab)
An Erdington tower block tenant asked me, “Will the Government pay to keep us safe?” The west midlands fire service has advised £41 million of works, including the retrofitting of sprinklers, but the city is reeling from £700 million of cuts to its budget. Will the Government pay to keep the tenants of Birmingham safe?
Sajid Javid
First, if the city had managed its public finances better, it might be in a better position. But when it comes to essential work, of course there should be no shortcuts. Any support that it needs will be provided. I have talked about how that support can be provided and the type of works it needs to do. As I have said, and am happy to repeat, it is essential that the city take the advice of its local fire and rescue service, which it has done—that is important and it is good to see. We will look at that, but it is the legal owner of that building with a legal responsibility to keep it safe. Whatever it comes to us with and determines as essential, that is what we will listen to, and this is how we will work with it to help provide the flexibilities it needs.
Robert Courts (Witney) (Con)
Will my right hon. Friend please reassure me that the victims’ views will always be given paramountcy by the Government and that when making decisions about the recovery their views will be taken into account above all else?
Sajid Javid
I can absolutely assure my hon. Friend that victims’ views come first, second and third.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Does the Secretary of State not recognise that escaping from a 20-floor tower block is exactly the same in Birmingham, Manchester and London, so leaving this to local decisions is not good enough? Local authorities will face having to replace panels and trying to retrofit sprinklers in a short period. I do not see that that is manageable out of a normal essential works budget.
Sajid Javid
The hon. Lady raises an important point about how this is about not just the funding, which I have talked about at the Dispatch Box a number of times, but capacity—the capacity to commission the work, and to make sure the replacement cladding, the scaffolding and all the essential bits and pieces are available. That is why one of the first things we did, working with the Department for Business, Energy and Industrial Strategy, was to set up an industry response group, with representatives of industry across the UK, to make sure we are co-ordinating the availability of essential materials and capacity, including the specialist labour that will be necessary. As well as the funding, that is also a necessary part of this and we are very much involved in it.
Martin Vickers (Cleethorpes) (Con)
I am chairman of the all-party group on local government, and along with other members of the group I have been following closely the responses of individual local authorities. I recognise that much hard work has been done to monitor the situation in social housing, but to reassure people up and down the country, will the Secretary of State confirm that his Department is monitoring the response of councils, particularly those facing financial problems and those perhaps with a lack of expertise within them?
Sajid Javid
Yes, I am happy to give my hon. Friend that reassurance. From day one, when we put the building safety programme in place, the number of people in my Department—the specialists—dealing with this has increased dramatically. One reason that has been necessary is that every building that has been identified—where, first, there had to be testing, and this was followed by the results of the testing, the interim measures and the remedial measures—has been allocated to an individual in my Department. So an individual has been following how the local authority, housing association or private sector operator has handled the testing and their response to the results of that testing. That has been necessary to make sure that all the necessary work takes place, and we will continue to do it for as long as is necessary.
Matt Western (Warwick and Leamington) (Lab)
I welcome the announcement of the social housing review, but will the Secretary of State please reconsider, as part of that review, my request of some weeks ago for an audit of all social housing? That would enable us to understand things such as the extent of concrete cancer and the percentage of homes with sprinklers, and therefore to best understand the scale of the problem and the investment that is needed, to which the hon. Member for Cleethorpes (Martin Vickers) perhaps alluded. That would be most welcome.
Dan Carden (Liverpool, Walton) (Lab)
We must never forget the incredible work of the firefighters on that day. The fire and rescue service faced 30% cuts up to 2015, and local government settlements suggest there will be cuts of a further 20% before 2020. Meanwhile, firefighter pay has been capped at 1%. Is the Secretary of State at least having conversations with the Chancellor about a moratorium on fire and rescue cuts and about increasing firefighters’ pay?
Sajid Javid
The House cannot commend enough the work done by the fire service—not just what it did in response to this terrible tragedy, but its work in general up and down the country. With respect to the response to the tragedy, there is no evidence that there was a resource issue; however, it is correct that the ongoing independent inquiries are the ones properly to assess that, not us in this House. I direct the hon. Gentleman to the work that is being done through the independent review of not only building regulations, but fire safety rules and regulations. It is just the kind of thing that the review can look at.
Lilian Greenwood (Nottingham South) (Lab)
The Secretary of State has confirmed that it is for local authorities to seek expert advice in determining what work is essential to keep tower block residents safe. As my hon. Friend the Member for Eltham (Clive Efford) said, fire chiefs’ advice is unambiguous: the retrofitting of sprinklers cannot be optional or a “nice-to-have”; it is something that must happen. Why, then, did the Minister for Housing and Planning tell Nottingham City Council that sprinklers were “additional rather than essential”? Is he wrong?
Sajid Javid
We have asked Nottingham City Council for further information. What I have said generally for every council, whether it is Nottingham or others, is that it is for the council to determine what is genuinely essential, and that must be based on expert advice.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Lewisham Council has done all the safety checks and is doing all the remediation works to ensure that our blocks are safe, and it doing that at great cost. The Government said that such work would be fully funded, yet no funding is forthcoming. Are the Government trying to bankrupt councils?
Sajid Javid
Lewisham Council is one of the number of councils I mentioned earlier that have contacted us. We are in more detailed discussions with a few of them, and we have asked for further information and are looking at it.
Thangam Debbonaire (Bristol West) (Lab)
What is the Secretary of State doing to build public confidence among the people of Barton Hill, Kingsdown, Redcliffe, Hotwells and elsewhere in my constituency in the content, scrutiny and enforcement of fire and building safety regulations?
Sajid Javid
The hon. Lady will know about the work that has been going on with respect to publicly owned buildings, which include those owned by housing associations as well as by local councils; I have set that out previously and done so again today in detail. Like all other Members, she will have in her constituency private sector buildings, including the tall buildings above 18 metres, some of which we have tested if samples have come forward to us.
On 5 September, based on the expert advice that we had received, I wrote to the chief executive officer of every council to ask them to put in place a procedure to work out what other private buildings they have that would meet the criteria, to make sure that they are tested and to confirm for themselves that they are safe. I also took the opportunity to remind local council leaders and chief executives of the powers they already have under the Housing Act 2004 to take enforcement action, if they need to, on building regulations, if the work was recently done, as well as the powers that the fire and rescue services have under the fire safety order.
Ian Mearns (Gateshead) (Lab)
I remind the Secretary of State that the withdrawal of billions of pounds of revenue support grant from local authorities has been a unilateral decision of his Government since 2010. Therefore, placing that responsibility on local authorities in that light is beyond contempt. The residents of my 24 tower blocks in Gateshead really do express their deep sympathy for the occupants of Grenfell Tower, the bereaved and the traumatised, but they are also looking for peace of mind. Their buildings are not clad in the same way as Grenfell Tower, but they do live in blocks that have no sprinkler systems, and many of them in blocks with single stairwells. They have to live there whether they are elderly, infirm, disabled or vulnerable. They are looking for peace of mind from this Government and from this Secretary of State, and I am looking for it now.
Sajid Javid
In that case, the hon. Gentleman should be reassured that his council, like others, has received expert advice and has been asked to work with us in checking all buildings locally, whether they are in the public or the private sector. Where it needs further support and advice from us, those are available. It has also been reminded of the extensive enforcement powers.
Business of the House
(6 years, 6 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 business for next week?
The Leader of the House of Commons (Andrea Leadsom)
The business for next week is as follows:
Monday 23 October—Second Reading of the Automated and Electric Vehicles Bill.
Tuesday 24 October—Second Reading of the Smart Meters Bill.
Wednesday 25 October—Opposition day (3rd allotted day). There will be a debate on social care followed by a debate on supported housing. Both debates will arise on a motion in the name of the official Opposition.
Thursday 26 October—General debate on the implementation of the Modern Slavery Act 2015 followed by general debate on global LGBT rights. The subjects for these debates were determined by the Backbench Business Committee.
Friday 27 October—The House will not be sitting.
I should also like to inform the House that the business in Westminster Hall for 23, 26 and 30 October will be:
Monday 23 October—Debate on an e-petition relating to eligibility for mortgages.
Thursday 26 October—Debate on International Freedom of Religion or Belief Day.
Monday 30 October—Debate on an e-petition relating to proportional representation.
I am sure that the whole House will join me in marking national adoption week. The love and support offered by so many in this country to otherwise vulnerable children is to be celebrated.
Finally, the festival of lights, one of the happiest holidays, also begins today, signifying the victory of good over evil, knowledge over ignorance and light over darkness. May I take this opportunity to wish everyone a very happy Diwali?
Valerie Vaz
I thank the Leader of the House for the forthcoming business—again, it is just for one week, not two—and also join her in wishing everybody peace and prosperity for Diwali. I also thank her for providing an advance copy, which I got via email on Tuesday, and the Vote Office in Portcullis House for having hard copies of it for Members on Monday.
This week, the sky darkened, a hurricane hit our islands, and the Government continued with their game playing both here and in Europe. I want to reiterate what you said after the motion yesterday, Mr Speaker, which was that
“the Leader of the House has to be the House’s representative in the Government.”—[Official Report, 18 October 2017; Vol. 629, c. 956.]
I am sure that the Deputy Leader of the House, who was in his place yesterday, will have informed the Leader of the House about the outcome. There were seven points of order following the debate. Member after Member—and you, Mr Speaker—wanted to know what the position is when the House votes 299-0. As the shadow Secretary of State for Work and Pensions said in her point of order, if the Government have retreated on certain aspects of a policy, the Minister should come to the House and explain.
This is where we make the law. The hon. Member for Gainsborough (Sir Edward Leigh) was right to say that this is not a school debating chamber. You made it very clear, Mr Speaker, that the Government should come to the House, because a motion was passed to pause the roll-out of universal credit. It took a week for them to end the charges on the helpline for universal credit. This is a disorganised Government who are disrespectful to the House. What do we say to the democracies around the world; to the UK Youth Parliament, who are coming here on 10 November; to young people as they learn about democracy; or to those who voted to get their sovereignty back? No wonder the EU negotiating team think the Government are amateurs. That is why they want to speak to the Opposition.
Could the Leader of the House please tell us how the Government will honour the result, as the Official Report put it:
“Resolved, That this House calls on the Government to pause…Universal Credit”—[Official Report, 18 October 2017; Vol. 629, c. 955.]?
Is that really it for the business for next week: Monday, robot cars and Tuesday, smart meters? Are those the most pressing things for the House to debate? The shadow Secretary of State for Transport told me that the Government have accepted our amendments, so it is effectively our Bill.
The country is crying out for action—not calls for evidence—on housing, education, health, and the mounting debt caused by stagnant wages and increases in the cost of living, which we want to address in our Opposition days. But the Leader of the House must give the House a commitment today that non-urgent statements will not in future be used to disrupt Opposition days. I know the Government did not want to hear about people in rent arrears struggling to feed their families when they are in work, but that is the reality when Government policy is failing.
Mr Speaker, I want to draw your attention to another alarming situation. The Sanctions and Anti-Money Laundering Bill—a very serious Bill, to make provisions enabling sanctions to be imposed to comply with UN obligations “or other international obligations”: the EU cannot be mentioned at all on the face of the Bill—had its First Reading in the House of Lords yesterday, but the Bill will be printed today. That must be a first—where a Bill has passed its First Reading and no one has seen its contents until a day later. It should be one for the Foreign Secretary, but perhaps he cannot be trusted with the Bill. Worse still, the House of Commons cannot be trusted with the Bill. So will the Leader of the House please explain why that Bill started in the other place?
When will the European Union (Withdrawal) Bill come before the House for its Committee of the whole House stage? I read in an email yesterday that it will be after the November recess. Is that correct? Should we not be discussing it here? Will the Leader of the House please tell us what is happening?
May we have a statement on the growing scandal of the missing NHS files, as revealed in the Public Accounts Committee? There has been no response to the letter from my hon. Friend the Member for Stockton South (Dr Williams) on referrals for children with autism; 142 Members across the parties want to know why parents and children in a place like Stockton have waited nearly four years from the point of referral to specialist assessment. NICE guidelines say it takes three months. We are failing those children, some of whom are absolutely brilliant and see life in a different way from us.
Finally, it was great to attend the Women of the Year lunch last Monday with other hon. Members. The winners of the awards are truly deserving. The leadership award went to Dany Cotton, the first female commissioner of the London fire brigade, for her leadership in response to the Grenfell Tower fire. The international award went to the White Helmets, as a favoured charity of our dear colleague Jo Cox. It says:
“To save one life is to save all humanity”.
The main award went to the women of the emergency and medical services following the Manchester bombing—doctors, nurses, paramedics, the deputy chief constable and community police officers. I know the whole House will join me in acknowledging the work that those women have done in difficult times, as we all work towards a more equal society.
Andrea Leadsom
May I start by absolutely sharing in the hon. Lady’s praise for all those amazing women who won awards in the Women of the Year award ceremony this week? Our thanks and gratitude go to all those who contributed in the response to the appalling Grenfell Tower tragedy and those who rushed out to help after the Manchester bombing. I completely share her awe at what they have achieved.
The hon. Lady raises a number of issues. I will try to address them all but if she will forgive me; she spoke very fast—[Interruption.] I will try to get to all of them. She raised first the issue of the number of points of order last night in response to the Opposition day debate. She is aware that, as you said, Mr Speaker, the resolution of the House was passed, and that the Government are indeed not bound by that resolution, as you pointed out yourself. However, I assure all Members on both sides of the House that the Government are listening and have been listening. As my right hon. Friend the Secretary of State for Work and Pensions said yesterday, and as was reiterated by the Prime Minister in Prime Minister’s questions, the DWP, as a result of issues raised in the House, has looked again at charges for those using the DWP helpline and has agreed that those charges should be stopped. That is direct action as a result of concerns raised across the House.
It is important—again, the Department for Work and Pensions has been listening carefully—that more is done to ensure that those claiming universal credit are aware that they can get up to 50% of the first month’s payments in the form of an emergency payment within seven days or even earlier. It is also important that many different efforts are being made by the DWP to work with landlords to ensure that those on universal credit do not get into difficult rent arrears. As colleagues will know, it is possible for rent to be paid directly to landlords, and that is now the case for many universal credit recipients.
So I assure colleagues that the House is absolutely being listened to, and the concerns being raised are acted on. I can also assure colleagues that DWP Ministers will come back to the House, as they have several times, to update it on progress in addressing the concerns raised by Members across the House. [Hon. Members: “When?”] That will be as soon as there is more to tell the House about the achievements that have been put in place. It is very important that the Government show that we are listening and taking action. If hon. Members wished to be fair about it, they would accept that a great deal of progress has been made, and it is important that we continue with that.
The debate yesterday specifically called for a pause in the roll-out of universal credit. I can reassure hon. Members that the roll-out schedule already includes a number of pauses. There has recently been one; the next is scheduled for January. The roll-out of universal credit is being done over a lengthy period.
However, it is important that we go back to the origins of universal credit. Even the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) on the Opposition Front Bench agrees that universal credit is a good move for those trying to get back into work. It consolidates six benefits into one. It provides more support for those trying to get into work. Three separate studies show that universal credit recipients get into work faster than jobseeker’s allowance recipients. Because of the simple taper rate, there are no hours rules and cliff edges, as there are with tax credits. And, of course, universal credit covers up to 85% of childcare costs, versus 70% with tax credits. All of those things are really important to support recipients to get into work, which is good for them and good for their families.
The hon. Member for Walsall South also raises the question of when the European Union (Withdrawal) Bill will come to the House for its next stage, which will be Committee of the whole House. I want to reassure hon. Members that, as has been widely reported and as is well known, 300 amendments and 54 new clauses have been put forward. It should be reassuring to the House to know that the Government are looking carefully at those amendments and new clauses to ensure that, when the Bill does come back to this Chamber for a response and for the debate—we have eight days of debate, with eight protected hours on each day—the responses will be well thought through.
However, I would like to point out to Members on both sides of the House, who may not be aware of this, that there is nothing odd at all about a pause between Second Reading and Committee of the whole House. Specifically, with a constitutional measure such as the Fixed-term Parliaments Act 2011, there were six sitting weeks between Second Reading and Committee of the whole House. With the Human Rights Act 1998, there were 10 sitting weeks between Second Reading and Committee of the whole House. With the Scottish Parliament (Constituencies) Act 2004, there were eight sitting weeks between Second Reading and Committee of the whole House. I hope that that reassures hon. Members that there is nothing odd or anything to fear from this slight pause. It is our clear, stated intent to show respect to the House by coming back to it with clear, considered responses to all the proposals made by hon. Members on both sides.
The hon. Lady asked why the Sanctions and Anti-Money Laundering Bill has started in the other place. She will be aware that through discussion among the parties it is important that we schedule legislation appropriately between starting in the Lords or in the Commons. There is nothing odd about a Bill starting in the other place. This Bill was considered suitable for their lordships to consider with the level of expertise that they have. She will be aware that this week we have had the Second Reading of a Brexit Bill on nuclear safeguards, and further Brexit Bills will be introduced in this House and in the other House, as is perfectly normal parliamentary procedure.
The hon. Lady raised the length of time that it has taken for referrals of children and young people with autism. I share her concern about that issue, and I am happy to raise it specifically with the Secretary of State for Health—I know that he is concerned about it himself. I urge Members to seek appropriate methods, either through Health questions or through a debate, to raise this very serious issue further.
Sir Edward Leigh (Gainsborough) (Con)
May I put to my good friend the Leader of the House a Conservative long-term point of view about the events of last night? It may be that in future we have a minority Labour Government. They may produce a policy that we think is deeply contrary to our personal liberties. We may muster a majority in Parliament against it. What happens if that future Labour Government then say, “We’re sorry—you’ve set the precedent, this is only an expression of opinion, and we’re going to ignore Parliament”? Frankly, the road to tyranny is paved with Executives ignoring Parliament. I therefore urge my right hon. Friend to listen to Parliament. I believe that the Secretary of State should come and make a statement, and it should be a statement full of meat. Parliament does matter. If we, as Conservatives, live by the sword now, our Conservative values might die by the sword in future.
Andrea Leadsom
Can I assure my hon. Friend that there is no precedent being set here? The Government, like different parties and different Members, will look on a case-by-case basis at whether they will vote on specific motions or not. There is no precedent being set. I have just explained at some length that this Government are very clearly listening to Parliament and have very clearly taken action as a result of concerns raised in the House. I have also given an assurance that DWP Ministers will come back to this Chamber to update Members on progress with rolling out universal credit.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank the Leader of the House for announcing the business for next week.
Well, last night went well, didn’t it? What an anti-democratic shambles—an utter embarrassment for this House. Just when we thought this Government could not demonstrate more contempt for the democratic arrangements of the House, they have got into the lift and taken us down another couple of levels. I do not know what will be next. Maybe they will refuse to answer questions from the Dispatch Box. Maybe they will even try to abolish all these inconvenient voting Opposition parties. They might even do the country a favour and abolish themselves. The Leader of the House has to get a grip and the vacuous nonsense has to stop. She is the Leader of all of the House and she has to take that responsibility seriously. The first thing she needs to say is that she takes the view of the House seriously. We voted last night to pause the roll-out of universal credit, the Government have to accept it, and we have to hear that from a DWP Minister at the Dispatch Box.
What about the EU repeal Bill? The delay is not because of all the amendments the Leader of the House talks about—it is because the fractious Conservative party cannot agree a solid line on all this, and they are terrified of any possible defeat. That is why we are not seeing the repeal Bill. There is talk now that we might not even see it much before Christmas. We have to see it soon.
We are getting all this talk about a no-deal hard Brexit, and these guys are actually serious about putting forward this flavour of disaster. We need to have a debate to see how much it will cost. We know that Scotland and the north-east of England will be impacted the hardest by a no-deal hard Brexit, so can we have a debate on all this?
Lastly, can we have a statement on Catalonia, which is perhaps the biggest crisis we have seen in mainland Europe? There is talk today of suspending the national Parliament and of repression on the streets. When will we get a statement on that?
Andrea Leadsom
I am grateful to the hon. Gentleman for his contribution. I could repeat all the points I have already made: I absolutely take my responsibilities seriously; I am, absolutely, Parliament’s representative in Government as well as Government’s representative in Parliament; and I am listening very carefully. As I have assured hon. Members, the Department for Work and Pensions has taken action as a direct result of points raised in this House by Members from across parties, and it will come back to this House to provide further updates on progress made as a direct result of points raised in this House.
The hon. Gentleman talks again about the European Union (Withdrawal) Bill. I think I have made the point very clearly that out of respect for this House, the Government are doing justice to the very significant concerns that have been raised about procedures and policy in the EU (Withdrawal) Bill, and it will come back to the House just as soon as the Government are prepared to do justice to the new clauses and amendments that have been tabled by Members. In addition, it is absolutely normal practice in this House to have a pause between Second Reading and Committee of the whole House, particularly on large constitutional Bills, to make sure that we are able properly to consider all the points raised.
The hon. Gentleman also raises the significant and very concerning matter of the Catalonian situation. He is right to do so, and I say again that we have all been very concerned and dismayed to see the violence on the streets in Spain. However, Spain is a very key ally of the UK, and we do urge all parties to ensure that any actions taken are constitutional and legally justifiable.
Mr Peter Bone (Wellingborough) (Con)
On rare occasions, I have been in trouble with the Whips for not voting for Government policy. Yesterday would have been the first time that had I voted for Government policy, I would have been in trouble. We cannot ignore the will of the House. This is about not just Opposition days, but Back-Bench business days—and what if a motion put forward by the Government is lost, because the Government ignore it?
The fact is that we have to have a mechanism whereby the Government formally come back and explain what action they are going to take as a result of a vote in this House. May I suggest to the Leader of the House that she considers that proposal this week, and that she comes back next week and says that that is exactly what is going to happen? Will she tell us that within 12 weeks of a vote, a Minister—perhaps even the Leader of the House—will come back and explain what action has been taken? [Interruption.] I said within 12 weeks. [Interruption.] Oh, tsk—stop! That could perhaps be called the Leadsom convention.
Andrea Leadsom
My hon. Friend has raised that perfectly reasonable suggestion on a number of occasions. As I have made clear, it is the intention of DWP Ministers to come back to this place to update the House on progress frequently and, I am sure, certainly within the timeframe that he mentions. I think it is very important to be clear on this: this is not some new precedent. On the universal credit issue yesterday, the Secretary of State for Work and Pensions came to this House and responded very fully to points and concerns raised by this House. It is perfectly right that the House continues to raise issues and that Departments continue to respond to them.
Ian Mearns (Gateshead) (Lab)
I thank the Leader of the House for the business announcement for next week, and for confirming the two Back-Bench business debates on Thursday 26 October on the implementation of the Modern Slavery Act 2015 and on global LGBT rights. May I, however, entreat her once again to give us some notice of future Back-Bench time? We received eight applications from right hon. and hon. Members on Tuesday this week, but we were unable to confirm to them that we had any debating time in the Chamber to allocate to them. It may be difficult at the moment for the Government to know what they want to do in their own time, but surely they could let the Backbench Business Committee know in a timely way what time they intend to allocate to us.
I am very privileged to say that I was re-elected as chair of the all-party group on housing in the north last night, when we received representations from a number of chief executives of housing companies in the north of England. I am afraid to say that the message from them is that housing arrears are building in universal credit roll-out areas. In the discussion earlier, the Secretary of State for Communities and Local Government told us that local authorities have a responsibility to retrofit sprinklers and undertake safety work, but if they have major problems with their housing revenue accounts and are at the borrowing cap, it is very difficult for them to do so. Some reality needs to kick in here.
I have one last point. I do not know if it is just me, but my mobile phone does not seem to be working as well in this building as it has done in the past. I am wondering whether the scaffolding now cladding many parts of the building is acting as a Faraday cage for mobile phone signals. If that is the case, we need to do something about it so that Members can communicate with one another and with their constituents.
Andrea Leadsom
I am grateful to the hon. Gentleman for his points. On Back-Bench days, as I said last week, we will always seek to give him as much notice as we possibly can. He will appreciate that there is a lot of new legislation—we are still in the early days of this new parliamentary term—and we need to get started with a number of competing priorities. He will appreciate that we will give him as much notice as we possibly can, and I was delighted that we were able to protect time last week for some of his important debates. We will continue always to listen and to seek to address any specific concerns he has.
On social landlords, as I mentioned earlier, it is possible to have direct payments to landlords from universal credit recipients: 34% of social sector tenants on universal credit now have such an arrangement. I encourage the hon. Gentleman to make sure that landlords are aware of that facility. I know that Ministers have taken away that point from yesterday’s debate and will look at it carefully again.
On the hon. Gentleman’s third point, I had not previously heard about mobile phone problems. I am pleased to say that my mobile phone still seems to be working, but I certainly understand that there may be some problems relating to the scaffolding and I will look into the matter.
Sir David Amess (Southend West) (Con)
Will my right hon. Friend find time for a debate on encouraging people with learning difficulties to get involved with the performing arts? On Sunday, at the London Palladium, the Countess of Wessex, the chairman of the Royal Mencap Society, Mr Derek Lewis, and many parliamentarians witnessed an absolutely inspiring performance by the Music Man Project.
Andrea Leadsom
I regret, in that case, that I was not invited. The Government aim to ensure that Britain is one of the world’s most creative and exciting places to live. As part of this, we are absolutely committed to ensuring access and equality within the performing arts, and of course to making sure that creative professions are accessible to talented individuals irrespective of their background. I thoroughly welcome my hon. Friend’s question, and I will look to find time for such a debate.
Mr Ben Bradshaw (Exeter) (Lab)
Has the Leader of the House seen the very worrying series of openDemocracy reports this week on the role of dark money in the EU referendum, including revelations of illegal donations to the Democratic Unionist party and new questions today over the real wealth of Arron Banks, the main financial backer of Leave.EU? Given the widespread public concern about foreign, particularly Russian, interference in western democracies, will she assure the House that the Government and the Electoral Commission will examine these reports very carefully, and reassure our country that all the resources spent during the referendum were from permissible sources?
Andrea Leadsom
The right hon. Gentleman raises an incredibly important point. Of course, any specific information should always be raised with the Electoral Commission to ensure that any wrongdoing is caught. I absolutely share his concern that we need to make sure that all donations are indeed permissible and legal.
Mims Davies (Eastleigh) (Con)
Last week, I was delighted to host an event in Parliament to highlight the issues of familial hypercholesterolemia, or FH—a genetic disorder. I also ran the marathon this year in support of Cardiac Risk in the Young, which promotes heart screening. Some 1,300 young people in Eastleigh have been screened in memory of Claire Reed. Ensuring that those young people with risks are screened saves countless lives. Will the Leader of the House find time for a debate in this Chamber on heart screenings?
Andrea Leadsom
First, I congratulate my hon. Friend on that marathon; I remember her absolute exhaustion the following day, and we were all in awe of her achievement. She raises an incredibly important point about how screening, particularly for heart issues, can save lives. I encourage her to seek an Adjournment debate on that very important matter.
Chris Bryant (Rhondda) (Lab)
I am enormously grateful to the Leader of the House for her personal support for my private Member’s Bill, which we will be debating tomorrow. I wonder whether she could do something else to help. As things stand, if Second Reading goes through tomorrow, as I hope it will—many Members had their photograph taken yesterday in support of the Bill—and even if we get it through Committee in a couple of weeks, it will not reach remaining stages until the end of April. That is a long time. If the Government wanted to—if it had a gap in the legislative programme, perhaps—it could decide to adopt the Bill and give it Government time on the Floor of the House before Christmas, so that we could get it on the statute book.
Andrea Leadsom
As the hon. Gentleman is being so charming and persuasive, I absolutely assure him that the Government are behind his Bill. It is entirely right that we should protect emergency workers from abuse and violence and completely wrong that they should be attacked by people whom they seek to help. I assure him that we will make our best efforts to bring forward his Bill as soon as we can.
Mark Pawsey (Rugby) (Con)
On yesterday’s debate and debates more generally, my observation is that there is often very little time for Ministers to respond to the many points raised by Members. Many Members spoke yesterday, but the Minister had only 10 minutes to respond. Will the Leader of the House consider making more time available for Ministers to respond?
I wanted to ask the Leader of the House for a debate on strategies for increasing participation rates in sport. There was an announcement yesterday by the sport that started in my constituency about Project Rugby, an initiative encouraging the disabled and those from the BAME community to play rugby. I was interested in the remarks made by my hon. Friend the Member for Southend West (Sir David Amess) about those with learning disabilities taking part in theatre. They can also play rugby. Can we encourage such initiatives?
Andrea Leadsom
I share my hon. Friend’s love of rugby—both the sport and the town; I am thinking in particular of my own home team, Northampton Saints. He is right to highlight Project Rugby, an excellent initiative to try to get more people with disabilities, and BAME people, to participate in the sport. It is a fantastic game and I encourage all Members to promote it as far as they are able.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I gently say to the Leader of the House that if she is worried about the number of amendments to the European Union (Withdrawal) Bill, she might consider giving it more time when it finally turns up in this House to be debated.
I wanted to ask the Leader of the House a specific question, Mr Speaker; I know that you recognise the important work done by the Intelligence and Security Committee. Given the serious terrorist incidents that we have seen this year and the fact that the Committee, as I understand it, has not met since April, will the right hon. Lady explain when she expects it to be established and when it will start its important work?
Andrea Leadsom
The hon. Gentleman is right to raise the issue. The Committee will be established just as soon as it can be. It requires that names be put forward from both sides of the House, and there are particular screening procedures and so on. I assure the hon. Gentleman that it will be re-established as soon as possible.
Kirstene Hair (Angus) (Con)
Does my right hon. Friend agree that it is vital for Members to able to raise their concerns, both local and national, about the ongoing defence review? Will she agree to hold a debate on the issue, which could have huge implications for my constituency if the future of RM Condor and 45 Commando is not clarified?
Andrea Leadsom
My hon. Friend raises a very important point not just for her constituency, but the country. I can tell her that in July the Government initiated a national security capability review—the NSCR—which will ensure that the UK’s investment in national security capabilities is joined up, effective and efficient. It is being led by the National Security Adviser. The Ministry of Defence, the Home Office and our security services will make a full contribution to that review. She may like to know that there is a Westminster Hall debate this afternoon. She may wish to take part in it.
Vernon Coaker (Gedling) (Lab)
Will the Leader of the House go back to Department for Work and Pensions Ministers and tell them it is no good them coming to the House at some point in the future? They should be here on Monday and they should be saying to people what they are going to do about the will of Parliament, as expressed in yesterday’s vote. We already have universal credit in my constituency. The latest figures from Gedling Homes show that 92% of its tenants on universal credit are in arrears. That is not an accident, but a direct consequence of Government policy. It is a new Poor Law and we need to do something about it now.
Andrea Leadsom
As I have said to a number of hon. Members, the Department for Work and Pensions has heard the concerns of this House. The Minister has specifically said that he will look more closely at the issue of rent arrears. A number of those rent arrears are rolled over from the previous system, and are not as a direct result of universal credit. Let us be clear: universal credit is designed to help people to get back into work. It consolidates six complex benefits into one. It provides more support, more encouragement, more ability for people to increase their hours and not lose their benefits, and more support for childcare. It is designed to help people into work and it is succeeding.
James Cartlidge (South Suffolk) (Con)
I just received a letter this morning from the Under-Secretary of State for Transport, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) stating that the A12 upgrade is to be delayed. This is an extremely significant piece of infrastructure in East Anglia. For my constituents, it is probably their most important road. I am obviously very concerned to hear this news, but I received the letter 17 minutes after Transport questions. Given that I did not have the chance to raise the issue then, will my right hon. Friend consider a debate on road infrastructure? I am sure that many other colleagues would like to consider the significance of such issues.
Andrea Leadsom
I am very sorry that my hon. Friend just missed Transport questions and I can quite understand his frustration. He will be aware that billions of pounds of new road programmes are being introduced, including £2.3 billion on a new housing infrastructure fund to ensure we can provide more roads that facilitate housing development. I would be very happy to take up his specific point with the Department for Transport. I am also sure that Transport Ministers will be keen to hear from him.
Paul Flynn (Newport West) (Lab)
While I am sure the answer was given in good faith, the answer the Leader of the House gave to my right hon. Friend the Member for Exeter (Mr Bradshaw) is untrue. The Electoral Commission has confessed that it has no mechanisms to find out whether there has been interference by cyber-techniques from Russia, by botnets and by artificial intelligence. These methods of distorting and buying elections have come in since the rules for the Electoral Commission were laid down. We must look seriously at this issue. I recommend the Leader of the House reads the journalism of Carole Cadwalladr, who has named precisely the organisations that may well have rigged the result of the referendum, because we know it is in Russia’s interests to destabilise Europe.
Andrea Leadsom
Just to be very clear to the hon. Gentleman, I was not suggesting that the Electoral Commission should investigate; I was merely saying that information should be reported to the Electoral Commission, as indeed it has been in all areas of fraud, misuse of voting and so on. The Electoral Commission should then be in a position to bring in the legal and police services, should it decide there is a case to answer. It is very important that as much evidence as possible is brought forward and not just left as rumours and accusations. These things need to be investigated properly to make sure our electoral system remains as free and fair as we all hope it is today.
Robert Halfon (Harlow) (Con)
Does my right hon. Friend agree that although winter is coming, one freeze that millions of hard-working people want maintained is the fuel duty freeze? Is she aware of the campaign by FairFuelUK and many MPs not just to keep the freeze, but to stop taxes on diesel car owners? Will she make a statement on what the Government are doing to help hard-pressed motorists?
Andrea Leadsom
My hon. Friend has been a real champion for drivers and has been extremely successful in his bid, in that over seven long years this Government have rejected the fuel duty increases that the last Labour Government proposed should occur automatically each year. Car drivers are now significantly better off as a result of lower fuel taxes. I suggest, however, that he makes his submission to the Chancellor in time for the Budget.
Tom Brake (Carshalton and Wallington) (LD)
As several Members have pointed out, there is rather a large gap in the Government’s legislative programme. I am sure that the Leader of the House would like to fill it, for instance with a debate on the £400 million needed for St Helier hospital or on the funding that Sutton’s schools lack. However, I would like to support the bid by the hon. Member for Perth and North Perthshire (Pete Wishart) for a debate on no deal and its impact. Such a debate would enable Brexit supporters on the Conservative Benches to talk in advance to the businesses that would be crippled by no deal, to the communities on the border in Northern Ireland that are worried about the security considerations, and to EU citizens in the UK and UK citizens in the EU for whom no deal would be a disaster. Who knows, perhaps some of those Brexit supporters might even change their minds by the end of the debate.
Andrea Leadsom
The right hon. Gentleman is well aware that the Government’s clear position is of seeking an all-encompassing agreement on free trade and other matters of co-operation with our EU friends and neighbours that will be to their benefit and certainly to the UK’s benefit. Unfortunately, his position is that we should seek to subvert the will of the people as expressed in last year’s referendum. As I understand it, the position of the official Opposition and the SNP is that we should accept whatever the EU offers, which clearly would not be to the advantage of the UK people. Britain’s interests are best served by sticking with the Government in their determination to seek a sound and comprehensive agreement with our EU friends and neighbours.
Martin Vickers (Cleethorpes) (Con)
The Government have done much work on, and given great support to, our cities and city regions, but our provincial towns, and particularly coastal communities, do not get the benefit of a trickle down from the economies of a nearby city. Will the Government find time for a debate on the support that they can give to our provincial towns?
Andrea Leadsom
My hon. Friend is a great champion for his constituency. I have had the pleasure of visiting him there twice, including to open an offshore wind farm, which I know has brought growth to his area. He is absolutely right to raise the importance of focusing on specific issues facing coastal towns, and I am sure he will be keen to seek a Westminster Hall or Adjournment debate specifically to discuss the interests of his constituency.
Grahame Morris (Easington) (Lab)
May we have an urgent debate on the role of the voluntary sector? I received a report today of a lady in my constituency who has had to sell her child’s pushchair so that she can pay her electricity bill. Organisations such as the East Durham Trust in my constituency are a vital safety net for the most vulnerable, but they are running low on food bank donations. The trust is crowdfunding online through its website, www.eastdurhamtrust.org.uk, for a “people’s takeaway” so that children in my constituency do not go cold and hungry owing to the roll-out of universal credit. What will the Leader of the House do to support organisations such as the East Durham Trust that are struggling to meet the growing demand of services caused by the Government’s failures, such as the roll-out of universal credit?
Andrea Leadsom
The valuable work done by charities and the voluntary sector that the hon. Gentleman talks about is appreciated throughout the House—it is certainly appreciated by many of our constituents. He may well wish to seek an Adjournment debate. Let me point out, however, that under this Government the number of children living in workless families has dropped by almost 1 million households, which is absolutely vital. Progress is being made. Employment is the highest that it has ever been, and universal credit is designed to help people to get into work. It is incredibly important for us to continue to pursue policies that help people to enjoy the security of a pay packet that benefits them and their families.
Mr Philip Hollobone (Kettering) (Con)
Will the Prime Minister be making a statement to the House on Monday about this weekend’s EU summit, and what other Government statements will be made next week?
Andrea Leadsom
My hon. Friend will know that statements are announced on the day by the usual methods. It is a convention that the Prime Minister comes to the Chamber to make a statement on European Councils and I am sure that she plans to do so as normal.
Joanna Cherry (Edinburgh South West) (SNP)
I congratulate the Members who secured the Back-Bench debate on global LGBT rights that will take place next week. The Government have an appalling record on the detention and deportation of LGBT asylum seekers. Will the Leader of the House confirm that a Home Office Minister will respond to that debate?
Andrea Leadsom
I think that all Members recognise that the Government have done an enormous amount to promote LGBT rights, including by introducing same-sex marriage. The hon. and learned Lady may well wish to raise her specific point during Home Office questions, but I think we can all celebrate the huge achievements that have been made in this country in addressing discrimination against LGBT people, and doing as much as possible to ensure that they have equal access to every aspect of our daily life.
Bob Blackman (Harrow East) (Con)
May I join my right hon. Friend in wishing Shubh Deepavali to Hindus, Sikhs, Jains and Buddhists not only in this country, but throughout the world? I apologise in advance to the hon. Member for Rhondda (Chris Bryant) as I will not be able to support his excellent Bill tomorrow. That is not because I do not agree with it—I do—but because I shall be visiting no fewer than nine temples in my constituency and others to celebrate the Hindu new year.
May I invite Members who were not able to attend the Diwali reception that we held on the Terrace yesterday to join us at our seminar on Monday night? It will provide an excellent opportunity for Members in all parts of the House to understand the true meaning of this great festival.
Andrea Leadsom
I join my hon. Friend in celebrating this wonderful festival. I agree that it is important for us all to understand its purpose and origin, and, again, I wish all Members a very happy Diwali.
Paula Sherriff (Dewsbury) (Lab)
Following this week’s announcement on sentencing for dangerous driving, will the Leader of the House consider providing time for a debate on enforcement? My constituency is experiencing serious problems with dangerous and erratic driving, and it is only a matter of time before that leads to serious injury or even death. The West Yorkshire police force has lost nearly 40% of its traffic officers in the last five years. What use are new laws if they cannot be enforced?
Andrea Leadsom
The hon. Lady raises an important issue that matters a great deal to Members on both sides of the House, which is why we have decided to address concerns about dangerous driving. Enforcement is, of course, absolutely key. I commend the amazing work of our police forces in enforcing all our laws, and this law will be no different in that respect.
Dr Julian Lewis (New Forest East) (Con)
Will the Leader of the House draw the attention of all relevant Ministers a very important ten-minute rule Bill that will be introduced on Wednesday week by my right hon. Friend the Member for Newbury (Richard Benyon)? It proposes the introduction of a statute of limitations to prevent the persecution, through legal process and the courts, of veterans for events that occurred in Northern Ireland up to 40 years ago.
Andrea Leadsom
My right hon. Friend is very consistent in supporting the protection of those who were involved in events that happened long ago and are still under investigation today. I absolutely assure him that the Government are unstinting in our admiration for the role our armed forces played in ensuring that Northern Ireland’s future would only ever be decided by democracy and consent.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
This week I attended a Government roundtable on ending gang violence and exploitation. The necessity that Government Departments develop a joined-up approach and share data to tackle the root causes was absolutely evident, so may we have a debate in Government time on how Departments can work together to tackle this important issue?
Andrea Leadsom
The hon. Lady raises an important matter, and I encourage her to find a way to ensure that a debate on it is held in this place, perhaps through the Backbench Business Committee. The Government take this matter incredibly seriously, and she will be aware that the Home Office is taking steps both on prevention and education, as well as on stamping out this kind of violence.
Judith Cummins (Bradford South) (Lab)
May we have a statement from the Leader of the House on modern democracy? Our constituents send us here to represent them and to hold the Government to account by voting in this place. What message does it send to our constituents when the Government feel that they can ignore the will of this House?
Andrea Leadsom
I say again that the Government are by no means doing as the hon. Lady suggests. We are listening. I have been absolutely clear since coming into this role that the Government are determined to listen to views from right across the House. That is evidenced by the work of the Department for Work and Pensions and yesterday’s statement, and, following yesterday’s debate, by our doing more to help those applying for universal credit, which Members across the House agree is there to help and support people, and which is succeeding in getting more people into work.
Nick Smith (Blaenau Gwent) (Lab)
The Government guarantee the mineworkers pension scheme, but 50% of the surplus goes back into Government pockets. They have had a £3 billion windfall. Mineworkers and their families want a better deal for their years of toil at the coalface. May we have a Treasury statement so that my uncle Desi, my uncle Jackie and their comrades get their fair share?
Andrea Leadsom
We all agree that the work done by coalminers over so many years to keep the lights on did a huge service to this country. The hon. Gentleman might well wish to raise this issue at Business, Energy and Industrial Strategy questions, or through an Adjournment debate.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
Earlier this month I had the honour of accompanying my local police force on a Friday evening shift. I was appalled by the lack of respect for our officers, so I applaud, as I am sure the whole House does, the efforts of my hon. Friends the Members for Halifax (Holly Lynch) and for Rhondda (Chris Bryant) in this area, and support the Bill that we will consider tomorrow. However, important though that is—it is truly vital—I was horrified to learn that a third fewer warranted officers are now on shift on Friday nights than was the case 10 years ago, so they are completely overstretched. May we have a debate in Government time about the number of warranted officers serving in our forces? We have lost 501 in the past eight years.
Andrea Leadsom
I reiterate that I share the hon. Lady’s support for the private Member’s Bill of the hon. Member for Rhondda (Chris Bryant). I look forward to it receiving its Second Reading tomorrow.
I understand that the hon. Lady’s police force is achieving significant progress in the fight against crime. It is performing exceedingly well, for which I congratulate it. However, as she will no doubt be aware, the proportion of officers in frontline roles has increased to over 93% from an estimated 91% in 2010, and police budgets are being protected.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
More than 900 of my constituents are being placed on universal credit from 1 November, so will the Leader of the House explain how I can reassure them, given that we have no date in the diary for the Department for Work and Pensions to come and talk to us, that they are not being used as guinea pigs?
Andrea Leadsom
I can absolutely give the hon. Lady an assurance. As I have said several times today, universal credit is designed to help those looking for work. According to three independent studies, it has resulted in many more people finding work than was the case under jobseeker’s allowance. It is improving opportunities to get jobs, it enables people to keep more of the benefit as they increase their hours, and it helps much more with childcare costs.
In accordance with the DWP’s statement to the House yesterday, the scheme is also being improved so that the costs of calls to the helpline will be waived, and more instruction will be given to jobcentre officials to ensure that people know that they can get up-front emergency payments. The Department has taken away a list to consider and Ministers have assured me that they will come back with further updates as soon as they have more to tell the House about progress on addressing those issues.
The House called for a pause and the Department has been clear that it has just had one to ensure that it can update and upgrade systems. It plans another in January. Members should therefore be reassured that the Government are listening carefully and acting on the points that Members raised.
Dan Carden (Liverpool, Walton) (Lab)
I am gravely concerned about the chaos in Walton prison in my constituency. It had a snap inspection, and received one out of five, the worst possible score. The governor was removed last week and the NHS trust that provided healthcare at the site has today pulled out of its contract. The mayor of Liverpool and I have learned all that through the media, with no contact from Ministers or the Prison Service. I wrote to the Minister for Prisons and Probation on Monday and I am waiting for a reply. Will the Leader of the House advise me on the breakdown in communication between the Government, the Prison Service and local representatives? Can we at least have a debate or statement on health, safety and welfare across our prisons network? What more can I do to get answers about Walton prison?
Andrea Leadsom
That sounds like a very concerning issue and the hon. Gentleman is right to be worried about it. I understand that the Secretary of State for Justice will meet the chief inspector of prisons today to discuss the specific issue and I am certainly happy to raise the matter with the Secretary of State after business questions.
However, the hon. Gentleman will know that we are putting an extra £100 million a year into the frontline to recruit 2,500 more prison officers by the end of 2018 and investing £1.3 billion in a modern, fit-for-purpose prison estate, with up to 10,000 new modern prison places during this Parliament. The hon. Gentleman is right to raise the issue and I will happily take up the specifics with the Secretary of State.
Clive Efford (Eltham) (Lab)
It was not just Opposition Members voting against universal credit yesterday who defeated the Government, but the will of the people at the general election, which decreed that the Conservative party does not have an overall majority in the House. The Government have bunged some money to the Democratic Unionist party and they think that that gives them the right to behave as if they have an overall majority, but they do not. We need from the Leader of the House—our representative in the Cabinet—a statement about what she will do to ensure that the minority Government respect and act upon the House’s decisions.
Andrea Leadsom
The hon. Gentleman needs to ask himself why, if the Conservative party has no right to govern, we are sitting on this side of the House. The Conservatives won 56 seats more than the nearest party to us, and we are governing under well-established rules through a confidence and supply agreement.
The hon. Gentleman again raises the issue of money going to the Democratic Unionist party, but that is not the case. There is further investment for the restored Northern Ireland Executive, but to be clear, according to the latest figures, only £232 per person has been spent in recent years in Northern Ireland on transport, compared with £504 in Scotland. It is right to provide the money that goes to Northern Ireland for city deals and to promote health and infrastructure. The Government have provided many billions of pounds for city deals in other parts of the United Kingdom, so there is nothing strange about that.
As I have said time and again, the Government are determined to listen to colleagues from all parties. We continually revert to the fact that the Opposition are determined to talk about process rather than the serious policy challenges that face our country on which the Government are determined to make progress.
Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)
I thank you, Mr Speaker, for your wise words last night about the huge number of points of order that were made. Unfortunately they have fallen on deaf ears. The Government showed disrespect not only to Parliament but to my constituents, who continue to suffer day in, day out, under the ill-thought-out universal credit scheme. Instead of trying to answer the questions herself, will the Leader of the House get a Minister from the Department for Work and Pensions here on Monday so that the Department can be held accountable for its actions and show respect for Parliament’s vote yesterday?
Andrea Leadsom
I say again that the universal credit programme has received approval across the House because it is helping more people into work. It enables people to keep more of their benefits as they increase their hours and it helps with childcare costs. It is intended to help people. The Department has made it clear that it has listened to points from hon. Members of all parties about implementation, and it is taking action, such as getting rid of call charges to the universal credit helpline and ensuring that people know that they can get emergency payments up front. Evidence shows that the scheme helps people to get into work and gives them the security of a pay packet that benefits them and their families.
Nic Dakin (Scunthorpe) (Lab)
There is no pause in Scunthorpe, where universal credit is being rolled out this week. Local partners, whether Ongo, the social housing provider, private landlords or the citizens advice bureau are genuinely concerned that what my hon. Friend the Member for Gedling (Vernon Coaker) described—an increase in rent arrears and evictions—will happen locally. What would the Leader of the House say to my constituents, who hear that the House has said so clearly that there should be a pause, when nothing then happens?
Andrea Leadsom
I would say to the hon. Gentleman’s constituents that the Department for Work and Pensions has listened to the House and acted straight away. There has just been a pause, and that is why the Department could take action quickly to improve the roll-out of universal credit. A further pause is planned for January, and DWP Ministers will come back to the House to provide further updates in due course. The hon. Gentleman’s constituents should therefore be reassured that this benefit, which is designed to help them get back into work, will be improved as much as possible.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is not just universal credit that causes people untold misery. I have a constituent, Mr McMaster, who, when he transferred to a personal independence payment from a lifetime’s enhanced disability living allowance award, was given only four points and lost his benefits. The stress that that caused meant that his marriage suffered, he tried to commit suicide and he nearly lost his house and car. Out of sheer desperation, he reapplied for PIP, using the same evidence that had been presented previously. Luckily, the right decision was made and he was given an enhanced award in both categories. Will the Leader of the House make a statement outlining what the Government will do to review that iniquitous system, and will she apologise to my constituent?
Andrea Leadsom
The hon. Gentleman is right to raise that case. As constituency MPs, we all have examples of where we are not happy with interpretation or with the assessment of individuals, and it is right to raise such cases. I am pleased to hear that his constituent has had a good result, and I commend him for taking up that case. However, it is important from a policy point of view that proper systems are in place to assess those who receive disability benefits, that that is fair and is seen to be fair and that there is an appropriate appeal process, in addition to support from MPs, when we feel that the outcome is in doubt.
Diana Johnson (Kingston upon Hull North) (Lab)
The trade unions from BAE Systems at Brough are visiting Parliament this week to talk to MPs about potential job losses, and 140 MPs from both sides of the House have signed a letter asking the Government to think again about the out-of-service date of the Red Arrows Hawks, many of which were built in the 1970s. Is it therefore not time for a statement about securing those jobs and, more importantly, our sovereign capability?
Andrea Leadsom
I share the hon. Lady’s enthusiasm for the Red Arrows, which are beloved in this country and do a fantastic job. To be clear, there is no requirement to replace the Red Arrows Hawk T1. We have a large fleet of around 75 aircraft from which the Red Arrows display team can draw. There has been no reduction in Red Arrows flying hours, and it is incorrect to suggest, as some have, that numbers have been reduced at displays. The Government have helped to secure orders for Hawk aircraft from Qatar, securing production for next year, and we are pressing hard for further export deals. There is no need for an early replacement for the Red Arrows as a decision is not needed until at least the end of this Parliament.
Ben Lake (Ceredigion) (PC)
May we have a statement detailing the Government’s expectations for lifeboat provision? There is considerable concern in Ceredigion that proposals under the recent coastal review of Cardigan bay would leave the entire Ceredigion coastline without sufficient all-weather lifeboat provision.
Andrea Leadsom
The hon. Gentleman makes an important point, and I encourage him to go direct to the Department for Transport. If it is aware of the situation, it will be equally concerned. If he would like to write to me, I am happy to raise the matter on his behalf.
Chris Elmore (Ogmore) (Lab)
Over the past three months, I have attended the opening of four pensioner lunch clubs. The common theme coming from the groups, which are mainly run by volunteers, is that pensioners are lonely and are struggling to feed and cook for themselves. The clubs are trying to help to build community cohesion. Will the Leader of the House find space in Government time for a debate on loneliness and its impact? It would allow colleagues on both sides of the House to highlight the excellent work of the commission on loneliness set up in the name of our former colleague Jo Cox.
Andrea Leadsom
I commend the Jo Cox Commission on Loneliness for its excellent work. I have taken part in some of its presentations in the Speaker’s apartments, and I congratulate you on raising awareness, Mr Speaker. I agree with the hon. Gentleman that loneliness among the elderly is a serious concern, and I have initiatives in my constituency to try to bring people together more frequently so that communities can work together to try to alleviate loneliness. I am happy to support any proposal that he wants to make to highlight that issue further. I would add, however, that I am proud of this Government’s efforts to ensure that pensioners are now much better off than they were when we came into government in 2010 and to protect pensions and the pensioners’ uplift, which has been incredibly important for those on low fixed incomes.
Martyn Day (Linlithgow and East Falkirk) (SNP)
My constituent Mrs Withers has been caring for her diabetic grandson since 13 August. She has thus far received no financial support due to non-co-operation from the child’s mother, who has been given until November to respond to requests to transfer benefits to the grandmother. May we have a debate in Government time about the financial support available for those who take on emergency childcare arrangements and about ensuring that guidelines and payments are consistent throughout the country?
Andrea Leadsom
I am sorry to hear about what is obviously a difficult situation, which the hon. Gentleman is absolutely right to raise. I encourage him to speak directly to the Department for Work and Pensions, which I urge to take up this specific issue.
Louise Haigh (Sheffield, Heeley) (Lab)
The Leader of the House says that the Government are listening, but the only thing they did yesterday was scrap helpline charges. It frankly beggars belief that it takes an Opposition day debate for the Government to decide that 55p a minute is too much to charge cash-strapped people to call the very Department that is making them cash-strapped. The Secretary of State for Work and Pensions kept recommending yesterday that claimants visit their local jobcentre, but at the same time the Department is shutting nearly 70 jobcentres across the country. Sheffield’s Eastern Avenue jobcentre is due to close on 17 November, but the Department is yet to publish a cost-benefit analysis for the decision despite claiming that it is based solely on the need to make savings. I am yet to be convinced that the Department has even conducted such an analysis, so can we have a debate in Government time on that decision before the jobcentre is closed, causing misery for claimants in the area?
Andrea Leadsom
I gently say to the hon. Lady that she cannot have it both ways. She cannot complain that the Government are not listening to the House and then say that it is not right that the Government should act on the views of this House, rather than independently. That seems a little back to front. On universal credit, the key point is that the Department for Work and Pensions is responding both to its own pauses and its experiences of the roll-out of universal credit to date and to the representations of Members from right across the House. The Government are determined to make universal credit a huge success and to deal with implementation issues as they arise. I assure Members that that is the case.
As for jobcentre closures specifically, the hon. Lady will be aware that we still have a significant fiscal challenge as a result of the state of the economy that we were left with in 2010. We continue to try to take steps to live within our means. I know that Opposition Members do not understand this, but the reality is that every day we continue to spend more than we receive in taxes means another day of debt for which our children and grandchildren will be forced to pay, so we need to live within our means. The reduction in jobcentres is actually being offset by an increase in the number of work coaches, who will provide more support to people who need it. We are merging a number of smaller offices into bigger sites, so that we can save the taxpayer money, but we are not changing the service we offer. Wherever possible, we are improving that service for those who are looking for work.
Jim Shannon (Strangford) (DUP)
On Tuesday, Muhammad Safdar made several discriminatory comments in the National Assembly of Pakistan against the Ahmadiyya Muslim community of Pakistan. He accused the faith group of being untrustworthy and a threat to Pakistan, arguing that it should be banned from the armed forces. Coming from the son-in-law of a former Prime Minister, such comments are dangerous and will surely fuel prejudice towards the already persecuted Ahmadiyya Muslim community. Will the Leader of the House agree to a statement on that pressing issue?
Andrea Leadsom
The hon. Gentleman raises a significant issue. I absolutely encourage him to raise it directly with the Foreign Office, which will no doubt have further information to share with him on the steps that the UK Government can take.
Mr Jim Cunningham (Coventry South) (Lab)
Linked to universal credit is the whole question of funding, including for women’s shelters, for example, and nursery provision. Can we have statement on that?
Andrea Leadsom
The hon. Gentleman raises a separate issue about support for women who are suffering from domestic violence, and I assure him that—[Interruption.] Am I misunderstanding his question?
Mr Cunningham
My point is that the two are linked, but if the Leader of the House wants to talk about it separately, the issue is about funding for women’s shelters, which has been badly cut.
Andrea Leadsom
Then I think I did understand the hon. Gentleman correctly. He raises an incredibly important point about protection for women who are experiencing domestic violence, and DWP Ministers took away some action points from yesterday’s debate to look more at ensuring that women who need protection from abusive partners are receiving it. More broadly, the hon. Gentleman should welcome, as we all do, the Government’s bringing forward of new measures to try to protect people from domestic violence and other domestic abuse, which is so appalling and unacceptable in this country.
Martin Whitfield (East Lothian) (Lab)
Will the Leader of the House join me in celebrating the British citizen youth awards? The awards are being granted today to celebrate young people from across the country, including my constituent Grace Warnock.
Will the Leader of the House also provide a statement on how her discussions are going on topical questions on devolved matters?
Andrea Leadsom
I am delighted to congratulate Grace. The hon. Gentleman did not say what she is receiving her award for, but the House congratulates her.
The question about the time allotted for topical questions on devolved matters comes up from time to time, and we regularly review it. Obviously there is sometimes a challenge that questions on UK issues would be appropriate for other Departments, rather than just the territorial offices. There is always a balance to be struck in ensuring that questions go to the Departments that are best able to give the appropriate answer.
Justin Madders (Ellesmere Port and Neston) (Lab)
On Monday we had the incredibly disappointing news of 400 redundancies at Vauxhall, and I was grateful for the opportunity to raise it on the Floor of the House that day through an urgent question. I will return to the issue of the plant’s future in the coming weeks and months, but there was also other news on jobs that day in the form of a constituency-by-constituency report on the effects of automation. The report predicted that around 30% of jobs in my constituency will be lost to automation in the next 10 to 15 years, and the figure is higher in other constituencies. I just do not think the Government have a strategy or plan to deal with that impending challenge, so can we please have a debate?
Andrea Leadsom
The hon. Gentleman is right to raise the very concerning issue of job losses at Vauxhall, and he has done so again today. He will be aware that the Government are doing everything possible to ensure that those who lose their job are helped into work elsewhere. I am sure he would join all Members of the House in celebrating the fact that there are over 3 million more people in work than in 2010, that there are more than 3 million apprenticeships for young people and that there are almost 1 million fewer workless households with children than in 2010. Those are all things to celebrate and, as it kicks in, automation should enable us to transform jobs into the skilled jobs of the future, which is why I am delighted that the Automated and Electric Vehicles Bill has its Second Reading next week. The Bill will create more high-technology, skilled work in this country.
Matt Western (Warwick and Leamington) (Lab)
When I arrived in the House a few months ago I knew that democracy was not necessarily the most efficient process, but last night I realised just how dysfunctional it is at present. It was the fourth time that the Government have been defeated on a substantive issue. We are obviously spending a significant amount of valuable time on such issues, so we should be heard. We should have received a statement from the Government last night. Will the Leader of the House ensure that the Government hear our views?
Andrea Leadsom
I assure the hon. Gentleman that the House’s views are being heard by the Government. As I have said throughout today’s business questions, the Department for Work and Pensions has heard not just the issues raised in yesterday’s debate on universal credit but what Members on both sides of the House have said in recent weeks. The DWP has not just heard but has taken action. The business discussed in this House is always heard by the Government, who take careful action on it. I assure him that that will continue.
Points of Order
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Robert Halfon (Harlow) (Con)
On a point of order, Mr Speaker. Yesterday, my hon. Friend the Member for Southend West (Sir David Amess) mentioned the sad passing away of Sir Teddy Taylor. I also bring to your attention the sad passing away over the summer of the former MP for Keighley, Mr Gary Waller. I mention it because he was president of the Harlow Conservative Association for a number of years, and he was also a councillor for Sheering, a village in my constituency. He was incredibly active.
Mr Speaker
I am grateful to the right hon. Gentleman for his point of order, which gives me an opportunity to respond sympathetically. Sir Teddy Taylor was very well known to me, and he offered me much encouragement in the early years when I was contemplating the possibility of a political career. I remember Sir Teddy coming to speak at Essex University in, if memory serves me correctly, January 1984. Although it was 33 years ago, I remember it as keenly as if it was yesterday. I have written to Sheila to offer my condolences. Much was said yesterday about Sir Teddy that was fully merited.
Gary Waller I also knew, although much less well. I heard about his passing over the summer, not least from his ex-wife. He was very well known, and he was a very cultured individual. I think it entirely fitting and characteristically gracious that the right hon. Member for Harlow (Robert Halfon) has recorded his respects in this way.
John Woodcock (Barrow and Furness) (Lab/Co-op)
On a point of order, Mr Speaker. Have you had any notification from the Government on whether they intend to make a statement on the military campaign against Daesh in Iraq and Syria? I am sure you will be aware of the widespread and authoritative media reports showing that Raqqa has fallen and that Daesh has been evicted. Given that the Government asked for and got specific authorisation from this House to deploy UK armed forces in that theatre of war, I would expect them to come forward as soon as possible with an update on what is happening.
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. I am aware and other colleagues will be conscious of his long-standing interest in these matters. That interest, incidentally, will be very widely shared by other colleagues. I have received no indication from any Minister of an intention to make a statement. Ministers and other occupants of the Treasury Bench will have heard, or will shortly hear of, his point of order. It is perfectly open to Ministers to volunteer to come to the House next week to make a statement.
Alternatively, and possibly as an attempted insurance policy, it is open to the hon. Gentleman to seek other means by which to secure the presence of a Minister. If I may very gently say so, Members undertaking such initiatives can benefit from the advice I am about to proffer, which is that such submissions should be detailed and comprehensive. When such written submissions are detailed and comprehensive in initiating, developing and concluding a compelling argument for the presence of a Minister, they have a greater prospect of success.
Backbench Business
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Tobacco Control Plan
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sir Kevin Barron (Rother Valley) (Lab)
I beg to move,
That this House has considered the Government’s publication of the new Tobacco control plan.
I begin by thanking the Backbench Business Committee for allocating time for this very important debate. I also welcome the Minister to his new post in the Department of Health, and I am sure he will hear much more about this issue in the months to come.
I have no financial interest, but I should mention that I am an honorary fellow of the Royal College of Physicians, as it is heavily involved in the debate on tobacco.
I have repeatedly called in this House for the publication of a comprehensive tobacco control plan to replace the Government’s previous plan, “Smoking Still Kills,” which expired in 2015. I welcome the Government’s publication of this new five-year strategy this summer, which seeks to achieve what they term a “smokefree generation”.
Despite a long-term reduction in smoking rates, tobacco use remains the leading cause of preventable premature deaths and ill health, accounting for about 100,000 deaths each year in the UK. In addition, 23% of all hospital admissions for respiratory problems in 2014-15 were directly attributable to smoking. I thoroughly welcome the falling adult smoking rates in England—down from 46% in 1974 to 15.5% in 2016—but I have to say to the Minister and to the House that we cannot take this work for granted. That is why we need the tough but achievable targets that the new current control plan contains.
Smoking and the harm it causes are not evenly distributed, as hon. Members will know. People in more deprived areas are more likely to smoke and less likely to quit. Smoking is increasingly concentrated in more disadvantaged groups and is the main contributor to health inequalities in England. Men and women from the most deprived groups have more than double the death rate from lung cancer of those from the least deprived areas of the UK. I am not saying there is exactly a north-south divide, but where money is divided in such a way that is likely to happen. Rates do vary between north and south on occasion, as we see if we examine smoking during pregnancy rates, which vary from 2% in the Central London clinical commissioning group area to 27% in the Blackpool CCG area.
Alex Cunningham (Stockton North) (Lab)
Data produced by Public Health England show that in my local authority area 18.1% of women smoke at the time of delivery compared with the national average of 10.6%. The plan says that it will reduce the prevalence of smoking during pregnancy. Does my right hon. Friend agree that every CCG and local authority will have to have sufficient funds to carry this work forward?
Sir Kevin Barron
Clearly that is the case. I agree with this publication and its intention, but there will be issues to address on different forms of funding. I will discuss that a little later in my speech. We can see from the two figures from central London and Blackpool that there is a challenge out there; this difference alone can have a dramatic impact on health inequalities, as maternal smoking causes up to 5,000 miscarriages, 300 perinatal deaths and 2,200 premature births in the UK each year.
In my area of Rotherham alone, the smoking rate among people in managerial and professional occupations is about 10.2%, but that leaps to 29.4% among those who have never worked or are long-term unemployed. Such facts clearly show that we are still struggling to get through to certain groups within society, and the Government must do more to identify ways of getting through to these difficult-to-reach groups.
Mark Pawsey (Rugby) (Con)
The right hon. Gentleman is setting out the harm caused by tobacco. As a recent convert to the benefit of e-cigarettes in assisting people to stop smoking, I wonder whether he will be talking about the valuable role they play. Does he agree that it is a bit of a shame that the tobacco control plan does not go further in recognising the role that e-cigarettes can play?
Sir Kevin Barron
I will comment on that, but I think the hon. Gentleman ought to be happy that this is the first time in any tobacco control plan that e-cigarettes have been mentioned and there is some intent to do things with them.
I welcome the acknowledgment of the seriousness of the issue for people with long-standing mental health problems, as the smoking rate is a staggering 40% among those with a serious mental illness. That is another area that needs to be targeted and worked on. The control plan rightly states that joined-up working and integrated commissioning between local government and the NHS are very important. This is not just the case in hospitals when people are admitted; we must focus on prevention and early diagnosis. For example, dentists are the only healthcare professionals who frequently see healthy patients and so are in an excellent position to identify possible oral health problems early on.
Jim Shannon (Strangford) (DUP)
We welcome the tobacco plan and the reduction in the number of people who smoke from 20% to 16%, but there is one anomaly here, to which the right hon. Gentleman has referred. I refer to chewed tobacco, as it is not mentioned in this plan and there does not seem to be any plan to address this. Oral cancer is one of the major cancers across the UK, with some half a million people affected by it. Action on this was recommended 11 years ago. Does he feel, as many in this House feel, that chewed tobacco should be part of this tobacco plan and that there should be legislation to address this?
Sir Kevin Barron
I am going to go on to discuss some of the issues relating to that situation. As I said, dentists are the only ones who normally see healthy people. I am aware that some GPs—we have one sat here in the Chamber—talk to healthy people even though these people do not think they are healthy at the time, but the situation is a little different for dentists. This early identification is crucial, as mouth cancer patients have a 90% chance of survival if the condition is detected early, but that plummets to just 50% if their diagnosis is delayed.
I say to the hon. Gentleman that I worked in an industry where people used to chew tobacco because we could not smoke at work. I tried it once at the age of about 16 and I am pleased to say that I never went near it again, although I used to smoke cigarettes when I came up from underground—that is a long, long time ago now. The general health implications of smoking are well known and documented, but mouth cancer often gets overlooked. This is the point: despite its killing more people in the UK than cervical and testicular cancers combined, there is still an alarming lack of public awareness towards oral cancer. There are thousands of chemicals contained in a single cigarette, and their point of entry is the mouth. Smoking helps to transform saliva into a deadly cocktail that damages cells in the mouth and can turn them cancerous.
Pharmacy teams also have an important role to play in promoting and encouraging attempts to stop smoking; as Members will know, in Healthy Living pharmacies and others, this is part of the job they do in advising people. These teams can be trained to be very effective in that. This often occurs in the community, but hospital and GP-based pharmacists are also well placed to offer this support. They are well placed to offer stop-smoking interventions with behavioural support and medication. In fact, the National Pharmacy Association is re-evaluating its position on e-cigarettes. As frontline healthcare professionals, pharmacists and dentists are exquisitely positioned to make a difference to health outcomes.
The Government must look to protect public health funding for stop-smoking services in particular if their aims are to be achieved. A growing number of local authorities have already stopped providing stop-smoking services for general smokers. The King’s Fund also highlighted that in 2017-18 local authority funding for tobacco control faces cuts of more than 30%. We have seen the transfer of commissioning responsibilities for public health services to local authorities, and subsequent cuts to the public health grant. A study by Cancer Research UK and ASH—Action on Smoking and Health, an organisation I have been involved in for more than two decades—found that 39% of local authorities reduced their smoking cessation budgets, despite the public health budget being ring-fenced by central Government. These are the issues that are happening down below, but we need to be aware of them.
All this has led to a reduction in mass media campaigns to motivate quitting, which are so vital to direct people towards the services that are on offer. Only this morning, I saw that the British Lung Foundation has published a report showing, yet again, that stop-smoking support is one of the most cost-effective treatments for people with COPD—chronic obstructive pulmonary disease.
Recently, in my role as vice-chair of the all-party group on smoking and health, I visited a smoking-cessation service—the one led by Louise Ross in Leicester. The team in Leicester have been trailblazers in the use of e-cigarettes for cessation purposes. They told me that Leicester’s stop-smoking service was the first in the country to go “e-cig-friendly” on No Smoking Day 2014. Since then, the team has built up a comprehensive bank of knowledge and insights, developed from many discussions with both vapers and smokers, that can be drawn on to help people get the best advice when they decide they have had enough of smoking. I had a discussion with a nurse who works in that service and who was using e-cigarettes in working with pregnant women to try to address our awful statistics on the effect of smoking in pregnancy. Most smoking-cessation services could do worse than talk to the people in Leicester about exactly what they are doing on that.
There has clearly been an increase in e-cigarette usage since the publication of the previous strategy in 2011: in 2012, there were some 700,000 e-cigarette users, and that had risen to 2.8 million by 2016. There is growing evidence to support the successful use of e-cigarettes as a smoking cessation aid. The Office for National Statistics found that in 2016, some 470,000 people were using e-cigarettes as an aid to stop smoking, while an estimated 2 million people had used the products and completely stopped smoking. I believe that e-cigarettes played a huge part in the beating of the target in the previous tobacco control plan. It is clear that e-cigarettes do not suit everyone, though, so there still needs to be a wide range of licensed stop-smoking medication to use alongside much-needed behavioural support.
Alex Cunningham
Some 4,000 people in my Stockton North constituency use e-cigarettes and 14,000 people still smoke. Can my right hon. Friend envisage a day when e-cigarettes are available on prescription, like other products?
Sir Kevin Barron
I actually had this conversation in Leicester, although I was not going to mention it in my speech. There is an issue—I think it was in a column in one of the national newspapers many months ago and I have tried to avoid it. If somebody avoids spending £20 or £25 a week on cigarettes, should they get free NHS prescriptions, if they are eligible, to help them to quit? There is a debate there, but I shall say no more than that at this stage.
I asked the team in Leicester what they thought about e-cigarettes on prescription for people who are eligible for free prescriptions, and they said that there might be a case for doing it for a month to break the person away from the cigarette-smoking habit and get them on to e-cigarettes. For the purposes of this debate, I shall leave that where it sits, but there might be a case for it. We clearly need more evidence on the use of e-cigarettes for smoking cessation so that we can make a better estimate.
Mark Pawsey
I accept that the right hon. Gentleman wishes to park the issue of whether e-cigarettes should be available on prescription, but does he think that e-cigarette manufacturers should have a little more freedom—the tobacco products directive places restrictions on the advertising of e-cigarettes—to tell people about the nature of their products and how they can help people to switch from tobacco?
Sir Kevin Barron
I shall address that briefly, because I know that other Members wish to get involved in the debate. The simple answer is that that is one of several issues that need to be addressed.
The best thing smokers can do for their health is of course to quit smoking altogether, but it is clear that e-cigarettes are significantly less harmful to health than smoking tobacco. Public Health England found that e-cigarettes are around 95% less harmful than smoking cigarettes. My instinct is that the remaining 5% is down to the fact that they have not yet been tested for long enough for it to be said that there is little or no danger at all. There is no evidence that e-cigarettes act as a smoking gateway for children or non-smokers, but research is still needed on their long-term use, and it should be carried out. Quitting smoking is always best, but there is clearly a hard core of smokers who have so far struggled to quit; they must be the people we focus on. It is worrying that an ASH survey found over a three-year period that the number of people who thought that e-cigs were “as or more dangerous” than cigarettes rose from 7% to 26%. That is why we need Government-funded research. I find it incredible that statistic is moving in that direction, rather than the opposite, although I must say that the debate on e-cigarettes, both in the Chamber and elsewhere, has not always been particularly clear.
Other innovations are continuing the “nicotine revolution”. Manufacturers are developing additional smoke-free products to persuade heavy smokers who would not otherwise quit smoking to switch to smoke-free alternatives, among which are the heated-tobacco products that have come on to the scene in the past year or so. Referred to in the “novel tobacco products” category of the tobacco control plan, such products could be the next step to reaching those hard-core smokers who, although they did not get on with e-cigarettes, are looking for another way out of smoking. I was pleased to see in the plan that Public Health England will continue to lead the investigation into the use of novel products as stop-smoking tools, with the evidence updated annually, and that PHE acknowledges that novel products are currently the most popular aid to stopping smoking in England.
Many people are wary of so-called novel products and the fact that many are produced or funded by tobacco companies. We must recognise that tobacco companies have in the past been extremely dishonest about the harms of smoking and the products they have sold, so we urgently need more research on these devices, and I hope the Government’s annual review will help to provide more information. I have been anti-tobacco for more than two decades in this House, but we should not ignore the potential benefits for people who have not been able to stop with more traditional smoking-cessation products just because some of these products have tobacco connections. It is vital that we all focus our minds on the reality of getting people off this habit that is still killing people and shortening the lives of more than 100,000 of our fellow citizens every year.
Many of the products I am talking about are covered by the EU tobacco product directive, which has resulted in many good things, including the establishment of reporting and notification requirements for tobacco products. Nevertheless, stakeholders have raised issues with some of the other requirements, and we may be able to use Brexit as a chance to look at the directive. I understand that we have been thrown into the TPD at the last minute. We have had the debate and I do not want to bore anyone with it further. We need to move on, because that is what happens in politics sometimes. We need to talk about what should be happening now and in future for the sake of our fellow citizens. Brexit is coming, so we should not be tied into a timetable for any changes to the TPD—although I do not even know the potential timetable for any further debate on Brexit. Nevertheless, if there is any discussion about changes to the TPD, we need to ensure that all stakeholders are involved in working groups to design a directive that works for the good of the United Kingdom, taking into account the issues I have mentioned.
For all its positives, there is a glaring problem with the tobacco control plan, and we all know what it is: money. Although not short on lofty ambitions, local authorities face huge strain and will not be able to deliver the kind of joined-up smoking-cessation services that the tobacco control plan deserves. Luckily, there are people who can help. Tobacco companies have made a fortune selling cigarettes. We might well argue that they got us into the mess we are now in, so it is only right they get should us out of it. They have the resources and customer base to help smoking cessation tools to get straight to the people who need them most. If the industry is willing to commit to a future based on e-cigarettes and other reduced-harm products, we should take them up on the offer and allow the Government and local authorities to partner with them to ensure we have the financial and technical assistance needed to help smokers to quit. I would not have said that five years ago, but five years ago we did not have these products that can clearly help a lot of our fellow citizens to get off cigarettes.
Alex Cunningham
It was remiss of me earlier not to pay tribute to my right hon. Friend for all his work on this issue in recent years. Will he talk a little about people with mental health conditions and the fact that the tobacco control plan emphasises the need for parity of esteem in their treatment, in a similar way as there should be parity of esteem between the treatment of mental health conditions and the treatment of the general population? For that parity of esteem, the professionals who work with people with mental health conditions would need the necessary expertise and education. Will my right hon. Friend join me in encouraging the Minister to step up education for mental health professionals so that they, too, can be part of the campaign to help people to quit smoking?
Sir Kevin Barron
I will indeed. The use of e-cigarettes in mental health institutions or in prisons could go a long way towards alleviating some of the problems in such institutions. When I was Chair of the Health Committee, we looked into smoking in public places in 2005-06, and we saw tobacco in effect being used as a form of control in some institutions, and everyone knew the damage it was doing to the people in those institutions. A lot of institutions have moved on now, though. It is a matter for the Prisons Minister, not the Minister who is present, but we need to consider the availability of e-cigarettes in such institutions so that we can get people away from this life-threatening habit.
In conclusion, the tobacco control plan offers the groundwork for a comprehensive strategy that is much broader than just cessation and that must include measures that reduce uptake as well as those that increase quitting. They should include reducing the affordability of tobacco by increasing taxation, which has been happening in this country for many years now. I will certainly have a close eye on the Budget in a few weeks’ time, as we need a renewed commitment from the Government to the tobacco tax escalator. Any money that is raised should be ring-fenced for use in smoking cessation and mass media campaigns to motivate quitting and enforcement of age of sale, which is also an issue. When the mass media campaigns ended after the 2010 general election—people were no longer seeing them on television or in other parts of their life—the demand for smoking cessation services reduced.
We all want a smoke-free society as soon as possible. We on the Labour Benches, and even some tobacco companies, are now saying that as well, so the Government could not ask for a better opportunity to take this further, to do it more comprehensively and with more success. The challenge now is to make sure that reality lives up to these ambitions. The tobacco control plan needs to be properly implemented and built on if we are to achieve those goals.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Before I call the next person to speak, may I say that we have plenty of time for this debate and I hope that we will manage without a formal time limit? I much prefer to rely on the reasonableness and honour of hon. Members to have regard for others as well as themselves. If every speaker takes approximately eight minutes or so, then everybody who has indicated their wish to speak will have an equal chance to do so. If that does not happen, I will impose a time limit.
Michelle Donelan (Chippenham) (Con)
I am delighted to have the opportunity to speak in today’s debate on the Government’s tobacco control plan, which was unveiled in July 2017 and is supported by the British Heart Foundation. It is a co-ordinated effort to bring together the NHS, the Department of Health and local government to tackle smoking.
Although smoking in the UK is declining, the problem should not be underestimated. There are still 7.3 million adult smokers in the UK, and more than 200 smoking-related deaths a day in England, which costs the NHS millions every year. I welcome the plan and the £16 billion that has been ring-fenced by the Government for local public health services until 2021.
Those who use a local stop-smoking service are four times more likely to quit. The figures are astonishing. As the daughter of a smoker of more than 20 years, I have seen at first hand the journey that needs to be replicated to achieve the goal of a “smoke-free generation”.
The success of the 2011 to 2015 tobacco control plan reduced adult smoking rates from just over 20% to just over 15%. The aim now is to reduce rates to 12% and lower by 2022. That is not only right, but essential. We must work to save the 79,000 preventable deaths in England per year and the £11 billion that smoking is costing the economy.
Smoking is not a necessity. A cigarette is not a fashion accessory; it is the way towards lung and mouth cancer, strokes and heart disease and a host of other ailments and illnesses that kill. Let me be clear: I believe in choice and individual freedom, but I also believe that the Government have a role not only to guide, but to signpost and to promote the choices that will lead to healthier lifestyles. That is why I am so proud that the Government are prioritising the issue of smoking.
Some people have said to me: “Michelle if people want to smoke, let them.” I respond by saying that we must arm those people with all the information—the warnings and the facts. We must work together to deglamorise smoking. As has been pointed out, the smoking industry also has a responsibility to play its part. We must guide people and steer them to make informed choices. We must also discourage them, otherwise we will have to pay their NHS bills—money that could be spent in other sectors of the NHS. I often ask people, “If smoking were invented today and we knew all the risks and effects, would it be so freely available and popular?” Armed with the facts, we often make different choices in life.
My mother started smoking in an era when the health consequences were not known. I saw her struggle, desperately trying to give up. My Dad describes that time as a caricature, with my mother wearing anti-smoking patches and smoking cigarettes, while chewing anti-smoking gum and seeing a hypnotist, all at the same time. She simply tried everything. All the hypnotist did was to get her on to menthol cigarettes and give her a fear of hypnotists, so that did not go quite to plan. That taught me that, to break the cycle, it needs to be killed at the root, and people need to be prevented from smoking in the first place. I must add that my Mum has now not smoked a cigarette for seven years. [Hon. Members: “Hear, hear.”] Instead, she has e-cigarettes. Although that cannot be seen as the answer, it is very much part of the solution.
As part of the tobacco control plan, I want to touch on the support provided for pregnant workers, which aims significantly to reduce the likelihood of a person smoking while having a child. Currently, more than 10% of pregnant women smoke, and the plan is to get it down to 6%. Smoking during pregnancy increases the risk of stillbirth. Babies born to mothers who smoke are more likely to be born underdeveloped and in poor health. It is important that we give those mothers all the support and information available. For example, within the plan, NHS England will work to reduce smoking in pregnancy through carbon monoxide testing at antenatal care facilities and referrals to stop smoking services through the Saving Babies’ Lives care bundle.
Support, advice and information are crucial. We must make sure that all mothers are aware of the dangers of smoking. I urge us to be bold—bold with our information and bold with our warnings.
Alex Cunningham
Information is key to this matter as well. ASH has told me that the Government no longer have the measure of the number of people with mental health conditions who smoke. Does the hon. Lady agree that the Government need to re-establish a national measure for smoking rates among people with mental health conditions, as that will aid planning and the provision of services?
Michelle Donelan
Indeed, we have problems among many categories in the country. By 2018, the target is to ensure that all mental health facilities are smoke free. We need to identify why people with mental health problems are turning to smoking and then target those issues.
I urge us to be bold with our information and warnings. We should not be afraid to shock in our marketing material, because we in this House have a duty to those who have yet to have a voice and the ability to choose for themselves.
As I mentioned before, perhaps the section of the plan that will prove the most successful is the backing of evidence-based research into e-cigarettes. As the right hon. Member for Rother Valley (Sir Kevin Barron) said, it is the first plan to reference e-cigarettes. In 2016, it was estimated that 2 million people had used e-cigarettes and completely stopped smoking, while a further 470,000 were using them as an aid to quit.
There has been a great deal of discussion on e-cigarettes—the pros and the cons—so what is needed now is more evidence to support them and enable their use positively. They are not risk free and they are addictive—it would be wrong not to mention that—but I agree with Public Health England, which recommends that e-cigarettes are used in areas not covered by the smoke-free legislation and that organisations do not include them in their smoking policies. It is true that we do not know the full extent of the medical effects, but we do know that, for the majority of people, they are the only way to stop smoking and they are by far a better alternative.
In addition, statistics show that people rarely start on e-cigarettes. They use them as a way of breaking their cigarette addictions. It is important to remember that, to tackle smoking effectively, we need a prevention strategy as well as a strategy to help people quit smoking. Dr Andy McEwen, executive director of the National Centre for Smoking Cessation and Training, stated that switching from tobacco to e-cigarettes substantially reduces the major health risk. I urge the Minister to push the case for a review by the National Institute for Health and Care Excellence, which currently is at odds with Public Health England on this topic.
As I said, we have seen many worried headlines about e-cigarettes, particularly for young people. However, the latest and largest study, based on five separate surveys, gathered data from 2015 to 2017 and was from a collaboration including experts from Public Health England. It showed that a tenth to a fifth of 11 to 16-year-olds had tried an e-cigarette. However, only 3% or fewer used them regularly, and they were already smoking tobacco-based products. Among young people who have never smoked, the use of e-cigarettes was completely negligible, despite the media headlines. It is also important to remember that they are restricted in terms of the minimum age sale and the tight restriction on marketing. Let us be clear: the best thing that a smoker can do is to quit smoking. However, the evidence is increasingly clear that e-cigarettes are significantly less harmful to health than smoking tobacco.
Another area that I want to mention is inequality in smoking. By 2022, the Government expect to reduce the inequality gap in smoking prevalence between those in lower paid or manual occupations and those in higher paid or professional occupations. For example, the plan includes promoting links to “stop smoking” services across health and care systems in the UK. However, it is important that we look at the causes, not just the symptoms, when we examine why those in lower economic circumstances smoke more, and why they struggle more to quit. That is why support to councils is so vital, so that they can identify local trends and solutions. I would be interested to hear more about the Government’s plans to invest in research into the causes. We do need to pay more attention to the challenges that are faced by the disadvantaged and those from lower socio-economic groups.
As someone who believes in low tax in general, it would be remiss of me not to point out that on this subject I passionately argue that we should maintain a high duty rate for tobacco products. It is a disincentive for people to start smoking, especially the young, and I urge the Government to go further in the upcoming Budget. Of course, enforcement is nothing without encouragement to give up. So, to conclude, I echo the sentiments that tackling smoking requires a plan—a plan that seeks to prevent smoking, but also assists those who currently want to give up smoking. This plan does that. Treating smoking-related illnesses is estimated to cost the NHS £2.5 billion a year, while the wider cost to society is a staggering £12.7 billion. But the real cost is the human lives—those that are cut short, and the families that suffer: families in Wiltshire, in my constituency, and up and down the country. I am delighted that in Wiltshire there are now 25% fewer hospital deaths from smoking-related illnesses, but that is still too many, and that is why creating a smoke-free generation is essential.
Sandy Martin (Ipswich) (Lab)
I am concerned about the damage that smoking does to my constituents. Almost 15% of the population of Suffolk smoke. More than 7,500 admissions to Suffolk hospitals every year are attributable to smoking. Those who do not quit will have roughly a one in two chance of dying prematurely from smoking-related diseases.
The tobacco industry is deliberately producing products that it knows will kill its customers. While the market for cigarettes is mercifully in decline in the UK and other rich countries around the world, it is still growing in low-income countries, where the industry regularly uses tactics that would be illegal in this country, including the deliberate sale and marketing of cigarettes to young people and children. As a result, more than 7 million people die from the consequences of tobacco use each year. Almost four fifths of the world’s 1 billion smokers now live in low and middle-income countries. Money spent on tobacco is money not spent on other household needs. In Kenya and Bangladesh, tobacco cultivation has replaced food crops, leading to local food insecurity. In Malawi, at least 78,000 children are forced to work in tobacco fields, preventing most of them from attending school. Tobacco growing around the world is responsible for a loss of biodiversity, land pollution due to the use of pesticides, soil degradation, deforestation and water pollution. The result of all that deeply destructive and irresponsible activity is that the four major tobacco manufacturers are some of the most profitable businesses on earth.
It is impossible to hold an ethical investment in a tobacco company. To invest in tobacco is to seek to make money from environmental destruction, social exploitation, disease and premature death. That is increasingly understood by investors, because last year AXA, one of the world’s largest insurers and a major part of the Ipswich economy, divested more than $2 billion of tobacco industry assets. I welcome its decision. Tobacco-free investment policies have also been announced by AP4, one of the most influential pension funds in Sweden; Medibank, the largest health insurer in Australia; Fonds de Réserve pour les Retraites, France’s public pension fund; the Irish sovereign investment fund; and CalPERS, the largest public pension fund in the USA. So far in 2017, tobacco-free investment decisions have been made by AMP Capital, Bank of New Zealand, SCOR, PME, ACTIAM and Aviva, the largest insurer in the UK. In addition, ABN AMRO, the global bank, will cease lending to tobacco manufacturers. Those very welcome individual decisions now constitute a clear trend.
In that context, it is increasingly absurd that large investments in tobacco are still held by local authority pension funds across the United Kingdom. There is a fundamental contradiction between the local authorities’ public health responsibilities and their investments in tobacco, which actively promote the biggest public health problem confronting this country.
I understand that pension fund trustees have a duty to run their funds to secure strong returns for beneficiaries. Local authority workers depend on sound investments for their pensions. Case law has now made it clear that local authority pension fund trustees may consider non-financial factors when setting investment strategies, provided that any restrictions they place on investment as a result of such consideration do not significantly affect financial returns. But how immoral does an investment have to be before the financial returns no longer trump the moral question?
Iain Stewart (Milton Keynes South) (Con)
The hon. Gentleman is making a powerful argument, but will he consider the fact that many tobacco manufacturers are actively investing in non-tobacco products, which may change their whole future investment strategy? In the light of that fact, should not investors—pension funds and so on—look at that long-term development of such businesses rather than their current position?
Sandy Martin
I thank the hon. Gentleman for his intervention, but I do not agree with him. If a company is producing something that is detrimental to the whole world, the best approach is to disinvest from it.
How bad does an investment have to be before its financial returns no longer trump the moral question? Are there no factors that could lead a pension fund to divest on moral grounds alone? Such factors could—and in my view should—include the UK’s treaty obligations. For example, article 5.3 of the framework convention on tobacco control, to which the UK is of course a party, states:
“In setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law.”
Guidelines for the implementation of article 5.3 were agreed back in November 2008 at the third conference of the parties to the convention. Recommendation 4.7 states:
“Government institutions and their bodies should not have any financial interest in the tobacco industry, unless they are responsible for managing a Party’s ownership interest in a State-owned tobacco industry.”
I am delighted that the UK has no state-owned tobacco industry, but the level of public investment in private tobacco firms in this country flies in the face of the convention.
As leader of the opposition at Suffolk County Council—before I was elected to this august House—I brought forward a motion proposing that the county’s pension fund should disinvest from tobacco funds. The motion was passed unanimously. The pension fund committee then commissioned legal opinion on how to divest, but the opinion was that the committee could not legally do so.
