House of Commons
Prayers
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Oral Answers to Questions
Mrs Emma Lewell-Buck (South Shields) (Lab)
Tracy Brabin (Batley and Spen) (Lab/Co-op)
Paula Sherriff (Dewsbury) (Lab)
The Secretary of State for Communities and Local Government (Sajid Javid)
There are too many people sleeping rough, and I am determined to do more. That is why I will be leading a ministerial taskforce that will drive forward the implementation of a cross-Government strategy to help tackle this issue.
Mrs Lewell-Buck
I thank the Secretary of State for his answer, even though he did not answer my question. The reality is that since 2010 rough sleeping has risen by 134%. Worse still, this Government have encouraged local authorities to use public place protection orders to criminalise and fine rough sleepers when they accept food or money from kind strangers. When on earth is he going to do to curb this?
Sajid Javid
The hon. Lady is talking about trends. Let me remind her that statutory homelessness acceptances reached their peak in 2003 under the previous Labour Government, and since then they have come down by more than a half. But of course there is much more to do, and she is right to highlight this issue. That is why I am sure that she will welcome all the work that this Government are doing in this area, including £1 billion of dedicated funding over this spending period.
Tracy Brabin
According to Shelter, one in 2,122 people in Kirklees is currently homeless. My local drop-in homeless shelter has seen numbers double in the past six months alone, with the biggest cause being the termination of private rental agreements. What is the Secretary of State doing to make tenancies more secure, and what steps is he taking to tackle soaring private rents?
Sajid Javid
Again, the hon. Lady is right to emphasise this issue, which many Members on both sides of the House have worked hard on. I thought she would welcome the funding we are providing, including the announcements made by my right hon. Friend the Chancellor just a couple of weeks ago on more funding to tackle homelessness, which will help in all constituencies, and the ministerial taskforce, which will make an effort across Government.
Paula Sherriff
Many young homeless people fear being trapped in local authority temporary accommodation when they lose their housing benefit under universal credit. Given the revelation that roll-out has been delayed in the constituencies of the Prime Minister and the Secretary of State for Work and Pensions, and his two predecessors, will the Secretary of State agree to pass on the concerns of Kirklees Council and suggest that the delay might be applied elsewhere?
Sajid Javid
I hope that the hon. Lady will join me in welcoming universal credit as a policy that helps to get people into work, including in her constituency. Where there have been issues, my right hon. Friend the Work and Pensions Secretary has listened carefully. He responded through the recent Budget, including with changes that will help people who were getting housing benefit, such as the new transition to universal credit housing benefit that will help some 2.3 million people.
Mr Mark Prisk (Hertford and Stortford) (Con)
The recent National Audit Office report on this issue showed that while councils have increased their spending on tackling homelessness, they have reduced their spending on preventing it in the first place. These priorities seem to make no sense. May I urge the Secretary of State to ensure that all councils reverse this trend so that we can properly tackle the causes, not just the symptoms?
Sajid Javid
My hon. Friend speaks with experience; as a former Housing and Planning Minister, he knows these issues well. He is right to highlight this. That is why it was important that the whole House supported the Homelessness Reduction Act 2017, which is coming into force in April next year. With that, there will be new burdens funding of over £70 million for local authorities.
James Gray (North Wiltshire) (Con)
I am sure that the Secretary of State agrees that for as long as one person remains rough sleeping in our nation, it is a national tragedy that we must do something about. At the same time, does he not accept that there is often a complex of reasons to do with mental health, being in the military—I am very concerned about that—physical health, and drink and drug abuse? Those are the complications, and making it some kind of party political issue actually diminishes the interests of these people.
Sajid Javid
My hon. Friend right. This is one of those issues that I think we can safely say that every Member of this House is concerned about. If we work together we can achieve more. I am sure that he will welcome, for example, the funding of £28 million for the Housing First pilots announced by my right hon. Friend the Chancellor, which will help people to deal with the complex needs that he talks about.
Bob Blackman (Harrow East) (Con)
I congratulate my right hon. Friend on securing additional funding in the Budget to help people who are homeless. Will he elucidate what he is going to do to roll out the programme to combat rough sleeping right across the country so that we can end this national scandal once and for all?
Sajid Javid
Let me once again take the opportunity to commend my hon. Friend for all the work that he has done, in this House and beyond, to combat homelessness, including with the Homelessness Reduction Act 2017, which he championed. He is right to highlight the new funding that has been provided: £28 million for the three Housing First projects, and an additional £20 million to help to prevent people in the private rented sector from getting to homelessness in the first place. We will be looking carefully at, and talking widely about, how best to make use of that money.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Sajid Javid
The hon. Gentleman is right to ask what central Government can do to help. One of the ways we are helping is by providing the resources nationally—over £1 billion of funding to 2020, which is the highest budget that has ever been dedicated to combating homelessness.
Eddie Hughes (Walsall North) (Con)
I, too, want to mention the work of YMCA. YMCA Black Country and Rachael Taylor in my constituency run an “Open Door” programme that places young people in family homes so that they can continue to enjoy a family life. Will the Secretary of State join me in visiting this work in my constituency?
Sajid Javid
I take this opportunity to thank my hon. Friend for the work that he has done in this area since long before he came into the House; I know that he continues to champion such work. I will very happily join him in his constituency. I hear that the work the YMCA has done throughout the country, including in his constituency, has been exemplary.
Bambos Charalambous (Enfield, Southgate) (Lab)
Sajid Javid
Every homeless person is vulnerable, but children are particularly so. That is why we must work together to do all that we can. The funding of over £400 million for the flexible grant that is provided through local authorities can help, but the new taskforce will also take on that work to see what more we can do across Government.
David Morris (Morecambe and Lunesdale) (Con)
Homelessness is a very complex issue, and I am sure that everyone in the House agrees that it is something that we should not be facing. What discussions has my right hon. Friend had across Government Departments on, for instance, mental health, which is always identified as an issue in homelessness?
Sajid Javid
My hon. Friend is right to say that the causes of homelessness and rough sleeping are very complex, and not just economic. He is right to emphasise that mental health issues sometimes play a part. My right hon. Friends the Health and Education Secretaries have announced a Green Paper on the mental health needs of children and young people, and this is an appropriate time to make sure that we are doing everything we can as a Government.
Alison Thewliss (Glasgow Central) (SNP)
May I begin by paying tribute to the former Labour MP Jimmy Hood, who was MP for Clydesdale and my home town when I was growing up, and who I understand has died today? My thoughts and those of the Scottish National party are very much with his family and friends.
Shelter has found that eviction from private tenancies in England accounts for 78% of the rise in homelessness, and some of the people who are made homeless will almost certainly end up sleeping rough. Will the Secretary of State look at protection measures such as the Private Housing (Tenancies) (Scotland) Act 2016, which came into force last week and which includes measures such as banning no-fault eviction?
Sajid Javid
May I first associate myself with the hon. Lady’s comments about Jimmy Hood? He will be sorely missed by the House.
The hon. Lady made a point about the Scottish experience of combating homelessness. One thing we want to do is to look at best practice outside England. We want to look at whether there are some things to learn from Scotland, and some measures have been suggested by my Scottish friends. For example, we are looking further at the Housing First policy from Finland.
John Healey (Wentworth and Dearne) (Lab)
The hon. Member for Glasgow Central (Alison Thewliss) has just broken the news to the Opposition about Jimmy Hood’s death. He was a huge humane figure in Scottish Labour and in this House, and he will be sorely missed.
The Secretary of State tries to tell us that the Government have a good record on homelessness. Since 2010, Ministers have made 452 announcements on homelessness, but 47,000 more children are now homeless; that is more than 100 additional homeless children for every Conservative press release. What is needed now is action to deal with the root causes of this rising homelessness, not more warm words. I have a straight question for the Secretary of State: will there be any further cuts in funding in this Parliament for homeless hostels and women’s refuges under his plans for short-term supported housing?
Sajid Javid
Last week, the right hon. Gentleman and I attended a parliamentary reception in the Commons for St Mungo’s, where he rightly talked about—we both talked about—how some issues are above politics and it is important for Members on both sides of the House to co-operate on them. Homelessness and rough sleeping is one of those issues, and I know that he meant what he said so I take his question seriously.
We have no plans to cut the funding, whether for women’s refuges or for other support we are providing in relation to homelessness. Indeed, in my right hon. Friend the Chancellor’s Budget just a couple of weeks ago, we saw an increase in spending and resources to fight homelessness.
John Healey
The problem is that many of the decisions the right hon. Gentleman’s Government have taken have made this so much worse. In his consultation document on supported housing, he pledges to protect funding only in 2020-21, which is why homelessness charities, such as women’s refuges and Women’s Aid, are so concerned that there is still a risk to their future services. The tragedy is that we know what works because we have done it before, when Labour was in government. If he wants to act on a cross-party basis, will he back Labour’s plan to end rough sleeping homelessness within a Parliament, provide 4,000 extra homes for rough sleepers, review the social security system and build the new low-cost housing that is needed?
Sajid Javid
With respect, the right hon. Gentleman is being a bit disingenuous in his use of those figures and so-called facts. He will know that when it comes to women’s refuges—
Mr Speaker
Order. “Disingenuous” means dishonest and—[Interruption.] Indeed. The word cannot be said without a response. The Secretary of State is a most versatile fellow—very dextrous in his use of language—and I am sure he will withdraw it and use some other word. [Interruption.] Order. I cannot hear what the hon. Member for Bolsover (Mr Skinner) is chuntering from a sedentary position, but we can always have a cup of tea later.
Sajid Javid
I withdraw the word “disingenuous”, and let me say that the right hon. Gentleman is not being as clear as he could be if he wanted to be. When it comes to women’s refuges, we have dedicated £20 million, which will provide some 2,200 additional bed spaces. In future years, it will be right to see what the demand is and make sure we make appropriate resources available. [Interruption.]
Mr Speaker
The hon. Member for Bolsover is right to say that if somebody who uses an unparliamentary word refuses to withdraw it, that Member has only one place to go—and that is out. That applies across the piece, but to be fair, the right hon. Gentleman did withdraw the word, so the crisis has been averted. [Interruption.] Order. Anyway, it is on the record and I hope the hon. Gentleman is now content. He has a beatific smile on his face, and I think this should be canned.
Mr Clive Betts (Sheffield South East) (Lab)
Alex Cunningham (Stockton North) (Lab)
The Secretary of State for Communities and Local Government (Sajid Javid)
The Government recognise the pressures faced by local authorities and have provided additional dedicated funding for adult social care, including the £2 billion announced in the spring Budget.
Mr Betts
In the Budget statement, the words “social care” did not pass the Chancellor’s lips. Indeed, in response to a written question, he said that he really did not give any consideration to the funding needs for social care for the next financial year, although the Local Government Association estimates that there is a shortfall of about £3 billion. Does the Secretary of State agree with the Chancellor that no more money is needed for social care, or will he press the Chancellor for a rethink?
Sajid Javid
I thank the hon. Gentleman for the work that the Select Committee, under his leadership, does on social care. I listen carefully to the issues that he brings up, and I am sure he will recognise that this £2 billion over the next three years will make a huge difference, and means that £9.25 billion will be dedicated to this over the next three years. There are longer-term issues and some real challenges, and that is why we will bring forward a Green Paper on social care next year.
Alex Cunningham
I was rather stunned to find out that local authorities do not have to consider the quality of care when offering a care home place. According to the Care Quality Commission, that means vast numbers of elderly people are being forced to live in facilities that are either inadequate or require improvement. The profit-making sector is failing, but rather than pass the buck to local authorities, which are cash-starved, what will the Secretary of State do to ensure there is enough money in the system to enable every elderly person to live in a good home?
Sajid Javid
The hon. Gentleman is right to highlight that it is the responsibility of local authorities to help look after some of the most vulnerable people in society, and of course they should be careful about the quality of care they provide. That is why the CQC is independently involved, to look at the quality of care provided. We also have to make sure that the funding is there. As I have just said to his hon. Friend the Member for Sheffield South East (Mr Betts), extra resources have been provided, with £2 billion over the next three years, and we are also looking at the longer-term challenges.
Sajid Javid
The Government have rightly decided to look at a whole host of issues that have an impact on adult social care because of our ageing society. The appropriate approach is to take the time to get it right and have this Green Paper on adult social care.
Judith Cummins (Bradford South) (Lab)
The Parliamentary Under-Secretary of State for Communities and Local Government (Jake Berry)
Our Departments have developed a joint programme of work to better integrate our funding decisions and policies so that we maximise economic growth and deliver an improved transport system for Great Britain.
Judith Cummins
Why did the autumn Budget not allocate any new funding to the Yorkshire and Humber region as part of the northern powerhouse, when there is clear evidence of underfunding for the rail network across the region?
Jake Berry
The Transforming Cities fund of some £1.7 billion, of which £850 million remains unallocated, is available to all local authorities to bid for to improve intra-city transport. In total, we are investing £13 billion in northern infrastructure in this Parliament—more than any Government in history.
Michael Fabricant (Lichfield) (Con)
Jake Berry
I am sure that everyone in the House was delighted that in the Budget we agreed a second ambitious devolution deal with Andy Street. While my right hon. Friend the Secretary of State, as the midlands engine champion, is the supercharger for the midlands engine, Andy Street is its turbocharger.
Helen Jones (Warrington North) (Lab)
Tomorrow my hon. Friend the Member for City of Chester (Christian Matheson) will open a debate on tolls on the Mersey crossing. Does the Minister accept that the fact that people cannot cross the Mersey between Warrington and Liverpool without paying a toll, whether across the bridge or through the tunnels, is holding back the regional economy? If so, will he have urgent discussions with his colleagues at the Department for Transport, to rectify the situation?
Jake Berry
I have already held discussions with Steve Rotheram, the Labour Mayor of Liverpool, who told me that he supported the toll charges.
Justin Tomlinson (North Swindon) (Con)
Swindon is building houses at roughly three times the rate of the national average and we wish to go further. Does the Minister support Swindon’s proposal to use the Transforming Cities fund to extend the Oxford and Cambridge rail link to Swindon, which would unlock further new homes in Swindon?
Jake Berry
That is a tempting invitation to support a bid to the Transforming Cities fund. That is exactly what the fund is designed to do. When people make good, ground-up, locally supported proposals, the fund, on a competitive basis, should be there to support them.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
London received almost £2,000 per person in transport investment, while the figure for Yorkshire and the Humber was just £190, the north-east just £220, and the north-west £680. Even if every penny of the £800 million that has been referred to was allocated to the north, it would amount to just £53 per head. When will the northern powerhouse get the money it needs to compete on a par with London?
Jake Berry
I am sure that the left-wing think-tank, the Institute for Public Policy Research, is delighted its figures have been repeated in the Chamber, but they are simply incorrect. They do not include 60% of our national infrastructure spending or the spending on HS2, which I know, as someone who was born and brought up in the north, and who lives and works there, will benefit the north more than any other part of our country.
Mr Philip Hollobone (Kettering) (Con)
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
We collect a range of financial data on local government, which is published online. Local authorities also publish their own financial data, including budget documents and accounts. We routinely engage with a range of local authorities to discuss various issues, including finance.
Mr Hollobone
Will the Minister confirm that a major review of fair funding for local government is under way? Given that Northamptonshire County Council is considering closing 28 of its 36 libraries, will he encourage it to bring forward innovative proposals to set up a county-wide libraries trust to keep those vital facilities open?
Mr Peter Bone (Wellingborough) (Con)
In the light of the county council’s financial situation, would the Minister be keen to look at emerging proposals from across Northamptonshire about how local government might be better restructured?
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
The Secretary of State for Communities and Local Government (Sajid Javid)
In the autumn Budget, we announced further reforms and financial support to increase housing supply in England. This includes more than £15 billion of new financial support, at least £44 billion of funding to 2022-23, and reforms to ensure that more land is available for housing.
Andrew Bowie
I thank my right hon. Friend for that answer. The work of his Department and the pledge in the Budget to build 300,000 new homes in England are very welcome, and will go some way to address growing intergenerational unfairness when it comes to getting on the housing ladder. Will he join me today in calling for the Scottish Government to match the Scottish Conservatives’ pledge to build 100,000 new homes north of the border so that young people in my constituency can have the same opportunities to buy as those in constituencies in England?
Sajid Javid
I absolutely join my hon. Friend in doing that, and he is right to highlight this issue. The Scottish Government, even on their own targets, have been failing consistently on house building, especially affordable house building. I commend the ideas, energy and ambition shown by the Scottish Conservatives in challenging the Scottish National party to build more homes in Scotland.
Rachael Maskell (York Central) (Lab/Co-op)
Not a single new home has been registered in York in the last quarter. In the light of the Secretary of State’s rejection of the draft local plan, due to the council’s complete failure to address York’s housing crisis, will he ensure that he works with councillors across the piece, including Labour councillors, to get it right for the city with regard to the houses that need to be built for our future?
Sajid Javid
The hon. Lady will know that the Government have invested huge amounts in the past few years to make sure that house building picks up. The rate was down to 100,000 homes a year when the Government took office in 2010, but the figure for the latest year is 217,000. There is a lot more to do, including in York. I have written to the council in York and we are considering with it what we can do to speed up its planned development.
Mr Richard Bacon (South Norfolk) (Con)
In Berlin and elsewhere in Germany, architects, landowners, homeless people and local councils co-operate to bring forward thousands of new dwellings through mutual housing co-operatives. Will the Secretary of State encourage local councils here to consider that option as a way of bringing forward more dwellings more quickly?
Sajid Javid
I agree with the direction my hon. Friend sets out. One issue highlighted in the housing White Paper, which we are tackling as we implement it, is how we make sure that we have more diversity of supply. That includes different types of supply, including custom-build and co-operatives. My hon. Friend is right to highlight that and I commend him for his work in this area.
Alison McGovern (Wirral South) (Lab)
In New Ferry, we are desperate to build new homes as part of the regeneration following last March’s explosion. I am still disappointed that the Government refused to help with emergency costs for New Ferry, but will the Secretary of State confirm that he received Wirral Council’s email of last week containing the regeneration plan, and will he now step forward and fund the regeneration that New Ferry desperately needs?
Sajid Javid
I can confirm to the hon. Lady that we have just received the local council’s plan—I believe we received it five days ago, having waited five months. I am not sure why it took it so long, but now that we have received it, we will take a close look at it.
Bim Afolami (Hitchin and Harpenden) (Con)
Will the Secretary of State reassure my constituents that although there is an obvious need to build more houses, green-belt restrictions have not been loosened and the green belt will still be protected in my very rural constituency?
Sajid Javid
I can reassure my hon. Friend that no changes have been made to green-belt rules and that building on the green belt requires exceptional reasons. There were no changes in either the housing White Paper or the recent announcement by my right hon. Friend the Chancellor. The change we did announce was for more funding to make sure, for example, that we get the right infrastructure in the right places to help us to build more homes.
Alison Thewliss (Glasgow Central) (SNP)
The Scottish Parliament has delivered more than 69,500 affordable homes since 2007, during the period of SNP government, and the new-build social sector completion rate is at 72 per 100,000 population, compared with just 49 in England. Why exactly was there no commitment to increase social rented housing in the Budget?
Sajid Javid
We will take no lectures from the SNP when it comes to housing. In Scotland, under the SNP’s leadership, the number of housing starts has declined by 40%, the number of housing completions has fallen, the rate of housing ownership has fallen, and all affordable housing targets are being missed. It is about time that the hon. Lady stopped lecturing and started listening to the Scottish Conservatives.
Tony Lloyd (Rochdale) (Lab)
The Secretary of State just referred—rightly and approvingly—to the aspiration of home ownership. In the last year of the Labour Government, 54% of under-45s’ homes were owned by their occupants, but under this Government, that figure has plummeted to 44%. Given that the Chancellor has cut the money for starter homes in the Budget, will the Secretary of State tell the House what he has learned from seven years of Conservative failure? What will he do to give hope to our under-45s?
Sajid Javid
The hon. Gentleman talks about failure in the delivery of housing, but I think that he has got the wrong party. The track record of the Labour Government of whom he was a part included a massive fall in house building in this country—to its lowest level since the 1920s—a decline in social units for rent of 421,000, and almost a doubling of the waiting list for social housing. Their record on housing was one of the worst that this country has seen. If he wants to do something about it, he should support the policies of this Government.
Andrew Selous (South West Bedfordshire) (Con)
The Minister for Housing and Planning (Alok Sharma)
As my hon. Friend knows, the Government are concerned about unauthorised encampments and the effect they can have on settled communities. That is why we will be issuing a call for evidence on the effectiveness of enforcement against unauthorised developments and encampments. I will publish that call for evidence shortly.
Andrew Selous
On a daily basis, Central Bedfordshire Council is dealing with completely unacceptable numbers of unauthorised Traveller encampments. Many of those Travellers own land elsewhere, and many of their children are not in school, so when will the Government’s consultation lead to appropriate powers being made available to all local authorities, including my own?
Alok Sharma
I know that my hon. Friend has expressed views on this several times in the House. My Department is working closely with the Home Office and the Ministry of Justice to prepare the call for evidence. Once it is published, he and all Members with an interest will have an opportunity to set out their views.
Kate Green (Stretford and Urmston) (Lab)
Last month, the all-party group on Gypsies, Travellers and Roma, which I chair, met to discuss unauthorised encampments and possible positive solutions. We heard from a representative of the National Police Chiefs Council that the police do have adequate powers, and that unlawful trespass is not the answer and had not worked in Ireland. Will the Minister meet the all-party group and representatives of the community to talk about some of the positive solutions that could help to address this issue?
Alok Sharma
Of course I will meet the all-party group, but the whole point of a call for evidence is to allow everyone to feed in their views, and it is precisely those views that we want to hear. Following that, we will, of course, set out plans to take this further.
Christine Jardine (Edinburgh West) (LD)
The Minister for Housing and Planning (Alok Sharma)
The Government are providing substantial support for the building of social homes. We recently announced an additional £2 billion of funding, which takes the figure for the affordable homes programme to more than £9 billion. We have provided rent certainty for social landlords, and we have announced that there will be a £1 billion lift in housing revenue account borrowing caps.
Christine Jardine
The number of homes delivered for social rent has fallen by more than 85% since 2010. Just 5,380 are expected to have been completed in 2016-17, compared with nearly 40,000 in 2010-11. The Budget contains virtually no support for the building of new social housing, and only £6 billion of new money for housing altogether. Is that not a far cry from the £50 billion that was called for by the Secretary of State himself, and does it not mean that the number of houses will fall far short of the number that we need?
Mr Speaker
Order. That was far too long; absolutely hopeless. The hon. Lady’s questions will have to be much shorter in future. I am always keen to encourage her—she is a new Member, and a prodigious attender—but she needs to apply the blue pencil.
Alok Sharma
Since 2010, nearly 128,000 homes for social rent have been built in England, and 118,000 have been built for affordable rent. The hon. Lady talks about the money available for housing. I can confirm that, as my right hon. Friend the Chancellor said in his Budget statement, we are making at least £44 billion available over the next five years.
Mr Speaker
The hon. and learned Lady is an illustrious QC, so I am sure that she is capable of asking an extremely pithy question.
Lucy Frazer
I will try, Mr Speaker.
East Cambridgeshire has established five community land trusts. Does the Minister agree that such trusts are a valuable way of ensuring that local people can have affordable homes locally?
Alok Sharma
My hon. and learned Friend makes a very important point. I commend her for the work that she is doing in encouraging the development of community land trusts, for which I announced additional funds only last week.
Kerry McCarthy (Bristol East) (Lab)
The Minister for Housing and Planning (Alok Sharma)
Since 2010, we have delivered 357,000 affordable homes including, as I said earlier, about 128,000 homes for social rent. As I also said previously, we are providing £9 billion for the affordable homes programme, a £1 billion lift in HRA borrowing caps, and rent certainty for social landlords. That will help the sector to build more affordable homes, including social rented homes.
Kerry McCarthy
Shelter has found that in the past year developers have used viability assessments to wriggle out of building more than 2,500 affordable homes to rent or buy, including 200 in Bristol. Will the Minister take steps to remove that loophole when he rewrites the national planning policy framework next year by, removing the reference to the need for a competitive return?
Alok Sharma
One of the key issues in our consultation on local housing needs, which closed on 9 November, was viability assessments. We will of course review what comes forward, but we have made it very clear that we want developers to build affordable homes.
Richard Graham (Gloucester) (Con)
Alok Sharma
I commend my hon. Friend for the work that he is doing in his constituency to encourage more building of homes, including social homes, and I am delighted by the progress that is being made in estate regeneration. My hon. Friend’s constituency has received £1.25 million of capacity funding. More detailed eligibility criteria for the national productivity investment fund will be announced in due course, and I shall be happy to meet my hon. Friend to discuss the matter further.
David Linden (Glasgow East) (SNP)
Alok Sharma
Of course we support the right to buy. It has meant that people have been able to own homes, which I think is incredibly important. We are making more money available for affordable homes but, as I have said, there will be at least £44 billion over the next five years so that more homes can be built. We have a housing crisis now because not enough homes were built under the last Government.
Martin Vickers (Cleethorpes) (Con)
If we are to meet the demand for more affordable homes, there needs to be a partnership between the private and public sectors. What actions can the Minister take to ensure that local authorities work with both sectors in order to deliver the homes that we need?
Alok Sharma
In the Budget, my right hon. Friend the Chancellor set out the planning reforms that we are looking at, which will have an impact on local authorities bringing forward more sites more quickly for building. We have also announced an uplift of up to £1 billion for the housing revenue account, which will make a substantial difference.
Andrew Percy (Brigg and Goole) (Con)
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
Victims fleeing abuse must be given appropriate priority access to social housing. We are consulting on new guidance that makes it clear to local authorities that victims moving on from refuges should be given the appropriate priority and that any residency test should not be applied.
Andrew Percy
Members on both sides of the House hold Women’s Aid in high regard. It has stated that the Government’s new model will close refuges. What assurance can the Minister give the House that that will not be the case?
Mr Jones
I can reassure my hon. Friend that that will not be the case. We will continue the funding at exactly the same level as currently. There will be a dedicated grant for local authorities that will be ring-fenced in the long term, and we will also make sure that vulnerable people will not need to deal with the payment of rent at a very difficult time in their lives.
Helen Hayes (Dulwich and West Norwood) (Lab)
The recent joint Select Committees’ inquiry on supported housing recommended that the Government should establish a national network of women’s refuges to avoid a postcode lottery and to ensure that there is even coverage across the country. Why did the Government reject that recommendation? What will they do to ensure that there is even coverage and that refuges reopen in those areas of the country where they have closed?
Mr Jones
We believe that it is right to have a locally led approach in this regard, but we have confirmed that we are committed to reviewing this policy in 2018 under the violence against women and girls strategy. We are looking at all the options, and we have not ruled out nationally commissioning refuges and refuge beds if that is found to be a better solution.
Nigel Mills (Amber Valley) (Con)
The Parliamentary Under-Secretary of State for Communities and Local Government (Jake Berry)
Following the launch of our industrial strategy, the Government are in the early stages of designing a devolution framework for England. Areas such as Derbyshire and the east midlands should seek widely supported, ground-up proposals in line with the framework.
Nigel Mills
After the failure of the earlier devolution proposals, can the Minister confirm that the Government are still interested in further proposals coming from Derbyshire and Nottinghamshire, perhaps along the lines of the Derby and Nottingham metro proposal published a couple of weeks ago? Can he also confirm that there is now no requirement for an elected mayor?
Jake Berry
We are of course aware of Derby and Nottingham City Councils’ metro proposals, although we have not received a formal submission to the Government. I can confirm that the door remains open for devolution in this area and that, in line with our manifesto, there is no requirement for rural areas to have a mayor.
Sir Kevin Barron (Rother Valley) (Lab)
In the North East Derbyshire constituency and my own, the INEOS shale gas fracking company has applied for its planning application to be determined by the national Planning Inspectorate, not the local authority. Does the Minister condemn that?
Helen Goodman (Bishop Auckland) (Lab)
The Parliamentary Under-Secretary of State for Communities and Local Government (Jake Berry)
Local authorities in London have estimated that the business rate retention pilot announced in the Budget will benefit them by £240 million. There will be no impact from the pilot on other local authority areas.
Helen Goodman
Will the Minister explain how it can possibly be the case that business rates in London raise £7.5 billion and retention only gives £240 million? Surely this is swiping money from the rest of the country, which needs it in order to even up resources.
Jake Berry
The £240 million is new money from business rates growth. Let me share with the hon. Lady the startling fact that 100% of the local authorities that will get the business rate localisation pilot applied for it. When she goes back up to her constituency, she might like to ask her own Labour-controlled council why it could not be bothered to do so.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Will the hon. Gentleman pass on the message very forcefully to the Secretary of State that many of us applaud what he said in relation to Donald Trump’s retweeting of certain messages? My difficult question is: why does he not get on with the job of ensuring that the regions of our country get a fair share of resources, and stop piling money into London and the south-east?
Jake Berry
I noted that the Mayor of London, Sadiq Khan, said that this was the worst Budget for London in 10 years. What I know is that, at £1.8 billion, it was the best Budget for the north of England ever.
Chris Williamson (Derby North) (Lab)
The Minister for Housing and Planning (Alok Sharma)
Decisions on who is allocated particular properties are ultimately for local authorities and landlords to take at local level. However, our statutory guidance on social housing allocations encourages councils to give appropriate priority to those who need ground-floor accommodation, including disabled people.
Chris Williamson
The Minister will be aware that several disabled people were housed on the upper floors of Grenfell Tower at the time of the fire earlier this year. One disabled woman, whose name was Flora, would certainly not have survived had it not been for the heroics of her son, who carried her to safety from the 24th floor. Can the Minister assure the House that the Grenfell inquiry will consider access and egress for disabled people living in tower blocks? Will he also tell us whether disabled and independent abled organisations will be able to have their voices heard in the inquiry?
Alok Sharma
The Grenfell inquiry is independent, so I will let the judge take care of that. I can tell the hon. Gentleman that the Government will be publishing a social housing Green Paper next year, and that I am conducting a tour of the country and meeting social housing tenants directly. Of course we will consider access to accommodation for disabled people that is suitable for their needs as part of that work.
Mrs Kemi Badenoch (Saffron Walden) (Con)
The Secretary of State for Communities and Local Government (Sajid Javid)
We are working with 24 garden cities, towns and villages across England to unlock barriers, broker solutions and support them with infrastructure needs. I am announcing today £3 million of additional capacity funding for 14 garden villages, bringing our total funding through this programme to £19 million.
Mrs Badenoch
The Secretary of State will be aware that my local authority of Uttlesford is proposing three new garden communities, but significant infrastructure is required first. What reassurance can he give them that investment for this will be forthcoming?
Sajid Javid
My hon. Friend is right to highlight the need for infrastructure when it comes to housing, which is why I am sure she will welcome the increase in funding that was in the recent Budget. I am also launching today a £25 million planning delivery fund and inviting bids from ambitious councils, and a consultation on regulations that will enable the creation of locally led new development corporations.
Ruth George (High Peak) (Lab)
Does the Secretary of State accept that, when new developments are built, it is not in the interests of householders that they are leasehold estates? Will he reiterate the statement he made in July that the Government will not allow the building of any new leasehold homes, and act for those who are already being unfairly treated?
Sajid Javid
The hon. Lady will know that a consultation on this has just closed, and we will be responding to it shortly. I have said before, and I am happy to repeat, that I see no reason whatever for new houses to be sold on leasehold.
Vicky Ford (Chelmsford) (Con)
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
We are spending more than £1 billion up to 2020 on the implementation of the most ambitious legislative reform in decades—the Homelessness Reduction Act 2017—and establishing a homelessness and rough sleeping implementation taskforce.
Vicky Ford
I thank the Government for their work on implementing the Homelessness Reduction Act. Will the Minister give us an update on what money and resources are being made available to local councils so that they can help us to achieve this ambition?
Mr Jones
I thank my hon. Friend for her very good question. We are providing £72 million to enable local authorities to deal with the new burdens. In advance of the implementation next April, the first tranche of actual funding will go out to councils tomorrow. We will also review the new burdens funding within two years of the implementation of the Act.
Liz McInnes (Heywood and Middleton) (Lab)
Is the Minister aware of the pioneering work being done in Greater Manchester to eradicate homelessness? Does he agree with Mayor Andy Burnham that the Government’s target of 2027 for the eradication of the problem is much too far away?
Daniel Zeichner (Cambridge) (Lab)
The Secretary of State for Communities and Local Government (Sajid Javid)
Today marks the start of UK Charity Week, in which we redouble our commitment to working with the likes of Shelter, Crisis and St Mungo’s to end rough sleeping in this country. It is also the 62nd birthday of the Chancellor of the Exchequer, who last month delivered a Budget to help get Britain building—many happy returns to him. On the 226th birthday of The Observer, I am pleased to say that we are continuing our crackdown on local authorities that think it is their job to publish weekly newspapers.
Daniel Zeichner
Dockless bike schemes have recently been established in several cities. Some are working well and some less so, but councils are left struggling with outdated legislation to deal with such schemes. Will the Secretary of State meet me and others from affected areas to discuss the right way forward?
Sajid Javid
The hon. Gentleman raises an important issue. It is important that we encourage better ways for people to travel and give people more opportunities, and I am happy to have a chat to discuss his ideas.
Tom Pursglove (Corby) (Con)
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
I pay tribute to everyone involved in charities such as Corby Nightlight. We are providing a package of over £1 billion up to 2020 to prevent homelessness and rough sleeping. Part of the package involves providing funding for services and projects such as the one in Corby, which does so much to improve the lives of some of the most vulnerable people in society.
Andrew Gwynne (Denton and Reddish) (Lab)
Several national children’s charities and the Local Government Association wrote to the Secretary of State ahead of the Budget to warn that funding for children’s services is unsustainable and insufficient. Instead of creeping to the Chancellor with birthday wishes, what did the Secretary of State do to lobby the Chancellor to provide the £2 billion that councils need to properly safeguard and look after children in need?
Sajid Javid
The hon. Gentleman is right to highlight the pressure on children’s services in many local authorities up and down the country, and that is why we are listening carefully to what local authorities have to say and working with my right hon. Friend the Secretary of State for Education to ensure that adequate resources are provided. Many local authorities are doing very well, but some are experiencing challenges. The hon. Gentleman will know that the local government finance settlement is coming along shortly, and he can look to see what happens with that.
Andrew Gwynne
The Secretary of State does not just need to listen; he needs to act and perhaps read our “Local Government Health Check” report, which highlights that children’s services are facing a £2 billion funding gap now. Early intervention has been cut, Sure Start centres have closed, child protection cases have doubled, more children need taking into care, and ever more families need specialist help, so why will the Secretary of State not stand up for our children’s services and tell the Chancellor that now is not the time to cut £4.75 billion from the bank levy? It is time to put our children first.
Sajid Javid
Time and again, the hon. Gentleman stands at the Dispatch Box asking for billions and billions of more spending. He has no idea how the funds are raised, and he would do much better to support the measures that we are taking to keep our economy strong so that we can pay for all those services.
Maria Caulfield (Lewes) (Con)
Mr Marcus Jones
While the vast majority of local authorities have re-billed their businesses, it is unacceptable that some councils still have not. The Government have given councils a £435 million package of support for businesses, so I urge all councils that have not yet done the right thing to do so urgently.
Martyn Day (Linlithgow and East Falkirk) (SNP)
The Minister for Housing and Planning (Alok Sharma)
The hon. Gentleman will have noted that in the Budget the Chancellor set out our plans to consult on longer tenancies in the private rented sector, and that is precisely what we will be doing.
Craig Tracey (North Warwickshire) (Con)
The Parliamentary Under-Secretary of State for Communities and Local Government (Jake Berry)
Only a Labour council could put up parking charges and lose money at the same time. What that shows to people living in Nuneaton and Bedworth is that, by putting into action the Marxist twaddle we hear from Labour Members, under Labour it is the many who pay for the dogma of the few.
Kerry McCarthy (Bristol East) (Lab)
Jake Berry
I would happily meet the hon. Lady to discuss her interesting idea.
Mark Pawsey (Rugby) (Con)
Mr Marcus Jones
The Government are still committed to further business rate retention. We have relaunched our working group, which is our officials and the Local Government Association, to take that work forward. It is important that any future reform of the system has a balance between meeting need and having an incentive for areas to grow their tax base.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
Sajid Javid
This Government have done much to improve bus facilities throughout the country, especially in the new metro mayor areas where we have extended bus franchising. If the hon. Lady has particular issues, the Department for Transport is the policy lead, and I would be happy to pass her questions on to my right hon. Friend the Secretary of State for Transport.
James Heappey (Wells) (Con)
The affordability of a house is not just what it costs to buy or rent each month but what it costs to live in it thereafter. May I therefore encourage the Secretary of State to set the highest energy efficiency standards possible for new houses so that they can be cheap both to own and to operate?
Alok Sharma
Energy efficiency, as a result of the policies this Government have put in place, has improved. Fuel costs are now several hundred pounds cheaper than they were in 2010.
Mr Stephen Hepburn (Jarrow) (Lab)
Sajid Javid
I had thought the hon. Gentleman would welcome the fact that in his constituency the claimant count has fallen by some 42% since 2010. If he really wanted to champion Gateshead and more funding, including for jobs and investment, perhaps he might ask why the mayoral devolution deal was rejected last year.
Ms Nusrat Ghani (Wealden) (Con)
With the abolition of stamp duty for most first-time buyers, families in Wealden will save, on average, £3,209 on their first home. Will the Minister say what else is being done to help families secure their first home?
Alok Sharma
Of course I am delighted that my hon. Friend has highlighted the stamp duty cut, but we also know that for a number of years we have been running the Help to Buy scheme, which has helped 135,000 households already, and the extra £10 billion committed a few weeks ago will help another 35,000 households.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I listened to the Secretary of State’s response to my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) and heard no acknowledgement that the cuts by his Department to local authority funding and the removal of the weighting for deprivation have a massive impact on our country’s children—on their physical and mental health, and on their ability to access a wide range of services. Why does the Secretary of State not care?
Sajid Javid
I know that the hon. Lady cares about this issue, but she should recognise that many Members in all parts of the House care about it, too. That is why this Government have made sure that for children’s mental health services, through local authorities, there is dedicated funding of £1.4 billion over this spending period, which is the highest ever. In addition, the Green Paper that will be published by my right hon. Friend the Health Secretary will look at many of the long-term issues.
Steve Double (St Austell and Newquay) (Con)
I noted with interest the Secretary of State’s comments about funding to support the delivery of garden villages. Will he confirm that this will include the development at West Carclaze in St Austell? If so, will he meet me to discuss how we can ensure that these new homes are affordable and accessible to local people?
Sajid Javid
Let me thank my hon. Friend for his support for more funding for garden villages. The announcement will be made later today, and I will look carefully at making sure that it is clear about the ones we are supporting. He should also be clear that this is the first stage of support and we will be taking many other actions in due course, as set out by the Chancellor in the Budget, to support more garden villages and towns.
Andy Slaughter (Hammersmith) (Lab)
The Minister said earlier that there would be a review of the viability assessments under the national planning policy framework. Will he admit that there is a problem, which the Mayor of London and London councils see, and that these viability assessments are abused by developers to stop local authorities and others developing affordable homes?
Alok Sharma
On London, it is worth pointing out that we have made £3.15 billion already available for affordable housing .That has been welcomed by the Mayor of London, so I suggest that he should start and get building. On the viability assessments, as I have said, we have had a consultation, which we will reflect on and come forward with proposals.
Wendy Morton (Aldridge-Brownhills) (Con)
In his response to an earlier question, the Minister made reference to a call for evidence on unauthorised Traveller encampments. Will he confirm that local residents will also be able to feed in to that?
Alok Sharma
I can confirm to my hon. Friend that everyone will have an opportunity to give their views as part of that call for evidence.
Diana Johnson (Kingston upon Hull North) (Lab)
The northern powerhouse Minister mentioned HS2 as being the best transport investment for the north, but surely the best transport investment for the north would be “Crossrail for the north”, linking the great cities of the north with high-speed rail.
Jake Berry
Improving the east-west connectivity between Liverpool and Hull is one of the issues that we have asked Transport for the North, the first sub-national statutory transport body, to report on when it comes forward with its report. I am delighted that in the Budget we have a confirmation of £360 million to ensure that HS2 is futureproofed against HS3.
Robert Courts (Witney) (Con)
What assessment has the Minister made of whether owners of buildings with cladding that may not meet building regulations have been meeting their responsibilities or whether they have been seeking to pass the costs for this essential work on to leaseholders?
Sajid Javid
I thank my hon. Friend for that question. He will know that local authorities and housing associations have made it clear that they will not be passing on the costs, and that is the right approach. I would like to see private sector landlords follow the lead of the social sector and not pass on the costs to their tenants, but I also want to make sure that leaseholders have more information, which is why today I am announcing an increase in funding for the Leasehold Advisory Service.
Dan Jarvis (Barnsley Central) (Lab)
People in Barnsley and Doncaster are now voting on the future of Yorkshire devolution, and we will get the results on 21 December. Does the Minister agree that, whatever the results, national and local politicians have a responsibility to get round the table and work together to serve the best interests of the people of Yorkshire?
Jake Berry
As the season of goodwill and peace to all men approaches, I hope that across Yorkshire a compromise will be found. Just to restate our position, the Government remain committed to the south Yorkshire city deal proceeding.
Mr Speaker
Two Members are standing and seeking to catch my eye who have not contributed. I will call each of them, but their questions must be extremely brief—a short sentence. If you cannot do it that way, I do not want to be unkind, but don’t bother.
Wera Hobhouse
Last month, the Secretary of State decided not to call in a planning application on Foxhill, where we are losing 99 homes for social rent, telling us that the development is in line with Government policy. Will he confirm that losing social homes for rent is Government policy?
Rebecca Pow
I will talk very fast, Mr Speaker. May I say a big thank you to the Housing Minister for coming to Taunton Deane last week, where he met protestors at the Staplegrove development to see how important the road through the development was? Are the Government pursuing the right policy in putting more money into the housing infrastructure fund to guarantee that we get the roads that we need to make our houses work?
Alok Sharma
Absolutely; I can confirm that, as a result of the Budget, there is £5 billion in the housing infrastructure fund, which is precisely what many colleagues want to see in terms of spending on infrastructure.
Mr Speaker
Before we move on, I have been notified of a number of intended points of order springing directly out of Question Time. I say for the record that, on this occasion, I will take Members on trust and take those points of order now. However, if it becomes apparent to me that they are really just a way of trying to continue Question Time or if they are too long, when I have specifically said that they must be short, I will cut them off and the process of taking any—[Interruption.] Order. If that happens, the process of taking points of order at this time will be discontinued and those Members will be responsible.
I look to the shadow Secretary of State to set a good example, with a proper point of order done briefly—for which read “a sentence”.
John Healey (Wentworth and Dearne) (Lab)
On a point of order, Mr Speaker. Can you offer any guidance to the House on your expectations and on the conventions? We just heard the Secretary of State, after an hour of Question Time, say in an offhand way, in answer to the hon. Member for St Austell and Newquay (Steve Double), who has now left the Chamber, that later this afternoon he will make a statement about the backing the Government will give to garden villages and urban extensions. Surely we should have expected that either in a written statement this morning or certainly through a reference in the body of questions this afternoon, so that the House had a chance to ask him about it.
Mr Speaker
My understanding is that a written ministerial statement is expected. Whether that WMS is the WMS concerned, I do not know.
Mr Speaker
The simple nod—in fact, two nods of the head in unison by the Secretary of State and the Housing Minister—suggest that that is the gravamen of the matter. I am bound to say that it would be preferable, if such announcements are intended, for them to be worked into Question Time in some way, not by elongated replies, but by responding at topicals. What has happened is arguably irritating to colleagues, but it is not demonstrably disorderly. We will leave it there for now, but the shadow Secretary of State has made his point with his customary force and alacrity.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Will the nods appear in Hansard?
Mr Speaker
I do not know whether the nods will appear in Hansard. There will be no graphic images, but reference to the nods will appear. I hope that that satisfies the insatiable curiosity of the hon. Member for Huddersfield (Mr Sheerman).
Luciana Berger
On a point of order, Mr Speaker. In answer to my hon. Friend the Member for Warrington North (Helen Jones) about the Mersey tolls, the Under-Secretary of State for Communities and Local Government, the hon. Member for Rossendale and Darwen (Jake Berry), said that he had spoken to the Metro Mayor and that the Metro Mayor supported the tolls. I have been in contact with the office of the Metro Mayor of Liverpool and he says that he said no such thing. Would the Minister like to correct the record and withdraw his remarks?
Mr Speaker
I am grateful to the hon. Lady for raising her point of order. The answer is that it is for each and every Member, be they a Front Bencher or a Back Bencher, to be responsible—[Interruption.] Order. It is for each and every Member to be responsible for the veracity of what is said in this place. If a correction is required, it is better sooner rather than later. If the hon. Gentleman judges that no correction is required, that is his prerogative.
Jake Berry
No correction is required, Mr Speaker. I discussed the matter with the Metro Mayor of Liverpool as we walked across the bridge while it was under construction. Perhaps he will remember with the added detail.
Mr Speaker
In that case, we will leave it there. It was right that it was aired and I am grateful to the Minister for his response. I cannot be expected to adjudicate between the competing witness accounts.
Petition
Mr Peter Bone (Wellingborough) (Con)
I am grateful to all the Members who have come along to listen to the petition, particularly my hon. Friend the Member for Corby (Tom Pursglove), whose constituency is also affected by this dreadful proposal for a factory-style American chicken farm in Higham and Rushden. As a result of this outrageous proposal, 540,000 chickens will be slaughtered every 39 days. The lead petitioners are Councillor David Jenney, Roger Barnes and Councillor Peter Tomas, and 7,002 people have signed the petition. It states:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled,
The Humble Petition of residents of Rushden, Northamptonshire and the surrounding area,
Sheweth,
That the Petitioners believe that the proposed Bedfordia Farms planning application for a high intensity chicken farm be refused on the grounds of increased pollution, foul odour, effect on local house prices, increased traffic volume; and further that similar farms have a poor record on animal welfare.
Wherefore your Petitioners pray that your Honourable House urges the Department for Environment, Food and Rural Affairs, the Department for Communities and Local Government, Northamptonshire County Council and East Northamptonshire Council to take in account the concerns of petitioners and refuse to grant the planning application for a high intensity chicken farm to Bedfordia farms.
And your Petitioners, as in duty bound, will ever pray, &c.
[P002087]
Social Mobility Commission
(7 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Speaker
We are about to come to the right hon. Member for Twickenham (Sir Vince Cable) and his urgent question. Let me say to the House that this is not the occasion for a general exchange about social mobility or the lack of it. This is a question laser-like focused on the resignation of the board of the Social Mobility Commission and will be treated as such by the Chair. I want it to run for no longer than half an hour, not because it is not important—it is extremely important—but because there are eight hours of protected business, which is also extremely important, and I have to balance these considerations, so self-discipline is required.
Sir Vince Cable (Twickenham) (LD)
(Urgent Question): To ask the Minister for Children and Families if he will make a statement on the resignation of the board of the Social Mobility Commission.
The Minister for Children and Families (Mr Robert Goodwill)
Thank you, Mr Speaker, for allowing me to take this urgent question, which gives us an opportunity to underline our commitment to improving social mobility in our country.
I am extremely grateful to Alan Milburn for his work as chair of the Social Mobility Commission over the past five years. We had already told him that we planned to appoint a new chair. We will hold an open application process for that role to ensure that we continue to build on this important work and that the foundation laid by Alan and his team can be built on.
Tackling social mobility is the Department’s priority. We are driving opportunity through the whole education system. We have made real progress in recent years. The attainment gap between disadvantaged children at the end of reception has narrowed, and the proportion of eligible disadvantaged two-year-olds benefiting from funded childcare has risen from 58% in 2015 to 71% in 2017. We are putting more money into the early years than ever before, spending a record £6 billion a year on childcare and early education support by 2019-20. We are also increasing the number of good school places, with 1.9 million more children in good or outstanding schools than in 2010. There are over 15,500 more teachers in state-funded schools in England than in 2010. The £140 million strategic school improvement fund will target resources to support school performance and pupil attainment at the schools that need it most.
The attainment gap, as highlighted by the commission, between disadvantaged pupils and their peers has narrowed since we introduced the pupil premium—now worth around £2.5 billion a year—in 2011. That is a coalition policy that we continue to embrace.
We know that there is more to do and we are focusing on areas of the country with the greatest challenges and the fewest opportunities, including £72 million in the 12 opportunity areas. Plans for the first six areas were published on 9 October 2017 and we will publish plans for the second six areas early in November.
The outgoing chair of the Social Mobility Commission welcomed the launch of the opportunity area programme and the Government’s commitment to addressing disadvantage, which remains a priority for the Government.
Sir Vince Cable
I do not think that the Conservatives have ever claimed to be a party of equality, but they have always claimed to be a party of equality of opportunity—in other words, social mobility. When the Prime Minister took office, her first speech set out very clearly the objective to do everything to help everybody, whatever their background, to go as far as their talents will take them. What does the resignation of the commission tell us about the Government’s success in achieving that objective? The chairman of the commission was very pointed. He said that the worst possible position in politics
“is to set out a proposition that you’re going to heal social divisions and then do nothing about it.”
It would be very difficult to spin the resignation of the commission in partisan terms, because Alan Milburn has conscientiously served Labour, coalition and Conservative Governments. Among the commissioners who have resigned with him, one was a highly respected former Conservative Secretary of State for Education.
I have a specific question for the Minister about the most recent of the commission’s reports, to which he will no doubt be able to respond. Why have only five of the 65 social mobility coldspots—the areas with the least social mobility, everywhere from west Somerset to east midlands cities—been covered by the various growth deals negotiated by the Government? The report makes the point that geographical division in Britain is now more extreme than in any other country in Europe, so will the Government consider reinstating the regional growth fund, which played an important role in addressing that problem during the coalition? As the barriers to social mobility often rest in incentives to work, will the Minister explain how the £3 billion cut to the work allowance will affect people’s willingness to work once they are in low-income employment?
The commission is even-handed and praises the Secretary of State for Education for her commitment. But what does it say about the Government’s commitment when the most committed and conscientious member of the Cabinet is presiding over a 60% cut in apprenticeships, which blocks social mobility through vocational education, and a 6% cut real cut in schools spending over the next five years?
Does the Minister agree with the chair of the commission’s point that Brexit is now sucking the life out of Government, and that the biggest casualties of Brexit—particularly the extreme Brexit of withdrawing from the single market and the customs union—will be the 60 of the 65 social mobility coldspots that voted for Brexit?
Mr Goodwill
I do not recognise the right hon. Gentleman’s characterisation that we have done nothing to address social mobility. Disadvantaged children are 43% more likely to go to university than in 2009. Our two-year-olds childcare offer has a 71% take-up compared with 58% in 2015. Some 1.9 million more children go to outstanding schools than in 2010, and there are more teachers in schools than ever before. We have made progress in a number of areas, including our offer of 30 hours of free childcare, which helps working families to cope with the cost of childcare while they juggle childcare and work at the same time.
I reaffirm the fact that social mobility remains a priority of the Government. I am fully committed to that, as are the Secretary of State and the Prime Minister. The right hon. Gentleman mentioned geographical spread. If he reads the report, he will see that the spread is patchy, with parts of London demonstrating a real need for more assistance, and more needing to be done in places such as the east and west midlands. That is precisely why we have designated the 12 opportunity areas in the places where we most need to address the situation for children in the early years, with regard to education, the aspiration to get into employment and get good qualifications and the most difficult nut to crack—the home learning environment. Many young children are starting nursery provision without the basic skills that many other children from better-off backgrounds have.
I want to make it clear that, although Brexit is an important priority for this Government, we can walk and chew gum at the same time. We are absolutely committed to ensuring that we continue the process of improving social mobility for everyone in the country.
Mr Speaker
May I remind the House of what I said fewer than 10 minutes ago? The question is about the resignation of the board, so questions should be about that matter; it is not unreasonable to hope that the same might also be said of answers.
Robert Halfon (Harlow) (Con)
Many people were inspired by what the Prime Minister said on the steps of Downing Street when she took office. Will my hon. Friend look into using this opportunity to reform the Social Mobility Commission to create a social justice commission at the heart of Downing Street to assess the impact of every bit of domestic legislation on social justice?
Mr Goodwill
May I put on record our commitment to maintain the Social Mobility Commission? It has done great work over the last five years, and I again pay tribute to Alan Milburn for his work as chair. We intend to refresh the commission. We need to bring in some new people—people who will hold us to account and who will hold our feet to the fire—to ensure we get a good spread of representation on the commission.
Angela Rayner (Ashton-under-Lyne) (Lab)
I thank the right hon. Member for Twickenham (Sir Vince Cable) for securing this urgent question.
Once again, this Prime Minister is not for turning up, and nor is the Education Secretary. No wonder the former chair of the commission said that No. 10 was no longer listening. Perhaps the Minister can actually answer the questions the chair raised in his resignation letter. Are the Government really committed to the commission as an independent body? Although they have just put on record their commitment, what do they see as the commission’s role, and what will its remit be now? How much funding will the commission have? Can the Minister confirm that, in the year since the commission’s 2016 report, the Government have not adopted a single one of its recommendations? Did the commissioners raise that with Ministers before resigning? The report said that Britain had a “deep social mobility problem” and
“an unfair education system, a two-tier labour market, an imbalanced economy and an unaffordable housing market.”
What are the Government actually doing about that, and was that a factor in the resignations?
On the labour market, the Prime Minister made a defining speech on insecure jobs—she has been developing an expertise in that issue lately—but whatever happened to the Taylor review? In education, has the Minister seen the commission’s findings on the teaching workforce, early years and kids in care, who are still denied the 30-hours entitlement? Has he listened to the commission’s recommendations on housing, regional transport infrastructure and the need for rebalanced investment to create more decent jobs across the country?
When a former Tory Education Secretary resigns from a Tory Government commission, we know this goes well beyond party politics. In his resignation letter, the chair of the commission said the commissioners were resigning because he had “little hope” of the current Government building a fairer Britain. If their own commission has little faith in this Government, why should the rest of us?
Mr Goodwill
I am happy to answer this question on behalf of the Department, as the Minister for Children and Families and also as the Minister responsible for the opportunity areas, which demonstrate our real commitment to tackling social mobility in the coldspots, as laid out by the commission itself.
The hon. Lady asked, are the Government really committed to this commission? The answer is yes, absolutely. She asked about the role of the commission. That will not change; indeed, I pay tribute to the commission for the work it has done and to Alan for the work he has done.
The hon. Lady talked about the workforce in education, and I just repeat the fact that we now have 457,000 teachers working in state-funded education, which is over 15,500 more than before. She drew attention to the 30 hours of free childcare, and that is an example of exactly how we are trying to help working families. We have a 93% uptake from the children who have achieved codes. I have met parents up and down the country who have told me that this has transformed their lives, enabled them to juggle work and childcare and, indeed, put £5,500 in their pockets.
So I am proud of what this Government have achieved in addressing social mobility. To listen to Labour Members, you would think that everything in the garden was beautiful when they left power. Again, as in so many cases, we are sorting out the mess they left behind.
Mrs Helen Grant (Maidstone and The Weald) (Con)
Can the Minister confirm when the Government are likely to publish their social mobility strategy, and are there likely to be any changes in the light of what Alan Milburn has said in recent days and of his resignation?
Mr Goodwill
I thank my hon. Friend for the question. We continue to work hard on our social mobility action plan, and we plan to publish it soon.
Tommy Sheppard (Edinburgh East) (SNP)
Alan Milburn is no longer a Member of this House, so he observes the Government from an outside and slightly detached point of view. When he says that this Government are riddled with
“indecision, dysfunctionality and a lack of leadership”,
I have to say to him that he should see it from where I am standing—it is a lot worse than that. In this country, we are approaching a perfect storm of freezing wages in real terms, cuts to benefits in real terms and rising prices—a perfect storm where the poor will pay for the failure of Government policy. So I ask the Minister what assurances we have, given that the Government continue to be obsessed by Brexit, that he will actually listen to any advisers in this policy area who are appointed in the future?
Mr Goodwill
Alan Milburn has advised the Government through his commission over the past five years, and the Government have taken much of his advice on board; when he was publicising his most recent report, he made some very constructive comments. I stand by the record as outlined in the answer to the initial question from the right hon. Member for Twickenham (Sir Vince Cable): we have made considerable progress but there is much left to be done. The best way of getting families out of poverty is to ensure that they get into the workplace, and we have record levels of employment. The best way to get children the best opportunities in life is to deliver a great education, and we are delivering a better education for more children than ever before in England.
Mims Davies (Eastleigh) (Con)
I was pleased to hear from the Minister about the home learning environment, alongside our good schools, giving true opportunity to our children. On the Government side of the House, we want our children to go as far as their talents will take them. Is this not an opportunity for a renewal?
Mr Speaker
Order. I remind hon. Members again that the resignation of the board is the matter of which we are treating.
Mr Goodwill
I will comment briefly. The home learning environment is one of the toughest nuts to crack. Many children start their early education without the basic skills that they need. Much of that is due to the fact that they are not read to, that televisions may not be turned off and that they are not communicated with. That is a real challenge, and I hope that the new commission will give us pointers on how we can continue to address it.
Ms Angela Eagle (Wallasey) (Lab)
The Minister is doing his best to ignore the fact that the entire board of the social mobility commission has resigned. Why does he think that is? Can he give us an answer?
Mr Goodwill
If the hon. Lady looks back over the past five years, she will see that Alan has been supportive of much of the action that we are taking to improve social mobility, such as the Department for Education’s opportunity areas. We welcome constructive challenge as we all work together to tackle social mobility.
This will give us an opportunity to refresh the commission and improve its diversity. I assure the House that we are not in the position of employing a patsy for the Government: I want somebody who will continue to challenge the Government, continue to hold our feet to the fire and engage constructively—not only with central Government but with local government, which is charged with delivering many of the solutions.
Sir Edward Leigh (Gainsborough) (Con)
Before the commission resigned, did they suggest one radical idea for driving social mobility through the education system, and did the Government gainsay it? Namely, why do we not concentrate on the children from the most deprived backgrounds and postcodes, give them an intelligence test at 11 for which they cannot be tutored, and put them in special schools so that they have a rigorous academic education? The schools could be called grammar schools.
Mr Goodwill
As I understand it, that was not one of the suggestions that Alan Milburn made as he was leaving.
Mr Speaker
Order. That question, although delivered with the hon. Gentleman’s customary lucidity, also suffered from the disadvantage of being utterly irrelevant to the question of the resignation of the board. Perhaps we can return to the matter at hand.
Several hon. Members rose—
Mr Speaker
Let us take a good, honest, reliable citizen—there are so many to choose from on both sides. I call Peter Kyle.
Peter Kyle (Hove) (Lab)
Thank you, Mr Speaker—that is an introduction I will struggle to live up to.
Alan Milburn has said that he resigned because of dysfunction in the Government and the lack of implementation. The Minister’s response gives the impression that he resigned because all the work was already done. Once again, can the Minister give us a clear explanation: why did the board resign, from his perspective?
Mr Goodwill
Mr Milburn was told on 22 November that, although the post would be readvertised, he would not be expected to apply. On the resignation, as the hon. Gentleman described it, we were looking to refresh the board and bring some new blood in. I hope that that will give us a good opportunity to improve the functioning of the board. As I say, that is no personal reflection on Alan Milburn or the work he has done—he has been very good over the five years he has done this job. He has held us to account and held our feet to the fire, as the commission was designed to do.
Mr Speaker
I was gently teasing the hon. Member for Hove (Peter Kyle) but, needless to say, all Members are honest—that goes without saying.
Lucy Frazer (South East Cambridgeshire) (Con)
Reports produced by the Social Mobility Foundation show that in the past year, east Cambridgeshire has gone up 70 places. While there is still more work to do, does the Minister think that the commission should be proud of this progress?
Mr Goodwill
Absolutely. There are parts of the country where tremendous progress has been made, not least in London, and they have shown the way ahead not only in education but in other areas. I am very optimistic that, as our 12 opportunity areas get into the full implementation stage, we will see improvements in those areas and learn lessons that can be applied elsewhere around the country.
Nic Dakin (Scunthorpe) (Lab)
Is the fall in social mobility reported by the Joseph Rowntree Foundation today good reason for the commission to resign, or should the Government be resigning for their failure?
Mr Goodwill
I am certainly aware of the Joseph Rowntree report on relative poverty. I point out to the hon. Gentleman that absolute poverty has fallen by over 300,000 since 2010 and pensioner poverty remains close to historical levels. That is the sort of poverty that affects people in their everyday lives. Perhaps people are not as aware of the measure of relative poverty as they would be of real poverty.
Huw Merriman (Bexhill and Battle) (Con)
I am very sorry that the board has chosen to resign. The Conservative party has done so much for social mobility; I would consider myself an example from the ’80s. When it comes to appointing a new board, could we look at having more than four members to provide a bit more diversity?
Mr Goodwill
My hon. Friend makes a good point. There is no limit on the number of people on the board; indeed, I think it had almost 10 at one time. I hope that the publicity surrounding this question may encourage people to apply to be on the board, because we want a wide cross-section of applications, including perhaps somebody who has not necessarily been in political life but has been involved at the cutting edge in delivering better social mobility solutions.
Neil Gray (Airdrie and Shotts) (SNP)
The board members have clearly become exasperated by the UK Government’s failure to acknowledge and act on their work on lifting people out of poverty. Does the Joseph Rowntree Foundation report today not highlight and emphasise that?
Mr Goodwill
The Joseph Rowntree report on relative poverty will always reflect changes—for example, in levels of pensions and levels of employment. If we see higher employment or higher levels of pensions, then an unfortunate side effect will be that relative poverty will increase. As I have said, there are now over 300,000 fewer people in absolute poverty, and that is the figure that is more important to them in their everyday lives as they are shopping for Christmas.
Justin Tomlinson (North Swindon) (Con)
As the new board is formed, one of the key areas of expertise we need is the ability to build on record employment as, for the first time ever, those entering work will continue to get support from their named job coach, helping to unlock their potential to keep their work, increase their hours, increase their pay, and progress within work. Can that be a real priority for a new board member?
Mr Goodwill
There are a number of areas of experience and expertise that we will wish to see from the new board members. This is an opportunity to refresh the board. I look forward to an inspiring chair of the Social Mobility Commission to take forward the work that Alan Milburn has laid the foundations for.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The Minister’s attempt to divert attention from what has happened simply has not worked. Is he embarrassed that according to the Joseph Rowntree report the Government have presided over a record increase in poverty, particularly among young people and pensioners?
Mr Goodwill
Once again, I must repeat that while there are changes in relative poverty, absolute poverty has fallen.
Mr Philip Hollobone (Kettering) (Con)
Education is key to improving social mobility, so will the Minister ensure that the new commissioners who are appointed recognise the benefits of, and draw inspiration from, the fact that the proportion of pupils attending good or outstanding schools has increased from 66% in 2010 to 87% today?
Mr Goodwill
My hon. Friend is absolutely right. One of the best routes out of poverty—out of the trap that social mobility failures often put people in—is a good education. I am very pleased that we have more good school places than ever before, that more people from underprivileged backgrounds are going to university, and that more people than ever before are taking the other opportunities such as apprenticeships and training.
Nick Thomas-Symonds (Torfaen) (Lab)
In the years I worked in the university sector, a great deal of time was spent going out to schools to encourage pupils from all backgrounds to apply to university. What sort of message does it send when the chair of the commission resigns and says that the Government simply do not have time for social mobility?
Mr Goodwill
That is not the case. Social mobility is absolutely at the top of my priority list, as well as those of the Secretary of State and the Prime Minister. We are absolutely committed to delivering better social mobility in our country. The evidence that I have already given about progress in very many areas, including in university, is testament to that.
Tom Pursglove (Corby) (Con)
Rather than appointing politicians as replacements to the board, is my right hon. Friend keen to consider leading community people who have ground-level experience? I can suggest to him a list of brilliant people who do incredible work in Corby and whom he might want to consider.
Mr Goodwill
Yes, absolutely. I must make it clear that Alan Milburn was told that there would be an open process—in other words, that we were opening up the selection—and he said in his letter that he would not be applying. That is to put on record exactly what happened in that case. I hope that we will get a wide range of applicants, so that we can choose some of the very best and most able to help us in moulding our future policies to improve social mobility.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Why have the Government not adopted any of the Social Mobility Commission’s recommendations since 2016? How does the Minister expect to attract new commissioners when he ignores the very important work that they do?
Mr Goodwill
We have certainly not ignored the commissioners’ work, and the social mobility index has been a useful tool to help the Government to prioritise how they address the problem. The opportunity areas, some of which were announced in September and more of which will be announced in the new year, are precisely targeted at the areas identified by the Social Mobility Commission in its “cold spot” programme.
Alan Brown (Kilmarnock and Loudoun) (SNP)
With a report in The BMJ estimating that up to 120,000 deaths in England and Wales have been caused by UK Tory policy, with Scotland’s Children’s Commissioner threatening to take the UK Government to court over universal credit, and with life expectancy falling for the first time in decades, it is little surprise that the Social Mobility Commission resigned en masse. What changes are the Government going to make, and what are they going to do to get in place a new independent commission that can hold the Government to account?
Mr Goodwill
The recruitment process will commence as soon as possible and will ensure that we get the best people to advise us and the House on the progress that we continue to make. As I say, the situation has improved since 2010, and we are ensuring that it continues to improve.
Thelma Walker (Colne Valley) (Lab)
With all the board members of the Social Mobility Commission resigning, and with a new report released today by the Joseph Rowntree Foundation showing that the number of lone-parent families in poverty has increased by 5% since 2010-11, does the Minister agree that the Government’s ambition for social mobility has failed?
Mr Goodwill
Our 30 hours’ free childcare offer is available to lone parents, who need to earn only about £6,500 a year to qualify. That is a great opportunity for lone parents to get into the workplace, to start putting some money into the family budget and to get themselves and their families out of the difficult financial situations in which they may find themselves.
Clive Lewis (Norwich South) (Lab)
The former commission was valued across the political spectrum for its independent advice. Can the Minister assure us that in contrast to Norwich’s social mobility opportunity board, where a crony has been appointed, he will consider allowing a Select Committee to appoint someone to this public position?
Mr Goodwill
I had thought that the hon. Gentleman was better than that. I think we have some great people on the board in Norwich, and I look forward to working with them to provide better opportunities for people in Norwich.
Diana Johnson (Kingston upon Hull North) (Lab)
The Minister is a plain-speaking Yorkshireman. Could he use those attributes to explain why he thinks the whole board resigned?
Mr Goodwill
As I have made clear, we need to refresh the board. The board have been very effective, but earlier in the year we had a recruitment round, at which we did not feel we had the right calibre of new people coming in. I think this is a great opportunity to get some new blood on to the commission and make sure that it carries on the work started by Alan and his board, so that we continue to identify the challenges of social mobility and the best ways of addressing them.
Chris Bryant (Rhondda) (Lab)
If everything the Minister says is true, why was Gillian Shephard, a Conservative member of the board, absolutely livid about the way in which the Government have treated the commission?
Mr Goodwill
I cannot speak for my right hon. Friend, but as I have said, we now have an opportunity to get some new people on to the board. A number of the existing members had been long-standing members of the board, and although I recognise the contribution they have made, a refresh that brings in new people will provide a good opportunity to increase the body’s diversity and experience.
Matt Western (Warwick and Leamington) (Lab)
Will the Minister confirm whether he or the Education Secretary has had the chance to speak to any members of the board since their resignation and to establish whether the wholesale closure of our children’s centres across the country, including the 25 in Warwickshire, contributed to their resignations?
Mr Goodwill
The Secretary of State spoke to Alan Milburn on 22 November. I understand that the other members who have tendered their resignations have written letters; they have not made them public, which I think is interesting.
Certainly one of the challenges for local authorities is how they deliver good services for children, and having children’s centres is one way of doing so. If I may say so, when I was at the children’s centre in my constituency, the lady in charge looked out of the window and said, “Of course, the real problem is that the kids we need in this children’s centre aren’t here; they are stuck at home because their parents won’t bring them in.” There are a number of initiatives around the country that will demonstrate better solutions for addressing social mobility issues for the most difficult to reach families.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The commissioners who have resigned claim there is a lack of Government seriousness on social mobility, as evidenced by the fact that the millennials are the first generation ever to earn less than the previous generation. Is what pushed the commissioners over the edge the fact that, under this Government, things can only get worse?
Mr Goodwill
The hon. Lady makes quite a political point. I note that the East Anglia Co-op is now selling goods that are past their best-before date, but I do not think this country needs Labour peddling policies that were well past their sell-by date in the 1970s.
Several hon. Members rose—
Mr Speaker
Order. I am sorry, but I am going to conclude at this point. I know only a few Members are left to ask questions, but there will be many opportunities fully to air this matter. Looking at the perspicacious Members who were standing, I am quite sure that even if I had not said that, they would anyway have found such opportunities.
Points of Order
Peter Kyle (Hove) (Lab)
On a point of order, Mr Speaker. After incessant briefing for the past two days that the Prime Minister and the Government were close to a deal, it has emerged in the past few seconds that she is going to come home empty-handed, with no deal. This shambles puts into perspective the constitutional settlement for our country, so can we expect her to make a statement tomorrow?
Mr Speaker
I am bound to say to the hon. Gentleman that it had very much been my expectation that there would in any event be a statement to this House this week. Although I cannot predict this with certainty, I had anticipated and been given reason to believe that it was likely to be tomorrow. The appetite of the hon. Gentleman will be at least partly satisfied ere long, and I expect to see him in his place and springing up from it with alacrity in a desire to contribute to our proceedings.
Several hon. Members rose—
Mr Speaker
I am saving up the hon. Member for Ilford South (Mike Gapes); it would be a pity to squander him too early. I call David T. C. Davies.
David T. C. Davies (Monmouth) (Con)
Further to that point of order, Mr Speaker. The news is actually that Juncker is confident there will be a deal next week. Is it not wrong to say that the Prime Minister is coming back empty-handed when there is almost certainly going to be a deal? Is it not the Europeans who are going to be empty-handed if they do not get their hands on our £50 billion?
Mr Speaker
That underlines the importance of not jumping the gun. I understand the hon. Gentleman’s impatience, but we must not allow this to become a spat between people who want to say that all is well and those who want to say that all is ill. I simply invite the House to be a little patient: these matters will be addressed by one means or another—almost certainly by the proffering of a Government oral statement—very soon.
Several hon. Members rose—
Mr Speaker
Order. If Members only want to repeat what others have said, but with the words they have busily rehearsed in front of the mirror, they might think it better to save them for the long winter evenings that lie ahead.
Mr Speaker
The hon. Gentleman is a former Chair of the Foreign Affairs Committee, so I must hear him.
Mike Gapes
On a point of order, Mr Speaker. The media are reporting that a Europe Minister is at this moment briefing Conservative MPs about what has been happening in Brussels. Do you have any indication whether Members of the other parties will be given a briefing or a statement by the Brexit Department about issues such as regulatory divergence?
Mr Speaker
The matter of regulatory divergence has not crossed my desk today.
Mr Speaker
The right hon. Member for New Forest West chunters from a sedentary position that it has not crossed his desk either. The question of what Ministers do in respect of briefing their own Members is not known to me, but I think I can say with complete confidence that this House will be briefed about this matter and will have an opportunity fully to question the relevant Minister, be it the Prime Minister or the Brexit Secretary, on it. I hope that Members will accept that on the basis that they do not have to look into the crystal ball when they can read the book. I say this, I hope, in no spirit of immodesty. I run statements in this place more fully than used to be done in the past, and I do that because I think that the priority is for Members of the House to have the opportunity to question and challenge the Executive, even if now and again the Executive find that irritating. That does not bother me at all. I always try to put the House first, so worry not. Everyone will get a chance to be heard.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
On a point of order, Mr Speaker. You will no doubt have seen the extensive coverage that the Government secured yesterday on the front pages of various newspapers, and in a number of interviews on political programmes and on the radio with both the Secretary of State for Health and the Secretary of State for Education, about the launch of the Green Paper on young people’s mental health, including an announcement of £300 million. The 50-page Green Paper has been published today, accompanied by a brief written statement. Have your good offices been made aware of any intention by the Government to make an oral statement to the House about this announcement? If not, is it in order for the Government to make announcements to the press about how they intend to address our nation’s mental health crisis and for us then not to get the chance to properly scrutinise or debate it in this House?
Mr Speaker
I understand the hon. Lady’s sense of frustration about this matter, in view of her long-standing and deep interest in the subject. Nothing disorderly has occurred. It is quite commonplace for Government to issue Green Papers, and they are not necessarily accompanied by oral statements. In this instance, a written statement has been issued. I understand that that might not satisfy the hon. Lady’s palate, if I can put it that way. Moreover, I have to make judgments, as she knows, about urgent question applications, to which she has not referred, quite properly, on the basis of overall levels of demand on other subjects and in the light of time constraints. It may be that the Government will be sufficiently moved to want to make an oral statement about their planned expansion of mental health services for young people. If, however, that proves not to be the case, or the hon. Lady has reason to suspect that it will not be the case and she wishes to return to the matter, it is open to her to try to do so by one or other means.
European Union (Withdrawal) Bill
Monday 4th December 2017
(7 years ago)
Commons ChamberRead Full debate European Union (Withdrawal) Act 2018 View all European Union (Withdrawal) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 4 December 2017 - (4 Dec 2017)
23:59 - The Committee divided: - Ayes: 256 / Noes: 313 - Question accordingly negatived.
00:14 - The Committee divided: - Ayes: 292 / Noes: 316 - Question accordingly negatived.
00:30 - divided: - Ayes: 290 / Noes: 316 - Question accordingly negatived.
00:45 - The Committee divided: - Ayes: 315 / Noes: 290 - Question accordingly agreed to.
Jenny Chapman (Darlington) (Lab)
I beg to move, That the clause be read a Second time.
The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)
With this it will be convenient to discuss the following:
New clause 65—Role of Joint Ministerial Committee—
“(1) The Joint Ministerial Committee is to be a forum—
(a) for discussing—
(i) the terms upon which the United Kingdom is to withdraw from the European Union and the United Kingdom’s future relationship with the European Union;
(ii) proposals to amend retained EU law;
(iii) agreed legal and policy frameworks in relation to the subject matter of devolved retained EU law that are to operate throughout the United Kingdom;
(iv) a concordat setting out the process for concluding the legal and policy frameworks mentioned in sub-paragraph (iii); and
(b) for seeking a consensus on those matters between Her Majesty’s Government and the other members of the Joint Ministerial Committee.
(2) Before Her Majesty’s Government concludes a withdrawal agreement, the Secretary of State must produce a document for consideration by the Joint Ministerial Committee setting out—
(a) Her Majesty’s Government’s objectives and strategy in negotiating and concluding a withdrawal agreement;
(b) Her Majesty’s Government’s objectives and strategy in relation to establishing a framework for the United Kingdom’s future relationship with the European Union;
(c) the steps Her Majesty’s Government intends to take to keep the Joint Ministerial Committee informed of progress in reaching a withdrawal agreement;
(d) the steps Her Majesty’s Government intends to take to consult each member of the Joint Ministerial Committee before entering into a withdrawal agreement and for taking the views of each member into account;
(e) the steps Her Majesty’s Government intends to take to seek the approval of the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly before entering into a withdrawal agreement.
(3) Until a withdrawal agreement is concluded, the Secretary of State must produce a report every three months for consideration by the Joint Ministerial Committee setting out—
(a) Her Majesty’s Government’s assessment of the progress made against Her Majesty’s Government’s objectives—
(i) in negotiating and concluding the withdrawal agreement;
(ii) in relation to establishing a framework for the United Kingdom’s future relationship with the European Union;
(b) any change to the matters listed in paragraphs (a) to (e) of subsection (2).
(4) Before concluding a withdrawal agreement the Prime Minister must produce a document setting out the terms of the proposed agreement for consideration by the Joint Ministerial Committee.
(5) Meetings of the Joint Ministerial Committee must, until Her Majesty’s Government concludes a withdrawal agreement, be chaired by—
(a) the Prime Minister, or
(b) the Secretary of State for Exiting the European Union.
(6) In this section, “the Joint Ministerial Committee” means the body set up in accordance with Supplementary Agreement A of the Memorandum of Understanding on Devolution, between Her Majesty’s Government, the Scottish Government, the Welsh Government and the Northern Ireland Executive Committee.”
This new clause would put the Joint Ministerial Committee’s role in the withdrawal process on a statutory footing.
Amendment 42, in clause 11, page 7, line 16, leave out subsections (1) to (3) and insert—
“(1) In section 29(2)(d) of the Scotland Act 1998 (no competence for Scottish Parliament to legislate incompatibly with EU law), omit ‘or with EU law’.
(2) In section 108A(2)(e) of the Government of Wales Act 2006 (no competence for National Assembly for Wales to legislate incompatibly with EU law), omit ‘or with EU law’.
(3) In section 6(2)(d) of the Northern Ireland Act (no competency for the Assembly to legislate incompatibly with EU law, omit ‘is incompatible with EU law’.”
This amendment removes the Bill’s proposed restrictions on the ability of the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly to legislate on devolved matters.
Amendment 164, page 7, line 16, leave out subsections (1) and (2) and insert—
“(1) In section 29(2)(d) of the Scotland Act 1998 (no competence for Scottish Parliament to legislate incompatibly with EU law), omit ‘or with EU law’.
(2) In section 108A(2)(e) of the Government of Wales Act 2006 (no competence for National Assembly for Wales to legislate incompatibly with EU law), omit ‘or with EU law’.”
This amendment would replace the Bill’s changes to the legislative competence of the Scottish Parliament and the National Assembly for Wales in consequence of EU withdrawal, by removing the restriction on legislative competence relating to EU law and ensuring that no further restriction relating to retained EU law is imposed.
Amendment 132, page 7, line 19, leave out from “law)” to end of line 29 and insert
“omit ‘or with EU law’”.
This amendment is intended to remove the proposed bar on the Scottish Parliament legislating inconsistently with EU law after exit day.
Amendment 90, page 7, leave out lines 22 to 29 and insert—
“‘(4A) An Act of the Scottish Parliament cannot modify, or confer power by subordinate legislation to modify, retained EU law which relates to matters specified in Schedule 5 to the Scotland Act 1998.’”
This amendment would remove the restrictions on the Scottish Parliament modifying retained EU law except in relation to matters that are reserved.
Amendment 133, page 7, line 33, leave out from “law)” to end of line 7 on page 8 and insert
“omit ‘or with EU law’”.
This amendment is intended to remove the proposed bar on the National Assembly for Wales legislating inconsistently with EU law.
Amendment 91, page 7, leave out from beginning of line 36 to the end of line 7 on page 8 and insert—
“‘(8) An Act of the Assembly cannot modify, or confer power by subordinate legislation to modify, retained EU law which relates to matters specified in Schedule 7A to the Government of Wales Act 2006.’”
This amendment would remove the restrictions on the National Assembly for Wales modifying retained EU law except in relation to matters that are reserved.
Amendment 134, page 8, line 9, leave out from “Assembly)” to end of line 28 and insert “omit subsection 2(d)”.
This amendment is intended to remove the proposed bar on the Northern Ireland Assembly legislating inconsistently with EU law.
Amendment 92, page 8, leave out lines 14 to 28 and insert—
“‘(6) An Act of the Assembly cannot modify, or confer power by subordinate legislation to modify, retained EU law which relates to matters specified in Schedules 2 or 3 to the Northern Ireland Act 1998.’”
This amendment would remove the restrictions on the Northern Ireland Assembly modifying retained EU law except in relation to matters that are reserved or excepted.
Amendment 72, page 8, line 28, at end insert—
“(3A) This section shall not come into effect until—
(a) the Scottish Parliament has passed a resolution approving the provisions in subsection (1);
(b) the National Assembly for Wales has passed a resolution approving the provisions in subsection (2); and
(c) the Northern Ireland Assembly has passed a resolution approving the provisions in subsection (3).”
Amendment 337, page 8, line 33, at end insert—
“(6) Subsections (1), (2) and (3) shall not come into force until the exit day appointed for the purpose of this section, which must not be before the end of any transitional period agreed under Article 50 of the Treaty on the Functioning of the European Union.”
This amendment, alongside Amendment 42 and NC64, would establish that the UK Government has until the end of transitional arrangements to create any UK-wide frameworks.
Clause 11 stand part.
Amendment 165, in schedule 3, page 25, line 37, leave out paragraphs 1 and 2 and insert—
“1 In section 57(2) of the Scotland Act 1998 (no power for members of the Scottish Government to make subordinate legislation, or otherwise act, incompatibly with EU law or Convention rights), omit ‘or with EU law’.
2 In the Government of Wales Act 2006, omit section 80 (EU law).”
This amendment would replace the Bill’s changes to the executive competence of the Scottish Ministers and Welsh Ministers in consequence of withdrawal from the EU, by removing the restriction on competence relating to EU law and ensuring that no further restriction relating to retained EU law is imposed.
Amendment 183, page 28, line 2, leave out from first “and” to end of line 3.
This consequential amendment, linked to Amendments 164 and 165 to Clause 11 and Schedule 3, would change a heading in the Scotland Act 1998 to remove a reference to retained EU law.
Amendment 184, page 28, line 38, leave out from “(d)” to end of line 39 and insert
“omit ‘or with EU law’”.
This consequential amendment, linked to Amendments 164 and 165 to Clause 11 and Schedule 3, would change the definition of devolution issues in the Scotland Act 1998.
Amendment 185, page 29, line 5, leave out paragraph 21.
This consequential amendment, linked to Amendments 164 and 165 to Clause 11 and Schedule 3, would enable changes to the procedure for subordinate legislation in the Scotland Act 1998.
Amendment 186, page 29, line 28, leave out from “subsection” to end of line 29 and insert “(4), omit paragraph (d)”.
This amendment makes a change consequential on Amendment 165, which would omit section 80 of the Government of Wales Act 2006, making section 58A (4)(d) of that Act redundant.
Amendment 187, page 30, line 4, leave out
“before ‘EU’ insert ‘Retained’”
and insert “omit ‘EU law’”.
Amendment 165 omits section 80 of the Government of Wales Act 2006. This amendment would amend the changes made to the heading before section 80 to reflect the omission of section 80 of the Government of Wales Act 2006.
Amendment 188, page 30, line 5, leave out paragraph 31.
This amendment makes a change consequential on Amendment 165, which would omit section 80 of the Government of Wales Act 2006, making paragraph 31 of Schedule 3 in this Bill redundant.
That schedule 3 be the Third schedule to the Bill.
Amendment 177, in schedule 2, page 19, line 47, leave out “and retained EU law”.
This is a consequential amendment linked to Amendments 164 and 165 to Clause 11 and Schedule 3.
Amendment 178, page 20, line 23, leave out “and retained EU law”.
This is a consequential amendment linked to Amendments 164 and 165 to Clause 11 and Schedule 3..
Amendment 179, page 23, line 21, leave out “and retained EU law”.
This is a consequential amendment linked to amendments 164 and 165 to Clause 11 and Schedule 3.
Amendment 180, page 23, line 25, leave out
“and section 57(4) and (5) of that Act”.
This is a consequential amendment linked to amendments 164 and 165 to Clause 11 and Schedule 3.
Amendment 181, page 23, line 31, leave out “and retained EU law”.
This is a consequential amendment linked to amendments 164 and 165 to Clause 11 and Schedule 3.
Amendment 182, page 23, line 35, leave out “80(8)” and insert “80”.
This consequential amendment, linked to amendments 164 and 165 to Clause 11 and Schedule 3, changes the reference to section 80 of the Government of Wales Act 2006 to make clear that the restriction on the powers of the Welsh Ministers not to act or legislate incompatibly with EU law is removed.
Amendment 189, in schedule 8, page 50, line 19, leave out
“section 57(4) of the Scotland Act 1998, section 80(8) of the Government of Wales Act 2006 or”.
This amendment and Amendment 190 are in consequence of Amendment 165 as no restriction relating to retained EU law on the making of subordinate legislation by the Scottish Ministers and the Welsh Ministers would apply.
Amendment 190, page 51, line 1, leave out
“section 57(4) of the Scotland Act 1998, section 80(8) of the Government of Wales Act 2006 or”.
This amendment and Amendment 189 are in consequence of Amendment 165 to Schedule 3 as no restriction relating to retained EU law on the making of subordinate legislation by the Scottish Ministers and the Welsh Ministers will apply.
Amendment 191, page 55, leave out lines 8 to 13 and insert—
(a) in paragraph (a), omit sub-paragraph (ii), and
(b) in paragraph (b), omit “or with EU law”.”.
This amendment would amend the Criminal Procedure (Scotland) Act 1995 on the right of the Advocate General to take part in proceedings in consequence of removing the restriction on the competence of the Scottish Parliament and Scottish Government by Amendments 164 and 165 to Clause 11 and Schedule 3.
Amendment 192, page 59, leave out lines 10 to 16.
This amendment, with Amendments 193, 194 and 195, is in consequence of Amendments 164 and 165 to Clause 11 and Schedule 3 which would remove the powers to make an Order in Council to adjust the new restriction on the legislative competence of the Scottish Parliament and the National Assembly for Wales.
Amendment 193, page 59, leave out lines 23 to 29.
This amendment, with Amendments 192, 194 and 195, is in consequence of Amendments 164 and 165 to Clause 11 and Schedule 3 which would remove the powers to make an Order in Council to adjust the new restriction on the legislative competence of the Scottish Parliament and the National Assembly for Wales.
Amendment 194, page 59, line 47, leave out from beginning to end of line 8 on page 60.
This amendment, with Amendments 192, 193 and 195, is in consequence of Amendments 164 and 165 to Clause 11 and Schedule 3 which would remove the powers to make an Order in Council to adjust the new restriction on the legislative competence of the Scottish Parliament and the National Assembly for Wales.
Amendment 195, page 60, leave out lines 13 to 23.
This amendment, with Amendments 192, 193 and 194, is in consequence of Amendments 164 and 165 to Clause 11 and Schedule 3 which would remove the powers to make an Order in Council to adjust the new restriction on the legislative competence of the Scottish Parliament and the National Assembly for Wales.
Jenny Chapman
It is a pleasure to serve under your guidance, Mrs Laing. I will speak to new clauses 64 and 65, as well as to amendments 42 and 337, which stand in my name and those of my right hon. and hon. Friends.
New clause 64 would establish a collaborative procedure for the creation of UK-wide frameworks. It would require that the Secretary of State must lay before each House proposals for replacing European frameworks with UK ones. We need those frameworks to enable the functioning of the UK internal market; to ensure compliance with international obligations; to ensure the UK can negotiate and enter into international treaties, or, if we leave the customs union, trade agreements; to enable the management of common resources; to administer and provide access to justice in cases with a cross-border element; and to safeguard the security of the UK. The frameworks will have a significant impact on the carefully constructed devolution settlements in the Union. They must be created in collaboration with the devolved Administrations.
The birth of devolved Governments in Scotland, Wales and Northern Ireland was a significant change to the running of the United Kingdom. The then Scottish Secretary, Donald Dewar, battled to extract powers from Whitehall mandarins, who attempted to cling on to them. Then, as now, the default position of Whitehall is to hold on to power whenever possible. There are those who believe that this pro-Whitehall centralising tendency, on display yet again in clause 11, is evidence of the Tories’ reluctance to engage with devolved Administrations, or, even worse, that it signals a persistence of their initial opposition to devolution as a point of principle.
I am pleased to say that I am not one of those people. I believe we have come a long way since 1997, thanks in large part to the persistence of Donald Dewar and others. I sense that the Government’s decision to withhold retained EU powers in Whitehall is not an anti-devolution stance, but instead one of the clearest indications yet that the Government are just not coping with the task of Brexit. The Government simply have not had the ministerial headspace—or, as Alan Milburn said, the bandwidth—to engage with the consequences of Brexit for the established, yet still young, devolution settlements now in place.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I completely agree with the point my hon. Friend is making so eloquently. Does the news from Brussels in the last few minutes about the complexity of the negotiations not show that the Bill, and the whole process of Brexit, will have far greater consequences for our country, not just for the economy but our whole constitutional settlement and the way we run our affairs here in these islands? The very serious consequences needed to have been much more clearly thought through by the Government.
Jenny Chapman
I encourage Ministers to listen very carefully to what my hon. Friend says. Like me, he has a deep concern about what clause 11 may mean for the devolved Administrations. We watch with alarm the statements being made today. We hope the position is clarified very quickly.
Mike Gapes (Ilford South) (Lab/Co-op)
My hon. Friend refers to Donald Dewar. The basis for the devolution process came about via referendums in Scotland, Wales and both parts of Ireland to agree the frameworks under which we now operate. Is it therefore not a contempt, an insult, to the people as a whole—not just this House—for the Government to undermine the Good Friday agreement and the devolution settlement, which was endorsed by the people in referendums?
Jenny Chapman
My hon. Friend is right. People voted for these powers to be devolved and it is wrong for the Government to attempt to use Brexit as an excuse to bring them back to London.
The historian Professor Tom Devine called Scottish devolution and the establishment of the Scottish Parliament
“the most significant development in Scottish political history since the union of 1707.”
The Conservative party may have been opposed to devolution in the 1990s, and the Scottish, Welsh and Northern Irish Administrations may not have been conceived of in the early ’70s, but they are now an important and respected integral part of the constitutional architecture of our country.
The Good Friday agreement could never have succeeded without devolution to Northern Ireland, and, in the view of many of those involved at that time, the fact that devolution to Scotland and Wales took place at the same time as the Good Friday negotiations helped to ease some misgivings about the process.
Two nations of our Union voted to remain in the EU and two voted to leave. Our nations are run by different parties with different views about what Britain should look like after Brexit. The challenge for the Government therefore is significant. Just because it is challenging, however, does not mean the Government should attempt to take shortcuts that undermine the credibility, autonomy or sharing of decision making that are now an accepted feature of our democracy.
Ian Murray (Edinburgh South) (Lab)
I pay tribute to my hon. Friend for all her work on the Bill. Is she surprised, as I am, that the 12 new Scottish Conservative Members of Parliament were sent here by the Scottish Conservative leader, Ruth Davidson, under the banner of standing up for Scotland, yet it appears that, with regards to the Bill and these clauses, all they will be standing up for is the Government Whips Office?
Jenny Chapman
We will have to wait until later this evening to see which Lobby they choose to walk through. I, like my hon. Friend, was encouraged by some of the comments from Ruth Davidson and her hopes for the new group of Conservative Tory MPs, but we shall see if they live up to the billing she has given them.
Whether they want to or not, the Government must adapt to the very different constitutional circumstances that now exist. They are very different from those that existed before 1973. Clause 11, which is intolerable to the devolved Administrations, sets it as the default that powers currently exercised in Edinburgh, Cardiff and Belfast within EU frameworks will be ripped away and held in London. First Ministers are calling this a Whitehall power grab.
Lucy Frazer (South East Cambridgeshire) (Con)
The hon. Lady is making a passionate speech, but does she accept that powers are not being ripped away, given that they are not there for the devolved Administrations at the moment? [Interruption.] Whether hon. Members think it right or not, as a matter of law those powers are vested in the EU, so if they come back to the devolved Administrations, they will be additional powers. Powers are not being taken away.
Jenny Chapman
I think that the hon. and learned Lady has not—if I may be polite—quite grasped what we are talking about. We are talking about a framework, within which the devolved Administrations currently make decisions, that is held now at the EU level. Our desire is for a UK framework that enables those decisions to continue to be made by the devolved Administrations. It is very different from saying, as I anticipate some Government Back Benchers will claim, “Well, the powers are currently held in Brussels, so why is everybody so worried about it?” Actually, the decision making is held in Belfast, Edinburgh and Cardiff.
Susan Elan Jones (Clwyd South) (Lab)
Does my hon. Friend agree that in Wales devolution actually came in two tranches—in 1997, but also in 2011, when Wales voted overwhelmingly for full law-making powers—and that any rolling back of those powers would be simply unacceptable and anti-Welsh in the extreme?
Vernon Coaker (Gedling) (Lab)
My hon. Friend is talking about the UK framework and the devolved Administrations. Would she care to comment on the quite astonishing scenes we have witnessed today? It is apparent that the Government have not spoken to the Northern Ireland First Minister about what should happen with respect to any deal. If we are to have special arrangements—or special alignment—between Northern Ireland and the rest of Ireland, what is wrong with giving the whole UK that special alignment? It is called all of us staying in the customs union.
Jenny Chapman
My hon. Friend is highlighting the alarm with which we are witnessing the statements coming out today—the confusion, the briefing, the counter-briefing—and with which we contemplate the destabilisation, particularly in Northern Ireland, that could result. We are deeply concerned about it. I will resist making any specific comment until we have a much clearer picture of the situation, but I am sure that every Member will want to ensure that the negotiations proceed this week and that there is a clearer outcome. The Prime Minister has asked for that to happen at the end of the week. We are expecting a full statement tomorrow, and we look forward to it. I am sure that some very serious questions will be asked of the Prime Minister tomorrow about the conduct of the negotiations.
Chris Bryant (Rhondda) (Lab)
Is there not a really important point that the Government seem to forget? When they are negotiating about a border, or no border, or about divergence from or convergence with a regulatory framework on the island of Ireland, they must speak to the First Minister of Wales as well, because the vast majority of the exports from Ireland into the rest of the European Union go through Wales. There is no point in coming up with a Bill that simply ignores the devolved Administrations.
Jenny Chapman
My hon. Friend is right to highlight the fact that the Government seem to have acted in a rather high-handed way with all the devolved Administrations on a matter that is so fundamental to the future of the citizens of this country.
Hywel Williams (Arfon) (PC)
I agree with the hon. Member for Rhondda (Chris Bryant). The other border between the United Kingdom and Ireland is the one that passes through Holyhead and Fishguard. When I asked the Secretary of State for Exiting the European Union, in the Select Committee, what consideration he had given to the position in Holyhead in particular—given the chaotic road across the island, the two insubstantial bridges, and the extra traffic from the proposed Wylfa B power station—his answer he gave was very clear: “None.”
Jenny Chapman
That is shocking. I am sure that the hon. Gentleman and other colleagues from Wales will continue to make the point as the debate proceeds. Needless to say, the Government’s attitude has been most concerning to me and to First Ministers, because it suggests that they are not interested in the needs and ambitions of the people of Scotland, Wales and Northern Ireland. That approach is regrettable, but it is not too late to change it.
Stephen Doughty
My hon. Friend is being very generous in giving way. Just last week, senior border immigration officials told the Home Affairs Committee that the implications for the Welsh ports of Holyhead, Fishguard and Pembroke, which other Members have mentioned, are very serious in practical terms unless we remain in the customs union, for instance. That underlines the point that my hon. Friend is making about proper frameworks, the Joint Ministerial Committee and so on, and the points made in the new clauses and amendments.
Joanna Cherry (Edinburgh South West) (SNP)
The hon. Lady is making a persuasive speech. She mentioned the renowned Scottish historian Sir Tom Devine. He, of course, has made the journey from being a supporter of devolution to being a supporter of independence. Does the hon. Lady agree that if the Bill is allowed to drive a coach and horses through the current devolution settlement, a great many more Scots are likely to follow Sir Tom Devine by becoming supporters of independence rather than devolution?
Jenny Chapman
I sincerely hope that that will not be the outcome, but I have to admire the hon. and learned Lady’s ability to spot an opportunity and take it.
The Government have never argued that these powers need to be in London or that they intend to hold on to them permanently. Rather, it seems that they feel that tackling the undoubted complexities of considering how to make new arrangements with the devolved Administrations post Brexit belongs in the “too difficult” pile—something to be put off until there is more time and there are fewer distractions. However, there are no time limits on when the Government will cease to hoard the powers. While the hard-line Brexiteers on the Back Benches are promised a time and date—to the very nanosecond—for when they will see powers returned from Brussels, the nations of our Union are told to wait indefinitely. The people of Wales, Scotland and Northern Ireland deserve better from the Government.
The Government agree with Labour and the devolved Administrations that frameworks are needed—I think—and new clause 64 assists them by outlining how that can be achieved. The presumption should be that powers remain devolved as is the case now, and that UK frameworks are created to co-ordinate policy in some areas through negotiation with the devolved Administrations. To do anything else would turn back the clock on devolution—impossible—and cause untold damage to important relationships between Parliaments.
As well as having the motivation and attention to address this issue, the Government need to trust the devolved Administrations. That is why our proposal makes explicit the obligations on each Government and the nature of the frameworks needed. So far, the Government have not exactly shone in their endeavour to develop a UK-wide approach to Brexit, so new clause 65 helps by putting the Joint Ministerial Committee on a statutory footing.
It is important to reflect on the absence of representation from Northern Ireland on the JMC. The suspension of the Executive is deeply regrettable, and permits the neglect of the needs, concerns, ambitions and hopes of the people of Northern Ireland. Their voices must not go unheard at this most critical of moments, but need to be amplified, as it is they who have the most to lose from a chaotic departure from the EU.
Mr Dominic Grieve (Beaconsfield) (Con)
I am following the hon. Lady’s speech carefully. I am also looking very carefully at her new clause, but I do not see how it would resolve the question of what would happen if we set up joint structures and there was disagreement about how they will work. It can, of course, be argued that the Parliament of the United Kingdom is ultimately sovereign, so I think that it is a matter of law that if there is a disagreement, the logjam would ultimately be resolved by this Parliament and the Government in Whitehall having primacy. The question the hon. Lady has to answer is whether the structure she is putting forward would be workable in practice, or if it would just lead to conflict.
Jenny Chapman
The new clause is not intended to cause conflict—we already have a certain degree of conflict between the Administrations—but, rather, to remove that conflict, and to provide a mechanism by which issues can be resolved. Hearteningly, the JMC seems to have started to function rather better than it did when we last went around this particular issue. It has issued statements that explain how it wants these frameworks to be established, so it does not seem to be too much of a leap to write that into the Bill.
The right hon. and learned Gentleman will probably remember our attempt to put the JMC on a statutory footing when we considered the article 50 Bill, but this time the Brexit negotiations are upon us. The Government have lost their majority since our last attempt, so I encourage Ministers to take a more conciliatory approach this time. New clauses 64 and 65 would force the Government to respect both the devolution of decisions, and those who are responsible for taking the decisions.
Ian Murray
Does my hon. Friend agree that the JMC should be producing communiqués that give the public and this House slightly more information? The communiqué published on 16 October merely stated the attendees and apologies, and concluded:
“Ministers noted the positive progress being made on consideration of common frameworks”.
Does my hon. Friend agree that we need slightly more information?
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Do the Welsh First Minister, and indeed the Welsh Cabinet Secretary for these matters, agree with the wording of new clause 64? Given their public comments, I think they would find it very difficult to agree totally with its current drafting.
