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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
(7 years, 2 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
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Valerie Vaz (Walsall South) (Lab)
Will the Leader of the House give us the 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
(7 years, 2 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
(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Tobacco Control Plan
(7 years, 2 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
(7 years, 2 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)
(7 years, 2 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
(7 years, 2 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
(7 years, 2 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
(7 years, 2 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
(7 years, 2 months ago)
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Backbench Business
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Carbon Capture and Storage
(7 years, 2 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
(7 years, 2 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
(7 years, 2 months ago)
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Banking Act 2009
(7 years, 2 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
(7 years, 2 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
(7 years, 2 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
(7 years, 2 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)
(7 years, 2 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
(7 years, 2 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.
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Employment, Social Policy, Health and Consumer Affairs Council
(7 years, 2 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.
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