Does the Minister believe that our local authorities should also invest in, say, pornography—a very profitable business I am led to believe? Profit should not be the only consideration for pension fund investment. We can and must do better, and responsible disinvestment by local authority and public sector pension funds is the right place to start. This is an issue on which the public health Minister could usefully engage, and I hope he will make a commitment to do so when he replies to the debate.
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow that contribution by the new hon. Member for Ipswich (Sandy Martin). I agreed with almost all of what he had to say—except perhaps about pension funds investing in pornography, which I think stretched the point. I also congratulate the right hon. Member for Rother Valley (Sir Kevin Barron), who I have known since I was elected as a great champion of anti-tobacco and anti-smoking measures.
I should declare an interest as the chairman of the all-party group on smoking and health. For me, this is a personal issue: both my parents died of cancer, directly as a result of smoking, and I do not want anyone to go through what my family had to go through.
My hon. Friend the new Minister for public health is the third Minister I have berated about getting the tobacco control plan published, and I congratulate him on the fact that it was duly published almost in his first few days in his role. I thank him for that, and I look forward to many such measures, which we will be calling for, being given equal standing and impetus.
We should, of course, review the outcome of the previous plan, which expired at the end of 2015. The three ambitions of the old plan, which included reducing smoking rates among adults and children, were more than achieved, and I congratulate Governments of both political persuasions on that. We just about made the target of reducing the level of smoking among pregnant women to below 11%, although that happened somewhat later than envisaged in the plan. We now have the lowest prevalence of smoking ever recorded among adults and children.
We are still in the position where 80,000 people a year die from preventable smoking-related diseases, and the single cause of that is tobacco. It is the only product available legally that, if people use it as the manufacturer intends, will kill them. My hon. Friend the Member for Chippenham (Michelle Donelan) made the point that were tobacco to be discovered now, there is no chance that it would ever get to the stage it has.
Tobacco kills half of lifetime smokers. On average, smokers lose 10 years of their life expectancy. For every death that is caused, about 20 smokers suffer from a smoking-related disease, so the problem is not only death but smoking-related diseases and the cost to the health service.
Every year in Harrow, my local borough, about 1,500 hospital admissions and 200 premature deaths are caused by smoking-related diseases. If we extend the picture across the country, we see that there is a huge problem.
Tobacco control policy should have as its objective the end of smoking, which I absolutely support. The Minister states in the plan that the aim is
“to create a smokefree generation”,
which is a wonderful idea, but if we go further into the plan, we see that the aim is to cut smoking rates to no more than 12% by 2022. That is too weak a target—we should be looking to go much lower than 12% by 2022.
I particularly welcome the targets to cut the number of 15-year-olds who smoke regularly to lower than 3%, and to cut the number of pregnant women who smoke to less than 6%. Those key targets will have long-term effects. The reality is that most people who smoke—two thirds—acquire the habit before the age of 18, so one of the key issues is to prevent young people from starting to smoke. If we can achieve that, we can make sure that we cut off the supply of smokers. We know that once people are addicted, it is much harder for them to give up smoking.
Funding for tobacco control is essential. We need to be clear that the headline figure for public health spending has increased since 2013, rising 25% each year, but that does not take into account the extra responsibilities that local authorities have. Analysis by the King’s Fund has shown that once we take those responsibilities into account, local authority spending on public health has fallen in real terms since 2013-14 by 5%. At the same time, the population has grown by 3%, so the reality is that we are seeing a reduction in spending.
In Harrow, spending on tobacco control has fallen from £364,000 a year in 2013-14 to £9,000 in the current year—a decline of 98%. If we analyse Department for Communities and Local Government returns, we see that spending on tobacco control across the country has fallen by 33%. That cannot be acceptable.
It is clear that one of the issues we have to address is stop smoking services, which are key to helping people to get off smoking in the first place. They are highly cost-effective and they would make sure that we reduced the number of deaths. Every smoker who goes to a GP or any doctor should be relayed to a stop smoking service immediately to help them to give up smoking. Clearly, that will cost money, and I share the view of my hon. Friend the Member for Chippenham that the tobacco industry should pay for the damage it does to our national health service and our health. Imperial and Japan Tobacco International make joint profits of about £1 billion a year, and they should be charged for cleaning up the damage that these products cause on the basis that the polluter pays. In the United States, the tobacco industry is required to pay an annual user fee, which means that the Food and Drug Administration collects more than $2 billion a year.
The Government introduced the annual tax escalator of 2% above inflation, but that is due to end in 2020. We should increase it and make sure that the money raised is ring-fenced so that it can be used to implement smoking-cessation measures. That would not only encourage the tobacco industry to look at what it does to prevent people from smoking, but discourage it from manipulating prices to subsidise cheaper brands and encourage people on low incomes, or young people, to start smoking—we know that the industry does precisely that. As we move in that direction, we should see an increase in tobacco tax.
A licensing system for tobacco should be introduced to make sure that we have complete control, from manufacturer to retailer. That would ensure that we could have proper enforcement all the way through the process and take action against the illicit trade.
One issue that is very prevalent, but is not mentioned in the tobacco control plan, is oral cancers. The British Dental Association estimates that between 91% and 93% of oral cancers are preventable and that two thirds are caused directly by smoking or by chewing tobacco. Large numbers of people who originate from the Indian subcontinent—between 40% and 50%—chew tobacco that is unregulated. There are no warnings on any of this tobacco and nor is there any estimate of how much damage it is doing, but large numbers of people from the Indian subcontinent who chew tobacco routinely present with oral cancer as a result. We should make sure that there are health warnings on these products, and that people are warned about the consequences of taking them. Tobacco does not have to be included within these products, but frequently it is included. If tobacco is involved, clearly there should be warnings and proper regulation should be in place. My hon. Friend the Minister has suggested that there are no plans to do anything about this, but I urge him to review the situation very closely, examine the evidence, and then act in the same way that he has done on the tobacco control plan.
Dr Paul Williams (Stockton South) (Lab)
I am grateful to my right hon. Friend the Member for Rother Valley (Sir Kevin Barron) for securing this important debate.
There used to be a time when cigarettes were perceived as cool—but people were being conned. Powerful tobacco companies were placing their products in movies and using careful branding to make us think that cigarettes would make us more attractive, more athletic, or even smarter. What they forgot to tell us was they also leave people unable to breathe, cause heart attacks, and kill half of those who use them. Some 15% of adults in the UK still smoke. In some parts of my constituency, half of all people still smoke. Not surprisingly, these are also the areas where people die youngest. I predict that in 50 years’ time nobody will smoke. We will look back on the 20th and early 21st centuries and shake our heads and laugh at the idea that people were poisoned with tobacco and paid for the privilege.
Like many Members in the Chamber, I would like to see England smoke-free. That means no young people starting to smoke because they know that it will make their breath smell and their teeth bad, no pregnant women smoking because they know that each time they smoke a cigarette their baby is also smoking a cigarette, and no young parents smoking because they know that their kids will copy them as soon as they are old enough. It means people in their 40s and 50s quitting, because lungs decline rapidly if people continue smoking beyond this age, and in time they struggle to breathe. It is never too late to stop. It is best never to start, because stopping smoking is one of the hardest things that someone will ever do—but one of the most worthwhile. As many Members have mentioned, half of all cigarette smokers will die of smoking-related conditions. There is a powerful case for continuing to take stronger action towards a smoke-free society, and I welcome much of the tobacco control plan for England.
It is important to recognise success. Smoking rates in the north-east of England have fallen to just over 17%—down by almost a half since 2005, and the largest regional fall in smoking rates in the country. Having 200,000 fewer smokers in the region could mean 100,000 fewer premature deaths. This is, in part, due to the work of successive Governments who have pushed the issue up the agenda.
I welcome all the ambitious targets that the tobacco control plan for England sets for future reductions, but I particularly welcome the focus on stopping smoking in disadvantaged social groups. The decline in smoking in our society has not been uniform and, as in many areas of society, many people have been left behind. However, it is wrong to think that just providing services to people living in poverty will be enough. My experience of working in areas of socioeconomic deprivation in England has taught me that health behaviours do not occur in isolation. It is genuinely hard for someone to stop smoking if they are worried about how they are going to pay their next bills; they are threatened with losing their benefits, perhaps even having to wait six weeks for universal credit; they have insecure work; they live in a community threatened by crime and antisocial behaviour; and they are struggling to look after their family. Smoking is often a symptom of other problems. Reducing smoking requires poverty reduction and true engagement at a community level to make life better and easier for people living in areas of deprivation.
I would now like to focus on those with mental health conditions. As has been mentioned, the smoking rate among people with mental health conditions has remained stubbornly high. In Stockton South, the rate is about 40%, even though smoking rates have fallen among the rest of the population. It is one of the single largest factors in the lower than average life expectancy among people with a mental health condition. For someone who has a mental health problem, stopping smoking is good not just for their physical health but for their mental health too. There is evidence that if someone with depression stops smoking, it can have an effect on improving their mental wellbeing similar to taking antidepressants.
Closing the gap in smoking rates is not a straightforward task. It is a challenge that requires a collaborative approach, including not just the NHS but communities, mental health charities, anti-smoking organisations and, not least, smokers themselves. I welcome the plan’s commitment to work with the Mental Health and Smoking Partnership to identify how we reduce rates of smoking in this population. However, while the ambition of the plan is welcome, it is not clear how the Government intend to assess progress within the population of those with mental health problems. I would be grateful if the Minister could tell us what he intends to do to make sure that there are reliable, national ways of measuring smoking rates among the whole population of those with mental health conditions, not just those with severe mental health problems. Government should know how they will assess whether targets are being achieved.
Like other Members, I am concerned about cuts that local authorities are making to public health funding, their hands often tied by huge Government cuts. I am particularly concerned about cuts in smoking cessation services. The evidence is quite clear: well-run services that combine behavioural therapy and prescription of nicotine replacement products offer smokers who want to quit the best chance of success. Community-based interventions to tackle inequalities are stressed in the plan, but that will be empty rhetoric unless the funds to do this work follow. The five year forward view and the sustainability and transformation partnerships place a significant emphasis on prevention. The pressure on NHS services in future can be significantly eased if we ensure that we make the necessary investments in prevention now. Government must finance the public health provision necessary to put effective tobacco control policies into action and to enforce tobacco control legislation where it is being broken. That Government commitment is threatened by austerity, and by cuts in local government funding in particular.
It would be a welcome boost if the political consensus that exists in this House—it spreads across all parties— on the need for tobacco control were supported by a commitment to fund local authorities in England to deliver the radical steps that we now need to make the next push towards a smoke-free society.
Will Quince (Colchester) (Con)
I rise to speak primarily as the co-chair of the all-party parliamentary group on baby loss. I apologise to some extent if I appear a little like a broken record on this subject, but in many respects I do not apologise because we have so much work to do in this area. I want to focus, if I may, on smoking in pregnancy. My hon. Friend the Member for Chippenham (Michelle Donelan) has eloquently put some of these points already, but I want to go into somewhat more detail.
The Prime Minister spoke of the burning injustice that sees the poorest in this country die on average nine years earlier than the richest. It is essential for the tobacco control plan significantly to reduce the health inequality between richest and poorest in Britain. Those who earn £10,000 a year are twice as likely to smoke as those who earn £40,000. As the Minister knows, we have massive issues with regard to smoking in pregnancy and regional variation: 2% in Richmond, 2.2% in Wokingham, and 2.4 % in Hammersmith; yet 26.6% in Blackpool, 24.4% in South Tyneside, and 24.1% in north-east Lincolnshire. Women in routine and manual jobs are almost three times more likely to smoke during pregnancy than those in managerial and professional roles. Teenage mothers are six times more likely than those over 35 to smoke throughout their pregnancy.
I applaud the success of the 2011 to 2015 tobacco control plan. As my hon. Friend the Member for Harrow East (Bob Blackman) pointed out, we exceeded the ambitions in the plan and reduced the adult smoking rate from 20.1% to 15.5%. I also applaud the Minister’s ambition to reduce the rate of adult smoking from 15.5% to 12% or less by 2022, and I further welcome the ambition to reduce the prevalence of smoking in pregnancy from 10.7% to 6% or less, notwithstanding my earlier point about regional variation.
To be clear, this is absolutely not about criticising or demonising women who smoke during pregnancy. Tobacco, as Members have already pointed out, is highly addictive and it can be incredibly difficult to stop smoking. In relation to stillbirth and neonatal death, the Government have set some really ambitious targets: to reduce the rate by 20% by 2020, and to cut it in half by 2030. In order to achieve that, we have to be clear about the fact that the biggest modifiable risk factor for those issues is smoking in pregnancy. I have raised these statistics in the House before, and I make no apology for reiterating them today. One in five stillbirths is associated with smoking, and women who smoke are 27% more likely to have a miscarriage. Their risk of having a stillbirth is a third higher than that of non-smokers. Mothers who smoke are more likely to have pre-term births and babies who are small for their gestational age.
Then we have second-hand smoke. Maternal exposure to second-hand smoke during pregnancy is an independent risk factor for premature birth and low birth weight, but only one in four men make any changes to their smoking habits when their partner is pregnant. The number of sudden infant deaths could be reduced by more than 30% if children were not exposed to second-hand smoke. The Royal College of Physicians has estimated that 20% of pregnant women are exposed to second-hand smoke throughout their pregnancy, increasing the risk of many poor birth outcomes. If every pregnancy were smoke-free tomorrow, there would be around 5,000 fewer miscarriages, 300 fewer perinatal deaths and 2,200 fewer premature births each year.
I want briefly to raise with Ministers the question of vaping and e-cigarettes. Although I appreciate, notwithstanding points already made by colleagues, that the jury is still out on these products to some extent, and although quitting outright is always the aim, these products must surely be better than smoking, especially for pregnant women. I encourage the Minister to work with the Treasury to investigate some kind of levy on the tobacco industry. Incidentally, the tobacco industry has huge investments in vaping and e-cigarettes; in fact, most of the biggest e-cigarette companies are owned by the major tobacco manufacturers.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Perhaps I should start by declaring an interest as an electronic cigarette smoker myself. I have seen at first hand the health benefits of moving from smoking to electronic cigarettes, including being able to run much further and feeling much healthier. A smoker who gives up for, say, six months will start to feel the same benefits. I encourage the hon. Gentleman to seek a lot more research in this area.
Will Quince
I thank my hon. Friend—I use that description intentionally—for that intervention, and I think she is absolutely right. Without wanting in any way to sound patronising, I applaud her for making the move from smoking cigarettes to using e-cigarettes. The evidence is out there to suggest that it is a great way to transition off smoking and off nicotine entirely. Far more research needs to be done in this area, and I hope that the Chancellor is looking at how we could, in the Budget, encourage tobacco manufacturers to provide these products for free to women who are struggling to give up smoking during pregnancy, in particular.
I would also like to touch on the important issue of carbon monoxide monitoring. Challenges remain for staff in implementing the NICE guidance, particularly in relation to carbon monoxide screening. NICE has recommended since 2010 that pregnant women be screened for exposure to carbon monoxide. The current tobacco control plan reiterates the importance of that and further commits to recording women’s carbon monoxide levels in the maternity services dataset. However, front-line staff do not universally have access to carbon monoxide monitors.
We know already that babies who are exposed to carbon monoxide are more likely to suffer birth defects, to be born prematurely and to have a low birth weight, so it is incredibly important that we look at this area. Carbon monoxide screening is one of the key elements in supporting women who smoke to access quit services. Properly embedded into services, screening can transform outcomes. The evidence from the north-east shows that following a comprehensive programme to train midwives, provide them with monitors and set up referral routes to local quit smoking services, smoking in pregnancy rates fell by nearly a third. We know that this absolutely works.
I stress to the Minister that carbon monoxide monitors are not an optional extra; they are an essential tool for midwives. We would never ask midwives to do their jobs without, for example, blood pressure monitors. In the same way, all midwives should have access to CO monitors. Part of the problem is that there is no consistent national approach to the provision of these vital pieces of equipment. Local decisions determine whether midwives and health visitors have access to them, so there is local variation.
I would also like to touch on training for health professionals. The smoking in pregnancy challenge group, a coalition of health and baby charities, produced a report in July examining the training needs of midwives and obstetricians in England. That report was launched at a joint event of the all-party group on baby loss and the all-party group on smoking and health. I co-chaired the event, and the Minister kindly attended and addressed the meeting. I do not need to remind the Minister of this, but the report found that although health professionals have generally received training about the harms of smoking in pregnancy, a majority have had no training in how to communicate those harms to women and support them effectively to access the treatment that is available. Health professionals say that, in the absence of training, they lack the confidence to engage in such conversations.
The report recommends that such training form a regular part of mandatory midwifery training and be embedded into obstetricians’ continuing professional development. Can the Minister outline the steps that are being taken to review and implement the findings of this report? Will consideration be given to extending the analysis undertaken by the smoking in pregnancy challenge group to look at training needs, involving key stakeholders such as other health professionals?
To conclude, I very much welcome the new tobacco control plan and the commitments that the Minister and the Government have made in this area. Is there more that we can do? Yes, of course, there is much more that we can do. I know that the Minister, the Secretary of State and the Minister of State, my hon. Friend the Member for Ludlow (Mr Dunne) are as passionate as I am about reducing our miscarriage, stillbirth and neonatal death rates.
I repeat, because it is really important, that this debate is not about demonising or criticising women who smoke during pregnancy. I fully appreciate how addictive smoking is; it is really hard to stop. Like my hon. Friends the Members for Chippenham and for Harrow East, I have seen my parents struggle. They have both been smoke-free for many years, and I am very proud of them, but it is incredibly difficult.
When it comes to pregnancy, we know that all parents want to give their baby the best possible start in life, so I thank the Minister for all the work that he and the Department have done so far. I ask him to keep a watchful eye on this issue and to be pragmatic in ensuring that the Government give anyone who is struggling to quit smoking the tools and the support that they need to help them to achieve that goal.
Mary Glindon (North Tyneside) (Lab)
It is an honour to follow my friend the hon. Member for Colchester (Will Quince). He highlighted, importantly, the dangers of pregnant women smoking, and he was very supportive of women who find themselves smoking during pregnancy. I congratulate my right hon. Friend the Member for Rother Valley (Sir Kevin Barron) on securing this Back-Bench debate. The knowledge he brought to his opening speech set the tone for the debate.
I am pleased to take part in the debate because I am a member of the all-party group on e-cigarettes, and I believe that vaping is a safe and popular alternative to smoking. I have never smoked or vaped. I am the oldest of five siblings, and none of us has ever been a smoker. I put that down to the fact that both my parents smoked all their lives, and smoking never held any charm or attraction for me or my brothers and sisters when we were young people.
Because my parents, other relatives and friends smoked, and I am married to someone who started smoking at the age of nine, I think I understand why people smoke and the impact it can have on their lives. When my parents started to smoke in the 1940s, people were not fully aware of the dangers of smoking. Now, we all know that smoking can kill or cause serious lifelong illness. It makes me so sad to see so many young people starting to smoke.
The hon. Member for Harrow East (Bob Blackman) mentioned mouth cancer. That reminded me that I lost a colleague, who was in her early 60s, to mouth cancer, and only a year before she had seen her son, aged in his 40s, die of the same horrible disease, so I know how awful it can be.
Vaping is important as a safe alternative to smoking for people of all ages. I am pleased that for the first time the tobacco control plan focuses on vaping as a viable alternative to cigarettes. As my right hon. Friend the Member for Rother Valley has said, independent studies by Public Health England and the Royal College of Physicians have recognised that vaping is at least 95% less harmful than smoking, and research by the University of St Andrews has found that the cancer risk from vaping is only 1% of that of smoking. Many other valid statistics from various bodies now support vaping as a safe alternative for smokers, as has been highlighted in the debate.
I am pleased to say that many of my family and friends, including my husband, have all stopped smoking and now use vape products, and although many people so dear to me tried to give up smoking and always returned to tobacco, I am sure many others across the country are as happy as I am that relatives and friends have made this choice on vaping.
The commitment to support stop-smoking services is commendable, but in my experience—I undertook training to run smoking cessation sessions some years ago—it is very difficult for people diagnosed with diseases that might be smoke related to give up smoking. We all know that ill health can increase stress levels, so reliance on the habit at such a time can increase and it can be really tough to give up. Being able to switch to vaping for people in such situations is very welcome. I wish I had been able to recommend people, such as those who had had a heart attack, to switch to vaping when I was trying to help them to stop smoking, because those were difficult times for them.
I believe that the promotion of vaping and e-cigarettes is key to the Government achieving their vision of a smoke-free generation as part of the tobacco control plan. I support the view of the UK Vaping Industry Association that article 20 of the tobacco products directive, which conflates vaping products with tobacco products, should be reviewed, and that restrictions on advertising, packaging and product size should be lifted.
I do, however, have a warning for the Government. Much of the attraction of vaping is that, after the initial outlay for equipment, it proves a much cheaper way to enjoy the habit than smoking. I seek an assurance from the Government that they will ensure vaping always remains affordable, and that they will not be tempted to impose an excise tax that would force up prices and give smokers less reason to switch. Finally, I agree with colleagues that the Government must put their money where their mouth is if the tobacco control plan is to succeed.
Robert Courts (Witney) (Con)
May I say what a pleasure it is to follow the hon. Member for North Tyneside (Mary Glindon)? I am glad that vaping has been of assistance to her family, and that things are on the up from that point of view. May I also thank the right hon. Member for Rother Valley (Sir Kevin Barron) for securing the debate? We have had a really important debate this afternoon. He raised some critical points, and I thank him for doing so.
May I also take this opportunity—I have not yet had such a chance—to welcome the Minister to his place? I know he is absolutely passionate about healthcare, and that he will bring to his role all the dedication and enthusiasm of someone who is in the lucky position of having a job that is also his passion. It is good that he will be responding to the debate.
I gave a lot of thought to how I would approach the debate. For a Conservative who generally takes the approach of pursuing individual liberty, there is perhaps some tension in favouring a control mechanism that takes away people’s individual choice. Some excellent points have been made, and two speeches in particular really nailed it. The first was by my hon. Friend the Member for Chippenham (Michelle Donelan), who made the point that were tobacco discovered today, it is inconceivable that it would be freely available on the high street in the way that it is. It seems to me that that is an historical anomaly. The second was by my hon. Friend the Member for Harrow East (Bob Blackman), who spoke movingly about his parents’ deaths from cancer. I am very sorry to hear of that, but it really emphasises everything we are saying in the debate. Of course, we always have to balance the libertarian desire for freedom with the public health interest, and I hope that those two important points have really hit home with hon. Members.
I have spoken at length this week about healthcare in Oxfordshire, its future and my concerns about the way it has been managed. While we must always look at treatment—ensuring that we will one day find a cure for cancer, and in the meantime that we care for those who have cancer with every means at our disposal—we really must continue to fight. What I mean is that we must continue to decrease as much as possible the number of people who suffer cancer in the first place.
We are in the presence of some particularly cold and hard facts. The cost of having 7.3 million smokers is that smoking is the biggest killer. It is clearly identified and open to view as the biggest cause of cancer. It leads to more than 200 smoking-related deaths a day, or 16% of those who die. There are 79,000 deaths per annum —79,000 preventable deaths, 79,000 personal tragedies—to say nothing of the 20 times the number of people who, for every death, are suffering from preventable smoking-related conditions. It seems to me that there is an enormous emotional imperative: we must tackle smoking and the damage it causes.
If I have not persuaded hon. Members on an emotional level, let us just look at the hard economic facts. Smoking costs the economy £11 billion. There is a £2.5 billion cost to the NHS, with 474,000 hospital admissions. Let us just think what we could do for the NHS if we could divert that funding towards the care of conditions that are not avoidable or preventable. There is a £4.3 billion cost to employers, and a £4.1 billion cost to wider society, including the £760 million going to social care. Let us just think about how we could treat dementia or Alzheimer’s if we could divert the money from conditions that are preventable towards those that are not.
Moreover, not only is smoking a cost to the economy and a personal tragedy for those affected, but it is overwhelmingly targeted on the poorest. This health condition is actively feeding inequality. Children of smokers are two to three times more likely to be smokers themselves. The Prime Minister has spoken—very powerfully, in my view—of how the poorest are dying up to nine years earlier than the richest, and half those deaths are smoking related. This condition affects the poorest in society the most.
Surely the economic, moral and health arguments are overwhelming when it comes to the Government’s ambition of creating a smoke-free Britain. It is into that arena that the Government step with this plan.
The good news is, of course, that stopping smoking produces health benefits in months and it is easier, relatively speaking—I appreciate that it is not easy—to give up now than it ever has been. There is the technology. We have heard about the help given by vaping or e-cigarettes; last Stoptober, 53% of those who gave up did so with the assistance of e-cigarettes.
Happily, yes, the prevalence of smoking is declining more sharply than for many years, and this is where the tobacco control plan stands. The last one hugely exceeded expectations: the percentage of people smoking declined from more than 20% to 15%. I applaud the Government for taking forward bold, imaginative and forward-thinking measures as we tackle this public health crisis. The Government wish to reduce the inequality gap that I mentioned, get adult smoking rates down from 15.5% to about 12% and reduce the percentage of 15-year-olds who regularly smoke from 8% to 3%. That is so important, given that the early years govern people’s health choices for the rest of their lives.
My hon. Friend the Member for Colchester (Will Quince) and I spoke in the baby loss debate earlier this week; I mentioned that smoking was one cause of problems during pregnancy. I am glad that my hon. Friend brought that issue up again today. He is right to say that it is difficult to give up smoking. We are not being censorious in talking about pregnant women who smoke, but it would be much better for everybody if we reduced the proportion who do from 10% to 6%.
The Government are providing £16 billion for public health funding to local councils, which are best placed to marshal resources and help people in their areas. Perhaps most effective has been the mass media campaign. Many years ago now—it is a distant memory—the campaign against drink-driving started, and it has had an incredible effect in shaping public expectations. I am not suggesting that smoking is on the same level—there is a recklessness in drink-driving that is not so stark in smoking—but as my hon. Friend the Member for Chippenham said, the issue is education and making it clear that someone is much more likely to hurt themselves and others if they continue to smoke.
I will not speak for much longer, but I want to make one or two brief further points. The first is that the Government propose a joined-up approach between local authorities and NHS England, which I encourage as it produces results. I am also encouraged by the “smokefree NHS” section of the plan—the NHS leading by example. I have discussed the impact on employers; the NHS is a large employer, so it is important that it should lead the way.
Lastly, I want to comment briefly on mental health. The NHS is leading the way as far as those using, working in or visiting the NHS are concerned, and the practice of escorting people from mental health hospitals on and off premises is due to end now that the health problems have been identified. Let us be clear: although 40.5% of people with serious mental health difficulties do smoke, they want to stop smoking just as everybody else does. I hugely encourage that. This is an example of the Government’s taking an approach to mental health in the round. Yesterday, I asked the Prime Minister about help given to military personnel, but this is another example of how to ensure that the issue is not just addressed in only one silo of society.
Thank you for letting me speak for a little while, Madam Deputy Speaker. Like the British Heart Foundation and Action on Smoking and Health, I welcome the plan enormously. It builds on recent Government work on tackling smoking. The proposals are ambitious and bold, and I ask everyone to support the Government’s plan to create a smoke-free generation.
Mims Davies (Eastleigh) (Con)
It is a pleasure to follow my hon. Friend the Member for Witney (Robert Courts). I also congratulate the right hon. Member for Rother Valley (Sir Kevin Barron) on bringing this debate to the main Chamber, on enabling an important conversation about the coming of smoke-free Britain, and on the long-term work he has done on this issue. I welcome my neighbour, the public health Minister, my hon. Friend the Member for Winchester (Steve Brine); I applaud his progress and focus on this issue and encourage him to be as ambitious as possible.
Many colleagues will be aware that I am passionate about trying to keep fit and healthy, although serving in the House precludes much of that, and about working to reduce heart conditions among people of all ages. It should come as no surprise that I very much welcome the Government’s new tobacco control plan. I chair the all-party parliamentary group on running—please join. I also actively support Cardiac Risk in the Young and belong to the all-party parliamentary group on arrhythmias. I could not be more passionate about these issues. Smoking claims more than 200 lives per day in England. Think of how many lives we are losing from preventable causes. We have also heard about the £11 billion cost to the economy.
Last November, I held the parliamentary reception for carers’ rights day and I shall do the same next week; the long-term impact of this issue really concerns me. Like many Members, I am not here to lecture; we are all sympathetic and we have been measured in our comments. I believe in choice, but more importantly in education and understanding the real impact on families and our NHS. We simply know that smoke-free is best.
I know first hand what the addiction can do to long-term health and quality of life. As we have heard today, we simply would not allow a smoking culture to start growing today so we cannot ignore the challenge it has left us. Smoking has blighted my life—sadly, it can blight relationships and families all too often. Like many, my mum became a smoker in the late ’50s to stay slim and attractive and avoid putting on weight. It was fashionable, and the reality of its impact on health was simply never understood. She could never, ever give up: it was the first, the last, the everything—an addiction and a habit. She always said, “I wouldn’t know what to do with my hands; I’ve tried knitting!”
E-cigarettes did help, but we were unclear at the time whether they were better or worse. There was great help from GPs, including hypnosis, gum, tablets, lozenges, wands—you name it; it did not work. My dad smoked heavily throughout his life, although to be honest he enjoyed all the so-called good stuff as well. But it all resulted in my being a sandwich carer, with young children and older parents on whose health smoking had taken its toll. Both my parents died in their early 70s from smoking-related heart issues—both before my 40th birthday, and both before I came to this place. They did not have a chance to see their grandchildren grow up, as happens in many families as a result of smoking.
Alongside our transformative success on smoking in public places is further good news: back in October 2015, smoking in cars with children was banned and that was also transformative. But there is also bad news—how often do we see people in work vehicles flouting smoking rules? Air pollution is having a growing impact on our mindset. We need to make sure that people are doing what is safe at work. Earlier this week, I was at a British Lung Foundation event highlighting its Breathe Easy campaign, which I applaud.
The 2011 and 2015 tobacco control plans had those successes and should be applauded—adult smoking rates are down almost 5% over that period—but we must continue to be bold. I am so pleased about the Government’s new plan. As we heard from my hon. Friend the Member for Chippenham (Michelle Donelan), action is essential: just saying that we have made some progress is not good enough.
By 2022, the Government expect to reduce the smoking rate to 12% or less, reduce the prevalence of smoking in pregnancy by almost half, and permit innovative technologies. We all know about vape shops and the prevalence of vaping on our high streets. It cannot be ignored and we must research it. I do not want, 20 or 30 years down the road, to have on our hands the results of thinking it was the new messiah when it was not. However, it may be, so let us do the research.
As a strong supporter of and believer in the excellent work of the British Heart Foundation, including in my constituency, I thank it for all it does. Public Health England tells me that since 2014 there are still about 20,000 smokers in Eastleigh. I welcome the previous Chancellor’s announcement of £2 million for the British Heart Foundation for the replacement of local defibrillators. I would like the Government to help with work on an app, so we know where those defibrillators are. The former Chancellor made the announcement because his constituent, Fabrice Muamba, survived only because of a defibrillator. Let us legislate to have them on planes as well—they cost about £700. My constituents Graham and Anne Hunter have seen the benefits of defibrillators. After losing their daughter, Claire Reed, they would absolutely welcome both the app and the defibrillators. It was as a result of them talking to the Chancellor that the £2 million was provided.
I welcome the Government’s plans to seek to reduce smoking among those with mental health conditions. We know that the most deprived and challenged will always be the most dependent. Those in a lower paid job are, sadly, still more likely to smoke or, more importantly, to stay a smoker. I stress to the Minister the importance of tackling the health inequality of this particular group in driving the next phase forward.
I congratulate the Government on their bold vision for a smoke-free generation and I look forward to further progress. All the lives we can save, and all the resources we can save, are absolutely worth it.
Stephen Kerr (Stirling) (Con)
With your kind permission, Madam Deputy Speaker, as a Scottish MP I hope to make a short contribution to the debate on a tobacco control plan for England. I shall make some reference to the situation in Scotland, to highlight the cost of smoking in human suffering and death, as well as the cost impact on public health budgets and the overall economy. I welcome the debate on this vitally important matter and congratulate the right hon. Member for Rother Valley (Sir Kevin Barron) on securing it. I also applaud the Backbench Business Committee for granting the time.
The tobacco control plan builds on the successes of the previous control plan, established by the coalition Government, and aims to herald a smoke-free generation—I say that while recognising that much yet needs to be done. I wholeheartedly support the principle of preventative spending on early intervention, which can prevent negative health outcomes later in life. I also welcome the investment in tackling ill health and recognise that it has the potential to save a significant amount of public spending in the long term and can help to reduce health inequalities. I do not underestimate the power of addiction. For that reason, I feel that where there is a will to stop smoking we should do everything possible to help people to help themselves.
I welcome recent falls in the number of adults who smoke in England and Scotland, and the number of children exposed to second-hand smoke. However, smoking rates in Scotland are still higher than in England, and we must be prepared to do much more to reduce this figure. Currently in Scotland, tobacco use is linked to 10,000 deaths a year.
On e-cigarettes, I am a firm supporter of having a robust regulatory framework, which ensures all devices are safe and acknowledges their potential use in smoking-cessation programmes. I welcome the fact that earlier this year the Scottish Parliament voted to ban the sale of e-cigarettes to under-18s and to limit advertising, moves I fully support because they will protect the health of our young people.
On the tobacco control plan for England, I acknowledge that the previous plan reduced adult smoking rates in England from 20.1% to 15.5%. That is indeed progress. I also applaud the ambition in the plan to reduce adult smoking rates from 15.5% to 12% or less by 2022. It is welcome that the plan is supported by the British Heart Foundation, which recognises it as an important tool in reducing the rate of strokes and heart disease. I compliment the Government on the fact that the World Health Organisation has designated England as one of the best places in the world to give up smoking. The strategy is based on a joined-up approach between the NHS, the Department of Health and local government. That can only be good, too.
I welcome the ambition of the plan to reduce the number of 15-year-olds who regularly smoke from 8% to 3% or less; reduce the smoking rates among adults in England to 12% or less; reduce the inequality gap in smoking prevalence between those in lower paid, routine and manual occupations, and those in higher paid professional and managerial occupations; and reduce the prevalence of smoking in pregnancy from 10.7% to 6% or less. I also applaud making all mental health in-patient service sites smoke-free by 2018, as was mentioned by my hon. Friend the Member for Witney (Robert Courts). It has been a source of frustration for me for many years, as I am sure it has been for other Members, to visit hospitals for various reasons and find people congregated around the entrances, often having been escorted there by health workers who I am sure would prefer to be doing more productive things. I also welcome the ambition of permitting innovative technologies than minimise the risk of harm and maximise the availability of safer alternatives to smoking.
I hope we all support the idea of creating a smoke-free generation without any reservation. Effectively enforcing existing legislation on proxy purchasing and standardised packaging to reduce the uptake of smoking among young people is a very noble objective. Supporting pregnant smokers to quit, which will undoubtedly increase the life prospects of children yet unborn, and reviewing the sanctions for retailers who consistently break the law designated to protect young people from smoking, is welcome. As the right hon. Member for Rother Valley mentioned in his opening speech, in 2016 it was estimated that 2 million people had used e-cigarettes and had completely stopped smoking—that must be very good news—while at the time a further 470,000 were using them as an aid to quit.
In 2013, the Scottish Government introduced a five-year tobacco control strategy entitled “Creating a Tobacco-free Generation”. It set the target to reduce smoking prevalence in Scotland to 5% or less by 2034—again, a very ambitious and welcome target. The strategy set out a range of measures to support young people to choose not to smoke, to protect children and all people from second-hand smoke, and to continue to support those who do smoke to quit. Actions taken by the Scottish Parliament in recent years to control tobacco, and to limit and tackle the harm caused by tobacco, include legislation to prohibit smoking in public places, which came into effect in March 2006; raising the age of sale for tobacco from 16 to 18 in 2007; implementation of a tobacco retail register in 2011; a ban on self-service sales from vending machines in 2013; and the introduction of a tobacco display ban in shops from 2013.
I turn now to the impact of smoking. According to Scottish Government statistics, tobacco use in Scotland is associated with more than 10,000 deaths and about 128,000 hospital admissions every year. According to the Office for National Statistics, smoking prevalence in Scotland among over-16s was 17.7% in 2016—an estimated 942,644 smokers—compared with the UK-wide smoking prevalence of 15.8%. Smoking prevalence in Scotland fell between 2003 and 2013 but has remained fairly static since. Some 35% of adults in the most-deprived quintile of the Scottish index of multiple deprivation smoke compared with 11% in the least-deprived quintile.
According to ASH Scotland, on average lifelong smokers die about 10 years sooner than non-smokers. The estimated cost to the NHS in Scotland alone is £323 million. According to the Scottish Public Health Observatory, for every 1 percentage point by which smoking prevalence is reduced, the NHS could save £13.4 million. One last set of numbers underlines the cost of smoking: ASH Scotland estimates that smoking costs Scotland around £1.1 billion annually, including £271 million in healthcare costs, £692 million in productivity losses due to active smoking, £60 million in productivity losses due to passive smoking, £34 million in clearing smoking-related litter and £12 million in fires caused by smoking in commercial properties.
Colleen Fletcher (Coventry North East) (Lab)
As an ex-smoker who went cold turkey many years ago, I agree with most of what has been said. Like many others, however, I come from a family where parents and grandparents smoked. I welcome all measures to help people to stop smoking. Does the hon. Gentleman agree that we need more investment in prevention, not least through public health budgets, but that those are now in the hands of local authorities, the cuts to which have been abominable over the years? Does he agree that more money needs to be invested in public health?
Stephen Kerr
I note in the plan the £16 billion commitment to funding public health programmes, in conjunction with local authorities in England, which is surely welcome news.
Bob Blackman
Just to reiterate, although it is local authorities that spend the money to help people give up smoking, which is warmly welcome, the savings go directly to the health service, and so the money is not recycled back to those helping people to stop smoking to meet the considerable expense incurred.
Stephen Kerr
I thank my hon. Friend for his intervention and his moving and impactful contribution earlier.
Behind the numbers on lives and costs, there is above all else the human suffering and the suffering of the families who lose family members to this terrible disease. I welcome any and all efforts to help people across the UK stop smoking.
Martyn Day (Linlithgow and East Falkirk) (SNP)
I am grateful to the right hon. Member for Rother Valley (Sir Kevin Barron) for securing this important debate on the tobacco control plan for England. I congratulate him on his work over the years and, as a testament to that, on the general consensus today.
Scotland has its own strong tobacco control strategy. The Scottish Government have implemented and overseen a number of progressive actions on smoking, and I am grateful to the hon. Member for Stirling (Stephen Kerr) for listing many of them, which shows the strength of the consensus in the Chamber to which I referred. Record investment in NHS Scotland on smoking cessation services has helped hundreds of thousands of people to quit smoking, and our aim is to create a tobacco-free generation by 2034. Last year, the Scottish Parliament celebrated the 10-year anniversary of the smoking ban and welcomed comments from the World Health Organisation praising our excellent example of global public health leadership.
Not everything that we want to achieve can be done in isolation, however. A good example of something that required UK-wide co-operation was the introduction of standardised packaging for tobacco products. However, I want to focus on another area that requires co-ordination across the jurisdictions of the UK, and indeed of Europe and the world: the illicit tobacco trade. I press the Minister to report on progress to secure a Europe-wide traceability system, which is still being discussed at the European Commission, and to confirm that the UK Government will rapidly ratify the illicit trade protocol, the first subsidiary treaty under the WHO framework convention on tobacco control.
Illicit tobacco undermines public health policy because it makes tobacco products available at a low price and often in branded packaging. It damages public revenue because it reduces the take from tobacco taxation. Figures from Her Majesty’s Revenue and Customs for 2015-16 estimated that the illicit market share in the UK for cigarettes was 13%, with the figure for hand-rolling tobacco 32%. The tobacco tax gap in that period was estimated at £2.4 billion, so clearly the illicit trade undermines our tobacco control strategy.
The involvement of the major tobacco manufacturers in the illicit trade is a major concern. Their involvement is evidenced by the fact that their genuine products—not counterfeit ones, or so-called cheap whites—form the largest share of the illicit market. The Scottish Government have committed to continue to support strong national and local alliances to tackle illicit tobacco. In 2009, the enhanced tobacco sales enforcement programme was introduced to enable the Scottish Government and trading standards officers throughout Scotland to work with Her Majesty’s Revenue and Customs to tackle the availability of illicit cigarettes and their sale to people under 18.
As we all know, there is an open border between England and Scotland, and if the amount of illicit tobacco rises in England, it will affect Scotland, as well as Wales and Northern Ireland. Scotland needs a commitment from the UK Government that they will ensure that local authorities in England are adequately resourced to conduct the fight against the illicit trade. At present, that is absolutely not what we appear to have.
Bob Blackman
The hon. Gentleman makes a powerful point. Does he concede that the tobacco companies themselves deliberately overproduce products for certain countries, knowing that they will be brought into the UK by illicit means and sold as illicit products? The tobacco companies themselves have a key role in this.
Martyn Day
The hon. Gentleman makes a good point. The tobacco companies are indeed the villains in this scenario.
For the last 20 years, the UK has had an effective and well-resourced anti-smuggling strategy, and HMRC’s tax gap estimates have fallen by about a half since the peak in 2000, but there is every reason to fear that that success is under serious threat and that the progressive reductions in the market share of illicit tobacco may soon go into reverse. That is already suggested by recent small upticks in HMRC’s figures.
There is a specific problem for local authorities. Figures from the Chartered Trading Standards Institute published at the end of last year showed that the total budget for trading standards across Great Britain had fallen from £213 million in 2009 to only £124 million in 2016, and that the number of trading standards staff had fallen by more than half. That means that the chance of catching someone selling illicit tobacco or supplying it to an unscrupulous retailer or local consumers is significantly reduced. Information from local enforcement action can be used to help to track the supply chain, and less information means less tracking and intelligence, which cannot be in the interests of either public health or the public finances.
I urge the UK Government to make rapid further progress at the European and international level. The EU’s revised tobacco products directive establishes a new traceability system for all tobacco packaging, and that requires a coding system that can be accessed by enforcement officers to give information about the movement of products through the supply chain from manufacturer to retailer—this addresses the point made by the hon. Member for Harrow East (Bob Blackman). The system also requires security features to prevent tampering and ensure that products are genuine.
The European Commission has been carrying out consultations and research on the system’s specifications. While I consider its current proposals to be largely constructive and sensible, there are tobacco industry systems that the manufacturers are desperate to see states adopt to implement the directive requirements. The coding system developed by the four major manufacturers is known as Codentify, although it has now been hived off to a nominally independent company. In my opinion, it does not fulfil the requirement for independence in the protocol to eliminate illicit trade in tobacco products. That protocol explicitly requires Governments to take responsibility for control measures, rather than relying on industry self-regulation, which has clearly failed to deliver in the past. I therefore ask the Minister to confirm that the UK Government intend to participate in the European traceability system, and also to state clearly that they will work to ensure that its specifications include robust requirements for independence from the tobacco industry. The industry must not control the traceability system, either directly or indirectly through proxies.
A global tracking and tracing system is offered by the World Health Organisation’s illicit trade protocol, which was rightly negotiated as the first subsidiary treaty under the framework convention on tobacco control. The EU system will have to be consistent with the protocol, but it is obvious that a working global system would be even more effective than one that is confined to the EU. The protocol also contains other important provisions on control of the tobacco supply chain, including the requirement for manufacturers to conduct due diligence with their customers and to keep proper records of their transactions.
The UK Government have stated that they will become a party to the protocol on numerous occasions, including in their new tobacco control plan, and I welcome those statements, but they are yet to do so. I ask the Minister to give a clear commitment that the UK Government will move rapidly to ratify the protocol. A date for ratification would be excellent. It certainly needs to happen before 10 July 2018, which is the deadline if the UK is to be able to participate in the first meeting of the parties in October 2018 in Geneva.
Like others who have spoken, I welcome the tobacco control plan for England. It is not perfect, but it does represent a real commitment to tackling the smoking epidemic. I trust that it will also strengthen continuing co-operation with the Scottish Government, as well as the Welsh and Northern Ireland Governments, in addressing this No. 1 public health priority. However, the approach still needs to be strengthened and supplemented, and action against illicit trade is at the top of my “to do” list.
I very much hope that the Minister will be able to make the commitments that I have called for today, along with other Members on both sides of the House, and I look forward to the arrival of the first truly smoke-free generation throughout the United Kingdom.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I thank my right hon. Friend the Member for Rother Valley (Sir Kevin Barron) for securing the debate. He is a long-standing campaigner on the issue of tobacco and its effects on society, and it is good to see that he is continuing his campaign. He made an insightful and thought-provoking contribution.
I also thank other Members who have made excellent speeches on this important issue, including the hon. Member for Chippenham (Michelle Donelan), my hon. Friend the Member for Ipswich (Sandy Martin), the hon. Member for Harrow East (Bob Blackman), my hon. Friend the Member for Stockton South (Dr Williams), the hon. Member for Colchester (Will Quince), my hon. Friend the Member for North Tyneside (Mary Glindon), and the hon. Members for Witney (Robert Courts), for Eastleigh (Mims Davies) and for Stirling (Stephen Kerr).
I welcome the fact that the debate is taking place during Stoptober. It is nearly a year since our last debate on the tobacco control plan, which—this may interest some Members—marked my first outing as shadow Minister for public health. While the Minister I shadow has now changed—it is now the hon. Member for Winchester (Steve Brine)—the most significant change since our last debate is that, thanks to him, we finally have a new, updated tobacco control plan, which we were all very pleased to see. It is welcome that, after a long-drawn-out 18-month delay, we now have a plan that will take us a step further towards creating a smoke-free society.
Labour Members have welcomed the plan and its ambitious and noble goals, but we remain concerned about how it will be effectively implemented and achieved, especially given the short-sighted cuts in public health budgets, which my hon. Friend the Member for Stockton South highlighted knowledgeably in his excellent speech. As we know, the previous plan was extremely successful and reduced smoking rates from 20.2% to 15.5% but, as we have heard from every speaker today, it remains the case that smoking is still a serious issue in our society in terms of both its financial and human cost. Smoking and its related health problems cost our already financially strapped NHS more than £2.5 billion each year. If we were to seriously address smoking in society, we could reduce that financial cost and direct the money towards improving our NHS and ensuring that we have a healthy society.
It is estimated that 200 people a day die from smoking-related illnesses. In 2015, 79,100 people aged just 35 or over died because of smoking. It is not just adults who are affected, but babies and children. In 2010, as a result of pregnant women smoking, 19,000 babies were born with a low birth weight and an increased chance of taking up smoking later in their lives. As we heard in the excellent speech made by the hon. Member for Colchester, last week was Baby Loss Awareness Week. The hon. Gentleman is co-chair of the all-party parliamentary group on baby loss, of which I am proud to be an officer. It is estimated that up to 5,000 miscarriages, 300 perinatal deaths and around 2,200 premature births each year are attributed to smoking during pregnancy. Those saddening and distressing figures show exactly why we are here today to debate this issue and to ensure that the tobacco control plan is as effective as possible so that we can achieve a smoke-free society, and, in particular, support women during pregnancy.
We also know that smoking rates remain persistently high, especially among people with mental health issues, as my right hon. Friend the Member for Rother Valley mentioned. The plan sets out various recommendations relating to mental health, including improving support for smokers with mental health conditions and training for mental health staff to help to reduce smoking among that group, but I should like to hear from the Minister exactly what measures have been taken on the basis of those recommendations.
It is equally worrying that, as a number of Members have pointed out, the level of smoking remains high among those who are unemployed or members of lower socioeconomic groups, especially given the estimate that tobacco was 27% less affordable in 2016 than it was in 2006. There are a host of reasons for that, including the tax on tobacco products. I agree with the hon. Member for Chippenham that we should never seek to reduce that tax, for all the reasons that she gave, but it is deeply worrying that those groups, for whom poverty is rife, are not being sufficiently helped to quit smoking. During last year’s debate, I cited figures that showed that if smoking were reduced among those living in poverty and the costs of smoking to them were reinvested, we could make serious progress towards the eradication of poverty. Will the Minister give us an idea of what consideration he has given to the idea that reducing smoking could be a vehicle for ending poverty in society?
There is a clear drive in the plan for action on smoking cessation to be taken at a more local level. We do not disagree with that; in fact, we welcome it. We all agree that a “one size fits all” approach does not work, because of the geographical variations when it comes to smoking in our society. In my own region of the north-east of England, smoking rates are 25% higher than those in the south-west, and it is therefore unsurprising that the prevalence of lung cancer in the north-east is close to double that in the south-west. This is why it is important for us to do more at a local level to reduce smoking. However, I must urge the Minister—I know that he takes these matters very seriously—to bear in mind that “localising” action does not mean abdicating responsibility at a national level.
The Prime Minister’s driving mission on the steps of Downing Street in the summer of 2016 was to call out the burning injustices of inequality in our society, but we have yet to see that come to fruition—as we know, the Prime Minister has been a bit busy with Brexit. I know that the Minister is also passionate about the burning injustice of health inequality, because we have worked together on many health issues over the years. I know that he understands the importance of improving public health as a mechanism of prevention, and reducing the burden on our NHS by addressing the issues at source. However, the Department in which he is now a Minister has overseen some of the deepest cuts in public health services in recent years. I am sure the Minister knows the figures for these significant cuts, but for the benefit of the House, I will quote statistics used by the Royal Society for Public Health, meaning that I know they are accurate. It says that the total cuts mean that there will be £800 million less in public health budgets between now and 2020-21, which must have a significant impact on smoking cessation rates.
A study conducted by Action on Smoking and Health and funded by Cancer Research UK found serious budget cuts to smoking cessation services, with a growing number of authorities admitting they no longer have a specialist stop smoking service that is accessible to all smokers. This must be paired with the damaging analysis of Department for Communities and Local Government figures on local government spending by the King’s Fund, which found that wider tobacco control faced cuts of more than 30%. If the tobacco control plan is to be truly successful, as I know the Minister wishes, it cannot be pushed for in isolation from the cuts to public health budgets. The two are inextricably linked and cannot be dealt with in silos.
The Minister must go away and look into this matter and the effect it will have on the outcome set out in the TCP. Now that we have a blueprint in front of us, which we are all grateful for, it is time to ensure it is achieved completely—not partially and not just in bits, but completely.
The Minister has been given much to think about during this excellent debate, and I hope that, in his relatively new role, he will be the champion needed to improve smoking cessation and reduce the prevalence of smoking in our society. Now is the time not for simple, warm words, but rather for concrete, defining action that drives forward this agenda.
There are many actions to take, but I know the Minister has a true passion for health improvement and prevention. He cannot allow the power he now has at his fingertips to be squandered when it comes to implementing this plan. I say again that the plan, as good as it is, cannot be seen in isolation from other Government actions and policies. Ensuring that the right funding is in place to fulfil the plan’s vision and ending the disastrous cuts to public health budgets is the only way we can truly see the plan’s vision realised.
The Parliamentary Under-Secretary of State for Health (Steve Brine)
I thank the hon. Member for Washington and Sunderland West (Mrs Hodgson), my ministerial shadow and my friend—she certainly is that.
I congratulate the right hon. Member for Rother Valley (Sir Kevin Barron) on securing this important debate. The Backbench Business Committee was an excellent innovation that arrived in this House at the same time as me—there is no correlation between those two things, I should point out—and debates such as this would not necessarily have happened without it. So well done to the right hon. Gentleman, and to all the Members who have participated. As the shadow Minister said, it is Stoptober, which is an excellent time to have this debate, but of course our passion to cut back on smoking rates is not confined to October.
Let me say a bit about the tobacco control plan and try to respond, as far as I can, to the points raised in the debate. My ministerial brief covers a wide area: public health, primary care, and cancer. That might appear to be a disparate agenda, but there is a plan. For me, all of my responsibilities come back to prevention and in particular how we prevent some of the major diseases; cancer is, of course, still the biggest preventable killer in our country, and the link to smoking is obvious and has been given by many Members. To give some obvious examples, our work to tackle the harmful use of alcohol, our strategy to tackle obesity and specifically childhood obesity, and our tobacco control plan are all about doing more to prevent ill health in our country, and above all cancer.
The TCP is not an end in itself; it is part of a plan. The shadow Minister kindly said that publishing it was down to me. At our very first health orals, she asked when it would be published, and I gave the answer that it would be published by the summer recess. She then shouted out, “Which summer recess?”, but the plan had been started and I wanted to get it right and to get it out. It is amazing what announcing things at oral questions will do to our officials. Anyway, we got it out, and I am very pleased with it.
The last TCP ran from 2011 to 2015 and was considered highly successful; I am grateful to the many Members from all parties for saying that. All the ambitions we set out in that plan were exceeded. We introduced a significant amount of legislation over the course of the plan, as did the Labour Government before then. There was the ban itself, then the ban on smoking in cars containing children, and then, last year, the introduction of standardised packaging, which is a first for Europe. The UK remains a world leader in tobacco control, and Governments of both parties have a proven track record in reducing harm caused by tobacco. The country has made a significant reduction in the prevalence of smoking over the past 25 years, from 27% in 1993 to just over 15% today. That is some achievement.
Will Quince
At the moment we have symbols on every bottle of alcohol sold in the UK. I appreciate that this is under EU rules, so other Government Departments would need to look at this, but could we consider having “no smoking while pregnant” symbols on all smoking products, rather than just one in six, as is the case at present?
Steve Brine
I will look at that point; as ever, my hon. Friend makes a pertinent point from the Back Benches—where I do not think he will be forever, I might add. [Interruption.] It is evidently not my decision.
I have given the relevant figures, and we are now considered by independent experts to have the best tobacco control measures in Europe. We published the new plan this year to build on that success, but there is no room for patting ourselves on the back in this game, and we still have a huge amount to do.
We still have 7.3 million smokers. That exerts a huge impact on our communities and our NHS. Tobacco use is the biggest contributor to cancer, accounting for more than one in four UK cancer deaths, and nearly a fifth of all cancer cases in this country. Research by the Independent Cancer Taskforce reported that up to two thirds of long-term smokers will die as a result of smoking if they do not quit. We have heard from a number of Members across the House about people whom they have loved and lost, and they are not statistics; they are people’s mothers and fathers, and sons and daughters, who have been lost to cancer. Cancer is not contracted through smoking alone, of course, although it accounts for a huge part of the cancer rate. We must remember that 200 people die every day due to smoking; I think every Member will join me in saying I want us to do better than that.
The plan sets our interim ambitions en route to that goal. Over the next five years we want to reduce the prevalence of adult smokers to 12%. In answer to my hon. Friend the Member for Harrow East (Bob Blackman), I would like to go lower than that, but that is the current figure in the plan. It is not necessarily an end-point, however, and it is not an end in itself. We should also remember the prevalence of 15-year-olds who regularly smoke. We want to get that down to 3%, and the prevalence of pregnant smokers—which so many Members have mentioned today—down to 6%. We want to reduce the burning injustice—a number of Members have used that term today— that sees some of the poorest in our society die on average nine years earlier than the richest, so we will focus, as the plan says, on people in routine and manual occupations.
We want to focus on other groups particularly affected by smoking, such as people with mental health conditions and those in prisons. The hon. Member for Stockton South (Dr Williams) rightly spoke about that being part of a wider poverty reduction programme. That has to be central to the plan, which is not just owned by the Department of Health and me. It is a cross-governmental plan and everything that we do should be part of that aim to reduce poverty. That is why the Prime Minister said what she did. I guess that the hon. Gentleman does not agree with everything she said, but surely he must agree with her words on the steps of Downing Street about poverty reduction.
John Grogan (Keighley) (Lab)
The statistics in some of our cities are much higher than in others. In my city of Bradford, the Minister will know that the figure for smoking prevalence is about 22%. Public health is so important; does he recognise the importance of giving more resources to public health and councils, which have experienced significant cuts in recent years?
Steve Brine
I simply say to the hon. Gentleman, who has not been present for the debate, that that point has been made. I also point out that we are giving £16 billion of ring-fenced public health spending to councils in England, which is significant. However, I shall come back to his point if he will bear with me.
To achieve the ambitions in the plan, we need to recognise that smoking is increasingly prevalent in particular groups in society and in particular areas. That is why we need to shift the emphasis from national to local action, and support smokers, particularly in disadvantaged groups, to quit. Now is not the time for more legislation—we have done that bit. I do not rule it out forever, but successive Governments have done that part. Now is the time to redouble our efforts to focus on our top priority groups such as pregnant women, young people and people with mental illnesses. We must focus on the people and areas with the greatest need.
Let me give an example. Yesterday, we published the two-years-on plan from the national cancer taskforce, which looks at the cancer strategy. It is full of good case studies. One that especially struck me was the Manchester lung cancer project, whereby we screen people arriving at supermarkets in certain parts of Manchester. That has led to improved cancer detection and outcomes for the local community that are quite staggering. Why do that in Manchester and not in Hampshire—in Winchester in my constituency? That is because there is a high prevalence of lung cancer driven by smoking in the Greater Manchester area. I visited Macmillan’s headquarters in London and sat and listened to some callers on their support line. I asked about regional disparities and they said that when they got calls from that part of England, they were about lung cancer, and that is no coincidence.
The example I gave is a policy response from the Greater Manchester authority, led by Andy Burnham, formerly of this parish, who has already put in place a plan that will mean 115,000 fewer smokers by 2021. I pay tribute to Andy, with whom I worked a lot in the House through my chairmanship of the all-party parliamentary group on breast cancer. I know that he has been greatly affected by that, and he is great partner for us on this matter. That is exactly the kind of thing we meant when we said in the tobacco control plan that we wanted local areas to develop their own local strategies.
There are many other good schemes locally—for example, the Fresh programme operates in a dozen local authorities in the north-east. I wonder whether the hon. Member for North Tyneside (Mary Glindon) is aware of it. She made an excellent personal speech, and I congratulate her on managing not to turn into a smoker, given the family background that she described. All the evidence suggests that children who grow up in families where the parents smoke go on to do so. The hon. Lady clearly knows something that we do not.
Leicester provides great examples of innovative stop smoking services, and the right hon. Member for Rother Valley mentioned Leicester and namechecked the council officer, who I suspect will keep that Hansard report. Well done to Leicester.
I recognise that hon. Members are concerned about local stop smoking services, but as I said in response to an intervention, we have a £16 billion ring-fenced public health budget. The Government believe that local authorities are best placed to make decisions on how the services should be prioritised to meet the needs of their populations. That is why I gave the example from Manchester. I am many things, but I am not best placed to decide what works in Leicester or Manchester; locally elected politicians are best placed.
The Government will continue to publish data that help local people hold those locally elected leaders to account. That is a crucial part of the plan. Public Health England, for which I am responsible, will continue to offer support to local authorities to help them develop their local approaches in the most cost-effective and evidence-based way. As Minister, I will continue to be a passionate advocate for evidence-based tobacco control plan policy making. It is an integral part of my mission to reduce the toll of preventable cancers.
I want to say something about the Government’s approach to e-cigarettes, which almost every Member who spoke mentioned. The new control plan commits to monitoring the safety, uptake, impact and effectiveness of e-cigarettes and so-called novel tobacco products. We must find a better term than that. The plan charges Public Health England with the responsibility of including messages about the relative safety of e-cigarettes in their quit smoking campaigns. I am pleased to say that that is already under way and that PHE’s current Stoptober campaign, for the first time, highlights e-cigarettes among the array of tools that smokers can use to improve their chances of quitting successfully.
As we like to say during Stoptober, there has never been a better time to quit. I will leave to my right hon. Friend the Chancellor the several Budget submissions around e-cigarettes. The suggestion of my hon. Friend the Member for Colchester (Will Quince) of providing free e-cigarettes to pregnant women who are smokers is certainly worthy of consideration. I noted that the hon. Member for North Tyneside is not necessarily a fan of changes to e-cigarette levies, so it is fair to say that we so not have unanimity across the House on that. PHE is already preparing its new year quitting campaign, which is rolled out in January each year, and it will reprise the hard-hitting messages that we have seen on our televisions. It is through consistent messaging that we can hope to reverse the harmful, mistaken and increasingly widespread belief that vaping is no safer than smoking. It clearly is.
The right hon. Member for Rother Valley made an excellent speech, touching on health inequalities and how smoking disproportionately hits the poorest in society. There is huge variation in the figures for pregnant women, with smoking rates of between 2.3% in London and—to correct the record—28.1% in Blackpool. He also made an excellent point about dentists and oral health. PHE-commissioned training will continue to ensure that local authorities have access to the training they need to provide effective help to quit and the information they need to work with patients. He chairs the all-party parliamentary group on pharmacy—I think we will be meeting soon—so he would say this, but he spoke about pharmacists and healthy living pharmacies, which have been particularly good. He referred to Government research, and PHE is committed to reviewing the evidence on e-cigarettes on an annual basis, and is working closely with Cancer Research UK and the UK Centre for Tobacco and Alcohol Studies to deliver a forum to ensure that we continue to have that strong evidence base.
I think I need to wind up by 3 o’clock, Madam Deputy Speaker. Is that right? [Interruption.] “Well by,” she says. Okay, let me conclude by thanking everyone who has spoken today. I particularly enjoyed the speech of my hon. Friend the Member for Chippenham (Michelle Donelan). It was hypnotic in many ways but very good, and I noted her Budget submission. As usual, I thank my hon. Friend the Member for Harrow, although I suspect that his berating me on this subject will not have started and ended today. The hon. Member for Ipswich (Sandy Martin) made a consistent point about local authority pension schemes, and it must be for local authorities to make such decisions and then answer to members of the scheme, their elected members and, of course, the residents who elect them and get to make such decisions every day.
In closing, I appreciate the many challenges and I appreciate the support that the House has given to tobacco control legislation over many years. It is now up to us to provide a national lead and to support our local authorities and ensure that they carry through what is in the plan. I thank my friend the right hon. Member for Rother Valley for introducing today’s debate and ensuring that tobacco control is no longer a partisan issue; this is now about the tobacco control plan.
Sir Kevin Barron
I just have a few reflections. Several people mentioned my involvement in anti-tobacco measures in this Chamber over many years, but it was never just me. Whether sat on the Opposition or Government Benches, I had allies on the other side who forced different Governments to take different positions all the time. Listening to the debate, we have now reached a consensus. We started off by banning tobacco advertising and promotion, then smoking in public places, then point of sale advertising and now we have standardised packaging. It has been just wonderful to sit here and recognise the fact that we now know what is in our midst, shortening the lives of many tens of thousands of our fellow citizens, and we are now seriously doing something about it. I say to the Minister—if I was on the Government Benches, I would say the same—that I do not see any need for further legislation. We need to implement what we have already done on smoking cessation to help people break this habit. I am thankful for what was said about me, but it is was not just me; there have been teams of people at different times.
It has been really good today that we have recognised the new products on the market, such as e-cigarettes and other novel products—I think “novel” is a European term that has come in from the tobacco product directive. No matter who owns them and no matter who is promoting them, people now recognise that such products can potentially be very useful in getting citizens off this killer—tobacco shortens the life of 50% of those who use it. We need the research, and we need to be determined.
I enjoyed all the Front-Bench speeches, and I say to my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) that I loved the parliamentary Labour party brief I received last night—I cannot always say that when I talk about tobacco products or tobacco policy in this House. We now need to make sure that we improve things for our fellow citizens as soon as possible.
Question put and agreed to.
Resolved,
That this House has considered the Government's publication of the new Tobacco control plan.
Valproate and Foetal Anticonvulsant Syndrome
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Norman Lamb (North Norfolk) (LD)
I beg to move,
That this House notes with concern that there has been a systematic failure to inform women of the dangers of taking the epilepsy drug sodium valproate during pregnancy, resulting in thousands of children being born with congenital malformations, disabilities and developmental disorders since the 1970s as a result of fetal exposure to the drug; welcomes the launch of the Valproate Toolkit by the Medicines and Healthcare Products Regulatory Agency in February 2016 to ensure that women are informed of the potential risks of the drug, but further notes with concern a recent survey which found that 68 per cent of women have still not received these safety warnings; calls on the Government to take immediate steps to ensure that the materials in the Valproate Toolkit are distributed to all prescribing clinicians, pharmacists, and women who are being prescribed the drug; calls on the Government to require all clinicians prescribing sodium valproate to women and girls of childbearing age to discuss annually with the patient, the risks during pregnancy before a prescription is renewed; and further calls on the Government to bring forward proposals for a care plan and financial assistance to the victims of sodium valproate in pregnancy and their families.
I congratulate you, Madam Deputy Speaker, on getting through this debate’s catchy title.
I start by thanking the Backbench Business Committee, on behalf of the all-party parliamentary group on valproate and other anti-epileptic drugs in pregnancy, for facilitating this debate. I also pay tribute to Janet Williams and Emma Murphy, who are present today. They have fought tirelessly on this cause over many years, and we owe them an enormous debt of gratitude.
It is fair to say that “scandal” is an overused word in political discourse, but it is appropriate in this case: a family who have suffered as a result of a mother taking valproate in pregnancy would regard it as an absolute scandal, and we need to treat it in that way. There are many similarities to the thalidomide scandal. A group of women, over many years, took a drug during pregnancy without knowing the risks, with awful consequences, and we owe them a duty—that is the important point.
Kate Green (Stretford and Urmston) (Lab)
I apologise to the right hon. Gentleman for not being able to stay for the whole debate.
I, too, pay tribute to Janet and Emma for the campaign they have run. This debate is a great tribute to their efforts. Does the right hon. Gentleman agree that the real scandal is that we have known about the problems with this drug since the 1960s, but, as he says, expectant women were not told? The Government and the pharmaceutical industry knew there were dangers.
Norman Lamb
I thank the hon. Lady for her intervention, and I completely agree with her. Interestingly, the original product licence in March 1974 stated this, way back then:
“In women of child bearing age, it should only be used in severe cases or those resistant to other treatments.”
They knew in the ’70s, yet the appalling scandal is that so many women since then have had their life turned completely upside down, with enormous consequences for their children, because they were not told.
Tim Farron (Westmorland and Lonsdale) (LD)
My constituent Nicola took sodium valproate through her pregnancy, and her son has chronic fatigue. The impact on her family is immense and expensive. We have fought for, and managed to secure, medical support for her through hospitals in Manchester, but does my right hon. Friend agree that there needs to be a Government fund to ensure that victims have such support, rather than having to rely on their own means?
Norman Lamb
I completely agree. I will make the case a little later, but it seems unanswerable and the Government need to reflect on that.
What happened was worse than just the neglect of not telling women. The minutes from the 18 July 1973 meeting of the sub-committee on adverse reactions, a sub-committee of the Committee on Safety of Medicines, have been uncovered. That document reveals a real outrage, because it talks about keeping the information from women—deliberately withholding it
“especially as it could give rise to fruitless anxiety.”
It continued:
“Nevertheless, they thought it would be best if prescribers were all made aware of the nature of the evidence and recommended that a statement similar to that proposed by ICI”—
in respect of another product—
“could be included in all relevant data sheets but not on package inserts so that there would be no danger of patients themselves seeing it.”
That is extraordinary.
Martin Whitfield (East Lothian) (Lab)
Would the right hon. Gentleman share my great disappointment if the original documents were to go missing from the archive while these debates and this campaign are ongoing?
Norman Lamb
I thank the hon. Gentleman for that intervention. Issues such as this are of enormous concern and this raises the question whether there needs to be some sort of inquiry or Hillsborough-style panel to look at exactly how it has happened. However, it is important that we focus on the top priority, which is ensuring that women get told, that this drug is not used inappropriately and that a compensation package of some sort is put in place.
Mr Ben Bradshaw (Exeter) (Lab)
Given what the right hon. Gentleman has said, is it not even more extraordinary that, even now, this information and these warnings are not getting through effectively to pregnant women and their families? My constituent David Tout’s son has been affected by this, as have 20,000 children across the country in every one of our constituencies. There is no sense of urgency from the MHRA—Medicines and Healthcare Products Regulatory Agency—or from the Government.
Norman Lamb
I thank the right hon. Gentleman for that, and he is right in what he says; I, too, feel that there is a sense of inertia. For goodness’ sake, for as long as women are not getting told about this, more such babies are being born. That is the awful horror of this.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Many of us in the House have been approached by constituents or groups about several of these drug scandals, which represent a paternalistic time, when the patient was not part of a team in an open discussion with the doctor. I am sure there are many of these, so should they be looked at together, as the principles of them all are the same?
Norman Lamb
That is a profound comment to make and it reflects a changing attitude and culture; it is thankfully now less paternalistic than it was. However, elements of it remain and we need to keep fighting against that. The hon. Lady makes a good point: this relates to other products, too.
Norman Lamb
I will take this intervention and then I ought to make progress.
Norman Lamb
I thank the hon. Lady for the intervention. I am aware of that figure and again it is shocking. It makes the point that this is a continuing scandal, not something from the dim and distant past.
Since the 1970s, more information has emerged bit by bit. In 2000, the information given to patients was changed to refer to the warning, but it took until then for anything to emerge. In 2005, Sanofi made an addition to this, and an interesting question is whether it downplayed the risk. That is one point that raises the question whether some sort of panel investigation needs to take place. In 2005, Sanofi said on its warnings to patients:
“Some babies born to mothers who took Epilim during pregnancy may develop less quickly than normal and may require additional educational support”.
That is putting it at its mildest, because the implications were far more serious. The question is, did it know then? These things need to be investigated further.
It is important to state what the risks are. Among the general population there is a 2% to 3% risk of foetal abnormality. If valproate is taken during pregnancy, that risk rises to 11%, and possible defects include spina bifida; malformations of the face, including cleft palate; malformations of the skull, limbs and organs, including the heart; and respiratory issues. It is incredibly important not to disregard the fact that when people take valproate during pregnancy there is also a 30% to 40% risk of developmental problems, including life-changing issues such as poor speech and language skills, delayed walking and talking, behavioural problems, interaction and communication issues, low intellectual abilities, memory problems, noise sensitivity, sensory issues, attention deficit hyperactivity disorder and autism spectrum disorders. The consequences are incalculable. It is estimated that 20,000 babies have been affected since the 1970s. It is also important to remember the profound impact on the mothers themselves, who too often have been treated as if they are to blame for the problems their children face and who then face years of guilt. That is a really shameful aspect of all this.
I have some case studies. Becky Parish, a mother from my own county, Norfolk, says:
“Logan is 7 and was born with a 7 mm unilateral cleft lip and palate…which the geneticist confirmed was due to Fetal Valproate Syndrome…He also has grommets and struggled with glue ear and bronchitis as a baby”.
He has needed “constant speech therapy” and suffers ear infections.
Becky describes how Logan
“has all facial features of FVS”
and is short in height and low in weight for his age. He has
“severe aggressional and destructive behaviours, including violence against others and self-injurious behaviours”
and so it goes on. This is really significant. There is sometimes a danger when we talk in general or abstract terms, but when we hear the stories of the affected families, we realise just how awful it is.
Becky says “social”—social services—“blamed me for it”. Her assertion is that in her case social services thought that the problems related to a detachment disorder, with the implication being that the mother was in some way to blame. She says:
“Social blamed me for it and so did the school—and now I feel more guilt due to it being FVS. Because no matter how much someone says I didn’t know and it wasn’t my fault, the guilt never goes away. And sadly it never will.”
That is really shocking.
Becky decided not to continue with valproate when she became pregnant with her youngest child, who is now five. She says that it was not a difficult decision, because in her view her child’s health was “far more important” than her own seizures, but that must have been a terribly difficult judgment for her to make. Nevertheless, she stopped straight away and was not put on any alternative treatment, despite conflicting messages from health professionals. Her specialist nurse told her that—wait for it—she was being selfish, and made her upset at her 12-week scan. However, her neurologist said that coming off the drug was the best thing she ever did. So she got two completely conflicting messages.
Carolyn Allen in Southampton talks about how her son requires support for a number of the effects of the condition, including deafness in his left ear, noise sensitivity, and speech and language delay. She says:
“He has been referred to portage, speech therapy, occupational therapy, ophthalmic, hearing clinic, physiotherapy, community paediatricians and has already had one operation to release his tongue tie.”
Just imagine the massive impact of this condition on that family.
Paula Hartshorn, a mother from Leeds, says:
“The powers-that-be need to think about the devastating impact this has on families, and how these families have to just cope and instantly know how to deal with all these complex medical issue. We have been left to give up on our jobs, careers, social interactions, and everything that goes with a well-rounded life. There are no breaks for us.”
The stories are heartbreaking.
Kazzy Southam from Blackpool tells a story of not finding out about the condition until her daughter was nearly 20. Her voyage of discovery began when she met Janet and Emma in 2014. This was after her daughter had been diagnosed with learning disabilities, dyspraxia, and social anxiety disorder. She had to fight to get a geneticist to investigate and give advice. Eventually, it was confirmed that her daughter had foetal valproate syndrome. It was a shocking fight for her to get justice, and she should not have had to go through that. She says:
“To me, she is an angel and I wouldn’t change her for the world. She said to me not long ago: I wouldn’t want to be ‘normal’—I like my mad head. But it hurts me to say, she doesn’t and won’t know any different—all down to the pills I took for my seizures.”
I ask Members to imagine living with that throughout their life. The Minister really needs to reflect on this. It seems to me that the Government have an obligation to do good by these people and not just to say that they must resort to the local authority or the clinical commissioning group for whatever might be available in their locality. There is a moral duty here and we must accept it just as we did with thalidomide.
I became aware of this scandal when I was a Minister and met the campaigners in September 2013. I was horrified by what I heard, having known nothing about the condition until then. I asked the Medicines and Healthcare Products Regulatory Agency, which attended the meeting, for an urgent review of what was being done to stop more and more mothers giving birth without knowing of the risks. In October that year, the MHRA asked the European Medicines Agency to undertake a full review. That review reached the conclusion—it was very little different from what the product licence said back in 1974—that the product should be used only if all other drugs are ineffective or are not tolerated. It also advocated a strengthened warning to ensure that all mothers were aware of the issue.
In January 2015, the MHRA issued new information with stronger warnings, education materials, patient information leaflets and so on. Eventually, in February 2016, the toolkit was issued: I have it here. It may not look like a toolkit, but it is. It is of value, because it gives information to clinicians and patients about the risks involved. Again, the scandal is that the information has not been communicated to very many of the affected women.
In September this year, a survey carried out by the UK’s three leading epilepsy charities—Epilepsy Society, Epilepsy Action and Young Epilepsy—found that the warnings were not getting through. Some 68% of women of childbearing age had not had any of the materials released as part of the valproate toolkit. That is not acceptable.
Kate Green
I thank the right hon. Gentleman for accepting a further intervention. He is making a very powerful case. The hon. Member for Central Ayrshire (Dr Whitford) mentioned the paternalistic approach that the medical profession has perhaps taken in the past. Is he as shocked as I was to learn that that paternalistic approach was still in evidence some two years ago when I met the pharmaceutical company Sanofi to discuss getting information out to mothers? The company told me that it would be inappropriate to make the information available, as it was unsupported by detailed advice from doctors. Of course it is important that women should be able to discuss the matter with their clinician, but they are able to understand and interpret intelligence, too.
Norman Lamb
I thank the hon. Lady for her intervention and pay tribute to her for her work on the all-party group for valproate and other anti-epileptic drugs in pregnancy, and for her campaigning. Yes, the response she got from Sanofi two years ago was unacceptable. It had the effect of hiding from women the full extent of the risk. Women should be presented with the evidence so that they can have a full discussion with the clinician about what steps to take. The September 2017 survey also found that 18% of women did not know of the harm—it was not that they had not received the toolkit, but that they still did not know. The system is failing those women.
Huw Merriman (Bexhill and Battle) (Con)
I stand here as an advocate for my constituent, Ms Carol Short, who describes her son as a 26-year-old locked in a man’s body, but unable to do much more than a 10-year-old. Does the right hon. Gentleman agree that it is shocking, with the clinical commissioning groups and all the funding that comes from the public sector, that we still cannot get this message through? Might one solution be shorter length prescriptions, to increase the likelihood that women receive more regular advice?
Norman Lamb
That suggestion is worth exploring. There certainly should be regular reviews—discussions on the woman’s intentions about childbirth, and on the appropriateness of the treatment for that woman at that place and time.
I acknowledge an important danger. If all the focus is on the risk of valproate, there is a risk that women will simply give up and take no medication during pregnancy, and that there will be a rise in unexpected deaths through epilepsy. SUDEP Action raised that really important issue. Already, every year, 1,200 people die sudden unexpected deaths in epilepsy, and of that total SUDEP Action estimates that about 42% are avoidable. We definitely do not want any increase in that number. For me, that points to the need for all women—indeed, all people—with epilepsy to have access to specialist teams, wherever in the country they live. My worry is that access is haphazard and variable.
Last Friday I met a specialist team in Norwich. It is a very good team, and they explained to me how they have managed to reduce the use of valproate by women in the childbearing years to a very small number. They say it is only a very small subset, for whom there is no alternative. Thus they can focus all their attention on those women. They said that there is considerable variability around the country—that many women do not get access to a specialist team. I would like the Minister to commit to the publication by the Government of data for every CCG showing the level of prescribing of this medication, to enable us to pinpoint where over-prescribing is taking place.
The interesting and rather concerning point is, if those specialists that I spoke to are right that only a very small subset of women of childbearing age need to take valproate, why is it that still, of the 173,787 people with epilepsy taking valproate, 17,848 are women of childbearing age? That looks like substantial over-prescribing, which is completely contrary to the current guidance. If the guidance is clear that it should not be prescribed to women of childbearing age unless there is no alternative that is safe for the individual woman, why on earth are so many women still being prescribed this medication? It is a scandal, and the Government need to get to grips with it.
We need a holistic approach, so that women have access to specialist care and so that full consideration can be given to the right arrangements to ensure that no woman is on valproate who need not be during those years of childbearing age. Then we might start to see an end to this awful continuing scandal.
Finally, I shall outline the steps that the Government and others should take. First, the toolkit must reach everyone. It must surely be mandatory, not voluntary. Given the clear evidence from the survey of the number of women who are not getting the message, we cannot rely on the current system to work, because it is not working. As the hon. Member for Lancaster and Fleetwood (Cat Smith) said, 400 affected babies have been born since it was introduced. That cannot continue; the warnings must be mandatory, along with raising awareness among GPs, pharmacists, specialists, midwives and health visitors.
Secondly, people should have an annual discussion with their GP or another health professional. The Epilepsy Society has argued that that should happen, and it is very much consistent with the valproate toolkit, which highlights the need for regular review. There should be face-to-face discussion with a health professional before the prescription is renewed.
Thirdly, all women should have access to specialist units, wherever they live. We must end this haphazard, variable position around the country, and we must address fully the concerns raised by SUDEP Action. Professor Ridsdale, a consultant who has specialised in this area of policy, says:
“A useful outcome of this exercise would be that whoever prescribes Valproate agrees to identify and provide regular advice to women and girls at risk. Better still, that policy-makers and providers start exploring how ongoing structured self-management advice might be offered to everyone with epilepsy.”
That is surely the ambition we should set.
Fourthly, we should publish the prescribing rates for valproate for every CCG. The Government say they have a commitment to openness, and this would be a good demonstration of it, because we would be able to identify where the real problems exist and where women are not getting access to good enough advice.
Fifthly, we should ensure that only those women who absolutely have to take valproate do so during their child-bearing years, in accordance with the advice, and that we end what appears to be the significant over-prescribing of this medication for such women.
Sixthly—this comes back to some of the interventions that have been made, including by my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron)—there must be a financial support package. In a way, that comes down to the Government’s duty to these people. This has gone on for many decades, so my point is not directed just at this Government, but they have the responsibility here and now to do right by these people. There is an overwhelming moral case for them to do that, and it is not good enough for Ministers to simply say that support is available locally through local authorities or CCGs. These families have suffered an injustice, and the Government have a moral obligation to address it. If it is right for thalidomide victims, it is right for those who have lost out severely as a result of valproate. In France, a €10 million initial fund has been established, and it could be increased. The Government need to take the same step in this country.
Seventhly, there must be a statement of regret or apology for the people who have been let down by the system so very badly.
Finally, there is a case for an inquiry or a Hillsborough-style panel so that we can understand how on earth this outrageous scandal could ever have happened, how it has gone on for so many decades, letting down so many families, and what lessons can be learned to ensure that this never, ever happens again.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. If colleagues could stick to around nine minutes, we will be able to get everybody in.
Fiona Bruce (Congleton) (Con)
I pay tribute to the right hon. Member for North Norfolk (Norman Lamb) for so eloquently articulating the concerns that many of us share about the taking of sodium valproate by expectant mothers.
I am speaking today because I believe there is a case for Ministers to answer on the grounds of compassion and justice as to how and why pregnant women were allowed to take sodium valproate for so many years without being better advised and informed, and without their unborn children being better protected from the risks. That is particularly the case since professionals became increasingly aware of those risks over the years—as early as 1973. As we have heard, the risks are huge. At the end of the day, the people who should have been able to weigh them up and choose whether to take valproate while pregnant were the mothers. I appreciate that in 1973 we were, as has been said by a practitioner in medicine, in a more paternalistic era, but that was not the case as the years went by, and certainly not in 2016, when the valproate toolkit—the patient guide that I have here in my hand—was published.
Mothers were not given the relevant information and, sadly, far too many still are not. It is absolutely critical that they are given it, because the toolkit is stark, stating:
“If you take valproate when you are pregnant it can harm your unborn child…Taking valproate…can cause birth defects and problems with development and learning…In women who take valproate while pregnant, around 10 babies in every 100 will have a birth defect”,
such as
“spina bifida…facial and skull malformations…malformations of the limbs, heart, kidney”
and other organs. It goes on to say that
“about 30-40 children in every 100 may have developmental problems”
such as
“learning to walk and talk…lower intelligence…poor speech and language skills”
and “memory problems.” It states that
“it is…important that you…know about these risks”.
But for years women did not know about the risks when medical professionals did. They might not have known, and probably did not know, all those details. However, I have with me a copy of a letter from the Committee on Safety of Medicines—the precursor to the MHRA—from 1973. It refers to a number of studies and says:
“it is now clear from other studies…that the use of anticonvulsants during pregnancy…is liable to produce other abnormalities as well as hare-lip and cleft palate. The risk appears to be low and not sufficient to justify stopping the use of anticonvulsants when they are necessary for the control of epilepsy.”
There we have it—the Committee on Safety of Medicines was aware of this in 1973. The documentation relating to the licensing application in 1974, which the right hon. Gentleman mentioned, says that the product is licensed
“for use in general, focal or other epilepsy. In women of child bearing age, it should only be used in severe cases or those resistant to other treatment”.
So we now know that the dangers were being raised as long ago as 1973 and 1974.
In response to these concerns, the CSM instructed that an alert must
“not go on the package inserts”
so that patients would be protected from “fruitless anxiety”. Because patients did not see anything, they were denied the information and therefore the choice to abstain from this drug. Yet very much more anxiety was caused for many of them when the reality was that thousands of babies were born with life-changing disabilities and deformities that could have resulted from taking this drug during pregnancy.
Teresa Pearce (Erith and Thamesmead) (Lab)
Does the hon. Lady find it even more shocking that it was decided to keep this information from women in 1973-74, in the wake of the thalidomide scandal, when it should have been uppermost in people’s minds that pregnant women needed warning about the drugs they took? That should have made it more likely that women were informed about the risks.
Fiona Bruce
The hon. Lady makes a very good point.
Further warnings were issued. In 2000, a patient information leaflet from the producer, Sanofi, said:
“It is known that women who have epilepsy have a slightly higher risk of having a child with an abnormality than other women. Women who have to take Epilim in the first 3 months of pregnancy to control their epilepsy have about a 1-2% chance of having a baby with Spina Bifida.”
In 2005, Sanofi added:
“Some babies born to mothers who took Epilim during pregnancy may develop less quickly than normal and may require additional educational support”
and that some
“babies born to mothers who took Epilim…during pregnancy may develop less quickly than normal or have autistic disorders.”
Warnings were emerging over the years, but nothing was done to ensure that patients were told. Why did patients have to wait almost 30 years to be warned of the risks?
Janet Williams and Emma Murphy, whom the right hon. Member for North Norfolk (Norman Lamb) mentioned and whom I have had the privilege of meeting, are tenacious and brave women who have campaigned for years and set up a support group for affected families. I pay tribute to them, and I want to tell the House a little bit about their family situations. Janet has two sons aged 26 and 28: Lee and Philip. Janet took Epilim, but nothing else, during both pregnancies. She told me:
“I wasn’t offered anything else—and no one told me of the risks.”
Lee, at 26, has curvature of the spine, Asperger’s, learning difficulties and memory problems, and he cannot hold down a job. Philip, at 28, has even more problems. He has problems with hearing, vision, speech, language and walking, as well as floppy joints. He is still fully dependent on Janet.
Emma had her children a generation later. She has five children, aged eight to 14: Chloe, Lauren, Luke, Erin and Kian. They have all been diagnosed with a number of symptoms. All have varied problems, including autism, incontinence, deafness, cerebral palsy and curvature of the spine, and all are slow to develop. Emma took the same dose of Epilim during each pregnancy. She told me that she questioned that, but was told that it was the best drug to control her seizures and that her baby would be fine. She took no other drugs during her pregnancies. No one warned her of the risks.
The tragedy is that those two women represent more than 1,000 others in their support group, the Fetal Anti Convulsant Syndrome Association. Together, they founded the Independent Fetal Anti Convulsant Trust, a registered charity, to campaign for better awareness of the risks of taking valproate, to prevent further such difficulties occurring, and to challenge the Government. There is, as I say, a case to answer, and I do not believe that we would be here today were it not for these two women.
Rosie Duffield (Canterbury) (Lab)
Does the hon. Lady agree that women such as Janet and Emma are ideally placed to get compensation, should the Government agree to a system similar to the €10 million French compensation scheme for Depakine?
Fiona Bruce
I certainly think that has to be looked at as part of the case that Ministers have to answer.
I would like to say much more but time prohibits me. We have heard some of the terrible statistics that have already been cited about the 20,000 children who could have been affected since the risks were first known about, the 400 children who are still born each year with symptoms, the 28,000 women of childbearing age—according to ONS figures—who are still being prescribed the drug, and the 68% of women in this situation who say that they are not properly informed of the risks.
What do I ask of Ministers? I ask the Minister to agree that significantly more needs to be done urgently to raise awareness of the risks of taking sodium valproate among pregnant women and those who could become pregnant. Does he agree that although Ministers might have come to know about the risks only relatively recently, the producer Senofi, the MHRA and its predecessor, the Committee on Safety of Medicines, knew about them and should have done more to address them? They should have published information and improved warnings years ago.
Does the Minister accept that the support needed by mothers such as Janet and Emma, who have to care for their children with foetal valproate syndrome, is major and may be lifelong, and that much more needs to be done to consider how that support can be improved and funded? Janet and Emma tell me that the current provision through local councils and health authorities is wholly insufficient and that care plans are needed for the many affected children.
Is there any reason why, as I said at the outset, Ministers cannot look at what we in this country can do to support these families now, without further delay, and certainly without awaiting the final decision of the European Commission regarding the link between sodium valproate and birth defects? After all, we are leaving the EU. Does the Minister now have full confidence in the MHRA’s ability to effectively inform and guide healthcare professionals on the use of the prescription of sodium valproate for epilepsy, and does he think the same can be said of the MHRA’s involvement over the years? Finally, will the Minister, at an early date, meet Janet Williams and Emma Murphy, as well as a group of Members who are concerned about this issue, to respond to their concerns and to my call that our Government at the very least have a case to answer?
Paul Flynn (Newport West) (Lab)
It was heartbreaking and infuriating to read the news that 68% of the women who are taking valproate today were not aware of the risks. That is a failure for all of us. We debated this issue in March 2013, and we have put down early-day motions. There was a television programme, chaired by Huw Edwards, in which the victims took part. We thought we had cracked it: we thought we had advertised enough so that no one, after 2013, could be in the position of not realising the terrible risks caused by taking valproate in pregnancy.