Jenny Chapman
My understanding is that the answer is yes. We have not worked alone on this—we have worked together with the devolved Administrations—so I am slightly surprised by that question. Perhaps the hon. Gentleman is angling for something. Is he trying to extract something from this that I am unaware of?
Jonathan Edwards
The plight of the First Minister has always been that new UK frameworks have to be made collaboratively in a partnership of equals. The new clause seems to suggest that this would be a matter determined by Westminster, in negotiation with the devolved Governments, but that is a totally different thing.
Jenny Chapman
The intention is that the frameworks would be achieved collaboratively. That is precisely what we are trying to achieve. It is, of course, a matter for the hon. Gentleman if he is trying to force a wedge between me and my hon. Friends and the First Minister, but I do not think he is going to be successful.
Hilary Benn (Leeds Central) (Lab)
On the point about conflict that was raised by the right hon. and learned Member for Beaconsfield (Mr Grieve), it seems to be the way in which the Bill has been structured that creates the conflict. The Government could have done this differently. They could have said, “You can have all the powers back and we will hold a veto.” The question is about getting agreement on the frameworks when they are necessary. The two new clauses to which my hon. Friend is speaking seem to me—and, I am sure, to many people—to set out a really practical way of bringing the two sides together to get those agreements. That is the route by which we will find a way through this problem.
Jenny Chapman
That is absolutely the approach that we have tried to take. We are trying to be practical, realistic and respectful, and to work collaboratively with the devolved Administrations.
Pete Wishart (Perth and North Perthshire) (SNP)
Will the hon. Lady give way on that point?
Jenny Chapman
I believe that the hon. Gentleman is sincere that his intervention will be on that point.
Pete Wishart
Perhaps the hon. Lady requires a note from elsewhere to say that this is not one of the amendments brought forward by the Scottish Government and the Welsh Government. In fact, the new clause says something entirely different. It states that “Ministers of the Crown” would “create UK-wide frameworks”. The Welsh and Scottish Governments want this to be a combined process that involves all the parties.
Jenny Chapman
I understand what the hon. Gentleman is saying, but I think he is dancing on the head of a pin. We want the creation of the frameworks to be done collaboratively by the devolved Administrations and the Government.
Jenny Chapman
I have already given way quite a lot. If the hon. and learned Lady does not mind, I am going to crack on now. She will have a chance to make her own speech, and I look forward to listening to it.
Mr Jones
Pursuing the same point, does the hon. Lady not accept that new clause 64(3), having provided that there should be no new frameworks created without the agreement of the devolved Administrations, would be a recipe for chaos, on the basis that if there were no such agreement, it would be impossible to create the frameworks that she seems to acknowledge as so desirable?
Jenny Chapman
The Joint Ministerial Committee said that it wanted frameworks to be created in this way, I think at the time when the right hon. Gentleman was a Minister, so I really do not understand what his objection is today.
We need look no further than Wales to learn of the practical benefits of devolution. It is right that Cardiff should decide the best way to support farmers in Wales, within an agreed framework but according to their needs and priorities. Jobs Growth Wales has so far supported the employment of 17,000 young people using European funding. That decision would not have been possible if the arrangements proposed by the Government had been in place at the time. When I was first elected, the Tories and the Lib Dems scrapped the almost identical future jobs fund in 2010. Such decisions were devolved for good reason, and we will support the devolved Administrations in keeping them. Amendments 42 and 337, alongside new clause 64, would allow the Government until the end of the transitional arrangements to create UK frameworks.
I want to make it clear to the Minister that in tabling these new clauses and amendments, Labour is attempting to assist the Government by enabling the devolved Administrations to be engaged in decisions that have a direct impact on their people. If the Government accept our criticisms and proposed improvements, Ministers will find that they have a less turbulent time in the months ahead. Do the Government really think that it is wise to pass a Bill to which the devolved Administrations are so hostile? Ministers need to focus on negotiating the best possible deal for all the people of the UK, not on embroiling themselves in constitutional rows with Edinburgh and Cardiff.
David T. C. Davies (Monmouth) (Con)
I first want to pick up on an earlier comment about what Mr Juncker has been saying. If one could get past the headlines of the biased BBC, the reality is that Mr Juncker actually said that enormous progress has been made in the talks. It might be worth listening to what he actually has to say for once instead of listening to all the usual commentators, who are doing their best to undermine the excellent work that has been done by my colleagues in Government.
The hon. Member for Darlington (Jenny Chapman) delivered an interesting speech in which she made a couple of pointed, but very kind, remarks about the fact that the Conservative party had opposed devolution, and she is of course absolutely correct. We totally opposed devolution in Wales and in Scotland, too, but it is Wales that I will talk about. Indeed, I was one of the leaders of the anti-Welsh Assembly campaign in 1999. However, the hon. Lady forgot to mention something in her long speech, despite making several references to devolution, and it is rather an important point. After the referendum in 1999, when the Welsh Assembly was voted for by just over half of the half of the electorate that came out to vote, the Conservative party totally accepted the result of the referendum. On the very next day, we said that we did not like it and that we would not have chosen it ourselves, but we respected the voice of the people of Wales. We recognised that when people vote in a referendum, even if the result is far from overwhelming, we have to adhere to the result. That is a lesson that the hon. Lady and many of her colleagues have yet to learn properly.
Susan Elan Jones
Would the hon. Gentleman like to explain to the House why he was opposed to Wales having full law-making powers in 2011?
David T. C. Davies
I would be delighted to explain, but I probably will not be able to today. It is a lovely idea, and I would be more than happy to spend 20 minutes or so on it, but—
The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)
Order. I do not think that the hon. Gentleman would like to tell the Committee that at this point. We will stick to the matter in hand for the moment.
David T. C. Davies
Let me return to the matter in hand for a minute, because the hon. Member for Clwyd South (Susan Elan Jones) was also there for the underwhelming vote for devolution in 1999, and she will surely recall that the Conservative party did not call for a second referendum. We did not threaten to drag the whole thing through the courts to get the judges to overrule the will of the people of Wales. We were not going around pretending that people had changed their minds and saying that we needed to run the whole thing over again. We did not say that we were going to drag the whole thing out and do everything possible to undermine it. In actual fact, Nick Bourne, who was then the leader of the Welsh Conservatives and is now a Member of the other place, sat down with Members of all parties on the National Assembly advisory group and helped to draw up the Assembly’s Standing Orders, most of which are now in place. That is the difference between the Conservative party’s approach when we were on the losing side of a referendum and the approach of the Labour party, the SNP and many others now that they are on the losing side.
The reality is that the change will be called a power grab. I did not hear the phrase used today, but it will be described as a power grab. Of course it is a power grab, and what a wonderful power grab it is, too. We are grabbing powers from Brussels and bringing them back to London. Not only that, but over the next few years—[Interruption.] SNP Members can shout all they like; I am waiting for one of them to intervene.
Peter Grant
Perhaps the reason why the hon. Gentleman’s campaign against the Welsh Assembly in 1999 failed was that the people of Wales voted in 1997. It might have gone better if he had turned up two years earlier. As we are talking about where power ultimately resides, I believe 100% in Scotland’s ancient doctrine that the people are sovereign. Where does he believe ultimate sovereignty over Scotland resides?
David T. C. Davies
As the hon. Gentleman knows, that is for the Scots to decide, and they decided that, for the time being, ultimate sovereignty rests within a United Kingdom Parliament in which the Scots are heavily and well represented, if I may say so. I totally respect that, and I hope he does, too.
A few weeks ago, Scottish National party Members were telling us that we should all support and recognise the referendum result in Catalonia, where a nation decided that it wanted to break out of a union with Spain. I find it ironic that the SNP is saying that we have to recognise referendum results when it happens to agree with the policy but that we should completely ignore referendum results when it does not agree with the policy.
Mike Gapes
The hon. Gentleman cannot compare an unconstitutional referendum in Catalonia, in which only 2 million people took part, with a constitutional referendum in Scotland and Wales organised according to legal procedures.
David T. C. Davies
I am comparing not the two referendums but the reaction to those two referendums. On that point, I am probably on the same side as the hon. Gentleman.
Stephen Doughty
The hon. Gentleman appears to be making light of the powers coming back from the EU. The Welsh and Scottish Governments were promised that the powers would go to those Administrations. The powers cover a huge number of areas. The Scottish Government reckon there are 111 returning powers, and the Welsh Government reckon the figure is 64. A huge number of areas are coming back here, rather than going to where devolved competence exists. While he is at it, will he tell us which way Monmouthshire voted in the EU referendum?
David T. C. Davies
The hon. Gentleman knows the difference between a local authority area and a parliamentary constituency, so he knows there is absolutely no way of telling what the Monmouth constituency did. He will be aware that it was quite close in the Monmouthshire local authority area. Indeed, there was a very small majority in favour of staying in the European Union. He will also be acutely aware, as I am sure is the hon. Member for Torfaen (Nick Thomas-Symonds), that I represent 10,000 Labour-voting, traditionally working-class voters in Torfaen. I respect those voters, and they voted overwhelmingly to leave the European Union. Some people say I should not listen to such people, but I tell the hon. Member for Cardiff South and Penarth (Stephen Doughty) that those people mean as much to me as anyone living in Monmouth. I will represent their views, and they overwhelmingly voted to leave the European Union.
Stephen Kerr (Stirling) (Con)
Is not the key point about the referendum not which regions or nations within the United Kingdom family voted one way or another but that we voted as a United Kingdom on the United Kingdom’s membership of the European Union?
David T. C. Davies
Absolutely. My hon. Friend makes an excellent point. Of course, the Government’s whole purpose is to ensure there is a single market within the United Kingdom. We cannot have a situation where different nation states within the United Kingdom go off and do their own thing. If that were to happen, we would have exactly the problem that some Opposition Members complain will occur when we leave the European Union. That is what we are about today.
If one judges the Government by their actions, rather than on the words of Opposition Members, one can see that, actually, this Government and this Conservative party have, over and again, given extra powers to the Scottish Parliament, the Northern Ireland Assembly and the Welsh Assembly. Sometimes they have been rather more enthusiastic in doing that than I would choose, but we saw it happen in 2011 and we are about to see a huge tranche of extra powers being handed over to the Welsh Assembly on 1 April 2018. The Conservative party has shown it is very willing to give extra powers to the devolved Parliaments and, to some extent, I suppose I agree with that approach. I sometimes think it is happening a bit too quickly, but it will certainly happen again. So I completely support what the Government are doing here today. They are doing what all those on the other side of the House are calling for: bringing about Brexit in a stable and controlled fashion that allows us to move forward with certainty. It is inevitable that this will lead to further powers going to the devolved Parliaments—it may not happen straightaway, but it will happen. Not one single power is coming back to London as a result of these measures; there is not one single thing that can be done by the Scottish Parliament or the Welsh Assembly today that they will not be able to do once this Bill is passed.
Mrs Madeleine Moon (Bridgend) (Lab)
The hon. Gentleman was a Member of the Welsh Assembly for some considerable time. Is he saying that if he were still there he would not be arguing in Wales, in the Welsh Assembly, for the powers in the 140 distinct policy areas that have devolved responsibility, many of them in relation to the environment, to come back to the Welsh Assembly? Would he be happy for the Westminster Parliament to make those decisions on behalf of Wales?
David T. C. Davies
I can say to the hon. Lady that that is exactly what I am saying to her. May I remind her that in 2003 I had an election leaflet that had the headline “No more powers for the Welsh Assembly” and I was given one of the biggest majorities of anyone in Wales? That is something to think about. So “yes” is the answer to that question.
This Government are doing a superb job. All sorts of people and the commentators will once again be, in the newspapers tomorrow trying to find little reasons to undermine this process. It is quite a complicated process, but I say from the bottom of my heart that I think these Ministers are doing a superb job, and they are being supported not just by their Back Benchers or all those who voted to leave the European Union, but by a majority of people in Wales, who also voted to leave the EU and are not being respected by the Labour party, Plaid Cymru and whatever is left of the Liberal Democrats. More power to them, and I look forward to joining them in the Lobby tonight.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Before I begin, I wish to pay tribute to the former hon. Member for Clydesdale, and for Lanark and Hamilton East, Jimmy Hood, who served this House between 1987 and 2015 and whose sad death we learned of today. I knew Jimmy, having been a constituent of his for a number of years, and I would like to pass on condolences from everyone on our Benches.
I will speak to amendments 72 and 184, which stand in my name and that of my hon. Friend the Member for North East Fife (Stephen Gethins), as well as the remaining amendments standing in the names of Members from these Benches. First, I wish to update the House on the St Andrew’s day meeting in Edinburgh last week, where the Scottish Government and UK Government met to discuss the Bill and its impact on devolution. The talks were constructive and progress was made in some areas, especially on the subject of frameworks, a matter I will come to later in my speech. However, there is a long way to go on this Bill and, as it stands, the Scottish National party cannot and will not support it.
Clause 11 is a bare, naked power grab and it completely undermines the devolution settlements across the United Kingdom. The right hon. Member for Wokingham (John Redwood) often speaks about the UK taking back control from the EU, but this Bill tramples all over the devolved competences of the Parliaments in Edinburgh, Cardiff and Belfast. The Scotland Act 1998, which established the Scottish Parliament, establishes all matters that are reserved. What is happening here is that, without agreement, Westminster is taking back control over matters that are devolved, without having shown due respect and negotiating appropriately with the devolved Administrations.
We are willing to compromise and reach agreement, but we are some distance from that point. The UK Government have failed to see a sense of urgency in concluding an arrangement with the devolved Administrations. Despite our protestations, there was too long a delay in arranging meetings of the JMC, and the Government here in Westminster have to take responsibility for that. Fundamentally, nothing can be agreed until agreement is reached on both frameworks and amendments to the Bill.
The SNP’s amendments seek to remove the power grab and protect Scotland’s devolution settlement. Amendment 72 is a simple and straightforward one.
Stephen Kerr
What are the circumstances in which the right hon. Gentleman would vote for, and what are the changes he would have to see in, clause 11?
Ian Blackford
If the hon. Gentleman bears with me, I will take him through that in my speech.
The fundamental point is that we must protect the interests of the Scottish Parliament. I say to the hon. Gentleman and his friends: are they willing to join us in the Lobby tonight to make sure that we do not have that naked power grab against the interests of the Scottish Parliament and the Scottish people, or will they simply be the poodles of the Prime Minister? Are they going to stand up for Scotland—Ruth Davidson has talked about that—or are they going to fail tonight to stand up for Scotland, which they said they would do when they got here?
Douglas Ross (Moray) (Con)
Does the right hon. Gentleman accept that his tone and language in this debate are quite different from what his Ministers say when they come out of their meetings with UK Government officials? We should reflect on the progress that has been made to date, rather than continually try to find a political divide on this most important of issues.
Ian Blackford
A simple one-word answer: no.
Amendment 72 is simple and straightforward. It seeks to ensure that all the devolved Administrations have a vote on approving clause 11 before it can come into effect. The principles behind the amendment are critical. Scotland, Wales and Northern Ireland have been told time after time that this is a Union of equals. There must be equality in the Brexit process and every corner of the UK must be heard.
Ian Murray
We had a very good briefing, as we always do, from the Law Society of Scotland. It concludes, after several paragraphs of different suggestions on how this could be done more practically, that this is essentially a political decision. Does the right hon. Gentleman share that view?
Ian Blackford
Absolutely. When so many people have worked so hard over many generations and many decades to establish the Scottish Parliament, this attack on the competences of the Scottish Parliament by the Government is absolute bare-faced cheek.
The Tory Members of Parliament from Scotland should remember what they said: that they are here to stand up for Scotland. Tonight they have their opportunity. Are they prepared to see this power grab against the Scottish Parliament? Are they going to vote to take powers back from the Scottish Parliament to Westminster? That is the simple choice that Conservative Members of Parliament face tonight.
It is deeply depressing that the UK Government did not even bother to consult the devolved Administrations on the legislation before publishing it. Where is the respect when they cannot even talk to their colleagues in the devolved Administrations as they should do? I am sure that that obvious act would have saved many of the problems and headaches the Government now face over the devolved aspects of the Bill.
Stephen Doughty
I was happy to put my name to amendment 72 because it is not about whether we want this Brexit Bill to go forward or not—a leaver or a remainer could support amendment 72—but about respecting the constitutional settlement and respecting the rights of the Welsh Assembly, the Northern Ireland Assembly and the Scottish Parliament.
Ian Blackford
I am very grateful for the hon. Gentleman’s remarks. He is absolutely correct. Amendment 72 is about protecting the interests not just of the Scottish Parliament and Government, but of the Administrations in Wales and Northern Ireland.
A point was made earlier about where sovereignty lies, but this House has to be very careful about going against the wishes and the democratic institutions that have been established in all the devolved areas. We play with that at our peril. I am delighted that amendment 72 has gathered support across the House. I sincerely hope—I plead with them—that the Scottish Conservatives join us and support it tonight. Let us all stand up with one clear and united voice, defending the interests of the Scottish Parliament. Do that tonight—stand up for Scotland. It is their moment to stand up and defend the devolution settlement.
Mr Alister Jack (Dumfries and Galloway) (Con)
Can the right hon. Gentleman please tell me one of the 109 powers that is not already implemented at a devolved level?
Ian Blackford
I am not quite sure what the hon. Gentleman is referring to. If he had listened to what the Scottish Government have said, he would know that 111 devolved competences are being interfered with. That is the salient point.
When the Scottish Parliament was established, the Scotland Act 1998 defined matters that were reserved. Those matters that were not reserved were devolved to the Scottish Parliament. Areas such as agriculture, fisheries and the environment are fully devolved. In this Bill, powers over agriculture, fisheries and our environment are being taken back to Westminster. I say with all due respect to the Conservatives: do you want to trample over the powers that the Scottish Parliament has over these areas?
The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)
Order. I hesitate to interrupt the right hon. Gentleman, but he knows what I am going to say: I am not going to trample over anyone—well hardly anyone—this afternoon. I would be grateful if he addressed the Government as the Government.
Ian Blackford
My sincere apologies, Mrs Laing. You are right to reprimand me, and I apologise. I am talking about the powers that the Government are taking back—the naked power grab that is taking place against the Scottish Government.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The Secretary of State and the United Kingdom Government have made it absolutely clear that, after Brexit, the Scottish Parliament will be much more powerful than it is today. Despite that the right hon. Gentleman continues to stand and spout those views. That is just not the case. Our job is to protect Scotland’s place within the United Kingdom and within the internal market of the United Kingdom. Can he tell me the value to Scotland of the rest of the UK trade compared with the value to Scotland of trade with the EU?
Ian Blackford
My goodness, that really does demonstrate that they are not getting this. Purely and simply, it is about the powers that are being taken back from the EU that will sit here in Westminster. The Scotland Act is very clear about the areas that are devolved and the areas that are reserved. It comes to this fundamental point: are Conservative Members who have been sent here from Scottish constituencies going to defend the interests of the Scottish Parliament, or are they simply going to go through the Lobby tonight and speak up for London? Are they speaking up for Scotland or for London? That is the question that the Tories face tonight.
Several hon. Members rose—
Ian Blackford
I wish to make some progress. I will happily take interventions later.
By supporting the amendment, the Scottish Conservatives would give power over how this Bill impacts the devolved Administration to the Scottish Parliament. I am sure Conservative Members will agree with their colleagues—and their leader—in the Scottish Parliament that our own Parliament should have the ability to debate and effect clause 11 and vote on its inclusion in the Bill.
Amendment 184 is a consequential amendment linked to amendments 164 and 165, tabled by the hon. Member for Edinburgh South (Ian Murray). The SNP’s amendment 184 would support amendments 164 and 165 in changing the definition of devolution issues in the Scotland Act 1998. The SNP will work with Members across this House when and where we can. Our joint amendments show just how serious we are about sending a strong message to this Government. However, it is with regret that new clauses 64 and 65, in the name of the official Opposition, do not go far enough for us on the SNP Benches. It is a concern that new clause 64 seeks to place the UK Government in control of joint frameworks and does not recognise that they should be joint creations of the two Governments.
New clause 65 grants the JMC only a consultative role. That is not good enough for the so-called “nation of equals”. We now get to the heart of the problem with this clause. The European Union (Withdrawal) Bill represents the biggest threat to the devolved settlement since the Scottish Parliament reconvened in 1999. Clause 11 seeks to restrict the Scottish Parliament’s legislative competence over EU law and aims to keep all the powers coming back from Brussels, which are under the remit of the Scottish Parliament, firmly in the grip of Whitehall officials. The outrageous way in which this legislation was drafted has united the Governments in Scotland and Wales.
After publication of the Bill, the First Ministers of Scotland and Wales published a joint statement warning against this power grab and stating that the Bill does not deliver on the promise to return powers from the EU to the devolved Administrations. That consensus highlights the extent of the problem with the legislation and the extreme power grab facing the devolved Administrations. We want to keep power where it belongs—in the Scottish Parliament.
Douglas Ross
The right hon. Gentleman says that he wants to keep the powers where they are. Does he therefore accept that he is saying that the SNP wants powers to come back from Europe to Scotland, and for Scotland to become independent to shove those powers straight back to Europe again? Those are views that ensured that the people of Moray voted for a Conservative, rather than an SNP, representative this time.
Ian Blackford
I do not appreciate the hon. Gentleman’s tone. We cannot get away from the simple fact that this legislation is trampling over the powers of the Scottish Parliament.
Lucy Frazer
The right hon. Gentleman keeps saying that we are trampling on powers that Scotland has, and I just want to correct him. Regardless of what he thinks of the principle, the position—as a matter of law—is that these powers are now vested in the EU. The Supreme Court said in paragraph 130 of the article 50 case judgment:
“The removal of the EU constraints on withdrawal from the EU Treaties will alter the competence of the devolved institutions unless new legislative constraints are introduced. In the absence of such…restraints, withdrawal from the EU will enhance the devolved competence.”
Is the right hon. Gentleman saying that the Supreme Court is wrong?
Ian Blackford
The simple fact is that the Secretary of State and others have been asked on a number of occasions to name one power—just one—that will come back to the Scottish Parliament, and they have failed to do that. I do not know whether the hon. and learned Lady has ever read the original Scotland Act 1998, but she seems to ignore the fundamental point of all this, which is that the Scotland Act defines what is devolved and what is reserved. The only powers that are reserved are those expressed in the Scotland Act. It excludes fisheries, agriculture and the environment. I would think better of the hon. and learned Lady, who I know has a background in law, if she actually read the relevant documents. She would then understand exactly why people in Scotland and in Wales recognise this legislation for what it is; it is about taking back control.
Ian Paisley (North Antrim) (DUP)
On that point, does the right hon. Gentleman agree that, if another region of the United Kingdom were offered “regulatory alignment” outwith the rest of the United Kingdom, it would be a real trampling on the rights of the Scottish people and the Scottish Parliament?
Ian Blackford
Indeed, although I am not quite sure what the hon. Gentleman is referring to when he talks about regions, because we always say that this should be about an equality of nations within the family of nations of the United Kingdom. The issue of sovereignty has been raised in that context. We should remind the Committee that, although we often hear about parliamentary sovereignty, that does not apply in Scotland because the legal case that prejudices our position is MacCormick v. the Crown in 1953, which established that parliamentary sovereignty is a purely English concept that has no counterpart in Scottish constitutional history. It is the people of Scotland who are sovereign.
A recent survey by 38 Degrees shows that 62% of Scots want the responsibility over devolved areas currently held by Europe to be transferred straight to the Scottish Parliament. That is the settled will of the people of Scotland.
Paul Masterton (East Renfrewshire) (Con)
Will the right hon. Gentleman give way?
Ian Blackford
I will give way later.
The Scottish and Welsh Governments have tabled a number of key amendments to the Bill—amendments 164, 165, and 183 to 188—through SNP Members and Labour Members. I am delighted that these amendments have all been selected for debate today, and I will leave my friends to speak to the amendments in their own names. It must be recognised that there is deep disapproval from the devolved Administrations in Cardiff and in Edinburgh about not only how this legislation was drafted, but the extent to which it disrupts the functioning of devolved competences.
During the referendum campaign last year, Scotland was promised all sorts of powers. The Environment Secretary told BBC Scotland that Scotland would get immigration powers with a leave vote. The former Member for Birmingham, Edgbaston promised Scotland powers over fishing and agriculture. But here we are, 17 months after the referendum. There are no new powers for Scotland. In fact, Brexit means Scotland losing powers. [Interruption.] I can hear huffing from the Government Benches. I invite any Government Member to rise now and name one power—just one—that will come back to Scotland as a consequence of Brexit.
The Secretary of State for Scotland (David Mundell)
At the start of his remarks, the right hon. Gentleman sought to give us feedback from the meeting that I held with the First Minister and Deputy First Minister of Scotland and the Minister responsible for exit. If the right hon. Gentleman had been party to those discussions, he would know that all 111 powers were subject to discussion between the two Governments, and the two Governments will bring forward their proposals in due course. This power grab talk and this naming one power—it is pantomime. What this Government are involved in is the reality of negotiating a way forward on this matter.
Ian Blackford
I can hear Conservative cheering, but what a waste of time that intervention was. The question was very simple: name one power coming back to Scotland. Once again, the Secretary of State for Scotland, who is London’s man in Scotland—far from being Scotland’s man in the Cabinet—was not able to demonstrate that one single power is coming back to us. It is 17 months after the referendum, and we are no further forward. The clock is ticking, and every single power, as things stand, is coming back to Westminster. That is the reality. The Secretary of State, like his colleagues from north of the border, has failed to stand up and protect Scotland’s national interest.
Paul Masterton
Is the right hon. Gentleman not just demonstrating how out of the loop he is with his own party, given that the Brexit Minister, Mike Russell, knows full well what those discussions have been about? Secondly, is the position of the SNP at Westminster different from that in Holyrood, because the SNP there has said explicitly that it agrees that agriculture and fisheries are areas where UK frameworks will be needed?
Ian Blackford
I am surprised at that intervention from the hon. Gentleman. I expressed right at the outset of my speech that we recognise that progress was made, but that progress has not been sufficient to justify the SNP supporting this Bill tonight. The whole point about our position is that we want to see frameworks in place, but we can move forward on that only when the UK Government are prepared to negotiate. Why was there a six-month period when the Joint Ministerial Committee did not meet? If there is any blame in this matter, it lies with those on the Government Benches.
I can tell the hon. Gentleman that there is not a fag paper between the position of the SNP on these Benches and that of our colleagues up the road in Holyrood. We are united, which is more than can be said of the Conservative party, because Ruth Davidson is delivering a very different message from the one that is being delivered by the Conservatives down here. Ruth Davidson recognises the threat to Scotland of being out of the single market and the customs union. The Scottish Conservatives would serve the interests of the people of Scotland if they recognised that there is an economic threat from being outwith the single market and the customs union.
Mr Grieve
If I may say so, I have sympathy with the point that is being put across—that the way in which the Bill is drafted seems to be excessively stark and to fail to take account of the sensitivities of the devolution settlements. However, I am afraid I cannot join the right hon. Gentleman on the rhetoric, because, ultimately, as a United Kingdom, which is what we are, there has to be flexibility in reaching a sensible way forward in the light of a change in circumstance. If I may gently say so to him, because I participated actively in the debates on the devolution legislation of 1997, it was always acknowledged then that devolution was not just a one-way street; for it to work, we required that flexibility of dialogue between Cardiff, Edinburgh, Belfast and London to reach solutions and not just to get anchored on principles. While I am respectful of the point he is trying to make, I suggest to him that that might be a sensible way forward.
Ian Blackford
I thank my right hon. and learned Friend, if I may call him that, for that intervention. I always listen carefully to what he has to say, and I think that, in some respects, he makes my point. Way back last December, the Scottish Government published a paper about achieving compromise, and that is the position we have always taken. We fully recognise that we have to get to a situation where we can compromise and where we need to have joint frameworks. The nub of this argument is where the powers should lie when they come back from the EU. It would be far better if they came back to the Scottish Parliament, so that we could agree a framework; as it is, the UK has grabbed the powers and is failing to discuss these matters adequately—not just with the Government in Edinburgh, but with the Government in Wales.
The Bill returns powers solely to the UK Government and Parliament, imposing new restrictions on devolved legislatures. Scotland is getting used to Labour and Tory politicians promising all sorts of things during referendums but never delivering them. It is astonishing that just three years ago the Conservative and Labour parties were telling the people of Scotland that the biggest threat to the economy and EU citizenship was an independent Scotland—“Vote no to protect the UK’s EU membership!” Let us think about that for a minute. Now we are losing our EU membership. The economy is already seeing the effects, inflation is up and the fall in the pound and living standards has been the consequence.
The reality is that Brexit is making us poorer before it even takes hold. Our prosperity is under threat. Meanwhile, the UK Government are attempting the biggest power grab since 1999.
Ian Murray
I am grateful to the right hon. Gentleman, whose amendments I will support this evening; I believe the SNP will be supporting Labour’s. In that spirit of consensus, may I probe a little further into what he is saying about the independence referendum? I have still to find anyone who supports independence who can explain to me how they think the EU single market is such a good thing but the UK single market is not.
Ian Blackford
The answer is very simple: we would not be leaving the single market of the UK. We are hoping to protect the interests of the people of Scotland. The simple matter in front of us at the moment, as identified by the Fraser of Allander Institute, is that we run the risk of losing 80,000 jobs in Scotland if we are outwith the single market and the customs union. A decline in wages of £2,000 per person—that is the reality of the threat. We are seeking to protect the interests of the people of Scotland.
Ian Blackford
I am going to make some progress.
The enormity of clause 11 has been highlighted by numerous legal experts. Professor Alan Page noted that the Bill proposes a massive increase in the power of UK Ministers to legislate in the devolved areas. Professor Richard Rawlings noted:
“The sooner clause 11 is cast aside, the better.”
Professor Stephen Tierney has noted a confusion around the Bill, made even more problematic by the fact that the interpretation of devolved competence will become an area of constant fluctuation.
In evidence to the Scottish Parliament’s Finance and Constitution Committee in early November, the Under-Secretary of State for Exiting the European Union, the hon. Member for Worcester (Mr Walker), stated that it was “quite possible” that the clause restricting the Scottish Parliament’s competency would be “substantially reduced”. We are having this debate today without any action having been taken. I am deeply disappointed that the Government should have found time to table an amendment on the date of Brexit, but have failed to table anything rectifying the mess they have made of clause 11. The House of Lords Delegated Powers and Regulatory Reform Committee report even concluded:
“The Order in Council powers in clause 11 and Schedule 3 are inappropriate and should be removed.”
Secretary of State, why has that not happened?
The problem with clause 11 is not just the power grab. The Law Society of Scotland has raised concerns around the modifying of conferring power by subordinate legislation to modify retained EU law. It highlights that it is not clear what Acts of the Scottish Parliament the new provision will apply to. The Bill suggests that the provision is not intended to be retrospective and will apply only to post-exit Acts of the Scottish Parliament. But what exactly is such an Act—an Act enacted on or after exit day? That would mean that legislation would be required to comply with that restriction even if it was introduced months before exit day and even if it had been passed by the Scottish Parliament before exit day.
Following the mounting pressure, lists of questions and growing criticism, the UK Government brought forward a plan of common frameworks. Although we on the Scottish National party Benches recognise that common frameworks that replace EU law across the UK may be needed in some areas, the competence in matters otherwise devolved should revert to the Scottish Parliament. The scope and content of any UK-wide framework must be agreed rather than imposed. That is the fundamental point. We welcome the Secretary of State’s commitment to that principle.
Although the UK Government have indicated that they wish to develop common frameworks, it is not currently clear how policy within those frameworks might be agreed. The Law Society of England and Wales has called for discussions about where common frameworks will remain and the extent of their scrutiny. Professor Michael Keating has warned of the UK Government creating a “hierarchical model of devolution” through the frameworks. With clause 11 in place, agreement can never be reached, as the price of UK Government demands for an agreement would be reservation of the matter, putting the terms and operation of the common frameworks beyond the powers of the Scottish Parliament. Reading clause 11 leaves me in no doubt of that. Whoever drafted it had absolutely no understanding of the devolution settlements of the Scotland Act 1998.
The Scottish Government have published the 111 powers at risk in clause 11 of being held centrally in London despite falling under devolved competencies. Those powers range from agriculture, to justice, to environmental standards. Devolution has meant the divergence of policy across the UK. The Climate Change (Scotland) Act 2009, passed unanimously in the Scottish Parliament, established Scotland as a world leader in tackling climate change. As the UK Government seek continually to catch up, any holding centrally in London of powers that affect this policy divergence will not only hold back the progress Scotland has made on environmental matters but prevent any legal measures that aim to deliver phased introductions on any proposal.
The confusion around the effect of clause 11 deepens. When asked multiple times, as I have done, to name just one power that is currently coming back, the Secretary of State has not been able to do so. Yet the Cabinet Office says that
“anything”
the devolved Administrations
“could do before we leave the EU, they will able to do after we leave”.
The truth is that this Bill does not provide for a single new decision-making power for any of the devolved legislatures. Everything goes to London, and it is for London to decide what ultimately happens to these powers. Where is our sovereignty in all this? Where is the sovereignty of the people of Scotland?
The Scottish Government have been clear that there is no way the Scottish Parliament can grant a legislative consent motion until this Bill is drastically dealt with. If no progress is made today on the amendments tabled in the names of Scottish and Welsh Members, there will be no change in that position. Let me make it clear: we do not want to be in the position of not granting a legislative consent motion. We want to do that, but in order for us to do so, the Government have to respect the powers that should sit in the Scottish Parliament. [Interruption.] The hon. Member for Stirling (Stephen Kerr) is saying, “Really?” We have tried to engage in this process constructively; it would be great if the Conservatives would engage in the same way.
Stephen Doughty
Is the right hon. Gentleman genuinely surprised that there has not been progress on some of the reasonable amendments that have been tabled on a cross-party basis, given that the Secretary of State for Scotland himself said to the Scottish Affairs Committee that
“it may be that some amendments can be accepted with a little bit of modification”?
I would have hoped that by this stage the Government would have made more progress on some of the very reasonable amendments that have been tabled.
Ian Blackford
The hon. Gentleman makes an important intervention. We are 17 months on from the vote and we are at a very important stage of this Bill.
We are trying to negotiate on the basis that we recognise the threats that we are facing. It is incumbent on the Government to recognise that we have to get agreement between the Government in London and the Governments in Edinburgh, Cardiff and Belfast. It saddens me that we are having eight hours’ debate today and will have eight hours’ debate on Wednesday, and the Government’s approach just seems to be that they are listening. How long does it take them to listen, and how long does it take them to respond to the fact that they are trampling over the powers of the devolved Administrations? The Government in Edinburgh and SNP Members are making it absolutely crystal clear that we do not want to be in the position of a legislative consent motion being withheld. We want to make sure that we can strengthen this Bill to the advantage of everybody, but we need to get the position from the UK Government that they are prepared to respect the Administrations in Edinburgh, in Belfast and in Cardiff.
Joanna Cherry
There is a lot of scoffing on the Government Benches. Three Committees of this House have heard evidence about clause 11—the Scottish Affairs Committee, the Exiting the European Committee, and the Public Administration and Constitutional Affairs Committee—and the weight of that evidence from a number of senior, distinguished lawyers from both north and south of the border has been that there are very real concerns that clause 11
“drives a coach and horses through the devolution settlement”.
Those are not the SNP’s words but the preponderance of evidence heard by Committees of this House.
Ian Blackford
My hon. and learned Friend makes a strong case. That is why the Government should listen to her, and to the other reasonable voices that have spoken this afternoon and at other times. The Government have to recognise that they are playing with the powers that have been established under various Scotland Acts, and that is not right. The evidence is there from academics and from the Select Committees of this House that have made judgments on the matter, and the Government have a responsibility tonight to reflect on it. They must not push the matter into the long grass and say that they are listening; they have to show that they are prepared to take action.
I will sum up, because I know that many others want to speak. With the overwhelming evidence from experts in the legal profession showing how flawed clause 11 is, the best thing the Government can do is to accept that the Bill needs to be fundamentally amended. They can do that this evening, by accepting the joint Scottish and Welsh Government amendments. Common frameworks will not prevent the imminent constitutional crisis that clause 11 will create. The Government must change this Bill.
Paul Masterton
I am grateful to have the opportunity to speak, as a Scottish Conservative MP and as a member of the Scottish Affairs Committee, on what I believe is being termed devolution day. I draw Members’ attention to the Committee’s—in my biased view—exceptional report, which our Chair, the hon. Member for Perth and North Perthshire (Pete Wishart), may well highlight at some point. The report was unanimous, and it draws on huge amounts of common ground between Scotland’s two Governments. That suggests that despite some histrionics, consensus exists on this area of the Bill, and that consensus will enable us to improve the Bill.
We must recognise that the debate takes place in the context of active, and now constructive, talks between the UK and the Scottish Government. That makes it a little difficult to debate the words on the page, because there are so many moving parts, but I will focus my remarks on where I believe clause 11 needs to end up and the route that the Scottish Conservatives envisage for getting there.
As has been addressed, several provisions of the Bill fall within the scope of the Sewel convention; in other words, the Scottish Parliament and Welsh Assembly have been asked to give their consent to the Bill. The Scottish and Welsh Governments have signified that, unless the Bill is substantially amended, neither will recommend that consent be given. The UK Government’s position is, I believe, the right one. They are committed to working to obtain a legislative consent motion and expect to achieve one.
As Scottish Conservatives, we are committed to ensuring that the Scottish Parliament can give its consent to the passage of the Bill. As Members may not all be aware of the timescale, I will explain that the plan is for the Scottish Parliament to vote on whether to grant a legislative consent motion ahead of the Third Reading of the Bill in the other place. It is not an all-or-nothing event; it is perfectly possible for an LCM to be initially denied, and then for another vote on granting an LCM to be taken and passed at a later date.
Although, as readers of The Daily Telegraph will be aware, I have a number of issues with the Bill, by far the biggest concern regarding devolution is clause 11. It is my view that if we can fix clause 11, most of the other issues regarding the Bill’s impact on devolution will fall away. On Second Reading, I said that I would not allow legislation to pass that undermined the Union or the devolution settlement, and that remains my position today.
There are 111 powers currently exercised at EU level that do not fall within reserved competence under the Scotland Act 1998 and are therefore, under the scheme of the Act, devolved. Clause 11 will effectively hold those powers at Westminster level. Although that is a sensible interim measure, as the Scottish Affairs Committee heard in evidence during its enquiry, the interim phase has given rise to the “power grab” melodrama that we have heard from the SNP.
Alison Thewliss (Glasgow Central) (SNP)
Would the hon. Gentleman like to tell us how interim interim is?
Paul Masterton
If the hon. Lady will bear with me, I am coming on to talk about that.
Clause 11 provides that the 111 powers that I have mentioned will be released to Scottish Ministers on a case-by-case basis once UK Ministers are satisfied that it is safe to do so. There is no timescale for that, and the process is unilateral. Under clause 11, the powers, once repatriated from the EU to the UK, are for UK Ministers to exercise or to devolve, as they see fit.
Joanna Cherry
The hon. Gentleman is pouring some scorn on the phrase “power grab”. He might be interested to know that the first person to use the words “power grab” in relation to the process was not a member of the Scottish National party, but the former Prime Minister, Gordon Brown.
Paul Masterton
The hon. and learned Lady and I perhaps have different definitions of what is interesting.
Ostensibly, amendment 164 and the consequential amendment 165 to schedule 3 are in the names of Opposition Members, but they have in fact been tabled on behalf of the Scottish and Welsh Governments. This distinction is important, and Ministers should be mindful of it. The amendments would turn clause 11 on its head, repatriating all 111 powers directly to Holyrood. Brexit must be delivered in a way that respects devolution, but it would plainly be contrary to the interests of the United Kingdom as a whole for the devolved Administrations in Edinburgh or Cardiff to be able to use powers formerly held at EU level to pull apart Britain’s three centuries old internal market. The fact that Britain is a single employment market, with no barriers of any sort on the movement of people, goods or services is core to the case for the Union.
Pete Wishart
The hon. Gentleman is a very assiduous member of the Scottish Affairs Committee, for which I am grateful, but surely he must agree with, recognise and accept the basic premise that clause 11, as currently constituted, is unacceptable and needs to be significantly reformed?
Paul Masterton
I absolutely agree, but the point is that the amendments proposed by the Scottish and Welsh Governments go far too far. There is some middle ground, on which, if the hon. Gentleman will allow me, I will set out where I believe we can get to.
Neil Gray (Airdrie and Shotts) (SNP)
Some of the hon. Gentleman’s Conservative colleagues have proposed their own amendments on other areas of the Bill. Why has the Scottish Conservative group of MPs not tabled any amendments to clause 11 if they share his concern?
Paul Masterton
For the simple reason that there is another JMC meeting on 12 December, and we do not believe it is right to prejudge or prejudice the outcome of those negotiations. There is going to be an agreement, and it is much better to allow such an agreement to be reached and incorporated into the Bill.
Much has been devolved since 1998, but nothing that jeopardises the UK’s single internal market. It would be in the interests of neither consumers nor producers for product safety and consumer protection rules to be different across the nations of the United Kingdom.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Will the hon. Gentleman give way?
Paul Masterton
I am going to make some progress.
These rules are now uniform throughout the UK and many, but of course not all, should remain so after Brexit. Amendments 164 and 165 go too far and are dangerous to the Union. Frankly, I am startled that Scottish Labour—only one Scottish Labour MP is here—and Scottish Liberal Democrats are prepared to support these amendments, which could so fatally undermine the integrity of our Union. The Scottish Conservatives will not support them. However, I want to make it clear that my vote with the Government should not and must not be taken as an acceptance of clause 11 as it stands.
Christine Jardine (Edinburgh West) (LD)
I am astonished. Does the hon. Gentleman not agree that continual discord, arguments about the constitution and a perceived threat to the powers of the Scottish Parliament are more of a threat to the United Kingdom than anything proposed in any amendment in Committee today?
Paul Masterton
I thank the hon. Lady for her intervention, but I do not agree. I think that amendments 164 and 165 are fundamentally dangerous to the Union, and it would be dangerous for the integrity of the Union to pull them into the Bill.
Dr Whitford
Does the hon. Gentleman not accept that the principle of the Scotland Act 1998 was that what was not reserved was devolved? These powers could easily go to the devolved nations, which could then sit around the table. Their voices would then be heard properly in any national framework, and they would not simply be told what it would be.
Paul Masterton
If the hon. Lady was listening, she will have heard me say that I agreed that that was the purpose of the 1998 Act. I am coming on to say explicitly that clause 11, as drafted, is not fit for purpose and must be changed. It does not need to be tweaked a little; it needs to be amended and replaced with a new version. However, I do not consider now to be an appropriate stage in the process at which to demand a new draft to be brought before the House.
I fully accept that this issue is linked to active conversations tacking place between Governments, and I share my hon. Friends’ concerns about the fact that introducing new drafting to reflect where I believe we need to, and should, end up—indeed, where we will more likely than not end up—would pre-empt what are now and are expected to continue to be fruitful negotiations between the UK and Scottish Governments. I am prepared at this stage to give the UK Government the time and opportunity to take forward these matters, on the clear understanding that both sides need to move from where they now are on clause 11. We are beginning to see movement: we can see it in the constructive JMC (EN) talks, the next meeting of which will be on 12 December, and Scottish Conservatives stand ready to help broker a compromise. In our view, the impasse is readily solvable. Most of the 111 powers are technical and regulatory.
Joanna Cherry
I ask the hon. Gentleman to seriously consider what he has just said. He said that most of the 111 powers are technical and regulatory. Is he aware that the list affects huge swathes of our justice system in Scotland? Does he consider our devolved justice system and separate legal system to be simply technical and regulatory matters?
The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)
Order. I am always grateful for the help of the hon. Member for Paisley and Renfrewshire North (Gavin Newlands). Thank you very much. Mr Masterton must have a chance to answer the point made by Ms Cherry before we have any further interventions, although there will probably be another one in a moment.
Paul Masterton
Again, I draw the attention of the hon. and learned Member for Edinburgh South West (Joanna Cherry) to the fact that I said that most of the 111 powers are technical and regulatory. They cover areas either where divergence in policy between UK and Scottish Government Ministers would not be a threat to the integrity of the UK internal market, or where consistency could be maintained through non-legislative options. Those powers should be devolved to the Scottish Parliament on exit day, or as close to it as can safely and realistically be achieved.
In respect of those powers where there is a legitimate UK interest in uniformity across the UK—that is, where divergence between the nations of the UK would be contrary to the UK’s interests—it would be unsafe to allow them to be devolved without providing for constraints on how they may be used. It is in those cases that we will need common frameworks, a concept accepted as necessary by UK, Scottish and Welsh Ministers. Aspects of agriculture and fisheries are among the examples where it has been accepted that there will be a need for common frameworks.
As confirmed to the Scottish Affairs Committee by the Secretary of State for Scotland, if the frameworks are to be acceptable to the Scottish and Welsh Governments, they will have to be negotiated and agreed, not imposed top down by the UK Government. That suggestion is fairly straightforward. Each of the 111 powers will either fall to be wholly devolved to the Scottish Parliament, or the UK will step into the shoes of the EU, replacing an EU-wide framework with a new UK-wide framework, for which administrative competence will largely rest with the Scottish Parliament.
Although we will not seek to amend clause 11 at this stage, we will, in exchange for supporting the Government on amendments 164 and 165, require confirmation from Ministers that they will expedite discussions with the Scottish Government further. We seek quick progress, looking ahead to the next JMC (EN) in December and into January, and in any event certainly before the debate on Report.
My focus at this stage is very much on the framework negotiations running parallel to this debate, but I ask that the UK Government give me the assurances I seek that they will move forward urgently through the JMC (EN) with, first, identifying and agreeing areas where there is a need for legislative common frameworks; secondly, recognising that the other powers can be devolved immediately on EU exit, including as many of those where non-legislative solutions on maintaining consensus have been agreed; and thirdly, settling how the common frameworks will be agreed. I expect an assurance on the first two issues to be given by the debate on Report, and if the third has not been given by then, I expect clear and significant progress to have been made.
In time, clause 11 will need to be replaced to reflect that, but I recognise that its final form will be linked to the points I have listed, so I do not ask for, or expect, that change to be made now. Looking ahead, once agreement is reached on where frameworks are needed and how they will be agreed, I believe that clause 11 should include a draft default setting, so that the power would be held by UK Ministers until a common framework is agreed. Crucially, however, that default setting could apply only in areas where it was established that there should be a common framework and the mechanisms to reach agreement on a framework have failed.
A lot of work needs to happen between now and then, primarily on moving the frameworks on through the JMC (EN). That is why my focus will stay on that for now. I say again, however, that my vote against amendments 164 and 165 tonight is conditional and must not be taken as support for clause 11 as it stands.
Christine Jardine
What action will the hon. Gentleman take if amendments 164 and 165 are not passed and his demands do not come to pass? Would it not be more sensible to just support the amendments?
Paul Masterton
No, because I do not believe that amendments 164 and 165 provide the position in which I think clause 11 could and should end up. I have been very clear—I said this on Second Reading and I have said it again tonight—that I will not support a Bill that undermines devolution and does not respect the integrity of the Union. I do not think I could have been any clearer to Ministers.
I consider my argument to be reasonable, pragmatic, achievable and, crucially, acceptable to both of Scotland’s Governments. There is much at stake. If the steps I have outlined are not completed, the consequences are quite simple: LCMs will not be granted by the devolved Administrations and the other place will not pass the Bill. I genuinely believe that that is not a situation in which any of us want to find ourselves, and I look forward to receiving the necessary assurances from the Minister in his closing remarks.
Ian Murray
I pay tribute to the hon. Member for East Renfrewshire (Paul Masterton) for his contribution. His sensible approach to the Bill shows that, while we may not reach a consensus across the parties on some of these issues, we can make the Bill better, which is why we are here. The dogma with which the Government have approached the UK’s withdrawal from the European Union and the Bill will shape many aspects of how the UK operates for generations to come. I wish that more Members had the attitude of the hon. Member for East Renfrewshire as the Bill goes through Parliament.
The hon. Gentleman wants assurances about amendments 164 and 165, which I tabled, but I say gently that the best way for him to get them would be for him and his colleagues to wander through the Lobby with the Opposition tonight and put the amendments in the Bill. That would ensure that Ministers would get the message that the current drafting of clause 11 is incorrect.
I shall speak to amendments 164, 165, 177 to 181, and 189 to 195, all of which I tabled. I appreciate that many are consequential to my main amendments, 164 and 165, and that a number will be for decision on another day. Amendment 42, which was tabled by my right hon. and hon. Friends on the Opposition Front Bench, is much better drafted than mine—I wish I had said that two weeks ago in the customs union debate. It will probably be the one that is carried as it covers Northern Ireland, which I missed out because of the constitutional difficulties there.
I would like to take a few moments to pay tribute to the former Member for Lanark and Hamilton East, Jimmy Hood, who died last night. We send his wife, Marion, and his wider family all our very best thoughts and wishes in the days to come. Jimmy was a close friend of mine and of this House. He was a great source of advice, and indeed fun, particularly in the Tea Room. Perhaps I should move on to the amendments before I tell any of those stories from the Tea Room, as they may not be over-appropriate for this Chamber.
Two weeks’ ago, in the debate on the Ways and Means motion with regard to the customs union, I put it to the Scottish Conservatives that all Members in this House try their very best to represent the views of their constituents, and of those in our wider geographical areas, including our nations of Scotland, Northern Ireland, Wales and England, as well as the wider United Kingdom. The Conservative party’s leader in Scotland trumpeted the outcome of the 2017 general election in Scotland by heralding it as 13 Scottish Conservative Members of Parliament coming to this House to stand up for and to defend the interests of Scotland. In the context of the Bill, the only Scottish Conservative Member to do that so far—he has demonstrated it today and in previous votes—is the hon. Member for East Renfrewshire. One therefore has to ask: are the Scottish Conservative MPs here under the flag of the Scottish Conservative leader, Ruth Davidson, or under the flag of the Whips Office of the UK Government? I suspect it is the latter.
Ian Murray
I will be happy to take the hon. Gentleman’s intervention if he tells us whether he is standing up for the interests of Scotland or the interests of his Chief Whip.
Ross Thomson
That is absolutely the case. That is why there are 13 Scottish Conservative MPs and only seven Scottish Labour Members. Indeed, a number of my colleagues are in their place on the Conservative Benches, whereas the hon. Gentleman seems to be the sole Scottish Labour Member in the Chamber. I think that the Scottish Conservatives are doing well in standing up for Scotland.
Ian Murray
I think the hon. Gentleman has just demonstrated that he will be voting with the UK Government Whips this evening against the wishes of the Scottish people and against the will of the Scottish people expressed in the referendum. When Ruth Davidson is asked about the 13 Scottish MPs, she always says that they are here to fight Scotland’s corner, but it is quite clear that they are not going to fight Scotland’s corner on these clauses.
I wish briefly to mention new clause 65, which relates to the Joint Ministerial Committee. I have long tried in the House to strengthen the case for the JMC. One of the key aspects of the original Smith commission, which was established on a cross-party basis following the independence referendum in 2014, was to strengthen intergovernmental relationships so that such issues could not occur. I was disappointed, however, during our 2015 deliberations on what became the Scotland Act 2016, when the Government rejected our amendments aimed at strengthening that relationship. The conclusion of many commentators is that weak intergovernmental and inter-parliamentary working is causing some of these problems.
In his final report, back in 2014, Lord Smith of Kelvin said:
“Throughout the course of the Commission, the issue of weak inter-governmental working was repeatedly raised as a problem.”
That has been a common thread throughout many of the documents we have seen. The Public Administration and Constitutional Affairs Committee, which produced a report on clause 11, mentioned at great length how impenetrable and difficult it was even to determine what the JMC was discussing, what its final conclusions were, and when it was meeting. Its meetings are sporadic, and when a committee is private and produces minutes that are very sparse, the politics take over. It is clear that the UK and Scottish Governments, being different colours—blue and yellow—will never agree in the political sphere, so the JMC is diluted to a political argument and unable to achieve what it is trying to achieve.
I intervened on my hon. Friend the Member for Darlington (Jenny Chapman), during her wonderful speech to talk about the minutes of the JMC. The October minute from the JMC was two pages long. One and a half pages dealt with who attended and who provided apologies, and there was then a skeletal explanation of what was discussed and no real conclusions. The JMC has to be put on a statutory footing along with the parameters required to make it transparent to the public and this House. That is why we should support new clause 65, as it would give us some understanding of the processes of the JMC.
We are heading for a constitutional crisis. We have a Conservative party threatening the very fabric of the United Kingdom just after the people of Scotland decided that the UK should stay together. We have the farce of today’s events: first the Prime Minister and the Downing Street spinning that a deal is close; then, with the Prime Minister barely through her soup with Donald Tusk, Downing Street backtracking as quickly as possible from those briefings; and then, with one phone call, the leader of the Democratic Unionist party, who controls the Government—the de facto Prime Minister—pulling the rug from underneath the feet of the Prime Minister, who then turns her back on something that it was thought had been negotiated and agreed.
Mike Gapes
Is my hon. Friend aware that the Taoiseach, Leo Varadkar, has said:
“I am surprised and disappointed that the British government now appears not to be in a position to conclude what was agreed earlier”—
The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)
Order. The hon. Gentleman might be making an interesting point, but it is not directly relevant to the new clause.
Ian Murray
Thank you, Mrs Laing. If I may, I will respond to what the Taoiseach said just by saying I am surprised that he is disappointed, but not surprised that he is surprised.
Stephen Doughty
With specific reference to the amendments, particularly around the importance of joint ministerial consultation on a number of matters, does my hon. Friend wonder, like me, whether the First Minister of Wales, the First Minister of Scotland and indeed the Mayor of London, whom we have heard speaking out, were in any way consulted on the potential terms that were being offered in the negotiations in Brussels today?
Ian Murray
That is my point about the constitutional crisis we are in. It seems that the only way to follow the discussions between the UK Government and the EU is on Twitter. Journalists seem to know what is happening before hon. Members. We are getting a running commentary from the Government through press releases, but there is absolutely no proper consultation with the devolved Administrations.
Ian Murray
I will give way to my friend from the DUP, because I think he might have something interesting to say.
Ian Paisley
I am glad that the hon. Gentleman thinks I might have something interesting to say as I know that he always has something interesting to say. On the general point, I do not think that anybody should get their news constantly from Twitter. Specifically on the amendments, is not the key point that we must show discernment and skill and not fall for the spin, whether that comes out of Dublin, London or Brussels? Let the negotiations run and let us see what comes out of them at the end.
Ian Murray
I could not agree with the hon. Gentleman more, but why not bring some of that to the House, rather than leaving it for commentary on Twitter? Journalists following the Prime Minister seem to know much more about what is happening than anybody in the House. If the Prime Minister were to fly home—Ministers can get back from foreign countries very quickly, as was demonstrated over the summer—come to the House and let us know what was going on, we would not need to stand here and speculate. The hon. Gentleman made an intervention about regulatory harmonisation. I think he let the cat out of the bag when he mentioned that the DUP was firmly against regulatory harmonisation in the island of Ireland, and that is why this is so important across the rest of the UK.
Stephen Doughty
Has my hon. Friend noticed that the Minister who has apparently been briefing Conservative Members has just appeared in the Chamber? Perhaps he could give us some answers about what has been going on in Brussels today.
The First Deputy Chairman
Order. No he cannot. We are discussing new clauses and amendments to the Bill, not what people are seeing on Twitter. If the Prime Minister has anything to report to the House, I am sure that she will come at the earliest opportunity to give such a report.
Ian Murray
I am grateful to you, Mrs Laing. I apologise to the Committee for digressing, but these are incredibly important matters—and actually they are directly connected to my amendments, because they about keeping the devolved Administrations informed and involved in the process.
The hon. Member for East Renfrewshire said he was seeking reassurances. What we have seen since lunch time should give him cause for concern that no assurances will be forthcoming, which is why we must put in the Bill the requirement that the Government keep the devolved Administrations properly informed. This is about not just the devolved Administrations, but the people they represent.
Paul Masterton
Does the hon. Gentleman not accept that his amendments would allow every single one of the 111 powers to be immediately devolved from day one, with no constraints, and that they would therefore enable all the devolved Administrations to do whatever they wanted, meaning that we could have divergence from day one? He believes in continuity and maintaining similarities between the four components of the UK. Does he not understand why his amendments would be dangerous to the integrity of the UK’s internal market, given that from day one the four component parts of the UK could go off and do whatever they wanted?
Ian Murray
I will answer that directly when I talk about the Law Society of Scotland’s possible options. We could devolve everything and then put agreements in place, if the JMC and intergovernmental relations worked properly. There are therefore several other options, and it is not just me saying that, but many of the organisations that have commented on the Bill.
Ian Paisley
Will the hon. Gentleman clarify his amendments? Is he suggesting that some parts of the UK should be treated differently from others? Should London have a different and better deal than, say, Cardiff, Edinburgh or Belfast? Should not we all, as UK subjects, be treated the same?
Ian Murray
I agree that all parts of the UK should be treated similarly, which is why I have always championed the UK’s staying in the single market and the customs union. That would allow us to leave the EU while keeping the regulatory harmonisation required—the very regulatory harmonisation that the hon. Gentleman railed against just a few moments ago—and keeping the UK single market operating within the EU single market.
Dr Whitford
On the question of where power actually lies, we know that many farmers voted leave, yet I know, having attended a National Farmers Union meeting on Friday, that the idea of farming and hill farming in Scotland being controlled from here is something they consider anathema. Given the failure to pass on the convergence uplift in 2013-14, they are frightened about farming powers being here.
Ian Murray
These are complex discussions and issues, but the key principle is that any power devolved under schedule 5 to the Scotland Act 1998 should be devolved. No one is saying that everything should be devolved at one minute past midnight—or whenever we leave the European Union—but these discussions must take place by means of intergovernmental processes, and the principle should be that there should be devolution at the point at which powers come back from the EU, when it is possible for that to be done.
Sammy Wilson (East Antrim) (DUP)
Does the hon. Gentleman accept that if the powers are devolved without a framework having first been established, whether we are talking about a European or a UK single market, that principle could not be applied, because powers would be devolved to four different Administrations who could then make whatever regulations they wanted? How does the hon. Gentleman marry that with the need—the recognised need, as he has pointed out—for a UK single market? Surely the framework should first be set, with the remaining powers then devolved to the Assemblies.
Ian Murray
But that assumes that we automatically start from the position of hoarding the powers here at Westminster, and I disagree with that principle. The principle must be that when a power is currently devolved to the devolved Administrations, that power should remain devolved—it is very simple. I accept that Members might not agree with that principle, but it is fairly sensible. My amendment 164 would merely remove from section 29(2)(d) of the Scotland Act 1998, on legislative competence, the words “or with EU law”, meaning that everything else would have to be compatible with the Act.
Deidre Brock
The hon. Gentleman mentioned the hoarding of powers at Westminster. One of the biggest problems that I see with clause 11 is that, ultimately, Scottish Ministers will not be able to amend retained EU law, potentially for an indefinite period, although UK Ministers will. That is completely against the word and spirit of the devolution settlement.
Ian Murray
It is against the spirit of the devolution settlement, but it is also against the spirit of the referendum that we heard about earlier. The Scottish people, the Welsh people and the Northern Irish people voted for devolution.
There is no doubt that clause 11 is using a sledgehammer to crack a nut. There are many other ways of legislating that would allow a transition on day one that would respect the devolution settlement. The Law Society has put forward such options. As the leader of the SNP said, the way in which the Government are using clause 11 is clear. There is no sunset provision and no timetable is attached. There is no list of powers, and there is no indication of when certain powers should be given priority. There is no commitment to intergovernmental working and there is no real commitment to devolution. We were diverted to today’s discussions in Brussels because that is part of the disrespect for the devolution settlement in this country, which is why the process has become so difficult.
Jim Shannon (Strangford) (DUP)
Does the hon. Gentleman also acknowledge the disrespect that the Taoiseach has shown for the people of Northern Ireland? He has said that he now speaks for them, but the Democratic Unionist party and other elected parties do not. Is it not time that he knew that when it comes to Northern Ireland, democracy and the political process, the power lies here in the Chamber? It certainly does not lie with Leo Varadkar, the Taoiseach of the Republic of Ireland.
Ian Murray
We may be being diverted from the point again, but I think that the Committee, the country and anyone who happens to be watching our proceedings will see that the three members of the Democratic Unionist party who are sitting in the Chamber are the real Government. They are dictating the terms of Brexit—and the hon. Member for Strangford (Jim Shannon) is doubtless the de facto Secretary of State for Exiting the European Union—in terms of the power that they have over the Prime Minister.
As I said earlier, it is clear that between courses this afternoon the Prime Minister has gone from a negotiated agreement to a set of texts to throwing it all in the bin alongside any leftovers from lunch. It is clear that the DUP—10 Members of Parliament from Northern Ireland —are holding the Government to account and holding them by the neck, because it is much more important for the Prime Minister to hold on to power than it is to do what is the best interests of all our nations.
Charlie Elphicke (Dover) (Ind)
May I gently point out to the hon. Gentleman that at least there are three DUP Members in the Chamber, whereas by my count only two Scottish Labour MPs are present?
The hon. Gentleman talks a very good game for defending the Union, but the fact is that the leader of the SNP in Scotland, Mrs Sturgeon, and the Mayor of London have been very quick to start talking about how they would like divergence and special deals, which would completely wreck the union of the United Kingdom.
Ian Murray
I normally say that I am grateful for interventions, but in this instance I will refrain. I do not think that the question of how many members of how many parties are in the Chamber at any particular time is relevant. What is relevant is ensuring that Members are in the Lobby tonight. I hope that 13 of the hon. Gentleman’s Scottish Conservative colleagues will go into the Lobby with us to change the Bill, because that is what is important. This is about voting, not about talking and then doing nothing.
Paul Masterton
The hon. Gentleman is giving a very good speech, but he is not giving a speech in support of his own amendments; he is giving a speech in support of a middle ground between the positions of the UK Government and the Scottish Government. Does he not understand that his amendment would devolve everything from day one, with no constraints, thereby enabling all four constituent parts of the UK to do whatever they wanted? That is not the Labour position, and it is bonkers.
Ian Murray
It is funny that the hon. Gentleman now calls my position bonkers after seeking assurances that amendments 164 and 165 would be carried by the Government to ensure that clause 11 became much more appropriate. Perhaps he will intervene again and tell us exactly what he meant, because I am confused. He seems to want to support my amendments, not to support my amendments, to seek assurances, to vote with the Government, and to back Ruth Davidson. I am not sure where he stands.
Paul Masterton
The hon. Gentleman does not seem to have read his own amendment. I do not want either clause 11 as it stands or clause 11 as suggested by the Scottish and Welsh Governments, because both go too far. We need a middle ground, and that means knowing what the position will be in relation to powers. We do not seem to be too far apart, but the hon. Gentleman is intending to vote for something that he is not arguing for.
Ian Murray
I do not wish to be disrespectful to the hon. Gentleman. I know that he is new to this place, having been elected in June 2017. However, he could have tabled his own amendment to do what he wants to do. He has the cheek to stand in the Chamber and criticise my amendments, and say that he wants to seek assurances from his own Government, but he does not have the nerve to table his own amendment.
That highlights one aspect of the debate. Scottish Conservative Members are happy to bluff and bluster in the Chamber, straight from the Alex Salmond playbook, but when it comes to putting their money where their mouths are, they will walk into the Lobby with the Government in order not to deliver what they fundamentally believe should be delivered. I look forward to the hon. Gentleman’s tabling a raft of amendments on Report to ensure that clause 11 becomes a much better clause, and I look forward to his being influential with Ministers to ensure that those amendments are carried.
Stephen Doughty
Is it not the case that the reason why my hon. Friend and I—and, indeed, a number of Members on both sides of the House—had to work together to table the amendments, with the support of the Welsh and Scottish Governments, is that the Bill is deficient in so many areas, and needs to be fixed in so many areas before we can even consider allowing it to proceed, and before the Welsh and Scottish legislatures will give their consent?
Ian Murray
Absolutely. I think that it comes down to the word “trust”. Many reports on the Bill come down to whether or not the devolved Administrations trust the UK Government to deliver what they are attempting to deliver in the Bill, and I do not think we can trust them to do that. The Law Society of Scotland has argued that the Bill should be revised because clause 11 has no transitional basis: it is an open-ended provision that could last forever. We could see Ministers in Cardiff, Edinburgh, Belfast and, indeed, Whitehall arguing about the minutiae of the detail rather than getting on with the job in hand, for political purposes. We have seen in the House, in respect of every single aspect of devolution, that when it comes down to the politics, it is the people who lose out and the politics that try to win out. We should be very wary of that while we are debating this Bill.
Stephen Doughty
I thank my hon. Friend for giving way again. He is being very generous. Does he agree that this is relevant to an example that has been set in relation to so many issues, including the issue of the Agricultural Wages Board? We do not want case after case to end up in the Supreme Court, with vast amounts of taxpayers’ money being spent and the UK Government fighting the devolved Governments over matters on which they have the clear competence.
Ian Murray
Absolutely. We could become involved in a constitutional battle with no end in sight. The Institute for Government, which I am sure is respected by Members on both sides of the House, has said that the Bill
“has exacerbated the already serious tensions between the UK and the devolved Governments”,
and we see that day after day. The Repeal Bill Alliance concluded:
“By returning all EU power to Westminster against the wishes of Scotland and Wales, the EU (Withdrawal) Bill is an attack on the principles of devolution.”
So time and again Committees of this House, independent bodies and respected bodies tell us that this Bill is deficient, is a power grab by the Government, and could be done in a different way.
The report of the Public Administration and Constitutional Affairs Committee concludes that, on clause 11:
“The overall concerns regarding the devolution aspects of the EUW Bill arise from the constitutionally insensitive nature of the UK. Government’s approach”.
I am trying through these amendments to take away some of that constitutional insensitivity, so as to be able to get to a place where we can be much more comfortable that the Government will do what they said they would do.
The Brexit Select Committee and its well respected Chair, my right hon. Friend the Member for Leeds Central (Hilary Benn), have also produced a report on the Bill and found that
“the devolved administrations have insufficient trust in the process for agreeing these future relationships and have, accordingly, indicated that they will withhold legislative consent from the Bill.”
That is an incredibly serious issue, because the Scotland Act 2016 put the Sewel convention on a legislative footing that means the UK Government should not be legislating in devolved areas unless the Scottish Parliament, or any of the other devolved Administrations, pass a legislative consent motion. They are saying they will withhold an LCM as this Bill is currently constituted, which would mean we end up in yet another constitutional difficulty with regard to whether this Bill will even be passed.
What will the UK Government do? They will ride roughshod over the constitutional settlement, over the Sewel convention, and over the Scotland Act 2016, in which the convention was put on a statutory footing, in order to get this Bill through. But if they were just to work cross-party on clause 11, and, indeed, with some of their own Members from the Scottish Conservatives, they might get to a place that we could all support and respect.
It is worth working through some of the alternative solutions put forward by the Law Society of Scotland, particularly for the hon. Member for East Renfrewshire, who is desperate to find an alternative to this clause. The society is not saying that any of these solutions takes preference over the others; it is merely proposing some of the different ways this could be done to make it less constitutionally insensitive. One of them is:
“Repeal the EU law constraint and amend schedule 5 to re-reserve specific competences to the UK level to enable UK Government to establish common frameworks.”
That would, essentially, allow us to devolve the vast majority of the competences coming back from the EU, and, with agreement, reserve some of the more complicated issues as may be required, agriculture being one that has been mentioned.
The society’s second alternative suggestion is:
“Replace the cross-cutting EU constraint with new cross-cutting constraints, for example to protect the UK single market and/or to comply with international obligations. These might be more or less extensive than the EU law constraint in practice, but would have the benefit of (a) an underpinning principle and (b) catering for unforeseen cases.”
I am not advocating any of the suggestions, but it is worth airing that there are alternatives to clause 11 in this Bill.
Another of the society’s suggestions is:
“Repeal the EU law constraint leaving EU competences to fall as determined by schedule 5”
of the Scotland Act 1998,
“and any new common frameworks to be established by agreement between the UK Government and the devolved administrations.”
That provides a direct answer to the hon. Member for East Renfrewshire. We could devolve everything, but come to an agreement with regard to some of the UK-type frameworks and common frameworks that might be required.
Alternatively, we could:
“Adopt the provisions in the bill on a transitional basis only and subject to a specific cut-off date. At the expiry of the transitional period, powers in devolved areas would revert to the devolved legislatures, unless specific alternatives had been put in place.”
Indeed, we could clearly mix and match from the four alternative solutions from the Law Society of Scotland, but this goes back to the fundamental principle of trust—to the fundamental principle of whether the UK Government and devolved Administrations are truly working together to seek a solution or whether the politics of this trumps the solutions that might be required. That is why we should pass the Opposition Front-Bench new clause on the JMC.
I have proposed these amendments to try and take the edge off this Bill. We are heading into a constitutional crisis. The Conservative party has left this country out of the EU and is risking the constitutional framework of the UK. The question that cannot be answered by this Government is the same question that the Members of the SNP cannot answer, but in reverse: why are the EU single market and customs unions so important—as I believe they are, and on which we see the issues with regard to the island of Ireland—but the UK single market is not? Likewise, I say to the Conservative party, how can they have stood on a platform in the 2014 Scottish referendum saying that removing Scotland from the UK single market would mean a hard border, customs checks and no free movement of people from Scotland into England, and defending that principle, but do completely the opposite in terms of the island of Ireland now? We cannot have the single market and customs union principles on one hand, and then discard them on the other because it suits our political ideology.
It is clear that having a frictionless, seamless border between Northern Ireland and the Republic of Ireland while not staying in the single market or the customs union is utterly impossible to achieve. I say that because I was persuaded by the arguments the UK Government made back in 2014 that removing Scotland from the single market of the United Kingdom would require a hard border at Berwick.
Joanna Cherry
The hon. Gentleman keeps referring to the single market of the United Kingdom. Does he agree that what we have in the UK is a unitary market, because we do not have four separate states, but instead have a union of four separate nations? What the EU has is a single market, which is a regulatory alignment of sovereign states. We do not have that in the UK; we have a unitary market. Will the hon. Gentleman use his language more carefully, please?
Ian Murray
That is legal semantics. I can buy an animal in Edinburgh and sell it in London, crossing the border with it in the back of my car—not that I would do so, as that would probably be illegal, but this is just to highlight the point—and do that in one single market, and not have any customs checks or transfer paperwork, apart from the legal paperwork required, and I could also do that across the EU. Outside the legal semantics, the point I am making is that the SNP says the EU single market is a good thing, and I agree, but says the UK single or unitary market is a bad thing, and I disagree. We also have the Conservative party saying that the UK single market is the most wonderful single market in the world, and I agree, but it is also saying that the EU single market is a bad thing and we must come out of it, but we can keep all the benefits of that at the same time.
Joanna Cherry
The crucial difference between the single market and the unitary market is that in the single market there are at present 28 sovereign states who meet together to make their rules from the top down, whereas in the UK’s unitary market the rules are imposed from the United Kingdom. This supports the hon. Gentleman’s argument, because his argument, which I agree with, is that these frameworks across the UK should not be imposed from the top down, but should grow up organically from the bottom.
Ian Murray
We have just had a bombshell there; the hon. and learned Lady has just told us that she wants to stay part of the UK. That is what we can surmise from that intervention, and I completely agree with her that the best way for Scotland, and Wales, to thrive is to stay part of the UK. Indeed, in my view, the best way for the UK to thrive is to stay part of the single market and customs union of the EU, and all of these issues would therefore fall away, because we would not need clause 11, because we would not need the framework in place to be able to put UK frameworks together, because we could stay within the frameworks that are already in place. It is strange that we will spend a significant amount of time in this Chamber, in the Committee Rooms of this House, and in all the devolved Administrations discussing frameworks that we already currently have.
The Government strategy is that they want every benefit they currently have from the EU while not being a member of the EU. I suggest that if the Government want to achieve that, they should stay in rather than wrench themselves out. That would resolve all the problems, and would have saved the Prime Minister lunch this afternoon, because they would have had a very straightforward solution to their problem.
I will not press my amendment to a vote if those on my Front Bench are going to press amendment 42, because they are very similar in nature. My Front-Bench colleagues’ amendment is much more technically efficient than my proposal, and we know that technically ineffective amendments tend to be criticised. I will therefore support my Front-Bench colleagues’ proposal, and finish by saying that the simple solution for Northern Ireland, Scotland and Wales would be to stay in the single market and the customs union.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Sir David, thank you for calling me at this stage of the debate.
To be fair to the hon. and learned Member for Edinburgh South West (Joanna Cherry), I think she was chafing against the Act of Union, which, as she correctly described, established a unitary market. The Act of Union banned tariffs between Scotland and England and established the free movement of goods.
I commend the use of the word “trust” by the hon. Member for Edinburgh South (Ian Murray), which he used regularly, but I question whether he is in fact doing much to promote trust, as this debate needs to do. He talked about heading into a constitutional crisis, but I think he did so to create a sense of distrust.
I was also disappointed when the hon. Gentleman questioned the motives of my hon. Friends who represent Scottish constituencies. One could suggest that people in glass houses should not throw stones. I do not know which part of the Labour party he represents, but they come in diverse characters these days. Is he in that part of the party that supports its leadership, or the part that is trying to get rid of it? Is he part of Momentum or against it? I do not know whether he is living in fear of deselection. The one thing we do know about him, however, is that he is subject to the Labour Whip. It is not unusual for members of a governing party to be subject to a single Whip, but I think he undervalued the highly significant speech made by my hon. Friend the Member for East Renfrewshire (Paul Masterton).
My hon. Friend made it clear that his support for the Government on this issue “should not and must not be taken as an acceptance of clause 11 as it stands.” That demonstrates the fact that, while my hon. Friends representing Scottish constituencies take the Conservative Whip, they demonstrate an independence of mind and work with their colleagues in the Scottish Parliament, whom I met recently on a visit to the Scottish Parliament, along with Scottish Conservative and Scottish National party Members, to discuss clause 11. My hon. Friend also made it clear that the legislative consent motions might not be granted for clause 11 as it stands.
We all accept that the Gina Miller case made it clear that the requirement for legislative consent motions in the devolved Parliaments would not effectively block the passage of the legislation in this House, but it has created some constitutional tension. My hon. Friend pointed out that the progress of the Bill is likely to be somewhat impeded by the absence of legislative consent motions from Holyrood and Cardiff, and from Northern Ireland if the Assembly is operating there. This is an important message. It demonstrates that the devolution that Labour said it was promoting when it gave us devolution has turned into a very different constitutional reality—
Kevin Brennan (Cardiff West) (Lab)
There was a referendum. It was the will of the people.
Mr Jenkin
I am sorry, I did not realise that I was saying anything particularly provocative—[Interruption.] Yes, there was a referendum, but the constitutional reality has turned into something much more federal in character than the proponents of the original legislation told us it would be.
I do not want to detain the Committee for long. I have chosen to speak in the debate because I am the Chair of the Public Administration and Constitutional Affairs Committee, which is looking at the relationships between the four Governments and Parliaments of the United Kingdom. We issued a report on inter-institutional relations earlier this year, in the previous Parliament, and we issued an interim report just last week on clause 11. That followed meetings that we held in Edinburgh, which will be followed by further meetings in Cardiff and Edinburgh, and if we can get to Northern Ireland, we will. What was striking about the meetings in Cardiff and Holyrood was how little this kind of interchange takes place, how slenderly we know other individuals in other Parliaments throughout the United Kingdom, and how there are no formal mechanisms for proper exchange between the four Parliaments of the United Kingdom. What a shortage that is!
This debate is less about leaving the European Union and more about devolution. It is about reconciling competing narratives of what devolution in the United Kingdom has come to mean, and about dealing with the lack of trust we have inherited from the present devolution settlement. The debate about clause 11 reflects that.
Usually, when devolved powers are going to be legislated for in this House, there is a great deal of discussion, large numbers of papers are produced in all parts of the United Kingdom and eventually, a piece of legislation emerges with a degree of consensus around it. This Bill emerged in much shorter order. We are told that there was very little discussion about the contents of clause 11. This underlines how, under strain, the reflex of our constitutional habits is not to consult. We in the United Kingdom Parliament, and those of us who support United Kingdom Governments, in the plural, have to recognise that there is a serious gap in our capability to discuss, explore, befriend and understand each other throughout the United Kingdom.
Ian C. Lucas (Wrexham) (Lab)
I am interested in the point the hon. Gentleman is making, but is it not the case that the UK Government consulted very little with Members of all parties across the House during the preparation of this Bill after the referendum? Does he agree that that was a massive mistake?
Mr Jenkin
The hon. Gentleman has been in this House for quite some time, and he should be used to that by now. That is the way in which Governments have tended to behave. Yes, we have tried to improve things. We now have pre-legislative scrutiny, for example. I did not vote for the Lisbon treaty, which put article 50 into the treaties. I did not vote to have a two-year time limit on the negotiations on leaving the European Union. I suspect that the hon. Gentleman did vote for the Lisbon treaty, however, so I think he should take more responsibility than I should for the time constraints under which we are now operating.
Ian C. Lucas
What is unusual about this Bill is that it followed a referendum that means we are going to leave the European Union, and there are splits in both the major parties on this issue. The right approach would have been for the Government to consult much more widely on how this legislation should be taken forward. The reason that it is in such a mess at the moment is that the Government are allowing a small coterie to dominate the conduct of the process, rather than consulting the House as a whole.
Mr Jenkin
I do not accept that the Bill is in any kind of a mess. I think that we ought to keep the effects of clause 11 in proportion. From the perspective of the Government—and, in reality, from the perspective of what actually happens in Scotland, Wales and Northern Ireland—the clause is a status quo measure. The powers, while not reserved by the Scotland Acts, were reserved by virtue of our membership of the European Union, so there is no power grab. If the hon. Gentleman wants me to, I can quote from the evidence that the Committee received from Mr Nigel Smith. He was the chairman of Scotland Forward, which ran the pro-devolution campaign in 1997. He stated:
“Nobody who voted for the Scottish Parliament exactly twenty years ago need worry—there is no ‘power grab’ underway.”
We did receive countervailing evidence. Incidentally, the report we published last week is an interim report. We produced no conclusions or recommendations, but we wanted to surface and discuss many of the pieces of evidence that we have received and make them available for this debate.
Pete Wishart
The main conclusion of Alan Page’s work, with which I am sure the hon. Gentleman is more than familiar, is that clause 11 proposes a hierarchical version of devolution whereby this place has all the central powers. I am surprised that the hon. Gentleman does not know that, because that was the main conclusion. Clause 11 creates a hierarchy of devolution under which, for the first time, this place has control in asserting its sovereignty, and Scotland would fall far under the radar. I am surprised that he is not familiar with that work.
Mr Jenkin
The hon. Gentleman will be surprised no longer, because my next point is that the manner of clause 11 reflects a lack of sensitivity on these matters. Clause 11 suggests that there will be no time limits on the retention of powers and no process for the discussion of how powers should be handed over. There is only consultation through the JMC, which meets sporadically, and there is no statement of long-term aims for where the powers should eventually lie.
Returning to the hon. Member for Edinburgh South and his comments about trust, we should be asking how we can build some trust. The great gap in the devolution settlement, as it exists, is that it is based on a binary notion of what devolution means: power is either reserved or devolved. In fact, most decentralised systems of government have shared competences. The EU itself operates substantially on the basis of shared competences and, paradoxically, it is leaving the EU that is exposing the flaws in the devolution settlement. There are so few mechanisms for dealing with shared competences—virtually none.
Martin Whitfield (East Lothian) (Lab)
Does the hon. Gentleman agree that one of the functions or strategists that can deal with this matter is the Joint Ministerial Committee?
Mr Jenkin
I do agree, but the number of times that the JMC and its sub-committees have met formally is few. Months can go by with no meetings, and then a Whitehall Minister will say, “Ooh, we should have one.” That does not inspire confidence. Perhaps the JMC should have fixed diarised formal meetings every year, because there would be things to discuss whether or not a Minister of the Crown here actually thinks there might, and that would give people an opportunity to get to know each other better.
Martin Whitfield
Does the hon. Gentleman also agree that diarised meetings and more interaction might lead to confidence and agreement between the Governments?
Mr Jenkin
I could not agree more, but I hope that the hon. Gentleman will acknowledge—I am not being accusatory—that this has been a failure of previous Governments as well as this one. When the Select Committee visited the Welsh Assembly and the Welsh Government during the 2010 Parliament, First Minister Carwyn Jones actually complained to us, perhaps with more rhetoric than was justified, that he had been trying to get a meeting with Prime Minister David Cameron for months and months—more than a year—but had not been allowed to have one. We need fewer excuses for people who want to be destructive and more confidence that meetings will take place and that they are valued by all parties.
Stephen Kerr
Is it my hon. Friend’s view that the mechanisms that determine such communication should be established by statute?
Mr Jenkin
I have an open mind on that, and I have fiddled around with my amendments, which have not appeared on the order paper today, to see whether we can find a way of doing that. I do not know whether this is the right Bill through which to do that—probably not—but such things are statutory in other decentralised systems. There clearly needs to be something much more formal, but we should perhaps experiment without statute first to see whether it is necessary. My Committee took evidence from one civil servant and a former Speaker’s Counsel who said, “It has worked very well for the past 300 years, so why do we need statute?” but that does not recognise that we now have competing political centres with, I repeat, competing narratives about what the constitution actually is. SNP colleagues talk about the natural sovereignty of the Scottish people, but the legal constitutional reality is that the Queen in Parliament in Westminster is still absolutely sovereign. Those things need to aired, discussed and understood.
Deidre Brock
Further to that point, the Scottish Government have consistently made it clear that they cannot support the Bill as it stands, so if the UK Government do not vote for amendment 72 tonight, would that not render the Sewel convention completely pointless and not worth the vellum it is written on?
Mr Jenkin
I hear the hon. Lady’s impatience, but we need to be more patient. We are not completing the consideration of this Bill this evening, and I am encouraged by the work done by the First Secretary of State, who chaired the last meeting of the Joint Ministerial Committee and seemed to be drawing people together around some agreed principles for how joint frameworks might be approached. We all want to see that, so let us hope that that work will continue.
Kevin Brennan
The hon. Gentleman was mildly critical of the Welsh First Minister for using rhetoric, but the rhetoric in that relationship came from Prime Minister David Cameron, who said that he wanted to follow a respect agenda but then failed even to have a meeting with the First Minister. May I also correct the hon. Gentleman on something? Ministers actually know each other very well at the moment and met extremely frequently prior to the introduction of this Bill. The problem is that UK Ministers ignored the advice that they were getting from both Scottish and Welsh Ministers, which was that something like clause 11 would be utterly unacceptable.
Mr Jenkin
The better we know each other, the more we will forgive each other for the rhetoric. That is what I found when my Committee went to Edinburgh on a semi-formal visit. The hon. Member for Inverclyde (Ronnie Cowan) and I, as Chairman, had some open and frank discussions about some difficult issues with people I had never even met before, but we of course found that there was lots of common ground.
My next point is that there are no inter-parliamentary arrangements. We had to scrabble around for a bit of budget to do the trip. We found it in the end, but there needs to be a habit of people in this Parliament interacting much more openly and frequently with our counterparts in the other Parliaments. For example, the Environment, Food and Rural Affairs Committee and the Business, Energy and Industrial Strategy Committee have competences that are shared by Committees in different Parliaments. Those Committees should be meeting regularly together. Another suggestion worthy of consideration is that there should be some formal inter-parliamentary council in the United Kingdom to allow representatives of all four Parliaments to meet on a regular basis on some kind of neutral ground.
Vernon Coaker
The Good Friday/Belfast agreement set up many inter-parliamentary institutions, both east-west and north-south. The hon. Gentleman talked about trust. How does he think that trust has been helped by what we saw this morning, with the Government saying there would be a deal on the border in Ireland and the Prime Minister then having to come out of lunch because the DUP either had not been consulted or had not agreed to the arrangements? What does it do for both Unionism and nationalism in Ireland when such things happen? Frankly, it looks as though the Government are in chaos, do not know what they are doing and, in pursuing it, are undermining the whole peace process in Northern Ireland.
Mr Jenkin
Sir David, am I to be tempted to enter a debate on today’s negotiations, or should we wait until tomorrow, when perhaps someone will come to tell the House something about what has been going on?
A formal inter-parliamentary council that meets on a regular basis would be another opportunity for parliamentarians to understand each other better.
Kevin Brennan
Does the hon. Gentleman acknowledge that there is an inter-parliamentary council? The British-Irish Parliamentary Assembly, which obviously includes the Government of the Republic of Ireland, provides an opportunity for parliamentarians to get to know each other. Perhaps it would be useful if, as the Chair of the Select Committee on Public Administration and Constitutional Affairs, he were to be a member of that Assembly. On today’s issues, does it not show that we have a Prime Minister who is in office but not in power and a DUP that is in power but not in office?
Mr Jenkin
I am endeavouring to raise the tone of this debate, and obviously I am not succeeding with certain Opposition Members.
My final suggestion goes to the heart of what clause 11 is about. I mentioned that, in previous discussions about devolution, there has always been a Silk commission or a Calman commission. There has always been a body that has deliberated, drawn out the more controversial politics and tried to make the discussion more objective. I wonder whether there is a case for the Government convening some kind of standing commission, under the scrutiny of a joint group of parliamentarians, to dispassionately look through the powers returning from the EU that intersect with the devolved Parliaments and Assemblies in order to determine what powers should lie where, both immediately as we leave the European Union and in the longer term.
At the moment, I am afraid my criticism of clause 11, as it stands, is that it does not give any assurance about process or much assurance about consultation, time limits or sun-setting. It just sets out this static proposal.
Gerard Killen (Rutherglen and Hamilton West) (Lab/Co-op)
Will the hon. Gentleman give way?
Chris Bryant
On a point of order, Sir David. I am not sure whether you were in the Chamber earlier, but Mr Speaker made it clear when asked that the Prime Minister intended to make a statement to the House tomorrow about the negotiations and discussions she has been having with the DUP and Europe.
I gather that Downing Street is notifying the press, not this House, that there will be no such statement tomorrow and that the Prime Minister does not intend to make a statement. Is there any way you can make sure that Mr Speaker is aware of this and, for that matter, that Downing Street is fully aware that if we are taking back control—I thought that was the whole point—this House should be kept fully and appropriately informed of the negotiations at every stage?
The Temporary Chair (Sir David Crausby)
I will certainly pass on your remarks to Mr Speaker but, in the meantime, you have made your point to the House.
Pete Wishart
It is a pleasure to follow the hon. Member for Harwich and North Essex (Mr Jenkin), who I commend for his thoughtful speech and for how his Committee has sensitively considered some of these issues. We have seen the interim report, and I look forward to the full conclusions. My hon. Friend the Member for Inverclyde (Ronnie Cowan) is a member of the Committee, so the hon. Member for Harwich and North Essex has more than able deputies to back him up.
I rise to support the amendments variously tabled on behalf of the Scottish and Welsh Governments in the name of my hon. Friends and other hon. Members. The key point is that where we are going requires cross-party attention, support and consensus, but it also requires cross-institution support. The efforts to try to resolve some of the difficulties in clause 11 not just in this Chamber but, to give them credit, in Committees, in the other place and in the Scottish Parliament have to be noted. We are starting to see progress on concluding some of these conversations and discussions. This debate will help us to move things on.
Gerard Killen
Does the hon. Gentleman agree that the danger of clause 11 is that it seeks to replace Scotland’s relationship with the EU with Scotland’s relationship with the UK? It is important for the Government to set the tone on how they intend to proceed on an equal basis with the devolved Governments.
Pete Wishart
The hon. Gentleman is, of course, absolutely right. I will address some of those issues. He is spot on that there is an imbalance in how everything is repatriated. The repatriation of the powers is the central feature that concerns us.
Devolution is an elegant solution. Devolution in this country is asymmetric, with the different Parliaments and Assemblies having different powers. The United Kingdom is a complex constitutional nation, and we have designed devolution to meet the demands of a complex, multi-nation United Kingdom. We therefore muck around with the basic premises and principles of devolution at our peril, which is why clause 11 presents such a clear danger and threat that it must be amended.
It is also important to say that Scotland did not vote to leave the European Union. Every single local authority area in Scotland voted to remain in the European Union. I now have constituents who are very concerned about the chaotic cluelessness at the heart of the negotiations and discussions about taking this country out of the European Union. The Scottish Parliament has become collateral in all those conversations and discussions. There is real concern about how our Parliament will operate and about the powers it has the right to expect and to progress with.
Paul Flynn (Newport West) (Lab)
Does the hon. Gentleman agree that the secret to the Government’s thinking on this Bill is in the fact that they are insisting on including a date for withdrawal from Europe but that they refuse to include a sunset clause to give us a date when the powers they are about to grab from Wales, Scotland and Northern Ireland will be repatriated?
Pete Wishart
That is an important point, because a sunset clause is the sort of thing we need to see. It would give confidence to the hon. Gentleman and me, rather than just naming the day that we leave the European Union—we are all familiar with that date, anyway.
It is important that we set the context for this debate. We have to see Northern Ireland in the context of devolved powers. Today, we believed we had some sort of solution to the Northern Irish question. There was an agreement. The Prime Minister of Ireland was prepared to get to his feet and say that a solution had been delivered and garnered, only for it to be knocked out of the water by a telephone conversation with Arlene Foster. That is where some of these issues about devolution have gone.
We have now heard the elegant phrase “regulatory divergence”. I had never heard of it before today, but it is fantastic and I want to hear more of it. If regulatory divergence works for Northern Ireland, I am thinking it could just about work for Scotland, given the range of powers we have in the Scottish Parliament and the legislative competence we have in a swathe of areas. So let us hear more about this regulatory divergence. I am disappointed that none of my DUP friends are in, as they could have talked a bit more to me about some of their concerns. The last thing we need in the Scottish Parliament is to be sucked into all this process, so it is incumbent on this Government to ensure that devolution continues to operate on the basic premise set out in the 1998 Act. The sooner we get reassurance that that is their view and they introduce considered amendments, we will be happier—it starts with clause 11.
I listened carefully to the hon. Member for Harwich and North Essex, and I looked at his Committee’s report, saw the witnesses he brought forward and was surprised that he referenced Nigel Smith. My Committee also looked at this issue, hearing from a variety of witnesses—the House of Lords Constitution Committee and the Scottish Parliament Committees have also looked at it—and it is hard to find anybody with expertise in constitutional politics, either on the legal frameworks or in terms of having an academic interest, who does not agree that clause 11 does not work and is in need of amendment. Of all the guests that have been before the various Committees dealing with these matters it is difficult to find someone who would support the Government’s position, and I congratulate the hon. Gentleman on doing so.
There needs to be a basic understanding that the Scottish Government have stated that if clause 11 proceeds as currently constituted, they will not be in a position to recommend a legislative consent motion. That will lead, at the very least, to a constitutional stand-off, which would be singularly unnecessary and unhelpful, and would of course get in the way of all the other issues the UK Government have to deal with in this Brexit mess. Surely the last thing they want is to get into a constitutional stand-off with the Scottish Government. I know that progress has been made and that there is not much difference on some of these things, so it would be much better if the UK Government just fixed this for goodness’ sake. They should just get it sorted if we are so close; they should accept these amendments as a way forward and we could all then get relaxed and happy about the fact that there will not be any sort of constitutional issue to do with it. The Minister needs to say that we are going to be doing that.
It is good to have a look at what has been included in this Bill, particularly in clause 11, so let us start with something that the clause does not do. We have to be clear that it does not return powers from the EU to the devolved Administrations. Instead, it returns powers within the devolved competences solely and exclusively to the UK Government and Parliament. Worse than that, it imposes new restrictions on how the Scottish Parliament can operate when it comes to these devolved competences. The Scottish Parliament and Government will take a double hit. The clause would give the UK Government power to legislate in relation to policy areas that are the responsibility of the Scottish Parliament and the Scottish Government.
There is another issue, which has not been touched on today. At the point where we leave the EU, all these powers are repatriated to the UK Government and into some form of redistributive system—we are not really clear how that would work, as that has not been stated. When we leave, the EU will of course continue to amend and legislate in these areas, and the UK Government will be legislating on behalf of the Scottish Government. So there will be a space in between, from when we leave, where there is a divergence between EU law and UK retained law, which this Government solely and exclusively fit. Not only will the UK Government have powers on retained law when we leave the EU, but they will have ongoing responsibilities, as we continue to make that journey from leaving the EU, to try to fill that gap in between.
Stephen Kerr
I congratulate the hon. Gentleman on making a very positive contribution to this debate compared with the speech we heard earlier from the right hon. Member for Ross, Skye and Lochaber (Ian Blackford). The worthy report that his Committee produced, which is a huge contribution to the establishment of common ground, states:
“We recommend that the UK Government agrees with the devolved administrations what areas should be subject to common frameworks and which ones can be devolved.”
Is that not exactly what is going on? Is that not the common ground that he and we are seeking so that we can get this process to move?
Pete Wishart
I am grateful to the hon. Gentleman for that intervention. My Committee looked at these issues and considered them seriously, and we hope our report makes a contribution to addressing some of these issues. The key point that he makes, and the thing we have to start to get to in agreeing issues relating to common frameworks, is that they have to be agreed by the Scottish Government and Scottish Parliament before they can be progressed. This idea that frameworks can be imposed upon devolved Assemblies and Parliaments is unsustainable and cannot be operated. That is—
Several hon. Members rose—
Pete Wishart
I will make some progress; I will deal with our report before letting Members in. The key point is that this needs to be agreed and consented to before progressing. We have to get that in place in order to start moving forward on this sort of thing.
Pete Wishart
I have given way to the hon. Gentleman. A lot of people wish to speak and I know he will get a chance, so he will be able to come back to this and we can have a conversation about it.
Clause 11 also changes the fundamental dynamic between the Scottish Parliament and this House. Under the clause, the UK assumes a role as the master and repository of all retained EU legislation in devolved areas. As I said to the hon. Member for Harwich and North Essex, who is deep in conversation with the right hon. Member for West Dorset (Sir Oliver Letwin), the provision creates for the first time a hierarchical model of devolution, as Alan Page said in the work that he did on behalf of the Scottish Government. This House will face absolutely no restriction in how it may want to operate in its areas of devolved competence, but the Scottish Parliament will face restrictions. This represents a sort of “know your place, Scotland”, whereby this House asserts its sovereignty on the Scottish Parliament. That is not good enough. We have a conversation among several Members about sovereignty and our different understanding of and approaches to it culturally. This House obviously takes the view that parliamentary sovereignty is what it is all about, whereas we take the view that it is about the sovereignty of the people and the claim or right of the Scottish people to assert their sovereignty. This idea of a “know your place, Scotland”—
Pete Wishart
I have given way to the hon. Gentleman and I want to make some progress. In large swathes of devolved competencies, we will be subject to UK frameworks, determined and controlled by the UK Government. That will never be satisfactory to anybody who works in any of the devolved structures and any devolved parliamentarian.
Let me try to make it simple for the Brexiteers—although when I look around I do not see very many of them. It is strange to look around and see mainly remain types; I do not know who to pick on. I am trying desperately to see a Brexiteer. [Interruption.] The hon. Member for Aberdeen South (Ross Thomson) will do. I will try to make it simple for him so that he can get an understanding of this issue. This situation is like Scotland giving up its place in the European Union as part of the United Kingdom in order to join a UK super-state, but the super-state does not seem to be as benign as the European Parliament. For Scotland, this UK super-state we are expected to be part of would make its jaundiced view of the EU look like a benign, cuddly, receptive institution of enlightenment. I am grateful to my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) for this analogy. He is not in place, but I hope he will join us later with his words—
Pete Wishart
I have given way to the hon. Gentleman already. This UK super-state seeks to control and restrict the operation of Scotland, and it is prepared to strip us of powers faster than any United Kingdom Independence party cartoon version of some evil EU bureaucrat or Commissioner would. I wish to make a comparison with Ireland, because it is instructive. Ireland, as a member of the EU, can almost stop the progress of Brexit—it has the powers to do that, and in the past couple of weeks it has asserted that that might be something it may be obliged to seek. Scotland, as part of the UK super-state, does not even have the power to legislate for the best interests of hill farmers in Perthshire—that is going to be left to this House.
That shows how power grabbing the UK super-state and this place are going to be. This is a real power grab, more menacing than any fantasy dreamt up by our Brexiteer friends in relation to their death star version of Brussels. They are even starting to use the words of the super-state. Our integrated UK joint economy is now to be “the single market”. Any minute now the hon. Member for Harwich and North Essex will be made a UK commissioner and we will start to see “UK-pol” and “UK-atom”. This is the sort of place they are going with this creation of the British super-state. We have to be very careful when we are designing these things. We do not want to swap our useful place in Europe in order to be junior and subservient members of their British super-state.
Pete Wishart
I will give way to the hon. Gentleman just to shut him up for a bit.
Stephen Kerr
I thank the hon. Gentleman for giving way to shut me up. All the things he has said for the past few minutes, which have detracted from the tone of his speech, are covered in “Common Frameworks: Definition and Principles” published by the Joint Ministerial Committee (EU Negotiations) on 16 October 2017. It describes in detail exactly how we will go about creating the common frameworks. It is the complete opposite of what the hon. Gentleman is saying. He is making it up as he goes along—it is very entertaining, by the way.
Pete Wishart
I am grateful for the hon. Gentleman’s intervention, as always, but I do not recognise his view of the way things are progressing. If he will forgive me, I will make some progress and we will look at some of these issues once again. I am not going to satisfy him on these matters and his intervention has certainly not reassured me about the general progress that we have to make.
Let us get back to more of a consensual tone, because I note from the hon. Gentleman’s irritation that I may have been a tad too political in some of my remarks. I look around and I see my colleagues from the Scottish Affairs Committee on the Conservative Benches. I am genuinely grateful for the contribution that they have made. We have designed a way forward in our recommendations and observations that might help to resolve this issue. Resolution is what is required, and I think we all agree that we can find it. Although our recommendations do not directly match what is in the amendments, they are roughly in the same territory.
I think that we all agree that a framework should be agreed and not imposed. Looking around, I think that we are all agreed on that one. That is good. I think that we agree that the UK Government should not legislate on areas of competence devolved to the Scottish Government. Perhaps there is not so much agreement on that one. It genuinely disappoints me that Conservative Members still believe that it is right for the UK Government to legislate in areas of devolved competence. I am looking at the ministerial team, hoping that they will reassure me that that is not what they are seeking to do. No, I am not getting that either. We will leave that there. We were doing well and making a bit of progress, but perhaps that is a step too far. That is the difficulty that we are starting to encounter.