I am not making any criticism of anyone, except the MHRA, and we must look at our relationship with the regulatory body. The former Minister, the right hon. Member for North Norfolk (Norman Lamb), did all he could. He has a great and honourable record as a compassionate campaigner on many issues. It is a shock to all of us in that we did not expect there to be compensation, but it should now be coming along. It is not compensation in any serious way, but it is some admission that a terrible mistake has been made—not by the mothers, but by the system.
It is helpful to look back at what happened with thalidomide, which I remember vividly. There were 2,000 cases of birth defects in the United Kingdom; there were 20 in the United States. Why? The reason is that we went on prescribing Destobel for a year after the birth defects were suspected, because the drug company was adamant about it. It had tested the drug on animals, including pregnant animals—pregnant rabbits, even—and only when it went back to do another test of a particular strain of the drug on pregnant rabbits were the birth defects reproduced. That shows the limits of animal testing. The real difference was that the regulatory body in the United States would not accept thalidomide in that form, and its use produced a very small number of cases: 20 compared with 2,000.
We have had the effect of a drug called Vioxx for arthritis sufferers. According to the Food and Drug Administration in America, it caused 60,000 deaths; imagine it—60,000 deaths. How many bad reactions did the MHRA have in this country? About six. We would still be using it if the FDA had not discovered that death was one of the side effects of the drug, which was taken by millions.
GlaxoSmithKline in America has been fined—it is hard to believe—$3.5 billion. What was the fine for? It had suppressed the evidence of the trials it had carried out. It did not publish any of the negative results of the trials it carried out, and only the ones that were neutral or favourable. Drugs that were killing people were getting on to the market—this is a British company. What did the MHRA do in this country? Nothing! I wrote to them saying, “For goodness’ sake, you have to act against GlaxoSmithKline.” It is no coincidence that the person who chaired the regulatory body for more than a decade was a previous employee of that company. I am not saying that in this instance the body did absolutely nothing; it did produce the tools and provided advice, but that clearly did not work—how could it have done if 68% of the women still taking the drug did not know?
This issue applies to all Governments; it has been raised many times before. What we need is a regulatory body that is not paid for or controlled by the pharmaceutical industry but is independent and controlled nationally. Some years ago in Italy, the system changed. The pharmaceutical industry still pays for running the body, but for the past 20 years each Government have said that they would not have a fully independent body because they did not want to pay for it, although it was fine if the burden was taken by the pharmaceutical industry itself.
I do not want to say that we are all against the pharmaceutical industry, which has produced miraculous results this century. Valproate is a very good drug: everyone I have spoken to who has used it says that it is very effective and that it reduces seizures, epileptic fits and the incidence of bipolar disorders. We do not want to stop its use at all and we want to appreciate its quality, but after these four years, when the evidence from parents who have suffered has been there, clearly nothing has worked. We must look to reform our regulatory system, appreciating the value of the drug but at least setting up a fund that can express the sorrow of the country and the regret that we have not sorted this matter out or given warnings to future parents. We must make sure that the reforms suggested by the right hon. Member for North Norfolk proceed as a matter of great urgency.
Mims Davies (Eastleigh) (Con)
I thank the right hon. Member for North Norfolk (Norman Lamb) for securing this important debate and the Backbench Business Committee for allowing us time in the main Chamber to consider this issue. I also pay tribute to campaigners who have done so much to raise it.
As one who works closely with constituents so gravely affected by the use of Primodos as a pregnancy test, I recognise the huge importance of airing such concerns on behalf of our constituents as widely as possible so that all can hear. There is so much work to do on Primodos, and I hope to bring those concerns to the Prime Minister shortly. As the chair of the all-party parliamentary group on women in Parliament and a former member of the Women and Equalities Committee, I want to take the time today to note, along with colleagues, that many Backbench Business and Westminster Hall debates seem to focus on women’s health issues: Valproate, Primodos, vaginal mesh. It is great to see such an issue raised in the main Chamber.
Dr Whitford
I come back to the point I made earlier. We seem to see these themes. Rather than having multiple separate inquiries, should we consider issues such as Primodos and valproate together? Common learnings need to come out of them.
Mims Davies
I absolutely agree. I hope to pull that issue together as I go on with my remarks. It is really important that we raise the case of sodium valproate, which, as we have heard, is still in use. All of these issues need to be looked at.
Common to this debate—and in all such cases, including Primodos—are the hidden, missing and lost documents, along with a delay in education and information. That was raised again today by the right hon. Member for North Norfolk. I pay tribute to Sky News for its exposés on valproate and Primodos, because this really matters to the families affected.
Ms Nusrat Ghani (Wealden) (Con)
My hon. Friend raises a valid point about media coverage. I congratulate right hon. and hon. Members on raising the issue in the Chamber today, but I am concerned that it might make some women nervous about taking medication if they are pregnant, or are considering whether they would like to become pregnant and are on medication. Surely one of the messages we want to send out today is, “Please consult your doctor and do not respond to everything you read in the press if you are taking epilepsy medication.”
Mims Davies
I thank my hon. Friend for her intervention. Many of us have constituents, friends or family who are affected by epilepsy, which, in itself, is very serious, or by bipolar disorder. Appropriate use remains very important. For the vast majority of patients, treatment can be effective and useful if it is done right—if managed, if educated and if understood. The argument, therefore, should not be about ceasing use, but about telling the truth and looking at appropriate use during pregnancy. Men use the drug too, so we need to take a balanced approach and reflect all situations.
Norman Lamb
The hon. Lady is making really good points. I totally agree with her that the drug is appropriate for most people. I just want the guidance to be followed. The guidance is clear that for women of childbearing age it should not be used unless there is no alternative. We just need to stick to that guidance and make sure it is implemented everywhere.
Mims Davies
Absolutely. Speaking about this issue in this Chamber will empower our women constituents, before and during pregnancy, so they can be informed and make the right choices. That is the outcome we should all be hoping for.
Similar issues were raised yesterday during a debate in Westminster Hall on mesh implants. New mothers in particular had taken the advice they were given without hesitation. A woman’s first pregnancy can be an unsettling time with all the changes their body goes through. I would imagine that for people suffering from epilepsy or bipolar disorder that time is even more nerve wracking. It is absolutely right that we are measured when we talk about these issues.
It is important that our specialists ensure that women are given the correct and proper guidance. Patients need knowledge and they need it more than anyone. They live with the consequences if things go wrong and they will always look back on their decisions. If they have not been given the right information, how can they truly know they have made the right decision for themselves and their family? Siblings are often impacted as well.
The Government and MPs have a really important role to play in raising awareness of medical issues during pregnancy, including those concerning sodium valproate. I recognise the efforts that have been made, with labelling on packages. I am sure the Minister will agree, however, that more needs to be done. This drug, introduced in 1974, has been crucial, but support for families affected is also crucial. I welcome the fact that young people who have been affected are to be included in the new framework for health and social care for children and young people. It has been a real battle, but clinical commissioning groups and local authorities are getting to grips with it. It is really important that they receive support on a local level. I welcome the Minister’s forthcoming meeting with the all-party group, and I know that Ministers are taking this matter seriously, but I ask the Department for assurances on similar health issues affecting women, such as those relating to Primodos and mesh implants. We have moved to an incredible place on blood contamination—some of my constituents were affected by that—and constituents have written asking me to raise this issue too. We want more action, and there is a common denominator.
Teresa Pearce
Two years ago, I asked the Minister to extend the Primodos inquiry to include valproate, but my request was declined because, I was told, the two issues were very different, yet they seem to be quite similar. Does the hon. Lady think that that was a missed opportunity?
Mims Davies
As a woman in Parliament, I think that any opportunity not taken to raise women’s issues is a missed opportunity, and I know the Minister is listening intently.
The hon. Member for Newport West (Paul Flynn) raised a point about the seemingly cosy relationship the MHRA has with the drugs companies, when it suits it, and sometimes the laissez-faire attitude it adopts, when it suits it. It is incomprehensible that greater independence cannot be injected into this area. We need openness and reform. I would like the Minister to take a look at the position in France and consider setting aside some funding for compensation for medical accidents.
Few in the Chamber can imagine the hardship, guilt and heartbreak of the impact of taking a simple prescription drug during pregnancy and finding out later that it might have had an effect on one’s child. I am lucky to have two healthy beautiful daughters. We are all at the mercy of decisions we take during our pregnancy and the professional guidance we receive. We are fortunate to have the opportunity to raise awareness among people in this situation, but there are those not lucky enough to be sufficiently informed. This is an important debate, therefore, and I urge the Department to work with the MHRA to give patients full confidence in it on all pregnancy matters.
Liz McInnes (Heywood and Middleton) (Lab)
I am pleased that we are having this important debate, and I pay tribute to the right hon. Member for North Norfolk (Norman Lamb) for securing it and for setting out so clearly the issues involved.
My career before I was elected was as an NHS clinical scientist. Working in a biochemistry laboratory, I was very familiar with sodium valproate as part of the battery of anticonvulsant drugs for which we regularly tested patients to help their clinicians better monitor their treatment and ensure that their dosage was at the optimum level. Until I met Emma Murphy, however, and became aware of her campaign, I was not aware of what appeared to be a systematic failure to inform women of the potentially damaging effects of taking valproate during pregnancy.
Only after watching a television programme about foetal anticonvulsant syndrome did Emma herself became aware that her own children’s health problems were probably attributable to the anti-epileptic drugs she had taken while pregnant, which had been prescribed to her from the age of 12. Like everyone in the House, I pay tribute to Emma Murphy and Janet Williams for their great campaigning work.
The damage to the developing foetus is thought to be caused in the first trimester of pregnancy when the anti-epileptic drug crosses the placenta into the foetus, and the effects depend upon the dosage and the drug. Sodium valproate, or Epilim, is indicated in 80% of cases of foetal anticonvulsant syndrome. Experts such as Dr Peter Turnpenny, clinical geneticist at the Royal Devon and Exeter Hospital, say that Epilim may affect about 560 babies every year. He adds:
“About 10% of foetuses exposed to sodium valproate will have a major congenital malformation such as cleft palate. 12% are likely to be diagnosed with a neurodevelopmental disorder.”
Reports linking valproate to birth defects started to appear, most notably, in 1981, with a paper by H. Nau entitled “Valproic Acid and its Metabolites”. In 1983, the British Medical Journal published an article in which the Royal Liverpool Hospital cited two cases suggesting a link between birth defects and valproate taken during pregnancy. The American Journal of Medical Genetics cited seven cases in 1984 of children born with malformations to mothers taking valproate, and the Journal of Paediatrics cited 26 cases in 1986. The list goes on. It would appear that the evidence was steadily building up with the publication of more and more cases linking valproate to birth defects. The Committee on Safety of Medicines and the Medicines and Healthcare Products Regulatory Agency noted those reports, and, I hope, monitored the use of valproate, particularly during pregnancy.
Dr Whitford
We have heard about various scandals. In the case of Vioxx, which was mentioned by the hon. Member for Newport West (Paul Flynn), trials did not show a problem but real-world use did. Does the hon. Lady think that we need some kind of reform of the reporting system? There is something that we call a yellow card, and patients can now fill it in themselves, but many of them do not realise that. I feel that there is not enough “flagging up” when patients suspect that they are suffering from side-effects.
Liz McInnes
The hon. Lady is absolutely right. She and I are well aware of the yellow card system, because we have both worked in the NHS, but how many people out there know that they can report side-effects of drugs, or even suspected side-effects? We really have a job to do in conveying that message to the general public, and we also need people to collate the information and act on it.
A definitive paper stating that there was a clear link between valproate taken during pregnancy and birth defects was published in 1995. It was entitled “Foetal Valproate Syndrome”, and was written by geneticists at St Mary’s Hospital, Manchester. It is clear that the evidence has been building up for a long time, so why does it appear that women were not warned about the potential dangers of taking the drug in pregnancy?
Fiona Bruce
That 1995 report concluded that the “risk” of foetal valproate syndrome when babies were exposed to valproate was “significant”.
Liz McInnes
That was probably the first research paper to suggest that it was not just coincidence and that there was a causal relationship, which is why it is seen as definitive.
The pharmaceutical company Sanofi, which many Members have mentioned, has stated that it has kept in line with scientific knowledge when reporting side-effects in a foetus. However, from as early as 1983 the CSM and the MHRA reported the problems caused by taking sodium valproate in pregnancy, but did not insist that Sanofi issue warnings in the form of a patient information leaflet.
Even now, to this day, epilepsy charities report that women are not aware of the potential risks when taking the drug in pregnancy. A survey has shown—I know it has already been mentioned, but it does no harm to reinforce these findings—that 18% of women taking sodium valproate were not aware of the risks during pregnancy, and 28% said that they had not been informed of any risks. That is despite the production by the MHRA of a valproate toolkit designed to help healthcare professionals to talk to women with epilepsy about the risks of taking valproate during pregnancy.
Norman Lamb
The hon. Lady is making an incredibly valuable contribution to the debate. Does she agree that if it is clear during a period of time that the amount of a drug that is being prescribed is significantly more than the guidance suggests is appropriate, it is not acceptable for the drug company, the regulator and the Government simply to be passive and to allow that to continue? If we knew that this drug was being over-prescribed, which appears to be the case, why on earth was action not taken?
Liz McInnes
That is a very good point, and if we manage to establish an inquiry, it should look into the issue of over-prescribing.
I want to mention other agencies. The European Medicines Agency has also recommended a strengthening of measures to reduce the risk of harm to babies born to mothers taking valproate. Information from the House of Commons Library outlines a situation in France, which has already been referred to, with an estimate that between 425 and 450 children were affected by birth defects attributable to valproate from 2006 to 2014. The French Parliament this year voted to set aside €10 million for claims related to valproate. The Health Minister, Marisol Touraine, described this as a “starting point” and stated that compensation would ultimately be paid by those deemed responsible:
“I regret that Sanofi didn’t seek an amicable settlement as a matter of principle. I hope Sanofi will change its position.”
Sanofi had no comment to make on the Minister’s remark. A class action has also been brought by the French association for people affected by sodium valproate against Sanofi.
In the UK, in 2004 a class action was brought by a group of families under the Consumer Protection Act 1987, which was expected to go to trial in 2011, but the litigation was discontinued prior to this after the Legal Services Commission withdrew funding. It is disappointing that this Government have said that there are no current plans to introduce a compensation fund similar to that in France, and I urge them to reconsider.
I fully support the remedial steps outlined in the motion, including the call for an inquiry, and this Government must bring forward a care plan and financial assistance for the victims of this national scandal.
James Frith (Bury North) (Lab)
I congratulate the right hon. Member for North Norfolk (Norman Lamb) on securing this important debate, which I hope will compel change. I also join colleagues in putting on record my thanks and admiration for the FACS Association founders, Emma Murphy and Janet Williams, who are here today. Emma and Janet are an inspirational pair who have turned their life-affecting experiences as victims of this syndrome, and their knowledge of victims of it, towards justice on the issue and the demand for better knowledge of the risks that sodium valproate poses to our unborn children.
I speak as someone who for 10 years or so took sodium valproate, not in utero, but in childhood. At seven years of age, I was rushed to hospital with meningitis. Within a few hours, I was fighting for my life and in a coma for two days before responding to a spinal tap. I was one of the fortunate ones and survived without any of the known side-effects such as deafness, blindness or amputation, which routinely follow for those suffering from meningitis. Instead, I was left with epilepsy for the six years that followed. During that time, I got pretty close to the NHS, its out-patients and out-patient wards, and its brilliant teams of nurses and doctors, who worked together to get me better. I was prescribed sodium valproate, and dutifully took Epilim for at least six years, so I stand here also to give voice to epilepsy sufferers in this country.
Let me give the House a sense of what it is like to endure a convulsion. There is a stillness at the control centre of the mind, but a violent movement of the body—an arm, the head or legs. You are aware of it but unable to prevent or stop it. I recall that it is possible to steer it, though I do not know how. I remember, as a young boy, enjoying, like most siblings, bunking down in a bedroom with a sibling and being able, on the rare occasions I had convulsions—only between 4 am and 6 am —to wake my sister, with whom I had enjoyed a sleepover in one of our bedrooms. She alerted my parents and I was observed until the convulsion stopped because there is nothing that can be done.
Epilim—sodium valproate’s commercial name—is widely thought to be the greatest contributing factor to curing me of epilepsy. But for a simple twist of fate, I might have consumed the drug at a different time. When Emma and Janet presented me with the National Archives papers of minutes from 1973 and 1974, when decisions were taken to withhold the knowledge of the risk to foetal development, I was stunned. There were notes in those minutes advising two consecutive, different Governments not to include any warning or information on the risk. It is all too familiar: another national cover-up and further scandal from those closed decades; the “we know what’s best for you” attitude taken by the few to the many, and often said by men to women; the long wait for social justice, and a burning injustice finally coming to light. There was conspiring against the women for whom the drug was prescribed.
I want to spread not fear, but knowledge of sodium valproate. I stand here as a record of its effectiveness, but I also stand up for the unborn children, the women and the expectant parents to whom the risks are not widely enough known. I welcome the news that warnings will feature on the outside of packaging and hope that our medical leaders and the Government will appreciate that issuing guidance is not the same as ensuring knowledge.
I support practical steps such as the distribution of the valproate toolkit to all clinicians, pharmacists and women for whom the drug is prescribed. The Government have a duty to respond with practical steps to address the problem. However, our fight is as much against the cover-up as it is for the clear picture we need to send to parents where mum is taking valproate.
Let this be another moment where we draw caution for all those in positions of power who are about to make decisions that keep people in the dark, or withhold information that is life-affecting, life-changing or poses risk to life. Life will catch up with you. The truth will out. An open and tolerant society has freedom and equality of access to information as a guiding principle to life in it.
On health, decisions should not be made for us, but taken with us: nothing about us without us; a democratic voice at the table; an informed patient choice, not deals in the dark. We have a democratic deficit in decision making on health matters and services. Sadly, on the evidence of last night, there is a democratic deficit on the part of the Government, too. They say they are a listening Government, but I think we have a Government who refuse to hear.
I urge the Government to listen, to make amends for this national scandal, to look at compensation, to address the lack of knowledge, to apologise to the women and to the children who are now men and women themselves, and to make clear our instruction that no content or information pertaining to health and medical prescriptions and the decisions for patients to make should ever be withheld again.
Jim Shannon (Strangford) (DUP)
It is always a privilege to speak in these debates. I give special mention to the hon. Member for Bury North (James Frith), whose powerful and personal summary of his life has greatly added to the debate. Everyone who heard his contribution will appreciate it and thank him for it. The right hon. Member for North Norfolk (Norman Lamb) set the scene so capably, outlining the case for addressing valproate and foetal anticonvulsant syndrome. I pay tribute to him for the summary at the end of his speech, about which I will speak later, and his eight recommendations. If there are any recommendations to follow, those are they, as everyone in the House will agree. I thank all the other hon. and right hon. Members who have spoken, because their contributions were equally as important, and I also thank those who made interventions. The House shines better whenever we discuss issues on which we can have an input both personally and on behalf of our constituents, and this is one such issue.
There is no greater gift from God than a little baby. I have two wee granddaughters, and I adore them. We maybe do not spend as much time with them and our children as we should, but we try. They are both perfect in my opinion, even if they have some tantrums. As girls, perhaps they have different tantrums to boys—I only had boys, so I do not know. We live on coffee in my office—I suspect everyone else is the same—and I have watched my parliamentary aide as she refused her normal 10 cups of coffee and drank only caffeine-free beverages for nine months during her pregnancies. Indeed, her not drinking coffee was the first indication that she was expecting again. She had had two miscarriages but now had one baby and was expecting her second, so she was going to take every step that she could to ensure that the baby was perfect. She said that the reason for not drinking caffeine was that it can make the baby’s heart beat a little fast. Mothers everywhere will do almost anything to ensure that they protect that little life when they know of its existence. Unfortunately, as this debate has clearly shown, some mothers did not know what was happening, which is why I feel strongly that more research must be done for the mothers who have long-term health problems and do not know how the medication they need may affect their children. Every Member who has spoken has made that point.
I want to throw another point into the equation. People with ulcerative colitis, Crohn’s disease and other conditions who have infusions such as infliximab have to come off them if they want to get pregnant. Some people are made aware of such things, but does everyone know that? I suspect not, but they should. The hon. Member for Central Ayrshire (Dr Whitford) and others referred to the yellow card scheme, and people need to be made aware of when incidents happen. More needs to be done to ease families’ minds, and that is why I join with colleagues today to ask for more to be done not only in the case of this epilepsy medication, but with more long-term medications in general. We must look beyond this debate and encapsulate what other people are saying.
Sodium valproate is an anti-epileptic drug that is associated with greater risks in pregnancy than other AEDs. Other valproate medicines include valproic acid and valproate semisodium. The Medicines and Healthcare Products Regulatory Agency reports that, although the general risk of foetal abnormality is 2% to 3%, the risk for women taking sodium valproate is around 10%. Did those women know? This debate illustrates that they did not, but they should have known. We have to address the issue now.
The birth defects can include spina bifida and limb, facial and skull malformations. The use of sodium valproate in pregnancy can also affect a child’s development. Many Members, including the hon. Member for Bury North in his powerful speech, have told us exactly what valproate does. Children have delays in learning to walk and talk. The drug can lower intelligence, and affected children have poor speech and language skills compared with children of the same age.
There have unfortunately been many scandals over the years, and my constituents made me aware of the thalidomide scandal, to which I can relate. The hon. Member for Eastleigh (Mims Davies), like me, spoke in yesterday’s Westminster Hall debate on mesh implants: I have been contacted by many affected women, and they did not know what the risks were, either. They have lived with the repercussions for years. One Member mentioned a lady who had to go in three times in six years to have operations before she was cured.
The same is true of Primodos. A Member who is not here told me about his involvement with that issue. There many such scandals and, as other Members have said, we need to bring them all together under one headline.
I am not a doctor, and I have no medical skills, but I can read about symptoms. I have no medical training, but it appears that the risks are significant enough that people should be fully informed of them before they are prescribed such medication. The massive risks in taking these drugs during pregnancy will then be embedded in their minds.
Many of us were supplied with the Epilepsy Action briefing. The statistics are hard to read, but they are very clear. I also thank the Library for the in-depth information it has provided so we can prepare for this debate. The surveys to which hon. Members have referred go back to 1995-96, when a possible problem was first mooted, but no action was taken. The Library briefing says:
“This survey has been repeated in 2017, when it was found that 18% of women taking the epilepsy medicine sodium valproate didn’t know the risks this medicine can pose during pregnancy and 28% of women said that they had not been informed of the risks of this medicine in pregnancy.”
How can it be that lessons have not been learned?
Dr Rhys Thomas, an honorary consultant in epilepsy at the Royal Victoria Infirmary, Newcastle, says:
“This is a dramatic and important survey focusing on a crucial area for women with epilepsy. As a medical community, we clearly could be doing more, and should be doing more. Even if women are being told of the risks, this may be at the wrong time for them—or in the wrong way.”
Sometimes the risks are not explained in a way that people understand, which is wrong. We need to have the conversation, and it has to be repeated. People need to be aware of the risks, and I am not sure that that has happened in the way it should.
The Medicines and Healthcare Products Regulatory Agency figures suggest that up to four in 10 babies are at risk of developing disorders if valproate medicine is taken during pregnancy—that is massive. How can it be ignored? Approximately one in 10 babies is at risk of physical birth defects. Babies affected by sodium valproate can have severe problems that require lifelong care and support. Are we looking at prevention? Are we looking to the future? Are we looking at what the long-term care will be? I suspect not.
It is estimated that 20,000 babies have been affected and 400 babies a year are born to women taking sodium valproate. Epilepsy Action, the Epilepsy Society and Young Epilepsy have surveyed more than 2,000 women with epilepsy, and they found that some women are still not aware of the risks of taking epilepsy medicine in pregnancy. More than a quarter, 28%, of women who have taken an epilepsy drug have not been given information. That would indicate to me that a knowledgeable medical professional should have taken the time to go through the risks of being pregnant with people on the drug. After someone has become pregnant, it may well be too late, so those discussions with the GP are very important. It is not a matter of someone simply stopping a drug when their pregnancy test is positive, as that is not the safe way to do things.
In conclusion, I urge that the eight points are followed, but that we should put in place the compensation fund that everyone in this House wants to see, because that will at least help the families affected to deal with the financial positions they are in.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I call Cat Smith. If she could finish at half past, I would be grateful. In addition, if the wind-ups could be about nine and a half minutes long, that would allow us to bring in Norman Lamb.
Cat Smith (Lancaster and Fleetwood) (Lab)
Thank you, Mr Deputy Speaker. It is a pleasure to be able to be squeezed into the end of this debate, and I shall be brief. For me, this debate started within days of being elected as an MP in 2015, when my constituent Janet Williams got in touch to ask whether she could meet me. When I was first elected, I imagined that I would meet most of my constituents back up in Lancashire, but Janet was keen to get a meeting in quickly and she chased me down to Westminster. I met her in Portcullis House, along with Emma Murphy. Both of them have been mentioned a lot in this debate, and I pay tribute to the work they do on this important issue.
When I met Janet, my jaw hit the floor, as I could not believe that in this day and age women were still being prescribed drugs that were harming their unborn babies and they were not being told about it. But it was not just that they were not being told about it; a cover-up was taking place. I find this to be a national scandal, and I do not use those words lightly. I have met Janet’s sons, Philip and Lee—they are both constituents—and for them this is a life sentence. Janet should not feel guilty for taking the drugs that her doctors told her to take during her pregnancies, but her sons will continue to need care throughout their lives; they are young men in their 20s and so that is a huge social care need.
This scandal started in the 1970s but, as I have said, it continues today, with women in this country still being prescribed this drug. It is a great drug—it is a very effective anti-epileptic-fit drug and it is good at treating bipolar conditions and migraines—but we need women to have knowledge about it. We need to share knowledge with women so that they can make decisions about their own bodies and own health in pregnancy. So I urge the Minister to respond to the call to publish prescribing data so that we know whether certain areas of the country are overprescribing this drug to women of childbearing age, as colleagues have mentioned. I also add my voice to the call for a public inquiry into this national scandal, and for an adequate compensation package for all those many people and their families who are affected by this national scandal.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I, too, pay tribute to the right hon. Member for North Norfolk (Norman Lamb) for securing this debate and trying to air this issue again. Epilepsy affects 1% of the population—600,000 people—and it is not a trivial condition. It is dangerous. As we have heard, 1,200 people a year die due to epilepsy, and we must not diminish that fact. At the lowest level, someone who has a fit after being well controlled suddenly cannot drive again, which can have quite a big impact, but at the other end of it there is death. We therefore must be careful not to send out a message that anti-epileptic drugs are bad, or even that Epilim is. It works really well, and it is one of the drugs that often can control the most dangerous seizure—the tonic-clonic or grand mal, as it used to be called—without the use of other drugs.
Almost all anti-epileptic drugs carry risk. Sodium valproate is the worst by far, but all the ones we have heard of in the past—phenytoin, phenobarbital, primidone and carbamazepine—carry some risk. We therefore have to recognise that it is not just as though the doctors prescribed the wrong drug. This condition is really hard to deal with, and we need people to have specialist input. We are really asking that from when girls reach puberty until they reach menopause or get into their 50s—when there is no risk of them having children—decisions are made with them by specialists.
As we have heard, there was obviously a recognition right back in the ’70s that sodium valproate could bring about congenital abnormalities, but what appears to have changed is the scale. If we look back, we see that people used to discuss a 2% risk of malformation and “some possibility” of developmental delay. We are now talking about 10% of children having a birth defect, which might be something like a minor cleft palate that can be dealt with, right through to spina bifida, meaning the child faces major physical disability. On a much worse scale, some 40%—almost half—of children face some form of developmental delay, which might mean an autistic spectrum disorder, learning difficulty or ADHD. That is a big change.
We heard earlier about the 1995 paper that started to bring these cases together. Before that, there were predominantly case reports—someone saying, “Oh, this is odd; I’ll write it up”—but we needed someone to bring things together. When we hear that 400 affected babies have been born in the year since the recent attempt to deal with this issue, we realise that had the yellow-card reporting system been working when we had perhaps 500, 600 or 700 cases a year, the situation would have been spotted much more quickly.
The system utterly failed to recognise a pattern and has to be reformed. If a woman gives birth to a child with a birth defect, or there is in the very early years recognition of some kind of major developmental delay, and she is on a drug, that should be reported, and I do not care what the drug is. Her GP may never have seen such a thing before and might not recognise that there could be an association, but someone sitting in the MHRA who is receiving 400 or 500 reports certainly ought to.
The obvious question is how to tackle this issue. The toolkit was put out in February 2016, because we have recently recognised the huge scale of the problem—the change is the recognition of the scale. It is therefore shocking and incredibly disappointing to hear that more than two thirds of women have not received any part of it. It is great that there is now some marking on packaging, but perhaps more of that needs to be combined, because we then do not have to depend on people remembering to hand something out or to pick something up. We would be empowering women to say, “Oh, what’s that? You’ve never talked to me about that,” and both sides would have the chance to have a discussion.
We have predominantly focused on the results of using sodium valproate during pregnancy but, as the hon. Member for—
Dr Whitford
Sorry. I am not doing very well today. Six hundred and fifty names is hard enough; adding another 650 constituencies just does my head in!
As the hon. Member for Strangford (Jim Shannon) mentioned, by the time a women is pregnant—crucially, by the time she knows she is pregnant—it is too late, because these abnormalities happen in the first trimester: those first two months when the brain and spinal cord are forming and the arches of the face are combining. That is why we particularly see neural tube defects, brain function abnormalities and cleft palate. Many women who lead hectic lives may already be two months pregnant by the time they finally know, and that means it is too late. That is why the annual review is important.
Epilim is perfectly fine for a girl to use if it gives good control for grand mal seizures, but we need to flag up the fact that when she is expected to be approaching puberty, discussions need to start with her and her family. Family planning is important for all women, but for women on these kinds of drugs, which must be stopped in pregnancy, it is crucial. We need to have that discussion so that the alternatives can be considered. I echo the comment that if a woman is pregnant and did not plan for that, she should not stop the drug on her own. She should have emergency access to a specialist who is able to look at her type of epilepsy and discuss the options with her, such as whether it would be safe to take nothing or if it would be better to change to something else. It should be recognised that uncontrolled seizures in pregnancy can cause the loss of the mother and the baby. We must not have any kind of irresponsibility by not flagging that up.
We had a debate in this Chamber last week on baby loss. It was a very powerful cross-party debate on the anguish that people face, whether it is due to early miscarriage, stillbirth or neonatal loss. We talked about that loss and bereavement, but any of us—male and female—who have had children know of the expectation and joy that comes from waiting for a child. There is still exactly that bereavement when we know that our child will face a life of physical and mental difficulties, and of learning disabilities. We know that a child with a marked learning disability has only a 7% chance of working. For the parents, there is the stress of knowing that there will come a point when they are not there, and of wondering how their child—perhaps now a young adult—will actually survive facing a harsh world.
Financial support is absolutely crucial to give families peace of mind. We need an inquiry, but rather than holding multiple inquiries, we should recognise that bringing some of these common themes together into one would be a much more powerful way to get people to understand that we are talking about relentlessly repeating patterns. Let us try to reform the things that allowed this to happen and to ensure that we support the families and the children to whom, sadly, it has happened.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
It really is an honour to be responding for the second time in this Chamber today on behalf of the Opposition.
First, I thank the right hon. Member for North Norfolk (Norman Lamb) for securing this very important debate. It really was much needed so that we could finally discuss in detail, and in the main Chamber, the issues around valproate and what the Government must do to address this injustice. He spoke with passion and obvious outrage on behalf of the thousands of women and children affected by this disgraceful scandal.
I, too, want to thank other hon. Members who have taken part in this debate, including the hon. Members for Congleton (Fiona Bruce) and for Eastleigh (Mims Davies), and my hon. Friends the Members for Newport West (Paul Flynn) and for Heywood and Middleton (Liz McInnes). My hon. Friend the Member for Bury North (James Frith) gave an extremely moving account of how the drug helped him as a young boy, making the point that, when used correctly, it can be a very good drug. We also heard contributions from the hon. Member for Strangford (Jim Shannon), my hon. Friend the Member for Lancaster and Fleetwood (Cat Smith) and the hon. Member for Central Ayrshire (Dr Whitford) who speaks for the Scottish National party. It has been a very good debate.
As we have heard, the issues of valproate and its effects on foetuses are not new. In fact, they span a significant number of years, going as far back as the 1970s and 1980s when the first cases of the effects of valproate were documented. Even recent scientific research has shown that valproate can have an impact on a child’s life, including a study finding that 10% of children exposed to valproate will be born with a major congenital malformation, with 29% requiring additional educational support and 6% being diagnosed with significant social communication difficulties, such as autism.
Although there has been some movement on making women aware of the risks of valproate during pregnancy through the valproate toolkit, there is still far more that should and must be done to support these women and their children who have been so seriously affected by this injustice. The scope of this issue is serious. Data from 2010 show that more than 21,500 women were prescribed valproate. Although not all those women will have become pregnant, or planned to become pregnant, it is worrying that, following the toolkit’s publication, there is still not enough awareness of the risks, with 85% of patients not receiving the booklet and 90% not receiving the pharmacist’s card. It is important that the Minister looks into this matter urgently and ensures that awareness is increased to help to address the lack of knowledge. That could save so many innocent lives from being irreparably damaged.
As part of that, will the Minister be minded to agree that the NHS should make it mandatory for every clinician prescribing sodium valproate to a woman or girl of childbearing age to have a conversation with her about risks during pregnancy, upon first prescribing the drug and at least yearly, before her prescription is renewed?
Over the decades there have been countless opportunities for this drug to be investigated, especially when evidence from the 1980s grew. Yet the various regulatory bodies for medicines have failed to keep their eyes on it as an issue worthy of investigation, with only fleeting references in position papers and reports, and nothing substantial. This is why it is welcome that the European Medicines Agency, in one of its first public inquiries, on 26 September 2017 called together patients, carers, doctors, pharmacists and academics to look into the matter further. It will be interesting to see the outcomes of its investigation when it concludes.
We have a duty to set the mistakes or oversights of previous Governments right, which is why we are here today—to seek justice for the victims of sodium valproate in pregnancy and their families. The Opposition welcome calls for the Government to look into how they can compensate the families who have been so significantly affected.
It must be noted that, as others have said, the drug is an effective treatment. For many it may be the only drug that works for them. Nevertheless, there is a systematic failure to inform women of the dangers of taking valproate. If expectant mothers had had the risks laid out clearly for them, many children would not have been harmed, and I hazard a guess that we would not be debating this issue today.
For those reasons Labour promised, in our election manifesto earlier this year, that we would look into this further by holding a public inquiry if we won the general election. We now make a plea to the Government. The evidence collected by In-FACT shows that despite the Government, pharmaceutical companies and regulatory bodies knowing about the risks for 40 years, that knowledge was withheld from women, which meant they were unable to make informed decisions about their drug treatment during pregnancy. I must ask the Minister: why have we not got to the bottom of this injustice, and is it not about time that we did?
A lot of the issues that we must understand and investigate are historic, yet for some they are still very prominent in their present. Many families are living with the repercussions of not being given the relevant information.
Hon. Members may have watched “Victoria Derbyshire” in recent months, on which valproate has been discussed, including last month when Deborah Mann, who took valproate during her pregnancy, discussed how the drug had affected her daughter, Branwen. Deborah had been given a dose of valproate of 5,000 mg, five times higher than the recommended daily dose of 1,000 mg. Any dose above 1,000 mg is considered to have the largest level of risk. Branwen has had to wear splints every day since she was a little girl. She is in chronic pain every day. She has migraines and problems with her brain and eyes. At just 22, Branwen has been told that she could go blind, have a stroke or even die at any moment.
I recently met the inspirational Janet Williams and Emma Murphy, who a number of hon. Members on both sides of the House have paid tribute to. I now realise that they are in the Public Gallery. They set up In-FACT in November 2012 after two of Janet’s children and five of Emma’s children were diagnosed with foetal anticonvulsant syndrome. We heard in detail from the hon. Member for Congleton the extent of the appalling damage to Emma and Janet’s precious children, and all of it was preventable. Both Janet and Emma campaign tirelessly after being told—in the case of Emma, time after time after time—that these drugs were safe to take in pregnancy. These women did ask the obvious questions when the truth was already well known, and they were still told that these drugs were safe to take while they were pregnant. Can hon. Members imagine how that feels? As a mum, I would be absolutely furious—we all would. I would want answers. I would want justice, and so do Janet and Emma.
It is approximated that, since 1973, 7,000 children have been harmed by exposure to valproate. No doubt there will be many other families who have failed to conceive or who have had stillbirths or miscarriages—all because of this drug. That is why we must get answers, but it is also why we must look at what compensation we can give these families because of the failure of the NHS to protect and support them. The idea of compensation has been established by our neighbours across the channel, where the French Parliament has recognised the true scale of this injustice and established a fund worth €10 million to support the victims of valproate and their families.
Opposition Members believe that mistakes should be recognised, addressed and accordingly compensated for. We also believe that burying our heads in the sand and ignoring the demands of the victims goes against the nature of justice and righting the many wrongs of the past. These families must be supported and allowed to have a full investigation into the failures and damage they have had inflicted on them.
The Minister cannot ignore the scale of this tragedy and the numbers of people who have had their lives so adversely affected not through any fault of their own, but due to medication they were prescribed by the NHS. We are here today to ensure that the Government wake up to the enormity of this scandal and take immediate action.
More must be done to make women aware of the risks of taking valproate during pregnancy, and to ensure that the injustice that has gone on for far too long is righted, with answers found and support provided to these families, who have seen their lives turned upside down because of what can only be described as a cover-up. The Minister should and must listen to what has been said today. I hope he will assure the House that he has constructively listened and that he will start the process of righting this pernicious wrong by holding a full public inquiry and properly supporting these families. They need, want and deserve justice. They should, at long last, receive nothing less.
The Minister of State, Department of Health (Mr Philip Dunne)
I congratulate the right hon. Member for North Norfolk (Norman Lamb) on securing this debate through the good offices of the Backbench Business Committee. He has, as he indicated, taken a particular interest in this issue since it was brought to his attention during his time as a Minister in the Department of Health, and all tribute to him for being so persistent in that endeavour.
This is a very important issue. Members on both sides of the House have come together once again—for two weeks in a row, as the hon. Member for Central Ayrshire (Dr Whitford) pointed out—to demonstrate their concerns. Those are not party political; these issues affect all our constituents, irrespective of any party political alliance.
We have had some very constructive suggestions on both sides of the House, and we have heard a number of the personal cases that constituents have brought to the attention of Members, which has been very moving. Rather than rehearse them, I will just point to my hon. Friend the Member for Congleton (Fiona Bruce), who went into some detail, as the hon. Member for Washington and Sunderland West (Mrs Hodgson) said, about the particular circumstances of the two outstanding campaigners—I am pleased they are here to witness this debate—who have spoken so powerfully about the effects that valproate has had on their lives and those of their children. Like other hon. Members, I have very great sympathy for those families who have been affected by valproate use in pregnancy.
The Association of British Neurologists advises that valproate remains the most effective treatment for generalised epilepsy, and this is reflected in NICE guidelines. For some women with epilepsy, it may be the only effective treatment—the only thing that prevents a potentially life-threatening seizure. However, because of its risks, valproate should be used to treat women of child-bearing age only if other drugs are ineffective or not tolerated. This is not a clear case of use or no use, as was clearly pointed out by the hon. Member for Central Ayrshire, who speaks with authority on these matters.
The key challenge for clinicians is to ensure that the drug is used only by those who really need it, that they are fully informed about the risks and that their treatment is closely monitored.
Norman Lamb
Does the Minister share my aspiration that we should be aiming to ensure that every woman, wherever they live, has access to a specialist unit?
Mr Dunne
I will come on to how access—and monitoring—needs to be improved.
As my hon. Friend the Member for Eastleigh (Mims Davies) acknowledged, it is vital that no woman stops taking valproate, or any other anti-epileptic, without first discussing it with their doctor and, if necessary, with the relevant specialist. The Medicines and Healthcare Products Regulatory Agency is currently working with European regulators, and with experts and healthcare bodies, to decide what further action should be taken. Like many anti-epileptics, valproate has always been known to carry a risk if taken during pregnancy. However, as hon. Members have pointed out, important questions have been raised, here in the Chamber and elsewhere, about the extent to which women have been informed over the decades about the risks.
At the time that valproate was first marketed in 1974 for the treatment of epilepsy, animal studies had shown that there might be a risk of birth defects. Health professionals were made aware of this and were expected to weigh the benefits against the risks. Difficult prescribing decisions had to be made. Campaigners have highlighted, as did the right hon. Member for North Norfolk in his opening remarks, the minutes of a meeting of the Committee on Safety of Medicines in 1973 where the Committee concluded that it would be best not to mention the risk of birth defects in package inserts. As has been said today, this paternalistic attitude has no place in the NHS of today. Now, patients and doctors are expected to make decisions based on open communication on the risks and benefits of a treatment, which is underpinned by legislation. However, that was not always the case, and the views expressed by the CSM in 1973 were not unusual at that time, particularly in relation to life-saving medicines such as anti-epileptics.
I am pleased to say that medical practice has changed considerably since then. Comprehensive patient information leaflets have been a legal requirement since 1999, and warnings have been issued when new evidence on risks has become available. The MHRA issued bulletins in 1983 and 1993 to update prescribers on the risk of birth defects, and in 2003 warned about a possible risk of developmental delay in children exposed to valproate during pregnancy. Warnings were extended to include a risk of autism in 2010, and a reminder bulletin was issued in 2013. Information on the full magnitude and nature of the risks with valproate first became available in 2013, following a long term follow-up of children whose mothers had taken valproate and other anti-epileptics.
Given those concerns, the MHRA initiated and led a Europe-wide review which completed in November 2014. The review found that there was still a clinical need for valproate despite the significant risks to the child if taken in pregnancy, and that it should remain an option for women of childbearing potential only where other treatments had failed or were not tolerated. To mitigate the risks, the recommendation was that women should use effective contraception and treatment should be supervised by a specialist. In January 2015, the MHRA sent a letter to doctors and pharmacists about the strengthened restrictions. As well as updating statutory information, the MHRA has developed the valproate toolkit referred to by hon. Members.
Although I am not allowed, quite properly, to use props while I am at the Dispatch Box, I cannot resist pointing out to hon. Members that the warnings now on valproate packaging include the following very specific warning:
“Warning for women and girls: This medicine can seriously harm an unborn baby. Always use effective contraception during treatment. If you are thinking of becoming pregnant or you become pregnant, talk to your doctor straight away.”
In addition to that warning on the packaging, there are other elements in the toolkit. I will not trouble the House to read them out, but they include patient cards, information for patients, and information for prescribers and clinicians. The toolkit was distributed to doctors and pharmacists in February 2016. Messages sent through different channels then and subsequently have reinforced the recommendation of its use to support discussions with patients.
In view of the importance of the issue, in the autumn of 2015 the former Minister for Life Sciences brought together healthcare bodies to support the promotion of the toolkit and ensure that there was co-ordinated messaging to health professionals and patients. The MHRA further developed that group into a 39-strong stakeholder network of health system organisations, health professional bodies, charities and campaign groups, which include In-FACT, FACS-Aware, the Organisation for Anti-Convulsant Syndrome, Epilepsy Action, the Epilepsy Society, the Royal College of General Practitioners and the Royal Pharmaceutical Society.
Our communications strategy has been informed at every step by the valproate stakeholder network, including NHS England. In response to concerns about gaps in awareness that have been identified by several Members in today’s debate, in July of this year the toolkit was redistributed to GPs and specialist prescribers, and additional materials were distributed to pharmacies. More than 100,000 healthcare professionals received the toolkit this year.
What are we doing beyond that? We are tracking changes in prescribing. Data show that between 2012 and 2017, there has been a decline of approximately 26% in the number of women of childbearing age treated with valproate. The decline is sharper among 10 to 17-year-olds. Although usage is declining, there has not been the step change that we would want, and, as has been mentioned today, the results of surveys of patient awareness of the risk clearly indicate that more needs to be done.
I am aware that campaigners have called for the use of the toolkit to be made mandatory. The MHRA and NHS Improvement sent out a patient safety alert in April 2017, which directs organisations systematically to identify women and girls taking valproate and to support them to make informed choices. MHRA and NHS Improvement are monitoring the implementation of the alert and are following up directly with relevant organisations. That action has been taken consistently across the UK and through the devolved Administrations.
The MHRA is fully involved in the new Europe-wide review to look into whether further restrictions are needed. An expert working group of the Commission on Human Medicines, a committee of the MHRA, has been convened to inform the UK’s position during the EU review, which is expected to conclude early in the new year. This review is also looking carefully at whether there is any evidence of adverse effects in babies whose father took valproate. I am sure the whole House was moved by the personal testimony of the hon. Member for Bury North (James Frith) about the consequences of childhood meningitis and his six years on valproate to control epilepsy.
I hope I have made it clear that we are taking the matter seriously. I have enormous sympathy for those families who have been affected by valproate use in pregnancy. In the short time that I have available, I want to touch on a couple of the issues raised by the right hon. Member for North Norfolk. He talked about support, and we have an established system, reinforced by the Children and Families Act 2014, to establish a new framework for local authorities and CCGs to secure services for children and young people who have special educational needs or disabilities.
I will not get into the question of compensation or an inquiry here. What I will say to the right hon. Gentleman is that a meeting has been arranged for the chair of the all-party group with my Lords colleague the Under-Secretary of State for Health, and the issues that the right hon. Gentleman has raised should be brought up at that meeting. I encourage other members of the all-party group to join him in that meeting at the Department.
I will look at the feasibility of extending the yellow card system, as hon. Members have described. I think it is right that we shine the spotlight of transparency to improve patient safety. No Government have done more than we have to make that happen in other areas, and the victims of valproate deserve nothing less.
Norman Lamb
I sincerely thank all right hon. and right hon. Members for participating in today’s incredibly well-informed, responsible and powerful debate. This is a fight for justice. The Minister is right that we have a meeting planned for 7 December with his colleague the noble Lord O’Shaughnessy, and I hope very much that by then, the Government will have reached a view on the case for compensation. The Government have a choice: they can either deny the unanswerable moral case for treating these people properly, or they can take the moral lead and accept that the state has a responsibility to these families. I hope very much that they do the latter.
Question put and agreed to.
Resolved,
That this House notes with concern that there has been a systematic failure to inform women of the dangers of taking the epilepsy drug sodium valproate during pregnancy, resulting in thousands of children being born with congenital malformations, disabilities and developmental disorders since the 1970s as a result of fetal exposure to the drug; welcomes the launch of the Valproate Toolkit by the Medicines and Healthcare Products Regulatory Agency in February 2016 to ensure that women are informed of the potential risks of the drug, but further notes with concern a recent survey which found that 68 per cent of women have still not received these safety warnings; calls on the Government to take immediate steps to ensure that the materials in the Valproate Toolkit are distributed to all prescribing clinicians, pharmacists, and women who are being prescribed the drug; calls on the Government to require all clinicians prescribing sodium valproate to women and girls of childbearing age to discuss annually with the patient, the risks during pregnancy before a prescription is renewed; and further calls on the Government to bring forward proposals for a care plan and financial assistance to the victims of sodium valproate in pregnancy and their families.
Money Laundering and Tax Evasion (Azerbaijan)
(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Dame Margaret Hodge (Barking) (Lab)
I thank you, Mr Deputy Speaker, for selecting this debate, and I thank the Minister for her attendance. I also thank the people who have helped me to prepare for this debate, particularly at The Guardian, Bellingcat, Transparency International and Global Witness.
We in Britain pride ourselves on our integrity, respectability and trustworthiness. We tell ourselves that this is a country that believes in high ethical standards of behaviour in the way we conduct ourselves as individuals, run our businesses and function as professionals. We preach to developing countries about how to stamp out corruption. We sell Britain to foreign investors by telling them that they can trust us, our laws, and our corporate rules and institutions.
Yet last month yet another bundle of leaked documents from yet another brave whistleblower, this time about Azerbaijan, revealed—yet again—that our self-belief is flawed. Many of the revelations and the allegations of corruption associated with the Azerbaijani ruling elite, as well as much of the evidence of money laundering, organised crime, tax evasion and bribery, come back to and are made possible by how the UK and our overseas territories choose to operate our corporate structures. Our persistent lack of transparency and our appallingly lax regulatory framework have made us the country of choice for every kleptocrat, crook and despot in the world. We have become the safe haven for dirty money. We are allowing money laundering and tax avoidance to take place on an industrial scale.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Two years ago, the then Prime Minister declared that London was not
“a place to stash dodgy cash”.
A year ago, in front of 40 Governments from around the world, the UK committed to a public register of foreign companies owning UK property to prevent those who are corrupt from being able
“to move, launder and hide illicit funds through London’s property market”.
Yet we have seen zero progress on all that. Does my right hon. Friend agree that this is a disgrace, and that with all that has happened since, the need for a public register is stronger than ever?
Dame Margaret Hodge
I do, and I will come to that later in my speech.
Our corporate rules and our weak regulatory framework are a gift to villains. Far from being proud, we should be ashamed. Today, I want to try to convince the Minister and the Government to act urgently to destroy the opportunities we are allowing, which are exploited by criminals and make us complicit in their crimes. We can stop this, but at the moment we are choosing not to do so.
Azerbaijan is well-known as a corrupt kleptocracy. It comes 123rd out of the 176 countries assessed on Transparency International’s index of corruption. Heydar Aliyev, the father of the current President, was head of the KGB in Azerbaijan in 1967, when Azerbaijan was part of the Soviet Union, and he became a full member of the Soviet Politburo in 1982. When Russia broke up, he moved seamlessly to become Azerbaijan’s ruling President in 1993, and he cracked down viciously on all opposition voices. He passed the presidency on to his son 10 years later, and Ilham Aliyev then pushed through constitutional changes to abolish the limit on the number of times one person could stand for office and to extend each term of office to seven years.
Paul Flynn (Newport West) (Lab)
Will my right hon. Friend send a copy of her speech to all the new delegates to the Council of Europe from this place, because there are examples in the recent past of Members of this House giving tacit support to and acting as apologists for the den of thieves that is Azerbaijan?
Dame Margaret Hodge
I welcome that suggestion and will do that.
Ilham Aliyev remains President to this day, and in February this year he appointed his wife Mehriban as First Vice-President, in effect anointing her his successor. According to Human Rights Watch, the ruling élite
“continues to wage a vicious crackdown on critics and dissenting voices”.
But the Azerbaijani Government do want to be respected by the international community, in part because they want to sell us their oil and gas. That is why they worked to become full members of the Council of Europe, why winning the Eurovision song contest mattered and why hosting the European games in Baku was important. The so-called Azerbaijan laundromat that we are discussing today was a scheme designed to launder money out of Azerbaijan—money used to curry influence and bribe European politicians, lobbyists and apologists, and further to line the pockets of the Aliyev family and their cronies.
The scheme was revealed by the Organized Crime and Corruption Reporting Project, working internationally with newspapers, including The Guardian. The leaked documents covered payments over a two-year period from June 2012 until the end of 2014. The payments amounted to €2.9 billion.
Nick Smith (Blaenau Gwent) (Lab)
I congratulate my right hon. Friend, who has shown her usual great resilience in identifying financial skulduggery whenever she can; we worked together on looking at financial chicanery as fellow members of the Public Accounts Committee. Does she agree that much more detailed research is needed on this topic so that every angle and element of this huge finagle is properly understood?
Dame Margaret Hodge
I completely agree with that important point.
Money came out of Azerbaijan—nearly half from an account held at the International Bank of Azerbaijan through a shell company linked to the Aliyev family. That bank recently filed for bankruptcy. The other main contributors were two offshore companies with direct connections to a regime insider. It is hard to believe that the money was held legitimately in Azerbaijan.
The money was transferred to a small Estonian branch of Denmark’s largest bank, which is where Britain comes in. The money went into the bank accounts in Estonia of four shell companies, all of which were incorporated here in the UK. Our laws that allow such companies to be established were at the heart of this nefarious scheme. Much of the money then went into the pockets of European politicians, journalists, prominent individuals in international organisations and powerful political Azerbaijani families.
The leaked data show, for instance, that Luca Volontè, an Italian politician who led the European People’s Party group in the Council of Europe, received over €2 million. We know that he was instrumental in lobbying to ensure that a report criticising Azerbaijan’s human rights record was rejected by the Council of Europe in 2013. Several months after the country achieved that veneer of respectability from the Council of Europe, the European Commission announced the construction of the controversial gas pipeline from Azerbaijan to Europe. Volontè is now facing charges of corruption and money laundering in Italy.
Eduard Lintner, a former German MP, founded the Society for the Promotion of German-Azerbaijani Relations. That organisation received €819,000 over the two years covered, and Lintner got a €61,000 cash payment two weeks after returning from observing the elections in Azerbaijan and praising them for being up to German standards. The Council of Europe said the elections marked a
“step forward taken by the Republic of Azerbaijan towards free, fair and democratic elections”.
The reality was that the opposition alliance boycotted the elections, there was voter intimidation and the press was gagged. Lintner has denied any wrongdoing.
Kalin Mitrev, a Bulgarian who lives in London, received €390,000 for so-called consultancy for Azerbaijan. He now sits on the board of the European Bank for Reconstruction and Development that only yesterday agreed a loan to the Azerbaijan Government for €500 million to build a gas pipeline. While he recused himself from the decision and has denied any wrongdoing, his presence as a board member having received money from Azerbaijan makes it very murky and uncomfortable. He is being investigated by the Bulgarian authorities. At the same time, his wife, Irina Bokova, is Director-General of UNESCO. She bestowed one of UNESCO’s highest honours, the Mozart medal, on Azerbaijan’s first lady, the wife of the President, for:
“merits in strengthening the intercultural dialogue.”
I suppose that is an innovative way of describing the use of bribes to stifle criticism and secure international support.
Those people were paid from companies incorporated in the UK: Polux Management LP, Hilux Services LP, Metastar Invest LLP and LCM Alliance LLP. All were registered at Companies House. They are shell companies, sometimes incorporated through our tax haven overseas territories, that are deliberately used to disguise the origin of the money they receive. They are set up by shady and unregulated formation agents. They can engage in transactions while hiding the identity of the real beneficial owners of the company, yet because they have the UK stamp on them they command a respectable status. Our lax controls allow them to prosper and our corporate system allows money to be moved around and used without any questions being asked. That is simply shameful and it is taking place right here, right now in our country.
I am particularly concerned by the trend for unscrupulous people to use Scottish Limited Partnerships—SLPs—to launder money, and to evade and avoid tax. SLPs were invented to help agricultural tenancies in Scotland. Creating an SLP allows the partnership to hold property and enter into contracts, because it gives them a legal personality. But SLPs do not need to name any “natural person”—an actual person—as partners. They can just name companies. They have limited reporting requirements —for instance, they do not need to file accounts at Companies House unless one of the partners is a UK limited company, and while they are supposed to file returns with HMRC, they do not need to pay UK tax and they do not need to have a UK bank account. Of course, HMRC does not check whether accounts are filed.
Our laws allow a secret vehicle to be created to smuggle unexplained wealth into the system, money that is then used for a variety of illegitimate as well as legitimate purposes. SLPs have become a byword for corruption, tax evasion and organised crime. Just look at the facts. There was a 430% increase in the creation of SLPs between 2007 and 2016. In 2016 alone—in that one year—more SLPs were registered than had been registered throughout the 100 years after they were introduced. Bellingcat has looked in detail at the 5,214 SLPs registered in 2016. Ninety four per cent. were controlled by corporate partners, not individuals, and 71% of those corporate partners were based in tax havens. Seventy per cent. were registered to just 10 mailbox addresses in Scotland. They are anonymous and untraceable obscured structures linked to corrupt jurisdictions.
Dr Huq
Does my right hon. Friend share my concern that since the flourish of the anti-corruption summit—and David Cameron has completely left the crime scene—this seems to have been put in the too-difficult-to-think-about box? If the Government really want a global Britain, they should table the necessary legislation as soon as possible and not use the excuse of Brexit to kick this into the long grass.
Dame Margaret Hodge
I agree entirely with my hon. Friend.
The Government recently required SLPs to file statements about the persons with significant control associated with them. Only 23% of those registered in 2016—1,176 SLPs—have done so, and of those 1,176 only 28 are British nationals. In the two SLPs associated with the Azerbaijan story, the records state that the bank accounts and the shareholders were opened by the same man, Maharram Ahmadov. He transferred more than $1.7 billion from those accounts, yet the journalists found that he was a working-class driver living in a modest house in the outskirts of Baku. The companies were registered from the British Virgin Islands.
Money laundered through these structures is being spent here in the UK. We know that $50 million was paid to individuals. For instance, the documents reveal 200 of the payments made to the UK paid for education. Queen Ethelburga’s College, a private school in York, received £89,800. A tuition college, Bellerbys College, and the International School in London also received payments.
Azerbaijan money is also being used to buy property in the UK. Anar Mammadov, the son of Azerbaijan’s Minister for Transport, was just 20 when he bought a £2.75 million mansion in The Bishops Avenue, a house now valued at £7 million. Yunis Abasov, the son of Azerbaijan’s Deputy Prime Minister, was just 21 when he bought a £1.4 million penthouse flat in the Docklands. That is now valued at £3.3 million. In 2012, on reaching the mature age of 27, he bought an even grander property in Kingston upon Thames for £5 million, and he has also been granted British citizenship.
Leyla and Arzu Ilyeva, the daughters of the President of Azerbaijan, used a British Virgin Islands company to buy UK property. Leyla owns a £17 million mansion in Hampstead Lane. The property transaction was undertaken by Child & Child solicitors. It failed to declare that the buyers were politically exposed individuals but has not faced any action, despite having flouted our laws.
In the short time available, I have outlined just a few examples to show how the UK is at the heart of international money laundering, bribery and corruption, tax avoidance and tax evasion. I have described a part of the Azerbaijan story, but the same story could be told from the Panama papers, the Falciani papers, the Moldovan bank robbery and the Russian laundromat. These stories will keep on coming as more and more whistleblowers leak other scandals. The issues will not go away.
I feel deep shame and embarrassment that we in the UK are not just complicit but central to the success of these despicable practices. We seem somehow to believe that dirty money is good for the British economy, but if homes are being bought with laundered money, it just fuels house prices and adds to our housing crisis. In accepting corrupt money, we accept the lawlessness that goes with it. Ministers must act to ensure much greater transparency and to clean up the UK’s corporate structures.
I ask the Minister to address these points. The Government promised us a register of beneficial ownership of property in the UK. We want to know who owns our houses. Consultation on this ended in May and nothing has happened. When will the Minister act to create the register? The Government have yet to commence the legislation on unexplained wealth orders. Why the delay? The Government continue to refuse to use their powers to insist on public registers of beneficial ownership in all our overseas territories, many of them tax havens. Why not act? The Government should properly staff Companies House. At the moment, six individuals are tasked with investigating breaches of company law in a register of 3.5 million corporate structures. Such under-resourcing makes a farce of our commitment to good regulation.
The Government should properly investigate the allegations made publicly in The Guardian and by Transparency International and the others, some of which I have outlined today. If allegations have been made, they must be investigated by the relevant authorities. The Government have a duty to make sure that this happens on our behalf, but it is just not happening.
The Minister should reform our corporate structures to create a more robust and transparent system. Why not ban corporate partners from LLPs and SLPs in all but exceptional circumstances? Why not insist that corporate partners must be UK-based? Why not insist that SLPs must have a natural person? Why not require that the documents of incorporation and the “person with significant control” declarations include the address, date of birth and passport or other identity details of named individuals so that we can trace them? Why not introduce a unique identifier for directors and partners of SLPs? Why not insist that partnerships incorporated in the UK should have a bank account in the UK? Why not set proper standards for the advisers and regulators, so that we can get rid of shady formation agents and reform the anti-money laundering supervisory system to ensure high and consistent standards?
All that is possible if the will to clean up our act on corporate structures is there. At present it seems that Brexit has made us incapable of tackling any wrongdoing for fear of offending some other country in some other part of the world, but Britain will never get rich on dirty money. Allowing it to roam freely will simply infect our institutions, our people and our economy. It is plain wrong that we have allowed ourselves to become the leading facilitator of money-laundering, organised crime and tax evasion. The Government can act to stop this abuse, and they must do so.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I congratulate the right hon. Member for Barking (Dame Margaret Hodge) on securing this important debate, from which I have learnt the shocking truth about Azerbaijan, and on her forensic analysis.
The Government are committed to making the United Kingdom’s financial system a hostile environment for illicit finance. The National Crime Agency takes allegations such as those identified by the right hon. Lady seriously, and will consider carefully whether recent information would allow an investigation to proceed. The Government pursue a targeted but proportionate level of enforcement that focuses on achieving compliance from companies. We seek to counter financial crime while protecting the dynamism of the UK’s business environment.
Nick Smith
Does the Minister think that she has heard enough this evening to ask the authorities to launch an investigation?
Margot James
I must confess that I am not entirely aware of what my powers are in that respect, but if I am so empowered, I will certainly do as the hon. Gentleman suggests.
We want the United Kingdom to be a trusted place in which to do business, and the best place in the world in which to set up and grow a business. The UK has high standards of business behaviour and corporate governance. The overwhelming majority of its 3.9 million companies contribute productively to the economy, abide by the law, and make a valuable contribution to society. In discussing what action to take in response to the minority who abuse the system, we must not undermine its strengths or impose more burdens on the law-abiding majority without very careful consideration.
The Government are active in taking action to tackle misuse. Since 2015, we have implemented a series of reforms to increase the transparency of UK incorporated legal persons and arrangements in order to prevent their misuse for illicit purposes. The reforms include, but are not limited to: the introduction of the publicly accessible register of people with significant control, which the right hon. Member for Barking mentioned; the abolition of bearer shares; the introduction of unexplained wealth orders; and the introduction of the combined register of trust and company service providers supervised by professional bodies, as well as HMRC.
Margot James
I have a lot amount of material to cover. I will give way a little later if I have time.
It is too early to measure the impact of many of those reforms, but we expect them to make a significant difference in helping to prevent the misuse of companies and other entities, and in assisting law enforcement agencies with their investigations when misuse does occur.
The right hon. Lady mentioned Companies House. It carries out checks on all information that is received to ensue that it is valid, complete, correctly formatted and in compliance with company law filing requirements. The obligation to ensure the information is accurate lies with the company and its directors. The validation checks serve to help companies to get things right. A company commits an offence if it fails to maintain its registers and keep them up to date.
The UK has a robust system of publicly accessible data. The Government favour an approach that encourages transparency of information, followed by the scrutiny of company information over its lifetime. I appreciate that—
Margot James
I will give way if I have time, although I might cover the points the hon. Gentleman wants to raise.
It might appear that the system is designed around the needs of law-abiding companies, which are the vast majority. I appreciate that it is open to abuse. Maintaining one of the most open and extensively accessed registers in the world is a powerful tool in identifying false, inaccurate or possibly fraudulent information. With many eyes viewing the data, as well as errors, omissions or worse, the information held on the register can be subject to significant policing by a variety of users.
Companies House is always looking at ways to further improve the quality of data. A significant recent development includes the introduction of the “report it now” function, which makes raising concerns easier than ever before.
If irregularities are raised, Companies House follows up with the company in question, and in most cases any inaccuracies are corrected immediately. There were over 2 billion searches of the Companies House register in 2016-17, which indicates that the data are available and under scrutiny. Companies House works closely with enforcement agencies such as the National Crime Agency in sharing data analysis to combat economic crime.
I will now talk about Scottish limited partnerships, which the right hon. Lady raised. I fully recognise her concerns. Over the past year or so, serious concerns have been raised about the use of these partnerships as vehicles for criminality. As a result, my Department launched a call for evidence earlier this year to collect information about the extent of the problem and how the limited partnership legal framework might therefore need to be strengthened. The Government have been considering this evidence and I can confirm that we are actively considering reform. We will announce our next steps shortly.
That said, it is important to mention that Scottish limited partnerships are a popular form of incorporation. I accept that their number has increased over the last few years, which gives rise to perfectly legitimate suspicions, but they are also used by many legitimate businesses across the economy, particularly in the investment and pensions sectors, fulfilling a genuine commercial need.
As the right hon. Lady mentioned in her letter to me at the end of last month, as of June this year, Scottish limited partnerships and a number of other legal entities were required to identify and disclose their “people with significant control”—beneficial owners—to Companies House. This information will form part of a central register that is publicly available, consistent with the requirements already placed on other forms of UK companies since 2016. Our objective is that the requirement will provide transparency over the ownership and control of Scottish limited partnerships.
Scottish limited partnerships are also required to submit a statement at least once a year confirming that their “people with significant control” information on the companies register is accurate. The right hon. Lady highlighted in her letter to me that many companies have yet to comply, but I can assure her that they will be chased down. As this is a relatively new requirement, the build-up of the names into the register of those who own and control SLPs is still under way. Companies House is undertaking compliance activity to ensure that Scottish limited partnerships comply with the new regulations.
In summary, I can confirm that the Government are actively considering options for the reform of these partnerships and will be setting out their approach soon.
Question put and agreed to.
Draft Electricity Capacity (Amendment) Regulations 2017
(6 years, 6 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
I beg to move,
That the Committee has considered the draft Electricity Capacity (Amendment) Regulations 2017.
It is a great pleasure to serve under your chairmanship, Mr Davies, and to see the shadow Minister, the hon. Member for Southampton, Test. The Opposition Whip and I were texting him, but I knew he would be here. I am sure I will face a reasoned and thought-out speech, which we Ministers do not like, but which will be a pleasure to hear in his case.
The draft regulations will amend two secondary legislation packages for the capacity market. The powers to make and implement the secondary legislation are found in the Energy Act 2013, which received Royal Assent in December 2013 with, I am pleased to say, cross-party support following scrutiny in the House and the other place. I will explain the changes in detail, but first, for hon. Members who are less familiar with the capacity market, I will explain it in terms as I understand them.
The capacity market is an insurance policy to ensure that the necessary supply is always available. The money is used to ensure that power is available as demand from the grid goes up and down, perhaps because a particularly interesting horse race or an episode of “EastEnders” is on the television, or more typically because of a good cold snap—or a bad cold snap, depending on how one looks at it. In many cases, suppliers are paid when supply is not needed, but the market has allowed us to have a consistent and readily available source of capacity for all contingencies. That main purpose received cross-party support. It is for Members on both sides and for the Government to secure that capacity, and they have done it pretty well.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
This stuff will be quite difficult to digest not just for the Committee but for our constituents, who have to pay a hell of a lot of money for their electricity. I hope the Minister will go into some detail about risk finance schemes and applicant credit cover, because I cannot go back to my constituents in Huddersfield, who are highly intelligent people, without an explanation.
Richard Harrington
I agree with the hon. Gentleman’s analysis of the good burghers of Huddersfield, because I come from Leeds—
Richard Harrington
I could not possibly comment, but we are all Yorkshiremen, including you, Mr Davies—not that that would affect your chairing of the Committee.
From memory, the actual cost of the capacity for our constituents is about £2 a year on their bill. I am not making light of it, but for what we get from it as a country and for what suppliers get for their customers, I think it is good value for money. There have been power cuts in other countries—even in quite developed places such as California and Australia—where they did not have such a sophisticated system, so there is a risk. When I said it was for hon. Members on both sides to ensure capacity, I did not mean just members of this Committee; the whole of Parliament in 2013 realised that this was a good thing to do.
I will go into more detail, and if the hon. Gentleman then feels that I have not answered his questions I will be able to do so—it will be nearer lunch time, and he may feel that I have covered most of it.
Sir Oliver Heald (North East Hertfordshire) (Con)
Does the Minister agree that it is one of the Government’s duties to ensure security for citizens? Energy security is a vital part of that, and if it costs £2, it is probably £2 well spent.
Richard Harrington
I agree, as I think most other people would, because generally the system works. To use the layman’s language I always use—being a Yorkshireman, I try to simplify things in a way so that I understand them; I cannot claim to have the technical expertise of the shadow Minister on this—the regulations propose a tweaking of something that works, rather than radical and complete change. I will make some progress, and if hon. Members would like to ask questions or intervene, they should obviously do so, subject to your largesse, Mr Davies.
The five changes in the draft instrument are essentially technical. They will improve fairness, ensure the competitiveness of auctions and provide important clarifications to scheme operations. The Department held a fairly lengthy public consultation on the changes and the majority of respondents agreed with them—more than 75%. I agree that it is important that people know how much the market costs, but if we did not have a capacity market and every individual had the choice of paying £2 or x pounds to make sure they do not have blackout periods, I am sure that most people would probably pay it anyway. It is not like that, but thinking about it in terms of what it means to customers and our constituents is right, as the hon. Member for Huddersfield mentioned. All the technical stuff we are here to discuss does not matter if in the end it boils down to continuity of supply at that price. He was absolutely right to mention that, as was my right hon. and learned Friend the Member for North East Hertfordshire.
We have the capacity market to ensure—as is the Government’s job—that we always have sufficient electricity capacity in Britain for the winter periods and for periods of exceptional demand. We need to give generators the confidence that they will receive the revenues they need to maintain, upgrade and refurbish their existing plants, and to finance and build new plants to come on stream as and when existing assets retire. They have to think ahead, and knowing that they are going to get these funds is part of their planning.
The capacity market also ensures that those who are able to shift demand for electricity away from periods of greater scarcity, without detriment to themselves and the wider economy, are incentivised to do so. It does so by offering capacity providers who are successful in these competitive auctions—there are two types; some bid for one year ahead and some for four years ahead—a steady, predictable revenue stream on which they can base their future investments. In return for those capacity payments, providers must meet their obligations to deliver electricity at times of system stress, or not deliver it if it is not needed, or face penalties.
Mr Sheerman
On the longer four-year period, we have a rapidly changing energy market, and many of us are delighted with the diversity of more sustainable energy providers coming on and providing a lot of our energy needs. Will the four-year period allow us to have that more flexible, diverse energy market?
Richard Harrington
That is a valid question, as I would expect from the hon. Gentleman. Having both four years and one year takes care of that. Four years is needed because of the investment cycle; suppliers have to plan and have some consistency. Things change a lot, and there is a lot of uncertainty when predicting four years ahead.
Richard Harrington
I believe that is extremely unlikely, but we all have our views on that subject; certainly, if this measure is voted down today, I am sure the Prime Minister will have no choice. In all seriousness, the hon. Gentleman makes a valid point, but if it were left only to the shorter, one-year cycle, I cannot see people taking the kind of investment decisions needed. Of course, it is arguable—some might say they want 10 years. When the rest of the electricity supply market—not the capacity market but the normal supply market—starts to build huge wind turbine farms and gets planning permission to build nuclear power stations and all those other things, those are all judged on 20 to 30-year cycles, so it is difficult.
The officials think that four years and one year are right, but it is always up for review, and if the market changed completely we would want the flexibility to be able to act. For the moment, it works. It sounds arrogant for Government to say it, but I think most people think the capacity market is working. Self-evidently, it is working.
Richard Harrington
I notice with fear and trepidation the shadow Minister shaking his head. I will try to make some progress, then keep quiet while he makes his comments, and then I will do my best to counter them.
The capacity market is working and there is fierce competition. We have the required capacity at prices significantly lower than many detractors of the scheme expected. I hope the shadow Minister agrees that it is working from a competitive point of view. As the hon. Member for Huddersfield said, that is good for consumers because it has translated to lower costs on bills. Whatever one’s view of bills generally, this is not a big chunk of bills.
The capacity market is driving investment in new and flexible capacity. The most recent four-years-ahead auction secured more than 3.4 GW of new build generating capacity, including combined-cycle gas turbines, open-cycle gas turbines, small flexible engines and battery storage, as well as 1.4 GW of demand-side response. The clear message from industry and investors is that the mechanism retains their confidence and is the best available approach for ensuring our long-term security of supply.
Industry and investors stress that regulatory stability is crucial, but also that the scheme, which is operating in a rapidly changing environment, must be reviewed regularly to ensure it remains fit for purpose. That goes back to the four year, one year point. The changes set out in the instrument are the latest in a series of amendments that ensure the scheme is kept relevant and workable. If the Committee bears with me, I will briefly expand on the amendments made by the draft regulations.
First, the instrument amends the method by which the costs of the capacity market are recouped from suppliers. It was felt that the current supplier charge arrangements potentially gave an unfair advantage to embedded generators—the smaller generators connected to the lower voltage distribution network—and could distort the outcome of the capacity auctions. I had better explain what that means. That arises because, under the current arrangements, suppliers are charged according to their share of demand at peak times, measured by the demand they place on the transmission grid. That is called the net demand.
By contracting with embedded generators to run over winter peaks, some suppliers are able to reduce their net demand and therefore their share of capacity market costs, which means others have to pay more. With some of the savings inevitably being passed on to the embedded generators, such arrangements unintentionally risk giving them a double payment for what is essentially only one contribution to security of supply. Nobody is operating illegally, but it is basically a loophole that needs shutting off. As my great hero Basil Fawlty said in another context,
“that particular avenue of pleasure has been closed off.”
We need to shut that off.
The instrument addresses the issue by amending the basis of the capacity market supplier charge and settlement cost levy from net to gross demand. That is a fairer way of sharing costs between suppliers. It ensures that suppliers’ costs reflect their overall demand and helps to ensure a level playing field between different generators in the auction. That is the first of what I hope are non-contentious amendments—although, looking at my shadow, perhaps that is a victory of hope over logic.
Secondly—I will be as quick I can—the instrument seeks to prevent new and refurbishing plants from being overcompensated within the capacity market when they are also in receipt of aid through risk finance schemes such as the enterprise investment scheme, the seed enterprise investment scheme and venture capital trusts. We do not want to have a double subsidy, whereby plants can get this payment and tax breaks as well, because that would distort the outcome of capacity auctions.
To ensure fair competition and value for money for consumers, the regulations assert that where a capacity provider has accessed investment through one of these risk finance schemes to provide or help to fund their capital expenditure, their capacity payments must be reduced until that has been offset. They can switch systems, but only after they have used up the original tax breaks. These offsetting arrangements ensure that the total amount of aid is capped at the amount awarded in the capacity market auction.
Thirdly, the regulations will remove an inconsistency between how demand-side response capacity and other capacity types are de-rated. For hon. Members who are less familiar with de-rating than we are in the Department, I should explain that it is the process by which the volume of a provider’s capacity is adjusted to reflect the reliability of the technologies being used. Unlike other participants, demand-side response providers can nominate a lower amount of capacity to bid in an auction than the capacity that they estimated at the pre-qualification stage, but that nominated amount is not currently subject to de-rating. The regulations will address that inconsistency by ensuring that the nominated value is de-rated, thus improving the overall reliability of the capacity procured and enabling us to know more exactly what we are getting. Again, it is about closing a loophole.
Fourthly, the regulations clarify the requirement for capacity market participants to maintain credit cover until they have fully discharged all the requirements against which it has been lodged. Additionally, they put it beyond doubt that a party’s credit cover will not be drawn down where a termination fee is due, unless the termination fee is unpaid.
Finally, the regulations will amend the name, though not the substance, of the capacity market warning—the statutory notification that has to be issued under the scheme in specific circumstances. We believe that “capacity market notice” will better reflect the nature of the notification and be clearer for all participants.
My Department published two consultations on our proposals in September and October 2016 and received 38 responses. Significant support was expressed for the majority of the proposals. I look forward to hearing what hon. Members have to say about them.
Dr Alan Whitehead
It is a pleasure to serve under your chairmanship, Mr Davies. I am afraid the feeling may not be reciprocated this morning because of my habit of turning up for Committee sittings 10 seconds before they start. I vow to turn over a new leaf and turn up earlier in future.
My support for the capacity market, as the Minister may have gathered from my non-verbal intervention to his speech, is lukewarm at most. I agree that it has been successful in securing a capacity margin over time, but its overall achievements have come at an enormous cost to the public and its results bear little relation to what was originally intended. I will spend a minute or two reflecting on the overall unsuccessfulness of the design, as opposed to the operation, of the capacity market in securing a capacity margin for the country.
The Minister has helped the Committee greatly this morning by setting out how the capacity market works and what it is about. It is a device that is supposed to secure capacity and to procure the long-term building of additional capacity by holding regular auctions. It is supposed not only to provide power on a one-year basis, as the majority of the auctions have concentrated on, but to receive competitive bids to supply power on a long-term basis. That entails building new plants and receiving not a one-year capacity contract, but a 15-year contract.
As far as the capacity market is concerned, bids can come either from existing suppliers for one-year contracts in order for them to continue to exist, or for 15-year contracts to build new power stations and for those power stations, once built, to exist. Hon. Members need to be clear that the capacity market does not procure any energy as such. All it does is ensure that the plants which might supply energy will be in place to do so when they are called upon. Those power stations then get the market rate, whatever it is at the time, for actually supplying the power. They are rewarded doubly through the capacity market. First, they are rewarded for existing. Secondly, they are rewarded when they supply power in the normal way when they are asked to do so. The capacity market is essentially a device that secures the continued existence of power stations, or the possible existence of new power stations. It is nothing to do with the actual supply of power.
The Department has now held a number of auctions along those lines and has spent to date—I say this very slowly—£4.8 billion. That money comes from consumers. As is reflected in the report today, the devices by which that money comes from the supplier, and thus from consumers, are set out in the explanatory notes and in some of the passages in the SI itself, but £4.8 billion has gone to power generators.
One of the aims, as I mentioned, has been to secure the development of new gas CCGT plants in order to secure a long-term capacity for those plants. Hon. Members will know that a number of gas power stations are closing in the near future and a number have been mothballed. Perhaps the idea of procuring new gas power stations to replace those is not so bad in theory, but in practice, after £4.8 billion has been spent, no significant new plants have been procured. Actually, that is not quite true: one plant was secured in the initial auction, but it was not built and has now been cancelled, and a small CCGT plant—I think at King’s Lynn—has been secured, but otherwise no significant large CCGT plants have been secured.
It is true, as the Minister says, that some other plants have been procured—small open-cycle plants from reciprocating engines. Some of those reciprocating engines are unfortunately diesel engines, which from a public policy point of view might be the worst idea in terms of securing new power capacity. Those are very small in individual capacity and collectively they do not add up to more than what would have been the output of about one new CCGT plant.
As far as one-year contracts are concerned, two thirds of what has been procured has been for the continuation in existence of fossil fuel plants, including, for example, coal plants, which are supposed to be phased out by 2025. Arguably, the capacity market has led to the continued operation of coal plants that otherwise would have closed down already.
Even among non-fossil fuels, in the December auction for example, the largest sum went to—I am not making this up—procuring the continued agreement of nuclear power stations to generate, to the tune of £177 million, when we know that it is not possible for nuclear power stations to switch off and not generate. We have thus very smartly procured a commitment to supply from the sector of the market that is unable to not supply; nuclear plants receive £177 million for the privilege of continuing to supply and not to switch off. From that point of view, the capacity market has not been a conspicuous success; put another way, it has arguably been a monumental waste of money, which eventually finds its way to customers’ bills, as shown in the mechanisms outlined in the SI.
It is not as though capacity markets were the only show in town. They were invented during the energy market reform process, hence the Electricity Capacity Regulations 2014, the starting point of capacity markets’ operation. The Minister has outlined how the SI seeks to make a number of mostly minor amendments to those regulations, which he described as “tweaks”. I agree that they are tweaks; with regard to the market working in its own right, they are perfectly sensible and reasonable and we should have no concern about them, with one caveat.
A significant impact assessment, published by the Government while considering the establishment of the capacity market, looked at it against the main possible alternative: a strategic reserve whereby capacity is reserved outside the market, for example from power stations already mothballed, and is released should there be a strain on the main market leading to very high prices per half hour of power. At the time, that was assessed as far cheaper for the public to underwrite, but for complex reasons it was not advanced instead of the capacity market, even though the impact assessment showed that the change in net welfare for the strategic reserve was twice as good as for the capacity market.
The strategic reserve has been my personal preference all along. I think even now it would be possible to establish a strategic reserve to ensure capacity margins and to discontinue the capacity market. From the explanatory notes alongside this SI, however, I see that the capacity market is now supposed to last for 10 years, with a review of its operation five years after its introduction, which I take to be 2014. We currently have a capacity market; it is prudent to look at its detailed workings and amend them to obtain better results if possible, which is essentially what these measures do. To that extent, with one caveat, I am happy to see them proceed and will not seek to divide the Committee.
My caveat is a measure in schedule 2 to the regulations, which, as the Minister has outlined, seeks to change the formula for securing a measure of payment from suppliers to underwrite the capacity market. The payment required is based on a supply share of total demand at peak times over the winter, and is based on power through the transmission grid. The suggestion is that some suppliers reduce their liability by sourcing some of their supply from embedded generators connected not to the transmission grid but to the distributed grid. In theory, they might gain a market advantage by, in effect, being paid twice: once through the indirect benefit to them from their dealings with the supplier, and once through their own activity.
As the explanatory note sets out, the theory is:
“It is expected that suppliers will pass on most of this saving to the embedded generator.”
It is by no means clear that that actually happens; if it does not, through the envisaged change from charging net supply to charging gross supply, the embedded generator loses rather than gains through the process. I would be grateful for the Minister’s thoughts on the process set out in schedule 2, and to know whether he is clear that it does set out the benefits he has described to us. I would ideally be grateful for an indication that he will have a further look at this section, to see whether further amendments might be made to the payments regime, reflecting better solutions that have been identified to the problem he quite rightly outlines.
Finally, returning to my initial point about the overall failure of the capacity market to do what it was intended to do, and the enormous cost incurred in the process, I would have thought it would be prudent to bring forward the review set out in the explanatory notes from five years after the beginning of the capacity market in operation to four years. If the review happened next year, we could see whether the capacity market has been working in the way it was intended and whether there may be better alternatives to the capacity market to secure capacity in the future.
The Minister and I agree that this is a fundamental part of the process we need to get right over the next year as we continue to deal with close capacity margins. We need to ensure that the lights stay on. I will be interested to hear from the Minister whether he is considering doing that review. If he is not, will he consider that in the not too distant future?
Richard Harrington
I am extremely grateful to the shadow Minister for his speech. He has provided food for thought on a lot of points. I thank him for his support for most of these technical tweaks or arrangements. I greatly appreciate it.
I have listened carefully to the hon. Gentleman’s views on the capacity market. You, Mr Davies, and others may get rather impatient if I go into great detail about the market itself, but I am happy to meet the hon. Member for Southampton, Test—I think I am seeing him on Monday anyway—to talk about it in the detail it deserves, rather than occupying the Committee now. If it is acceptable, I will stick to talking about the technical arrangements themselves.
The hon. Gentleman raised some specific issues that I should mention to get them on the record, if Members will bear with me. I did not actually mention the 15-year agreement in my opening remarks, but what he said was correct. The capacity market selects plant at auction simply by price. It is a safe assumption that an existing plant, because it has probably written off its investment, will be cheaper than a new plant, which faces significant up-front investment costs.
Some of the nuclear plants that the hon. Gentleman referred to are near the end of their life. They could be turned off, and in fact that was the intention with many of them, subject to the great safety requirements necessary. The operator, EDF, is extending the life of those plants, but for a short period. He is right about turn-on and turn-off—it cannot be done instantly—but the plants can be kept going within a safe limit for comparatively short periods, compared with their full life.
The majority of resources are able to access only one-year agreements. An exception was made for new and refurbished plant because investors required more certainty to invest in large capital projects. Where not necessary, longer-term agreements risk needlessly locking consumers into paying a long-term price. That goes against the valid point that was made about things moving quickly in the energy market. What seems like a good deal in year one could seem absolutely ridiculous in four years. The Government, as usual, have to try to strike a balance. The hon. Gentleman may feel and is perfectly entitled to feel that the balance has not been struck properly, and I look forward to discussing that with him.
The capacity market is technology-neutral. The types of energy or technology are not decided in advance, because all types are eligible to participate. That is correct, and it includes coal and other fossil fuels. Broadly, those get Government subsidies in the same way so as to comply with state aid rules. Value for money is very important for energy. For those less familiar with the energy market, there are other auctions, such as contracts for difference and other systems. We could discuss those at length. Members will be delighted to hear that I will not do that now, but those systems take care of the point that the hon. Gentleman raised.
Should we pay to keep new and existing plant going through the capacity market? The Government think there are good reasons to do so, but there are arguments to the contrary. I fully accept the hon. Gentleman’s point that the Government have a popular policy—popular in most parts of the country—of removing fossil fuels as soon as possible. We are doing that, as hon. Members know, but it does means that there might be some fossil fuel use in the short term, because fossil fuels can be turned on and off quite easily. I suppose that gas is the easiest to turn on and off, with coal just behind, but that is nothing to do with the Government’s strategy, which we are sticking to, of removing fossil fuels in the next few years. It is a well publicised strategy, and the owners of the power stations know about it and are on track for it.
Rather than going into more detail now, I would love to debate the more technical points that the hon. Gentleman has made with him later. Having worn the patience of the Committee significantly by going into more detail than some Members on both sides might have wanted, I am happy to speak to anybody individually. Obviously, I have regular meetings with the shadow Minister and the Scottish nationalist party spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey, and if they would like me to put this matter at the top of the agenda, I will happily do so, in a meeting with officials if they would prefer to go into those details.
Dr Whitehead
Before the Minister resumes his seat, would he say for the record whether a further view will be taken on the question of embedded generation and gross payments and, secondly, whether the review of the capacity market might be expedited over the coming period?
Richard Harrington
I listened carefully to the hon. Gentleman’s points on that subject. He asked me to give some thought to those options before we decided that we were not going to pursue them. I am giving thought to them both, and I look forward to discussing them with him.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Electricity Capacity (Amendment) Regulations 2017.
Finance Bill (Third sitting)
Thursday 19th October 2017
(6 years, 6 months ago)
Public Bill CommitteesRead Full debate Finance (No.2) Act 2017 View all Finance (No.2) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 19 October 2017 - (19 Oct 2017)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
With this it will be convenient to discuss the following:
Amendment 5, in schedule 5, page 364, line 10, at end insert—
“443A Review of effects in relation to PFI companies
(1) Within three months of the coming into force of this Chapter, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review of the effects of the provisions of this Chapter in relation to PFI companies.
(2) The review shall consider in particular the effects if the provisions of—
(a) the Chapter, and
(b) the exemption in section 439
were not to apply to PFI companies.
(3) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.”
This amendment requires a review to be undertaken of the impact of the provisions of Chapter 8 of new Part 10 of TIOPA 2010 in relation to PFI companies and if the provisions did not apply to PFI companies.
Amendment 28, in schedule 5, page 367, line 46, at end insert—
“448A Sectoral reporting on operation of this Chapter
(1) Within fifteen months of the coming into force of this Chapter, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review about the operation of its provisions in relation to different sectors.
(2) The sectors covered by this review shall be—
(a) water and sewerage,
(b) gas and electricity,
(c) telecommunications,
(d) railway facilities,
(e) roads and other transport facilities,
(f) health facilities,
(g) educational facilities,
(h) facilities or housing accommodation provided for use by any of the armed forces,
(i) facilities or housing accommodation provided for use by any police force,
(j) court or prison facilities,
(k) waste processing facilities,
(l) buildings (or parts of buildings) occupied by any relevant public body other than for purposes principally concerned with matters specified in paragraphs (a) to (k).
(3) A review under this section shall separately identify, in respect of each sector, information on operation in respect of qualifying infrastructure companies undertaking activities that were previously undertaken by a nationalised industry.
(4) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.”
This amendment would require HMRC to report on the operation of the special provisions in Schedule 5 relating to public infrastructure in relation to sectors and, within sectors, in relation to privatised companies as a group.
Amendment 6, in schedule 5, page 368, line 13, at end insert—
“‘a PFI company’ means a company which has entered into a contract with a public sector body under the Private Finance Initiative or the PF2 initiative.”
This amendment defines a PFI company.
That schedule 5 be the Fifth schedule to the Bill.
New clause 1—Review of relief from corporation tax relief for PFI companies—
“(1) Within three months of the passing of this Act, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review about how corporation tax relief is given for losses, deficits, expenses and other amounts of PFI companies.
(2) For the purposes of this section, ‘a PFI company’ means a company which has entered into a contract with a public sector body under the Private Finance Initiative or the PF2 initiative.
(3) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.”
This new clause requires a review to be undertaken of the corporation tax reliefs available to PFI companies.
Stella Creasy (Walthamstow) (Lab/Co-op)
It is a pleasure to serve under your chairmanship this morning, Mr Howarth. I am looking forward to this debate because it is something all of us across the House feel concerned about. I recognise that we are debating the Finance Bill. I reassure you that the amendments and the majority of what I will talk about today are about taxation and, in particular, the requirements of the legislation. I just want briefly to set out how that fits into the context of the concerns that are shared across the House about private finance and the cost to the public sector of borrowing to be able to build the infrastructure that we all know we need.
To be clear, Governments of all colours have used private finance and continue to do so. The private finance initiative and private finance 2 schemes are little different from each other. It is recognised that questions about the companies involved and the role of taxation in the decision to use PFI or PF2 to fund public infrastructure are questions for all of us, because we see in our constituencies the problems that are caused.
I note that the constituency of the hon. Member for Brentwood and Ongar now has repayments of £169 million as a result of private finance. The constituency of my hon. Friend the Member for Bootle, the shadow Minister, has £423 million-worth of repayments required under private finance contracts. I would describe private finance as the hire purchase of the public sector—indeed the legal loan sharks of the public sector— because the companies offer credit to the public sector, but at a high cost. In particular, the cost of the credit—the taxation that will come from the companies involved—is part of the decision to go with them. That is specifically part of the Green Book calculations. I am looking forward to the Minister telling us what has happened to those Green Book calculations, which were supposedly withdrawn in 2013 but I understand are still being used by Departments for private finance deals, to understand how tax plays a part in the decision to use private finance companies. The idea is that this form of credit may be more expensive but that the companies will repay us in taxation in the UK. That forms part of the decision to use them. The widespread evidence now is that those companies are not paying UK taxes, and that they are benefiting from changes in our tax regime over the past 20 or 30 years. That should trouble all of us because we are not getting the value for money that the deals were supposed to be.
One of my concerns that I hope the Minister will address is that PF2 also pays little regard to the question of where the companies are situated and how much tax they pay. I have therefore tabled two amendments—in fact, three; one is about defining private finance companies—to understand what kind of deal we are getting from those companies and how we as taxpayers and those who represent taxpayers can get a better deal for the British public.
For the avoidance of doubt, the debate is not about not using private finance. One day, I hope that we will have another debate—I am sure the Minister will look forward to it as much as he is looking forward to this one—about the alternatives to private finance. There is a role for private finance, but the question is, if we are getting a bad deal and if the companies are not honouring the obligations that we as taxpayers assigned to them, what can we do about it?
Clearly, the PFI companies are making huge profit. Research from the Centre for Health and the Public Interest shows that over the next five years almost £1 billion in taxpayer funds will go to PFI companies in the form of pre-tax profits. That is 22% of the extra £4.5 billion given to the Department of Health alone.
In my constituency I see at first hand the impact of this. Whipps Cross University Hospital is technically in the constituency next door, but serves my local community—it is part of Barts, which has the biggest PFI contract in the country: £1 billion-worth of build, £7 billion to be repaid. The hospital is paying back £150 million a year in PFI charges, more than 50% of which is interest alone on the loan. The hospital downgraded the nurses’ post to try to save money, and so found that many nurses left. It therefore faced a higher agency bill.
It is clear that PFI and the cost of those loans drives problems. It is also clear that those companies make what I would term excessive profits. That is where new clause 1 begins to try to offer us some answers. If the companies make excessive profits, that is not part of the contract that we signed with them. The National Audit Office has been incredibly critical of how taxation played a role in decisions about private finance companies, but that has not been realised.
Also, not that many companies are involved, yet the tax returns are huge. Just eight companies own or appear to have equity stakes in 92% of all the PFI contracts in the NHS. Innisfree manages Barts, which is my local hospital, and it has just 25 staff but stands to make £18 billion over the coming years. It might be thought, therefore, that companies of that size and stature would pay a substantial amount of tax—I see that the hon. Member for Brentwood and Ongar can predict where I am going with this; sadly, it does not appear to be the case.
Indeed, many of the companies seem to report little or no tax in the UK. One of the simple reasons for that is that many of them are not registered in the UK. That is crucial because the provisions in the Bill to give those companies a relief on paying tax on the interest that they get from shareholder debt are predicated on the idea that they are UK companies. That is the starting point for amendments 5 and 6. The Bill will bring in a cap on the amount of relief that companies can claim against interest. However, there is a public sector exemption, for public sector infrastructure companies, and it will substantially benefit the companies in question.
Having been a Member of this House for seven years, I have always assumed that when such a provision is introduced we will be able to debate its merits. I note that the restrictions in relation to the measure mean that we cannot stop it, or ask whether we are being wise and whether, given that we know the companies do not necessarily pay the tax it was assumed they would in the UK, we are getting their tax situation right. We cannot stop the measure, but we can certainly ask just how much the companies are going to benefit from it.
Amendments 5 and 6 are intended to enable taxpayers to understand how much the companies will benefit from the exemption, and how much extra money they will be able to write off against their tax bill, thus paying little tax in the future. It matters very much to the companies, because most are heavily indebted to their shareholders. They use a model involving 80% to 90% senior debt; the rest is equity loans in terms of the products that they offer. PF2 will change that very little. The amount of debt that they carry, and therefore the amount of interest that they can trade off, which the measure will allow them to do, will be relevant to their ability to give returns to their shareholders.
It is clear that those companies give their shareholders substantial returns, and will be able to fund that through such tax relief. Indeed, the shareholders’ returns are 28% on their sales—more than double the 12% to 15% that was predicted in the business cases. Between 2000 and 2016 the total value of sales of shares in PFI companies was £17 billion. It is notable that in 2016 100% of equity transactions involving those companies were to offshore infrastructure funds in Jersey, Guernsey and Luxembourg. That is based on a sample of 334 projects.
Those companies are going to get a substantial tax relief from the exemption. Yet they do not pay tax in the UK—or, certainly, there is a lot of evidence that they do not. It is an exemption that will enable them to continue to justify paying little or no tax; they will be able to write off the interest on their loans and projects against it. Yet taxpayers are not benefiting from the tax that they said they would pay.
New clause 1 goes to the heart of that question. Those companies signed up for public sector contracts, with particular rates of tax at the time they were finalised. Yet, as we know, corporation tax has varied substantially over the past decade. The debate is not about what the right level of corporation tax is; it is about a simple principle. If a company has signed up to pay a certain rate of tax, and the tax rate changes, it clearly benefits from that. We signed up to the deals for taxpayers, however, on the basis that they would pay a certain rate of tax. That tax rate will now change. New clause 1, again, asks just how much the companies are benefiting from the changes.
I know that the Minister will tell me that there are various anti-discriminatory clauses in the PFI and indeed the PF2 contracts. I agree with him. Therefore, how we might start to reclaim some of that excessive profit is a tricky question, but there is a strong case that, if a company has signed up in good faith to a particular rate of tax, surely that is the rate of tax that it should pay. That is written into the contract, it is part of the business case in the Green Book that is made on these sorts of deals. We as taxpayers have an expectation. Indeed, I would expect the Minister to have a series of sums reflecting the amount of money that would be paid back that he would write off against the large sums that I talked about. However, given that the corporation tax situation has moved from some of these companies nominally paying 28% to their paying 19% or less, that is clearly a substantial discount on what they were expected to pay. New clause 1 asks us to do what, frankly, at the moment we do not do as a country—understand what the difference is between what we expected to get in from tax from these companies and what we will get in.
It is always troubling to me that the Treasury does not seem to have a central database either of how much we were paying to take on these loans—particularly the rates of return, which we know are substantially higher than the rate of borrowing on the public sector—or of the taxation these companies are paying back versus what they were expected to pay back. New clause 1 would get to the heart of that matter and it sits alongside amendments 5 and 6 in trying to understand where these companies are making excessive profits from the public sector.
I am sure that the Minister will tell me that this is a dreadful attack on the private sector and that we should not be saying that these companies are ripping the British public off and that they are legal loan sharks. However, I ask him: if he will not accept the amendments, will he commit to gathering the data about how much these companies have paid in tax, how much difference these have made to the value-for-money case for these businesses, and therefore how our communities will be able to pay back the sums involved?
I am sure that the hon. Member for Brentwood and Ongar would love to have £169 million to invest in his local community; there are many worthy causes that I am sure he would support. I am sure that the hon. Member for Hitchin and Harpenden would be interested in the £170 million that I believe Stevenage, near his constituency, will have to pay out to PFI companies. That money could be invested in the public infrastructure that we so desperately need.
I am sure that all of us would agree that we expect these companies to pay their tax, as they signed up to in these contracts, yet it is clear that they do not. So if the Minister is not prepared to accept these incredibly reasonable amendments in this environment, I hope that he will set out precisely what he is going to do to get our tax money back. All of us and all of our constituents need and deserve nothing less.
Peter Dowd (Bootle) (Lab)
It is again a pleasure to serve under your stewardship, Mr Howarth.
I thank my hon. Friend for tabling the amendment, which seeks a review of the effect that the measures we are discussing will have on PFI companies. The Government blithely assert, including in their notes on the Bill, that companies involved in public benefit infrastructure spending are an inherently low risk for tax avoidance. That is an odd claim, especially in the light of what my hon. Friend has said. We know that some PFI companies have engaged in profit shifting to non-UK jurisdictions. It does not make sense to say that just because the profits of a company are extracted from public investment it cannot seek to be paid in a way that is fiscally undesirable.
No one should bemoan the huge public infrastructure investment that the last Labour Government enabled. It was fixing many of the problems left from years of neglect in the public sector. All Governments have taken part in PFI. When PFI was in effect the only game in town, so to speak, many public authorities took up the chance to make the investment they needed; my hon. Friend identified some in my constituency that benefited from such investment. However, we know that some contracts have produced excessive costs for the public sector, where direct borrowing could have produced much lower ongoing costs and provided for more direct influence over the quality of some ancillary services. Therefore, it is right that a review be used to work out whether we should be privileging PFI companies with exemptions from these measures at the same time as knowing that they often benefit from guaranteed profits at the public expense.
Kirsty Blackman (Aberdeen North) (SNP)
I appreciate where the hon. Member for Walthamstow is coming from with the amendments. We support Labour on new clause 1, which calls for a review of how much we are spending and where the money is going. Good points have been well made about how companies are making more of a profit as a result of the changes in corporation tax rates.
On the other amendments, we are concerned about the possible impact that any changes to PFI would have on Scotland. We are still paying off a number of PFI projects in Scotland. I know that people say that all Governments have implemented such projects, but the Scottish Government have moved away from the PFI funding model because the SNP does not support it. We have the Scottish Futures Trust and not-for-profit delivery mechanisms, which mean that profits do not go to private companies.
Stella Creasy
To be clear, the evidence of the problems with the PFI model extends to the not-for-profit model. I encourage the hon. Lady to read the work of Mark Hellowell of the University of Edinburgh. No political party can claim the moral high ground when it comes to private finance in this country.
Kirsty Blackman
I appreciate the hon. Lady’s comments. The not-for-profit model that was set up when I was a local councillor, which built schools in Aberdeen, was significantly better than some of the previous rental models. Perhaps that was just because Aberdeen was particularly diligent with the not-for-profit model that it chose specifically for its schools funding project.
As I have said, I am concerned about the effect the amendments might have on the projects in Scotland that were put in place under the previous Scottish Executive. The SNP Scottish Government have been very clear that the old PFI models are not the way to go and that they are incredibly burdensome for the public purse. Although there is a shiny new building, quite often they saddle the public purse with repayments for a very long time, which can amount to much more than the original cost of the building. There is also less flexibility, because the rules of the private sector organisation have to be abided by.
I agree with the concerns raised about PFI models and that we should not use them. The SNP Scottish Government have recognised that and are using initiatives such as the Scottish Futures Trust, which has delivered a significant amount of funding, savings and benefits to the people of Scotland. As I have said, we support new clause 1 because we do not agree with PFI models and think that it is completely reasonable to reconsider them, but we do not support the Labour party’s other amendments.
Kelvin Hopkins (Luton North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Howarth. Rather than speak specifically to the amendment, I want to make a comment. My hon. Friend the Member for Walthamstow has raised some very important issues about PFI, but from the beginning it has been an outrageous rip-off of the public purse and the citizens of this country. It should be abandoned. Indeed, in his speech at our party conference, the shadow Chancellor suggested that we should take PFI contracts into public ownership, saving billions for the public purse over time. That is what I want. I have spoken against, voted against and written a chapter of a book against PFI, because it is utterly ridiculous and total nonsense. It is driven by ideology to try to drive as much of the public sector as possible into the private sector. That is what PFI is really about: it puts vast sums of public money into rich private pockets. I will pursue that view vigorously over the next few years.
The Financial Secretary to the Treasury (Mel Stride)
It is once again a great pleasure to serve under your chairmanship, Mr Howarth. Before I respond specifically to the amendments tabled by Opposition Members, I will set out the aims of the Bill and some details of how it will work.
Clause 20 and schedule 5 introduce new rules to limit the amount of interest expense and similar financing costs that a corporate group can deduct against its taxable profits. Interest is a deductible expense in the calculation of profit subject to corporation tax. Therefore, there is a risk of groups borrowing excessively in the United Kingdom, with the resulting deductions for interest expense eroding the UK tax base.
The new rules are part of the Government’s wider changes to align the location of taxable profits with the location of economic activity. The rules follow the internationally agreed recommendations from the OECD’s base erosion and profit shifting, or BEPS, project to tackle tax avoidance by multinational companies. The rules aim to prevent businesses from reducing their taxable profits by using a disproportionate amount of interest expense in the UK.
The schedule introduces a new part into the Taxation (International and Other Provisions) Act 2010 and will raise about £1 billion a year from multinational enterprises and other large companies. The rules take effect from 1 April 2017, as announced in the business tax road map published in 2016 and reconfirmed at the spring Budget this year. Maintaining that commencement date ensures that groups that have already made changes in light of the new rules are not unfairly disadvantaged and that there is no delay in protecting the UK tax base. Given the sophisticated nature of corporate finance, the rules are detailed and technical. However, the core effect of the rules, which aim to match deductions with taxable profits, is relatively simple.
All groups will be able to deduct £2 million in net interest expense a year, so only larger businesses—those with financing costs above that level—can suffer a restriction. Above that threshold, the core rules will restrict interest deductions to a proportion of the group’s UK earnings or the net external expense of the group, whichever is lower. I will discuss the rules in further detail.
First, the fixed ratio rule will limit interest deductions to 30% of the company’s taxable EBITDA—earnings before interest, tax, depreciation and amortisation. Secondly, the modified debt cap will limit interest deductions to the net external interest expense of the worldwide group; this rule is consistent with the recommendation in the OECD BEPS report. There are provisions to ensure that the rules will not adversely affect groups that are highly leveraged with third-party debt for genuine commercial reasons. Thirdly, the group ratio rule will allow groups to increase their deductions if their UK borrowing does not exceed a fair proportion of the external borrowing of the worldwide group. In addition, there are public infrastructure rules that provide an alternative but equally effective approach for companies that are highly leveraged because they own and manage public infrastructure assets.
The Bill provides rules to help address fluctuations in levels of net interest expense and EBITDA. Amounts of restricted interest are carried forward indefinitely and may be deducted in a later period if there is a sufficient allowance. Unused interest allowance can also be carried forward, for up to five years.
The Bill introduces additional provisions to ensure that the rules work for certain types of business, such as banks and insurers, joint ventures, securitisation vehicles and real estate investment trusts. There are also rules to deal with particular issues including related parties; leases; payments to charities; the oil and gas tax regime; incentives such as the patent box and research and development tax credits; and double taxation relief. Given the technical nature of the Bill, we need to deal with a wide range of corporate arrangements. We will, as always, continue to keep their detailed implementation under review.
I welcome the opportunity to debate amendments 5 and 6 and new clause 1, tabled by the hon. Member for Walthamstow. Amendments 5 and 6 propose a review within three months of Royal Assent on the effect of the provisions contained in the new chapter 8 proposed by the schedule on companies with PFI contracts. Legislating for a review of the rules within three months is unnecessary. The Government have already undertaken extensive work and consultation on the issue over the past 18 months. We will continue to monitor the impact of the legislation, and Government officials continue to meet key stakeholders impacted by the rules in the chapter.
Proposed new chapter 8 includes the public infrastructure rules designed to ensure that companies holding public infrastructure assets are not disproportionately affected by the corporate interest restriction. In particular, proposed new section 439 of chapter 8 contains a grandfathering provision for loans entered into by certain companies on or before 12 May 2016. Such companies are highly leveraged as part of their standard business model, given their fixed assets and fixed income flows. The grandfathering ensures that investors who entered into contracts to provide Government services in good faith are not unfairly impacted. That could be the case where the additional tax expense was not factored into original funding models and there is no scope to pass on any of the cost. Given that PFI projects are long-term in nature and provide many of our vital public services, the rules grandfather the treatment of interest payable to related parties to the extent that the loan was agreed prior to the publication, on 12 May 2016, of detailed proposals for the interest restriction rules.
Stella Creasy
The Minister says that he has met the stakeholders affected and is setting out how those companies might be impacted. Will he clarify which companies his officials have met to discuss these rules?
Mel Stride
With respect to the hon. Lady, I do not think I said that I had met all the stakeholders, but as part of their ongoing work in this area officials naturally meet a large range of officials. If she is keen to know exactly who they are and what types of companies, I would be happy to ask my officials to write to her with that information.
The hon. Lady also proposes a new clause, which would require a review within three months of Royal Assent of how tax relief is given for losses, deficits, expenses and other amounts in relation to PFI companies. PFI companies do not obtain any special treatment under the tax rules in the way that losses, deficits, expenses and other amounts are treated. Legislating for a review of these rules in three months is unnecessary. As we debated on Tuesday, the Government have already undertaken extensive work on the treatment of losses and deficits over the past 18 months and through extensive consultation. The Government will continue to monitor the legislation’s impact, and officials continue to meet key stakeholders impacted by the rules in this chapter.
I turn now to some of the more general and specific points that the hon. Lady has raised. In doing so, I should acknowledge the important contribution she has made over a long period in Parliament on the important issues surrounding PFI. She is right to point out that PFI contracts are the creatures of many different Governments. It would be widely accepted that many of the issues that have arisen, and to which she and other Members have alluded, certainly occurred under the watch of the previous Labour Government. She rightly points out that not all of those contracts are perfect. That is evidenced by the fact that this Government have secured a rebate of about £2.5 billion by working with the private sector and raising funds through that approach.
We have had a general discussion about PFI, and proposed chapter 8 gives rise to the question whether PFI infrastructure projects should be treated differently from other projects that would otherwise be subject to the interest restriction. I have two important points to make. First, these are infrastructure projects, so they are, by their very nature, highly leveraged. They are projects where large amounts of interest are often part of the natural, right and proper, way in which they are constructed.
The second point, which in a sense follows from that, is that of proportionality. To what degree does one apply this kind of approach to a business of that particular nature, given that the downstream revenues from PFI arrangements cannot be easily adjusted to accommodate the provisions that would otherwise apply in the Bill?
The hon. Lady raised two specific points. One was related to the Green Book calculations. In 2012 we set up the operational efficiency programme to deliver savings from existing programmes. That brought in £2.5 billion. We also introduced the new PF2 model, to offer better value for money and greater transparency in the operation of these arrangements.
Kelvin Hopkins
Rather than having another elaborate PFI system, would it not be simpler, in the health service and in the education sector, to build by traditional public borrowing, which is extremely cheap and would save billions for the taxpayer?
Mel Stride
With great respect to the hon. Gentleman, I think that is probably a little out of scope of the issues being dealt with in the Bill. I make the point that his party is committed to bringing a lot of these back in, as it has described. That is a fine idea in principle, but it will cost a huge amount of money and there has been no suggestion from his party as to how it would be raised, what taxes will have to be raised as a consequence, or what additional borrowing will have to occur in order to do that.
Peter Dowd
I do not think that the Minister has recognised the paradigm shift in the public’s view of PFI. In fact, Mr Howarth, as you know, in the area where we live there is a big debate at the moment about a significant infrastructure project, which is creating all sorts of tensions because of the implications of the way it is constructed. I am not criticising anybody, because all political parties—certainly the two main parties—have dipped their fingers, possibly even up to their shoulders, into PFI, so it is not a question of pointing a finger at anyone.
My hon. Friend the Member for Walthamstow eloquently and forensically identified some of the issues, and I thank her for that. However, things are moving on and we have to keep up with the tone outside in the country. People are becoming increasingly suspicious of PFI contracts. I know that we are not discussing the whole question of PFI. I completely accept that, but there is a question about the generality of the measure, to contextualise it. What we have here in the Bill is one of the most complex measures ever legislated for in Britain. Schedule 5 alone stretches to 157 pages of dense text, which is far longer than the entire length of the majority of Bills that we debate in Parliament, and I daresay is longer than the entire tax code of some jurisdictions. We have to take that into account; that is the context we are working in.
The length, of course, relates to the complexity of what the measure tries to achieve, but sometimes the complexity and length do not improve the operation of law. The excessive length of the existing tax code is well known. In reality we have in PFI, as identified in amendment 28, a range of services in the public sector: water, sewerage, gas and electricity, telecoms, railway facilities, roads, health facilities—referred to earlier—educational facilities, court and prison facilities, and waste processing facilities. We have moved beyond dealing with this as just a technical issue—it is a wider issue—but for today’s purposes we must identify how much those projects cost the taxpayer and how much of our tax take they denude us of.
The UK’s engagement in the OECD’s base erosion and profit shifting project, which the Minister referred to, will be welcome if it really does lead to the end of practices that have denuded Exchequers here and abroad of much needed receipts, but many people are not convinced about that. They genuinely are not convinced that PFI projects, which have been in operation for the best part of a quarter of a century, have given us the best value for money. There are deep concerns about the Exchequer being denuded of tax, especially when many of these projects, if not all of them, have the copper-bottomed guarantee of the British state. They are hardly the riskiest ventures in the world. In fact, they are probably some of the safest. We have to take that into account. There has been a shift in people’s attitude to PFI. We must recognise that things have moved on.
We certainly do not oppose the overall aim of reducing companies’ ability to shift profits through artificial interest charge arrangements—no one is suggesting that—but as I and others have said, there is a concern that those deeply complex measures and the many loopholes have already found their way into the minds of tax advisers and into the accounting practices of many corporations. I said to the Minister only the other day that we are here to guard the guards, and I know that he recognises that we are perfectly entitled to ask many questions.
The debate about PFI—the concept, the philosophy, the notion—will take place elsewhere. The shadow Chancellor mentioned it in his party conference speech. We will take the issue out to the public, but given the context we want to delve down, and one of the only ways that the Opposition have to delve down is to ask HMRC to report on the implications. Amendment 28 would do that.
The Chair
I am going to call the hon. Member for Walthamstow, who tabled two of the amendments. The hon. Member for Bootle cleverly managed to balance the context and the amendments, but we need speeches that, although they might refer to the context, actually speak to the amendments at hand.
Stella Creasy
Be under no illusions, Mr Howarth; I intend very much to speak to the amendments at hand.
The Minister argued, slightly bizarrely, that we already have information about whether the changes would affect PFI companies, because the Government have been able to assess that, yet they are rejecting our call to put that information in the public domain. The Minister said clearly that his officials have met PFI companies, and I asked him to clarify which companies. I hope that when he meets stakeholders he will meet my local hospital, which is dealing with the difficult consequences of PFI deals for its financial position. I would argue that officials who are essentially having to sack nurses to pay back PFI loans are equally stakeholders, so I would be interested to know whether he has met any of them.
Kelvin Hopkins
Does my hon. Friend have a figure for the total cost of PFI repayments every year to the national health service? That would illustrate the enormous burden of PFI schemes on our health service.
Stella Creasy
Well, this is why how much tax these companies pay matters. I hate to tell the Minister how to do his job, but I have looked at the PFI and public sector comparator documents used to assess the value for money of the deals, and they explicitly talk about the levels of tax that the companies pay and, indeed, look at how those would be traded off against the cost of borrowing to the public sector.
My hon. Friend the Member for Luton North asks about the £300 billion for which we are now indebted in repayments on the loans, as against the £55 billion of outlay. One reason why we took on the £300 billion was that we expected to get back in tax from the companies money to trade off against it. That was an explicit part of the value-for-money calculations done by the Departments. That is why the Green Book matters. That is why I am slightly troubled when the Minister says that tax treatment is part of the deal, but does not then want to give us those data. He says that his Department has looked at the matter and therefore the amendment is unnecessary. Will he therefore commit simply to publishing the information used to assess whether the exemption was in the public interest? It can be in the public interest only if it does not affect the amount of tax that we get back from the companies to go towards the £300 billion that we will have to pay out as a consequence of signing the contracts.
I encourage the Minister to read the work from the National Audit Office on this issue, and specifically about the tax adjustments made in the contracts and whether that really did get value for money for us, and indeed its assessment of PF2. Far be it from me to suggest that pride comes before a fall, but I think that he will find it as troubling as I do that we have not cracked how best to borrow, given that, as my hon. Friend the shadow Minister says, we are always a good bet. Frankly, we never let hospitals or schools go bust, so we always repay our debts. I also encourage my colleagues from north of the border in Scotland to do that, given that the problems also apply to the Scottish Futures Trust. This is about the use of private finance companies. Their tax take is absolutely part of the calculation.
I note, too, that the Minister did not address at all new clause 1 and the levels of tax that the companies signed up to pay. Again, that is very troubling. Either the Minister is telling us that he knows and does not want to tell us, or he does not know and does not care. Either way, we as taxpayers should know and should care, because that money should go towards the £300 billion.
The new clause matters because we know that tax relief on interest paid to shareholders and other affiliates where the debt is held at arm’s length, which is what many of these companies do, has been widely abused, with shareholders injecting debt for the sole purpose of reducing their pre-tax profits and hence the company’s corporation tax. When the Minister gives the tax relief to these particular companies, which he admits are highly leveraged, he is giving them a bonanza. All the amendments do is ask the Government to admit just how much that is, because all of us will have to recognise that that money, which the companies will be able to pay off against their loans, is money that we will have to find to bridge the gap in relation to the £300 billion that we have now committed to paying them. It is entirely in order and within the scope of this legislation, Mr Howarth, that we should ask for that information.
For the avoidance of doubt, let me be very clear that I have absolutely no intention of giving these companies a penny more of taxpayers’ money. I do not wish to get into litigious battles with them about their tearing up their contracts and giving their lawyers an opportunity to claim even more money. Frankly, they have had more than enough from the British taxpayer. I am determined that we can table legislation and show these companies that we are serious about recognising where they have generated excessive profits, where we can learn from the windfall tax of the previous Labour Government, to be able to bring them to the table to renegotiate the costs and get the money back for the British taxpayer so that we can properly invest in infrastructure.
There is another debate to be had about the range of credit available to this country, but with this legislation and the tax breaks that this Government are giving to these companies, it is the taxpayer who will lose out, and we deserve to know by just how much.
Anneliese Dodds (Oxford East) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Howarth. I have just two comments. The first is in response to what the Minister said about the extent to which the new measures implement OECD recommendations. The second is a comment about our amendment 28.
As I am sure the Minister is aware, the OECD BEPS recommendations, and specifically recommendation 4, which applies to this area, offer a range of possibilities when it comes to deciding what the write-off can be. The cap is allowed to be between 10% and 30%. Her Majesty’s Government have decided to go with 30%, but it is feasible for states to go down to 10%. When the EU looked at implementing this measure through the anti-tax avoidance directive, which of course applies to us for as long we are still a member of the EU, again a range between 10% and 30% was given. I have not yet heard why the Government have chosen 30% rather than 10%.
On amendment 28, our request for a review is specifically about the rationale for having special provisions for public infrastructure-providing companies. That is in the light of some quite worrying developments occurring around large swathes of British public infrastructure now being owned by firms and in effect provided through debt finance.
Stella Creasy
My hon. Friend is making a powerful point about the nature of these companies based overseas. Does she share my frustration that the Minister seems to think that does not matter because these clauses will only affect companies in the UK while not recognising that those companies have only nominal addresses in the United Kingdom, with their parent companies being based overseas? They are able to trade off the tax exemptions that the Bill will bring in. All of these PFI infrastructure companies may well claim to be UK-based for tax purposes to trade off these incomes, but actually they will be in Guernsey and Jersey, the Cayman Islands and the like. It is a con.
Anneliese Dodds
I am grateful to my hon. Friend for making those points. Indeed, that issue came up in Committee of the Whole House. There needs to be much more muscular engagement in questions around profit shifting between jurisdictions and especially between those that have low or no-tax regimes, where there appears to be a lot of evidence of harmful tax practices.
Mel Stride
I thank hon. Members for their contributions to this important and interesting debate. To come back on a few of the points made by the hon. Member for Walthamstow, at the heart of this there is a distinction. She kept raising the issue of how PFI organisations should have taken into account that tax treatments could change. To some degree that is a fair argument, but there is a distinction for a company that is involved in highly leveraged infrastructure projects, which after all is delivering to public services. While she might be right that many PFI contracts have been very lucrative, not all of them have been; some are far more marginal. She has to conjure with the possibility that, if we go down the road she suggests, some may fail. That is an important point for her to consider.
On the hon. Lady’s second point, it may be the case that part of the rationale for entering into PFI agreements was an assumption about what future taxes may be paid under the pre-chapter 8 system. However, such a decision would have been taken at that time, on that basis, and that is nothing other than what she would expect them to do. An important point is that after the announcement of these arrangements all PFI arrangements will not be subject to chapter 8; they will be under the arrangements we discussed previously.
The hon. Lady talks about smoke and mirrors in relation to overseas businesses effectively brass-plating over here, with all the profits being diverted elsewhere. There is plenty of anti-avoidance legislation out there, including the diverted profits tax, to address those matters.
The hon. Member for Oxford East raised the BEPS project and recommendation 4. She is right that there is a corridor—a range of percentages that could be applied for the corporate interest restriction—and that is between 10% and 30%. The Government have a balance to strike because of the importance of the UK remaining competitive. Germany, Italy and Spain have all elected to go for 30%. It should not be overlooked that these measures are bringing in £1 billion extra every year in which they operate, which is a considerable increase in the tax take. The Bill will bring in about £16 billion across the scorecard period, about £5 billion of which will be from this one measure. On that basis, I ask the Committee to reject the amendments and to support the clause and the schedule.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Schedule 5
Corporate interest restriction
Amendment proposed: 5, in schedule 5, page 364, line 10, at end insert—
“443A Review of effects in relation to PFI companies
(1) Within three months of the coming into force of this Chapter, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review of the effects of the provisions of this Chapter in relation to PFI companies.
(2) The review shall consider in particular the effects if the provisions of—
(a) the Chapter, and
(b) the exemption in section 439 were not to apply to PFI companies.
(3) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.”—(Stella Creasy.)
This amendment requires a review to be undertaken of the impact of the provisions of Chapter 8 of new Part 10 of TIOPA 2010 in relation to PFI companies and if the provisions did not apply to PFI companies.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
Amendment 29, in schedule 6, page 479, line 15, at end insert—
“Chapter 7
Review and policy statement
1218ZFB Review of operation of this Part and policy statement
(1) No later than 30 September 2020, the Chancellor of the Exchequer shall lay before the House of Commons a report of a review and a policy statement in accordance with the provisions of this section.
(2) The review shall consider—
(a) the number of touring exhibitions benefiting from the relief,
(b) the number of other exhibitions benefiting from the relief,
(c) an assessment of the operation of the provisions.
(3) The policy statement shall set our proposals for the continuation, discontinuation or modification of the relief from 2022 onwards.”
This amendment would make statutory provision for the 2020 review of the operation of the new museums and galleries tax relief, including consideration of its effects and its future beyond 2022.
That schedule 6 be the Sixth schedule to the Bill.
Mel Stride
The Government recognise the cultural value of museums and galleries across the United Kingdom, and understand the role they play in local communities. Clause 21 and schedule 6 provide support to those institutions across the country by introducing a corporation tax relief for the production of new exhibitions. The relief will encourage large and small museums and galleries to develop creative new exhibitions and to display their collections to a wider audience. To provide further incentive for institutions to tour their best exhibitions across the UK and abroad, there will be a higher rate of relief for touring exhibitions.
There are more than 1,700 officially accredited museums and galleries in the United Kingdom, as well as many other galleries without permanent collections. The relief introduced by clause 21 recognises the importance of new, creative exhibitions to those cultural institutions.
The Government originally intended the relief to be available solely on temporary and touring exhibitions. However, a consultation over autumn 2016 made it clear that that would not be accessible to a number of smaller museums and galleries. To ensure a wide range of institutions across the country are able to access the relief, autumn statement 2016 announced that it would be extended to permanent exhibitions. Given that they can at times be much more expensive than temporary exhibitions, the relief will be capped at the equivalent of £500,000 of qualifying expenditure per exhibition, to allow the change without significantly increasing costs to the Exchequer.
Following the responses to a consultation document released shortly after the autumn statement, the Government have also amended the legislation to include exhibitions with an element of live performance where that is not the main focus. Through constructive and positive engagement with the industry, we have been able to design a relief that will work across the sector.
Clause 21 introduces a new corporation tax relief and payable tax credit for the qualifying cost to museums and galleries of producing a new exhibition. It will allow qualifying museums and galleries to claim a payable tax credit worth up to 25% of the cost of developing a touring exhibition and 20% of the cost of a non-touring exhibition. The clause will take effect from 1 April this year, allowing museums and galleries to benefit from the date that was announced and expected.
The relief is aimed at museums and galleries with charitable or educational objectives. Across the country, such institutions play a major role in society by maintaining important objects and educating people about different cultures or local history. For that reason, the relief will only be available to charitable or local authority-owned museums. Exhibitions that are not open to the general public or that are run purely to advertise or sell goods or services will not be eligible.
Peter Dowd
No doubt all hon. Members support these measures, which will see more people, particularly children and young people, having the opportunity to access touring museum and gallery exhibitions and expand their educational horizons.
The United Kingdom leads the way with its diverse range of museums and galleries. It is estimated that there are 2,500 museums and galleries in the UK, which collectively receive more than 100 million visits a year. That is quite substantial. As you will know, Mr Howarth, some of the finest museums and galleries in the country are in our own city region: the Walker Art Gallery, the Atkinson, the Lady Lever, the Merseyside Maritime Museum, the World Museum, the International Slavery Museum, the Beatles Museum—the list goes on.
The huge impact the sector has on the economy cannot be discounted. According to the Department for Digital, Culture, Media and Sport, the culture sector accounts for 10% of GDP. Broadly speaking, £1 in every £1,000 in the UK economy is directly related to the museum and gallery sector, and there is a spend of more than £650 million a year.
The funding of museum and gallery exhibitions varies between national museums and the smaller independent museums. On average, national museums generate almost half of their own income, while the rest comes from the Government. Small independent museums are often fully funded by private donations, ticket sales and sponsorship. Most museums and gallery exhibitions are limited to large city centres, with a sizeable proportion in the capital. Domestically touring exhibitions allow the opportunity for people who would not otherwise have access to museums and galleries to see, visit and be in contact with them. We are fully behind the measures in schedule 6, which seek to support smaller companies that produce touring museum and gallery exhibitions and struggle to break even.
The Chair
I think the hon. Gentleman is referring to the Minister. I assure him that I have nothing further to say about it.
Peter Dowd
Which is a shame, I have to say.
The Minister referred to consultation. Consultation about what we want to do in the future, what people would like to see from the relief and how it might operate is in advance of the implementation. We consult, and we think this or that is a good idea, but it is also important to find out whether the relief has had the effect that the consultation wanted to achieve. One of the only ways to establish whether the consultation and the implementation have been effective is a review, and that is what we seek. If we are to have these reliefs, we must review whether they are doing the job they are supposed to do. The amendment is fairly simple in that regard.
Kelvin Hopkins
I support what my hon. Friend said, and I hope Members will support the amendment and that it will be successful. I have a brief comment to make.
In my ideal world, we would fund museums and the rich cultural heritage we have not through tax reliefs but by direct funding. We would collect all the tax and then pay it to museums and galleries directly through local authority and national funding and by specific grants where necessary. There would, of course, be charitable and private donations as well, but the great bulk of it would be in the public sector. I hope we can look towards a world where we have direct public funding, rather than a complex jungle of tax reliefs, and collect all the tax and forget about the tax reliefs.
The Chair
The hon. Gentleman has a tendency in this Committee to lead us down paths beyond the scope of the amendments he addresses. That being a matter of broadening our cultural horizons, I have been very lenient with him, but I hope he will in future stick to the matter at hand.
Mel Stride
I thank Opposition Members for their contributions. The hon. Member for Bootle calls once again for a review. We seem to be having a review-fest. Of course, there are always some arguments for having a review, but the critical thing is whether it is proportionate and sensible, given the measures we are taking on consultation. We will, of course, keep all these issues and the concerns he raised about the possible misuse of the provisions for the purposes of tax avoidance closely under review.
Peter Dowd
I understand where the Minister is coming from in his reference to a review-fest. I referred earlier to the size of the Bill, which is one of the longest Finance Bills in the history of Parliament. Given that the Government have started the festival off with the size of the Bill, we are perfectly entitled to a festival on reviews of that huge Bill. I am sure the Minister agrees with that.
The Chair
I do not think we want to get bogged down in the length of the Bill itself, but should rather confine ourselves to the amendments.
Mel Stride
Quite right, Mr Howarth. I think we should just agree that I will see you at Glastonbury next year. Sorry—I will see the hon. Gentleman there; I might see you there as well, Mr Howarth.
On the specific point the hon. Gentleman raised about ensuring that relief is not abused, anti-avoidance rules are clearly critical to the long-term success and stability of the museums and galleries exhibition tax relief. The Government will include rules similar to those applied under the film tax relief to prevent artificial inflation claims. In addition, there will be a general anti-avoidance rule, based on the general anti-abuse rule, denying relief where there are any tax avoidance arrangements relating to the production. During the consultation, respondents generally said that the strategy appeared robust and did not identify any additional opportunities for abuse. Of course, as I have said previously, HMRC will continue to monitor these important matters. On that basis, I hope that the hon. Gentleman will not press his amendment.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Schedule 6 agreed to.
Clause 22
Grassroots sport
Anneliese Dodds
I beg to move amendment 30, in clause 22, page 27, line 25, at end insert—
“217E Review of operation of this Part
(1) Within fifteen months of the coming into force of this Part, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review about the operation its provisions (including in relation to different eligible sports).
(2) The review shall, so far as practical, identify the extent to which the provisions have benefitted particular eligible sports.
(3) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.”
This amendment would make statutory provision for a review of the new relief for grassroots sport, including identification of benefits to particular sports where possible.
Anneliese Dodds
I should at the start declare an interest in this topic: my partner is an amateur football referee in the Uhlsport Hellenic League and others.
First, we need to be clear that the measures have been introduced, according to the Government’s consultation of last year, at least partly due to a lack of other funding sources for sport. That is obviously rather worrying, particularly following widespread concern that the legacy of the Olympic games has not been capitalised on to build the habitual involvement of the wider population in sport.
We also need to consider this measure in the context of other taxation measures that affect sports facilities, not least the changes to business rates and the fact that there was such a long postponement of the uprating. That has had a significant impact on many clubs, whose headquarters or area of operation is also that of a small business; I am particularly thinking about riding schools, for example, which may have seen a substantial increase in their business rate. There is also an unfortunate interaction between small business rate relief and the relief provided through the community amateur sports clubs relief. I mention that because it is important that we do not look at this issue entirely in isolation, because corporate support for sport can be enormously fickle; it will relate to the nature of the business environment. Many smaller sports clubs—exactly those the measure seeks to support—need reliable funding over the long term, and they particularly need to know that their premises will be supported over the long term.
For those reasons and others, we believe that there needs to be a thorough review of the benefits of this proposed relief for grassroots sports. We think it particularly important that that review examines which sports would be supported through the mechanism. That is especially important when it is clear that there are funding gaps in certain areas of sport in Britain, compared with other countries. For example, the provision of athletics facilities outside the capital is very patchy, particularly for amateur athletics. That is why we request a review of the measure.
Mel Stride
Before I speak to the amendment, I will set out for Committee members the general background and aims of the clause. Clause 22 introduces a new tax relief to support investment in grassroots sports by companies and our sports national governing bodies. It will help governing bodies channel their profits into grassroots sports and will give companies a simple means of making valuable contributions to support grassroots sport activity.
The changes made by the clause will allow qualifying expenditure on grassroots sports as a deduction from the company’s total profits in calculating their corporation tax profits. Sport governing bodies and their subsidiaries will be able to make deductions for all their contributions to grassroots sports. Companies will be able to make deductions for all contributions to grassroots sports through sport governing bodies, and deductions of up to £2,500 in total annually for direct contributions to grassroots sports. The relief has been designed to be simple to make it attractive to potential contributors and to allow as many organisations that support grassroots sports to benefit as possible.
Contributions must facilitate participation in eligible amateur sport, and the activities must be open to a sufficiently broad section of the public. The hon. Member for Oxford East asked who would be included and excluded. I am happy to write to her on that matter so that she has all the information she needs. No payments to participators will be allowed, other than to cover the reasonable cost of participation. Such requirements will ensure that payments are made for the intended purposes and will prevent payments from being made for personal benefit.
Following the calling of the general election, clause 22 was removed from the original Bill. The clause will take effect from 1 April 2017 so that taxpayers can still benefit from the changes being made from the original commencement date.
I do not want to dwell too long on amendment 30 because I am conscious that we are eager to make progress on what is a very lengthy Bill. On the issue that the hon. Lady raised about the interplay between business rate relief and sports club reliefs, if she writes to me with her questions I will be happy to provide the information to her. However, I can reassure hon. Members that the Government ran a full consultation on the policy and the legislation prior to its inclusion in the Bill. During that process, there was extensive engagement with key stakeholders to ensure that the legislation is well designed and targeted at meeting its policy objectives. I was pleased to see a recent article in World Sports Advocate welcoming this new relief as
“a welcome incentive to support community sport for everyone”.
An important aspect of the legislation is that it has been deliberately designed to be as simple as possible to operate. There is no new reporting requirement and we want the new relief, particularly the relief for small deductions by companies, to benefit a wide range of sports in the UK without added administration burdens and costs. The Department for Digital, Culture, Media and Sport will of course continue to liaise closely with the sports governing bodies on a range of issues through their existing processes. A review, particularly to the timescale proposed, is neither practical nor necessary, and I hope that Opposition Members will not press their amendment to a vote.
Anneliese Dodds
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 ordered to stand part of the Bill.
Clause 23
Profits from the exploitation of patents: cost-sharing arrangements
Anneliese Dodds
I beg to move amendment 31, in clause 23, page 32, line 45, at end insert—
“357GCZG Review of changes to provisions for cost-sharing arrangements
(1) Within fifteen months of the passing of the Finance (No. 2) Act 2017, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review about the effects of the changes to cost-sharing arrangements.
(2) In this section, “the changes to cost-sharing arrangements” means the changes to this Part of this Act made by section 23 of the Finance (No. 2) Act 2017.
(3) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.”
This amendment would make statutory provision for a review of the effects of the changes relating to cost-sharing arrangements on profits from the exploitation of patents or similar intellectual property.
Anneliese Dodds
As hon. Members will be aware, the patent box system in the UK was introduced following the Labour Government’s 2009 Budget, which committed to,
“consider the evidence for changes to the way the tax system encourages innovative activity and the relative attractiveness to global firms as they make decisions on where to locate their research and development and other innovation activities.”
As a result of that commitment, the patent box was created, intended to cover income from patents dating from April 2013. In 2010, before it came into practice, it was altered by the coalition Government.
The patent box rules reduced the corporation tax that accrues to profits from the development and exploitation of patents and some other forms of intellectual property. Our regime was identified during the OECD BEPS process, which we have already referred to this morning, as harmful and open to abuse. It was also identified as potentially harmful by the EU’s code of conduct group in 2013. It is therefore positive to see attempts to tighten the regime, following other measures that were discussed last year.
We have already seen a shift to the nexus basis for identifying the fraction of profits that will be allowed in a claim through the patent box as derived from R and D activities. That brings us in line with international best practice. It is good to see other countries adopting that approach as well. In this context, the British tax regime undoubtedly will have some impact on business investment decisions, but comparative evidence suggests that other factors, not least infrastructure and the availability of highly skilled researchers, technologists and other workers, are most significant to our overall competitiveness.
Mel Stride
The Opposition amendment would require the Government to review the effects of the changes to cost-sharing arrangements made in clause 23. Before I set out why that review would be inappropriate, I will remind Committee members of the background of the clause and what it is designed to achieve.
The clause introduces provisions for companies undertaking R and D collaboratively under a cost-sharing arrangement that will ensure that those companies are neither advantaged nor disadvantaged compared with those undertaking R and D outside such an arrangement. Following the calling of the general election and subsequent wash-up negotiations between the Government and the Opposition, clause 23 was removed from the Bill that became the Finance Act 2017. The Government propose that the provisions in the clause will apply from 1 April 2017 as originally intended and announced.
The UK patent box was introduced by the coalition Government in 2012. It provides a reduced rate of tax to companies exploiting intellectual property, such as patents, to incentivise them to grow their businesses and to create jobs in the UK. The Finance Act 2016 included changes to the patent box rules in line with the new international framework agreed by the OECD for intellectual property regimes, as part of the BEPS action plan. The main change was the introduction of the R and D fraction, which connects the amount of profit from an item of intellectual property that can benefit from the patent box to the proportion of the R and D activity undertaken by the claimant company.
The 2016 Act did not directly address R and D undertaken as part of cost-sharing arrangements, as it required further consultation to ensure that, as the hon. Member for Oxford East pointed out, very complex collaborative arrangements are appropriately addressed. Following completion of the consultation, the clause now adds specific provisions to deal with cost-sharing arrangements.
Under a cost-sharing arrangement, typically companies agree to undertake a proportion of R and D activity as part of a collaborative project, therefore receiving a commensurate proportion of income if the project is successful. That means that the calculation of the R and D fraction must take into account how the company has discharged its proportion of the R and D costs throughout the life of the arrangement.
The arrangements create specific challenges in the application of the OECD framework. Over the life of the arrangement, the claimant’s R and D activity may fluctuate year on year and trigger additional top-up contributions—balancing payments—payable to and from the claimant company to other companies in the cost-sharing agreement. Although at the end of the project the claimant may have met its agreed proportion of R and D costs, the interim position can differ greatly. Without providing a specific mechanism to deal with the treatment of the payments, the claimant’s R and D fraction would be unduly depressed, putting it at a comparative disadvantage to claimants undertaking R and D outside a cost-sharing arrangement. The changes made by clause 23 are therefore exclusively focused on addressing that issue. Specifically, balancing payments made by the claimant will generally be treated as if subcontracted to the other member of the cost-sharing arrangement, so the impact on the fraction will depend on whether the two parties are connected.
It might be helpful at this stage to remind the Committee that under the revised patent box rules, payments to connected subcontractors reduce the R&D fraction, as does spending on acquired intellectual property, in line with the OECD guidelines. Balancing payments received by the claimant—that is, receipts—will be offset against outgoing payments, again depending on the relationship between the parties.
The hon. Lady raised the question whether that could be used for the purposes of tax avoidance. My comment is that the OECD base erosion and profit shifting project agreed an acceptable framework for intellectual property regimes that would address concerns about profit shifting, and the UK patent box regime was revised in the Finance Act 2016 to align with that framework. The changes ensure that the amount of profit and benefit from the patent box is restricted to the proportion of research and development undertaken by the company when compared with the total research and development. As a result of the changes, the payments and receipts should net out to ensure that, at the end of the project, the claimant’s R&D fraction reflects only the costs it has incurred to meet its agreed share of R&D activity.
Amendment 31 would impose a requirement on the Government to undertake a review of the effects of these changes to the patent box regime. However, the Government have carefully considered the regime and consulted extensively with stakeholders to ensure that the changes comply with the relevant international frameworks and provide no opportunities for abuse. The Government regularly publish statistics on the patent box and will continue to monitor the impacts of both the patent box and these legislative changes. On those grounds, I urge the hon. Members to reject the amendment.
Anneliese Dodds
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 23 ordered to stand part of the Bill.
Clause 24 ordered to stand part of the Bill.
Schedule 7 agreed to.
Clause 26 ordered to stand part of the Bill.
Clause 27
Substantial shareholding exemption
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendments 1 and 2.
Clause 28 stand part.
Mel Stride
Clauses 27 and 28 deal with the exemption from corporation tax on gains and losses arising on certain disposals of shares, known as the substantial shareholding exemption, or SSE. Clause 27 simplifies the substantial shareholding exemption by removing some conditions that impose unnecessary administrative burdens. Amendments 1 and 2 to clause 28 together ensure that the definition of a substantial shareholding in companies owned by institutional investors applies for the whole of the SSE rules, as intended. Clause 28 introduces a new and simpler SSE for companies owned by some tax-exempt institutional investors; it will help to promote the UK as a place where global investors can establish and manage their investments in trading businesses, infrastructure projects and real estate.
The exemption was originally introduced in 2002, with the aim of eliminating the potential double taxation of trading profits when a corporate shareholder disposes of a large shareholding in a trading company or sub-group. That allows a group of companies to restructure its trading operations without facing a further tax charge. The value of the shares being sold generally reflects profits that have already been taxed, so a tax on disposal of the shareholding would amount to another layer of taxation. The Government announced a consultation on the existing rules at Budget 2016, with the aim of simplifying the rules and making the UK more competitive globally.
The changes made by clause 27 will simplify the regime in a number of ways, affording greater certainty to the business community at negligible cost. Those changes include removing the onerous condition that the company making the share disposal must show that it, and any group of which it is a part, does not have substantial non-trading activity. Previously, the company making the disposal would have had to establish the level of trading activity across a group, which could be worldwide. The change ensures that all companies holding large shareholdings in trading companies can benefit from the exemption, with a reduced administrative burden. They also extend the ownership period in which a substantial shareholding must be held in order to qualify. That ensures that companies can continue to benefit from the exemption in instances where shareholdings are disposed of in tranches over many years, or where an initially large stake in a growing company is diluted to below 10% by new share issues.
The changes made by clause 28 provide a simpler exemption for companies owned by a specific class of investor, defined as qualifying institutional investors. Those include pension funds, widely marketed UK investment funds, life assurance funds and other large international investors that would be exempted from UK tax on their chargeable gains if they held shares directly. The clause allows them to organise their investments through UK holding companies by removing tax barriers. At present, most choose to locate their holding companies in a variety of other European jurisdictions that have effective share exemption regimes. Clause 28 provides an exemption without regard to the nature of the business activities of either the company making the disposal or the company in which it has a substantial shareholding.
Government amendments 1 and 2 are essential to ensure that institutional investments in shares costing at least £20 million always qualify for SSE. That is an extension of the general SSE threshold that requires holdings to be at least 10% of the shares. Unless an amendment is made, the £20 million rule would apply to investments in real estate or other non-trade activities but not to other activities that are equally important to the UK, such as investments in major infrastructure projects or other trading companies.
The changes introduced by the clauses will make the UK tax regime more competitive globally and will incentivise these institutional investors to hold and manage their investments from the UK, with negligible cost to the Exchequer. Following the calling of the general election, these clauses were removed from the Finance Act 2017. The changes are almost wholly relieving and so the Bill provides for them to take effect retrospectively, so that taxpayers can still benefit from the changes being made from the original commencement date. The clauses simplify the corporation tax regime and make the UK a more attractive location for investment. I urge the Committee to accept amendments 1 and 2 and commend clauses 27 and 28.
Anneliese Dodds
I have a couple of brief questions. Clause 27 provides the Treasury with new powers to regulate the list of approved investors that qualify for the substantial shareholding exemption. It would therefore be helpful to know what checks will be placed on the Treasury’s use of those new powers. In its assessment of the measure, the Treasury said that the financial impact would be negligible, which sounds slightly peculiar. Any further information about that would be gratefully received.
I understand the rationale for the measure in clause 28, which will shift the qualifying conditions for exemption from the activities of the disposing company or the company being disposed of to instead focus on, as described by the Minister, the shareholding for which the disposal is made and to the other shareholders of the company disposed of. I would be interested to learn whether the Minister believes that the new measures will extend beyond trading companies to encompass, for example, commercial real estate. What assessment has he made of the likely impact that might have?
More broadly, I am keen to learn how the Government are trying to balance the need to ensure that tax treatments do not artificially impact on commercial decision making with the need to prevent any potential for abuse.
Mel Stride
The hon. Lady asks a large number of technical questions, which are gratefully received, but I hope she will forgive me if I drop her a note on the more specific points. The measures have been scored by the Office for Budget Responsibility as having a negligible cost. They are independently assessed and scored by that authority. I hope on that basis we can move forward.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Substantial shareholding exemption: institutional investors
Amendments made: 1, in clause 28, page 38, line 5, leave out from “applies” to “in” in line 6.
Amendment 2, in clause 28, page 38, line 10, leave out “paragraph 7” and insert “this Schedule”.—(Mel Stride.)
Clause 28, as amended, ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Graham Stuart.)
Finance Bill (Fourth sitting)
Thursday 19th October 2017
(6 years, 6 months ago)
Public Bill CommitteesRead Full debate Finance (No.2) Act 2017 View all Finance (No.2) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 19 October 2017 - (19 Oct 2017)
The Chair
With this it will be convenient to discuss the following:
That schedule 8 be the Eighth schedule to the Bill.
Clause 30 stand part.
Clause 31 stand part.
That schedule 9 be the Ninth schedule to the Bill.
Clause 32 stand part.
New clause 3—Deemed domicile: review of protection of overseas trusts—
“(1) Within fifteen months of the passing of this Act, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review about the operation of the provisions for the protection of overseas trusts in relation to deemed domicile.
(2) The review shall in particular consider—
(a) the effects of those provisions on the Exchequer,
(b) the behavioural effects of those provisions, and
(c) the effects on the matters specified in paragraphs (a) and (b) if those provisions were repealed.
(3) For the purposes of this section, “the provisions for the protection of overseas trusts” means the provisions inserted by paragraphs 18 to 38 and 40 of Schedule 8 to this Act.
(4) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.”
This new clause requires a review to be undertaken of the effects of the provisions for protecting overseas trusts from the new provisions in relation to deemed domicile.
Peter Dowd (Bootle) (Lab)
As ever, it is a pleasure to work under your stewardship, Mr Walker, and your perfect pronunciation of the word “schedule”.
I would like to deal with the Government’s overall intention behind this group of clauses and schedules reforming non-domiciled status. Under the measures being introduced through the Bill, an individual who has been resident in the UK for 15 out of the last 20 years will be considered UK-domiciled for the purposes of income tax, capital gains tax and inheritance tax. From appearances, one might think that overall the Government are finally doing away with non-dom status, but that is far from fact.
The changes in the measures are superficial—one could even say artificial—and designed to give the impression that the Government are seriously clamping down on tax avoidance. Why else would an exemption be built into the measures for offshore trusts? Another question is: why else would the Government have given a grace period for those non-doms affected to get an offshore trust if they do not have one already? Another question begging for an answer is: why else would the Government have actively signposted the changes for non-doms, which has set hares running? It seems to me that those are things that the architect of the measures would do if they were of a mind to completely undermine the measures’ effectiveness. They close one loophole and—hey presto!—create another. Put a new coat of paint on it and no one will notice—job done.
I of course accept that some people will be caught by the changes, but I imagine that it will be the few—and “few” is the operative word—who cannot afford the financial advice fees and legal fees to set up an offshore trust. Once again, we are talking about low-hanging fruit. In my opinion and that of some of my colleagues, this is indicative of the Government’s tax policy. They are doing this rather than tackling tax avoidance undertaken by wealthy individuals who are—I will mix my rodent analogies here—squirrelling their money away in offshore trusts, or large multinational corporations that play cat and mouse with Her Majesty’s Revenue and Customs, with, in this situation, HMRC being the mouse and the one that rarely roars to boot. It is happening daily: certain people are not paying their fair share, and the Government are instead attempting to squeeze further taxes out of everyone else. That is no doubt motivated in part by the dwindling resources of HMRC, whose staff levels have been cut by 17% since 2010. The shame that HMRC does not have the resources to clamp down on the use of offshore trusts is part of the motivation behind these measures, but I am not convinced that the Government have the inclination to do so, either.
The delayed timetabling of the measures will also have an impact on their effectiveness. They were first proposed in the summer Budget 2015, they were consulted on in late 2016, and they were meant to be debated and come into effect in March 2017. Of course, we had an unnecessary snap election, whose mother was hubris and whose father turned out to be pyrrhic. As Plutarch noted—it is always worthwhile getting in a quote from Plutarch:
“If we are victorious in one more battle with the Romans, we shall be utterly ruined.”
I ask Government Members opposite to bear that in mind when the next election comes.
Peter Dowd
I actually was going to bring that, but the Chair has difficulty enough pronouncing English to check me on my Latin.
Added to that, we had a zombie Parliament throughout the summer, with the Minister announcing that the measures would not be brought back until September. In total, that means that the best-advised non-doms will have had two years’ advance notice, while even those with little to no advice would have had seven months to prepare, even without the Government’s grace period. That is why the Opposition are proposing that, at the very least, the Government conduct—the Minister will not be surprised to hear this—a review to assess the impact of leaving in the exemption for offshore trusts on the effectiveness of the measures.
Our opposition to these measures is well noted. I raised concerns over them on Second Reading of the Finance Act 2017. We raised them further in private discussions with the Government, to no avail, as well as during the Ways and Means resolutions debate and on Second Reading of the Bill, so our view is fairly well laid out. What we want is genuinely not unrealistic or far removed from the observations of most members of the public, which is, in short, the removal of the exemption for offshore trusts from these clauses and schedules. It is simply lubricious—I was thinking of another word—to introduce measures abolishing non-dom status while at the same time creating further loopholes. I would have used “disingenuous”, but no doubt you would have ruled me out of order, Mr Walker.
I ask the Minister once more, as I have at every stage of the Bill, to remove the exemption for offshore trusts. If the Government are truly committed to abolishing non-dom status and not just paying lip service to it, the Minister should have no problem doing so.
Ruth George (High Peak) (Lab)
Does my hon. Friend agree that creating this loophole, which enables non-domiciled individuals who are coming back into UK domicile to simply send funds to offshore trusts, creates work for accountants and tax specialists without actually assisting the Treasury or the Government?
Peter Dowd
That is a very good point. It is also actually creating an awful lot of work for us, given the amount of times we have asked for this to be dealt with. It is getting pretty repetitive. I do not know how many times we have to ask for this to be dealt with once and for all; no doubt we will come back to it time and again until something is sorted out.
This is not only about non-doms using offshore trusts to hide their money and essentially subvert the measures in the clause; it is about the source of the money and its value, particularly when we are discussing how to clamp down on tax avoidance. The Government should consider a register of offshore trusts, ensuring that non-doms have to register the sources of their property and income. Again, that request is not unreasonable to the public or to our constituents who elect and send us to this place, all of whom have to register the sources of their income with HMRC. In fact, a number of the measures in the Bill will require even more financial information to be passed on to HMRC through the bulk collection of financial data by third parties. It seems to many people that there is one law for one group and another for the rest of us. That cannot be right.
Kelvin Hopkins (Luton North) (Lab)
The issue of non-dom taxation has been going on for years. The reality is that Conservative Governments and perhaps even Labour Governments have not gone far enough to eliminate the problem by saying that these people are going to pay tax properly and not wriggle all the time. Does my hon. Friend agree that we have to get rid of a world where rich people live in Monaco in the south of France and fly in a couple of times a week in their private planes, working in the City and making billions, just to avoid tax, and that we should be making sure they pay their taxes and be looking after ordinary people?
Peter Dowd
What we need is a fair taxation system—that is the key. I do not think it is beyond the wit of this Government or any Government, for that matter, to deal with that. That is not to say that we have not moved some. That would not be appropriate. We have moved on.
The Financial Secretary to the Treasury (Mel Stride)
In terms of having moved some, as the hon. Gentleman puts it, does he accept that with the current proposals we have gone much further in the direction he seeks than was the case under any previous Labour Government?
Peter Dowd
It is a moving feast. Dealing with tax avoidance is—to use the old hackneyed phrase—a process, not an event. That process, at different times over the decades, moves along at different paces and with varying levels of enthusiasm. We have to set the tone and send the message from this place that we will tackle tax avoidance wherever we see it occurring. We should all do that as robustly as we can. It is not a beauty contest between which party has done the most. The reality is that we all have to stick together in tackling tax avoidance. That is the reason for our proposal, which would move this process further on, regardless of what may or may not have happened in the past.
The contention between the Opposition and the Government on this part of the Bill highlights a fundamental problem with parliamentary procedure around financial legislation. Some argue—I do not necessarily agree—that it is ludicrous that the Government can introduce a measure that claims to abolish non-dom status with an exemption for offshore trusts, and that the Opposition are unable to push through an amendment that would remove it. That goes back to the point I made earlier when the Minister referred to a review-fest. That is one of the only tools the Opposition have in this situation, given the nature of proceedings.
I do not criticise that at all. We are where we are. It would be better if we were not here, in some regards, but we are. We are trying, with the tools available to us, to move the debate on. I understand the limited scope that the Opposition have to amend financial legislation, particularly on bringing more people into tax or raising revenue. That may have to be looked at, especially in the light of the Minister’s concern that we are partying too much on this issue.
Ruth George
Given that the only reason for a trust going offshore seems to be to engage a lower rate of taxation, will my hon. Friend join me in asking the Minister what the reasons are for the exemption for offshore trusts and for opposing listing those offshore trusts to ensure we have greater transparency in our tax system?
Peter Dowd
That is a fair point. I will hang on every word the Minister says when he explains that today; he will have my full attention and concentration.
The convention of the limit on parliamentary scrutiny, particularly at a time when the Government do not have a parliamentary majority, risks enfeebling the Opposition by denying us the ability to properly scrutinise the Government and their financial legislation—essentially, the ability to do our job. Here we are, with a limited armoury, and that is why we are asking for a review. It is important that this is as transparent and open as possible. This is the line I bring to the Committee and have put to the House a number of times: it is not a question of us, the Opposition, guarding the guards; it is a question of the public guarding the guards. That is why we have tabled this measure.
Mel Stride
Again, it is a pleasure to serve under your chairmanship, Mr Walker.
Members of the Committee are now turning their attention to clauses 29 to 32, which with schedules 8 and 9 bring an end to permanent non-dom status in the United Kingdom. This historic change was announced by the Government at the 2015 summer Budget. The provisions were then introduced in the Finance Bill in the last Parliament, but were removed at the Opposition’s request following the calling of the general election. At the time, the Government announced they would return to legislate these proposals at the earliest opportunity, and I am pleased to be able to deliver on that promise and introduce the changes from April 2017, as originally intended. I should perhaps pick up the comments by the hon. Member for Bootle, who suggested that the delays, such as they are, may in some way have favoured non-doms by delaying the introduction of these measures. These measures will be introduced, as we have always indicated, in April this year. In that sense, they are retrospective in a way in which I am sure he will approve.
As the Committee will be aware, individuals who are non-domiciled in the UK for tax purposes enjoy two significant advantages. The first is that where such individuals are resident in the UK, they have access to the remittance basis of taxation. That allows them to defer tax on any of their income and gains arising overseas until they are brought into the United Kingdom. The second big advantage is an inheritance tax rule, whereby those who are domiciled overseas need pay tax on only their assets that are situated in the UK, rather than on their assets worldwide. Those advantages have been a feature of the UK tax system for many years. As successive Governments have recognised, the advantages have played a big role in ensuring that the UK is an attractive place to live and work for people from around the world, and it should not be forgotten that non-doms have actually brought in around £9 billion each year in much-needed revenue for the Exchequer.
None the less, the Government recognise that there are some unfairnesses in the current rules for non-doms that need to be addressed. For example, the Government believe that it is unfair that someone can live in the UK for lengthy periods of time—in some cases, virtually their entire life—and continue to enjoy tax advantages that are not available to the vast majority of people who live and work in the UK. These provisions seek to address that unfairness, and I am sure that will enjoy cross-party support.
The changes being made by clause 29 will bring an end to the permanent non-dom status for the purposes of both income tax and capital gains tax. That means that from April 2017 anyone who has been resident in the UK for 15 or more of the previous 20 years can no longer be treated as a non-dom for tax purposes. They will instead be taxed in the same way as everybody else and pay tax on their worldwide income and gains. Likewise, anyone who was born here with a UK domicile of origin will also become deemed domiciled whenever they are resident in the UK. The clause fundamentally changes the way that non-doms pay tax in the UK, raising a further £1.6 billion over the next five years to fund our vital public services.
Clause 30 sets out how the deeming rules apply for the purposes of inheritance tax, ensuring that all those who become deemed domiciled under the new provisions are liable for UK inheritance tax in the same way as UK residents. Clause 31 ensures that individuals who become deemed domiciled under the new provisions pay the right amount of tax on any benefits they receive from overseas trusts that they set up while they were domiciled outside the UK. Finally, clause 32 ensures that a double charge is prevented by excluding gains that represent carried interest from the trust charging provisions.
The hon. Member for Bootle wants the removal of what he terms “the exemptions” from off-shore trusts for those who have become deemed domiciled under these new proposals. I assure him, and he should reflect on the fact, that any moneys coming out of those trusts for whatever purpose will be taxed once an individual becomes deemed domiciled.
There is also an important matter of proportionality here. As I have already indicated, the Exchequer raises around £9 billion per year from those who are non-domiciled in the United Kingdom. That is a huge amount of money, which goes some way to paying for our doctors and nurses, our armed forces and so on. These measures will raise a further £1.6 billion over the scorecard period, as I have indicated.
Ruth George
How can the Treasury be so sure of the projected future income of £1.6 billion when there is a loophole for transferring money to offshore trusts that could be used to avoid the taxation? How can those future projections possibly be calculated?
Mel Stride
I am clearly not in a position to share with the hon. Lady the entire ins and outs of all the intricacies of calculating such figures, but I can assure her that the numbers are looked at in great detail and are scored by the independent Office for Budget Responsibility. They are robust figures, albeit that no figures are entirely, absolutely guaranteed in cast iron ahead of time—but they are robust.
During the debate, the hon. Lady raised an important issue about transparency of trust arrangements. The UK is right at the forefront of greater transparency. We spearheaded an initiative to systematically share information on beneficial ownership arrangements with more than 50 countries. That will help law enforcement to unravel complex, cross-border changes in companies and trusts. Following our work with international partners, by September 2018 more than 100 jurisdictions will be sharing information with the UK under the common reporting standard, which will provide HMRC with taxpayer information from tax authorities around the world, enabling it to better target tax evaders.
That brings me to my next point. The hon. Member for Bootle would have us believe two things: that we are only on the side of the wealthy and that we are not actually that interested in clamping down on tax avoidance. On the first point, I remind the Committee that the top 1% of earners in this country pay 27% of all taxes. That is virtually at an historic high, and is certainly higher than was the case under the previous Labour Government.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Does that not reflect the wealth of the very richest in our society? Surely it would be more appropriate to assess the ratio of tax against their whole income and wealth. In that case, most studies would suggest that the very worst-off people pay much more of their income in tax than the very best-off. That figure does not suggest that we have a more progressive tax system—it does not give us any indication of the progressivity of the tax system.
Mel Stride
I hate to disagree with the hon. Lady, but I have to. If she checks something called the Gini coefficient, which is about income inequality—
Anneliese Dodds
With all due respect, the Gini coefficient does not reflect the impact of tax on people’s incomes. I repeat my point: if we are looking at the progressivity of the tax system, considering the overall tax that is contributed by the 1% is not helpful. The two are independent.
Mel Stride
With respect, the first point is that income inequality is at its lowest level for 30 years. That is a simple fact. Secondly, in terms of how progressive the tax system is, we are the Government that, since 2010, have raised the personal allowance to £11,500, which has taken about 3 million people out of tax altogether, and we have a manifesto commitment to raise that still further, by 2020, to £12,500. Much that we are doing is extremely progressive.
It is also a fact that the wealthiest 3,000 in this country pay as much tax as the poorest 9 million, just to put some of those figures into perspective.
Anneliese Dodds
That is clearly a reflection of very severe income inequality. If we focus on income, rather than on tax, which the Minister is trying to pull us towards, and look at the overall impact to the fiscal system, taking into account that fact that working tax credits are being folded into universal credit, we will see that the very poorest people in Britain are much worse off now than in previous years.
The Chair
Order. We will indulge the Minister with one more response. We might then have to make a little progress.
Mel Stride
A very quick one—perhaps we should leave it there, but no. The national living wage is another example of doing things for those who are less well-off. There are many things to consider.
David Linden (Glasgow East) (SNP)
Does the Minister accept that the national living wage that he is trumpeting is in fact a con trick, because it does not apply to under-25s?
Mel Stride
I do not think that is true, because we have a national minimum wage that certainly applies to under-25s. However, as Mr Walker has suggested, we are probably going slightly beyond the scope—fun though it is—of the actual matter in hand.
Mel Stride
If the hon. Lady will let me make a little progress, perhaps we will have time later.
Another point the hon. Member for Bootle raised was the suggestion that we are somehow slack or not concerned about tax avoidance. This Government have clamped down on avoidance to the extent that we have brought in £160 billion in revenue by clamping down on tax avoidance, evasion and non-compliance. We have done that despite his constant assertions that HMRC is under-resourced and incapable of acting. We are bringing in record levels of compliance income at the moment.
Peter Dowd
I think the Minister misrepresents what I was saying. I was trying to say that we need to push harder. The reality is that HMRC does as good a job as it possibly can given its resource. I suspect that if its resource were returned to the previous level, HMRC would do an even better job.
Mel Stride
Given the resource that HMRC has, which the hon. Gentleman suggests is inadequate, the tax gap—the amount of tax that we have failed to collect by not bearing down on avoidance—is at its lowest level for many, many years, including every year under the last Government. It is 6.5% compared with, I think, 8.3% in 2005-06. In terms of bearing down on avoidance, we are doing our bit.
The Chair
Order. Everybody sit down for a bit. We have not heard the word non-domiciled for a long time. I would quite like to hear it.
Anneliese Dodds
I am grateful, Mr Walker. I was grimacing because I felt like I had to come back on the Minister’s assertion, but we are talking generally about tax avoidance and evasion and we have had those general debates in earlier discussions. It is just that when specific claims are made, it is hard for the Opposition not to react and respond to them. To repeat points that we went around the houses on in earlier debates, the tax gap figures—as I know the Minister is aware, because he is very well-versed in these matters—do not cover problems related to profit-shifting, which many experts have suggested constitute a huge portion of taxes that are forgone. The element of error in the tax gap has increased.
The Chair
Order. I may not have a grasp of English, but I do have a grasp of this Committee, and it is trying my patience. Let us get back to the subject. I am very cross.
Mel Stride
Mr Walker, you are right, as you always are. Let me now turn to new clause 3, tabled by the Opposition, which is the subject of debate at the moment. The new clause would commit the Government to publish a review of the effects of the provisions for protecting overseas trusts from the deemed domicile changes set out in schedule 8.
The provisions outlined in schedule 8 relate to trusts that were created before an individual became deemed domiciled under the new rules. As I am sure members of the Committee will appreciate, many non-doms will have set up family structures in their home country long before they ever considered moving to the UK. That is an important point. The Government believe that it would be unreasonable to expect individuals in such circumstances to pay UK tax on all the money in such a structure as it arose. The provisions therefore protect such trusts from unintended consequences and ensure that the UK remains an attractive place for those individuals to live and work.
Let me be clear: even with those protections in place, those non-doms who do become deemed UK-domiciled will only be protected on income and gains that remain inside the trust. Any moneys withdrawn, or benefits provided, will lead to a tax charge.
The Government recognise that non-doms make an important contribution to the UK’s economy. In terms of tax alone, as I have already stated, they contribute more than £9 billion to the Exchequer per year. It is therefore vital that these changes are not introduced in a way that would drive non-doms out of the UK altogether.
Kirsty Blackman (Aberdeen North) (SNP)
I promise that I will stick to the topic of the debate. For the avoidance of doubt, we will support the Opposition’s new clause 3. I heard what the Minister said about previous family structures, but that does not give us enough reassurance that the system that is being set up for overseas trusts is the correct one.
Mel Stride
I thank the hon. Lady for making her intentions so clear.
These changes are fair, and they have been carefully considered and consulted on since they were announced more than two years ago. With regard to a review of the legislation, as stated in the tax information and impact note published in December 2016, HMRC will monitor the effects of the provisions through information collected in tax returns. I therefore urge the Opposition not to press new clause 3.
The changes introduced by clauses 29 to 32 and schedules 8 and 9 will bring an end to permanent non-domicile tax status. When people live in the UK permanently, it is right that they should pay the same tax as everyone else. This is the biggest and most fundamental change to non-dom taxation in history, and strikes the right balance between raising £1.6 billion of much-needed revenue and ensuring that the UK tax system remains internationally competitive.
Peter Dowd
In the light of what has been said today, we may want to tease out the matter of non-doms further at a later date, but let us be clear: there is nothing wrong with being a non-dom. It is not an illness or a disease. It is not something that we want to eradicate absolutely. We do not want to tell non-doms to go home or to go back to where they lived. This is not about that; it is about fairness in comparison with people who are not non-doms. That is what it comes down to.
We recognise that non-doms contribute to our economy. I do not think that anyone is denying that at all. Non-doms have existed in this country since Napoleonic times, in effect. That is the essence of their origin. After 200 years, we might think, notwithstanding the fact that we are coming out of Europe, that we should have done something about them sooner. The bottom line is that there is nothing wrong with being a non-dom. There are issues vis-à-vis the status of parents of non-doms, too, which we will no doubt come back to in due course.
We have made our point for today’s purposes. As I alluded to, new clause 3 seeks to have a review in relation to non-doms. I do not think that there is anything wrong with asking for a review of how this proposal will work. That is our job, and we will persist with it. We are determined to raise this issue time and again.
The Chair
The Committee will be aware that new clause 3 will be moved later. I do not want anybody to feel disappointed or cheated.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Schedule 8 agreed to.
Clauses 30 and 31 ordered to stand part of the Bill.
Schedule 9 agreed to.
Clause 32 ordered to stand part of the Bill.
Clause 33
Inheritance tax on overseas property representing UK residential property
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider that schedule 10 be the Tenth schedule to the Bill.
Mel Stride
Clause 33 and schedule 10 introduce the final element of this historic package of non-dom reforms. As with the clauses that we have just discussed, it was our intention to include these provisions in the previous Finance Bill, and we are pleased to be able to introduce the changes from April 2017 as we originally intended. The changes will ensure that non-domiciled individuals who hold UK residential property through an overseas structure are liable for inheritance tax on that property, in the same way as UK residents.
The basic inheritance tax position is that a non-UK-domiciled individual is liable for UK inheritance tax only on the property in their estate that is situated in the UK. That has been the case since inheritance tax was first introduced.
However, it has long been fairly common practice for some individuals to take deliberate steps to avoid tax on homes they hold in the United Kingdom. Instead of owning UK residential properties directly in their own names, they set up an overseas company or partnership that has legal ownership of the property. They will often use overseas trusts as part of those structures. The effect of doing so is that the non-domiciled individual is no longer a UK homeowner; instead they own shares in an overseas company or an interest in an overseas partnership. In other words, by changing the structure of the way they hold UK assets—UK property is transformed into overseas property—they are no longer subject to UK inheritance tax.
The Government do not believe it is fair that non-doms with residential property in the UK can avoid paying UK inheritance tax in that way. That is why we are making changes to ensure that, from now on, they will pay the same tax as everybody else. The changes made by clause 33 and schedule 10 will ensure that individuals domiciled overseas pay inheritance tax on UK residential properties they hold through overseas structures. They will do so by looking through the overseas structures to the underlying UK property, bringing any share or interest into the scope of inheritance tax, even if those shares are overseas. In other words, the clause will ensure that an inheritance tax charge will arise wherever the value of such structures is derived from a residential property in the UK.
The clause closes a long-standing loophole that has allowed non-domiciled individuals to structure their assets to avoid inheritance tax on their UK homes. This change will ensure that non-dom individuals with residential property in the United Kingdom are treated the same way as everyone else, raising an estimated £250 million over the next four years.
Stella Creasy (Walthamstow) (Lab/Co-op)
Having heard the Minister make a compelling case about the importance of ensuring that non-doms do not avoid paying tax, I look forward to the debate that we will have on new clause 2, which raises exactly the same issues about the treatment of commercial property as a way for non-doms to avoid residential property taxes. I look forward to the Minister supporting the new clause accordingly.
Mel Stride
Like the hon. Lady, I cannot wait to get to the matter at hand.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
Schedule 10 agreed to.
Clause 34
Employment income provided through third parties
Question proposed, that the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
That schedule 11 be the Eleventh schedule to the Bill.
Clause 35 stand part.
That schedule 12 be the Twelfth schedule to the Bill.
Mel Stride
Clause 34 introduces schedule 11, which makes changes to ensure that businesses and individuals who have used disguised remuneration tax avoidance schemes pay their fair share of income tax and national insurance contributions. Clause 35 and schedule 12 follow on from clause 34 in tackling similar avoidance schemes used by the self-employed, introducing new rules to make those schemes ineffective and ensuring that individuals pay the tax they owe.
Disguised remuneration schemes claim to avoid tax and national insurance contributions by paying individuals through third parties in ways that promoters claim are not taxable, such as loans. These schemes are highly artificial, and it is the Government’s firm view that they have never worked. The coalition Government began tackling the schemes in 2011, introducing legislation to successfully stop the schemes that existed at that time. Since then, HMRC has collected more than £1.8 billion in settlements from scheme users.
However, not every scheme user settled, and since 2011 the tax avoidance industry has created and sold more than 70 new and different schemes aimed at sidestepping the 2011 legislation. These schemes are generally more contrived and aggressive than those that existed before and are growing in popularity, including with the self-employed. These schemes deprive the Exchequer of hundreds of millions of pounds each year and have been used by up to 65,000 companies and individuals. The Government’s firm view is that they do not work. We therefore need to take further action to tackle this avoidance and ensure that scheme users pay their fair share.
The Government introduced legislation in the Finance Act 2017 to put it beyond doubt that new employment income schemes are caught within the existing rules. Schedule 11 will tackle the existing use of schemes by introducing a new charge on loans outstanding from these arrangements on 5 April 2019. Affected scheme users can avoid the loan charge by repaying the loan and replacing it with a commercial loan, or by settling the tax due with HMRC. The Government will bring forward further measures in the coming year’s Finance Bill to ensure that the rules are appropriately targeted.
Clause 35 will put it beyond doubt that these schemes do not work for the self-employed. Where there is an arrangement of this type, the receipt will be taxed as a trading receipt, no matter what form it is received in by the self-employed individual. The clause applies from 6 April 2017 to protect Exchequer revenue and ensure that scheme users pay their fair share. Schedule 12 introduces a new charge on loans outstanding from self-employed schemes on 5 April 2019 in a similar way to schedule 11.
It is right that everyone should pay their fair share of tax and make a contribution to public services. These changes will ensure that users of disguised remuneration schemes pay the tax they owe and will help to bring in more than £3 billion by 2020-21.
Anneliese Dodds
I will first address clause 34 and schedule 11 before moving on to clause 35, given that both were created at the same time. As I understand it, clause 34 and schedule 11 re-characterise loans as remuneration for tax purposes, but in some cases they would be doing so many years after the original transaction. The Opposition want to see change in this area, because abuses have been clearly documented.
However, this measure comes after a long period of relative inaction, at least in the areas where this legislation is focused. That has meant that many people believed the arrangements they entered into were legal and did not constitute tax avoidance. The April 2019 change in these circumstances could, some have opined to us, cause significant problems, for example to individuals whose situation has changed such that they no longer have the funds to meet the tax charge. How will the Minister ensure that this measure will not cause hardship or injustice to individuals who planned on the basis of previous arrangements, and how will that be balanced against the clear and pressing need to prevent the abuse, which the measure is targeted at?
Clause 35 and schedule 12 aim to tackle avoidance by the self-employed and those trading through a partnership, where their taxable income has been replaced by loans and other non-taxable amounts in order to avoid tax. The pertinent question is how to ensure that the measure is not overly wide-ranging. In particular, how will it be ensured that a transaction entered into in the ordinary course of business, and on commercial arm’s length terms, is not caught within the definition of remuneration? The scope of the measure appears to be relatively wide, particularly when compared with others—for example, the Income Tax (Earnings and Pensions) Act 2003, which discards remuneration—where certain transactions are excluded, but they are not here. It would be helpful to have more specification on that.
Finally, there is a broader question: how will the Minister ensure that these measures are genuinely achieving their objective of ensuring that the full earnings of self-employment remain part of the individual’s taxable income, subject to income tax and national insurance contributions, and that attempts to circumvent that position and still reward the individual are genuinely ignored?
Mel Stride
I thank the hon. Lady for her typically thoughtful contribution and important questions. She raised the issue of the retrospection or otherwise of these measures. We will certainly be looking at individuals who may have entered into these kinds of arrangements as far back as 1999. Critically, they have until 2019 to clean those arrangements up, if they wish to. If the schemes are legitimate and above board, they have no reason to be concerned because those schemes will stand the tests that we have set.
Mel Stride
Clause 38 introduces a new tax relief to support the development and installation of recharging equipment for electric vehicles. The first-year allowance of 100% allows businesses to deduct charge point investments from their pre-tax profits in the year of purchase. To ensure that businesses could take advantage of the changes as soon as possible, the legislation had effect from the date of its announcement, which was 23 November 2016.
The Government are committed to encouraging the uptake of cleaner, more efficient vehicles that can help improve air quality in our towns and cities. We are doing that in a number of ways through the tax system. First, from 2020-21 company car tax rates for ultra-low emission vehicles will be lowered to 2% to incentivise uptake of the cleanest cars. Under the new vehicle excise duty system for cars registered after 1 April 2017, people with the cleanest zero-emission cars will pay nothing in first-year rates.
The availability of electric charge points is key to encouraging further take-up of cleaner vehicles by giving ULEV drivers greater confidence about where and how far they can drive. There are already more than 11,000 charge points at more than 4,000 locations in the UK, but more are needed. It currently takes at least 30 minutes to charge an ultra-low emission vehicle, which gives a range of between 50 and 100 miles, compared with 30 seconds to fill a petrol-powered car for a similar mileage range. We need to make charge points a more common feature on our roads in order to make electric cars a more convenient and reliable mode of transport.
Clause 38 supports the development and installation of electric charge point equipment by introducing a new tax relief for eligible expenditure on charge point infrastructure. Businesses that invest in electric charge points can deduct the expenditure from their pre-tax profits, thereby benefiting from a lower tax bill. The tax relief complements existing reliefs that encourage the use of cleaner vehicles, including the 100% first-year allowance for cars with low carbon dioxide emissions and the 100% first-year allowance for equipment used by cars powered by natural gas, biogas and hydrogen. It will help to increase the number of electric charge points on our roads, improving the infrastructure for electric car drivers and encouraging further take-up of low-emission vehicles for a cleaner environment.
Anneliese Dodds
We support measures to increase the uptake in electric vehicles, and we recognise that creating more electric vehicle charge points is a part of that. However, I would be grateful if the Minister addressed two questions.
First, as I understand it—he will correct me if I have the wrong end of the stick—the clause focuses on firms that invest at least £200,000 a year in plants and machines. Small business will not be able to take advantage of the same tax breaks, and I am concerned that that could create an imbalance. In town centres with a zero-carbon target—the first was in my home city of Oxford—businesses are required to use only electric vehicles or other zero-carbon modes of transport, so it is important that they are on a level playing field. Is there an imbalance? I may have misunderstood the legislation, but I would appreciate the Minister’s thoughts.
Secondly, how does the policy relate to other measures within the fiscal system that aim to promote low-carbon technologies? The founder and CEO of the renewable energy investor Rockfire Capital states:
“Increasing availability of charging for electric cars is all very good but the biggest challenge is making sure the energy used is as green as the cars. These measures are a drop in the ocean compared with what is actually required.”
Removing the renewable energy exemption from the climate change levy has reduced the tax incentives for business to invest in large-scale renewable energy schemes. Green cars are only green if green energy is going into them.
Ruth George
Like my hon. Friend, I am pleased to see decent allowance made for expenditure on electric vehicle charge points. It is much needed, particularly in my rural constituency, where it will be difficult to install the infrastructure in a way that business can comply with. I echo her point about small businesses. I understand that the Automated and Electric Vehicles Bill may introduce a requirement for service stations to install electric vehicle charge points. Many service stations are independently owned; it seems particularly hard on them that they will not receive tax incentives for installing charge points, but larger companies will.
Will the Minister explain why the cut-off date is 31 March 2019 for corporation tax and 5 April 2019 for income tax? The technology is already being produced but will change constantly over the next few years. It is important to ensure that companies can consider the full range of technology coming on the market and adapt their charging points to the most successful and future-proofed. For that reason, it seems odd to include an arbitrary time limit. Can the Minister explain that?
Mel Stride
I have a direct answer for the hon. Members for High Peak and for Oxford East: the relief will be available to businesses of all sizes. I take on board the point made by the hon. Member for High Peak about her own constituents in that context.
The hon. Member for Oxford East raised the general issue of whether the electricity going through the charging points would be green enough. It is probably not the purpose of the Committee to determine that, but I certainly share her aspiration that we should encourage as much green energy as possible, which is why we are investing so much in the shift from traditional power generation to greener alternatives. She also quoted the suggestion that the number of charging points was a drop in the ocean, which is why we hope that such tax reliefs will help set up charging points as quickly as possible.
The hon. Member for High Peak also asked about the March and April dates for tax year ends for the different categories.
Mel Stride
I thought the question was about March and April. The reason for March and April was that individuals and companies have different tax year ends in that respect.
Ruth George
May I clarify? I was simply asking why there was a 2019 cut-off, not why there were two dates of 31 March and 5 April, which I think is fairly widely understood.
Mel Stride
I believe that is the review date—the point at which we would naturally want to look again at the issue and see how the roll-out has occurred.
Question put and agreed to.
Clause 38 accordingly ordered to stand part of the Bill.
Clause 39 ordered to stand part of the Bill.
Clause 40
Co-ownership authorised contractual schemes: capital allowances
Anneliese Dodds
I beg to move amendment 32, in clause 40, page 58, line 31, at end insert—
“262AG Review of operation of co-ownership authorised contractual schemes
(1) Within fifteen months of the passing of the Finance (No. 2) Act 2017, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review of the operation of the new provisions for co-ownership authorised contractual schemes.
(2) The review shall, in particular, consider the operation of these provisions in relation to master funds.
(3) In this section, “the new provisions for co-ownership authorised contractual schemes” means—
(a) sections 262AA to 262AF of this Act, and
(b) regulations made under sections 41 and 42 of the Finance (No. 2) Act 2017.
(4) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.”
This amendment would make statutory provision for a review of the operation of the new provisions for co-ownership authorised contractual schemes.
Anneliese Dodds
As colleagues will have noted, the Opposition are requesting a review of the operation of the new provisions for co-ownership authorised contractual schemes. Authorised contractual schemes, previously referred to as tax transparent funds, can be established as either limited partnerships or co-ownership schemes, although this discussion will focus on the latter.
The schemes were introduced in 2013 to aid the establishment of UCITS—undertakings for collective investment in transferable securities—master funds in the UK. A number of the new rules appear relatively sensible from my perspective—for example, in clause 41, the provision of additional information by schemes to their investors—but I have some concerns, particularly about clauses 40 and 42. That is why we have suggested that a review would be helpful.