I am pretty sure that Ministers do not share my characterisation of the process, so I will be interested to hear what they say. I am interested in how they will describe the repatriation of devolved competences straight to the United Kingdom, instead of to the devolved Assemblies and Parliaments where they should be; how we will come together to agree the common frameworks, working together in a spirit of consensus—all the warm, cuddly things that the hon. Member for Harwich and North Essex suggested he wants—instead of having them imposed; and then some sort of process of redistribution through Orders in Council and all that sort of stuff. It is disappointing that we cannot hear that.
Amendments 164 and 42 would ensure that the UK Government had to consult and secure the agreement of the devolved Administrations in this context, so they roughly match what I have said. Indeed, they roughly match what the Secretary of State for Scotland has said. This is a really good quote from when he came before the Scottish Affairs Committee:
“A UK framework is not a framework that the UK Government imposes; it is a framework that is agreed across the United Kingdom.”
That is the approach that we need to hear more of, and we need to see how that works out. I very much support the cross-party amendments that were tabled on behalf of the Scottish and Welsh Governments, which are mainly in the name of the hon. Member for Edinburgh South (Ian Murray). I appreciated his comments today.
I am sorry to say to Labour Front Benchers that we cannot support new clause 64. I know that it is the lead new clause, but we will abstain because it suggests that the frameworks should be designed by the UK Government; not that they should come together with all the devolved Assemblies and Parliaments. Unfortunately, we cannot side with Labour on that. I hope that it withdraws that new clause. I am looking at the hon. Member for Greenwich and Woolwich (Matthew Pennycook). Please withdraw it because it is not helpful. We need all the parties in this House to work together. The presumption that the UK Government will be responsible for initiating the frameworks is not acceptable to us.
I do not even think that that is acceptable to—I am looking at Welsh colleagues—the Welsh Assembly, which the Labour party runs. I am looking at the hon. Member for Cardiff South and Penarth (Stephen Doughty). He will have to tell me whether the Welsh Government are absolutely happy about the UK Government designing frameworks.
Paul Masterton
Does the hon. Gentleman accept that the amendments he is discussing do not reflect the recommendations of the Scottish Affairs Committee and go further than those recommendations? Does he therefore understand why we as Scottish Conservatives are not in a position to support those amendments? It is not about talking Scotland down or being whipping boys for the Conservative Government, but a recognition that that is not the agreeable position where the Scottish Affairs Committee landed?
Pete Wishart
I am grateful to the hon. Gentleman, because I said that. I said that the amendments do not directly match our recommendations, but that they are in roughly the same territory. I think that he will agree with me about that. He is right that they do not match.
Pete Wishart
Yes, of course—as long as I am hearing from the Welsh Government.
Stephen Doughty
The hon. Gentleman gives me more power than I currently have. I refer him to the detail of new clause 64. Subsection (3) states:
“Ministers of the Crown shall only create”
these frameworks with the advice and consent of the devolved Administrations. We put that forward with the aim of securing their agreement. It relates to the wider discussion and to the other amendments about the Joint Ministerial Committee. I do not think that we should be doing things on a UK-wide basis without their consent. Unfortunately, that is exactly what the Government are doing.
Pete Wishart
I am grateful to the hon. Gentleman for clarifying that. I just refer him to exactly what is in new clause 64:
“Ministers of the Crown shall only create UK-wide frameworks”.
The presumption is that Ministers of the Crown will create them.
Pete Wishart
It speaks about consent, but that leaves it to Ministers of the Crown to create the UK-wide frameworks. That is not acceptable.
Kevin Brennan
Does the hon. Gentleman accept that Scottish Ministers and Welsh Ministers are also Ministers of the Crown?
Pete Wishart
Absolutely, but that is not the intention of the new clause.
It is shame we are in this position, because the Scottish Government and Welsh Assembly amendments, which all appear in the name of the hon. Member for Edinburgh South, were very clear in their focus and direction. Why Labour Front Benchers felt they had to come along and table new clause 64, I will never understand, but I leave it up to them. I have explained to them why we cannot support it this evening and I think they understand that reason. Let us leave it at that.
Lastly, I turn to my Scottish Conservative colleagues, ever so gently. [Interruption.] No, I think they have entered into this debate with a degree of consensus. The speech by the hon. Member for East Renfrewshire (Paul Masterton) was very thoughtful and well delivered. However, this is a big test for them tonight. The devolution settlement is at stake. These are critical decisions that we must take. They can believe Ministers, but I do not know what reassurances they have received that this will be resolved. I have worked with Scottish Government colleagues and they have told me that progress has been made, but nothing is decided. The best way to get progress and to ensure that there is total focus from Ministers is to vote for the amendments. That will tell them clearly that all of us across this House say that something has to be done.
Nick Thomas-Symonds
I want to be absolutely clear about the new clause, because it says clearly:
“Ministers of the Crown shall only create UK-wide frameworks if they have consulted with, and secured the agreement of, the affected devolved administrations.”
It is very, very clear. I agree with the hon. Gentleman that we should be working across parties as much as possible, but there is really no need to split hairs. That is very, very clear.
Pete Wishart
I do not know what part of that line the hon. Gentleman does not understand:
“Ministers of the Crown shall only create UK-wide frameworks”.
It does not talk about anybody else. I will leave that there. It is unfortunate. I do not know why Labour Front Benchers could not have come to us and had a conversation about it. We could have put forward our concerns. We could have come together consensually, as we have been doing quite a lot, and worked something out, but unfortunately that was not the approach they wanted to adopt. That was up to them.
Back to my friends in the Scottish Conservative party—I feel like I have neglected them now. This evening is a test for them. The future and the principles of the devolution settlement are up for grabs this evening. They can trust these guys here—the Ministers—trustworthy though they may be, to do the right thing. Perhaps they have received assurances that the Government are going to do all these things and that everything is going to be all right.
But what is not acceptable—I know most of my Scottish Conservative colleagues and friends are new to this place—is for this to go to the unelected House of Lords to be amended. That is what increasingly this Government are doing. They do not like to accept amendments in this place, which is a democratic outrage. This House, which we are all elected to by our constituents, should be the exclusive place in which these things are resolved and fixed down. If those Tories think that we should resolve these really important issues in a place that is full of unelected donors and cronies and failed Members of Parliament—I am thinking about the guy who opposed me in the Scottish Parliament and who managed to get himself in there and a role in the legislature—then that is their view, not mine. When we have debates about such critical issues, we owe it to our constituents to ensure that it is we who decide and determine them and not those in another place, which is unelected.
I hope that the Scottish Tories are right—I am looking round now and can see that they have full confidence that this will be resolved and fixed down—but the one way that they can definitely guarantee that they will get their way is to vote. That is what we do in this House: we vote on issues that we agree on and support. For the sake of the devolution settlement and to ensure that we get some sort of solution to everything that we need to get fixed, they should back us tonight, stand up for Scotland and make sure that these amendments are passed.
John Lamont
I will speak to the measures that relate to Scottish devolution, particularly clause 11, which we have heard so much about during this debate. However, before I do so, I want briefly to talk about my role in this process, and indeed that of other Scottish Conservative and Unionist Members here and in the Scottish Parliament. Our job is to ensure that the Bill is in a form that will ensure that the Scottish Parliament can give its approval through the legislative consent procedure. It is fair to say that without a legislative consent motion, the Brexit process will shudder to a halt and create a constitutional crisis. It is therefore imperative that the consent of the Scottish Parliament is achieved.
John Lamont
No, I just want to make a little bit of progress.
Although I do not support the amendments proposed by the Scottish and Welsh Governments—I will try to outline my reasons why—I do think that the UK Government need to do more to find a way forward with the devolved Administrations. The leader of the SNP here, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), completely misjudged the tone of the debate. Peddling lines about “power grabs” when the complete opposite has clearly been stated to be the case really was staggering. Moreover, I was astonished that the hon. Members for Edinburgh South (Ian Murray) and for Edinburgh West (Christine Jardine) seemed to be supporting the Scottish Government’s amendments, which would do so much harm to the integrity of the UK internal market and to Scotland’s place in the United Kingdom, given that so many of their voters voted overwhelmingly for Scotland to remain part of the United Kingdom in 2014.
Christine Jardine
Does the hon. Gentleman accept that I and, I hope, the hon. Member for Edinburgh South (Ian Murray) are doing what we believe is necessary to protect the devolution settlement? By doing so, we are doing much more to protect the United Kingdom than the Conservatives, who may actually be undermining it.
John Lamont
It is my colleagues on the Government Benches who have made the Scottish Parliament as powerful as it is today. The Scottish Secretary has given a guarantee that, after Brexit, the Scottish Parliament will have even more powers. The problem with the amendment that the hon. Lady intends to support is that it goes too far. It would harm the internal market of the United Kingdom and undermine Scotland’s place in the United Kingdom. I do not believe that that was what the voters of Edinburgh West or of Edinburgh South voted for when they voted for their MPs, with their Unionist credentials, back in June.
Mrs Moon
I just find this debate absolutely ironic. We talk about the power of the devolved Assemblies at a time when one individual, in a quick phone call with the Prime Minister, can scupper the whole policy and the whole plans for devolution. Nobody from the Democratic Unionist party is in the Chamber to argue their case. DUP Members will go into the Lobby to vote, but they will not come here to argue their case. That is the shame of this debate. There is no parallel between what is happening in Northern Ireland, and what is happening in Scotland and Wales.
John Lamont
The hon. Lady should perhaps look at last week’s discussions between the Secretary of State for Scotland and the Deputy First Minister for Scotland about how powers should be divided between this place and the Scottish Parliament. I believe that genuine progress is being made, but we should not rush it.
Ian Murray
I am very grateful to the hon. Gentleman for allowing me to correct his inaccurate record. He talked about my constituents in Edinburgh South. I should know them better than he does, and they voted 68% to 32% to keep Scotland in the United Kingdom. There is no greater defender of that United Kingdom than me, but perhaps he would like to reflect on the fact that the danger to the United Kingdom is Brexit and English votes for English laws. He stood on a manifesto saying that he would not only maintain the single market and the customs union, but enhance them.
John Lamont
I am grateful to the hon. Gentleman for that point. I will leave it to him to explain to his constituents why, by pressing his amendment, he will be putting at risk Scotland’s place in the United Kingdom. The amendment would damage the internal market of the United Kingdom and Scotland’s place in the United Kingdom. We are not supporting it because it goes too far. As my hon. Friend the Member for East Renfrewshire (Paul Masterton) explained, we want to amend the Bill, but we will not do so if it puts Scotland’s place within the United Kingdom at risk. The amendment tabled by the hon. Member for Edinburgh South would do that, and that is something that we will be reminding his voters of.
I come to this debate as someone who was disappointed with the result of the referendum in 2016, but I am also a democrat. We need to accept the result and move on to ensure that we get the best outcome possible for Scotland and the United Kingdom. SNP Members would do well to show a degree of acceptance of that, too. They have been on the losing side of two referendums in recent years, but they seem to be unable to accept the result of either.
Our job now is to deliver Brexit smoothly and in a legally coherent way. That is why the Bill is so important. It is horrifically complicated—I expect that most people in our country do not really understand what it is all about—and it could affect many aspects of our everyday lives, particularly in constituencies in parts of our country that are also governed by devolved Parliaments and Assemblies. Rather than focusing on the detailed wording of each clause, my approach has been to focus on outcomes. What do Scottish residents living in the border communities that I represent want to achieve from this process? What do Scottish farmers believe to be important? What do Scottish businesses and traders want from leaving the EU? What do our fishermen want to see on the other side of Brexit day? Ultimately, they all want as little disruption as possible. They want to be able to trade, move, and work within Scotland’s most important trading partner—the rest of the United Kingdom.
Stephen Doughty
Given the concerns that the hon. Gentleman is raising about many issues and the complexity that he is describing, is he not surprised to hear that, in recent moments, the statement that the Prime Minister was due to give to the House tomorrow about the negotiations and these matters of devolved Administrations has apparently been cancelled? The Prime Minister will not be coming here. Does he not agree that she should come to this House to explain just what is going on with these negotiations?
John Lamont
I am grateful to the hon. Gentleman for his intervention. I will not get involved in a running commentary on what he has been reading on Twitter. I look forward to hearing what the Prime Minister has to say when she is ready to speak to us.
My priority from Brexit is twofold. My first priority is to protect the integrity of the UK internal market, which is worth four times more to Scottish businesses than that of the European Union. The other priority is to get the best possible access to the EU market. That, I believe, is also the priority of SNP colleagues, although there are differences over how we define the word “possible”.
The amendments proposed by the Scottish and Welsh Governments would, I believe, put the United Kingdom internal market at risk, which is why I cannot support them. By automatically devolving powers, they would place unnecessary barriers to trade between Scotland and the rest of the UK, our largest market. While accepting the need for common frameworks, the Scottish Government’s approach seems to be that everything should be devolved on day one and there should then be a process of trying to re-reserve powers to Westminster at a later date once we know what trade agreements require a UK-wide approach. That approach would bring an extra layer of uncertainty at an already uncertain time.
Martin Whitfield
Does not the hon. Gentleman agree that these powers have already been devolved? We are talking about powers coming back that have already been devolved, rather than something fresh and new.
John Lamont
These powers are with the European Union just now. We all accept that there will be a need for UK-wide framework agreements, and we need to get the process right. Why rush into devolving everything to the Scottish Parliament when the framework agreements might require powers to be retained at a UK level to protect the UK internal market, and to allow us to enter into trade agreements with other countries around the world? It is critical that we get things done in a logical and thoughtful way, rather than rushing into a situation that we might be unable to unpick further down the line.
Stephen Kerr
Does my hon. Friend agree that there are many moving parts in the current process? Our debate is taking place at a time when many things are on the move. For example, there was a very positive meeting last week between representatives of Scotland’s two Governments. Does my hon. Friend welcome that, and does he believe, as I do, that we should be optimistic that we can come up with an agreement based on some of the things that the Scottish Affairs Committee mentioned in its report?
John Lamont
My hon. Friend makes an excellent point. Significant progress is being made between the two Governments, which was why I was so disappointed with the opening remarks of the right hon. Member for Ross, Skye and Lochaber. There is not a million miles between the two Governments.
Christine Jardine
But does the hon. Gentleman accept that this is not just about how well Scotland’s two Governments are talking to each other? It is also about Wales and Northern Ireland—it is about each devolution settlement. We should not expect the situations in Wales and Northern Ireland to be dependent on the outcome of talks between Scotland’s two Governments.
John Lamont
I accept that the UK Government are holding discussions with the other parts of the United Kingdom, but I am here to represent a Scottish constituency and my Scottish constituents. I would not be doing my job properly if I did not focus on Scotland and the challenges that Brexit will present there.
John Lamont
I want to make a little bit more progress.
I completely reject the Scottish Government’s unhelpful narrative in the early stages of this process—we have heard it from some who have spoken today—that there is a power grab. No powers that are currently exercised by the Scottish Parliament will be reserved to the Westminster Parliament. Every decision that the Scottish Parliament could have taken before Brexit will still be possible after March 2019. The Scottish Parliament will, in fact, be given greater powers as we leave the European Union. This Bill maintains the current powers of the Scottish Parliament. It merely replaces the restriction on legislating contrary to EU law with the restriction on legislating contrary to EU retained law.
Chris Elmore
I am beyond confused by the hon. Gentleman’s assumption that we would reserve the powers that come back from the EU here on the basis of trade deals. The hon. Member for Stirling (Stephen Kerr) is shaking his head, but the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) did say that the powers would be reserved based on trade negotiations. As a Welsh MP, I want to know whether the hon. Member for Berwickshire, Roxburgh and Selkirk is saying that this British Parliament is to forfeit Welsh lamb in favour of Trump’s chicken. Will he clarify what he means by the powers being reserved based on trade?
John Lamont
My comments relate to the UK-wide framework agreements, on which I thought there was cross-party agreement. We need the framework agreements to protect the integrity of the UK internal market’s operations. As we progress out of Brexit, we will enter into trade deals with other countries, and it is important that the United Kingdom as an entity can offer one approach—common standards—in those negotiations. That will be good for Scottish business and for our constituents, and it is one reason why the framework agreements are so important.
John Lamont
I just want to make a little more progress.
The UK Government have made it crystal clear that clause 11 is temporary until powers can be devolved. It is simply wrong to suggest that the Bill is some sort of power grab by Westminster. I suggest that this is just another chapter in the SNP’s book of grievance politics.
Joanna Cherry
The hon. Gentleman makes a point about the power grab, but he needs to understand that this phrase is not just used by the SNP. As I said earlier, it was first used by the former British Prime Minister, Gordon Brown. Government Members have been surprised that I am quoting Gordon Brown, but the Conservative and Unionist party needs to understand that all the Scottish parties—apart from the Conservatives—are united in their desire to protect the devolution settlement. The hon. Gentleman is describing what he hopes will happen, but clause 11 will not enable that to happen, because it involves top-down imposition, rather than organic upwards agreement.
John Lamont
The hon. and learned Lady is misrepresenting the Scottish Conservative and Unionist party’s position. We are completely committed to devolution. We have delivered more powers to the Scottish Parliament than any other party in this Chamber and we will continue to do so after Brexit. It is completely disingenuous to suggest anything else.
Joanna Cherry
On a point of order, Mr Crausby. The hon. Gentleman has used the word “disingenuous”. We have already heard from the Chair once today that that word ought not to be used about another hon. Member. I very much hope that the hon. Gentleman is not suggesting that I am being disingenuous. We might disagree, but I am not being disingenuous. I invite him to withdraw the comment.
The Temporary Chair (Sir David Crausby)
The hon. Gentleman should not have used the word “disingenuous”. I am sure that he will learn from it.
John Lamont
I will learn, Mr Crausby, and I am happy to withdraw the remark.
The hon. and learned Lady said that the Scottish Conservative and Unionist party was in some way not supportive of devolution, which is just not the case. She has given me the opportunity to repeat my point: this party has delivered more powers to the Scottish Parliament than any other party in this Chamber, and it will continue to do so after Brexit.
John Lamont
No; I think I have heard quite enough from the hon. and learned Lady this evening. Despite the rhetoric of the Scottish National party, the opposite is in fact true, as the UK Government and the Scottish Government are relatively close to reaching an agreement.
Colin Clark (Gordon) (Con)
Does my hon. Friend agree that it would be of better service to all our constituents if we dialled down the rhetoric and looked closely at the positions that we all hold? We all agree that we need some common frameworks, and we all agree that the JMC and bilateral negotiations are the right way to make progress. Does he agree that we need to let the negotiations progress so that they can inform future changes to the Bill?
John Lamont
My hon. Friend is absolutely right. Both sides agree on the need for common frameworks. As I listened to the Scottish Government’s Michael Russell and the Secretary of State for Scotland speaking yesterday, it was clear that significant progress has been made in the discussions between the two Governments, which is to be welcomed.
I also welcome the clear statement from the Secretary of State for Scotland that the UK Government’s default position will be devolution in policy areas that are already devolved, and that common frameworks must be agreed, not imposed on the devolved Administrations. The problem with the SNP’s demands is that they would rush a complicated process. I do not support an arbitrary timetable for listing what will be devolved and what needs to be dealt with on a UK basis until that has been agreed between the two Governments. I hope that we can proceed in a constructive way to achieve that. Although the Government are right to take their time, we do need further clarity from them on such matters during the progress of the Bill. In particular, we need more information about the areas in which common UK-wide frameworks are likely to be required.
Finally, it is absolutely not constructive—internally and within the EU—to have the threat of a second independence referendum hanging over the Brexit negotiations. We have seen the front pages of the Scottish press this morning, with the First Minister again talking about the case for independence. I see some SNP Members nodding enthusiastically. This is creating an extra layer of uncertainty for businesses in Scotland and making the task of negotiating with the EU even more difficult.
Ian Murray
It seems as if the hon. Gentleman is coming towards the end of his speech. Before he does, will he clarify a matter for the Committee? Is he saying that if something is part of a UK-wide trade deal, it will remain reserved to this place even though it is devolved under schedule 5 to the Scotland Act 1998?
John Lamont
If the two Governments agree that a power is required for the framework, that is the type of power that will have to be retained. That will protect the integrity of the UK market and allow our country to do trade deals with other countries of the world, but it will be an agreed position. That is why the discussions between the Scottish Government and the UK Government are so important. That is why I have said throughout my speech that I believe significant progress has been made to get to this point, which I certainly welcome.
I urge the SNP to put the national interest first and to work more constructively with the UK Government to achieve what we all want, which is the best outcome for Scotland and the United Kingdom from leaving the EU. I look forward to working with my colleagues in the UK Government to ensure that this Bill works for Scotland and for my constituents in the Scottish borders.
Anna McMorrin (Cardiff North) (Lab)
In the past few weeks, we have spelled out many reasons why this Bill will leave the UK worse off in terms of human rights, workers’ rights, animal rights and environmental protections. However, it is designed to leave our devolved Governments and Parliaments worse off too.
Nick Thomas-Symonds
I entirely agree with the speech my hon. Friend has made so far. [Laughter.] I am sure I will agree even more as it develops further. She talks about the devolved Administrations, but is the truth not that this Bill also denudes this Parliament of powers through a number of Henry VIII clauses?
Anna McMorrin
I thank my hon. Friend, and I completely agree.
Wales voted for a devolved Government 20 years ago. I was part of that campaign, and I was proud to see the then UK Labour Government bring that about. We now see a more successful and confident Wales than we did two decades ago, but I fear that we are about to go backwards. The Tories have made it clear that, when it comes to devolution, they just do not get it. Anyone who understands the basics of devolution can tell you that this Bill is taking us backwards. The powers devolved to Wales must stay in Wales.
Clearly, the issue is one of trust—trust to exercise devolved powers responsibly, trust to carry out measures that represent the people of Wales and trust to provide meaningful scrutiny of legislation. However, why should we in Wales trust a UK Government that are leading us to such a shambolic Brexit? As it stands, after Brexit, the devolved Governments will be at the mercy of Whitehall.
Stephen Kerr
The hon. Lady’s remarks lead me to conclude that there seems to be no basis, in her mind, on which Wales’s two Governments can get together and make agreements, but there has to be trust. We have to have some basic trust between our levels of Government —otherwise, we will not be able to progress. Surely she is not advocating constitutional confrontation rather than consensus.
Anna McMorrin
I think we are seeing the beginnings of a constitutional crisis right now actually. [Interruption.] I will go on to explain if the hon. Member for Stirling (Stephen Kerr) will let me.
After Brexit, devolved Governments will be at the mercy of Whitehall mandarins with complete control over the time, place, method and future of the repatriation of powers from Brussels. We need only an elementary understanding of how institutions and Governments work to understand that this is leading us to a constitutional crisis.
Devolution is one of our country’s great strengths. The last 20 years have shown devolution to be a success, with our Governments in Wales and Scotland able to forge their own distinctive paths with confidence. Decisions about Wales are best made in Wales by the people of Wales. This is not an argument for nationalism, but one for democracy. Governments formed here in Westminster are not best placed to dictate what happens in Wales.
This Bill lets down the constitutional settlement and the people of Wales, Scotland and Northern Ireland. First, as drafted, clause 11 places a new and significant constraint on the devolution settlement and shifts the power dynamic around setting common UK frameworks firmly in the direction of the UK Government. As yet, the UK Government have provided no information on how these common frameworks will be agreed, the timetable for agreeing them or how Parliament and the devolved legislatures will be involved in the process.
Stephen Kerr
I am afraid that what the hon. Lady is saying is just not true. The excellent report produced by the Public Administration and Constitutional Affairs Committee reproduces in full the agreement from October —just a couple of months ago—which spells out exactly how these common frameworks will be put together between the Governments. [Interruption.] No, that is what it says in this report.
Anna McMorrin
I am afraid the Chair disagreed with the hon. Gentleman. [Interruption.] Well, the hon. Gentleman should speak to the Chair and to other Conservative Members about that.
The situation is further complicated by the fact that, in a number of EU policy areas, the UK Government are in fact acting as the Government of England.
Mr Jenkin
I am most grateful to the hon. Lady for giving way—I know she is trying to get on with her speech.
Yes, we published the conclusions of the last Joint Ministerial Committee in our report because they, I think, do show the good faith of the Government. However, I also understand why people have doubted the good faith of the Government—because clause 11 is so bald, if I may say so. We need reassurances around clause 11 that do not necessarily change the substance of it but give assurance that there will be a process and a timetable. That would certainly be a good step.
Anna McMorrin
I thank the hon. Gentleman, and I agree absolutely that we need far more information on how the common frameworks will be agreed, the timetable for agreeing them, and what is involved in the processes.
Wayne David (Caerphilly) (Lab)
But the very fact that there is no timetable surely gives weight to the argument that what we are seeing here is a crude power grab.
Anna McMorrin
I thank my hon. Friend, and I completely agree. That is what I am saying in my speech—that this is an absolute power grab to the centre and away from the devolved Administrations.
Paul Flynn
My hon. Friend is being extremely generous in giving way.
Could we take a practical example of what will happen? The Welsh Government have wisely introduced a law on presumed consent for organ donation—it is settled, and it has saved 40 lives. The United Kingdom Government have not introduced such a law, and England has lost 400 lives. Scotland is in the process of introducing such a law, but the power it has to do that is being grabbed back here. Will that kill people in Scotland? That is an example of this legislative paralysis, which is taking away Scotland’s powers to do something that is much needed.
Anna McMorrin
Absolutely. I completely agree. That just shows that what we have here in a number of policy areas is a constitutional crisis emerging and the UK Government acting as the Government of England, not the Government of the UK, leading to a number of possible conflicts of interest when it comes to imposing pan-UK structures.
Secondly, it is crucial that Welsh Ministers and the Welsh Parliament are responsible for correcting and amending all areas of EU law that are devolved. Restricting involvement means taking away powers that have been devolved for 20 years and creates an inequality between the nations of the UK, as has just been described by my hon. Friend the Member for Newport West (Paul Flynn). That endangers the proper functioning of any UK single market—one of the main aims of this Bill.
We have seen the mess the Prime Minister is making of these negotiations, and we have seen the mess today. She is held to account by a small minority party—the DUP—and we have seen that this afternoon in the negotiations. A hard Brexit or no deal would seriously challenge devolution, as well as risking the Union. As a devolutionist who wants the UK to stay together, I think these issues are likely to cause the UK to begin to unravel. The UK Government must take responsibility.
Finally, the UK Government know they cannot win this. They may be able to whip their Members here in the House of Commons, but they cannot whip their Members in the Lords. Those Members are determined to expose what this Government are doing and will not let them off lightly.
Luke Graham (Ochil and South Perthshire) (Con)
Like the hon. Lady, I represent a constituency in a devolved part of the United Kingdom. Many in the House believe that clause 11 should be amended and have put their point to the Government, but will she work constructively with the Government and be specific—not fan the flames of nationalism, which we all know are at play and could undermine our United Kingdom?
Anna McMorrin
As the hon. Gentleman knows, I am not fanning any flames of nationalism; I am talking about democracy in this place and the democracy of the UK. The Welsh Government have tried on many occasions to negotiate with the UK Government. That has not been possible, so we have the opportunity to vote with our Front Bench on these amendments.
Chris Elmore
My hon. Friend makes the point that Conservatives with constituencies in devolved parts of the UK should vote with us this evening. The Welsh and Scottish Governments have been saying for years that the JMC should be put on a statutory footing. That would build trust between the Government and the Welsh, Scottish and Northern Irish legislatures. Does my hon. Friend agree?
Anna McMorrin
Yes. It is so important that structures and discussions are formally put in place across the country.
Jo Stevens (Cardiff Central) (Lab)
I recall that during the passage of the Wales Bill last year we specifically asked for the JMC to be put on a statutory footing. The Government said no.
Anna McMorrin
The Government will probably see the error of their ways as the Bill passes through the Lords and they lose there. My advice is that the Government should avoid any more embarrassment, listen to our devolved nations and amend the legislation before it is too late.
Mr Alister Jack (Dumfries and Galloway) (Con)
On 23 June last year, I voted, like more than 1 million Scots and more than 17 million Britons, to leave the European Union. I did not take that decision lightly; the caricature of leave voters as romantic zealots with no regard for our economy could not be further from the truth. Brexit is a practical decision, and I believe that the United Kingdom will be better off, and less exposed to risk, by taking control of its own destiny and trading with partners around the world, rather than becoming increasingly tied to the whims and fortunes of the European Union.
Tom Brake (Carshalton and Wallington) (LD)
Will the hon. Gentleman give way?
Mr Jack
I will make some progress, if I may. Voting remain was a leap of faith that I could not take. I am not here to call for chaos; in fact, it is crucial to the short-term success of Brexit that we disengage from the EU with as little disruption as possible. That is why I support the Government’s plan for a time-limited implementation period after exit day. It is also why I support the Bill, which ensures that the statute book will continue to operate normally on exit day. We have a whole future ahead of us in which to use the controls that we will gain from Brexit to reform the laws and regulations in agriculture, fisheries and so on. At present, the focus should be on ensuring that the process of Brexit runs smoothly. The Bill recognises that.
For me, that approach extends to our devolution settlement in Scotland. We all expect the Scottish Parliament to become more powerful as a result of Brexit, but it is vital that we have secured common frameworks that ensure that the Union continues to function properly after Brexit. The Scottish Government, I hasten to point out, agree—and I commend them for that.
I call on both of Scotland’s Governments to come to a quick agreement. Scots deserve clarity in advance about exactly which powers will rest with Holyrood and which with Westminster after Brexit. The amendments to clause 11, proposed by SNP, Labour and Liberal Democrat Members, do not help that process. Clause 11 preserves the current devolution settlement.
Hannah Bardell (Livingston) (SNP)
One of the hon. Gentleman’s colleagues has just said that he wants specifics about clause 11, while another says that the Conservative party respects the devolution settlement. Can the hon. Gentleman explain what it is about amendment 72—
“This section shall not come into effect until…the Scottish Parliament…the National Assembly for Wales…and…the Northern Ireland Assembly has passed a resolution approving the provisions”—
that does not respect the devolution settlement or support his position?
Mr Jack
I will come to that. That is going to happen anyway—by legislative consent motion.
Clause 11 preserves the current devolution settlement. Holyrood will not be stopped doing anything that it can do now, and nor will it automatically become able to do anything that our current EU membership stops it doing. This is simple and easy to understand, and it provides a solid basis for the talks currently taking place over which EU powers will be devolved.
Tommy Sheppard (Edinburgh East) (SNP)
I think the hon. Gentleman misunderstands what is happening. At the minute, the EU has legislative competence in 111 devolved areas, to ensure compatibility with the treaty on European Union. After Brexit, that will not be the case; what is being proposed is that the UK Parliament should be given legislative competence over these devolved areas that it currently does not have. That is a material change and constraint on devolution.
Mr Jack
That is correct—that is what we are negotiating about. The 111 powers are already devolved at implementation level. That exists at the moment. The question is about where the frameworks sit in respect of the powers that come back from the EU. We have to look at our internal market and how we would better run our country.
On issues such as food standards, it makes complete sense for us to have one framework for the United Kingdom, so that everyone can participate in the trade deals that we do. If we had different rules and regulations in different parts of the United Kingdom, our overseas trade agreements and internal market would fall apart.
Hannah Bardell
The hon. Gentleman talks about different regulations. Surely he understands the desire in Scotland, which the votes cast in Scotland reflected, to stay in the single market and the customs union and have the same rules and regulations. Only England and the other parts of the UK that leave may be threatened with different regulations.
Mr Jack
The United Kingdom voted to leave and we respect that democratic decision. Earlier, the hon. Member for Perth and North Perthshire (Pete Wishart) said that the councils of Scotland were confused, that there was a lot for them to look at and that every council voted against. In 2014, I remember that 28 of 32 councils voted to stay in the United Kingdom. Hon. Members should respect that, just as I respect the decision taken by the United Kingdom to leave the European Union.
Mr Jack
I am going to make some progress. By the time we reach Report, I hope we will have a better idea about what common frameworks are needed and how Scotland’s two Governments, in Westminster and Holyrood, will work together to implement them. That is the clarity that Scottish businesses want and need.
Almost two-thirds of Scotland’s exports go to the rest of the United Kingdom. I represent Dumfries and Galloway, which is but a few miles from both England and Northern Ireland, so this matter is particularly important to my constituents. If the internal market of the United Kingdom is harmed, Dumfries and Galloway will be among the worst hit areas. That is why I believe the amendments to be pointless at best, and harmful at worst. The forthcoming round of post-Brexit devolution must be conducted in a clear, measured way, preserving the internal market of the United Kingdom.
Christine Jardine
I want to speak specifically to amendments 132, 133 and 134. Like many others before us today, they are designed to protect the integrity and powers of the devolved Administrations of Scotland, Wales and Northern Ireland by removing the proposed bar on legislating inconsistently with the EU in each case. I have been disappointed that in this debate we have not been able to reach the consensus that members of the Scottish Affairs Committee and the hon. Member for Perth and North Perthshire (Pete Wishart) mentioned on the frameworks. There has been no suggestion, as far as I have heard, that we do not all agree on the need for a framework—it is the devolution of the powers that we are concerned about. This Bill appears to facilitate a power grab by this Government that, in its own way, undermines the devolution settlement and the powers of the Scottish Parliament.
It may have amused SNP Members that, while in the past I have appeared to be critical of their Government, I am agreeing with them on many things today. For example, I have criticised their Government’s handling of Police Scotland, pointed to GP shortages, and highlighted plummeting standards in Scottish education. However, those are criticisms of an Administration and their policies. They have never been criticisms of the Scottish Parliament, of the exercise of its devolved powers, or of any other Administration’s ability to exercise devolved powers. This now represents the settled will of the people of Scotland.
Stephen Kerr
The hon. Lady is a member of the Scottish Affairs Committee, which took evidence from the Secretary of State for Scotland, who was adamant about the fact that there would be additional powers to the Scottish Parliament and about the fact that the existing powers would remain. In fact, this Bill cements those powers to the Scottish Parliament. What has she heard that makes her think anything to the contrary?
Christine Jardine
I will come on to that. As the hon. Gentleman himself has said, it is currently being negotiated between Scotland’s two Governments exactly what the framework and the powers would be, and until we have that assurance we cannot be absolutely sure.
Today I find myself in the strange position where I feel as though I have been transported back 25 or 30 years, to a time when the Opposition parties are all in favour of devolution and campaigning for devolution, and the Conservatives are needing to be persuaded.
Christine Jardine
No, that is how it is. The Conservatives are needing to be persuaded, even though they themselves admit that they are unhappy with aspects of clause 11. They are looking to their own Whips rather than to what might be best for the devolution settlement in Scotland, Wales and Northern Ireland.
We should not forget that the leave campaign argued that Brexit would lift restrictions and lead to Scotland gaining major powers, yet today we find ourselves considering a Bill that aims to modify and place restrictions on both the Scottish Parliament and the Welsh Assembly in relation to EU law. Surely we cannot allow this erosion of our democratic processes. I appeal to Conservative Members, particularly those who have served at Holyrood, to support us in this. Their party may not have originally supported devolution, but they, of all people, must recognise its significance today.
As part of the EU withdrawal process, Scotland’s two Governments are currently discussing where the powers returned from the EU should be vested and how the new frameworks should operate. Just as the 111 powers relating to Scotland are being discussed, the Welsh Government have a list of 64 powers that they feel could be vulnerable under this agreement. Both Administrations are looking to this place for amendments to the Bill that will ensure that they continue to have approval over the aspects that affect them. Indeed, only last month, Scotland’s First Minister stated that the Bill as it stands is not one that her Government would recommend for approval.
This is the specific point where I would take issue with the Conservative allegation that it is Opposition Members who are undermining the Union. If we do not put forward a Bill that can get a legislative consent motion in the Scottish Parliament, we threaten the very fabric of the agreement and throw ourselves into a constitutional crisis. I do not want to be responsible for that. It will undermine the Union in the same way that the Conservative Government’s actions in taking us out of the European Union with a hard Brexit will cost Scotland perhaps £30 billion and put 80,000 jobs at risk. Those are the threats to the United Kingdom, not the debate we are having here today.
Tom Brake
Would my hon. Friend also like to consider the threat to the United Kingdom that is represented by the debacle that is happening with the border between Ireland and Northern Ireland in the context of ensuring the coherence of the United Kingdom? Surely the Government are failing on that front as well.
Christine Jardine
My right hon. Friend makes a very good point. That is yet another example of how this Government are undermining the United Kingdom at every turn.
For Opposition Members, the drive is to protect the devolution settlement and potentially the stability of the United Kingdom. There are a number of other amendments that are similar to ours which we are happy to support, and we will not press ours to the vote. Our overriding priority is to get this Bill in shape so that there is no danger that when it goes to the Scottish Parliament it does not get that consent and we face the crisis that Opposition Members have worked so hard to avoid for the past five years.
Ross Thomson
This has been a very interesting debate. It has been quite extraordinary to hear some of the rhetoric from Opposition Members about power grabs. I do not care where that phrase originated. Whether it was Gordon Brown, Kezia in the jungle, or Patrick Harvie, the fact is that it is simply not true.
It is amazing that Opposition Members have found this new belief in sovereignty. Let us go back to some basic facts. For the past 40 years, the UK has ceded its sovereignty to the EU and its institutions, with literally thousands of pieces of legislation being imposed on the UK and all its nations, and our Parliament having no ability to scrutinise them—
Ross Thomson
No, I am just getting started.
There has been no ability to scrutinise them, amend them, or even reject them. Now, on the day that we leave the EU in March 2019, powers will be returned to the UK and the Scottish Parliament will become more powerful than it already is.
Ross Thomson
No, thank you.
The Scottish Parliament will regain powers over agriculture, the environment and transport, for example. We have seen quite an astonishing level of hypocrisy from Opposition Members today. Where was the SNP’s belief in sovereignty when over the past 40 years laws were imposed on the people of Scotland by the EU without debate in this place, or over the past 20 years without debate in Holyrood?
Jo Stevens
I am grateful to the hon. Gentleman for letting me stop him in mid-flow. Has he never heard of the European Parliament?
Ross Thomson
I am aware of the European Parliament, which cannot reject the legislation that is imposed on it by unelected commissioners. This is about re-establishing democracy. The EU has nothing to do with democracy—it is a deficit in democracy. We are taking that back. Opposition Members should celebrate that fact.
The Temporary Chair (Sir David Amess)
Order. We cannot have two Members standing at the same time. I do not think that the hon. Gentleman is giving way.
Ross Thomson
Thank you, Sir David.
There was no option for debate, and no opportunity to amend or even reject those laws. Where was SNP Members’ concern for sovereignty then?
Ross Thomson
I would like to make some more progress before I take an intervention.
SNP Members have manufactured the power grab argument in grievance, yet we have heard time and again from the First Minister, all the way along, that the position of the SNP is for full membership of the European Union. [Interruption.] There we go; we have had it confirmed again. The SNP’s position is to support full membership of the European Union for an independent Scotland. The argument that SNP Members are making today is clearly fake news, because they do not want a single one of the new powers that will come to Scotland. They want the EU to retain and maintain those powers.
Stephen Kerr
My hon. Friend is making a powerful speech, as is characteristic of him. Does he agree that SNP Members here are not representative of the SNP Government in Scotland? The SNP Government are quite attracted to the idea of these additional powers and would quite like to have them, but SNP Members here are indulging in rhetoric.
Ross Thomson
My hon. Friend is right that the rhetoric of the SNP group in Westminster is very different from that of the SNP group in Holyrood.
Ross Thomson
No, I will answer this point first. It looks as though we are achieving a real consensus about the powers that will come to Scotland, but we have just heard the SNP’s heated rhetoric in this Chamber. I know the SNP group in Holyrood, because I worked with them, and I know that Alex Neil and some bashful others are very keen on Brexit and powers coming back to, and being exercised in, Holyrood. SNP Members in Westminster want those powers to lie with the EU, and they want the EU to retain and maintain full control over all those areas.
Given that the EU is still very much travelling in the direction of greater integration, the SNP will simply want to cede even more powers to the EU if they get their way and win a second independence referendum. Boy, we in the Conservative party will do everything to prevent that from happening. There is no power grab here; this is simply the SNP’s great power giveaway.
Ross Thomson
The hon. Gentleman will want to hear this point, believe me. The SNP is only stronger for Brussels, while the Scottish Conservatives deliver for Scotland yet again with an even stronger Scottish Parliament. Perhaps the right hon. Member for Ross, Skye and Lochaber (Ian Blackford)—he has just come back into the Chamber; that is terrific timing—should reflect more on the comments in his speech. He says that the people of Scotland are sovereign. If that is the case, he should respect the sovereignty of the people of Scotland who said no to independence in 2014, and who rejected in 2017 the SNP’s premise of a second independence referendum. Unlike the SNP, Scottish Conservatives will continue to deliver for Scotland, and for its businesses, communities and people.
Ian Blackford
I should point out to the hon. Gentleman that, when we appeared in front of the Scottish electorate in 2016, we won a mandate to deliver a Scottish referendum if Scotland was dragged out of the EU, the single market and the customs union. Lastly, we have got 35 MPs; we won the election in Scotland.
Ross Thomson
In 2016, the SNP went into the election with a majority in Holyrood and lost it. The SNP now depends on the votes of the Greens to see through its legislation, its budget and a second independence referendum. The right hon. Gentleman mentioned the election in June. I do not know whether he has looked behind him, but 21 of his colleagues have gone missing, including the former leader of the SNP, Alex Salmond, and the party’s leader in Westminster, Angus Robertson. In that election, it was quite clear that the people of Scotland wanted to send the First Minister a message: “In 2014, we said no and we meant it.” That is why there are fewer SNP Members here than there were. There may be 35 of them, as the right hon. Gentleman says, but 13 Scottish Conservatives have achieved more for Scotland in five months in the last Budget than 56 SNP MPs ever did in two years.
I want to get back to my previous point. We will always stand up for Scotland’s businesses, communities and its people.
Ross Thomson
I have literally just answered a point, so I will finish making this one. We will ensure that no barriers are created to trade within the UK. Even the SNP Scottish Government—including the Brexit Minister, Mike Russell—accept that there will have to be common UK-wide frameworks, because they are needed. That is reflected in the Scottish Affairs Committee report, as other colleagues have highlighted in the debate. We need common frameworks, because a UK single market or unitary market—whatever we want to call it—is our greatest asset and we need to maintain it. Where frameworks are needed to underpin the work of companies and individuals across all parts of our United Kingdom, we will make the case for such frameworks.
Luke Graham
Does my hon. Friend agree that, although the SNP always talks down Westminster, this is a great opportunity to talk up Holyrood and Westminster and use the common frameworks to find areas on which we can pull together and act as one great country?
Ross Thomson
My hon. Friend is right. Scotland has two Governments: the United Kingdom Government and the Scottish Government. I know from my own constituency that my residents like it when both Governments work together, rather than being at each other’s throats. We have co-operated on city deals, for example, to achieve something, and we need to see more of that, because my constituents are absolutely fed up with the back-biting.
Drew Hendry
On the subject of powers, does the hon. Gentleman still subscribe to what was written on the banner that he held outside the Scottish Parliament for the Vote Leave campaign? The banner urged people to vote to
“LEAVE the EU and give control of the Scottish fishing industry to our democratically-elected Scottish Parliament”.
Does he still agree that those powers should go to the democratically elected Scottish Parliament?
Ross Thomson
I am so grateful to the hon. Gentleman for bringing that up. By leaving the European Union, we can take back powers over fishing, and we will come out of the common fisheries policy. As we heard earlier in this debate, the SNP wants to take us straight back into the EU and therefore drag every fisherman in Scotland straight back into that very policy, selling Scotland’s fishermen out. That has been confirmed today, but the Scottish Conservatives, such as my hon. Friend the Member for Banff and Buchan (David Duguid), will stand up for Scottish fishermen and deliver a Brexit that works for them. I thank the hon. Gentleman for giving me the opportunity to say so.
Stephen Kerr
I am grateful to my hon. Friend for saying that the people of Scotland like it when Scotland’s two Governments work together. We have heard several times from SNP Members—not the hon. Member for Perth and North Perthshire (Pete Wishart), whose speech was, I thought, rather positive—that that negotiation and co-operation has not started. But the Select Committee’s report states:
“We recommend that the UK and Scottish governments continue their efforts to secure agreement”.
“Continue” suggests that something has started, does it not?
Ross Thomson
I agree with everything that my hon. Friend has said. It is clear from this debate that I want these powers to come to the Scottish Parliament, but SNP Members want them to stay with the EU. I find it fascinating that I have a higher opinion of the ability of Nicola Sturgeon and her Cabinet to make decisions on such matters in Scotland than her own party in Westminster does. That really tells us something.
To continue with what I was saying, we will need UK-wide frameworks in areas such as food labelling.
Ross Thomson
I want to make some more progress, please.
It would make no sense whatsoever to have four different sets of food labelling rules, because it would simply add to our companies’ costs and cause confusion for customers right across the UK. Common frameworks are needed to secure the functioning of the UK internal market, as my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) said, while acknowledging policy divergence and ensuring that we comply with international obligations.
We cannot support the SNP’s proposal because of the danger that it poses to the integrity of the UK single market, and therefore to our United Kingdom. Let us be absolutely honest. Is it a surprise to anyone that the Scottish nationalist party would suggest something that would create barriers in our UK, in order gradually to break it up? Absolutely not. I gently urge our colleagues in the Scottish Liberal Democrats and Labour to be cautious, because the SNP’s amendments are simply a Trojan horse for the Scottish Government. We in the Scottish Conservatives will work constructively with our colleagues to achieve something better, and I am sure that the Government will reflect on what they have heard tonight.
Ross Thomson
No, thank you.
We need clause 11 to work for our United Kingdom—to protect it as well as enhancing our devolution settlement. It is in the interests of all our constituents that a deal is reached and an LCM is passed in the Scottish Parliament, so perhaps the right hon. Member for Ross, Skye and Lochaber should reflect on his pantomime performance earlier this afternoon. I know he is no longer in the Chamber, but as my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) stated, the Scottish Conservative group will work constructively with our colleagues to help to support both of Scotland’s Governments in moving forward with a withdrawal Bill that will strengthen Holyrood and maintain the integrity of the UK.
In his speech, the hon. Member for Perth and North Perthshire (Pete Wishart) spoke about having confidence in the UK Government. I actually have confidence not just in the UK Government, but in the Scottish Government because I believe they will come to a deal that will work for the whole of the United Kingdom and for Scotland’s place within it. I do not think we should act prematurely tonight because, as we know, there is an upcoming meeting of the JMC, and there is more to come from such a process. We will not support the amendments tonight because we are taking a constructive, productive approach that will actually deliver for Scotland, rather than playing the politics of grievance.
Stephen Doughty
It is a shame to follow the hon. Member for Aberdeen South (Ross Thomson), the tone of whose speech was in stark contrast to those of the more thoughtful colleagues who recognise the very serious problems with the Bill, and particularly with clause 11.
I absolutely assure the hon. Gentleman that I would not sign up to any Trojan horse for independence or for breaking apart the UK. I have been very happy to work together with Scottish National party Members and others on some of the amendments, but they know full well where my views stand on the Union, and we will not agree on that. We can absolutely agree, and I state this as a proud devolutionist, that we have a constitutional settlement that we have spent many years—20 years, in fact—establishing, and I am very proud to support it at all levels. If we throw apart that settlement, we do so at our peril. We are already seeing the chaos created after the negotiations in Brussels today, which is affecting parts of our economy because of the uncertainty for business. Do we really need to add to that uncertainty and chaos in the constitutional settlement of the UK and our islands? I do not think we do.
I rise to speak to amendments 182 and 186 to 188 in my name and those of the hon. Members for North East Fife (Stephen Gethins), for Arfon (Hywel Williams), for East Dunbartonshire (Jo Swinson), and for Brighton, Pavilion (Caroline Lucas), the right hon. Members for Carshalton and Wallington (Tom Brake), for Orkney and Shetland (Mr Carmichael) and for Ross, Skye and Lochaber (Ian Blackford) and my hon. Friend the Member for Edinburgh South (Ian Murray). I support the amendments tabled on behalf of the Welsh and Scottish Governments, and I also add my support to new clauses 64 and 65 tabled by the Opposition, as well as amendment 72 tabled by the Scottish National party—I have put my name to it as well—about legislative consent motions, and the important amendment 337 about transitional arrangements. We will not be speaking much about transitional arrangements today, but they affect the devolved settlements as much as they do many other parts of the Bill.
Withdrawal from the EU represents a major constitutional upheaval for the United Kingdom. I spoke and voted against the Bill on Second Reading, and the Committee will already be aware of my grave concern with the proposed sweeping powers that Ministers intend to gift themselves, bypassing Parliament and in effect subverting the long-established principle that legislative power and sovereignty is in the purview of this Parliament.
The Government are seeking to subvert not just this House, but the elected—duly democratically elected—Governments of the United Kingdom. The amendments I have tabled with other Members seek to protect the devolution settlement. I have with me the various Acts pertaining to Wales. A serious amount of work, effort and consideration has gone into them over 20 years. They are not perfect—they do not necessarily get everything right or include what I and others would like—but they have been developed with the advice and consent of the Welsh people, as have the other settlements with the people of Scotland and of Northern Ireland. They have also been developed by Members of this House, including many Members from across England who take a keen interest in such matters, not least when they relate to the internal borders of the United Kingdom and the differences that may exist.
Although far from perfect, the legislation laid down in law the permanency of the National Assembly for Wales as part of our constitutional arrangements. I am now incredulous that Ministers are seeking to undermine the ability of Ministers of the Crown in Wales, and indeed Scotland, by allowing Whitehall Ministers to pass swathes of secondary legislation in policy areas that it has been long established are administered from Edinburgh and Cardiff Bay.
For those who do not know, the National Assembly is in the heart of my Cardiff South and Penarth constituency, and I take a great interest in that body. I worked there in its early days—in fact, on the first few days after it opened—and like many of the more recently elected Welsh Members in this House, I have spent time in and around both Welsh and UK institutions and I recognise the importance of the settlement we have and how it works for the people of Wales, as indeed it does for Scotland.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The hon. Gentleman is making a good speech showing up the deficiencies of the Welsh Assembly and the Scottish Parliament. Does he agree that current events show the vastly advantageous situation in which Ireland finds itself? Its Parliament is not dependent on this place but is actually pulling the strings and telling this place what to do, and this place has to listen.
Stephen Doughty
I do not want to get too drawn into conversations about the state of the negotiations. I have already said that they are absolutely shambolic. Members from Northern Ireland are present and I am sure that they will contribute, if they wish to do so, and there will be a great number of debates on Wednesday.
I am absolutely clear, however, that Wales should not be treated less favourably than any other part of the United Kingdom. I am sure that Scottish Members would say the same about Scotland. Whether that relates to debates about remaining in the single market and the customs union—I believe that we should do so—or to other areas of legislative competence or to funding, about which this place has had many lively debates, Wales deserves to be treated as an equal. The First Minister, Carwyn Jones, is absolutely right to have made that absolutely clear this evening, given the shambolic events in Brussels today.
To return to the advice given to Assembly Members, its chief legal adviser has said that the Bill means that, effectively,
“London could step in and make law for Wales on devolved matters”.
The Bill does not stipulate that that would be subject to the agreement of the Welsh Government or the Assembly. In some cases—I am trying to be charitable—constitutional conventions, such as the Sewel convention, would apply, but the reality is that we are expected to take these matters on trust, when we could be legislating for them and getting the Bill’s detail right.
David Rees, a Welsh Labour Assembly Member and Chair of its External Affairs and Additional Legislation Committee, has said:
“If this Bill does seek to constrain the Assembly’s powers, then it could be seen as undermining devolution and the democratic will of the Welsh people, as expressed in the 2011 referendum on full law-making powers for Wales.”
When we talk about referendums, we need to be clear that they all have value and importance. We need to listen to them all, not just one, and not just interpret them as we see fit. Scottish colleagues have also said as much, with the Scottish Brexit Minister saying very clearly:
“The current proposals are a direct threat to the devolution settlement which the people of Scotland overwhelmingly voted for”.
We are talking about different mandates and our democracy; let us make sure that we listen to all parts of that democracy, not just some of them.
The Library clearly states:
“Matters of devolved competence are effectively reserved in this Act of UK Parliament… Devolved competence frozen…which will go out of date over time… No statutory basis for discussing and making new frameworks.”
That is why Labour Front Benchers’ new clauses 64 and 65 are so important. We need to give statutory effect to those frameworks, and we need clear guidance and processes. There is a small degree of disagreement among Members of different parties about their impact, but I will not dwell on that. It is clear that we need clear frameworks to debate and discuss these matters.
As currently drafted, clause 11 will amend both devolution Acts for Wales by inserting a new restriction on the competence of devolved legislatures. The Welsh and Scottish Governments consider that those provisions fundamentally cut across the principles of the devolution settlements, which is why the amendments that so many Members have signed would remove those restrictions in clause 11 and schedule 3.
I do not want to get into too much technical detail, but there is a crucial point to be made about the nature of Welsh devolution and how it has developed, particularly in the new Wales Act 2017, some parts of which have yet even to come into effect. I urge Ministers to look carefully at the sequencing. They do not seem to have thought through the commencement dates of different parts of the Act and how they relate to the Brexit process.
The question whether Wales would have reserved or conferred powers was at the heart of the debate about that Act. Mark Drakeford, a Welsh Government Minister, made some clear points about that in his evidence to the Assembly’s External Affairs and Additional Legislation Committee. He said that, essentially, there would be a move backwards from the reserved powers model and that the areas set out in the Bill would be subject to conferred powers. He set out the case very clearly, and I hope that you will excuse me, Sir David, if I quote what he said:
“In the Welsh Government’s view, this is an extremely complex and confusing basis on which to construct a properly-functioning system of legislative devolution. Even if we agreed with the policy behind clause 11, we would have strongly to oppose the way the Bill impacts on the structural foundations of devolution, reversing as it does many of the gains for devolution which adoption of the Wales Act reserved powers model aims to create.”
This is the danger of the Brexit Bill process. Those who drafted the Bill seem to lack an understanding of devolution and the different ongoing processes. Wales, Scotland and Northern Ireland have much in common, but they are different. One big gain we achieved in the passage of the Wales Act was moving to a reserved powers model, which the Scottish Parliament and Government have enjoyed for some time. It seems absurd for that to be suddenly rolled back, changing and creating different categories when we have just set out what we thought was a settlement. That is an absurd situation.
Hywel Williams
I am grateful to the hon. Gentleman for giving way. There is a good deal of agreement between us. He talks about the 2017 Act and some of the more abstract aspects that people listening in perhaps might not understand or follow, but there are practical and technical implications for children’s rights, the environment and so on. Does he not think that those aspects should be explored fully before we move to a vote? I certainly hope to do so.
Stephen Doughty
Absolutely. The danger of this place is that we sometimes get into the technical detail, but do not talk about the implications. Fundamentally, this is about where the Welsh Government and the Welsh Assembly have powers over the areas that affect many parts of our lives. When we talk about the impact Brexit could have on the agricultural sector, transport and customs arrangements—look at the debate on Ireland and Northern Ireland today—we need to speak a lot more about how the maritime border between Wales and the Republic of Ireland could be completely messed up, and the effect of the shenanigans and chaos of today’s negotiations on the prospects for Welsh businesses, ports and hauliers. These are real things that affect real lives. They might seem obtuse within this place, but they have an impact in reality.
Finally, I want to reflect on what the Exiting the European Union Committee said in paragraph 77 of its recent report. It was very clear about the problem of trust, and I think that this gets to the heart of the matter. The Government expect us to trust them that everything is going to be okay: there will be no problems; this is all going to fine; and, as I said, it is going to be all right on the night. The Committee said:
“Whilst the Government has said that it plans to work with the devolved administrations to reach agreements on UK common frameworks, the devolved administrations have insufficient trust in the process for agreeing these…relationships and have, accordingly, indicated that they will withhold legislative consent from the Bill. The Government must improve engagement with the devolved administrations. It must reach an agreement with the devolved administrations, which might result in changes to the Bill, setting out how and when…competencies will be devolved.”
What surprises me about this process is that the Government have known about those concerns. They have heard them repeatedly from Welsh and Scottish Ministers. They clearly were not listening to the concerns of some of their Northern Irish colleagues; otherwise we would not have seen today’s mess.
Angus Brendan MacNeil
Those concerns have been laid out by the Scottish Government for over a year now. Surely today’s actions by the UK Government show that if they can concede on Northern Ireland with regard to the customs union and the single market, despite the Democratic Unionist party vetoing that, they can make the same offer to Scotland and to Wales.
Stephen Doughty
I completely agree. The simple way to resolve all these issues would be for us to stay within the customs union and the single market, to stop messing about, get on with it and remove half the problems that will be created for Wales, Scotland and elsewhere. That is my very clear view.
What I cannot understand is that the Government have been told about these problems repeatedly by Welsh Government Ministers. They have been told about these problems repeatedly by the legal advisers in the devolved Administrations. They have been told about these problems repeatedly by Members of this House. They have had plenty of time to come up with some fixes. Some of these areas are really not that contentious. They are practical. They are not about wrecking the Bill or stopping Brexit; they are about making sure we keep a stable constitutional settlement in these islands.
And yet, where is the evidence that the Government have listened to any of it? So far, there is very, very little. In fact, the Secretary of State for Wales has barely been in here for the debate. Other Ministers have been here for longer. The Secretary of State for Scotland at least had the courtesy to take part in it and make some interventions. The Secretary of State for Wales has been completely absent, apart from about 20 minutes at the start of Bill. I do not think that that shows respect for the people of Wales and for the Members of the Welsh Assembly who have been putting these concerns forward. I sincerely hope that Ministers do listen and come up with fixes to these problems. Otherwise, I can tell them that they will have a very rocky ride on Report and in the other place and that they will have very little, if any, chance of getting the legislative consent motions, which they say they want to receive, from the Welsh Assembly and the Scottish Parliament.
David Duguid (Banff and Buchan) (Con)
I welcome the opportunity to speak in this lively debate. I am here to represent all my constituents as best I can, not just those who voted for me and not just those who voted in 2016 to leave. It has been estimated that approximately 54% voted to leave, but I also represent those who continue to have concerns about what will happen after we leave the EU. I appreciate the concerns expressed by many of my constituents, even if I do not necessarily always share them. I will come on to talk about why.
I can understand, to some extent, a certain level of cynicism towards the UK Government—of any Government—by our population. There seems to be a belief, however mistaken, that Scotland’s best interests could be side-lined in the EU withdrawal process. The UK Government, however, are working with, not against, the devolved Administration in Edinburgh to deliver an outcome that works for the whole UK, including Scotland. It is about getting the best deal that works for Scotland, England, Wales and Northern Ireland inside the United Kingdom—that is the key point I want to keep coming back to—so when the SNP and its supporters suggest that Scottish Conservative MPs somehow do not have the best interests of Scotland and the Scottish people at heart, I find that, quite frankly, offensive and insulting. Conservative Scottish MPs, as has been shown, speak up regularly for not only our constituents, but for Scotland as a whole.
I was surprised to hear so much mention of the so-called power grab, considering the amount of progress that has been reported between Ministers from both Scotland’s Governments on that very topic. I was happy to hear my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) quote Nigel Smith, who led the Scotland Forward campaign, that there is actually no power grab. The Bill is about continuity and certainty as much as it is about control. Powers that currently sit with Brussels will return to the UK, but we will still have devolution after Brexit. The devolved institutions, particularly the Scottish Parliament, will end up, through a period of systematic and methodical transition, with more powers than it currently holds. It will certainly have far more powers than if we followed the SNP’s policy of staying in the EU.
The SNP wants the Scottish Government to have more powers, but it does not necessarily want to devolve those powers any further than Edinburgh. It would rather see powers go back to Brussels than to our rural and coastal communities, for example. It has two obsessions: independence and centralisation. [Interruption.] Scotland is far bigger than just the central belt. [Interruption.] It is nice of the SNP to join us.
The Joint Ministerial Committee on EU Negotiations, chaired by my right hon. Friend the Secretary of State for Exiting the European Union, has provided the leaders of the devolved Governments with an opportunity to help to shape the UK’s exit from the EU. This is important because there is a clear need for UK frameworks to protect the sectors of our economy most heavily influenced by EU laws.
Angus Brendan MacNeil
Can the hon. Gentleman imagine any politician elected in the Republic of Ireland thinking that Ireland could not manage such matters itself, especially given what has happened today? Why does he require—demand, need—London to do this? Can he not stand on his own two feet and look at the world eye to eye? What is this puppy-dog need for London to sort it all out?
David Duguid
I do not recognise those concerns. As has been said by several hon. Members tonight, this is a matter of trust, and I accept that it is probably far easier for Scottish Members on the Government Benches to trust the Government to get on with the job of delivering the Bill as required.
As I said, the leaders of the devolved Governments have an opportunity to help shape the UK’s exit from the EU. This is important because there is a universally recognised need for UK frameworks to protect sectors of our economy heavily influenced by EU laws, particularly agriculture and fisheries, which are very important to my constituency. It is universally recognised, including by the Scottish Parliament and the Welsh Assembly, that UK frameworks are necessary and must be established, not imposed, as has been mentioned. This should be done in full partnership with the UK Government. That recognition was shared in what I thought was quite a beautiful moment between the Secretary of State for Scotland and the hon. Member for Edinburgh East (Tommy Sheppard) in a recent meeting of the Scottish Affairs Committee.
Deidre Brock
The hon. Gentleman talks about devolved Administrations being involved in discussions, but none of them is involved in the negotiations themselves, because of the UK Government’s decision to exclude them. Does he agree that in the end that was a big mistake?
David Duguid
The UK Government are interacting actively with the devolved Administrations, but it has to be recognised that it was the UK that voted to leave the EU and it is the UK that has the responsibility for the negotiations.
It is disappointing that the SNP is attempting to undermine the progress made by its Ministers in Holyrood on working towards UK-wide frameworks that work for Scotland. Despite the best efforts of SNP Members, the United Kingdom is still a united kingdom. To expect powers currently held by Brussels to devolve straight to the Scottish Parliament, without a transitional stage in between, is simply not practical or in Scotland’s long-term interests. I say that as someone who believes that Scotland is better off in the Union, whether or not SNP Members agree.
In conclusion, I am confident, particularly given the bending of ears by my Scottish Conservative colleagues and me, that the Government will do right for Scotland. Devolution will be strengthened, but not by these amendments.
Hywel Williams
It is a pleasure to follow the hon. Member for Banff and Buchan (David Duguid), who talked about the promise of more and better powers than the Scottish Parliament currently holds. I suppose the same goes for Wales, but the problem is the question of when, and how we can be sure. While he ruminates on that, perhaps I will get on with my speech.
Angus Brendan MacNeil
Although the Tories might need to ruminate on that, clearly Leo Varadkar does not. He has the powers and he is using them.
Hywel Williams
Indeed. That was an instructive point for us all.
I rise to speak to Plaid Cymru’s amendments 90 to 92. I am pleased to have co-sponsored the similar joint Welsh and Scottish Government amendments although, for reasons that I will make clear, I prefer my own versions.
The UK constitution is unwritten—or at least it is not written down all in one place—and is constantly evolving. It has evolved in such a way that we no longer live in a one-Parliament state. The UK consists of four representative, governing and law-making bodies, not one. That might seem like stating the obvious but, as I noted in my speech on our first day in Committee, there is no operative Assembly in Northern Ireland, the Parliaments in Wales and Scotland are considered differently from this one in Westminster, and of course England is invisible, except that we accept at the very least that England is de facto represented by this place, which raises questions of conflicts of interest.
The point is that democracy and its values apply to all, not just to one, and devolution demands that all parts of the UK have a say, not just one. As Members will know, the devolution statutes operate through a reserved-powers model in which certain matters are listed as the UK Parliament’s responsibilities. That means that matters not explicitly reserved to the UK Parliament are within the competence of the devolved legislatures.
Angus Brendan MacNeil
The hon. Gentleman is making a good point, and the rhetoric of a UK single market would make sense if the UK was composed of independent states, instead of being one super-state.
Hywel Williams
The hon. Gentleman has made that point already, and I agree with it.
In contrast to the EU internal market, the nature of the UK internal market appears to be self-evident and a matter of common sense to many people. It might be great and it might be something that has grown organically and suits us all, but how often have we seen apparently simple, clear and—crucially—unregulated systems descend into a writhing tangle of irreconcilable and conflicting interests? That is what might happen. We might wish for a simple UK internal market, but we might regret it if we wish for it. We will vote for new clause 64 but, if it is passed, we will give close consideration to how it could be improved through further amendments.
Subsidiarity is supposedly one of the governing principles of the European Union. Powers are supposed to be exercised as close to the citizen as possible. That model does not exist in the UK, where the UK Government remain sovereign. We rely on the separation of competences listed in the newly enshrined reserved powers model in the recently passed Wales Act 2017. This Bill, as it stands, undermines and reverses 20 years of the existence of the National Assembly for Wales.
Professor Rawlings, the professor of public law at University College London, in evidence to the Public Administration and Constitutional Affairs Committee on 31 October, highlighted the concern over what he describes as the double-hatted nature of the UK Government, meaning that they simultaneously represent the UK-wide Government and the Government of England. I raised that point during my speech on our first day in Committee. As I said earlier, this raises a concern not only about conflicts of interest, but about the fact that the subcultures, networks and assumptions of large Departments, including the Department for Environment, Food and Rural Affairs, are focused, almost unconsciously, on England. That has been a recurring theme throughout Select Committee evidence sessions. As I said with reference to the Department of Health, this is a long-standing difficulty.
In evidence to the Brexit Committee on 17 October, Laura Dunlop, QC said:
“In our prototype framework—whatever our internal market is destined to look like—at the moment, there is one party in the discussions that is wearing two hats, and that is the UK Government, who are also required to speak for England. That is a significant difficulty, in my view.”
The hon. and learned Member for Edinburgh South West and I were there to hear Laura Dunlop say that. On 24 October, Dr Viviane Gravey told the Welsh Affairs Committee:
“What I mean by giving greater powers is that during that period planned in the Withdrawal Bill, UK Ministers will be able to change the law that has been given back from Brussels, but the devolved”
Governments
“will not. There is then a question of whether any changes made will be in the interests of the whole of the UK or just of England.”
That is the question.
The United Kingdom consists of four countries—four political bodies—not just one. Democracy requires and values all voices, not just one. Devolution demands that all countries within the United Kingdom have a say in the future, not just one. Members will have the opportunity today to stop this Westminster power grab. If all the Opposition parties turn up to vote, and vote together in the interests of the devolved countries, we can stop this encroachment on Welsh sovereignty and put all four UK countries on an equal footing.
Mr David Jones
It is a great pleasure to be asked to address the Committee as a lonely Welsh voice in this Scottish enclave south of the Gangway. I should like to say how impressed I am with my new Scottish colleagues, and with the way in which they stand up for their constituencies and for Scotland.
It was always predictable that clause 11 would be one of the more contentious clauses in the Bill, given that it impinges on the devolution settlements that have been created over the past 20 or so years. When we consider what the clause seeks to achieve, it is important to consider the history of devolution in this country. In the case of Scotland and Wales, it was implemented as a consequence of the two referendums that were held in 1997. That was some years after the United Kingdom became a member of what was then the European Economic Community. Indeed, all our devolution legislation was put in place after we joined. It is important to remember that, at the time of accession to the European Union, devolution was not contemplated.
It was in the context of our membership of the European Union that the various devolution settlements were crafted. The powers that were conferred on the new devolved bodies are consequently subject to overriding EU law, regulations and common frameworks, the principal purpose of which was to protect and preserve the integrity of the European single market, as we have heard repeatedly today. It is a fact, however, that as a consequence of the protection of the European single market, those reservations have operated to protect what I am quite happy to call the UK internal market—
Pete Wishart
Does the right hon. Gentleman think that France has a French internal market and that Germany has a German internal market, or are they just national economies? Does Perthshire have a Perthshire internal market?
Mr Jones
I have never been to Perthshire but I am sure that it is a delightful place. In this country, we have four countries and three devolved bodies, which have competence in the area of economic development, among other things. The hon. Gentleman and I might be at odds on this, but I take the view that there is a United Kingdom internal market. He can come to the contrary conclusion if he wishes.
Hywel Williams
I am intrigued. Can the right hon. Gentleman identify anyone who has spoken in the House today who has argued against having a UK internal market?
Mr Jones
No, but I can identify several people who have denied its existence. Clause 11 seeks to ensure that the integrity of the internal market is not compromised, by preserving the restrictions that prevail in respect of EU law.
It is quite clear that the proposals in clause 11 have caused immoderate anger in certain quarters. The SNP Scottish First Minister and the Labour Welsh First Minister actually joined forces to describe what is proposed as a “naked power grab”, a phrase which has been repeated again and again during this debate, but the fact is that it is nothing of the kind. The competences that are the subject of the retention proposed by clause 11 have never been exercised by the devolved authorities since devolution was first implemented. In practical terms, not one iota less power will be exercised in Belfast, Cardiff or Edinburgh than in the current state of affairs. If there is a diminution in power, it is very much theoretical.
Since the devolved bodies first condemned the proposals in the summer, it is fair to say that their position has moderated considerably. However, I find it intriguing that that position does not appear to have moderated in this House. Indeed, certain Opposition representatives seem to be at odds with their own parties in the devolved areas. Preserving the UK internal market is, after all, extremely important to every constituent part of the United Kingdom. Some 63% of Scottish exports go to the rest of the UK. For Northern Ireland, the equivalent figure is 60%. In Wales, it is a bit less at 49.2%, but I suggest that that is due to the distorting effect of Airbus exports, which form a disproportionately large element of the Welsh economy. Whichever way one looks at it, it is therefore important to guard against any policy divergence that might imperil or damage the internal market. It is also important to ensure that the UK Government have the power to conclude trade agreements with third countries post-Brexit, free from concern that the devolved authorities may be legislating in a manner contrary to the obligations contained in such agreements.
We have heard this evening that the provisions of clause 11 affect approximately 111 devolved competences in Scotland, 64 in Wales and an estimated 149 in Northern Ireland. Many of them exist in the fields of agriculture, the environment and fisheries, where it is generally agreed, not least by those who would be closely affected by market distortion, that it is necessary to preserve common frameworks. As my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) pointed out, we need to look at the individuals who are most likely to be affected by policy divergence. For example, NFU Cymru—the Welsh branch of the National Farmers Union—supports the retention of common frameworks so that the price commanded by Welsh lamb, which is certainly the highest-quality lamb in the United Kingdom, is not adversely affected by differing husbandry practices in other parts of the UK.
The UK Government have always made it clear that the retention of competence effected by clause 11 is intended to be only temporary. Decisions on where competences may lie in the long term will be taken at a later date. I fully agree that that should not take too long, and a Minister should indicate from the Front Bench what sort of timescale they anticipate the Government will adopt when deciding and agreeing with the devolved Administrations on where those competences should lie.
Dr Whitford
That is the problem. There is no timescale. This place is snarled up in dealing with Brexit work, and that pressure will be even greater after Brexit. Those of us from the devolved countries feel that the needs of our farmers and fishermen will be way down the agenda for the devolution work being done here.
Mr Jones
I remind the hon. Lady that I am also from one of the devolved countries, so I understand her point and I understand that a timescale is needed. My right hon. Friend the Secretary of State for Brexit has always made it clear that the devolved authorities will ultimately have considerably enhanced powers after this process is complete.
Mr Nigel Smith has been extensively quoted in this debate, and what he has to say is of some significance. He was the chairman of Scotland Forward, the campaign for a yes vote in the 1997 Scottish referendum, and he makes a businesslike and practical statement of the position:
“simply giving into demands from the devolved administrations for a complete takeover of powers would quickly fragment policy coherence threatening the function of the UK single market and even over time the political integrity of these islands.”
That would probably be quite welcome to certain Opposition Members. Nigel Smith continues:
“It would be necessary to establish where coherence was vital and where policy could be devolved or shared. There are also financial considerations in some areas. Temporarily retaining the powers in Westminster through clause 11 while this is assessed and negotiated seems nothing more than procedural common sense. As a long-standing devolutionist, I support the process on this basis.”
He is entirely right. It is common sense. We need to assess where powers properly lie, but that process should not take too long.
I am heartened that, at the Joint Ministerial Committee in October, the various Administrations agreed to work towards the establishment of the necessary frameworks. Contrary to what the hon. Member for Perth and North Perthshire (Pete Wishart) indicated, it is not a question of the United Kingdom Government imposing where those powers lie; it is a question of agreement. The communiqué that followed the meeting said:
“There will also be close working between the UK Government and the devolved administrations on reserved and excepted matters that impact significantly on devolved responsibilities.
Discussions will be either multilateral or bilateral between the UK Government and the devolved administrations. It will be the aim of all parties to agree where there is a need for common frameworks and the content of them.
The outcomes from these discussions on common frameworks will be without prejudice to the UK’s negotiations and future relationship with the EU.”
It seems to me that the United Kingdom Government and the devolved Administrations are moving positively towards agreement on where those competences should lie, but I stress that the process should be pursued as expeditiously as possible. I have a huge amount of sympathy for those on both sides of the House who have indicated that there is currently a degree of uncertainty. The best way of resolving that uncertainty is by working quickly and co-operatively with the devolved Administrations.
I therefore believe clause 11 should be supported by the House. I endorse once again what Nigel Smith, a practical devolutionist, has to say about the matter. I also believe those who are promoting the various amendments, most of which appear to be aimed at ensuring the powers that are repatriated pass straight to the devolved Administrations, should think again. Without a coherent agreement beforehand, there could be chaos in this country, which is frankly the last thing we want.
My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) made some important points about the wider issue of devolution. We need to revisit the various institutions that operate the devolution settlements in this country. It is fairly clear that the JMC process is not working. It has been honoured by Governments of all stripes more in the breach than in the observance. Indeed, I believe that during the last Labour Government several years passed without a meeting of the JMC. This cannot be right. It is important that the United Kingdom Government and the devolved Administrations should have regular dialogue, one with another. I am not persuaded that that needs to be put on a statutory basis, but it needs to be something more than a chore for the various Administrations. It is important that a dialogue be constantly maintained. We are moving into a new era in this country, a post-Brexit one, and it is important that there should be that constant dialogue and that all Administrations within the UK understand that they all have a duty, one to another, to work positively to ensure the prosperity of this country and its citizens. At the moment, that is not happening and this needs to be revised and reviewed. I do not believe this Bill is the proper vehicle for such changes, but once this process is over we are going to need to look at those institutions again carefully. We need to move into that new era.
Several hon. Members rose—
The Temporary Chair (Sir David Amess)
Order. Before I call the next speaker, I remind the Committee that the debate finishes at 18 minutes past midnight. Many Members are waiting to speak and I want to give the Minister plenty of time to respond to the debate. So unless colleagues keep the speeches to about 10 minutes, there will be any number of disappointed Members.
Joanna Cherry
I rise to support the amendments standing in the name of my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford), and those that have been drafted by the Scottish and Welsh Governments, which have cross-party support from the SNP, the Labour party, Plaid Cymru and the Liberal Democrats.
I want to dispel a myth emanating from Conservative Members before I look at clause 11 in any detail: the idea that there is some sort of division between the position of my Scottish Government colleagues and the SNP. I can assure those Members that that is not the case and we regularly meet the Scottish Government Brexit Minister, Mike Russell. Let me tell Conservative Members what Mr Russell told a number of Sunday newspapers yesterday. He said that these cross-party devolution amendments are “non-negotiable” and that, if the UK Government want the SNP to recommend support for the Bill in the Scottish Parliament, they must be passed. He continued:
“I don’t want to leave anybody in any doubt, if the Bill cannot be amended—”
as per these amendments—
“there cannot be a legislative consent motion, there cannot be the progress that the government wants.”
So let there be no doubt of the SNP position on this, which is the position of the Scottish Government and of the Welsh Government, and which has the support of the Lib Dems, Plaid Cymru and the Labour party in this Chamber.
It is important to focus on clause 11. We have heard a lot of general rhetoric today, but what we are actually looking at is that clause. I am not going to use my own analysis of it. I am going to use the analysis of much more eminent lawyers than myself. Let me start by briefly declaring an interest, as I am going to quote the views of the Faculty of Advocates in Scotland on the Bill and I am a member of the faculty, although I am no longer practising. It has pointed out that 111 areas were listed as potentially requiring a common policy framework and that the list is too long, its content is too broadly drawn and some of the 111 areas were so imprecise
“as to be incapable of meaningful understanding”.
It said that the proposed approach of this Government to the European Union (Withdrawal) Bill
“threatens to encroach on matters that are already devolved and legislated on by Holyrood under the current settlement.”
That is the view of the Scottish Bar, of which I am a member; I wish I could say they were all members of the SNP, but they are not, as they comprise people from all political persuasions and none.
The hon. Member for Arfon (Hywel Williams) referred to the evidence given to the Brexit Select Committee by Laura Dunlop, QC, who is the faculty’s spokesperson and head of its law reform committee. The Bingham Centre for the Rule of Law has convened a group of experts to look at the Bill, under the chairmanship of the right hon. and learned Member for Beaconsfield (Mr Grieve), who was in his place earlier. It, too, has been extremely critical of clause 11:
“In a constitution where legislative power is divided between the national parliament and devolved parliaments, uncertainty about the division of legislative power undermines foreseeability and predictability about the overall legal framework and is therefore inimical to the Rule of Law.
Clause 11 of the Bill is such a law: it re-defines the scope of devolved legislative competence after Brexit.”
Those are the words of a group of expert lawyers convened by the Bingham Centre for the Rule of Law. It is not an SNP partisan view, but the view of a cross-party group of lawyers.
Pete Wishart
My hon. and learned Friend is absolutely right. The Scottish Affairs Committee has not heard one dissenting voice to the fact that clause 11 is thoroughly bad for devolution. It is not just all the constitutionalists and all the legal experts who agree with that; the Conservatives agree with it too. They do not believe that clause 11 is fit for purpose. What can she do to encourage them to join us this evening to ensure that we make progress and change the clause significantly?
Joanna Cherry
I am encouraging those Conservatives to listen to the experts who have given evidence to the various House of Commons Committees,whether orally or in writing. I have mentioned several of them. May I mention what Dr Jo Hunt, from the University of Cardiff, said to the Exiting the European Union Committee? She said:
“This should be a profound constitutional moment, where the nature of the UK is properly addressed, and a debate and discussion is had about what the United Kingdom is for and what the roles of the various parties in the United Kingdom are. We have had any number of Select Committee reports from the Commons and the House of Lords dealing with interinstitutional relations, intergovernmental relations, and devolution”.
Now is the moment, when we are allegedly taking back control, to look carefully at how we distribute those powers within the nations of the United Kingdom. We should not simply bring them back in one box from Brussels, rest them at London and leave it to London to decide when and if Edinburgh and Cardiff ever get sight of that power.
There is a terrible irony here. Many Brexiteers went on at great length about how Brussels imposes its will on the United Kingdom, but that is actually a fundamental misunderstanding of how the European Union works. As has been explained, it works by a number of sovereign nations pooling their sovereignty and participating in a process of decisions. If anyone on the Conservative Benches really is a Brexiteer who believes in taking back control and does not like the way, in their opinion, Brussels has imposed on the UK, surely that should make them even more motivated to ensure that the centre—Westminster—does not impose on the constituent nations of the UK.
Luke Graham
We have all raised concerns about clause 11, and we are trying to constructively address them. The hon. and learned Lady makes her position about devolution clear, but she also talks about a chance to refresh the whole constitutional settlement for the United Kingdom. Will she work constructively with Members on the Government Benches to address issues such as air quality, which is devolved? It would be better if we had a joined-up UK approach and if that were reserved with climate issues and other such issues, so that we look effectively to get the best outcome for our constituents and not just go on to political dogma.
Joanna Cherry
The Scottish National party has always worked constructively with all parties to ensure that the principle of subsidiarity is respected within these islands. However, what we are not in the business of doing is simply lying supine while all these powers are brought back from Brussels and left here at Westminster, with absolutely no time limit—[Interruption.] The hon. Member for Stirling (Stephen Kerr) may not like it, but this is the weight of the evidence that we have heard about the effect of clause 11. It is not my view; it is the view of many others.
Several hon. Members rose—
Joanna Cherry
I will continue my point.
We are told that it is imperative for everything to be imposed on Scotland, Wales and indeed Northern Ireland from the top down, because we have a UK single market.
Joanna Cherry
No, we have heard a lot from the hon. Gentleman. I only have a little time left, and I want to develop my point about the single market, because it is very important. I am indebted to the Scottish blogger and writer Paul Kavanagh—better known on these Benches as the Wee Ginger Dug—for my thoughts on this matter. He has pointed out that there is no such thing as a UK single market. At the moment, the United Kingdom is a unitary state, and what exists in the UK is the internal market of a unitary state. A single market refers to the situation where there are several distinct and discrete national entities coming together from the bottom up in a mutually agreed and negotiated regulatory framework. That is what the EU is at present. It is not what we have in the United Kingdom at present. Indeed, after Brexit, if this Bill goes through unamended, the unitary state of the United Kingdom will be even more centralised than it is at present.
At the moment, the EU states decide collectively what regulations they want to govern the EU single market. On the basis of the Bill as currently drafted, what will happen is that Ministers of the Crown—by the way, that does not include Scottish Ministers; the definition just talks about Cabinet Ministers—will decide on these frameworks, and they will be imposed on us.
I am conscious of what you said, Sir David, so I will bring my remarks to a close, but I will give way to the hon. Gentleman.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
On the definition of what constitutes a single market and a unitary market, my interpretation is that any marketplace’s singularity is simply defined by the friction in the trade and the commerce carried out within it. By definition, it is not really something that we can simply sign up to or leave. It is about the extent to which there is a commonality of regulatory and trading arrangements, and cultural and institutional relationships. Therefore, this definition does not really hold water in that respect.
Joanna Cherry
The distinction I am drawing is between a single market and a unitary market. I am saying that the European Union is a single market because it is a collection of sovereign states that come together and participate in making common regulations. The United Kingdom, as framed by this withdrawal Bill, will not be such a single market. It will be a unitary market where the regulations and the frameworks are imposed from the top down. That is the distinction that I seek to make.
Joanna Cherry
As I said, I am drawing my comments to a close.
I want to address one of the many points we have heard from the Government Benches. I think it was the hon. Member for Aberdeen South (Ross Thomson) who said that he is upset and disappointed that the issue of independence is still on the table. Well, I will tell him why it is still on the table; today gives us a good example. The majority of people at the last Scottish election voted for Members of the Scottish Parliament who want another independence referendum—it is called democracy —and the Scottish Parliament itself has voted that there should be another independence referendum if it is necessary because of the Brexit process. But the reason why so many of us in Scotland are interested in the notion of independence really arises from the current crisis in which the United Kingdom finds itself. I will finish by quoting the First Minister of Scotland, who today said:
“Right now, Ireland is powerfully demonstrating the importance of being independent when it comes to defending your vital national interests.”
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
This debate concerns all constituent countries of the United Kingdom, but I will reserve my remarks to Scotland as I represent West Aberdeenshire and Kincardine.
As a Member of Parliament of the 2017 vintage, which is a very fine vintage, I am finding—along with everyone else, I am sure—that one of the most common questions asked of me on the doorsteps and in constituency surgeries is, “How did you vote in the referendum on membership of the European Union?” On such occasions, I deploy one of two answers. I either say, “I’m terribly sorry that I did vote to remain, but I promise you that the United Kingdom is leaving the European Union, and we will make a success of it”, or I answer, “Yes, I know. Like you, I voted to remain, so I’m sorry, but the fact is that we are leaving the European Union. And, you know what? I think we will make a success of it.” That is very easy. Being a Scottish Member of Parliament, another regular inquiry is whether I believe that powers returned from Brussels should be directly transferred to Holyrood. It is not a simple question. [Interruption.] No, it is not, and it requires more than a simple answer. Unfortunately, that is hard to get across on the doorstep, or even in this Chamber.
Patrick Grady (Glasgow North) (SNP)
Let me make it simple for the hon. Gentleman. The founding principle of the devolution settlement is that things that are not reserved are automatically devolved. Is it or is it not his belief that clause 11 fundamentally undermines that principle?
Andrew Bowie
Like my hon. Friend the Member for East Renfrewshire (Paul Masterton), I believe that changes will have to be made to clause 11 as it stands, but that we cannot support the amendments tabled by the SNP as they would fatally undermine the United Kingdom and the common market that we all share.
Let us look at the facts of the devolution settlements. The current devolution settlements reflect the UK’s membership of the European Union. They provide that devolved institutions cannot act or legislate incompatibly with EU law. This has meant that, while we have been within the EU, we have had overarching laws and frameworks across the UK, which has meant that businesses in the UK can trade with one another knowing that they share agreed standards and that we have agreed approaches on how to manage our shared resources. Ultimately, it has meant that Britain can enter into international agreements knowing that our whole country can meet our obligations. That is vital. It is complex and hard to explain to people when we are out knocking on doors, but it is vital that we try. The future of our internal market, which exists, and of our United Kingdom depends on our making a success of Brexit, and that means making a success of devolution and the settlement for our nations and regions.
Ian Murray
The hon. Gentleman is talking a lot about being on the doorsteps in his constituency. When his constituents ask him whether he thinks clause 11 is deficient and whether he would like it fixed, does he explain how it is deficient and how he would like it fixed?
Andrew Bowie
I thank the hon. Gentleman for that question. I have to admit I have never been asked specifically on the doorstep how I think clause 11 is deficient, but when I am I will explain the issue to people, and if the hon. Gentleman holds on, I will get to that in my speech.
Let us be clear: this is not a power grab. It is part of a process through which we must work to achieve the best possible settlement to ensure continuity for business, the integrity of our internal market, and the future success of our United Kingdom. We must, and we will, make a success of this process.
Pete Wishart
Is the hon. Gentleman actually saying that if, for whatever reason, clause 11 was not passed or was significantly amended, what he refers to as the UK’s single market would be done away with?
Andrew Bowie
I am not sure I actually understand the premise of the question. I will give way again if the hon. Gentleman would like to explain.
Pete Wishart
It is quite straightforward. The hon. Gentleman is alleging and suggesting that, for some reason, if clause 11 were significantly amended, his internal market would be at risk. Does he actually believe for one minute that, if clause 11 were rejected, his internal market would absolutely disappear?
Andrew Bowie
I am arguing that, if we agreed to the provisions set down by the Scottish National party and the other Opposition parties, it would be fatally undermined and at risk.
Just to prove my point, we all know that making a success of Brexit and protecting and strengthening our internal market are not in the interests of the Scottish National party, whose raison d’être remains the destruction of our United Kingdom. Conservative Members are committed to making these things work and to making a success of this exciting new chapter in our island’s story for business and for peoples from Inverbervie to Ipswich, and from Banchory to Bognor.
That is why the UK Government are working tirelessly with the devolved Administrations in Cardiff and Edinburgh, and with the various parties in Northern Ireland, to make sure that when we leave the European Union in 2019, the laws that protect the integrity of our market, and the common frameworks that ensure parity and access across Britain, remain the same as they are today. That will involve compromise, but surely even the greatest hardliner would agree that it makes no sense for each of the four nations of our United Kingdom to have different rules and regulations or different regulatory bodies for packaging, animal welfare or aircraft noise, for example.
If we get this right, little will change for most people and most businesses. For the fisherman, it will still be Marine Scotland responsible for implementing rules and regulations on the quayside. For the farmer, it will still be the Scottish Government making a mess of their support payments. But instead of Brussels being responsible for overarching frameworks or new laws, or for negotiating trade deals, fishing quotas and common agricultural payments, it will be the sovereign United Kingdom Parliament in London, which is directly responsible and accountable to the British people.
Andrew Bowie
I will not give way, I am afraid, given that I have to wrap up soon.
As things stand today, it is a fact that, thanks to the actions of this Government, the Scottish Parliament is now one of the most powerful devolved legislative Assemblies in the world, with powers over—[Interruption.] It has powers over justice, education, health, transport, the environment and, now, taxation and elements of social security. The jury is still out on whether that is a good thing, but that may be to do with the parties that have been in charge of those regulations, rather than the powers themselves.
Far from Lord Robertson’s claim that devolution would kill nationalism stone dead, we are about to enter our 11th year of nationalist Government in Scotland, so I remain worried for our Union. For me and the people of the north-east of Scotland, which I have the huge privilege to represent, I am afraid that, far from the renewing or revitalising experience promised by the architects of devolution in 1999, the reality of devolution has been cuts, tax rises, a failing education system and the perception of a central-belt bias in all decision making.
However, just because devolution in its current form has not worked for my constituency or my constituents, that does not mean that it cannot. The point is that, as we today debate new powers that might be going to the Scottish Parliament, it is high time that the current Administration in Holyrood looked at their record in managing the powers they already have and the effect that has wrought on the north-east.
This afternoon and this evening, we have heard a lot from the SNP about power grabs, a betrayal of the Scottish people, Scotland being dragged out of the EU against its will and how we are undermining the devolution settlements, when, of course, nothing could be further from the truth. We all know that concessions are going to be made on both sides of the Committee on this argument. We all know that the Scottish Parliament will have sweeping powers under common UK frameworks on a whole raft of areas.
I will support clause 11, and I will vote against the Opposition provisions. As my hon. Friend the Member for East Renfrewshire said earlier, amendments to clause 11 will be required: we do require a legislative consent motion if we want the other place to pass the Bill. I think that all sides appreciate that. That is why we expect movement on the issue this month at the JMC. However, this is a process. The Opposition amendments would undermine our United Kingdom and threaten our common market. That is why I cannot support them.
Neil Gray
I am grateful for the opportunity to speak in one of the most important constitutional debates impacting on Scotland since the re-establishment of the Scottish Parliament. The whole basis and foundation of how Scotland is governed is being discussed today. We should not underestimate how important that is; we cannot allow today to be politicked away or the issues to be kicked down the road. We must consider what is before us carefully and in a non-partisan way. Cross-party working has already started in the tabling of amendments, which have been drafted jointly by the Labour Welsh Government and the Scottish National party Government.
Anyone who understands politics in Scotland will appreciate that Labour and the SNP do not often agree on constitutional issues; that is not a flippant point, but a serious one, on which Ministers might reflect. I fully support amendments 72, 164, 165 and 183 to 188, in the names of my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford), my hon. Friend the Member for North East Fife (Stephen Gethins) and the hon. Members for Edinburgh South (Ian Murray) and for Cardiff South and Penarth (Stephen Doughty). They all aim to protect the devolved settlements of both Wales and Scotland. Indeed, just about every speaker this evening has expressed great concern about clause 11 as it stands, perhaps with the honourable exception of the hon. Member for Aberdeen South (Ross Thomson) —even the right hon. Member for Clwyd West (Mr Jones) highlighted that clause 11 impinges on the devolved settlements. That is where my concern lies with the so-called UK frameworks.
I understand that it would be sensible in some areas for there to be agreed principles across these isles—I think that of a future independent Scotland’s relationship with the rest of the UK, so why would I not think it now?—but for intra-national frameworks to be strong, effective and deliverable, they need to be agreed on the basis of mutual partnership, without a dominant and dictatorial director.
Neil Gray
To be fair, the hon. Gentleman has had a good say this evening.
I am not the only one concerned about the direction of travel that the UK Government appear to think we are taking. NFU Scotland has, as I am sure Ministers will be aware, a series of red lines regarding Brexit, many of which are pertinent to today’s debate. I will pick a few out: it wants a replacement for the common agricultural policy that will support the industry in the medium to long term; agriculture must continue to receive the same level and proportion of funding as it does now in the post-2022 landscape; and crucially for tonight, although the Treasury should finance the new policy on a UK-wide funding basis, NFU Scotland says that
“Any approach that adopts a ‘Defra-centric’, one-size-fits-all policy on to the devolved nations would not be acceptable.”
That is why it is crucial that powers in devolved areas are returned to the devolved nations, not held centrally. To do anything other than devolve and then seek to agree a framework agreement in devolved areas would undermine devolution. It would set a dangerous precedent if the UK Government set the terms of devolved policy and then left it to the devolved nations to fill in at the margins. That point was reiterated by Professor Michael Keating when he said the Tory plan would create a “hierarchical model of devolution” where
“the broad principles are set in London and the details filled in across the nations.”
That is not devolution, but executive management. It is anti-devolution, and would rip up the terms and principles of the Scotland Act 1998.
Brexit already poses potentially huge challenges for Scotland economically and constitutionally. Keeping the Bill as it stands in this area would not just be a hard Brexit—it would be a constitutionally regressive Brexit. At this stage, it is worth returning to NFU Scotland’s Brexit priorities: that Scottish and UK agricultural and food products must have frictionless access to existing and new export markets, and that the domestic market must not be exposed to cheaper imports that lack Scotland’s exemplary animal welfare and environmental standards. Continued access to a skilled and competent workforce, within both the farming and food processing sectors, must be secured as a priority. Continued, targeted farm support will be vital, not least through an unknown transition period. This support must be refocused on action-based measures to bring about improved productivity across sectors while delivering environmental benefits and safeguarding and enhancing product standards—the bedrock of a thriving farming, food and drink sector for the post-Brexit era.
I am not closed to the idea that there may be opportunities from Brexit should the UK Government listen and act in a way that is inclusive and bipartisan, but that has not happened to date, no matter what Ministers try to say. The Scottish Government’s compromise proposals have been dismissed and ignored, and that is why we are at today’s crucial juncture. [Interruption.] Conservative Members, some of whom represent farming constituencies, ought to listen to this. NFU Scotland shares the Scottish Government’s desire for continued membership of both the single market and the customs union. Perhaps now the UK Government will realise that they need to allow for tailored arrangements to allow varying national priorities across these isles to be reflected.
How topical it is that we should be discussing aspects of devolution relating to Brexit as we learn, this very day, of what the UK Government appear to be willing to concede in their negotiations with the EU regarding Northern Ireland. In essence, they are conceding that the compromise plan that was presented by the Scottish Government last year for a bespoke deal for Scotland in retaining single market and customs union membership—a plan dismissed as impossible—was on the table earlier for Northern Ireland and has now been discussed. There will be no hard border on the island of Ireland, in summation. It appears that the DUP has put the brakes on that—the irony is there for all to see. What a precedent that sets.
It is time that the UK Government acknowledged that Scotland, as well as Northern Ireland, has the right to expect a bespoke Brexit deal, and that there is nothing precluding a deal that protects Scotland’s interests, as we have been arguing all along. Clearly, for Scotland, that means the ability, for example, to have a different immigration system, and continued membership of the single market and the customs union. Sadly, though, that does not appear to be the path the UK Government are willing to follow, regardless of the consequences either for Scotland or for the future of the United Kingdom. Why not? I fully understand why Northern Ireland needs a bespoke deal. I have no issues with the UK Government pursuing that—in fact, I congratulate them on it—but why do Scotland’s needs matter less? To deny Scotland the same opportunity as Northern Ireland is being afforded would be ridiculous and indefensible. To take back powers from the EU that are clearly devolved competencies and have them sitting here at Westminster for some future divvying-up shows a lack of political or critical thinking, shows a lack of trust or respect towards the devolved nations, and is—quite frankly—lazy. To refuse to look at fresh areas of devolution like employment law to help Scotland deal with Brexit in the most flexible way is equally untrusting, disrespectful, and lazy.
The UK Government must understand the concerns that are being raised. They must not want to rip apart and fundamentally undermine the devolved settlement. Surely they must be willing to engage and accept amendments so as to make Brexit, if not politically palatable, at least reasonable for the devolved nations. I hope that all Members representing Scottish constituencies will support the amendments to be voted on later tonight.
Stephen Kerr
I will—[Interruption.] Yes, I am going to speak. I know that SNP Members will be very pleased about that. I will keep my remarks short because a number of people want to speak, but I want to respond to the idea that has been traded pretty commonly in the past couple of speeches about the imposition of a devolution settlement vis-à-vis the frameworks. The Scottish Affairs Committee report quotes the Secretary of State for Scotland, who said:
“A UK framework is not a framework that the UK Government imposes; it is a framework that is agreed across the United Kingdom.”
I believe that that is a definitive expression of the Government’s policy in relation to the nature of frameworks and how they will be achieved.
Every time we have a debate in this House in which devolved powers and Brexit are mentioned, the Scottish nationalists go crazy—[Interruption.] Yes, berserk; that is a good word. A number of contributors, including the hon. Member for Airdrie and Shotts (Neil Gray), have spoken positively about how we can work together to create common ground and lift the issue from the trenches of political warfare in which, too often, the SNP wish to put it.
Ian Murray
The hon. Gentleman is one of the 12 new Scottish Conservative MPs. Many of his colleagues have already said that clause 11 is deficient, and they would like it to be amended. Will he tell us whether he thinks it is deficient, and how he would like it amended?
Stephen Kerr
I will come on to that point, if the hon. Gentleman will let me make some progress through my speech.
I remind the Committee that despite what we heard to the contrary, the Conservative Government delivered additional powers to the Scottish Parliament in 2015 and 2016 in fulfilment of their vow, making it the most powerful devolved Parliament in the world. That was a Conservative promise made and kept. The SNP wants to create a crisis, and I hope that we in the Conservatives will continue to be reasonable in our approach to the issue.
Andrew Bowie
Does my hon. Friend agree that SNP Members have absolutely no interest in our making a success of Brexit, because their only aim is to break up our United Kingdom?
Stephen Kerr
I thank my hon. Friend for his intervention. I was about to say that the SNP is like a collection of 35 carbon copies of the famous Rikki Fulton creation, the Rev. I. M. Jolly. SNP Members sit there on the Benches, depressing the nation and bringing their grim worldview to the people of Scotland. Being so cheerful keeps them going. They talk themselves and Scotland down, and they imply that our Scottish entrepreneurs, our businesses and our communities will be unable to cope with any change and unable to take advantage of the opportunities that the hon. Member for Airdrie and Shotts mentioned and that will undoubtedly arise as we leave the European Union.
Stephen Kerr
I thank the hon. Gentleman for bringing the Fraser of Allander Institute to the attention of the Committee, because the institute also points out that the perpetual threat of a second independence referendum is having a dragging effect on the Scottish economy.
Mr Sweeney
The hon. Gentleman referred earlier to the Scottish Parliament being the most powerful Parliament in the world, and I am aware that he opposed its initial creation but now recognises its benefits. The creation of the Scottish Parliament has resulted in regulatory divergence between parts of the United Kingdom. Does that fact not undermine the whole logical position of the Tories’ argument against our amendments? Surely, it has already been established that divergence exists but there is still a viable single market in the UK.
Stephen Kerr
In my opinion, divergence brought about by devolution enriches the fabric of the Union, but the divergence we are talking about could, in a very real sense, undermine the integrity of the United Kingdom’s common market.
I have had emails from constituents that regularly begin with the words: “I believe that Brexit should strengthen devolution for Scotland, not weaken it.” Many other Members will have had similar emails. I want my constituents to know that that is exactly my position. I want a Brexit that strengthens the democracy of our country and strengthens the devolution settlement for Scotland. I ask Ministers, in the summing up at some point tonight, to make it clear again that the Bill guarantees the existing devolution settlement and the existing powers of the Scottish Parliament and promises that there will be more powers to come.