Clause 40 focuses on reducing the administrative burdens of such schemes. I am concerned that additional consideration should be given to the potential for tax avoidance now that the Government are loosening rules. Luxembourg and Dublin already provide tax transparent vehicles. Surely, in our focus on ensuring that Britain is an attractive destination for investment, we must ensure that our offer is based on our investment expertise and the investment opportunities available here, rather than any artificial factors. Furthermore, I do not feel from what I have examined that I have sufficient understanding of the rationale for enacting some of the provisions through secondary legislation. It would be helpful to understand how the Minister will ensure that the measures are discussed with an appropriate degree of accountability.
Mel Stride
Before I respond to the amendment tabled by Labour Members, I would like to set out for members of the Committee the overall aims as they relate to this particular piece of legislation.
Clauses 40, 41 and 42 make changes to ensure that the tax system works effectively for investors in co-ownership authorised contractual schemes, which I will refer to as COACS for short. COACS are UK collective investment schemes authorised by the Financial Conduct Authority. They were introduced in 2013 to make the asset management industry more competitive internationally, to reduce industry costs and to increase returns to investors. These schemes are transparent for tax on income. That means that the income generated by the scheme is taxed on the investors, not on the scheme. Investors are taxed as if they had invested directly rather than through the scheme.
COACS have been welcomed by investors, which are predominantly institutions such as pension funds and life insurance companies. Following consultation last year, the Government are now making three changes to simplify the tax rules for investors in COACS and to align them with rules for other types of investment funds so far as is practical.
Amendment 32 would require HMRC to complete a review of the operation of COACS by early 2019. I reassure the hon. Member for Oxford East that the Government have consulted extensively on the measure. There was a formal consultation in summer 2016, in which the industry participated fully and constructively. The consultation process also included a well-attended open forum of interested parties in September 2016 to investigate and evaluate options. In addition, the Government have held regular discussions with industry representatives. It was in those discussions that the issue that clause 40 seeks to address was first highlighted. The Government will continue to engage with the sector on COACS and the practical implementation of the rules governing the schemes.
The hon. Lady referred to master funds, which are a fund structure where a fund has a number of separate feeder funds as its investors. They were not the subject of any response to the consultation, but HMRC stands ready to engage further with industry, should it have any questions related to COACS and master funds. The hon. Lady suggested that there may be a possible means of tax avoidance here. Income accruing to a master fund that is a co-ownership authorised contractual scheme is treated as the income of the investors, so UK investors cannot avoid tax on it. Clause 42 and its related secondary legislation will help to protect revenue. The measure as a whole is robust against potential tax avoidance, but HMRC will of course continue to be vigilant.
Kirsty Blackman
The Minister has been positive about the transference of accountability with COACS. I want to raise a query. Will he confirm that the changes being made will not erode the transparency and accountability of the scheme as it is? Will that be kept under review ?
Mel Stride
Absolutely. All these matters will be kept under review. It is not the Government’s belief that the changes will erode the scheme; we believe that the changes will facilitate and ease the operation of these particular schemes to the advantage of pension funds and others that typically make use of them.
In the light of the extensive consultation held and the Government’s continuing commitment to work with industry on the implementation of rules governing COACS, I hope that the hon. Member for Oxford East will withdraw the amendment.
I turn now to the background to the clauses. COACS are not subject to tax, but the operators of the schemes hold information needed by investors to complete their own tax returns and to claim any capital allowances to which they are entitled. The calculation of capital allowances falls in practice on the investors and can be extremely complex. In addition, operators hold information that would help HMRC to check that investors’ tax returns are accurate, but at the moment there is no statutory requirement for COACS to provide tax information to either investors or HMRC. That is one example of the easements, from the investors’ and HMRC’s point of view, that the hon. Member for Oxford East may be interested in. Further, where a COACS holds investments in offshore funds, the rules that normally apply to ensure that offshore income is taxed appropriately on UK investors do not work as they should.
Clause 40 introduces new rules that allow the operator of a COACS to elect to calculate any capital allowances due, benefiting investors by avoiding the need to exchange large amounts of information with the operator of the COACS. The election can be made for periods that start on or after 1 April 2017. Clause 41 enables the Treasury to make regulations that will do three things to help to ensure that the right tax is paid on investments in COACS. First, the regulations will require the operator of a COACS to provide sufficient information to investors for them to complete their own tax returns. Secondly, they will require the operator to provide information to HMRC about the income arising to investors each year, and provide HMRC with a power to request copies of any other information provided to investors. Thirdly, they will impose penalties if scheme operators do not comply.
Clause 42 enables the Treasury to make regulations that will require a COACS that has invested in an offshore fund to ensure that all of the offshore fund’s income is treated as its investors’ income, regardless of whether it is actually distributed to them. This removes the risk of income rolling up offshore without being taxed as it arises. It also brings the treatment of investors in COACS into line with the treatment of UK investors in offshore funds generally.
These targeted measures will help to ensure that the tax system works efficiently for investors in COACS, and that they pay the right tax on their investments. I hope that the hon. Lady will withdraw the amendment, and that clauses 40, 41 and 42 will stand part of the Bill unamended.
Anneliese Dodds
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 40 to 42 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Graham Stuart.)
Westminster Hall
(6 years, 6 months ago)
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Backbench Business
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Carbon Capture and Storage
(6 years, 6 months ago)
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Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
I beg to move,
That this House has considered carbon capture and storage.
I thank the Backbench Business Committee, chaired by the hon. Member for Gateshead (Ian Mearns), for granting this debate, and the sponsors who helped to secure it, particularly my hon. Friend the Member for Waveney (Peter Aldous) and the hon. Member for Redcar (Anna Turley), whose support is deeply appreciated. I also thank the team at the Energy and Climate Intelligence Unit for their help and Sarah Tennison at the Teesside Collective for her excellent advice. I congratulate the Minister on the production of the clean growth strategy and I support its core message that there does not have to be a trade-off between green energy and economic growth.
As the Minister noted in her announcement to the House last week, since 1990 the United Kingdom has simultaneously grown its economy by almost 70% and reduced its emissions by more than 40%. I also welcome the commitment that the UK will continue to be a world leader in creating clean technologies, jobs and businesses.
Chiefly, I am delighted with the new resolution to demonstrate international leadership in carbon capture, usage and storage. The benefits of carbon capture and storage are multiple. CCS will be essential in ensuring that the UK meets its legally-binding target to reduce carbon emissions by a minimum of 80% on 1990 levels by 2050 in a cost-effective manner. That was the conclusion of the Energy and Climate Change Committee, which warned that without CCS the UK
“will not remain on the least cost path to our statutory decarbonisation”.
That has been echoed by other leading authorities. The Intergovernmental Panel on Climate Change estimates that without CCS, the cost of meeting global climate change targets could increase by 138%. Similarly, the Committee on Climate Change believes that
“carbon capture and storage…has the potential to almost halve the cost of meeting the UK’s 2050 target.”
It warns that the additional costs of inaction on CCS for UK consumers could be £1 billion to £2 billion a year in the 2020s, rising to £4 billion to £5 billion a year in the 2040s.
The economic benefits of CCS stretch far beyond the cost-effective attainment of our carbon budgets. According to the House of Commons Library, CCS could create 60,000 jobs in the UK, not to mention the greater number of jobs that could be saved by avoiding the decline or closure of carbon-intensive industries, for which it will quickly become progressively less viable to remain in operation in the UK as levies on carbon emissions increase. Those industries emit carbon dioxide as an intrinsic part of their production methods, so regardless of how much we decarbonise our power supply, they will continue to be huge emitters. As the North East of England Process Industry Cluster, which represents the chemical industry in the north-east, warns,
“on current trends and policies, industrial emissions reduction will only be met through the closure of industry.”
That would be a totally avoidable catastrophe and we need to do everything in our power to prevent it, and that means developing CCS.
The International Energy Agency estimates that there will be a global CCUS market worth over £100 billion. With even a modest share of that market, UK gross value added could increase to between £5 billion and £9 billion per year by 2030. The wider economic benefits and opportunities presented by CCS are huge, whether in the form of increased domestic manufacturing activity, a more positive balance of trade, or the possibility that UK carbon storage sites could generate income by storing emissions from other countries.
When it comes to the location for CCS, hon. Members will be unsurprised to learn that I think there is a natural choice: Teesside. That judgment is not born of the bias of someone who was born and grew up there, and is very proud to represent it, but based on a number of unique advantages that our area has to recommend it as a prime site for CCS development.
First, Teesside is home to nearly 60% of the UK’s energy intensive industry. Regional emissions per person are almost three times the UK average. Fully rolled out, CCS on Teesside would therefore have a substantial impact on overall UK emission reductions.
Secondly, Teesside has one of the highest concentrations of industry in the UK. That includes the specific and unique mix of companies that comprise the Teesside Collective. That group has come together with the excellent Tees Valley combined authority to drive the case for CCS investment in the area. The group includes Sembcorp Utilities, the area’s leading energy supplier; SABIC, one of the world’s largest makers of chemicals, fertilisers and plastics, whose Teesside operations alone emit 1.25 million tonnes of CO2 every year; Lotte Chemical UK, which manufactures the plastic needed for soft drinks bottles; BOC, which produces more than half the UK’s hydrogen; and CF Fertilisers, the UK’s largest ammonia fertiliser plant.
That integrated cluster is so important because the emissions from those facilities can be captured, mixed with emissions from a power station in the same area, and transported and stored together. Analysis by the Green Alliance found that this approach would reduce the cost per tonne of carbon captured by about two thirds, compared with the cost of doing it for a power station alone. The mixture of companies would also allow a test project to assess the cost of CCS when facing different levels of difficulty in the removal and extraction of carbon.
Thirdly, the cost of CCS would be further reduced by Teesside’s close proximity to North sea storage sites. A fortnight ago, I had a fascinating briefing from Professor Jon Gluyas and Simon Mathias of Durham University at Boulby potash mine in my constituency. The UK storage appraisal project, which concluded in 2013, identified some 600 storage locations on the UK continental shelf—enough to store our direct emissions for the next 130 years.
Neil Parish (Tiverton and Honiton) (Con)
My hon. Friend mentioned nitrogen fertiliser and the need to use carbon capture and storage to help create more fertiliser. At the moment we use a lot of natural gas to make this fertiliser. Therefore, it will be a win-win situation, because we will be reducing the amount of natural gas we use and using the carbon that is already being produced.
Mr Clarke
I agree with my hon. Friend that carbon utilisation is something we should look at. It is not necessarily the same as carbon capture and storage, but it is definitely a valuable mechanism to ensure we are not wasting carbon dioxide that we have to produce. Therefore I would certainly back that, as does the strategy.
Fourthly, Teesside is the prime location because developing industrial CCS would create an additional 1,200 jobs during its construction phase and help create and retain a further 5,900 jobs when in operation. That is vital in our area, where, as Opposition Members will attest, despite the huge progress that has been made, too many people are struggling to find secure and well-paid jobs. The Teesside workforce have the strong engineering skills required for CCS, largely as a result of long-standing expertise in the oil and gas, energy supply, and chemical and process sectors.
Finally, and perhaps most importantly, Teesside is ready to go. The Teesside Collective is ready to commence front-end engineering design—FEED—studies immediately and could be capturing and storing CO2 in just six years. No further research or innovation is required. The Teesside Collective has already presented a cost-effective finance model to Government, which sets out an attractive business case for both Government and industry to invest in a demonstration phase.
Last week, the Minister told me that Teesside makes a very powerful case for the funding set out in the clean growth strategy, of which £100 million has been committed to support CCUS innovation and deployment in the UK. That is greatly welcomed. She said that pints would be available for myself and the hon. Member for Stockton North (Alex Cunningham), and I think she could be included in the round as well. However, can the Minister provide clarity as to what proportion of that investment will be spent on carbon capture and storage specifically, as opposed to carbon capture and utilisation, which was referred to by my hon. Friend the Member for Tiverton and Honiton (Neil Parish)? Although I can understand the rationale for investing in carbon utilisation, such as its relative ease of development and more direct economic gains, it does not allow us to store the same amount of carbon dioxide as carbon capture and storage, which I believe is the real prize.
In relation to CCS, specifically CCS on Teesside, I ask the Government to take three critical steps. First, just as the Government established the contracts for difference mechanism, which is the incentivised investment that led to the huge cost reductions we are witnessing in green energy, so too the Government need to come up with an incentive mechanism for industrial CCS. What would that look like in practice? There are two elements. We need a transportation and storage solution, and the Government need to state their intention to agree a financing mechanism. Stakeholders tell me that those are the two most important things they are asking for, without which there can be little practical progress on delivering CCS in the UK. The Teesside Collective very much hopes that such a model can be developed and agreed in 2018 and it has already done really impressive groundwork.
Secondly, please deliver FEED funding for a trial industrial CCS network on Teesside. The Teesside Collective has requested the relatively modest sum of £15 million to get a demonstration project under way and it hopes that that can be allocated in 2019. Government support for the deployment of such a strategic demonstration project will enable CCS to reduce costs significantly if and when it is built at commercial scale in the 2020s.
Thirdly, we need to establish the facts to show the rest of Government and the public why this matters so much. In its April 2017 report on CCS, the Public Accounts Committee stated:
“By the end of 2017, the Department should quantify and publish the impact across the whole economy of delays to getting CCS up and running, and of it not being established at all.”
Will the Minister inform us whether such analysis has been commissioned and, if so, when the Department will publish the results?
Those are my three asks, which I sincerely and deeply hope are deliverable. I have come into politics to try to help deliver many things: a stronger economy; a world that we can pass on to our children in better shape than we found it; and a change in people’s perceptions of Teesside and what it has to offer our country and our world. I am an unashamed evangelist for the latter, as are so many of the people who work there. Carbon capture and storage would allow us to deliver all those objectives. I urge the Minister, as I urge all colleagues: let us seize this opportunity, and seize it today.
Anna Turley (Redcar) (Lab/Co-op)
It is a pleasure to serve under your chairmanship as always, Sir David. I thank the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) for securing this debate and for his powerful contribution.
Carbon capture and storage is a technology with huge importance for our industry, energy and our climate challenges. It has huge potential to bring investment and jobs to Teesside, which is why I am so pleased to be joined today by so many colleagues from the Tees valley area. I welcome the shared cross-party ambition to see the UK leading the way by introducing CCS into our national infrastructure.
Following the clean growth strategy, which the Government published recently, I hope that this debate will help to reinforce the case for making progress. Earlier this year, I pressed the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd)—the then industry Minister—on the need for some clear Government leadership to help to get the technology off the ground, and I am delighted to see the process reignited in the clean growth strategy and the promise of a CCS demonstration project. I sincerely hope to see that responsibility granted to the Teesside Collective in my constituency—a project ready and waiting to start decarbonising UK industry.
Meeting our commitments to reduce emissions under the Climate Change Act 2008 and the Paris agreement while protecting and expanding British industry is a serious challenge. The fifth carbon budget commits to a 57% reduction from 1990 levels by 2030. The easiest and most cost-effective solution to this challenge is, without doubt, CCS.
Research by the Committee on Climate Change has shown that CCS could virtually halve the costs for the UK of meeting emissions targets. The UK is especially well placed to be a leader in the industry, not least because of storage space in our depleted oilfields just off our coasts, but the clock is ticking. The UK has fallen down the Global CCS Institute’s readiness index in the past two years, due to a
“lack of clear CCS policy”.
The Committee on Climate Change has also been clear that we must develop this technology in the coming years so that we are ready for a full-scale operation in the 2030s.
There is also an urgent need to stay competitive with our continental partners, which is particularly important post-Brexit. In fact, getting ahead on CCS could be the competitive edge that we need to attract inward investment. If we delay, we will see that investment lost to other countries who get ahead. For example, this year Norway announced the award of contracts for full-scale carbon capture at cement, ammonia and waste-to-energy plants. In 2016, Toshiba completed construction of a carbon capture facility at a waste incineration plant in Saga city, and the world’s first large-scale carbon capture facility in the steel industry was launched in Abu Dhabi. The Dutch Government have committed to CCS and handling 20 million tonnes by 2030 from industrial sites. Rotterdam is one of the biggest industrial zone competitors, so it is vital for Teesside to get ahead.
The difficulties we have experienced in the steel industry, where energy cost pressures are higher than those faced by our European competitors, are a warning of what is to come if we do not get serious about industry decarbonisation. As my neighbour, the hon. Member for Middlesbrough South and East Cleveland, has mentioned, our region has huge CCS potential. The Teesside Collective project could become one of Europe’s first clean industrial zones.
Yesterday, I attended the launch of the South Tees mayoral development corporation’s strategic masterplan for the future of the former SSI steel site. At 2,000 acres, we have a once-in-a-generation opportunity to attract global investment and to become a hub for new industries and technologies. We could genuinely create a world-renowned site for clean industry with CCS at its heart.
Teesside is home to nearly 60% of the UK’s major energy users in the process and chemical sectors. The internationally renowned North East of England Process Industry Cluster—NEPIC—represents chemical-based industries in the region, but particularly those concentrated in Teesside. The sector generates £26 billion of annual sales, £12 billion of exports and is the north-east’s largest industrial sector. BOC, one of the Teesside Collective partners, operates the UK’s largest hydrogen plant, which produces over half the UK’s hydrogen. If we are to convert our gas grids to hydrogen—as Leeds is currently exploring—CCS on Teesside would need to be a key part of that decarbonisation strategy. Another Teesside Collective partner, Lotte Chemical, produces plastic for the soft drinks industry. CCS could capture over 90% of its carbon output, essentially decarbonising the soft drinks materials supply chain.
The density of our industry makes us a heavy emitter of carbon dioxide—it is three times the national average and accounts for more than a fifth of all UK industrial emissions. That makes us especially vulnerable to uncompetitive energy prices and carbon price pressures relative to other countries, but it also makes us a prime candidate for CCS, because the technology could drastically cut a very significant proportion of UK emissions. If we combine that with our close proximity to the North sea industry and potential storage sites in depleted oil fields, it means that Teesside would be one of the most efficient and cost-effective locations for a test case. The technology would help us to maintain and even enhance the comparative advantage we already have in chemicals and process industries. Or, to put it another way, without support to decarbonise our industry, we risk seeing the problems at the SSI steelworks happen in our other sectors.
NEPIC estimates that the use of CCS could create and safeguard almost 250,000 jobs by 2060, and 7,000 new jobs could be created in Teesside for the building and operating of facilities alone. The House of Commons Library estimates that CCS could sustain up to 60,000 jobs and deliver a £160 billion economic boost by 2050 if it is delivered along the east coast. Teesside is ready and waiting to face the carbon reduction challenge and could be capturing and storing CO2 within six years.
The Teesside Collective has costed engineering for three industrial plants and presented to Government the business case for an initial CCS hub in Tees valley. Its proposals are for a cost-effective introduction strategy, with companies capturing and storing 11 million tonnes of carbon dioxide over 15 years. That would then expand to include power stations and more industrial companies as the network demonstrates its worth. It estimates that a pilot could repay up to £31 million a year to the Government in carbon savings.
The Government have understandably been concerned about cost and value for money for the taxpayer, which unfortunately led to the disappointing decision in 2015 to cancel the £1 billion CCS competition. I am glad that the Government have changed their view and recognised that CCS is a technology where, for relatively small up-front investment, greater savings in reducing carbon can be made down the line.
The Oxburgh review noted that investing in CCS now would deliver the lowest cost to the consumer and that heavy costs would follow if it kept being delayed. I truly welcome the Government’s commitment of £100 million in the strategy, and I hope that some of that will support the £15 million FEED—front-end engineering design—study requested by the Teesside Collective. The Oxburgh review suggests that CCS on a power station could be constructed at a cost of £85 per megawatt-hour under state ownership, which is lower than Hinkley Point’s £92.5 per megawatt-hour. Those costs would be even lower for industrial clusters. Analysis by Green Alliance, for instance, suggests that costs in that context could be cut by two thirds, making it comparable to wind and solar power. The Teesside Collective already has two industrial plants producing pure CO2 and therefore requiring no additional capture facilities at all.
The important thing is that business and Government work together to devise a sustainable funding model that does not place unsustainable costs or risks on the partner business or consumers. One crucial element missing from the clean growth strategy is the lynchpin for starting any major CCS project in the UK: work on transportation and storage. The report of the parliamentary advisory group on CCS stated:
“The lowest cost CO2 storage solution for the UK at the scale required will be offshore geological storage in UK territorial waters.”
The group also cautioned:
“The state will need to take an enhanced role in managing storage risk if costs are to be minimised.”
Teesside is well placed for that, given its location and links with the oil industry, but work needs to start on developing the infrastructure soon, so that a cost-effective model can be found.
As the Government acknowledge in the clean growth strategy, the success of the offshore wind cost reduction taskforce provides a good model for the cost challenge taskforce on CCS. However, as NEPIC has argued, that success was based on Government investment through a clear marketplace and a funding model that provided the certainty that investors need. Both the Oxburgh review and the Green Alliance report recommend contracts for difference or similar for financing the storage infrastructure to achieve that.
The strongest message that I want to send to the Government is: let us get moving on this as soon as possible. The Public Accounts Committee cautions that the UK has already missed opportunities, and we cannot afford to lose any more. It is crucial for our energy and climate strategy, but it is also a chance for Britain to take a world lead in a cutting-edge industry, future-proof our industries, protect jobs and create new ones. Teesside stands ready and willing to get to work and make it happen.
Peter Aldous (Waveney) (Con)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) on securing this debate. His timing is spot on, given the publication last week of the clean growth strategy.
We last held a debate in this Chamber on carbon capture and storage on 24 January. From my perspective, the outcome of that debate was disappointing, but nine months on, I believe that we are in a much better place. A framework is beginning to emerge within which carbon capture and storage in the UK can become a major industry, and we are learning lessons from the aborted second CCS competition.
I believe that the Government are studying closely the proposals in the noble Lord Oxburgh’s report of September 2016. I was on his advisory committee, which heard the evidence, drafted and approved the report, and I believe that it is a good blueprint for the future. We see carbon capture and storage as fitting in well with the 10 pillars of the Government’s industrial strategy; it ticks all the boxes. Finally, the publication last week of the clean growth strategy provides the much-needed road map that business is looking for in order to invest time and money in carbon capture and storage.
Invariably in debates such as this, Back-Bench MPs have an ask of the Government, which we look to the Minister to take on board and respond to. However, from my own perspective, with the publication of the clean growth strategy last week, the Government have, to a large degree, shot my fox. I shall briefly set out the case for CCS and why it is so important that it is at the heart of the UK’s industrial strategy.
The UK has legally binding commitments, set out in the Climate Change Act 2008, to reduce carbon emissions by a minimum of 80% from 1990 levels by 2050. As the Intergovernmental Panel on Climate Change and the Committee on Climate Change have both pointed out, if we do not deploy CCS, it will be very difficult to meet that target cost-effectively.
The UK has a unique selling point that means we should be at the vanguard of the CCS movement. It is the thing that most colleagues in this room have in common, in that our constituencies adjoin it: the North sea. I believe that your seat also adjoins it, Sir David. In the North sea and the UK continental shelf, the UK has its own large, safe and secure offshore CO2 storage vessel, in the rocks deep beneath UK territorial waters. It provides us with the least-cost form of storage on an industrial scale. Over the past 50 years, as a result of the development of the North sea oil and gas industry, the UK has acquired enormous expertise and experience that can be harnessed to deliver CCS.
Ross Thomson (Aberdeen South) (Con)
Will my hon. Friend join me in acknowledging and welcoming that the University of Aberdeen has world-leading experts at the forefront of research into carbon capture and utilisation? It is reflected in the fact that Aberdeen was the only UK university whose entry into the Carbon XPRIZE was accepted. It is developing technology to help create a solution to the damage that CO2 can cause, such as using what is left as materials for furniture and so on. Does he welcome and acknowledge that?
Peter Aldous
Yes, I do. I am happy to acknowledge it. We have enormous, significant expertise across the UK. I am sure that all of us in this Chamber can highlight institutions in or near our constituencies that can and should put us at the vanguard of the low-carbon economy and its global development over the next few years.
As I was saying, the UK has acquired enormous expertise and experience in the oil and gas sector, which can be used to deliver CCS, create jobs and—most importantly for the Government—generate revenue for the Exchequer. However, as the hon. Member for Redcar (Anna Turley) highlighted, time is of the essence. We need to get on with it. As a result of the lower oil prices that have prevailed for the past three years, the North sea is going through a period of transition and restructuring. We must move quickly to use assets that otherwise might be prematurely decommissioned.
As we have heard, CCS has an important role to play in delivering growth across the whole UK and in bringing jobs to coastal communities, which in recent years have faced particular challenges with the decline of traditional industries. There are areas where clusters of energy-intensive industries are based—such as Scotland and the north-east on Teesside, as the hon. Member for Redcar highlighted—which could benefit significantly from CCS. That might not be the exact situation in my own constituency, but we have businesses in East Anglia that are part of the North sea supply chain, whether in oil and gas or in the emerging offshore wind sector, and that would benefit from the development of CCS.
The industrial strategy highlights the importance to the UK of cultivating world-leading sectors and being global pioneers in industries in which we have an advantage. CCS is one of those industries. We have the resources and the skills. It is an industry in which we can not only secure inward investment but, in due course, create significant export opportunities, building on the expertise that my hon. Friend the Member for Aberdeen South (Ross Thomson) mentioned a minute ago.
On the resources and skills required for CCS, Norway is a country with which we have a great deal in common.
Mr Simon Clarke
On that point, we have had disappointing news from Norway this week. I spoke to the Teesside Collective to discuss what was going on there. It is important to put it on record that although the Norwegians have retreated somewhat in the scope of their ambition for when things will happen, they have not pulled out of CCS altogether. Effectively, they have found themselves in a minority Government situation—we can perhaps empathise—and that has made certain investment decisions rather harder to achieve, so they are looking to make them on more of a case-by-case basis. That is why the news has come out of Norway in the way that it has.
Peter Aldous
I am grateful to my hon. Friend for that intervention. I talked this morning to representatives of Statoil, who emphasised that they are proceeding with CCS and that the situation is, dare I say, a fact of life with minority Governments.
We have a great deal in common with Norway. The Norwegians are also taking forward CCS, and they are slightly ahead of us. However, I emphasise that it is not a question of CCS taking place either in the United Kingdom or in Norway; it should be in both. We need to collaborate between our two countries to ensure that that takes place on the best possible terms and at the lowest possible price.
On that point, cost is the elephant in the room. CCS has foundered on this particular rock in the past, and I am sure that there are some who say that it will do so again. However, I do not believe that that will be the case. The Oxburgh report showed that in the right circumstances, CCS can be delivered at £85 per megawatt-hour. It is also important to highlight what has happened in the offshore wind sector. Costs have decreased in the past three years from around £140 per megawatt-hour to just under £60. That has been achieved by the Government providing the framework for the delivery, and by the industry getting on with the job and building, rather than just talking.
With the clean growth strategy, the Government have provided a framework for CCS to develop. I look forward to more details from the Minister about the road map for turning this exciting vision into a practical reality. Doing so will not only make the world more resilient to climate change, but transform places and—most importantly —people’s lives.
Alex Cunningham (Stockton North) (Lab)
I am grateful to the Backbench Business Committee for granting this debate, and to the hon. Members who persuaded it to do so. It is a particular pleasure to follow my co-chair of the all-party parliamentary group on carbon capture and storage, the hon. Member for Waveney (Peter Aldous).
My interest in the Government’s new approach to CCS in the clean growth strategy goes wider than Teesside, but I am pleased that new colleagues from our region are present, including the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) and my hon. Friend the Member for Hartlepool (Mike Hill). They join the work that many of us have been doing for years to persuade the Government to get serious about CCS. I am surrounded by no fewer than five Teesside MP colleagues; 100% of us are here, and we are 100% behind the debate.
I hope my new Tees colleagues recognise that the Government’s reaffirmed commitment to CCS, two years after withdrawing £1 billion in funding, is only a small step along what will be a very long road if our country is truly to reap the benefits of carbon capture. We need more than tens of millions in investment; we need billions. We need big leaps, not tiny steps. Nevertheless, this new recognition of CCS is testimony not only to the impressive body of evidence that continues to emphasise the key role of CCS in delivering least-cost decarbonisation, but to the energy—no pun intended—and enthusiasm of the industry, which has kept up a steady drumbeat on CCS since November 2015. I pay tribute to the Carbon Capture and Storage Association for its work and for its support of the APPG.
In the clean growth strategy, the Government have recognised what the industry has been saying for years: CCS is vital to broad sections of the UK economy. Power aside, key industries such as steel, cement and refining are increasingly looking for ways to remain competitive in a low-carbon world. CCS offers the only solution for deep decarbonisation in these industries that helps to enable their sustainable future, which is crucial for regions such as the Humber, the north-west and Teesside.
Dr Paul Williams (Stockton South) (Lab)
CF Fertilisers is based in my hon. Friend’s constituency, Stockton North, but also employs people in my constituency and in Middlesbrough. My hon. Friend the Member for Middlesbrough (Andy McDonald) has a long-standing commitment to carbon capture and storage, but cannot be present because of a Front-Bench commitment.
Dr Williams
My mistake.
CF Fertilisers uses as much gas every year as the city of Manchester. Does my hon. Friend the Member for Stockton North (Alex Cunningham) join me in calling on the Minister to acknowledge that carbon capture and storage is very much part of the future of CF Fertilisers?
Sir David Amess (in the Chair)
Order. Having recently been at a meeting of the Panel of Chairs, I remind new Members that if they wish to intervene they must be present at the start of the debate. However, I know that Dr Williams spoke in the main Chamber earlier, and I realise that he cannot be in two places at once. Nevertheless, as a Clerk is sitting beside me, I thought I should point that out.
Alex Cunningham
My hon. Friend the Member for Stockton South (Dr Williams) was indeed in the main Chamber earlier. So was I; I was in the smoking debate, trying to persuade our country to give up the weed.
I agree entirely with my hon. Friend. The company he refers to consumes the same amount of gas at its other plant in Runcorn. It is crucial that CCS be spread across the country.
The Minister for Climate Change and Industry (Claire Perry)
May I address that question now, in case I forget later? The hon. Member for Stockton South (Dr Williams) is right to focus on the effect on companies such as CF Fertilisers. He will be pleased to know that I had a meeting with that company yesterday. We have had conversations on several issues, but the impact of this technology on its carbon dioxide emissions and its cost base is clear.
Alex Cunningham
I thank the Minister for that helpful intervention. I have seen companies across the area, including those that make up the Teesside Collective, working hard to decarbonise their processes, but engineering can only do so much. The Government appear to understand that. The clean growth strategy estimates that CCS could provide almost half the required emissions reductions in energy-intensive industries, helping them all on their way.
A recent study by Summit Power gives a simple explanation as to why the first CCS projects must begin operation in the 2020s: achieving the CCS capacity needed to meet the UK’s 2050 target requires a 30-year build-out rate. Any attempts to significantly shorten that period would place unrealistic expectations on the supply chain and the construction companies. The end result would either be a failure to meet the 80% target by 2050 or the deployment of alternative low-carbon solutions that are likely to be considerably more expensive. We need the first CCS projects to begin operation in the 2020s. Although the £100 million of funding to support that work is welcome, the Government will need to do much more if we are to realise our ambitions.
The Government’s recommitment to CCS sets out an ambition to deploy it at scale during the 2030s, which throws up some interesting questions. What exactly is meant by “at scale”? Does it mean deploying the first CCS projects in the 2030s, or does it mean that the projects will be up and running in the next five to 10 years and at the required scale 10 years later? To achieve large-scale deployment of CCS in the 2030s, it will be essential to have at least one phase, if not two phases, of operational projects in the 2020s to enable learning and cost reduction.
That was just one of the messages from yesterday’s APPG meeting, where we heard about CCS progress in three fantastic projects that could be the first building blocks in the construction of a world-leading CCS industry: the Caledonia Clean Energy project, the Teesside Collective and the Liverpool-Manchester hydrogen cluster. They are all in a strong position to get work under way to deliver projects that could be expanded or replicated with relative ease.
The Department is familiar with those projects and is providing some support, but the message to Government at that meeting was clear: each of the projects is costed, demonstrates relatively low cost and, most importantly, could make something happen quickly. The projects have invested heavily in development, worked with leaders in the field and done the numbers. Their plea was for the Government to come up with a timetable for decisions.
The Teesside Collective spells out what it needs in its briefing note, which the hon. Member for Middlesbrough South and East Cleveland alluded to. It asks for the allocation of £15 million in capture plant FEED funding to enable it to develop phase 1 of the project. It wants support for investment in a suitable CO2 store. It states that transport and storage costs will come down through new delivery models and that it is keen to work in partnership with Government to look at a cost-effective solution. It also wants the establishment of a funding mechanism to build and operate an industrial CCS network.
Will the Minister address those pleas and let us know what decisions we can expect from her? The industry desperately needs decisions. I invite her to attend a meeting of the all-party group early in the new year so that she can outline the Government’s thinking, listen to Members’ feedback and answer their questions.
I hope I will be forgiven for being a bit more parochial now. As other hon. Members have mentioned, NEPIC has identified Teesside as a location with a particularly strong competitive advantage in the deployment and commercialisation of CCS. My Teesside constituency is home to the Teesside Collective, a consortium of industries developing the first CCS project in the UK. Teesside has the workforce and the strong engineering skills required for CCS, largely as a result of long-standing expertise in the oil and gas, energy supply, chemical and process industries.
We know from the clean growth strategy that CCS has to do more than demonstrate carbon reduction and low cost. It also has to offer a competitive opportunity for the whole of the UK. There is every reason to believe that that aim can be realised. The UK has some of the best CO2 storage capacity in the world, a world-class oil and gas industry with the ideal skill set for CCS, and industries already located together in key regions. The economic benefits of CCS could be immense, with the Summit Power report concluding that developing it in the UK could deliver an estimated £129 billion of benefits. The clean growth strategy includes a commitment to developing a deployment pathway for CCS in 2018, but there is no detail about how that pathway will be developed or about the actions that may be included, so I hope the Minister can help us in that regard.
To make sure that, come the 2020s, the first CCS projects are operational, the Government need to implement a number of key actions in this Parliament to kick-start CCS clusters in a number of key regions. Countries such as Norway and the Netherlands have come forward with strong commitments on CCS, and it is time for us to step up and take our place among the leading group of countries that are developing this transformational technology.
I am ambitious and optimistic about the potential that exists and I am encouraged that we seem to be moving in the right direction. However, in closing I reiterate three messages: we need huge leaps to be taken, not tiny steps; the Government need to publish a timetable for the decisions needed to make real progress; and there are good, costed projects ready to go that can make our country a world leader in carbon capture and in creating and protecting countless jobs. I hope that the Minister will help us do that.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is always a pleasure to serve under your chairmanship, Sir David.
I congratulate the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) on leading today’s debate and speaking so eloquently about the benefits of carbon capture—and, of course, on throwing a strong pitch for his own constituency into the mix as well. In fact, all Members in this debate have spoken about the benefits of carbon capture, so I will not cover the ground that others have already covered, apart from perhaps touching on a couple of the points made. I will concentrate more on the policy.
As we know, carbon capture and storage has huge potential for decarbonising fossil fuels and it could be highly effective in reducing greenhouse gas emissions, as we have heard from many Members today. However, it was telling that, in the last contribution, the hon. Member for Stockton North (Alex Cunningham) referred to “tiny steps”, because that is indeed what these are: tiny steps on the way.
In Scotland, the SNP Scottish Government are already consulting on a new climate change Bill, with proposals—along with interim targets for 2020, 2030 and 2040—for a 90% reduction by 2050. That is as far as the reduction can go under current scientific advice. The independent expert advice from the Committee on Climate Change has said that that is the limit of feasibility and at the moment there is not enough evidence to set a net zero target.
However, I would caution the hon. Member for Middlesbrough South and East Cleveland. If he is successful and gets a promise about an installation, there is an elephant in the room. It is not the white elephant of Hinkley Point, which I will refer to later; it is the elephant that is Peterhead, where there was a shameful decision by the UK Government to pull the plug on a long-planned development. Peterhead is not far from the Aberdeen South constituency and it is where we saw a hugely damaging decision being taken, without warning, that will create a legacy that will deter investment incentives and dent consumer confidence.
That decision was a manifesto betrayal. That should be key—it was in the Conservative manifesto that the project would go ahead, and the cost to the taxpayer was £100 million. Peterhead was set and ready to accept a £1 billion contract and expected 600 jobs. I would therefore caution the hon. Gentleman about getting too excited about any promises, because by axing that project at the 11th hour, George Osborne committed what can only be described as a betrayal of the people in Peterhead.
Even now, the commitment to CCS, welcome as this small U-turn is, is still fairly mealy-mouthed, because in the detail it says: “subject to cost reduction”. That is the bare minimum of commitment, and the Carbon Capture and Storage Association has pointed out that it is counter to the way that technology actually develops. We have to invest in order to get the experience to get the drive costs down, so it is very difficult to see how an energy policy cherry-picked in this way, with these announcements and selected U-turns, will really provide a cohesive way forward for the industry. And all the while, in the background, we have the expensive and regressive nuclear policy at Hinkley C.
The SNP Scottish Government support the Paris agreement’s zero-emissions aim and we are providing significant funding in Scotland to establish the feasibility of the Acorn CCS demo project at St Fergus. Incidentally, that project is also supported by EU science funding of €1.9 million, and with SNP Government support the low carbon and renewable industry has created 58,500 jobs. That was the figure in 2015, which was up by a third from 2014.
Claire Perry
I know that the marching orders for the SNP, if not always for the hon. Gentleman himself, is that its Members have to be as gloomy as possible about everything at all times, but it is, frankly, really very sad that he has made no reference today to the high-wind offshore floating wind plant, which is one of the most innovative and creative things that is being done. It is being done by the UK Government, because this area is not a devolved matter, as he knows. That has been done because of the combination of the policy, Government leadership and work with industry to drive down the costs of offshore wind, exactly as we propose to do with this technology. Let us focus on what can be delivered and acknowledge that no country in the world is taking a major step into unreformed CCUS at the moment, and we want to do this together, so perhaps we could have just a bit more cheerfulness from north of the border.
Drew Hendry
I am grateful to the Minister for her short speech, or lecture, about how we should look at Government policy. I believe it is quite common now for us to be told that we should just hope for the best—that we should all be doing a “rah-rah” and saying, “This is all going to be great in the future”. No amount of deflection from the Minister will get away from the point that the UK Government, at the 11th hour, cancelled the Peterhead project, with no warning to the people involved, and that is shameful. On the point of the floating wind farm, which was launched yesterday, she will be aware that Nicola Sturgeon was there, not only to welcome the project but to launch it officially.
By making these policies—by making these small U-turns and small concessions—the Government are doing some welcome things. However, we want to see further, more significant U-turns. We want to see a significant investment, because, as has been stated, it is time for a long-term, robust UK policy for a low-carbon future. That is needed urgently. I urge the Minister to come up with some actual details about what the Government are going to do in the future to deliver it.
Mike Hill (Hartlepool) (Lab)
It is a pleasure to speak under your chairmanship, Sir David. I am grateful to the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) for securing this debate. As an MP who supports climate change initiatives and the reduction of carbon emissions, I am pleased that the Government are now recommitting to CCS as part of their clean growth strategy, in order to meet legally binding targets.
I am proud that in Hartlepool we are already one of the main suppliers of low-carbon energy to the national grid, and EDF is developing green technologies around the production and supply of electricity for a future beyond the life of the nuclear power stations.
While I am pleased that such work is being undertaken, I recognise that where we have more traditional coal and gas-fired power stations, we need to act swiftly to reduce emissions. CCS is a proven technology that can do that. The Tees valley has been identified as one of two energy-intensive industry clusters that would benefit from the development of CCS technologies. Further, our expertise and experience of working with the offshore oil and gas sector put us in prime position as a region to develop technologies for the use of depleted oilfields for the purposes of carbon storage.
I commend the Tees Valley combined authority, which is made up of four Labour council leaders, the Labour Mayor of Middlesbrough and the elected Tees Valley Mayor, Ben Houchen, for their efforts to secure CCS pathfinder status for the Tees valley. Success would not only bring much-needed jobs but much-needed investment into the area. If we are serious about meeting environmental targets, we must invest in initiatives such as CCS. As an industrial base located on the coast, Hartlepool and the wider Tees valley area are best placed to meet those needs.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairmanship, Sir David. Like other Members, I congratulate the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) on bringing forward this debate. He promoted Teesside and highlighted the possible economic benefits of CCS, including to the energy-intensive industries located there.
I had started to wonder what the Teesside Collective was. Before I came into the Chamber, I understood that it was the consortium looking to develop the project, but it is quite clear that the name could be applied to the Members gathered in Westminster Hall, because there is no doubt that they spoke with a unified voice. It is good to hear cross-party support fighting for jobs in constituencies, and it is to be applauded.
As the hon. Member for Waveney (Peter Aldous) said, this is the second debate on CCS in this Chamber in a 10-month period. That shows how valuable CCS is deemed to be for climate control and emissions reduction. The debate has been somewhat more upbeat and optimistic than the debate in January, but I warn the Minister that, just like my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), I reserve the right to apply a bit of gloominess to the issue.
Alex Cunningham
Before the hon. Gentleman introduces further gloom to the debate, perhaps he would like to welcome, as I did yesterday, the fact that the Caledonia project in my home country is working very closely with the Tees Collective project in my adopted home. It is co-operation between projects that will capture the imagination of the Government and others and drive things forward.
Alan Brown
Yes, I welcome that collaboration and announcement. The hon. Gentleman made a joke about being parochial for his area and his constituency, but surprisingly I am not going to be that parochial. I would like to see all these projects develop, with local areas across the United Kingdom benefiting.
The hon. Gentleman talked about taking tiny steps forward. We need to take much bigger leaps forward—this is where I turn to the gloomy aspect that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey touched on—but we have taken backward steps. The Minister might not like hearing this, but it is important, and it has got us to where we are just now. Pulling the plug on the Peterhead project cost the Peterhead area 600 jobs, but it has the much wider implication that it dented investor confidence. The Government need to take action to recover that confidence and find ways to get private investment going forward.
In 2014, before the Scottish referendum, we were told by the Better Together campaign that only the broad shoulders of the United Kingdom could cope with a reduction in the oil price. Since then, we have sadly seen a reduction in the oil price, but we have not seen enough support from those broad shoulders. That is why the pulling of the project at Peterhead was a further blow to the oil and gas industry in that area of Scotland. That project could have been the perfect fillip.
Ross Thomson
Does the hon. Gentleman accept that the White Paper on independence was wrong when it talked about the proceeds from oil and that the Deputy First Minister John Swinney was wrong when he said that there would be a second oil boom? As we are talking about U-turns, will the hon. Gentleman join me in calling on the First Minister to perform a U-turn on scrapping the energy jobs taskforce, because that is needed to support jobs in Aberdeen?
Alan Brown
I thank the hon. Gentleman for that intervention and for talking down the oil and gas industry in his area. Yes, the Scottish Government’s predictions in the White Paper had the future price of oil wrong—just like the UK Government and the Office for National Statistics had it wrong. The Scottish Government were somewhere between the two. We were not the only ones who got it wrong; economists got it wrong too. We admit that we got it wrong, but it is why the SNP has long argued for an oil fund, because that would have helped to smooth the trough that came. I am happy to acknowledge that point and put it on the record.
Returning to where I was going to go, the decision to pull the plug on Peterhead had wider implications for investor confidence. It has been acknowledged and was repeated in the clean growth strategy that risk was an issue with these projects, but in the previous competition the real risk was the White Rose project, where the contractors involved could not apportion risk between themselves properly and could not provide a compliant bid. In the Peterhead project, Shell was able to manage the risk. The Government need to review that and find out why Shell said it could manage the risk and provide a compliant bid. That has important implications going forward.
The National Audit Office report compiled after that decision confirmed that a total of £168 million was spent on the two CCS competitions with no tangible research and development outcomes to show for it. The Government may suggest that the contractors or personnel involved in the projects developed some expertise, but there is no guarantee that they will be involved in future projects. There is a risk that they will take their expertise elsewhere. That is why we need to go forward quickly. Following the decision on Peterhead, there has been the withdrawal of funding for onshore wind and solar power, which has caused problems in those sectors, leading to a 95% drop in expenditure on renewables. There is a clear pattern, and I highlight that to remind the Government that investor confidence is low and it must be stimulated. They need to find a way forward.
The Government can find ways forward to manage risk. In the Thames tideway project, they underwrote risk to the value of £5 billion. Hinkley Point C had bonds of £2 billion underwritten, not to mention the fact that the National Audit Office estimates that the project will cost £30 billion. We must remember that, unlike the other contracts for difference awards, Hinkley has a 35-year lifespan and not the standard 15. It is clear that where there is Government will, there is a way. They need to find that will and way for carbon capture and storage. The hon. Member for Waveney talked about the Oxburgh report, which highlights that CCS can deliver an estimated strike price rate of £85 per megawatt-hour. That compares favourably with £92 per megawatt-hour for Hinkley.
Other Members have highlighted the estimate of the Committee on Climate Change that CCS could halve the cost of meeting the 2050 carbon reduction target. In that respect, I welcome the clean growth strategy, which the Government brought forward last week. As I said at the time, however, the strategy gives mixed messages. It states that CCS will be deployed subject to cost reductions, but we need clarity. What are the Government’s cost expectations and what is the expected trajectory once the initial project is up and running? We need to remember how that compares with the “sign at all costs” attitude taken towards Hinkley. The Government also need to state clearly how they expect CCS to be paid for. Members from Teesside have highlighted the need to find a suitable and robust payment mechanism that gives value for money.
I welcome the Government’s statement in the clean growth strategy that they
“will work with the ongoing initiatives in Teesside, Merseyside, South Wales and”—
importantly from our perspective—“Grangemouth”. However, they need to clarify what “work with” means. What is the real level of support that they will provide? It needs to be more than working with or providing token support. As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey highlighted, the St Fergus project in the north-east of Scotland is being supported by the Scottish Government and EU funding. When it comes to EU funding, what future funding are the UK Government going to allocate beyond the 2020 horizon? How do they see collaborative working going forward?
Due to the abrupt pulling of the previous competition, at great cost to the public purse, not only was the National Audit Office report undertaken, but the Public Accounts Committee also undertook an investigation. It made a number of recommendations; hopefully the Minister will advise us on how the Government will take them forward. First, the Committee recommended that the Government
“set out in its Industrial Strategy the role that CCS can play”.
I am not sure that there is enough detail in the industrial strategy on that yet. The next recommendation was that
“By the end of 2017, the Department should quantify and publish the impact across the whole economy of delays”
to CCS and of its not having been implemented yet. The Committee recommended that an
“Emissions Reduction Plan should set out a clear, joined-up strategy for deploying CCS”.
It also said that the Government need to look at different risk options for energy policies, that the Treasury should buy into the emissions reduction plan at the outset and that there is a need for less Treasury interference—the Department for Business, Energy and Industrial Strategy must actually make the decisions, rather than the Treasury intervening.
I hope that the Minister will respond to that, and advise whether the carbon capture, utilisation and storage cost challenge taskforce that is to be put forward will consider those aspects. I welcome the setting up of that taskforce. Will she also confirm how experts will be selected and incorporated into the taskforce, and what the terms of reference from the Government will be?
It is laudable that the clean growth strategy reiterates that we want to see the implementation of CCS. As the hon. Member for Stockton North (Alex Cunningham) asked, what does large-scale CCS in the 2030s mean, what is the pathway to that, and what projects do we need to see on board before then? The mention of supporting hydrogen production is also laudable; that is certainly a good way forward. I would also highlight the fact that Scotia Gas Networks is looking to run demonstration trials up in Scotland, to see how that will work in a domestic setting.
It is laudable to say that the UK aims to be a global leader, but to be a global leader we need to lead from the front. We need financial commitment, drive and determination, and we need to see a clear way forward soon. I look forward to hearing the Minister’s response.
Dr Alan Whitehead (Southampton, Test) (Lab)
Surrounded as I am by what we now know is a Teesside collective, who look out on to the North sea, I cannot offer quite such a spectacular view from my constituency. I have a view on to the English channel, which is of course rather less bracing for a dip this time of year, but does not share the North sea’s potential for CCS in the future.
It was good to hear this afternoon from Members across the House about that potential, in terms of what is in Teesside—both in its own right and in conjunction with what is in the North sea. As a country, we must play a role in, among other things, making sure that after the exploitation of the North sea for oil and gas, the industry continues. That can be done by ensuring that the plant, the connections and the various other things currently in the North sea are turned around over the coming period, so that we are the leading country in Europe and the world for storing carbon as well as capturing it—perhaps offering that facility to not only our own country, but all the countries bordering the North sea and more widely.
In that context, it is interesting that that is precisely where Norway is now going. Statoil has been fairly busy recently; I met with its representatives just the other day. It was good to hear from them that although there have been setbacks in the process of getting the Norwegian project under way, it is very much still on track. The aim is to develop the Troll field, essentially as the first part of a European-wide process of storage of carbon in the North sea. They are currently looking at processes of barging captured carbon to an onshore site in Norway and then pipelining it out.
Alex Cunningham
The development in Norway is an illustration of why the UK needs to get on its bike and get moving. Yesterday, at the all-party parliamentary group meeting, it was revealed that the cost for projects in this country might be as low as £40 or £60 a tonne, but going to a third party might cost us £100 a tonne. That is an economic argument in favour of our own comprehensive storage.
Dr Whitehead
My hon. Friend has exactly anticipated, in rather more eloquent terms, what I was about to say almost immediately. The pace of the Norway project illustrates that we should get our act together as early as possible in making sure that we have the lead on the whole process in the North sea, for all the reasons that my hon. Friend mentions—cost, expediency and proximity. This unparalleled opportunity will probably not come again. If, for example, we close down all the capped wells and sites in the North sea as the oil begins to diminish, we will have lost that opportunity to be world leaders in the North sea. Action needs to be undertaken now, or in the very near future.
I endorse everything that has been said by pretty much everybody in the Chamber today about the importance of carbon capture and storage for the future. I cannot do better than describe it in the exact words of the Committee on Climate Change:
“Carbon capture and storage (CCS) is very important in meeting the 2050 target at least cost, given its potential to reduce emissions across heavy industry, the power sector and perhaps with bioenergy, as well as opening up new decarbonisation pathways (e.g. based on hydrogen).”
The committee goes on, in that report, to talk about the cost of not doing anything as far as carbon capture and storage is concerned over the coming period, which hon. Members have discussed.
The Committee on Climate Change sees carbon capture and storage as absolutely essential. That is what it said in its report, “The Fifth Carbon Budget”, which we in the UK have now adopted. It is incumbent on us to make sure that we respond to what the committee has underlined in that report—the importance of carbon capture and storage.
On that matter, I have been pleased to see that the clean growth strategy not only mentions but more than mentions what will happen with carbon capture and storage. Just a little while ago, the Minister told us in the House that the clean growth plan would be on its way shortly, with further bells and whistles. I would like to think that that mention—all three pages of it—may be a bell or whistle that she personally inserted into the clean growth plan to get a new view abroad of what we can get from carbon capture and storage, how important it is for the future and what the next pathways are.
I cannot be wholly uncritical, because certain things need to be underlined at this stage. Opening an avenue on carbon capture and storage will inevitably be seen by many people concerned about the area as springing from something that hon. Members have also mentioned this afternoon—the shameful passage in our recent history of the cancellation of the two carbon capture and storage pilot projects at the very last moment, in 2015. The cancellation of those projects was not just a tragedy and a disaster for the communities involved in them; it spread a pall of doubt and concern across the whole of the industry about whether carbon capture and storage has a future, whether it is worth investing in and whether confidence can be restored to make it go forward, as we all want. We have to tread a path back to the starting line, and I hope that, given the intentions about carbon capture and storage set out in the clean growth strategy, the Government understand what that setback has done to us and find a way to get back to the starting line. There are a lot of measures in those three pages, which suggests that that can be achieved.
I am not sure whether the £100 million—or, to be precise, up to £100 million—that has been set aside for the next phase of the development of carbon capture and storage will be remotely sufficient to get us where we want to go. I hope that, in 2018, when the Government come forward with more plans and details about how the £100 million will be spent and what will happen to it—the clean growth plan assures us that they will do that—the next stage of the road map will set out what we will put in over the next period to make carbon capture and storage work properly and ensure we reach the carbon reduction goals set out in the fifth carbon budget.
In that context, we ought to pay more attention to the excellent report on carbon capture, usage and storage by the Oxburgh commission, of which the hon. Member for Waveney (Peter Aldous) was a member. Although the clean growth strategy says that that advisory group’s advice influenced the Government’s thoughts on carbon capture and storage, the report sets out the investment that is likely to be needed for carbon capture and storage over the next period, and it is substantially more than the £100 million set out in the clean growth plan. It would be helpful for the Government to provide a formal response to that report, which they have not done hitherto, to put on the record which parts of it they think are important, which parts they will try to implement at an earlier stage and which parts they will leave for later. I will leave that thought with the Minister. That would be a very positive thing to do, in the light of what was put forward in the clean growth strategy. We must be clear about the path ahead of us, and we need to learn from the report’s very good insights.
I hope the Minister notes the cross-party agreement in this Chamber about the urgency of the need to develop carbon capture and storage, about the development route we need to take, about the key role that Teesside and the North sea will play in that process, and about the need to work together to realise the carbon capture and storage goals that are so necessary on our path to carbon reduction.
The Minister for Climate Change and Industry (Claire Perry)
As always, it is a great pleasure to serve under your chairmanship, Sir David.
I thank my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) for securing this excellent debate, to which there have been many thoughtful, detailed and factual contributions. My hon. Friend is a strong proponent both of the technology and of the area he represents. It was wonderful to hear the unanimity of views, in particular from the hon. Member for Redcar (Anna Turley), who speaks so passionately on behalf of her constituency; the hon. Member for Stockton North (Alex Cunningham), who made a very factual contribution about the importance of this technology; the hon. Member for Hartlepool (Mike Hill), whose predecessor also promoted the technology; and my hon. Friend the Member for Waveney (Peter Aldous), who, although not from the region, represents a coastal constituency and has a long-standing interest in this issue. As always, he spoke very well on this subject.
I tweaked the tails of the hon. Members for Kilmarnock and Loudoun (Alan Brown) and for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) slightly. I understand their points, but I sometimes wonder whether we do not have more solar deployment in Scotland because listening to the Scottish National party might lead us to think that the sun never shines north of the border, whereas we all know that it does very frequently. They made a fair point about the criticism that has been levelled at previous decisions, and that criticism has made me determined to find a copper-bottomed means of taking this technology forward. We all accept, and the report is clear, that it should be in our decarbonisation mix, but we need to develop it in a way that meets our triple test: it must ensure maximum decarbonisation, offer a clear route to an acceptable cost level, and help us boost the UK’s technology leadership so we grow the number of jobs in that part of the economy and our export potential.
I will try to answer all hon. Members’ questions. As always, some will not get answered, but I am sure my excellent Parliamentary Private Secretary, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), will be assiduous in capturing any that are not answered and making sure that I answer them further down the line.
Alex Cunningham
The Minister talked about fact-based speeches. Does she accept that the costings for the projects I alluded to are good costings and demonstrate good value for money?
Claire Perry
I have not reviewed those particular costings. As the hon. Gentleman knows, I am never without my calculator. If there is one thing I want, it is value for money and a clear route to cost-effective deployment. Hopefully, we all want to go down that path.
It was excellent to hear cross-border, cross-party support for this technology. That is the way to boost investor confidence and ensure the clean growth strategy survives the vagaries of the political cycles. These long-term decisions benefit both us and our children and grandchildren.
All parties welcomed the clean growth strategy, and I thank their representatives for that. We are coming at this from a position of strength. We have the best decarbonisation and growth performance of the G7 economies. We are all determined to capture the enormous opportunity from the global pivot to low-carbon economies, and we want to ensure the UK’s productivity benefits from it. The strategy is broad and binding. It sets out clear targets and harnesses the power of innovation, on which we lead the world, to drive down costs and increase the pace of the roll-out of innovation. It also clearly sets out how we intend to meet some of the challenges.
Carbon capture, usage and storage is a vital part of the strategy. It is needed as a long-term strategic option so we can deliver the 2050 target at the least cost. It is crucial that we cut emissions from sectors that are hard to decarbonise. CF Fertilisers has done an excellent job in taking as much carbon as possible out of its industrial processes, but we understand that producing that vital product is carbon-intensive.
Carbon capture, usage and storage also gives us optionality. The hon. Member for Kilmarnock and Loudoun talked about the opportunity to decarbonise hydrogen production, and it is important that we maintain that option as we move towards our low-carbon future. As my hon. Friend the Member for Middlesbrough South and East Cleveland argued so well, capturing and effectively deploying this technology enhances the competitiveness and productivity of industrial regions such as Teesside, Merseyside, Grangemouth and south Wales. I do not want anyone listening to this debate to be in any doubt that, although some areas may be leading in terms of their ability to promote themselves as places to use this technology, that does not rule out other areas. We want it to be deployed effectively in all parts of the UK where there are industrial clusters.
The technology represents an export opportunity for firms such as Shell and Costain and new UK technology providers such as Carbon Clean Solution, which was funded by the Department for Business, Energy and Industrial Strategy to develop globally leading new forms of carbon sequestration for industrial processes.
Many companies are involved in the supply chain as well. I have been following with great interest the Eight Rivers plant, because it is UK-developed, completely breakthrough technology. It is funded with UK Government money deployed in Texas because of the package of incentives put around it, but the supply chain to the plant involves venerable companies such as Goodwin in Stoke-on-Trent, which is an amazing leader in high-specification metallurgy, and Heatric in Poole, Dorset. If we can capture such opportunities onshore, we bolster our onshore supply chain and, as the IEA has estimated, the global CCUS market could be substantial.
The problem, however, is this: we all accept that CCUS is important—we had some conversation on the nervousness in Norway about doing this—but while 21 CCS plants are operating at scale in the world, 16 are dependent on the revenues from enhanced oil recovery, which suggests that for only five plants on the planet has someone been able to persuade a Government or local player to subsidise the technology substantially, despite the potential of such technology. That tells me that the cost of the existing technology is too high and that there are potentially ways to deploy it more effectively.
That is why I want to change things—this is the point made by the hon. Member for Southampton, Test (Dr Whitehead)—and it is very much a personal commitment and something I strongly believe is exceptionally important. That is why we have put in place a much broader strategy on CCS. We want the prize of global leadership in the area: we want to be the people who break the deadlock, deploy CCS in the UK and capture the export opportunities.
We therefore have three areas in which I have set out actions under the clean growth strategy. First, we will constitute the CCUS cost challenge taskforce rapidly, because the model worked extremely well for offshore wind where we all accepted that the existing costs were too high. I take the point about risk sharing—the hon. Member for Kilmarnock and Loudoun is knowledgeable about this. There is a real question as to how much risk partners were able to accept in that structure. We are keen to probe our understanding of how to get down the cost of the deployment of the technology, so the new taskforce will be constituted in the next month. It will report to me and, as with the green finance taskforce, it will be set specific challenges to come up with ways to reduce the cost.
Secondly, we will publish a deployment pathway for CCUS over the course of the next year, which will include the points made about power capture, industrial capture, and transport and storage. We want specific delivery and investment models for each of them. We will continue to progress the work we are doing with the Teesside Collective, but will also work with other initiatives in Teesside, Merseyside, south Wales and Grangemouth, because there are other opportunities to do so and to learn from.
Alex Cunningham
I very much welcome the commitment to a timeline over the next 12 months. That is extremely welcome, and I wanted to say it specifically, but what else will the Minister do to help build the investor confidence to ensure that we can get the investors to put the money forward to make the projects happen?
Claire Perry
The hon. Gentleman has pre-empted what I was going to come on to, although I am conscious of the time and that I have to leave some for my hon. Friend the Member for Middlesbrough South and East Cleveland. For example, I too am meeting Statoil today— I am doing the rounds and going straight from this debate.
I am very conscious of the opportunities to work with organisations such as the Oil and Gas Climate Initiative, which for the first time is deploying new funding specifically into this area. We are very keen on substantial private sector investment. We are talking for the first time to the gas turbine blade manufacturers, who have never been involved in the conversation but who clearly depend for their long-term business survival on continuing to generate power with gas.
Internationally, I want to be sure that everyone is aware that we are perceived as a technology leader. We participate in Mission Innovation and its carbon capture innovation challenge. We are already exploring collaborative working relationships with countries such as Norway, which has an excellent Energy Minister. Collectively, between our two countries, we took the hydrocarbons out from under the North sea; surely there is cost-effectiveness in co-operating to put back the CO2 we have extracted. Given budget constraints, Norway in particular bears some interest, but there is also interest in working together in the United States, Canada and Australia.
We will therefore keep investing in our international CCUS programme and will organise and host an international global carbon capture, usage and storage conference next year to affirm that this is an area in which we want to take international leadership. We want to be the movers and shakers in this field.
As we have made hon. Members aware, we will invest in innovation to support such technology through our £100 million industry and CCUS innovation programme. We will make up to £20 million available for a CCU demonstration programme; we will support the next generation of technology; and in particular, as we talked about, we will support CCUS in some of the further out technologies, especially those to do with the removal of greenhouse gases. To ensure that that all works, I will personally chair a new CCUS council with industry to review progress and priorities.
I want hon. Members to be in no doubt that we are making a fundamental doubling down, as it were, on our commitment, but the guideline is that we must come up with a more cost-effective way of doing CCUS. We have to ensure that we produce the maximum reduction in emissions and we want to position the UK as the global technological leader in this space. That is at the heart of the clean growth strategy.
I will be delighted to attend the APPG and I am happy to have the conversation. As hon. Members should know, my door is always open. I feel that collectively—I choose the word advisedly—we are much better together on this sort of technology. The more we set aside any political differences, the more we ensure that we are perceived as a great place for investors—that would be great.
Sorry, I have one point to finish on quickly. I was asked about the response to the Public Accounts Committee. We accepted a majority of its recommendations, but we did choose to reject that one because, for one thing, it was based on outdated cost analysis. We want to convince everyone—I hope we have done—of the Government’s commitment to move forward on CCUS. I do not feel that we need to demonstrate its importance because that is already accepted.
I want absolutely and sincerely to say how impressed I am with the work of the Teesside Collective, which has made an exceptionally powerful case to be the first place to move forward with this technology. Discussions are very active, but it would be a bold Minister at my level who set out funding commitments ahead of the publication of the industrial strategy or the Budget. However, the case has been made, and made so well that—forgive my lapse into urban slang—I wonder whether “Teesside Massive” might be more appropriate than Teesside Collective. It is a powerful force, and it is wonderful to see so many colleagues from all parts of the House making the case.
Mr Simon Clarke
It has been a pleasure to serve under your chairmanship today, Sir David. This has easily been the most pleasant debate that I have experienced in my short time in this House. I hope that it marks a new era of consensus in our politics.
We have heard about the fierce urgency of “now” when it comes to seizing the moment for CCS. In a powerful speech, the hon. Member for Redcar (Anna Turley) set out her long-standing commitment to delivering this technology, rightly alluding to its potential significance after Brexit. My hon. Friend the Member for Waveney (Peter Aldous) made a typically thoughtful speech, welcoming the progress that has been made this year and referring in particular to the opportunities for coastal communities—including his own in East Anglia—that form part of the supply chain. The hon. Member for Stockton North (Alex Cunningham) has made a huge contribution to the pursuit of CCS for Teesside—for our new “massive”, which may take me a while to get used to—in his role as the chair of the APPG, where I am delighted that the Minister will join us in due course.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—I hope I did not just mispronounce his constituency, or at least that I have not endangered the Union in so doing—made a passionate case for the Peterhead site for CCS, and that was echoed by my hon. Friend the Member for Aberdeen South (Ross Thomson). I entirely agree that there must be no more false starts. This is surely the line in the sand and I think we have heard enough today to suggest that it will be.
The hon. Member for Hartlepool (Mike Hill)—my mother is also from Hartlepool; she is also a monkey hanger—rightly referenced the key role his town has to play in our green revolution. The hon. Member for Kilmarnock and Loudoun (Alan Brown), in a very generous tribute to the work of the Teesside Collective, rightly emphasised the benefit of delivering all the viable projects, including those in Scotland. The hon. Member for Southampton, Test (Dr Whitehead) is a hugely informed Opposition spokesman who has done so much on this issue down the years. He rightly praised the Oxburgh review and there is a lot to learn from that.
In closing, I thank the Minister for her personal commitment to making a success of CCS. Her speech was thoughtful and really helpful. It was great to hear about the taskforce and the deployment pathway. We have a great ally in her and I look forward to working with her, and with all colleagues who were here for this debate, as we move forward in the years ahead. I think we are on the cusp of something very special.
Question put and agreed to.
Resolved,
That this House has considered carbon capture and storage.
Defence Capability
(6 years, 6 months ago)
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Mr Marcus Fysh (Yeovil) (Con)
I beg to move,
That this House has considered the Government’s review of defence capability.
It is a pleasure the serve under your chairmanship, Mr Bone, and an honour to engage with the Under-Secretary of State for Defence, my right hon. and gallant Friend the Member for Bournemouth East (Mr Ellwood), in this vital debate. People throughout the country will remember his empathy, bravery and application when he helped the emergency services during recent terror events not far at all from here. They will not be surprised to learn that he served in our armed forces with distinction before he came to this place. They will recognise the virtues that he displayed that day as the instincts of our armed forces personnel serving throughout the world. We are all lucky to have him representing us as a Minister.
At the battle of Thermopylae some 2,500 years ago, a vastly outnumbered 300 Spartans led resistance against the massed ranks of Persian invaders from the east on a narrow seaside salt marsh only 100 metres wide, while their Greek allies retreated behind them, better to defend their homeland. That Spartan royal guard, who were specially selected for their prowess and the fact that they had sons, and their King, Leonidas, all perished together at those hot gates. They bought their allies crucial time to fall back and regroup, to preserve what they held dear. A famous ancient memorial inscription to them at the site reads:
“Go tell the Spartans…that here, obedient to their laws”
300 lie.
The Greek word for laws that was used is ambiguous. It can mean orders. That ambiguity was appropriate, since at that particular festival time, the Spartans usually observed a strict religious law that was against their normal tradition of military readiness. However, they had been ordered by the Spartan political council to lead this vanguard of the Greek city states’ defence, and they put aside what must have been deeply mixed feelings to do the duty that had been assigned to them, for their countrymen and for wider civilisation. The culture of the enlightenment and the forces enlisted throughout history to help defend it have drawn inspiration from these men, who did their duty for the greater good against all odds.
We all remember Nelson’s final message, that
“England expects that every man will do his duty”,
and his own personal sacrifice for our nation and our allies. Our modern civilisation and modern forces face different challenges and threats, but what does not change is our crack forces’ heroic willingness to go all out, head on and straight at them, to defend each other and what we hold dear. When our modern-day political councils ask what our country should ask of those who are willing to put themselves in harm’s way for us, and how we should help them, we need to remind ourselves of the value of that bond in blood that binds our history and our fighting generations. It is easy for generations whose family memory is distant from the sacrifices our nation made to make the future safe to lose feeling for their importance. However, the modern western civilisation in which we live and into which most nations—even those from outside our tradition—seek to integrate, even while maintaining their own traditions, is founded on a rules-based system that we, as much as any nation, helped to make. We must be prepared to defend it.
Our politics, our freedom and our democracy are worth fighting for, now as always. It is only through preparation, innovation, training and modernisation in our time of relative peace—when the gates are not so hot, as it were—that we will ensure that, should things change, this and successive generations can fight and win.
It is right that in this fast-changing and in many ways increasingly dangerous world we constantly consider how to enhance our capability, capacity and ability to defend the things that we hold dear. The Government recognise that. They have a growing budget for defence and they are committed to the regeneration of our capabilities. They are committed to spending at least 2% of GDP and to grow the defence budget by at least 0.5% above inflation every year. We need to get the most out of that spending and to ensure that our armed forces and other security and support services have the resources, forward thinking and support from our nation that they need to succeed, if at any stage they are called upon. It is right that we, as politicians, in close consultation with our security advisers, military and otherwise, clearly assess our capability requirements in different areas. It is also right that we constantly drive for value for money in the long term, which includes ensuring that we have a highly productive, agile and innovative defence and security industrial base that is a strategic asset and deterrent in its own right. The political councils of our time must take a long-term view and provide consistent leadership on policy in this area for military and security chiefs to implement.
At this time especially, as we leave the political construct of the European Union, we must lead in showing that our European friends and allies have no more dependable, able and committed a partner in defence and security than the United Kingdom. I believe that the people of the UK instinctively understand that and have the overwhelming will and desire to ensure that it remains the case. The vast majority of people across politics get that when it is expressed in this way. Those who rail at the inefficiency of Brussels and its largesse, inscrutable accounting and questionable politics would nevertheless, without hesitation, defend the values at the heart of homes across Europe. Those of almost all shades of political opinion on how we should improve our compatriots’ lot would agree in a heartbeat that the defence of our shared basic values of liberal democracy and the rule of law should be defended in as modern and effective a way as we can muster. Most people understand that those values provide and preserve the certainty that is fertile ground for prosperity and happiness to flourish, and that protecting and nurturing them is a multigenerational and never-ending endeavour for us all to pursue.
I will leave it to others to catalogue the ways in which our ongoing and upgraded sovereign contribution could help to preserve the rules-based structures that nations of the world enjoy, but let us make no mistake: every child, every family and every individual throughout the land should understand that our willingness to stand up for the civilisation that we hold dear is part of what makes us the people we are, and temporary strictures should not be allowed to detract from that. We are proud of our forces and of the people who serve in them, and we want them to be proud, too. We want them to serve, safe in the knowledge that they and their loved ones will be looked after. If we need to spend more to ensure that they know that, then that is what we must do.
We should not underestimate the economic value to our communities of defence spending. That value comes not just in pounds, shillings and pence, or in the form of the 10,000-plus jobs that support families across my constituency, for example. No—the ethos of service, and respect for it, has its own much wider value in society. If we want public servants who are committed and dedicated to often unseen work, they need to know that, even when they are not thanked, we are thankful. If we want people to look out for each other, it helps to think about what we would do to help each other in extremis.
Everyone in our nation has been touched by stories of ordinary people doing extraordinary things in recent moments of need, in Manchester, London, Paris, Brussels and Nice. Our defence personnel, our security services, our police forces and all the other public servants and civilians who leap into action daily inspire us. They, too, are ordinary people doing extraordinary things. Let us think about how we inspire those who make that their life’s work. Let us ensure that we have the most excellent personnel to operate our state-of-the-art new equipment. Let us ensure that they have good pensions and homes. Let us ensure that they are incentivised to give their all.
Colleagues will, I hope, speak about how we used to spend more on defence. I will highlight two aspects of that as food for thought. In the early part of the cold war, we spent 6% of GDP on defence. I do not necessarily advocate spending quite as much as that, and obviously circumstances are different. However, it may be worth noting, at least for theory’s sake, that if the UK were to make up the other EU nations’ deficit of spending against their NATO target of 2% of GDP, we might do that by spending 5.5% to 6% of our GDP.
Some extraordinary new strategic assets are coming into our forces, not least the two Queen Elizabeth class aircraft carriers and their complements of aircraft, which it would absolutely be in our allies’ interests for us to be able to deploy, concurrently, in the European sphere and elsewhere. We should maximise the sovereign usefulness of those assets by making sure we can operate them in battle groups on our own if need be. Our naval programme should be geared towards that, and our defence spending and training of skilled personnel should be upgraded substantially to deliver it.
My community in south Somerset is particularly proud of the contribution that it makes and can make in future through the Fleet Air Arm at Yeovilton and the helicopter manufacturing and wider defence industry supply chain. I strongly believe that the armed forces component of our national security must have a 360-degree ability to deal with all requirements. For me, amphibious capability is an essential part of that. I strongly support the modernisation of our Army and want it to have sufficient trained personnel to be scalable and capable of sustained use, with properly equipped medium-weight strike brigades that can make an essential contribution to allies and that are a strategic deterrent in themselves.
I am conscious that the tempo of operations and lack of proper equipment, at least in the early part of operations in recent middle eastern engagements, put significant pressure on the Army and its families, and that must not happen again.
Helicopters were one thing our forces lacked, and I am proud of the way that my Yeovil community has helped to give our forces proper battle-space protection and mobility with its Wildcat and Merlin programmes. In particular, I note Wildcat’s agility and flexibility in close support operations, versatility over land and sea, and flexible and powerful inter-operation with other key systems in both the naval and army spheres. Although there may be other systems that one might want to add for specific purposes, I believe it would be immensely short-sighted not to upgrade and extend our indigenous helicopter platform capabilities, and indeed support, as the Ministry of Defence is, the development of the next generations of battle-space mobility and protection products.
Anna Turley (Redcar) (Lab/Co-op)
I appreciate the hon. Gentleman giving way on that point. Does he agree that it would be great to see a defence industrial strategy that really set out a vision for the way in which we procure stuff from the MOD, particularly to support the British steel industry, which is close to my heart, so that we do not see a repeat of the procurement process for the Type 26 frigate, which saw just 35% of the steel in each ship coming from British steel?
Mr Fysh
I thank the hon. Lady for her intervention. She makes an excellent point. I will come on to industrial strategy in a moment.
I will be working as hard as I can with industry partners to raise the tempo of productivity and innovation to match the commitment from the Ministry of Defence. Defence should be a fundamental part of our industrial strategy for both military and economic reasons, and I stand ready to work with Ministers and their Departments to ensure that we get this right and that proper account is taken of these matters during the defence and security review.
So what are the arguments against spending more? There are those who say we do not have the money. I wish a strong signal to go to the Treasury and Cabinet Office from this debate that it is a false economy not to give defence what it needs to regenerate a full 360-degree capability at this time. We could certainly use a few billion pounds a year currently given in international development, with overwhelming popular support and much greater domestic economic impact.
I have made other multibillion pound suggestions for savings to the Chancellor for his upcoming Budget, which I look forward to discussing with him again. To those who say we have other priorities, I say that this Government more than any other have focused spending on defence and on regeneration of our capabilities, and that this success needs to be reinforced. Economic value added to our communities and inspiration to our people and our allies should be top priorities for us at this time.
To those who say we do not have the will, I have never underestimated the ingenuity, good humour and grit of the British people. We should not hide our light under a bushel. I believe most of our fellows citizens would be proud to see it shine as a beacon for all to rally around.
I will conclude now because I want to allow time for others to speak. We all have a duty to do what we can to keep ambitions for our civilisation open to the next generations. There are some things worth fighting for, and we need excellence in the fight for them in all aspects of what we do every day. We have a duty to honour those who have gone before us. Giving our defence what it needs now is part of defending what they held dear.
Mr Peter Bone (in the Chair)
The House might like to know that the winding-up speeches will start at 4 o’clock. Only four Members have written to say they wish to speak. I shall take those Members first and then get in as many others as I can.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
I congratulate the hon. Member for Yeovil (Mr Fysh) on securing this debate via the Backbench Business Committee, and I was pleased to be able to support it. It is incumbent on all Members to thank our armed forces for their contribution. They do a heroic job all year round keeping us safe and defending our citizens and allies. As the son of a submariner I know from experience how important the armed forces are, not only for my family who relied on the money brought in to help us when I was growing up but for Plymouth, which is the area to which I will restrict my remarks on the upcoming defence review.
Members will know that since the election in June I have mainly spoken in this Chamber about the paucity of the shipbuilding strategy, the offshoring of our Royal Fleet Auxiliary builds, which should have been done in UK shipyards, and the lack of detail on our Type 31 armaments. My concern is that we will have a lightly armed fishing patrol vessel rather than a fully capable frigate. I am concerned about the loss of HMS Ocean, particularly its helicopter-carrier capability in littoral waters close to the coast. Then there is the issue of wages and veterans and the need to invest more in our frigates and escort carrier fleet. There was a lot of support for that and I am grateful to Members of all parties who encouraged me to continue speaking on these matters.
My concern about the upcoming review is about the potential for hollowing out capabilities, particularly around the Royal Navy and Royal Marines. Devonport in my constituency is home not only to half our frigate fleet, but to the deep maintenance facility for frigates, submarines and our amphibious assault ships. We already know that HMS Ocean is due to be scrapped, creating a capability gap in helicopter-carrier capacity in littoral waters, but the rumours and speculation that HMS Bulwark and HMS Albion, two world-class capable amphibious assault ships, also face the axe is deeply concerning to those people who have an interest in not only Devonport and Plymouth, but in our national security, which is where I want to focus for a moment.
Having assured access capabilities and the ability to project force and deter our enemies via amphibious assault ships is absolutely a key component of our Royal Navy’s full spectrum capability. As we have the precedent of HMS Ocean, one of our three amphibious assault ships, being cut, I am concerned that we could further erode or scrap altogether our amphibious capabilities. Tying up either Albion or Bulwark alongside in Devonport has reduced our capability in that respect, which is deeply concerning.
Once the amphibious capabilities have been removed, there is a logical step forward threat to the Royal Marines. I note from recent speculation in the media that up to 1,000 Royal Marines also potentially face the axe. We need to be really clear that the amphibious capabilities provided by the Royal Navy and the specialist forces in the Royal Marines are absolutely essential.
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I am grateful to the hon. Gentleman for giving way. He talks in great detail about what is going on in Plymouth, but I should make it clear, in case other hon. Members pick up on speculation about what may or may not be happening in the review, which I hope to elaborate on, that no decisions have been made at all. I know hon. Members will want to get things off their chest and share their concerns, but no decisions have been made about any of the ships the hon. Gentleman has mentioned so far. Any decisions to be made are quite some distance off.
Luke Pollard
I invite the Minister to take this opportunity to rule out cuts to our amphibious forces in that respect, because—
Luke Pollard
I think it is entirely possible for Ministers to set a strategy and direction in which the country will preserve its amphibious assault capabilities. The forthcoming defence capability review should be able to match that, to be honest.
My concern about what is happening to amphibious assault ships is matched by the concern of many people in Plymouth after the experiences of the past couple of years: not only the closure of Stonehouse barracks, but the cut to 42 Commando Royal Marines, and the loss of the Royal Citadel and HMS Ocean. No decisions have yet been made about the future basing arrangements for the Royal Marines, and I invite the Minister to talk about when a decision will be made. The possibility that without an amphibious assault capability in Devonport the Royal Marines could be moved out of the city is a matter of deep concern to me and to those who have served, especially those who were based near the spiritual home of the Royal Marines at Stonehouse barracks.
HMS Albion and HMS Bulwark are incredibly capable, world-class ships. They are due to be out of service in 2033 and 2034 so there is still a lot of life left in them. It is important to consider the context of the defence review. I am concerned that, without the normal detail that comes with a strategic defence and security review, the mini-review will look simply at cuts, rather than at the upcoming threats that the country faces. I am concerned particularly about the rise of Russia and its influence in the Arctic. For quite some time our amphibious assault ships and the Royal Navy have been good at deterring Russian aggression, or Russian possession of Arctic waters. That issue needs to be looked at.
I am also concerned about the figure of 2% of GDP for defence spending. It is a line that I hear from Ministers a lot. The Minister will know that the gaming of the 2% figure by the inclusion of war pensions produces a situation in which we are not spending 2% on defence. I should welcome it if the Minister would adopt Labour’s position of removing those gamed elements and spending an actual 2% on defence. I am sure that that sentiment would be echoed by hon. Members throughout the House. Would the Minister rule out cuts to our amphibious force, explain briefly how the capability review will mean a greater number of frigates and, importantly, more capable frigates—with a decent offensive and defensive armament package on the Type 31s, in particular—and address what the review means in the context of post-Brexit Britain? A strong and robust full-spectrum UK capability is vital to enable us to project our power, so that we can have a distinctive beacon status as a nation after Brexit, and so that we can fulfil our obligation to our NATO allies, particularly with Russia flexing its muscles, both in cyberspace and in military space, in relation to its near neighbours.
Johnny Mercer (Plymouth, Moor View) (Con)
I invite the hon. Gentleman to clear something up; he talked a lot about cuts in the military. He knows my position on that. I have advocated on that matter for a long time. However, the debate must be in the realms of honesty. Since April 2016 the money going into defence has been increasing and it is at 2%. It is going up by half a billion pounds a year. I do not understand how that fits in with his narrative of cuts happening all the time. Surely our defences should be dealt with according to threat and capability, rather than with a constant narrative of doing down our armed forces.
Luke Pollard
I am grateful for that intervention, which gives me an opportunity to direct the attention of the House to the comments from the hon. Gentleman about the gaming of the 2% that I believe appeared in the media recently. It is important to base the debate on capabilities, and I have clearly done that in my remarks. As we approach the latest round of defence cuts—
Leo Docherty (Aldershot) (Con)
If it would be of use to him, the hon. Gentleman might apply to the Ministry of Defence for a useful fact sheet that it has provided to me. It clearly states that as of 2016 our defence budget was £34.3 billion, but that by 2020 and 2021 it will be £39.7 billion. How is that a cut?
Luke Pollard
I invite the hon. Gentleman to visit Plymouth, where I can show him Stonehouse barracks and the Royal Citadel, which are shortly to be closed, and HMS Ocean, which is shortly to be scrapped. The key point that I was making in my remarks, which I shall happily repeat so that it will not be missed, was about the capabilities of the Royal Navy and Royal Marines. It is in the matter of capabilities that we need to preserve our world-class excellence. I am grateful and thankful to the people who serve in our armed forces; I know many such people, and members of my family have served in that area as well, so I am cautious about how I talk about the issue.
I have asked, both in Plymouth and nationally, for cross-party working to make a robust case to the Government opposing cuts to our amphibious assault ships in the future. [Interruption.] I know there has been some laughing about this but, after the interventions that I have taken during my speech, I do not expect, in a few months’ time, the Ministry of Defence, the Government or the Royal Navy to announce any loss of our amphibious assault ships. I implore the Minister to cement and celebrate the world-class contribution that HMS Albion, HMS Bulwark and the Royal Marines make to the United Kingdom’s amphibious assault capabilities, and protect them in the capability review that is coming up. I should be grateful if the Minister would address the concerns that I have raised about the Type 31 frigate, in particular.
Jack Lopresti (Filton and Bradley Stoke) (Con)
It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Yeovil (Mr Fysh) on securing this important and timely debate and I echo the comments that he made about my right hon. Friend the Minister, whose recent actions in trying to save the life of an injured police officer are an example and inspiration to us all.
I welcome a review of Britain’s defence capability. There is, after all, much to review. We should review whether we are really meeting our 2% of GDP NATO spending commitment. We should review the woeful situation that means that we cannot commit to enduring brigade-size multi-theatre operational deployments. We should review what the future of defence capability and procurement will look like if we do not continue to support and encourage the expertise and world-leading skills that we have in our country and our industry. We absolutely must address the shortfall in the current defence equipment budget. I understand that that is about £10 billion over 10 years or so. I agree with other hon. Members that we must significantly increase defence spending, for several reasons: first, the defence of the realm and the protection of our people is the first duty of any Government; secondly, we must do it for vital strategic reasons; and, finally, the armed forces are the jewel in the crown of the country, and the best of Britain. Defence spending increases our industrial capability and the ability to defend ourselves, but it is also a fantastic vehicle for social mobility and advancement for people of all backgrounds.
A few weeks ago, I visited the Kurdistan region of Iraq. I was immensely proud to meet elements of 2nd Battalion the Mercian Regiment, who are there training peshmerga forces. That is one of the many contributions that we are making in the fight against Daesh, and it is a clear demonstration of our armed forces’ global reach. Needless to say, ours is not a peaceful world: we can see threats from an emboldened Russia, a belligerent North Korea, and the remnants of the Daesh death cult. There is also always the possibility of unforeseen threats. History demonstrates that we rarely see where the next conflict will come from. It is therefore unwise, at the very moment when we are launching ourselves back into the world as an independent, free and sovereign nation, to penny-pinch on our national defence expenditure.
The 2% NATO obligation, which I am pleased to see the Americans are urging all our NATO allies to take extremely seriously, was a welcome commitment from the previous Prime Minister. However, it may inadvertently have given our forces false hope. It is now clear that we achieve 2% only by a recent change in how we measure, and what we include in, our defence expenditure. The inclusion of forces pensions and efficiency savings diminishes the value of the 2% in terms of real defence capability. I hope sincerely that the review will address those matters and lead to a realistic increase in defence expenditure. However, regardless of how much is spent on defence in future—and we must spend more—the result must be forces that are truly capable, with the ability to project both hard and soft power globally.
Currently our armed forces cannot deploy at brigade level to two major operational theatres simultaneously and enduringly. That means that we could not today undertake Iraq and Afghanistan-type operations simultaneously. That is a massive reduction in our global power, our status and our military capability and credibility. We must be able to deploy in more than one operational theatre simultaneously and enduringly at brigade level if we are to be—or remain—a nation of some worth. We need the ability to project the full spectrum of our capabilities on land, sea and air without having to be part of an international coalition, as we did successfully in Sierra Leone and the Falklands.
Bob Stewart (Beckenham) (Con)
It is not just about the deployment of two brigade groups but about the follow-on forces: those that come six months later, and six months after that. We have to have sustainment. Sustainment is what guarantees us a decent result.
Jack Lopresti
I thank my hon. Friend for his excellent intervention. I was careful to use the word “enduringly”. We could possibly throw 10,000 troops around the world to do a short operation simultaneously, but the important point is about doing so over a reasonable period of time and enduringly.
As long as we have a funding settlement that forces commanders to choose between equipment and recruitment, the armed forces will remain severely restricted and hampered in their capabilities. I suggest that the restraint on our current defence capability must be reviewed as a matter of great urgency. Such discussions normally lead to the question of equipment and its provision. Better, more realistic funding will help buy more equipment in the mid-term, but we must think in strategic terms. If the review does not lead to increased investment but further limits the spending power and capability of our forces, we may soon discover that it will be more difficult for our country to remain a world-renowned centre of defence and aerospace excellence and expertise, never mind having the ability to defend our people here and abroad.
I have the interest and great pride of representing a constituency that has a very large number of successful and highly skilled defence and aerospace companies, the largest among them being Rolls-Royce, Airbus and GKN. As an example, Rolls-Royce represents 2% of all UK exports by value. We must build on and increase that. Filton and Bradley Stoke is also home to Defence Equipment and Support at MOD Abbey Wood, which employs about 10,000 people and does a fantastic job in procurement and equipping our armed forces across the world.
The most obvious example of the threat to our sovereign defence industrial capacity is the recent announcements from BAE. From conversations I had with representatives of Rolls-Royce in my constituency just a couple of days ago, I know it is concerned in the wake of those announcements. The RAF Typhoon jets have a predicted service life of until about 2040. That may sound like plenty of time, but the delivery of the next-generation fighter could take two decades from start to finish. Also, without such defence contracts, as well as clarity on what the Government’s plans are and sufficient funding, companies such as Rolls-Royce are in danger of losing skilled personnel capable of delivering such contracts. In recent conversations the company was unequivocal in its fear that once the capability and skills are lost, in many cases they are lost for good.
I am pleased that recent responses from the Ministry of Defence have confirmed that it understands how important the review is to British industry and our sovereign capacity to equip our armed forces properly. I would therefore like to ask the Minister when progress will be made on committing to the next-generation fighter. That is vital to safeguard the expertise we need and the capacity and capability we require for future generations.
The review comes at a crucial time. If done properly, and acted on, it will reinforce and strengthen our sovereign defence capability at a time when we are reasserting ourselves on the world stage. Crucially, in the end, wars are not won, and nations are not defended, by equipment alone; we need people. The Army has a severe manpower shortage, the Royal Navy is fearful of being unable to man our aircraft carriers and the Royal Marines are very concerned about potential cuts to our amphibious capabilities.
I call on the Minister to show real courage and leadership. A failure to increase resources would see Britain losing both its technical expertise and international credibility. In short, it would serve to entrench a dire situation and diminish our place in the world—and, crucially, our ability to defend our people.
Douglas Chapman (Dunfermline and West Fife) (SNP)
It is a pleasure to serve under your chairmanship, Mr Bone. I thank the hon. Member for Yeovil (Mr Fysh) for bringing forward this important issue for discussion.
I welcome the review of defence capability and hope that it will address some of the serious shortcomings of the current strategic defence and security review, which was published only a few years ago. As we know, the 2015 SDSR does not take into account issues regarding Brexit in any shape or form and it therefore requires urgent revision in the current climate.
We have often said that the SDSR is hugely ambitious. However, in recent years the Government have failed to manage the defence budget effectively and get best value for the taxpayer. There are gaping holes in the existing budgets. There is an £8.5 billion black hole in the defence estate strategy budget and a £4 billion hole in the defence equipment plan. As many in the Chamber know, the National Audit Office warned at the beginning of the year:
“The risks to the affordability of the Ministry of Defence Equipment Plan are greater than at any point since reporting began”.
The National Audit Office also noted the lack of room for unplanned cost growth in the equipment budget and the vulnerability to changes in foreign exchange rates, which are significant, with £18.6 billion for equipment that has to be paid in US dollars. The Prime Minister’s own former security chief, Mark Lyall Grant, has warned of a stark impact on UK national security and the military’s spending plans in the event of a Brexit downturn in the coming years.
As many Members will know, in Scotland, the Tories have slashed 20% off our defence estate, and Army personnel numbers are at an historic low. What is more, in Scotland we still have no conventional ocean-going vessels in our waters, and we have had no maritime patrol aircraft since the scrapping of the entire Nimrod fleet.
Douglas Ross (Moray) (Con)
I am grateful to the hon. Gentleman for taking an intervention. Will he acknowledge the significant investment in my constituency at RAF Lossiemouth, with the P-8 Poseidon aircraft, which is replacing the maritime aircraft scrapped in 2015? That is a huge investment by the UK Government in a Scottish airbase that will make Lossiemouth one of only three fast jet airbases in the whole of the United Kingdom.
Douglas Chapman
Again, that is part of an ongoing campaign by the previous Member for the hon. Gentleman’s constituency, who highlighted on so many occasions the loss of the maritime aircraft capability.
Douglas Chapman
Of course, we welcome that, just as we welcome the contribution of other countries in the northern Atlantic. I believe Norway has also taken on a number of P-8s. It is important that we have that level of cover. Other Members have mentioned capability, and the critical issue is how we spend our budget, so as not to keep ramping up a misspent budget.
We are now in the absurd situation in Scotland that we do not have a single maritime patrol aircraft, and neither do we have any ocean-going surface vessels to defend our own waters. Let us not forget the ludicrous scenario in February 2014, when The Scotsman reported that the MOD had had to use Twitter to gather information about a Russian warship moored in Scottish waters over the Christmas period of 2013. That was not only a national embarrassment; it reflects the utter inadequacy of the UK’s defence capabilities.
As a member of the all-party parliamentary group for the polar regions, I have a particular interest in the Arctic and high north. The Defence Committee published a report in 2015 called “Flexible response? An SDSR checklist of potential threats and vulnerabilities”, which identified Russian aggression in Europe and the high north as one of the potential threats facing the UK. In evidence given to the Committee in 2015, Tim Reilly, founder of the Arctic Advisory Group, highlighted the importance of a UK presence in the Arctic and high north, yet the UK has gone AWOL in the region. That is not good enough for Scotland and for the UK. It should be a bread-and-butter activity and military priority to defend our own shores and coastlines.
The cuts in defence—some Members have said that there are no cuts—have been made to fund the Tory obsession with Trident. In 2010, the national security strategy downgraded the threat of nuclear weapons conflict, yet the SDSR failed to downgrade the role of nuclear weapons and military capability in that area. It is high time the Government prioritised conventional defence capabilities instead of weapons of mass destruction, which I think we all pray will never be used. We issue the reminder again that Trident skews every single part of the defence budget, across three services, and that the project should be abandoned.
Almost all the promises made to Scotland on defence during the independence referendum have been broken. It is clear to us that the Government cannot be entrusted with the defence of the UK or Scotland. Only this week, we heard that the Type 31 ships, promised in 2014 to workers on the Clyde, may now be built on Merseyside. For those workers, their trust in the Government lies at zero. I urge the Government to commit to publish the findings of the review by the end of the year. Beyond that, we need as a matter of urgency a new live-within-our-means SDSR that takes account of the repercussions of Brexit for today and beyond.
Leo Docherty (Aldershot) (Con)
I am grateful to my hon. Friend the Member for Yeovil (Mr Fysh) for securing this important debate. I must start by saying that my constituency will be at the heart of any discussion of defence capability. Aldershot, the home of the British Army and with a significant garrison, welcomes some of the specialised infantry battalions that will be formed in response to the SDSR 2015. In Farnborough, the birthplace of British aviation, we have a significant number of world-leading defence industry companies, which export their world-class manufactured goods around the globe.
In the brief time that I have, I will express two things. First, I hope that this review will be about more than just kit and equipment. When we consider responding to the threats this country faces around the world, our attitude should be one of energetic and ambitious global engagement. I saw a good example of that last weekend—I refer hon. Members to my entry in the Register of Members’ Financial Interests—when I travelled to Bahrain with several other hon. Members to see work being done on the new Royal Naval base, HMS Juffair. It is a remarkable facility, which will accommodate the four mine countermeasure vessels that are already out there, and will allow our aircraft carrier to be serviced via tender. It is a phenomenal capability multiplier and a tangible commitment to the security of an important ally. That is the kind of model we should apply elsewhere—not just in the Gulf, but around the world.
It is an attitudinal thing. We must ask the question: “If we do not have the resources to facilitate that commitment in the Gulf states and beyond, should we perhaps invest in them?” It will be money well spent.
Robert Courts (Witney) (Con)
My hon. Friend makes an important point about an attitude, with which I entirely agree. Under this Government, we are seeing for the first time an increase in the defence budget by 0.5% each year. We have a growing defence budget, a new naval base east of Suez again, Type 31s giving us the opportunity to increase platform numbers on the fleet, and new aircraft carriers. Under this Government we see an increasing defence budget and increasing defence capability.
Leo Docherty
Absolutely; I am very grateful for that intervention. What is impressive, when travelling to the Gulf—
Mr Peter Bone (in the Chair)
Order. If the hon. Gentleman faces more toward the Chair, the Minister will hear better and the microphone will work better for the recording.
Leo Docherty
I will gladly afford the Minister the opportunity to listen. I agree with my hon. Friend the Member for Witney (Robert Courts). When travelling in the Gulf, as the Minister and others will know, it is reassuring that they recognise the tangible commitment to our collective security. There is a return on the investment that is more than the value of the vessel itself. I hope that that attitude, and our requirement to invest in that attitude, will be recognised in the review, because it could apply elsewhere, such as Libya or Iraq. If that recognition is to be meaningful, however, it must be joined up with our foreign policy. For example, there is no point in our having military engagement with Iraq while simultaneously closing our consulate in Basra. We should be energetic and ambitious, but that must be part of the whole package, alongside our foreign policy.
My second point is that I hope the review will recognise the strategic importance of our defence industries in enhancing our global position. I have talked about the naval base, but I want also to mention the export of Typhoon to our allies in the Kingdom of Saudi Arabia. That has not been without controversy, but having travelled to Riyadh to visit the targeting centre, where targets in Yemen are assessed and allocated, I was most impressed to see NATO doctrine in use and a large number of British-trained members of the Saudi royal air force and army. Because we are involved, and not another supplier such as China or Russia, they have the benefit of our doctrine of responsible use. We do not only sell them aircraft, but we export a doctrine of responsible use. I know that the Saudis are grateful for that, and it is a tremendous strategic benefit to us.
Bob Stewart
I was with my hon. Friend when he visited. I point out to the House that the Saudi pilots we spoke to would often abort their mission immediately if they felt there was any danger of so-called—I hate this phrase—collateral damage; in other words, civilians being killed. That was good to hear.
Leo Docherty
I agree entirely with my hon. Friend. We should have the confidence to double down on those relationships. BAE Systems successfully supplied the Typhoon to our allies in Saudi Arabia, and it has been very effective operationally. We heard recently that BAE Systems has signed a memorandum of understanding with the state of Qatar for 24 Typhoon aircraft. I hope that more exports can be achieved throughout the region. It is the right thing to do not only commercially, but strategically and morally.
Mr Peter Bone (in the Chair)
We have now heard from all those hon. Members who notified me of their wish to speak. It may help new and less experienced hon. Members—I know that some are less experienced—to know that the same rules apply in Westminster Hall as in the Chamber: you should notify the Chair if you wish to speak.
Sir Vince Cable (Twickenham) (LD)
I congratulate the hon. Member for Yeovil (Mr Fysh) on securing the debate. I will concentrate on the particular aspect of defence and industrial capacity relating to his constituency: helicopters. It has long been understood that that is an important sector—those with long memories will remember that Michael Heseltine walked out of the Cabinet over the issue. It was also important to me. I recall that early in the coalition Government we had a deputation from the six leading aerospace companies, which pointed out that the British capacity in aerospace manufacture was gradually declining because of a lack of commitment to research and development. Helicopters were very much part of that story. On the back of that, we launched the aerospace growth partnership, a £2 billion joint research programme that did a lot to revive the sector.
The current Defence Secretary was a stalwart supporter of that programme, and of the defence partnership that was a key component within it. We also provided substantial funding through the regional growth fund to enable what was then AgustaWestland to diversify into civilian aircraft while maintaining its military capacity. Although it is seen as a niche industry, it is an important one—I think current figures suggest that about 10% of British aerospace exports come from the helicopter subsector within the industry. There is a massive supply chain; about 17,000 jobs depend on it. For the part of the country that the hon. Member for Yeovil represents, south Somerset, it is fundamental to its future as a regional economy. The industry’s health is a matter of great importance.
However, there are clouds on the horizon, as the hon. Gentleman knows well. There was a decision two years ago on Apache replacement, and he will recall that, contrary to the advice from the Business Department, his predecessor for Yeovil and others, the Government went ahead with procurement from the United States rather than from Yeovil. Since then, the pound-dollar exchange rate has deteriorated by 18%, which makes it a rather less clever decision than it may have seemed at the time. There are now doubts over the Wildcat platform. The company has a potentially excellent long-term future built around unmanned helicopters, but it needs time, resources and steady orders to maintain its capability.
Sir Oliver Letwin (West Dorset) (Con)
I agree with much of what the right hon. Gentleman says about past Governments’ actions. In the light of that, does he agree that it would be odd to decide to scrap the Wildcat, of which we have about 60 and which is an exportable helicopter with a high degree of flexibility, in order to keep the Pumas, which are not made in the UK, are not exportable and are old, about to retire and less flexible and capable?
Sir Vince Cable
The right hon. Gentleman is right. The Wildcat programme is of great advantage, and it is of considerable concern to the industry that its future is now in question as a result of the opening in a very open-ended way of the procurement programme by the Government.
I want to leave the Minister with one question. Can he say quite explicitly that the helicopter sector is an important part of the industrial strategy? If he can give that statement and commitment, that is rather important. This is the only part of the whole aerospace sector where there is a completely integrated system, from R and D upstream, down to manufacture in the UK. If that is lost, an industry that is crucial to defence and to the economy is lost.
Dr Julian Lewis (New Forest East) (Con)
As time is so pressing, and so many people wish to speak who do not get as many opportunities as I do to speak on this subject, I shall just raise a few brief points.
First, I wish to place on record the gratitude of the Defence Committee as a whole to my hon. Friends the Members for Beckenham (Bob Stewart), for Filton and Bradley Stoke (Jack Lopresti) and for North Wiltshire (James Gray) and the hon. Member for Dunfermline and West Fife (Douglas Chapman), who served on the Committee in the last Parliament, for everything they did to buttress the strength and depth of our inquiries and conclusions. We are very grateful to them all.
I would like to raise the following questions. What is this review about? Who should be able to scrutinise the process? What should we be spending on defence? What is our concept for defence? Is our decision-making process adequate to produce a strategy? Is our soft power adequately resourced? The answers necessarily will be inadequate.
The answer to the first question—what is this review about?—is: I do not know. It is about either increasing the money, sorely needed for defence, or further cutting capability in order to balance the books. I know which of them I should like it to be, and I know which I fear it will be.
Who should be able to scrutinise the process? This process is being carried out by the National Security Adviser, Mark Sedwill. The Defence Committee has applied to have Mr Sedwill appear before us, but the initial response has not been encouraging. It is being suggested that the Joint Committee on the National Security Strategy would be the appropriate body for the National Security Adviser to appear before, notwithstanding the fact that National Security Advisers have appeared before us previously. I hope wiser counsels will prevail there.
What should we be spending on defence? I thank my hon. Friend the Member for Yeovil (Mr Fysh) for not only initiating the debate, but making the point very well about what percentage of GDP we used to spend on defence. We used to spend the same on defence as we spent on education and health in the 1980s. Now we spend two and a half times on education and nearly four times on health what we spend on defence. Although we are spending more on defence, defence has indisputably fallen down our national scale of priorities.
What is our concept for defence? That was ably set out by the Labour-led strategic defence review of 1997-98, which came to the conclusion—at a time when we were not facing a threat on the continent of Europe—that we needed an amphibious taskforce and a carrier strike taskforce in order to form a sea base that could go anywhere in the world. I hope to reassure the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) by quoting to him from what the Minister for Defence Procurement wrote in a letter deposited in the House of Commons Library in January, after I raised the question of the future of HMS Albion and HMS Bulwark on the Floor of the House. She said:
“There are no current plans to decommission the ships early, and I can reassure you that their out of service dates are 2033 and 2034 respectively.”
It would be diabolical to take ships with that amount of life left in them and retire them early.
Mr Mark Francois (Rayleigh and Wickford) (Con)
I absolutely agree with what my right hon. Friend said, not least because he is my boss on the Defence Committee. To take Albion and Bulwark out of service would be an absolute false economy, and I very much hope that the Minister will convey that back to the Department.
Dr Lewis
The idea that anyone could be my right hon. Friend’s boss on the Defence Committee is polite, but fanciful.
Is our decision-making process adequate to produce a strategy? In a word, no. We have got to a situation where the chiefs of staff are too divorced from strategy-making. They are then left to have to make cuts in capacity themselves, while they are not able to get together to thrash out a joint strategy in the way that the Chiefs of Staff Committee traditionally did.
Finally, is our soft power adequately resourced? It could be, but the signs are not promising. For example, we produced a report entitled, “Open Source Stupidity”—I think that is probably the first time the word “stupidity” has appeared in an official Select Committee report title—referring to the fact that, for £25 million a year, we need not close the BBC Monitoring centre at Caversham. It is not too late to reverse that extremely stupid decision; and I am glad that the Foreign Secretary, the Chairmen of the Foreign Affairs Committee and the International Development Committee and I will have the opportunity to visit that excellent establishment soon, in the hope that we can, even now, prevent that folly from proceeding.
Several hon. Members rose—
Mr Peter Bone (in the Chair)
Order. A number of Back Benchers are still trying to catch my eye. While I cannot extend the debate, I will shorten the time for the Front Benchers. The winding-up speeches will now start at 4.6 pm, to give more Back Benchers a chance.
Mr Paul J. Sweeney (Glasgow North East) (Lab/Co-op)
It is an honour to serve under your chairmanship, Mr Bone. I thank the hon. Member for Yeovil (Mr Fysh) for securing the debate.
I will constrain my remarks to a specific element of defence policy, which is the recently published national shipbuilding strategy, in the context of previous policy with regard to the shipbuilding strategy in the United Kingdom and, in particular, the terms of business agreement signed between the Ministry of Defence and what was then known as BVT in 2009 and subsequently known as BAE Systems Surface Ships Ltd. I would appreciate it if the Minister made specific reference to how that terms of business agreement has been formulated into the current national shipbuilding strategy.
I was alarmed to read that document and learn of key omissions that have not been carried over from the TOBA to the national shipbuilding strategy—most notably, the definition of any key industrial capability with regard to the shipbuilding industry. The key industrial capability for shipbuilding is defined as being to
“design, build and integrate…a complex warship of up to 5,000 tonnes deep displacement at an interval of 1 shipbuild every 12 months and a design interval of every 6 years”
and to
“contribute to the sustainment of sovereign capability”
through the provision and maintenance of facilities and key post workers in the shipbuilding sector.
I was alarmed to learn that the Type 31 frigates should be competitively tendered, which essentially breaks clause 39 of the TOBA between the Ministry of Defence and BAE Systems because it jeopardises that long-term drumbeat of work. It also makes no reference to the achievement of upper quartile performance in the national shipbuilding industry. That upper quartile performance was defined as a benchmarking exercise that would determine the optimal design, build, combat systems integration and through-life support infrastructure in the UK that would be in the upper quartile of all firms engaged in the industry worldwide. I would like to know why those terms and definitions have not been sustained in the current national shipbuilding strategy.
I had the privilege of working in the shipbuilding industry, following in the footsteps of my grandfather and father, and was heavily involved in the development of the benchmarking exercise during my time at BAE Systems. That included development of the design of a shipyard on the Clyde that would deliver exactly what I have referred to: the key industrial capability at an upper quartile performance level. I was rather alarmed to learn that that will no longer be invested in. That means that we will no longer be able to achieve a build interval of one shipbuild every 12 months or a design interval of every six years. That capability has now in effect been surrendered by the Ministry of Defence, as is clear in the current shipbuilding strategy. I would like to know why that has happened and why the business case demonstrating that delivery of that capability was perfectly financially viable has not been upheld. What long-term financing options have been considered beyond current in-year spend to deliver that long-term build capability? I would be grateful if the Minister elaborated on those issues.
Sir Oliver Letwin (West Dorset) (Con)
I shall be brief, Mr Bone.
This is like wandering into a group of the last of the big spenders. I do not share the view of most of my colleagues that we should be spending more on defence. Moreover, I am always very suspicious of Members of Parliament who come and represent their constituency interests in these sorts of lobbying exercises. Therefore, I was loth to contribute to a debate that is about, from my point of view, the question of helicopters, which the leader of the Liberal Democrats raised, but I have looked into it a bit and I find, to my surprise, that I can reconcile what I want to say both with my views about defence expenditure and with the national interest rather than my constituency interest, which happen, on this rare occasion, to coincide.
I understand that, as part of the review, the Government are, rightly, considering reducing the number of kinds of helicopter that are run by the armed forces as a whole by at least one. I welcome that, because I am perfectly sure that we run too many kinds of helicopter, which is a very expensive way to do things. I understand that the choice may come down to one between the Puma and the Wildcat. As my hon. Friend the Member for Yeovil (Mr Fysh) mentioned, the Wildcat is built in his constituency. Many of my constituents work in the Leonardo factories that produce it. It is a relatively modern—in fact, very modern—helicopter. It is highly flexible, small, agile, armed with the latest equipment and highly exportable. It is also highly usable on the new light frigates, which unlike most of the ships of our Navy, which I persist in believing will never be used in the whole of their lives, are likely to be used, because they are small and agile themselves and may be useful somewhere in the world. They would be a great deal more use if they had helicopters on them, and those helicopters are ideally suited to that. The Army also uses them. They are very new, as I said; they have many years of life ahead of them. We own roughly 60 of them.
The Puma, by contrast, is a much bigger thing, which the Royal Air Force loves. I bear the scars, as I think the right hon. Member for Twickenham (Sir Vince Cable) and my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) do, of a previous defence review, in which we found a sort of gang of all the top brass. They appeared, with spaghetti all over them, at the National Security Council, and persuaded us to invest in cats and traps and things on those very large aircraft carriers, and to get rid of the vertical take-off planes that we then had, the Harriers, because the Royal Air Force loves big fast jets. I fear that the Royal Air Force may also love those large helicopters, but they are not built in Britain. They are aged. They will be disappearing quite soon anyway. They do not carry the latest equipment. We cannot put them nearly so easily on ships.
I think it would be a travesty if we ended up getting rid of the 60 modern, light, effective, flexible, British-built, exportable helicopters, for the sake of keeping 22—if I have the number right—ancient, foreign-produced, non-exportable, heavy RAF helicopters. I very much hope that the Ministry of Defence will not make that mistake.
Douglas Ross (Moray) (Con)
It is a pleasure to serve under your chairmanship, Mr Bone. I, too, welcome the debate secured by my hon. Friend the Member for Yeovil (Mr Fysh).
I want to put on the record some positive points about defence and defence spending in Scotland. GMB Scotland reported in July 2016 that almost 14,000 people were estimated to be employed at MOD installations in Scotland and that MOD employees support 20,687 jobs and £473 million-worth of wage payments in Scotland alone. That contrasts with some of the more negative points that we heard from the hon. Member for Dunfermline and West Fife (Douglas Chapman). He went on to talk about the Clyde. The Clyde is getting 20 years of work building the eight Type 26 anti-submarine frigates. That is what this Government are investing in Scotland. The hon. Gentleman also mentioned the Type 31 contracts. Scottish yards will be able to apply to build those frigates like any other yards across the United Kingdom, so it is important to put that on the record.
I again welcome the investment in my constituency; I also did so in my intervention. RAF Lossiemouth will be a key focal point for the UK’s defences with the arrival of the P-8 Poseidon aircraft. That will bring 400 new jobs and will involve £3 billion of investment over the next 10 years. That is crucially important to my constituency and very welcome.
The UK has one of the biggest defence budgets anywhere in the world. Scotland benefits from that, and I am sure that under this review it will continue to benefit.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I shall be brief, Mr Bone. There is a realism that we need to bring to this debate. A capability review starts with what sort of country we want to be, what sort of role we want to play in the world, and the strategic situation that we face; and the only thing that is changing is the strategic situation that we face, which is getting worse. The Development, Concepts and Doctrine Centre puts state-on-state warfare as a major threat; it is slight now, but growing and will be becoming severe in the next 20 or 30 years. That is the context in which this debate should be seen. We keep hearing, peppered throughout the debate, the noises from colleagues who are complaining that capability is being cut on an arbitrary basis because there is not enough money in the budget. These are not strategic decisions; they are decisions taken to match a year-on-year target, so the impression being given is that the defence budget is really being planned only one year ahead, with the consequences of these cuts.
Let us look back over the last seven years. The coalition Government inherited a black hole in the defence budget of £35 billion. Coupled with George Osborne’s 8% defence cash cut to the headline figure, that meant that we reached 2015 already having suffered a real-terms cut of 17% in the defence budget, regardless of the ongoing pressure of defence cost inflation. Recently, we have suffered the collapse in the value of the pound against the dollar, as has been said; and looking five and 10 years ahead, we are facing another black hole in the defence budget, which will have severe consequences, because the big equipment programmes that tend to dominate defence expenditure are crowding out investment in technology and people. Always it is manpower that takes the cut to protect the big equipment programmes.
We need to concentrate not just on how we are to strategically improve the defence budget to protect the existing programmes. If we are to have such a limited defence budget, we need to learn how to spend more on people, technology and industrial capacity, to be able to build the equipment that we need for the campaign that we are in, rather than finding ourselves with the equipment that we ordered 10 years ago, which is inappropriate for the campaign that we now face. We need to invest more in the people, who are, in the end, the absolute force multiplier in any crisis that we face. It is a big challenge, but if we continue on the present trajectory, the situation will just get worse.
Stewart Malcolm McDonald (Glasgow South) (SNP)
I am not a religious man, but it is proof that God is smiling on us when you are in the Chair, Mr Bone. I congratulate the hon. Member for Yeovil (Mr Fysh) on securing the debate and giving a very thoughtful speech at the start.
Like other hon. Members, I pay tribute to members of the armed forces, the first responders to the events that happened here and across Europe earlier this year, and of course to the Minister. He knows that although we have disagreements, I have great respect for him. I am a fan of his. I think he is a thoughtful Minister and I look forward to his summing up the debate.
The review is welcome. It is of course necessary. However, as has been mentioned, we hope that it leads to a new SDSR, because the previous SDSR, which other hon. Members have mentioned, does not take account of the currency fluctuations and does not take account of Brexit. We need a proper review of our strategic assets.
The Government need to be a bit more transparent on this. I was concerned to hear what the Chairman of the Defence Committee, the right hon. Member for New Forest East (Dr Lewis), adumbrated earlier on the lack of engagement from those involved in the review. It would be good if the Minister secured that for the Defence Committee when he leaves the debate today.
The big thing that we need to look at is our own back yard. As the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) and my hon. Friend the Member for Dunfermline and West Fife (Douglas Chapman) mentioned, we are AWOL in the High North. It is an area where we are not just letting ourselves down, but letting our allies down as well. It has to be a high strategic priority, and this review and the subsequent SDSR that we think should happen must address that. The total absence of major surface vessels anywhere in Scottish waters, and the continued reliance on our allies, should alarm every single Member of this House. They are our waters and we have a duty to protect them.
I also want to address the 2% spend on GDP. It is, frankly, the most creative accountancy that I have witnessed in some time, including efficiency savings and pension contributions, as has been mentioned. Let us be clear: the 2% that the Government claim is an example of the books being well and truly cooked.
There are too many glaring and serious problems for one mini review to handle: a black hole in the equipment plan; inadequacy of the defence estate; dilution of the national shipbuilding strategy, as mentioned by my fellow Glaswegian, the hon. Member for Glasgow North East (Mr Sweeney); threats to the Royal Marines; uncertainty over amphibious assets; and the impact of Brexit—the list is alarmingly long. If the review is to be honest, and if it is to be worth the paper it is written on, it will lead to a new SDSR and it should be published before the end of the year. I look forward to hearing what the Minister says in his summing-up speech.
Wayne David (Caerphilly) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bone.
This is an important debate, and I congratulate the hon. Member for Yeovil (Mr Fysh) on securing it. It comes at a very appropriate time, as has been mentioned, because the Ministry of Defence, the Cabinet Office, the Treasury and other Government Departments are currently conducting a review of national security capabilities. My first question to the Minister, echoing what others have asked, is about whether he can indicate when that report will be published and what exactly its terms of reference will be. As I understand it, the strategic defence and security review will be, to use the Secretary of State for Defence’s phrase, “refreshed”. Will the Minister confirm that that will dovetail into the review of national security capabilities?
We know that a review is necessary because the Ministry of Defence is facing enormous problems. The SDSR 2015 is built on the premise that there will be sufficient efficiency savings, but as we all know those savings have not been identified. I know that the MOD was hoping for savings in the defence estate, but very little has come from that direction and, of course, there is the deprecation of the pound following the decision on Brexit. In fact, the Royal United Services Institute recently warned that there will be “substantial financial implications” for defence as a result of the weakening pound. In August, RUSI warned that the MOD faces extra costs of up to £700 million a year in the wake of the Brexit vote and the pound’s fall against the dollar. The National Audit Office recently pointed out that there is
“little room for unplanned cost growth”
and has expressed concern about the current defence equipment plan’s vulnerability to foreign exchange rates.
The problem is that approximately £18.6 billion is going to the United States in dollars. Rather than placing an emphasis on developing our own industrial defence capacity—our sovereign capacity—the Government are buying a whole raft of new equipment from the US for the Navy and the RAF: the F-35s, nine P-8 Poseidon maritime patrol aircrafts and 50 Apache attack helicopters, all from the United States of America.
Bob Stewart
We buy equipment and weapons from the United States because they are better than the equipment and weapons we can produce here, and those of us here all want our armed forces to have the best. That is the reason we do it: we do not have a choice if we want to help our armed forces.
Wayne David
That highlights the short-term thinking of the present Government. What we really need is an industrial defence strategy that invests in the skills and capabilities of our own indigenous industries, so that when choices have to be made we can choose, quite rightly, to have our own capability enacted and not bought off-the-shelf from abroad.
The Government regularly come out with their platitudes that defence expenditure increases every year, but let me be clear that the MOD faces a financial crisis. We are told by the MOD’s permanent secretary that over the next 10 years the MOD will have, in his words, to seek out and secure £20 billion of efficiency savings. He says that notwithstanding increased budgets,
“our ambitious equipment program will not be affordable without”
those efficiency savings. I do not believe it is realistic or, indeed, honest to talk about that level of efficiency savings. I note the comments by Sir George Zambellas, the admiral and former head of the Royal Navy, who recently said to the press:
“There is a suggestion that there’s lots more efficiencies to be made. There are not. I’ve been helping deliver efficiencies for my 37 years in the navy. We have reached the bottom of the efficiency barrel and we all know that, because the Navy is so hollowed out. It hasn’t got enough missiles and spares. It’s very short of the integrated support that is needed as a single service.”
Those are damning comments by someone who does not have a political axe to grind, but takes an objective view of the very real crisis that the Navy, in particular, faces.
Indeed, it is clear that the MOD is already involved in planning for a fresh round of deep and crude cuts. As we have all seen, there have been reports in the press that the Royal Marines may be cut by 1,000 from their present 6,500. Earlier this year there was confirmation that Plymouth’s 42 Commando, one of the last specialist Royal Marines fighting units, was withdrawn from frontline service. The amphibious fleet may face decommissioning, with HMS Albion and HMS Bulwark both potentially becoming part of history—I refer Members to the excellent early-day motion 391 in the name of my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard). I ask the Minister to listen not only to what I am saying, but to what all Members have said this afternoon about how important it is to maintain that amphibious capability, and I urge him to give a commitment today that those two ships will not be considered ripe for cutting.
This is all occurring, as I said, at a time of crisis. The Navy personnel stands at 2% under establishment. There is a particular problem in the Navy with skilled personnel and engineers. The RAF is 5% under strength, and we had the very bad news last week that nearly 2,000 skilled, well-paid jobs will be lost with BAE Systems. One of the reasons it has given for those redundancies and the cutback in capacity that has taken place, is the slowdown in production of the Hawk aircraft. I would reiterate what was asked for this week and ask the Government to bring forward an order for nine new Hawk aircraft for the Red Arrows. As well as the crises in the Navy and the RAF, we are seeing a crisis in the Army, which is 5% understrength. I remind hon. Members—
Mr Peter Bone (in the Chair)
Order. I am sorry to interrupt the shadow Minister, but I am afraid I cannot let him speak for longer than the Minister will be able to, so I hope he is about to finish.
Wayne David
I am about to wind up. I remind Members that the Conservative manifesto for the 2015 election said that the Army would not fall below 82,000 people. It has: the latest figures show that the Army is down to 76,680, which speaks for itself. There is a very real crisis.
In conclusion, I ask the Minister for an honest statement about the real problems that our armed forces face today. Can we have a commitment that the short-term—
Mr Peter Bone (in the Chair)
Order. I am not having this—the hon. Gentleman must sit down.
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I am grateful for the opportunity to speak today, Mr Bone. It is a real pleasure to be able to draw some thoughts and conclusions together on this important, interesting and timely debate. Like others, I pay tribute to my hon. Friend the Member for Yeovil (Mr Fysh), who has shown passion and a detailed understanding not only of what is going on his constituency, but of the wider picture of the defence capability. I congratulate him on bringing this debate to the fore. Looking around the Chamber, I recognise that there is an officers’ mess worth of experience, commitment and understanding of what the armed forces has done and is doing, and of where we want to go. It is a pleasure to respond to this debate.
I give hon. Members the apologies of the Procurement Minister—the Under-Secretary of State for Defence, my hon. Friend the Member for West Worcestershire (Harriett Baldwin)—who would otherwise be here. However, I take a personal interest in these matters, so I grabbed the opportunity to share some insight about what is going on. This has been a wide-ranging discussion and as I have said, if I am not able to answer some questions, I simply will not be, but I will write to hon. Members, as I have before.
All hon. Members, including my hon. Friend the Member for Yeovil, began by paying tribute to our brave and professional armed forces. As a former Regular Army officer, and indeed, a reservist, I stand with all in paying tribute to those who, when there are so many opportunities in the world today, choose to wear a uniform, to step forward and be counted, to stand and defend our country and to do the things we see, whether that is in the Caribbean or in the floods, or by going into harm’s way. We think about what it means to be British, what Britain is and what our reputation is, and that is shown in the professionalism that our armed forces display.
As a nation, we have an aspiration and the ability to shape the world around us and to play a role on the international stage, and that comes about because of what our armed forces can do. We are recognised as the world’s leading soft power because our professional armed forces are respected and revered not just by our allies, but by our adversaries. We follow a transparent agenda and in a changing, challenging world, leadership is needed on the international stage. I think we can all agree that we want our armed forces to continue to play that role in shaping this very challenging world.
We need to face some big questions, many of which have been raised today. I join right hon. and hon. Members in recognising the important economic value of our industrial base—not just in defence and aerospace, but in a wider context—in the economics of this country. However, we face a fiscal reality and my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) made the situation clear, taking us back in time to the legacy fiscal issues that we have inherited, which are still very real today. My hon. Friend the Member for Yeovil touched on the important wider duty of care that we have to our armed forces. I include the whole family—the partners, the wives, the husbands, the children, the cadets and the reserves. It is important that we look after them not only when they are in uniform, but further afield, when they finally move back into civilian life as our respected veterans.
Before I come on to the national security capability review, which is the core of our discussion, I will respond to a couple of points. The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) spoke about the importance of the Type 31e. It is a simple design that is intended to have bespoke changes put on to it. It is designed for export. That is why it seems simplistic compared with the Type 26, the frigates, the destroyers and so on.
I am grateful to the Chair of the Defence Committee, my right hon. Friend the Member for New Forest East (Dr Lewis), who made the future of HMS Albion and HMS Bulwark clear. We should not forget the amphibious capabilities in the Bay class, as was illustrated in our response to the recent hurricanes in the Caribbean.
My hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) spoke about our commitment to 2%, which I can confirm. I am pleased that other nations are catching up with us to meet that important commitment. We want that to continue and, as many hon. Members have said, we are increasing our budget by 0.5% above inflation. That is very important to recognise.
My hon. Friend the Member for Aldershot (Leo Docherty) spoke about the importance of our footprint across the world. There is not only HMS Juffair, which I am pleased that hon. Members were able to see; we have a footprint right across the Gulf and in other places, including in a transitional or temporary mode. We are operating in and have exercises in 20 locations from Nigeria to the Balkans, to further afield in Poland with a resurgent Russia, to the Caribbean and not least, to the skies of Iraq and Afghanistan.
The right hon. Member for Twickenham (Sir Vince Cable) asked important questions about helicopters. If I may, I will ask the Procurement Minister to write to him in more detail.
My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) spoke about the number of platforms, and I agree with him. We have more than a dozen different helicopter platforms, if we count them all up, which is too many given all the procurement lines, software upgrades and training packages. That needs to be simplified.
On the national security capability review, we need to step back and remind ourselves that the SDSR 2015 was the blueprint for our security—for meeting terrorism, the growth of terrorism and extremism, state-based aggression and cyber, and responding to those who undermine the rules of international order—but there have been changes. We have had five terrorist attacks in this country, a resurgent Russia, the activities of North Korea and cyber-attacks on our health service, on companies and on Parliament itself. That is why the capability review is required. As I said, there has been much speculation, but the details will come through in the new year. I am sure that Parliament will be involved in the usual manner, including through the Select Committee.
The review will be Cabinet-led and have 12 strands, of which the defence aspect is simply one part. It is important, however, to recognise that any armed forces must adapt to and evolve with the times. We need to understand what the right balance of scale, readiness and reach is, and what our enablers to provide that support are. Where do we place those assets, not only so they are ready to be used but as a deterrent?
I will leave a minute for my hon. Friend the Member for Yeovil to conclude, but I am sure that we can all join in saying that we are very proud of our—
Mr Ellwood
I will not give way to the hon. Gentleman. He took far too much time—
Mr Ellwood
I will not give way to the hon. Gentleman. I have made that clear—
Mr Peter Bone (in the Chair)
Order. The hon. Member for Caerphilly (Wayne David) is not in my good books at the moment. Yelling from a sedentary position is not acceptable.
Mr Ellwood
The hon. Member for Caerphilly (Wayne David) has successfully eaten into more of my time, so I think he had best remain seated.
To get back to the point, we are all committed—I hope even the hon. Member for Caerphilly—to working hard for our armed forces and ensuring that they have the equipment they need and that we provide support for personnel. Yes, in politically difficult times, that is tough, but we will work hard to ensure that we meet the armed forces’ requirements.
Mr Fysh
I thank all hon. Members for turning up to this important debate. We have heard that since SDSR 2015 the challenges have increased and so has our need to project our capabilities and to make them available to our allies on a full-spectrum sovereign basis. We heard from many Members about the energy we need and about our potential deficiencies, not least in integration with industrial strategy, which in defence must be an essential consideration.
Written Statements
(6 years, 6 months ago)
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Banking Act 2009
(6 years, 6 months ago)
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The Economic Secretary to the Treasury (Stephen Barclay)
The Treasury has laid before the House of Commons a report required under section 231 of the Banking Act 2009 covering the period from 1 October 2016 to 31 March 2017. Copies of the document are available in the Vote Office.
[HCWS184]
Service Complaints Ombudsman Annual Report: MOD Response
(6 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
The Ministry of Defence (MOD) formal response to the service complaints ombudsman’s (SCO) annual report for 2016 on the fairness, effectiveness and efficiency of the service complaints system has today been placed in the Library of the House.
The ombudsman’s report commented on the operation of the new service complaints system which was implemented on 1 January 2016 and the work of her office in 2016. The response sets out how the MOD proposes to address each of the ombudsman’s new recommendations.
The MOD values the strong independent oversight that the ombudsman brings to the new service complaints process, and remains committed to having a system in which our personnel can have confidence.
[HCWS183]
Antique Firearms
(6 years, 6 months ago)
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The Minister for Policing and the Fire Service (Mr Nick Hurd)
I have today launched a Government consultation on proposals for implementing legislation to define antique firearms.
Antique firearms are exempt from most of the controls placed on firearms if they are held as a “curiosity or ornament”. There has previously been no statutory definition of an “antique firearm”— only non-statutory guidance. This has created legal uncertainty which has been exploited by criminals to obtain old but functioning firearms for use in crime. Since 2008, there have been four fatalities linked to antique firearms. The number of antique firearms recovered in criminal circumstances has increased from four in 2007 to 91 in 2016.
The Government have included in the Policing and Crime Act 2017 provisions to define an “antique firearm” in regulations. This consultation will inform the content of those regulations and provide a statutory definition which will ensure that old firearms that still pose a danger to the public are no longer exempt from control. It will also provide legal clarity on the definition of an antique firearm to help law enforcement tackle criminal use.
The consultation seeks views on the obsolete cartridges and propulsion systems used by old firearms that can be considered antique; a cut-off date of manufacture, after which a firearm will not be considered antique; and arrangements for the ongoing review of the regulations.
The Government welcome responses to this consultation from everyone involved with antique firearms, including the police, dealers, museums and individual collectors. We will take account of all views before deciding on the final shape of the regulations. The consultation will run for eight weeks. A copy of the consultation paper will be placed in the Library of the House and will be available on the Government’s website at www.gov.uk.
[HCWS182]
Northern Ireland Update
(6 years, 6 months ago)
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The Secretary of State for Northern Ireland (James Brokenshire)
As Secretary of State for Northern Ireland, my overarching objective is a more secure, stable and prosperous Northern Ireland. Having a fully functioning and effective Executive, delivering for all the people of Northern Ireland is critical to meeting this objective.
Northern Ireland is currently in the midst of a period of political uncertainty. At this time there is no devolved government in place and there has not been one for 10 months. This is not what the people of Northern Ireland voted for last March. They want devolved government in place and expect their elected representatives to make decisions to deliver effective public services for all parts of the community. Moreover, they deserve to have a functioning Government and locally elected voices representing them on key issues, including Brexit.
Over the past weeks and months the Prime Minister and I have sought, working with the Irish Government in accordance with the three stranded approach, to bring the parties together to work towards an agreement.
The DUP and Sinn Féin are seeking to find agreement on the issues between them. Those remaining are small in number but highly difficult and sensitive—notably in relation to language and culture.
The outlook for an imminent resolution is not positive. Time is running out. And without an agreement, we are on a glide path to increasing intervention by the UK Government.
The Northern Ireland civil service has dealt with the lack of an Executive with the utmost professionalism to date—including in the face of Storm Ophelia. But by virtue of the legal spending limits imposed in the absence of formal budget, public services cannot be sustained without further legislation for much longer. Indeed the limits set out by the Northern Ireland Act 1998 are such that it is essential for budget legislation to be in place by no later than the end of November. Working from that deadline, the Northern Ireland civil service has assessed that it would still be possible, with political agreement among the parties in the Assembly, for an Executive formed in the week commencing 6 November to take forward its own budget.
Consequently, the last week I could introduce Executive formation legislation in Parliament for an Executive to take forward its own budget would be the week commencing 30 October.
I have made clear that I will only legislate in this way on the basis of a written agreement between the parties. If this is not forthcoming before 30 October, the only option remaining would be to legislate for a budget at Westminster. This is not a step I wish to take, nor one I would take lightly. My strong preference is for a restored Executive in Northern Ireland to take forward its own budget. Without an Executive, though, it would be grossly remiss for the UK Government not to step in and take action to ensure the continued funding of critical services in Northern Ireland.
I, the UK Government and the Irish Government want the parties to reach an agreement and restore devolved government in Northern Ireland. But my ultimate responsibility is to the people of Northern Ireland. The UK Government will do what is necessary to provide the stability required to ensure communities in Northern Ireland are not disadvantaged by the continued absence of devolved government.
Next year will be the 20th anniversary of the Belfast agreement. It behoves us all to do what we can to ensure that that historic date is not marked by an increasingly hands-on UK Government, but instead by a functioning Northern Ireland Executive.
This remains my overriding priority.
[HCWS185]
High Speed Rail (Preparation Act 2013)
(6 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
The High Speed Rail (Preparation) Act annual expenditure report is published today under section 2 of the High Speed Rail (Preparation) Act 2013. The report covers the period from 1 April 2016 to 31 March 2017.
A copy of the report will be placed in the Libraries of both Houses.
Attachments can be viewed online at: http://www. parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2017-10-19/HCWS179/
[HCWS179]
Roads
(6 years, 6 months ago)
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The Secretary of State for Transport (Chris Grayling)
I am today setting out further details of significant investment for our roads, including announcing the next two major local road schemes and 76 winners from the recent competition for national productivity investment funding on local roads. This funding from the Department for Transport totals £345.3 million.
This funding includes two new large local major road schemes receiving programme entry approval, at Carrington bridge in Worcester and at Middlewich in east Cheshire. The scheme in Worcester will alleviate congestion on the A4440 southern relief road and receive £54.5 million of funding towards a total cost of £62 million. The Middlewich eastern bypass will alleviate congestion in the town centre and facilitate the expansion of the Magnitude employment site. It will receive £46.8 million of funding towards a total cost of £56.9 million.
I am today announcing the winning 76 local projects which will receive funding of £244 million from the national productivity investment fund, during 2018-19 and 2019-20. The schemes will help to ease congestion, provide upgrades on important local routes, as well as facilitating the unlocking of economic and job creation opportunities. They will also support, in some areas, the potential delivery of new housing developments. Further information on today’s announcement is available on the Department for Transport’s website. These projects are an essential part of ensuring we have a country which works for everyone.
The Government announced the road investment strategy (RIS) in December 2014, an ambitious plan to increase much needed road capacity, boost economic development and improve road safety. It seeks to address many years of under-investment in England’s motorways and major trunk roads. Highways England has made good progress on delivery to date, completing 18 road schemes and starting work on 15 more.
Highways England has also undertaken longer-term planning work to ensure that the high level of road investment along key corridors of the network can be delivered in a way to minimise disruption and keep road users moving. These plans also help to mitigate delivery risks and achieve better value for money for the taxpayer. This planning work was referred to in recent ORR and NAO reports on the road investment strategy. I confirm that Government have agreed with Highways England’s plans to optimise delivery of the RIS. This re-profiling and optimisation of delivery is consistent with Highways England’s remit and does not involve any cancellation of schemes, so the regions of England can expect continued and similar levels of road investment.
Further details can be found on Highways England’s website and press releases.
[HCWS180]
Employment, Social Policy, Health and Consumer Affairs Council
(6 years, 6 months ago)
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The Minister for Employment (Damian Hinds)
The Employment, Social Policy, Health and Consumer Affairs Council will take place on 23 October 2017 in Luxembourg. Margot James, Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy, will represent the UK.
The Council will be invited to agree a general approach on the proposal for a directive of the European Parliament and of the Council amending directive 96/71/EC concerning the posting of workers in the framework of the provision of services. The Council will also be invited to agree a partial general approach on the proposal for a regulation of the European Parliament and of the Council amending regulation 883 on the co-ordination of social security systems and regulation 987 laying down the procedure for implementing regulation 883.
The Council will be invited to adopt the text and provide authorisation to sign on behalf of the Council the proposal for an interinstitutional proclamation on the European pillar of social rights.
The Council will be invited to endorse: (i) the key messages from the Employment Committee based on the annual employment performance report and the employment performance monitor; and (ii) the main messages from the Social Protection Committee based on the annual review of the social protection performance monitor.
Under any other business, the presidency and Commission will provide information on the tripartite social summit. The presidency will provide information on the Tallinn digital summit. The Commission will provide information on the new skills agenda for Europe. There will be a presentation by the European Institute for Gender Equality on the new edition of the gender equality index.
[HCWS181]
House of Lords
South Africa: Money Laundering
(6 years, 6 months ago)
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The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, the Government are committed to tackling corruption in the UK and overseas and preventing the proceeds of corruption from entering the UK’s economy. The recently introduced money laundering regulations set out strict rules that British banks must follow when doing business with those with links to prominent public functions that may expose them to risks of corruption. We are concerned about the allegations in South Africa, and the British high commission is monitoring the issue closely.
Lord Hain (Lab)
May I thank the Chancellor for ensuring that the Financial Conduct Authority, the Serious Fraud Office and the National Crime Agency investigate HSBC, Standard Chartered Bank and Baroda Bank, each of which expert South African whistleblowers have told me must have been conduits for the corrupt proceeds of money stolen from their taxpayers and laundered through Dubai and Hong Kong? In my letter of 25 September to the Chancellor, I supplied for investigation 27 names and personal identification numbers, including President Jacob Zuma, 11 members of his family, 11 members of his close friends, the Gupta family, and their five associates, together with 14 entities linked to the Guptas and suspected to have been set up for the purposes of transnationally laundering an estimated £400 million, or 7 billion rand, of their illicit proceeds. Will he ensure that those banks, together with the European banks—about which I have similarly written to Commission President Juncker—track down that laundered money, return it to the South African Treasury and supply evidence to its officials to enable the prosecution of all those connected with such corruption?
Lord Bates
My Lords, we are grateful to the noble Lord for the persistence that he has shown on this issue and in drawing it to the Chancellor’s attention and to international attention. The UK has some of the toughest anti-money laundering laws in the world. We have been at the forefront of introducing them—whether it is the Criminal Finances Act this year or the fourth anti-money laundering directive. We realise that London, as the largest financial centre, is a target which can be used for this purpose, but we are determined to root it out. That is why, when we are provided with information—as when the noble Lord, correctly, wrote to the Chancellor setting out that detail—immediate action is taken to refer it to the relevant authorities to ensure that they can pursue the matter and that justice is done, and is seen to be done.
Baroness Pidding (Con)
My Lords, as someone who is incredibly fortunate in having a family home in South Africa, in White River, in the province of Mpumalanga, I have seen at first hand the sheer beauty of this amazing country, its diversity and vibrancy and the determination of its people to overcome the many challenges that it faces. Does my noble friend agree with me that, with South Africa as a key trading partner in the region and a member of the Commonwealth, it is in our national interest to make sure that we strengthen our relationship with it?
Lord Bates
Well it is certainly right—and I pay tribute to my noble friend for raising this issue—that South Africa is a country with incredible resources, not only naturally but in its people. It is the largest economy in the African continent and is the largest investor in the UK and largest trading partner in Africa for the UK. Whenever countries go through political difficulties, as they are in South Africa at the present time, we recognise that there is a long-term important relationship for the UK to maintain.
Baroness Kramer (LD)
My Lords, this is another instance where the US regulators have been ahead of the curve of the UK regulators, even though it appears that London is part of the core allegations. It has happened before in money laundering—it was so evident in the LIBOR scandal. Will the Minister once again look at the resources available and the enforcement strength of our regulators? Will he also look again at the whistleblowing laws which, although improved, are still so weak and career ruinous that the regulator does not have access to information that it should be getting at a much earlier stage?
Lord Bates
I do not accept that we are behind the curve on this. In many ways, the UK is leading the world: at the G20, in the Financial Action Task Force, and with the regulations that we have put in place and the reform of the Financial Conduct Authority. That is why this year the Financial Conduct Authority handed out one of the toughest fines ever levied—£163 million—to Deutsche Bank for failing to comply with up-to-date money laundering regulations. We are very tough on this, but we realise that you have to be vigilant all the time. Therefore, when issues are drawn to our attention, we respond to them quickly and appropriately.
Lord Davies of Oldham (Lab)
My Lords, this is a very big issue in South Africa, and it will not do for the Government to suggest that they have their eye firmly on the ball. At last we are getting some response, but it is quite clear that a number of British banks have got very significant interests in South Africa. It is important that action is taken now to make sure that these banks are clear of this corruption and, if they are not, that action is taken against them. I urge the Minister to reinforce what he has said today elsewhere. It will not do Britain’s reputation any good at all for us to be tardy on this very significant issue.
Lord Bates
I totally agree with the latter part of the noble Lord’s point. That is exactly why we have taken action in referring this matter to the Financial Conduct Authority. That is why we passed the Criminal Finances Act in April this year and introduced the tough new anti-money laundering regulations in July this year. That is why we introduced, just yesterday in your Lordships’ House, the Sanctions and Anti-Money Laundering Bill, which my noble friend Lord Ahmad will take through the House. We are taking this very seriously because we realise the consequences of not doing so for the reputation of the City of London and the UK.
Lord St John of Bletso (CB)
My Lords, in light of the endemic corruption of the state in South Africa, what are Her Majesty’s Government doing to deal with the broader issue of state capture, a term used to describe the misappropriation of state funds by a power clique?
Lord Bates
I think the other point to recognise is that in South Africa there are democratic processes and systems of law. The parliamentary inquiry is now under way into state capture by the specific companies that were referenced. A judicial commission of inquiry into state capture has been proposed but has yet to start to take evidence. We recognise that South Africa needs to go through its processes to find out what happened and who is responsible so that action can be taken, both domestically and internationally.
Fuel Poverty
(6 years, 6 months ago)
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Baroness Donaghy
To ask Her Majesty’s Government what is their estimate of the number of households in fuel poverty; and what action they intend to take to reduce that number.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)
My Lords, the latest official statistics show that in 2015 there were 2.5 million households in England living in fuel poverty. Some 70% of the £640 million energy company obligation is focused on improving the energy efficiency of these households. We also propose to bring an end to high energy prices by putting in place a price cap on standard variable and default tariffs and retaining the warm home discount.
Baroness Donaghy (Lab)
I thank the Minister for his Answer. It appears ironical to me that a Question on fuel poverty is answered by saying that all consumers are being ripped off. The figures that we have been given may be the tip of the iceberg, as many older or infirm people need extra heating and do not appear in these statistics. The Minister will be aware, because of his previous responsibilities, of the premature deaths due to cold houses and the increase in childhood illnesses. The Government are missing their own targets and not fulfilling their legal obligations on this issue. Can the Government give us some information about what practical steps are being taken to eliminate the scourge of fuel poverty in the approaching winter?
Lord Prior of Brampton
I assure the noble Baroness that we take fuel poverty extremely seriously. Interestingly, there are 835,000 fewer fuel-poor homes within bands E, F and G than there were in 2010, so there are signs that targeting the energy company obligation more specifically at lower-income families is having an effect. With the Digital Economy Bill having gone through the House of Commons, I hope that we can target our resources more accurately to ensure that we meet the obligations set out in the sustainable growth paper that came out last week.
Lord Hylton (CB)
My Lords, will the Minister confirm that the delay in paying universal credit when it has been approved will be cut from six weeks to four weeks? What are the prospects of further reductions in that time delay?
Lord Prior of Brampton
My Lords, I am not able to answer that question. It is not specifically related to the Question in front of us, but it is none the less extremely important and I will write to the noble Lord later.
Baroness Maddock (LD)
My Lords, can the Minister tell us why the Government have extended from 12 months to 18 months the period in which the energy company obligation will operate, and why they have put a cap on boilers in that transition period? Could the Government use the upcoming Budget to make sure that emergency funding is available to the most vulnerable for boiler repairs and replacement?
Lord Prior of Brampton
My Lords, I believe that the ECO is there until 2028. I do not recognise the 18-month figure that the noble Baroness mentions, but I will check that afterwards. As for how we spend the money under the energy company obligation, there is clear evidence that it is better put towards longer-term improvements such as insulation than the short-term repair of boilers. However, part of the ECO is spent on boiler repair.
Baroness Greengross (CB)
My Lords, more than 6 million older people are very worried about this winter, and 14% go back to bed during the day because they are so worried about their fuel bills and doing so will keep the cost down. Will the Government commit to reforming the energy efficiency programme so that it is a national infrastructure priority? Will they also commit to bringing 2 million low-income homes up to the performance certificate standard band C by 2020 and all 6 million by 2025, as Age UK has requested?
Lord Prior of Brampton
The noble Baroness is right that fuel poverty is a desperate problem for many people. We have a target to bring everyone up to band C by 2030, to band D by 2025 and to band E by 2020. That was reiterated in the Conservative Party manifesto and we intend to keep to it.
Baroness McIntosh of Pickering (Con)
My Lords, I commend the Government on the work they are doing to make homes warmer; I speak as vice-president of the NEA. Will the Minister take the simple measure of encouraging private landlords to improve their property by replacing single-glazed windows with double glazing wherever they can?
Lord Prior of Brampton
My noble friend makes a good point. As she will know, we are putting an obligation on all private landlords so that if they rent out their properties in 2018, they must have at least a band E category certificate on them. That will begin to make the kind of difference to which my noble friend refers.
Lord O’Neill of Clackmannan (Lab)
My Lords, I draw attention to my interests as set out in the register. The Minister will be aware that some 850,000 households, or 35%, of the people in fuel poverty are in the privately rented sector. In 2011, the coalition Government introduced regulations which are to take effect next year, but as far as can be discerned, very little in the way of instructions have been given to private landlords to carry out the necessary improvements to change the dreadful conditions that prevail for so many people. They now have less than a year to do something about it. Will the Government give us a clear indication of what will be required of landlords and when that will be published, so that landlords can get on with the job, if they have the stomach and resources to do it?
Lord Prior of Brampton
The noble Lord raises a very important point. As he will know, from 2018 private landlords will not be able to let their property to new tenants unless the property is at least band E. The cost of getting to band E is an issue that is under negotiation at the moment with Claire Perry, the Minister responsible for green energy. I hope that we will make some serious progress in that area over the next few months.
Lord Palmer (CB)
My Lords, is it not a scandal that in 2017 any household should be living in fuel poverty?
Lord Prior of Brampton
My Lords, that is a question that should be directed at poverty as a whole. The fact of the matter is that successive Governments, on both sides of this House and the other House, have done what they can to reduce poverty and to create a just and fairer society. So long as there are people living in poverty, whether fuel poverty or any other form of poverty, we have clearly failed.
Syria
(6 years, 6 months ago)
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Lord Green of Deddington
To ask Her Majesty’s Government, further to the Written Answer by Lord Ahmad of Wimbledon on 20 September (HL1251), how much of the nearly £200 million provided to moderate opposition groups in Syria was for political support; and what was the nature of that assistance.
The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)
My Lords, of the £200 million spent in Syria since 2011, £14 million has been used to fund political support to the Syrian opposition. This funding has developed the operational capacity of the Syrian national coalition and the higher negotiations committee through diplomatic technical assistance, communications and advisory support, as well as media training.
Lord Green of Deddington (CB)
My Lords, I thank the Minister for his Answer. This week has seen the fall of Raqqa, a major development in Syria, so will the Government now stop their ineffectual meddling in the affairs of Syria, wasting £1 million a week of taxpayers’ money, and focus on the defeat of ISIL, which is our real enemy? When will they realise that although the present regime is terrible, any likely alternative will be even for worse for minorities, for Christians and for women? In these new circumstances, will they now have a proper, fundamental review of their policy towards Syria?
Lord Ahmad of Wimbledon
My Lords, first, we all welcome the inroads that have been made towards the defeat of Daesh. While there are reports that that has happened completely in Raqqa, that is not quite the case, but when it does happen, I assure the House that we will make a statement to that effect. I think I speak for everyone in this Chamber when I say that we welcome the fact that Daesh has been heavily defeated not just in Syria but in Iraq. On the noble Lord’s second point on minorities—I believe he was referring to the Assad regime and the Government’s stance—let us not forget that it was the Assad regime that first attacked minorities, particularly minorities in Aleppo. That fact should not be lost on anyone.
Baroness Northover (LD)
My Lords, what conditions are we and the wider EU putting on reconstruction aid to Syria so that we can strongly encourage political reform and help ensure safety if refugees wish to return home?
Lord Ahmad of Wimbledon
The noble Baroness raises an important point. Half the population of Syria has been displaced and 400,000 people have lost their lives. We are committed to ensuring that there is a political settlement to provide the framework and the stability for long-term development in terms of restructuring and aiding the country to stand on its feet once again. Through CSSF funding within the Foreign Office, we have been providing basic support in sanitation, water supplies and the building of roads so that those first steps can be taken in the areas of Syria that are no longer under Daesh administration.
Lord Gordon of Strathblane (Lab)
My Lords, if the Government gave £200 million to opposition groups and only £14 million or £40 million—I did not quite catch which it was—was for political support, what on earth was the rest for?
Lord Ahmad of Wimbledon
I partly answered that question in my response to the noble Baroness, Lady Northover. The £14 million was specifically in terms of political support. I referred to the negotiations committee, where the opposition are at the UN and at the Geneva talks, and money has been spent on ensuring that they have the skill sets to take part in those negotiations. Other examples include £39 million having been spent on roads, water supplies and sanitation. That is where the overall £200 million pot is being spent. I will write to the noble Lord with a specific breakdown, but it is very much about assisting the coalition of the Syrian opposition both to stand on its feet internationally and to start rebuilding the country locally.
Lord Collins of Highbury (Lab)
My Lords, we should not forget that the situation in Syria has seen terrible crimes against humanity on all sides, including the government side. Will the Minister repeat Her Majesty’s Government’s commitment to hold these people to account and ensure that money is spent to ensure that there is proper evidence so that these people can be brought to justice?
Lord Ahmad of Wimbledon
I totally concur with the noble Lord’s sentiments. I assure him that he is right: this is not just about Daesh, although I am pleased that at the UN recently we passed a resolution in the Security Council that was all about holding to account those who committed these heinous crimes against humanity and wore the name of Daesh in committing their actions, which bear no resemblance to any humanitarian act. Regarding the Syrian regime, as the noble Lord knows, we are supportive of all resolutions. That is why we also take the strong stance that while the Assad regime is in place there can be no long-term political settlement of the situation. Let us not forget who created the crisis in the first place.
Lord Naseby (Con)
My Lords, why do Her Majesty’s Government not recognise that Assad is not going anywhere and that the Syria that he holds is growing back almost to the boundaries it had before? Against that background, does my noble friend really think that British taxpayers want £14 million to be spent on supporting the so-called opposition? Surely it would have been better spent on fuel poverty.
Lord Ahmad of Wimbledon
My noble friend perhaps mixes two issues. I think that all these issues are of equal importance. We have just heard from him about the importance of addressing fuel poverty. Equally, I think I speak for many in this House when I say it is right that we stand up for the oppressed of Syria and support the opposition forces because it is they, not Bashar al-Assad, who hold the key to the future development of all communities in Syria, including all minority communities.
Baroness Cox (CB)
My Lords, is the Minister aware that when I was in Syria I met representatives of civil society, including the Syrian doctors’ society in Aleppo, and there was great concern over the disastrous impact of sanctions which prevent the provision of essential medical supplies as well as food? Will Her Majesty’s Government change their priorities from providing massive financial support to opposition groups, which are not moderate, to making every effort to achieve the lifting of sanctions?
Lord Ahmad of Wimbledon
The sanctions that the noble Baroness mentions apply specifically to the regime. Equally, she will be aware, as I am sure is the whole House, that we stand second in terms of the humanitarian assistance that we are providing to all groups: more than £700 million has been given to people in Syria on the humanitarian front and £800 million has been allocated elsewhere in neighbouring countries, while a further £1 billion remains to be allocated. Our commitment to assisting the humanitarian recovery in Syria is second only to one.
Mohammed Mirzo
(6 years, 6 months ago)
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Lord Roberts of Llandudno
To ask Her Majesty’s Government, ahead of the planned deportation to Bulgaria of the Syrian refugee Mohammed Mirzo, what assessment they have made of the impact on his human rights.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, as a matter of policy, the Government do not comment on individual immigration cases but, as I discussed with the noble Lord just before Question Time to ask where this Question was leading, the Government respect the principle of family unity and our moral obligation to bring together families separated by conflict and persecution. That is why we provide legal pathways for people to come here through family reunion and resettlement. We must discourage people from risking their lives to come here illegally instead of claiming in the first country of safety that they reach.
Lord Roberts of Llandudno (LD)
I am grateful to the Minister for that reply, and I am happy to welcome the release of Mohammed from Campsfield immigration centre and, before that, the Parc Prison in Bridgend, but why was he there in the first place? What offence had he caused? We know that family reunion takes precedence over anything else. The Red Cross briefing on this states that if somebody applies to go under Dublin III, say to another country on their way in, that is fine, but if they have family in the UK, that takes precedence. What we see here is a breach by the Government of this regulation. I remind the Minister that the Dublin III regulation is of European origin; it is European legislation. What will happen to that if we come out of the European Union?
Baroness Williams of Trafford
I again point out to the noble Lord that I will not discuss individual cases. I point out that Dublin III and family reunion are for different groups of people. Dublin III determines the member state responsible for processing or deciding on an asylum claim; our family reunion rules are for those granted refugee status in the UK, and allows those with refugee status to be joined with their pre-flight family. As for Dublin III when we leave the EU, it will of course be a matter for negotiation, but we have made it absolutely clear that we want to continue to co-operate with our EU partners on asylum and illegal migration.
Lord Marlesford (Con)
My Lords, my right honourable friend the Defence Secretary recently warned British jihadists who go out to fight for ISIS that they may find themselves at the wrong end of an American or British missile. Would it be sensible to extend that warning to those British jihadists who go out to fight for ISIL that they will not be allowed to return to the UK?
Baroness Williams of Trafford
My noble friend quite skilfully completely departs from the Question, but the word “Syrian” is in the Question, so I admire him for his efforts. What would happen would depend on the case. People who have been to Syria to fight are dealt with using the full force of the law if and when they return, and many do not return.
Lord Alton of Liverpool (CB)
My Lords, returning to the point that the noble Lord, Lord Roberts, raised about family reunion and human rights, has the noble Baroness had a chance to read the letter I sent three days ago to her and the right honourable Brandon Lewis MP, the Immigration Minister? It concerns evidence given in your Lordships’ House only last week by a woman from Aleppo, who described how her 10 year-old niece had been forced to watch an execution, how three of her brothers had been taken by ISIS and subjected to torture, and one they tried forcibly to convert. This Armenian Syrian family had been seeking family reunion with others already successfully relocated to the United Kingdom. In cases such as this, what premium do we place on the position of minorities who come from particularly endangered backgrounds, who are rarely able to enter United Nations refugee camps because the very people who oppressed them are now running some of those same camps? What emphasis are we placing on helping families in that situation?
Baroness Williams of Trafford
I think I have received the noble Lord’s letter, and he raises very complex and distressing circumstances. People in their country of origin would obviously be able to claim asylum here or resettlement. I will not go into the details of that case, as I would not with the noble Lord, Lord Roberts, but certainly we are very mindful of those special cases.
Lord Hamilton of Epsom (Con)
Can my noble friend confirm that hundreds of thousands of Syrian refugees are now returning to Syria, and can she tell us what effect that is having on our policy of deporting Syrian refugees?
Baroness Williams of Trafford
My noble friend makes a really important point, which is that if you are a Syrian you want to return to Syria in improved circumstances. I can give him exact figures by letter. Indeed, it is in all our interests to get a more peaceful situation in Syria so that people can return to their country of origin.
Lord West of Spithead (Lab)
My Lords, people of many nations fought in the British fleet at Trafalgar, but I am pretty certain that there was not a single Bulgarian. The 212th anniversary of that great battle is on Saturday, and as this is the year of the Navy, according to the Secretary of State for Defence, I wonder whether the noble Baroness will pass the best wishes of this House to the Royal Navy on this very auspicious occasion.
Baroness Williams of Trafford
I can always rely on the noble Lord to say something vaguely related to the Question. I most certainly will pass on those best wishes. Thank you.
Business of the House
(6 years, 6 months ago)
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Baroness Evans of Bowes Park
That Standing Order 72 (Affirmative Instruments) be dispensed with on Tuesday 24 October to enable a motion to approve the draft Misuse of Drugs Act 1971 (Amendment) (No. 2) Order 2017 to be moved, notwithstanding that no report from the Joint Committee on Statutory Instruments on the instrument has been laid before the House.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, the Motion standing in my name will allow us to dispense with Standing Order 72 next Tuesday so that we can take an SI relating to the control of a synthetic drug under the Misuse of Drugs Act 1971. We need to suspend it because the Joint Committee on Statutory Instruments, which would normally report on affirmative instruments before they are taken, is yet to be reappointed. The Senior Deputy Speaker confirmed the Members of this House who will serve on that committee on 19 July. The appointment of Commons Members is of course a matter for that House, but the Joint Committee does vital work in the scrutiny of secondary legislation and, in my view, the sooner it is up and running, the better. I beg to move.
Lord Newby (LD)
My Lords, I am sorry to detain the House on this matter. The Motion before us looks pretty innocuous and we on this side have no objection to the Government’s proposals.
However, as the noble Baroness has explained, the need for this Motion arises from the fact that the Joint Committee on Statutory Instruments has not considered the SI. The reason for that, as we have heard, is that it has not been reconstituted since the general election. Indeed, I believe it has not met since March. The reason for that is because the Commons has not nominated its Members. I fully understand the convention that this House does not criticise the workings of the Commons, and I have no intention of doing so. The delay in this case is caused entirely by the Government’s contentious approach to party balance on all Commons committees, which rightly caused significant political controversy, debate and delay in the other place.
I have three questions for the noble Baroness, as I understand the process in the Commons is slowly cranking into gear. First, will the Government now do all they can to expedite the formation of this very important Joint Committee? Secondly, do the Government have any date in mind when they believe that this will be achieved? Thirdly, how many affirmative resolution statutory instruments are there in the pipeline that we would normally have considered and which have not been able to be brought before this House since the last meeting of the Joint Committee on Statutory Instruments in March?
Baroness Smith of Basildon (Lab)
My Lords, I concur with the comments made by the noble Lord the Leader of the Liberal Democrats. This is a really sad state of affairs. I congratulate the noble Baroness on bringing this Motion before the House today as it is the right course of action. It is exceptional and urgent, and not to do so would have grave consequences.
Having said that, this is unprecedented. I do not know whether any other noble Lords can recall this happening before; certainly I cannot. On a straw poll of other colleagues, I am not aware that it has ever happened before that the JCSI has not been set up in time for the House to consider business of this kind.
The noble Lord, Lord Newby, makes an important point. The Labour names are ready and waiting to set up this committee. The only thing holding it up is that the Government have failed to do so. So it is right that we consider this today, but it is an emergency situation; it is unprecedented and can only be exceptional. In this case, I think the noble Baroness has to speak for the Government and not just for the House of Lords. She has to tell us when the committee will be set up and assure us that it will not happen again and another such Motion will not come before this House.
Baroness Evans of Bowes Park
I thank the noble Baroness and the noble Lord for their interventions. The noble Baroness is absolutely right: standing orders are very rarely suspended, and only when there is agreement to do so does it happen. She is absolutely right that this is a case when it needs to happen, and I thank the House for its appreciation of that. As I said, the nomination of Commons Members to serve on Joint Committees is a matter for the usual channels in the House of Commons and I cannot say anything further on that, but this House has made its views very clear and I hope the Commons will hear them.
District Councils
(6 years, 6 months ago)
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Lord Greaves
That this House takes note of the future availability of resources for the provision of District Council services in two-tier areas.
Lord Greaves (LD)
My Lords, in moving this Motion, I should first remind the House of my registered interest as deputy leader of Pendle Borough Council. This Motion is about district councils—the 201 non-metropolitan or shire districts that exist in areas where there are also county councils, in two-tier areas. Shire districts have become the Cinderellas of local government, in many ways the forgotten ranks, or the poor bloody infantry, yet they are vitally important as the foundation of local democracy in their areas. According to the District Councils’ Network, they deliver 86 out of 137 essential local government services to more than 22 million people, 40% of the population of England. They cover 68% of the country by area and represent the diversity of England, ranging from former county boroughs and urban areas of acute deprivation to attractive and prosperous county towns, university towns and cities, coastal towns, small towns and villages and much of the richness and diversity of the English countryside. They are a kaleidoscope of old and new communities, rich and poor, growing and stagnant, towns and countryside and suburbs and hamlets, and include much of the English coast.
Districts collect council tax on behalf of themselves, the counties and the other precepting authorities yet, for every pound they keep for themselves, more than £5.50 goes to the county councils. So in that sense they are the poor relations. Yet when people refer to “the council” it is usually the district, borough or city council that they are thinking of—whatever they call themselves. It is much more local at that level; it is the town hall where people are more likely to know, see and hear from their councillors. The district provides many of the most local services, which are now becoming known as “neighbourhood services”. In my view, they could do more; it is time for a devolution of powers and services from counties to districts, where the districts can do it more locally and better.
District council services include refuse collection and recycling; local leisure facilities; parks and open spaces; street cleansing; town centres; planning, development and regeneration; environmental health; licensing; support for local advice services; community safety; anti-social behaviour, and much more. It is at the local level where issues are dealt with that really matter to people in their street, town and community, yet when it comes to finance, district councils have been in the front line of cuts in government funding and in their ability to raise money locally. The District Councils’ Network reports that, based on the 2017-18 settlement data from the Department for Communities and Local Government, 146 out of 201 district councils—that is 72%—will face a negative revenue support grant position by 2019; that is, the districts will be sending support grant to central government.
This year, the core spending power of shire districts is being cut by over 5%. The settlement data on core spending power shows that districts are hit far harder than other categories of council. Other councils show increases in the core spending up to 2019-20, but for districts this year, the figure is minus 5%, then minus 4% and then minus 1%. That is unsustainable and cannot go on.
The Government will say that the new homes bonus has come along to rescue the situation. This was introduced in 2011 and provided councils with a payment for each new house occupied, equal to its council tax, in each year for six years. In two-tier areas, 80% went to the districts. The bonus was funded by top-slicing the total local government grant settlement—it was not new money—and helped to offset the cuts in districts’ grants. However, there were unintended consequences—notably a large shift of funding from northern regions to London, the south-east, the south-west and the east of England. That is a different issue from this debate as it affects all councils, but it is an important one. This year the funding has been top-sliced again to provide extra money for social care, and in two-tier areas that has meant moving money from districts to the social care authorities—that is, the counties. It is being paid only for five years instead of six, and from 2018-19 it will be paid only for four years.
There is a new threshold of 0.4% of the housing stock. If your area has not built more than 0.4% of its housing stock as new housing in a year, no new homes bonus at all will be paid for that year. That is already affecting a lot of districts and is likely to affect more. This threshold removed over £70 million of spending from district councils this year, and the threat is that this will get worse in the future. As an example, in my own authority of Pendle, the year-on budget for paying for services is being cut by around half in real terms between 2010 and 2020. Government support is already down by about 60%. The budget plans for the next three years involve a cut of £4 million on a net budget of £13 million—a gross budget of £23 million. We have already cut £7 million since 2010 and the position is devastating. This is all being forced on these councils by government policies, changes to government support, financing systems and the council tax cap. This is not a time to discuss national government policy but simply to report the effect of it on a council such as this.
So far, like most districts in the country, we have coped in a fairly miraculous way. However, staffing has been stripped to a skeleton service and there is a high level of stress among staff working three or four days a week but doing the same amount of work they did when they were working five. The number of people in offices has been reduced from, say, five to three—again, trying to do the same amount of work. In our case, we have offloaded services to town and parish councils and voluntary groups as best we could. But now, like many districts, we are down to the bone. Basic neighbourhood services are at risk: services such as refuse and recycling, the maintenance of parks and open spaces, street-sweeping, the ability to go and remove litter—all that kind of thing. There is the threat of closing a swimming pool and a sports centre and removing the grant to the CAB.
Burnley, next door to us in East Lancashire, forecasts that £3.8 million has to be cut from the budget in the next three years. Harrogate, which is just over the border, over the hills in Yorkshire, is now in a position where there will be no direct grant at all from the Government from next year. It says that there is acute pressure on non-statutory services, pressure to close a swimming pool and reduce the quality of parks and gardens. When the quality of gardens in Harrogate is reduced, something is seriously wrong.
Guildford’s current shortfall is manageable but it is having to pick up the tab as Surrey County Council withdraws from funding local services and Guildford has to take them on. I have a quote from a colleague in New Forest District Council—so in the south of England:
“I would say that the New Forest District Council has been forced into nearly a decade of ‘managed decline’ in which services have been reduced or stopped completely. We are nearing the point when all the authority does is collect household waste and determine planning applications. It is a distressing state of affairs for all of us who value public services”.
On Colchester:
“With Colchester’s rate support grant due to go negative next year to the tune of £400,000 having come down from over £12 million we have had to make a lot of savings”.
The council wants to build council houses but due to the cap on HRA—housing revenue account—borrowing,
“we had to scrap plans to build 50 Council Houses”.
There is a huge tale of woe from South Cambridgeshire District Council, which reports that it cannot get suitable and experienced planning officers—there is a chronic shortage—and it is failing to carry out its proper duties there. It says:
“We no longer have a designated conservation officer, tree officers, environmental officer, economic development officer … or community support officer. Consequently we lack strategies which we once had, e.g. climate change mitigation, economic development”.
It points out that the sheltered housing wardens who visit people in their homes have been removed and,
“replaced by estate managers who just look after the fabric of the schemes”.
Inevitably, that results in more bed-blocking.
The Association for Public Service Excellence—APSE—reports that spending on neighbourhood services across local government has fallen by more than £3 billion over the last five years. Cuts in funding and wide variations between authorities in funding services are,
“changing the very nature of local government”.
Its excellent report in April, Redefining Neighbourhoods: A Future Beyond Austerity?, which bangs the drum for neighbourhood services, says that the total expenditure in the period it covers fell by 13%; and in the most deprived fifth, environmental and regulatory services are at minus 13%, while the least deprived fifth of local government increased by 4%. Expenditure on planning and development services in the most deprived fifth is down by 42%, and in the least deprived areas it is up by 2%. It says:
“Innovation will not solve the funding crisis”,
and that the answer to the social care funding crisis is not to transfer money from other vital services, especially those at local level that have a huge prevention effect. It says:
“This analysis provides compelling evidence the time has come for a robust defence of neighbourhood services”.
Of course, district councils are the places where neighbourhood services are most important. Do the Government agree with that?
The Institute for Government, in a report which is due to be published in about 35 minutes, makes similar points, and points out that spending on local neighbourhood services has fallen by around a quarter since 2009-10. Spending on waste collection is down 18%; on food safety it is down 20%; on open spaces it is down 23%; on culture and heritage it is down 26%; and on sports and recreation it is down 34%. The very fabric of local services is being eroded and people at national level seem to be blind to what is going on.
The King’s Fund report, The District Council Contribution to Public Health, points out that every £1 invested by district councils in preventive services can save the wider public sector up to £70. There is a suggestion that there should be a 2% prevention precept for district councils to match the social care precept for county councils, which of course in county areas does not raise as much as it does in unitary areas because the district part of the precept is not included in that.
Then there is economic growth, which the Government will tell us is the answer to all the problems. It is what we all want to see. District councils are the key to local growth, yet economic development powers are discretionary and little support is provided by the Government at this level. Districts are often effectively excluded from the system for distributing government funding via local economic partnerships. In Lancashire, the local economic partnership has two representatives out of 10 from the 12 districts on the county-wide LEP. The districts are marginalised, yet in areas with strong districts, such as Lancashire, it is they that provide local knowledge, initiatives and drive.
Therefore, I call on the Government to recognise that, at the very local level in which the districts are involved, if they want to build new council houses, unblock the beds, keep the streets clean, help people to live fitter and healthier lives, keep our food safe and have decently maintained local communities, the time has come to look at districts and to treat them better. The pressure is building. It is almost at breaking point and I do not think that people will accept the situation for much longer. Will the Government please respond?
Baroness Maddock (LD)
My Lords, I am very grateful to my noble friend for introducing this timely debate on district councils. I begin by declaring my interests. I am a vice-president of the Local Government Association, the vice-president of a fuel poverty charity, National Energy Action, and I am president of the National Home Improvement Council.
I shall confine my remarks to just a few of the areas that district councils are responsible for and shall also reflect on where district councils have been completely abolished in the north-east of England.
As my noble friend said, there are now just over 200 district councils—considerably fewer than when I joined this House over 20 years ago. Where they remain, they are responsible for all matters pertaining to housing in their areas. It is generally agreed that we have a housing crisis, so restricting finance and financial freedoms to district councils at this time seems particularly perverse.
Along with their responsibility to ensure sufficient housing in their areas, district councils are responsible for planning and building control. Again, it seems perverse not to recognise that this is an essential part of providing homes, but at the moment district councils are not able to cover the cost of these services—indeed, they are prevented from doing so.
As we have already heard from my noble friend, planning departments are severely underresourced. In fact, local taxpayers are subsidising planning services by about 30% because the planning fees set nationally do not cover the full costs. When will the Government progress their commitment to allow councils to increase planning fees by 20%? Indeed, there are calls for them to rise by more than that and to increase by 40%.
In recent days—my noble friend referred to this—the problems of bed-blocking have once again been in the news. District councils do not run social services but they are responsible for social housing. Indeed, at one time, there were numerous sheltered and extra-sheltered housing schemes run by local authorities, with on-site wardens and other help. However, cuts in local authorities’ budgets and their ability to raise funds have severely reduced the number of such good schemes. Some of the housing associations have taken this up. My own aunt lived in one such extra-care scheme in West Sussex.
One of the reasons many elderly people cannot get back to their homes after recovering from illness is that they need home adaptations: things like flat-floored showers, wider doors and other access facilities. These, of course, are the responsibility of the district councils. I am grateful to the District Councils’ Network for some figures about the value for money it can provide in this area and how it can help the National Health Service:
“By adapting 100,000 homes to meet the needs of older people, districts could save the NHS £69 for every pound spent … By improving 100,000 homes to protect older people from the cold weather districts could save the NHS £34.19 for every pound spent”.
The average cost to the state of a fractured hip is a bit over £28,500. This is nearly five times the average cost of a major housing adaptation—which runs at about £6,000—and 100 times the cost of fitting hand and grab rails to prevent falls.
Another important area—it is dear to my heart—where district councils have duties pertains to energy efficiency in the homes in their areas. They still have a duty under the Home Energy Conservation Act 1995— which I am proud to have seen through in another place rather a long time ago now—to collect information about the energy efficiency of homes in their areas and to suggest solutions for improvement. However, I regret to say that successive Governments have failed to enforce these requirements or to use this Act to its full potential in any way.
Councils do have powers, however, to enforce minimum housing standards relating to excess cold. There are several pieces of legislation on this matter, but it is often the case that local authorities are not really aware of some of the things that they can do. Once again, enforcing regulations in these areas falls to overstretched environmental health and trading standards departments. Will the Government commit to looking at how they can allow councils to get more funding—particularly by returning the fines that councils levy when they find problems—to support more proactive work? On several fronts, failure to fund district councils properly goes against the other aims that we have heard from the Government, many of which we agree with: more homes, quicker discharge from hospital and fewer cold homes.
I would now like to spend a few minutes reflecting on the reduction in the number of district councils. Central government has consistently driven an agenda of cutting the cost of local government through “efficiency savings”. Across the board—and my noble friend referred to this—local government has risen very well to this challenge; indeed, there is evidence that it has risen more successfully to the challenge than central government departments. This has happened despite often being given new responsibilities with poor funding that dries up after a few years.
Different Governments have attempted local government reorganisations as part of efficiency savings, but at what cost to local democracy and to services? Nowhere has this been more obvious to me than in my home area of Northumberland. In 1997, there were six district councils and one county council, with 239 district councillors and 67 county councillors. In 2009, we had a change imposed on us by the then Labour Government, which reduced us to 67 councillors to cover the whole of Northumberland. This is an area 50 miles north to south and, in the south, at least another 50 miles east to west. To travel from Berwick to Hexham is 100 miles. This year, we had the council count in Hexham and people were running about Northumberland in the middle of the night to get there.
There was a consultation and a vote on how local people wanted the reorganisation to happen. The people voted in favour of two districts, one in the north and one in the south—they recognised that we needed fewer small councils. However, this was ignored, and the Labour Government gave us one, with just 67 councillors. The effect on local democracy and the control of local services has been devastating. It might have been mitigated to some extent if town and parish councils had been given more powers.
As the whole area was not parished, new councils had to be set up, in particular in the south-east but also in the town of Berwick-upon-Tweed, where I live. However, the development of the town council does not make happy reading. There were town clerk resignations, councillor resignations, inquiries about bullying and the most appalling behaviour by some councillors on social media. Many people have been completely put off wanting to be councillors, given all these things working against them. It is very difficult to find people who are able to take on the role of county councillor, in particular in Berwick, where you have to travel 50 or 70 miles to meetings. That is pretty difficult to take on if you work full-time or run a business.
Engagement by the community, particularly with council services, is also extremely difficult. The development of electronic communication has helped but in my part of the world we have a predominantly older population who tend not to engage with modern technology. Earlier this week, when the House was talking about Islamophobia, there was much discussion about community cohesion. Changes such as I have outlined do not help communities to engage with those who provide the local services and with each other.
As we heard from my noble friend, the ongoing financial constraints for district councils clearly work against many of the stated aims of the Government: building more homes, ensuring new and existing homes are more energy efficient, providing housing with care for our ageing population, and adapting homes for our ageing population. These last two would definitely help alleviate bed-blocking. Will the Minister explain why the Government seem unable to have policies and actions that work together, rather than against each other, in achieving their aims? Why have the Government failed to understand the role of district councils in aiding their agenda by providing good local community services? Why do they continue to reduce the finance to district councils, which provide very good services in line with government objectives? I look forward to hearing from the Minister on these very important matters.
Lord Beecham (Lab)
My Lords, I refer to my local government interests as a Newcastle councillor and vice-president of the Local Government Association. The fact that I live in Newcastle tempts me to suggest to the noble Baroness that she should look again at the map and the distance between Hexham and Berwick. She may be right that they are 100 miles apart if you go via Newcastle, but she will find that it is possible to take a slightly more direct route. However, we are not discussing the geography of the north-east.
I commend the noble Lord, Lord Greaves, for securing the debate but am disappointed, if not entirely surprised, that there has been no recognition of or apology for the Lib Dem role for five years during its partnership with the Conservatives as an accessory to the battering that local government sustained.
Councils across the country and of different political complexions have sustained unprecedented losses of support, with district councils suffering a 40% cut in their three prime services: planning, housing and culture. The total runs into billions. As I have had occasion to mention many times, in Newcastle alone the shortfall will be £280 million a year by 2020. How does this fit alongside the Government’s proclaimed housing policy? For that matter, how many properties do the Government think will be built as a result of the recently announced £2 billion for new council housing? Where will the 20,000 to 25,000 new homes be built and how will the money be allocated? Specifically, what proportion is envisaged for district councils, only 20% of whose income comes from government grants? Given the pressures on them, that figure is simply inadequate.
Do the Government recognise that councils are subsidising planning services by 30% because the nationally set fees do not cover the costs? That is a particular problem for district councils. Will the Government take the Local Government Association’s advice to increase fees for planning applications by 20%, and allow an experiment with a higher increase to test whether that would help improve the process? Above all, will the Government enable councils, including district councils, to borrow to build, and remove the borrowing cap, recognising that such borrowing, creating assets, should not be included in the public debt?
The 44% rise in homelessness in the last few years, accompanied by a 102% rise in the number of rough sleepers, also needs tackling. Such difficulties are not confined to major cities or unitary authorities. District councils face many of the same problems—not always to the same degree, of course; nevertheless, that is a real problem for them, as it is for the rest of local government. Many district councils struggle to support local transport schemes. Will the Government fully fund such schemes?
Everyone now recognises that social care funding is inadequate. District councils have a significant role, albeit an indirect one, in supporting healthy communities. As the noble Lord, Lord Greaves, pointed out, the King’s Fund estimates that every £1 spent by district councils in preventative services, such as home adaptations, leisure and environmental policies, can result in a public expenditure saving of £70. That is a huge return on that investment—an investment that district councils are finding increasingly difficult to make.
There is also concern about changes to the new homes bonus, which will make it more difficult for district councils, in particular, and others, to deliver much needed new housing. The King’s Fund report on the district council contribution to public health, both direct and indirect, has made 10 recommendations, including involving district councils in improving the relationship between clinical commissioning groups, counties and districts, and a wider collaboration over health economics, with greater district council investment in environmental health services and health impact services. For that to happen, appropriate funding will have to be provided. Will the Government implement those recommendations and ensure sufficient funding is available? Ultimately, they will save the health service a great deal of money.
In an Answer to a recent Question of mine, the noble Lord, Lord Prior, revealed that there are 278,000 domestic, and 200,000 non-domestic, privately rented properties with an energy performance rating below E. Some landlords may be exempted from the requirement to upgrade their property’s performance rating on the grounds of cost, but as yet, the Government have no estimate of the numbers. Inevitably, some of those properties will be in district councils. When the Government consult on making energy regulations more effective, will they look specifically at the situation in those councils?
There is as yet no clarity on how the changes in business rates will be implemented. Can the Minister enlighten us as to the approach, especially to ensuring an equitable distribution of business rates across the local government world? That is a hugely important concern of local authorities, many of which are likely to be able to raise exiguous amounts from local business rates. Has the recent revaluation affected the current distributional picture in relation to districts in particular, and all local authorities in general? What is the Government’s approach to ensuring there is some measure to redress imbalances between different authorities? Perhaps I can take this opportunity to ask the Minister about the sixth report from the Secondary Legislation Scrutiny Committee on the Draft Regulation of Social Housing (Influence of Local Authorities) (England) Regulations—a somewhat prolonged title, not untypically. In particular, will the Minister look at the involvement of local government in that respect?
We have before us an issue that runs right across local government: its capacity to meet and fulfil needs, many of them important both to individuals and communities. All types of local authorities have an interest in there being a proper reflection of their needs in the local government finance system.
Reverting for a moment to my previous point, on changes in board membership of social housing bodies, I do not expect the Minister to have an answer at his fingertips today, but will those proposed changes adversely affect local authorities, including districts, bearing in mind that the committee expressed doubts about the failure to have a formal consultation, including with tenants, on that set of regulations? In a way, it illustrates a somewhat cavalier attitude towards local government as a whole; but district councils in particular, with their interest in housing, will certainly need some assurances in that respect.
I believe Members will make a powerful case on behalf of district councils. I am sure they would agree that a similar approach needs to be adopted across the local government scene. We await the forthcoming local government finance announcement, which presumably will come just before Christmas. It will be interesting to see the extent to which the Government are prepared to change those policies—at least as much as they are apparently now prepared to change some of their other policies in the light of the recent general election results.
Lord Shipley (LD)
My Lords, I remind the House that I am a vice-president of the Local Government Association. I am grateful to the noble Lord, Lord Beecham, for reminding us that some of the things the Liberal Democrats did in the period of the 2010-15 coalition Government were very much in the interests of local communities. Indeed, he accuses us of being an accessory to the cuts of 2010-15, but it all depends on what is being counted. The noble Lord can sometimes be selective in his facts, missing out certain things that are relevant. What is relevant is that the National Health Service was protected locally by that Government, as were our schools’ budgets. In addition, the pupil premium was introduced by that Government, which enabled a lot more money to go into schools in disadvantaged parts of the country. That Government also introduced several years of council tax support to keep council tax bills down for individual council tax payers.