In regard to the tone and manner in which this issue is discussed and debated, I wish to pay tribute—SNP Members will not be surprised to hear me say this—to Ruth Davidson, Professor Adam Tomkins and others, who have worked as honest brokers in this process, by working with the Scottish and UK Governments to bring them together to build consensus. I believe consensus is vital for the new constitutional settlement we need to reach.
I welcome the recent change of tone from the Scottish Government, especially from the First Minister. When she came out of Downing Street on her last visit to London, I thought she had some very positive things to say. As a Scot, I welcome that: I welcome the fact that the First Minister of my country is willing to be a positive contributor, rather than a simply a detractor.
I want take this opportunity to express my full confidence in the approach and style of the First Secretary of State and the Secretary of State for Scotland, who are leading the UK Government in the very important talks with the Scottish Government. I have great confidence that there will come out of the discussions an agreement that will be sustainable because it will be built on consensus. Consensus is not gained by shouting matches or feigned indignation—we see quite a lot of feigned indignation in this place—and all I would say is thank goodness the SNP leadership in Edinburgh has more maturity than some of the MPs it sends to London. I remain hopeful, and I am optimistic.
Stephen Kerr
I was just about to deal with the hon. Gentleman’s previous intervention, but I will sit down.
Ian Murray
I was about to ask the hon. Gentleman when he was going to talk about the deficiencies in clause 11 and what he would do to sort them out.
Stephen Kerr
I will say this much: it is not that I do not understand people’s concerns about clause 11, because I share some of those concerns. As the intergovernmental discussions progress and the Bill returns to this House, as it will, before it goes to the other place, it is very much my hope that there will be some greater detail in clause 11 to help all hon. Members to have a degree of confidence in its intent.
We are talking about trust, or the lack of trust, and that issue is keeping us from working out a satisfactory agreement. Steps must be taken to underpin the trust that needs to exist on both sides—the UK Government and the devolved Administrations. The UK Government will have to demonstrate trustworthiness in the way that the Bill is amended, as it must be, and the Scottish Government will have to show trustworthiness by committing themselves to the outcome of these talks to the extent that they will publicly state their support for the passage of a legislative consent motion in the Scottish Parliament. To me, that is what trust looks like.
Deidre Brock
If the UK Government genuinely wish to show willing towards the Scottish Government and their concerns about the Bill and clause 11 specifically, does the hon. Gentleman not think that powers should be devolved directly to the devolved Administrations first and then that frameworks should be agreed? One wonders what the UK Government are actually afraid of. The hon. Member for East Renfrewshire (Paul Masterton) spoke about powers being devolved when the UK Government think it is safe to do so. Why is there such concern about not sending those powers to the Scottish Government?
Stephen Kerr
There are, as we have discussed, either 109 or 111 powers. The Public Administration and Constitutional Affairs Committee report lists 111. There is an issue of trust that we need to address to underpin any eventual agreement. The point is that the Bill will need to be amended. Those amendments will need to reflect where the powers will eventually rest, and whether they will go straight to the devolved Administrations on the day we leave the European Union, or if some will be subject to mutual agreements—memorandums of understanding—that will create the frameworks to support the functioning of the UK’s internal market. I hope very much that the Government will bring forward some detail to add light with regard to those issues.
Ian Murray
Like many of his colleagues, the hon. Gentleman is therefore admitting that clause 11 is deficient. He is almost but not quite telling us how he might fix it, but even so he is going to vote in favour of it this evening.
Stephen Kerr
Yes, and that is no surprise, because I sit on the Conservative side—the Government side—of the House of Commons. I believe and trust in the Government. I believe that Ministers will deliver on a settlement. I do not know why that is such a surprise to Opposition Members.
Jenny Chapman
The hon. Gentleman has told his Front-Bench colleagues that he will vote with the Government this evening but, should the Bill return unamended in this House, what would be his inclination on Third Reading?
Stephen Kerr
In common with other colleagues who have spoken today, I expect there to be amendments, and when those amendments come to the House in due course, it will be because everyone involved in this process, including the UK Government and the devolved Administrations—the Scottish Government are my immediate interest—will have put on an adult head because there is so much at stake for our country. I happen to think that one of the most positive contributing factors to the change of climate has been the Scottish Affairs Committee’s excellent report, which is a step in the right direction.
Ian Murray
On a point of order, Sir David. I am slightly confused about the process in this Chamber. The hon. Gentleman is making a fine speech, but he keeps talking about amendments that will result in him supporting the Bill. Have you been notified of the Government tabling any amendments to clause 11?
The Temporary Chair (Sir David Amess)
That is not a point of order; it is a point of frustration.
Stephen Kerr
Let me press on, because I did say that I would be brief, and I am in danger of not keeping that promise.
I insist on the Government doing what has to be done to ensure that there is no disruption to the UK home market. I want to be clear that when I say the UK, I mean Scotland, England, Wales and Northern Ireland. I do not want a Brexit that weakens the United Kingdom politically or economically. I am a Unionist. I do not want to see the creation of needless barriers that hinder the frictionless function of Scotland’s most important marketplace, namely the rest of the United Kingdom. The process should avoid any unwarranted points of difference that make it more difficult to trade throughout the UK, because that would inevitably affect business, which would inevitably affect jobs.
Common standards will be needed for the common market within the UK, and those standards will need to be set democratically and transparently. Businesses are looking for leadership on these matters as much as they are looking for harmony throughout the UK single market. It is time to step up to the plate in that respect. Frameworks for the operation of the UK single market must be set at a UK level on the basis of agreement across the United Kingdom, including with the devolved Administrations, and it is up to us as politicians to rise to that challenge.
I am not calling for a whole raft of complex arrangements, because I do not think that would help anything, but we do need some jointly agreed common frameworks. I acknowledge and welcome the Scottish Government’s positive approach towards that end. I believe that the two Select Committee reports that were published in the last couple of weeks have been hugely helpful to the aim of bringing about the co-operation and partnering needed between Scotland’s two Governments.
Ronnie Cowan (Inverclyde) (SNP)
Thank you, Dame Rosie. I shall attempt to keep my remarks within the time limit handed down by the Chair, at least 20 minutes ago.
As a member of the Public Administration and Constitutional Affairs Committee, I have been in the privileged position of being able to talk, both formally and informally, with constitutional and political experts about many things, including clause 11. As part of the process of formulating our latest report, the Committee’s Chair, the hon. Member for Harwich and North Essex (Mr Jenkin), and I travelled to Edinburgh and took evidence from panels of experts over two days. It was an enlightening and informative experience.
Under clause 11, a potential 111 powers that could be devolved to Scotland will be held at Westminster until such time as the UK Parliament sees fit to devolve them. The UK Government’s stance is, “Trust us; we’ll do the right thing.” And trust them we have over the years: we trusted them to deliver the Calman report but they did not; we trusted them to deliver on the Smith commission but they did not; we looked to the Sewel convention and we saw right through it; and we listened to, and were influenced by, a vow that was not a vow.
In September 2014, the then Prime Minster David Cameron told us that we were a “family of nations”. We were told that Scotland could lead, not that the Government would attempt to put a lead on Scotland, but every amendment requested by SNP MPs, who were democratically elected to represent the citizens of Scotland, was voted down. When we voted to stay in the EU, our views were ignored. When we asked to sit at the table during the negotiations, we were snubbed. I can assure the Minister that the words “the cheque is in the post” and the promise that you will respect me in the morning will not work any more.
I am well aware of the cold, hard fact that the UK Government do not have to do anything, but Scotland is not a faithful hunting dog standing at its master’s heel, waiting on its orders. Scotland in the Union is a concept rooted in the past. The ties that bind us come from, in part, a shared history—a history of conflict and conquest—but the sun set on the empire a long time ago. It might come as a surprise to some, but 59 colonies have walked away from the empire and, as a new dawn rises, so does Scotland. We want a different future from the one set out for us, but Scotland cannot choose its own future when we have to seek permission to do so.
Clause 11 does not set out a timetable for transition. Professors Richard Rawlings and Alan Page have both raised concerns that clause 11 is described as a transition agreement, but that there is no provision for that in the Bill. Despite that, we are currently designing our Scotland. Civic Scotland, combined with academia and business, is already coming together to design the country we want to live in. Discussions in think-tanks and at public meetings about the Scotland we want to be are common occurrences. There is a growing awareness that Scotland, with the right powers, can reform our energy business, banking sector, and agriculture and fishing industries.
We could even negotiate our own trade deals, like Norway, Iceland and the Faroe Islands do. The Faroe Islands negotiate their own trade deals because the Danish Government respect and trust them. We could each define our own future and still be trading partners and valued neighbours, while continuing to help and support each other, but only if that is achieved through mutual respect for each other’s sovereignty. And there is the rub: clause 11 shows no respect or trust for Scotland or any of the devolved authorities.
Dr Tobias Lock, a senior lecturer at Edinburgh Law School, has said:
“The European Union (Withdrawal) Bill will result in a shift in balance between the powers Westminster has in practice and the powers Holyrood has in practice with Westminster’s powers being augmented and Holyrood's staying the same.”
That concern is shared by Professor Nicola McEwen, professor of territorial politics at the University of Edinburgh. She identifies that clause 11 is fundamentally a problem of trust. The UK Government do not trust the devolved Governments to refrain from using repatriated powers to create policy and regulatory divergence that might harm the UK’s internal market and create problems in trade negotiations. This, she argues, overlooks the considerable constitutional authority that the UK Parliament already retains over market regulation, trade, and the making and implementation of international treaties. For their part, the Scottish and Welsh Governments do not trust the commitment of the UK Government to devolve repatriated powers after Brexit and/or to agree and govern UK common frameworks on a genuinely co-operative basis. Once the existing imbalance has been augmented, when will it be realigned?
Scotland, if given the right powers, could negotiate with the European economic area and European Free Trade Association to seek what is best for Scotland but not detrimental to the rest of the UK. However, we are hamstrung by a UK Government who are scared of their own shadow, constantly looking over their shoulder and wondering from where the next challenge or crisis will emerge. We have a UK Government propped up by bluster and buffoonery.
Individuals may be protected by personal wealth that generates self-confidence and self-assurance, and supports a “devil may care” attitude—one that nudges us forward, assuring us that it will be all right on the night—but the vast majority of people in the UK are less well protected from the economic turmoil that lies ahead. They have concerns about jobs, pensions and visas. They have rightly turned to the UK Government time and again for reassurance, but their concerns are not being addressed. All that has been offered is a sickly mix of jingoistic imperialism. The Scottish Government wish to bring clarity and seek the powers to govern responsibly, but clause 11 does not provide that authority or opportunity. It must be amended forthwith, and the powers due to the Scottish Parliament—powers that will be best used by the Scottish Government, in the best interests of the citizens of Scotland—must be repatriated to the Scottish Parliament immediately after the UK leaves the European Union.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
I rise to support clause 11 and schedule 3. Let me say at the outset how grateful I am to all Members for their contributions to the six-hour debate that we have had so far today, and for the thoughtful consideration that has been given to this part of the Bill. I assure the Committee that I shall listen carefully to, and take very seriously, all the views that are expressed on these issues.
The Government have been clear about the fact that the Bill is about continuity, certainty and control. That applies equally, and without exception, to people in businesses in all parts of the United Kingdom. Clause 11 is about delivering certainty while guaranteeing all the existing powers of the devolved institutions. The current devolution settlements reflect the UK’s membership of the EU, and on that basis, they provide that devolved institutions cannot act or legislate in a way that is incompatible with EU law.
Ian Murray
I apologise to the Minister for interrupting him so early in his speech. Many members of his own party have said that clause 11 is deficient and requires amendment. Does he believe that, and, if so, how does he intend to amend it to make it less deficient?
Chris Skidmore
I will set out the Government’s position in due course during my speech. [Interruption.] The hon. Gentleman intervened within 30 seconds of the beginning of my speech, and he is not accepting the answer that I have barely been able to give. I hope he will appreciate that I have a speech about the amendments to get through. When it comes to the clause itself, however, we are interested in the views of all Members and all devolved Administrations, and, above all, we are seeking a legislative consent motion. We are determined to approach the clause with a view to consensus.
As I was saying, the current devolution settlements provide that devolved institutions cannot act or legislate in a way that is incompatible with EU law. That has provided common, overarching laws and approaches throughout the UK while we have been in the EU. Those common approaches and laws have meant that businesses, regardless of where they are based in the United Kingdom, can trade with each other in the knowledge that they share agreed standards.
Stephen Doughty
The Minister is making an important point about businesses being able to trade. Given the amendments that we have been discussing and the importance of consultation with the devolved Administrations, will the Minister tell me whether the proposals that were put forward in Brussels today on the Northern Ireland-Irish border were discussed with the First Ministers of Wales, Scotland or, indeed, Northern Ireland?
Chris Skidmore
It is not for me to comment, during a Committee stage, on the process of European negotiations. There is a time and a place for that. I am not going to get into a discussion with the hon. Gentleman about the process of EU negotiations. We must ensure that the Prime Minister has the opportunity to reach out to Brussels, but I am here to discuss clause 11 and schedule 3 and the amendments, and I hope that the hon. Gentleman will allow me to continue to do so.
I was talking about the common approaches that enable us to trade with each other in the knowledge that we share agreed standards. We have agreed approaches on how to manage our common resources, and the UK can enter into international agreements knowing that we, as a country, can meet our obligations. As we leave the EU, the simple question is about where we need to retain the common approaches in EU law and where we do not. In the immediate term, clause 11 and part 1 of schedule 3 create a mechanism for those common approaches to continue to apply throughout the UK after exit.
Mr Chris Leslie (Nottingham East) (Lab/Co-op)
The Minister speaks of common approaches across the EU. We have heard today about the possibility of an alignment between the Northern Irish arrangements and those of the Republic and the rest of the EU. How will we retain those common approaches if, for instance, the UK negotiates a new trade deal post-customs union, and we end up with circumstances in which that would, or would not, apply to Northern Ireland? How on earth can the Minister reconcile that with the offer that the Government have been talking about today?
Chris Skidmore
I note that the hon. Gentleman has just walked into the Chamber. He is welcome to make a speech later on setting out his own principles; I would listen to that very carefully. I am addressing clause 11 and schedule 3 to the Bill. There is a time and a place for the wider discussions he wants.
Deidre Brock
On the temporary nature of these proposals, why have the Government not chosen just to put in place a sunset clause? Why is no date indicated, because the lack of one creates an enormous amount of uncertainty for everyone?
Chris Skidmore
The issue around placing a sunset clause on this provision is that, in a way, it creates an artificial cliff edge. The sole purpose of clause 11 is to ensure that the UK statute book is complete on exit day. We want to ensure that we work towards common frameworks, and that we can ensure that, when we have that statute book prepared for exit day, we have common frameworks and non-common frameworks in place. Having a sunset clause creates an artificial cliff edge to work towards that date, whereas we might want to create some of those frameworks before that date, and there might need to be some corrections to the withdrawal agreement and the EU withdrawal agreement Bill that has been announced, and some deficiencies that need to be corrected. Having a sunset clause is therefore unhelpful for the purposes of this clause in itself.
Returning to the issue of the policy areas where EU law intersects with devolved competence, as I have said, common frameworks will not always be required, or can be achieved through non-legislative means like concordats, and in such cases clause 11 provides a mechanism to release decision-making powers from the temporary competence arrangement through the Order in Council procedure, giving new powers to the devolved Administrations.
Pete Wishart
I am listening carefully to the Minister’s speech, but I am not hearing much about addressing the concerns of the devolved Parliaments and Assemblies, which are clearly saying that what is being proposed drives a coach and horses through the devolution settlement. How on earth is the Minister going to take on board their real concerns about what this Bill does to devolution, not least through clause 11?
Chris Skidmore
I have listened for six hours to the concerns of Members, but outside this Chamber there is an entire process that I want to touch on later in my speech, and which I hope the hon. Gentleman will reflect upon. There might be hostility in this Chamber from those who say that the Government are somehow taking clause 11 and ripping up the devolution settlement, but that is hyperbole. Clause 11 is a temporary competence limit that is being applied simply by taking EU law and it becoming EU retained law.
Chris Skidmore
No, not at the moment.
There are no powers that the devolved Administrations currently have that they will be losing. We have therefore had tremendous engagement on the framework that we are delivering, and I will touch on that engagement shortly. In particular, in the JMC (EN) process there has been huge good will from the colleagues of the hon. Member for Perth and North Perthshire (Pete Wishart) in the Scottish Government, and his officials, above all, working tirelessly behind the scenes, trying to deliver on what we need to do.
Chris Elmore
The Minister uses the word “temporary”. How long is temporary, and why is that not specified in the Bill?
Chris Skidmore
The hon. Gentleman points to the word “temporary”, and I repeat that this is a temporary competence limit—[Interruption.] He wants to know how long temporary is. It is as long as it takes to ensure that we have a complete statute book that is in the interests of continuity, certainty and control for UK businesses. We want to ensure that we have time to be able to correct the statute book and ensure that this is done properly. To create an artificial time limit would be unhelpful to this process. As he knows, the First Minister of Wales is going forward with the JMC (EN) process. That engagement is taking place, and I will talk about that later in my speech. This means that when it comes to ensuring that we have the temporary competence limit on the face of the Bill, the Order in Council process gives new—
Chris Skidmore
No, I have given way a lot—[Interruption.] I am going to carry on with my speech; otherwise I will not get through it. Other Members want to speak, and although I could stand here and take up all the rest of the time, I think it would be inappropriate to do so.
The Order in Council procedure will provide an opportunity for those powers to be returned to the devolved Administrations. This highlights a well-established procedure for adapting the parameters of the devolved competence, which requires debate and approval in the UK Parliament and the relevant devolved legislatures. It is absolutely right that the devolved legislatures are able to debate and consider any additional areas of competence being released to them through this mechanism. Of course we acknowledge that the Scottish and Welsh Governments have taken a different view on the mechanism to provide the necessary certainty, but we are in agreement that common frameworks will be needed in some areas. In some cases, legislative frameworks might be required, and we hope to continue working closely with our counterparts in the devolved Administrations to establish exactly what those will look like.
Ian C. Lucas
I am puzzled. The Minister has made it clear that the Government’s intention is to maintain the current legislative situation, so far as the clause is concerned. Why then did he not seek agreement with the Welsh and Scottish Governments before he brought this legislation to the Chamber? Why did he not achieve a resolved position before coming to the Chamber with the Bill?
Chris Skidmore
The hon. Gentleman will be aware that the clock is ticking, and that we have a limited amount of time in which to ensure that our statute book is prepared for exit day. We are determined to do that, because we need that certainty, control and stability. Businesses need to know that the statute book will be complete on exit day.
We have had a tremendous amount of engagement with our Welsh and Scottish partners, and I am perfectly happy to place in the Library records of the meetings between the First Secretary of State and his counterparts so that Members can see the level of engagement involved. I think that they would be quite struck by the number of meetings that have taken place and the work that has gone on behind the scenes. Members might be hostile in the Chamber today, but their Welsh and Scottish counterparts are working constructively with the UK Government because they recognise that we need some serious politics here and that we need to ensure that we have certainty and control for businesses.
Chris Skidmore
No, only once for each person. I will give way to the hon. Member for Central Ayrshire (Dr Whitford).
Dr Whitford
Why will having a Brexit date give certainty and clarity, yet having a date on which the powers would move to the devolved Governments is considered unacceptable?
Chris Skidmore
We will be discussing the clause 10 powers to which the hon. Lady refers on a separate day—on the morning of day five. Clause 11 is about ensuring that the statute book is prepared for exit day. In a way, exit day provides that temporary limit. We know that we need to make changes to the common framework, but beyond that, we do not yet know what the negotiation period will look like when it comes to ensuring that we need an implementation period. That is why we cannot necessarily provide that certainty.
Several hon. Members rose—
Chris Skidmore
I will give way to the hon. Member for Ilford South (Mike Gapes) now.
Mike Gapes
I am grateful to the Minister for giving way. Clause 11(3) refers to the Northern Ireland Assembly. Is the position for Scotland and Wales the same in the Bill as it is for Northern Ireland, given that the Good Friday agreement is underpinned by an international treaty between two countries and that it explicitly mentions the European Union?
Chris Skidmore
We are moving on to some of the clause 10 issues around international obligations, but when it comes to schedule 3, which I had hoped to touch upon later in my speech, we are determined to ensure that we obtain legislative consent from all the relevant devolved Administrations. Although the Assembly is absent, we are already working with officials in Northern Ireland to ensure that their perspective is reflected, but we are determined to move forward as the United Kingdom, which includes Northern Ireland.
Martin Whitfield
Does the Minister envisage requesting the legislative consent motions before explaining what amendments the Government are going to make to the Bill?
Chris Skidmore
As I have stated, the Government’s intention is to seek legislative consent for the Bill from all the devolved Administrations, where possible. We have already seen legislative consent memorandums being tabled in Scotland and Wales, and we are determined to ensure that we work with all our devolved partners and with officials in Northern Ireland and that we legislate on behalf of the United Kingdom.
Chris Skidmore
I am going to carry on with my speech. The hon. Gentleman has already intervened and now he decides to—[Interruption.]
The Second Deputy Chairman of Ways and Means (Dame Rosie Winterton)
Order. We cannot have sedentary interventions. If the Minister wants to give way, he will give way.
Chris Skidmore
We have been working closely with the devolved Administrations on these questions and will continue to do so, progressing the discussions and the necessary analysis of where common approaches are and are not needed, through ongoing bilateral and multilateral discussions between Ministers and officials.
In an excellent speech, my right hon. Friend the Member for Clwyd West (Mr Jones) highlighted the important progress that was made at the recent JMC (EN) meeting on 16 October, when the UK Government, the Scottish Government and the Welsh Government agreed to a set of principles to identify where we will need frameworks. Given the myth busting that needs to take place around the JMC (EN) process and given how open and transparent it already is, it may be appropriate to quote from a communiqué regarding an agreement by all the devolved Governments and the First Secretary of State on the definition and principles of the common frameworks. It states:
“As the UK leaves the European Union, the Government of the United Kingdom and the devolved administrations agree to work together to establish common approaches in some areas that are currently governed by EU law, but that are otherwise within areas of competence of the devolved administrations or legislatures. A framework will set out a common UK, or GB, approach and how it will be operated and governed. This may consist of common goals, minimum or maximum standards, harmonisation, limits on action, or mutual recognition, depending on the policy area and the objectives being pursued. Frameworks may be implemented by legislation, by executive action, by memorandums of understanding, or by other means depending on the context in which the framework is intended to operate.”
The communiqué then goes on to set out some important principles for where common frameworks
“will be established where they are necessary in order to: enable the functioning of the UK internal market, while acknowledging policy divergence; ensure compliance with international obligations”.
Jenny Chapman
I may be able to save the Minister a job here. New clause 64 includes what he is reading out, word for word. Given that he supports the principles, is he not inclined to accept new clause 64?
Chris Skidmore
The hon. Lady did not touch on the communiqué and seemed to push it to one side without acknowledging the importance of the process. When the JMC (EN) process is taking place, her new clause is unnecessary. I will touch on why it is unnecessary to legislate when we have all this work ongoing to provide flexibility for the devolved Administrations to draw up a communiqué exactly like this one.
To carry on with what I was saying, common frameworks will
“enable the management of common resources; administer and provide access to justice in cases with a cross-border element; safeguard the security of the UK.”
The frameworks will also
“respect the devolution settlements and the democratic accountability of the devolved legislatures, and will therefore: be based on established conventions and practices, including that the competence of the devolved institutions will not normally be adjusted without their consent; maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory as is afforded by current EU rules; lead to a significant increase in decision-making powers for the devolved administrations.”
In the absence of Northern Ireland Executive Ministers, the Northern Ireland civil service will continue to be part of these discussions. We are building on the positive and constructive joint working between our Administrations to continue to accelerate our progress on common approaches. For example, there is ongoing work between officials from the devolved Administrations and the UK Government on how policy areas intersect with the devolution settlement. There have been several deep dives into those policy areas, and the work will be presented at the next JMC (EN) on 12 December, where we hope to make further progress by assessing more of the detailed work that has been carried out.
Angus Brendan MacNeil
How does the UK Government’s approach to working together with the devolved Administrations differ from their approach to working together with, say, Dublin and the other members of the EU27? Is one not a meeting of equals and the other a meeting of master and underling?
Chris Skidmore
The work on the common frameworks that clause 11 addresses points to the fact that we are keenly working with the devolved Administrations on drawing up those frameworks. We have an absolute commitment to ensuring that we can look at the principles that were agreed between our Governments on 16 October and that explicitly recognise that frameworks will not be needed in many of the areas currently governed by EU law.
As we have said from the outset, the Bill starts a process that will lead to a significant increase in decision-making powers. That is not a power grab. We are ensuring that more powers go back to the devolved Administrations and legislatures.
Wes Streeting (Ilford North) (Lab)
The Minister talks about the constructive relationship with the devolved Administrations. Has he taken time to look at what they have said about the shambles today?
Chris Skidmore
A bit of a wasted intervention. I am here to talk about clause 11. I do not know whether the hon. Gentleman has read the clause, but he came in slightly late.
Chris Skidmore
The hon. Gentleman is very kind, but we are discussing the effect of clause 11 and schedule 3 —that is the purpose of Committee.
Several hon. Members rose—
Chris Skidmore
I have already given way.
We want to build momentum over the coming months in the continued bilateral and multilateral discussions between Ministers and officials. Let me be clear that the Government are the party committed to devolution. Our record shows that, and we will continue to press on with devolution. Working through these frameworks is part of that, but we also want to protect the benefits of our Union across the UK and across each of our constituent nations, benefiting us all.
Chris Skidmore
No.
I am grateful to hon. Members for raising important points of detail on the ongoing framework process. They are right to acknowledge that work has been done today on agreeing the guiding principles for the future frameworks, and that the further analysis is the product of the ongoing engagement between officials and Ministers in the UK Government and the devolved Administrations. Of course, the outcomes of those discussions are important not just to Governments but, most crucially, to the people and businesses across the UK to whom the rules apply.
Liz Kendall (Leicester West) (Lab)
The Minister is talking about the impact on people in the UK. Under the Good Friday agreement, people in Northern Ireland can choose to be British or Irish, or both. Will that remain the case after Brexit? If so, seeing as Ireland remains a member of the EU, will people in Northern Ireland still be able to choose to be EU citizens?
Chris Skidmore
I do not disagree with what the hon. Lady says. It is important to note that, when it comes to the common frameworks procedure, the communiqué agreed on 16 October states:
“Frameworks will ensure recognition of the economic and social linkages between Northern Ireland and Ireland and that Northern Ireland will be the only part of the UK that shares a land frontier with the EU. They will also adhere to the Belfast Agreement.”
By way of myth busting, it is not the case whatsoever that the Good Friday agreement will somehow be affected.
Clause 11 introduces part 1 of schedule 3, which makes the same provisions in relation to devolved Executive competence—that is, any secondary legislation that the devolved Administrations might make. In addition, provisions in the Bill extend competence to the devolved Administrations so that devolved Ministers can exercise the powers provided by clause 10 and schedule 2 to make the statute book operate effectively once we have left the EU.
In recognition of the current standing of the existing devolution settlements, part 2 of schedule 3 ensures that a significant number of corrections are made to the devolution statutes arising from the UK’s exit from the EU. Together, clause 11 and schedule 3 preserve the current scope of devolved competence. They ensure that any decision that could have been taken by the devolved Administrations and legislatures prior to exit day can still be made after exit day, and that devolved Ministers can exercise powers to make sure that law in areas of devolved competence works correctly. They set up the Order-in-Council process, which will allow for an increase in decision-making powers of the devolved institutions as discussions with the devolved Administrations on common frameworks progress. The Government have repeatedly stated, as I have today, that this is a temporary arrangement; it is a safeguard against a cliff-edge situation as we leave the EU to provide certainty for people and businesses in all parts of the UK. Just as importantly, it allows time for discussion about the future: on where common approaches are needed and where they are not. It is our overriding aim to work with the devolved Administrations to define which areas need frameworks and which do not as soon as possible.
It was absolutely right for the hon. Member for North Down (Lady Hermon) in the debate on clause 2 to raise the matter of consultation with the political parties in Northern Ireland in the absence of a power-sharing Executive. I would like to reassure her that this Government value the views of those parties on the devolution provisions in the Bill, and officials have provided briefings on the Bill to each of the parties represented in the Northern Ireland Assembly that wanted them. In addition, officials have been engaging with their counterparts in the Northern Ireland civil service on the technical and legal aspects of the Bill to make sure it operates properly in the context of Northern Ireland law. That is, of course, no substitute for a devolved Government in Northern Ireland, and my right hon. Friend the Secretary of State for Northern Ireland continues to prioritise the talks between parties to restore the power-sharing Executive. This Government are sincere in their wish to discuss these matters, particularly with regard to common frameworks, with the Northern Ireland Executive when they are restored.
I reiterate that I welcome scrutiny by the House on the approach the Government have taken. I also welcome the vital contributions that the Scottish Government and the Welsh Government, and the devolved legislatures, have made to today’s debate by publishing their views on how—
Ian Murray
I feel that the Minister may be finishing his remarks. I intervened at the beginning of his speech to ask whether he would tell us where he thinks clause 11 is deficient, as many of his colleagues have said it is, and how he thinks that, as the Minister responsible for it, he is going to fix those deficiencies.
Chris Skidmore
As I stated at the opening of my remarks, and as I will state throughout my speech and at the end of my remarks, we are open to hearing from those who seriously want to look at this Bill and consider how we productively ensure that our statute book is complete on exit day. We are in a Committee stage at the moment and there is a process to go through here, and there is a process outside this House in the JMC, which I have spoken about. It is not for me as a Minister to prejudge the discussions that may take place at JMC (EN) next week, on 12 December. What I will say is that I will ensure that when it comes to the agenda of that meeting, the discussions that have taken place in Committee are reflected and discussed in JMC (EN).
Stephen Doughty
I thank the Minister for what he is saying, but it is clear that the Welsh Government and the Scottish Government, and Members of this House working with them, have proposed clear and specific amendments that are not about blocking the Bill or undoing Brexit; they are about retaining a stable constitutional settlement in these islands. Will he accept those amendments, as his colleague the Secretary of State for Scotland said he might?
Chris Skidmore
I am discussing whether the clause should stand part of the Bill and I am about to turn to the hon. Gentleman’s amendments. I hope that he can wait in eager anticipation for my remarks and that he will not be disappointed, although he may be.
I reiterate that I welcome scrutiny by the House on the approach that the Government have taken. As I said, I also welcome the vital contributions the Scottish Government, Welsh Government and devolved legislatures have made in this debate by publishing their views on how devolution aspects of the Bill might be improved. This Government are clear that we want to consider all those views and make improvements to the Bill where we can, but I also emphasise that it is right that we provide certainty across the UK, as this clause seeks to do, and do not take any action to undermine the integrity of our United Kingdom.
I will also take a moment to reflect on the insightful contribution made by my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), informed by the evidence to and input from the members of the Public Administration and Constitutional Affairs Committee. He made a number of pertinent points and I will turn to those now. He is right to say that leaving the EU is that opportunity to revisit some key constitutional questions. As I have set out today, the Government’s aim in introducing clause 11 is to do precisely that: to give us time to give these important issues the consideration they deserve.
We welcome the views of experts such as my hon. Friend and his Committee on these issues of intergovernmental institutional relationships. The Government are ensuring that we engage with other external experts such as leading academics on these questions. What we are focused on today is how we provide that certainty and continuity we need in the law on exit day and how we give ourselves time to consider the issues properly and reach the right answers. I welcome my hon. Friend’s continued contributions to this discussion.
New clause 64, which relates to the creation of common frameworks, comprise three subsections and I will take each in turn. First, the new clause would require the Government to lay their proposals for the replacement of European frameworks with UK ones before each House of Parliament. It is not the position of the UK Government, or of the devolved Administrations, that the existing UK frameworks will be replaced by our own common frameworks in every instance. Instead, we expect more power to sit directly with the devolved Administrations as a result of our leaving the EU.
As I mentioned earlier, we are working closely with the devolved Administrations to determine where future frameworks, whether legislative or non-legislative, will be required in each of the policy areas in question. Although joint conclusions have not been drawn at this point—as I have stated, I do not want to prejudice the outcome of the discussions with the devolved Administrations—we believe that the majority of policy areas will not require legislative frameworks.
Angus Brendan MacNeil
Surely the determination is very simple. It is set down in the Scotland Act 1998 that what is not reserved is devolved, so if it comes from Europe, it will be devolved. It is set down and it is simple. It should not be up to the Minister to be judge and jury. He talks about partnership, but he should respect the law.
Chris Skidmore
As I set out clearly at the beginning of my speech, when current EU law—which it is the UK’s position not to breach—is transferred to become retained EU law, we need to look at the areas where we need to create common frameworks. That is the position that the hon. Gentleman’s own Brexit Minister, Mike Russell, has taken. Mike Russell signed the communiqué and agreed to look at these common approaches and to look at retained EU law being transferred across.
The hon. Gentleman should speak to members of the Scottish Government, because they seem to understand the need to work with the UK Government to come up with common frameworks. He seems to be unaware of the process of engagement that is taking place outside the House. His constituents will not thank him for bringing up constitutional points and not acknowledging that, in looking at the common frameworks procedure and at EU law, we need to ensure that, when it comes to exit day, there is certainty, control and stability in respect of our statute book. We need to ensure that clause 11 provides for that.
Should our detailed discussions conclude that UK-wide or parallel legislation is necessary, both Houses of Parliament will of course have an important role to play in scrutinising the detailed proposals. Where policy areas are released from the temporary arrangements provided for in clause 11, the Order in Council process provides a mechanism to do precisely that to ensure that these decisions are subject to careful scrutiny by both Houses of Parliament and the relevant devolved legislatures.
Secondly, the new clause would permit the establishment of frameworks only where the criteria set out in it are met. That is also unnecessary. Although I agree with the criteria, which, as the hon. Member for Darlington (Jenny Chapman) pointed out, have been lifted by and large from the broader principles that underpin the creation of frameworks, they form only one part of the picture. The broader principles were agreed by the UK, Scottish and Welsh Governments at the meeting of the JMC (EN) on 16 October and were published in the communiqué that I have put on the record. To ensure that the interests of Northern Ireland were heard, a senior official from the Northern Ireland civil service was in attendance.
Those broader principles recognise, among other things, the importance of a wider range of issues, including
“the economic and social linkages between Northern Ireland and Ireland”.
Not only do we have an established set of detailed principles; we have put those principles into practice through a process of ongoing engagement and analysis with the devolved Administrations on where common frameworks are or are not needed. It therefore follows that the more limited set of criteria in the new clause is unnecessary.
Finally, the new clause would permit the creation of frameworks only if they were subject to consultation agreements with the affected devolved Administrations. Once again, that is unnecessary. As the agreed principles published in the communiqué make clear:
“It will be the aim of all parties to agree where there is a need for common frameworks and the content of them.”
The Government are committed to intensive discussions on the areas where common frameworks will and will not be required with the devolved Administrations, and those are happening right now. I therefore urge the hon. Member for Darlington to withdraw the new clause.
New clause 65 seeks to enshrine the Joint Ministerial Committee in legislation. The Joint Ministerial Committee is a forum for the UK Government and the devolved Administrations of Scotland, Wales and Northern Ireland to discuss matters of joint interest and is underpinned by a memorandum of understanding between the four Administrations. Specifically, it provides for a focus of intergovernmental relations and allows attending Ministers to present the positions of their own Administration in a multilateral setting. There is no need to enshrine the JMC provisions in legislation as set out in new clause 65. Indeed, doing so would place limitations on the ability of the members to adapt to what is a rapidly changing political landscape.
The current basis for the JMC has been agreed by all four Administrations and allows for wide-ranging discussions, including on topical issues such as EU exit. The JMC, as set out by the written agreements, must remain adaptable enough to address those four Governments’ interests. If this clause were to be added to the statute book, it could severely hamper the JMC’s ability to do so.
The scope of the committee and its supporting sub-committees is not solely to discuss the domestic impact of EU exit and negotiations with the EU. The JMC plenary, which is chaired by the Prime Minister, should also continue to discuss matters agreed by the Administrations as set out by the terms of reference under subsection (1) (a). As drafted, new clause 65 would significantly limit the scope of the Joint Ministerial Committee. The provisions under subsection (1) are already being demonstrated through the JMC on EU negotiations sub-committee. My right hon. Friend the First Secretary of State chaired the most recent JMC (EN) meeting on 16 October and will chair a further meeting on 12 December to build on those discussions that have taken place so far.
There are also other sub-committees that are equally important for the integrity of intergovernmental relations. The provisions under subsection (5) stipulate that either my right hon. Friend the Prime Minister or my right hon. Friend the Secretary of State for Exiting the European Union must chair all further meetings of the Joint Ministerial Committee until a withdrawal agreement is concluded. That would ignore the role of my right hon. Friend the First Secretary of State who chairs what I am sure will be recognised as an important sub-committee on EU negotiations as well as other sub-committees of the JMC that already exist, such as the sub-committee on Europe. Such provisions will remove the flexibility afforded to the Joint Ministerial Committee to adapt and evolve.
The existing written agreements coupled with the ongoing multilateral and bilateral engagement between Ministers and officials make this new clause redundant. The versatility of the committee is achieved through consensus of the participating Administrations and therefore we urge the Opposition not to press their amendment.
Angus Brendan MacNeil
The hon. Gentleman talked earlier about co-operation and listening. Our party represents the Government of Scotland. Then there is the party that represents the Government of Wales. In this spirit of co-operation, which amendments will he be taking from either of those parties?
Chris Skidmore
I am currently going through the list of amendments and setting out the Government’s position on them. When it comes to looking at the Bill, the Government will listen to those who seek to improve it constructively. We are in Committee at the moment, and we have amendments and legislative consent memorandums that have been tabled by the Welsh and the Scottish Governments. The Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Worcester (Mr Walker), and I have been to Scotland to give evidence. My hon. Friend has also given evidence to Welsh Select Committees. We are determined that it is not just SNP Members who have a veto over this process. There is a consensus that we need to seek across all devolved Administrations—
Chris Skidmore
I have given way to the hon. Gentleman several times; I will not do so again.
Chris Skidmore
No, I am afraid that the hon. Gentleman came in relatively late. I have given way to him several times. I am making my point in response to the amendment, which he does not even want to listen to. The point is that there is a reasonableness test: the UK Government are determined to be the reasonable partner, but we will listen to anyone who puts forward amendments to the Bill and who is determined to ensure that our statute book is protected on exit day, that the UK integral internal market is protected, and that we have that stability, certainty and control that we need for businesses and for the people of Scotland, Wales, England and Northern Ireland, as they will not thank us if we do not work together to ensure that that is achieved. The point of clause 11 is to ensure that we have that stability, certainty and control.
I now turn to amendment 337, which is to be read with amendment 42 and new clause 64. It provides that existing EU law limits on devolved competence will remain in place until the end of the transitional period. At that point, amendment 42 would give the devolved Administrations and legislatures the power to legislate in relation to those matters currently subject to EU law but that are otherwise devolved.
I will discuss amendments 90 to 92, 132 to 134 and 164, which essentially provide the same effect as that of 42, which means that the devolved institutions will be able to diverge from those retained EU law frameworks after exit day. I will also deal with consequential amendments 177 to 179, 181, 185 and 191 to 193, which flow from those substantive amendments. I understand the intention behind these amendments, but we cannot agree with the effects. I have already set out the measures in clause 11 that establish the temporary arrangement that maintains the currents parameters of devolved competence, taking no decision-making power away from the devolved Administrations or legislatures. This means that where we have common approaches across the UK by virtue of EU law, they will continue to apply as they currently do after exit day.
It is vital that we provide certainty to businesses and to people who live and work across the UK, and that laws in place remain consistent while we work with the devolved Administrations to consider where we may need common approaches and where we do not. The amendments risk undermining not only that certainty, but out precious Union. Let me be clear: this Government are committed to ensuring that power sits closer to the people than ever before. Our commitment to strengthening the devolution settlements is clear from the statute book with, most recently, the Wales Act 2017 and the Scotland Act 2016, which has made the Scottish Parliament one of the most powerful devolved Parliaments in the world.
In line with our commitment to devolution, we have been clear that we expect the process of leaving the EU to result in a significant increase in the decision-making powers of the devolved Administrations. But we are also clear about how this must happen. We need careful analysis with the devolved Administrations to determine the areas where common UK-wide or GB-wide approaches need to be retained, and the areas where they do not.
Ian Murray
The Minister is addressing the amendments in my name and those of my hon. Friends. The hon. Member for East Renfrewshire (Paul Masterton) said that he agreed with the principles of my amendments 164 and 165, and that, although he would not vote for them, he expected that the Government would come back with something different to deal with the deficiencies in clause 11. I have not quite heard the Minister admit that the clause has deficiencies. What will he bring back to the Committee that it can vote on that will satisfy his own Scottish Conservative Members with regard to the principles of amendments 164 and 165?
Chris Skidmore
I have already stated that the Government are prepared to listen to all those who seek to improve the Bill. We will use this opportunity to reflect on all the speeches made by hon. Members in Committee; that is what Committee is for. I have stated a commitment to ensuring that the content of today’s debate is shared with all members of the JMC (EN) on 12 December. There is a process to look at the establishment of common frameworks, and the careful analysis needs to take place with the consent of or working with the devolved Administrations and their officials. I am pleased that we have made good progress on this with the agreement at JMC (EN) with the Scottish and Welsh Governments on the principles that will guide our future framework discussions.
Stephen Doughty
The Minister is being generous in giving way. My name is on a number of these amendments. Will he be absolutely clear on one point? The Welsh Government and the Scottish Government have tabled amendments in good faith that are aimed at being constructive and making the Bill more sensible, with the support of many Members across the Committee. Indeed, Members of the Minister’s own party have pointed out problems with the Bill. Am I correct that, despite those points, he is not going to accept any of the amendments?
Chris Skidmore
We have always made it clear that we stand ready to listen to those who offer improvements to the Bill. Engagement at all levels of government—[Interruption.] The hon. Gentleman does not want to listen to what I have to say. He wants me to accept an amendment; I have given way several times, yet he is not prepared to listen to what the Minister has to say. Engagement at all levels of government is a usual part of the process, and this engagement must be at all levels of discussion, not just that which takes place in this Chamber. We want to work with the devolved Administrations, and we have been clear that we would like all parts of the UK to come together in support of this legislation, which is crucial for delivering the outcome of the referendum.
We continue to believe that the provisions in clause 11 are vital to providing the necessary immediate certainty to people and businesses while we discuss where common frameworks are and are not needed. We recognise that the Scottish and Welsh Governments have taken different positions from our approach, and we welcome the contribution to the debate. We remain open to suggestions and thoughts about how to ensure that the Bill works to deliver a functioning statute book for all parts of the UK. However, we cannot accept changes that would undermine the UK’s internal market or increase difficulties for people and businesses.
We are also clear how this process must happen. As I have said, we need the analyses to take place. We are clear that we will make progress with the JMC (EN), and that we will ensure that our final analysis indicates that legislative frameworks will be unnecessary for a majority of those policy areas. Following the agreement of the principles of the JMC (EN), we have already commenced work with the devolved Administrations, building on the work that is taking place at both ministerial and official level to make quick progress on the potential role for frameworks in some specific policies areas including agriculture, justice, home affairs and public health, where deep dives have taken place with officials from all Administrations. This work is allowing us to explore the different form the frameworks could take.
I should say that a legislative framework is by no means the only method. Indeed, as I said, legislative frameworks are likely to be used in a limited number of areas. There is far more use for non-legislative frameworks, including memorandums of understanding, concordats and informal collaborative working arrangements, as already happens.
In removing clause 11, these amendments fail to recognise the importance and value of our internal market and of having consistent rules for individuals and companies. They pre-empt the vital work we are undertaking with the devolved Administrations, and prejudge the outcome of our negotiations with the EU. Until we know the outcome of those negotiations, we cannot have certainty over how these powers, in places, will relate to our future relationship with the EU or, therefore, at what level they should be exercised in the future.
I note that Members have referred to evidence given to various Committees. I have heard their points, but it is important to come back to the motivation and need for the Bill: to provide certainty and control.
Sir Stephen Laws, formerly first parliamentary counsel, has pointed out that the devolution settlements were agreed in the context of our EU membership. That is why we are focusing through our discussions on common frameworks with the devolved Administrations on what our constitutional arrangements should be outside the context of our EU membership. That is what the provisions in the Bill give us the space to do, by maintaining the parameters of devolved competence.
I stress again that the mechanism here is not an end; it is an important first step in the process of returning these powers from the EU to the UK, enabling us to do the necessary work to determine where further powers can be released to the devolved Administrations.
I must reiterate that I understand the intention behind the amendments—that powers sit at the right level once we have left the EU. I am clear that the process we are going through does not change our unshakeable commitment to ensure that devolution in the UK is even further strengthened so that we may have more devolution and more union across the UK.
I turn now to amendment 165, which I will take with consequential amendments 180, 182 to 191, 194 and 195, tabled by the hon. Member for Edinburgh South (Ian Murray). Amendment 165 would allow the Scottish and Welsh Governments to make secondary legislation to change retained EU law in the areas that are currently subject to EU law. Taken together with other provisions of the Bill, part 1 of schedule 3 is intended to maintain the common frameworks across the UK that have been created by EU law. In particular, that will ensure that no new barriers to people living and doing business across the UK are created after we leave the EU.
As I have made clear, the Bill guarantees that the current decision-making powers of the devolved Administrations are respected. Anything the devolved Administrations could do before exit day they will be able to do after exit day. Our priority must now be to prepare our statute book for exit, and we want to work closely with the devolved Administrations to do that.
It is through the work on the common frameworks and the discussions with the devolved Administrations that we can make progress on specific areas and seize the opportunities to improve policy in the UK. As I mentioned earlier, the next JMC (EN) is scheduled to take place on 12 December, and it will continue that accelerated process of assessing where frameworks are needed and where they are not. We will prioritise those areas of greatest interest and significance.
We very much hope to see further steps forward, but it is right that we do these things in discussion and collaboratively with all Governments across the UK. Once it has been agreed through ongoing engagement, which this Government are committed to, where common frameworks are not required, we can use the Order in Council power to release decision-making powers to devolved Administrations. For that reason, the amendment is unnecessary, and we would urge the hon. Gentleman not to press it.
Let me turn now to amendment 72, tabled by the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), which would enshrine a requirement for the Government to seek a legislative consent motion from the devolved legislatures. As the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Worcester, said on day one of Committee stage, we want to make a positive case in favour of legislative consent for this vital piece of legislation and to work closely with the devolved Administrations and legislatures to achieve that. As I have mentioned, there has been an extensive programme of engagement with the Scottish and Welsh Governments and legislatures. In the absence of the Executive in Northern Ireland, official level engagement also continues with the Northern Ireland civil service.
We do not recognise the need for this amendment. The Government have already explicitly recognised the role of the Sewel convention in the Wales Act 2017 and the Scotland Act 2016. I ask hon. Members to look at our track record: we are committed to the devolution settlements and the conventions that we have established.
We continue to believe in the importance of the Bill, which is in the national interest, and we will work to deliver it with the devolved Administrations. The question of ensuring certainty both for our statute book and our internal market when we leave the EU is of great significance to all parts of the UK. We would like all parts of the UK to come together in support of this legislation, which is vital to the securing of a smooth and orderly exit. I urge the hon. Member for Darlington (Jenny Chapman) to withdraw the motion.
Several hon. Members rose—
The Second Deputy Chairman of Ways and Means (Dame Rosie Winterton)
Order. As colleagues will see, a number of hon. Members still want to speak. If interventions are kept to a minimum and speeches are kept under about eight minutes, everybody will get in.
Mike Gapes
Having listened to this debate for seven hours and been in the Chamber for most of it, I can say that occasionally it was like watching paint dry. I want to comment on something that the Minister just said: that the Government cannot accept changes that would undermine the UK internal market or businesses. That seems a little ironic on the day the Prime Minister has shown how strong and stable she is and when we are in such a crisis over Northern Ireland and the issues relating to the Good Friday agreement.
Sadly, Democratic Unionist party Members seem to have gone AWOL; I assume that they are out discussing how to spend £1 billion. They, of course, were not part of the negotiations that led to the Good Friday agreement and were not happy when we brought in the institutional frameworks established as a result of the 1998 legislation. I had the pleasure of being in Mo Mowlam’s team during those negotiations. I was a very minor person in the process—as the Parliamentary Private Secretary to the Political Development Minister, my good friend Paul Murphy—but it was a great achievement of our Labour Government.
As Tony Blair has so eloquently put it and John Major has also said, today the Good Friday agreement is in danger. Those of us who have looked at these issues understand that the agreement has three strands. One is the internal political situation in Northern Ireland, which is clearly not going well. The Assembly and Executive are not functioning and the civic forum that was supposed to be established under the Good Friday agreement does not exist.
Then there is strand 2, which is the Irish dimension, the North South Ministerial Council and the implementation bodies; it is supposed to cover agriculture, education, transport, the environment, health and EU programmes. Strand 2 is going to be undermined by the decision to leave the single market and the customs union.
Then there is strand 3, which is the east-west British-Irish Council and the British-Irish Intergovernmental Conference. We now understand that the Irish Government are right to express concerns about the position we face. I was in Dublin three weeks ago with the Foreign Affairs Committee. We also went to County Cavan. We drove along the road that goes from one side of the border to the other, and back across, through County Monaghan. The only way anyone knows they are in Northern Ireland is that there is a building with a “Fireworks for sale” sign. Fireworks cannot be sold in the Irish Republic, but they can be bought in Northern Ireland—that is a bit ironic, but we will not go there.
The reality is that we have fields on both sides of the border, cows that move backwards and forwards, farmhouses that are divided and institutional structures such as the veterinary organisations. We have the milk that is taken from cows in the south and cows in the north, put together in the same factory, mixed together with whiskey, and comes out as Baileys, which is then marketed as an Irish whiskey derivative, and there is an all-Ireland trade arrangement on that basis. Similarly, with tourism, Northern Ireland and the Republic are promoted together globally.
We are putting all this in jeopardy—putting it all at risk. We have to understand how difficult it was to get the Good Friday agreement and how not necessarily just the reality of the economics but the symbolism of the politics will come back, and people will have to think about their differences rather than what unites them. At the moment, there are many Irish citizens living in Northern Ireland because one can have either a British passport or an Irish passport—it does not matter. Will the European Court of Justice apply to those people living in Northern Ireland? Will they have protection even though they are living in the UK? These are interesting and complicated issues.
The Mayor of London, the Welsh Government and the Scottish Government have all said that we need to stay in the single market and the customs union, but above all we need to listen to the voices of the people of Northern Ireland, who want us to stay in the single market and the customs union. Although they claim the contrary, Democratic Unionist party Members do not speak for Northern Ireland—they speak only for one part of Northern Ireland. Northern Ireland voted to remain. Northern Ireland wants to be in the single market. Northern Ireland, collectively, wants to keep the institutions of the Good Friday agreement.
It is fundamentally important that we recognise in this Bill that there are special circumstances relating to Northern Ireland. When I intervened on the Minister—eventually he gave way to me—he did not respond to my point, which was that there is no specific understanding of the differences in Northern Ireland. The all-Irish Good Friday agreement—Belfast agreement—institutional framework is crucial and fundamental, and we have to preserve it and keep it. We will break up the United Kingdom and we will cause dangers and conflict again on the island of Ireland. We will damage relations with our closest neighbour and best friend. We have such a good British-Irish relationship, as we saw when Her Majesty the Queen went to Croke Park, and as Mary McAleese told us when she was the Irish President at the time. That is at risk, and we must not let it happen. Please, please support the continuation of the Good Friday agreement.
Alison Thewliss
I pay tribute to the hon. Member for Ilford South (Mike Gapes), because that was an absolutely perfect speech. It had to be made and I am glad that he did it.
We have talked in general terms today about lots of the things to do with the new clause and what it might mean, about clause 11, and about the 111 things that require some attention. I want to look at how issues of waste are dealt with within the EU. The EU waste framework directive flows into the Waste (Scotland) Regulations 2012. The European landfill directive, the European packaging and packaging waste directive, and various other EU directives are currently implemented by the Scottish Government. The EU sets the rules within those frameworks and directives, and the Scottish Government have flexibility, as do the other devolved nations, on how they implement them.
Without any certainty over what happens on the day of Brexit, we can have no deal, no certainty and no regulation of those matters. In Scotland, we have developed a circular economy strategy and made a lot of progress towards the implementation of the EU’s circular economy action plan. We have made more progress than the rest of the UK has, and we have made different progress. The directives have given us the flexibility to take a different road. Were the matter to come back to the UK Government, we could not be guaranteed the flexibility we need to make progress with the plans that we have already embarked on.
The Local Government Information Unit recently produced an excellent briefing on waste disposal and Brexit. The briefing raises specific concerns about the future UK directive, which could well be less ambitious than our plans. We have heard a lot from various Tories in the past about cutting red tape and regulations, but doing so could have a serious impact on the interesting and important issue of waste collection. Scotland’s zero waste plan is award winning and ambitious, as we are on climate change. We should have full control over it, and we should not have to drag behind the UK if it does not wish to step forward as quickly as we do.
Mr Kevan Jones (North Durham) (Lab)
The hon. Lady says that the plan is ambitious, but, in practice, waste from Scotland is simply being transferred into England, and there is very little enforcement of the so-called zero waste plan.
Alison Thewliss
I would take issue with that, and our plan is ambitious. An awful lot of our plan depends on the existence of a European market for waste. Lots of waste goes backwards and forwards to Europe for processing.
There has been no clear detail from the Government about what they mean by an interim period or a temporary period before further powers are released to the Scottish Government. We already know that the market for waste exists, and taking that market away will create uncertainty. Businesses face huge uncertainty, because there is a big private market in waste; I have a large processing facility in my constituency, for example. The Confederation of Paper Industries has said that its members need to be sure which regulations they will have to operate under. If paper is going into European markets, it needs to meet the standards required by those markets, so we need the regulations in place to allow that to happen.
Hon. Members might not know that paper is a £6.5 billion industry. The UK is the world’s largest net importer of paper, and the industry is doing quite well out of the Bill, which is producing huge amounts of paper. The regulations determine our participation in the paper market, and certainty is important. We need clarity, so that we can make progress on recycling and other things that we have started on. If our ability to work under directives is taken back to the UK Government, who do not share exactly our environmental ambitions or links to European markets, where does that leave Scotland?
There is uncertainty as well for local government. If we do not have the rules or the framework, can we just throw our waste in the street and the council is no longer obliged to collect it? Those things are underpinned by EU waste directives about the processing and treatment of waste, and without them there is no framework at all.
I want to speak briefly about where the power lies in another area. The hon. Member for Aberdeen South (Ross Thomson) and a couple of hon. Members who are no longer in their places mentioned food and food labelling, a lot of which is dealt with by the European Food Safety Authority. Of particular interest to me is the labelling and marketing of infant formula. I am fairly sure that the Scottish Government may wish to act to regulate infant formula further, but the UK, as has been evidenced in questions that I have raised on the issue, may not wish to do so.
The UK has long used EU law as a means to get around the full implementation of the international code of marketing of breast-milk substitutes. If we are no longer in the EU and we can set up the frameworks ourselves and make progress on the issue, why should the Scottish Government have to lag behind? Why should we have to wait while those powers are held at Westminster for an indeterminate length of time—it has been described as temporary and interim, but how long it is we do not know—when we want to make progress on policies?
The hon. Member for Newport West (Paul Flynn) made a very good point about organ donation and presumed consent in that, when the Welsh Government had such powers, they made progress and had a good policy, which has led the way in the UK. In Scotland, we have had the smoking ban and other progressive health policies. If action on such policies is wrapped up in frameworks or EU directives, how can we be certain—in the context of clause 11 and of this Government not accepting any amendments that would give the devolved Administrations competence in these areas—that the devolved Administrations will be able to take the action we actually want to take, and how long will we have to wait for Westminster to give us back our powers?
Tommy Sheppard
I was going to reassure the hon. Member for Stirling (Stephen Kerr), who is no longer in the Chamber, that, given the lateness of the hour, I can do nothing other than be reasonable and mild mannered in my presentation. He seemed fearful that SNP Members would go berserk and worried that we were putting our case with too much passion. Let me try to put this as reasonably as I can.
I want to agree with Members who have talked about the positive cross-party nature of what is happening. There are three parties on the Opposition side of the House that differ quite significantly on our preferred constitutional outcome or endgame for Scotland, but we are united in trying to defend the gains of devolution that have been made during the past 20 years. Indeed, I think that some of the Scottish Tories might feel that way too, given the discussions we have had in the Scottish Affairs Committee. They seem too timorous to exercise that conviction by going through the Lobby with us tonight, but perhaps they will be persuaded in the fullness of time.
By way of context, we need to remember two things. One is how the interplay between the referendums of 2014 and 2016 in Scotland affects this debate. I was on the losing side in 2014—I lost the Scottish independence campaign—and I accept that result. However, it is important in understanding why Scotland voted to remain in the United Kingdom to look at some of the assurances that were given by the people who won that campaign, because that affects this debate. I am going to talk not about the obvious one, which is what was said about EU membership itself, but about two other things.
First, all parties that campaigned for a no vote in the 2014 referendum went out of their way to stress that there was no threat to the devolution settlement, and that they would defend and extend it. The other assurance given was that should Scotland vote to remain in a political Union with England, Wales and Northern Ireland, this was not a matter of one country being subsumed into a much larger neighbour, but the creation of a partnership of equals—a multinational yet unitary state—with the views of Scotland therefore respected in any future debates. I am now calling to collect from this Government on both their respect for and commitment to devolution because, as far as I can see, the way in which clause 11 is currently written means that it recognises neither of those points. It is regrettable that at this relatively advanced stage of our discussions on the Bill, we still do not have any agreement whatsoever about some basic things.
The other factor we need to remember by way of context is of course the debate about devolution itself. I was heavily involved in the campaign that led to the creation of the Scottish Parliament, arguing for yes, yes in 1997. I was not in the House when Members debated the Bill that became the Scotland Act 1998, but I observed the proceedings and we can read the transcripts. We know that Parliament, led by the late Donald Dewar, clearly took a maximalist position. It basically said that everything should be devolved unless there was a case for its not being so, which is why the 1998 Act lists not the powers that are devolved, but the powers that are reserved.
If we had not been in the European Union when Parliament was debating the Act, how many of the 111 areas of responsibility would have been reserved and how many would have been devolved to the Scottish Government? The truth is that practically all of them would have been devolved without question, because there would have been no compelling case for reserving them. I think that people misunderstand the nature of the debate when they talk about the transfer of competences from the EU to the UK following Brexit.
Let us be quite clear that the reason why the European Union currently has some legislative competence in devolved areas is to ensure compliance with the treaty on European Union. That is what this is about. If Brexit goes ahead and we come out of the European Union, that, de facto, will not be required, so whatever the UK Government say about taking on these areas of competence, it will not be about complying with the terms of the treaty on European Union. The only thing it can be about, given that we already have a single economy in the United Kingdom, is convergence on policy. The transfer raises the possibility that we will move from compliance with international agreements to compliance with domestic policy. That is what I mean by a power grab, because it represents a severe potential constraint on the ability of the Scottish Parliament to legislate and act in its devolved areas.
Ministers will say, “That’s not the intention. This is a drop-off point for the powers so that we can then decide the best way for them to go to their final resting place.” I have to say to them that we are politicians, not psychics. We have to deal with what is written in the Bill that they have brought before us, not their intentions for what might happen as they go towards their endgame. What is written in the Bill is most clearly not what is being argued for by Ministers. If that were the case, we would have a schedule by now outlining which of the 111 powers can go straight to the devolved authorities on exit day, which of them definitely need to be reserved in the context of the 1998 Act, and which of them need further exploration through some sort of process, but we have heard nothing about a single one of them.
I say to Ministers that, even from a public relations point of view, would it not have been sensible to at least chuck a few of these powers the way of the devolved Administrations? No. 9 on the list is about blood safety. What is it about the Scottish health service and blood transfusion service that they do not trust? Why on earth would blood safety need to be reserved to the UK? Energy efficiency is another power on the list. Is it the end of the world if Scotland pioneers aspects of efficient energy use and perhaps leads the way in the UK? How is that a threat to the Union? Why do Ministers need to keep those powers? There are other examples that illustrate the ridiculousness of arguing that there should be even a temporary drop-off of these powers at Westminster. Such powers should clearly go to the devolved Administrations.
I am left wondering why this is being done. The obvious first answer is the phenomenal degree of administrative competence involved. I think that there is malintent on the part of some Conservative Members, but probably not on the part of its Front Benchers. However, I think Ministers have got themselves into a situation in which, because they have been incapable of producing a plan, they simply have no option but to say, “Trust us for now; we’ll do the best thing in the end.” It is very difficult for this Parliament to accept those assurances.
I think there is another red herring with the idea that a further reason why these powers need to be retained and examined further is that there might otherwise be interference with the United Kingdom’s ability to strut the post-Brexit globe in its ambition for “Empire 2.0”. There is a fearfulness that people in Scotland or Wales might act like the Wallonians and try to frustrate the creation of an international trade agreement. How ridiculous is that? Would it really matter if the Scottish Government introduced a policy that said, “We don’t wish to have genetically modified food in our food chain”? How is that a threat to an international trade agreement? All that would need to be done would be simply to specify that that was what people would need to deal with in Scotland, and that anybody wishing to sign the agreement would, quite reasonably, be able to do so.
The only way that that could become a threat to post-Brexit deals would be if there was a suggestion that the Scottish Government and the Welsh Assembly should take to themselves a power to veto a future UK international trade agreement, but no such power is being discussed. It is ridiculous that we should not by now be discussing which powers are going where, rather than arguing that nothing can be done apart from a power grab by the Westminster Government.
Finally, the common frameworks that we need for these 111 areas are going to be entirely different, depending on the individual area. In some cases, it might just be a simple matter of agencies north and south of the border talking to each other and sharing best practice. There are probably very few areas that actually require a full-blown statutory regulatory framework across the United Kingdom.
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
indicated assent.
Tommy Sheppard
The Ministers are nodding their heads. If that is the case, why have they not identified them? Why not bring forward proposals for dealing with the joint arrangements? I do not attribute malintent to those on the Government Front Bench, but there are people within the Conservative party—I see that the Scottish Tories have gone home—[Interruption.] I am sorry; they have left the hon. Member for Gordon (Colin Clark) as the lone representative. [Interruption.] Two of yer! I withdraw the remark; only 80% of them have gone home.
Conservative Members talk about the process we are engaged in. We are engaged in a process of considering amendments to a Bill. I say to the Scottish Conservatives that they should think again about going through the Lobby with the Government tonight, because if they do so, they will give the Government succour, rather than putting pressure on them to come forward and make agreements and changes. If that happens, it will provide sustenance to those Conservative Members who never believed in devolution in the first place, and who will use Brexit as an opportunity to roll it back and take power to the centre.
Deidre Brock
I appreciate the opportunity to speak. I rise in support of amendments 72, 184 and 185. I am disappointed the Minister will not accept a single amendment or new clause tonight.
It is clear from the amendments that have been tabled, and from many speeches we have heard today, that there is general opposition among Members to the power grab in the Bill, even from people who aspire to be Whitehall Ministers and would wield that power if they did. I also think that the previous Prime Minister—the one who dragged us into this mess with his cunning plan of a referendum—would oppose it. His respect agenda did not run very far, but it did at least run. I urge the current crop of Ministers to aspire at least to clear that very low bar.
The Scottish Secretary has assured us on several occasions that powers repatriated from Brussels will be held at Westminster only temporarily. We could call that the “fluffy protocol”, or the political equivalent of “It’s only resting in my account, guv.” As yet, however, we have seen nothing to suggest there is anything coming down the road to confirm that that is guaranteed to happen. If that were the intention, surely the sensible, logical and easy thing to do would be to have a sunset clause in the Bill that would see the powers transferred to devolved Administrations timeously. Numerous experts, including witnesses to the Scottish Affairs Committee, on which I sit, have advocated that but, like several other things that should have been achieved, that has not happened.
The in-depth analyses of the effects of Brexit that were promised have not been delivered to the devolved Administrations. Some extremely superficial desk research was proffered as if it were the Rosetta stone, but the paucity of what has been delivered leads me to the inescapable conclusion that the Government have no idea what is or might be down the road, or what turns the road might be taking before we get there. The only certainty Ministers seem to have is that the map says “Here be no monsters”. Well, there are monsters, and they are in the Bill. The monsters are those that will damage devolution settlements with the tearing away of responsibility, power and resources from the devolved Administrations to be sucked into the abyss that is a Whitehall trying to deal with Brexit.
Judging by the confusion, bewilderment and disorientation that we have seen so far, just today, in fact, the aftershocks of Brexit are likely to keep hitting the UK—its economy, its international standing and its ability to attract immigrants—for decades. There are no indications that anyone in Whitehall will have the time, patience or inclination to run the rule over coming legislation to make sure that Scotland, Wales and Northern Ireland are properly considered. The devolved Administrations deserve the right to try to mitigate the deleterious effects of Brexit as much as is possible. I believe that the attitudes in each of those Administrations, including Stormont when it gets back on its feet, will differ from those here in great measure on a number of issues. My hon. Friends have already made significant reference to that issue. I appreciate that large swathes of England are about to get sideswiped by the effects of Brexit as well. They undoubtedly have cause for complaint, but I am here to speak for Scotland.
Tonia Antoniazzi (Gower) (Lab)
It is a pleasure to follow the hon. Member for Edinburgh North and Leith (Deidre Brock).
I rise to speak in support of new clause 64 and the Labour amendments that seek to address the sidelining of the devolved Administrations. Since devolution, over 17 years ago, there has been considerable divergence in many policy areas between the different parts of the UK. Environment and rural affairs policy has been significantly devolved, and this is one area where Brexit will have a huge impact. The day before the UK Government triggered article 50, the Welsh Government provided rural communities with a £250 million boost via the final tranche of the rural development fund to help them become more resilient after Brexit. We need this support to continue.
This evening, we have listened to the detail and intricacies of clause 11, the impact of which will have a detrimental effect on Wales, if powers come back to Westminster from Wales. I will take my speech in a different direction, however, so that I can highlight the needs of the farming community in Gower in the light of the new clauses and amendments. As we all know, there might not have been much truth in some of the claims made by the leave campaign, but many farmers had no reason to disbelieve politicians when they were told that
“Wales would not be one penny worse off after Brexit”
and that Welsh farming would have
“at least as much support”
as it currently has after Brexit, but we are yet to see any funding guarantee from the Government that will ensure that Welsh farmers get, at a minimum, the same level of funding support they currently receive through the common agricultural policy after 2020-21.
The Tory UK Government have refused to provide assurances about matching the current level of funding, but they have also failed clearly to explain what will happen about any future trade rules for farmers. The right hon. Member for Clwyd West (Mr Jones) stated that NFU Cymru supported the retention of a common framework for agriculture, but decisions made in Westminster would most definitely not reflect the needs of the devolved nations, particularly of sheep farmers in Wales. There has been no mention, either, of how any support there is for farmers will be distributed between the devolved Administrations.
The Farmers’ Union of Wales supports the UK’s remaining in the single market and the customs union. The president of the FUW, Glyn Roberts, stated it was “the only sensible outcome” as much of the uncertainty about the future would just disappear. NFU Cymru has also stressed that access to the EU single market must be tariff free. We wait on tenterhooks for news from Brussels about whether a special deal can be struck for Northern Ireland, but as the First Minister, Carwyn Jones, said earlier, we cannot allow different parts of the UK to be treated more favourably than others. If Northern Ireland is to stay in the customs union and the single market, why cannot Welsh farmers profit from the benefits of remaining in them as well? They currently have a fantastic global reputation for quality produce, higher environmental standards and animal welfare protections. Wales needs to retain that strong brand, underpinned by high standards, but we have still not had any guarantees on how we can protect it.
It is more important than ever for Members of Parliament to engage with the farming community and the farming unions, which is something that I am proud to do. In my constituency, farming focuses on dairy, lamb and beef. I have met many farmers, and have discussed the post-Brexit situation with dairy farmer Andrew Stevens of Llannant Farm and with Dan Pritchard of Gower Salt Marsh Lamb. Dan has been involved in agricultural talks in Brussels, and says that the main concern for sheep farmers is uncertainty: because no one knows what is happening, it is impossible to plan for the future. Given that profits are already being squeezed for farmers, certainty about a future trade deal with the EU needs to be prioritised, or many more farmers will lose their businesses and stop farming. If Welsh farmers put their trust in the Tories, they will find themselves out of business.
The lamb, beef and dairy industry in Wales is subject to high standards of regulation, and we are proud of that. It ensures that produce from Wales and the United Kingdom is of the highest quality. Welfare should be a high priority, but the big issue for Welsh farmers is that Tory austerity means that people cannot afford to make better choices. Farmers will be unable to compete without either some sort of protection or some assistance to export so that we can continue to sell our goods in the EU and to other countries. Given the threat of tariffs and the risk of losing subsidies, the farming industry in Wales is feeling vulnerable. There must be public procurement in which the produce from our Welsh farms has priority. Our schools, hospitals and armed forces should be using British produce, including produce from Wales.
During my discussion with Dan from Gower Salt Marsh Lamb, he identified one positive aspect of our leaving the EU: the possibility that other markets could be tapped into. However, while farmers hope that that may happen, the prospect of a tariff on their current trade with France, the EU’s largest importer of lamb, makes future business inconceivable. The fact that such huge changes are on the horizon means that leaving the EU is an uphill battle for Welsh farmers. The message from farming unions in Wales is clear, and the message from the Welsh Government is clear: the UK Government must maintain current levels of investment in farming in Wales after Brexit, to ensure that Welsh farmers remain competitive and can produce food of the highest standards.
I support new clause 64 because it would establish collaborative procedures for the creation of UK-wide frameworks only if Ministers
“have consulted with, and secured the agreement of, the affected devolved administrations”,
such as Wales.
Drew Hendry
We have heard a great deal about clause 11 tonight. My right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) described it correctly earlier, and even Conservative Members representing Scottish constituencies admitted that it was faulty in its current form. Indeed, it is nothing more than a power grab which is fatally undermining the devolution settlement in all the nations of the United Kingdom.
Alan Brown (Kilmarnock and London) (SNP)
I thank my hon. Friend for giving way so early in his speech. I do not know whether he has seen the coverage of last week’s rural broadband debate, during which Scottish Tory Members shouted across the Chamber, “Strip the Scottish Government of their powers.” That is their attitude. There is no doubt that there is a power grab at stake.
Drew Hendry
My hon. Friend has made a good point. It is important for us to be aware that there are forces that would like power to be taken away from Scotland.
Clause 11 was drafted by people with no understanding of devolution law. It is a midden in its current form. There are questions about the mechanisms that will result from it. Surely, if the Prime Minister’s “union of equals” statement is correct, frameworks should be agreed, not imposed. If, as the Minister said earlier, this is a temporary situation, why should it not lie with the Scottish Government to take that power temporarily until the frameworks are agreed? Our amendment 72 ensures that the devolved legislature would give consent to those appropriate areas in clause 11 before it comes into effect.
As we have heard, the fact that there are 111 powers demonstrates the scowth of the issues at stake. As things stand, however, UK Ministers could simply make changes to important policy areas without the formal consent of the Scottish Government or the Welsh Government, or the Scottish Parliament or the Welsh Assembly.
We are told to trust that a deal will be done—that we can expect this to happen—but I think people were expecting something to happen today, yet that deal did not happen. How can we have confidence that things will be done and a deal will be delivered when Arlene Foster can just pick up the phone and say, “No, we don’t like that”?
There are 111 areas covering a massive range of Scottish life: fishing, farming, law, data sharing, aircraft noise, pesticides, fracking, flooding, water quality, food, forestry, organs, blood safety—as my hon. Friend the Member for Edinburgh East (Tommy Sheppard) pointed out earlier—land use, railways, renewables and victims’ rights.
It is clear that those at the top of the profession in legal circles believe clause 11 is drafted without an understanding of devolution law. As Professor Alan Page put it:
“Not only does the Bill propose a massive increase in the power of UK Ministers to legislate in the devolved areas, it also proposes that their exercise should not be subject to any form of Scottish parliamentary oversight or control. What is proposed therefore is a law-making system fundamentally at odds with two of the key principles on which the devolution settlement is based.”
He was not the only one. Professor Rick Rawlings noted:
“The sooner clause 11 of the Withdrawal Bill is cast aside, the better. Constitutionally maladroit, it warps the dialogue about the role and place of the domestic market concept post-Brexit.”
On clause 11, even the Law Society of England and Wales has called for discussions about where the common frameworks will remain and their scrutiny. Professor Alan Page said that
“the real purpose of Clause 11 is not to secure legal continuity but to strip the devolved institutions of any bargaining power that they might have when it comes to the discussion of common frameworks and all the rest.”
We welcome the fact that there will be discussion over devolved areas of responsibility; consultation, however, does not satisfy the needs of devolution, and the UK Government should seek consent from the Scottish Government before exercising delegated powers in devolved areas, and the same goes for Wales and Northern Ireland. People’s jobs, businesses and farms, their environment at sea, in the air, above ground and below ground, virtual lives and literal lives, justice we depend on, and even the blood in our veins: tonight we must vote to uphold the rights of people across the nations and ensure that power is not taken from them.
Brendan O'Hara (Argyll and Bute) (SNP)
I begin by echoing the words of my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford), because clause 11 is an unashamed power grab; it is undermining the devolution settlement, and it drives a coach and horses through devolution across these islands. In the time that I have to speak, I will talk about the impact it will have on farming, particularly in my Argyll and Bute community.
It is generally accepted that Scottish farmers, particularly farmers and crofters working the land on the west coast, face vastly different challenges from farmers in the rest of the UK. Not only do Scottish hill farmers toil with some of the poorest land, but they face additional challenges from climate, geography and topography, and so much so that 85% of Scottish agricultural land is classed “a less favoured area” compared with just 17% of English agricultural land.
Given that Scottish farmers face specific challenges, surely it stands to reason that they need a bespoke solution that recognises the vast differences that exist across these islands. It is understandable that the Scottish Government and the Scottish farming community are demanding confirmation that all powers relating to agriculture post-Brexit will automatically be passed to the relevant legislature—in this case, the Scottish Parliament. I fear that this Government are taking us down a dangerous road. They are deliberately proposing fundamentally to alter the basic principles of devolution.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The hon. Gentleman has mentioned the word “road”, which prompts me to intervene on him. When the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) and I—and indeed the hon. Member for Argyll and Bute (Brendan O’Hara)—drive to the west, we see big signs telling us that the road was built with the assistance of the EU. One of the biggest questions in the minds of my constituents is: what will replace that funding stream? This relates to the ability of farmers and crofters to access their beasts.
Brendan O’Hara
The hon. Gentleman is absolutely right. This is why my constituency, his constituency and the constituency of my right hon. Friend the Member for Ross, Skye and Lochaber all voted to remain in the European Union. As things stand, all the powers connected to agriculture will go to London post-Brexit. It will be London that decides what happens.
Ian Blackford
My hon. Friend is making a first-class contribution to the debate. I declare an interest as a crofter. Is it not the case that the UK Government have form on this? When they were given convergence uplift money in 2013, there was a distinct intention that 86% of those funds should come to Scotland, yet they have given us only 16%. The Secretary of State for Environment, Food and Rural Affairs, who is sitting on the Front Bench, made sure that Scotland did not get what it should have done. We have been short-changed by Westminster. It is little surprise that we do not trust Westminster to look after us in this regard.
Brendan O’Hara
I thank my right hon. Friend for that intervention. I will touch on that issue in a moment.
Let us be clear that this is not just an SNP argument. The National Farmers Union of Scotland has made it absolutely clear that any move to impose what it describes as “DEFRA-centric policy” is completely unacceptable to Scotland. I agree wholeheartedly with the union when it states:
“The Scottish Government must retain the ability to manage, support and implement schemes, policies and regulations as it currently does”.
If the UK Government are serious about protecting Scottish agriculture, I suggest they listen to the president of the NFUS, Andrew McCornick, who has made it clear that the union’s priorities include securing friction-free trade, access to skilled labour and a support package specifically designed for Scotland. He was absolutely spot-on when he said that maintaining access to the single market and the customs union was essential for Scotland’s farmers. On today of all days, if a deal can be found for one part of the United Kingdom to remain in the single market, there can be no other reason than political pig-headedness that such a deal cannot be found for Scotland.
Stephen Gethins (North East Fife) (SNP)
Does my hon. Friend agree that, if immigration powers were to be devolved to the Scottish Parliament, that would allow us to make provisions for agricultural workers? That was proposed by the Environment Secretary, who is on the Government Front Bench at the moment.
Brendan O’Hara
I could not have put that better myself. My hon. Friend is absolutely correct.
We have heard much today from the hon. Members for Banff and Buchan (David Duguid) and for Stirling (Stephen Kerr) about trust. They said that we should trust the UK Government to do the right by the Scottish farming community, but why would the Scottish farming community trust this Government to do the right thing? This is a Government who shamelessly robbed the Scottish farming community of the convergence uplift, and I doubt that that community will ever trust them again. The Government have to recognise the hugely important part that the Scottish farming community plays, economically and socially, in our lives. It is a vital component of our rural economy. It keeps the land productive and, in many cases, it is members of that community who keep the lights on in the glens of Argyll and the west highlands. I fear that London and Whitehall do not understand that community.
In conclusion, Brexit is a huge challenge for the Scottish farming community. Without a deal on agriculture that does not return legislative competence from Brussels to the Scottish Parliament, Brexit poses an existential threat to Scotland’s farming communities and will be a disaster. Tonight is the first real test of whether the Scottish Conservatives, who are wrong on a whole host of issues, actually put Scotland’s interests first; or are they, as many suspect, simply the Conservative party on manoeuvres in Scotland? They know that, if they choose to vote with the Government tonight and let the Bill go unamended, the result will be catastrophic for Scottish farming. What comes first: their loyalty to the captain of a sinking ship or to the rural communities of Scotland? Be in absolutely no doubt that no serious person believes that lumping Scotland in with the rest of the UK on agriculture is a good thing. This is a litmus test for the Scottish Tories, and I look forward to joining them in the Lobby.
John Mc Nally (Falkirk) (SNP)
I rise to support the amendments in the name of my right hon. and hon. Friends and to oppose clause 11. I have sat here since 3 o’clock, and I have been to the toilet once, nearly equalling Mr Speaker’s record, so he is obviously having an influence on my ability to hold in my water.
As a member of the Environmental Audit Committee, I want to discuss my concerns about clause 11 and Scotland’s environmental laws. Since Scotland gained a devolved Parliament, the political conversation on the divergence of policies has in many cases become diametrically opposite to the policies here in Westminster. I have always believed that, if someone wants to change the world, they have to get busy in their own little corner. The Scottish Government and the Scottish Parliament have done and are doing just that, and they are backed by the people of Scotland in trying to come up with more policies to improve social wellbeing and social mobility. A better community means that a better community spirit can be established, but if the present Tory Government stand in the way of our targets, aims and aspirations, do not think for one minute that the Scottish people will take that lying down—they will not.
The Scottish Government have steadily improved their environmental policies, which have been praised by a variety of academics and recognised by various politicians from other countries, who have commented positively on Scotland’s aims and ambitions. During a trip by the Environmental Audit Committee to Washington earlier this year, the president of one of the universities that we visited could not speak highly enough of the Scottish Government and all their chemical policies, and I want the Labour party and the Conservative party to remember that. The Scottish Government have provided certainty of policy on environmental issues and that policy sits at the top of the tree. Investors like that. Investors who believe in corporate responsibility like that. Investors in people and businesses who see the positive social impact that good, sustainable policies deliver to all parts of the community like that. Expert commentators like that. Most importantly, our people—the Scottish people—like that, and it is the right thing to do. That is why it is so important that we as a country protect our carefully thought-out policies—our devolved policies.
I want to give some examples of comments about our policies that have been given to the Environmental Audit Committee. Professor Holgate, who is an expert on the health effects of poor air quality, said:
“Scotland is taking a lead in this area… Scotland has been able to… keep the relationships between the public, health and local authorities intact. In this country”—
England—
“they have drifted apart”.
He praised the Scottish Government’s approach to tackling poor air quality and their adoption of World Health Organisation guidelines on fine particulates into law—the first country in Europe to do so. He challenged England to raise the bar—I like that. Do we need to protect these policies? Yes, we do.
We simply must not get soil health wrong. Sir Peter Melchett and David Thompson attended our Committee. During their evidence, David Thompson said:
“The Scottish Government…have a statutory requirement to produce a land use strategy under their Climate Change Act, which is not the case for the rest of the country.”
Sir Peter Melchett said that the Scottish Government were looking at the science of soil protection 15 years ago and that the science is linking more closely in Scotland than he has
“ever seen happen in England.”
I like that. Sir Peter Melchett and David Thompson are educated, knowledgeable people. Do we need to protect that policy? Yes, we do.
I will now get a wee bit into the crux of the matter, the re-reservation of powers and the possible threat to Scotland’s environment. Emma Barton, the Royal Yachting Association’s planning and environmental manager, and Professor Carolyn Roberts, vice-president of the Institution of Environmental Sciences, both appeared before the Environmental Audit Committee. When I asked them about marine protection zones, Emma Barton said:
“As far as I am concerned we have had a…positive experience in Scotland… I don’t have any particular concerns…in Scotland.”
When I asked Professor Roberts about the possible post-Brexit danger that devolved Administrations would be forced to take things they do not want, such as genetically modified crops or fracking, her answer was yes. Again, I pressed her on whether these powers could be taken back, and she said, yes, of course they could.
The complexity of working out exactly what the devolved Administrations can and cannot do will mean that every legal decision they make in areas touched by European legislation will be open to challenge at UK level. Effectively, this could turn them into paper Parliaments whose decisions could be overturned by anyone with the resources to launch a case at the UK Supreme Court. The Scottish Government agree that common frameworks are needed to guide many legislative areas across the UK post-Brexit, but the frameworks need to be agreed, not imposed.
My last quote is from the Secretary of State for Environment, Food and Rural Affairs, who was sitting in the Chamber earlier. He has said that he had his own “Damascus moment” on environmental issues, which I welcome, but he raised eyebrows at the EAC in November with his answers on devolved matters. He promised to clarify his position, which he has done by way of a letter to the Committee. Or has he? The letter said:
“In particular, we will explore with the devolved administrations whether they wish to take a different or similar approach. We have been clear throughout that we respect the devolution settlements, that we expect more powers to be devolved and that no decisions which the devolved administrations currently make will be taken from them.”
Consider that. I repeat it:
“no decisions which the devolved administrations currently make will be taken from them.”
Post-Brexit, will the Government honour the Environment Secretary’s statement and make the temporary position permanent?
Jenny Chapman
After eight hours of debate, during which I lost count of the number of contributions, I do not think I heard a single speaker on either side say that there was not an issue with clause 11. The Minister seems to accept that it has some deficiency, yet after eight hours he will not say what he thinks it is or how he intends to remedy it. He has not seen fit to accept a single amendment or new clause put before him today, despite saying he welcomes reasonable, practical contributions. For that reason, I shall seek to put new clause 64 and amendment 42 to the vote.
Question put, That the clause be read a Second time.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
Under Standing Order No. 83D(4), I must now put the single stand part question.
Question put (single Question on successive provisions of the Bill), That clause 11 stand part of the Bill; and that schedule 3 be the Third schedule to the Bill.
Business without Debate
Mr Deputy Speaker (Mr Lindsay Hoyle)
With the leave of the House, we shall take motions 2 to 7 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Road Traffic
That the draft Community Drivers’ Hours Offences (Enforcement) Regulations 2017, which were laid before this House on 14 September, be approved.
Judicial Appointments and Discipline
That the draft Selection of the President of Welsh Tribunals Regulations 2017, which were laid before this House on 14 September, be approved.
Petroleum
That the draft Scotland Act 2016 (Onshore Petroleum) (Consequential Amendments) Regulations 2017, which were laid before this House on 19 July, be approved.
Pensions
That the draft Pension Schemes Act 2015 (Transitional Provisions and Appropriate Independent Advice) (Amendment No. 2) Regulations 2017, which were laid before this House on 10 July, be approved.
Financial and Markets
That the draft Risk Transformation Regulations 2017, which were laid before this House on 12 October, be approved.
International Immunities and Privileges
That the draft Unified Patent Court (Immunities and Privileges) Order 2017, which was laid before this House on 26 June, be approved.—(Craig Whittaker.)
Question agreed to.
Committees
Mr Deputy Speaker (Mr Lindsay Hoyle)
With the leave of the House, we shall take motions 8 to 12 together.
Ordered,
Environmental Audit
That Colin Clark and Glyn Davies be members of the Environmental Audit Committee.
Environment, Food and Rural Affairs
That Jo Platt be a member of the Environment, Food and Rural Affairs Committee.
Home Affairs
That Esther McVey be discharged from the Home Affairs Committee and Douglas Ross be added.
International Trade
That Keith Vaz be discharged from the International Trade Committee and Stephanie Peacock be added.
Science and Technology
That Stephanie Peacock be discharged from the Science and Technology Committee and Carol Monaghan be added.—(Bill Wiggin, on behalf of the Selection Committee.)
Chicken Farm, Rushden, Northamptonshire
Mr Peter Bone (Wellingborough) (Con)
I am grateful to all the Members who have come along to listen to the petition, particularly my hon. Friend the Member for Corby (Tom Pursglove), whose constituency is also affected by this dreadful proposal for a factory-style American chicken farm in Higham and Rushden. As a result of this outrageous proposal, 540,000 chickens will be slaughtered every 39 days. The lead petitioners are Councillor David Jenney, Roger Barnes and Councillor Peter Tomas, and 7,002 people have signed the petition. It states:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled,
The Humble Petition of residents of Rushden, Northamptonshire and the surrounding area,
Sheweth,
That the Petitioners believe that the proposed Bedfordia Farms planning application for a high intensity chicken farm be refused on the grounds of increased pollution, foul odour, effect on local house prices, increased traffic volume; and further that similar farms have a poor record on animal welfare.
Wherefore your Petitioners pray that your Honourable House urges the Department for Environment, Food and Rural Affairs, the Department for Communities and Local Government, Northamptonshire County Council and East Northamptonshire Council to take in account the concerns of petitioners and refuse to grant the planning application for a high intensity chicken farm to Bedfordia farms.
And your Petitioners, as in duty bound, will ever pray, &c.
[P002087]
Universal Credit Sanctions
(7 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
I thank those Members who are staying to listen to the debate. I realise that it is very late at night, but this is an important issue that affects many people—far more than we would want to be affected. Ideally, we would not be having the debate. We hoped that by now the Government would have listened to the calls for the universal credit programme to be paused so that they could learn lessons, take stock of where we are, and fix an arrangement that ought to be providing a decent service and simplifying the benefits system.
After the great war, William Beveridge declared that there were five giants on the road to reconstruction: poverty, disease, ignorance, squalor and idleness. To tackle those five giants, a new, radical response was needed—a response big enough to meet head on the challenges of the day that risked Britain’s future. Furthermore, Beveridge set a vision for a new settlement between the rights of citizens, the role of the Government, and the formation and foundation of public services. It was a balance of roles and responsibilities, rights and obligations, and an expectation that if Britain was to succeed, there must be investment in its foundations.
The challenges that face Britain today, although different, are as big. Our economy is weak and reliant on low wages, low skills and insecure employment. We might sweeten the bitter reality by making it sound cutting-edge—by calling it the gig economy rather than exploitation —or by affixing power to the workers when in fact many of them are powerless, but at its heart is a weak foundation of exploitation and low value that fails to respect a basic belief on which I was raised: a fair day’s wage for a fair day’s work.
Why is this important? It is important because people should be able to earn enough to live—not just to get by, but to be comfortable and enjoy life: to have a nice meal, a holiday, a reliable car, a decent, secure home and a healthy family, and, crucially, to live in a country that invests to ensure that the next generation does even better than the one that went before. We should have a society in which fairness runs through everything we do. There should be a balanced contribution, with equal dividends for those who pay their fair share.
Judith Cummins (Bradford South) (Lab)
Does my hon. Friend agree that the new sanctions in the universal credit system punish the working poor, especially low-paid workers?
Jim McMahon
The evidence says that—it says that working families are worse off under universal credit, and not because of its technocratic elements, but because the Government made a deliberate decision to make sure the financial crisis would be borne by those who could least afford it. They are people who are going out to work and doing what is asked of them but, as hard as they try, they cannot make ends meet because the odds are stacked against them and the Government are not on their side. That is what people in Oldham tell me, and that is what people in Oldham feel when they work very long hours and do not see the reward from doing that.
Jim Shannon (Strangford) (DUP)
I am grateful to the hon. Gentleman for giving way at this late hour of the day, or this early hour of the morning—whatever it might be.
The issues that the hon. Gentleman is describing are United Kingdom-wide. A report from the Central England Law Centre shows that UC sanctions are three times greater than other sanctions. Does the hon. Gentleman agree that that is a worrying trend that affects all constituencies throughout the United Kingdom of Great Britain and Northern Ireland?
Jim McMahon
That is an important intervention. The Department for Work and Pensions’ own error statistics show that the error lies within the DWP. In 2016-17, claimant error was 1.8% and official error was 4.9%. When claimants are doing what is asked, the margin of error is marginal, so it is the official errors that are sending people into severe debt and often poverty, and, all too often, to the food bank.
Neil Gray (Airdrie and Shotts) (SNP)
I congratulate the hon. Gentleman on securing this debate. It is about a different aspect of UC from what we have discussed before, which is refreshing. Does he agree that reports produced by the likes of Oxford and Liverpool Universities on the links between benefit sanctions and the use of food banks prove that there is a major issue regarding the DWP’s sanction regime forcing people into food poverty?
Jim McMahon
That is what is cruel about this. The working classes are taught that if they are willing to roll their sleeves up, work hard and put the hours in, they can get by, and that if they work really hard, their son or daughter will have a better life than they had, and that legacy can be passed on to their children. I see a lot of people in Oldham who are doing what is asked of them and working long hours, but the idea that they will do better than their parents, and that their children will do better than them, is a distant prospect. That is cruel. We are still one of the richest countries in the world, but we are a country that is built on very weak foundations. I fear what Brexit means for our country because of how fragile our economy is and how little investment has been made in the foundation of rebuilding our economy, whether in skills, the types of industry that will get us beyond Brexit, housing or public services. All those things matter, and I do not see investment being made in places where it ought to be. This is a very sad situation.
Reflecting on my own situation, when my son was born, we relied on working families tax credits. That helped us, because it meant we were not just eating cheap microwave meals or skipping meals entirely to pay the rent, but it also meant that for the first time we were part of the welfare state. We were always taught that we claim benefits only when in absolutely dire need of them, not because there is a shame necessarily attached to claiming them, but because they are to be treasured. We were taught that we must not abuse them, but that they are a safety net to catch us when we need it. That is why we pay our national insurance and that is why we value benefits.
I worked for 40 hours a week, but it still was not enough, especially when large or unexpected bills arrived. It was a tough lesson to me that sometimes it does not matter how hard people work, because if they get caught in a cycle of debt, it can be difficult to break out of that trap. It only takes one or two minor things going wrong, such as a household bill coming in unexpectedly, for things to become very difficult.
The situation also showed me that sometimes the machinery of government is not on our side. We were in debt not because of unexpected bills, but because an error in the calculation of our family tax credits sent us into an overpayment situation.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It has been worth staying in the Chamber for this important debate. My constituency, like that of my hon. Friend, has been a pathfinder for universal credit for some time. It is those bits of absurdity that I find so hard to take. Government errors are resulting in people being sanctioned. I have seen people sanctioned for attending a job interview, which they are mandated to do. They win such cases on appeal, but that can often take two or three weeks, and the sanction leaves them dependent on high-cost credit or food banks to get by. They become trapped in a spiral of despair, and I find that bit of the system absolutely unconscionable.
Jim McMahon
That was my experience. We were working long hours and we relied on tax credits to be able to pay the rent and put food on the table. Through no fault of our own, we were trapped in a system that put blame and responsibility on to our shoulders, even though the fault was eventually proven to be that of the system. Families experience a great deal of stress when they do not have the necessary disposable income to satisfy all the demands that are coming in. That is the extremely difficult experience of people who are on universal credit.
I was in a secure job with a regular wage, and my hours were not changing all the time. I would fear being a universal credit claimant today if I were in insecure employment where my hours changed from one week to the next, where my employer would not give me certainty of employment or, even worse, where my employer would put me on a zero-hours or self-employed contract and I had to declare my earnings up front just in case there was an error further down the line. That does not strike me as a system that has been designed to help the claimant. It seems to have been designed to create a culture, and I believe that it is a corrosive culture. It is not a safety net to catch people, or a top-up benefit system that is meant to make work pay. It is a culture that talks about the deserving poor. It tells people that they are poor because of their own fecklessness or laziness, or as a matter of choice, not because they have been caught in a cycle of debt and despair. There also seems to be a grudging idea of what the welfare state is meant to be. People are told, “All right, we’ll pay you the money if we have to, but only if we really have to.” The culture that that creates is very dangerous for a country that has a long history of a welfare state.
More than 1 million working families will be £2,800 worse off under universal credit. Food banks have reported a 30% increase in referrals in areas with full universal credit roll-out. I want to talk about Greater Manchester, and particularly about Oldham. I want to take this opportunity to pay tribute to my neighbour, my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), for the leadership that she has shown on this issue. She will know from her constituency the depths of despair that people reach and the problems with the system, but some of these issues can be resolved, provided that the Government step back and listen to these concerns and take enough time to fix them, instead of going full steam ahead into a programme that they know has been built to fail.
We were one of the first pilot authorities, and we now have 4,000 claimants in Oldham. There are 49,000 claimants across Greater Manchester, nearly 20,000 of whom are in work. We have seen delays, mistakes and IT failures, on top of the deliberate decision by the Government to cut payments for those claimants who need them the most. Those things have real consequences. We have heard from Citizens Advice, the Greater Manchester law centre, my own local authority and directly from people working in job centres across Greater Manchester. We have also heard from a wide range of charities, including the Oldham food bank, which have seen scores of people—often referred by the Department for Work and Pensions itself—queueing for food vouchers for the food banks, just to get a basic supply to be able to live. My casework advisers are swamped and so are many of the charities. We fear the roll-out to the full 322,000 legacy benefit claimants, not for ourselves, but because we see what the scale of human suffering will be if the Government continue to fail to heed the warnings that the system is broken.
Ruth George (High Peak) (Lab)
Does my hon. Friend agree that it is particularly worrying that the sanctions regime is to be rolled out to people who are already in work? As he says, they are often in insecure work with varying hours, which will leave them open to benefit sanctions for reasons beyond their control.
Jim McMahon
That is important, because concerns have been raised about when people are underemployed and do not have enough hours for a full-time week and the Government require them to actively pursue work to make up the additional hours. They may be only one or two hours under the threshold, but they are still required to attend an interview. If they work for an employer that has no flexibility and would be happy for them to walk out the door, because there is a queue of 10 people who are willing to take the 35-hour-a-week job, perhaps they cannot get to the appointment or perhaps the employer will not give them the additional hours required to satisfy the jobcentre. That is a real example of what people are going through today.
In a recent survey, Citizens Advice found that 39% of people had waited for more than six weeks and 11% had waited for more than 10 weeks. We have a heard a lot about the need for welfare to mirror work. It ought to provide a smooth transition between employment, changing contract terms and earnings, and significant changes in circumstances, but at its heart it is part of the welfare state. It is a safety net to catch people when they fall on difficult times that helps them to keep their head above water. It is meant to help people, not treat them as undeserving or with suspicion and resentment. For a safety net to work, it must be there when people fall. It should not let people hit the ground hard and then make them wait six or 10 weeks before help arrives. That is not the spirt of a welfare state that people pay into through national insurance. It is an insurance policy, but it fails to be there when people need it. That is fundamental.
There is a contract in place between citizens and the state. If we collectively, through our common endeavour, pay national insurance contributions, that fund ought to be there when we need it. The Government have failed to honour that contract, as far as I can see, and people who pay into that pot have the right to be disgruntled and to question whether it is really there. I would like to believe that that is not what the Government want, but some of the benefits debates in the media are corrosive. We hear the language that gets used by the Government. We are now in a position where the Government would be happy for public support for the welfare state to fall away completely to give them a reason to take the axe even further.
When the banking crisis really hit, people in Oldham did not blame the bankers or the Government; they blamed their neighbours. They looked at the neighbour who had a slightly nicer car than them and wondered why they could not have a nicer car. They saw the people with their suitcases full who were getting into a taxi to go on holiday and asked why they could not go holiday. That is the cruelty. People on low incomes were set against other people on low incomes, and the Government got away with it. When bankers have not been taken to task and corporation tax cuts have been handed out, the axe has been taken to the welfare state that was supposed to support people.
Thirty per cent. of people have reported making more than 10 calls to the universal credit helpline before their application was processed, with many waiting more than 30 minutes. Up until very recently, they were also charged a high premium. Some 57% had to borrow money while waiting for their first payment. So far, 101 job centres covering 14% of all job centres in Great Britain operate universal credit full service, and we fear for what the roll-out really means. But this is more fundamental than all the facts and figures. I talked about how we collectively pay into the pot that should be there to support people, and I could go into a lot of detail about the sanctioning regime and just how unfair and inflexible it is and how it does not take people’s lives into account.
Hannah Bardell (Livingston) (SNP)
I congratulate the hon. Gentleman on the passion and conviction with which he is speaking on this hugely important issue at such an early hour. Does he share my concern at the report released this morning by the Joseph Rowntree Foundation highlighting that pensioners, children and many families are, as a result of benefits sanctions, falling further into poverty despite much progress having been made? Does he also agree that, as Brexit starts to bite and as these sanctions come into place, we are approaching a catastrophe for those on low incomes?
Jim McMahon
That is absolutely the experience of people who have been affected, including people who are far away from the job market. The treatment of people who are in work on low wages and in insecure employment is wrong, but we should have a welfare state that supports people into employment, and it just does not do that in the way we want. Universal credit might force people into a job regardless of what the job is and regardless of its suitability, and it does not take into account people’s real desire to make an active contribution and to feel that their life is going somewhere. That is the real cruelty of the current system.
According to the DWP’s own data, Greater Manchester saw a staggering 34,000 sanctions in the 12 months to June 2017, with 3,420 of those sanctions in Oldham alone. Unsurprisingly, December 2016 saw sanction rates hit their peak at 4,200, which is hardly surprising given that the Christmas period knocks appointments out of sync, meaning that people might not be able to attend.