It is the case, not just in local government, that cuts were made that were higher than we would have liked. There are other parts of public spending where cuts were made because of the crisis produced by the banking collapse and the failure of the Labour Government in those years to address some of its consequences adequately. As the noble Lord will also be aware, the Government have been running an annual deficit ever since 2008, causing the country’s debt as a whole to continue to rise. However, let us not engage any further in tit-for-tat.
I was reminded by my noble friend Lady Maddock of the situation in the north-east of England, where we have only unitary councils. I have personally been very supportive, where there is local demand, of introducing unitary councils, as long as two factors are in play: that communities are generally supportive of the geographical size of their unitary council; and that town and parish councils are properly empowered to provide a focus for the explanation of local need to the unitary council, but also for the provision of some services. I find myself agreeing in very large measure with what my noble friend said; she covered a number of the practical problems that can be caused in a large unitary, such as Northumberland, extremely well.
My noble friend Lord Greaves said that district councils were the Cinderellas of local government, that they were in the front line of cuts and that the fabric of local services was being eroded. The Minister should look carefully at the evidence base for this, because I have come to the conclusion that it is true. That is because district councils do not spend a lot of money—I am grateful to the Library brief for providing the information. Local government spends in total some £94.5 billion and district councils spend just £3.1 billion of that—approaching 3.5% of the total.
For a sector of local government to have to cover so many of the services that my noble friend Lord Greaves described seems a tall order on total spending of that kind, yet district councils provide some 60% of local government services in their areas—that is going by the defined number of services that local government provides overall. There is a mismatch between the amount of money they spend and the number of services they are required to provide, which explains why, in some district council areas, the cuts imposed have a greater impact on some services, particularly on housing support.
District councils tend to provide universal neighbourhood services rather than individual services. Individual services in adult social care, for example, are provided by another tier of government. As my noble friend Lord Greaves said, the provision of such local services is gradually reduced to the point where only the basics are done.
However, another factor about district councils should be borne in mind. I concede that there are district councils in urban councils, but district councils tend to cover the more rural parts of the country, where populations are lower and services may lie a considerable distance from where people live, increasing household costs. It is not just a function of council tax levels; it is also a function of how far away a service is that somebody wants.
It is incumbent on all district councils to make themselves as efficient as possible. Sharing services, particularly back-office services, matters. There are some examples of where that is done very effectively. There are areas where becoming a unitary council may be an obvious step to take, underpinned by strong parish and town councils. However, that may not be the right approach for all areas, as I would be the first to concede. There is a big problem about money, in both relative and absolute terms. I read in the District Councils’ Network brief that two-thirds of district councils will face negative revenue support grant by 2019-20, but they share with other councils uncertainties around business rates, about their powers to raise council tax and about reduced spending power generally—as the National Audit Office has made clear in recent studies. District councils claim that they have been affected by worse settlements than other councils in terms of their core spending power. All I ask the Minister to do is look carefully at that and at whether further clarification can be secured.
We have heard today about the 2% prevention precept proposed by the District Councils’ Network. It is a very interesting suggestion.
Years ago, I helped to introduce a business improvement district in Newcastle-upon-Tyne, which had to be voted on by all the businesses within the area of that district. It works only if people understand what they are paying additional tax for but, when they do, it can be a huge success—as it has been, I believe, in our case. There is a 2% precept for adult social care, as we have been reminded, but another idea that the Minister should look at very carefully is how a 2% prevention precept might work. It would need a clearly defined set of outcomes against which success can be assessed. One example might be in housing support services and, in particular, in tackling homelessness, because the spending reductions that have occurred in housing support services in district councils are at almost 50% in the last few years.
As we have heard, district councils can do more on housing, affordable homes and social homes for rent. I am aware that quite a number of district councils have not been replacing homes that they sell. One reason is that they need adequate fiscal freedoms to allow them to do so, by using right-to-buy receipts, lifting the borrowing cap for the housing revenue account and through generally greater certainties on government policy. Some of this will, I presume, be clearer when the Government’s Green Paper is published. Overall, I hope the Minister will reflect carefully on what is being said. There may be an opportunity in the Budget, or in the settlement itself, to ease things in respect of those services that the general public see as universal, which are used by very large numbers of people but which are, at the moment, suffering unfairly and taking away public services that people value.
Baroness Pinnock (LD)
I thank my noble friend Lord Greaves for enabling this debate and I remind the House of my interests as set out in the register as a councillor in a metropolitan council and as a vice-president of the Local Government Association. Three themes seem to have emerged in this debate so far about district councils and their resources. They are fairly obvious and straightforward: financial resources, the impact the cuts have had on services, and the impact on local democracy.
In 2014, the National Audit Office produced an important analysis of the impact of the severe cuts in government funding to local government. I hope that the National Audit Office will be able to update this analysis because it has provided the clearest independent picture yet, using evidence from district auditors and others, of the financial state of local councils. In the report, the NAO states that by 2015 district councils had lost 37% of their government grant. This has had a serious impact on local services, as has been illustrated in other Members’ contributions. The NAO said that spending on housing—largely on adaptations and support services—had reduced by 17%, along with a 24% cut in planning services and a cut of 16% in transport and highways. Fundamental and vital local services have seen very serious reductions in expenditure. Efficiencies are one thing but cuts of this order are another thing entirely.
I have a couple of examples of what the future holds for district councils, from looking at the government figures on the DCLG website where there is a very helpful spreadsheet of core spending per household for every council in the country. I have picked out two from the Somerset area. Mendip District Council faces a further 12% cut in available funding over the next three years. South Somerset District Council, which has £263 per household this year, will have £231 per household by 2019. We are talking about a constant drip-drip of cuts. Any business will tell you that constantly making cuts on that scale ends up in only one way, which has been described by other speakers. There are real impacts on very important services that affect people’s lives. For example, there are huge changes to waste collection—people might have to pay for bulky waste collection, leading to more fly-tipping—and to disabled adaptations, as we have heard, which enable people to live independently for longer. These are small investments with very big returns, not just financial but on people’s lives with, obviously, local health services having to help more people as a consequence.
Those are the financial cuts and some of their impacts, which have been clearly articulated by others. I want to point to the impact on communities. These constant cuts belie the value and importance of communities to our national well-being. Funding cuts have a more insidious effect because people in areas of the country that are remote from London equate the Government with London and feel that if they live in the north of England, the Lake District, Somerset or north Nottinghamshire, it is London which neither understands nor cares about them. They know that the support and services they value the most are not there any longer because of London. That feeling is not good for the well-being of our country and certainly does nothing to help promote vital, robust communities.
District councils in particular feel that their voice has been lost. They are no longer able to have a say about what happens to their local services because the cuts are being imposed by government on the local authority without it being able to influence that one jot. That has undermined local democracy itself. We have heard about the pressure to centralise local councils in Northumberland. The pressure to collaborate, to make efficiency savings and to centralise services does not always end up with reduced costs but it definitely results in a great feeling of remoteness and a strong feeling that London does not understand. That may not be the case but it is what people up and down the country feel, and we ignore that at our peril.
At its very best, local democracy provides leadership and vision. Undermining that leadership and vision because of the constant pressure of having to cut important services results in communities having a sense of inadequacy, frustration and anxiety. None of that is good for the health and well-being of local people. Unwittingly—some would say that it was with purpose—successive Governments have cut funding so heavily that the very existence of some councils is being put into question. It is not me saying that but the National Audit Office and we ought to take it seriously.
I am sure that the noble Lord, Lord Bourne, has enormous influence on his colleagues elsewhere in the Government. We are at a crisis point. Further cuts to local government will result in the crisis that we have already seen in social care extending to children’s social services. It is beginning to happen in that area and it will extend to other important services delivered by district councils. I hope that the Minister will be able to put his considerable pressure and influence on government to reverse the cuts predicted in the three-year spending plan that was agreed last year and say, “Enough is enough; local people need and deserve these services”. Cutting them further will only harm individuals and communities.
Lord Kennedy of Southwark (Lab)
My Lords, I refer the House to my interests in the register, as a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association. I congratulate the noble Lord, Lord Greaves, on securing this debate. He has raised the important issue of the future availability of resources for district councils in two-tier areas. We have received some excellent briefing notes, which have been helpful for me in the preparation for this debate, from the Library of the House, the Local Government Association and the District Councils’ Network. I thank them all very much for what they have provided.
We quite rightly debate local government matters a great deal in this House. Local government delivers a huge range of services and, as the noble Lord, Lord Greaves, told us, district councils deliver 86 of the 137 essential services to more than 22 million people, or 40% of the population in England, covering 68% of the country by area. They also approve 90% of the planning applications and enabled most of the housing completions in their areas last year. They collect the council tax and, as the noble Lord also said, are the councils with which local residents often identify most. That gives the House some idea of the scale of what district councils do and cover.
There are particular issues that affect local government funding, which I want to go through. First is the impact of changes to the new homes bonus on district councils. The introduction of the 0.4% baseline threshold for that bonus removed funding of over £70 million from district councils in 2017-18, which was passed to adult social care authorities. We have a social care crisis and the Government need to address it with new, additional funding, recognising that we are all living longer—which is good news. Medical advances mean that conditions can be treated more successfully but that could mean a greater draw on resources over a longer period. We need ideally to get to a place where there is an agreed settlement on adult social care funding.
The Government learned an important lesson at the recent general election: that the proposals they put forward then were not fit for purpose and contributed to the loss of their majority in the House of Commons. The “robbing Peter to pay Paul” strategy, which is in effect what the Government have done recently in respect of the new homes bonus, is not a sustainable solution and anyway, it provides nowhere near the level of resources required to solve the problem. Can the Minister confirm what plans the Government have in respect of the new homes bonus in future years?
As other noble Lords have said, district councils provide a number of services that, if delivered adequately, can have a very positive effect on the public purse generally. The old adage that prevention is better than cure works here as well. Keeping people active for longer through keep-fit classes, swimming and plans to encourage more walking has positive effects on people’s health and fitness and helps to combat other problems, such as loneliness. Not only are we living longer but the number of people who live alone is increasing. Aids and adaptations to homes can keep people in their own homes longer with consequential savings to the public purse, as I mentioned earlier. Can the Minister tell the House what weight is given to the spending of money that assists with prevention rather than cure when the Government are deciding on levels of grant and the funding of programmes? How is that done or is it not done at all?
Housing is an area of concern to the whole House. The Minister referred to it as “our broken housing market”. Some of the actions the Government have taken, no matter how well intentioned, have not helped the situation. The 1%-a-year compulsory rent cut is just taking money out of the system. The housing revenue account borrowing cap and the time limitation on spending right-to-buy receipts suppress district council delivery of much-needed new homes. We also need finally to scrap any notion that any councils will be forced to sell high-value assets to fund the right to buy for housing association tenants. That should be funded direct from government. Perhaps the Minister can update us on what is happening here.
My noble friend Lord Beecham raised housing and the provision of new homes following the recent announcement of additional funding. It would be helpful if the Minister would tell the House the number of social homes on social rents as opposed to any other form of tenure that will be provided as a result of this funding.
Local government can do more. District councils can do more to deliver the Government’s aim of providing new homes, but they have to be enabled to do so. I lived in the east Midlands for many years, and I have a reasonable knowledge of the district councils there, of all different political persuasions, which often moved from Labour to no overall control to Conservative and vice versa. They would rise to the challenge if they were allowed to. They are places such as Corby Borough Council, Broxtowe Borough Council, High Peak Borough Council and City of Lincoln Council.
We have to move on from re-announcing previous announcements from the housing White Paper and elsewhere, as we saw yesterday in the Statement that the Minister presented to the House, which was previously announced in the housing White Paper in February this year.
There are new requirements to deliver welcome reforms in dealing with homelessness. When it came before the House earlier this year, we all supported the then Homelessness Reduction Bill. Our only issue is the adequacy of the funds available. This will be a much bigger pressure for London boroughs, but district councils in two-tier areas near unitary cities such as Derby, Leicester and Nottingham may have additional unfunded financial pressures in future years as a result of the new obligations. That needs to be addressed.
Planning fees are another area that needs action from the Government. This has already been referred to. Council tax payers are subsidising developers as the low level of nationally set planning fees does not cover the costs. I am well aware that the Government announced in the housing White Paper that local authorities can increase their fees by 20%, but I think they should go further by committing to allow every council the flexibility to increase their fees by up to 40%, to be invested back in the planning service, and also by quickly allowing some pilot schemes for local fees setting which are fair and transparent. I do not want councils to be making a profit but I want them to be able to recover their full costs. That would allow district councils to use other precious resources, which are presently subsidising the planning process, to be put to better use locally, helping with economic regeneration, improving the high street, supporting other measures to support healthy living and supporting housing growth. Again, if the Minister would address that in his remarks it would be most welcome.
The noble Baroness, Lady Maddock, made reference to the situation in Northumberland. I am not sure about the particular issue that she spoke about but I would say that consultation, and listening to its results, is important and should influence the decisions made.
There is no doubt that the noble Lord, Lord Shipley, is right that the coalition Government, which he supported, did some good things, but it also did some not so good things as well as some things that I opposed and which caused great damage—the LASPO Act and legal aid funding, for example. I do not blame the Liberal Democrats at all for joining the coalition; in fact, they had a duty to do so. It was the only serious coalition on offer, looking at the maths in the House of Commons. Equally, though, the Liberal Democrats have paid a heavy price for being in the coalition and making pledges that they broke, none more so than the broken promise on student fees, which I am sure has had a salutary effect on the noble Lord and his colleagues in his party.
In conclusion, I thank the noble Lord, Lord Greaves, for initiating this debate. I think I am right that all the speakers are or have been local councillors, and that is reflected in the quality of the contributions that have been made. The Minister has a number of important points to respond to and update the House on.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I thank the noble Lord, Lord Greaves, for moving this debate and outlining the importance of district councils, the range of services that they cover, the area coverage and the trusted, familial and responsive nature of district councils, as well as for the energetic way in which he always represents the best interests of Pendle, which came across again today.
In trying to set the scene for this debate, I have to say that even I noted perhaps a slight tension, a frisson, between the opposition parties—a hint of disagreement from the noble Lord, Lord Beecham, for example, which was uncharacteristic. Let us reflect on where we are with this. I do not think there is any question that we would all wish to spend more in local government but we all have a responsibility, which came across earlier this week, on intergenerational fairness. At the moment, we are still running a considerable deficit. There has been a lot of talk of cuts and so on, but noble Lords should cast their minds back. As the noble Lord, Lord Shipley, referred to, when the coalition Government came in in 2010 there was a dreadful financial position. That has been ameliorated, but we are not out of the woods yet. Those parties and individuals who understandably want to spend more money have a duty to tell us where that money would come from. Would it come from increased borrowing, taxation or a combination of the two?
Lord Bourne of Aberystwyth
I think I heard a murmur that it could come from cancelling Brexit. If people are suggesting that, they had better tell us how they are going to go about doing it. There are some serious fundamental issues lying behind any increase in spending.
That said, we have councils up and down England providing essential services to millions of people. I know district councils in particular are at the front line of our democracy; they play a vital role in our society. As I say, they are familial, trusted and, obviously by their very nature, local. They are responsible for providing housing, collecting local taxes, protecting our environment and shaping our community. District councils provide these services, and they are services that people value and depend on on a daily basis.
I am grateful to some noble Lords for indicating that there are ways in which local government can save money, and indeed has done, by the merger, sometimes voluntary, into unitary councils. The noble Lord, Lord Shipley, referred to this. Sharing back-office functions sometimes makes sense. The noble Baroness, Lady Pinnock, mentioned, perhaps critically, rationalisation of waste collection. This is often a sensible way to save money, not something that is necessarily bad news. We have to look at what is proposed.
We also need to put it in context. In the 2015 spending review, the Government delivered £200 billion for local government—a significant amount—and in 2016 we provided an unprecedented four-year financial settlement offer, which 97% of all local authorities accepted. We did this because local government was asking for certainty, and we recognise the need for that; that is absolutely right and fair. The settlement will see a modest increase in funding in cash terms—in cash terms, I acknowledge—over the period covered and, as I said, we still face a challenging national debt which is at nearly 90% of our GDP. Nevertheless, the settlement is designed to ensure that councils have the right level of funding for the most important services that they offer. The noble Lord, Lord Shipley, referred to the challenge of rurality. The settlement includes a dedicated grant worth more than £260 million for rurality.
We are in the second year of that multi-year offer, and we recently published a consultation on our approach to the third year. This includes—something that was touched on—a commitment to continuing the reforms to the new homes bonus, as laid out last year, and the social care challenge. The noble Lord, Lord Kennedy, rightly recognised the size of that challenge. He said that it might lead to increasing costs; I do not think there is any doubt about that, as it certainly will. He is absolutely right that we should welcome the fact that people are living longer, but it means additional costs to the health service and social budgets. That represents a challenge, which the Government are looking at, and we will bring forward proposals on how to face it. I think that there is recognition around the House that this problem is faced by the country, and we need to square up to that challenge as a country. I am sure that we will be able to work together on it.
The new homes bonus—to return to it—has been successful so far. It has allocated more than £6 billion, reflecting more than 1.2 million new homes. People have referred to the importance of new housing, and I will deal with some of the specific issues raised later. The council of the noble Lord, Lord Greaves, Pendle, is set to receive more than £4.5 million over the course of the Parliament, around 13% of its total core spending, but we need to explore every possible option to support the creation of even more homes for our communities. The Government continue to be committed to incentivising local authorities to support housing growth in their areas; it is something we value. This is why we are currently consulting on a methodology for reducing payments for new homes where planning permission is later granted on appeal. That seems to us to be the right thing to do. Decisions on any changes will be made in light of this consultation, and, as I said, we will be bringing forward our proposals.
When it comes to increasing our country’s housing supply, we stand behind local government. The new homes bonus is one way in which we do this, but there are others, and we know that we need councils to continue to deliver. We have introduced our new £2.3 billion housing infrastructure fund for all councils to bid into, and we have already committed more than £1.7 billion of the home building fund, which will deliver more than 100,000 homes and create thousands of new jobs.
We are also engaging in bespoke deals, which are progressing in, for example, Leeds, Manchester and the West Midlands. I think a specific question was asked about the £2 billion additional money that has been announced. I said earlier this week, I think, but I am happy to restate it, that we will be bringing forward our specific proposals as to how that money is to be spent and, of course, a great deal of it will be on social housing. We will publish those proposals.
District councils play a particularly vital role as local planning authorities, and reference was made to planning departments. The noble Baroness, Lady Maddock, the noble Lords, Lord Beecham and Lord Kennedy, and others spoke of the importance of ensuring that we deliver on the 20% increase, which was referenced in the housing White Paper. I apologise for again restating a policy that has already been announced, which is something I was criticised for, but I have been asked what we are doing on it and I can say that we will be delivering on that 20% additional fee by the end of the year. That has been broadly welcomed, and I am glad that we are able to deliver on it. All planning authorities have accepted and confirmed that they will ring-fence the additional income for investment and planning. We are also, as noble Lords will be aware, consulting on options to go further and to allow an increase of another 20% for those authorities delivering on their housing need, thus coupling additional money for planning departments with increased housing supply, which I know is something noble Lords understandably are keen on.
Reference was made to energy efficiency by the noble Baroness, Lady Maddock, and I know she does great work on this—we engaged together on this area when I was in a previous role on climate change—and the noble Lord, Lord Shipley, also talked about energy efficiency standards. I will ensure that a copy of this debate is passed to BEIS, which leads on energy efficiency, but much is happening through product regulations and through the action of the market on things, such as cars and so on, in reductions of carbon. We published last week The Clean Growth Strategy, setting out proposals for decarbonising all sectors of the economy, so that is happening, too.
Looking to the future, we have ambitious plans for the local government funding system. Questions were asked about this. We are committed to our manifesto pledge to give councils even greater control of the money they raise locally. We will press on with these reforms to increase business rates retention. I think it was the noble Lord, Lord Beecham, who asked about smoothing mechanisms to make sure there was a fairness element. Of course, that will be inherent in it.
I know from the current retention scheme that Pendle benefits, as does Lancashire generally, from the Lancashire business rate pool. Pendle is forecast to increase its business rate income above its baseline level by more than 10%. This year, Lancashire’s business rate pool members will have an estimated extra income of £9.8 million. We want to increase further that reward for growth.
In September, we published a prospectus for a new tranche of pilots for 100% business rates retention. I urge members to participate in that—applications for the pilots close on Friday 27 October, which is a week tomorrow, and there are five spaces. We launched the prospectus, as I said, in September, and that would be for 100% business rates retention, so it may well be of interest to district councils. From next year, successful applicants will run alongside the current five pilots. These authorities will be able to keep even more of the growth in their business rates income, with no impact on the rest of their funding. They can use that growth to invest or spend on services. Our pilots will be invaluable in testing our reforms to ensure an outcome which delivers for the whole of England. So those pilots are extremely important.
We have recently relaunched our steering group, looking at how we progress business rates retention beyond the current level independently of those pilots. My department co-chairs the steering group with the LGA to look at ways to move forward without primary legislation. We can certainly achieve much by secondary legislation, and we will come forward with suggestions and publish them. We are analysing more than 200 responses to a further consultation on business rates retention, and I want to thank those who participated.
I shall touch on two related matters, if I may, which are not directed specifically laser-like at local government finance but which certainly have an impact on it. One of those is coming up next week—the Committee stage of the Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill, which is related to relief for fibre. It has broad support throughout the House. There are some issues that we will need to work through, but it is something that will help. Just to take Pendle as an example, it currently has only 0.05% full-fibre coverage, so that is something that Pendle and many other areas would expect to benefit from.
Many of the contributions were in the context of the north, so I should also mention the opportunities that are provided by the northern powerhouse, which is particularly the case in Lancashire. We have created a network of growth hubs—for example, Lancashire’s hub has over 3,000 local SMEs and has created more than 1,300 new jobs in its first three years. It has run in tandem with growth investment into the Lancashire local enterprise partnership. So to get the full picture, it is right that we look at those things as well, and at specific local projects. The Burnley-Pendle growth corridor, for example, has funding of £8 million for a transport and highways improvement scheme. We want to unlock growth in all sorts of ways—some through local government and some elsewhere.
I shall turn briefly to the fair funding review, which I think was not touched on. I should like to set out where we are on that review and in that cycle. It is going to redesign the way in which we determine local government’s relative needs, and set new baseline allocations. It is over a decade since the current formula was looked at thoroughly; indeed, some parts of it date back to 1991. Since then, the demographic make-up of many areas, such as those we have talked about, including Northumberland and Pendle, has altered radically. An ageing population, as the noble Lord, Lord Kennedy, said, means demand for different services has shifted within areas. We are entering a world in which local government spending is funded by local resources, as I have indicated, with business rates retention, not through central government necessarily.
The fair funding review will consider how to introduce a more up-to-date and more transparent needs assessment formula. We need to make sure that it works for all local authorities, wherever they are. Rural councils, for example, or areas which struggle with higher levels of deprivation, will have unique needs that have to be met. That has to be recognised. To get this right, we are working collaboratively with local government at every step of the way. We have a strong relationship with the LGA, with which we chair a working group, which is progressing matters. Last year we conducted a call for evidence, which drew over 200 responses. We plan to consult again soon, and we will make sure that it is a thorough, evidence-based review. It should be fully effective by 2021.
There were some specific questions from the noble Lord, Lord Beecham, to which I shall respond in writing—and I shall copy other noble Lords in. As is my customary practice, I shall ensure that a circular letter is sent around to noble Lords to pick up any points that I miss, with copies also placed in the Library.
We recognise the vital and ongoing importance of district councils. We wish to work with district councils; they are our partners, and we have shared ambitions with them. We recognise the challenges, and I fully recognise and wish to place on record the debt that the Government have to our partners in working with us to ensure that we continue to bear down on some of the costs involved while providing excellent services. There are challenges but, as I have indicated, there are mechanisms that we are looking at in terms of business rate retention and some of the specific funds and matters to which I have referred. As I say, the fair funding review will help to equalise within different councils some of the distortions that currently apply.
With that, and with the assurance that, if there are any other points that I have missed I shall certainly pick them up on the write-around, I again thank the noble Lord, Lord Greaves, for bringing this important topic to the House and airing it as effectively as he has done.
Lord Greaves
My Lords, I am grateful to the Minister for his reply, and to everybody who took part in the debate. I was a bit disappointed that more people did not take part, as I thought that lots of Peers would come from district areas and would be lobbied by their local councils. Perhaps we need to organise that a bit better.
The noble Lord, Lord Beecham, suggested that I should apologise for things that happened during the coalition. Whether or not any apologies are due, I am not sure that I am the right person to ask.
I am grateful to my noble friends Lady Maddock and Lord Shipley for talking about housing, which I had deliberately left to them.
I was disappointed that the Minister did not respond on the proposal for a 2% prevention precept for districts. I just want to say briefly why it is a fair thing to do. In unitary areas—London boroughs, mets and unitaries—the 2% applies to the whole of the council tax levied by the council. In shire areas, it applies only to that proportion of the council tax that comes from the county precept; it does not apply to the proportion of the council tax—10% or 15%, whatever it is—levied by the district. That means that people in shire areas are paying less 2% precept, in a sense, than people in unitaries, because they are paying it only on the proportion that goes to the county and not on the proportion that goes to the district. Therefore, it is perfectly reasonable—even though I would be one person who would have to pay a bit more—that in shire areas, two-tier areas, the district ought to be able to pick up their share of the 2% and apply it to preventive measures. Having said that, in my own authority, the total would be less than £50,000 on 2%, not a huge amount of money and not a great pot of gold. But it would be useful for districts to be able to do that. It is not an additional imposition on council tax payers in district areas compared with the rest of the country. That is an important point. Perhaps the Minister will go away and think about it, and it is something that he could write about.
The Minister seems to be getting a bit obsessed with Pendle—I do not know why. I made it quite clear that, in so far as I talked about Pendle in my speech, I was just using it as an example of a type of area. I talked about lots of other areas, too. However, if the Minister is really so interested in Pendle, perhaps he would like to come and see for himself and talk about some of our problems, and we can explain to him what they are. If he would like to do that, I would very happily, together with colleagues in east Lancashire, across the councils, organise a meeting for him with three or four east Lancashire districts, which all have the same problems. We could explain to him why, probably in four years’ time, the contribution of the new homes bonus in some or all of those districts will be zero. No matter what we do, given our resources, we are probably not going to meet the conditions that the Government are laying down for the number of new houses that would then have to be built. I issue that invitation publicly.
It only remains to me to move the Motion and thank everybody again for taking part in the debate—although I am a little disappointed that the Minister gave a general reply about local government finance and did not focus on specific district issues, in particular on neighbourhood services. They are becoming more and more a matter of concern and the subject of members’ reports, and they are coming up to a crisis point in many areas. Having said that, I promise that the debates will continue.
Grenfell Tower
(6 years, 6 months ago)
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The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)
My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my right honourable friend the Secretary of State for Communities and Local Government to an Urgent Question in another place on Grenfell Tower. The Statement is as follows:
“My Lords, it is now just over four months since the tragedy of Grenfell Tower. Since then the Government, local council and wider public sector have been working hard to ensure that everyone affected by the fire gets the support they need and that tall residential buildings across the country are safe.
Since I last updated the House on 5 September, the number of households seeking rehousing has risen to 202. As before, this increase has been caused by members of larger households choosing to be rehoused separately. The local council has now secured more than 200 suitable local permanent properties. Negotiations are under way on others, and by Christmas it expects to have over 300 available. As of this week, 112 households have accepted an offer of either temporary or permanent accommodation. Of these, 58 have moved in—44 into temporary accommodation and 14 into permanent accommodation.
The Government are determined that everyone who needs support gets it, regardless of their immigration status. We have previously established a process to grant foreign nationals who were resident in Grenfell Tower or Grenfell Walk 12 months’ leave to remain in the country, with full access to relevant support and assistance. Last week, the Immigration Minister announced that there will be a dedicated route to permanent residency for these survivors. This policy will allow them to apply, for free, for two further periods of two years’ limited leave. After this time, they will be able to apply for permanent residence.
Meanwhile, our work to ensure the safety of other tall residential buildings continues. One hundred and sixty-nine high-rise social housing buildings in England feature some form of aluminium composite material cladding. Our programme of testing has identified 161 that are unlikely to meet current fire safety standards. The particular focus of current work is now on supporting remediation work in these 161 buildings. Additionally, we are improving our understanding of the situation for privately owned high-rise residential buildings with ACM cladding so that all such buildings are as safe as they can be. We have been clear with councils and housing associations that we expect them to fund measures that they consider essential to make a building safe. However, if councils have concerns, they should get in touch with us. We will consider the removal of financial restrictions if they stand in the way of essential work. To date, 31 local authorities have expressed concern in principle to us. We have liaised more closely with six of these, and one of them has now submitted supporting evidence for consideration by my department”.
Lord Kennedy of Southwark (Lab)
My Lords, I thank the noble Lord, Lord Bourne, for repeating the Answer to the Urgent Question asked in the other place. I remind the House of my entry in the register of Members’ interests. I pay tribute to the work that continues to be delivered on the ground by public sector staff across a variety of disciplines and by charities, faith groups and volunteers.
The noble Lord has just said that the Government expect councils and housing associations to fund the work they consider essential to make buildings safe, that councils should get in touch with the Government and that the Government will consider removing financial restrictions if they stand in the way of essential works. That is slightly different from where we were four months ago, when I think it was said that money was no object. Therefore, does it follow that the Government are saying that they will not provide any grant funding to fund these essential works? Can the noble Lord be very clear on that? What are the Government actually saying? They seem to have moved a little on that over the last four months. We need to be clear what they are going to do on funding works—or not.
Lord Bourne of Aberystwyth
I thank the noble Lord for his thanks to the public sector staff and very much echo those on behalf of the Government. Emergency staff, central government staff and local government staff have performed absolutely magnificently, and continue to do so around the clock. That is particularly true of staff in the National Health Service as well, who provide care for people suffering from emotional distress and others. I thank, as did the noble Lord, charities and the many volunteers for the work they have done. I also thank the public for their generous giving.
The noble Lord asked a specific question about the building works. We have been clear that the safety of buildings subject to these checks post Grenfell, whether in the public or the private sector, is absolutely paramount. We have said that we will ensure that financial restrictions will not be a barrier to essential work being carried out. That would mean, most typically, the lifting of borrowing restrictions on councils. That is what we have in mind. As I have indicated, 31 authorities have been in touch with us—we have been very clear about this and have encouraged local authorities to take up this offer, if appropriate. Six have issues that we wish to pursue, one has completed—I think, from memory, that it is Portsmouth—and we are looking at that now. I repeat that financial restrictions will not limit essential work post Grenfell.
Lord Shipley (LD)
My Lords, I echo the comments of the noble Lord, Lord Kennedy, on the vital role of public sector staff, who have done a magnificent job. I had not realised until a couple of weeks ago that a large number of people from all over the United Kingdom have assisted at Grenfell. We should note that contribution in what has been a very difficult time for everybody.
I wish to ask the Minister two specific questions. First, the Statement makes it clear that the Government expect councils and housing associations to fund measures that they consider essential to make a building safe. But what if the Hackitt review says that such works are essential? Will the Government step in at that point? As I understand it, there will be an interim report from the Hackitt review some time during the autumn, which may well make clear statements about what should be done.
Secondly, sprinklers have been required since 2007 in all new high-rise buildings in England over 30 metres, whereas in Scotland, the relevant height is 18 metres. Will the Minister explain why that is the case? Do the Government expect that sprinklers will be retrofitted in buildings constructed prior to 2007?
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord, Lord Shipley, for what he said about the work carried out by the public sector. I certainly echo his thanks to people from throughout the country who have come to help at Grenfell on a voluntary basis. That shows our country at its very best.
The noble Lord asked about essential work and sprinklers. I think he raised a similar point somewhat earlier in relation to the Hackitt review. As I said then, having set up the review to look at building regulations and fire safety—it will obviously look at sprinklers, and the inquiry will doubtless want to look at that as well—I do not think we should prejudge what it will come up with. If it recommends that something essential be done, clearly, the Government will take that very seriously—I cannot imagine it being otherwise—and that would include points relating to retrofitting.
On the difference with Scotland and the devolution element, I know from a previous life that if you have devolved systems, policies may diverge, sometimes for very good reasons. Therefore, I will not tread on any toes by pontificating on something I am not clear about, except to say that these things are sometimes quite different.
Lord Beecham (Lab)
My Lords, Newcastle is not the only city or place where in recent years a huge number of newly built multi-storey buildings have been constructed to house students. Do the Government have a view on requiring the builders of those buildings to ensure that they also check issues concerning cladding and sprinklers? In respect of the latter, I endorse the plea of the noble Lord, Lord Shipley. I hope the Government decide that it should be a requirement to install sprinklers. If so, I hope they will ensure that they provide appropriate finance, and that this will not simply fall on local council residents.
Lord Bourne of Aberystwyth
I thank the noble Lord, Lord Beecham, for that point about Newcastle and more generally on higher education. I can confirm that some higher education and further education blocks—on which I think we have published statistics—also fall foul of these concerns, and they are being looked at in exactly the same way. That is also true of one or two buildings in the health service. It does not extend more widely in other areas of government, at least not in England; separate considerations and reviews are going on in Scotland, Wales and Northern Ireland. I reiterate that we have set up the Hackitt review, which is looking at building regulations and fire safety, including sprinklers, for the specific reason that we want it to come up with evidence-based recommendations. We should not anticipate those, but I can confirm that, obviously, whatever it comes up with—this goes for the inquiry as well—will be taken seriously by the Government, and, no doubt, by opposition parties as well.
Baroness Verma (Con)
My Lords, moving away from building work, can my noble friend say whether the people of Grenfell are getting the emotional support that they require as they go through this difficult time? In addition, will he ensure that young people and children in particular are being well looked after, especially with regard to their needs during their time at school?
Lord Bourne of Aberystwyth
I think my noble friend for that sensitive and appropriate question. It is obviously a massive concern. NHS experts estimate that 50% or more of the people who survived the fire are expected to display symptoms of post-traumatic stress disorder. NHS teams are providing the screening close to Grenfell at the Bard Road centre, and we are also providing support and counselling through the night with volunteers at the Notting Hill Methodist Church and at a number of hotels. It is obviously a serious issue, but I hope and believe that we are addressing it. My noble friend also mentioned young people. This is certainly a subject of great hope, and it is to our great credit that we have been able quickly to open a temporary school to substitute for the one we lost. It seems to be performing magnificently. Once again, I pay tribute to all the people who made that happen.
EU: Transition Deal
Baroness McIntosh of Pickering
To ask Her Majesty’s Government what assessment they have made of the impact on the economy of failure to agree a transition deal with the European Union.
Baroness Vere of Norbiton (Con)
My Lords, because there are so many wonderful speakers and so little time, I will start to look fierce when the clock says three.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to have secured this timely debate, and I look forward to contributions from other noble Lords, especially the Minister. I refer to my interests in the register. I also worked as an EU lawyer in Brussels and advised MEPs before myself becoming an MEP. As an MP, I chaired the EFRA Committee, where some 80% of the work originated from EU directives and policies. I am also extremely proud to be half Danish, and I studied at the University of Aarhus.
Yorkshire and other parts of the UK have benefited hugely from our membership of the EU. Examples include current payments to farmers, both direct payments for producing farm products as well as stewardship schemes for environmental benefits, and financial services in Leeds, York and London have flourished within the single market. Leeds Bradford Airport and the Humber ports also provide a gateway to Europe for our goods, services and people to access the EU market.
Despite this, the electorate was split down the middle on the referendum, with only 37% voting for Brexit—52% of the 70% who voted. Many who voted remain stand prepared to change their minds once convinced that it really is in our interest to leave the European Union. Only 18 months are left to finalise the agreement. However, talks leading up to Brexit and the smooth transition afterwards appear to be stalling, which is why I have sought this debate today, to consider what the impact will be on the local and national economy in the event of there being no transition period or no deal being reached at all—and therefore no smooth transition and implementation period following our exit from the European Union.
As the UK applied to the EU Commission to set Article 50 in motion only in March, and negotiations started on 19 June, it would seem extremely precipitate to threaten to walk away after only four months of talks. The UK’s initial opening gambit was somewhat unfortunate in tone. However, the Florence speech which the Prime Minister gave last month represents an altogether more moderate and conciliatory approach. One way for the UK to capitalise on the new mood music and progress the talks would be for it to suggest hosting the talks, or one round of the talks, in London. That would be a positive idea and might be well received by our current partners.
The Prime Minister has said that on the day we leave the EU we will leave the single market and the customs union because we do not agree to the four pillars—the free movement of goods, services, capital and people—or the jurisdiction of the European Court of Justice. Yet she states that we want to carry on trading on the same terms. How can that happen? This smacks of having our cake and eating it, and we have been warned that that is specifically not on the table.
The Government have indicated that they are prepared to walk away from talks without a deal or a transition period, with the Treasury committed to spend £250 million on preparations for such a scenario. Yet transitional arrangements are essential to give businesses more time to plan and eventually to create a new relationship between the UK and the EU. When discussing transition, it is vital to consider the nature of this relationship and the effect it will have on industry.
In farming, there are three potential outcomes of a future trade relationship, none of which guarantees increased production levels or farm-gate prices, although each could threaten higher costs for consumers. Farming confidence, which is key to investment and productivity, has already fallen sharply in the last two years. Continued access to EU workers is essential for the agri-food and hospitality sectors, as it is for the care sector and the NHS. The pound’s fall in value has had a huge impact on the economy. Falling prices have boosted exports yet also increased the price of imported materials. Transitional arrangements would increase certainty for seasonal and other EU workers as well as for the value of the pound. Such arrangements would also allow the Government more time to implement a new domestic agricultural policy to support farming.
The Government, other than stating that the UK does not wish to remain subject to the jurisdiction of the European Court of Justice, have not explained what the dispute resolution mechanism will be for all those businesses that will still be buying and selling goods with our current EU partners. Such a scheme must be agreed by both sides in advance of any potential trade dispute.
There are many other outstanding issues. What will the customs and excise arrangements be? What will the costs be of putting those in place? How will we avoid the imposition of tariffs and quotas or, worse still, non-tariff barriers? Will financial services be allowed to passport their existing services within the EU? What is the status of the UK within the World Trade Organization? When will we become a member of that organisation in our own right as opposed to negotiating as part of the EU? How long will it take the UK to negotiate each free trade agreement with third countries, as they all lapse on the day that we leave? Is it the UK’s intention to apply under Article 127 to leave the European Economic Area? How costly will the physical checks and inspections at borders be for food, drink and other perishable goods and products?
To some, the US appears to be a preferred trading partner. However, the US rigorously adopts a protectionist approach. It does not, for example, allow foreign carriers to pick up and drop off on domestic air routes, and the aggressive approach that it recently demonstrated against Bombardier is an early indicator of future behaviour. The US and other non-EU countries such as New Zealand have objected to proposals agreed by the EU and the UK on how to split World Trade Organization tariffs on goods post Brexit. It is also a puzzle why the Department for International Trade has appointed a non-British person—a New Zealander—to lead negotiations for future trade deals when there are so many experienced British nationals to choose from in the EU Commission who are already negotiating at a very senior level and who would have seemed a far more appropriate appointment.
Another question is: what can we offer Commonwealth countries in a bilateral trade deal when they already enjoy preferential access to the European Union through ACP-EU membership, strongly encouraged by this country? One of its first achievements to be heralded was the setting of a fair and stable price for sugar.
Britain must demonstrate that it wants to make the best trade deals for Britain, not just any deal at any cost, which could have the potential to compromise our high animal health and welfare standards—for example, by accepting hormone-induced beef and chlorine-rinsed chicken from the United States. We should also be sensitive to the concerns of our near neighbours such as Ireland, where the common border is of concern. Effectively that becomes an external border, yet both sides of the border agree that they want no physical barriers. The EU has made this border issue, along with free movement and the rights of EU citizens, a top priority in these negotiations.
A particular sticking point has arisen over the third major EU priority—the budget: the amount that the UK will contribute to ongoing commitments. These include not just the salaries and pensions of British nationals—such as me—who are or have been officials of the EU institutions, but programmes such as Erasmus, which allows university students to study in other EU countries. There is also Horizon 2020, the EU research and innovation programme for companies, and EASA, the European air safety authority, which regulates licences for airlines.
The Government’s priority is to proceed rapidly to the next stage of negotiations, but what are the alternatives for our future relations? We are told that existing models, which are tried, tested and shown to work, are not suitable. Therefore, concluding a new arrangement by March 2019 is a tall order. It is important to recognise that there has never been a trade agreement for services anywhere in the world to date.
Britain is at a crossroads after taking the biggest single decision in over 40 years, with huge implications for the economy, and Parliament needs to have the best available information to hand. It is therefore appropriate and necessary that the impact assessments undertaken by the Government are published so that we can analyse the impact of Brexit on the economy.
Our European partners are bemused and confused. The messages coming from the Government are mixed, depending on the audience. The complexity of disentangling ourselves from administrative arrangements spanning 40 years is immense. Every sector is crying out for certainty. We owe to the people of Britain clarity, certainty and a smooth transition to future opportunities and challenges.
Baroness Kramer (LD)
My Lords, first, I congratulate the noble Baroness, Lady McIntosh, both on obtaining this debate and on her speech. With so few minutes in which to speak, I shall focus on just one or two areas that I think illustrate the underlying problem and the need to get absolute certainty, with a transition arrangement being agreed by both sides before the end of this year.
I work extensively with the financial services community, about a third of whose business is EU domestic only. It has as its priority a smooth arrangement for its clients, with no disruption in contracts or in the flow of work. That is its absolute priority, as indeed is appropriate. Because of the complexity of licensing, contract movements, moving people and operations and so on, these businesses have been working on contingency plans for transferring business out of the UK efficiently against a worst-case scenario of no deal and no transition for months. Those plans are now complete. At board meetings in October, November and December, different institutions will make the decision on whether to press the button so that implementation can begin in the new year. As I said, this is likely to be concentrated around business for clients based in the EU, but eventually it will bleed over into the global financial services, which are absolutely crucial to the ongoing future of London and of which about a third is domestic, a third global and a third EU regional. Therefore, the Government have to focus. We need absolute certainty for those institutions not to press that button in the next several weeks.
Frankly, however, it is not just in that arena that all these issues are critical. I was in Brussels for two days a couple of weeks ago and came away with the understanding that, if we do not wish to have clearance requirements at our ports for manufactured goods, we have to remain in “the” customs union, not in “a” customs union, otherwise WTO and treaty rules will require the establishment of borders and customs clearance arrangements. Noble Lords will know that many of our major manufacturers—those in the car industry and many others—work on a just-in-time basis. With some car manufacturers, the phone call goes over to the European factory at eight in the morning and goods need to be provided to go into the production line in the UK three hours later. For others, it is as much as six hours later, but that is about the outer limit of just-in-time arrangements, which will fail completely if any clearance process is in existence at the borders. I have listened to the head of the British International Freight Association. As this House will know, a two-minute delay will back lorries at Dover up to Ashford, and a six-minute delay will push them back to the M25. There are critical issues of this calibre all across which require a transitional arrangement, and it must be one with certainty—and soon.
Lord Kerr of Kinlochard (CB)
But, my Lords, that is not going to happen because a transition requires a defined destination. The Government still cannot agree among themselves the long-term relationship that they want with the European Union. In Florence the Prime Minister told us that it was not the Canadian model because that would be too restrictive, and it was not the Norwegian model because that would not respect our democratic control, but she did not say what it was going to be, and I fear that she will not do so today. However, the Government will have to define it before the 27 can negotiate on it, let alone agree to it, so that we can transition to it. With respect, the ball is still in our court.
I have some questions for the Government. First, when will they at last put forward a draft of the framework for the future relationship with the EU, which is required by Article 50?
Secondly, when the Prime Minister spoke in Florence of a transition agreement, she was actually describing a standstill agreement. She talked of our respecting all EU rules and regulations for two years after we leave the Council, Parliament, court and Commission, which make those rules. Even I could negotiate that. If I am the 27, what is not to like about having all my decisions respected by the British without having to put up with boring British negotiators like me? And they are ready for it. Their guidelines, agreed on 29 April—exactly one month after we rashly fired the trigger and chose to spend three months having an election—say that,
“a time-limited prolongation of Union acquis”,
is fine, provided that all,
“existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures”,
continue to apply. Do the Government accept that they would continue to apply? If so, will somebody please tell the Foreign Secretary, who is still out there cherry-picking with his mouth full of cake?
My last point is that business certainly requires a transition agreement—the noble Baroness, Lady Kramer, is absolutely right—but it is not going to get it because the Government cannot make up their mind about what we are transitioning to. A standstill agreement would be better than nothing for business, but let us not pretend that it avoids the cliff edge; it merely postpones it from 2019 to 2021. Even if by 2021 the Government have finally stopped negotiating with themselves and have decided on the long-term relationship that we want, there is no chance that a version acceptable to the 27 will have been agreed, translated into detailed treaty texts and ratified in all EU legislatures, including Wallonia, following all necessary referenda, including in the Netherlands. Canada took seven years.
Therefore, my third question to the Government is: what comes after the standstill period? Do we, after the standstill, get to the transition period? How long does this uncertainty last? And when will the Government drop the Panglossian pretence that it does not entail massive economic disruption?
Lord Bowness (Con)
My Lords, I thank my noble friend for asking this Question. The Government did work on the economic consequences of exiting the European Union, and that was published before the referendum. However, little good use was made of it in the campaign, the parties instead preferring exaggeration and rhetoric.
The question now is about no transition. “No transition” means either a deal that has been agreed by the end of March 2019, ready for immediate implementation—and there is no one who considers that possible—or we leave via the cliff edge like lemmings, save that lemmings appear to be agreed on their hopeless course of action, while in our case many will be carried over, dragged by the crowd against our wishes.
The Question refers to transition, but at present no deal also remains a possibility at the end of transition. It is therefore time to face reality and abandon that rhetoric. The leavers’ simplistic cry that we fall back on WTO rules must be exposed. They say that WTO rules govern the majority of trade with the rest of the world and that, therefore, it is no problem to apply the same system to goods to and from the European Union. The Freight Transport Association commented in the Sunday Times that the nature of much of our trade with the EU is physically different. Some 70% of it is by lorry, unlike from the rest of the world, which is in bulk, by container. Containers have time at sea to deal with customs formalities. The same considerations of speed do not apply to them. European Union trade consists of many and frequent loads, all of which require customs formalities, creating cost and delay, and not just regulation but infrastructure, too.
Concerns exist in many businesses and industries, and they are not agents of remain. These concerns include worries about rules of origin, the maintenance of existing regulatory regimes and agencies and the delay and cost if we become a third country. The Government therefore need to assess not merely “no transition”, but “no deal”. There has to be a transition to something, and what that is is not clear, if indeed anyone knows. Transition merely puts off the realities until later. It becomes clearer by the day that no dynamic, creative and unique economic partnership will give the UK arrangements better than we currently enjoy. Anything post exit will be a compromise.
If business and, therefore, the country is not to face economic problems—and the revised figures from the ONS last week suggest that the picture might not be as rosy as we hoped—surely we should think again about our rejection of continued membership of the single market and the customs union and give more consideration to EFTA and EEA-type arrangements. How much are we prepared to sacrifice to keep the commitment to reject any jurisdiction of the European Court of Justice, which colours our judgment and is having an effect on many issues, including citizens’ rights and the Irish border?
Parliament and people need an honest and comprehensive assessment of the cost of no deal, not just in terms of trade and tariffs, but all the additional costs to business, individuals and government.
Baroness Jones of Moulsecoomb (GP)
My Lords, I, too, thank the noble Baroness, Lady McIntosh, for bringing forward this debate, which is obviously very timely. I will mention two issues, both of which have been raised already, but about which I feel quite strongly.
The first is the impact assessments that the Government have had done. I am told that there are about 50 of these, and at the moment they are being kept secret. I simply cannot understand why that is acceptable: we live in a democracy and it is for this House and the other place to see, scrutinise and understand exactly what those options are. How can businesses prepare, how can anyone prepare and how can we call ourselves a democracy if we cannot discuss them? It is almost as if the Government are holding us to ransom, not allowing us to know what is actually incredibly important. This is probably the biggest thing that has happened to Britain since the war. We need to know, and those impact assessments really have to be published.
My second issue relates to the World Trade Organization. The Secretary of State for Exiting the European Union has said that the default position for leaving the EU without a trade agreement would be to trade on most favoured nation status under World Trade Organization arrangements. Again, this is something that absolutely cannot go unscrutinised. The WTO is undemocratic and places big restrictions on what countries are allowed to do. It is designed to force through free trade at the expense of local communities and local production. It also has a dispute settlement body whose decisions are binding on all members. A country that loses a dispute must change its policies to comply with the body or face compensation and retaliatory sanctions.
David Allen Green, a law and policy commentator at the Financial Times, has said that since the WTO operates on a consensus decision-making system, the UK will be,
“at the mercy of countries playing politics with ulterior motives, say by Argentina over the Falklands or by Spain over Gibraltar”.
He went on to say that,
“the WTO was another ironic example of a process supposedly about ‘taking back control’ handing real power of the UK’s post-Brexit fate to the whims of outside powers”.
There will, of course, be tariffs; there will be big impacts on the services that we export, such as professional legal services and management consulting. Our European Union Committee has said that, in a no-deal situation, many professional services firms would either relocate to the EU or move resources to partner firms in order to continue to trade on preferential terms.
In spite of the fact that I voted to leave—and I still feel very strongly that that was the right decision—I also feel that we cannot do it in this way. We have a Cabinet supposedly ignoring all concept of group or ministerial responsibility. It is not for me, from an unwhipped party, to lecture the Tory Party on discipline, but perhaps somebody should. The Government have calculated what impact all of this will have on the UK, and they must tell the truth to the public about what is coming. They must allow Parliament to play its proper role.
Lord Horam (Con)
My Lords, I am glad to hear of the semi-conversion of the noble Baroness, Lady Jones, to something like what I regard as common sense.
There always seemed to me to be three elements in the negotiations between the UK and the European Union. First, there is the dosh—the money. It has been obvious for months that Germany would be very unhappy about there being a big hole in the European budget, which it would largely have to finance. It was expecting us to come up with a better deal than we have already. Frankly, £20 billion is ridiculous: we could easily double that with no real problems. Our deficit at the moment is £1.7 trillion; another £20 billion is frankly ridiculous. It is about 100 times the amount for Harry Kane’s transfer to the Tottenham Hotspur football team. As one of my investment banker friends said, £40 billion or £50 billion upfront by the UK would be an absolute steal for us.
Secondly, there is the issue of the transition. As the noble Baroness, Lady Kramer, rightly pointed out, imagine the scene at Dover if this were to end in March 2019 with no deal whatsoever and acrimony as well. The queues would be back to the M25, just at Bexley: in that case, there would be a certain amount of chortling in heaven. The fact is that the reputation of the Government for competence is already sliding and the effect of this would be a hammer-blow. Black Wednesday would be as nothing compared to what would happen if we marched off the end of the cliff.
As the noble Lord, Lord Kerr, rightly pointed out, for all the platitudes and good will of the Prime Minister, we do not have a mechanism. What is the end-point of all of this? We have no clear understanding, after all this time, of what is to be expected. I personally think we should stay in the customs union, but I recognise that that would cause a few problems for Liam Fox. The alternative, frankly, is that we have an association agreement, which the European Union has with many of its surrounding countries, such as Ukraine, Morocco, Turkey, Algeria, Serbia and so forth. All of these have association agreements with the European Union which contain free trade agreements. That is a familiar template for the European Union and a flexible one. You can put into it what you want and that would make total sense for us given that, even outside the European Union, most of our trade would still be with the European Union.
It is a delusion to imagine that somehow or other there is a large area out there with which we could do trade but are not doing so at the moment. That is not to understand at all the nature of trade, which is that trade halves as distance doubles. That is the fact of the matter, and will always be the case. Therefore, we should follow the advice that was set out in the House of Lords European Union Committee report, Brexit: the Options for Trade, way back in December, on transition deals and the possible role of an association agreement. It shows how lugubriously slow the Government have been to follow it up. We still, even now, have no clearer idea where we are going.
The time has come for the Prime Minister to crack the whip and get a move on. Otherwise, we will be in real trouble. If she does crack the whip, believe you me, she will have Parliament and the people behind her.
Lord Liddle (Lab)
My Lords, my congratulations to the noble Baroness, Lady McIntosh, on getting this debate on this day of all days, given that our Prime Minister has to face her European partners tonight. I will tell the House briefly what I think she ought to say but fear will not.
First, any suggestion of the United Kingdom walking away from these talks would bring about a national catastrophe that anyone who seriously cares for our national interest could never contemplate.
Secondly, the money question has to be settled quickly. The Florence speech accepted not only that the financial obligations will be met to the end of the current financial period but that Britain will honour obligations it had met during its period of membership—that means commitments we have made that have not, as yet, been paid for. A classic example is EU pensions. For the Government to say that they will not contribute to the pensions of British people who have worked in the national interest in the European institutions is, frankly, ignorant xenophobic populism. We have to meet those obligations.
Thirdly, we should set up an objective method of calculating those obligations—probably a Brit and a continental from the European Court of Auditors. We should look for an independent process to make that calculation.
Fourthly, as the noble Lord, Lord Kerr, said, it is not good enough to talk just about a transition; we have to say what we are transitioning to. I would like a transition to the position of Norway. However, I suspect that all Mrs May might be able to say, if she has the courage, is that she wants a transition to a Norway-minus position. What does that mean? It means that we want to maintain frictionless trade with the EU and will adhere to European standards, except in a limited number of cases where we decide to diverge. Where we decide to diverge, we will set up joint consultation machinery with our EU partners. On any question of divergence, they will tell us how they would react to that divergence and then, in the light of that knowledge, we would decide whether we are going to go ahead and exercise the sovereign right. There would have to be a relationship of co-operation.
We have to resolve the question of the final destination. The Prime Minister should say to our partners that if there is any continued dispute in the Cabinet about this, and if the Brexiteers are not prepared to accept it, they should go and enjoy the freedom of the Back Benches because there is a clear majority in the House of Commons for a sensible, long-term deal with the European Union.
Lord Butler of Brockwell (CB)
My Lords, I am glad to follow the noble Lord, Lord Liddle, because it gives me a chance to amplify the remarks for which he criticised me earlier in the week. First, I will address the subject of the noble Baroness’s Question. I am afraid I cannot get as excited as the noble Baroness, Lady Jones, about a government assessment of the effect on the economy of leaving without a transition. I do not doubt that leaving without a transition would be worse than getting an agreement to it, but such an assessment on the effect on the economy is, in my view, unlikely to be worth the paper it is written on. We all remember how unreliable were the forecasts on both sides before the referendum of the short-term effects of a vote for Brexit. As a member of your Lordships’ European banking and finance committee, I hear every week from witnesses how speculative are the forecasts on the effects on our financial services of leaving without a transition.
Although I was and still am a remainer, we should now direct all our efforts to getting the best agreement available in the present negotiation. That should certainly include a transition. Here, I find myself in disagreement with my old and noble friend Lord Kerr and others that the Government have not been clear about the ultimate destination. It seems to me that the Government have been clear. They are looking for a bespoke agreement, not an existing agreement, and as wide-ranging and frictionless a trade agreement as can be negotiated.
In her Florence speech, the Prime Minister made a constructive offer on all aspects of stage 1. If the EU now refuses to proceed to discussing our future relationship, it will be acting in bad faith and inconsistently with Article 50. We would be justified in saying to Monsieur Barnier, “We hear the clock ticking”. In this respect, the opposition parties have to be very careful, and I include my noble friend in this. Of course I accept the role and the duty of the Opposition to hold the Government to account and point up what they see as deficiencies. However, if they simply mock the Government and exploit their internal differences for party-political reasons, they risk undermining our negotiators and delivering them into the hands of the EU. There is too much at stake in the national interest for that.
Lord Cormack (Con)
My Lords, the noble Lord, Lord Butler, should be congratulated on his wonderful charity and willingness to see precision where some of us find it difficult to detect that quality.
We all should be a little humble in this debate. Those of us who were on the remaining side have to recognise that the vote went the other way, albeit by a very small majority. But those who voted leave, for a variety of reasons, equally have to display a degree of humility and recognise that their victory was a narrow one. Until both sides accept that there has to be constructive compromise, we are not going to get very far. In his excellent speech, my noble friend Lord Bowness said that we have to face reality. My noble friend Lady McIntosh, who introduced this debate extremely well, made clear how many difficulties we have to surmount in less than 18 months.
I have pleaded before in this House, and now plead again. The two Houses of Parliament are very often poles apart and do not understand each other. We are in completely uncharted waters in an unprecedented situation. No country in the European Union has ever before tried to come out. This is the time to have a joint Grand Committee of both Houses, accessible to Members of both Houses as Grand Committees are, where we can try to come together and discuss the intricacies of the extraordinary situation that we are in, and we should try to do so with the sort of charity that the noble Lord, Lord Butler, just displayed in your Lordships’ House. Unless we can do that, the future is dire.
I was, frankly, dismayed to see this morning in the papers a letter reportedly sent to our Prime Minister—almost in the form of an ultimatum. A number of people in the Conservative Party, and one or two in the Labour Party as well, do not seem to grasp the immensity of what we are faced with. They are behaving with a degree of certitude and arrogance that is not helpful if we wish to see this country, which saved Europe twice in the 20th century, continue to play a constructive part with our present friends, allies and fellow members of the Union, who must remain our friends and allies after March 2019.
We have a part to play. I hope the Government will listen to my suggestion. I have discussed it with Members of both Houses, who seem fairly receptive, but we have to move forward.
Lord O’Neill of Gatley (CB)
My Lords, I now find myself wondering whether the most passionate advocates of Brexit, some of whose arguments we have just heard the noble Lord illustrate, are secretly in favour of a second referendum on the original question. If not, I cannot see any of their logic. Brexit with no trade deal—the ultimate consequence of no transition—is anywhere from worrying to extremely bad. I shall make three quick points.
First, the world economy has shown in the first half of this year probably its strongest performance compared to any since the 2008 crisis, with eight of the 10 largest economies in the world accelerating. However, there are two notable exceptions—sadly, one of them is the UK. It would normally be close to impossible for the UK not to benefit from such a synchronised global upswing. In fact, our economy has slowed. We do not really know why, but it is probably to do with the weakness of investment spending and the pressure on consumers coming from sterling-related weakness in the cost of living— both of which can be traced to Brexit.
The second, more concerning, point is that after a very small lift in 2016, our productivity performance has apparently turned down again. Long-term economic growth is driven by two factors alone: the size and growth of the labour force, and that force’s productivity. If we pursue Brexit at any price, we will add a fresh challenge to that of our weak productivity through a significant threat to the significant advantage our labour force growth has shown.
Thirdly, as I have highlighted once before in this House, at the end of 2016 China became Germany’s number one trade partner, overtaking France and the US. You are good at trade if you are good at trade. To be good at exporting, we must produce things that the fastest growing domestic economies want, as well as, or instead of, being very competitive and/or trading on the best terms available. For the UK, a small—too small, sadly—group of companies have such strong brands that it is possible that defaulting to WTO rules may not be a massive issue for them. An example close to us might be open-top bus tours around Westminster, which would probably have a market, irrespective of this outcome.
To be seriously more successful in international trade, we need a dramatically increased effort toward the largest and fastest growing economies in the world, not just sentimental relationships with Commonwealth countries. This year, China will add another $1 trillion to global GDP. That is equivalent to creating five new New Zealands in one year. A lot of industries are not in the position of open-top bus tours around Westminster; for those that are highly integrated into the world economy, defaulting to WTO rules is likely to be highly damaging. I can think of at least two such major industries: autos and finance, the latter of which the noble Baroness, Lady Kramer, talked about. Do we deliberately want to reduce the importance of each of those? Autos, by the way, is one of the few major industries that has been highly productive in the past 30 years, although there may be many others. The time has come for less emotion and more focus.
Baroness Ludford (LD)
My Lords, one of the factors inhibiting a transition arrangement deal, leaving aside the stasis on phase 1 of the negotiations, is the Government’s failure to specify what it would be a transition to, as the noble Lord, Lord Kerr, among others, has pointed out. “Deep and special” does not cut the mustard; it is just a slogan.
Business needs to hear that the Government intend to stay in the single market and fully in the customs union in the standstill, in the transition and permanently. Of course, that would be achieved by remaining in the EU, which would also give us a voice in the rules. The Government must specifically resile from a no deal intention. I find it rather rich that the opposition parties are enjoined by the noble Lord, Lord Butler, to back the Government when their own party is not backing them.
The notion that crashing out of the EU will liberate the UK economy to prosper, as it sails the high seas in buccaneering spirit, is rejected by all serious and credible economists. No WTO member can unilaterally decide its rights and obligations. A new schedule of our trade arrangements would take years to negotiate and, as we saw recently, be a golden opportunity for trade partners to extract concessions. No country can unilaterally fix the regulatory environment it would face. The notion that life outside the EU would be less affected by red tape is utterly fallacious. Being in the customs union and single market cuts paperwork over rules of origin and local content, tariffs and compliance with regulations.
No deal would make the bad economic situation, as sketched by the noble Lord, Lord O’Neill, much worse, as highlighted by the OECD just this week. The cost of living would rise, possibly costing families £5 more a week. With inflation already at 5%, that is no small deal. There could be trade and customs chaos, with tailbacks of lorries, perhaps even from Dover to the Dartford Crossing, as mentioned by my noble friend Lady Kramer and others. Losing the benefits of the EU 66 trade agreements would be a serious setback: we would potentially see serious job losses and a regulatory minefield, with industries struggling to function as we dropped out of EU rules and agencies.
My party is not secretly in favour of a further referendum. We are extremely up-front about that ambition. There are no options as good as remain, and thus voters should have the chance to think again on the wisdom of Brexit, once they see what it would really entail.
Lord Tunnicliffe (Lab)
My Lords, the Prime Minister’s speech in Florence marked an important turning point, not because it brought about a breakthrough—it did not. The EU’s chief negotiator was clear when he described talks as having reached deadlock. It was significant because the Government finally accepted the need for a transitional period, which Labour has consistently argued is essential for British business and jobs. Florence, while offering no guarantees, at least represented a step forward.
Falling off a cliff edge in 2019 is in nobody’s interests. If anyone has any doubt about the importance of transitional arrangements, they need look no further than two reports published this week that warn of the dire economic consequences we face if the Government cannot get their act together. The OECD has said that no deal would wipe £40 billion off the UK’s economy, while the Resolution Foundation revealed that if the UK reverts to most favoured nation tariffs, the cost of living will rise dramatically. How many more warnings do the Government need before they wake up to that fact? TheCityUK warned that,
“a transitional deal is of diminishing value”,
if no agreement is struck by the end of March next year. Banks and other financial services have been clear: without progress, they will have no choice but to move at least some of their operations out of the UK. Can the Minister give this industry the “urgent clarity” it needs?
As the Prime Minister has now recognised, it is nonsensical for businesses, consumers and public bodies to adjust to one set of changes in 2019, only to move to another regime when the new UK-EU relationship comes into force. That is why we on these Benches welcome the Government finally accepting the need for a transitional deal. For the avoidance of doubt, such a deal must not become a means of staying in the EU. Any transition should be as short as possible, but as long as necessary for our economy.
I urge the Government to finally publish their sectoral impact assessment, as Labour called for during the passage of the Article 50 Act. There is cross-party consensus on this. We know these assessments exist. The Secretary of State has been warned of legal action if they are not published. I therefore hope the Minister will assure us that these documents will be forthcoming.
Baroness Goldie (Con)
My Lords, I thank my noble friend Lady McIntosh for bringing this debate to the Chamber, and I thank your Lordships for your diverse and interesting contributions.
It is in the interests of all that we secure a good deal for the UK and the EU. Good progress has been made. Both my right honourable friend David Davis and the European Commission’s lead negotiator, Michel Barnier, have acknowledged the new dynamic created by the Prime Minister’s speech in Florence. This momentum was maintained during the September and October negotiating rounds.
As I stated in this House on Tuesday, both negotiating teams have continued to work constructively together. Since June we have steadily developed our shared political objectives. Of course, there is still some way to go to secure a new partnership, but we are confident that we are on the right path. Indeed, the shadow Secretary of State for Exiting the European Union, the right honourable Keir Starmer, said in a recent letter to my right honourable friend David Davis:
“The announcement of further progress on the rights of EU citizens and the issue of Northern Ireland is welcome. It is also encouraging to see a more constructive tone in the talks”.
Mr Starmer seems to concede that something positive is happening in these talks.
As I said before, I think there is recognition that progress is now visible and tangible. That has been borne out by different parties and by Michel Barnier himself. He said at the end of the October round:
“Since Florence, there is a new dynamic. I remain convinced that with political will, decisive progress is within our reach in the coming weeks”.
It is important to set a perspective of what are undoubtedly challenging and complicated negotiations against what I think is a positive perception. Indeed, at the dinner earlier this week attended by Mr Juncker, the Prime Minister, my right honourable friend David Davis and Michel Barnier, that view seemed to be shared. I regard that as encouraging.
My noble friend Lady McIntosh made the interesting suggestion that the UK Government might host a round of the EU Brexit negotiations in London. I do not think anyone would be inimical to that suggestion. While the Government have no immediate plans to host a round of negotiations, the arrangements for each round are subject to agreement between both parties. I thank her for what is an innovative suggestion.
Acknowledging the clarity we now see emerging on issues related to Northern Ireland and Ireland, citizens’ rights and mutual financial obligations, and the positive atmosphere to which I referred, the presumption is we shall reach a deal and agreement on an implementation period. Of course, any Government would be negligent if they did not plan for the remote, unwelcome but none the less possible outcome of no deal. Frankly, to fail to do that would be folly.
As the Prime Minister set out in her speech in Florence on 22 September, the Government believe a strictly time-limited implementation period is in the interests of both the UK and the EU. It would help both sides to minimise disruption if we agree this principle as early as possible in the process. We are confident we can achieve this.
An implementation period will help to build a bridge from our exit to our future partnership, to allow businesses and people time to adjust, and to allow new systems to be put in place. My noble friend Lady McIntosh raised the important point of who interprets the rules during this implementation period. On ECJ jurisdiction, my understanding is that it may mean we start off with the ECJ still governing the rules we are part of for that period, but the Government are also clear that if we can bring forward a new dispute resolution mechanism at an earlier stage, we will do so.
In a similar vein, the noble Baroness, Lady Kramer, raised the issue of business sectors, specifically the finance sector. I wish to reassure her that as part of our analysis, the Government are looking at more than 50 sectors and at cross-cutting regulatory, economic and social issues, and engaging closely with business.
It makes sense for there to be only one set of changes for businesses and individuals. That is why the implementation period should be based on the existing structure of EU rules and regulations. During that time the UK and the EU would continue to have access to one another’s markets on current terms, and the UK would take part in existing security measures. Any implementation period should be strictly time limited, determined by the length of time needed to implement new processes and the systems for our future relationship. As the Prime Minister set out, as of today, these considerations point to an implementation period of around two years. That period should be agreed as early as possible to provide certainty. It remains overwhelmingly in our national interest and in the EU’s interest for both entities to succeed in the years ahead.
The implementation period is a temporary measure. In the long term, the Government are seeking a special relationship—a deep relationship—with our European friends and allies. This is a mutually beneficial choice and we are confident we can achieve it. The partnership should be one that reflects our shared values and histories, and that works for the people of both the UK and the EU. That remains our priority.
A number of Members raised and commented on the prospect of no deal. I go back to my earlier phraseology: there is a presumption that we will achieve a deal. We are confident in our ability to secure a deal, but we have a duty to plan for the alternative. As I said earlier, not to do that would be utter folly.
As part of the general planning, we are also planning, under a range of scenarios, to make sure we deliver exit in as smooth a fashion as we possibly can. That includes preparing this country for the future economic partnership we hope to secure. Plans are well developed and they prepare us for a range of outcomes, including the very unlikely eventuality of leaving the EU without a deal. Every government department has developed a detailed understanding of how withdrawing from the EU will affect its existing policies and services in a wide range of outcomes. This general approach of trying to anticipate what is involved, and the unwelcome possibility of having to plan for no deal, was endorsed by Parliament. The Foreign Affairs Select Committee recently said that not preparing for all outcomes would be a “dereliction of duty”.
Among these preparations we have some that will require long lead-in times. We need to begin that planning now for them to remain viable. We hope we will not need all the provisions once we have achieved a deal with the EU. As Members are aware, the European Union (Withdrawal) Bill is currently in the other place to ensure we have a fully functioning statute book on the day we leave. In addition to legislation already announced in the Queen’s Speech, the Government will bring forward further legislation as we require.
We recognise, as a number of Members have importantly stressed, the need for industry to prepare contingency plans. The Government are engaged closely with businesses across each sector to understand the challenges and opportunities that may impact on them in the coming months and years. We accept and understand the need to reduce uncertainty wherever we can, and we are working to get the right deal for industry, ensuring that the UK remains the best possible place to do business.
I am conscious of the time. I want to try to deal with some of the important specific contributions raised by Members. I turn to the noble Lord, Lord Kerr, who posed a number of questions on the destination and the framework. I slightly disagree with his assessment. There is a framework. That started with Article 50—I need hardly tell your Lordships that no one is more expert on Article 50 than the noble Lord, Lord Kerr. However, I remind the noble Lord that Article 50 specifically says that withdrawal is inextricably interwoven with our future relationship with the EU, and that relationship involves trade. We need to move on to discuss that future. That will in turn help to shape the next part of our negotiations. The noble Lord, Lord Butler, made a helpful observation in relation to these issues.
My noble friend Lord Horam raised trade and customs issues. We want an ambitious free trade arrangement—that is what we are negotiating for. We want to move on to discuss these issues and hope that the climate of the negotiations will assist that.
My noble friend Lord Bowness had a rather colourful metaphor about pessimistic outcomes, but the genesis of where we are is a referendum instruction from the voters, and the Government are endeavouring to deliver on it.
The noble Baroness, Lady Jones of Moulsecoomb, asked whether we would publish impact assessments. We are carrying out a programme of rigorous and extensive analytical work to contribute to our exit negotiations, define our future partnership and inform our understanding of how exit will affect our domestic policies and frameworks. It is not standard practice to provide an ongoing commentary on internal analytical work being carried out, but I assure the noble Baroness that it is being carried out.
I commend the noble Lord, Lord Liddle, because he focused on important issues and made some interesting observations. I realise that this is a genuinely difficult issue for him, so I want to thank him for his contribution, which was in many respects constructive and helpful.
The noble Lord, Lord Butler, gave us a timely and wise reminder of what it is realistic to address and what is inevitably speculative and hypothetical. I know that my noble friend Lord Cormack’s views are well intended and they are well known. They will be noted, but I think he will understand that I cannot give him any affirmative response.
The noble Lord, Lord O’Neill, made serious and significant points about the economy. I listened to them with respect and, again, they are noted. The noble Baroness, Lady Ludford, was also pessimistic about a deal. Let me say again that the presumption is that we shall reach a deal. We are focusing all our energy on that and straining every fibre and sinew to achieve it. That is our objective.
Finally, the noble Lord, Lord Tunnicliffe, raised issues similar to those raised by the noble Baroness, Lady Kramer. We want a deal and are striving to get one, and we want a manageable implementation period.
I have run out of time. If I have been unable to address any contributions, I shall look at Hansard and endeavour to make good my deficiencies.
Battle of Passchendaele
(6 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Black of Brentwood
That this House takes note of the centenary of the Battle of Passchendaele and of Her Majesty’s Government’s plans to commemorate it.
Lord Black of Brentwood (Con)
My Lords, to lead a debate commemorating the horror and savagery of the third battle of Ypres, black-edged in the annals of British and European history, in which half a million men lost their lives, were wounded or went missing in the most appalling conditions imaginable, is both a privilege and deeply humbling. A century on, it is still a struggle to find the right words to describe what became known as the Battle of Passchendaele and to do justice to the tale of sacrifice, killing and loss that characterised the three-and-a-half months of the late summer and early autumn of 1917, which the historian AJP Taylor has perhaps most succinctly summed up as,
“the blindest slaughter of a blind war”.
I am exceptionally grateful to all noble Lords who are joining me today in commemorating those who suffered and died at Ypres and trying to find those right words.
I have wanted this House to take time to remember since I toured the First World War battlefields last autumn. With friends, I visited first the Menin Gate, one of the world’s most iconic memorials. It bears the names of more than 54,000 men who died serving the forces of Britain and many other countries from what is now the Commonwealth who have no known grave, their bodies sucked into the thick, glutinous mud of Flanders, and where to this day “The Last Post” is still sounded at 8pm every evening. From there, we went to the haunting cemetery at Tyne Cot, the final resting place of almost 12,000 Commonwealth servicemen, of whom more than 8,000 are unidentified, their graves bearing the inscription only that they are: “Known unto God”. I spent more than an hour there, looking not just at the graves but watching the faces of young people who arrived on coaches. They entered the cemetery often in boisterous form. Within moments they fell silent and their faces became ashen not just as they realised the scale of the loss—something unintelligible to a generation which has known Europe at peace—but as they realised, looking at the ages of those whose names were etched on to the gravestones, that these were people of their own age who had made the ultimate sacrifice.
For that reason alone, the powerful message that these memorials send anew to each generation—a terrible warning from history—they deserve to stand cared for and tended for all time, and we as a nation are immensely lucky that we have the Commonwealth War Graves Commission to do just that. I am sure the Minister will join me in paying tribute to its outstanding work.
A debate still rages today about the rights and wrongs of Passchendaele and whether things could have been done differently. There will never be a resolution to this debate—it will probably be raging a century from now—and, for me, today is not the place to rehearse those arguments but simply to remember. The battle was conceived by Field Marshal Haig to break out of the Ypres Salient where the British had been stuck for several years. The aim was to punch through the German lines and get to the coast in order to stop the devastating loss of vessels crossing the Atlantic being destroyed by U-boats that was threatening our survival as a nation.
As noble Lords know, it began on 31 July 1917. A century ago this month, it was grinding its bloody, grimy path to a conclusion on 10 November and, in doing so, in Churchill’s words,
“disgorged its streams of manhood”.
By this time in October, the village of Passchendaele had been all but wiped from the map. A soldier with the 13th Reserve Infantry Regiment wrote almost 100 years ago to this day:
“In all directions there was yawning emptiness, ruins, ruin and destruction.”
By the time the battle had finished, a quarter of a million men on both sides were dead or wounded in exchange for an advance of just five miles by British troops. The small strip of land over which they fought had been turned to desolation. A few years later, the brave war reporter, Philip Gibbs, who saw the battle at first hand, said that,
“nothing that has been written is more than the pale image of the abomination of those battlefields, and ... no pen or brush has yet achieved the picture of that Armageddon in which so many perished”.
Apart from the extraordinary tale of sacrifice, this “Armageddon” was a battle marked by two things in particular. It was marked first and foremost by the bravery of the men. More Victoria Crosses were won on the first day of Passchendaele than on any other single day in the First World War. It would be useful to hear from my noble friend what is being done to commemorate their particular sacrifice.
It was marked above all by the most dreadful physical conditions imaginable because of the heavy rainfall which accompanied the start of the battle and turned the area into a quagmire which trapped soldiers and immobilised their weaponry. Indeed, the battle has become defined by what Lloyd George called,
“the campaign of the mud”.
In his extraordinary poem about Third Ypres, Siegfried Sassoon describes the horror of death in the Salient:
“I died in hell -
(They called it Passchendaele). My wound was slight,
And I was hobbling back; and then a shell
Burst slick upon the duck-boards: so I fell
Into the bottomless mud, and lost the light”.
Many of your Lordships will know that I have spoken a number of times in this House about the welfare of animals. In describing the horror of the conditions in the battle, I want briefly to mention the plight of the animals that served and died in the war and whose suffering is so powerfully commemorated on the Animals in War memorial in Park Lane. Dogs and, above all, horses were particularly vulnerable in the swamp of land. In his superb book on the battle, Nick Lloyd describes the conditions as fighting raged in the lines around Becelaere 100 years ago to this day. One soldier wrote afterwards how horses just disappeared into the muddy quicksand. He wrote:
“Officers and men attempted, in some cases up to their necks in icy water, to free the horses ... this proved to be impossible … There was nothing else … but to put them out of their … misery with a revolver shot … further on, another team fell into a crater where, before it could be rescued, all the horses drowned”.
It is right that we remember them.
The battle was marked by the great bravery of troops from today’s Commonwealth, particularly from Canada, Australia, South Africa, New Zealand, a country whose worst casualty figures of the Great War came from Passchendaele, and from Hindus and Muslims alike. Indeed, it was the Canadian 27th Battalion from Winnipeg which with British assistance finally took the village of Passchendaele on 6 November in an assault that took place, according to one Canadian soldier, in absolutely nothing but mud and water. Men came from every race, every faith, every culture, across the seas—as in the saying,
“from the uttermost ends of the earth”—
to fight and die for their king. And many did so on the Ypres Salient. It is essential that we pay tribute, as we have throughout the commemorations of the Great War, to the indispensable role that Commonwealth troops played in Passchendaele and in securing our ultimate victory.
We should also remember how important women were to the fighting at the front and the waging of war. Some of course served as nurses, 260 of whom died in the line of duty throughout the war. One was Nellie Spindler, from Wakefield, who was killed by the blast from a shell at a hospital just three miles from the front line at Passchendaele and who is the only woman buried at Tyne Cot, alongside 12,000 men. Her headstone bears the inscription “Staff Nurse” and in its simplicity sums up the heroism of all the women who endured the rain, the mud and the horrendous conditions to tend the sick and dying. Well away from the front, tens of thousands of women of course played a vital role in the war effort, producing munitions for the artillery which was so critical to the fighting at Passchendaele. Many suffered the most dreadful conditions and illnesses—we think of the canary girls whose repeated exposure to toxic TNT used in munitions production turned their skin yellow. I hope that at some point before the four years of commemorations of the Great War come to an end, this House will have an opportunity to mark their role. I would be grateful if my noble friend could tell us what is being done to pay the most profound tribute to women and their role in the war.
One enduring characteristic of all the battles of the Great War is the loss of youth and of so much potential, particularly in the worlds of music, art and poetry. Passchendaele is no exception. On the opening day of the battle of Pilckem Ridge, the talented Welsh poet Ellis Evans—better known as Hedd Wyn—a pacifist conscripted into the army, was killed. A similar fate that very day befell the gifted Irish poet Francis Ledwidge, known as the “poet of the blackbirds”. From the world of music, the brilliant young composer Ivor Gurney fought valiantly in the battle. Gurney was a student at the Royal College of Music where he was taught by Charles Villiers Stanford, who described him as potentially,
“the biggest of them all”.
Gurney survived 15 months at the front and, having been shot and gassed, returned home with five of his most enduring songs. One mud-spattered manuscript, “By a Bierside”, was written by the light of a stump of candle in a trench. But war had destroyed Gurney in other ways: as a result of shell shock, mental illness overwhelmed him and he spent the rest of his life in a mental hospital, writing little more. The loss of these artists as a result of Passchendaele underlines the pity of war and the waste of potential, for who knows what they and countless others who died in those four bloody years might have achieved had they lived.
There are a number of reasons why I believe it is important for us to commemorate the battle. One is that it was in many ways a turning point in the war. It may have failed in its objectives, but as Nick Lloyd puts it in his book,
“it marked the moment when German morale on the Western Front began to collapse”.
Equally important was that it contributed to development in British tactical skill and weaponry which gave us a decisive edge over the German armies in the summer of 1918. Passchendaele was a milestone on the road to victory.
Secondly, it was a battle in which the whole nation—and, as I mentioned, much of what is now the Commonwealth—was involved. I doubt that there are many communities in the land that do not have a war memorial bearing the names of their many sons and fathers who did not return from the hell-hole of Ypres. It is important to remember in particular the contribution of troops from Scotland. Three divisions fought at Passchendaele and made what was probably a disproportionate sacrifice in the battle.
Thirdly, and perhaps most importantly, the battle in so many ways epitomises the absolute essence of the Great War. On the one hand, it symbolises the nobility of war: the sheer scale of supreme sacrifice, the extraordinary acts of valour that were underscored by the number of VCs awarded, and the comradeship linking people of all backgrounds, faiths and cultures in a common aim. Yet on the other hand, it represents the futility of war: the immense loss of life and the squandering of so much potential—all for five miles of land which was then surrendered back in the blink of an eye to the Germans in the spring of 1918. A ridge that had cost so much blood was abandoned without a shot being fired.
Many organisations are involved in the commemoration of this great battle. I mentioned earlier the exceptional work of the Commonwealth War Graves Commission, to which should be added the War Memorials Trust which works so hard to maintain the war memorials across the United Kingdom that house forever the names of the fallen. The BBC and the Royal British Legion have played significant roles as well. The Imperial War Museum—I declare my interest as a trustee of the IWM Foundation—has this year put in place a comprehensive programme of commemoration and education. It has supported organisations across the world through the First World War Centenary Partnership, not least to bring alive for today’s young people the horror of this campaign through film, images and social media. Its Lives of the First World War project contains a permanent digital memorial to all those who sacrificed so much on the Ypres Salient in those deadly days of 1917. Their story lives on, too, in the museum’s remarkable First World War galleries.
I commend the work of my noble friend the Minister and the Department for Digital, Culture, Media and Sport. Together with the indefatigable work of Dr Andrew Murrison MP, they have done so much to make the commemoration of Passchendaele and all the significant milestones of the Great War, of which we have more to come next year, utterly memorable. I look forward to hearing from my noble friend more of what the Government have done and what impact they judge it to have had, particularly in terms of the education of young people. The department and the other organisations have between them generated a huge and almost insatiable public interest in the record of the sacrifice and heroism of those who died a century ago. I hope that today’s debate will contribute to the powerful record of commemoration of that fateful year, one which all those who are privileged to sit in this House, in this seat of freedom and democracy, should revere for all time.
Let me finish where I started, back at the Memorial to the Missing at the Menin Gate. It was opened in July 1927 with words of comfort for those who were never recovered from the battlefield: “He is not missing; he is here”. I like to think that all those who fell are here with us today.
Baroness Andrews (Lab)
My Lords, I congratulate the noble Lord on securing this debate and the very powerful way in which he has introduced it. It is an opportunity for us to reflect on this defining moment of the 20th century. I hope that he will forgive me if I cast my net slightly wider to talk a bit about the war in general as well as the battle of Passchendaele. I want, in particular, to talk about the way in which communities across the country have commemorated the war and about the role of the Heritage Lottery Fund and what it has done to make that possible. I declare an interest as chair of the Heritage Lottery Fund committee for Wales.
In introducing the debate, the noble Lord created some very graphic pictures for us. The casualty figures are of course still debated, but I think they seem to have settled at around 500,000 men lost in those first three months to October. The battle was dignified as the Third Battle of Ypres—we know it as Passchendaele. It has become associated with the story of those thousands who drowned in the mud. The mud itself became synonymous with the battle. Many others were sickened to death or froze. It was the last battle of Kitchener’s volunteer army, so it has a more poignant aspect as well. It was a reprise of the Somme, but it was worse. Although fewer men died, they died in worse conditions. It divided Lloyd George from Haig. So we must continue to ask whether it was necessary and why it was so prolonged. The noble Lord is right that much of the burden was borne by Commonwealth troops. Australia lost more men in the first few days of that battle than in the eight months at Gallipoli. The Canadians suffered equally.
The Great War continues to invade our minds, never more so than the past four years. Passchendaele is different, though. It is the battle that really grips us, and it will always do so. In the images of that hellish landscape, where the trees were—as Blunden, who survived the war, wrote—as “described by Dante”, the poetry of the war is imprinted in our minds, our imagination and our national psyche. No one who watched the ceremony at Ypres in July will ever be able to forget the words and images revealed through the incessant rain that was projected on to the great Cloth Hall. I felt then, as I do now, that in remembering the Great War we have to remember all those who fought and died. In his great anti-war novel, All Quiet on the Western Front, Erich Remarque might have been speaking of young men on all sides of the conflict when he described how his generation of young Germans was betrayed by the older generation who took them to war, when he wrote that,
“in our hearts we trusted them. The idea of authority, which they represented, was associated in our minds with a greater insight and a more humane wisdom. But the first death we saw shattered this belief. We had to recognise that our generation was more to be trusted than theirs … The first bombardment showed us our mistake, and under it the world as they had taught it to us broke in pieces”.
As I said, the Battle of Passchendaele was a defining moment for the 20th century. It is very easy to be overwhelmed by the scale. The quality of the talent lost, as the noble Lord described so beautifully, cannot be quantified: the best of physicists—men such as Henry Moseley; the best of poets, mathematicians and musicians; the brilliant son of the Prime Minister; and that golden generation. But when we seek to commemorate, it is vital that we ask who as well as what we commemorate. So far history has not given much space to the memory and experiences of the many, many more who also had such a lot to give—until now. The past three years have enabled some of this to be revealed for the first time, made possible in large part by the Heritage Lottery Fund and those who faithfully play the National Lottery, who deserve our most grateful thanks.
I will give the House some figures. Since April 2010 the Heritage Lottery Fund has awarded £90 million to more than 1,700 projects. In Wales alone, 100 grants have been made, totalling well over £1 million. Some of these have been massive capital grants, not least for the galleries and the Imperial War Museum, as well as the £15 million that went to the National Museum of the Royal Navy to save “HMS Caroline”. Just as important has been the £11 million awarded to 1,300 community projects, involving 7 million people drawn from every type of community in Britain: disability groups, Muslim groups, African groups, veterans’ groups, civic trusts, women’s health groups, YMCAs, prisoner education groups, faith groups and refugee councils. The research they have done has uncovered the most extraordinary stories of Indian, African and Caribbean soldiers, conscientious objectors, refugees in the UK, the German communities, advancements in medicine and race riots in Liverpool. For the first time they have brought into the light—as Sassoon described it—the names on the war memorials. They have told their stories for the first time, in oral and written form, in photographs, exhibitions, plays and films. With regard to Passchendaele, grants have been made, for example, to Portsmouth Poetry and Portsmouth Cathedral in partnership to put on a specific exhibition and film, and to the Whilton Local History Society to research the life of a local hero, Captain Henry Reynolds VC.
Finally, I turn to Wales and Passchendaele. Four thousand Welshmen died on the first day of the battle alone. Among those who died, as the noble Lord said, was a young man who was already a great poet: Hedd Wyn. He had volunteered to spare his younger brother from the war. He died, as so many other compatriots did, at Pilckem Ridge, not knowing that he would be shortly awarded Wales’ greatest prize—the Bardic Chair at the National Eisteddfod—for a poem that he posted from the battlefield. His bardic name was Hedd Wyn; his given name was Ellis Evans. His death, announced at the National Eisteddfod in Birkenhead in September 1917, came immediately to stand for what all Wales had lost.
As the years have gone by, more and more people have climbed the mountain to the farmhouse near Trawsfynydd where he lived with his family, which has been cared for lovingly by his nephew Gerald Williams. The farmhouse, Yr Ysgwrn, was given to the Snowdonia National Park a few years ago by Mr Williams, who deserves our great thanks for all he has done for Wales. I am delighted to say that this year the HLF, through the £3 million grant we were able to make, has worked with many people to conserve the cottage and the Bardic Chair, which he never occupied. The barns have become museums and places where young and old can learn about Hedd Wyn, his poetry and his life and times.
Contrast that with the unknown story of Mr William O’Brien, a policeman living and working in the small village of Abersychan in Gwent, who joined the Grenadier Guards and who was killed at Passchendaele just three days after Hedd Wyn. He wrote regularly to his girlfriend Rose, and his correspondence gives an intimate view of life on the front line—the routine and the traumatic—and his longing to come home to Rose. His letters are in the Gwent Archives and, with an HLF grant, children from Victoria Village Primary School and Ysgol Bryn Onnen have made a series of films. They have created a guided walk around the places that would have been known to Rose and William, and they have researched and created a roll of honour to the other men from Abersychan who gave their lives but who never had a war memorial.