My plea, and it has been made a number of times, is that if we believe in the foundations of a fair society, we have to have rights and obligations, but we also have to have a state that recognises it has a role to play. The foundations cannot be taken for granted. When they were brought in, they were brought in because the country was in a state and we recognised that something dramatic had to happen to build the type of Britain we want. The idea that those brave decisions can be undone by a Government who seem completely indifferent to human suffering is worrying.
More than that, the challenge our country faces as we embark on leaving the European Union is one of the biggest in generations. It could cause economic shock and social shock, and we do not quite know yet what the consequences will be. A person might think that the Government would take this opportunity to re-establish their vision for the type of Britain that will exist after Brexit. Core to that has to be decent public services, a social security system that is there when people need it and an employment system in which we invest in industry and make sure that the next generation has the chance, which has unfortunately been taken away from too many, to do better, get on in life and have a decent life living in this country.
The Government need to step up. Time is ticking. Generations are passing by. I do not want the current system for my children, and nobody in this House should want it for their children or for their constituents, either.
The Minister for Employment (Damian Hinds)
Time is a little short, but I will seek to address as much of what the hon. Member for Oldham West and Royton (Jim McMahon) raised as possible. I congratulate him on securing this important debate.
I will start by going over some of the principles of why we have conditionality and of how the system we have specifically designed in universal credit supports claimants in meeting conditionality. The hon. Gentleman went over some of the history of our benefit support system and, yes, the system is there to provide a safety net, but it is also a well-understood and long-standing principle that individuals must meet certain conditions to receive certain benefits.
It is possible, of course, to argue for a system of out-of-work support that does not have conditionality—something like a universal basic income—but that is not, to the best of my knowledge, the policy of the official Opposition or of other Opposition parties in this House. That would be a completely different debate.
Conditionality has been a long-standing feature of welfare benefit entitlements in this country, and the scope and scale of it has evolved over time. The introduction of jobseeker’s allowance in 1996 intensified the monitoring of unemployed claimants’ job seeking behaviour, and the incoming Labour Government of 1997 adopted what was called a work-first and work-for-all approach that embraced JSA’s monitoring of claimants’ job search activities, backed up by benefits sanctions in cases of non-compliance. Universal Credit is specifically designed so that work coaches engage with and support people early in their claim, and then throughout, to give them advice and support, and not to lose contact with them. With the introduction of the claimant commitment, it is clear to claimants what is expected of them. Through it, they commit to undertake certain actions, such as attending interviews, applying for jobs and apprenticeships, or going on training, in exchange for receiving benefits.
Ruth George
Does the Minister believe it is correct that a single parent of a 13-year-old child should have to sign up to a claimant commitment to seek work for 35 hours a week when they have a child to look after in the school holidays?
Damian Hinds
The claimant commitment is agreed between the claimant and the work coach, and it is based on the claimant’s particular circumstances. So where a mother is taking young children to school and back, the time she would have available to work and for work search would be restricted by that. Where someone has caring responsibilities for a spouse, parent or disabled child, that will also change the amount of time they have available. The point is that this is to be a tailored system that responds to and reflects the individual’s circumstances. The individual and the work coach between them agree what is reasonable, and the claimant then commits to it. As I was saying, work coaches have the flexibility to personalise the requirements—I have pretty much covered what I was about to say in that paragraph in responding to the hon. Lady.
Work coaches can also remove all work-related requirements where it is not reasonable to expect claimants to be able to comply, or suspend them temporarily, such as when someone needs time to find a home. We are constantly reviewing our guidance and ensuring that work coaches understand the importance of getting the right levels of conditionality in place, based on a claimant’s individual circumstances. Indeed, when a work coach takes up the role for the first time, they go through a minimum of five weeks of classroom-based learning, after which they consolidate that learning back in their jobcentre. This training covers conditionality and setting appropriate commitments for the specific circumstances of the claimant. Additionally, when a jobcentre goes live with the universal credit full service, existing work coaches there go through three weeks of classroom learning, which also includes how to apply conditionality and agree reasonable commitments. Similarly, work coaches can refer to extensive guidance on how to support claimants with disabilities and complex needs.
It is right that there is a system in place to encourage claimants to meet their requirements and, as a result, move closer to work. As such, if a claimant does not meet the requirements they have agreed to in their claimant commitment, they are referred to a decision maker to determine whether a sanction is appropriate. We take a number of steps to make sure our decisions are fair: the decision maker invites those referred for a sanction to explain why they failed to meet their requirements; and we take the claimant’s individual circumstances into account, including any health conditions or disabilities, and any evidence of good reason, before making a decision to apply a sanction.
Evidence from trials where there was no conditionality for the first 13 weeks showed a significant increase in the length of time spent on benefit. That was due mainly to people taking longer to find work. In addition, more than seven tenths of UC claimants said the potential for sanctions made them more likely to look for work or take steps to prepare for work.
A report from the OECD in 2013 also noted that the UK’s
“long tradition of activation policies to promote the effective reintegration into employment of working age benefit recipients helped limit the rise in unemployment, even during the global and financial crisis”.
When a claimant disagrees with a sanction, they can ask for the decision to be reconsidered. Following that, if necessary, they can appeal against the decision to an independent tribunal. Ultimately, where a sanction is applied, it can only deduct an amount equal to the claimant’s personal element of universal credit—that is, their standard allowance. It does not apply to the additional amounts they may receive in respect of having children, to cover housing costs or to help with the costs of disability.
We have a well-established system of hardship payments and, in universal credit, claimants are able to apply for a hardship payment from the time their payments are reduced through a sanction. Nevertheless, most claimants do what is expected of them and are not sanctioned. The latest published statistics show that at March 2017, 6.9% of people on universal credit had a deduction taken from their standard allowance as a result of a sanction.
The rate in universal credit is higher than the sanction rate for jobseeker’s allowance, but the two are not directly comparable. In UC, if a claimant fails to attend a work-focused interview without good reason they can be sanctioned, whereas if a claimant on JSA fails to attend a work-focused interview, after five days without making contact they would have their claim terminated. In the November statistics release, about two in every 10 adverse sanction decisions are for failing to attend, whereas under UC it is about seven in every 10. To repeat, it cannot be inferred from that that more people are not attending. Rather, it means that non-attendance is often treated differently because UC is a very different benefit that covers not just the individual element, but support for children, housing costs and other elements.
Universal credit is designed to support claimants in a holistic way, ensuring that we help them find or progress in work, while ensuring that they continue to receive help with their housing costs and other benefits. In universal credit, we are more likely to temporarily reduce benefit, for example where there is a complete loss of claimant contact, while we try everything possible to contact the individual. In jobseeker’s allowance—
Draft Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) Order 2018
Draft Proceeds of crime Act 2002 (Cash Searches: Code of Practice) Order 2018
Draft Prceeds of Crime Act 2002 (Recovery of Listed Assets: Code of Practice) (England and Wales and Scotland) Regulations 2018
Draft Criminal Finances Act 2017 (Consequential Amendment) Regulations 2018
(7 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
I call the Minister to move the first motion and speak to all four instruments. At the end of the debate, I will ask him to move the other motions formally.
The Minister for Security (Mr Ben Wallace)
I beg to move,
That the Committee has considered the draft Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) Order 2018.
The Chair
With this it will be convenient to consider the draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2018, the draft Proceeds of Crime Act 2002 (Recovery of Listed Assets: Code of Practice) (England and Wales and Scotland) Regulations 2018 and the draft Criminal Finances Act 2017 (Consequential Amendment) Regulations 2018.
Mr Wallace
It is a privilege to serve under your chairmanship, Ms Buck.
Criminals go to great lengths to hide the proceeds of their crimes and exploit any opportunities to frustrate the recovery of such proceeds by the authorities. We need to stay ahead of that problem. That is why the Criminal Finances Act 2017 was passed in April, with cross-party support from the Labour party and the Scottish National party, for which I was grateful. The Act strengthens and extends existing powers to trace and recover criminal assets. The powers most relevant to this debate are those relating to the forfeiture of certain items of property that are either the proceeds of crime or intended to be used to further criminal activity.
Codes of practice protect the public by ensuring the appropriate and proportionate use of new powers. In this case, that includes search and seizure powers, which are used by a wide range of law enforcement officers in connection with various investigations. Three of the draft statutory instruments before the Committee bring into force revised and new codes of practice providing guidance on powers of search, seizure and detention of property to support enforcement of confiscation orders; search powers for criminal cash; and search powers relating to the new power to seize certain listed assets, such as precious metals and stones. The final draft instrument makes a minor technical amendment to an existing provision of the Proceeds of Crime Act 2002 to take account of the creation of a new power to forfeit listed assets. POCA provides tough powers in the fight against all levels of crime and was introduced under a Labour Government.
The use of those powers can involve significant interference in the rights of persons in respect of their privacy and property. The purpose of the codes of practice is to provide guidance to officers who use those powers and an assurance to the public that they are being used correctly. The codes act as a safeguard to ensure effective, consistent and proportionate use of the powers. The POCA powers were significantly strengthened by the Criminal Finances Act 2017. The new, extended and strengthened powers will give officers important tools for the recovery of criminally obtained assets. They form part of the Government’s commitment to making the UK a hostile environment for those who seek to move, use and hide the proceeds of crime and corruption.
Two of the codes before the Committee are revisions of previous codes issued under POCA and closely follow the procedures established in those codes. They also follow a similar approach to the codes issued more widely to police officers under the Police and Criminal Evidence Act 1984. The third code is new, but follows the approach in the existing POCA and Police and Criminal Evidence Act codes. The new powers that give rise to those codes have been debated extensively by both Houses, resulting in the Criminal Finances Act receiving Royal Assent in April. We are therefore not debating the powers themselves, but considering the codes that give guidance about their use.
Importantly, some matters in POCA are devolved to the Northern Ireland Assembly. Members may recall that the Assembly was dissolved during the passage of the Criminal Finances Act, meaning that a legislative consent motion could not be obtained. A commitment was made on the Floor of the House not to commence any legislation relating to devolved matters without the appropriate consent being in place. In line with that commitment, there is nothing in these codes relating to the new powers that is a devolved matter in the competence of the Northern Ireland Assembly. I assure the Committee that we are working with the authorities in Northern Ireland to commence those powers as soon as possible.
A separate combined code of practice has been drafted in respect of searches by constables in Scotland in relation to the civil forfeiture of listed items of property and the civil forfeiture of cash. A public consultation is being undertaken. The code is expected to come into force in the spring, and I hope that it does.
The amendments to POCA that require these new and amended codes of practice are the new power to forfeit listed assets; the expanded powers relating to search and seizure to prevent the dissipation of property that may subsequently be used to satisfy a confiscation order; the extension of search powers to a range of law enforcement agencies, notably the Serious Fraud Office; and the change of the definition of cash for the purposes of cash seizure and forfeiture powers to include gaming vouchers, fixed-value casino tokens and betting slips. During the passage of the Criminal Finances Act, I distinctly remember the Scottish National party raising the issue of betting slips. The Government recognised that and have included related measures in the Act and therefore the codes.
POCA stipulates that the Secretary of State must prepare and publish a draft of any new or revised codes, consider any representations made and modify the draft as appropriate. A public consultation on all the codes before the Committee was carried out this summer and amendments were made to the drafts accordingly. The explanatory memorandum addresses the consultation in detail.
The first order brings into effect a new code of practice, providing guidance on the use of search powers for the recovery of listed assets, such as precious metals and watches, that are suspected to be the proceeds of crime or intended for use in crime. The second code of practice relates to search and seizure powers in England and Wales to prevent the dissipation of property that might be used to satisfy a confiscation order. That has been revised to take account of the extension of powers to the Serious Fraud Office and a change in the authorisation process for the powers for certain civilian financial investigators. Those amendments to the code are both purely consequential.
The final code relates to search powers for the seizure and detention of cash. These amendments are also purely consequential. The code required revision due to three amendments to the cash provisions. These are an amendment to the definition of cash, the extension of powers to SFO officers and an amended definition of senior officers who can provide prior approval for the search powers. The three instruments will bring the codes of practice into effect. We will therefore have safeguards in place on the use of the powers, and that will enable full commencement of the POCA amendments that I have described.
The final instrument makes a technical amendment to an existing provision in POCA. The approach in POCA is that when property has been recovered, it cannot become subject to further recovery action under the Act; that would be recovering the same property twice. Given the new forfeiture powers that have been introduced by the Criminal Finances Act, further powers need to be brought within that safeguard. The regulations provide that property forfeited by the High Court under the new listed items powers cannot subsequently become liable to future civil recovery action.
I ask the Committee to approve the orders, thereby giving effect to the codes of practice and making the small addition to the safeguard in POCA against double recovery.
Carolyn Harris (Swansea East) (Lab)
Thank you, Ms Buck, for chairing the Committee. The Opposition generally support such measures, but with some reservations. We of course welcome any new provision to prosecute, prevent and seize the assets of criminals. However, amid continued cuts to public services, I am interested to hear exactly how the measures will be fully and robustly enforced. There have been staff cuts in literally every agency carrying out this work, from the police to Border Force, to revenue officers.
I remind the Minister of Labour’s argument that agencies involved in exercising civil recovery powers should have enough resources to do their job properly. He may recall that we requested a distinct and clear annual report, detailing the resources that are allocated to agencies strictly for carrying out the recovery powers. The Conservatives objected to that during the early stages of the Proceeds of Crime Act, on the grounds that the asset recovery incentivisation scheme would allow frontline agencies to keep 100% of the illicit value that they recover. In theory, the agencies could retain the total value recovered, but as was made clear by the Public Accounts Committee at the time in its progress review of confiscation orders and by the Home Affairs Committee in its review of POCA, the agencies’ recovery rates have been poor. Although the measures appear to convey greater powers to the agencies, there is no guarantee that they will improve their recovery rates. Given the failure to achieve that in recent Bills, we had hoped that these orders might go further.
We also note with concern that the said powers will be conferred on immigration officers. Although that makes sense in theory, will the Minister explain whether that includes agents of the state such as G4S and Serco? I remind the Government of the complete lack of trust in those agencies, following recent revelations in immigration detention centres, such as Brook House and Yarl’s Wood. If we cannot trust those individuals to deal with human beings professionally, that clearly indicates that we may not be able to trust them with other matters. Those matters aside, which we would appreciate the Minister’s assurances on, we will support the orders.
Mr Wallace
I am grateful for the points made by the hon. Member for Swansea East. I can set her mind at rest: we are not in any way envisaging that G4S, Serco or anyone else will be empowered by these new powers. I have heard her points about resourcing the correct individuals to pursue the proceeds of crime. There are two parts to that. First, there were many valid points in reports published by the Public Accounts Committee and the Home Affairs Committee about 18 months ago. I have used those reports as a reference to try to push for better recoveries. Some of those points were about basic day-to-day processes that have not always been undertaken, such as police officers not routinely loading confiscation orders on to the police national computer. Those orders are a matter of public record, so it would not be obvious to a police officer who stopped someone driving around in Lancashire in a brand new Range Rover that they happened to have a confiscation order outstanding. We are on our way to improving that.
On reinvesting, we took a decision in line with our manifesto to return 100% of ARIS funds—the proceeds of crime that were taken—above the baseline of the assets recovered last year when the amount returned was 50%. At the moment, any money taken off organised crime by regional organised crime units, for example, goes back only into the asset recovery part of that organisation. Some police lobby for it to go across the broader spectrum, and others have said it must be incentivised and remain in the proceeds of crime part of the organisation. We are trying to unlock more money to address that issue.
Alongside resourcing is the issue about powers. POCA was a good Act, but it has to be kept up to date. Some of the decline in recovery is partly because some bad guys switched from cash to mobile stores of value—betting slips, jewels and all the other things—which is why we have to move to stay one step ahead. We have also started doing quite a lot. With the National Crime Agency and HMRC, we have invested in an international network to try to ensure we get assets when they are overseas—I have been abroad to visit some of that and recover some of the assets.
One of the challenges with recovering the proceeds of crime is that sometimes dirty money has already been washed, so it is not as straightforward as just grabbing it. That is why we included unexplained wealth orders in the Criminal Finances Act 2017, which effectively reverse the burden of proof. If someone rocks up as unemployed who owns a £1 million house—we all have some of those people in our communities—they have to prove how they got it. That is an important message.
I understand the issue about resource and ensuring that we give the police the powers and resources they need. We recognised that in the last spending round by protecting police spending, but I also recognise the increasing pressures on our police, so I would still like to see more. We hope that the Criminal Finances Act goes a long way towards giving them those extra powers and building on POCA. Part of the challenge has been that POCA is massively complicated and requires lots of specialists to interpret it because the criminals are massively complex in hiding their money. I wish there was an easy answer.
This is the right step. These codes of practice are as much about protecting our constituents to ensure that police and other people do not overstep how they use the powers—some of which are quite powerful—as they are about making it easier for a detective sergeant or whoever to go after the money in the first place. We will be pushing them; I push them quite a lot to get more. I ask them the questions and, where there is a resource issue, I try to address it; I hear what the hon. Member for Swansea East said.
Question put and agreed to.
DRAFT PROCEEDS OF CRIME ACT 2002 (CASH SEARCHES: CODE OF PRACTICE) ORDER 2018
Resolved,
That the Committee has considered the draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2018.—(Mr Ben Wallace.)
DRAFT PROCEEDS OF CRIME ACT 2002 (RECOVERY OF LISTED ASSETS: CODE OF PRACTICE) (ENGLAND AND WALES AND SCOTLAND) REGULATIONS 2018
Resolved,
That the Committee has considered the draft Proceeds of Crime Act 2002 (Recovery of Listed Assets: Code of Practice) (England and Wales and Scotland) Regulations 2018.—(Mr Ben Wallace.)
DRAFT CRIMINAL FINANCES ACT 2017 (CONSEQUENTIAL AMENDMENT) REGULATIONS 2018
Resolved,
That the Committee has considered the draft Criminal Finances Act 2017 (Consequential Amendment) Regulations 2018.—(Mr Ben Wallace.)
Draft Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) Order 2018
Draft Proceeds of crime Act 2002 (Cash Searches: Code of Practice) Order 2018
Draft Proceeds of Crime Act 2002 (Recovery of Listed Assets: Code of Practice) (England and Wales and Scotland) Regulations 2018
Draft Criminal Finances Act 2017 (Consequential Amendment) Regulations 2018
(7 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
I call the Minister to move the first motion and speak to all four instruments. At the end of the debate, I will ask him to move the other motions formally.
The Minister for Security (Mr Ben Wallace)
I beg to move,
That the Committee has considered the draft Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) Order 2018.
The Chair
With this it will be convenient to consider the draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2018, the draft Proceeds of Crime Act 2002 (Recovery of Listed Assets: Code of Practice) (England and Wales and Scotland) Regulations 2018 and the draft Criminal Finances Act 2017 (Consequential Amendment) Regulations 2018.
Mr Wallace
It is a privilege to serve under your chairmanship, Ms Buck.
Criminals go to great lengths to hide the proceeds of their crimes and exploit any opportunities to frustrate the recovery of such proceeds by the authorities. We need to stay ahead of that problem. That is why the Criminal Finances Act 2017 was passed in April, with cross-party support from the Labour party and the Scottish National party, for which I was grateful. The Act strengthens and extends existing powers to trace and recover criminal assets. The powers most relevant to this debate are those relating to the forfeiture of certain items of property that are either the proceeds of crime or intended to be used to further criminal activity.
Codes of practice protect the public by ensuring the appropriate and proportionate use of new powers. In this case, that includes search and seizure powers, which are used by a wide range of law enforcement officers in connection with various investigations. Three of the draft statutory instruments before the Committee bring into force revised and new codes of practice providing guidance on powers of search, seizure and detention of property to support enforcement of confiscation orders; search powers for criminal cash; and search powers relating to the new power to seize certain listed assets, such as precious metals and stones. The final draft instrument makes a minor technical amendment to an existing provision of the Proceeds of Crime Act 2002 to take account of the creation of a new power to forfeit listed assets. POCA provides tough powers in the fight against all levels of crime and was introduced under a Labour Government.
The use of those powers can involve significant interference in the rights of persons in respect of their privacy and property. The purpose of the codes of practice is to provide guidance to officers who use those powers and an assurance to the public that they are being used correctly. The codes act as a safeguard to ensure effective, consistent and proportionate use of the powers. The POCA powers were significantly strengthened by the Criminal Finances Act 2017. The new, extended and strengthened powers will give officers important tools for the recovery of criminally obtained assets. They form part of the Government’s commitment to making the UK a hostile environment for those who seek to move, use and hide the proceeds of crime and corruption.
Two of the codes before the Committee are revisions of previous codes issued under POCA and closely follow the procedures established in those codes. They also follow a similar approach to the codes issued more widely to police officers under the Police and Criminal Evidence Act 1984. The third code is new, but follows the approach in the existing POCA and Police and Criminal Evidence Act codes. The new powers that give rise to those codes have been debated extensively by both Houses, resulting in the Criminal Finances Act receiving Royal Assent in April. We are therefore not debating the powers themselves, but considering the codes that give guidance about their use.
Importantly, some matters in POCA are devolved to the Northern Ireland Assembly. Members may recall that the Assembly was dissolved during the passage of the Criminal Finances Act, meaning that a legislative consent motion could not be obtained. A commitment was made on the Floor of the House not to commence any legislation relating to devolved matters without the appropriate consent being in place. In line with that commitment, there is nothing in these codes relating to the new powers that is a devolved matter in the competence of the Northern Ireland Assembly. I assure the Committee that we are working with the authorities in Northern Ireland to commence those powers as soon as possible.
A separate combined code of practice has been drafted in respect of searches by constables in Scotland in relation to the civil forfeiture of listed items of property and the civil forfeiture of cash. A public consultation is being undertaken. The code is expected to come into force in the spring, and I hope that it does.
The amendments to POCA that require these new and amended codes of practice are the new power to forfeit listed assets; the expanded powers relating to search and seizure to prevent the dissipation of property that may subsequently be used to satisfy a confiscation order; the extension of search powers to a range of law enforcement agencies, notably the Serious Fraud Office; and the change of the definition of cash for the purposes of cash seizure and forfeiture powers to include gaming vouchers, fixed-value casino tokens and betting slips. During the passage of the Criminal Finances Act, I distinctly remember the Scottish National party raising the issue of betting slips. The Government recognised that and have included related measures in the Act and therefore the codes.
POCA stipulates that the Secretary of State must prepare and publish a draft of any new or revised codes, consider any representations made and modify the draft as appropriate. A public consultation on all the codes before the Committee was carried out this summer and amendments were made to the drafts accordingly. The explanatory memorandum addresses the consultation in detail.
The first order brings into effect a new code of practice, providing guidance on the use of search powers for the recovery of listed assets, such as precious metals and watches, that are suspected to be the proceeds of crime or intended for use in crime. The second code of practice relates to search and seizure powers in England and Wales to prevent the dissipation of property that might be used to satisfy a confiscation order. That has been revised to take account of the extension of powers to the Serious Fraud Office and a change in the authorisation process for the powers for certain civilian financial investigators. Those amendments to the code are both purely consequential.
The final code relates to search powers for the seizure and detention of cash. These amendments are also purely consequential. The code required revision due to three amendments to the cash provisions. These are an amendment to the definition of cash, the extension of powers to SFO officers and an amended definition of senior officers who can provide prior approval for the search powers. The three instruments will bring the codes of practice into effect. We will therefore have safeguards in place on the use of the powers, and that will enable full commencement of the POCA amendments that I have described.
The final instrument makes a technical amendment to an existing provision in POCA. The approach in POCA is that when property has been recovered, it cannot become subject to further recovery action under the Act; that would be recovering the same property twice. Given the new forfeiture powers that have been introduced by the Criminal Finances Act, further powers need to be brought within that safeguard. The regulations provide that property forfeited by the High Court under the new listed items powers cannot subsequently become liable to future civil recovery action.
I ask the Committee to approve the orders, thereby giving effect to the codes of practice and making the small addition to the safeguard in POCA against double recovery.
Carolyn Harris (Swansea East) (Lab)
Thank you, Ms Buck, for chairing the Committee. The Opposition generally support such measures, but with some reservations. We of course welcome any new provision to prosecute, prevent and seize the assets of criminals. However, amid continued cuts to public services, I am interested to hear exactly how the measures will be fully and robustly enforced. There have been staff cuts in literally every agency carrying out this work, from the police to Border Force, to revenue officers.
I remind the Minister of Labour’s argument that agencies involved in exercising civil recovery powers should have enough resources to do their job properly. He may recall that we requested a distinct and clear annual report, detailing the resources that are allocated to agencies strictly for carrying out the recovery powers. The Conservatives objected to that during the early stages of the Proceeds of Crime Act, on the grounds that the asset recovery incentivisation scheme would allow frontline agencies to keep 100% of the illicit value that they recover. In theory, the agencies could retain the total value recovered, but as was made clear by the Public Accounts Committee at the time in its progress review of confiscation orders and by the Home Affairs Committee in its review of POCA, the agencies’ recovery rates have been poor. Although the measures appear to convey greater powers to the agencies, there is no guarantee that they will improve their recovery rates. Given the failure to achieve that in recent Bills, we had hoped that these orders might go further.
We also note with concern that the said powers will be conferred on immigration officers. Although that makes sense in theory, will the Minister explain whether that includes agents of the state such as G4S and Serco? I remind the Government of the complete lack of trust in those agencies, following recent revelations in immigration detention centres, such as Brook House and Yarl’s Wood. If we cannot trust those individuals to deal with human beings professionally, that clearly indicates that we may not be able to trust them with other matters. Those matters aside, which we would appreciate the Minister’s assurances on, we will support the orders.
Mr Wallace
I am grateful for the points made by the hon. Member for Swansea East. I can set her mind at rest: we are not in any way envisaging that G4S, Serco or anyone else will be empowered by these new powers. I have heard her points about resourcing the correct individuals to pursue the proceeds of crime. There are two parts to that. First, there were many valid points in reports published by the Public Accounts Committee and the Home Affairs Committee about 18 months ago. I have used those reports as a reference to try to push for better recoveries. Some of those points were about basic day-to-day processes that have not always been undertaken, such as police officers not routinely loading confiscation orders on to the police national computer. Those orders are a matter of public record, so it would not be obvious to a police officer who stopped someone driving around in Lancashire in a brand new Range Rover that they happened to have a confiscation order outstanding. We are on our way to improving that.
On reinvesting, we took a decision in line with our manifesto to return 100% of ARIS funds—the proceeds of crime that were taken—above the baseline of the assets recovered last year when the amount returned was 50%. At the moment, any money taken off organised crime by regional organised crime units, for example, goes back only into the asset recovery part of that organisation. Some police lobby for it to go across the broader spectrum, and others have said it must be incentivised and remain in the proceeds of crime part of the organisation. We are trying to unlock more money to address that issue.
Alongside resourcing is the issue about powers. POCA was a good Act, but it has to be kept up to date. Some of the decline in recovery is partly because some bad guys switched from cash to mobile stores of value—betting slips, jewels and all the other things—which is why we have to move to stay one step ahead. We have also started doing quite a lot. With the National Crime Agency and HMRC, we have invested in an international network to try to ensure we get assets when they are overseas—I have been abroad to visit some of that and recover some of the assets.
One of the challenges with recovering the proceeds of crime is that sometimes dirty money has already been washed, so it is not as straightforward as just grabbing it. That is why we included unexplained wealth orders in the Criminal Finances Act 2017, which effectively reverse the burden of proof. If someone rocks up as unemployed who owns a £1 million house—we all have some of those people in our communities—they have to prove how they got it. That is an important message.
I understand the issue about resource and ensuring that we give the police the powers and resources they need. We recognised that in the last spending round by protecting police spending, but I also recognise the increasing pressures on our police, so I would still like to see more. We hope that the Criminal Finances Act goes a long way towards giving them those extra powers and building on POCA. Part of the challenge has been that POCA is massively complicated and requires lots of specialists to interpret it because the criminals are massively complex in hiding their money. I wish there was an easy answer.
This is the right step. These codes of practice are as much about protecting our constituents to ensure that police and other people do not overstep how they use the powers—some of which are quite powerful—as they are about making it easier for a detective sergeant or whoever to go after the money in the first place. We will be pushing them; I push them quite a lot to get more. I ask them the questions and, where there is a resource issue, I try to address it; I hear what the hon. Member for Swansea East said.
Question put and agreed to.
DRAFT PROCEEDS OF CRIME ACT 2002 (CASH SEARCHES: CODE OF PRACTICE) ORDER 2018
Resolved,
That the Committee has considered the draft Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) Order 2018.—(Mr Ben Wallace.)
DRAFT PROCEEDS OF CRIME ACT 2002 (RECOVERY OF LISTED ASSETS: CODE OF PRACTICE) (ENGLAND AND WALES AND SCOTLAND) REGULATIONS 2018
Resolved,
That the Committee has considered the draft Proceeds of Crime Act 2002 (Recovery of Listed Assets: Code of Practice) (England and Wales and Scotland) Regulations 2018.—(Mr Ben Wallace.)
DRAFT CRIMINAL FINANCES ACT 2017 (CONSEQUENTIAL AMENDMENT) REGULATIONS 2018
Resolved,
That the Committee has considered the draft Criminal Finances Act 2017 (Consequential Amendment) Regulations 2018.—(Mr Ben Wallace.)
Draft Scotland Act 1998 (Insolvency Functions) Order 2017
(7 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Deputy Leader of the House of Commons (Michael Ellis)
I beg to move,
That the Committee has considered the draft Scotland Act 1998 (Insolvency Functions) Order 2017.
The draft order, which was laid before the House on 20 September 2017, is part of a package of measures aimed at updating and modernising corporate insolvency in Scotland, particularly the insolvency rules that apply to the winding up of companies. It follows on from the recent modernisation of company insolvency rules in England and Wales that culminated in the Insolvency (England and Wales) Rules 2016.
To briefly give some background, I should explain that the law on corporate insolvency in Scotland and the division of legislative responsibilities between the Scottish and UK Parliaments and Governments is complex, particularly in relation to winding up. For business associations, for example, the general legal effect of winding up is reserved, but the process of winding up is excepted from the reservation. In practice, it is not always clear whether a winding-up matter relates to a reserved aspect or a devolved aspect.
In an effort to facilitate the efficient, effective and user-friendly modernisation of Scotland’s insolvency rules, particularly those that relate to companies, both Governments have therefore agreed that it would be of benefit to lawmakers and practitioners alike if the complicated exercise of assessing which rules relate to a reserved matter, and which do not, could be avoided. Accordingly, both Governments have agreed to the preparation of a combined order under sections 63 and 108 of the Scotland Act 1998. Section 63 enables an order to
“provide for any functions…exercisable by a Minister of the Crown in or as regards Scotland, to be exercisable…by the Scottish Ministers concurrently with the Minister of the Crown”.
Conversely, section 108 enables an order to
“provide for any functions exercisable by a member of the Scottish Government to be exercisable…by a Minister of the Crown concurrently with the member of the Scottish Government.”
The draft order will allow for the mutual conferring of functions on Scottish Ministers and a Minister of the Crown so that both have the power to introduce, as appropriate, rules or regulations on winding up for companies, incorporated friendly societies and limited liability partnerships in Scotland, irrespective of whether those rules or regulations relate to reserved matters under schedule 5 to the 1998 Act.
Under the draft order, a Minister of the Crown and the Scottish Government Ministers must reach agreement before either can make rules or regulations on the winding up of companies, incorporated friendly societies and limited liability partnerships under the functions that it confers. That approach will enable each Administration to make provision on winding-up matters without any doubt being cast on the scope of the relevant enabling powers. Users of winding-up legislation will also benefit, because the draft order furthers our aim that the rules on the winding up of companies in Scotland be contained in a single instrument rather than split between two. The immediate intention is that the Scottish Government, with the consent of the UK Government, will introduce an instrument to make provision for both the reserved and devolved aspects of winding up, as part of the current project to replace the Insolvency (Scotland) Rules 1986 with updated and modernised rules.
I hope the Committee agrees that this is a sensible approach that will enable the modernisation of corporate insolvency in Scotland to move forward in an effective manner. I believe it provides an excellent example of our two Governments working together to make the Scottish devolution settlement work for people and industry in Scotland.
Martin Whitfield (East Lothian) (Lab)
I am grateful to the Minister for his excellent explanation of the draft order. Has a procedure been envisaged to deal with disagreement between Ministers in Westminster and in Holyrood?
Michael Ellis
All these matters are carefully considered. It is anticipated that whatever happens, the process enabled by the draft order will be preferable to the current situation, which is clearly rather confused.
I commend the draft order to the Committee.
Lesley Laird (Kirkcaldy and Cowdenbeath) (Lab)
It is a pleasure to serve under your chairmanship, Mr Chope. As the Minister set out, the order is part of a package of measures aimed at updating and modernising corporate insolvency in Scotland, particularly insolvency rules for companies. The law on winding up in Scotland is complex because it is a mixed area of competence. Section C2 of schedule 5 to the 1998 Act provides:
“In relation to business associations…the general legal effect of winding up”
is reserved, but
“the process of winding up, including the person having responsibility for the conduct of a winding up or any part of it, and his conduct of it or of that part”
is excepted.
It is not always clear whether a winding-up matter relates to the general legal effect of winding up, or whether it falls within the exception provided for the process of winding up. Accordingly, rather than attempt the complicated exercise of trying to assess, as part of the modernisation process, which rules relate to a reserved matter and which do not, the draft order provides for the mutual conferral of functions on a Minister of the Crown and Scottish Ministers under sections 63 and 108 of the 1998 Act, so that each can make winding-up rules for company insolvency in Scotland irrespective of whether they relate to reserved matters. This approach makes it clear that each Administration has the power to make, in the exercise of those powers, all subordinate legislative provision on winding-up matters without any doubt being cast on the scope of the relevant enabling powers. The Labour party therefore supports the draft order.
Question put and agreed to.
Draft Pharmacy (Preparation and Dispensing Errors - Registered Pharmacies) Order 2018
(7 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Health (Steve Brine)
I beg to move,
That the Committee has considered the draft Pharmacy (Preparation and Dispensing Errors – Registered Pharmacies) Order 2018.
I do not believe we have danced before, Mr Brady, so it is very much a pleasure to serve under your chairmanship. The order was laid before Parliament on 13 November and extends to the whole of the United Kingdom. Its purpose is to create, for registered pharmacy professionals working in a registered pharmacy, new defences to the criminal offences set out in sections 63 and 64 of the Medicines Act 1968. The order makes those defences available in defined circumstances to pharmacy professionals making genuine dispensing errors. This marks an important step forward in addressing barriers to providing a safer, higher-quality service. Let me make it clear that the order does not cover pharmacy professionals working in non-registered hospital pharmacies. That will be addressed in a separate order that we intend to consult on early next year.
The Mid Staffordshire inquiry highlighted the importance of putting patient safety at the heart of everything we do and achieving a careful balance between assuring accountability to the patient and developing a culture of openness and transparency, so that we learn from errors and improve practice and safety. Indeed, Professor Don Berwick stated:
“The most important single change in the NHS in response to this report would be for it to become, more than ever before, a system devoted to continual learning and improvement of patient care.”
The order very much follows that philosophy.
Pharmacy professionals are highly regulated individuals —in relation to dispensing errors, more so than any other healthcare professionals. Indeed, they are subject to triple jeopardy in the event that they commit a dispensing error. They face prosecution for strict liability offences under sections 63 and 64 of the Medicines Act 1968, prosecution for offences under general criminal law and sanctions under professional regulation requirements. That can lead, we believe, to defensive practices. It has been demonstrated in other industries where safety is critical that working under such threat of sanction is a hindrance to the reporting of errors and accidents and therefore to wider learning.
Evidence suggests that patient safety and service quality can be improved through increasing the rate of reporting and learning from dispensing errors. That will have benefits to patients locally and throughout the NHS. By removing the fear factor of a strict liability offence for inadvertent dispensing errors, our aim is to create a much more open and transparent culture, which in turn should help to improve learning and prevent mistakes from happening in the first place. We will be working closely with pharmacy regulatory and professional bodies across the UK to make that a reality.
Let me be clear that registered pharmacies already have a range of systems and procedures in place to prevent dispensing errors from occurring. More than 1 billion prescription items are dispensed every year, and it is a testament to the professionalism of pharmacy staff that errors occur in only a very small proportion of cases. Dispensing errors can, however, occur within a registered pharmacy for a variety of reasons. For example, there are many thousands of medicines, and some have very similar names and brandings. Medications may also have complicated dosing schedules.
The order is not about accepting the inevitability of error in the system. It seeks to ensure that we collect information on errors that do occur and think hard about how they can be prevented in the future, including through spotting trends at a national level. That may involve improving systems and procedures and designing out errors as far as is practicable, but without knowledge of what has gone wrong that is just not possible.
We are not removing all safeguards for patients. There will remain offences under general criminal law—for example, in cases of gross negligence and manslaughter—and sanctions under professional regulation, as I have said. In such circumstances, the professional regulators, the General Pharmaceutical Council and the Pharmaceutical Society of Northern Ireland, can still subject individuals to regulatory fitness-to-practise procedures. Sanctions would depend on the circumstances of the error but could ultimately include the individual being removed from the professional register and no longer being permitted to practise.
The order is well supported: it was overwhelmingly endorsed during the public consultation, including by patients, the public and groups such as Action against Medical Accidents, who will now want to see pharmacy professionals play their part and demonstrate increased learning from, and reporting of, errors. The order has also been some five years in gestation, so I am pleased to attempt to land it today through the Committee. I am fully committed to ensuring that that happens, and we have already taken action in that regard.
In each of the four home nations, a number of initiatives to support reporting and learning have been introduced, such as medication safety officers or champions, and national reporting systems. Regulatory and professional bodies in pharmacy have also put in place standards and guidance to support the desired culture change, with community pharmacy trade bodies encouraging their members to follow those standards and encouraging pharmacy teams to report, learn, act, share and review.
Action is also being taken in each of the home nations on medication error more generally throughout their healthcare systems. It is a sobering fact that 5% to 8% of all hospital admissions are medication-related. In September, the Secretary of State for Health and the chief pharmaceutical officer for England launched an initiative that focuses on reducing prescribing and medication errors throughout the national health service in England. The programme will look at a number of areas, including how we use technology, understanding how best to engage patients in their medicines and advancing the transfer of information between care settings.
As I mentioned at the start, while the order provides a defence for pharmacy professionals working in registered pharmacies, it is important to recognise that pharmacy services can occur outside of those settings, and therefore that not all pharmacy professionals will be able to avail themselves of the defences set out in the order. That is deliberate. Work is progressing to develop similar measures for pharmacy professionals working in hospitals and other care settings. That will ensure that, regardless of their position in the healthcare system, pharmacy professionals will be encouraged to report and learn from errors.
In summary, the order supports improved patient safety by encouraging a culture of candid and full contributions from those involved when things go wrong. Within that culture, pharmacy professionals—I have to say, they are some of the most motivated and professional people I have met in our national health service during my time as an MP and a Minister—can increase their learning from dispensing errors and identify mitigating actions to make reoccurrence much less likely. I commend the order to the Committee.
Julie Cooper (Burnley) (Lab)
It is a pleasure to serve under your chairmanship, Mr Brady, and to respond on behalf of the Opposition to the important order in front of us.
As the wife of a retired community pharmacist—I have no interest that I am obliged to declare—I have to say that 24 years’ experience of owning and running a community pharmacy has given me an in-depth understanding of the sector and the challenges that community pharmacists and their staff face every day. As the Minister mentioned, more than 1 billion prescription items are dispensed every year—the vast majority from community pharmacies—and the trend is that prescription numbers will increase each year, reflecting the general increase in demand in the national health service and the ageing population. An average community pharmacy dispenses between 300 and 500 prescriptions a day.
It is important to consider that that volume of work is only one part of the role performed by community pharmacists. They are an integral part of the primary care team and make a huge contribution, including giving advice on a range of health and wellbeing issues; providing support for public health initiatives, such as those employed to reduce smoking, drug abuse and obesity; medication use reviews; diagnostic testing; diabetic and asthmatic care; and minor ailment schemes. The list is endless.
In that context, genuine errors will happen occasionally. As the Minister mentioned, it is a credit to the profession that those are very few and far between, but it remains a fact that pharmacy professionals are one of the few health professional groups to face criminal conviction and potential imprisonment, for an inadvertent dispensing error—that is, where there is a discrepancy between the prescription and the medication supplied to the patient. The prosecution of pharmacists and dispensing technicians is very rare, but it does occur, so pharmacy professionals always have that fear hanging over them.
The principal beneficiaries of the order will be professional community pharmacists and registered dispensing technicians practising in registered premises—and, of course, patients. The draft order, which will amend the Medicines Act 1968, will be welcomed by community pharmacists, technicians and their professional bodies. I am aware that the National Pharmacy Association, the Pharmaceutical Services Negotiating Committee, the Royal Pharmaceutical Society and patient groups support the proposed changes; I am sure they agree that they are long overdue.
Most products are prepared outside registered premises and arrive ready to be dispensed. Errors in such cases may take the form of selecting the wrong product or providing incorrect dosage instructions. However, there are still many instances in which pharmacy staff members are required to prepare medications on site, in which case errors may take the form of miscalculation of required quantities, addition or subtraction of necessary ingredients or incorrect instructions for use. The order will introduce a new defence against criminal liability that will apply to both preparation and dispensary errors and will be open to pharmacy professionals who can prove that the error occurred when they were acting in the course of their profession.
Such a defence really is overdue. In 2009, the chairman of the Pharmacists’ Defence Association warned:
“Inappropriate use of the criminal sanction will lead to defensive practice…less innovation”.
During the passage of the Health and Social Care Bill in 2011, Earl Howe said that the legislation needed to be reviewed so that criminal liability did not arise as a result of genuine dispensing errors.
Ensuring the right to legal defence against prosecution in cases relating to an inadvertent error will undoubtedly remove some of the fear burden and lead to a greater willingness to admit errors. It will also assist in promoting a culture of transparency that will help to inform future learning and improve protocols for the dispensing and preparation of medicines. The better practice learned will result in fewer errors and improved patient safety and is therefore eminently desirable.
The order will offer protection to pharmacists and dispensing technicians, but its main purpose is quite rightly to improve patient safety. Proposed new section 67B(5) will require the accused to prove in their defence that on discovery of the error, every step was taken to report it at the earliest opportunity to the person in receipt of the medication. That provision will give pharmacy professionals the chance to minimise the effect of errors and will positively incentivise them to admit them, as the act of so doing will aid their defence. This new duty of candour has the potential to lead to a major cultural change.
Pharmacy professionals who show deliberate disregard for patient safety will not benefit from any of the defences in the order. Where they are found to be wilfully negligent or intent on causing deliberate harm, they will continue to face criminal prosecution. The order will protect only those practising in registered premises who are already subject to professional regulation. For the sake of the protection of patients, it will not provide a defence for other groups or individuals external to registered premises involved in the medicine supply chain.
The Opposition welcome the order and believe firmly that it is a step in the right direction, but it does not go far enough. Even after it is implemented, pharmacists will still not be on a level playing field with other healthcare professionals; they may benefit from access to improved defences, but as the Pharmacists’ Defence Association maintains, they will still face the prospect of a police investigation and a lengthy trial. They will have to hold on to the hope that they can successfully use the defences, but they may still face prosecution under other provisions of the 1968 Act. I hope that the Minister will consider further legislation to ensure that inadvertent errors are totally decriminalised. I welcome his comment that the situation for pharmacy professionals not covered by the order will be consulted on early next year; I ask that it be looked at as early as possible, because pharmacists in hospitals need these defences.
There is an omission in the order. We know that learning from reported errors is anticipated, but there is no formal requirement in the order to deliver on that. It is reliant upon good will. I am sure that many pharmacists and pharmacy dispensary technicians will want to take it upon themselves to improve their existing protocols so that errors cannot reoccur, but there is no formal requirement in the order for them to so do.
As we all want to prioritise patient safety and wellbeing, I hope the Minister will undertake further work to positively promote patient safety within the pharmacy setting. One really useful suggestion I would like to make is to allow pharmacies full read and write access to patient records. All health professionals involved in the care of a patient surely need access to the fullest information, without the danger of knowledge gaps or incorrect information regarding past medications. That would aid continuity of care and contribute to safer patient outcomes.
There is so much more to do, but we welcome the order as a starting point and look forward to the Minister bringing forward further improvements.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I, too, and the Scottish Government welcome the order, as does our Scottish chief pharmaceutical officer. This is an anomaly that is being corrected, and the key thing is that it leads to more reporting. We understand that there were almost 21,000 reported errors in 2016, but it has been suggested that a considerably higher number were not reported. I echo the argument that risk to patients is increased if pharmacists are not flagging up simple things such as poor labelling, things that are difficult to read or mistakes that someone else has made. That is where everyone wants to get to.
I am keen to support the shadow Minister’s point that the obligation to report should be formalised, rather than pharmacists just having to contact the patient. That is how they will be able to utilise the defence, as they must show that they have taken every possible action to contact the patient and correct the mistake. That changes a defensive reason to hide errors into a reason to report errors, but it really needs to happen through a reporting system. I am interested in what the national reporting system will be and whether it will be across the UK, so that lessons can be shared as widely as possible.
The order will amend sections 63 and 64 of the Medicines Act, which contain a power that has hung over pharmacists, even though it has rarely been used. The Secretary of State for Health talks a lot in the Chamber about getting away from a blame culture and moving to a learning culture. I do not think there is any argument about that, but I want to know how mistakes will be reported.
I also echo the point about information sharing. In Scotland, we have had community pharmacies providing minor ailments treatments and other treatments, including a chronic medicine service, for about 10 years. We are moving to a point where patients are registering with their community pharmacy, in the same way they do with their GP and dentist, so that records are shared. We also use e-prescribing widely in general practice and hospitals. That technology helps to reduce errors right from the prescriber, which is what I used to be, to the patient. The system simply flags up the danger of prescribing penicillin to someone who is allergic, using the wrong dose or bad interactions. Using technology in that way, to prevent system errors right through from the prescriber to the patient, needs to proceed as quickly as possible. A lot of that comes back to data sharing and getting the confidence of the public back.
I agree with the shadow Minister’s call for the Minister look at other areas of pharmacy. If we start to have a single system through e-prescribing, that will become easier. Although it is suggested that that will be brought forward early next year, the legislative burden in this place is a tad heavy at the moment, and I certainly would not like to see it delayed for another five years. In essence, we welcome the order but want to know exactly what the reporting system will be and when the move to things such as e-prescribing will be made.
Paul Flynn (Newport West) (Lab)
This is a fascinating piece of legislation in that by far the greatest pressure on us in most areas of law is to make punishments more severe, but here we have an order that calls for an intelligent approach of drawing back from what appear to be excessively severe punishments for errors, mistakes, crimes or whatever they may be, in the knowledge that, human nature being what it is, there will be an atmosphere of more openness. That seems an entirely beneficial and persuasive argument and a good reason for putting the order forward.
We have clearly had a legacy of excessive and unreasonable punishments hanging over pharmacies, but that is not to say that all is well in the prescription of drugs in this country. In 2003, a COX-2 inhibitor drug called Vioxx was identified as a problem in America because the Food and Drug Administration there published a report saying it believed that the drug, which was not a life-saving one at all, had caused 120,000 heart attacks and strokes, many of which had led to death. I wrote to the regulatory body here asking why we did not spot that and how many prescriptions had been issued in 2003. I was told that there were 4,500 prescriptions, but there had been only half a dozen reports of bad reactions. We have errors and weaknesses in our system for spotting issues of that kind, and I believe that if we are doing something wise, generous and sensible as far as pharmacists are concerned, we might look to them to play a fuller part in future as the frontline in identifying bad reactions to drugs such as the COX-2 inhibitors. They can also help us to avoid the great scourge in America at the moment, which is now coming here: the misuse and overuse of opioid drugs. That has become a greater killer in America than traffic accidents or gun crime, and we are seeing an increase in deaths from opioid drugs and addiction to them here.
I believe we would all say that we welcome the order, but there is a great deal more to be done to protect the public from the dangers of prescribed drugs, and pharmacists could play a major role in that.
Steve Brine
I thank my shadow, the hon. Member for Burnley, and the hon. Members for Central Ayrshire and for Newport West for their contributions and their support for this measure.
I am well aware that the hon. Member for Burnley has in-depth understanding and knowledge of this issue from her previous life supporting her partner, a community pharmacist. She is absolutely right to highlight the wide portfolio that community pharmacists hold. I sometimes think it is even wider than mine, and I have said in the House, and will say again now, that community pharmacists are absolutely central to me and to the primary care objectives that I hold in this job for primary care and for the public health and prevention agenda. Primary care and public health are pulled together under my portfolio for a reason, and community pharmacists sit together as a hub in the middle of those two bits of my work.
The hon. Lady is absolutely right to say that the order will be welcomed—I think alongside the hashtag #abouttime. For many people in the community pharmacy sector, the changes are long overdue. I spoke to the Royal Pharmaceutical Society’s conference in the summer—I suspect she was there—and I said that this was long overdue and that I would sort it. I have tried to remain true to my word, and I have.
I think the defences in the order strike the right balance, which the hon. Lady outlined coherently, while not leaving the door wide open. We still have to make sure that patient safety is protected—the current Secretary of State above all would say that—but I do believe that it strikes the right balance. I note her request for early work in respect of hospital pharmacists, and I am very amenable to that. I do not want that to drag on for many years; I want it sorted quickly, and officials know that.
On read and write access to patient records, many pharmacists already have read access and some already have write access. I am interested in making the change, and I am exploring more with officials how to make it happen; it is of some frustration to me that it seems to be an IT issue as much as anything else. If pharmacists are to be integrated within our primary care system as much as I want them to be, I suggest that that is very important.
Julie Cooper
This all centres on acknowledging that pharmacists are the experts when it comes to medication. I think that most GPs who work alongside pharmacists day in, day out will hold their hands up and say that. GPs used to be regularly on the phones to us saying, “Can I just ask you about this? I am thinking of prescribing this, but I am not sure. Is this best, or would it be better with something else?” That is good teamwork between people who are specialists in their areas.
In the light of that, it is quite ridiculous that pharmacies cannot record their advice and intervention on a patient record for other health professionals to see. It would be entirely in the patient interest, and in the interests of making sure that patients do not fall through the gaps between the different health professionals.
I will make one further point about recognising that expertise, if you will allow me to, Mr Brady. Pharmacists could be used to do more, as I have said many times in the House. When he talked about protections, my hon. Friend the Member for Newport West reminded me of the work that is happening on antibiotics and a recent Westminster Hall debate on their overuse and the development of antimicrobial resistance. Pharmacists could lead on that in the interests of wider patient wellbeing and safety.
Steve Brine
The hon. Lady is absolutely right. Pharmacists have been absolutely brilliant, focused and motivated supporters of the “Keep Antibiotics Working” campaign. I responded to that Westminster Hall debate on antibiotics, as she knows.
On the hon. Lady’s wider point, I believe, and I believe the evidence backs me up, that in the best health economies, the three planks—secondary care, primary care and pre-primary care, which is where we could see a community pharmacy as being—work hand in hand. The sustainability and transformation partnerships are supposed to be a one-NHS solution for different areas and different health economies to help the population achieve good health when they become unwell, but also to practise good preventive health. I absolutely agree with her that pharmacists know their patients and customers, and that they spot things because they see those patients much more regularly than GPs do. That is why they are absolutely central.
On the point about the obligation to report, which was mentioned by the hon. Members for Central Ayrshire and for Burnley, I said in my opening speech that the Government are already working with the regulators and professional bodies to ensure that pharmacy professionals are supported in the implementation of the order. An absolutely critical part of that is making sure that they report errors, because if they do not, this will all be somewhat wasted. There are a huge number of examples that I could give; maybe I can write to the hon. Member for Burnley with the details. The national reporting and learning systems were established in England to collect data and report on safety incidents. The health service safety investigations Bill, which is in draft and undergoing pre-legislative scrutiny at the moment, also adds power to this argument.
I think that, with this order, we have something of a rare gem in Committee Room 9: it is something that we all agree is needed. We are delivering it as a Government, as I promised we would. It will add further impetus to the work already under way to reduce medical errors across the health service and will provide much-needed assurance to pharmacy professionals that they can do their job with confidence. I know they have that confidence, but there has been this little niggling thing undermining them. I hope the order addresses that.
As the Whip next to me coughs—I am sure that was purely accidental, as opposed to a hint—I will finish by saying that, should both Houses approve the order, commencement orders will be drafted to enact the changes in England, Scotland, Wales and Northern Ireland. I thank hon. Members for their attentiveness, their interest and their contributions, and I commend the draft order to the Committee.
Question put and agreed to.
Ministerial Correction
International Development
(7 years ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Martin Whitfield (East Lothian) (Lab)
Alistair Burt
I am pleased to join the hon. Gentleman, and I am sure the whole House, in commemorating World AIDS Day. We have been a long-term supporter of the international AIDS vaccine initiative, and we are the largest international funder of HIV prevention, care and treatment. From the £1.1 billion going into the Global Fund to Fight AIDS, Tuberculosis and Malaria, 1.3 million retroviral drugs will be provided through the UK this year. There will be no let-up in the fight, and we are united on that.
[Official Report, 29 November 2017, Vol. 632, c. 311.]
Letter of correction from Alistair Burt:
An error has been identified in the answer I gave to the hon. Member for East Lothian (Martin Whitfield).
The correct answer should have been:
Alistair Burt
I am pleased to join the hon. Gentleman, and I am sure the whole House, in commemorating World AIDS Day. We have been a long-term supporter of the international AIDS vaccine initiative, and we are the second largest international funder of HIV prevention, care and treatment. From the £1.1 billion going into the Global Fund to Fight AIDS, Tuberculosis and Malaria, 1.3 million retroviral drugs will be provided through the UK this year. There will be no let-up in the fight, and we are united on that.
Consumer Rights
System of obtaining Permanent Residence Certification
Westminster Hall
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Public Sector Pay
(7 years ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Helen Jones (Warrington North) (Lab)
I beg to move,
That this House has considered e-petition 200032 relating to public sector pay.
It is a great pleasure to be here under your chairmanship, Mr Hanson.
When Conservative Members talk about public sector workers, it is common to hear them refer to them as if they were somehow a drain on the economy. They try to make a distinction between public sector workers and taxpayers, as if somehow to be fair to one is unfair to the other. That is nonsense, for two reasons. First, public sector workers, like most of us—or at least those of us who cannot afford obscure offshore tax avoidance schemes—are taxpayers and, secondly, in a modern economy the private sector and the public sector are interdependent. It is not possible to run a 21st-century economy without a healthy, educated workforce. The security that is provided by our armed forces, the police and the fire service is as essential to businesses as to individuals, and the rule of law they maintain, along with the courts and the Prison Service, provides the essential stability that allows businesses to grow and invest.
Nick Thomas-Symonds (Torfaen) (Lab)
I congratulate my hon. Friend on the speech she has started to make. Does she agree that one of the great betrayals and causes of instability is the constant promise that the pay cap is temporary, when all the time it has continued, and seven years down the line here we are?
Helen Jones
My hon. Friend is right, and I will come to that issue later.
None of us could function day to day without, for instance, the people who sweep our streets and empty our bins. I mention them because their hard and unglamorous jobs—as many public sector jobs still are—often get overlooked when we talk about the public sector. We understandably see documentaries about hospitals and schools, but I would like to mention those people who are now officially refuse disposal operatives, but in my neck of the woods are the binnies. They do a grand job.
Kevin Brennan (Cardiff West) (Lab)
I congratulate my hon. Friend on the way in which she is introducing the debate. As Chair of the Petitions Committee, she always introduces these debates with great force and eloquence. In addition to the points she has made, does she agree that public sector workers are also consumers? It is essential that they are appropriately rewarded, as consumers, for their work so that they too can contribute to stimulating the economy, including the private sector.
Helen Jones
My hon. Friend is right and, again, I will come to that matter later.
When we are told that only the private sector generates value in the economy, we should ask, “Yes, but who looks after your workers when they are sick? Who do you call if you are burgled or are the victim of fraud? Who do you call if a fire starts in your building? Who educated the workers you employ?” The answer is, of course, “the public sector”. There is something else about the public sector that cannot be measured so easily: it has contributed more to human improvement and happiness than it is possible to say. Without our teachers and our classroom assistants, for instance, so many hopes and aspirations would be stifled. Having a national health service has freed many families from the fear of being ill and not being able to pay the doctor. The improvements that NHS staff have made in preventing and tackling disease have vastly increased everyone’s quality of life.
Something else about the public sector is that its workers are often ready to go the extra mile, precisely because they believe in the notion of public service. We see that in teachers and classroom assistants, who put on extra classes in their own time to help children who are struggling or to help the very brightest achieve their potential. We see it in an NHS support worker, who will bring in a card or a small gift for an old person on their birthday because they know they have no one else. We see it in a police community support officer who will go around to reassure a victim of crime or antisocial behaviour, even when they are off duty. Nor should we forget that we saw it in this House when Westminster was under attack from terrorists. The staff of St Thomas’s Hospital ran—they ran—across that bridge, heedless of their own safety, to help others, and a very brave man, Police Constable Keith Palmer, lost his life defending us. After such incidents, a lot of gratitude is expressed to public sector workers, and rightly so, but gratitude does not pay the rent or the mortgage, or put food on the table. It does not buy a new uniform for the kids, or a day out.
Dan Carden (Liverpool, Walton) (Lab)
I, too, congratulate my hon. Friend. Aintree University Hospital is in my constituency. Nurses have had a 14% pay cut in real terms since 2010 and one in four of them is taking on additional employment to make ends meet. What does that say about the state of our economy?
Helen Jones
My hon. Friend is absolutely right. Gratitude for public sector workers is not enough; they also deserve our respect. Respect involves paying them a decent wage for the job they do but, sadly, under this Government their wages have been continually held down.
John Spellar (Warley) (Lab)
Many of the arguments my hon. Friend has made up to now would have been recognised and endorsed by traditional Conservatives. Is it not unfortunate that, having imported the anti-state ideology from the US Republicans, they now see the state and public service as the enemy rather than a key part of the mixed economy?
Helen Jones
I could not have put it better myself. The result was that one of the Conservative Government’s first actions was to announce a two-year freeze on public sector pay from 2011-12. They followed that up with an announcement that public sector pay would be capped at 1% for the following four years and, in his 2015 summer Budget, the Chancellor announced a further four years of the cap, saying that he would fund public sector workforces for a pay award of 1%. That did not mean, of course, that everyone would get even 1%: a letter from the right hon. Member for Chelsea and Fulham (Greg Hands), then a Treasury Minister, made it clear that the money was first to be used—as if—to address recruitment and retention pressures in the system: “there should not be an expectation that every worker will receive a 1% award”. What that meant, of course, was that those people in areas where there were retention pressures received less, and those in areas where there were many people on the minimum wage—46,000 in local government alone—who had rightly to receive a pay rise, received less. Even if a public sector worker got the 1% pay rise, their wages were still declining in real terms. A public sector worker on the median income who had their pay determined by the pay cap would, by 2016, have lost £3,875 in real terms. Real-terms losses of between £2,000 and £3,000 are common throughout the public sector.
A midwife on band 6 will have seen a real-terms decline in her wages of 12.1%. Midwives are leaving the profession at a previously unseen rate. They are leaving the register in serious numbers. A teacher outside London will have lost 10.4% and a band 5 nurse will have lost 11.9%. If the pay cap continues until 2020, there will be a further real-terms decline in wages. A social worker will lose £3,533. A border guard—I thought the Government wanted to secure our borders—will lose £2,520. A firefighter will lose £2,766. The reason for those falls is not hard to find: while wages have been stagnant or hardly rising at all, prices have been rising at a much faster rate.
Gloria De Piero (Ashfield) (Lab)
My hon. Friend is making an incredible speech, and I thank her for giving way. On the point about rising prices and falling wages, I want to tell her about a police officer who contacted me. He said that after 20 years of service, he never thought he would be in a position where he was struggling to look after his family. He ended with a question:
“Do we really want a police force that is stressed out and humiliated by not being able to look after their family?”
The clear and simple answer to that is no, we do not.
Helen Jones
Indeed. The situation my hon. Friend mentioned is true of many people in the public sector. Between 2010 and 2016, food prices went up by 8.5%, electricity went up by 27.7% and gas went up by 24%. These are not things that people can do without; they are essential for a decent life. Note that I am not talking about an extravagant life; I am simply talking about a decent life.
Ian C. Lucas (Wrexham) (Lab)
My hon. Friend is making a powerful case. The continuous process since 2010 is taking money out of local economies. All the salaries she is referring to are normally spent on our high streets and in our local businesses. They are being hit hard by the Government’s sustained deflationary approach.
Helen Jones
My hon. Friend is right. I will come to the effect on local economies in a moment. In the meantime, we should note that the costs of going to work have risen since 2010. Bus and coach fares have gone up by 25%. Many low-paid public sector workers are reliant on public transport because they cannot afford to run a car. The cost of a nursery place for a child under two has gone up by 21% on average. In big cities, it has gone up much more. For a child older than two, the cost has gone up by 19.6%.
In addition, public sector workers have seen other attacks on their wages. In many cases, their pension schemes have been changed. They are now having to pay more pension contributions than before. Those on lower pay have been hit by changes to tax credits and will be hit again by the universal credit system. Even when we take into account increases in the minimum wage and changes to the tax threshold, the changes to tax and benefits that the Government have introduced have hit poor working families even harder than those out of work. So much for having a system that makes work pay.
The real effect that those things have on people can be seen clearly in some of the evidence gathered by the trade unions. A Unison survey in 2015 showed that 73% of respondents had had to borrow from family and friends to get by. Some 17% had pawned items and 23% had had to move to a cheaper property or re-mortgage. Some had even used food banks. When those in the public sector—people we collectively employ—are having to use pawn shops and food banks to get by, it shames us all. [Hon. Members: “Hear, hear.”]
Many other staff have real issues, too. In its document on the pay cap, the TUC interviewed a number of people about their experiences. A midwife on £23,000 said she could no longer have a night out or buy gifts for family and friends. An ambulance control worker who works part time—colleagues may have been in an ambulance control room; I can imagine few more stressful jobs—found that his family was £200 a month worse off because of changes to tax credits. A dental nurse had seen her national insurance contributions go up by £28 and her pension go up by £10. That does not seem a lot, but it is a hell of a lot of money for someone on a low wage to lose each month. It is the difference between getting by and not getting by.
Chris Elmore (Ogmore) (Lab)
My hon. Friend is making a hugely important and informative speech, as she always does in her role as Chair of the Petitions Committee. On the trade unions point, the Royal College of Nursing has run a campaign in Wales asking the British Government, not the Welsh Government, to fund the public sector pay rise, because the Welsh Government have sustained £1.6 billion of cuts by the British Government to the block grant since 2010. Does she agree that it is not for the devolved Administrations to fund the pay rises? It is for the British Government to step up and increase the funding for our public sector workers to ensure they get the pay rise they deserve.
Helen Jones
My hon. Friend is right. This Government have been very good at trying to place the blame elsewhere for a policy they introduced. In fact, so bad have things got that last year the chief executive of NHS Providers told the Health Service Journal that one trust had tracked where its low-paid workers were going when they left. They were leaving to work in supermarkets because the pay was better.
Of course, it is not just pay that has caused problems for public sector workers. While their pay is being held down, they are being asked to do more with fewer resources, and they worry about that because they are committed to their jobs. The TUC report includes interviews with various people. One midwife said:
“The pressures on wards, the size of our caseloads and the level of pressure means we worry about making mistakes.”
Another said:
“I’ve seen people walk away from the profession because they can’t take it anymore. It all affects the continuity of care for the women in our care”.
A firefighter told the TUC:
“My station used to have fifteen firefighters and two vehicles on each day. Now there are only six firefighters and one frontline vehicle.”
That combination of pay restraint leading to real-terms cuts and increased pressure on public sector workers means that in many areas we are now having serious difficulty recruiting and retaining staff.
The school workforce census in 2015 showed that one in 10 teachers had left the profession in the previous year. We now know that one quarter of newly qualified teachers leave within three years. That is the highest since records began, and that is not surprising, because they are under enormous pressure. The Government have tried to deprofessionalise the job. They have taken away the checks and balances that used to ensure that heads did not behave unreasonably. Not all bosses are saints, even in the public sector. Cuts to schools are changing the balance of the workforce. We used to have that balance between young teachers coming in with new ideas and older, more experienced staff who could support them, but that is subtly shifting because schools cannot afford to employ the more experienced staff.
I know of one woman, fluent in two languages, who could not find employment when she wanted to come back into teaching after looking after her children. She can only find a job as a teaching assistant. That is a scandalous waste of her experience and qualifications. The Government got rid of lots of prison officers, and now our jails are at risk of serious violence, yet they are having difficulty recruiting more staff because the pay is poor. The NHS has shortages in various areas—accident and emergency, anaesthetics and psychiatry, for example—and the Government’s response when trusts bring in locums or agency staff is to blame the trusts for spending too much money. In fact, the cure is in the Government’s own hands: recruit staff, train them well and pay them properly. That means not only abandoning policies such as refusing to give trainee nurses a bursary, but stopping treating staff as the enemy, as the Health Secretary did in the case of the junior doctors, and it now seems that he plans to do that again to other staff.
In the Budget the Chancellor announced the Government would fund a pay rise for nurses. It applies to all the “Agenda for Change” staff, although we are used to the Government forgetting that cleaners, porters, lab technicians, support workers and a whole load of other staff work in hospitals, and without them our doctors and nurses could not do their jobs. However, the Health Secretary immediately announced that he wanted to change the conditions of work for staff, particularly their unsocial hours payments, so the Government are giving with one hand and taking away with another.
A very wise old headteacher once said to me—in the days when headteachers stayed around a long time, rather than getting burnt out and leaving—“People say the most important thing in school is that the children are happy, but I think the most important thing is that the staff are happy, because if the staff are happy the children will be happy and well taught.” That needs to be applied in other areas as well. Public sector pay has dropped 15% from its peak, and has lagged behind growth in the economy as a whole since 2016. It is now at its lowest level relative to the private sector since the 1990s, when, funnily enough, there was also a Conservative Government in power. As my hon. Friend the Member for Wrexham (Ian C. Lucas) has said, that has had a huge effect on regional economies.
If we take average public sector pay and look at the number of full-time equivalent workers in a region, we can estimate the loss. The north-west has lost £3.7 billion from its economy; the midlands £3 billion; and London a whopping £9.1 billion. That is all money that would have been spent in local businesses, protecting local jobs. Most of the people we are talking about are low paid and the extra money they get is spent on essentials, but the Government choose to ignore that. They have several excuses, or explanations, depending on one’s point of view. First, they try to say that public sector workers have better terms and conditions than the private sector. Well, they no longer have better pensions—although most of them never did—as their pensions have been changed. Estimates of private sector pay are always depressed by the fact that some areas of the private sector have very low pay indeed. The Government know that, because their statistics authority told them so in 2016 and showed that on a like for like comparison public sector workers are on average paid 5.5% less than in the private sector, not more.
The second attempted explanation usually implies that public sector workers have cushy jobs and have it easy. Tell that to a police officer in the inner city, a nurse in A&E, someone who cleans in a hospital, or the bin men working out in the rain and snow this winter. Cushy? Most Conservative Members here would not last a week. In fact, I do not think many of us would last a week. The jobs are hard.
The third explanation says that all this is dreadfully, terribly regrettable, but necessary to get down the debt. We need to say that that is simply and absolutely wrong because during the time of the public sector pay cap, debt has increased, not diminished. It has increased by £496 billion. So if the answer to debt is a public sector pay cap, someone is asking the wrong question. The Government fail to take into account the tax that the public sector generates. It has been estimated that for every 1% increase in public sector pay, at least £710 million worth of tax receipts are generated, possibly as high as £800 million, cutting the amount that is spent on tax credits and benefits. That reduces the total cost of a 1% increase to around £600 million. Opposition Members will say, “That is a lot of money”, which it is, but it is a drop in the ocean compared with what the Government have spent on reductions in corporation tax.
The total of the reductions in the main rate of corporation tax, the small profits rate and the combined rate costs the country £16.5 billion a year on current prices. So there we have it: tax cuts for big companies and pay restraint for public sector workers. Nothing could tell us more about the Government’s priorities. They also ignore the fact that public sector pay increases generate more jobs in the wider economy and at least £470 million in the wider economy, probably nearer £800 million, and that supports at least 10,000 full-time equivalent jobs in hospitality, transport and retail. The truth is that the policy is based on a failed economic model.
Mr George Howarth (Knowsley) (Lab)
My hon. Friend is typically making a powerful and eloquent case, which I agree with. Does she agree that another excuse the Government frequently use is that it is not down to them, but down to pay review bodies? The difficulty with pay review bodies, which are generally a good thing, is that they are not required to close the gap that already exists, but to consider relativities as they stand at the moment. Is it not time we had a proper review that looked at all the issues my hon. Friend has mentioned and that accepted that public sector workers are important to our economy, our safety and our everyday existence?
Helen Jones
My right hon. Friend is right. The cap has depressed the wider economy. It is now starting to depress wages in the private sector, and it is seriously depressing public sector workers. It has failed all round. The Government need to accept that they have failed and should stop trying to put the blame elsewhere. They announced, for instance, that the police can have a rise, but they will not fund police authorities to pay for it. Council workers can have a rise, but they are cutting the money available to local authorities. Health service workers can have a rise, but they will take it back from somewhere else. The Government must stop making excuses and recognise that the policy has failed.
Two things need to happen: first, all of our public sector workers should at least get a proper living wage: not the spurious national minimum wage, but a real living wage. We cannot run public services on the backs of poorly paid workers any longer. Secondly, the Government need to let proper negotiations begin in the various pay review bodies. My right hon. Friend is right: at the very least they should look at the discrepancies that have been created and how far public sector workers have fallen behind. Then they need to fund those pay rises. That would be good for public sector workers, the wider economy and our regions, and in the end it would be good for our country. It is time to abandon the policy and give people a decent wage.
Several hon. Members rose—
David Hanson (in the Chair)
Order. Some 22 right hon. and hon. Members have indicated that they wish to speak in the debate. The debate appears to have a long time to run, as it can continue until 7.30 pm, but my successor in the Chair will have to call the Front-Bench spokespeople at around 7 pm. Given that we have two hours and, at the moment, about 22 hon. Members who wish to speak, I suggest that Members stick to five or six minutes. I may have to impose a time limit later on, but I hope that we can manage that voluntarily. I call Gerald Jones.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Thank you, Mr Hanson, for calling me to speak so early in today’s debate. Given the large number of people who wish to speak, I will try to keep my comments relatively brief. I congratulate my hon. Friend the Member for Warrington North (Helen Jones) on setting out so powerfully how the Government are on the wrong track with regard to public sector pay. I also wish to declare an interest: two trade unions, Unison and the GMB, gave financial support to my constituency Labour party in the 2017 general election.
Right across the United Kingdom, we rely on our public servants each and every day to do the jobs that keep our communities and our country functioning—whether working for our local councils, maintaining our highways, cleansing our streets and villages, teaching in our schools, providing home care to the elderly, or working in our emergency services or Her Majesty’s armed forces. All those roles have one thing in common: they provide essential pubic services, and it is absolutely right that those public service workers need and deserve a fair pay rise.
The Government’s pay cap has been in place since 2010 —seven long years. Throughout that time, our hard-working public servants have endured significant financial pressures. Inflation has risen by 22% over this period, while public sector pay has risen by just 4.4%. Wage freezes and the Government’s pay cap have lasted throughout this time, bringing financial misery to public service workers and their families, and causing huge damage to services. For example, an average public sector worker, paid the median public sector wage in 2010 and subject to the two-year pay freeze followed by the pay cap, has seen the value of their wage drop by £4,700.
The pay cap and years of below-inflation pay awards are also having a significant impact on recruitment and retention, and are one reason why nurses have been leaving their profession in droves. Local government is having trouble recruiting and retaining staff, with the workforce survey revealing that 71% of councils are reporting issues. That recruitment and retention crisis applies across the public sector.
Although the Government have made pay offers in excess of 1% for some sectors, the pay cap effectively remains in place for the vast majority of public sector workers. It is important that the Government do not cherry-pick pay rises for some public sector workers, which could be seen as an attempt to divide.
Stephen Kinnock (Aberavon) (Lab)
Is my hon. Friend aware that in my local authority area, Neath Port Talbot, public sector workers took a voluntary pay cut totalling £8 million to avoid the catastrophe of compulsory early redundancies? Does he agree that such a situation cannot and should not be repeated?
Gerald Jones
Yes, I do. It is an example of the dedication of our public sector workers but, as my hon. Friend says, is a bridge too far.
We need to see an end to the public sector pay cap, with a fully funded pay rise for all those working in our public services. Local authorities have tried to ease the situation. The two local authorities serving my constituency, Merthyr Tydfil County Borough Council and Caerphilly County Borough Council, took decisions during the previous council term to become living-wage employers—the real living wage, not the pretend living wage that the Government are promoting. That has helped to mitigate, in a small way, the effects of the pay cap.
The Welsh Government have indicated their support for our public sector workers and repeatedly called on the UK Government to end the cap on public sector pay and give workers across the UK a much-needed pay rise, funded properly by the UK Government. They have stated:
“The UK Government must do the right thing and lift the pay cap right across the UK public sector as part of a wider strategy to end their damaging policy of austerity.”
With huge cuts to the Welsh Budget and local government in recent years, the Welsh Government have been unable to take further action without funding from the UK Government.
There are many economic arguments for paying our public service workers; however, as a country, surely it is our moral duty to value our public sector workers. They work to keep us safe, healthy, educated and cared for, in the face of prolonged real-terms pay cuts that have strained their working and family lives. The Government need to act. Last month’s Budget provided the Chancellor with an opportunity to bring an end to the period of unfairness and pay misery for public sector workers. The Chancellor chose not to act. Instead, public service workers are facing Christmas and the new year wondering how they are going to make ends meet.
Finally, figures have been released today showing a rise in the number of children and older people in poverty of 700,000. That may not be wholly attributable to the pay cap; however, in-work poverty is on the rise, and the pay cap will have had a significant impact on that. Food banks are now used more by people in work than by those out of work. Taken with the resignations of the members of the Social Mobility Commission, there is plenty of evidence to urge the Government to act. I look forward to the Minister’s response, and urge the Government to listen and take action sooner rather than later.
Mary Glindon (North Tyneside) (Lab)
It is an honour to serve under your chairmanship, Mr Hanson. I, too, thank my hon. Friend the Member for Warrington North (Helen Jones) for introducing the debate on behalf of the Petitions Committee.
Hundreds of people in North Tyneside signed the petition, and I have received emails from dozens of constituents asking me to be here today—some of them are former colleagues with whom I worked before becoming an MP. Thousands of people in North Tyneside work in the public sector. In fact, North Tyneside Council remains one of the largest employers in the borough, with over 3,000 employees. Many other constituents of mine are among the thousands of workers in Government Departments at Tyneview Park, Cobalt business park and Benton Park View, which was known as “the Ministry” for many years. It is not surprising that there has been so much support for the petition locally, particularly given that many of those workers saw their pay frozen between 2010 and 2012, with only a 1% increase each year since then, meaning that basic pay for local government workers has, on average, fallen by 21% in real terms since 2010.
The Public and Commercial Services Union, of which I remain an associate member, represents over 180,000 members in the civil service and related agencies nationally. Its members have seen the value of their incomes plummet, with pay being cut on average by £3,000 under the pay cap. Because of pay restraint in all our communities we have seen huge reductions in disposable income in the local economy, to which many Members have referred. That is only made worse by large public sector job losses.
Furthermore, the pay cap has also led to problems with recruitment and retention in essential public sector jobs, putting more pressure on our already overstretched services. Perhaps that is why a recent poll by the TUC revealed that 70% of the public support scrapping the pay cap. It would make sense, as research from the Institute for Public Policy Research demonstrates that a significant portion of the cost of increasing public sector pay
“would be returned to the Treasury almost immediately in the form of higher taxes and lower spending on means-tested benefits”,
which, sadly, many of our public servants rely on. It would also bring more money into the economy and thus create further jobs.
I pay tribute to the public sector unions, mainly Unison and PCS, for pressing the Government on this issue, and calling for an end to the pay cap, with an above-inflation pay increase for all public sector workers. I hope that the Minister will heed the results of the recent ballot by PCS of all its members, in which 99% said the pay cap must be scrapped and 80% said they would be prepared to strike if the Government would not back down.
Some of the people who were balloted are my former colleagues, whom I described in my maiden speech in June 2010 as committed to delivering good services. I think every Member here knows that that is true. I went on to say:
“As Members of this House, we are elected public servants and we should do all that we can to protect our colleagues across the public sector from Government cuts.”—[Official Report, 30 June 2010; Vol. 512, c. 902.]
Seven years on, I stand by what I said then, and ask the Minister to show due respect and appreciation for all public sector workers. Pay up now and end the public sector pay cap across the board.
Several hon. Members rose—
David Hanson (in the Chair)
Order. A number of Members have intervened, then left the Chamber. Mr Speaker takes it very seriously if people do not have the respect to stay for the rest of the debate if they have intervened. I hope that other Members who intervene will stay in the Chamber for the whole debate. It is extremely discourteous to all Members, particularly when we have 22 people wishing to speak.
Eleanor Smith (Wolverhampton South West) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hanson. I thank my hon. Friend the Member for Warrington North (Helen Jones) for bringing this subject to us.
I have received a number of emails from constituents highlighting the effect of the public sector pay cap on them. One of my constituents—a single mum of two, who is also a nurse working part-time shifts—has been struggling to make ends meet, and Christmas is fast approaching. She needs extra money but is unable to do extra work due to childcare costs. The cost of living is increasing, but her wages do not reflect that.
I was a nurse for 40 years—I was elected to Parliament in the June election—and during that time, like many other nurses I experienced the pay cut. Many of us would say that we got three-week, not four-week, pay. When it came to the fourth week, many of us who could do extra work would do it, although we were overworked already. People with childcare responsibilities could not do that.
I am not only talking on behalf of the nurses; I am also talking on behalf of the support staff, who are on even lower pay. They would work 70 hours a week, which is not legal under the working time regulations, but what else could they do to keep a roof over their head? I was approached by a GP on Sunday, who asked me to talk about the fact that he cannot get practice nurses in his surgery because the wages are too low.
That is what happened to us throughout that time. I ask the Minister to look at this matter. I am a Unison member, and on its behalf I want to ask whether the Government will guarantee that the new deal on NHS pay, including the Agenda for Change, will get additional funding, and will not be paid for through cuts to annual leave and maternity pay. I can tell him this now: nurses and staff will not go for that.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Had the Chancellor’s Budget a couple of weeks ago been different, we might not all be sitting here this evening; we might not even need to have this debate. Many public sector workers have seen their pay fall by up to £5,000 over the past seven years, and in the same period consumer price inflation has risen by 15%. That is not sustainable in anybody’s book. The Budget can only be seen as a missed opportunity to redress the balance.
Most people, not just in this Chamber but across the UK, understand that the 1% pay cap is not only unsustainable but deeply unjust. Surely the Minister will not attempt to justify it. How on earth could he? The UK Government’s current position, as I understand it, seems to be to cherry-pick certain public sector workers and set them against the others. That certainly looks like their plan, but how will setting workers against each other improve matters?
In Scotland, the Scottish Government are unequivocal in saying that the pay cap must go. It cannot be justified or sustained any longer. The rising inflation alongside too many years of pay restraint means that our public sector workers feel too hard pressed, despite delivering essential services, which we all use, to our communities daily.
I must declare an interest: until I was elected in 2015, I served in the public sector, as I am sure many hon. Members did. I was an English teacher for more than 20 years, and I too endured the pay cap and saw my wages fall in real terms, so I know what it is like. Scotland’s Budget in 2018-19 will be about £3.1 billion lower in real terms than the 2007-08 Budget due to the cuts by successive UK Governments.
The proper way to fund the lifting of the pay cap is for the UK Government to commit new money, which will bring a consequential to Scotland. That is the only realistic way to do it, as the hon. Member for Ogmore (Chris Elmore) pointed out. Like the hon. Member for Warrington North (Helen Jones), I am fed up that, while the Government mouth concerns about their so-called appreciation for public sector workers, they are quite willing to justify holding down their wages and seeing their living standards fall.
Unlike the UK Chancellor’s Budget, the Scottish Government’s Budget, which will be announced next week, will focus on trying to strike a balance between affordability and giving staff a fairer deal. The full details will be published next week. The Scottish Government face budgetary constraints, but let us do what the hon. Member for Ogmore said and put the ultimate fiscal responsibility for the situation we are all in where it belongs: squarely on the Chancellor’s shoulders.
I urge the Minister to be mindful of the real and understandable anger of the public sector workers who provide essential services. This petition reflects their anger about the fact that the UK is on course for the longest fall in living standards since records began, according to the Institute for Fiscal Studies, which described its forecasts of slumping productivity and wage stagnation as “pretty grim reading”. Household disposable incomes are set to fall until 2020.
The Chancellor’s Budget did not address any of those issues. As has been pointed out, it was a profound and cruel missed opportunity to show public services across the UK that they are valued and that they matter. Warm words do not pay the rent or put food on the table. The UK Government’s ideologically driven austerity is affecting every corner of the UK and every devolved Administration’s Budget.
The claim that there is no new money available to fund increases in public sector pay, which has been held down for too long—workers’ take-home pay is being hurt—has caused great anger. There are billions of pounds on the table for Brexit and the Democratic Unionist party, and there is apparently a blank cheque for Trident. There is money, but public sector workers are simply not a priority. That is disgraceful. I ask the Minister to reflect on that. The Government say they value public sector workers, but how does that value manifest itself? Whatever it means, it cannot mean continuing the cruel pay cap and continuing to alienate our hard-pressed public sector workers. I hope the Minister will go back to the Cabinet and his ministerial colleagues and convey the anger that public sector workers justifiably feel.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hanson. I thank my hon. Friend the Member for Warrington North (Helen Jones) for introducing this important debate.
Seven years after the wage freezes and pay caps for public sector workers began, there is still no end in sight for millions of workers, many of whom are low paid and struggling to make ends meet. When the pay restraints were first introduced, workers like me were understandably not best pleased, but many grudgingly accepted them. Not in their wildest dreams—or should I say nightmares? —could they have foreseen that, seven years later, such conditions would still be forced upon them. The growth of the wealth of the very richest in our society has been matched by the growth of the number of people, including those in work, using food banks. It cannot be right that in the sixth richest country in the world, those who do some of the most important jobs in society feel themselves getting poorer every year.
Kayleigh, one of my constituents, wrote to me outlining her concerns. A newly qualified nurse, she loves her job and is passionate about delivering patient care, yet she finds herself questioning her decision to join the profession. She has spoken to colleagues who have been forced to seek a second job to feed their children. She has watched nurses leaving their jobs for low-skilled jobs in restaurants as the stress of being a nurse has become too much. She even spoke to one colleague who had to remortgage her home, as the rate of inflation had made it increasingly difficult to keep up to date with repayments. If young, passionate people like Kayleigh are considering leaving nursing, what does the future hold for our public services?
Mike Amesbury (Weaver Vale) (Lab)
In my constituency, as a result of the pay cap, a social worker with Halton Borough Council has put off their professional registration to carry out the essential job of being a social worker, and so is left at their desk. Does my hon. Friend agree that that is disgraceful?
Preet Kaur Gill
Absolutely. I totally agree that workers are having to put their professions on the line in that way, as is Kayleigh, but it is not just the effect on such individuals and their families—the impact on the wider economy is clear.
Research by the TUC shows that the long-standing pay cap has meant that, since its introduction in 2010, staff such as nurses, teachers and civil servants have spent £48 billion less on the high street. Across the public sector, there are massive issues with recruitment and retention of staff. According to the Institute for Public Policy Research, in December 2016 there were an estimated 40,000 nursing vacancies in England, a vacancy rate of 11.1%, and 12,000 vacancies for healthcare support workers.
That is no surprise. Why would people want to go into a profession in which they feel undervalued and have a real-terms pay cut every year? If we cannot recruit the nurses, teachers and local government workers we need to provide the crucial local services that our constituents rely on, the very fabric of our society is at risk. It is time to end the stranglehold on public sector workers, for the good not just of hard-working people such as my constituent Kayleigh, but of our economy and our society as a whole. It is time to scrap the cap.
Rachael Maskell (York Central) (Lab/Co-op)
Thank you, Mr Hanson, for calling me to speak in this important debate.
We have seen the cost of living soar by 22%, with the increase in the cost of utilities, food and travel exceeding that, so at the same time the pay gap is getting bigger and inflation is on the move. At the Budget, this Government were left exposed as not having an answer for all our public sector workers who have endured pension cuts, down-banding and cuts to their allowances. As union head of health, I represented people who had seen their wages decrease by a third. That is the reality of our public sector today, and it is having an impact on recruitment and retention, as we have heard.
In York, house prices are 9.5 times higher, and that is what people need to save for, although totally unaffordable. People are leaving our NHS, which has to go to agencies to put in safe staffing levels. That has pushed our health service into debt and into the process of capping expenditure. The Secretary of State for Health says that hospitals will have to find the money, but where from? We need the Government to wake up to the reality of what is happening to our public services—not just the NHS, but right across the public sector. Our public sector workers are so professional despite the pressure they are under, that they deserve a pay increase. Today we hear from the Joseph Rowntree Foundation that 13.9 million people have been pushed into poverty in the sixth richest nation on this planet—that is a complete disgrace.
I want to highlight one or two of the issues that have not yet been raised in the debate. First, I will talk about inequality in our pay system. We know that there is vertical segregation on the grounds of race and gender. In 2013, during the pay restraint, I was completely shocked that the armed forces had an advance on their pay of 1.5%—I do not begrudge them that, but everyone else received 1%. The police and prison officers, too, have had an advance in their pay that has not been awarded elsewhere. I highlight the fact that those are male-dominated professions, while nurses, teachers and those in other women-dominated professions, as well as those not even covered by pay review bodies and also predominantly women, have had no such increases. That shows an inherent problem of gender discrimination in the Government’s pay policy. I also emphasise that those who receive the lowest pay are the worst off.
With Agenda for Change, the pay scale that covers the vast majority of NHS staff, I want to highlight the disparity of pay. Although a fair system was introduced to address real problems in the pay system, since 2004 someone in band 1, on point 2 of the pay scale, has received an increase of £3,525, while someone on point 54 has received a £21,910 increase. That shows the growing disparity in pay. We need to ensure that we do not just add percentage increases to pay, which benefit people at the top of the scale. That is why the trade unions have come together this year to put forward a pay claim that involves a linear increase to ensure that those worst off in the pay system also get a fair deal. That is such an important issue. We also need to address the growing inequality between the different nations of England, Wales, Scotland and, in particular, Northern Ireland which now has real problems in the pay system as money is not being paid out.
We must also look at redressing the situation so that a percentage increase is seen as separate from the incremental scale—that is one of the points I really want to dispel the myth on. We have heard how pay progression is being mistaken for a pay increase. Agenda for Change is absolutely clear that incremental pay progression for all pay points within each pay band will be conditional on individuals demonstrating that they have the requisite knowledge, skills and competencies for their role. Forty-six per cent. of staff are at the top of the band, which is the rate for the job, but people acquire skills and knowledge as they move to the top of the band, so that is not a pay increase—it is a mistake by the Government even to pretend that it is.
Finally, I want to say: do not mess with the terms and conditions. Those have already been played with so many times, and the kind of things that the Government have asked of staff—such as addressing unsocial hours payments—predominantly impact on women. Do not go there—staff do not want the Government to go there and will not let them take away those crucial elements of pay enhancement for people who work through the night so that they can pay for more expensive childcare. I want to say to the Government: “You have the money and the ability to raise that money—pay it!”
Jack Dromey (Birmingham, Erdington) (Lab)
Workers have suffered the longest stagnation of wages since a royal prince was about to get married—Prince George, the son of Queen Victoria—when Disraeli and Gladstone were in No. 10 Downing Street and trade unions were illegal, 150 years ago. The hardest hit have been public servants, with a 4.4% increase since 2010 against a background of a 22% cost-of-living increase.
Who are the public servants we are talking about? The Unison home help I met last year who was buying Easter eggs—“Is the council paying for them?” I asked, to be answered, “No, I am buying them myself and taking them around to all the people I care for, because some of them never see anyone else from one month to the next.” Tracey the neonatal intensive care nurse who nursed little Liam, who died seven times, back to life. The headteacher, teaching assistant and teacher in Kingstanding who were rescuing children from desperate poverty by turning around their prospects. They took one particular young boy from the bottom of the class to the top, despite the fact that he came from a household with no carpets, no curtains and no cupboards, with clothes stored in bin bags—acute poverty, but the school turned his life around. The police officers who chased the armed bank robber and recovered for Lucy her children, who had been hijacked by him as he sped away from the police. None so noble as those who care, none so noble as those who save lives and nurse the sick back to health, none so noble as those who provide ladders of opportunity, particularly for the poorest in our society, and none so noble as those who put their life at risk to help save the lives of others.
Jack Dromey
Because of the pressure of time, I will not, so that more people can speak.
The reward of those public servants is rising demand, rising workload and falling living standards. That is the impact of not only pay restraint but major cuts to, for example, local government budgets, leading in turn to problems with increments, shift changes and fewer people being employed, so those left having to do more. In our constituencies we can all see the impact on them and their families, as they have to turn to debt advice, pawning household goods, taking out payday loans and food banks, such as the home carer I met in a food bank in my constituency—a proud woman with two kids who loved her job but could not make ends meet without going to the food bank.
If public servants are suffering, so too are public services, through the turnover of labour and the stress on staff—very often, staff complements are stretched to the maximum and those who work in public services are demoralised. There is an impact on local economies, because if public servants get a pay rise, they do not salt away their money into Cayman Islands bank accounts; they spend it in the local economy, creating wealth and jobs. There is a grotesque contrast between the way that public servants are treated and what has been revealed in the paradise papers. This is a Britain where we have a Conservative Government that stand back and allow tax dodgers to get away with it, and then the Prime Minister says during the general election campaign to a nurse that there is no such thing as a magic money tree. Yes, there is, and they grow on the Cayman Islands, Bermuda and Jersey, helping the wealthy to avoid their responsibility to society.
I am grieved because I am from a family of public servants: when my dad came off the roads he was a train driver on the London underground; my mum was a nurse; my Uncle Mick, who lived with us, was a street cleaner. They believed in public services, as the country believes now in public services and public servants, but public servants have been let down by a failing, uncaring Government. It is interesting that a monastic vow of silence has been taken by those opposite, who have been reluctant to get up and defend what their Government are doing. The unmistakable message from this debate is that they may stay quiet but we will not. Labour is on the side of public servants.
David Hanson (in the Chair)
A number of hon. Members have withdrawn from speaking, giving us a little more flexibility. Rather than a strict five-minute limit, hon. Members may speak for six or seven minutes.
Mike Hill (Hartlepool) (Lab)
It is a pleasure to speak under your chairmanship, Mr Hanson. I wish to declare an interest; I used to be employed by Unison, which brought forward the petition and also donated to my general election campaign, together with Unite and GMB.
The Government’s austerity agenda has not only done great damage to our public sector services but brought our NHS to the brink of collapse. Indeed, in Hartlepool, our local hospital is at risk of haemorrhaging services, which is unacceptable to the people. I know from experience that relentless cuts and redundancies have led to remaining staff being over-stretched and under extreme pressure. For more years than I care to remember, those same workers have suffered pay restraints and pay caps. In the light of inflation, that has meant, in effect, that they have suffered a real-terms pay cut. It is a sad indictment of the situation created by this Government that health workers and other public sector workers in my constituency are resorting to food banks.
Things have got so bad that Unison gives out school uniform grants and other welfare provisions for those trapped in in-work poverty, and local branches increasingly issue food bank vouchers to their members who are in need. It is unacceptable that this situation has arisen and that NHS and other public sector workers are struggling to get by on low pay. The pay cap has been cited as one of the reasons why nurses have been leaving the profession in droves, yet its main purpose—addressing Government debt—has failed. Since the cap was introduced, Government debt has grown by around 50%, to reach £1.7 trillion in May this year. Our hard-working NHS staff should not suffer the burden of propping up—
Mr Jim Cunningham
My hon. Friend has probably heard Ministers say how wonderful our public services are and that what staff and our emergency services do is wonderful. But does he agree that the best thing that the Government could do is to improve on the recommendations of the wages board for a big increase—not the one that the Government might be proposing? More importantly, does he agree that that the Government should put their money where their mouth is, and give those staff a decent increase?
Mike Hill
I absolutely agree with my hon. Friend. The Government’s words are hollow when they say that they will look at the pay review bodies but they have not committed to the recommendations of those pay bodies.
Our hard-working NHS staff should not suffer the burden of propping up the Government’s failed and farcical fiscal policy. They deserve a pay rise and they deserve it now.
David Linden (Glasgow East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hanson. I thank the 331 people in my constituency who signed the petition, and I commend the hon. Member for Warrington North (Helen Jones) on very eloquently opening the debate. I am grateful to the hundreds of local people who have emailed and written to me before the debate and I am pleased to be speaking on their behalf in calling for action on public sector pay.
It is important that, as we take part in this debate, we remember the backdrop against which it is taking place. We have the worst wage growth in 210 years, and public sector workers have seen their spending power reduced because of rising inflation. The average household has lost £7.74 per week due to higher prices of essential shopping items such as bread, milk and cheese. The Governor of the Bank of England has warned that households have slashed spending as incomes continue to be squeezed by a weak pound, which is almost certainly not helped by the Brexit shambles that is unfolding. We are witnessing the longest fall in living standards since records began. Under this Government, whose Members have been very silent in this debate, inequality has been exacerbated and, in the words of the Resolution Foundation, we are witnessing
“the biggest increase in inequality since Thatcher.”
This morning, I attended the Joseph Rowntree Foundation’s launch in central London of its report on the state of UK poverty in 2017. The report states that one in eight workers now lives in poverty. Essentially, that blows a hole in the argument that work is the best route out of poverty, especially if we are condoning embarrassing levels of poverty pay. The report said that 47% of working-age adults and the poorest fifth of the population now spend one third of their income purely on housing costs. The recent Budget was a missed opportunity for the Chancellor to end pay restraint for our hard-working public sector workers. The Chancellor should have followed the commitment of the Scottish Government, which will lay out its draft Budget next month. Our finance secretary Derek Mackay has already said that the Scottish Government will lift the public sector pay cap, even if Westminster—
Ben Lake (Ceredigion) (PC)
I agree with the hon. Gentleman that public sector workers across the UK deserve better than the current policy pursued by the UK Government. However, does he agree that in the interim, devolved Governments have a responsibility to do all that they can to mitigate the worst effects of the public sector pay cap, and to ensure that our public sector workers get a fair deal, regardless of where they are in the UK?
David Linden
I wholeheartedly agree with the hon. Gentleman. I very much welcome the engagement between the Scottish Government in Edinburgh and our trade unions on the public sector pay cap.
During the September recess, I undertook something that may be a bit unusual for an MP, called In Your Shoes, where I spent a day every week doing a different job: a day pulling pints and calling the bingo at the Tavern bar in Parkhead, a day with the Easterhouse citizens advice bureau, a day teaching children at Our Lady of Peace Primary School, and a day out with police officers in Baillieston. One of the last days that I did was at Easterhouse fire station. Over the course of the day, the guys at Easterhouse fire station were incredibly welcoming; they had me dressed up in all the outfits, going on the drills with them and using the ladders and hoses. After that, we went back to the fire station. I was grateful to the officers at Easterhouse fire station and the Fire Brigades Union representative, Thomas Hanlon, for their thoughts and comments on the challenges that they face. I was struck by the bravery of those guys, because when a building is on fire, they run towards it, as we saw happen at Grenfell tower. We MPs are on £76,000 a year, and the reality is that none of us would run into a burning building, but that is the reality of what those guys do. The Government will say that we are all in this together, but the reality is that we are not. We are not running into the burning buildings with those firefighters. The least that the Government can do is give them the pay rise that they deserve. Anything else is just lip service.
Laura Pidcock (North West Durham) (Lab)
I proudly declare my membership of Unite and I want to say well done to all the people who signed the petition to allow us to have this debate. I want the Minister to tell us two things. First, since pay rose by just 4.4% between 2010 and 2016 yet the cost of living rose by 22%, do the Government accept that they have in reality inflicted a real-terms pay cut on public sector workers? I say “real terms” because those are the only terms that matter to people outside the Westminster bubble. Secondly, can the Government really say that they value our public sector workers, who keep our services going day in, day out, when they first froze their pay and then capped it?
I ask those questions because it seems very difficult to get the Government even to acknowledge the problem. They are fond of saying that there have been pay increases, and we recently heard the Chancellor say that public sector workers are overpaid. Public sector workers across the board are unbelievably committed to their jobs—it is not all about pay. They are so committed to their work that they have worked £11 billion-worth of unpaid hours. Officially recognising them for the work that they have done would require a 24% increase in their pay.
Leaving aside the hundreds of unpaid hours of work, this is about a basic principle of work and pay. It is not right in principle that workers in North West Durham, for example, are worse off year on year despite doing absolutely nothing wrong. They are not directly responsible for inflation or prices; their living standards improve or degrade at the Government’s behest. If the Government are intent on keeping pay increases behind inflation, they ultimately have to accept that they are comfortable with making people poorer. I really wish that the Government would just admit that they are comfortable with that.
Fifteen unions, representing millions of workers, are asking for an end to the pay cap. Over the summer, thousands and thousands of workers took to the streets to protest about the pay freeze. I wonder whether any Government Members understand what forces workers out on to the streets or to withdraw their labour. That is always a last resort. It is a symbol of the hardship that these people are experiencing and of their anger—it is not about militancy.
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
GS day is coming. My hon. Friend just touched on it. Public sector workers have had enough. Working men and women in all sectors, both public and private, have had enough. The race to the bottom has to stop. How much longer do the Government expect workers to wait? Workers should keep pushing: breaking point is coming. I urge all workers to join a trade union, get themselves a voice and become part of a movement—a movement for change and a voice for change. GS day is coming and I urge all general secretaries to get involved.
Laura Pidcock
I could not agree more with my hon. Friend. Joining a trade union is the only way that workers will improve their terms and conditions under this Government.
The inequality between this place and the rest of the public services has been mentioned. How can it be right that Members awarded themselves a 10% pay rise in 2015 while most public sector workers’ pay was capped at 1%? People really feel that there is one rule for us in this place and another for all the rest. I genuinely do not think that Government Members can claim that they support or value our public services while they suppress workers’ wages. Pay is inextricably linked to morale, productivity and efficiency. Every single public sector worker I have met has said that they are under more pressure now than ever before, at the same time as their pay is at an all-time low. In fact, if we continue on this trajectory, there will have been the biggest average contraction in real-terms earnings since 1851. Are the Government proud of that happening on their watch?