Many of those who died at Passchendaele are remembered on the gravestones of Artillery Wood Cemetery. But, thanks to the huge efforts that have gone into remembering and commemorating in so many different ways, we have been able to bring the war back into the foreground of memory. People have discovered the hidden biographies and the lasting impacts. In the play “The History Boys”, one of them says that commemoration enables us only to remember, not to explain. But I think what has happened in the commemoration of the war contradicts this. In researching the war, and this battle, we have gone beyond commemoration to a greater understanding—perhaps not of the strategy of disaster but of what war did to those who fought and died or were left behind. I hope that this determination and duty to explain what we can as best as we can, to find the truth where it can be found, will intensify throughout the rest of the commemoration.
Baroness Brinton (LD)
I, too, congratulate the noble Lord, Lord Black, for arranging this debate on an important topic. It is important not just to commemorate the past but to consider the present for our service men and women. I do not think that any of your Lordships would disagree with the fact that Passchendaele was a tragedy, with bloodshed and casualties that were excessive even by First World War standards.
One hundred years on, some have expressed the view that perhaps the sickening inhumanities should now be left on the battlefield, but Passchendaele lived on in the minds of its survivors and their families down the years. It left permanent scars on those who fought through it, plaguing their brains with lifelong nightmares that they could not escape, even in broad daylight. The psychological trauma initially had no name, other than shame, until it grew to be known as shell shock. We now know it as post-traumatic stress disorder. Unfortunately, we have a name for it because it still exists. Passchendaele was not the end of combat-caused mental illness. One would think that perhaps over the last century the nature of war would change or at least the numbers of those suffering from PTSD would decrease as advanced medical treatments and rehabilitation therapy became more readily available, but this does not seem to be the case. The dreadful experiences that our service men and women face remain common even 100 years later.
We know about the horrific sights, sounds and smells that those on the front lines of Passchendaele experienced because soldiers documented those experiences in writing. In my family, my grandfather, Arthur Coningham, wrote home to his mother throughout World War I. His writings covered everything from roughly drawn maps of the difficult terrain to describing the sadness he felt—far too often—when a friend or fellow soldier died. Other soldiers have used their writing to describe their endured suffering as well, including Siegfried Sassoon and Wilfred Owen. Their poems presented graphic and heavily realistic images of what trench warfare was like for those who lived within it. Sassoon’s poem “Sick Leave” specifically explains the torture of shell shock. It was written when he was in Craiglockhart Hospital with shell shock. I believe it bears reading:
“When I’m asleep, dreaming and lulled and warm,
They come, the homeless ones, the noiseless dead.
While the dim charging breakers of the storm
Bellow and drone and rumble overhead,
Out of the gloom they gather about my bed.
They whisper to my heart; their thoughts are mine.
‘Why are you here with all your watches ended?
From Ypres to Frise we sought you in the Line.’
In bitter safety I awake, unfriended;
And while the dawn begins with slashing rain
I think of the Battalion in the mud.
‘When are you going out to them again?
Are they not still your brothers through our blood?’”.
Wilfrid Owen’s “Dulce et Decorum Est” describes a poison-gas attack, the title giving a bitter twist to Horace’s ancient line:
“It is a sweet and proper thing to die for one’s country”.
Owen and Sassoon were unusual in their blunt way of speaking; it was not usual to be so blunt at the time. Either physically or mentally, it was much more important to keep that stiff upper lip. Ordinary combatants—although I suspect that none was truly ordinary—faced horrors that very few of us are asked to see or do, and to keep their feelings muted when they wrote home regularly.
My grandfather Arthur was no exception. He told his mother everything, as far as the censors would allow. He was a New Zealander and joined the Anzacs within days of war being declared. He had seen active service in Samoa in August 1914 and taken part in Gallipoli in 1916. He returned home at that point because his health, physical and mental, had completely broken down. But he was determined not to give up and made his own way back to England, joining the RFC in late 1916. Promoted to captain, he was making his mark as a fearless flyer and strong leader of men as Passchendaele began and the Army moved in on the ground in preparation for the Third Battle of Ypres. He was awarded the Military Cross for outstanding work on his 96th patrol, leading his men and the patrol to take on German fighters. This young man wrote to his mother:
“A great life. Am in for the MC or something, so the Colonel says, and he ought to know. Bucked as old Harry ... am looking ahead a little, Mum, (optimism!) but will be able to send you a cable the day of the investiture just for luck”.
He goes on in the same letter:
“Friday is a day I dread almost as much as Sunday, but it has been a lucky one today. But we must get on. Beginning to dislike talking of the number of officers down, Mum, but I always tell you”.
This was code because on Fridays and Sundays, deaths were discussed and talked about but not during the rest of the week.
A fortnight later on 30 July, he and his patrol downed two Germans. During the dogfight, he was hit by a bullet in his head. Despite losing blood, he continued flying for another half-hour and even managed to land his plane before losing consciousness and being taken to hospital. We have his letters to my great-grandmother as he recovered, as well as this delightfully positive note from RFC HQ:
“Dear Coningham, I am very sorry to hear that you have been wounded in the head. I hope it does not give you too much pain and that you are feeling better and fairly comfortable now, and will be fit again soon, yours sincerely”.
This was followed with the announcement of the award of a DSO to add to his MC. The note said that,
“the Army Commander was frightfully pleased with your show”.
As my noble friend Lord Addington said to me the other day, it really begins to sound like Biggles. Yet that bravery was covering up the personal cost. That November, in writing home to his old school, Wellington College in New Zealand, he said:
“I am prouder of being spared to keep up the reputation of the College and of New Zealand than of anything else. It is a treat to have one’s efforts recognised, but at the same time … saddening to think of all the other real top notches not so fortunate”.
He felt like that for the rest of his life.
The one clear message echoing down the century since Passchendaele is “Never again”, and yet the Second World War followed not too long after. Once again, the world said “Never again”, yet British service men and women still face physical and mental traumas following active service in Afghanistan, Iraq and elsewhere. The military understand and accept that mental health is vital. I am encouraged that over 6,000 service men and women are trained mental health first-aiders—including Prince Harry and my own daughter, who is a current Army officer.
We cannot remove the horrors of war, but perhaps we can help those who serve their country to recover from their experience. We also need to ensure that veterans get prompt and proper access to mental health services once they have left, but that is just not happening: shame to us as a society. We have to do better for our military, our veterans and our citizens, and for the rest of the world. We do this by having debates like this one and commemorating Passchendaele, not least to remind us how precious peace is to the world. What plans are there to mark the role of the RFC and that of the doctors at Craiglockhart and other places, who helped us to understand mental health problems 100 years ago? The voices of Sassoon, Owen and ordinary combatants such as my grandfather still need to be heard and heeded today. That would be a true memorial for Passchendaele.
Lord West of Spithead (Lab)
My Lords, it is a privilege to speak in this debate commemorating the fearsome Battle of Passchendaele. As the noble Lord, Lord Black, mentioned in his very powerful opening speech, it epitomized the horror of trench warfare and combat on the Western Front during the First World War, but of course there was more to it than that. The fortitude and bravery of our men who were involved in the battle is very humbling but in hindsight, one has to wonder about how the battle was allowed to continue for over three months when it became clear in the first few weeks that there was limited strategic advantage to be won.
By that time of the war the British Army had begun to understand modern industrial-scale war, and the limited assault on the Messines ridge on 7 June 1917, using huge mines tunnelled under German positions and tanks, was a major tactical success. We were getting better at fighting tactically but fighting in a quagmire, created by nature and man, where tanks could not be used and men were bogged down—constrained by barbed wire and enemy blockhouses—was never going to achieve a strategic success. However, it did attrit and demoralise the German forces, far more than I think was realised at the time.
As has been said, one key reason for the battle was a desire to reach the Channel coast and stop German U-boats operating from ports there. Why was that considered so important? The Battle of Jutland, fought in the North Sea in mid-1916, had effectively decided the outcome of the war. The Germans knew their key adversary, which they had made clear was Britain, could be conquered only if they could defeat the Royal Navy. The Battle of Jutland, though not the crushing victory of annihilation that Britain expected, left the Navy pre-eminent and the Germans realized this.
On 22 December 1916, Admiral von Holtzendorff composed a memorandum which became the pivotal document for Germany’s resumption of unrestricted U-boat warfare in 1917. He proposed defeating Britain by sinking 600,000 tonnes of shipping per month, based on a study done in 1916 by Dr Richard Fuss, who had shown that if merchant shipping was sunk at such a rate, Britain would run out of ships and be forced to sue for peace within six months, well before the Americans—who were likely to enter the conflict because of the unrestricted U-boat campaign—could act. As an aside, is it not amazing that we had a shipbuilding industry that could build up to 600,000 tonnes of shipping each month? I leave your Lordships to reflect on where our shipbuilding industry is now.
On 9 January 1917, the Kaiser met with Chancellor Bethmann Hollweg and the military leaders to discuss measures to resolve Germany’s increasingly grim war situation. The German navy was bottled up in Kiel and the British blockade had caused food scarcity, which I am afraid in turn caused death by malnutrition in Germany. It is horrifying to think that by 1918, 900,000 German civilians had died of malnutrition as a result of the British blockade. There was a shortage of machine tools, copper and other essentials, which led to revolution and collapse within Germany. The German military staff urged the Kaiser to unleash the submarine fleet and on 31 January 1917, he duly signed the order for unrestricted submarine warfare, which started on 1 February. Germany had 105 submarines ready for action, of which 23 were based in Flanders. Its initial campaign was hugely successful: 500,000 tonnes of shipping was sunk in both February and March, and 860,000 tonnes in April, when Britain’s supplies of wheat went down below six weeks-worth. In May, the losses exceeded 600,000 tonnes and in June, 700,000 tonnes. Again, it is worth thinking that we still rely on ships for everything that comes into this country, 95% of which by volume comes by sea. We forget that at our peril.
By June 1917, there was a real possibility that Britain would be starved into surrender in a matter of weeks, and although the USA joined the allies in April as a result of the German campaign and the Zimmermann telegram, it was months before they could bring any military power to bear. At first, the British Admiralty failed to respond to the German offensive, refusing to consider widespread convoying. That changed on 27 April. In May and June a regular convoy system was established and after July, the monthly losses never exceeded 500,000 tonnes, although they remained above 300,000 tonnes.
With hindsight, we can see that the risk of Britain’s defeat by U-boats had been overcome by July, at the end of which the Battle of Passchendaele started. But when the battle was being planned there was a very real possibility of British defeat, and any action at all that could have some impact on the U-boats was worth considering, even a major battle such as Passchendaele, because if we did not stop the U-boat threat, Britain was going to be defeated.
When the Battle of Passchendaele juddered to a halt on 6 November, our gallant troops were no nearer to the key ports on the north Belgian coast, and for the loss of some 300,000 men or slightly more—the figure is disputed—the Ypres salient had been slightly expanded, by about five miles. However, many lessons had been learned and reinforced, and there were no more huge, meaningless, old-style offensive battles by the British in World War I.
By 1918, the British Empire Army was the best Army in the world. Having stopped the German spring offensive, it drove the German army back across the Siegfried line, defeating it daily, month on month, until the Armistice on 11 November. So perhaps Passchendaele had not been completely in vain, but it is completely appropriate that we should remember the gallant sacrifice of so many brave men during that battle.
The Lord Bishop of Derby
My Lords, I, too, thank the noble Lord, Lord Black of Brentwood, and associate myself with the lovely phrase that it is both a privilege and very humbling to be part of this remembrance.
Passchendaele is, as we have heard, a symbol of war: the human cost, the sheer complexity of leadership and the sheer complexity of operations. Commemoration is not simply to remember but, as the noble Lord, Lord West, has just pointed out, to learn, to take something, to honour what people gave in their lives and commitment, and to see how that can inspire us and point us forward positively. It is a sign of huge issues in international relations, warfare and military and political leadership.
I want to offer some kind of commemoration and a platform for learning and looking to the future through what noble Lords might think is rather an esoteric and peculiar lens, although they will not disassociate it from me: the lens of chaplaincy. Chaplaincy was in one sense, almost totally peripheral. The soldiers were fighting and there were commanders and politicians, and chaplains could be seen as scrabbling around the edge, adding perhaps very little value. Yet it is a lens that allows us to ask some important questions.
In Derbyshire, where I live and work, we produced a book for the period from 1914 to 1918 which collected memories, like those we heard from the noble Baroness, Lady Brinton, and others, so that people could reflect, remember and perhaps learn. There is a lovely diary entry from someone called Harold Blaylock about all things we know—the mud and the frustration—but also about the laughter and the fun that they had to try to make to survive. There are lovely stories about chaplains burying German soldiers as well as English dead. There are some very important insights about when the dead were buried in shallow graves—the noble Lord, Lord Black, mentioned how many people have never been found—an effort was made every time to write their name down, put it in a bottle and make some kind of stopper, and then put the bottle in with the body. One wonders how many millions of bottles there were and how many survive. They reflect the deep human instinct to preserve the preciousness of each person.
The chaplains were faced with not just the big issues of international relations, political judgment and military tactics but with issues that affected everybody on the battlefield about life and death, good and evil and how life can have any meaning in all that mess, which is what so many of the letters and memories were about. The Church of England tried to learn because in 1917, before Passchendaele, it set up a school for chaplaincy, having gone through the first couple of years of the war thinking it knew what to do. We obviously had to learn and to do it better.
An example I want to share with the House comes from just before the battle. It is the practice developed by Geoffrey Studdert Kennedy, whom noble Lords may know as Woodbine Willie. He was very famous. He had been a vicar in Worcester. He was called up, and he went to be a chaplain in the First World War. He was stationed in Rouen. That is where the men assembled or came back to for rest. They went on trains to the front, into all the horror that the noble Lord, Lord Black, described so powerfully. How could you be a chaplain to people in Rouen who were about to face all that or who had come back for respite? Rouen was a place of brothels and bars because when we are under stress, it is very difficult to ask the big questions about good and evil and what the mess is about and much easier to look at more immediate satisfactions and look after yourself. It is a very understandable instinct. How could you help people look at these big questions of good and evil, the meaning of life and what the mess was about? The men knew from being there what the experience would be.
Studdert Kennedy had a very interesting way of trying to help people engage with those issues. He would go to the station and there would be 600 men in the canteen waiting to get on the train. Noble Lords can imagine what they were feeling about getting on that train. He had a lovely voice, and he would go to the piano, start playing and get them all singing. That is a bit like what can happen in a good church service sometimes. You lift people out of themselves and create a spirit of connection and hopefulness and of being in it together. You create a situation of being accompanied on a pilgrimage and not being alone. Studdert Kennedy got them singing and created a spirit that enabled the men to feel they were part of a movement that was worth being part of. After the singing that had created that atmosphere of solidarity, he would stand on a chair and say, “If anybody wants to give me the name and address of a loved one, when you’ve gone and while you’re at the front, I’ll write to say that I’ve seen you and you’re okay”. A huge queue would form. Studdert Kennedy understood that within these big questions of good and evil, right and wrong and mess, each of us needs to know that we are precious, that we can be loved and that we can give love to other people. He would spend several days afterwards writing all those letters to say, “I saw so-and-so, and he wanted you to know he’s all right and has gone to fight. I’ll pray for him”. Each person is precious and needs to be loved.
Then, when they got on the train, before it went, he went down the whole train with two rucksacks on his back. In one were Woodbines, and he gave everybody a packet of Woodbines. That just shows that the Church, like everyone, is not immune from making serious mistakes in trying to be kind and good to people, and we certainly would not be giving Woodbines to people today, but the pastoral thing is to say, “Here’s something for you which in your culture at this moment might be a comfort”. From the other rucksack, he gave the men copies of the New Testament. Why did he do such a bizarre thing? Of course, the New Testament is a story of these huge issues, of suffering that can lead to hope and of evil that can emerge in goodness. It appeals to that spirit of solidarity, that preciousness of each person. That is what Studdert Kennedy tried to understand. It gives people a chance to step into a story that is full of all the horrors, the big picture and the little picture, but where hope keeps rising in human hearts and life can triumph over death. That was his offering. He did not tell the men that; he just gave them a book and they could read it or not—they could throw it away—but in it there was a place where these deep questions could be explored and the men could step into that story themselves, facing they knew not what.
Chaplaincy will always be a peripheral thing, I suspect, but it is worth remembering and trying to learn, as we reflect on the sheer horror painted so graphically and eloquently by the noble Lord, Lord Black, that in the human hearts that we are commemorating and saying thank you for, there was powerful witness about solidarity and a spirit of togetherness—a powerful sign of the preciousness of each person and the fact that we, and they, are in a story. We are here today speaking because we believe that hope can triumph over suffering and that life emerges out of death. That is something that we need to put in our remembrance and renew our commitment to in honour of all those who gave their lives for us at Passchendaele.
Lord Hutton of Furness (Lab)
My Lords, I warmly congratulate the noble Lord, Lord Black of Brentwood, on calling this debate, and on the tone of his remarks; he made a powerful and moving speech. Indeed, we have heard several such speeches today. Like him and others, I feel it is a great personal privilege to be able to speak today as we commemorate the third Battle of Ypres, the battle that became known as Passchendaele. I congratulate all those who have been involved in the commemoration events so far, both here and abroad. My noble friend Lady Andrews has reminded us of the excellent work of the English Heritage Lottery Fund as well.
What we are doing today in commemorating these events is truly right and proper. It is 100 years since that terrible battle took place. When we commit ourselves to acts of commemoration, even when we have debates in this Chamber, we strengthen the bonds that separate us now from our grandfathers and great-grandfathers who served with such distinction in the battle. As many others have said, arguments continue to rage over whether what was achieved during the titanic struggle in the second half of 1917 at Ypres was worth the cost. Every aspect of the battle—its inception, execution and continuance—has become a matter of great historical and public controversy. However, the commemorations of the battle are probably neither the time nor the place to take that controversy forward. Instead, our purpose should be to reflect on the courage, humanity and sacrifice of those who fought at Passchendaele, people from every part of our country and the Commonwealth, from every walk of life.
When I was thinking about saying a few words today, I thought the best words for us to hear were not mine—everyone would probably agree—but of those who fought, many of whom died. Sergeant John Carmichael of the 9th Battalion of the North Staffordshire Regiment was serving in September 1917 on Hill 60 on the Ypres battlefield. He was supervising a working party of his men who came across a grenade while digging a new communication trench. These are his words:
“One of the chaps was deepening the trench when his spade struck an unexploded grenade … and it started to fizz … I knew that there would be seven seconds before it went off unless I did something. I couldn’t throw it out, because there were men working outside the trench … All I had was my steel helmet. So I took it off my head, put it over the grenade as it was fizzing away, and stood on it … They tell me it blew me right out of the trench”.
When he woke up in hospital, he wrote a letter to his mother in Airdrie saying that he was fine and well, but he forgot to tell her that he had been awarded the Victoria Cross for his actions.
When it comes to humanity, I cannot think of anything more powerful than the image described by Private Bill Smith, who was serving with the 2nd New Zealand Machine Gun Company in October 1917. As the fighting inched its way towards Passchendaele Ridge, he witnessed something that still makes the hairs on the back of my neck stand up. He said: “We took advantage of a lull to lug three or four of our wounded mates down to Waterloo Farm, where our part in the advance had started the morning before … what a sight the place presented. Now we saw that it was a mass of shell holes full of water, and on the parts of firm ground between the holes there were scores, even hundreds, of wounded men lying there, 40 and also by their mates. In front, there were long lines of Northumberland Fusiliers and Durham Light Infantry, lying dead almost in formation when they had been mown down like wheat. Amid the fury and shelling, the Maoris were there. They had formed relays to get the wounded out but there were no stretchers, so they carried them to safety in their arms like children”.
Another example of humanity that really touched me was reported by Rifleman Jim Maxwell of the 11th Battalion The Rifle Brigade. Early in the battle he and his mates were laying new tracks to take materials up to the front line. He said:
“By dusk, we’d been at that job for eight hours or more and the wounded were still coming down. Two of the RAMC stopped just by our working party. They were carrying a young German private, obviously very seriously wounded. They laid the stretcher down … and asked if anyone spoke German. Our lance-corporal said, ‘Yes, I can speak a bit.’ ... one of them said, ‘Well, just have a word with this lad if you can, will you?’ So he bent over the stretcher”,
held the young German soldier’s hand,
“and said something to this boy. Some words of comfort in German. And the boy looked at him, and he said just one word, ‘Mutti’”—
“Mum”.
“Then he died. We knocked off, but I kept thinking about him”—
this young German boy.
“They were in the same boat as ourselves”.
When it comes to sacrifice, one thinks of the First Battalion the Hertfordshire Regiment, which took part in the fighting at St Julien the beginning of the battle. Company Quartermaster Sergeant George Fisher, who was to survive the battle, was given rations to take up to his battalion. After several hours of work, George found his way to brigade headquarters. He said:
“‘I went down the stairs, saluted the Brigadier”—
usually a good thing to do—
“told him who I was and said, ‘Could you give me any instructions, sir, that would help me find my battalion?’. He just stood and looked at me. We were both standing on the steps and the pillbox was rocking like a boat in a rough sea with explosions. He said, ‘I’m sorry, Quarters, I’m afraid there isn’t any Hertfordshire Regiment”.
Of the 650 men who had begun the attack that morning, only a handful ever returned.
Those are some of the many poignant and moving stories that can be found about the battle of Passchendaele. Many things divide us in our country today, be they politics, faith, religion or whatever, but I hope our shared history, the recognition of the service and sacrifice of previous generations, should never be a cause for division.
Lord Lexden (Con)
My Lords, my noble friend Lord Black of Brentwood, to whom we are indebted for this debate, summarised the course of a truly terrible battle and the reasons why it must be held firmly and for ever in the public memory with his customary clarity and skill in his opening speech, which others have described quite rightly as most moving and powerful. The third Battle of Ypres came to be known at once by the name of the final ridge conquered at the end of it with huge loss of life. It is not difficult to argue that this final attack should never have been attempted; indeed, that was the view of the Canadian general who, in reluctant obedience to orders, led the assault. As my noble friend Lord Black remarked, a few months later that hard-won ridge was quietly evacuated without a German in sight.
Passchendaele: it is as if providence itself decreed that that should be the name to ensure that this terrible battle would reverberate powerfully down the years, stirring feelings of pride and outrage generation by generation—pride in the wonderful courage of our forebears fighting in defence of freedom; outrage that they should have been called upon to endure so much wretchedness and agony because of the battle’s flawed strategy and tactics for which both generals and politicians bore responsibility, each indecently seeking to pass the blame to the other when held to account.
In this year of commemoration, as the noble Lord, Lord Hutton, reminded us, we must also remember the formidable German forces ranged against Douglas Haig’s great Army. They too suffered most grievously in the same dreadful conditions. A British pilot flying over the battlefield said:
“It’s just not conceivable how human beings can exist in such a swamp, let alone fight in it”.
Our opponents were also caught in that ghastly swamp. Nick Lloyd’s new history of Passchendaele, published a few months ago, to which my noble friend Lord Black referred, is the first study in English to make full use of German archives, and it provides a superb account of the battle on both sides. He writes:
“the German soldier had to cope with the perils of seemingly endless drumfire, poison gas and low-flying aircraft … Even the best units could be reduced to a shambling, lice-ridden bunch of stragglers after a few days on the battlefield”.
The well-worn defence of appallingly high First World War casualty rates is that important military lessons were learned from them which assisted our ultimate victory in 1918. It is not obvious that Douglas Haig progressed to victory by absorbing useful lessons along his bloodstained path. He adopted more or less the same tactics at Passchendaele as he had a year earlier at the Somme—with better artillery but in much worse weather.
“It was the Somme all over again, except that a Somme battle fought knee-deep in marsh was so much the worse”,
wrote one officer who took part in both. A Private Carter recalled that,
“the ground very much resembled that of the Somme, every yard being churned up by shells, the only difference was that many of the holes were a good deal bigger”.
Should not a fearful question lurk at the back of the mind when comments by the combatants are read today: how would I have acquitted myself in those frightful circumstances? It is a question that goes to the very heart of the matter and should induce great humility in us, as other speakers have mentioned.
Then, as now, Douglas Haig had many critics. In 1917, they were lead in Cabinet by the Prime Minister, David Lloyd George. His dynamism and originality stood in stark contrast to Hague’s stubborn stolidity. The Welsh wizard was completely opposed to a long, large-scale campaign in Flanders in 1917. Lloyd George argued against Haig’s ambitious plans for a decisive breakthrough in the War Cabinet which he himself had created. At any point during the long battle he could have brought it to a halt. Why did he not?
Lloyd George later gave a number of reasons. Haig, a highly political soldier, cultivated newspaper proprietors. He enjoyed strong support within the Conservative Party, known almost universally at the time as the Unionist Party, on whose votes Lloyd George’s coalition Government depended. Nearly 20 years later, in a long section of his war memoirs, Lloyd George furiously denounced Haig’s conduct of the battle while insisting that he had not been in a sufficiently strong position to dismiss a commander in whom he had no confidence. By and large, historians have been unimpressed. His latest biographer, Roy Hattersley, our own Lord Hattersley, writes that, “had Lloyd George done what he knew to be right, he would almost certainly have succeeded in imposing his views on policy either by insisting on a change of strategy or making a change in the high command”.
Those who look to historians for a final, definitive verdict on Passchendaele will continue to be disappointed. More than 50 years ago the distinguished Tory historian, Robert Blake, later a Member of this House, wrote that, “Historians will long argue as to whether Passchendaele on balance weakened most of the British or the German Army. If there had been no Passchendaele, would the British have been better able to withstand the German offensive of spring 1918 or would the Germans have been in a better position to exploit their early successes and perhaps roll the British Army into the sea? No clear answer”, Lord Blake concluded, “has been, perhaps ever can be, given to this question”.
What can be said with some certainty is that neither the British Prime Minister nor the British commander-in-chief served our long-suffering soldiers well while this terrible battle raged 100 years ago. How different everything would have been if we had had a Wellington.
Lord Murphy of Torfaen (Lab)
My Lords, it is always an enormous pleasure to follow the noble Lord, Lord Lexden, who made a fascinating contribution, as have been all the speeches made so far in this Chamber.
For about three or four years now, a good friend of mine and councillor, Stuart Cameron, has been compiling a register of those in the eastern valley of Monmouthshire, my former constituency of Torfaen in South Wales, who perished during the Great War. In her very good contribution, my noble friend Lady Andrews referred to those who came from my home village of Abersychan in Monmouthshire. They, too, are commemorated by the register that Mr Cameron has been compiling.
I had a look at that register for the months of July to November 1917, covering, of course, the third Battle of Ypres. I discovered that at least 50 young men from my valley perished in that battle. That is 50 in a relatively small part of our country. Tragically, too, of those 50, seven of the men who died had brothers who had also died during the course of the war. Most of them were coal miners. Of course, the majority of coal miners were in a reserved occupation, as my grandparents were: they were finding the coal to fuel the ships to which my noble friend Lord West referred. Others, though, joined up. We have heard today of the poets and mathematicians, and the other tragic stories of people who died, but this is also the story of coal miners, steelworkers and other working-class boys who lost their lives at the same time. Most of those eastern valley men are buried in Tyne Cot, near the town of Ypres. They came from different regiments, but mostly from the South Wales Borderers or from Second Battalion, Monmouthshire Regiment.
The successor to those regiments is the Royal Regiment of Wales, and I have the great privilege of being the local president of the association of that regiment, led as it is by Captain Lewis Freeman and Mr David Thomas. They recently visited Passchendaele and Ypres, and this afternoon gives us an opportunity to pay tribute to those veterans’ organisations up and down the land—involving veterans who have fought in more recent battles than even the Second World War, to whom I think we should pay tribute on this occasion.
Almost exactly 50 years ago, I visited Menin Gate in Ypres for the first time and saw the ceremony of the Last Post. The veterans I saw lined up then to pay tribute to their comrades who had died were themselves veterans of the First World War. It is interesting to note now that when we return to the Menin Gate, year after year, there are literally hundreds of young people from our country and the Commonwealth who commemorate those who, a century ago, lost their lives. I wonder whether, if the same thing had happened at the beginning of the 20th century, people would, 100 years later, have commemorated Waterloo or Trafalgar. I doubt it. The reason is, of course, that those who fought and lost their lives in the Great War came from a much wider section of society, and hardly a family was unaffected by death or misery as a consequence of that war. Indeed, at the 90th commemoration of the Somme battle, the Last Post Association in Ypres visited Cwmbran, my home town, and played their part in the commemoration.
In some parts, as the noble Lord, Lord Lexden, said, the third Battle of Ypres was even worse than the Battle of the Somme. The divisional historian of the Monmouthshire Regiment, just a few years after the Battle of Passchendaele, wrote this:
“By universal consent, the Third Battle of Ypres represents the utmost that war has so far achieved in the way of horrors … the cramped theatre with its slimy canals, becks, bogs and inundations; its shelled duck-boards; its isolated outposts; its incessant shelling and incessant rain; its mists and fogs; its corpses and its pestilential miasmic odours outdid anything that the Somme or Arras could boast”.
That moved me when I read it last week in a very old history of the Monmouthshire Regiment, which endured five months under those circumstances. Rightly so, its battle honours included the title “Ypres, 1917”. That was richly deserved.
Our debate today plays its small part in our country’s tribute and remembrance of those brave men who fell on the fields of Flanders a century ago.
Viscount Simon (Lab)
My Lords, the noble Lord, Lord Black, whose debate this is, and other noble Lords mentioned Siegfried Sassoon. I went to school with his son in the 1940s. Siegfried Sassoon used to come around quite regularly but we knew nothing about Passchendaele at that time, which I find quite extraordinary knowing about it now.
The third Battle of Ypres, which the troops called “Wipers”, was the largest military operation in 1917, involving British and French armies for three and a half months in a series of operations to the east and north-east of Ypres. This battle is, historically, one remembered by all Australians for certain reasons which I shall try to address. This is completely different from what we have discussed so far.
Two battalions of the 3rd Australian Division were involved in the battle and their artillery formations contributed to the massive artillery bombardment for a fortnight. Some 4.25 million shells were fired from some 3,000 guns. The opening attack involved 17 divisions across a 17-mile front. The British Army captured the lower features east of Ypres but the massive bombardment destroyed the drainage system, with offensive stalling on 27 August, as the result of which flooding reduced the battlefield to a vast quagmire within a few days. The total British casualties at the end of August amounted to almost 70,000.
Hell on earth has a name—Passchendaele, the suffering of Christ—and suffering it was. The offensive continued until late November with 11 major attacks in which 1 and 11 Anzac Corps formed the spearhead of five, with the majority fought in appalling weather conditions and the notorious Flanders mud. The Australian divisions were involved in lots of battles in which huge numbers were killed or injured. I wonder how many people are aware of the fact that in October 1917 alone more than 6,800 Australians were killed.
Including a preliminary operation on 7 June, the third Ypres offensive cost the British Army approximately 275,000 casualties, with about 70,000 deaths. It is interesting to learn that the German army is estimated to have suffered a total of about 200,000 casualties and, of extreme relevance, 35 Australians were killed for every metre of ground taken. Nine of the Victoria Crosses awarded were to Australians.
The strategic gains were minimal and the captured Passchendaele salient constituted a defensive liability, exposed as it was to the German artillery fire. Within a month of its capture the British high command was considering a withdrawal to get a better defensive line. In March 1918, the German army launched a massive offensive and quickly overran the region. In the words of a couple of Australian military historians:
“what had taken 4 months to win was evacuated in three days”.
Mounted on the concrete blockhouse at the centre of the Tyne Cot cemetery, which we have already heard about today, is the cross of sacrifice. Amid manicured gardens, lawns and 12,000 graves, including those of 1,369 Australians, it bears the plaque:
“This was the Tyne Cot blockhouse captured by the 3rd Australian Division 4th October 1917”.
Lord Addington (LD)
My Lords, I congratulate the noble Lord, Lord Black, on bringing this debate to the House. When I looked at it, I thought, “Where will I speak in it? Probably fairly low down, for all the normal reasons”. I thought, “Should I look at the stories of suffering?”. The answer was no because I know this House well and know that my colleagues would do that, and have done it extremely well. I could not add to any of these because I do not have enough special connections of my own.
However, I want to draw attention to the image that this brings up in the mind. I am just about old enough to remember parades of World War I veterans on Armistice Day. The passing of time tells me that now World War II veterans are much older than those men when they stopped doing it. We must look at the image of time and how it presents itself to us. The images coming out of Passchendaele are slightly different from those we get from the other episodes in the Great War. The initial period of “We will be home by Christmas” in bright uniforms with the French, then the terrible slaughter of the first day in the Somme, to Passchendaele, which becomes another image—of tiny men struggling in a sea of mud, making virtually no gain and dying in incredible numbers, almost for the most trivial of reasons and gains possible. That is the image that comes up.
Why did this happen? The attack—if attack is too strong, let us say criticism—of the noble Lord, Lord Lexden, on those in command at the time tells us exactly how anybody involved in any form of government or authority must always remember their responsibility to do the right thing at the right time. Taking that image back, and saying, “Do not commit these errors of judgment, and do not run away from them” is something we should also remember.
We heard from the noble Lord, Lord West, about the naval contingent in the battle in which he fought and how it brought it all together. That struck me. Passchendaele was when we were almost at total war. We did not want to get there; we resisted it and resisted rationing. We were co-ordinating and changing our lives and pretending that the war was not going on. That was something we did not do in the Second World War; we went straight in. Passchendaele brought us towards that situation. The volunteer army disappears and we are down to conscription—something we had never done before. The fact that there was a conscript national army meant that we had to reorganise our economy to fund and support the war. We had to throw everything into it.
This is what a big war costs. You have to change everything you do. You have to change your social order. Many of those changes would be applauded by many of us—women’s status was enhanced by this process. At that cost? Sometimes that is what it takes. Everything changed as a result of having a situation where men are reduced to statistics.
There is still doubt about the actual casualty figures. Although they were early 20th-century armies with mass literature and pay-books, we still do not know exactly how many died. It may be about half a million; we are not totally sure. It just goes to show how big and catastrophic this conflict was. What we take from this is that the whole nation is brought together to fund these types of activity. Everyone in power must take responsibility for the whole thing. They cannot stand back. They cannot ignore what is going on; it is not somebody else’s job. That is about the only thing I can say we can fully take forward from here. The individual suffering was catastrophic. The fact that it touched everyone is what we come back to and how the whole of society changed.
There is no way that we can remember this and try to get the full message without pointing out that the whole nation was drawn in, in a way that had never happened to us before. It was a new and traumatising moment in our history. Some people would take it as an example of what the state can do when it puts its mind to it. Half a million dead people in countries that are now our allies is quite a high price to pay for the control of the state. But let us please try to remember this when we go forward—remember exactly what was required to do this, and remember that, if we had tried really hard, we could at least have mitigated it, if not stopped it.
There are lessons to be taken here; some will be forgotten, some will be remembered properly, but we should at least challenge everybody when they talk about this and point out the fact that somebody, somewhere had to make those decisions.
Lord Faulkner of Worcester (Lab)
My Lords, I join others in thanking the noble Lord, Lord Black of Brentwood, for securing this debate, and congratulate him on his brilliant opening speech. I had the privilege of attending the two days of commemoration in Flanders on 30 and 31 July, which I went to as a member of the Government’s World War I centenary advisory board—and I shall say a bit about that in a moment. I also want to talk about other aspects of the commemoration programme, as we move towards the anniversary of the armistice in November next year.
We have been reminded today about the horror that was Passchendaele and the unimaginable scale of the casualties on the allied and German sides. After the wettest summer for 30 years, the ground under foot was a quagmire, and the mud was so deep that men and horses drowned in it—described by Siegfried Sassoon in his heart-breaking poem, “Memorial Tablet”, quoted to such effect by the noble Lord, Lord Black, in his speech.
One soldier who fought at Passchendaele and survived was Harry Patch, who died in 2009 at the age of 111, the last British survivor of the trenches. I had the privilege of meeting him in Ypres the year before, when he paid his last visit to the Western Front. His Great War service was uncovered only in 2000, when he began to talk of his wartime experiences. He was an ardent spokesman for the promotion of peace, saying that war benefits no one but merely leaves individuals and families irretrievably scarred. He travelled back to the battlefields of Ypres regularly during the last decade of his life, and attended the “Last Post” ceremony at the Menin Gate, always promoting the same message: dialogue, rather than show of arms. He agreed to meet a German veteran while in Ypres in 2006, and their coming together was a powerful symbol of reconciliation. I think that he would have agreed with David Lloyd George, about whom the noble Lord, Lord Lexden, spoke, when he described Passchendaele in his war memoirs as,
“one of the greatest disasters of the war... No soldier of any intelligence now defends this senseless campaign”.
Looking back at the commemorative events held in Flanders this summer, I would like to put on record my admiration and appreciation for everyone who made it possible for those two days to be so memorable and appropriate. I have been to many “Last Post” ceremonies at the Menin Gate, but the one on 30 July was extraordinary, as was the event in the Market Square the same evening. The digital imagery projection on the Cloth Hall was effective and striking and, by using the words of the people who were there 100 years earlier, gave a real sense of the suffering, endurance and sacrifice. The events on the following day, 31 July, were also very special. The Commonwealth War Graves Commission organised a powerful and moving ceremony at their Tyne Cot Cemetery, which, like those in Ypres the night before, was attended by members of our Royal Family and the King and Queen of Belgium, with our Prime Minister and members of the Government—one of whom was the noble Lord, Lord Ashton, I think. The commitment of all of them to ensuring that those two days were so successful reflects great credit on everyone involved, and I would particularly like to put on record my appreciation for the hard work behind the scenes of the DCMS team, Dave Thompson, Jennie Shaw and Clare Pillman, who all went the extra mile to ensure that everything worked so well.
With regard to other events going on now and planned for the coming months, the Commonwealth War Graves Commission tells me it will be doing all it can to ensure that the flame of remembrance is kept alight. I share the admiration expressed for the CWGC by other speakers in this debate. It has opened a new visitor information centre in Ypres, which was visited by the Prime Minister during the UK commemorations in July. This centre enables it to help all those who make the pilgrimage to the Ypres salient to find out more about the work of the commission and the 400 cemeteries and memorials that it cares for in that small stretch of the Western Front. The commission is placing young interns at Tyne Cot, welcoming those who visit, and telling the stories of those who fell—an initiative financed by the LIBOR fund, perhaps proving the truth of the old saying that it is an ill wind that blows nobody any good. The commission’s new charity, the CWGF, will be fundraising to continue that work, and expand it to include young people from all over the Commonwealth in 2019.
We should also express our appreciation to the Government of Flanders, who continue to be so supportive of the CWGC and of all member Government commemorations, and who have this year pledged over €3.8 million to help maintain and conserve some of the historic structures. I take this opportunity to thank them for agreeing over a decade ago to abandon plans for the extension of the A19 motorway across the Ypres salient, which would have destroyed the tranquillity of Pilckem Ridge. They did that in response to representations by Members of this House, who, with me, founded the All-Party Parliamentary Group on War Heritage in 2002. All these initiatives will help ensure that visitors to the battlefields of Flanders will continue to be able to honour those who fell long after the centenary is past.
Now everyone is preparing for 2018. As the paper considered by the Government’s World War I advisory board last week says:
“Commemorating the centenary of the war in 2018 is one of our greatest challenges to date. So far we have focused on highlighting and telling the story of a specific battle or engagement. In 2018 we have a far more complex narrative to convey, together with issues of tone – both throughout the year and on 11th November specifically”.
How we commemorate 1918 will, I am sure, be the subject of a separate debate in your Lordships’ House. I just express the hope that the high standards set in the first three years of the commemoration period in terms of tone, nuance and content are sustained through to November 2018. I have consistently supported the non-partisan and cross-party way in which the Government have approached the commemoration programme. The combination of school battlefield visits, national events, the enhancement of the Imperial War Museum, the active involvement of the Commonwealth War Graves Commission and the encouragement of local initiatives is absolutely right.
In my own city of Worcester, a great many initiatives have been taken—the city of Woodbine Willie, as the right reverend Prelate the Bishop of Derby reminded us. The next significant event is on 4 November in St Helen’s Church. It is planned to include exhibitions, short talks, Army, Navy and Air Force cadets, re-enactors and children’s activities. The day’s activities will start with a short service at 10 o’clock led by the Royal British Legion chaplain, which will include a one-minute silence and the “Last Post”.
There are countless other such events taking place across the country. I am happy to pay my tribute to the Prime Minister’s special representative, Dr Andrew Murrison, for the trouble he has taken to include as many organisations and individuals as possible in the plans to commemorate the centenary.
Lord Monks (Lab)
My Lords, I add my thanks to the noble Lord, Lord Black, for initiating this debate and join those who have expressed appreciation for the standard that he set with his introductory remarks—a standard which I think just about everybody who has contributed so far has also reached in their contributions.
I was general secretary of the European Trade Union Confederation and lived in Brussels for eight years. During that period, many family and friends visited Belgium and it became a pilgrimage to visit Passchendaele and Ypres. The repetition never bored: every visit stirred the emotions and burned into me and others the words, “Never again”.
We have to reflect from time to time on the origins of the Great War, how so few people saw it coming, how it erupted so volcanically after the assassination of Archduke Ferdinand, how the German emperor gave the Austro-Hungarians a blank cheque, which widened a local conflict into a European and global one, and, once the war had started, how it proved impossible to stop. It resolved none of Europe’s tensions while it bred plenty of new ones, which became fertile territory later for the dictators.
Yet the outbreak of war was totally unexpected by the mass of Europe’s population. There were, of course, many tensions: the rise of a sense of nationhood in the small countries which were part of Europe’s empires; the Prussianisation and militarisation of Germany under an erratic Kaiser; frontier disputes, social and class tensions and the rise of a powerful new political philosophy—socialism. But in 1913, none of these was expected to erupt into a European war. Is there a lesson here for today and tomorrow? I want to address that question briefly, because I think there is.
In the EU referendum, one argument I advanced, admittedly with limited success, was that the EU was a peace project to harness former enemies into a common endeavour. Yet it got very little traction. It was unthinkable to many that there was a risk of war in Europe—elsewhere yes, perhaps, but Europe, no, at least west of Ukraine. Peace is widely taken for granted in our part of the world. I just hope that those people are right. Yet the lesson of the start of the Great War is that peace should never be taken for granted. War can erupt with little warning.
Does the Europe of today generate complacency? We know that there is a new wave of nationalisms. Catalonia is today debating whether to declare UDI from Spain. We know, too, that extreme right-wing parties have gained support in many countries, now even surfacing quite noticeably in Germany. There is widespread disillusion with austerity and our economic models, especially since the economic crash of 2008. In addition, mass movements of migrants and refugees are under way and no one has a clear idea, beyond building walls, of what to do about it. However, you can say for sure that the EU and its member states have not risen adequately to all these challenges and so have fed scepticism and disillusion about the project. Into this tinderbox, the UK decision on Brexit has tossed a match—a match which we hope will not provoke other countries to think that they too need to “roar like lions”, to coin a current phrase.
One thing I remember from the time I spent in Brussels was the Europe-wide respect for Britain’s role in bringing peace and democracy back to Europe and for our stability and political maturity. We have to be very careful that we do not become a more nationalistic exemplar in the European world. Our Brexit negotiators should have Europe’s troubled history at the front of their minds, certainly not at the back.
So I advise all noble Lords who have not been—and many have, as has been said today—to visit Passchendaele and its cemeteries, especially Tyne Cot, the largest. Also, make a detour and take in the moving German cemetery at Langemark, which has affected everybody who has been there with me. Visit the Menin Gate and the wonderful In Flanders Fields Museum, which is in the Cloth Hall at Ypres. I hope that the many British visitors and schoolchildren who go there are as moved by all this as my family and my visitors have been. Reflect, too, not just on the sacrifice and the hopelessness then but on any contemporary lessons.
My own family came off lightly. There are Monks commemorated on the Menin Gate, but they are not of my immediate family, as far as we know. Six of my uncles were in the British Army in the Great War and all survived, although one was to die later of a wound contracted in Ireland. Nevertheless, we count ourselves among the lucky ones.
But while we remember and honour the past, the dead, the wounded and the disabled, we must resolve never to commit our young people to senseless slaughter and to work for a peaceful world. The hundreds of thousands of casualties of Passchendaele deserve no less.
Lord Shipley (LD)
My Lords, it is always a pleasure to follow the noble Lord, Lord Monks. I have made a note of his words: “Never take peace for granted”. How important that is when we consider commemorating the centenary of Passchendaele. I too thank the noble Lord, Lord Black of Brentwood, for enabling us to have this exceptional debate, in which we have remembered and commemorated all those who were present at Passchendaele.
Last weekend I visited the Paul Nash exhibition at the Laing Art Gallery in Newcastle. Before I go any further, I publicly thank the Tate gallery for enabling the exhibition to go out of London, the Tyne and Wear museums service for its work in securing the exhibition, and the Arts Council and other funders for ensuring that it could be financed.
Paul Nash was an official war artist by the autumn of 1917. He began the war in the Artists Rifles and subsequently joined the Hampshire Regiment, but he took sketches and painted in the autumn of 1917 in the Ypres Salient and at Passchendaele. His paintings are legendary and are an outstanding contribution to our knowledge of the realities of war. The sights he saw on the front line at Passchendaele traumatised him. He described it in a letter to his wife in November 1917 as,
“one huge grave, and cast up on it the poor dead”.
He went on to say to her:
“It is unspeakable, godless, hopeless. I am no longer an artist interested and curious. I am a messenger who will bring back word from men fighting to those who want the war to last forever. Feeble, inarticulate will be my message, but it will have a bitter truth and may it burn their lousy souls”.
You can see the message in all his paintings of Passchendaele and the Ypres salient. As we have heard, Passchendaele was described by Lloyd George as one of the great disasters of the war. There were 550,000 casualties on both sides, and the land gained was ceded just four months later.
It is very hard for us today to grasp the scale of what was happening. There were 300 British guns, firing over 4 million shells, which failed to destroy the heavily fortified German positions, particularly around Tyne Cot. The ground became the quagmire we have heard about, and so many soldiers drowned in the mud. There was an average of some 2,000 casualties a day on both sides.
I am particularly glad that this debate has recognised the contribution of Commonwealth troops in working in unity with British troops to capture Passchendaele; a number of speakers referred to that. My noble friend Lady Brinton talked about the permanent scars—the psychological trauma—of those who fought, and about her grandfather, who wrote home about how he endured suffering. She also talked about the problems that individual troops have had throughout history and in particular in the last 100 years—how they have had to manage suffering and how important support is for those who suffer from stress. Medical knowledge has advanced a great deal since 1917, when shell shock was officially recognised in Britain and a small number of war hospitals were asked to look after its victims.
My noble friend Lord Addington talked about veterans. He reminded us of the images of time and changes through time, and of how Passchendaele represented almost total war in which men become statistics. He also reminded us how important it was for people to come together in the face of war and in remembering war.
A number of contributors to the debate have thanked the organisations involved in commemorating the First World War, and I add my own tribute to the Commonwealth War Graves Commission. It maintains 2,500 cemeteries and plots, and the quality of its work is simply outstanding. The maintenance of very high standards demonstrates its care, and the design and quietness of the cemeteries are exemplary.
I was very glad that the noble Baroness, Lady Andrews, talked about the Heritage Lottery Fund. It has made a huge difference. She referred to the number of community projects that have helped communities to understand better what happened. The scale and role of the fund have been truly excellent.
We heard of the contribution of the War Memorials Trust, which is rescuing many memorials in a poor condition. There are up to 100,000 war memorials in the UK. I also thank the Imperial War Museum and the BBC for their work and resources, which are outstanding. I want to commend the Government too for their sensitive planning and for the appropriateness of events. They have been organised each year since 1914 and an excellent job has been done.
I was very pleased to hear from the noble Lord, Lord Murphy, about “The Last Post” being sounded at the Menin Gate by buglers from the fire brigade at Ypres every evening at eight o’clock since 1928—with a slight hiatus during World War Two. When I first went there, I wondered for how many years this would continue. Each time I have gone in recent years, there are simply more and more people. It is now quite hard to get a good vantage point because of the number of people, but I welcome that because it means that people are remembering and commemorating.
I understand that next year, 2018, there will be a national concert at Birmingham to bring an end to the four-year programme to remember those who fought and died in the conflict. It may bring an end to the programme but it will not end our need for remembrance. The noble Lord, Lord Black of Brentwood, said that we should take time to remember. He is right: it is important for our sense of who we are that we take time to remember the courage, endurance and sacrifice of all those involved at Passchendaele.
Lord Stevenson of Balmacara (Lab)
My Lords, I start by congratulating the noble Lord, Lord Black, on securing the debate and on his very moving and excellent speech, which set the tone for what followed. All speakers have risen to the challenge to come forward with compelling, moving and very interesting contributions, and it has, in totality, been one of the best debates that I have heard in recent years. As many people have said, it has been a privilege simply to be here and to be part of it.
It is also an important debate, and it has benefited hugely from the fact that your Lordships’ House has the capacity to bring into its discussions military expertise, political knowledge, compassion and understanding from all sorts of experiences that we have had. Bringing those experiences together and allowing them to play into the analysis of the issues before us is what we are good at and is something that I hope we will continue to do. Of course, in so doing, it is rather wonderful that so many people are able to work in contemporary issues and reflect on how some of the lessons of the past can be applied in near real-time. I am sure that the Minister will want to respond to this in a vigorous way.
Your Lordships’ House has debated World War I and the troubling questions of how to commemorate it on a number of occasions. I have taken part in a number of these debates, and the early ones were really about how to ensure that the accent that we placed on the national programmes was focused clearly on remembrance and education and on lessons to be learned, particularly avoiding the danger of glorifying the war. It became clear during that process that the emerging conclusion was that our national programmes should be a commemoration, not a glorification: they should concentrate—as many noble Lords have said—not only on the military aspects of the war, but on its impact on Britain’s social history. They should recall, for example, the way that the industrialisation of death and the devastating scale of the military carnage wiped out a generation of our young men, and all the loss of potential that that implied; the contribution of women; the sacrifice of Commonwealth citizens; the contribution of artists and war poets, who have shaped the way that the war is remembered; and, as the noble Lord, Lord Black, mentioned, the animals that lost their lives as part of that process, which is something that we often forget.
There will, no doubt, be opportunities to reflect on how these years of commemoration have gone after the final event on—appropriately—Armistice Day in November 2018. I certainly look forward to that. I agree with the sentiments expressed widely round the House today that the Government have got the balance about right, and that—as my noble friend Lord Hutton hoped—we have not been divided politically or otherwise over how we have, as a country, commemorated this battle and the war more generally.
Having said that, I hope that it will be of interest to your Lordships’ House if I use my time today to reflect on the process in which we are engaged rather than to detail some of the particularities of the commemoration. My first task is to ask, how certain are we about what happened? In January 1936, nearly 20 years after he took part in the Battle of Passchendaele, the poet was asked to choose a poem to represent all of his war poetry—and there is a great deal of it—he chose this one. In it, he asks himself if he can remember the war and describes his feelings when those memories return, often masked by what he calls “mists”, which, he goes on to explain are,
“spiritual
And luminous-obscure,
Evolved of countless circumstance
Of which I am sure;
Of which, at the instance
Of sound, smell, change and stir”.
The closing lines capture well the duality of these memories:
“And some of sparkling, laughing, singing,
Young, heroic, mild;
And some incurable, twisted,
Shrieking, dumb, defiled”.
My point is that while contemporary accounts are, as we have heard, a brilliant way of reliving the events, they can only be, at best, a partial solution to what we seek to understand and remember. We also need to take distance and time to give substance to what would have been the so-called first draft of history. Explanation of memory is not just simply important as a means of understanding a survivor’s experiences; it is also one of the ways that we have of building our own knowledge of our shared past, complementing the dry histories and challenging art works that flow from these lived experiences. As, inevitably, the distance between ourselves and our children and the events themselves widens, so society’s responsibilities to our past become greater. We must impart, in our very act of learning, an obligation to the young to be inquisitive about this narrative and others.
Secondly, what precisely are we commemorating? As we have heard, Passchendaele symbolises all the horrors of trench warfare. Indeed, it has been described as the worst battlefield in history. We have heard about the loss of life, which is almost unimaginable: in three months, 350,000 allied and 260,000 German soldiers were killed. The conditions in which they fought, lived and died are really beyond contemporary understanding. Major Desmond Allhusen recalls in his diary:
“The mud and water reached our waists and it took us about half an hour to do a hundred yards … It was different from what we were used to. It had lost all form and consistency and all resemblance to the honest stuff one finds in peaceful lands. It was just the shapeless mess that remains when everything else is gone”.
Lieutenant General Sir Launcelot Kiggell, General Haig’s chief of staff, when he reached the edge of the battlefield, exclaimed, “Did we really send men to fight in this?”.
As I have been arguing, commemoration, in particular of a battle such as Passchendaele, must be multidimensional. It must be open to exploring the past not only through the lives of the individuals who experienced it but within broader continental and global contexts. Crucially, while we have a responsibility to seek the truth and to be inquisitive, we must be open to our own prejudices. If we can recognise our own preconceived notions, we will be best placed to get the most out of any commemorative act, whether it be a Paul Nash painting or a local council memorial—I would argue that both are as valuable as each other.
What about fake news, to bring it up to date? In the past few months, the threshold on accuracy and truth has being diluted and this could have important consequences for how we commemorate, if we allow the patterns of the present to impact the way in which we see the past. Perhaps the best antidote to such behaviour is to continuously renew our interest in our own past and not shy away from such debates, by being open to different types of commemoration as they come forward. I will return to that point at the end.
Truth, memory and commemoration are all inextricably linked. It is not just the responsibility of academics, teachers or even politicians to be mindful of this. The responsibility of interpretation should weigh heavy on all our minds. Edmund Blunden, the poet I quoted earlier, was acutely aware of how memory changes our understanding of war. It is therefore very important that we have commemorations that properly reflect that.
We need to interrogate what has worked well in the national programme and build that into our thinking and plans for any future commemorations. We have heard of local and national events and of the exemplary work of the Commonwealth War Graves Commission, which I also salute. We heard also from my noble friend—I am sorry, but I have forgotten her name and she is not in her place but on the Woolsack. She cannot do this to me—she is like a ghost, appearing all around the place. I thank her for drawing our attention to the work of the Heritage Lottery Fund, which has been so important in bringing out the bottom end of the spectrum, including a range of responses and detail from the individuals involved.
However, we need more than this. We need writing, films, plays, art and performances if we are to fully understand it. I used to use a film made by Charlie Chaplin to exemplify this point, and it perhaps works in this context. You can understand history by looking at records and films of, for instance, events in Germany during the time of Hitler. But you will understand it much better if you see somebody taking off that, as Chaplin did in “The Great Dictator”. It is that duality that brings us to the nature of the understanding.
I want to leave the House with this. For me, the most impactful commemoration event I have experienced was the astonishing work by Jeremy Deller, “We’re Here Because We’re Here”. Noble Lords may recall this work. The participants were a volunteer army of non-professional performers who were sworn to secrecy while rehearsals took place across the country without anybody really understanding what was going on. The intention, as laid out by Rufus Norris and Jeremy Deller, was to create the complete opposite of,
“a static memorial that the public went to to be sad”.
It was something completely and unnervingly different and it,
“would take itself to the public rather than the public taking itself to the memorial”.
I picked up a very good explanation of the work by the Guardian arts correspondent, Charlotte Higgins. She recorded the appearance of these people in Waterloo station one morning, saying,
“they were dressed in the dull-green uniforms of the first world war. They were just there: not speaking, not even moving very much. Waiting, expressionless, for who knows what. A small crowd gathered, taking photographs. A woman caught the eye of one of the men. She tried to speak to him. Without speaking or dropping his gaze, he pulled a small card out of his pocket and handed it to her. ‘Lance Corporal John Arthur Green,’ it read. ‘1st/9th Battalion, London Regiment (Queen Victoria’s Rifles). Died at the Somme on 1 July 1916. Aged 24 years.’ There were similar scenes across the UK … There were more than 1,500 men in total. They gathered on the steps of the Gallery of Modern Art in Glasgow. They smoked roll-ups outside Bristol Temple Meads and marched … boots ringing, through Manchester Piccadilly. They stood in clumps by the entrance to Queen’s University, Belfast, and sat on the market cross in Lerwick, Shetland”.
It was a silent reflection and it was so moving. In some ways, it said it all.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I start by saying how grateful I am to my noble friend Lord Black for initiating this debate and to all noble Lords, both for making such moving speeches and for their kind words about the commemorations so far. Being the Minister responsible for the First World War commemorations is an honour, a great responsibility and, frankly, having listened to your Lordships’ speeches, rather humbling. I am also humbled because how does one sum up in 20 minutes speeches that have covered, in typical House of Lords fashion, subjects as varied as life and death, the meaning of life, art, the Royal Flying Corps, comradeship, mental health, the meaning of memory, fake news, the nature of sacrifice, the role of animals, the debate over military tactics, links to the Europe of today and, inevitably, Brexit?
Let me concentrate on what we have done to commemorate the third Battle of Ypres and how the First World War commemorations have extended across the country, with a little about 2018. As noble Lords have explained, the Battle of Passchendaele and the whole third Battle of Ypres is hugely significant: significant for the huge losses sustained, the horrific conditions and the lessons learned; significant in the context of the wider war, in trying to break the stalemate and increase attritional pressure on Germany and in regard to the U-boat threat outlined by the noble Lord, Lord West; significant for the impact at home on families that lost husbands, brothers, sons, and some daughters and sisters; and significant for the way the country was galvanised and reorganised to support those at the Front. Those losses affected communities across the country and across the world, and I hope noble Lords will agree that that has been commemorated appropriately by the Government.
The three months of fighting around Ypres in 1917, that would come to be known colloquially as Passchendaele, were marked by a series of events delivered by the Department for Digital, Culture, Media and Sport and its partners. The events were attended by their Royal Highnesses the Prince of Wales and the Duke and Duchess of Cambridge, their Majesties the King and Queen of the Belgians, and the Prime Minister, as well as thousands of descendants and members of the public.
The event on 30 July in Ypres, at the Commonwealth War Graves Commission’s Menin Gate, took place in the presence of 200 descendants of those commemorated on the gate, and built on the poignant service held there every night by the Last Post Association. It provided an opportunity for reflection and remembrance beneath the memorial, which records more than 54,000 soldiers who died before 16 August 1917 and have no known grave. That was followed by a public event in the Ypres market square, attended by thousands of members of the public and watched by some 1.5 million people at home in the UK. With performances by well-known actors, musicians, military personnel and the National Youth Choir of Scotland, it made the most of our artistic talent to pay tribute to those who passed through Ypres before us, many never to return. Of course, those losses were not just during the battle; in the days before the battle began, on average 500 men a day were killed by shelling alone.
The next day, a formal commemorative event at the Commonwealth War Graves Commission’s Tyne Cot cemetery focused on the third Battle of Ypres. Some 4,000 descendants of those who served at Ypres were present and another 1.3 million people watched live on the BBC in the UK. Those of us who were privileged to be there would, I think, also like to echo the comments of my noble friend Lord Black and the noble Lord, Lord Shipley, on the excellent work of the commission in maintaining those sites in perpetuity, in such a dignified way, and record our appreciation for the commission’s support in delivering the events. It was also particularly appropriate that, on the evening of the Menin Gate event, the chairman of the Last Post Association, Monsieur Benoit Mottrie, was awarded an honorary OBE in the Cloth Hall in Ypres by the Duke of Cambridge for,
“services to commemoration and remembrance of British and Commonwealth armed forces”,
recognising his huge contribution and that of the Last Post Association.
The events also saw the participation of nearly 100 National Citizen Service volunteers and participants in the Commonwealth War Graves Commission’s centenary intern scheme. They supported the delivery of events and were a visible presence throughout, interacting with descendants and families, from whom I heard many appreciative comments. They exemplified the theme of youth, to which I will come in a minute.
The events delivered huge media interest in print, online and on social media, reaching a broader audience than any of our previous events. The #Passchendaele100 hashtag reached 122 million potential impressions, engaging many people who had not previously connected with the centenary programme.
My noble friend Lord Black mentioned the impact on the Commonwealth. Australia and New Zealand have also recently delivered their own commemorative events in Ypres to mark their own significant dates. I understand Canada, whose troops finally took Passchendaele itself, will do so in November.
Throughout the centenary programme we have tried to reflect three themes: remembrance, youth and education. We believe the events ensured that the centenary was marked as widely as possible and that a new generation came to understand what Passchendaele means. This will also ensure that, as a nation, we appropriately commemorate the centenaries of 2018, which we will mark with a series of events. These include events to mark the appointment of Marshal Foch as commander-in-chief of the Allied armies in March, the centenary of the Battle of Amiens in August, and of course the Armistice on 11 November, which, suitably, next year falls on Remembrance Sunday.
There is also a wider government-led programme to help communities across the country to engage with the centenary. Historic England, working in partnership with the War Memorials Trust, Civic Voice and the Imperial War Museum, is helping communities rediscover, care for and conserve local war memorials. Funding is available for repair and conservation, and more than 300 projects have already shared £1.3 million of grants through the War Memorials Trust. There are also many projects taking place across the country funded by the Heritage Lottery Fund. I pay tribute to the work with the Heritage Lottery Fund of the noble Baroness, Lady Andrews, and thank her for explaining that. Since April 2010, the fund has awarded more than £90 million to more than 1,800 projects. Grants of between £3,000 and £10,000 for community projects are available via the Heritage Lottery Fund’s “Then and Now” programme. Applications will be accepted at any time up to 2019.
As my noble friend Lord Black mentioned, the Imperial War Museum’s Centenary Partnership programme, which now has more than 3,700 members from over 60 countries, helps to deliver a vibrant programme of events, activities and resources to enable millions of people to engage with the centenary. The Imperial War Museum also announced yesterday its “Women’s Work 100” programme, which will develop projects, collections and stories across the Centenary Partnership to explore the working lives of women during the First World War, including the very brave women who worked as nurses, very much on the front line. The women’s work collection is closely linked with the formation of the museum itself in 1917, and almost immediately plans were put in place to ensure that the role of women would be recognised and recorded. The centenary is a fitting opportunity to revisit the collection and highlight the enormous changes that occurred during the war.
For many people, an abiding memory of the Somme commemorations was 14-18 NOW’s “We’re Here Because We’re Here” project, which saw uniformed actors take to the streets of the UK. Its full plans for 2018 will be released early in the new year. So far its programmes have been experienced by 30 million people, of whom 4 million are aged under 16. The poppies sculptures, of which I know my noble friend Lord Black has been a great supporter, will also continue their tour of the country in 2018, having been to Derby, Belfast, Hull and Cardiff so far this year. Yesterday, my right honourable friend the Secretary of State announced that the poppies will appear at Hereford Cathedral, Carlisle Castle, Middleport Pottery in Stoke-on-Trent, the Imperial War Museum in London, Fort Nelson near Portsmouth and the Imperial War Museum North in Manchester in 2018.
As has been mentioned, the first day of the battle saw the most Victoria Crosses awarded on a single day during the First World War, including Army doctor Noel Chavasse’s posthumous bar to the VC that he had won on the Somme. I am pleased to say that the VCs of the First World War are being marked by the DCLG’s Victoria Cross commemorative paving stone project, which commemorates each Victoria Cross recipient by laying a memorial paving stone in their place of birth. Two Passchendaele VC winners, Captain Thomas Colyer-Fergusson and Second Lieutenant Dennis Wyldbore Hewitt, who were both born in Westminster, have been commemorated with paving stones in Victoria Embankment Gardens. They were also commemorated with the “Mud Soldier” statue displayed in Trafalgar Square in July by VisitFlanders.
More than 1,400 schools have visited the First World War battlefields as part of the Department for Education-led tour programme. The Great War Debate programme has seen 13 debates take place nationwide, with more than 1,200 young people having the opportunity to hear high-profile historians, including Sir Hew Strachan and Professor Annika Mombauer, bring a fresh perspective to their studies. The noble Lord, Lord Stevenson, asked how we could be sure what happened and suggested that the events should be multidimensional to address the subject in different ways. He might like to know that there is a four-day academic seminar on the Home Front led by Sir Hew Strachan. I hope that all the other events that I have described will achieve the multidimensional approach that we seek.
In conclusion, I pay tribute to the team at DDCMS who have worked so hard to deliver the commemoration—I was grateful for the kind words of the noble Lord, Lord Faulkner, about them; to the First World War advisory group, of which the noble Lord is a member; and to the work of the Prime Minister’s special representative for the First World War commemoration, Dr Andrew Murrison MP. Thanks to them and all our other delivery partners, I am confident that as we move to the final year of the centenary we will build on the achievements of the previous years and ensure we mark the tumultuous final months of the war in a fitting way. We owe it to those who served, fell or were wounded, in body or mind, to continue to ensure that they are remembered with admiration and gratitude.
Lord Black of Brentwood
My Lords, I thank the Minister for that comprehensive response. Even by the high standards of this House, as the noble Lord, Lord Stevenson, said, this has been an exceptional debate which has probed so many aspects of the dreadful Battle of Passchendaele in a series of incredibly thoughtful, poignant and moving contributions. I am most grateful to all noble Lords who took part.
One of the most striking features of the debate was what the noble Baroness, Lady Andrews, described as the hidden stories of the war, which she deployed to such effect. From the right reverend Prelate, we heard one of those hidden stories, of the chaplaincy, which I found fascinating. By the noble Lord, Lord Hutton, we were allowed the opportunity to hear the voices of the past in their own moving words. For me, the most telling moment was when the noble Baroness, Lady Brinton, talked about the ordinary combatants in the battle, but then added, quite rightly, that none of them was ordinary. How right she was. They were all extraordinary, as they faced up to what eye witnesses at the time said was like descending into Dante’s Inferno. My noble friend Lord Lexden said that it was as if providence had given Passchendaele its name, because it has become synonymous with so many different things: with suffering and courage. It lays bare our own humility and it lets us have lessons for the future, but, most of all, as the right reverend Prelate said, from the death of so many young men springs a message of hope.
National Health Service (Pharmaceutical and Local Pharmaceutical Services) (Amendment) Regulations 2017
(6 years, 6 months ago)
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Lord Hunt of Kings Heath
That this House regrets that the National Health Service (Pharmaceutical and Local Pharmaceutical Services) (Amendment) Regulations 2017, in delaying the review of the regulations governing the provision of community pharmaceutical services, do not prevent the closure of community pharmacies resulting from the budget cuts in 2016–17 and 2017–18 and changes to the way the funding is distributed (SI 2017/709).
Lord Hunt of Kings Heath (Lab)
My Lords, I beg leave to move the Motion standing in my name on the Order Paper. I so do because I am very concerned at the reduction in community pharmacy funding, at the very time when we need this precious profession to take on ever more responsibilities. In opening this debate, I take the opportunity to pay tribute to Mr William Darling CBE, the youngest ever president of the Royal Pharmaceutical Society, who died earlier this year. I had the pleasure of working with Mr Darling over many years in the NHS; it was he who brought home to me the hugely valuable role that community pharmacies play in the UK. I, the profession and the public will be ever grateful to him for his immense services.
I should also say by way of introduction that the Secretary of State, under current statutory requirements, was expected to initiate a review of the pharmaceutical and local pharmaceutical services regulations 2013 by 31 August this year. He has not done so because, according to the Explanatory Memorandum, the Pharmaceutical Services Negotiating Committee sought to judicially review the Secretary of State’s decision on pharmaceutical spending and the department decided to await the outcome of the review. Let me say at once that I do not object to that at all or, therefore, to the order. What I object to is the way the department has dealt with the profession over the whole question of funding.
I find it remarkable that a Conservative Government are effectively undermining both patient choice and the role of SMEs in their approach. On patient choice, it was clearly stated by Ministers at a meeting of the All-Party Pharmacy Group last year that the intention was to reduce the number of community pharmacies in this country. Remarkably, the department feels that there is too much choice for patients in our high streets. In effect, the change to funding they are making is reducing the number of pharmacies. The judicial review ruled in the department’s favour, but nevertheless established the legal principle that it is the duty of the Secretary of State to always bear in mind health inequalities when making judgments. The problem in relation to community pharmacy cuts is that the department has not done so; nor does it deliver the more clinical and effective approach that it said it wanted in its letter to the PSNC back in December 2015.
Community pharmacies are the most accessible of all healthcare services. Last year, they had, on average, 137 visitors a day, gave 281 medical reviews and dispensed approximately 87,000 prescribed products. My concern is that the cutbacks or reforms will have a painful impact on thousands of people and therefore need to be thwarted as soon as possible. By reducing the contribution that community pharmacies can make, there is a risk of an increased burden on already pressed GPs and A&E departments.
I remind the Minister of a PricewaterhouseCoopers analysis commissioned by the PSNC in England in 2015. It estimated that community pharmacies contributed £3 billion in value to the NHS, its patients, the public sector and the wider economy. This included £1.1 billion in cash savings for the NHS, £600 million in benefits to patients and £242 million saved in avoided NHS treatment costs. It is rather short-sighted to undermine a profession that can give so much to patients and relieve some of the pressure on a system that, overall, is really suffering at the moment.
The majority of community pharmacies’ funding comes, of course, from the NHS and is used to fund their premises, staff and all other operating costs. My understanding is that this funding was reduced by 4% in 2016-17, with a further reduction in 2017-18, making a total 7.5% drop from 2015-16. Some pharmaceutical contractors claim that the payments to them have been cut by as much as 20%. We know that the Government have brought in some reforms—combining dispensing fees into one, a special funding scheme for pharmacies in isolated areas, a scheme for high-performing pharmacies and a pharmacy integration fund—and I welcome those payments. The problem is, they will not ameliorate the impending crisis faced overall by many community pharmacies.
One of the reasons given by the Government is that they think there are simply too many community pharmacies in some parts of the country. It often seems to me that the Department of Health lives in a world of isolation, ignoring general government policy. I had rather thought that the Government were in favour of consumer choice and therefore having more community pharmacy premises on the high street would be a good thing, not a bad thing. No doubt the Minister can enlighten me on the Government’s view on that matter.
One has to be clear that although Ministers have said they are worried about the number of community pharmacies, the reality is that those cuts will actually affect mainly the smaller pharmacies, which tend to be in the deprived areas. This is the real concern here. The fact is that there is financial instability in the sector. The reduction in NHS funding has led to pharmacies having to face worryingly high and unexpected wholesale bills if they want to maintain an adequate level of stock, which clearly they need to do. They face the potential prospect of banks withdrawing credit because income covenants have not been reached, due to the inability to find a source of credit to cover the aforementioned bills.
In a desperate attempt to keep the business viable, community pharmacies are reducing their services to patients. Because they are having to reduce their staff costs and make staff redundant, they are reducing opening hours and apparently cutting some free services, such as delivering prescriptions to the home, which particularly benefit older people and those with long-term degenerative conditions. We know that community pharmacies were under significant financial strain this summer. We are concerned that as we move into the winter, that financial strain will grow. Of course, it is mirrored by the pressure on the NHS at the moment.
Last year community pharmacies provided 950,000 flu vaccinations. There is a reason for this: it is very convenient. You do not have to wait until the surgery tells you that you can come in one Friday when it is able to give you a vaccination. You can go into a pharmacy and have it immediately. Already this year, community pharmacies have given out 500,000 flu vaccinations—a figure that could double by December. It is just one example of community pharmacies’ huge potential. They could do more—much more—if they were fully engaged in the kind of planning we need to see at local level.
Last night in your Lordships’ House we debated sustainability and transformation programmes. I do not think many STPs have mentioned the contribution that community pharmacies could make to providing services which, otherwise, other bits of the health service will have to. It is a pity because I believe this profession could provide much more support for the system and for patients in the future. I am worried about the impact of the financial reductions that have been made. I hope through this debate to at least encourage the Government to think again. I beg to move.
Baroness Jolly (LD)
My Lords, I am happy to lend my support to this regret Motion. For many years, pharmacies have been the lynchpin of our health service. Before the NHS was formed, the pharmacist was the expert who those without means went to for advice and medicine. With the advent of the NHS and a free general practice service backed up by free prescriptions, the role of the pharmacist began to change. The last couple of decades have seen further change. Pharmacists began to reassert their role of offering advice to customers, being commissioned locally and nationally for public health and medicines support.
In 2015 the Government proposed 6% cuts to the pharmacy service and suggested the ways in which this might be achieved, including a reduction in the number of pharmacies and the adoption of internet supply. This was solely a budgeting exercise and lacked any evidence base or indeed impact assessment. The Chief Pharmaceutical Officer suggested that we have 3,000 too many pharmacies without offering supporting evidence.
Apart from the pharmacy being a place where we collect our prescriptions and buy over-the-counter painkillers and cough medicines, the public ask advice from the pharmacist on things they would not trouble a doctor with. Women access emergency hormonal contraception, while needle and syringe programmes are managed, as is the supervised consumption of medicines.
Pharmacies offer specific public health services, support with self-care and medicines support, including checking prescriptions and the New Medicine Service. In addition, they arrange deliveries of prescriptions to patients. That might be stopping in some parts of the country but in Cornwall it is ongoing. In 2015, there were nearly 12,000 community pharmacists dispensing a billion prescription items to the value of £9.3 billion. They are funded by both local and central government to provide essential, advanced and local services.
The PSNC was so concerned at the lack of evidence base for the Government’s decision that it commissioned PwC to look at 12 specific services and determine their net value. In 2015, more than 150 million interventions were made, along with 75 million minor ailment consultations and 74 million medicine support interventions. They also served more than 800,000 public health users, for example with supervised interventions and emergency hormonal contraception. PwC determined that patient benefits totalled £612 million, that the wider societal benefits were £575 million, and that the NHS benefits to the tune of £1,352 million. There are other benefits to the public sector of £452 million. That is a total just shy of £3 billion of benefit which, in one way or the other, comes to us all from having community pharmacists. That is just the financial benefit and does not include the benefit of Joe Bloggs or Mary-Jane being able to walk in and ask their pharmacist a quiet, discreet question and get support, help and advice.
I suggest that when not only our GPs but our A&E services are under immense pressure from patients presenting with conditions that do not require prescriptions or that level of advice, this is not the time to take away from the high street the welcome and expertise of the neighbourhood pharmacist. Will the Minister persuade his colleague to stop, look at the evidence and protect these services which are so vital to the communities they serve?
Baroness Redfern (Con)
My Lords, in debating this regret Motion I listened intently to the noble Lord, Lord Hunt. He agrees that more pharmacies should be more engaged and that people should have more choice. I agree with him, but in today lies an opportunity to acknowledge the unique contribution that community pharmacists make to the health and care sector by providing easy access to clinical advice. I refer at this point to my entry as listed in the register of interests.
We should acknowledge that the Government are spending over £150 million a year more on pharmacies than the last Labour Government did, with over 11,500 community pharmacies—up by 18% over the last 10 years—together with the growth in the service budget of 40% over the last decade, to £2.8 billion in 2015-16. We now see over 40% of pharmacies in clusters of three or four, which means that in some cases two-fifths of pharmacists are within 10 minutes’ walk of two or more others. So it is right and proper that the Government are having this review to make absolutely sure that no community, whether in urban or rural settings, will be left without a pharmacy.
I want to pay tribute to the people who work in those pharmacies. In many cases, they are located at the heart of our communities with trusted professionals on-site who reflect the social and ethnic backgrounds of their residents. They are not only a valuable health asset but an important social asset, because they are often the only healthcare facility located in an area of deprivation and play a critical role in improving healthcare. Maintaining community pharmacies is crucial to keeping older and frail people independent. Going forward, we certainly do not want to see those people forced to travel, potentially over long distances, to pick up vital medicines and receive health advice. I very much hope that many rural communities, where travel distances can be a lot longer, can receive some sort of protection to ensure that patients can still access those services.
In 2017, it is right and proper to support a better payment structure and to be more efficient in the allocation of precious NHS resources—particularly by payment for the quality of service, not just for the volume of prescriptions dispensed—and to support the continuous improvement of those services to patients. That in turn will relieve pressure on many other parts of the NHS, particularly with a commitment to a national minor ailments service delivered through pharmacies so that patients who need urgent repeat-prescription medicines will be referred from NHS 111 directly to community pharmacies, rather than a GP out-of-hours service. We need to move from clusters of pharmacies to protect access for patients through a new pharmacy access scheme where there is a higher health need in a particular community.
The NHS has to be much more integrated. Pharmacists can make opportunistic public health interventions and provide advice on healthy lifestyles, thereby preventing or delaying the onset of long-term conditions and fulfilling a commitment to support people to keep healthy outside hospitals within the wider health system and a more integrated approach.
Finally, with the NHS asking for a £10 billion budget increase, there is an overriding need to see reforms to make sure that every pound spent goes as far as it can for patients and for the taxpayer as well. This package of reforms will ensure much greater use of community pharmacies as a first port of call by more fully integrating working with the rest of the NHS so that more people benefit from the skills of pharmacists and their teams. I am pleased that the Government are investing £112 million to deliver a further 1,500 pharmacists in general practice by 2020. I hope this review of the regulations, although delayed, will bring about the beginning of a longer-term transformation of the sector, expanding it to provide public health services such as health checks and immunisations as well as dispensing and selling medicines. There is no doubt that we all want to see a strong future for community pharmacy, but only if we can move with the times, because any delay brings uncertainty.
Baroness Seccombe (Con)
My Lords, I am fortunate to live in a lively Warwickshire village. There are two doctors with their own pharmacies, but every time I want something as simple as paracetamol I have to get the car out and drive eight miles to the nearest pharmacy. Last week, I was thrilled to see that the closed HSBC bank had a sign above it saying “pharmacy”.
I understand that in an NHS with increasing demands for funds it is not sensible to have pharmacies—each of which costs the NHS, on average, £220,000 a year—in abundance every few yards in urban areas. However, in rural areas it can be more than difficult to buy those essentials we rely on, especially if you do not have a car and there is an infrequent bus service. I congratulate the Government on being selective in supporting pharmacies that make life easier for country people while encouraging those small businesses to expand their basic service. In another village, I recently saw a sign in the window saying, “Opening hours: 6am to 9pm Monday to Saturday, and 9am to 5pm on Sunday”. What a service.
Last Saturday, I went inside the empty pharmacy and met Steve, the new pharmacist who is planning to open next week. He is enthusiastic to get going. So to him and all independent pharmacists who are free to flourish and to respond to the needs of the community, I say good luck, as they provide a really worthwhile service to the community. I am sure noble Lords will understand why I am not able to support this Motion.
Lord Deben (Con)
My Lords, I declare an interest as chairman of the Climate Change Committee. I intervene only because one of the largest uses of vehicles is for health reasons. I hope my noble friend will not mind if I say that the Department of Health has perhaps not shown itself to be quite as central to the solution of our problems with climate change as other departments have. I hope this is going to change, and I am intending to bang on his door quite a lot until it does because this is a central issue.
This debate has shown that it is a useful one to have. I am not sure I want to enter into the party politics of it but there are quite good arguments about how many extra community pharmacies there have been, and there is certainly no doubt that the Government have shown themselves to understand this. No doubt there are other arguments, but the issue for me is proximity and propinquity. I am thinking not just about rural areas, although I live in a rural area and I understand the point very strongly; for many people in urban areas who do not have access to motor cars and where bus services are exiguous, the fact that they can walk to a pharmacy or ask others to do so if they themselves are unable to, is an important part of the kind of service that we need. It is disappointing that in the various collections of data we have not spent a bit more time looking at how many journeys are made and how many hours’ worth of diesel are used by people in accessing the health service. We know exactly how many journeys by lorry carry food—it is about 42% of all the lorry journeys in Britain—so we know a lot about these things, but I am not sure we know enough about what happens in the health service. When we are making these judgments, we have to make them in a holistic way.
So I do not apologise for the fact that on this, as on many other issues, I shall try to dramatise the fact that we should not be making decisions without asking ourselves, “What is the issue here in trying to meet the requirements which are now statutory?”. By 2050 we have by law to cut our emissions by 80%. We have to meet by law the fourth and fifth carbon budgets, and we have just issued the clean growth plan which is designed to deliver that end. There is nothing in any of that on the contribution of the NHS. It is time we asked the NHS to recognise that part of its role is to ensure that people’s access is as convenient as possible, not just for their convenience or because it saves money for other bits of the NHS, but because we as a community have to look at our statutory requirements to meet our climate change targets.
I hope that my noble friend will accept this as a preliminary thrust on the subject of the health service’s contribution to what we need to do. Indeed, in doing it, it is of course a circular system. Many of the problems the NHS has to deal with result from the subsidiary effects of pollution. It is not a matter not just of changing our climate but of the pollution at a much lower level physically but very high-level in terms of air pollution, and the damage that that does to health. I do not think this is something the health service can avoid and I hope my noble friend will take it into account.
Lord Shipley (LD)
My Lords, I should like to ask the Minister to clarify four issues. First, does he agree that community pharmacies are for many people the most accessible healthcare location, particularly where there are no GP surgeries locally; that community pharmacies in those situations can take pressure off GPs, and that in fact overall community pharmacies can take pressure off accident and emergency? Both GPs and A&E are experiencing rising demand.
Secondly, I am not clear whether the Government have responded to the Murray review and whether they plan to be clear what they think about that review, which was published in December last year. What policies do they have for community pharmacies as a consequence of that review?
Thirdly, we have heard about rural areas. I agree entirely with what has been said, but I shall talk in addition about deprived urban neighbourhoods where few people have cars. Has the department done an impact assessment on deprived communities’ access to health and care services, because I think it is material to this debate, particularly in the context of my fourth question? Do the Government accept that many pharmacies have cash flow problems? Many do, and I understand that it will be much worse from next month. What exactly is the Government’s grand plan? I cannot see one at the moment.
The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)
My Lords, I begin by thanking all noble Lords who have spoken in this interesting debate. Obviously, the Government disagree with the premise of the Motion of the noble Lord, Lord Hunt, but I am grateful for the opportunity that it has given us all to discuss this critical sector. I join the noble Lord in paying tribute to Bill Darling. I did not have the opportunity to know Mr Darling but, having researched his career, I can see that he was a man with a deep commitment to serving his community and the public, and showed true leadership throughout his life, so I pay tribute to him on behalf of the Government and send our condolences to his family and friends.
Perhaps no noble Lord has done more than the noble Baroness, Lady Jolly—I welcome her to her position on the Liberal Democrat Front Bench—to list the benefits and impact of the community pharmacy. It has a vital role to play in the nation’s health. More than that, pharmacies are, as my noble friend Lady Redfern pointed out, both a health asset and a social asset. They play more than just a straightforward health role. There are about 1.6 million visits to community pharmacies a day, and more than 11,500 community pharmacies are in operation, which is 20% more than in 2004-05.
As several noble Lords have pointed out, not least the noble Lord, Lord Shipley, they are increasingly important as healthcare moves into the community, and they certainly have a role to play, particularly in primary care, probably less so in A&E or urgent care. I reassure all noble Lords that the work of community pharmacies is deeply valued by the Government.
The regulations specify a detailed market entry and exit regime and terms of service for making arrangements for NHS pharmaceutical services in England. Their aim is to ensure that there is a proportionate regulatory framework which encourages the delivery of NHS pharmaceutical services that meet local needs, without excessive provision in areas already meeting demand. The regulations have been continually reviewed and updated since their inception, and the Government are committed to conducting a full post-implementation review. The regulations amend the deadline for that review, which was originally 31 August 2017.
As has been discussed, the delay is due to two reasons. First, the judicial review by the negotiating partner, the Pharmaceutical Services Negotiating Committee, was brought into the decisions made by the Secretary of State. We did not feel that it was appropriate to begin a judicial review, as the noble Lord, Lord Hunt, correctly said. Secondly, of course, we had a general election, and therefore a purdah period, followed by the summer holidays. That had some impact on the ability to conduct proper stakeholder engagement before the deadline. Therefore, the deadline was extended to 31 March 2018, to allow proper and wide-ranging engagement of stakeholders, so that we can fully consider whether the regulations are delivering their intended outcomes. A further stakeholder meeting is scheduled for later this month to present the emerging findings to these stakeholders and to shape the final report to be published early next year. I apologise if I have laboured the point about why the delay happened, but I thought it would be useful, given that it is the topic of the debate.
Lord Hunt of Kings Heath
I am grateful to the Minister, and I echo the welcome given to the noble Baroness, Lady Jolly, in her position as Lib Dem spokesman on health. I thank the noble Baroness, Lady Walmsley, for her sterling work over the last couple of years—we very much enjoyed working with her, particularly when we combined to defeat the Government on a number of occasions. Long may that continue.
I very much welcome the response from the noble Lord, Lord O’Shaughnessy. The review is very important, and I hope we will have an opportunity to debate these important matters. I am not sure that he is really in a position to talk about the deficit any more. I would refer him, perhaps, to the comments of the former Chancellor, Mr Osborne, about who exactly was responsible for the financial situation that we as a Government found ourselves in. I shall not carry on in that mode, but I think the Government’s mantra needs perhaps to move on.
Efficiency savings are one thing, but cuts to community pharmacies are another. That is where we really disagree. On the issue of closures, Mr Alistair Burt went to the All-Party Pharmacy Group in 2015 when these proposals first came out and said that he thought that thousands of community pharmacies would close. There is no question that cash flow is a real worry. I am very interested in what the noble Lord said, and it would be good to know the outcome of those discussions, but I can tell him only that in the sector there was very real concern about this.
I come to SMEs. The risk is that it will be the very small multiple, individual community pharmacies that will be the most affected. I do not know whether the Minister knows, but in 2015 Matthew Hancock for the Government announced an ambitious target to get more small businesses working on central government contracts. The target was set that, by 2020, £1 in every £3 by government would be spent with SMEs. I guess that there is a question of definition here, of the extent to which that is regarded as a central government target or not. The point is that last week Mr Damian Green in the Cabinet Office announced that the target is being missed by a considerable margin and that it has gone from being a hard target for 2020 to an ambition for 2022.
What is happening here today is symptomatic of the Government’s approach to SMEs. They say that they are important, but the actions of individual government departments are to make it more difficult for them to do business. This is where I am concerned that the cumulative impact of these cuts will have a damaging effect on the small independents, which would be a great pity.
The noble Baroness, Lady Seccombe, said that she was fortunate to live in Warwickshire, and I endorse that—it is second only to God’s own city, of course. I was delighted to hear about the opening of a new community pharmacy in the premises of a bank. That is good, and I welcome the four schemes to which the noble Lord referred. I have no objection whatever to that, but the problem is that overall the package of proposals reducing the funding will put many community pharmacies at risk; they will often be in vulnerable areas and will reduce patient choice. The point that I put to him is that I do not think we are making as much use of community pharmacies as we could.
The 2012 changes took many community pharmacies away from the table. With PCTs, they were more around the table. CCGs at first did not have the responsibility for community pharmacy contracts, although I think they have more influence now. But we have to be realistic: GPs are not always as supportive of community pharmacies taking on more work as one would wish them to be. Some of that is about finance, and where it goes. Alongside the issue of funding, which I hope will be reviewed, I hope the Government will see how we can ensure at a local level that community pharmacies are heard more, have more influence and contribute much more, because I believe they have the professional skills to do so.
Finally, it was a great pleasure to hear the noble Lord, Lord Deben, talk about the impact of this measure on the environment and climate change. We sometimes forget that the desire of the NHS to centralise many of its services can lead to more car miles. I hope we will take that factor into account in the future.
This has been a very good debate. One thing on which we are all united is the role of community pharmacies, which is a very good thing indeed. I beg leave to withdraw my Motion.
Financial Guidance and Claims Bill [HL]
(6 years, 6 months ago)
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Baroness Chisholm of Owlpen
That the amendments for the Report stage be marshalled and considered in the following order:
Clause 1, Schedules 1 and 2, Clauses 2 to 13 Schedule 3, Clauses 14 to 16, Schedules 4 and 5, Clauses 17 to 20, Title.