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
I thank my hon. Friend for her generosity in giving way. She makes an excellent point about productivity. It is correct that the UK has the lowest productivity of the G7 nations. That is not just to do with the private sector; a large part of it is to do with the public sector and the fact that we overwork, underpay and under-resource our public service workers. That has to stop if we are really going to grip the productivity issue in the UK.
Laura Pidcock
Absolutely. If our public sector workers worked to rule, this country would come to a standstill—it would collapse. It makes no sense at all to suppress these workers’ wages. As hon. Members have said, people who are skint do not spend in their local economy; they are very cautious with their spending.
Public sector workers need an above-inflation pay rise as part of a properly funded settlement. If it is not properly funded—public sector workers know this—the cuts will just continue through redundancies. If public sector workers do not get that pay rise, I will support them in whatever industrial action they take. If withdrawing their labour is all they can do to get this Government to see reason, they have my support.
Mohammad Yasin (Bedford) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hanson. I thank my hon. Friend the Member for Warrington North (Helen Jones) for introducing this debate, and the 147,000 members of the public—especially the hundreds from my constituency of Bedford and Kempston—who signed the petition that brings us here. I hope that they know their efforts are making a difference.
I have long argued that public service workers are well overdue a pay rise. The Government’s response to the petition is not good enough. They say:
“Public sector workers deserve to have fulfilling jobs that are fairly rewarded.”
They point us to 12 September, when they announced a move away from the 1% public sector pay policy towards a more flexible approach to pay. But those are just words. Where is the action?
The truth is that the Government are using the country’s debt—let us not forget that it has got worse on their watch—as an excuse not to give public sector workers the pay they should have. The Government were not worried about that debt when they managed to find £1 billion for the Democratic Unionist party or when they committed billions of pounds to funding Brexit. Public sector workers are bearing the brunt of the Government’s failed austerity policy, and that must stop.
The truth is that, far from respecting public sector workers, this Government are humiliating them. NHS staff were all but ignored in the Budget. Teachers and pupils were ignored. Firefighters were ignored. Police officers were ignored. Local authority workers were ignored. The decision on nurses’ pay was given to a pay review body. The Government refuse to take responsibility.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Will the hon. Gentleman give way?
Mohammad Yasin
Public sector workers should not pay the price for the Government’s incompetence. They are the backbone of society and will be supporting the public long after the Government are voted out.
Mohammad Yasin
If you had wanted to speak, you could have put your name forward.
Mrs Gillan
On a point of order, Mr Hanson. I need your advice. I was not able to put in to speak in this debate because I am not able to be here for the whole debate, but this matter was raised with me by two constituents and I came here to listen because I hoped that I would be educated. I have sat here and heard the Government being castigated. I wanted to intervene, and I was trying not to counteract your advice that we should not just intervene and leave the Chamber, but unfortunately the hon. Gentleman would not let me intervene. How do you think I can best make my point, other than through this point of order?
David Hanson (in the Chair)
I am grateful to the right hon. Lady for what was, in many ways, a non-point of order. She will know that the hon. Gentleman who has the floor is entitled to decide whether to give way. He has chosen not to give way. I did say that Members should not intervene and then leave, because I was concerned that some Members intervened and then walked straight out. If she wishes to intervene and a Member wishes to accept her intervention, that is fine. In order to progress the matter—we do have some extra time now because of Members withdrawing—Mr Yasin can continue.
Mohammad Yasin
Thank you, Mr Hanson. I have not finished yet. I am grateful for the patience of the right hon. Member for Chesham and Amersham (Mrs Gillan) and I am glad that a Government Member wants to speak, so I will take this opportunity to give her a chance to do so.
Mrs Gillan
I am genuinely grateful to the hon. Gentleman for giving way. I came here to learn more about this issue. Two constituents—one who earns £10,000 as a teaching assistant and another who earns £32,000 as an administrator—wrote to me because they had signed the petition. All Government Members value public sector workers; everyone sitting here is certainly here to learn. I wanted to ask the hon. Gentleman what his union’s proposals would cost and how it would advise the Government best to raise that money. It is a serious question, and I hope that he may be able to answer it.
Mohammad Yasin
You should ask your Minister how he will deal with these issues. If you care for the people, you should not ignore the workers, and you should not ignore the nurses—
Mohammad Yasin
I apologise. If the Government care for public sector workers, they should not ignore teachers and they should not ignore nurses. They should not ignore the 5.5 million workers in this country, and their families, who are struggling because of the cuts that the Government have made.
It is painful that only a handful of Government Members have turned up for this important debate. That shows that they do not care about our workers, who provide such a wonderful service to our country. As my hon. Friend the Member for North West Durham (Laura Pidcock) said, if those workers stopped work today, the country would collapse. The Government need to take care of these workers and listen to them, and they should stop cutting their livelihood.
Laura Smith (Crewe and Nantwich) (Lab)
I proudly declare my membership of Unison and congratulate it on its work on this matter. Rather than asking whether they can afford to scrap the public sector pay cap, the Government should be asking whether they can afford not to. Recruitment and retention costs in the public sector are soaring. The local government workforce survey revealed that 71% of councils are having trouble recruiting and retaining staff, with pay in local government and schools cited as one of the main drivers.
According to data produced this year, almost a quarter of teachers who have qualified since 2011 have left the profession. As an ex-primary schoolteacher, in my experience that is due to teachers feeling undervalued and under-supported. They long to do the job, but everybody has their limit. The pay cap has been cited as one of the reasons why nurses have been leaving their profession in droves. Nearly 40% of full-time vacancies advertised on NHS jobs in March were within the nursing occupational group.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I agree with everything my hon. Friend is saying. Does she share my concern that the issue is really urgent, considering the impact of Brexit? We know that some 10,000 EU nationals have left the NHS since last year. I therefore agree that continued pay restraint does not make sense in the light of the retention and recruitment challenges that the public services clearly face.
Laura Smith
I agree, and I will move on to another affected group. We have 900 careworkers leaving their job every day—every single day. An Age UK study estimated that, over five years, the NHS lost 2.4 million bed days as shortages of social care support meant that vulnerable patients could not be discharged, which has cost the NHS £669 million. For every extra pound put in a public sector worker’s pay packet, they are far more likely to spend it in our shops than to save it or stash it away in some offshore tax haven.
Unison research suggests that a 1% increase in public sector pay generates up to £820 million in increased income tax, national insurance and tax receipts, and it means reduced spending on benefits. It also adds £470 million to £880 million to the economy and creates between 10,000 and 18,000 jobs. A public sector worker paid the median public sector wage in 2010 and subject to the two-year pay freeze followed by the 1% pay cap ever since has seen the value of their wages drop by £4,781.
A Unison survey of its members in the NHS revealed that over 200 respondents had used a food bank in the last 12 months; 73% had had to ask family and friends for financial support; 20% used a debt advice service; 17% pawned possessions; 16% used a payday loan company; and 23% moved to a less expensive home or had to mortgage their house. As a child, I watched as my mother had to pawn our possessions. No child should ever have to watch that. Our public sector workers were told we are all in this together and that a pay cap is necessary to deal with our country’s debts.
Thelma Walker (Colne Valley) (Lab)
Does my hon. Friend believe it is appalling that the Government are trying to play public sector workers off against one another and that every public sector worker deserves a pay rise, as they are the glue that holds this country together?
Laura Smith
Government Members may sit and roll their eyes and shake their heads, but as far as I am concerned they just do not like listening to the truth. I absolutely agree with my hon. Friend.
The Government told us that it would all be over by 2015, once they had cleared the deficit. That was pushed back to 2016 and then 2018, 2019 and, most recently, 2025. In the meantime, we have become the only OECD country to see wages fall while the economy grows. The cap means that public sector workers received a pay increase of just 4.1% between 2010 and 2016. In stark contrast, dividends to shareholders in the top companies rose by 57% over the same period.
Austerity is not working; it is only hurting ordinary working people while the super-rich get ever richer. The Paradise papers show us exactly where their extra money is going. We were all hoping that the Chancellor would see sense and change course in the Budget, but instead we got more of the same for our public sector workers. The Government are great at thanking our emergency services in the aftermath of a crisis, but when they reach into their pockets, they find nothing more than a pat on the back for the workers who hold those services together.
The Government must stop viewing a pay rise as a burden on the public purse. To do so is not only economically illiterate but an insult to those who work to keep us safe, healthy, educated and cared for. With every new spending pledge, politicians are asked, “How can we afford to do it?” I ask the Government this: how can we afford it? Well, nurses are unable to afford food, police officers are unable to afford houses and cleaners are unable to afford to get into work—how can they afford it? Tax havens for the rich, executive pay ballooning, rapidly growing inequality—how can we afford it?
This is no longer a question of choice; it is a question of necessity. The Government must pay up now with above-inflation pay rises for all public sector workers. They cannot afford not to. I want to thank the public sector workers of my constituency for all that they do. Now, let us get them the pay rise they all deserve. It is shameful that Government Members sit shaking their heads, ignoring this and playing on their phones instead of listening to the facts that people in the Chamber have brought them and Unison has given them.
Alex Sobel (Leeds North West) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Hanson. I thank my hon. Friend the Member for Warrington North (Helen Jones) for so eloquently leading the debate. As a GMB member, I feel privileged to be able to speak in a debate on pay and pay inequality, because it is surely one of the most important issues facing the United Kingdom today. I have had hundreds of emails from Unison members and hundreds of postcards from members of the Royal College of Nursing on this very issue. In summer 2016, the Prime Minister promised to fight against what she called the “burning injustices” in British society. This weekend, the four key members of the Prime Minister’s Social Mobility Commission resigned, citing little hope that the Government could deliver a more equal society. What more damning indication is there that the Government are failing?
[Graham Stringer in the Chair]
It is clear that this country has a problem with wealth inequality. A recent report by the Resolution Foundation states that 1% of adults own 14% of the nation’s assets. At the other end of the scale, 15% of the British people own no assets at all. The reality now is that wealth inequality is hitting public sector workers—our social workers, police officers and firefighters—who are the very backbone of our society. That is largely down to the public sector pay cap: one of the most iniquitous policies the Government have come up with, and a policy not just of this Government but of the previous coalition Government with the Liberal Democrats—one might note that they are not in the Chamber.
In 2010, when the coalition Government was formed, the country was told it needed to make sacrifices to reduce the national debt. David Cameron’s exact words— I am sure we all remember them—were:
“we’re all in this together”.
Seven long years later, debt is still rising. The date for the eradication of debt, as my hon. Friend the Member for Crewe and Nantwich (Laura Smith) said, has been pushed further and further back; and all our public sector is in crisis, because of the harsh austerity economics of those two Governments. All in all, the cost of living has risen by about 22%, while public sector pay has not just stagnated but fallen back, in real terms.
The Government have created a system in which the people we rely on most cannot afford to live in 21st-century Britain. To me, that does not scream of a society where we are all in it together; I am sure it does not to the other Members in the Chamber, either—or perhaps that is not true of all of them. Is it not entirely reasonable for public sector staff to ask what their sacrifice has been for? Is it not reasonable for nurses to ask why more and more of them are having to take second jobs, or use food banks, to feed their families? Is it not reasonable for firefighters to ask why 27% of their colleagues have contemplated suicide because of the stress of reduced budgets and increased pressures? Is it not reasonable for teachers to ask why teaching staff and their families across the south of England are ending up homeless because their wages have stagnated while rents have sky-rocketed?
I recently spoke to one of my constituents, who has worked in social care for more than 20 years. He explained the effect that what is essentially a seven-year wage cut has had on his life and his family’s lives. He could have put a down payment on a house, paid for his child to go to university, or saved up for a more comfortable retirement. Yet, despite it all, he told me how they would have accepted a temporary pay cap, to protect the services that he has dedicated his life to. He is not unique; that is the norm for public sector workers, not just in Leeds North West but throughout the country, and I am proud of him and all public sector workers.
While such people have had to make money stretch further, the services they work in have been slashed and they are working twice as hard for less money to keep cash-strapped services from collapse. The Institute for Fiscal Studies has warned that the public sector faces a recruitment and retention crisis as a direct result of the pay cap. On any one day there are 90,000 vacancies for social care jobs in England. Just under 340,000 social care employees leave their job each year. Schools have been forced to increase money spent on advertising for teachers by 61%; that is money being wasted in the education system on recruitment rather than being spent on retaining excellent teachers.
Mike Amesbury (Weaver Vale) (Lab)
Would it make sense for the Government to reverse the ludicrous tax cuts for the incredibly wealthy and corporations, amounting to some £19 billion, to fund public servants and end the pay cap?
Alex Sobel
That is an excellent point, and if the right hon. Member for Chesham and Amersham (Mrs Gillan) had stayed in her place she would have heard her question answered by my hon. Friend. It is right: corporation tax rates have fallen consistently, but large corporations have not paid their burden of taxation. If they did, it would be to the good of all society, including their own workers and shareholders.
The Metropolitan police have had to take the extreme measure of asking retired police officers to return to work to help them cope with demand. The argument is not only a moral one—although it is a moral one; clearly the pay cap is a false economy, and maintaining it is costing billions. It is not just the recruitment crisis that is costing the country billions; the TUC has also shown that the pay cap has meant public sector staff spending £48 billion less on the high street since it was introduced in 2010, undermining private sector as well as public sector jobs and pay. I have a simple question for Conservative Members—those who are left: who will you turn to when there is no one to put out the fire in your house, when no one keeps criminals off your streets, and there is no one to care for you when you are sick, old or unable to care for yourself? The hypocrisy of the Government is staggering. Praise is lavished upon public sector workers, but is not reflected in their pay packet. Praise does not pay the rent, feed a family, or heat a home.
Faisal Rashid (Warrington South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Stringer. I am grateful for the opportunity to contribute to this important debate. I thank my constituency neighbour, my hon. Friend the Member for Warrington North (Helen Jones) for setting out the petition and opening the debate with some excellent points. I thank the almost 150,000 people who signed the petition, especially the 326 signatories from Warrington South. It is further evidence of public support for ending the public sector pay freeze, and it is extremely important that we, as a Parliament and as public representatives, react to that.
It was widely reported on 12 September that the Government had lifted the public sector pay cap but, unfortunately, that was not the case. The pay freeze remains in place for the vast majority of public sector workers. The Government’s approach has been to cherry-pick some groups in the public sector for a so-called pay rise, which would still result in their wages being cut in real terms. It is important to note that the Government have so far failed to provide much of the additional funding that is needed even for such an incremental rise. In areas where funding has been discussed, such as in the NHS, there remains a lack of clarity. That is yet another example where the Government have been strong with words but weak on action; and we need action.
Liz McInnes (Heywood and Middleton) (Lab)
On that point, does my hon. Friend share my concern that when he was asked about funding the lifting of the pay cap for NHS workers, the Health Secretary merely said he would look at reforming terms and conditions to pay for the increase?
Faisal Rashid
I totally agree; and nothing happened.
The continuing pay freeze is putting immense pressure on public services. I have seen first-hand, in Warrington South and across the country, how seven years of neglect and under-investment have put unnecessary and unacceptable pressure on many public sector staff. I have also seen just how hard public sector staff have continued to work, in what are often extremely difficult circumstances.
The Joseph Rowntree report that came out this morning highlights the fact that poverty rates have begun to rise in the United Kingdom for the first time in two decades, and wage stagnation is at least partly responsible. That shows that even though we are living in a time of record employment, it is not leading to a reduction in poverty levels. That is certainly evidenced among public sector workers. Reports of nurses being forced to seek financial support and assistance, and of police officers struggling to make ends meet, have become almost commonplace. That is simply unacceptable.
Despite seven years of relative pay cuts, public sector workers have continued to prop up services and support communities with their professionalism, skill and determination. It is high time that we repaid them for that. They deserve to feel valued by society and by the Government. They deserve having the pay freeze lifted now.
Liz Twist (Blaydon) (Lab)
It is an honour to serve under your chairmanship, Mr Stringer. I declare an interest as a Unison member. [Hon. Members: “Hear, hear!”] Thank you.
I am glad to take part in the debate because of the huge number of people who have contacted me —constituents, many of whom are members of Unison, or are in the RCN, who feel strongly, and rightly, that they have been badly done by. It is high time that public sector workers had a decent pay rise. For too long—more than seven years—they have borne the brunt of austerity. Many of them have seen colleagues made redundant as the revenue support grant for councils, police, fire and rescue and other local services has been cut, and they have picked up the pieces—and, often, new responsibilities —to keep services going. At the same time, their wages have reduced in real terms, while their living costs, like ours, go up year by year.
It is no wonder there are recruitment and retention problems in the NHS and elsewhere in the public sector. In the NHS, demand has gone up, but staff continue to work to make sure patients are looked after. They respond magnificently in times of crisis; and we have had too many crises in the past year. That is not just first responders, nurses and doctors. It is all staff, from those who drive the ambulances to the porters, cleaners and technical staff who make sure our hospital buildings are safe, healthcare assistants and nurses, and the many other professions allied to healthcare such as radiographers, physios and lab technicians. I have been visiting a lot of hospitals recently, and I see how hard they all work, yet the Government want them to pay for their own pay rise by looking at their terms and conditions. That is outrageous. In local government, I see the staff who work hard keeping our streets clean, looking after those who need help and support, and keeping our vital services going. It is about time they had a decent pay rise, and that that pay rise was fully funded.
I will refer to one particular issue today, and ask the Minister to address it in his response. I take the opportunity to draw attention to a serious issue affecting NHS workers in Northern Ireland; I thank Unison for bringing it to my attention. While health staff in England, Scotland and Wales have received 1%—paltry as it is—in Northern Ireland they are still waiting for the 1% that the pay review body recommended back in April. It was revealed last week that £26 million has been found to fund the pay rise, but the Government say it cannot be allocated without ministerial approval, which is impossible, given the current deadlock in Northern Ireland. The Secretary of State for Northern Ireland has implemented rates bills and a budget, yet he says he cannot give NHS workers in Northern Ireland even the 1% they are already owed.
The Government should amend the Northern Ireland budget to give NHS workers that 1% and, may I say, more than that. I ask the Minister to make that commitment today. All our public sector workers in all sectors, right across the UK, deserve a real pay rise and one that is fully funded. It is high time that the folk who carry out our essential services were properly recognised and not taken for granted.
Bambos Charalambous (Enfield, Southgate) (Lab)
It is a pleasure to serve under your chairmanship, Mr Stringer. I thank my hon. Friend the Member for Warrington North (Helen Jones) for presenting the petition in this debate, and I declare that I am a member of the trade union Unison.
Before being elected to represent my constituency in Parliament, I worked for a local authority and, along with my colleagues, was subject to the pay cap. Since the election, I have been contacted by many of my constituents who work in our essential public services and are struggling to make ends meet. They provide the services that keep our society going. One of my constituents emailed me recently and said:
“I am a highly skilled professional, and yet my pay packet does not reflect this…The Westminster Government’s public sector pay policy has eroded my salary year on year and caused me considerable hardship, including having to move out of the family home for 4 years to make ends meet…Many of my colleagues have left the profession and low pay and other poor working conditions, including excessive workload, are deterring new entrants.”
It is a travesty that we are seeing poor pay and conditions result in people leaving the public sector jobs they love. Local government has huge statutory responsibilities and our local government workers are carrying out necessary, vital and admirable duties in ensuring that our communities are healthy, educated, housed, cared for in old age and living in a clean and safe environment. As the savage and ongoing cuts that local authorities have faced since 2010 have resulted in redundancies, those still working for local authorities are not only enduring unprecedented workloads but, to add insult to injury, are seeing their pay capped, which is in effect a massive pay cut for them.
As in all our public services, the fact that those workers and their families are struggling makes it clear that the Government are failing in their economic and moral arguments, and are oblivious to what makes society flourish. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) pointed out, most public sector bodies are the biggest employers in their borough, town or city, and the knock-on effect of the pay cap affects the local businesses that serve the local workforce. As my hon. Friend the Member for Warrington North referred to in her excellent speech, in the House of Commons Chamber we hear many platitudes from Government Members, praising the work of our public sector workers, but that pat on the back does not put food on the table, keep a family sheltered or give dignity to workers.
Patricia Gibson
The hon. Gentleman is correct that we often hear platitudes and warm words from the Government about how valued the public sector is; a number of people have alluded to that fact. Is he, like me, deeply bewildered and alarmed at the fact that today we hear not even platitudes—nothing but silence?
Bambos Charalambous
The hon. Lady is absolutely right; the silence is deafening.
Danielle Rowley (Midlothian) (Lab)
With more and more children falling into poverty, many of them in working households, does my hon. Friend agree that the Government need to think now and address work inequality and income inequality, and that scrapping the public sector pay cap would be a great place to start?
Bambos Charalambous
My hon. Friend makes an excellent point, and I agree 100% with what she has said: ending the pay cap would be a good start to addressing inequality.
Decent pay for a hard day’s work is an easy concept to grasp, but it does not fit with the Government’s view that austerity and stripping the state to the bone are the only way to ensure that privatisation happens hard and fast. Just over a week ago, the Chancellor had a big opportunity to ensure that public sector workers got the pay they richly deserved, but once again the Government showed their true colours and would only consider increasing pay for nurses, and nurses only, if it was linked to negotiation on their terms and conditions. It is shameful that the Government expect people to negotiate away their terms and conditions in order to get the pay rise they deserve.
The Government must put an end to the public sector pay cap with a fully funded real-terms pay rise for all those working in our public services. As my hon. Friend the Member for Crewe and Nantwich (Laura Smith) eloquently put it, we cannot afford not to lift the pay cap. Public sector pay increases generate tax revenues, reduce social security expenditure, inject extra value into the economy and create jobs. Unison research suggests that every 1% increase in public sector pay generates between £710 million and £820 million in increased income tax, national insurance and tax receipts, and means reduced spending on benefits and tax credits. It also adds between £470 million and £880 million to the economy and creates between 10,000 and 18,000 jobs. The Government need to scrap the cap, and do it now.
Matt Rodda (Reading East) (Lab)
Thank you for the opportunity to speak this afternoon, Mr Stringer. I declare an interest as a former civil servant and a member of the Association of First Division Civil Servants, GMB and Unite, and I thank Unite for their generous support to my election campaign.
I start by paying tribute to my hon. Friend the Member for Warrington North (Helen Jones), who spoke very well about the issues, for her important and comprehensive speech, which clearly set out the need for a new approach to public sector pay. I was particularly struck by one of her points, which I believe sums up the issue: the Government must stop treating public sector workers as the enemy. Our public servants deserve our support, our appreciation and, most of all, a decent standard of living. That really is not too much to ask in the 21st century.
The pressure on incomes is clear. On average, public sector workers have seen the real value of their wages drop by nearly £5,000 since 2010 and, if the current policy of austerity continues, they face the loss of a further £1,400 by the end of this Parliament. Indeed, some workers have seen a pay cut of around 15%, a significant sum for those who are mainly on modest incomes.
I am aware of time, so I will move swiftly to the impact of public sector pay on my constituency of Reading East. As my hon. Friend the Member for Warrington North said, there have been many harmful effects across the public sector; in Reading, that has been made worse by the high cost of living in the south-east of England.
Furthermore, because of high housing costs and other costs, which are similar to outer London, and the lack of any London weighting in towns like Reading or many other places in south-east England, public sector workers in my constituency have been hit particularly hard by this failed policy. Our schools, NHS, police, local government and many other services are being hit particularly hard by the pay cap. We have seen the loss of teachers and midwives, and shortages in many other key services.
One of the harshest and most damaging impacts of the policy is its effect on younger professionals. I should point out that, with starter homes local to Reading costing up to around £300,000 for a two-bedroom house, home ownership is quite simply slipping out of reach for many younger people in their mid-20s and early 30s. That is a travesty, and it will do untold damage to our services in the longer term. It is driving people out of towns such as Reading, and other nearby cities such as Oxford, and into much lower-cost areas, and it is fuelling deep problems in our services. It has not always been like this. Just 10 years ago, there were no such problems—or not to this extent—and a supply of key worker housing in the Thames valley area existed under previous Governments of both political colours.
Given the context of the housing problems in the south-east and similar regions, I believe that the pay cap is quite simply deeply unfair, and also unworkable, for both public servants and our country as a whole. The situation is getting worse, and I urge the Government to review the mistaken policy. The pay cap has lasted too long, gone too far and should not be allowed to continue. However, it continues at a time when the Government have money for certain things. They have £1 billion to pay off the Democratic Unionist party, £3 billion to prepare for a failed Brexit and huge sums to bail out the very wealthy, through failing to continue with the 50p tax rate and many other policies.
I urge the Government to rethink this policy. As someone once said, when the facts change, we should change our minds.
Dan Carden (Liverpool, Walton) (Lab)
It is a pleasure to speak in the debate. I had not intended to speak, but having listened to all the contributions from my colleagues, I felt it was worth making some remarks and perhaps focusing on some of the services in my constituency that have been most affected by public sector pay restraint. It is a pleasure to follow my hon. Friend the Member for Warrington North (Helen Jones), who opened the debate with facts and figures and opposed the ideological drive behind so much of what the Government have done in their seven years in office—not least holding down public sector pay.
I declare an interest as a proud member of Unite the union, and I am grateful for its support before the recent general election. I am especially privileged to speak in the debate as someone whose mother has served our national health service on the frontline for more than 40 years. That is something I am incredibly proud of. It is an honour to meet people who my family and relatives, who work in our public services, have spent their lives helping and supporting. That is some of the most valuable work done across our society.
I do not have great facts and figures, but I will mention a few services in my constituency. Merseyside police has lost 1,000 police officers and £100 million from its budget. The effects of that can be read in the pages of the Liverpool Echo¸ which show rising crime, criminals developing in confidence and ordinary people feeling insecure in their homes and on the streets. The Prime Minister had the audacity to claim that police budgets have been untouched and that police pay has increased, which led the Police Federation to say she has
“lost touch with reality”.
I could not agree more. The Police Federation puts the pay cut at 16% for our police officers. There have been cases in my constituency and across Merseyside of some of the worst violent attacks on our frontline police officers. To think that we cannot even afford these people a decent standard of living in 2017 is absolutely outrageous.
I recently visited Walton Prison, which is in my constituency. Under this Government, 7,000 prison officers have been cut—one in four—and the ensuing crisis in our prisons has led the Government to look to recruit 2,500 new prison officers across our prison network. This year, prison officers have been awarded a 1.7% pay rise. That is still a cut of £980 in real terms; they have faced such cuts every year since 2010. The evening before I visited Walton Prison, three new recruits had been violently attacked. One reason we cannot maintain safe standards and retain new staff in our prisons is because prison officers’ pay has been depleted and the worth and value of the job is not recognised by the Government. It is time for change.
Helen Jones
I know from staff at Risley Prison in my constituency that prison staff are now unable to take time off when necessary and that whole wings are locked up for half a day, meaning that prisoners cannot access education or work. Does my hon. Friend agree that, as well as that being unfair to the staff, it does not help us to reform prisoners—it makes it more likely that they will reoffend?
Dan Carden
Having seen that at first hand, I could not agree more. It is worth noting that the Prison Officers Association is lobbying Parliament tomorrow; I hope many colleagues can get along to that.
I must touch on Aintree Hospital, which is also in my constituency. Nurses there have faced a 14% pay cut since 2010, and one in four are taking jobs outside their employment as nurses to make ends meet and to pay the bills. The effect of the pay cap on our hospitals is to cost us more, as hospitals are having to recruit nurses through agencies at a much higher rate than if they were recruited through the hospital itself. The economics of this fall apart as soon as we put them under any scrutiny.
Some 70% of the public—or more, I believe—support the calling of the debate, and the reasons for that are clear. We have seen the worst squeeze in living standards for generations, the worst wage growth since the steam engine was created and the worst decade for productivity since the Napoleonic war. The damning statistics on wages and productivity point us towards the truth: we cannot cut our way to productivity and we cannot reduce workers’ rights and pay to increase productivity. We need to respect workers, give them decent standards of living and actually create decent places of work. We can do that, first and foremost, in our public sector.
Since the 1970s, the percentage of GDP taken as profits and not paid as wages has risen through the roof; the paradise papers showed examples of profits being extracted from our economy and the money vanishing. When we talk about what money we have to share around for our constituents—in their pay and in benefits—we are talking about a smaller and smaller amount every year.
I remind the House of where the Government started back in 2010. This is not a new problem, and the Government were warned about where we would get to. It was this Government who talked about strivers versus skivers. It was this Government who sought to pit public sector workers against private sector workers, telling them that they were against each other in the race for decent wages and decent living standards. It was this Government who sought to pit unionised workers against non-unionised workers.
We are getting towards the end of the race to the bottom that the Government have started us on.
Luke Graham (Ochil and South Perthshire) (Con)
Will the hon. Gentleman give way?
Dan Carden
No, I will not. We are starting to realise that the race to the bottom is one that we all stand to lose. The sooner Government Members realise that, the better off our and their constituents will be.
Graham Stringer (in the Chair)
We now move on to the Front-Bench spokespeople. I remind hon. Members that the Chair of the Petitions Committee, the hon. Member for Warrington North (Helen Jones), will wind up the debate after the three Front-Benchers have spoken.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to see you in the Chair, Mr Stringer. As the Member of Parliament for Glasgow South West, which the House of Commons Library informs me has a bigger percentage of public sector workers in employment than any other constituency in these islands, as a proud member of Unison and former activist and treasurer for the Glasgow city branch, and—I refer to my entry in the Register of Members’ Financial Interests—as chair of the Public and Commercial Services Union parliamentary group, I very much welcome the debate. As someone who was a public sector worker for 25 years, I hope to bring stories of my experience in that field.
It has been an excellent debate, and I want to mention a number of contributions. The debate was led superbly by the hon. Member for Warrington North (Helen Jones), who discussed the plight of public sector workers, the impact of the public sector pay cap on the economy, which I want to come to later, and the fact that all nations and regions of the United Kingdom are affected. She also rightly mentioned the physically taxing nature and environment of public sector work. She referred to binnies, and it may be of interest to her that I found, when doing my research, that refuse collectors have suffered a real-terms pay cut of £2,064 a year, which I believe is a disgrace.
The hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) mentioned the impact in Wales and the devolved Administrations, which I agree with. The hon. Member for North Tyneside (Mary Glindon), who is vice-chair of the PCS parliamentary group, mentioned quite rightly the PCS ballot and the complete dissatisfaction of civil servants in the UK. I hope to mention that too in my contribution. The hon. Member for Wolverhampton South West (Eleanor Smith), who is a former president of the trade union that I am a proud member of, mentioned the impact of the public sector pay cap on nursing. My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson), in a typical tour de force, talked about the impact on the teaching profession. The hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) mentioned the impact on nursing.
The hon. Member for York Central (Rachael Maskell) said that this will increase the gender pay gap. I agree with that point and hope to mention it. The hon. Member for Birmingham, Erdington (Jack Dromey) gave another tour de force, with very powerful examples of public sector workers dipping into their own pockets to help users of public services. My hon. Friend the Member for Glasgow East (David Linden) talked about the impact on firefighters. The hon. Member for North West Durham (Laura Pidcock) quite rightly questioned whether the Government are comfortable with making people poorer. The hon. Member for Bedford (Mohammad Yasin) talked about the magic money tree, which I will come to. The hon. Member for Crewe and Nantwich (Laura Smith), a Unison comrade, questioned the idea that the country cannot afford a pay rise. Again, I agree with that and will come to it.
The hon. Member for Leeds North West (Alex Sobel) said that workers’ debt levels are on the rise, which is certainly the case. The hon. Member for Warrington South (Faisal Rashid) talked about the pressure on services. The hon. Member for Blaydon (Liz Twist), another Unison colleague who has replaced my good friend Dave Anderson, talked about recruitment and retention. That theme was picked up by the hon. Members for Enfield, Southgate (Bambos Charalambous) and for Reading East (Matt Rodda). Last, the hon. Member for Liverpool, Walton (Dan Carden) reminded us quite rightly that all of us have family and relatives who work in the public services.
That was in contrast to the lack of voices from the Government Benches, with one notable exception. I think we are all disappointed by that. They are obviously attending to affairs of state and constituency duties. We did not even hear the moderate voices of Conservatives from Scotland—a collection of individuals who have yet to realise that their hero, Alf Garnett, is in actual fact a parody.
Chris Stephens
I am more than happy to give way to Conservatives in a moment, but I want to develop this point. Cynics may believe that a political party that introduced in 1823 the Master and Servant Acts—legislation designed to repress working people and punish them for joining trade unions—would not be interested in issues affecting public sector workers, but I cannot believe that that would be the case.
Luke Graham
I thank the hon. Gentleman for giving way. He will appreciate that it was also Conservatives who introduced some of the first health insurance schemes and comprehensive education schemes in the last century. My specific point is that the pay cap was not an ideological point by the Conservative party; it was due to financial constraint at the time. As he knows, the pay cap was devolved in Scotland for a great number of years, so the criticism that he is levelling against the Westminster Government today should also be applied to the Administration in Edinburgh, who have held that pay cap, even though they have the power and the money to change it.
Chris Stephens
If the hon. Gentleman does not believe that the public sector pay cap was ideological, I really do fear for him and for his political analysis. Of course it was designed to be ideological. It was part of the cuts programme in the Budget. They kept boasting about the number—
Chris Stephens
In a second; I will just finish answering that point before we have a jack-in-the-box routine. It is good we have finally woken Conservative Members up.
Of course it was ideological—the Government kept talking about the savings it would bring to the Exchequer by imposing a public sector pay cap. I will talk about the effects on the devolved Administrations later on, but it might be very well for Conservative Members to read the petition itself. It says that the UK Government should be providing additional funding to fund the ending of the public sector pay cap and not allow local authorities and devolved Administrations to have to pick up the tab.
Alex Chalk
It is well known that Scotland now has tax-raising powers. If the Scottish Government want to pay their public sector workers more, why do they not just go on and do it?
Chris Stephens
Well, I would have thought a Conservative would know that the Scottish Budget follows the UK Budget. On 14 December, the Scottish Government—[Interruption.] The hon. Member for Cheltenham (Alex Chalk) can shout people down and follow the lead of the Scottish Conservatives that we have seen in the last six months, but he obviously has not read the petition. We are debating a petition that says additional funding should be made available by the UK Government for this. As I said, a local authority, a health board or a devolved Administration should not be clearing up the mess of this Government, who continue to impose poor wages on public sector workers.
Patricia Gibson
Does my hon. Friend, like me, despair at the fact that there has been a £3.1 billion cut to Scotland’s budget since 2010? It is appalling that people representing Scotland in the Chamber today are attempting to ignore that.
Chris Stephens
My hon. Friend is right. The facts speak for themselves.
I am reminded of the speech I made in the Chamber less than two weeks ago on the Budget, in which I said:
“The only difference between this Chancellor and the previous one is that of style, not substance. Where George Osborne could best be described as a tin of gloss, superficially painting over the cracks in our broken economy, the current Chancellor is the tin of matt, hoping to hide the worst lumps and bumps with repeated applications of more of the same. Either way, they are both the same shade of Tory austerity blue”.—[Official Report, 23 November 2017; Vol. 631, c. 1255.]
As a former treasurer of Glasgow city Unison, I know all too well that trade unions have a welfare fund, which is an important aspect of membership and the recruiting of public sector workers. That branch’s accounts show that from 2010 to 2015, there was a year-on-year increase in spending of that welfare fund. Is that because the pay did not quite match the increases in food, housing and fuel costs? Of course it is.
Today, the average household has lost £7.74 per week due to higher prices for goods, including bread, milk and cheese. The Trussell Trust statistics tell us that in 2010, it delivered 61,400 emergency food parcels to hungry people. Today’s figure, which the Trussell Trust released last month, is 1,182,594 food parcels. All the evidence suggests that many of those going to food banks are, in actual fact, public sector workers.
Despite all the hints, the Budget failed to lift the public sector pay cap. With inflation at a five-year high of 3%, the value of public sector wages has collapsed. In 2017, the civil service people survey, referred to by the hon. Member for North Tyneside, has shown that satisfaction with pay and conditions has fallen and now stands at 30%.
The Government’s solution is to park the issue with pay review bodies. The problem with that approach is that 55% of public sector workers in the UK are not covered by a pay review body. They include jobcentre workers, who administer our social security and pensions system; those who staff our borders, working in immigration and asylum services; civilians in the Ministry of Defence, providing equipment and support to our armed services; and, of course, workers in the national health service and local government.
In November 2015, I secured an Adjournment debate to demonstrate the low pay in the Department for Work and Pensions. Over 40% of its employees were receiving tax credits. As a result of that debate, the Government had no option but to negotiate with the PCS a wage rise for staff in that Department.
Of course, there is the Treasury pay remit, which covers about 400,000 workers. This is the so-called delegated pay system—a notional arrangement whereby Departments and agencies are individual employers responsible for negotiating pay and conditions. Although the remit is “guidance” for civil service departmental employers and other bargaining units, it does set a pay cap framework.
That was not always the case. In fact, national pay bargaining was first introduced in the civil service in 1919, and that position held for more than 70 years until the then Conservative Government, over a period between 1994 and 1996, broke it up and delegated responsibility to individual departmental employers. The reality is not only that it is incredibly wasteful and time consuming to hold hundreds of sets of negotiations about an issue decided and controlled centrally, but that that has led to inequalities whereby staff at similar grades across Departments, and even across agencies within the same sponsor Department, are paid vastly different salaries.
A real danger of the Government’s current approach is that it will increase the gender pay gap, because it is clear that so far the Government have announced the ending of the pay cap for those services that are male dominated, and those Departments that are female dominated do not yet see evidence that the public sector pay cap will be lifted. That is a very dangerous route for the Government to go down.
Luke Graham
I thought we got on so well! I thank the hon. Gentleman for giving way to me a second time. I supported the pay cap review, both in London and in Edinburgh, as did many Government Members, and my right hon. Friend the Chief Secretary to the Treasury has announced the lifting of the pay cap to allow flexibility. My question to the hon. Gentleman—perhaps he is coming to this—is: what should the percentage actually be, and can he give us a trailer of what will be announced in the forthcoming Budget at Holyrood?
Chris Stephens
The last point is well above my pay grade, but I will say this to the hon. Gentleman. It is not for me to determine what the percentage is. That should be negotiated. But the Government should not impose a cap of 1% and then say to individuals, “It’s either that or hit the cobblestones and take industrial action,” particularly given that they passed anti-trade union legislation—the Trade Union Act 2016—making industrial action even more difficult on a national scale.
There is a clear and sustained argument about the clear economic benefits of lifting the public sector pay cap. There would be a positive stimulus in the economy through increased household consumer spending. That would be likely to increase GDP and tax receipts, reducing the overall cost to Government still further. Estimates show that the effect of increased public sector pay would be similar to that of a decrease in income tax. The findings by the TUC and the Institute for Public Policy Research show that the significant portion of funding required to lift the public sector pay cap would in fact be returned to the Treasury almost immediately in the form of higher tax receipts and lower welfare payments. The initial cost per year in 2019-20 of uprating public sector pay in line with the consumer prices index for two years would be £5.8 billion compared with the cost had the cap remained in place. However, that drops to £3.55 billion once higher receipts from income tax and national insurance and lower welfare payments for means-tested benefits are taken into account.
It will be left to the devolved Administrations to take a different path. The Scottish Government have said that they will remove the 1% pay cap. This petition calls for the UK Government to fully fund a pay rise. I say again that it should not be left to a Department, a devolved Administration, a local authority or a health board to find the money from its own resources. Should the Government not look positively on this petition, I can guarantee the Minister that Scottish National party MPs will put pressure on the Government to ensure that they do that, and we will continue to campaign for public sector workers, not just in Scotland but across these islands.
Peter Dowd (Bootle) (Lab)
It is a pleasure to serve under your stewardship, Mr Stringer. Let me welcome Mr Dave Prentis, general secretary of Unison, who is sitting at the back of the room. His blood must be boiling at the complete lack of interest from the Conservative party in this debate. As a trade unionist for many years and someone who worked in the public sector, either in local government or in the NHS, I say that my heart goes out to those people who cannot afford to live despite the amount of work that they put in and their absolute commitment to public services.
I thank my hon. Friend the Member for Warrington North (Helen Jones) for achieving this debate, because we have been able to get a good feel for the situation and how our public sector workers are suffering out there. My hon. Friend the Member for Liverpool, Walton (Dan Carden) mentioned that the Police Federation had said that the Prime Minister was completely out of touch. That goes to the heart of one of the points that I want to make, but first I thank the 150,000 people who signed the petition—who took the time to put their name down. I thank them very much for that, and the trade unions that were backing the petition.
The Prime Minister is indeed out of touch with reality. The Police Federation was spot on about that. I will now ask people to use their imagination; I know it is a big ask for people to use their imagination in relation to the way the Prime Minister operates, but let me try to take them through it. Let us imagine that she is sitting there, with a smile on her face, reading the latest position paper from the Secretary of State for Health. All is well. The public services are well funded and the NHS is in rude health. The staff are all paid well; in fact, some of them are paid too much. There are no waiting lists for operations to speak of, or queues to see a GP. It gets better, in the Prime Minister’s mind. The Secretary of State for Business, Energy and Industrial Strategy reports that virtually everyone is in a secure, well-paid job, that the need for a national living wage is, for all intents and purposes, a thing of the past and that investment in our infrastructure is at historic highs. Of course the Secretary of State for Communities and Local Government, in the mind of the Prime Minister, reports that virtually the final brick for the 400,000th house to be built this year has just been laid.
Sustainable-trend economic growth is well above the OECD average, and productivity levels are going through the roof, as is wage growth. It seems improbable that things could get any better, in the Prime Minister’s mind, and then lo and behold, the Brexit Secretary pops his head around the door and tells her that the EU has agreed to all his demands, including tariff-free access to European markets, unbridled access to the single market and unprecedented immigration controls on EU citizens coming to the UK. He says, with only a scintilla of triumphalism, that the €70 billion divorce settlement cheque will be with the Treasury pretty soon, and the EU will pay the exchange control commission as well. Then he tells her that he is off to the Strangers Bar to have a drink with the Foreign Secretary and the Trade Secretary and she is welcome to join him.
This fantasy goes on. She apologises. She says she cannot go because she is waiting for a phone call from Donald Trump in which she plans to tell him in no uncertain terms that she is cancelling the state visit. She finally finishes off reading an email from the Secretary of State for Scotland informing her that Nicola Sturgeon told him that the SNP is disbanding because their claim for independence was simply a mistake and she is sorry for all the trouble caused. Then, with measured self-satisfaction, the Prime Minister rises from her seat, crosses the room, opens the wardrobe door, steps inside, pushes aside the fur coats and walks back into the world that we live in, the world in Westminster Hall, the world of reality. That is where she now is: the world of reality.
Over the past couple of hours of debate, many hon. Members have rightly paid tribute to the tireless work of our public sector workers, who go above and beyond the call of duty. However, these public sector workers, as has been suggested, do not need tribute from the Government; they need action. That is exactly what the Chancellor refused to do two weeks ago—absolutely no action whatsoever. I believe it is the Chancellor’s birthday today. He will not be getting many happy returns from public sector workers.
Some 5.4 million people work in the public sector, including friends and family members of mine, and of hon. Members across the Chamber, as has been alluded to. I would like to remind the Government what public servants do, because they seem to have forgotten. Public sector workers provide services that are crucial to the good running and order of the country. That has been touched upon. The armed services and the police protect our country and this House every day. My hon. Friend the Member for Warrington North alluded to that as well. They provide services that educate and look after our children, and care for our disabled citizens and our senior citizens. That was alluded to by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who said that there is no one as noble as he or she who cares—I think that is more or less the phrase. I have said this before, but it is worth repeating: we rarely hear from and do not see many of the services until something goes terribly wrong, such as traffic accidents, floods, public health emergencies and so much more.
This debate comes as we approach the Christmas holidays, which is a tough time for public sector workers. It is a difficult time for our police officers. Many will brave the elements to ensure we are safe over the holidays. What about them? It is difficult for our dedicated NHS staff, who will work long hours, back-to-back shifts over Christmas into the new year. They do not want our thanks. That is dead easy. They want our support for a pay rise, which they have not had for years. It will be a difficult time for all public sector workers, who now face the lowest pay in comparison to the private sector for 20 years.
Despite claims to the contrary, the public sector pay cap is alive and well. It will continue to be so while the Treasury refuses to offer any new money for public sector pay rises and expects overstretched Departments facing further cuts to find the funding themselves. The Chancellor did not even bother to mention the public sector pay cap in his speech. Instead, he signalled yet another attempt to divide one group of workers against the other by restructuring the NHS. Time after time, he sets workers against one another. Under these plans, the Secretary of State for Health will attempt to manipulate recruitment and retention payments, to deny most NHS workers a decent pay rise, and refuse to lift the cap. It is the classic case of dividing the public sector from the private: the nurse against the manager, the admin worker against the manual worker, the north against the south, or the British worker against the foreign worker. The Tories use the same old method time after time. The Chancellor, the Secretary of State for Health and the other departmental Ministers should think again, because they are defending the indefensible. It is as simple as that.
The pay cap disproportionately affects women, who account for two-thirds of the public sector workforce and are already disproportionately affected by austerity. I ask the Government to think about that. Public sector workers will continue to lose out. As has been indicated today, research conducted by the TUC shows that if the Government keep the cap in place until 2020, midwives, teachers and social workers will all see real losses of over £3,000 a year.
Mike Amesbury
Does the hon. Gentleman agree that it is a scandal that one of the few growth industries in constituencies such as mine—Weaver Vale—is food banks? There has been a 30% increase in the use of food banks, and many users are public sector workers and women with young families.
Peter Dowd
My hon. Friend is spot on. Yesterday I was at Tesco in Litherland collecting for food banks. I would like to thank every single one of those people—we have all been there—who gave a tin of soup, a tin of beans, some fruit, some cornflakes, washing liquid, all sorts of things for those people. Thanks to those people for the 1.1 million food parcels going through.
Alex Chalk
My constituents at GCHQ believe in their national security mission and are immensely dedicated and skilful public servants, but those skills are much sought after in the private sector too. As the Government move away from the 1% national pay cap, does the hon. Gentleman agree that the need to address pressures on recruitment and retention in this vital national security sector should be borne in mind when future improved pay rates are set?
Peter Dowd
Any public sector worker, whether somebody in the military, a nurse, a refuse worker, a teacher or social worker, the five-odd million of them all deserve the pay rise. If the hon. Member’s constituents in GCHQ need a pay rise, I will support them—will he? I am not sure he will.
Meanwhile, nurses, firefighters and border guards will face losing more than £2,500. The cap is not working. There is a situation where households will have one partner working in the public sector and somebody else in the private sector. It is typical: divide the public sector from the private sector. Homes do not work like that. As I said, if one person is working in the public and another in the private sector, should one subsidise the other? Should the wife subsidise the husband? Should the brother subsidise the sister? No. It is absolutely iniquitous and it should stop now. The Government’s continued support of the cap is economically nonsensical. The party of economic confidence, of business—the nonsensical party as far as I am concerned.
Chris Stephens
Now that the Conservatives have found their voice in this debate, does my hon. Friend agree that we should find the elusive Conservative who agrees that the public sector pay cap should be lifted?
Peter Dowd
Trying to find a Conservative who practically believes that—you are more likely to find, if you will excuse the expression, rocking horse dung, quite frankly. There is more chance of finding that.
Dan Carden
It seems that the Conservatives want to be seen to be softening the language on austerity and on pay caps, but in truth we see no action. Does my hon. Friend agree?
Peter Dowd
My hon. Friend, as ever, has hit the nail right on the head. It is all talk and no action.
Luke Graham
I thank the hon. Gentleman for giving way, he is being too friendly this afternoon. He asks for a Conservative, well there is one stood right here who, along with many Scottish colleagues, supported the pay cap reviews in London and in Edinburgh. It was announced in the Budget that, certainly from a UK Government perspective, according to the pay boards, they will have the flexibility to lift those pay caps. If they want the evidence, we are right here.
Peter Dowd
The voice of the lonely. That is what I would say: the voice of the lonely.
The IPPR and Unison have both provided research that demonstrates that lifting the cap would bring higher tax receipts and lower welfare payments. That has been suggested and indicated by other Members, and they are absolutely right. It would bring real money into the economy. We know that. Why do the Tories not accept it? Let me be clear, on cutting public sector pay, the Chancellor virtually stands alone. Ten years on from the international banking crisis, countries that instituted public sector pay freezes or pay cuts have all reversed them, including the likes of Germany and the United States. Once again, the Conservatives are left behind.
In their written response to the petitioners who triggered this debate, the Government said:
“We still need to deal with our country’s debts…to enable us to invest in our public services.”
They are not even doing that. Hon. Members should look at the Red Book: that is not being delivered. Again, they are the all talk, no action Government. They have not only borrowed more money than any other Government before, but have failed to invest in our public services and those who work in them. We all know it. The country will not run a surplus until 2030—batted off again—at the earliest, a full 15 years after the former Chancellor said the deficit would be eradicated.
So where are we? We cannot afford any rise for our public sector workers but, as has been alluded to, we can afford to relax the bank levy to the tune of the best part of £2 billion a year by 2022. We can also afford to relax corporation tax and other taxes for corporations worth the best part of £70 billion over the next five years. As has also been alluded to, we can afford to pay £3 billion for a botched EU Brexit that should have been sorted out months ago. That has cost the country because of the useless way the Government have dealt with it. We can afford, as we have found in the last two or three days, to pay out £2 billion to east coast line companies. We can afford that; just pick that up, it is no problem at all. We can afford to sell off the Royal Bank of Scotland at a loss of billions upon billions of pounds. The taxpayer picked up the bill for that, and it is the bank putting straight back into the hands of those who caused the problem in the first place. That is the reality, and as we come to the end of another miserable, cold, dark year under the Tories, we cannot afford to pay our public sector workers a decent wage.
I simply say, as I have said time after time and will continue to say: the sooner this Government get their marching orders, the better for all of us. I suspect the Government are in that position themselves, but I am not interested in the Government: I am interested in public sector workers.
The Exchequer Secretary to the Treasury (Andrew Jones)
It is always a pleasure to serve under your chairmanship, Mr Stringer.
I thank all Members who have contributed to the debate today. We have had 37 Back-Bench contributions or interventions. I have to say that there was remarkable knowledge from the hon. Member for Glasgow South West (Chris Stephens) about the 1823 Act—194 years ago; I am not even sure the Conservative party existed then.
Lots of points have been raised. Let me answer the one by the hon. Member for Blaydon (Liz Twist) about Northern Ireland. The decision and implementation is actually with the Northern Ireland civil service. I do not think that there are any decisions outstanding with Ministers, but of course the key thing is to get that Administration back up and running and hope the parties in Northern Ireland can find the common ground to achieve that.
Housing and housing challenges have been raised, which is entirely fair. It has been very tough for people all over the country to deal with housing costs, whether those relate to getting on the housing ladder or not. I have to say that I do not think that is an entirely private sector or entirely public sector issue. It applies equally to everybody right across the country and that is why housing was the centrepiece of the Budget.
Andrew Jones
I will get going first, and then I will come back to the hon. Gentleman.
Members also raised the paradise papers—the tax evasion papers. We have not actually seen those papers yet, because they would not be provided to Her Majesty’s Revenue and Customs, but the point remains. Should we be bearing down on anybody who is not paying their fair share of taxes? Absolutely, and that is why this Government have taken more action to do so than any other Government in history and have raised £160 billion from it since 2010.
Many Members have paid tribute to those in our public services, and I would simply agree. Within our society, public sector workers are among the most hard-working, talented and committed people. There are more than 5 million public sector workers right now, right across the UK. They carry out essential roles: they keep our streets safe; they teach our children; and they work day and night in our hospitals. At Christmas time in particular, they will be working when many others are enjoying time off with their families, and we should pay tribute to them for that and recognise their contribution. We should also recognise the contribution of those working overseas, who see their families even less frequently. The hon. Member for Warrington North (Helen Jones) said that they go the extra mile and deserve respect, and I entirely agree. But the right hon. Member for Warley (John Spellar), who I do not think is still in his seat, said that those on the Government side of the House see them as the enemy, and I am afraid that is just wrong. I do not think that anybody sees our public servants as the enemy.
Chris Stephens
Does the Minister believe that when a Government pay their own workforce decently the whole country benefits from the increased tax revenue generated and the increased spending it allows?
Andrew Jones
I will come to the issue of payment. It is of course part of a balanced approach to delivering public services, but I will address the hon. Gentleman’s point later.
I would like to re-emphasise the point that nobody on our side of the House in any way thinks that public sector workers are the enemy. I entirely agree with the hon. Lady’s point that modern economies have a mixture of public and private and the two are interrelated and work strongly together.
Laura Pidcock
For clarity, not one Conservative Member of Parliament has written to the Speaker to speak on behalf of public sector workers on the pay cap. They may not be the enemy, but there is a strong lack of interest in public sector workers.
Andrew Jones
I think that perhaps the hon. Lady is getting a bit carried away. We have no idea what the motives are for people being or not being at this debate. I have certainly been here in debates where there has been no Labour Member of Parliament, but I have not sought to make some kind of cheap political point off the back of it, because that is simply not appropriate and not reasonable.
To recap, the Government are acutely aware of how public sector workers form the backbone of our society and again I join Members in paying tribute to them. We have also had some questions about the reasons for pay policy. It is fair to remind the House that in 2010 we inherited the biggest deficit in our peacetime history. There was an urgent need to get public spending under some control, and that has been a key ingredient in returning our economy to health. The coalition Government implemented a two-year pay freeze, which has been mentioned several times by Members during the debate, but I remind the Labour party gently that it supported that policy at the time. The pay freeze was followed by a series of 1% pay awards for public sector workers. In the autumn Budget the Chancellor—he did mention this, I point out to the hon. Member for Bootle (Peter Dowd)—reconfirmed that under this Conservative Government the policy would end. It was a reconfirmation because that had been previously announced by the Chief Secretary to the Treasury in a statement on 12 September.
What does that mean? That means that for 2018-19 the Secretaries of State will have much greater flexibility in how they consider pay awards for public servants. I will return to the substance of the Chancellor’s announcement in a few moments, but first I will highlight the scale of the challenge. Public sector workers account for roughly £1 in every £4 that the Government spend, so we are dealing with some enormous sums of money here. The public sector pay bill in 2016-17 was £179.41 billion. That was an increase of 3.6% on the previous year, when it was £173.2 billion. There is a ginormous scale to the amount of money that has to be found. That leads me to one of the factors in determining pay policy: getting the right balance between finding the money and rewarding public servants for their vital work, while being fair to all taxpayers and ensuring that we return our public finances to balance.
Peter Dowd
In line 11 on page 4 of “Funding Britain’s Future”, Labour shows exactly how it would fund lifting the pay cap. Can the Minister be as explicit and comprehensive as Labour has been on this matter?
Andrew Jones
I am not entirely sure that the Labour election manifesto, which claimed that their policies were fully funded, was 100% accurate. Perhaps we could go back to some of the rather awkward interviews that the shadow Chancellor gave in the media over the weekend.
Chris Stephens
The Minister talked about the size of the pay bill. Have the Government done any research on its size and how much activity that has generated in the wider economy?
Andrew Jones
The hon. Gentleman asked whether the Government have done research on the size of the pay bill; I have just detailed the numbers. We are acutely aware of how public spending has an impact across the country. Any expenditure has an impact on the local economy as money recirculates, so of course that point is understood.
Andrew Jones
I am being very generous, but I will give way to a fellow north Yorkshire Member.
Rachael Maskell
I am grateful; I am looking forward to hearing about the Government’s generosity, because I want to know how much the Treasury is expecting public sector workers to receive in the total package, or the total envelope. How much—the figure?
Andrew Jones
I will come on to the process ahead. Despite the difficult economic circumstances from 2010, the Government have continued to invest in our public servants. We are helping them, alongside all others, to keep more of their money by increasing the personal allowance. That is a significant change. In 2010, the personal allowance stood at £6,475, but in the Budget only a few days ago, the Chancellor announced that in April 2018, the allowance will rise to £11,850. That means that public sector workers on a basic rate of tax will be £1,075 a year better off compared with 2010.
Helen Jones
Does the Minister accept, first, that most of the money spent on raising the tax threshold actually benefits the better-off? Secondly, does he accept that the combined effects of the Government’s tax and benefit changes, even when raising the tax threshold is taken into account, has been to hit low-paid families in work hardest?
Andrew Jones
I do not accept that. I have looked at the distribution analysis and what the hon. Lady said is simply not the case.
We have not just helped through the personal allowance. We have invested a further £100 million to recruit 2,500 extra police officers, and in July, my right hon. Friend the Education Secretary announced an additional £1.3 billion for schools to support the transition to the national funding formula. Let us go back to the NHS; in the Budget, the Government announced an additional £6.3 billion of new funding for the NHS. As I mentioned, we reconfirmed in the Budget the ending of the 1% public sector pay policy. That means that the Government are no longer pursuing a one-size-fits-all policy on pay for public servants.
Matt Western (Warwick and Leamington) (Lab)
This was before my time, so correct me if I am wrong; a few years ago it was voted through that Members of Parliament would receive a pay increase. If the principle was right then for MPs and it was seen to be appropriate, why is it not appropriate for all our public sector to receive a pay increase?
Andrew Jones
The hon. Gentleman is perhaps not absolutely correct about the process. That also predates my time in the House and goes back to the expenses crisis in 2007 and 2008. Any hon. Members who have been here a bit longer are welcome to jump in, but I think that at that point, Parliament basically gave all responsibility for its pay rises to an independent body. Since then, I do not think that it has voted on the matter. I have certainly never voted on Members’ pay. I recognise that that is a contentious point, but Parliament is no longer responsible for its pay.
David Linden
I accept that IPSA decided on MPs’ pay, but does the Minister not accept the absolute reality, which is that all of us are on at least a basic salary of £76,000 a year? He gets an extra allowance on top of that. Does he understand why members of the public watching this debate will find it absolutely bizarre to see a Minister earning such a high salary telling public sector workers that they should not be paid a basic rate?
Andrew Jones
Nothing the hon. Gentleman said about what I have said is remotely accurate—I have not said that public sector workers should not be paid a decent salary—so I am afraid I do not accept at all the point he makes. It is right that Secretaries of State have the responsibility to determine the right pay award for their workforces. That is because across the public services, each workforce is different, with different requirements, starting points, starting salaries and allowances, and each faces different recruitment and retention issues. Following the announcement, Departments will be able to fund appropriate pay rewards for their workforces from their existing budgets, just as we have done in the Ministry of Justice.
Liz McInnes
I want to make a point about IPSA and independent pay review bodies. NHS workers went on to Agenda for Change terms and conditions. One attraction of that was that it gave NHS staff access to a pay review body, but the Government have been overriding the recommendations of pay review bodies since 2010. The analogy just does not work: the Government have not overridden IPSA’s decisions, but they have overridden the NHS Pay Review Body’s decisions.
Andrew Jones
I draw the hon. Lady’s attention to the interview given by the shadow Chancellor yesterday in which he said that public sector pay reviews were always subject to negotiation. Perhaps he needs to have a conversation internally first.
Before any decision on pay is made, there is indeed a well-established process for the consideration of pay across the public sector. For local government workers, pay awards are considered by the National Joint Council for Local Government Services. Firefighters have the corresponding National Joint Council for Local Authority Fire and Rescue Services. The vast majority of the remainder are people employed in workforces with an independent pay review body. As part of the process, Departments will shortly submit evidence to the corresponding pay review body for their workforces.
Rachael Maskell
I must correct the Minister on what he has just said. Pay review bodies make a recommendation to Government, and the Government then do or do not accept it. There is no negotiation process in place.
Andrew Jones
I accept that—I was actually quoting the shadow Chancellor. Let me press on. The pay review bodies will consider evidence from stakeholders, including employers, Governments and unions, and they will make their recommendations in spring and summer next year. Secretaries of State will use the recommendations to inform the final pay awards in the normal way. The PRBs’ recommendations will recognise the wider economic context. The need remains for continued fiscal discipline, and Departments will take that into account when making any decisions.
Many Members have mentioned the NHS, which I want to spend a bit of time discussing. First, the Government are entirely committed to the NHS. Funding for the health service is at record levels. [Interruption.] Opposition Members may mock, but funding is in fact at record levels. They should be doing what we are doing, which is backing the service.
We know that pay restraint has been challenging and we are listening to the concerns of NHS staff and their representatives. We recognise that the NHS now faces greater pressures than at any point in its history, and the reasons for that are an ageing population, which is a significant challenge for western economies, and the greater demand that we are therefore seeing for NHS services.
Andrew Jones
I have given way already to the hon. Gentleman, so I will give way to the hon. Lady.
Catherine West
Does the Minister accept that there is a link between the current crisis in numbers of nurses in the NHS and the pay on offer, particularly given the huge student debts that many nursing graduates have? It is up to £54,000 for those at London Metropolitan University. Does he believe that there is any link between a starting salary of £21,500 and a huge student debt of £54,000 for nurses?
Graham Stringer (in the Chair)
I remind hon. Members who wish to intervene on the Minister that there are 10 minutes left. I am sure that people would like to hear from the Chair of the Petitions Committee after the Minister. Time is now beginning to get tight.
Andrew Jones
I was not watching the clock, so thank you, Mr Stringer.
I recognise that starting salaries and debt are clearly related for people making choices, but our NHS provides a magnificent career with long-term security and pay progression. The current average salary for a nurse is £27,635, which is very near the national average salary. Nursing presents a great career.
I mentioned earlier the pressures within the health service. That is why the Chancellor announced at the Budget that if the Health Secretary’s ongoing discussions with the health unions bear fruit, he will provide further funding for pay awards for Agenda for Change staff. That will, of course, follow the pay review body process in the spring. We cannot prejudge those discussions or the pay review body process, but we want the talks to succeed, and we share with NHS workers the common objective of a highly skilled, compassionate, productive workforce working to improve outcomes for patients. The Chancellor made his public commitment with that in mind.
I re-emphasise that the Government are committed to providing fair pay awards across the public sector. That is why we have the pay review body process, which ensures that pay for public sector workers is fair to all sides. We must also recognise the depth of public feeling on the issue, which the 150,000 signatures on the petition demonstrate. The 1% pay policy is ending, as announced on 12 September and reconfirmed in the Budget on 22 November. However, it is important to remember that we now face the established processes for determining those pay awards, and we cannot prejudge them. I cannot comment on a report that has not yet been written.
For that reason, the Government have not set out an explicit target for public sector pay, but I can provide an assurance that this Government will take the recommendations into account. We will continue to invest in our public services and ensure that our public sector workers continue to be fairly remunerated. They deliver a fantastic level of public service on which we all rely, and that will continue to be the case under this Government.
Helen Jones
It has been a great pleasure to listen to this debate. I thank all hon. Members on this side who have spoken. I feel sorry for the Minister, who is normally a reasonable soul, because he has been sent here to defend the indefensible. As hon. Members on the Government side have slipped away, I thought at one point that he would be left solely with his Parliamentary Private Secretary, chuntering from a sedentary position behind him. The hon. Member for Croydon South (Chris Philp) ought to learn that PPS’s are supposed to be, like Victorian children, seen and not heard.
We have heard from the Minister, once again, the same warm words for our public sector workers: hard-working, talented and committed. What we did not hear from him, significantly, was an agreement to fund a decent pay rise for them. Once again, the Government are deflecting blame. They say, “Yes, you can have a pay rise. Go away and negotiate it; we’re just not giving you the money for it.” That is the problem; that is what they have done all along. I say again that our public sector workers deserve better than that. They deserve far more than warm words. No one is asking for them to be paid an extravagant salary, merely a salary that enables them to live decently. That should not be too much to ask in 21st-century Britain, but it appears that it is too much to ask from this Government.
It is significant that no Conservative Members made a speech during this debate. They too must know that the policy is indefensible. They have public sector workers in their constituencies; they must have seen what is happening to them. They should not be complicit in this policy. They need to tell their Government and their Whips Office that this situation cannot continue. We on this side are clear that public sector workers ought to be able to negotiate a decent pay rise and have it funded; it is time for those on the Government side to realise that as well. Otherwise, their warm words about people in the public sector will be seen as so much hot air.
Question put and agreed to.
Resolved,
That this House has considered e-petition 200032 relating to public sector pay.
Written Statements
ECOFIN: 5 December 2017
(7 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Mr Philip Hammond)
A meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Brussels on 5 December. EU Finance Ministers will discuss the following items:
Early morning session
The Eurogroup President will brief Ministers on the outcomes of the 4 December meeting of the Eurogroup, and the Commission will provide an update on the current economic situation in the EU. The Chair of the European Fiscal Board (EFB) will present the EFB’s annual report followed by an exchange of views.
Strengthening of the Banking Union
The Council will be invited to take note of both the presidency progress report on the European Deposit Insurance Scheme and information from the Commission on the state of play of the action plan to tackle non-performing loans in Europe. ECOFIN Council will also hold a policy debate on the banking risk reduction package.
Current financial services legislative proposals
The Council presidency will provide an update on current legislative proposals in the field of financial services.
VAT administrative co-operation
The Commission will provide information on new proposals relating to VAT administrative co-operation measures.
Council conclusions on “The EU list of non-co-operative jurisdictions for tax purposes”
The Council will be invited to adopt Council conclusions which include the finalised EU list of non-co-operative jurisdictions for tax purposes.
Council decisions on the implementation of the stability and growth pact
Ministers will be invited to adopt a Council decision to close the UK’s excessive deficit procedure (EDP) and a decision and recommendation on Romania’s compliance with the EU’s fiscal rules.
European Semester 2018
The Commission will present the annual growth survey 2018, the alert mechanism report 2018 and a recommendation for a Council recommendation on the economic policy of the euro-area. Ministers will provide their initial reactions.
EIB proposal to establish a European Development Bank
Ministers will receive information on an EIB initiative to create a subsidiary dedicated to development.
[HCWS307]
Planning and Capacity: Update
The Minister for Housing and Planning (Alok Sharma)
Our Housing White Paper is clear that fixing our broken market requires solutions that look to the long-term. It requires action to boost local authority planning capacity to plan strategically and across local authority boundaries; to support local authorities to take a proactive role in planning for high-quality and scale; and to encourage local authority ambition and leadership in the delivery of new communities, not just new housing estates.
As part of our commitment to those goals, today I am:
inviting bids from local authorities and third sector organisations to a £25 million Planning Delivery Fund to support joint working, quality and innovation;
allocating £3 million of capacity funding to the 14 garden villages in our programme; and,
publishing a consultation of regulations which will enable the creation of locally led new town development corporations, as an effective vehicle for the delivery of new garden towns.
The £25 million Planning Delivery Fund, which is now open for bids, was first announced in the Housing White Paper and will support ambitious local authorities in areas of high housing need to plan for new homes and infrastructure.
The Planning Delivery Fund will provide the most ambitious local planning authorities with the skills, capacity or capability they need to deliver high quality housing growth at scale and implement our wider planning reforms. We want to support the type of joint working and strategic planning which has been demonstrated in Oxfordshire. A commitment to bring forward for adoption a joint statutory spatial plan across authorities is part of Oxfordshire’s recently announced housing deal.
In the Housing White Paper, we announced our ambition to increase nationally set planning fees to 20 per cent. Although this will partially address the issue of planning department funds, it does not go far enough to ensure local authorities are equipped with the appropriate resources, particularly in specialist areas such as design. The Government believe that good design is fundamental to creating attractive, safe and healthy places where people genuinely want to live and to ensure development is acceptable to communities.
The Government are initially opening up £11 million of the £25 million Planning Delivery Fund for financial years 2017-18 to 2018-19, to support and encourage:
more and better joint working, across local authority boundaries, ensuring that there are the skills and capacity where needed to plan strategically for housing growth, and to manage delivery of new homes and infrastructure;
a step change in design quality of new development, as well as design advice and support to local authorities delivering growth; and,
innovation in the planning system, to improve the efficiency and effectiveness of processes and enable the delivery of more high quality homes.
Accordingly, bids are invited for awards from three dedicated funding streams: a Joint Working Fund, a Design Quality Fund, and an Innovation Fund. A copy of the prospectus, including the funding criteria and how to submit a bid have been published (available at: https://www.gov.uk/government/publications/planning-delivery-fund-prospectus).
Across England, we are currently supporting 24 locally-led garden cities, towns and villages to be exemplars of high quality, good design and best practice. Together they have the potential for approximately 220,000 homes.
Our support has helped foster ambition and innovation and to accelerate the pace of delivery, with over 10,000 new homes now started. We have provided £16 million of capacity funding to date, including an additional £2.5 million to the garden towns in our programme in October. We are now allocating a further £3 million to the 14 garden villages in our programme to fund dedicated staff, master-planning and other studies and assessments that are key to successful, high quality delivery.
The Budget announced that we would support the delivery of another five locally led new garden towns, bringing together public and private capital and using appropriate delivery vehicles such as development corporations. We intend to publish in the spring a prospectus inviting expressions of interest in ambitious, locally supported, proposals for high quality new garden communities at scale. We will continue to explore with local authorities opportunities for planning freedoms where these will enable additional housing growth in our garden cities, towns and villages or elsewhere. We will not be limited to supporting just five new garden communities, but will look to support as many as we can, around the country.
In line with our locally led approach, we do not wish to prescribe any particular delivery model, but to facilitate local authority leadership and ambition.
Our Housing White Paper committed to legislating to enable the creation of new town development corporations, overseen by the local authority or authorities covering the area proposed for the new garden community, rather than by the Secretary of State. As bodies with statutory objectives focused on the development of the new town and with significant independence, we consider that new town development corporations are well placed to manage complex co-ordination challenges across local authority boundaries and create long-term planning and investment confidence, where local authorities consider these are the right delivery vehicle.
Section 16 of the Neighbourhood Planning Act 2017 enables the Secretary of State, through an affirmative resolution statutory instrument, to appoint one or more local authorities to oversee the development of a new town by a new town development corporation. It also enables the Secretary of State to make regulations about how that oversight is to take place.
We are now consulting on a draft of those regulations. Our focus is on ensuring that we maximise the transfer of oversight functions from the Secretary of State to the local authority or authorities and the independence of the development corporation, and support quality and long-term stewardship within the garden community.
Copies of the consultation document have been placed in the Libraries of both Houses and is available at: https://www.gov.uk/government/consultations/the-new-towns-act-1981-local-authority-oversight-regulations
[HCWS308]
Childcare: Update
(7 years ago)
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The Minister for Children and Families (Mr Robert Goodwill)
Today the Government are launching a public consultation on their proposed approach to revising the eligibility criteria for the early education entitlement for disadvantaged two-year-olds in light of the roll out of Universal Credit.
Universal Credit is replacing a number of qualifying benefits for the two-year-old entitlement, including Jobseeker’s Allowance, Employment and Support Allowance, Child Tax Credit, Working Tax Credit and Income Support.
The early education entitlement for two-year-olds was introduced nationally in September 2013 and subsequently extended in September 2014 to include low income working families. We want it to continue to be the case that a wider group of less advantaged children can benefit from high quality early education.
Subject to the outcome of this consultation, we propose to introduce a net earned income threshold of £15,400 per annum for those in receipt of Universal Credit. This threshold would increase the number of children benefiting—around 8,000 more children taking up this entitlement once Universal Credit is fully rolled out and in steady state. We do not propose to change any of the other eligibility criteria for the two-year-old entitlement.
Two-year-olds do not lose their entitlement once it has started so no child who has commenced their entitlement would lose it as a result of the introduction of the new earnings threshold.
If, following the public consultation and subject to the will of the House, the Government decide to take forward their proposals, we expect the revised regulations to come into force in April 2018, in time for the summer term.
The ‘Eligibility for the free early education entitlement for disadvantaged two-year-olds under Universal Credit’ consultation will commence today and run for six weeks. The consultation document, containing full details of the proposals and inviting responses, will be published on the Department for Education’s website. Copies of the consultation document will also be placed in the House Libraries.
[HCWS309]
Law and Order Trust Fund Afghanistan
(7 years ago)
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The Minister for Asia and the Pacific (Mark Field)
On 28 November 2017 the Foreign and Commonwealth Office fulfilled the pledge made by the former Prime Minister at the NATO Chicago summit in 2012 to commit £70 million for each of the calendar years 2015 to 2017 towards Afghan National Defence and Security Force (ANDSF) sustainment. At the NATO summit in Warsaw in 2016, the UK committed a further £210 million to sustain its commitment of £70 million per year from 2018 until 2020.
The UK’s 2017 contribution, funded from the Conflict, Stability and Security Fund (CSSF), has been channelled through both the United Nations Development Programme’s Law and Order Trust Fund Afghanistan (LOTFA) and the NATO-run Afghanistan National Army Trust Fund (ANATF). The contributions will support payroll management, Afghan National Police salaries, Ministry of Interior and Afghan National Police development, and the provision of additional medical facilities for ANDSF personnel.
The development of a capable, accountable and responsive Ministry of Interior and Afghan National Police service, committed to delivering rule of law, is essential to long-term stability and security in Afghanistan. The Afghan National Police play a fundamental role in providing security, rule of law and public order, as well as helping to build trust in the legitimacy of the state. Due to the challenging security environment, international support for Afghan policing continues to be required. The UK remains committed to supporting the development of security institutions in Afghanistan, including the Afghan National Police and Ministry of Interior.
[HCWS305]
Presidential Elections: Somaliland
(7 years ago)
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The Minister for Africa (Rory Stewart)
On 13 November, people across Somaliland took part in elections to choose a new President. The UK played an active role as part of a group of international donors in supporting the Somaliland National Election Commission in planning, preparing and delivering these elections. On 16 November, the international election observation mission stated in its initial findings that it had not witnessed irregularities on a scale which would undermine the integrity of the result. The UK joined international partners in expressing our deepest regrets for the loss of life caused by violent protests in some locations in the days which followed the voting.
On 21 November, the National Election Commission announced that Mr Musa Bihi Abdi had been chosen by the people of Somaliland as their next President. The UK Ambassador in Somalia has extended the UK’s warm congratulations to Mr Musa Bihi Abdi on his election and has commended the commitment and responsibility of opposition candidates, Somaliland’s people, and its institutions to the electoral process and strengthening democracy.
The UK remains committed to helping people from across the Somali region to reach their fullest potential. We now look forward to deepening our partnership with Somaliland as we support Mr Bihi in fulfilling his aspiration to govern for the benefit of all Somalilanders.
[HCWS304]
Children and Young People's Mental Health: Update
(7 years ago)
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The Secretary of State for Health (Mr Jeremy Hunt)
Together with my right hon Friend the Secretary of State for Education, I have today laid before Parliament “Transforming Children and Young People’s Mental Health Provision: a Green Paper” (CM 9523). The Green Paper forms part of the Government’s work to transform mental health support, ending what the Prime Minister has referred to as the “burning injustice” of inequality which those with mental health problems experience.
This Government have invested more than ever before in mental health services, and legislated for “parity of esteem”, to ensure that mental health is treated equally with physical health. Schools and colleges are already doing a great deal to support the mental health and wellbeing of children and young people. Most offer training to staff and many promote mental health and wellbeing through skills development sessions and taught sessions about particular mental health issues. Around half have a mental health lead.
However, there is more we need to do to create world-class support for children and young people’s mental health. Half of all mental health conditions begin before the age of 14. The Green Paper therefore focuses on earlier intervention and prevention before issues escalate, particularly in and around schools and colleges.
We are announcing plans to fund new collaboratively delivered mental health support teams. They will be made up of additional trained staff, supervised by NHS specialists, to provide support in or near schools and colleges for children and young people with emerging and more moderate needs, We will test how teams can work with other professionals and support vulnerable children and young people. We also want to continue to improve access to specialist services, and will pilot a four-week waiting time standard for accessing children’s mental health services.
We will also build on what schools already do—rolling out our “schools—children and young people’s mental health services link pilot” nationally. We will provide significant funding to incentivise schools and colleges to train designated senior leads for mental health to work with the new teams and implement whole-school approaches to mental health. The Green Paper also sets out how whole-school approaches will be supported by other developments that are underway, including our engagement process on relationships education, relationships and sex education and personal, social, health and economic education.
The Green Paper also contains a number of other proposals to improve support for young people’s mental health, including work to support the Department for Digital, Culture, Media and Sport’s work on keeping young people safe online, convening a new partnership to look at support for the mental health of 16 to 25-year-olds, and commissioning further research in a number of areas to build our understanding of the evidence.
The Green Paper has been developed with the input of a large range of individuals and organisations. We also commissioned an independent evidence review, conducted by University College London and the National Collaborating Centre for Mental Health, and have based our proposals on the evidence. We also benefited from the evidence submitted to the Health and Education Committees during their inquiry earlier this year into the role of education in children’s mental health. We are grateful to all who have helped shape our proposals.
The proposals as set out in the Green Paper would cost £215 million over the next three years towards the creation of mental health support teams, piloting a four-week waiting time standard and rolling out mental health first aid training to primary schools. Funding will be made available to take forward the final proposals following consultation. We will confirm the amounts to be provided to schools and colleges for training leads following consultation and development of training packages. However we will cover the costs of a significant training programme and provide up to £15 million to 20 million each year from 2019 to cover costs until all schools and colleges have had the chance to train a lead.
The Green Paper will be followed by a consultation and we welcome views on the proposals. Copies of the Green Paper will be available in the Vote Office and the Printed Paper Office. The consultation and Green Paper can be accessed at: www.gov.uk and https://engage.dh.gov. uk/youngmentalhealth.
[HCWS306]
Foreign Affairs Council (Trade): 10 - 13 December 2017
(7 years ago)
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The Minister for Trade Policy (Greg Hands)
The EU Foreign Affairs Council (Trade) will meet in Buenos Aires during the 11th ministerial conference of the World Trade Organisation (WTO).
The Council will meet on the 10 December before the formal opening of the ministerial conference. The Minister of State for Trade Policy will represent the UK.
We expect the Council to meet again during the ministerial conference, at least once, possibly more, but the date of subsequent meetings of Council has not yet been set.
The only substantive item on the agenda for the Council in Buenos Aires is the 11th ministerial conference of the WTO.
The Buenos Aires ministerial will be the first WTO ministerial conference to be held in Argentina. WTO members will discuss a range of important trade issues, including fisheries subsidies, digital trade, agricultural domestic support and public stockholding, domestic regulation in services, investment facilitation and transparency of regulatory measures for the benefit of SMEs.
[HCWS302]
EU Transport Council
(7 years ago)
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The Secretary of State for Transport (Chris Grayling)
I will attend the only formal Transport Council under the Estonian presidency (the presidency) taking place in Brussels on Tuesday 5 December.
The first item on the agenda will be a progress report on phase one of the Mobility Package, focusing on proposals designed to improve the clarity and enforcement of the EU road transport market (the ‘market pillar’), and proposals on the application of social legislation in road transport (the ‘social pillar’).
Following this, the presidency has proposed a policy debate on the ‘charging pillar’ of the package. The proposals to amend the existing directives on HGV road tolls and user charges (‘Eurovignette’) and the interoperability of electronic road toll systems (‘EETS’) set out rules for charging vehicles using the road (but do not mandate such charging) and promote better functioning of charging across national barriers.
Next, there will be a progress report on the proposed amendment to the regulation on safeguarding competition in air-transport. The proposal aims to tackle discriminatory practices and address perceived deficiencies in the existing legislation by allowing complaints to be made to the European Commission by a wider range of interested parties who suspect, or have evidence that, one or more EU carriers are being harmed by the unfair practices of a third country.
The Council will adopt conclusions on the progress on Trans-European Transport Network (TEN-T) and Connecting Europe Facility (CEF). The conclusions do not place any binding requirements on member states. They recognise the value that the TEN-T Policy and CEF (the associated funding programme) bring to EU transport infrastructure and look to strengthen transport investment in the next EU budgeting period. The UK can support these conclusions.
Conclusions will also be adopted on the digitalisation of transport. ‘Digital Europe’ has been a priority for the Estonian presidency and the conclusions highlight the potential and challenges for the digitalisation of transport and, among other things, call on the Commission to develop a comprehensive and multimodal digitalisation strategy for the transport sector during the first quarter of 2019. The UK can support their adoption.
Next, the Council will adopt conclusions on mid-term evaluation of the Galileo, EGNOS and European GNSS agency. We welcome these conclusions and, in particular, the need for new recommendations about the future evolution of the programme to be proportionate and costed before they are brought forward for decision.
Under Any Other Business, the Commission will first present phase two of the Mobility Package, which focuses on clean mobility and includes proposals on promotion of clean and energy-efficient vehicles, combined transport of goods, and access to the market for coach and bus services. The presidency will provide information on the state of play on the proposed rail passenger rights regulation. The delegations from Germany, the Commission, Poland, France and Finland will, respectively, provide information on automated cars, implementation of the aviation strategy, world maritime days, IMO greenhouse gas emission reduction strategy, and summertime arrangements. The Commission will also provide information on military mobility, and finally, the Bulgarian delegation will present the transport work programme of their forthcoming presidency of the Council of the European Union.
[HCWS303]
House of Lords
Children: Oral Health
(7 years ago)
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Baroness Benjamin
To ask Her Majesty’s Government what action they are taking to address the problem of child tooth decay, in the light of the finding by Public Health England in its most recent oral health survey that 25 per cent of five year olds had experienced dental decay.
The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)
Public Health England, NHS England and the Department of Health are working together to improve children’s oral health. For example, the “Starting Well” initiative will support outreach to children not currently seeing a dentist in the areas of highest need, while dental contract reform supports our longer-term aim for all care to have a preventive focus. Furthermore, we are taking steps to reduce the amount of sugar consumed by children.
Baroness Benjamin (LD)
My Lords, I thank the noble Lord for that Answer. We all need to ensure that everyone fully understands the importance of oral health practice, which, ideally, should start when babies are six months old. It is therefore great to hear that NHS England has introduced the “Starting Well” programme. However, this is being delivered in only 13 local authorities, despite the fact that many children across the country suffer from tooth decay; indeed, it is the No. 1 reason for hospital admissions. Will the Government therefore consider taking further action by introducing supervised tooth-brushing sessions in all nurseries, as they do in Scotland, to improve oral health education for all our children?
Lord O'Shaughnessy
The noble Baroness is right to highlight this important issue. Twice as many five to nine year-olds are admitted to hospital with tooth decay as are admitted with broken arms—that is how bad the problem is. It has improved in recent years: 75% of all five year-olds have no sign of physical decay, up from 69% in 2008. Supervised tooth-brushing is part of the “Starting Well” programme, but Public Health England and local authorities are responsible for commissioning and will look at the results to see whether it can be rolled out into general dentistry practice.
Baroness Gardner of Parkes (Con)
My Lords, does the Minister appreciate that in Australia and the United States there is widespread community fluoridation? Fluoride has been established as one way of preventing dental decay. I went on to Google today and found an article that states:
“With 60 Years of Data and 3000 Studies, Australia Declares Fluoride ‘Completely Safe’”.
That is supported by community water fluoridation, which means that your water authority cannot only see that the right amount is put in but will take out any oversupply above the optimum rate. The noble Baroness said that she thinks that oral health is important for children from an early age; I took my treatment antenatally for my children, who have very good teeth.
Lord O'Shaughnessy
My noble friend is quite right that fluoridation is effective. The 2012 Act allows local areas to choose to introduce it—with local legitimacy, which is important because this issue still stirs passions. We encourage any local area considering this—I believe that Greater Manchester is one—to look at the study my noble friend mentioned in order to see its effectiveness.
Lord Colwyn (Con)
My Lords, I am delighted that my noble friend mentioned the dental contract because the current target-driven contract was introduced in 2006. The Government committed to reforming it in their 2010 manifesto, but progress has been very slow. The latest reports speak of a national rollout no earlier than 2021. We urgently need a new contract that rewards prevention. Does my noble friend not agree that patients and dentists should not have to wait so long?
Lord O'Shaughnessy
Yes, I agree with my noble friend. Preventive care is important. Pilot schemes have been going on in 75 practices to look at incentivising preventive care and population care. I understand that an evaluation report of that first full year of prototyping is due to be published in the new year.
Lord Turnberg (Lab)
My Lords, regarding fluoride and dental decay in children, can the Minister provide figures for the incidence of dental decay in areas that fluoridate their water compared with those that do not?
Lord O'Shaughnessy
I do not have that exact comparison in front of me. I understand that areas that fluoridate have much better oral health than others, which is why, as I said to my noble friend, we encourage all local areas to look at the evidence and make decisions accordingly.
The Countess of Mar (CB)
My Lords, does the Minister realise that, in order to get children to be seen by a dentist, their parents have to take them, and many parents are not happy themselves about going to the dentist? How can that be overcome?
Lord O'Shaughnessy
Probably not by giving out lollies to say well done for coming. The noble Countess makes an important point, but some 7 million under-18s were seen by a dentist in the last year for which data is available, which is an increase on previous years, so I think that things are improving.
Lord Bradshaw (LD)
Will the Minister consider asking manufacturers of sugary cereals to include in the packet a free toothbrush, which would cost them very little?
Lord O'Shaughnessy
That is one idea that I will certainly take away. Some of the impact that we are having is on reformulation, which is perhaps even more preventive than putting toothbrushes in cereals. There is a plan to reduce sugar in key foods by 20% by 2020, specifically for the benefit of children.
Lord Lexden (Con)
Does not part of the answer to this problem lie in that attractive four-letter word “milk”? Does not research evidence show that milk helps to protect the teeth of young children, as well as combating obesity?
Lord O'Shaughnessy
I am sure that milk does have those benefits. I should also point out that one of the best things one can do for all bone health is to have vitamin D and calcium supplements, which are recommended for young children.
Lord Hunt of Kings Heath (Lab)
My Lords, I am sure that we are all grateful to the Minister for his wisdom in advising us on such important matters. I declare an interest as president of the British Fluoridation Society. To return to the point that I have raised with many Ministers over the past few years, the Minister says that it is down to local decision-making. The problem is that the hurdles that have been put in place make it almost impossible for local authorities to get fluoride into their water supplies. Will he look again at the rules and the law and agree that this is a strategic decision that needs to be made by government?
Lord O'Shaughnessy
I am certainly happy to look again at that issue because we know the benefits of fluoridation. That is one reason why more children are having fluoride varnishes, for example.
Energy: Home Battery Storage
(7 years ago)
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Baroness Jones of Moulsecoomb
To ask Her Majesty’s Government what assessment they have made of the potential for home battery storage to change the dynamics of energy supply and demand.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the Government and Ofgem published a smart systems and flexibility plan in July 2017, which outlines a series of actions to support the transition to a smart energy system. They include an assessment of changes in our energy system and measures to address the barriers to storage, whether in the form of home batteries or the range of grid storage technologies.
Baroness Jones of Moulsecoomb (GP)
I thank the Minister for his reply. I am sure that the Government have thought this through—or not—but as nuclear subsidies increase and the cost of national grid electricity rises, more people will move to solar and domestic storage of energy. That means that people still using the national grid will be the poorest in society because they cannot afford all these extra measures. Have the Government thought through how the poor will be relieved of paying for very expensive electricity?
Lord Henley
Obviously there will be changes as more people make use of storage. That will have an effect on the grid because if some people increase their use of storage, they may even be able to go off-grid in future. The noble Baroness is right to draw the House’s attention to that issue. That is a matter for Ofgem; it can certainly look at that to make sure that it can create a level playing field for all consumers.
Lord Howell of Guildford (Con)
My Lords, I declare my interests in energy, as in the register. Is my noble friend aware—I am sure that he is—that offshore wind producers are now saying that they can produce electricity at £62.50 per megawatt hour? Of course, commercial storage will make it considerably lower, if we go for it. Does that not cast a shadow over the costs of the contract at Hinkley Point C, which are for £92.50 for the next 35 years, indexed? Is it not time to question some of these lavish expenditures, which are having very little effect on carbon reduction and greatly increasing the charges to poor consumers?
Lord Henley
My Lords, at this stage, I do not want to get into the wider question of Hinkley C costs. I think it would be rather dangerous for me to go down that route. My noble friend is right to say that increased use of home battery storage, possible greater use of batteries in cars as a means of storage in years to come and greater use of other forms of storage, which the noble Baroness and my noble friend referred to—he is probably aware that we already have about 5 gigawatts of storage in the system, which is mainly pumped hydroelectricity—have implications for costs throughout the grid, which will need to be addressed.
Lord Campbell-Savours (Lab)
Has an audit been carried out of lithium resources worldwide or has it all been left to market forces?
Lord Henley
My Lords, so far, we have seen the cost of lithium-ion batteries drop by some 50% over the last five years, since 2012. That implies that resources of lithium are more or less okay and that market forces are driving costs down. I do not have the figures on long-term estimates of quantities of lithium, but that will be taken into account by the market in due course.
Lord Broers (CB)
My Lords, with respect to the previous question, would it not be a good idea for the Government to follow that issue rather carefully, so that the consumer can have a realistic price? Solar cells and storage batteries are expensive, and people selling them do not always give straightforward information. It would be a good idea, would it not, for the Government to look at this in some detail, so that consumers can be given reliable advice on the cost of such storage?
Lord Henley
My Lords, as I said in my answer to the previous question, the cost of lithium-ion batteries has come down considerably—by 50%. Batteries are still expensive but it is in the interests of some consumers to buy them to even out their use of electricity and make savings. Obviously, any advice that they can get, which was partly behind the Government and Ofgem’s smart systems flexibility plan, would be of use to those consumers.
Baroness Maddock (LD)
My Lords, the more smart meters are installed in our homes, the more potential there will be for battery storage. Will the Minister assure us that the promise the Government made of 26,000 smart meters in our homes before 2020 will really happen?
Lord Henley
My Lords, we are on track for that. As the noble Baroness will be aware, legislation dealing with this is coming forward. I hope we will get there; I see no reason why not.
Lord Hayward (Con)
My Lords, does my noble friend not agree that one way to change the dynamics of our energy supply would be to approve the Swansea tidal lagoon as quickly as possible, a decision on which has been pending for rather a long time?
Lord Henley
My noble friend makes a very interesting point. No doubt that will be addressed, but it is somewhat wide of the Question relating to battery storage. It obviously will have an effect on our production of electricity overall.
Lord Brooke of Alverthorpe (Lab)
My Lords, given the performance review in the summer and the driverless and electric vehicle charging point Bill currently in the House of Commons, why is there so little in the Bill to incentivise people to purchase batteries?
Lord Henley
My Lords, I do not think there is so little. There is quite enough to encourage people to buy batteries. That is why they are and why we have seen a reduction in their price.
Nurses and Midwives: Numbers
(7 years ago)
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Baroness Thornton
To ask Her Majesty’s Government, in the light of the report of the Nursing and Midwifery Council published on 2 November which found that the number of nurses and midwives joining its register from the European Union had dropped by 89 per cent over the last year, how they plan to make good the anticipated shortfall.
The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)
My Lords, the Government value immensely the contribution of EU staff working across the NHS and social care systems. We are committed to ensuring a clear pathway to permanent residency for these EU citizens. The figures in the NMC report represent a 0.2% decrease in those currently registered. Meanwhile, there are more nurses on our wards since last year. Numbers will increase because of a 25% increase in training places.
Baroness Thornton (Lab)
I thank the noble Lord for that response, although I think it borders on the complacent. I asked this Question because the statistics are very stark and concerning. Although we know that registration of UK-based nurses is falling—by 9% last year—the decrease from the European Union varies between 70% and 95%. That means that instead of there being 1,966 nurses from Spain, for example, the number has dropped to 104 in the last year. The numbers from Poland have dropped from 305 to 34. Even from Ireland the numbers have dropped, from 381 to 204. That looks, with winter looming, like a crisis might be looming. Given that it takes at least three years or so to train nurses and midwives, I return to my Question: how will the Government make up the immediate shortfall and replace those nurses and midwives that come to us from the European Union?
Lord O'Shaughnessy
I agree with the noble Baroness that there is a need for more nurses. That is why we are introducing more training places and new routes into nursing, such as the nursing apprenticeship. I know that she is particularly concerned about EU national nurses and health visitors. I think noble Lords will be reassured that between June 2016 and June 2017, there was an overall 5% increase in the total number of staff from the EU within the NHS, which is welcome. The one area, as I said, that has fallen marginally—by about 162 in practice—is in nursing and health visitors. That was significantly due to the new language test that was introduced. That is something that the NMC is looking at to make sure we are getting nurses capable of practising in this country to come here.
Lord Clark of Windermere (Lab)
My Lords, as the Minister knows, citizens of the EU who have spent five years working in the UK can avail themselves of the opportunity to apply for a right to remain permanently in the UK. That is now unclear. Will he announce that those who have been granted the permanent right to remain in Britain as EU citizens will be entitled to stay and work here? That would be a good way to start building confidence.
Lord O'Shaughnessy
My Lords, the rules as they are apply, so those who are eligible to apply for a right to remain can do so. We are talking about providing a path for those who are not yet at that point, now or in the future, to achieve settled status to provide the kind of certainty that we know. I understand that this causes some people to pause for thought about whether they should stay.
Lord Naseby (Con)
Will my noble friend ensure that the answer he has just given is publicised in every NHS hospital in the United Kingdom? There is not that depth of understanding in the average medical practitioner, nurse or administrator in our hospitals that he has so clearly communicated. Will he also reconfirm that the number of training nurses is going up, as I think he said, and is considerably higher than it has been during the previous decade? If that is the situation, it is surely to be greatly welcomed.
Lord O'Shaughnessy
I agree with my noble friend’s point on communication. I shall certainly look at whether we can do that better as an NHS. It is why I do not miss an opportunity from the Dispatch Box to say how much those nurses are valued and how much we want them to stay. That is what the Government are committed to doing. I mentioned the increase in the number of training places which my noble friend has pointed out. New UCAS data out today show that the picture is slightly better even than when we talked about it last week. Although the total is slightly down on last year, it is the second-highest number of nurses recruited in the history of nursing being a degree profession.
Lord Rennard (LD)
My Lords, is this not a problem particularly given that 35,000 nurses and midwives left the profession last year? Does the Minister agree with the Royal College of Nursing that the problem is made worse by the loss of student bursaries, deterring more mature students from applying to train as nurses and denying the profession the benefit of their valuable life experience?
Lord O'Shaughnessy
Retention is critical. A number of nurses have gone through return-to-practice programmes to make sure they can come back into the profession. I recognise that today’s UCAS data show that while the number of applications has risen among the under-21s, it has fallen among the over-21s. It is important to point out that financial support is available for those people, in terms of both help with childcare and extra financial support. Now, for the first time, we are providing funding for second degrees if they are in nursing.
Lord Tomlinson (Lab)
The Minister said clearly that he never misses an opportunity to say how much we value our nurses. Does he accept that “value” is best recognised in a tangible form rather than in words that have no meaning?
Lord O'Shaughnessy
I think that words do have meaning, and it is important not to miss the opportunity to say how much we value those nurses who have come from the European Union as well as all staff in the NHS. One example of the value with which we hold them is the announcement in the Budget that the Chancellor will fund an Agenda for Change pay settlement for nurses.
Baroness McIntosh of Pickering (Con)
My Lords, I congratulate my noble friend on the increase in the number of training places, but can he give the House an assurance today on the figures for recruitment and retention of nurses in rural areas and, in particular, that their travel is fully paid for when they drive round remote parts of the country such as North Yorkshire and other isolated areas that they have to cover?
Lord O'Shaughnessy
Yes, absolutely—travel costs should be accounted for, as long as they are incurred in the course of an ordinary working day. I should also point out that extra travel costs are now supported as part of the student finance package for those who need to travel for study.
Lord Watts (Lab)
My Lords, given the shortage of medical staff right across the board, should not the Government exempt them from quotas so that we can guarantee that we will have the medical staff and support staff that we need in our hospitals?
Lord O'Shaughnessy
In the long run, we want to be in a position to provide more of our staff domestically. There are concerns about the fact that we recruit from other countries, not least developing countries—I do not think that that is a long-term, sustainable position. In addition to the additional nurse training places that I mentioned, more medical training places for doctors are coming through, so we will be achieving that position in future.
Lord Pearson of Rannoch (UKIP)
My Lords, do the Government accept that the £10 billion per annum in net cash that we shall no longer pay to Brussels after Brexit is equivalent to the annual salaries of some 1,000 nurses every day?
Lord O'Shaughnessy
The noble Lord’s mental maths are far better than mine. I agree that it will provide for the possibility of yet more funding for the NHS, which is something that this Government have delivered in the past seven years.
Lord Turnberg (Lab)
My Lords, I wonder whether the Minister can help clear up my confusion. He is telling us that the number of training places is increasing while my noble friend Lady Thornton suggested that the number of people coming into those places is decreasing. What is the correct interpretation? Have we got more, fewer, or what?
Lord O'Shaughnessy
I will do my best to provide clarity. If you look at nurse training places in universities, in 2016 the number was 3% higher than this year. One reason for that has obviously been the change in the financing arrangements. However, this year still represents the second-highest number since it became a degree profession. If we look to the future, from 2018 onwards there will be 5,000 more funded clinical placements which will enable the number of nurse training places to increase by some 20% to 25%.
Personal Identity Cards
(7 years ago)
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Lord Campbell-Savours
To ask Her Majesty’s Government what discussions Ministers have had in the last year with United Kingdom security and border control authorities on the introduction of personal identity cards.
Lord Young of Cookham (Con)
My Lords, in 2010 the coalition Government decided to scrap the ID card scheme and the associated national identity register because it was expensive and represented a substantial erosion of civil liberties. While many countries have identity cards, we have not seen any evidence that they offer greater protection against terrorism or greater control at the border. The Government are not planning to revisit that decision.
Lord Campbell-Savours (Lab)
Many people would contest those conclusions. Does the Minister accept that the issues of national security, crime, protection against fraud, and entitlements are of concern right across this House and across the political divide? With that in mind, would it not be helpful if the Liaison Committee, which is about to select its ad hoc committee inquiry subjects for next year, were to support an inquiry into national identity cards? I appeal to Members across the House to write to Philippa Tudor, the clerk to the Liaison Committee, supporting this year’s application for an ID card ad hoc committee inquiry? If not, once again, it is likely that the application will be rejected.
Lord Young of Cookham
My Lords, I understand the noble Lord’s disappointment that when he applied to the Liaison Committee last time for an ad hoc committee on this very subject, his bid was not successful. There were 35 bids and only four ad hoc committees were established: I hope he accepts that his disappointment was shared by others. An email went to all noble Lords—I think it was last week—from the noble Lord, Lord McFall, inviting bids for the next tranche of ad hoc committees for this Session. The decision will be made by the Liaison Committee, on which the Government have only one member. The noble Lord appealed to the whole House to support his bid. The notion that the Government could stand in the way of the noble Lord’s bid, which I think was implied in some way, implies that my noble friend who sits on the Liaison Committee could go around discouraging people from supporting it—like Henry Fonda in “12 Angry Men”—which is fanciful. However, the noble Lord has launched his manifesto on the Floor of your Lordships’ House and his fate now rests with the Liaison Committee.
Lord Sterling of Plaistow (Con)
My Lords, in 2003 the noble Lord, Lord Blunkett, who was Home Secretary at the time—in the Government of the party opposite, of course—published Identity Cards: The Next Steps. Anybody who reads it will realise that the reasons put forward are even more meaningful now than they ever were in that period of history. I totally support what the noble Lord, Lord Campbell-Savours, is proposing: I think it is hugely important to this country.
Lord Young of Cookham
I am grateful for the intervention of my noble friend. I am genuinely envious of those, such as him and the noble Lord, Lord Campbell-Savours, who think that the case for an identity card system is made, and equally envious of those who come with equal conviction to the other side of the argument. I say that as someone who, with my party, has voted both for and against identity cards. Having revisited this subject recently with some assistance from the Home Office, it seems to me that introducing identity cards now would be a 20th-century solution to a 21st-century problem, since so much identity fraud is now online and forgeries have become much more sophisticated. Other countries are now moving away from physical identity cards to other forms of digital identification of who people are.
Lord Paddick (LD)
My Lords, if Ministers had discussed identity cards with border security services, no doubt they would have said, “We don’t need ID cards —we need stronger border controls, including effective exit checks”. With passenger numbers increasing, why have the Government reduced the budget of the Border Force, forcing it to cut the number of staff at UK airports? This morning two-thirds of the e-gates at Heathrow Airport terminal 5 were closed because of a lack of staff, resulting in queues that will only get worse if we have a damaging Tory Brexit.
Lord Young of Cookham
I think exit checks were reintroduced in May 2015. I will correct that in writing if that is not the case. The Government want tourists to be able to visit this country and not spend a disproportionate time going through passport or visa control. The last statistics I saw a few weeks ago indicated that the average time it takes to get through passport control was coming down, but I take note of the noble Lord’s representations. I agree that we should allow people to come in without undue delay.
Lord West of Spithead (Lab)
My Lords, the Minister has not addressed the issue, which is that the Government are undertaking work at the moment and have tasked businesses with coming up with options to provide a means of identifying yourself online by using a card with biometrics. If you have a biometric card which identifies you, which is being used so that you can get online to all the government services we want to put online, what do you call it? It seems to me that it is an identity card. If we have one, why can we not use it more thoroughly?
Lord Young of Cookham
I think what you call it is a voluntary system, as opposed to a compulsory one.
Lord Ramsbotham (CB)
My Lords, is the Minister aware that there is already an identity card in existence and use? Thanks to the initiative of an organisation called Headway, people with acquired brain injuries are issued with a card which not only has on it their photograph but lists the symptoms that the brain injury has resulted in, such as speech defects or movement defects. That has been recognised by the police and is helping a great deal in preventing people with acquired brain injuries being arrested so often. It is interesting that the police, having recognised that card, are now very much in favour of an identity card, on which such information could be included.
Lord Young of Cookham
I am sure the whole House applauds the introduction of the voluntary system which the noble Lord has just referred to. Eighty-four per cent of the people in this country have a passport. That is a perfectly feasible form of identity available to anyone who wants one.
Procedure Committee
The Senior Deputy Speaker
That the 1st Report from the Select Committee (Procedural changes arising from the two-year session) (HL Paper 33) be agreed to.
The Senior Deputy Speaker (Lord McFall of Alcluith)
My Lords, the first report from the Procedure Committee proposes a number of changes to existing procedures, arising from the Government’s announcement in June that the current Session would last for two years instead of the usual one year. In effect, the recommendations will double the present limits by resetting them half way through the Session. The details of the changes proposed are set out in full in the report but noble Lords may find it helpful if I set them out briefly.
First, for both Oral Questions and topical Oral Questions, the report recommends that for the duration of the current Session, the limit on the number of Questions per Member should be reset at the point of any Whitsun Recess or on 1 June 2018, whichever comes first. This would allow each Member to ask a total of 14 Oral Questions and eight topical Oral Questions during the current Session.
Secondly, the report covers Thursday and balloted debates. It recommends that the Thursday general debates should run from June 2017—the start of the current Session—to the end of January 2018, and then again from the first sitting Thursday in June 2018 until the end of January 2019. Balloted debates should run from June 2017, the start of the current Session, to the end of December 2017 and then again from the first sitting Thursday in June 2018 until the end of December 2018; and the limit on the number of balloted debates per Member should be reset at the point of any Whitsun Recess or on 1 June 2018, whichever comes first. This would allow each Member to initiate two balloted debates during the current Session.
Thirdly, the report covers topical Questions for Short Debate and recommends that: topical Questions for Short Debate on every Thursday should run from June 2017, the start of the current Session, to the end of January 2018 and from the first sitting Thursday in June 2018 until the end of January 2019; and that the limit of one topical Question for Short Debate per Member should be reset at the point of any Whitsun Recess or on 1 June 2018, whichever comes first. This would allow each Member to initiate two topical Questions for Short Debate during the current Session.
I hope that noble Lords will agree that these changes are an appropriate response to the longer-than-usual Session. I beg to move.
Data Protection Bill [HL]
(7 years ago)
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Lord Ashton of Hyde
That the amendments for the Report stage be marshalled and considered in the following order:
Clauses 1 to 9, Schedule 1, Clauses 10 to 14, Schedules 2 to 4, Clauses 15 and 16, Schedule 5, Clauses 17 to 20, Schedule 6, Clauses 21 to 28, Schedule 7, Clauses 29 to 33, Schedule 8, Clauses 34 to 84, Schedules 9 and 10, Clauses 85 to 110, Schedule 11, Clauses 111 and 112, Schedule 12, Clauses 113 and 114, Schedule 13, Clauses 115 and 116, Schedule 14, Clauses 117 to 147, Schedule 15, Clause 148, Schedule 16, Clauses 149 to 171, Schedule 17, Clauses 172 to 194, Schedule 18, Clauses 195 to 198, Title.
Drug Dealing Telecommunications Restriction Orders Regulations 2017
(7 years ago)
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Lord Young of Cookham
That the draft Regulations and Order laid before the House on 12 October and 11 September be approved.
Considered in Grand Committee on 29 November
Community Drivers’ Hours Offences (Enforcement) Regulations 2017
Baroness Chisholm of Owlpen
That the draft Regulations laid before the House on 14 September be approved.
Considered in Grand Committee on 29 November
Selection of the President of Welsh Tribunals Regulations 2017
(7 years ago)
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Lord Keen of Elie
That the draft Regulations laid before the House on 14 September be approved.
Considered in Grand Committee on 29 November
Budget Statement
(7 years ago)
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Lord Bates
That this House takes note of the economy in the light of the Budget Statement.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, just under two weeks ago in the other place, the Chancellor set out a Budget to define the UK’s future. It was a Budget which acknowledged the fundamental strengths of the UK economy, responded to immediate challenges and laid the foundations for an economy that is fit for the future. It is a privilege to present this Budget to your Lordships’ House today.
The Budget demonstrated the underlying strength and resilience of the British economy, which has grown over the past year by 1.5% and has now expanded for 19 consecutive quarters. Employment has risen by 3 million since 2010 and is close to a record high, with a near record number of women in work as well. The unemployment rate has fallen as well, to its lowest level since 1975.
This is all very welcome; however, there remain challenges that need to be addressed. In particular, productivity growth remains stubbornly low. Accordingly, the independent Office for Budget Responsibility has revised downwards the outlook for productivity growth across the forecast period. This has a direct impact on its forecast for GDP growth, which the OBR now predicts to be lower in every year of the forecast period compared to that forecast in March this year. As a consequence, business investment is expected to remain subdued, while inflation is set to peak at 3% this quarter before falling back towards the target over the next year. The Budget therefore takes action to support households and businesses in the near term while investing further to improve productivity and drive future growth in the medium to long term.
The Government have made significant progress since 2010 in restoring the public finances to health, but borrowing and debt remain too high. The Government’s fiscal rules take a balanced approach, getting debt falling while continuing to invest in our key public services and keeping taxes low. The OBR reports that, having taken into account the new forecast and the measures presented in this Budget, the Government are on track to meet both their interim fiscal targets during the forecast period. It is in this context that this Budget seeks to address the future challenges and opportunities for the UK, embracing change while providing immediate support for people, businesses and our public services where it is needed most.
This Government have already set in train a series of long-term reforms to deliver real improvements in growth. We have seen more than a quarter of a trillion pounds of public and private investment in our infrastructure since 2010. We are overseeing the biggest rail programme since Victorian times, and we are transforming skills through apprenticeships and the launch of T-levels at the previous Budget.
In this Budget, the Government have taken further steps to increase our long-term prosperity through investing in the skills and infrastructure needed to compete in future. The national productivity investment fund introduced last year will be extended to 2022-23 and funding will be increased to £31 billion. The fund will support an additional £2.3 billion investment in R&D, taking total R&D spend in 2021-22 to £12.5 billion. That is the largest public-sector R&D investment programme over the past 40 years. This will be alongside an increase in the R&D expenditure tax credit from 11% to 12%, an ambition to create the most advanced regulatory environment in the world and further funding to roll out fibre-optic broadband and 5G networks across the UK.
The Government are also committed to using funding from the national productivity investment fund, along with other transport spending, to boost regional infrastructure. Plans include an ambitious strategy to maximise the growth in the Oxford to Cambridge corridor through projects such as the completion of the east-west rail that will connect Oxford to Cambridge by train. The Budget also announced an action plan to unlock £20 billion of new investment in high-growth, innovative businesses in response to the patient capital review.
On skills, the Budget invests £406 million in maths and digital skills to help everybody get the skills they need to succeed in a modern economy. These efforts are complemented by the industrial strategy, which set out a clear plan for how we can boost the productivity and earning power of people throughout the UK and ensure that our country can embrace and be empowered by the excitement of technological change.
We speak about the infrastructure our businesses need to thrive, but we also need to talk about the infrastructure people need to survive. Increasing the supply of housing in the right places supports productivity improvements. It encourages a flexible labour market and enables people to work where they can be most productive, but, more importantly, providing homes is key to building communities and giving families the stability and security they deserve. Yet home ownership has become increasingly unaffordable, with the average house price in England and Wales now almost eight times the average person’s salary, compared to 3.6 times two decades ago. The number of 25 to 34 year-olds owning their own home has dropped from 59% to just 38% over the past 13 years.
So the Budget sets out an ambition to deliver 300,000 homes a year, supported by a comprehensive package of planning reforms and targeted investment. It commits over £15 billion of financial support to boost housing supply over the next five years, bringing the total amount of support to £44 billion over this period. It makes proportionate planning reforms, focused on urban areas where people want to work and live, helping towns grow in the right way while protecting the green belt.
But we also want to take action right now to help young people who are saving for a home, so the Budget permanently reduces the up-front cost of stamp duty for over 95% of first-time buyers who pay it. This is a comprehensive plan that will deliver on the pledge that we have made of ensuring that the dream of home ownership becomes a reality for the next generation once again.
The Budget is committed to ensuring that we have the foundations in place to support growth in the long term, but it also recognises that there are immediate challenges caused by rising prices. So the Budget will boost wages, reduce the cost of living and support businesses by freezing fuel duty, reducing the burden of business rates by a further £2.3 billion, increasing minimum wages and increasing the personal allowance to £11,850, lifting some 1.2 million out of tax altogether.
Finally, I turn to our public services and the taxes we need to pay for them. I take the opportunity to point out that this is the second Budget this year. The investment this Budget provides to core parts of our public services builds on the previous funding that the Government set out, such as the additional £2 billion we invested in social care in the spring Budget. The Budget takes further steps to put the NHS on a strong, sustainable footing, with £6.3 billion of additional funding, of which £3.5 billion will be invested in upgrading NHS buildings and improving care, while £2.8 billion goes towards improving A&E performance, reducing waiting times for patients and treating more people this winter. This is a significant first step towards meeting the Government’s commitment to increase NHS spending by a minimum of £8 billion in real terms by the end of this Parliament.
The Budget also commits an extra £3 billion to prepare for Brexit over the next two years, to make sure the Government are ready on day one of exit.
On welfare, the Government are committed to building a modern welfare state that is sustainable, in which work always pays and claimants are supported to increase their earnings. That is why the Government are continuing to roll out universal credit, which delivers long-overdue reforms to the welfare system. However, the Government recognise the genuine concerns raised in many places, including in your Lordships’ House, about the operational delivery of universal credit. In response, they are introducing a £1.5 billion package of measures to address those concerns.
The Government are clear that everyone must pay their fair share of tax in order to support our vital public services. The actions taken by this Government since 2010 have secured a £160 billion in additional tax revenue that would have otherwise gone unpaid, and brought the UK’s tax gap down to 6%—its lowest level ever and one of the lowest in the world. The Budget will continue to collect tax due, with a package of measures that is forecast to raise £4.8 billion by 2022-23.
A sustainable tax system also needs to keep up with developments in the wider economy. The Government recognise that the development of the digital economy creates imbalances between those firms with and those without a physical presence. This is not sustainable. Therefore, the Budget sets out how the UK will ensure that all businesses—both digital and bricks and mortar—operate on a level playing field within the corporate tax system.
In summary, the Budget takes sensible actions in the light of revised forecasts to address the some of the key challenges and opportunities that lie ahead, and in doing so, lays the foundations for a prosperous future. It invests sustainably in our public services, while supporting people and businesses and continuing to invest to secure a bright future for Britain. I commend it to your Lordships’ House.
Lord Tunnicliffe (Lab)
My Lords, in opening this debate for the Opposition, I am somewhat in awe of the speakers list, in terms of both its length and, principally, its quality. I will therefore try to be brief. I look on this Budget as a confessional. Economic growth is the lowest it has been since the Tories came into office, and the Budget confirms that failure: growth is revised down in every year of the forecast. The Government have promised to eliminate the deficit by 2015, 2016, 2017 and 2020, and now I believe they say the mid-2020s, yet the answer—continuing austerity—remains the same. The long-term economic plan has been and continues to be a shambles.
The investment promise is inadequate. Labour would bring forward investment in infrastructure in every region and nation to create a high-wage, high-productivity society. Real wages are lower than they were in 2010. The Budget confirms a further hit to living standards in 2017. The national living wage will not be the £9 per hour that was promised when it was introduced; in March it was revised down to £8.75, and it has now been revised down to £8.56. By 2020, average full-time workers on the national living wage will be £900 per annum poorer. If Labour’s promise of £10 per hour had been introduced, they would be £3,000 per annum richer.
What is the overall growth effect of the Budget? This can be found in the OBR’s Economic and Fiscal Outlook, somewhat obscurely, in paragraph 1.19:
“The short-term fiscal loosening announced in this Budget boosts growth by 0.1 percentage points in 2018 and 2019, but its withdrawal then reduces it by the same amounts in the following two years”.
Plus 0.1 plus 0.1 minus 0.1 minus 0.1 equals zero. When have a Government, with an economy as in the doldrums as this one is, ever turned down an opportunity to stimulate it? So growth is low, deficit reduction has failed, investment is inadequate, real wages are static and the national living wage is down.
I turn now not so much to the Budget as to what is not in it. I would call it a hope-free Budget, looking at it from the point of view of the poor, the aspirant, the sick and the old. First I want to look at it from the point of view of the poor. I think few of us in this House really understand what it is like to be poor. I came from a modest background where my household income was certainly in the bottom quintile and probably in the bottom decile. However, they were different times: I lived in a council house where the tenancy was secure and rents were reasonable, and my father was a hospital worker but he knew he had a job and he had stability. Yes, there were things that we did not have, but we did not have fear. I put it to the House that today’s poor have fear in a way that probably very few here can understand.
So what have this Government done? By introducing universal credit, they have taken £3 billion per annum from the poor, and this Budget produces a miserly £300 million a year to try to ameliorate the impact. People will not particularly believe me because I am standing here at the Labour Front Bench, but today the Joseph Rowntree Foundation published a report whose key finding is:
“Over the last 20 years the UK has seen very significant falls in poverty among children and pensioners. Twenty years ago a third of children lived in poverty; this fell to 27% in 2011/12. In 1994/95, 28% of pensioners lived in poverty, falling to 13% in 2011/12. This progress is now at risk of reversing: poverty rates for both groups have started to rise again, to 16% for pensioners and 30% for children”.
Is there any relief in this Budget for the poor? No.
Let us turn to what I call the aspirant group. What makes society work is social mobility. In my day it was surprisingly more available than people tend to think, and I was lucky to enjoy social mobility. To be fair to previous Governments, this was recognised and a Social Mobility Commission set up, chaired by Alan Milburn. Now, all the commissioners have resigned. I quote from his resignation letter:
“For almost a decade, I have been proud to serve under Labour, Coalition and Conservative governments in various social mobility roles. I remain deeply committed to the issue, but I have little hope of the current government making the progress I believe is necessary to bring about a fairer Britain”.
Does the Budget bring any hope of improved social mobility? No.
I turn to the sick. Yes, there was money in the Budget, but because of demographic and other effects, it was effectively delivering a cut. I must commend NHS England on its openness in decision-making. It places on the web its board papers and minutes. Therefore, I was able to look at the paper that the board produced for the meeting immediately after the Budget, which took account of the Budget. Under the heading:
“Be realistic about what can be expected from the remaining available funds”,
it states:
“For example, new advisory NICE guidelines can only expect to be implemented locally across the NHS if in future they are accompanied by a clear and agreed affordability and workforce assessment at the time they are drawn up”.
That is distinctly different from the present situation, where NICE guidelines are based not on affordability but on whether they are effective and give value. That paragraph continues,
“and even assuming this year’s unprecedented elective demand management success continues, our current forecast is that—without offsetting reductions in other areas of care—NHS constitution waiting times standards, in the round, will not be fully funded and met next year”.
Press reports indicate that the paper was fully endorsed by the board. The NHS has been honest, but this does not contain hope. Is there any comfort for the NHS in the Budget? No.
Finally, I turn to the old—perhaps we have more empathy with this subject. Let us face it: we all have to think about the last few years of life. Sadly, we live in a society where, throughout our nation, we are likely to feel most insecure in our last few years, because adult social care has been steadily ignored. There is a particular crisis in the care home sector. In July this year, Andrea Sutcliffe, chief inspector of adult social care in the CQC, said:
“Last October, CQC gave a stark warning that adult social care was approaching a tipping point. This was driven by more people with increasingly complex conditions needing care but in a challenging economic climate, facing greater difficulties in accessing the care they need.
While this report focuses on our assessment of quality and not on the wider context, with the deterioration we are seeing in services rated as Good together with the struggle to improve for those with Inadequate and Requires Improvement ratings, the danger of adult social care approaching its tipping point has not disappeared. If it tips, it will mean even more poor care, less choice and more unmet need for people”.
That is the CQC’s view of the world.
Interestingly, on 30 November, the Competition and Markets Authority reported on care homes. It said:
“Our assessment based on larger providers is that self-pay fees are now, on average, 41% higher than those paid by LAs in the same homes. This represents an average differential of £236 a week (over £12,000 a year)”.
It then discusses what will be the effect of that on the market. It argues that the effect is absolutely obvious: care homes will be built where there is a big market for self-pay, not built to meet the needs of local authorities. The area is approaching crisis. It goes on to say:
“Our assessment is that if local authorities were to pay the full cost of care for all residents they fund, the additional cost to them of these higher fees would be £900 million to £1.1 billion a year”.
Is there any hope in this sector? No. The care home sector is in crisis, and adult social care is in crisis. For the poor, the aspirant, the sick and the old, this is a no-hope budget.
Lord Razzall (LD)
My Lords, I am sure that all noble Lords would agree on the speech that the Chancellor of the Exchequer wishes that he could have made when he rose to his feet 10 days or so ago. In his dreams, he would have said that world growth is significantly benefiting the UK economy. In his dreams, he would have said that, as a result, company confidence has increased capital investment significantly in the UK. In his dreams, he would have said that there has been an improvement in the skills base driven in part by huge growth in apprenticeships, which is now feeding through to significant growth in productivity. Of course, he would also have said that the strong pound is reducing the inflation rate—and all those factors would be feeding through to stronger tax receipts. Sadly, noble Lords will be aware that quite the opposite is true.
On the basis of the OBR forecasts, which were set out in his Budget speech, productivity is now in the bottom quartile of all our economic competitors. The growth forecast is way below that of our competitors, with the OBR downgrading the 2021 GDP figures by £45 billion by comparison with the 2017 Budget estimates. The OBR indicates that tax receipts by 2021 will be £28 billion less than forecast.
On the Government’s own admission, a number of factors are applying to the British economy. The Government recognise that our workers lack the necessary technical skills. They recognise that infrastructure spend in the UK is not in the top 20 on World Economic Forum ratings and that R&D expenditure at 1% of GDP is below the OECD average of 2.4%, a figure that we are not aiming to reach until 2027. The Government recognise that the number of apprentices is falling. They say that that temporary fall is due to the introduction of the new procedures on the apprenticeship levy. Well, let us hope so.
Of course, there is some good news. Our creative industries are now worth £92 billion to the UK, which shows a 7.6% growth in 2015-16, twice the growth in the rest of the economy. The creative industries sector is probably bigger than our manufacturing sector, as a result. The drop in the exchange rate, as Brexiteers constantly remind us, has helped manufacturing exports—but, of course, the huge increase in import prices as a result of this drop is now starting to hit consumers, who face no real rise in their living standards for years. The Resolution Foundation says that it will see the largest squeeze on living standards for 60 years. As the noble Lord, Lord Tunnicliffe, has indicated, it is the poorest 20% of families who will be hit the hardest by this.
On the plus side, the corollary of poor productivity is a record high level of employment. It seems that, without any deliberate decision, we have sleepwalked into a world of low-paid jobs rather than improvement of skills and spend on R&D and infrastructure.
The Government’s big idea, I suppose, is the industrial strategy. It is a big idea of interventionist sector deals, which Tories traditionally baulk at—but, in this case, they are wilfully imprecise. Maybe the free market needs a strategic nudge from the Government, but a deliberate lack of detail in a chosen four industries— life sciences, construction, artificial intelligence and automotive—is worrying, and the arrangements with Nissan are, of course, still top secret. Nevertheless, we have to praise the industrial strategy. After all, its grandfather was the noble Lord, Lord Mandelson, its father was Vince Cable and its child is Mr Clark, so we cannot object to it across the Floor, but the proof obviously will be in the results.
There can be no doubt that the most challenging issue facing the British economy is Brexit. Without a successful Brexit, the business confidence and investment necessary to maintain our economy will not take place and it will continue to bump along the bottom as measured against all our economic competitors. We all know what industry wants: manufacturers want a tariff-free environment and a frictionless border. There are examples of that within Europe—for example, Sweden and Norway have an allegedly frictionless border. However, everybody knows that it is not entirely perfect. Companies such as the motor car manufacturers and Airbus want to move their components freely across borders in a tariff-free, frictionless environment. The finance industry wants to sell its services across Europe. The creative industries which, as I said, are now probably bigger than the manufacturing industry, want no restrictions on trade within Europe. Everybody wants the continuation of regulatory systems without necessarily establishing new structures employing tens of thousands of civil servants if we attempt to replicate what we have been used to in the European Union.
Time is lacking. The banks have to make key decisions on whether they relocate some of their functions outside the United Kingdom. The car manufactures have to decide where they will source new models and companies such as Airbus have to decide where they will source the next generation of their planes. Therefore, the ball is very strongly in the Government’s court. Those who advocate a hard Brexit must recognise that if we do not have something equivalent to a single market and the customs union, the OBR forecasts are likely to be grossly optimistic.
The Lord Bishop of Portsmouth
My Lords, one of the duties in which I take particular pleasure is chairing the governors at Ripon College, Cuddesdon, just outside Oxford, a theological college at which men and women are prepared for ministry. It is known by those associated with it more colloquially as a vicar factory. Notices around the college remind the residents that, after night prayer or Compline, they are expected to abide by what is known as the great silence. It is not, I suspect, adhered to with the same severity as in years past. Indeed, one has a sense that the silence masks all kinds of feverish activity, all of it associated with theology, of course.
Last week’s Budget was characterised by a great silence on two issues, and that silence too hides, I suspect, feverish activity and fevered discussions on social care and defence. On defence, I cannot help but think that behind the silence, titanic struggle is joined. We hear an echo of that struggle in the media. The new Secretary of State kept his cards close to his chest at defence Questions. My anxiety is that others will determine what cards he holds, and that he will not be dealt the hand he, or we, would hope for.
I comment on just one area on which I have touched before: capability. I endorse the Government’s rhetoric and aspiration on defence but remain concerned that we do not, and will not, have the resources to deliver on that rhetoric. We have responsibilities as a force for good in the world which we may not be able to meet. That is bad in itself for those we seek to assist and bad for our ability to combat evil, but it is just as bad for how Britain is perceived in the world, especially by those who would do us harm. This will be thrown into stark relief on Thursday: we will all stiffen with pride as HMS “Queen Elizabeth” is commissioned by Her Majesty in Portsmouth. Many of us will also be concerned that we do not and will not have sufficient capability to support this great ship.
My second point concerns social care—the subject of another great silence. I did not hear a syllable on it pass the Chancellor’s lips. The status quo is bad enough. The decision to link business rates to CPI, not RPI, is no arcane statistical recalibration. It may be good for business; it is surely bad for hard-pressed local authorities, reducing their already highly pressurised ability to fund social care. It goes without saying that the losers will be those who need, and deserve, care. The Government have committed to publish proposals on social care in the summer, and thereafter to consider responses. Action is not on the horizon. Somewhere over the rainbow is a long time away for a situation that is already unsustainable.
My third point is on an issue about which I have spoken before: universal credit. Here my point is also about a silence although not one, I fear, which betokens feverish activity. I recognise the care that the Government are taking over universal credit and once again confirm my support in principle for a coherent system that enables and encourages work. However, I have, alas, a degree of scepticism that the Government’s confident statement that people are moving into work faster and staying in work longer can be justified, since rollout of benefit currently covers 9% of those it will eventually apply to, and the basis for the claim is data from three years ago, albeit only published this September. Perhaps the Minister will confirm that later. This is an extrapolation too far, based on modest—to say the least—rollout and out-of-date evidence.
I also urge the Government to be careful as they consider responses to their consultation on eligibility for free school meals. One of the welcome attributes of universal credit is to encourage work and remove cliff-edge changes in support. An arbitrary, and probably low, earnings threshold for free school meals entitlement would be a return to the bad old times.
Finally, I remain animated by the moral injustice of the taper rate. I acknowledge the Government’s action in reducing it by 2% last year and that under universal credit it is lower than it was. The issue is one of equity. It is surely wrong that those on universal credit who are on the lowest incomes and are doing the right thing by going back to work are subject to a clawback or withdrawal of a minimum of 63%. That rises if you pay national insurance, to a 75% marginal rate if you earn over £11,500—a figure which is soon to rise—and are liable to income tax, and more still if housing benefit is factored in. We are invited to believe that the bulk of the population, like many in this House, behaves one way with marginal tax and national insurance rates of 32% or 42%, but those on low incomes behave in another, facing much higher rates.
The Government are showing commendable thoughtfulness in seeking to get universal credit right. These are areas where they should think again. I trust that the silence to which I have pointed will be a prelude to a burst of activity.
Lord Wakeham (Con)
My Lords, I am delighted to follow the right reverend Prelate the Bishop of Portsmouth. I do not quite live in his diocese—I live on the very edge of it, in Winchester—but I have heard him speak on many occasions. I do not usually agree with him and I am not sure that I entirely agree with him this time, but he always makes his case very persuasively and he adds greatly to the debates in the House. I congratulate him.
I first spoke in a Budget debate in the spring of 1974 following Denis Healey’s first Budget, and I have spoken in most of these debates ever since. I am pretty sceptical about the Budget forecasts that Chancellors make on growth, inflation, productivity and what have you. I am not saying that they are always wrong but they seem to be wrong as often as they are right, and it remains to be seen whether this Chancellor is right or wrong. I hope that things will be better than he suggested. I can well understand why George Osborne subcontracted the forecasting problem to an outside body, so it is not revolutionary to be somewhat cautious about Budget forecasts.
Of course, our productivity is too low, and I welcome the steps that the Chancellor is taking to improve matters, but I am particularly concerned about the way we make comparisons regarding our productivity without mentioning the level of employment in this country. Employment and low unemployment are, in their different ways, both at record levels, and I do not believe they can be totally dissociated from productivity. They are things which any civilised society ought to be proud of. If you add to that Brexit and the need to recover from the economic disaster of recent years, my view is that the Chancellor did a pretty good job in his last Budget.
Looking at the measures that have or have not been included in the Budget, I think that one or two things could have been done differently. The last time I spoke on these matters—it seems only a few days ago that my noble friend spoke from the Front Bench—I was very critical of the level of consultation between HMRC and professional bodies over taxation matters. Maybe I was a bit unfair, as I was very pleased to see from the Red Book that the Government will consult before making any changes to taxing the self-employed. That is good, but the Government have a role in that. They need to make the differences in taxation and national insurance between the self-employed and the employed as small as possible. It is not easy but, the more they can do that, the less of a problem they will have.
When I was in business years ago, Jim Callaghan, as Chancellor, gave capital allowances at more than 100% for a short while. That increased capital expenditure and was particularly valuable to a number of small businesses, and is another thing the current Chancellor could do.
Perhaps I may for a moment look back to when I ran a small businesses. My difficulty with getting working capital was due not to the cost of the capital but to my inability to persuade the banks to lend me the money that I needed. That was much more difficult than the rate of interest I had to pay. Of course I wanted the lowest rate I could possibly get, but that was not the main factor. Currently, many people who are not in business—I guess that some here today are—have money in their bank current account, whereas if they put it on deposit they would get interest of 0.5% or 1%. I just wonder whether the banks could be encouraged to find a way of lending money to smaller businesses to a greater extent than they currently do, and perhaps give a slightly greater return to those with deposits.
The Government will know—there is no need to go over the subject again—how carefully we shall be watching their progress on the Making Tax Digital initiative. What they are doing is highly desirable but, as I said in the last debate, they have set about it in the wrong way. HMRC knows what has to be done to make these desirable reforms happen. The Government need to encourage it to do it in an acceptable way.
I will finish on a much bigger issue facing us, and in particular the Treasury and HMRC. The Chancellor certainly referred to it, but we have not yet got to the problem. I think all of us realise that we are at the beginning of a massive industrial revolution in which technology will revolutionise our whole economy. Much of this is good, but there are dangers. The five biggest companies in the world are now internet companies. They will fundamentally change the fiscal landscape, and that trend will continue. We have to work out how to handle that in terms of taxation and a competitive marketplace. These enormous companies can make their profits and pay tax, I suspect, pretty much where they like, and as a result corporation tax will become yesterday’s tax before very long. The answer is that if you are a small business based in the UK, you will pay corporation tax; if you are a big, powerful company that trades internationally, you will have many other options.
Coupled with this is the ability of any of these supra-national corporations to enter virtually any business they want and put the competition out of business through predatory pricing. That runs the risk of standing on its head virtually every norm on which our economy and many of the world’s economies have been run, changing them beyond recognition. I think the Government understand this, and I hope proper consideration is being given to the problem of the downsides, as well as the upsides.
Lord Darling of Roulanish (Lab)
My Lords, it is a pleasure to follow the noble Lord. I agree with everything that he said in terms of his last point on the problems that all Governments face with large corporations. I also have some sympathy with what he said about forecasts and Budgets. I presented no fewer than six separate forecasts in my time, during a rather turbulent period, so I understood what he was saying. Before I turn to the Budget, I draw the House’s attention to my entry in the Register of Lords’ Interests in that I chair the Standard Life Foundation and am a director of Morgan Stanley.
Regarding the Budget, on any view the forecasts tell us one thing: that 10 years after the financial crash, our economy has still not returned—or showing any sign of returning—to the growth levels that endured in the preceding years if not decades. That ought to worry us. Whether or not the figures are precisely right, and they probably are not, they give us a fairly strong view of what is happening in the economy—which is that the economic prospects that we thought by now would have been getting a lot better appear to be stagnating, at best, if not deteriorating. Of course, that has implications for us all.
I note simply in passing that it seems a long time ago that I was told that my assumption that you could halve the deficit between 2010 and 2015 was dangerous thinking. Here we are now, where the whole target has slipped back. As I understand it now, we are expecting to balance the books on the never-never—it is just slipping into the distance. There is a problem in that our economy seems to be stagnating, and I think it is absolute fantasy to believe that if only we were free of the European Union at the earliest opportunity, somehow things would get better. Indeed, I would argue that, at the very time when the economy has been limping along, the last possible thing we need is the biggest disruption to our economic prospects since the Second World War.
I want to say a word about infrastructure. Like everybody else, I welcome what the Chancellor said on housing. However, none of this will resolve the fundamental problem, which is that not enough housing is being built. It used to be a badge of honour of successive Governments, Conservative and Labour, after the Second World War, to say how many houses they had built in the preceding five years. Housing policies, rather like industrial policies, went out of fashion in the 1970s and 1980s. Unless and until we resolve the problems in relation to planning permission, the problem will subsist.
My noble friend Lord Tunnicliffe referred to today’s Joseph Rowntree report. One thing that it identified that is causing an increase in poverty is rising rent levels. Fundamentally, that is a problem of a lack of supply. This is not just a London problem: it is a problem in most towns and cities throughout the whole of the United Kingdom. Unless the Government accept that and find a way to speed up the planning process and remove some of the logjams, the problem will simply subsist.
I will say a word, too, about the railways. Yes, it is welcome that the investment in railways is largely being sustained. When we started doing that in the late 1990s it led to the huge increase in the number of passengers using our railways. Last week, however, we saw something that is an issue of good governance. The Government appeared to announce the prospect of reopening a whole bunch of lines closed by Beeching in the 1960s. Actually, I doubt whether we will see any one of them opened in our lifetimes. But buried in the small print of the same announcement was the fact that Virgin Trains East Coast was being allowed to hand back the keys to its franchise three years early because it was finding the going a bit tough.
There is a pattern here. Railway companies are signing up for franchises and making all sorts of assumptions but when it gets difficult, they hand the keys back. If the Government take them back without penalty we will simply see more of this. For four years I tried to make the hybrid system that we have on the railways work. I found at times that it was difficult. Bringing the two, track and train, together is essential, but it was very ad hoc. I am not sure that we have not reached a time when this model is broken and needs to be looked at again. However, we certainly cannot have a situation where all the risk lies with the taxpayer and any profit goes to the individual operator. Noble Lords will know that I am probably not the most ardent Corbynista in my party, but there is a real problem here that we need to address.
I welcome the industrial strategy. However, we are very good in this country at producing industrial strategies—what we have to master is implementing them. This one is welcome. It has lots of the stuff that my noble friend Lord Mandelson published nearly 10 years ago, and I think the coalition Government did too, but we need to do more. Some would argue, and I would argue, that perhaps the best industrial strategy to help our industry and our country would be to avoid the worst effects of Brexit. The second-best strategy would be to have a strategy as to what we want in these Brexit talks, because I cannot see that the Government actually know where they want to go. They talk about transitions but you can transition only if you are going from A to B. If you do not know where you are going, it is little more than a standstill agreement.
Even as we debate this afternoon, discussions are going on over lunch in Brussels. It must be some lunch because I understand that it is still going on. But if it is true that the Government are contemplating saying that Northern Ireland will be in the customs union and the single market in all but name, you begin to ask: why on earth are we getting into this mess in the first place? If we are really saying, “Don’t worry: nothing is going to change in Northern Ireland and the border won’t really exist”, why should not other parts of the United Kingdom get exactly the same treatment? How will it operate in practical terms if someone sends a good from Liverpool to Belfast and it then crosses the border? Obviously, in Liverpool, too, there will be no divergence in terms of construction regulations and so forth. It seems a very odd way of going about things. If it is true, it blows apart the entire argument for Brexit. If we are saying, “Actually, we’re leaving but nothing is going to change except that the European Union will make the rules and we will have no say in what they do”, it seems absolute nonsense.
We will presumably see by the end of lunch and the beginning of dinner where we get to on all of this, but if it is true, the Government need to think long and hard about the implications, as they do about what transition actually means. By the way, I welcome that it now seems to be common ground that we will have a transition agreement if for no other reason than that we have run out of time—which is a warning of where we are and are likely to be in the future.
The last thing I want to touch on—there is no time to develop this theme but we will return to it again and again, and it has been adverted to by previous speakers—is the growing problem of income inequality in this country and the problems between the generations that are now building up. The Joseph Rowntree Foundation report is well worth reading. It is not just about rents. Another issue that it raises is that getting people into work cannot now be assumed to be sufficient in itself to get people out of poverty. The whole question of financial well-being is one reason why I referred to the Standard Life Foundation, which is about to commission research into that issue. We need to look at this because it is a very real problem. Every time we look at Brexit and other such events, people say that this issue must be addressed, but we do not get round to doing so. It is a real problem and one that we cannot afford to ignore.
Baroness Pinnock (LD)
My Lords, I want to focus my remarks on what was not in the Budget Statement. The right reverend Prelate the Bishop of Portsmouth has already raised concerns about social care, and I make no apology for doing the same.
Before I start, I draw the House’s attention to my interests in the register: I am a councillor on Kirklees Council and a vice-president of the Local Government Association. Therefore, I speak with some experience about the real and direct impact on people in the absence of government action on social care funding.
The Chancellor made no mention of the crisis in care for adults who depend on local authorities to fund all or part of their care. Those adults include older people—we often focus on that—and adults with complex physical and learning disabilities. The fact that there is a funding crisis is well-documented. A House of Commons Library briefing last month described adult social care as the largest discretionary budget of local authorities, and it is in crisis.
In my own council, the combined proportion of the net council budget for adults and children’s social services is 70%—70% of the council’s total net budget is spent on the care of others. That ratio has grown significantly, across my council and all councils, as cuts are made in other services, such as road repairs and keeping libraries open, to enable care to be provided.
However, the consequences of continued and substantial cuts in local authority spending by the reduction in central government grants, plus increasing numbers of older people in need of care and the rising costs in the care sector, have resulted in people not being able to get the care they need. One estimate is that there are 1 million people in this country who are not getting the care that ought to be provided. The reason for this, apart from the consequences of funding, is that councils are reducing eligibility criteria so that only those with the most urgent and complex needs qualify for care; everybody else is left to cater for themselves. The Local Government Association estimates that there will be a £2.3 billion funding gap by 2019-20. That is only for adult social care.
This is not just a local government perspective on what is going on. As has already been said by the noble Lord, Lord Tunnicliffe, the Competition and Markets Authority reported last month that the care sector is not sustainable. The Institute for Fiscal Studies analysed care funding from 2009 to 2016, and it concluded that chronic underfunding and short-term fixes are making it simply impossible for local authorities to plan effectively. On local government funding, the IFS went on to comment that it is not appropriate to use an outdated formula that everyone agrees is no longer fit for purpose. Which?, the consumer campaigning organisation, also investigated the care home market and reported last month. It concluded that the crisis is real and that urgent action is needed now.
Last month, prior to the Budget, the King’s Fund said that unless the Chancellor finds additional funding in the Budget, people will be denied the care they need. In 2016, the King’s Fund produced a report on the care sector that stated:
“Access to care depends increasingly on what people can afford – and where they live – rather than on what they need”.
It went on to state:
“Local authorities have little room to make further savings, and most will soon be unable to meet basic statutory duties”.
So the crisis is real and getting worse. That cannot be disputed.
The Government can, of course, point to some sticking-plaster fixes. They have passed on the cost of social care to some extent to hard-pressed council tax payers by enabling councils to increase council tax by adding a 3% social care precept last year and this coming year. In the spring financial statement, the Government allocated additional funds over a three-year period—which, of course, is not sustainable—and then tied that funding to NHS bed-blocking criteria, rather than trying to deal with the fundamental answer to the crisis.
We have been promised a Green Paper—we have been promised one for a long time now—to lay out a long-term solution. We have had the Dilnot report, which you would have thought would be a sufficient solution. The Green Paper is now promised for next summer, but a Green Paper is a long way from a fundamental fix for the situation. Meanwhile, people struggle with daily and basic living needs.
So I ask the Minister: do the Government agree that there is a funding crisis in adult social care and that there is duty on them to provide leadership and solutions with additional long-term funding? If so, the failure to address the need is both inexplicable and damning. I have not even referred to children’s social care, which is by some estimates facing an even greater funding crisis. I look forward to a constructive and positive response from the Minister.
Lord Maude of Horsham (Con)
My Lords, I draw attention to my entry in the register of interests. It is a pleasure to follow the noble Baroness, Lady Pinnock, and those other distinguished Members of your Lordships’ House who have spoken. I warmly commend my noble friend the Minister on the lapidary way he opened the debate, making a persuasive case, which sometimes gets lost, that most of the fundamentals of the UK’s economy are in pretty decent shape.
I will focus particularly on the Government’s fiscal stance and where it is heading, but I note in passing the tendency in this debate, as is often the case in Budget debates—I do not go back quite as far as my noble friend Lord Wakeham; my first Budget debate was my noble friend Lord Lawson’s first in 1984—to lament the lack of fiscal discipline and to plead for more public spending. I share the concerns that the date at which fiscal balance will be struck has receded. Every year it seems as far away as it was the year before. We have to accept that if we want that date to come further forward we have to exercise real discipline over public spending.
I will focus on productivity, particularly in the public sector, which got less of an airing in the Budget than productivity in the private sector. The ONS tells us that in the years between 1997 and 2010 productivity in the public sector was essentially flat, while in the private services sector—the nearest analogue we can find—it rose by nearly 30%. During the coalition Government, with the strong support of Liberal Democrat Ministers in that Government—I worked very closely with Sir Danny Alexander during that time—we discovered that we could get more for less in the public sector. There were plenty who said at the outset that it was simply impossible; we showed you can. We saved cumulatively some £50 billion from the overhead running costs of central government during that time. If we had not done that, the national debt would have risen by that amount, or there would have been tax increases, or front-line services and programmes would have been cut by that amount. In the Autumn Statement of 2014, we published a document, signed off by George Osborne, Danny Alexander and me, which showed that, by 2020, one could essentially do the same again and double those efficiency savings from central government. However, there seems to have been a sad loss of focus on that objective since. I would be grateful for some reassurance from my noble friend the Minister that this is still a priority for the Government.
We achieved those savings by strong leadership from the centre of government, particularly with central authorities for those cross-cutting functions of government which receive far too little attention, either from the Civil Service or from politicians. Let me give a couple of examples. We persuaded a reluctant Treasury to put in place a full-time head of financial management for government. In any big, complex organisation in the private sector, it would be automatic that such a post would exist, with finance directors in disparate parts of the organisation having a strong reporting line to that head of financial management. That has now been disbanded. The head of financial management for Her Majesty’s Government is now the finance director in the Ministry of Justice. He is a very talented individual, but he is looking after a budget of some £20 billion, and he cannot possibly give the leadership to financial management that it requires. The Government Digital Service, now copied in many places around the world, which saved vast amounts of money by putting services online, supported a burgeoning tech sector in this country and got the UK Government to the top of the UN’s ranking for digital government last year, seems largely to have been marginalised.
Two weeks ago in this House, we discussed the case of the chief executive of the Student Loans Company, who has been summarily dismissed having been brought in as a seasoned and robust operational leader to turn around that failing organisation. Productivity in the public sector will not improve if seasoned operational leaders brought in to turn around failing organisations in the public sector are driven out at the very moment when they are beginning to get to grips with those failings.
The other side of sound money is the need for the country to earn it before it is spent. I want to say a quick word about the industrial strategy. I am an old, unreconstructed Thatcherite, proud to have served in the Thatcher Government in the 1980s, when the whole idea of an industrial strategy was deeply unfashionable. I think that what we now see as an industrial strategy is a very different beast from what was regarded very poorly at that time. Then, the focus was on very large companies, often state owned, and on the companies themselves rather than on the sectors that could benefit from support. This time—and great credit is due to Vince Cable for the work he did in making the case for an industrial strategy in the coalition Government—the focus has been much more on the need to support the seeding, expansion and growth of smaller businesses, particularly through things such as the catapults, which were a feature of the coalition Government.
That requires a relentless focus on enterprise. Making that case should be an open door for the millennial generation. The young people of the generation of my children, in their 20s and early 30s, are much more likely than was my generation to be doing their own thing, to be starting something up—sometimes speculatively, sometimes developing something very serious indeed. The case for enterprise as the mainspring of economic growth, wealth and prosperity for all is more important today than it has ever been.
I echo the point made by my noble friend Lord Wakeham that when the Revenue takes the approach that it has sought to take towards the taxation of self-employed people, we need to be very careful. When I was Financial Secretary, the Inland Revenue, as it then was, had a rooted belief that people became self-employed only to pay less tax. The truth is that most people become self-employed because they want to make something happen and to have control of their destiny. They are taking a risk, which we as a society ought to be encouraging. I encourage my noble friend to take back from this debate to the Treasury that we want to see a sensible, risk-weighted approach to how we tax self-employed people.
Baroness Blackstone (Lab)
My Lords, I declare an interest: I chair the board of the Orbit Group, a large housing association, and it is on housing that I want to focus all my remarks. It seems appropriate to do so as we were told some time before Budget day that housing was to be the centrepiece of the Chancellor’s announcements. While there are some welcome proposals in the Budget, unfortunately the actuality does not match the preceding hype. Andrew Sentance, a former member of the MPC of the Bank of England, described the Budget as a whole as,
“a bits and pieces budget”,
with “small measures” and “little impact”. I describe the housing sections as medium-sized measures with a likelihood of limited impact when very large measures are needed to have a substantial impact on the serious housing crisis we face. The Government’s White Paper which came out before the 2017 general election recognised that the housing market was bust and proposed some, although not enough, radical measures to address the massive problems we face. The Budget picks up on some of the proposals in that White Paper but is not nearly ambitious enough if we are to crack these problems.
As my noble friend Lord Darling said, at the heart of the issue is a problem of supply. We simply do not have enough houses to go around, especially in London and the south-east, but elsewhere too. Moreover, there is an acute shortage of social and affordable houses for rent. This supply-side problem has driven up the price of houses for sale, making them unaffordable for most first-time buyers, yet until now the Government have fiddled around with demand-side measures, such as Help to Buy, that have driven prices up further. I congratulate the Chancellor on recognising that we need to build 300,000 new homes per annum, which is a big increase on the 140,000 average over recent years, but it is a sad reflection on our failure to give new housing the importance it deserves that the last time this country built more than 250,000 new homes a year was under the Labour Government of the 1970s.
The target is to achieve this supply increase by the mid-2020s. I recognise that it will take time to achieve the target but I wonder whether there is enough urgency in the Government’s proposals and whether the £15 billion of new money will be enough to get us there. Incidentally, it is not the £44 billion that was hyped up earlier. I welcome the decision to loosen the housing revenue account borrowing cap on local authorities in areas of high demand for housing. This was a central recommendation of the Economic Affairs Select Committee, on which I sat, in its report on the housing market.
We must be pragmatic and go for a mixed economy in the building of new homes, to which public and private sectors both contribute. I remind the House that in the 1970s 40% of new accommodation was built by local authorities. The ideology of the 1980s and 1990s, of cutting them out and leaving it to the private sector, has contributed to the mess that we are now in. Local government must return to building more social housing for rent, sometimes in joint ventures with housing associations. Allowing them to borrow to do so is vital. I agree with the LGA, the RICS and others that the lifting of the cap does not go far enough to get to the scale that is needed to reach the 300,000 target.
It is obviously crucial to building new homes that land is available and that better use is made of it. Sadly, this Budget fails to address this issue adequately. The National Housing Federation is right to say that the Government must stop selling public land at the highest possible price. They should update their guidance on best value so that all public bodies are required to set a price for their land that will support the delivery of more affordable housing. The Government should also insist that unused brownfield sites owned by their own departments should be sold off in areas of high need. A more radical approach to support social and affordable housing would require new developments on private sites to set aside 35% for it and for public-owned land to deliver 50% affordable housing.
Turning to the related subject of planning reform, I accept that focusing on urban areas and avoiding the green belt avoids a political storm in many Conservative constituencies but I wonder why the Government have not been brave enough to include a policy of green-belt swaps so that suitable sites on the edge of urban areas could be made available for housing. Perhaps the Minister could say whether this will be considered in the review of the planning system that was announced in the Budget. Resolving the scandal of the discrepancy between planning permission levels and the building-out rate should not be batted into the future by including it in the proposed review. We need action now so that developers are forced to get on with the job after permissions are granted. The suggestion that densities in urban areas should be increased and more small sites should be made available is welcome, and I congratulate the Mayor of London on announcing his intention to adopt this approach.
I will end with one of the few tax changes announced in the Budget: the abolition of stamp duty for first- time buyers purchasing a property costing £500,000 or less for the first £300,000 of the price. Apparently, Conservatives in another place cheered this announcement. Perhaps they should think again. The cost of the concession is an enormous £3 billion and it helps only a tiny proportion of those with housing need. Because this is a permanent reduction in stamp duty for first-time buyers, the OBR has calculated that it will increase the price of properties by twice the size of the tax saved; in other words, a first-time buyer of an average-price property will experience a £3,200 price increase to offset a £1,600 tax cut. This really is a nonsense. Moreover, the OBR calculates that the change will increase the number of first-time buyers by just 3,200.
In addition, the Resolution Foundation has calculated that this change will make a tiny difference to how long it takes a first-time buyer to save for a new property. Thirty years ago, it took three years. The current estimate is 19.1 years. Removing stamp duty will lower it to—wait for it—18.5 years. This is not a gain that young people would think worth a celebratory drink in their local pub. The £3.2 million spent on tax relief would be enough to provide government funding to support building 400,000 social rented properties in high-demand areas or to see around 140,000 properties built through the Government’s own Housing Infra- structure Fund. Would the Minister care to comment on this in his reply, especially since these figures are from the OBR?
In conclusion, of course there are elements in the Budget’s housing provisions to welcome. However, I regret that the Government have not been radical in devising policies to ensure that they reach their targets. I fear that the Government have not matched the expectations we had of them after the PM dedicated her premiership to fixing “the broken housing market” and the Chancellor trailed this Budget as the “housing Budget”. It has been a lost opportunity. What is needed most is a big, comprehensive housebuilding programme directly commissioned by the Government, working with local authorities and housing associations. Then and only then will the target of 300,000 new homes per annum be reached, and then and only then will the poor and the just about managing have the housing and, in the words of the Minister in his opening remarks, “the stability and security they deserve”.
Lord O'Neill of Gatley (CB)
My Lords, despite a lot of obvious things that—understandably—worry many people around the world, in fact the world economy has strengthened quite notably in 2017. Based on many of the indicators that I have followed for a very long time, the world economy is ending 2017 on a cyclically rather strong footing. I suspect that when we look back, world GDP growth may have been in the vicinity of 4% this year. In addition, eight of the 10 largest economies in the world have accelerated at the same time. The other two, India and—surprise, surprise—the UK, have weakened. Rather interestingly, even both of those have in recent weeks shown some better signs after their previous disappointments.
This level of global economic activity is probably the best that we have seen for 10 years and some of the economies most relevant to us here in the UK are showing particularly good signs, ironically including the eurozone. Its November purchasing managers’ index, published just last Friday, was the strongest since 2000. Of course, this is merely the cycle and, as I said, there are all sorts of things that worry people all the time, many of which could derail the global economy at any stage. But I say all this because it is important to remember it as the backdrop to the Budget.
In this regard, it is disappointing that the UK economy has slowed, although there may be a reason why the economy has not slowed as much as some might have thought. Looking forward, if this global environment were to remain so benign, it might help us more than many of us have previously thought with some of the challenges ahead, including of course Brexit. As I have stated in this House before, as important as I believe Brexit to be, we have bigger challenges here in the UK which, if addressed, could actually help diminish the dilemmas of Brexit, as well as forming an appropriate response to the challenge. At the core of these are weak productivity, poor educational outcomes for a country with our development, poor skills and regional and intergenerational inequality.
I therefore re-emphasise that some recent signs in the UK, albeit tentative, show surprising improvements. Our own November purchasing managers’ index, also published last Friday, was the strongest for four years. Moreover, and in my judgment of greater importance, there are tentative signs of regional economic change, especially in parts of the so-called northern powerhouse. Many people are still unaware that we have regional purchasing managers’ indicators: up to October, those regional PMIs show the north-west in particular, but also now Yorkshire, continuing to outperform London as they have for most of this year. Employment trends have also been stronger in some of these areas in recent months. On top of this, there are perhaps growing signs that the peaking of house prices in London is not yet being followed elsewhere in the country; indeed in parts of the north and elsewhere, house prices are picking up somewhat. If for some reason these trends were to persist—this is very tentative—they would be highly welcome developments which, among other things, would have a large impact on regional inequality in the UK.
Against this global and domestic background, and given the rather emotional political environment, I believe that the Budget was quite sensible. The Chancellor is to be commended for avoiding some of the considerable pressures for major shifts in taxation or spending. It is also possible that with the abandonment of its acknowledged previous multi- year anticipation of a future improvement in productivity, the OBR could still turn out to be wrong but in a different direction. While there are obvious reasons that can explain our persistent productivity weakness, some of which I have spent far more time looking at than I sometimes think I would like to have done, many aspects of them remain a bit of a mystery. It is also the case that despite persistent tightening of the labour market our productivity could suddenly start to improve—even if we do not know why—especially if wages were to accelerate.
The whole issue remains quite uncertain, as it was even without the OBR’s shift. Whatever path follows on this score, the Chancellor was right to focus on policies to boost productivity rather than pursuing a major shift in spending or tax policy focus. It was especially heartening, after a gap of more than 12 months, to see fresh policy measures, albeit modest, with respect to devolution. In this regard, I congratulate those in North Tyneside as well as the Government for their persistence in these endeavours, and encourage others in the remaining urban areas of England to put aside their ongoing petty squabbling and seize these greater opportunities. There may be many reasons why the north-west economy has recently started outperforming elsewhere, but being a trailblazer in the context of devolution certainly has not been a hindrance. Let us have some more of these policies as we may have found something that is actually working.
I shall finish quickly with a cautious welcome of the industrial strategy launched a few days after the Budget. It is so easily fashionable to dismiss it as merely a set of good concepts and wishes, which indeed it is, but it is generally the right sort of framework in which to deliver further long-term economic improvement, especially in helping to contain the damage from Brexit and other inevitable things that lie ahead. The focus on significantly boosting government support for R&D as well as more financial support for those emergent sectors that might develop as world-class industries are the right sort of policies, as are even more ambitious policies with respect to place-based devolution. The Government should get on and deliver them.
Social Mobility Commission
(7 years ago)
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The Parliamentary Under-Secretary of State, Department for Education (Lord Agnew of Oulton) (Con)
My Lords, with the leave of the House, I will now repeat a Statement made in the other place by my honourable friend the Minister of State for Children and Families:
“Thank you very much indeed, Mr Speaker, for taking this Urgent Question, which gives us an opportunity to underline our commitment to improving social mobility in our country.
I am extremely grateful to Alan Milburn for his work as chair of the Social Mobility Commission over the past five years. We had already told him that we planned to appoint a new chair, and we will hold an open application process for that role to ensure we continue to build on this important work and that the foundation laid by Alan Milburn and his team can be built on.
Tackling social mobility is the department’s priority. We are driving opportunity through the whole education system. We have made real progress in recent years. The attainment gap between disadvantaged children at the end of reception has narrowed. The proportion of eligible disadvantaged two year-olds benefiting from funded childcare has risen from 58% in 2015 to 71% in 2017. We are putting more money into the early years than ever before, spending a record £6 billion per year on childcare and early education support by 2019-20.
We are also increasing the number of good school places, with 1.9 million more children in good or outstanding schools than in 2010. There are more than 15,500 more teachers in state-funded schools in England than in 2010. The £140 million strategic school improvement fund will target resources to support school performance and pupil attainment at the schools that need it most. The attainment gap, as highlighted by the commission, between disadvantaged pupils and their peers has narrowed since we introduced the pupil premium, now worth around £2.5 billion per year, a coalition policy we continue to embrace.
We know that there is more to do, and we are focusing on areas of the country with the greatest challenges and fewest opportunities, including investing £72 million in 12 opportunity areas. Plans for the first six areas were published on 9 October, and we will publish plans for the second six areas early in the New Year.
The outgoing chair of the Social Mobility Commission welcomed the launch of the opportunity area programme and the Government’s commitment to addressing disadvantage. This remains a priority for the Government”.
Lord Watson of Invergowrie (Lab)
My Lords, I thank the Minister for repeating that Statement. However, those words and the catalogue of claimed achievements are in stark contrast to what the outgoing chair of the Social Mobility Commission said yesterday, and indeed what the Joseph Rowntree Foundation report said today. I am not making a partisan statement, because of course one of those resigning from the commission was the noble Baroness, Lady Shephard, a former Conservative Secretary of State for Education. Reinforcing that is today’s editorial in the Times newspaper—not a source I normally quote, and usually a friend of Conservative Governments—which said of Theresa May that the resignations were,
“an embarrassing failure of both politics and policy … No wonder her social mobility commissioners have quit”.
When the commission was established in 2012, it was as the Social Mobility and Child Poverty Commission and had nine members. Two years ago, the Government indicated that they regarded child poverty as having been ended, because they dropped that part of the commission’s title. They also took away its remit to advise Ministers. Meanwhile, the number of commissioners had dwindled to four.
How can the Government claim to have social mobility as an aim when, at this year’s general election, their manifesto contained a proposal to increase the number of grammar schools—the effect of which would have been the very antithesis of social mobility? Can the Minister tell noble Lords why the Government did not adopt a single recommendation of the Social Mobility Commission? Do the Government remain committed to the commission and, if so, why?
Lord Agnew of Oulton
My Lords, I reassure the noble Lord that we are committed to the Social Mobility Commission and it will remain an important force in encouraging the Government to improve social mobility. He asked specific questions around the recommendations that have been made by the commission in the past. One which I am familiar with is the opportunity area concept, which came from the commission’s recommendations, including the use of the social mobility index. As the noble Lord will be aware, and as I mentioned in the remarks from my honourable friend, we have created 12 opportunity areas, six of which have already released their plans for tackling some of the deprivation in those areas.
Lord Storey (LD)
My Lords, the Joseph Rowntree Foundation report that was alluded to found that 3.7 million in work are now classified as poor compared with 2.2 million a decade ago. As we see the economy of London and the south-east pulling away from the rest of the country, it is strange that we should do things such as stopping the regional growth fund, which seemed to me to be a good mechanism that was trying to rebalance funds at a time when over half the money for infrastructure projects goes to London and the south-east.
As for the co-ordination of such matters, a number of staffing vacancies in the Social Mobility Commission were of course left unfilled. Does the Minister not think it is time to appoint a Minister whose department could co-ordinate the various activities that are now taking place—or not taking place?
Lord Agnew of Oulton
My Lords, the process of appointing a new chair of the Social Mobility Commission will be run from the Department for Education, and internal discussions have already started to begin that process. It is a public appointment and so will receive the scrutiny that that requires. In terms of regional growth, the social mobility fund of £140 million that we have established in the last year is very much aimed at helping education in the areas of need which go beyond the opportunity areas referred to by the Social Mobility Commission.
Lord Campbell-Savours (Lab)
Why were the commission’s resources cut and the membership reduced by over half?
Lord Agnew of Oulton
My Lords, I have not been privy to the discussions about the size of the commission and its commissioners, but I reassure this House that it remains a very important part of our strategy for social mobility and that we look forward to appointing a new chair. As your Lordships will be aware, Mr Milburn served five years, and it is time for a new face.
The Lord Bishop of Salisbury
My Lords, I very much welcome the work of the commission and of the outgoing commissioners. We live in a very divided and polarised time. After a period of low economic growth and austerity, and with Brexit, it feels as if the divisions in society are very great. This piece of work has the potential to be cross-party, and indeed it has been. How will the Government ensure that it continues to be cross-party as a process of building the common good and mending some of the divisions, as well as paying serious attention to the growing inequalities in society to which the Joseph Rowntree Foundation has drawn attention?
Lord Agnew of Oulton
My Lords, I completely agree with the right reverend Prelate that this should be a cross-party action. That is why we had a former Labour Cabinet Minister as the chair of the last commission. To pick on one policy of this Government over the last seven years, the sponsored academy programme has gone out to 150 local authorities and taken in some of their most failing schools. Those schools were in areas where 21% of the pupils in the secondary sponsored academies were eligible for free school meals, which is dramatically higher than the average of 13%. When we began the programme and those schools joined it, only one in 10 was good or outstanding, but today nearly seven in 10 are good or outstanding. That makes another 400,000 children who were in failing schools but are now in better schools, and largely they were in areas of deprivation.
Baroness Berridge (Con)
My Lords, I was a member of your Lordships’ Select Committee on Social Mobility in 2016. The committee looked at the transition from school to work for the majority of young people. The majority actually do not go to university or end up as NEETs; they go into vocational education, training or apprenticeships. Can the Minister outline whether the Government will ensure that at least one of the commissioners has personal or other direct experience of that transition or the social mobility of being from the vocational or apprenticeships sector and then achieving a position in society as a result? It seemed to us that many of the policy workers—Whitehall civil servants and indeed Ministers—came from degree backgrounds and did not necessarily have a full understanding of the challenges facing the majority of young people who do not go to university.
Lord Agnew of Oulton
My Lords, my noble friend makes a very good point, and it is something I will take back to the department for consideration. I can speak personally as someone who never went to university. I realise how important it is that we provide good career paths for pupils leaving school who do not go to university. That is part of the reason why we have created T-levels, which will involve a substantial investment of nearly £500 million a year when they are fully rolled out over the next three years. So I can give some reassurance that we regard this as an important part of the strategy.
Lord Cunningham of Felling (Lab)
My Lords, what changes do the Government intend to carry out to restore the credibility of the Social Mobility Commission, which, frankly, is in shreds, as is the Government’s commitment to it? Without a change in attitude on behalf of the Government, let alone new personnel, there seems little purpose in continuing with it at all.
Lord Agnew of Oulton
My Lords, I have already complimented Mr Milburn on the great work that he has done with his commissioners over the last five years. We are determined to keep the Social Mobility Commission. If the Government were not interested in social mobility then perhaps we could do as the noble Lord suggests and shut it down, but that is not the intention. We want a strong and vocal commission to hold us to account. I know we fully intend to appoint a new board in the next few months.
Baroness Tyler of Enfield (LD)
My Lords, the Social Mobility Commission’s report State of the Nation 2017, published earlier this month, paints a very stark picture of a country with many deep divisions—economic, social and geographical— and makes a heartfelt plea for the Government to publish an overall strategy for tackling them as well as a detailed action plan to respond to the specific recommendations in the report, a number of which are aimed directly at the Government. When do the Government intend to respond to the report?
Lord Agnew of Oulton
My Lords, I can confirm that we will be publishing a social mobility action plan shortly; I cannot give an exact date but it will be soon. It might also be worth mentioning some of the achievements of the last seven years because I think people can get rather downhearted by the whole issue of social mobility. It is important to remember that today we have 3 million more people in work; 950,000 fewer workless households; 600,000 fewer people in absolute poverty; 100,000 fewer pensioners in absolute poverty; and 300,000 fewer working-age adults in absolute poverty. Lastly, 600,000 fewer children are living in workless families than in 2010.
Budget Statement
(7 years ago)
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Lord Freeman (Con)
My Lords, I shall concentrate my remarks on the problems faced by private sector pension schemes in this country, something that the Chancellor is very well aware of. I am greatly indebted to him and his staff for monitoring the situation, which is growing to alarming proportions. The financial position of private sector pension schemes—10 million people in this country are covered by such schemes—is in difficulty at present. I declare my past interest as a chairman of one of the large pension schemes in this country. The problems are that the liabilities of the pension schemes are growing, and the promised increase in the final payment made in the private sector to those who retire looking forward to a decent pension is coming under great pressure for the simple reason that interest rates have been extremely low for a number of years now. That means that gilt rates, in particular, are so small that provision for pensions is not growing as fast as demand.
The Department for Work and Pensions reported in February 2017, identifying this as a major problem for the private sector in industry and commerce—and, indeed, in the Civil Service—but did not provide any solutions. I have every confidence that the Chancellor will be addressing this. He has referred indirectly to an understanding of the growing problem, and I very much look forward to his and the department’s comments in due course.
The aggregate deficit of private sector pension schemes in January 2017, the beginning of this year, was £20 billion, and it has grown. It has been caused by very low gilt rates, which I am sure are a tremendous advantage and much appreciated by large sections of industry and commerce, but these low rates have been coupled with the growing obligations of industry in this country to provide a decent pension depending on length of service, and to augment that pension when unions and companies agree to increases. I know that the Chancellor is well aware of these problems. I keep a close connection with the Treasury, and know that he will continue to monitor the situation.
I touch briefly on two other problems. First, I very much welcome the Chancellor’s decision that foreign buyers of commercial properties in the United Kingdom must pay capital gains tax. This has been a problem for many years, and the decision is warmly welcomed not only by the property industry but, more importantly, by the community and electorate as a whole. Also, overseas purchasers of house properties in the United Kingdom—I am now talking about individuals—should have their ownership fully revealed. That is not the case at present. In London, in particular, unknown owners of recently acquired properties are escaping the full vigour of examination not only by the tax authorities but in terms of their proper maintenance. This matter has been debated in your Lordships’ House, and I believe that transparent ownership records will ensure that tax is fully paid. I know that the Chancellor is interested in this issue, and I ask the Treasury to continue to follow it up.
I welcome the tone and content of the Budget very much, and have confidence that the Chancellor will continue to monitor not only the pension fund problems to which I just referred but the well-being of our economy.
Lord Livermore (Lab)
My Lords, this Budget reveals an economy that is weaker, less resilient, and unprepared as we approach the biggest economic challenge faced by our nation in decades. It confirms that the Government’s economic plan is failing; that the price of Brexit is severe damage to our economy; and that those who can afford it least will be those who pay the most.
The independent Office for Budget Responsibility has set out the facts: growth has been cut sharply, and will now average just 1.4% a year. Indeed, growth will stay below 2% in every single year of the forecast period for the first time in history. Productivity growth has been cut to just 1.1%, making this the worst decade for that crucial measure since 1812. Household incomes are set to fall for an unprecedented 19 successive quarters, the largest fall in living standards since records began. On the public finances—the centrepiece of the Government’s economic strategy and the metric on which they have repeatedly asked to be judged—borrowing is up yet again, this time by an additional £30 billion by 2021-22. As a result, the Chancellor has abandoned his goal of reducing debt as a proportion of GDP, and it will now stay at around 80% for the entire forecast period. Even these debt levels, as the Resolution Foundation points out, are dependent on avoiding another downturn.
The Chancellor was also forced to abandon his overall fiscal objective—indeed, it was a manifesto commitment—to reach an absolute surplus by the middle of the decade. That target has been pushed back to 2030, meaning that Britain is now only one-third of the way through an unprecedented 20-year programme of austerity, with growth and productivity falling, wages stagnating and borrowing rising. The Government’s economic strategy keeps failing; their targets keep sleeping, and their austerity keeps biting. The sun has barely shone, the roof has not been fixed, and now the Brexit storm clouds are beginning to gather. Indeed, this Budget makes crystal clear that this fragile and failing economy is utterly ill equipped to withstand the challenges Brexit will bring.
In this Budget, the price that we are already paying for Brexit is clear: Britain has now officially fallen from fifth to sixth place among the world’s largest economies. Before the referendum, Britain was the fastest-growing economy in the G7; now we are the slowest. While the UK is slashing its growth forecasts, the global economy is enjoying the most synchronised recovery since 2007, with the EU seeing its fastest growth in a decade. Our GDP per capita will now be 3.5% smaller than forecast before the referendum, a loss of £65 billion to the economy. Before the referendum, a surplus of £10 billion was forecast by 2022. That is now predicted to be a deficit of £35 billion, a £45 billion deterioration, with the deficit now lasting 16 years longer than planned. Average earnings will now be £1,400 a year lower than expected before the referendum. With inflation higher following the sharp devaluation of the pound, disposable income will be £540 lower per person. The ONS has confirmed that business investment fell to just 0.2% in the last quarter, and the OBR has remarked that the renewed weakness of productivity is exacerbated by Brexit.
Our nation is poorer and its people are poorer, now and for years into the future. But this is no accident, nor the result of bad luck—it is a direct consequence of the Government’s determination to pursue the most extreme interpretation of the referendum result and the hardest possible Brexit, a determination driven not by the economic needs of the nation, but by the ideological needs of the Conservative Party. So the Government continue to spend billions of pounds in order to damage our economy even further—another £3 billion for Brexit in this Budget, on top of the £700 million already spent, the £2.1 billion for extra civil servants and now, apparently, a £50 billion divorce bill. We are surely entitled to ask: what are we getting for our money? We are getting nothing. In fact, we are getting worse than nothing. We are paying billions of pounds to make our country and its people poorer, weaken our economy, diminish our influence as a nation and leave the world’s largest free trading area, leaving us with a far worse deal than the one we have now. This is an unforgiveable waste of money on an act of monumental self-harm.
The Chancellor began his Budget speech by repeating the asinine claim that leaving the European Union would bring new opportunities to Britain. I am sure we would all like to know who these opportunities will be for, because they certainly will not be for Britain’s working families. This Budget confirms that working people will now pay the heaviest price for this deteriorating Brexit economy and shows that many of those who voted for Brexit in the greatest numbers will be among those who suffer the most from the outcome.
We have heard much from the Prime Minister and the Chancellor about their concern for those struggling to make ends meet. However, the Institute for Fiscal Studies has spelled out the reality: the entire bottom half of the income distribution will see their incomes fall; the second-poorest decile will lose £1,500 a year, a 10% fall, while the second-richest decile will gain £600, a 2% rise; the poorest working-age families with children will see an extraordinary 20% fall in their income, losing over £3,500 a year; a lone parent in work will have their income cut by 10%; and an out-of-work couple with children will lose over 17% of their income, some £4,000 a year. By their actions and because of their values this Government have shown that they cannot govern for all in society. This Budget from a faltering Government reveals an economic plan that is failing, with downgraded forecasts, falling living standards and a poorer country. With the price that we are paying for Brexit now so high, it is a plan that can lead only to a deeper and still more devastating failure in the years ahead.
Baroness Randerson (LD)
My Lords, it is fair to say that expectations were low prior to the Budget, and that the Chancellor lived down to them. He may have saved his job but he certainly did not save our economy, which in the last 18 months has gone from a position where we were vying for the championship to one where we are in the relegation zone. One after another, the dire forecasts and economic results have stacked up from the OBR, the IMF and the OECD. Their analysis shows the enormous act of self-harm we are inflicting on ourselves, and the predictions are dire. However, even more worrying are the structural failures in our economy, with a quarter of our workforce low-skilled at a time when technological change puts a massive premium on skills, productivity so much lower than that of our rivals at which the Brexiteers like to sneer, and skill shortages at a time when we are turning away those with skills who happen to come from the European Union.
To combat the economic threats posed by Brexit, we needed a Budget of exceptional skill and dramatic investment. Philip Hammond came over instead as the Paul Daniels of the Treasury. With a great flourish and an amusing line in gags, he pulled some carefully groomed rabbits from the hat. However, on careful inspection, his announcements turned out to be smoke and mirrors. Take that much-trailed plan to introduce railcards entitling 26 to 30 year-olds to reduced rail fares. It is apparently supposed to encourage young people to vote Conservative again, but it turns out to be puffed up way beyond its significance. It cannot be used for season tickets or at rush hours, so most people cannot use it to travel to work or college. Above all, it overlooks the fact that only one in six public transport passengers uses the railways. After all, large swathes of the country—Wales, where I come from, is one of them—have very few railways to use. The bus passengers who make up five out of six public transport users tend to be poorer as well and should be the ones we look at first.
If the Government really wanted to tackle social and generational inequality, they would introduce a reduced-fare bus pass for all. The Liberal Democrats have been advocating that for some years. Sadly, thanks to the huge amounts of money we are wasting on Brexit preparations, the Government feel they cannot afford significant social justice measures like that. In fact, the Government cannot afford not to introduce bold measures. As the resignation of the social mobility commissioners this week has underlined, the Government have a woeful record on this. The Joseph Rowntree Foundation report says it yet again. Faced with a crisis, the Chancellor should have read and digested his John Maynard Keynes, rather than his Paul Daniels magic guide. He should have recognised the importance of investment in infrastructure as an economic driver—that borrowing for capital investment is the only sensible solution.
This afternoon, the Minister repeated the much-vaunted list of rail projects. This was also repeated in the industrial strategy and the rail strategy last week. It is a rather disappointing list: it is a re-announcement of a re-announcement of a re-announcement. I was particularly disappointed by the Government’s go-pause-stop approach to electrification. There are lots of problems with not going ahead with this. Not only are electrified railways quicker and more comfortable for passengers, but they are better on emissions. After all, why is it all right to have new diesel trains when we are not supposed to have new diesel cars? There are also issues associated with the fact that areas such as Swansea have been encouraging local investment by companies on the basis that they are going to get an electrified railway line, which they are not going to get any more.
We need a much bolder rail investment programme. Above all, we need it for the whole of Britain, not just the south-east. The social divisions to which I referred are mirrored by the geographical ones. Over £6 billion spent on transport in London is matched by a miserable £500 million in the north-east. That is just inequitable. There was nothing in the Budget to redress that balance. As a result, we have a dangerously unbalanced society. Another missing link in the Budget was the absence of any mention of the Swansea Bay tidal lagoon. Before the 2015 election, senior Conservatives were queuing up for photos there but there has been absolutely no action since. I am disappointed at the lack of effort on renewable energy.
This Budget was long on rhetoric and very short on real funding. Money for electric charging points and the development of autonomous vehicles was announced with a big fanfare. That was welcome as far as it went, but it will not make us world leaders. The Chancellor has let us down in that regard. I spent the weekend at a gathering of Europeans. They think that we are having a national nervous breakdown. They cannot understand why we are being so stupid, because Britain is normally so sensible. Why, oh why, are we wasting billions and billions of pounds on Brexit when what we hear from everyone in industry, across Britain, is, “Please can we recreate what we have now?”? It is stupid.
Baroness Neville-Rolfe (Con)
I am among those who are thankful that the Chancellor resisted the many siren voices, heard again today, calling for a significant move away from so-called austerity. That is despite the fact that the OECD has forecast weakening economic growth, falling consumer confidence and even a collapse in private investment. I shall explain why.
I wish to concentrate, first, on the levels of the deficit and the national debt. Nearly 10 years after the financial convulsion of 2008, the annual deficit is still above the rate of growth in GDP—hence the debt is still increasing in real terms. The OBR expects debt to start falling in real terms from 2018-19, and even that partly relies on a reclassification of housing association liabilities. In 2017-18 debt is now predicted to peak at 86.5% of GDP.
What flows from these facts? First, if there should be another major economic convulsion in the next decade, we will be much worse placed than we were in 2008. Then, we were able to allow debt to increase from 40% of GDP to over 80%. However, it would be a very different matter to allow debt to increase by 40% of GDP from a base of over 80%. Indeed, it would be most imprudent. In short, we have used up much of our financial flexibility. The Bank of England has recently reminded us of these facts, not that we should need reminding. There is nothing complicated about it—the facts are there for all to see if they are willing to look.
There has been much hand-wringing in political circles about the so-called austerity of the last decade, but in truth policy has arguably been too lax. Certainly, there was more austerity in Ireland, where some really tough decisions were adopted. For example, public service pay was cut dramatically, not just frozen. In the UK, concessions to this and that interest in this and that Budget—the rabbits that the Chancellor of the day feels obliged to bring out of the Treasury hat—and the political pressures which lead to these should be seen against a sombre background.
Yet there are some obvious sources of revenue that have not been adopted. I confess to your Lordships that I benefit from at least one of them. In particular, because of my, sadly, advanced age, I do not pay national insurance on earnings from working, rather than savings or pensions. Why ever not? Everyone knows that in reality national insurance is just another income tax, and to allow unjustified exemptions is unwise. I cannot see that I, or others like me, should be treated more kindly than those who are younger.
We all know that, in the long run, increases in living standards depend on rising productivity, and that the West, and especially the UK, has a problem in this respect. The problem featured prominently in the OBR analysis and, I am very glad to say, in the Chancellor’s presentation. I have spoken before in this House about the beneficial impact on productivity of improved skills, housing and research, and I stand by all of that today. On Thursday I shall be leading a debate on regulation, which can be another productivity-killer, but today I will focus briefly in the time available on infrastructure and on the impact of immigration.
Improving infrastructure—that is, reducing travel times, expanding Heathrow, improving the provision of broadband and the like—is one vital way to improve productivity. The unfortunate fact is that most investigations suggest that as a country we invest less in improving infrastructure than many others do. Nevertheless—I disagree with the noble Baroness, Lady Randerson—some important steps have been taken to improve our infrastructure in recent years, and I particularly welcome the technology and innovation-linked measures in the Budget. Even so, the rate of movement on infrastructure seems to be rather slow. We decided fairly recently to go ahead with the third runway at Heathrow. If China had resolved similarly, diggers would now be on the ground, but I am told that the advance guard has not even arrived at Heathrow.
Traffic is a nightmare in too many parts of the UK. Noble Lords will remember the list of blackspots I have been collecting as I get about, often by chance in marginal constituencies. A fund was announced last year to eliminate traffic blockages. Has that got going properly? I fear not, and the Local Government Association tells me that cash-strapped councils, which might apply for smaller projects, which could reduce traffic and free up housing plots, find it too risky and too expensive to prepare the fancy applications needed to bid in this uncertain climate.
Speaking as a practical person, if there are institutional constraints on challenge funding that make it difficult for local authorities to bid—that is, which prevent our moving forward in a businesslike manner—they should be identified and proposals put forward to deal with the problem. The Chief Secretary was kind enough to say recently that she would look into this for me, and I very much hope that the Minister will have some better news today.
Finally, on immigration, it ought not to come as a big surprise if productivity stutters when large numbers of relatively unskilled people are constantly added to the population—a trend that continues as the Brexit process drags on. This supply of labour reduces the incentive for firms to invest in capital and training. I know from my experience in retail and the food supply chain that investing in capital and associated training is what shifts the productivity dial. You see that in sectors such as cars and lorries—the automotive sector—which is one of our most productive.
A proper immigration policy would place greater emphasis on skills. EU membership limits our ability to deal with this problem now, but not completely. We need to devise a satisfactory policy with a productivity focus, to be deployed rapidly post Brexit, and we need to do it now. Indeed, one of the opportunities of the difficult Brexit transition could be an increase in productivity after over a decade of flat-lining. This is because companies will start to invest capital— many are sitting on piles of cash because of current uncertainty—and develop the skills of our own workforce. In the meantime, we need to be honest and up to date about the size and location of our growing population. For years we have underestimated the scale of demographic change. This has made it impossible to forecast and build the right number of homes, the right number of hospitals, the right number of GP surgeries, the right number of schools and the right road, railway and broadband networks.
To conclude, I have concentrated on some difficult issues. My thesis is that, unfortunately, we have not faced up to these questions as fearlessly as we ought to have done. The background to this is that, especially with Brexit looming, the days of allowing wishful thinking are gone. It is time for reality.
Lord Campbell-Savours (Lab)
My Lords, I will confine my remarks to Autumn Budget 2017, document HC 587. I will start with paragraph 3.78, which refers to online VAT fraud:
“The government will legislate in Finance Bill 2017-18 to extend HMRC’s powers to hold online marketplaces Jointly and Severally Liable (JSL) for the unpaid VAT of overseas traders on their platforms to include all (including UK) traders”.
On the same issue, it continues:
“where the business was not registered for VAT in the UK and that online marketplace knew or should have known that the business should be registered for VAT in the UK”.
How do they know unless they are aware of the UK business turnover? It suggests that there will be some sort of inquiry by the marketplace of the individual trader; perhaps that could be clarified. It goes on to say:
“They will also be required to display a valid VAT number when they are provided with one by a business operating on their platform”.
What will happen if they are not provided with any number? Will they have to establish the turnover of the UK trader to know whether they have met the VAT threshold? If you take into account the early rumours of the VAT threshold reduction to £10,000 a year, which was mooted in the press over a number of weeks, that provision may well have been devised at the time when we were talking about a £10,000 threshold. It does not seem to apply now that it remains at the present rate.
I turn now to paragraph 3.41 which refers to alternative fuels. This year, the Government have chosen to end the fuel duty escalator on LPG. We are led to believe that next year there is to be a full review of all fuel duties. I appeal to the Government to further incentivise the treatment of LPG by reducing the fuel duty. It is less polluting for the environment and would greatly help in reducing air pollution. It could be of considerable benefit in conditions of inner-city pollution, such as in London, where it could be accompanied by concessions on the congestion charge.
Paragraph 3.51 concerns tackling waste crime. The report proposes that,
“operators of illegal waste sites will become liable for Landfill Tax”.
What interests me about landfill tax is to what extent the higher rate of £86.10 per tonne is promoting illegal dumping operations. We all support the tax, but its effectiveness is totally dependent on enforcement. The allocation to the Environment Agency in the Budget of £30 million is clearly intended to fund investigation and the enforcement effort. But local authorities across Britain are complaining about the very substantial costs that are falling on them. They too need additional resources. For every Niramax waste-dumping scandal—where the alleged loss to HMRC was reputed to be over £75 million—there are hundreds of occasions where local authorities are required to deal with problems of fly-tipping, which in many areas is now completely out of control. Will the Government respond and deal with their financial difficulties, which all stem from landfill tax rates?
The Budget report includes some major reforms to vehicle excise duty. They are very welcome in dealing with pollution, but there is one historic reform that is back-firing. It is turning the law-abiding into Road Traffic Act offenders, causing deep distress to the elderly who unknowingly can make a mistake. It is tying up public officials in enforcement, and is simply unfair. I refer to the ending of the tax disc on the windscreen. The incidence of accidental non-compliance is up, as is the incidence of deliberate evasion. There were supposed to be savings of £10 million a year, and I think we should be told what has been the effect on the public finances. I have seen estimates of up to 1.33 million non-taxed vehicles on our roads and losses of up to £107 million in a year to the Exchequer arising out of this change. The irony is that an AA survey has estimated that up to 3 million drivers were keeping old redundant tax discs in their windscreens as a reminder to renew.
I raised the issue of the change in stamp duty a couple of weeks ago. The change appears to me to be of little consequence. The problem is housing shortage, as was mentioned by my noble friend Lady Blackstone. The stamp duty changes will work only in conditions of adequate supply. Buyers set a budget when they purchase homes. The budget is adjusted or set dependent on local supply, scarcity, affordability and interest rate forecasts. Whether the purchase price paid includes stamp duty or not is often not the issue. In a steady market, the purchase price paid includes stamp duty or not. The higher the duty, the lower the price. The lower the duty, the higher the price. It is the total cost that matters. The Budget is simply boosting the housing market by pushing up house prices, with a tax loss of £125 million in 2017 and £560 million in 2018-19.
I asked the Government in a recent contribution to review the stamp duty surcharge. People are caught in a trap when buying and selling. If you buy and sell in a static or falling market, when houses are difficult to sell, you are particularly hurt as the house that you are selling is treated as your second home and you end up paying the 3% surcharge up front. People carrying bridging loans are particularly badly affected. I have argued for extending the second home resale period from three to five years, with payment payable only at the back end of the transaction and then only if the second home remains unsold.
I was going to deal with CGT payments, but my time is up.
Lord Tugendhat (Con)
My Lords, many years ago, I was the Parliamentary Private Secretary to Willie Whitelaw. As many noble Lords will recall, one of his most famous comments about politics was that things are never quite as good or quite as bad as they seem.
This saying came into my mind when I heard about the OBR’s downgrade of our productivity. It is understandable, after the OBR’s overestimates in the past, but I wonder whether the situation is quite as bad as it appears; I think that there is scope for looking further and deeper into its estimates. I say this because when one considers, on the one hand, the impact of hi-tech developments on the way in which services are bought, sold and produced in this country and, on the other, the impact of the gig economy, it is very difficult to believe that the situation is as dire as the OBR points out. I also feel that the way in which tax revenues have held up rather better than expected is another reason why one ought to query whether the OBR’s figures are as sound as they appear. This is not a criticism of the OBR at all. We all know that models are very difficult things; it is very difficult for them to keep up with changes in the economy. I wonder whether we can be confident that the model being used by the OBR is fit for purpose in the present circumstances. I hope that a good deal of work will go into looking at that and determining whether the situation is as it currently appears, despite all that is happening in the realm of hi-tech, despite the gig economy and despite the way in which tax revenues have held up.
My next point concerns the housing market. I do not wish to carp; I welcome what has been done. However, there is no getting away from the fact that what has been done is modest. As the Institute for Fiscal Studies pointed out, the extra spending will amount to about £1.5 billion a year and the target is 300,000 new houses. That was pretty good when Harold Macmillan did it, but a target that was regarded as good in the 1950s seems a little modest when we are almost in the 2020s. The stamp duty concession is certainly helpful, but I do not think anybody would suppose that it is game-changing. How much better it would be, as the noble Lord, Lord Darling, pointed out, if there had been changes in the planning rules as well. Some time ago, we had a debate on intergenerational fairness; I, along with several noble Lords, made the point that if something was going to be done on stamp duty, it would push up prices unless something was also done about planning. Of course, I quite understand why nothing was done—the Government are not strong enough to do it. Political reality is what it is.
Of course, political reality has also made it very difficult for the Government to tackle another problem—the privileges of the elderly. That problem also came up in the debate on intergenerational fairness; my noble friend Lady Neville-Rolfe had some wise things to say on it a short time ago. Unless and until the Government are in a position to tackle the very privileged position of the elderly, many of whom are sitting around me—I am myself an octogenarian—it will be very difficult indeed to do anything to help the younger generation. I draw particular attention to the triple lock, which provides an extraordinary boost to pensioners’ incomes at a time when the average pensioner’s income is above that of people in work.
The third striking feature of the Budget was the £3 billion for Brexit. That is certainly a very wise precaution, but it confirms what many of us have said for a long time: whatever the long-term consequences of leaving the EU may be, the short-term ones are extremely expensive. The Government were wise to put the £3 billion aside, but they now need to be far more open and up-front about where the cost will fall in disruption and changes to existing practices. My noble friend Lord Bridges has from time to time pointed out the need for honesty in this respect. Until there is more clarity on that point there will be a very considerable cloud hanging over investment decisions. Certainly today, after the disappointing news from Brussels, that is particularly true.
Finally, as we all know, the Government’s record in office will be defined by Brexit. Whether we bring it off successfully or fail to do so, the amount of effort, time and energy Ministers have to put into Brexit leaves very little time or energy for other matters. There is very little time for tackling intergenerational unfairness, social inequalities and regional differences. These are the issues that the electorate will judge us by. To the extent we are unable to play on those wickets, we leave a huge gap for the Opposition to take advantage of. The more Conservative Ministers and MPs make it difficult for the Prime Minister to bring about an agreement and pursue her chosen course, the more difficult it will be for the Conservative Party to win the next election.
Lord Hain (Lab)
My Lords, I enjoyed the spirited exposé of octogenarian privilege from the noble Lord, Lord Tugendhat. I noted that before the Budget George Osborne’s former chief of staff, Rupert Harrison, called for a “safety first” Budget. He thought the Chancellor could not afford another slip-up like the mess he made in March over self-employed national insurance contributions. The last thing the Tories needed was another bananadrama.
Mr Harrison got what he wanted. Nevertheless, it was a Budget that brought more bad news—very bad news—about Britain’s economic prospects. Just eight months ago, the Chancellor began his March Budget by claiming that the British economy had confounded critics with “robust growth”. He contended in November that it “continues to grow”. He should have said it “continues to slow”, because March’s “robust growth” proved to be a flight of ministerial fancy that melted away with the winter snow.
The stark reality is that Britain’s growth rate has fallen every year for three consecutive years and is set to plumb fresh depths next year, in 2019, and again in 2020. It is in their failure to get the economy growing at anything like the rate it did under Labour before the global financial crisis, let alone the growth rates achieved in the 30 years following the Second World War, that the Tories have done most damage. By the way, the debt bequeathed after the Second World War fighting Hitler was double as a proportion of GDP what my noble friend Lord Darling had to cope with after the global financial crisis.
The Tories have spent the past seven years sacrificing living standards, public services and our social safety net on the altar of their austerity policy. The Institute for Fiscal Studies says we face two decades without a rise in average pay, with average earnings in real terms £750 a year lower in 2022 than in 2007. What a total, shameful failure of Conservative economic policy.
The pedestrian pace of economic expansion since 2010 is the root cause of the hardship Britain has endured for years now. What has held growth back is the Tories’ savage tax and spending squeeze. George Osborne used to boast about having squeezed the UK economy tighter than any in the advanced world, all in the name of ending the budget deficit, but squeezing growth out of the economy has left the Tories well short of a balanced budget while doubling national debt. Having failed to end the deficit completely by 2015—their original target—they now say they will only halve it by 2022. By then your Lordships can be sure the goalposts will have moved yet again to maintain the illusion that their plan is still on track and to justify still more austerity. Clearly the modern Tory Chancellor is like the frog in a pond whose successive jumps only ever take him half way to the edge. He and the frog share an aim that they cannot realise unless they try a new approach. In the Chancellor’s case that means abandoning austerity and promoting faster growth, as Labour, in particular its shadow Chancellor, is indeed urging.
Some people think, mistakenly, that the Chancellor has already done so. The BBC economics editor Kamal Ahmed said that, compared to the March Budget, the Government are,
“doing more to stimulate the economy”.
I am afraid that is wrong. By making a smaller cut in the structural deficit than he had planned in March, the Chancellor is doing less to hold the economy back, not pushing it forward. There has been no U-turn. He still plans to take a big slice out of overall spending in the economy. More cuts are coming to departmental budgets, with real-terms cuts outside the NHS of more than 6% according to the Institute for Fiscal Studies. More cuts to working-age benefits are already in the pipeline—£12 billion on top of the £29 billion already made. Local government is being hammered. Head teachers are in despair. Further education colleges, surely key to any recovery, face even more cuts.
Their obsession with ending the deficit has blinded today’s Conservatives to the fact that bringing down Britain’s debt burden does not require a balanced budget. No Tory leader delivered more budget deficits than Margaret Thatcher—11 in her 13 years in power. Only one of the last six Tory Chancellors ever ran a budget surplus, the noble Lord, Lord Lawson, and he managed it in only two of his six Budgets.
At the Conservative Party conference Theresa May pledged to revive what she called the British dream. Perhaps her inspiration came from “The Island of Dreams”, the Springfields’ last hit before they broke up in the 1960s. That left Dusty Springfield to launch her solo career with two other features in the Prime Minister’s repertoire: “I Just Don’t Know What to Do with Myself” and “Wishin’ and Hopin’”. Ministers keep saying that they want to send a signal to the world that Britain is open for business, but all our friends abroad can hear is a garbled transmission on channel 16, the international distress frequency: “Mayday, mayday, mayday”. The British economy is in deep trouble. Frankly, that is because of primitive Conservative economic policies.
The Chancellor pledged to meet the challenge posed by Brexit and new technology, and to make whatever change is needed to fix Britain for the future. But by only easing his fiscal squeeze, instead of ending austerity altogether, he is cheating the challenge and faking the change. What the economy needs more than ever is a strong stimulus, not a weaker squeeze. Instead, all we are getting is austerity for ever, and that means failure for ever. Meanwhile, as my noble friend Lord Livermore pointed out so eloquently, Brexit grimly awaits to make the situation even worse.
Lord Bilimoria (CB)
My Lords, the UK economy is forecast to grow by 1.5% in 2017, and we still have debts of £1.7 trillion. Within eight months, the OBR’s GDP forecasts for the next five years have been revised down to the lowest in our history. In those eight months since the last Budget, our productivity growth forecasts have been drastically reduced and, in eight months, the OBR expects the UK to perform worse than our main competitors, with the table of real GDP per capita growth in the G7 from 2016 to 2022 listing in the following order: Germany, France, United States, Japan, Italy, Canada and then the UK. The IMF says 6%; the OBR is even lower at 5%. It makes for pretty grim reading. Mr Johnson of the IFS says that,
“We are in danger of losing not just one but getting on for two decades of earnings growth”.
So what are we going to do about this? George Osborne talked about fixing the roof while the sun is shining. He wanted to achieve his growth by balancing the budget by 2020. This is a pipe dream; it is not going to happen. The IFS calculates that it will be,
“well past 2060s for debt to fall to its pre-crisis levels of 40% of national income”.
There have been some indications recently that we might be heading for recession within the next year and a half. Does the Minister agree? Every 10 years, whatever happens, we have a recession. Are we going to have another? And then we face the longest period of falling real incomes since records began more than 60 years ago.
There are some good things in this Budget. For example, the Government listened to the Economic Affairs Finance Bill Sub-Committee, on which I sit, when we said of making tax digital that they should trial it out and not implement it straightaway. I am grateful for that. They will pilot it and limit it to turnovers above the £85,000 VAT threshold.
When it comes to research and development and innovation, the good news is that the Government say that they will invest more in this area. But what is “more” and what is required? We spend 1.7% of GDP on R&D and innovation; Germany and America spend some 2.7% and 2.8% respectively. Two billion pounds a year is a good move, but it is £20 billion a year that we need just to catch up with them, let alone the backlog.
What about agriculture? The National Farmers’ Union said that it was,
“disappointed to see no meaningful measures to help prepare farming businesses prepare for life outside the EU”.
Just wearing my Cobra Beer hat, I am grateful to the Government for the fact that duty on beer was frozen. On a very serious note, the British pub desperately requires encouragement and protection. This measure will help the great British pub at the heart of our communities.
It is good that the Government want to reduce single-use plastics waste, and there is no question but that the 5p carrier bag charge has reduced the use of plastic bags by 80% in the past two years. I applaud the Government for going down that route.
On business rates, much more needs to be done. Yes, there has been a move to CPI, but more needs to be done. Where rates are concerned, there is an initiative for pubs in England to continue to receive a £1,000 discount. Much more needs to be done there, too. Will the Minister agree to that?
And, of course, the Oxford to Cambridge rail line being revived is wonderful news. I congratulate the Government on that.
The noble Lord, Lord Tugendhat, has mentioned the £3 billion to prepare for Brexit over the next two years. However, in spite of the national living wage and national minimum wage being increased, we know how low they are going to be. In February 2016, this country was flying: we were the fastest-growing economy in the western world. We were at the top table of the world. Today, I am ashamed to say that we are no longer at the top table. There is only one reason: Brexit. There is only one reason behind this Budget being called lacklustre and boring: well, the Chancellor survived. Alan Milburn resigned because he said that social mobility is not happening. He said that many people voted Brexit because they were dissatisfied with the Government of the day—it was an anti-establishment, dissatisfaction vote. Just yesterday, the poverty figures were released. Britain, a rich country that spends £800 billion a year on government expenditure and is the sixth-largest economy in the world, has poverty today. That is what the focus needs to be on; that is where the Budget needs to focus.
Three reasons were given for Brexit, and they are all linked to the Budget. The first was: take back control of our money; take back control of £8 billion a year, the net contribution. I have just said that £800 billion is our government expenditure per year—a pie chart, a line, an arrow: 1% of our government expenditure per year is Brexit. A second reason was: take back control of our laws. I ask people and businesses, “What laws? Tell me one law that affects you on a day-to-day basis”. They cannot name one, because the laws that affect us every day are made over here in this Parliament, in this House and in the other place. The third reason was: take back control of our borders. There are no exit checks at our borders. Whatever the Minister may say, there are no physical, visible exit checks at our borders. I ask people what percentage of our population of 65 million is made up by the 3 million people from the European Union. The answer is less than 5%. It is said that that 5% is a “burden” and causing our public services to collapse; without them, the public services would collapse, with 130,000 EU citizens working in the NHS and care sector alone and 250,000 working in the construction sector.
Then we talk about skills. The university sector is hardly mentioned in the Budget. International students alone bring in £26 billion to the economy. There are 450,000 international students—I am president of UCISA, representing them—with 130,000 from the EU. What will happen if we leave? They count as domestic students; they are entitled to loans. What if they reduce the billions of pounds with which they enrich our universities? What about research funding from the EU and research collaboration with the EU? What about the academics from the EU? Some 20% of academics in most of our universities are from the EU. These are the things that will affect our economy, because when it comes to R&D and innovation, it is investment in university research and innovation that is going to work.
What about the negotiations now? They have stalled. We have heard the news: the lunch was lunch; fudge was served. The bill is to be £40 billion to £50 billion, yet Boris Johnson said they could go whistle and Priti Patel said words that I could not repeat in this House. We are now prepared to pay £40 billion to £50 billion and perhaps give some control to the ECJ. Then there is the question of the Irish border. We will not allow Brexit to break up our union. And then there was the £3 billion in the Budget for Brexit expenses. What about all the expenses that have already taken place?
I conclude on the issue of trade—again, not mentioned much in the Budget. Fifty per cent of our trade is with the EU and another 20% is through free trade agreements via the EU, including now with Japan. Seventy per cent of our trade is FTAs and Liam Fox talks about going after the other 30%, of which the Commonwealth makes up less than 10%—including India, Australia and Canada. We need to do more with those countries, but the Indian high commissioner said very clearly, “Yes, we’ll do a free trade deal with you, but it might take till 2030 and, by the way, it includes the movement of people as well”.
This Budget is completely overshadowed by Brexit. It is only a matter of time before the British public wake up to the realities, realise that the Brexit emperor has no clothes and we will not be leaving the European Union.
Lord Horam (Con)
My Lords, it is always a pleasure to follow the noble Lord, Lord Bilimoria. He may be interested to know that, when I first became a Member of Parliament along the Corridor, the Prime Minister was Ted Heath—that rather gives away my age. He had a Secretary of State for Trade and Industry called John Davies, who had been chief at the CBI. John Davies had a very tough policy on lame ducks. As it happened, Norman St John-Stevas, had had an accident rather similar to that of the noble Lord’s. He rose at Question Time pleading with him not to be tough on lame ducks. It is a rather long-winded way of saying that I hope that the noble Lord recovers from his accident. He has certainly shown no lack of energy.
We are used to Budgets unravelling with great rapidity in recent years, usually over some relatively trivial, second-order issue. This one has not unravelled so far, as the Chancellor said the other day: 12 days with no unravelling must be some kind of record. It was not only sensible but sure-footed in that respect. There were some extremely sensible provisions in it.
I particularly welcome the help for the homeless. The noble Lord, Lord Best, and I, with a great deal of help from Shelter, lobbied the Chancellor about this before the Budget. Never has my lobbying succeeded before, but on this occasion it did. The Government responded by increasing the so-called targeted affordability fund. This is the fund that puts money into those areas where the gap between the rate of benefit, which has been frozen so far, and local rents is highest. The calculation is that this will save 140,000 people over the next two years from becoming homeless. The upside of this, I tell my noble friend Lord Bates, is that we have cancelled our application to have a further lobby with the Minister for Housing, but we are keeping an eye on things because the fact is that housing is, as the Prime Minster herself said, a core issue for this Government, and much more needs to be done than was evident in the Budget.
The objective, as we know, is to achieve 300,000 houses a year. My noble friend Lord Tugendhat was a little disappointed by the figure of 300,000, pointing out that it was what Harold Macmillan aimed for and achieved in the 1950s. Does he not remember how much simpler things were in the 1950s, when we were very young? It was easy in those days for us to achieve that objective. I do not think that 300,000 houses a year, given the planning difficulties we have in this country, which have accumulated over the years, is that bad an aim. Indeed, I think it will be quite hard to achieve.
I recommend to the Government that they concentrate on two things in trying to get there. The first is incentivising housing associations. Housing associations have committed themselves to achieving a target of 120,000 houses a year, which I think is a very challenging target. They will need all the help they can get to get there. Remember that housing associations are no longer part of the public debt; therefore, the Chancellor can help them without adding to public borrowing, which is a very admirable situation to be in. Secondly, we need to stop selling publicly owned land at the highest possible price. We need to look at the guidance on best value to local authorities, because the land issue is fundamental to getting house prices down.
On the bigger economic picture, the Chancellor was more relaxed about borrowing than some of his predecessors. Here, I am afraid that I disagree with the noble Lord, Lord Hain, and agree, surprisingly, with the economics correspondent of the BBC, who pointed this out. He has borrowed more than he thought he would and the markets did not move an inch, frankly. That rather confirmed my view that the Treasury has always been too concerned about market reaction to excessive deficits. The best way to power down the deficit of a country is to prioritise economic growth. Certainly, we should keep a firm grip on current spending, but to cut back on capital spending is actually very foolish: we should keep that as level as possible over the years, which is the way to get sensible and sustainable economic growth.
The fact is that the pressure on the Chancellor to produce an ambitious, radical Budget was unrealistic. Janan Ganesh, political correspondent of the Financial Times, said:
“They expect them to write a symphony in the middle of a cage fight”.
The cage fight analogy is journalistic hyperbole, but I appreciate that there was a certain amount of unhelpful offstage noises accompanying the Chancellor’s attempt to solve our economic problems. I think he resisted those and produced something very controlled and balanced.
None the less, the fact is, as a number of noble Lords have pointed out, that there are severe structural problems remaining in the British economy. We are, and have been for decades, short of skills, low on investment, both private and public, and not very good at exports. Exports make up 27.6% of our GDP; they make up 46% of Germany’s GDP. That is the real problem that we have to face. It can be solved. Before I became an MP, I started a company which has become a medium-sized company with 250 employees: we export 92% of all our sales. I have never seen a trade agreement. So it can be done, if you have the right product and a willingness to get behind it and tackle world markets.
The issues remain to be tackled, but the Government produced a responsible and competent Budget which keeps us heading in the right direction.
Baroness Bakewell (Lab)
My Lords, I confine my comments on the shortcomings of this Budget to the two words: social care—a sin of omission, if you like. The subject has been raised by my noble friend Lord Tunnicliffe, and others have mentioned it. We are promised a Green Paper in the summer. How long do we have to wait?
The social care budget and its policy was already a problem in 2008, when I took up the position of voice of older people for the Government. It was still a problem in 2011 when Andrew Dilnot published his report proposing a cap on individual costs. At that time a sum of £35,000 a year was suggested, it went up to £50,000, then it went up to £72,000 and now we understand that the idea of a cap on individual contributions has been dropped. A rather cobbled-together proposal in the hurry to get the Conservative manifesto together had the seeds of a good solution in it, but it was dismissed by the tabloids as a “dementia tax” and when you invent such a phrase, it spreads like wildfire and the issue becomes politicised. Social care has become politicised. That is because the older generation—older people—are often represented by the media, but also in people’s minds, as doing very well at the moment.
The noble Lord, Lord Tugendhat, said how privileged we all are, because those of us of a certain age can draw the heating allowance. The heating allowance is the same amount as our daily allowance—we are, indeed, extremely privileged—but “the old” is not a single cohort of people like us. The Rowntree report this morning announced that there are 300,000 more old people—pensioners—currently in poverty than there were, so the old are not a single unit. The triple lock, much used to reinforce the well-being of the less well-off, is used to hammer the likes of us, who are seen to be benefiting. Something needs to change about the use of social care as a political weapon. Would the Budget do something about it? It failed.
The heating allowance is £300 a year. Who needs it? I was stopped in the street by Robert Plant, a multibillionaire rock star, of Led Zeppelin. He said, “Joan, I’ve been sent £300 by the Government. Why?”. Why indeed? The heating allowance for older people should be means tested. When I first received it, I tried to send it back but I was told it could not be accepted. There was no facility for taking it back. I, like many others like me, and perhaps like other noble Lords, give that heating allowance to charity, but it could be means tested if it were added to the income tax statement of our income.
When I speak to young people about how they are going to live their life and choose a career, I say to them, “Have you thought about the care sector?”. It should be a marvellous opportunity. It should be a booming sector of the economy. In fact, it is a basket case. There is a huge demand: there are 15,000 centenarians this year—this will have doubled by 2030—and 500,000 people aged over 90. The numbers are increasing. This is a demand that will go on increasing. In market terms, that is a marvellous invitation to people to supply social care. Why is it not happening? It is not happening because society has not decided who is going to pay for it. There is an illusion, shared by many, that social care came in with the National Health Service and support from the cradle to the grave included social care, so people resent the idea that they have to contribute to it. It comes as a shock to them and causes resentment. At the same time, it suits many people to feel that it is the burden of the state to pay for them, whatever their wealth assets might be, and there is an unwillingness to contribute from assets such as their own houses.
So we have a situation of an increasing demand that we are failing to meet. This is a failure of a Tory Government who supposedly believe in the operation of the market. Yet there is a funding gap now predicted for social care of £1 billion. The Government spend £140 billion on old people; 6% of that goes on social care. This is bad economics and bad social care. Will the Government please sort it out and will the Minister use those two words—social care—in his response?
Lord Taverne (LD)
My Lords, the OBR, the IFS and the Chancellor have all been accused by several speakers of excessive pessimism in their forecasts. I believe that they will prove to have been overoptimistic. I feel hesitant about differing in this from my friend, the noble Lord, Lord Tugendhat, whom I have always regarded as one of the most sensible of Conservatives. What is extraordinary is that the Government, the media and most of industry have all expressed confidence that in the end there will be a soft Brexit. But suppose they are wrong and we end up with no deal or the hardest of hard Brexits: if the financial markets should start to believe that this is where we are heading, it is very possible that there will be a panic, the pound will sink, business and consumer confidence will evaporate, and investment will dry up. Then we would be in a severe crisis. What price then the so-called pessimism of present forecasts?
What are the reasons why no deal or a very hard Brexit are a real possibility? Let us take the Irish problem—the border between the north and south of Ireland. Dublin wants a regulatory regime between the north and the south that is subject to the same rules and regulations as now. Obviously, this cannot apply to the rest of the United Kingdom so it would mean a border in the Irish Sea. How could this possibly be accepted by the Government, let alone the DUP? Other government proposals for a seamless, frictionless border—achieved by some innovative, untried and unexplained IT system—have rightly been rejected by the Republic as incredible. I have always thought—and the recent report by the Commons Brexit Committee confirmed—that the only way we can avoid a hard border is to stay in the single market and the customs union. But that has been firmly rejected by the Government. I really cannot understand why it was ever thought that these talks could succeed.
The failure of the talks at this stage is an indication of the problems of the talks about free trade in general. How can they conceivably be concluded and ratified by the parliaments of the 27 and the European Parliament before the Brexit date? It is said that the aim is now Canada-plus. The EU’s Comprehensive Economic and Trade Agreement with Canada took seven years to negotiate and would offer nowhere near the benefits we now gain from the single market and customs union; for example, services—our major export industry—would suffer particularly badly. Hence the need for Canada-plus, but this greatly complicates the negotiations.
The Government have conceded that more time will be needed, and now aim for a transition or implementation agreement, which, again, it is generally assumed can be sealed before the end of March 2019 and will run for two years after the Brexit date, during which we will stay in the single market and the customs union and will continue to be subject to the European Court of Justice. Will the Conservative Party accept that? It cannot even agree on the shape of the final relationship with the European Union. As I think the noble Lord, Lord Darling, pointed out, what would the transition be to? What would the implementation period implement? The obstacles to concluding the trade agreement are formidable. Furthermore, the moment we leave, all the various trade agreements with some 60 countries that have been negotiated on our behalf by the European Union cease to have effect. We would suddenly be left in total isolation, having to renegotiate some 60 by no means simple trade agreements.
When the reality of the problems that lie ahead in the Brexit negotiations begins to sink in, it looks pretty scary. No deal or a very hard Brexit loom as distinct possibilities, but also open up a new and happier possibility. I believe there is a very real prospect of a major shift in public opinion when a significant section of leave voters—who were promised the sunny uplands—realise that they did not vote to see their families seriously impoverished. If this happens, MPs who feel bound to obey the will of the people may find that the people’s will has changed. In Parliament a final vote is needed and it might well reject no deal. The only real choice for Parliament then would be to revoke Article 50—which is unlikely—or to let the people have the final choice. No deal might well lead to no Brexit. As several speakers have pointed out, if this unprecedented national act of self-harm were reversed, it would totally transform the present prospects of gloom and decline.
Lord Beecham (Lab)
My Lords, I begin, as is customary, by referring to my interests as a Newcastle city councillor and vice-president of the Local Government Association, and on this occasion as a beneficiary of the Government’s largesse in relation to capital gains tax, inheritance tax and the treatment of higher-rate taxpayers.
It is just a few days more than seven years ago that the then Chancellor proclaimed:
“Britain is on course both to grow the economy and balance the books”.—[Official Report, Commons, 29/11/10; col. 530.]
The reality is that the economy is growing at a slower rate than that of our partners and competitors and we have missed the target for balancing the books—something that will not be achieved, it now appears, until the mid-2020s. Instead, we are experiencing the worst record on household incomes and productivity in living memory, with devastating effects on the lives of millions of people, in relation to their ability not only to provide adequately for their families but to have access to key public services and affordable housing and to make provision for their years of retirement.
Across a wide range of critical services from health and social care to education, policing, the shocking state of our prisons and the appallingly diminished access to justice, the fifth-richest economy in the world is failing to meet the needs of its people, wedded as this Government are to the failed dogma of privatisation and the minimisation of the role of the state—national and local—in furthering economic growth and social justice. Consider the news in the last few days, to which some of your Lordships have referred. On Friday we had a report of a growing crisis in the provision of care homes, where the Competition and Markets Authority seeks urgent action because the current regime is not sustainable, as councils are unable to pay to the providers of the service the extra cost of between £900 million and £1 billion—and rising—needed to ensure equity between self-funded and public-funded care. Or take yesterday’s news, which has again been referred to, of the resignation of the four remaining members of the Social Mobility Commission, including not only Alan Milburn but the highly respected Member of this House, the noble Baroness, Lady Shephard—without any real response from the Government to that event.
In the 50 years I have been privileged to serve as a local councillor, I have never known such unrelenting and damaging pressure on crucial local services—pressure which this Budget, like its predecessors in the last seven years, has failed adequately to address. Even now, when the Chancellor talks of building 300,000 homes a year he is looking seven or eight years into the future, as my noble friend Lady Blackstone pointed out. It is far from clear how many homes councils will be allowed to provide let alone, as I have mentioned several times in debates, what improvements in space and energy conservation standards will be applied—areas on which we lag behind most of Europe.
The Budget did, it is true, make some movement towards addressing the issue but only to the extent of inviting councils to bid for increases in the cap on housing revenue account borrowing by up to a total of £1 billion from 2019 to the end of 2022. At a conservative estimate of a cost of £100,000 per home, that would provide over four years a grand total of some 10,000 new homes. What on earth is the problem with allowing housing revenue accounts to borrow? That borrowing would be not for revenue expenditure but to provide assets with a value, diminished in that sense only by the Government’s fixation with requiring the right to buy at a discount. Laughably, the Government are apparently now proceeding with a regional pilot of right to buy for housing association tenants at a cost of £200 million.
Councils are facing a funding gap of £5.8 billion by 2019-20 and there is a current shortfall of £1.3 billion in adult social care. Astonishingly, no mention was made in the Budget of increased funding in this crucial area, as the right reverend Prelate the Bishop of Portsmouth pointed out. This is an area in which the previous spring Budget provided £2 billion over three years, as a one-off sum. There are real issues, moreover, in relation to the funding going to an overstretched NHS for capital funding for the so-called sustainability and transformation partnerships, where it is far from clear whether local councils are treated as genuine partners, no doubt as a result of the systemic problems facing the NHS.
Shockingly, the Budget makes no extra provision for children’s services, which in 2015-16 spent £605 million more than was budgeted in the face of growing needs to protect children at immediate risk of harm, with 90 children a day entering care last year. The shameful reliance on charities and food banks to provide for children in school holidays remains in place.
Another visible and shameful result of government policy has been the rise in homelessness and rough sleeping. The formation of a task force to investigate the problem is welcome but the £48 million allocated seems unlikely to make the impact required. Will councils, which have the responsibility to deal with housing and homelessness problems, be given the lead role in accessing funding to provide suitable accommodation—either directly or via private landlords—rather than the dreadful places to which so many of these vulnerable people are all too often directed? Lastly in relation to housing, while the LGA welcomes the announced change in housing benefit awards under housing benefit and universal credit, will the Government deal with the gap between discretionary housing payment funding of £185 million and the annual loss of £486 million associated with the benefit cap, £557 million from the bedroom tax and £3.7 billion by those paying rent above the local housing allowance?
I end by quoting one of my favourite poems, Shelley’s “Ozymandias”, in which the poet imagines the text on the remains of a statue of a long-dead king of Egypt. It read:
“My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!”.
The poet added:
“Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare,
The lone and level sands stretch far away”.
A better epitaph for this Government’s seven and a half years in office could not be devised.
Lord Ryder of Wensum (Con)
My Lords, my interests are set out in the register. I want to speak briefly about the supply-side bottlenecks in the housing market. Thirty-three years ago in an equivalent debate on the Budget in the other place, I called for the abolition of stamp duty. I stated then that stamp duty,
“impedes change by curdling labour mobility”,
and that it is,
“a bad tax because it adds … transaction costs in the housing market … It is a bad tax because it discriminates against achievers and those who, through no fault of their own, lose their jobs but secure new ones in other locations”,
and that it makes,
“a mockery of the capital-owning democracy”.—[Official Report, Commons, 14/3/1984; cols. 449-50.]
A year or two later, I became a Treasury Minister and was partly responsible for taxation under the then Chancellor, my noble friend Lord Lawson. When I felt that I was on the verge of persuading my noble friend, who is a hard man to persuade, to abolish stamp duty he did a runner and inconveniently resigned from the Government. My chance was lost; it remains lost. Yet 33 years later, my views stay unchanged. They are even more hostile to stamp duty because in 2017, the housing market is in a far more dire state than in 1984.
The supply-side measures in the Chancellor’s 2017 Budget are timid. His headline-making stamp duty announcement is nothing new; it merely replicates decisions taken 25 years ago by my noble friend Lord Lamont as Chancellor, and over 10 years later by the noble Lord, Lord Darling, in the same post. The present Chancellor’s approach is potentially damaging. It risks the prospect of fuelling demand and hiking prices without accelerating with necessary speed the land supply for development, a case already propounded by the noble Baroness, Lady Blackstone, and the noble Lord, Lord Campbell-Savours. Of course, the Chancellor could have chosen my preference of abolishing stamp duty altogether or at least, to be perhaps more practical, slicing rates on every band of stamp duty. This would be a fairer and more efficient option than his own because he has now erected yet another market distortion by creating a new, steep cliff edge. I suspect—I fear—that he will come to regret his decision.
Allow me to highlight, if I may, problems in the supply of land for development. The feebleness of successive Government has enabled major developers to control swathes of a slanted market. The bureaucratic and legal expenses involved, with planning applications often taking up to three years, have suffocated supply by being beyond the scope of smaller competitors. An investigation carried out by the Guardian two years ago showed the biggest housebuilders, all within the FTSE 250, holding more than 615,000 plots in their land banks. This amounts to about four times the number of homes built each year. The 615,000 figure included Taylor Wimpey, with 184,000, and Barratt Homes, with 142,000.
The shortage of new homes, due chiefly to a flawed supply pipeline, has led, as the Minister indicated earlier, to average house prices across the UK standing at no less than eight times the national average income. This is unacceptable, and I say to my noble friend that the Conservatives have been in office, either in coalition or in government, for seven years now, and this problem gets worse, yet the way of dealing with it is quite apparent. After all, the housing market once represented a key component of social mobility, the subject of today’s Statement. Now this benefit dwindles year by year, surely to the shame of the Government.
The Chancellor disclosed in this Budget Statement that Sir Oliver Letwin, Member of Parliament, will conduct an interim review—not a review, as reported in the press. Why is this necessary when the reasons for the problems have been apparent for ages, not least to Mr Osborne and, indeed, to the then leader of the Opposition, Mr Ed Miliband? The Government can solve this so-called conundrum by restoring the balance between demand and supply. This requires new planning rules and the Government to press developers to build homes, if necessary through punitive measures, because the housing market at present is not a market at all. It is skewed by an oligopoly perverting the true cost of that market. The Prime Minister and the Chancellor have revealed a lack of urgency by commissioning this interim review. Instead of Downing Street folders demanding action this day, now it seems that there are reminder notes pleading for action this decade, or perhaps pleading for action next decade. Where is the willpower to release the manacles on the housing market? Where is the conviction to defy powerful lobbyists? Where is the steeliness, the belief, to overcome the present iniquities so damaging to the aspirations of young people and so exasperating to proponents of a property-owning democracy?
Lord Haskel (Lab)
My Lords, the OBR’s Blue Book for this Budget is one of the most depressing that I can remember. My noble friend Lord Tunnicliffe and others have reminded us that the largest change it makes in its forecast is to revise down the trend or potential of productivity. The Minister does not need me to tell him the impact that this will have on our standard of living or the prospects for our economy. Virtually every other speaker has told him.
Some noble Lords and some economists say that this forecast is too pessimistic. The Minister pointed to full employment and the increase in average hours worked, but much of this work is low skilled with low pay and does not lift people out of poverty. Much of the increased hours figure is due to inward migration, but the policy now is to reduce migration. Indeed, it is already happening, and it is difficult to see productivity gains coming from this or any other part of Brexit, so I would say that the Blue Book is probably about right.
International agencies, such as the OECD and the IMF, seem to agree. Indeed, they compare our gloomy prospects with the other 27 countries in Europe which are forecast to have their fastest growth in 10 years. Of course, the Minister enthusiastically announced some new spending, but not nearly enough to cover the cost of inflation. The Red Book and NHS executives indicate that the health service needs much more money to meet the pressures it is under, the right reverend Prelate the Bishop of Portsmouth told us that the Budget failed to resolve the health and social care split, and my noble friend Lady Bakewell explained why. The investment in housing is welcome but, again, not nearly enough, and the figure for universal credit for next year is too low, as other noble Lords have said.
The help on business rates is welcome, and so is the extra money for investment in research and development, but will it make up for the loss of European Union Horizon 2020 science funding? It is already dropping off. Meanwhile, we still need to discourage short-term corporate governance and do more to encourage private investment. The extra funding for the British Business Bank is welcome and so are the plans for working with industry to design a national retraining scheme, but I put it to the Minister that this is not nearly enough to deal with the size and scope of the problem we have, and it will not deal with our changing economy. That change is illustrated by the interesting fact that appeared last week that Babcock International, one of our major engineering companies, is being replaced in the FTSE 100 by Just Eat, a clever algorithm enabling thousands of low-paid messengers to deliver meals, largely from fast food restaurants and shops. This is a move towards the more intangible economy which we are only now beginning to understand. It helps to explain some of our inability to deal with inequality and productivity, but the Budget is silent on this, and that is another reason why drastic measures are required.
I agree with other noble Lords that the key to these more drastic measures must lie in the industrial strategy. If we take it seriously, if it becomes our priority, if it embraces society as a whole and not just the economy and if we reorganise all of government to carry it through and not just simply have the industrial strategy as part of a government department, we will have a chance of success, this time, because the other nine industrial strategies I remember have mainly failed. It has to involve everybody and teach skills to young and old. The digital monopolies and platforms that we depend on have to be properly regulated to allow for competition, as the noble Lord, Lord Wakeham, told us. It must deal with the tax loopholes which have only recently been revealed, not only overseas but here, as others have said. We have to be more serious about this. Certainly the strategy has to harness digitalisation and artificial intelligence, but driving all of this has to be part of the work of the proposed industrial strategy council. I hope that it will be a council equivalent to the Office for Budget Responsibility, that it will monitor and report sector by sector on what they need to do to be competitive and successful and perhaps push some of the improvements that the noble Baroness, Lady Neville-Rolfe, spoke about earlier. Why not have a branding campaign to go with all this, just to show that we are addressing it?
If we ignore this warning, and a period of decline sets in, we all know what will happen. It will polarise our society and politics even more around identity, nationality and income. Dealing with all these social problems will become even more difficult. Alan Milburn’s letter of resignation said it all, and so did the Rowntree report. So let us accept the OBR forecast, but let us prove it wrong by implementing our industrial strategy throughout government, throughout society, and throughout business and industry.
The noble Lord, Lord O’Neill, told us that this is a bigger challenge than Brexit. This could well mean perhaps putting Brexit on hold. I agree with my noble friend Lord Livermore that surely it is more productive to have hundreds of our best civil servants, and the £3.7 billion budgeted, working on this instead of on Brexit, when it looks as if we will have to retain most of our existing regulations anyway to keep trading with the EU. I agree with my noble friend Lord Darling that it would also provide time for the Government to unite behind a single policy and decide where we want to be and what that policy is to be.
I want to prove that forecast wrong. So let us change our priorities—and if this Government cannot agree on that, they will have to make way for one who will.
Lord Palumbo of Southwark (LD)
My Lords, once again we meet to debate the Chancellor’s offering of ritualistic cliché and fractional tinkering around the edges of vast, intractable problems—this time exacerbated by the need to save his job, the high drama of Brexit and the existential threat of a Marxist Government. We were offered such insights as:
“We are at a turning point in our history, and we resolve to look forwards, not backwards … to seize the opportunities ahead of us”.—[Official Report, Commons, 22/11/17; col. 1060.]
This was accompanied by a series of safety-first measures. The climax was a pyrotechnic display of policies to kick-start the housing market. But when the smoke cleared, one was left oddly dissatisfied—and, of course, the measures will not have the promised effect.
Noble Lords will recall promises, written in blood, to balance the books by 2015, to increase productivity, to slay the welfare beast and, yes, even to boost housing. Perhaps Budgets should begin with a scorecard, independently produced, showing promises made versus outcomes achieved. Of the many truths in politics, one stands out: the Budget will not change much. So it might be worth pausing to examine the economic background to this predicament.
We are now almost 10 years into the biggest exercise in monetary easing in history, one which was meant to turbocharge growth on the back of healthy inflation. Instead, relative to the trillions which have been spent, growth has been anaemic; and worse, the yield curve no longer exists. Noble Lords will recall 10-year rates at 10%, but now they are barely 2%, and negative in some places, while a quarter of a percentage point shift in rates is front-page news.
The Chancellor got one thing right:
“The world is on the brink of a technological revolution”—[Official Report, Commons, 22/11/17; col. 1046],
he announced. But he left it at that. He failed to craft a Budget through the prism of this truth. Instead, and as ever, it was a tweak here and a tinker there.
We need to step back and accept that a lot of what we learned at school no longer applies and that new technology is acting as a massive deflationary force, as the noble Lord, Lord Haskel, referenced with Just Eat. Margins everywhere are collapsing. Look at financial services and the effects of AI. I have seen this first hand. I recently sold a business after it was disintermediated by technology, and my new business is disrupting the office market, which at last is facing technology’s sharp edge. Today, as soon as an inefficiency is spotted, a young genius moves in for the kill like a “Blue Planet” predator, disintermediating, disrupting, driving down margins. Uber, Amazon, Spotify, Deliveroo, Airbnb, Google, Netflix—all devastating deflationary forces which disenfranchise the real economy. They are moving so fast that the combination of easy money and fractional tinkering will have no effect.
Ten years post 2008 and the measures which were then necessary, our direction of travel is clear. Look at our debt mountain, the toxic by-product of democracy’s largesse. In moments of lesser terror, we feel in our gut that we are living in a new paradigm—that the old rules no longer apply, that the edifice of confident promises will one day shatter and that something has to give. Even since the Budget, RBS has announced job losses due to technology, and Morgan Stanley has reported on the effect of a Corbyn Government on the economy and sterling. Clearly, we need remedies beyond cliché and tinkering. Yet to suggest we legislate for no deficits; require estates to contribute to old-age care; means test the winter fuel allowance—as the noble Baroness, Lady Bakewell, eloquently suggested—free TV licences and bus passes; require drug, alcohol, smoking and food abusers to contribute to their medical care, or charge for missed GP appointments, would be electoral suicide. Any proposal advocating the need for personal responsibility is anathema in current-day politics.
As a result, the Budget is designed to satisfy short-term needs and deal with urgent political imperatives rather than meet the reality of current economics and build a platform for long-term stability. Still, the time of ritualistic cliché and fractional tinkering may be drawing to a close.
Lord Dobbs (Con)
My Lords, it is a great pleasure to follow the noble Lord, Lord Palumbo of Southwark. I follow him for the very first time. I hope he will forgive me if I do not always follow his argument, however.
This has been a good Budget—no pasty tax or caravan crash in sight. There are some of course, and we have heard plenty of them today, who claim that a thousand kinds of carnage are about to engulf us from across the water. We wait patiently on the beaches for the arrival of that disaster, along with the ice cream sellers and those who rent out deck-chairs. Meanwhile, the country is getting on with the job. It is a strange sort of disaster that produces a record number of people in work, expanding manufacturing, rising car exports and foreign students pouring into the country at a record level along with new investment and entrepreneurs.
I am far from complacent about things—there is so much to do—but I am optimistic. I want to judge the Budget by how it brings the country together: what steps it takes to bridge the gaps between the young and the old, between the super-rich and the super-poor, and between regions, classes and cultures.
I do not dismiss the concerns that we have heard from all sides. There is clearly more to be done. So I cheered the additional billions for the NHS, the encouragement of driverless cars and better transport links, the long overdue refinement of universal credit, and the commitment to housebuilding and to raising apprenticeship levels. My noble friend Lord Horam, who I think is no longer with us, emphasised the measures to help to tackle homelessness. These are all excellent building blocks, although by comparison I have to agree with my noble friend Lord Ryder that the cut in stamp duty looks a little like a chicken that has wandered into a Chinese kitchen. It is surely supply rather than demand that we need to focus on. Meanwhile, though, my son is suitably grateful.
However, despite the thousands of pages available from the Printed Paper Office about the Budget, this Budget really boils down to one word: Brexit. One of the worst mistakes made by any recent Government was not to allow any preparation for that eventuality. We are playing catch-up, so the additional money for preparation is long overdue. Even so, I wonder whether any amount of money is enough to bring those who represent the EU in these negotiations to their senses. We are their friends, their neighbours, their loyal allies. So why the threats? Why the constant stream of abuse? Why does Mr Juncker call the British electorate stupid? What possesses Mr Barnier to suggest that Britain has deserted Europe in the fight against terrorism? It is insulting, outrageous, undignified and totally incorrect. Then there is Mr Tusk. How many more non-negotiable demands will he discover lurking under his mattress? There are so many bumps under his bed that I wonder how the poor chap manages to get any sleep at night.
Even the Taoiseach of Ireland is at it. He says we want to build a wall. We do not. I hope he does not, either. In which case, what is the problem? Unless of course there is another agenda that has nothing to do with trade. I fear that this is not a real negotiation. It seems to me more like an exercise in exacting revenge. Perhaps they do not want an agreement. What they really want is to humiliate Britain, just as they have wrecked and ruined Greece. That is why no deal is better than a deal that is deliberately destructive.
I hope I am wrong—I really do—but just in case I am not, I would like to ask my noble friend for two things. First, I would like him to restate the position that nothing is agreed until everything is agreed. I know he has said it before, but they are like those little words of love: the more you hear them, the better you feel the following morning. Perhaps there is progress. We seem to have reached some sort of agreement about the Brexit bill—£40 billion, maybe £50 billion, I do not know, but not the £100 billion that was originally demanded. Still, it is many, many billions. There are more than a few lunches in that, I guess, but let us not complain. They are our friends. Spendthrift friends, of course, who desperately need our money, but friends none the less.
In Florence the Prime Minister vowed to meet all our obligations, and quite right, but—secondly—I would appreciate my noble friend’s advice on whether the figure that we appear to have agreed is what the British Government believe is our legal obligation. Is that what we are offering, our legal obligation? If it is, that means we would be obliged to pay that amount whether or not we get an agreement. That would give Messrs Juncker and Barnier even less incentive to be reasonable. I hope my noble friend can reassure me that it is an offer, not an obligation.
The Budget has done many good things and Brexit will do many more: increase productivity, raise wages, reduce food prices, improve skills, increase competitiveness, open British business up to the wider world and new markets, encourage innovation and embrace the technological revolution that is about to sweep away those who hide in bureaucracy. If it enables Mr McDonnell to afford a new iPad to update his current kit, which appears to be about 50 years out of date, I believe that is a risk we should be willing to take.
Baroness Donaghy (Lab)
My Lords, it is a great pleasure to follow the noble Lord, Lord Dobbs; he is a great fiction writer. [Laughter.] My contribution will cover housing, rather briefly as other noble Lords have covered this, and the impact of the Budget on women.
As David Smith, economics editor of the Sunday Times, has said, the figure announced of 217,350 net additional dwellings in England in 2016-17 includes thousands of conversions where commercial properties and houses are converted into flats. Interestingly, it also includes caravans and houseboats, so now we know the direction of travel. The actual figure for England was more like 140,850—so no cheating, please. The Government’s target is not achievable under current policies even if we had the capacity to build, and the serious shortage of skills proves that we do not.
I rather like the Resolution Foundation’s suggestion for how the scrapping of stamp duty could have been better spent: the 3,500 first-time buyers who stand to benefit should have been handed £160,000 each to buy a property outright in 26% of local authorities across England and Wales. Then they would have been mortgage-free. Put another way, the cumulative cost of £3 billion over five years would have built 40,000 homes for social rent or 100,000 through the Government’s own Housing Infrastructure Fund.
I turn to the impact of the Budget on women. Women benefit most from social security protection rather than tax cuts. They rely more on health services and social care, and are lower paid than men. There was nothing in the Budget on social care, as has been said, and that is staggering. It is simply not good enough to say that it was dealt with in the Spring Budget, when that allocation was a drop in the ocean. There was nothing in the Budget about how the self-employed interact with the social security system. The Treasury is responsible for the difficulties of those self-employed on low incomes and who have fluctuating earnings. They are adversely affected by the minimum income floor, and the majority of the newly self-employed are women.
I do not know if it is a government tactic or just coincidence but when individuals and organisations carry out a comprehensive impact assessment on women and the Budget, they are told that they are wrong and do not take account of other factors. Last week I raised the issue of a household with one disabled adult and one disabled child being £5,500 per year worse off under this Government. The figure came from the Equality and Human Rights Commission. The Minister, the noble Baroness, Lady Buscombe, said the figures were skewed. In answer to a question by Gerard Killen MP, Secretary of State Justine Greening questioned the accuracy of the analysis of the effect of government policy on women that was conducted by the Women’s Budget Group and the Runnymede Trust. The Minister said:
“The analysis … does not take into account the impact of the national living wage”—
it did—
“the changes we have made to childcare”—
it did—
“the work that we are doing on reducing the gender pay gap”—
she gave no evidence for that—
“the introduction of shared parental leave”—
she gave no figures—
“or the introduction of increased flexible working”—[Official Report, Commons, 23/11/17; col. 1167]—
but she gave no impact assessment. We have a game of hide-and-seek going on: the Government do not produce a full impact assessment themselves, but anyone else who tries to do so is batted off with a series of declamatory statements.
The Women’s Budget Group has written to the Secretary of State emphasising the need to consider the impact of cuts to public services alongside changes to taxes and benefits. The group has offered to discuss its comprehensive analysis with the Minister and has asked the Government to produce their own analysis in the same level of detail. The analysis by the Women’s Budget Group and the Runnymede Trust reveals that low-paid workers, mainly women, were hardest hit by the 2015 and 2016 changes to universal credit. Employed women will lose £1,400 of their yearly income by April 2021, compared with the original design of universal credit. Such a cut endangers the integrity of the universal credit framework.
Two other aspects of universal credit directly discriminate against women. Payment of universal credit to one person in an English household will risk increasing women’s financial dependence on their partners and make them more vulnerable to financial and other abuse. The two-child cap and abolition of the first-child premium with effect from 6 April 2017 means that women will have to stretch that income, possibly to breaking point.
I do not know whether the Government meant it as a crude form of birth control, a form of saving public money or a warning-shot across the bows that even worse is to come, but this is a slow burner, and a large number of people who will be affected in future are not aware of it. By the way, a healthy birth rate is essential if we are to maintain a healthy tax take. Watch this space.
Because of the gender gap in higher earnings, raising the higher-rate threshold disproportionately benefits men—73% of them. Only 27% of women were higher-rate taxpayers in each of the past five financial years. The Women and Equalities Select Committee has expressed disappointment in the Treasury’s record on providing evidence of how it had met its statutory obligations under the public sector equality duty and called for an independent evaluation of the Treasury’s performance. No one will be surprised that no such independent evaluation has been commissioned, nor has the Treasury published its own equality impact assessment.
The Chancellor may have tried to play safe in his pedestrian Budget, but he has done nothing for the millions of people who are disadvantaged, or the millions of women who have to pick up the pieces.
Lord Gadhia (Non-Afl)
My Lords, I have always thought that the annual Budget Statement brings out some of the very best and worst of punditry and pontification among the commentariat in our country. This year’s Budget was no exception. My nomination for best contribution goes to Paul Johnson of the Institute for Fiscal Studies who captured perfectly the constant deferral in achieving a balanced budget, when he noted that,
“there is an Augustinian tinge to these plans: ‘Lord make me pure, but not yet’”.
The worst contribution, I fear, has to be the Daily Mail headline that described our Chancellor as: “Eeyore no more!”. It was an amusing quip, but it missed the important distinction that AA Milne’s character is pessimistic by nature. In contrast, the Chancellor is forced to be cautious by circumstance.
The brutal truth is that in recent times, central bankers rather than Finance Ministers have been more important in determining the future of western economies through unprecedented quantitative easing, more than trebling central bank balance sheets from $4 trillion to $14 trillion over the past decade. Lack of fiscal room for manoeuvre has rendered the Treasury relatively impotent but, as Mark Carney reminds us, Bank of England independence should not be confused with omnipotence. Its mandate can deliver price and financial stability and provide a breathing space for adjustment, but cannot secure lasting prosperity, solve broader societal challenges or address intractable issues such as housing affordability or poor productivity.
It is only now, with the deficit reduction process more advanced and declining towards 1% of GDP by the end of the Parliament, that the baton is passing back from monetary to fiscal policy. This is the first Budget since the financial crisis where we have seen a modest loosening of the purse strings, amounting to almost £18 billion over the course of the Parliament, providing some hope for a future beyond austerity. I anticipate further modest rebalancing in future Budgets under the envelope of a gradually declining debt-to-GDP ratio from this year’s peak of 86.5%. This is the new compass guiding policy, rather than the elusive balanced budget, which I doubt will ever be achieved in our lifetimes.
The respected market economist, Mohamed El-Erian, eloquently described this transition as an important crossroads for the world economy, but it feels more like a tightrope than a smooth tarmac road. With our continuing twin deficits, the current account tracking between 4% and 6% of GDP in the red—by far the largest in the G7—coupled with high household debt, now running at 150% of disposable income, we remain beholden to the kindness of strangers for our funding. Any spare debt capacity and fiscal space that the Chancellor has drawn on has been painfully created, and those who believe that we can somehow let rip and borrow significantly more are being naive, reckless or both.
The other big news of the Budget was, of course, the revision to productivity and the knock-on impact on growth forecasts, resulting in an economy that will be about £42 billion smaller by 2022 than previously expected in March—a number that is, incidentally, almost identical to our annual net interest cost for servicing the national debt. The reality is that Britain’s productivity puzzle is not news. The most salutary lesson is: do not extrapolate from the past. The previous OBR forecasts assumed that productivity growth would continue at levels experienced before the financial crash, but that has proved wishful thinking.
However, a “slower for longer” growth trajectory is clearly unsatisfactory in meeting expectations of higher living standards and better public services. The disturbing talk of a Japanese-style lost decade—or longer—will, I hope, concentrate minds on addressing the fundamentals. It is therefore welcome to see the industrial strategy co-ordinated closely with the Budget.
The two biggest influences for improving productivity are skills and investment levels and, in my remaining time, I shall make a few remarks about the latter. The most notable outcome of the Budget is that public sector investment is due to rise to 2.4% of national income, which, if sustained, would be the highest level in 40 years. It seems as though 2.4% is becoming an auspicious number for the Government, because it is, by coincidence, the target set for total R&D investment as a proportion of GDP by 2027. These twin investment goals are important stakes in the ground. As we seek to finance more innovation, which is intrinsically more risky, it requires more equity rather than debt. Start-ups are well aware of this, but our SMEs and scale-ups, in particular, need greater access to risk capital.
The Government’s Patient Capital Review did excellent work in identifying this funding gap, and estimates that we could easily double, and perhaps even treble, the current £3 billion deployed in scale-up businesses annually. The Budget contained a range of measures to crowd in private sector equity investment with the aim of unlocking more than £20 billion of new capital for innovative firms over the next 10 years. This is much needed rocket fuel for scale-up Britain, with its associated multiplier effects on jobs and livelihoods.
I end with some brief comments about the current market environment. Against a background of unusually synchronised global economic growth, to which my noble friend Lord O’Neill of Gatley referred, financial markets are enjoying a period of exceptionally benign conditions. The VIX index, which measures market volatility and is popularly known as the fear gauge, has been trading at about half its long-term average during much of this year but is now ticking back up again. Valuation levels across virtually all asset classes are at relative highs. In view of this, a market correction is more likely than not in 2018, which could lead to real economy effects. We should recognise that any impact on the UK economy could be disproportionate, as animal spirits are already sedated by Brexit uncertainty.
We must also recognise that Brexit remains an experiment. We simply do not know what happens to an economy when it unwinds a close integration with its nearest neighbours and, at least in the short term, becomes less globalised, but in 10 or 15 years’ time it is more likely that the effects of the so-called fourth industrial revolution will heavily outweigh those nearer-term impacts.
The Chancellor did not have a particularly high bar to meet for this Budget. His task was essentially to deliver a set of measures that did not unravel in short order. Spending a little more in a targeted way and avoiding significant or contentious tax rises has allowed him to meet this narrow objective, but he should be congratulated on having one eye on the future and using whatever limited wiggle room he had to invest in our future prosperity.
Lord Carrington of Fulham (Con)
My Lords, I am very grateful to be following my noble friend Lord Gadhia. One of the little pleasures of this place, as your Lordships will appreciate, is to be a long way down the speaking list in a debate such as this, because everything that one can possibly say has already been said, and said a great deal better than I could possibly say it. If noble Lords will bear with me, I shall make some general comments about the Budget, then go on to some issues that particularly affect London.
In my view, this is a good Budget—perhaps not a great, reforming Budget, but one that does what is required in a time of uncertainty. Of course, the OBR’s economic projections are disappointing but, like all projections, they are best guesses based on the facts at the moment. The problem is that, until the Brexit deal is done—or, as we heard this afternoon, not done—they must have an even wider margin for error than usual. Add into the mix the unknown terms of any trade deal with the USA and with our other major trading partners, and these economic projections become even less useful for making policy. If economic projections were any good for determining policy, our economy would be in much better shape.
One of the most worrying headlines in the OBR’s projections is the downgrading of its assessment of the UK’s productivity. Measuring productivity is a complicated business in a service economy such as ours, but there is no doubt that we clearly need higher skills and greater investment, and the Green Paper on industrial strategy produced by the Department for Business, Energy and Industrial Strategy is very welcome in laying a pathway to correct this, if possibly a bit interventionist for purists such as myself. But we also have to recognise that there is a trade-off between high employment and productivity. Personally, I would accept lower productivity, balanced by higher employment, particularly of the low skilled. Some countries, such as France, seem to take the opposite view.
One of the greatest uncertainties is what the future holds for our financial services industry. Its importance to our economy is hard to overstate in terms of employment and tax revenues. The deal that we do with the EU 27, and the timing of that deal, is crucial, but even more important to much of the City are the relationships that we develop with the rest of the world once we are outside the EU.
I want to mention a couple of other challenges that particularly face London. We hear a lot about the divide between the economy in the south-east and the rest of the UK. Of course, the challenge is to bring the rest of the UK up to the economic vibrancy of London, but London is not without its serious problems. The biggest is perhaps housing, as highlighted in the Budget, and mentioned extensively in this debate. I welcome the efforts to build more homes and to help first-time buyers. House prices in London mean that no one working in central London, trying to pay for their home out of taxed income, can afford to live within a reasonable travel distance of their work. The costs of housing are directly related to the shortage in housing. The high prices in London are not caused by absentee foreign buyers; they are a small part of the problem, if an irritating one. It is more basic—a shortage of homes being built. Get the supply right, and we will get the prices down to an affordable level. New towns and ribbon developments between Oxford and Cambridge are only part of the answer, as it will still be a massive and expensive commute for most people with jobs in central London.
I welcome the measures in the Budget to encourage more homes to be built in London. We need to develop the large acreage of brownfield sites which exist in London and which somehow never seem to get new homes built on them. But that alone will not be enough. We have to increase the housing density in central London closer to the levels which Paris and New York have always had.
The second massive problem in London is business rates. They have in places—and it is a mixed picture in London overall—gone up well beyond the ability of small shops and businesses to pay them. While the measures in the Budget will help and are welcome in the short term, they are not the long-term solution. It is clear that the business rate regime, with its many advantages for government of ease of collection and difficulty in avoidance, is now damaging businesses in London. Property taxes unrelated to profitability are no longer optimal, at a time when online retailers pay very low business rates and often not much tax at all, and our high streets are dying. We need a reform of business taxation in London, with rates being replaced by a tax which better reflects the profitability and turnover of the business.
Finally, I was pleased that the Bank of England has started to increase interest rates at long last. With nearly 10 years of close to zero interest, we cannot be surprised that few people see any advantage in saving. The savings ratio is still bumping along at historically, catastrophically low levels, and household borrowing is getting back to the heights last seen before the 2008 crash. We need to get back to more normal levels of interest rates. I wonder if the much-praised independence of the Bank of England needs to be rethought, or at least the targets of the Monetary Policy Committee need to be enlarged to encompass other factors than just inflation.
This is a Budget that does what is needed at this time, but I hope that soon the Chancellor will feel able to introduce a more radical Budget, not least to tackle the complexity of our tax system. A tax simplification Budget is long overdue and, while it would be resisted by the Treasury, tax accountants and lawyers—a formidable lobby they form as well—a simpler tax regime would liberate business to get on with its job of making the wealth that we all so much like to spend.
Lord Lennie (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Carrington of Fulham. I shall not agree with much of what he said, although I was interested in his analysis of London. I intended to restrict my contribution to the debate to the effects of the Budget on the north-east of England. However, since the Budget, much has happened that makes that self-imposed restriction almost impossible. On top of a Budget which, by popular judgment, set low expectations and lived down to them, we have since seen an industrial strategy published and the resignations of all of the commissioners on the Social Mobility Commission, all of which impacts on north-east communities, as elsewhere.
The north-east voted to leave the European Union. The vote was in large part based on a resentment by those who have not of those who have, and a lack of government action to change that. If you are born poor, the likelihood is that you will die poor. The Prime Minister’s early claims that the Government would prioritise a narrowing of the gap between rich and poor turned out to be only rhetoric, not reality. It is deeply corrosive and has led to political polarisation. Many former industrial areas are hollowed out. No digital replacements have come. There is a cynicism that says that, “Things cannot get much worse for me and my family, so why should I vote to stay in the EU?”. The Budget has reinforced this view. Nothing really changed. Austerity will continue, with the prediction of 20 years to come with no increases in real earnings. Growth forecasts have been slashed, reinforcing this deeply worrying prospect. The economic cake shrinks. Housing has experienced demand-side attention with the action on stamp duty, but everyone knew that the supply-side issue was the problem, with too few affordable houses and planning issues not addressed. The stamp duty issue will simply increase prices.
In the north-east, infrastructure investment is what is needed. Superfast broadband is just not available in many rural and seaside communities, meaning that they fall further behind the larger towns and cities as places to grow or start businesses. What of those successful large enterprises, such as Nissan? The mid-term prospects are unclear. If the Government cannot reassure people about the prospects of staying in the European Union customs union, it makes investment in future models at the Sunderland plant uncertain.
The steelworks in Redcar remain mothballed and unused. We have an “us and them” society, social resentment, political polarisation and deep corrosion unattended to by government. There was some marginal welcome news for the north-east in the Budget, with the announcement that the replacement rolling stock for the Tyne and Wear metro is to be paid for by central government rather than locally. There is to be a bit of cash for commuter transport in the Tees Valley and the welcome “north of the Tyne” mayoral deal on devolution, which will see a small increase in central government funding, but not enough to compensate for the loss to local authority budgets in recent years. However, these are small beer when set against the giant thirst of the north-east. Set between Scotland and the M62 corridor, both with infrastructure projects to make them more competitive, the north-east must scrap to be remembered by this Government. It has a workforce keen to learn and prosper but I fear that it will suffer in the way that has been identified, with workers being replaced by robots and moving to low-paid, part-time occupations, widening the gap between the rich and the poor. Nothing in the recent past shows that the Government are overly concerned about this prospect. However, a rising tide raising all boats is no longer a maxim that can be relied upon.
Lord Farmer (Con)
My Lords, many of your Lordships kindly gave time on 2 November to speak in the take-note debate on A Manifesto to Strengthen Families. Signed by over 55 honourable Conservative Members from the other place, the aim was to make it crystal clear to senior members of the Government that a solid quarter of their own Back Benches are determined that the impasse over family policy should be overcome. Signatories, including many noble Lords, are now working to build further support across all parties and in all government departments for policies that will strengthen and help bring stability to families.
As I said during that debate, since 1997, Governments of all colours have fallen short of stated intentions and ignored the elephant in the room of family breakdown, yet the Joseph Rowntree UK Poverty 2017 report published today reiterated the evidence that it is a root cause, as well as an effect, of poverty. It hits the poorest the hardest, compounds existing disadvantage and is a potent driver of wider social breakdown.
I regret that I feel compelled to draw attention to the almost complete lack of funding for family-strengthening policies in the recent Budget Statement. There was one line in the Red Book confirming that there would be a £15 million investment for relationship support and addressing parental conflict in 2018-19 and 2019-20. While this is obviously welcome, there remains a lack of a preventive approach in contrast to other major areas of government policy, particularly education and health, yet the prevalence of fractured and dysfunctional families has significant cost and business implications for all departments of government —therefore, especially for the Treasury. A figure of around £50 billion is often cited as the annual cost of family breakdown, but that inadequately captures the ways that failing families undermine many government priorities such as improvements in productivity. As we say in A Manifesto to Strengthen Families:
“Well-functioning families make a considerable contribution to society: they are wealth generators and vital to our nation’s economic competitiveness. There are very high social and economic costs when families falter, and currently this country is paying a particularly steep price”.
Every department of government needs to recognise that stronger families are potential assets that will reduce their financial outgoings and help them deliver their core business more effectively. Therefore, each one needs to contribute to a broad strategy. The Ministry of Justice, for example, has recently published my review on the need to see prisoners’ family ties as assets for preventing reoffending and reducing intergenerational crime. Its own research has found that prisoners who receive family visits are 39% less likely to reoffend than those who do not. Reoffending costs £15 billion per year but this is just the starting point for the large savings to be made. Each prisoner who “goes straight” will increase productivity, start to contribute to the economy and give his children a much better example to follow.
There is a clear business case for ensuring that policies to strengthen families become embedded in the machinery of government. Investing in this will yield significant benefits, albeit in the medium to long term. The Chancellor is well placed to implement a strategy that will ensure that the foundations—the human building blocks—of our economy are increasingly robust and in a much better condition to meet future challenges.
Leafing through previous Social Mobility Commission reports, I have found a strange silence on the issue of family breakdown. Before the events of this weekend I had—with some sadness and indeed some anger, given that this body is publicly funded to speak truth to power to improve lives—concluded that the commission had taken an ideologically inspired position on family breakdown. To its credit, it paid much attention to the issue of parenting, but almost none to the backdrop that sets the tone in so many households—the relationship between parents. This blindness seemed to me a fatal flaw that would undermine the effectiveness of its wider proposals. Therefore, my first question to my noble friend the Minister is: will the new Social Mobility Commission chair give the full gamut of family factors influencing social mobility the attention bandwidth they deserve, including parental relationship stability and conflict? He or she should know that viewing family-strengthening policies that go beyond cash transfers, childcare and parental leave as off limits for public opinion is mistaken. This is the impasse I referred to previously.
Recent surveys carried out for the Centre for Social Justice challenge the Westminster village assumption that policies to boost family stability will be unpopular. They found that despite the long-term trend of family breakdown in the UK—at least a third of people have directly experienced relationship break-up—support for stronger families, and indeed marriage, remains strong. Almost three-quarters of adults in Britain think that family breakdown,
“is a serious problem … and more should be done to prevent families from breaking up”.
More than 80% of adults think that,
“stronger families and improved parenting”,
are important in “addressing Britain’s social problems”, and almost 90% of new or soon-to-be parents support public money being spent on,
“strengthening families and improving parenting”,
specifically for,
“children growing up in poverty”.
Tackling family breakdown is not toxic. The public are becoming increasingly alive to this issue and the Government must not lag behind.
I submitted a Question for Written Answer asking Her Majesty’s Government whether,
“to strengthen families, they intend to make available funds for projects other than those specified in the Budget Statement”.
My noble friend Lady Buscombe—the Minister—informed me that,
“strengthening families is a cross-government objective and other government departments will be able to confirm their own plans in this area”.
To reiterate, this Budget was almost devoid of funding to tackle family breakdown. Can my noble friend the Minister explain how the Treasury will be proactive in requiring Ministers to meet this cross-government objective, so that we can be more productive, enjoy better well-being and live within our means?
Lord O'Neill of Clackmannan (Lab)
My Lords, I do not wish to follow the remarks of the noble Lord, Lord Farmer, in their entirety. I wish to comment on homes and construction, which play a fundamental part in supporting families.
This Budget was somewhat strange in so far as, in the run-up to it, there were very few leaks and very few promises. It was very modest in effect. In fact, when the forecasts were announced in the Budget Statement, it became quite clear why they did not contain very many promises—there was not much to go round. Brexit is understandably once again sucking the air out of the political room, but other considerations such as housing, construction and engineering deserve our attention.
I have declared interests in this area, which are in the register, and I want to talk about those because they feature in the industrial strategy. It is quite clear why we need to have consideration of construction and engineering in an industrial strategy. It is also fairly clear where we want to go. Unfortunately, in the middle is the “how”, and there is precious little about that in the Budget Statement. It is understandable that a right-wing Government would not wish to appear unduly dirigiste or to deal with some of the challenges which a sensible Government pursuing a strategy would need to consider. Construction is about far more than housebuilding, yet we need more homes. There is the generational gap, council waiting lists, and high private-sector rents. The nature of the problem with these issues is spelled out in statistics relating to the increasing age of first-time buyers.
The Chancellor seems to suggest that a tweak here, and a reduction in tax such as stamp duty there, will lead to a golden age of housebuilding—that we will be back to the 1950s and Supermac. There is a caveat here: the first thing that Harold Macmillan did when he sought to pursue the target of 300,000 houses was to reduce housing standards. He said that the programme set in place by Nye Bevan was too ambitious. Part of the problem with our existing housing stock is that, throughout the 1950s, we built poorer houses than we could have because we were pursuing statistical objectives that were not properly defined.
Construction is not an industry where you can just turn the tap and it comes on. For a start, there are supply chains with different business models and skill sets. During the most recent major housing recession, in the 1990s, 50% of the men—it was pretty well always men—who left the building sites never returned. As a consequence, we had to take advantage of the stream of labour from the European Union. If we had not, we would not have been able to build even the few houses that we did. As well as that, the threat of Brexit and the feeling that a lot of the construction workers on whom we depend are no longer welcome in this country means that they are thinking twice about coming here.
Looking at the structure of the construction industry, 95% of its businesses employ fewer than 10 people. Many are reluctant to expand; they are happy to tick along as they are. Sometimes this is because of late payment. Sometimes it is because of the retention system, which I have spoken about in this House. The Government have produced a report on this which they have lodged very carefully in the long grass and we might not see it for some time. These issues of payment create great difficulties, particularly for small businesses. Yet there are housebuilding opportunities, such as greater prefabrication and more efficient insulation and heating systems. Additional efficiencies are offered by BIM—building information modelling—which is the application of IT to conduct, construction and contractual arrangements in the building industry. Acceptance of that has a considerable way to go.
New build is only one area of the industry. As I said, the existing housing stock, built in part in the 1950s and 1960s, was not built to the highest possible standards. It has been suggested that 14 million homes out the housing stock of 26 million are badly insulated and hard to heat, particularly those in the private rented sector. Next year, that sector will be given some shock treatment: if it does not measure up to the standards, the houses will be taken out of availability to rent.
At the same time as this housing construction challenge, we also have ambitious projects such as HS2 and the power station programme, to say nothing of the many works that are going to be carried out within the M25. All of this will require the same skilled staff and inspections conducted by those responsible for ensuring that building regulations are followed. For some time this year I was privileged to chair a working group established by the Association of Plumbing and Heating Contractors. Using freedom of information legislation, we were able to get a picture of the extent of building control in England and Wales. It became abundantly clear that most local authorities did not have the appropriate number of people. They could not afford to pay them, so you had men with joinery skills looking at electrical work; men with plumbing skills looking at other forms of construction. Profoundly dangerous situations could arise. I do not doubt the Government’s ambition, but they ignore the staff shortages; competition from other parts of the construction industry; the limitation of financial incentives; the weakness of the business model of many small firms; and the lack of proper regulation of construction through inadequate building control. If—and it is a big if—we can address these challenges, then the ambitions of that part of the industrial strategy for housebuilding may be of benefit and our wishes realised. I will not proceed, because I have already taken up more than my time. The needs of engineering will be addressed another day, not this evening.
Lord Goddard of Stockport (LD)
My Lords, it is always a great pleasure to follow the noble Lord, Lord O’Neill of Clackmannan, especially when he mentions plumbers and heating engineers; it brings back memories. I draw attention to my interests, as stated in the register. I am an elected member of Stockport Metropolitan Borough Council. This debate is on the Motion that this House takes note of the economy in the light of the Budget Statement. Noble Lords have ranged far and wide on that topic and I wait with bated breath for the Minister to somehow weave Brexit, Dusty Springfield, Cobra Beer and Led Zeppelin into his reply to them.
I made my maiden speech in this Chamber on 11 December 2014, in a debate on economic leadership for cities. Almost three years later, to the day, I am returning to that debate. However, there is a new name, so I will address myself to the proposals in the Budget for investment in the economy of the northern powerhouse. We all welcome the proposed £1.7 billion investment in the transforming cities fund, not least because half of the fund will be shared among the cities with metro mayors, which is good news for the two-thirds of northern powerhouse cities that have secured devolution deals. However, how do the Government propose to deal with the one-third that do not have such deals in place?
I am particularly pleased to see the massive strides that are taking place in the north-east. These will, no doubt, be buoyed up by pledges of investment in the Tyne and Wear Metro, the former Redcar steelworks site and a devolution deal for the north of Tyne. I hope that gives some comfort to the noble Lord, Lord Lennie. The northern powerhouse is coming his way. At the launch of the Northern Powerhouse All-Party Parliamentary Group, of which I was elected a vice-chair, it was refreshing to hear northern leaders from Manchester, Leeds and Newcastle, to name but three, at last singing from the same hymn sheet. The message we wish to send to the Government, loud and clear, is that we are not against London; we do not want money diverting from London to the north. It is vital that the London heartbeat carries on generating wealth and prosperity. However, the north has fantastic strengths and we need more support from central government to develop them further. In that way, the north will be able to increase its contribution to the UK economy, creating a more balanced and prosperous economy, and leading to a win-win situation.
The other refreshing message was that we are not holding out a begging bowl; we are proud northerners. Our claims are evidence-based and on a sound economic footing, as my noble friend Lord O’Neill of Gatley expanded on far more eloquently than I can, talking about the north-west’s new indicators.
People ask me what the northern powerhouse is. What does it do? Is it real? Is it of substance? I shall give your Lordships some quick facts about the northern powerhouse and they can judge whether it is real or not. The northern powerhouse economy is worth £316 billion and is bigger than the economies of Norway, Sweden, Austria and Belgium. There are 15.3 million people living in the northern powerhouse region—more than in Portugal, Greece or Belgium. There are 20 universities in the north, with a total revenue of almost £6 billion and employing 70,000 people. There are 1.1 million private sector businesses in the northern powerhouse—an increase of 167,000, or almost 20%, compared with 2010.
I give noble Lords those figures not to boast about the north but to try to illustrate the giant steps that we are taking, but we need to do much more. Sir Richard Leese, the leader of Manchester City Council, tells the story of a visit to China with a delegation a couple of years ago. He says, “If you could draw a line from Leeds to Sheffield and down to Liverpool, with Manchester inside that triangle, it would be smaller than the city of Beijing. That’s the scale of the challenge we face in competing with world cities”.
Connectivity is the key. We need to connect our great northern towns and cities to maximise productivity and attract investment. The distance from Manchester to Leeds is shorter than the length of the Underground’s Central line in London, yet it seems impossible to bridge that small gap. If we had new railways connecting the cities I have just mentioned with Liverpool and Sheffield, 7 million people and three times the number of businesses would be able to interact and develop the economy of the north. Once we unlock these cities, we can develop transport links to Hull and Newcastle, and truly become the real powerhouse. We welcome the £300 million investment for HS2 junction improvements announced at the Conservative Party conference, but there is much more to be done. The Budget was silent on further transport investment, which is of some concern.
Of course, more than just transport is holding back the northern powerhouse. Education and skills specifically in the north of England lag behind those in the rest of the country, and this must be addressed with joint working between our cities and support from the Government. The north has demonstrated how critical major investment in infrastructure and education would be, creating a country of equal parts, along with our other thriving major cities. That would make the northern powerhouse a significant player on a global scale, which would be good for the north and, I believe, great for the country.
Lord Balfe (Con)
My Lords, I shall not try to follow the noble Lord, Lord Goddard, with a contribution on what our good friend Ruth Davidson calls the “southern powerhouse” but shall address other points in the Budget.
In 100 years’ time, will people look at this debate and the whole debate on fiscal policy that we are having now and wonder what sort of world we were living in? One thing that strikes me is how much the Government underplay their very real achievements and how little the aims of the Opposition differ from those that we are trying to achieve. If you look at the summary of government policy, you will find that in the last financial year, 2015-16, income inequality fell to its lowest level since the mid-1980s. Someone may like to remind us who was Prime Minister then, when it was last at this level. Since 2010 the growth in income from work for the lowest-income households has been higher than in any other major advanced economy. Government policy—I quote from the official document—is “highly redistributive”. It says:
“In 2019-20, the lowest income households will receive over £4 in public spending for every £1 they pay in tax”.
It also says that government tax and spending decisions have,
“increased the tax contribution from the top income decile”,
which means that those paying the top level of income tax are paying more than £4 for every £1 they get back from the Government. Yet, listening to people, you would think that we were in some sort of wicked world where everybody was being screwed to the ground and oppressed. I am afraid the facts just do not bear that out. If there are cuts, where are they if government expenditure is going up? I humbly submit that a lot of what is said about cuts just does not stand up. As I have already said, households in the lowest income decile receive over £4 in benefits for every £1 they pay in tax, and, looking closely at the figures, those in the highest income decile contribute over £5 for every £1 they receive back in benefits. Indeed, the document points out,
“the poorest 60% of households receive more in public spending than they contribute in tax”.
That is not a Government oppressing the poor; it is a Government doing their best. I am not saying that a Labour Government would not also do their best but I am not sure that they would find it possible to do any better. I submit that the much-vaunted talk about the few and the many actually refers to very much the same group.
Earlier, I heard the noble Lord, Lord Palumbo, make a very good speech putting forward various policies, such as taxing the winter fuel allowance. I think that would be quite sensible but he said it would be electoral suicide. Frankly, it may be electoral suicide but we have to start talking about such policies, even though they are only tinkering at the edges. The fact is that as a society we rely on giving incentives to people to work hard and do well. I know that the Opposition regard £80,000 a year as a fortune. That is where the punitive tax cuts in. Interestingly, it is just £1,000 ahead of the income of Members of Parliament, but we will set aside how they came to that figure.
The fact is that, if you want to encourage people like head teachers, scientists and leaders in professions, it is not unreasonable to pay them £80,000, £100,000 or even £120,000. If you want top consultants who will work to get to that level of salary late in their career, that is not an unreasonable sum for them to earn. Apart from vice-chancellors, who seem to have set themselves up as a new parasite class, most people, certainly in the public sector—many of these £80,000-plus people are in the public sector—do a good and hard day’s work for their income. Noble Lords would not expect me to make a speech without mentioning that many of them are paid-up members of unions affiliated to the TUC. So the Labour Party and the Conservative Party have workers who work very hard and deserve a reward, and they should not constantly be denigrated.
However, we need a common purpose between the two parties in relation to tax avoidance. I know that a distinction is made between avoidance and evasion but I always say to people, “Why are the Cayman Islands, the Bahamas and Gibraltar such popular places? They’re popular because you can hide your money there”. Not only do the parties have to get together but countries within the OECD and—dare I say it?—within the European Union have to get together as well in responding to the need for common action to close the loopholes. We all know that that is why these tax havens exist. We need a public register of the ownership of offshore companies and trusts. We have a housing problem in London; it would be nice to know who owns all those darkened houses in Kensington and to place some sort of income surcharge on them, would it not? My children—I am very proud of this—went to a private school. In the sixth form, every year, literally dozens of children who had no place in Britain came in and used all the public services. I have argued before that it would be quite easy to add VAT to their school fees, then they would make a contribution towards the economy that they benefit from.
In summary, we are arguing over angels and pinheads when we should be looking much wider. We should be looking at things such as my Amazon account, where everything comes through Luxembourg so that Amazon can avoid paying quite as much into the public coffers as it would if it came through the UK. The challenge is large, but we lose sight of it and of the huge amount of work that the Government have done in protecting the poorest and the most vulnerable and giving them a chance and a future.
Baroness Young of Old Scone (Lab)
My Lords, much as I would like to pick up some of the things the noble Lord, Lord Balfe, just said, I will resist the temptation. Instead, I hope to intrigue your Lordships by declaring an interest as chairman of the Woodland Trust and as a resident of the Oxford-Cambridge arc. That is “arc” as in geography, rather than boat, which would mean that we are sinking. Let me reveal the secret. I will talk about housing, but in particular I will draw the House’s attention to some tensions between different government policies in the housing sphere and ask the Minister to respond on how they will be resolved.
In the dash for housing, which I absolutely support and understand, we need to ensure that we understand why new housing needs to be of good quality, environmentally sustainable, well-served by infrastructure and should promote quality of life. One example of that is the Government’s industrial strategy. That will prosper, and inward investment flow, only if well-trained staff with aspiration are attracted to good places to live. Yet we now build the smallest, boxiest houses in Europe, new settlements are frequently ill served by transport, health, care and social services, and they certainly fail the settlement design standards that the Commission for Architecture and the Built Environment promoted before the Government did away with it in 2011.
In a similar vein of policies that seem to be in conflict, the Government have repeated with admirable vim and vigour the commitment they outlined in the housing White Paper to improve protection for ancient woodland. Yet over 500 ancient woodland sites are currently under threat in England, and half of these threats come from housing development. Last year we lost 50 ancient woodland sites, two-thirds from housing development. The Department for Communities and Local Government is reviewing the National Planning Policy Framework at the moment but, so far, the changes it is proposing simply will not deliver the improvement in ancient woodland protection that the Government have committed to carry out in another place. The Chancellor’s statement in the Budget pledges continuing strong protection of the green belt—where most Conservative voters live—but where was the Government’s similar commitment to ancient woodland? There has been no sight of it at all.
However, the Chancellor was much keener on garden towns, and the name has rather a fine ring. Letchworth Garden City, for example, is a superb historic demonstration of what is possible in bringing the built environment together with the green environment. Ebbsfleet is rather less so. In the Budget three years ago the Chancellor pledged a garden city of up to 15,000 homes there. Since 2012, 33 government announcements have mentioned Ebbsfleet, but only 749 homes have been built in total. I make that 23 homes for every press release. We need true garden cities—the Letchworth sort of garden city—led by proper development corporations with a keen sense of place and a commitment to the environment and quality of life. Otherwise, developers, hoping to get a favourable planning status for unsustainable, cheap, boxy developments with inadequate infrastructure, will sex up their proposals—if I may use that technical term—with the odd badly-planned and ecologically unsound scrubby park and damaging encroachment on ancient woodlands that are trapped in concrete within these developments.
In the Budget, the Government endorsed the National Infrastructure Commission report on the Cambridge-Milton Keynes-Oxford corridor—the Oxford-Cambridge arc—and committed to build 1 million homes by 2050. That NIC report says all the right things about the environment, sustainability and access to infrastructure but, alas, schemes spawned by the idea of the corridor are already proposing garden villages. These have poor access to road and rail infrastructure, both north-south and east-west and, distressingly, often encase ancient woodlands in concrete zoos.
Can the Minister assure the House that the dash for housing that the Chancellor’s Budget showcased will not result in the short-changing of other important government policy commitments for the environment and for quality of life? If, when the Government change the National Planning Policy Framework, they could state that damage to ancient woodland would be contemplated only in wholly exceptional circumstances, that will be a good sign that they can harmonise their policies for housing, industrial growth and the environment—that they can walk, talk and chew gum at the same time.
Lord Skidelsky (CB)
My Lords, I will concentrate, as is my wont, on the macroeconomic implications of the Budget. That is not to say that supply-side questions are not important—of course they are. I agree with the noble Lord, Lord Maude, that a Government should not be exempt from the efficiency expected of the private sector. However, in general, efficiency is closely related to investment. The more investment there is, the more efficient an economy is likely to be, for the simple reason that there will be much less resistance to cutting costs—which in practice usually means laying off workers—if there are plenty of alternative jobs available.
We have 1.4 million people out of work—“too many”, the Chancellor rightly says. That would not be so bad if we could take those figures at their face value. Headline unemployment is down to under 5%, the lowest since 1975, and who would doubt that it is better to be in work than out of work? But we must remember that, as well as the wholly unemployed, millions of part-time workers say that they would work full-time if they could, many of them forced into precarious self-employment and zero-hours contracts, and there are those overqualified for the jobs they do. If we take just two categories—those claiming unemployment benefit and those who say that they would work longer hours if such work were available—about 11% of the British workforce is either unemployed or underemployed; they are unemployed on a wider definition which is accepted by the ILO.
Then we must also remember that 4.3 million families claim tax or child tax credits—subsidies to their earnings. Previous noble Lords have mentioned the study by the Joseph Rowntree Trust showing a big growth in child poverty. In my book—and this is my response to the comments by the noble Lord, Lord Balfe—an economy in which a large fraction, some 20%, of the workforce is permanently reliant on the benefit system for a living income is not a healthy economy.
The Chancellor asks us to look forwards not backwards, but we need to look backwards to explain why productivity has collapsed, why living standards have stagnated, and why the Chancellor has a Budget that remains unbalanced five years into recovery, despite his best efforts. The Chancellor said:
“The key to raising the wages of British workers is raising investment, both public and private”.—[Official Report, Commons, 22/11/17; col. 1049.].
He is quite right. But what has happened to investment?
In 2007, total investment was 17.4% of GDP; in 2016, it was 16.5%—1% lower. It may just have got back now. Over the same period, public investment has fallen from 3.4% of GDP to 2.6%. In other words, total investment has more or less recovered its pre-crash level, but public investment still remains below it. Instead of using public investment to offset the fall in private investment, the Government pointed public investment in exactly the same direction. One has to believe some very peculiar things to believe that a simultaneous fall in public and private investment will galvanise the economy into new and vigorous life, but they do believe those peculiar things. I wish that I had time to go into it, but they are peculiar.
In those statistics of investment are to be found a crucial explanation for tepid GDP growth, stagnant wage growth and low productivity. The British economy is forecast by the OBR to grow by an average of just 1.4% annually over the next six years. That is at half the rate that it grew between 1997 and 2007. The Chancellor places the blame for weakening growth on the collapse of productivity. According to the Office for National Statistics, output per hour is 21% below the pre-crisis trend. Why has that happened? I have been looking in vain for an explanation for that “mystery”, as it is called. But I do not think that it is actually much of a mystery. An economy whose lack of investment forces a large fraction of its workforce into low-productivity jobs is going to be a low-productivity economy.
We come to the vaunted industrial strategy. It is full of aspiration. But why is the Chancellor only now “laying the foundations”, as he puts it in his Budget speech, of the dynamic economy of his dreams? Is it because, as Anthony Hilton wrote in the Evening Standard on 16 November:
“Governments in Britain since Mrs Thatcher’s time have refused to have an industrial strategy and, as a result, we have very little industry left”.
When we come to the actual money that the Chancellor is prepared to commit to the strategy, we find some pretty thin gruel. I welcome the money for R&D.
There is also a promise of £44 billion for housing to build 300,000 houses a year, but it turns out that some of that has already been allocated and a lot of the rest is through guarantee. Why will it take another eight or nine years to reach the 300,000-house target? Harold Macmillan promised to build 300,000 houses a year in 1951, and he built 300,000 houses every year. Why is it now taking eight years to reach that target?
The answer is very clear. Since 2010, Governments have made liquidating the deficit and reducing the share of the national debt in GDP their top priority. No matter that they keep missing their targets, they return to them every year, but each time with a longer timeline. That means that they do not have the money available in their own world. You cannot have an industrial strategy without a much larger underpinning of public investment. It is the Government’s obsession with deficit reduction that leaves them with no money for an industrial investment strategy. We could put it technically. What they have done is concentrated on reducing the numerator—the deficit—without considering its harmful effects on the denominator, which is the economy.
I have often wondered why such clever people—and the Treasury is full of very clever people—have come to believe such a foolish thing. That is the real mystery, not the productivity puzzle. We do not have the time and certainly this is not the place to go into it, but it means delving quite deeply into the economic theory of public policy. As it is, all I can do is to remind noble Lords of the old adage, “Fine words butter no parsnips”.
Lord McKenzie of Luton (Lab)
My Lords, it is a particular pleasure to follow and hear the noble Lord, Lord Skidelsky. There can seldom have been greater disparity between the upbeat rhetoric of a Chancellor and the seriousness of our economic situation. The reality, as we have heard, is a bleak canvas where real wages are lower than in 2010 and living standards are set to fall in 2017. Economic growth has been revised downwards in every year of the forecast as households’ real income and spending is squeezed by higher inflation. Perhaps most worrying is the downward revision of productivity growth and what that means for our economic future. Just this morning, we saw headlines from the CBI contrasting the gloom over the UK economy with the strength of the global economy, including members of the eurozone. That could not be more pertinent as we stumble towards an exit from the EU.
A variety of assessments have been undertaken about the effect on the UK economy of our departure from the EU in both the short and the long term. These reflect assumptions around reductions in trade with EU countries and increasing tariff barriers, reductions in foreign direct investment, especially related services, and reduction in the UK’s net fiscal contribution. They do not make happy reading. The NIESR estimates the long-run impact of leaving the EU will mean GDP between 1.5% and 3.7% lower than baseline in 2030 and real wages between some 2.2% and 6.3% lower. Other studies show different outcomes pretty much all with a lower GDP.
Where we end up of course depends on negotiations, which will presumably get under way at some stage, but not apparently today. Lack of progress is creating uncertainty, which is in danger of inhibiting the investment that we need to improve productivity. The projected lack of growth has reduced the Chancellor’s headroom against his fiscal mandate, but we should acknowledge a modest loosening of the fiscal policy—a loosening of the squeeze in my noble friend Lord Hain’s terminology, or perhaps a modest change of heart.
So far as debt falling as a share of GDP, we know that that has been achieved only with the help of the reclassification of some £70 billion of housing association debt. As the OBR pointed out, the DCLG Secretary of State confirmed in his evidence to our Secondary Legislation Scrutiny Committee that the regulations under review were introduced only to enable a reclassification. That is a pretty cynical approach. Will the Government really stand aside should a housing association fall into severe financial difficulty?
What have been the Chancellor’s priorities in dealing with this headroom? There is £3 billion, as we have heard, for Brexit—no additional funding for social care but funding to help us extricate ourselves from the single market at a time when its economies are growing strongly and ours is struggling. That is perverse indeed. Can the Minister tell us how this sum will be allocated across departments? What is the strategy and what are the economic risks of the various options?
The Chancellor has allocated nowhere near enough extra resources to address the NHS funding crisis, although a new payment with new money is to be welcomed—as is an additional £10 billion of capital, notwithstanding that most of that is coming from selling parts of the NHS estate. Recently, we have debated the very minimum of changes to universal credit, with nowhere near enough being done to end the misery caused by that programme: nothing for the self-employed, second earners, lone parents or disabled people; no rolling back of the cuts of £3 billion a year; nothing to ease the effects of a decade of cuts to social security on the incomes of families with children; and a million more children heading for poverty. It is no wonder that the social mobility commissioners have had enough. It appears that the Government are too busy with Brexit to address the needs and aspirations of their citizens.
As for the abolition of SDLT for first-time buyers, we share the reservations that this does too little to help too few of the young people who wish to buy a home of their own; it risks further pushing up prices. Government focus on the need to build more homes is to be welcomed, but we need more affordable homes and we need delivery. Garden cities have not blossomed since announcements four years ago. My noble friend Lord O’Neill took us back to the time when Nye Bevan was in charge of housing, with his insistence on maintaining standards and the use of councils to deliver many of these properties, which are now applauded. Of course, that was at a time when materials were difficult to obtain, being just after the Second World War. There is much to learn from what he did.
The switch from RPI to CPI for business rates is welcome, if a little late. As for other tax measures, the Government have published an array of policy measures, announced in the Budget as part of the new annual tax policy-making cycle. They range from setting tax rates and allowances to anti-avoidance rules for offshore trusts, accommodation allowances for the Armed Forces and hybrid mismatch rules. There are over 100 of them. Of course, they justify an increase in resources for HMRC, but they demonstrate how complex our system is, how difficult it is to simplify it and how the fiscal landscape is changing.
However, there are broader issues, of which we were reminded with the release into the public domain of what have been termed the Panama and Paradise papers. They show vast amounts of wealth swashing around in offshore entities—some in the UK, some in British Crown dependencies or British Overseas Territories. We acknowledge that it is not just a matter of political will to secure an appropriate tax take from such sources, where there may be competing claims on who has the taxing rights, and we accept that the Government have been active in supporting the OECD in its base erosion and profit-shifting initiatives. However, there is more to do in establishing beneficial ownership and driving transparency. The weekend press suggested that the EU was ready this week to approve a list of those countries, island states and former colonies that it deemed to be non-co-operative jurisdictions, which would be blacklisted with suggested appropriate sanctions. Unanimity is required for this decision. How will the Government approach this matter?
The Chancellor invited us to share his vision of an economy fit for the future, but frankly, we should decline. We would rather he spelled out the real challenges we face so that we can be enjoined to face the reality of those challenges.
Baroness Eaton (Con)
I declare my interest as a vice-president and former chairman of the Local Government Association. It is a pleasure to follow the noble Lord, Lord McKenzie; in the past, it has usually been on matters of local government, where I take my hat off to him for being one of the most informed people on the subject. I have not always agreed with his decisions but I have been impressed by his knowledge.
To help the country to meet the challenges ahead, local government need the funding and fiscal freedoms to get on and deliver the high-quality public services and infrastructure that help our communities to thrive. The Chancellor made announcements in his Budget that will make a positive difference to local areas. Perhaps most importantly, as mentioned by many speakers today, he has recognised that our housing crisis is one of the most pressing issues we face as a country. It is good news that there will be more investment in housing and infrastructure, support for SME builders, and a greater focus on tackling rising homelessness. The Government have shown that they can be ambitious about tackling the country’s problems head-on by committing to building 300,000 homes a year.
However, we must remember that councils must be allowed to play their part if we are to meet these kinds of targets. We heard from the noble Lord, Lord Skidelsky, about Harold Macmillan building 250,000 to 300,000 homes a year, but he did not mention that 40% of them were built by councils. Back then, local government was trusted to get on with things and to deliver. It is therefore encouraging to see that councils in areas of high affordability pressure will receive additional borrowing powers to deliver much-needed homes for their communities. That is an important first step, but I would like to see the Government be much bolder and give every council in the country greater freedom to borrow to build new homes.
I believe that there are areas where the Government could go much further, especially in child and adult social services. I know that the Chancellor mentioned the local government finance settlement in his Statement to the other place. I would like to put on record some areas that I think the Government should prioritise as Ministers agree funding allocations for councils. Above all else, the Government must find the funds to ease the financial difficulties facing adult social care and children’s services—service areas that other noble Lords have already mentioned. Funding gaps and rising demands are placing hugely increasing pressures on councils. As the Local Government Association has highlighted, almost 60p in every £1 of council tax could have to be spent caring for children and adults by 2020, unless there are changes. It is not just councils saying this. In its report on the country’s economic and fiscal outlook, the Government’s Office for Budget Responsibility wrote:
“Local authorities remain under pressure as demand and costs for both adult and children’s social care rise”.
Such pressures are taking money from other services that keep our communities running, such as cleaning streets, gritting roads and many other services that communities rely on. In order to build desperately needed homes, create jobs, improve health and care support for our most vulnerable and boost economic growth, all councils need greater freedom from national government to take decisions over services in their areas. They also need the long-term resources to meet the demanding financial position in adult and children’s services.
The Budget made some progress, most notably on housing. I welcome that, but I hope that the Government will use the upcoming local government finance settlement to tackle the other issues that I raised today, which were not included in the Budget Statement.
Lord Lea of Crondall (Lab)
My Lords, the state of the economy at the moment is gloomy in the extreme. I am sorry to those people who think that we ought to say that there is light at the end of the tunnel, but at the moment, there is not. I follow the noble Lord, Lord Skidelsky, in saying that we have to target one thing above all: we have to jack up the rate of economic growth to 2% or 3%. Nothing else will work unless we do that. That sounds a bit like George Brown in 1964; I say, “Come back George Brown, all is forgiven”.
Lord Lea of Crondall
Some parts are forgiven. We have to have a new deal in both senses of the term: a TVA-type new deal and a new deal for workers. There is an ambiguity to what a lot of the speeches add up to of where this productivity problem arises.
In passing, the noble Lord, Lord Tugendhat, made a speech that could have been interpreted as saying he does not quite believe the statistics and that the economy is growing in a way we have not recognised. I used to be a bit of a guru on national income accounting. Income, output and expenditure have to be measured to match. I cannot see how the ONS can be all that wrong in saying that the economy is not growing by nought point something.
On the idea that there is some mysterious factor in the economy we are not measuring, a lot of people in Silicon Valley believe the zillions of extra things we can do with the things in our pockets—our phones—must mean that productivity is rising. There is a puzzle there, but for the moment the statisticians are correct: they are not adding to our productive potential. We are just playing around on our mobile phones; we are not doing anything useful with them. That is a big factor, but at the moment there is nothing that is measurably happening.
We can have a look at measuring the rate of economic growth, but everything else is second order. The main candidate for something the Chancellor can do about it is public investment. It is a long time since we have been worried about productive potential, but it is the only term that meets where we are at the moment. It goes back to the strange discussion we had the other day on the industrial strategy with the noble Lord, Lord Henley, when he took some comfort from the fact that unemployment is down and that this was a good way of justifying lower productivity—“Don’t you people want lower unemployment?” It is one of those questions you get on the BBC’s “Today” programme, as our friend Mr John McDonnell found out the other day. You cannot look at a dynamic economy by trying to stick to questions and answers such as that.
We have to jack up the rate of investment. Whether we get the money off the Norwegian wealth fund, which is now worth $1 trillion, or not I do not know, but there has to be a dynamic piece of arithmetic and we can agree on some the answers—if you did get the economy to grow at that pace, then you would get this return through business growth and tax returns. We ought to raise the level of public discussion, whether at the BBC or anywhere else. We are not short of excellent material. The number of excellent reports we have heard mentioned is extraordinary. I will not go through them all because I only have two more minutes, but they all say roughly the same thing: we have a low pay trap, a low productivity trap and low investment, and we ought to transform the economy in some way. Mr McDonnell has said most of the right things about how to increase our productivity potential, as has the Social Mobility Commission. I congratulate Mr Milburn and the noble Baroness, Lady Shephard, on the way they identified these cold and hot spots around the country, because that is also very important in terms of where public investment should be going.
We have to make sure there is some targeting in numerical terms in this debate—how do you get to, say, 3%? Even as a paper exercise it would show us where we need to do something. Without sounding as if it is all to do with pay, the fact is you cannot change the definition of value added without recognising that value added is pay and profits. There are people at the top earning zillions, but pay and productivity are low. I am not saying you do it just by increasing pay, but we cannot wallow as a zero economy, with zero growth in real pay and in productivity.
I have one final word on the Brexit effect. There are undoubtedly three very bad Brexit effects relating to this. First is an investment problem relating to trade barriers. The second is the spectre of the exchange rate falling, as it has at 90p to the euro. We can see circumstances in which it could well have parity with the euro. The third is the prospective collapse of investment in those industries with a single factory floor in Europe, whether it is Jaguar Land Rover, Airbus or Unilever, and all the other sorts of investment which require a change in the policy so that we stay in the single market and the customs union.
Lord Shipley (LD)
My Lords, I remind the House that I am a vice-president of the Local Government Association.
The advance publicity for the Budget suggested that housing would be at the centre of it, but I agree with the noble Lord, Lord Ryder of Wensum, that it was timid in this respect and that measures in it would not address the “flawed supply pipeline” that he referred to. I agree, too, with the noble Lord, Lord Horam, that the Government need to intervene directly over publicly owned land and use its value to build more homes that are affordable for people to live in.
The Chancellor referred to the housing market as a “challenge”. A few months ago, it was described as “broken” in the housing White Paper. Since publication of that White Paper, very little has happened to address two crucial problems: first, an inadequate supply of new homes in absolute terms; and, secondly, the lack of new social homes for those on low incomes.
The Government know that one solution lies with councils, but councils need greater freedoms to borrow. There has been a cap since 2012 on the amount a local authority can borrow under its housing revenue account. I find it odd that it can be easier for councils to borrow to buy shopping centres and office developments than for them to borrow to build homes. That cannot be right.
The Budget took a step towards some easement of this situation by permitting a lifting of the borrowing cap for some councils. But all councils have waiting lists. It is not possible anyway to build 300,000 homes a year by the mid-2020s unless all councils are empowered to build more affordable and social homes.
Why is the Treasury allocating a sum of £1 billion for additional borrowing by councils by the end of 2021-22 in areas of greatest pressure, because it assumes in so doing that it will spend only 80% of it? Might the Government not do two things: first, allocate 120% of the £1 billion so that they will actually spend the £1 billion; and, secondly, explain why they have not taken the opportunity, following the reclassification of housing association debt from the public to the private sector, to borrow more for social housing by councils? In any case, why is borrowing for council housing a matter of public debt? It is not treated as public debt anywhere else in the European Union, so why does the Treasury continue to claim that it must be treated as part of public debt?
I fear that the Budget will not deliver the boost to housebuilding required. Abolition of stamp duty for first-time buyers purchasing homes under £300,000 is obviously good news for individuals, builders or the current owners of a property, but as the Office for Budget Responsibility pointed out, house prices will rise as a consequence. We should just note that the average purchase price of a first home in the UK is £165,000. The reduction in stamp duty is worth £800 of that, of which some will go in higher purchase price.
The Chancellor has set a target of building a net 300,000 homes by the mid-2020s. I agree with the noble Lord, Lord Skidelsky, that the Government could and should reach 300,000 homes a year much earlier. It will not be reached because the levers introduced in the Budget are insufficient to do it. The financial allocation for housing in the Budget is £44 billion, but that is over five years and only a third of it is new money for housing,
There are some positive things in the Budget. It is good to see extra support for small builders to get some 40,000 extra homes built on smaller sites. It is good to see extra resource to increase skills in construction, but it is very small beer in the face of Brexit—if Brexit happens—because of the loss of EU skilled workers. The Letwin review of land-banking is welcome, just so long as it does something to reduce the scale of the problem of land-banking by large builders. Big housebuilders need to realise that they are seen by the general public as hoarding land for reasons of managing supply and keeping prices higher than they need to be. The buildout of their planning permissions is too slow and something needs to be done about it. Let us hope that the Letwin review is speedy and comes up with conclusions that ease the problem.
It is right to permit local authorities to charge a 100% council tax levy on empty homes after two years, rather than 50%. In some places where homes are left empty deliberately as investment properties, they should be taxed more heavily. I do not see the 100% after two years as the end of the issue.
It was good to see the extension to the home building fund, the doubling of the housing infrastructure fund and the extra funding for urban regeneration schemes, but in absolute terms the total sums of money involved are not that great.
The difficulty is this: what the Chancellor has proposed in the Budget does not address the central problem, which is the lack of supply of new housing. Housing cannot be all about owner-occupation. The number of affordable social homes is too low and their supply needs to be increased. In that respect, will the Minister tell the House when the Communities Secretary will say more about the housing elements of the Budget promised by the Chancellor? Secondly, when will the much trailed Green Paper on social housing be published?
Lord Whitty
My Lords, the news for the Government since the Budget has not been great, and I am not even going to talk about Brexit—I will leave that until later in the week. On the economic side, the OBR projections have shown all too clearly that the austerity strategy has lamentably failed on all fronts: on debt, on growth, on productivity and on living standards. On the social side, the report of the Social Mobility Commission, compounded this morning by the further report from the Joseph Rowntree Foundation on child poverty, shows just how uneven life chances are in this country. We are greatly divided, societally and geographically. In that view, I have to differ from my former noble friend Lord Balfe. I think he had rather rose-coloured spectacles on today. There is great division in our society and the Budget will not help to address it.
I pick out three issues. One is the housing crisis, where I broadly follow the remarks just made by the noble Lord, Lord Shipley. The Government claim to have addressed the housing crisis, but it is a seriously misconstrued strategy, in so far as it has been so far revealed. It has attempted to tackle the wrong problems, mostly with the wrong measures and benefiting the wrong people. The second crisis, which has also been referred to at length in this debate, is the social care crisis. The Government have completely ignored it in this context. I hope the Minister will tell us that we are about to get a new White Paper with a strategy on social care. Both residential social care and care visitors are in colossal crisis.
Residential homes’ standards of care are diminishing as they cannot contend with the combination of squeezed resources and burgeoning demand. As we have heard in recent days from the CMA, of all people, some care homes are facing closure and bankruptcy. Local authority fees for care are capped too low to be economic for care homes or for care workers to be paid adequately. Private funders, who are often hard-pressed families themselves, are faced with fees of more than £45,000 a year and often forced to sell their own homes or their parents’ homes. In care homes, deteriorating conditions and slashed staffing levels make the final years of many of our elder people, some of our own age, and our parents and grandparents, an avoidable misery. Not all the generational disadvantage is in one direction.
On housing, I shall not say much more. Other noble Lords have clearly spelled out that if we are to achieve the 300,000 target that the Government now support, there will have to be a substantial increase in council house building. The Conservative Party still seems to have an antagonism to council houses and to local authorities being involved in housing provision. To meet their targets they will have to get over that, because the cut in stamp duty and the other measures announced by the Government do not address the right people. In most parts of the country, people with quite adequate incomes for all other purposes are unable ever to get on the housing ladder. That means we have to provide some form of rented accommodation. We know that the private rented sector has seen escalating rents and deteriorating conditions and security.
We are going back to a situation that existed 100 years ago, when there were only two forms of tenure: you either owned it or you rented it from a usually grasping, exploitative landlord. In many parts of the country, that spectre has returned already. The only reason people can afford to meet those rents, and in some cases meet their mortgage, is that they are bolstered by social security, particularly in the rented sector by housing benefit, which continues to grow, despite the Government’s attempts to limit it. We are effectively passing money from the state to private landlords. That is not a sensible housing policy, a sensible social policy or a sensible economic policy. We therefore need to follow the well-trodden path of creating greater social housing, through both councils and housing associations, to get decent, well-built, sustainable homes for the majority of our people. The Government are ignoring that at their peril. I hope that the social housing Green Paper, or whatever it will be, calms my fears about that, but I have seen no indication from anything any government Minister has said so far that gives me any cause for comfort.
I know there are those who will say that I see the housing market through the eyes of a London-based politician, but I do not. The reality is the same in all parts of the country, particularly in the south-east. London prices have affected the whole of the south, including the south-east. They have also affected many of our other great cities. The reality is that this is part of a bigger problem. It is part of the problem that was highlighted to some extent by the Social Mobility Commission: the overheating of the London economy and the relative advantage of people in London as against the rest of the country is causing grave dislocation in our society, our economy and, as the Brexit vote shows—I promised not to mention Brexit—our body politic between those who are benefiting, directly or indirectly, partially or totally, from the London effect and those who are not. The families who live in the Midlands and the north, and in the rural areas of East Anglia and the south-west, where I live, are suffering from the fact that we have an unbalanced economy, yet there is no sign from the Government of developing a proper regional strategy.
For decades, in the early years of our being in the European Union, we relied on regional funds and structural funds from the European Union as a substitute for regional policy. The very small instruments for regional policy that the Labour Government instituted were abolished by the coalition. We need to go back to an interventionist industrial regional policy as well as an industrial strategy. At the moment we have some commitments towards a northern powerhouse but they have yet to be delivered and we have not even seen the machinery whereby they can be delivered. The third great gap in the Budget, after social care and housing, is the complete lack of any indication that the Government are about to have a rethink on regional policy in England.
The Duke of Wellington (Con)
My Lords, I will speak briefly on just one small but important initiative announced by the Chancellor in his Budget speech last week. It has hardly, if at all, been referred to in the debate so far. I declare an interest as a former chairman of King’s College London and patron of the King’s Maths School.
In the Chancellor’s Budget Statement he said:
“Knowledge of maths is key to the high-tech, cutting-edge jobs in our digital economy”.—[Official Report, Commons, 22/11/17; col. 1050.]
I would go further than this. One of my own children, when studying philosophy at university, always said how much he regretted not having done maths at A-level. Maths is an essential part of all education, helping the student with logical thought, elevated numeracy and analysis, leading to better decision-making. There is also considerable evidence that those who do maths A-level have a better chance of getting a well-paid job later in life.
The Government have announced in the Budget Statement that they will provide money for maths teaching, will pay a maths premium and will invite proposals for new maths schools. Sometimes government initiatives of this nature do not achieve what they intend, but so far maths schools have been a great success, and more should be created. I will illustrate the point.
In 2012, King’s College London was approached by the Department for Education asking whether we would be prepared to sponsor a new maths school. We readily agreed to do so, and the story is really inspiring. The first year’s intake in 2014 numbered 60. They took their A-level exams in 2016, and 50 of the 60 achieved an A* in maths, 12 went to Oxford or Cambridge and all the rest went to other leading universities. The school is now in its third year. Some 44% of the students are from black and ethnic-minority backgrounds; 21% have English as an additional language; and 34% are girls. The school now tops a number of league tables—a remarkable achievement. Great credit goes, of course, to the headmaster, the staff and the students, and for the co-operation with the staff and students of King’s College. But I must say that a lot of credit should go to the Department for Education, which took the initiative to create two new maths schools. The other pilot maths school at Exeter University also achieved outstanding results.
The Government’s invitation for proposals for new maths schools is based on strong evidence that this concept really works and will substantially increase the number of students reading maths at university. It is widely acknowledged, in particular in an interesting study published in the British Educational Research Journal in February 2016, that we need a major increase in maths teaching and maths students in this country. I was very pleased to read this morning that there has been quite a good increase in the number of applications this year to read maths at university. In the long term, this will have a most positive impact on the economy. I advise Ministers and their officials to consult the noble Baroness, Lady Wolf, on how to drive this programme forward. It was she who masterminded the creation of the King’s Maths School. She is hugely respected by educationalists, and I am sure that she could help the Government to achieve one of their policies for long-term growth of the economy.
There are a number of major policy issues which, as many noble Lords have said today, affect our economy at the moment: comparatively low productivity; a diminishing growth rate, probably as a result of the Brexit decision; and a temporary—we hope—rise in inflation. But improving education, particularly of maths, is just one of the many policies which the Chancellor has announced to help the economy in the long term. In this context, I strongly support the creation of more maths schools throughout the country.
Lord Rooker (Lab)
My Lords, that speech was a remarkable example of the benefits of maths, which I do not propose to follow. This is the first time that I have ever been the last Back-Bench speaker and I thought, “What do I do? Shall I chuck my notes away, listen to the speeches and pick up some good points? Should I keep up to date with the fiasco in Brussels?”. I thought about all that, but I am sticking to the notes that I did at the weekend, so there may be a bit of repetition.
I am certainly not expert in economics, but I can recognise unfairness and failure from across the Chamber. I too have listened to Budgets for more than 40 years, like the noble Lord, Lord Wakeham—the first Budget for both of us was in 1974. I have learned to listen to the bits you are not supposed to hear. When I heard the Budget in 1977, I thought something was not fair about it, so, along with the late Audrey Wise, I did something about it.
In the first 10 minutes of his long speech, I heard the most important point that the current Chancellor had to make. It was about the decision of the OBR to lower the growth forecast. After seven years of failed austerity, this is a catastrophic forecast. I am not surprised that he got it out of the way early and hardly came back to it. It should have been a key factor in the Opposition’s response.
The OBR forecast has not been challenged. The Financial Times leader afterwards said:
“It is hard to overstate the significance of the Office for Budget Responsibility’s bleak forecasts”,
and that growth now is forecast to be,
“a third lower than it estimated two years ago”—
a third lower than just two years ago. I also read that the new projection will lop £50 billion off the size of the economy by election year, 2022.
Adding to concern about this key factor in the Budget is the fact that the OBR has said that, after believing the productivity slow-down was a temporary hangover after the financial crisis, and that it had factored it in, it no longer assumes that recovery is on the way when it looks to the future. The financial crisis started in the United States of America, not the UK. I need to point out that, in 2010, the Conservative Chancellor inherited an economy from new Labour which had had three-quarters of economic growth after the crash. The Conservative Chancellor inherited from new Labour an economy which had three-quarters of economic growth after the crash—I have to repeat that because we do not hear it very often from the Official Opposition. We need not have gone backwards.
The income tax changes in the Budget mean that most goes to those with the most. The low-earning worker will see the paltry change in income tax wiped out by the spiteful freeze on in-work benefits. Working families will be hit. In fact, higher inflation, the effect of the squeeze on in-work benefits and weaker pay growth will see low earners £300 a year worse off from 2022, and in some cases, according to the Resolution Foundation, £4,000 a year worse off, taking into account changes from the 2015 Budget.
It is now estimated that earnings in 2022-23 will be lower than when John Major left No. 10 Downing Street in 1997. The forecast is two decades of lost wage growth and falling living standards. Even in the dark days of Margaret Thatcher’s cuts it was not this bad, and at least she promised to take the country to a better place. There is no promise like that today.
There is simply no precedent for what is going on. The Chancellor thinks there are no unemployed; the Prime Minister thinks nurses use food banks for complex reasons; the only money tree is for the DUP; the just about managing are not—they are struggling; in-work benefits are frozen; in the small print, the Government plan an attack on public sector increments in the health service; children in poverty are on the increase; and there is no real plan to reverse it.
The Budget was so shallow that it did not deal with social care, the defence of the realm, public sector pay or the prospects for the largest manufacturing sector in this country, which is food related. There was nothing radical on university fees, the mention of the NHS was derisory and, indeed, far short of what experts say is required, and there was nothing on planning law and land supply, which is the only route to more homes and sustainable communities. There was nothing whatever. Infrastructure was talked about, but that is all that happens—talk. There are even little examples.
There was nothing on asking well-off pensioners to pay tax on the winter fuel allowance or those still working after the age of 65 to pay national insurance. There was no effort to spread any of the misery around. In fact, there appears to be a degree of spite towards those who need help. Why else freeze in-work benefits? Why continue to freeze public sector pay? We have come a long way from strong and stable; by any measure, it was a shallow Budget with spiteful side-effects on the working poor.
I want to finish with a brief point about immigration, which has been used by the Brexiteers in respect of the economy since 2013. On top of all the misery that is out there, we now have a new climate of fear spreading in this country due to the promised hostile environment for immigrants. It started before Brexit—I will grant you that—when the Prime Minister was at the Home Office. We remember the lorries she ordered up, travelling the streets with signs telling people to go home. The signal has been sent from the top—cut corners and use fear—and it is not only towards illegals, as claimed. There is evidence of elderly people who have been resident in the UK since the 1960s, when they were children, being picked up and bundled off to detention centres with a view to deportation to countries they have not been in since the age of 10. We have reached the knock-on-the-door stage in pursuit of delivering on the Prime Minister’s hostile-environment targets.
I shall give two brief examples. Eleanor Rogers, aged 71, arrived in the UK from Sierra Leone in 1966. She now has no documents and is facing removal to a country she has not lived in for 51 years. Paulette Wilson, aged 61, arrived in the UK in 1968. She worked and brought up a family. Indeed, at one time she worked in the House of Commons Refreshment Department. She was picked up and spent a week in Yarl’s Wood detention centre with a view to being deported to Jamaica, a country she has never visited since she left. This is a direct result of the Prime Minister’s hostile-environment policy, set up some years ago. It is completely and totally unacceptable.
We do not have a strong and stable Government; we have a shallow and spiteful Government. The sooner we have a new broom and direction, the better.
Baroness Kramer (LD)
My Lords, there is one area where I completely agree with the noble Lord, Lord Rooker, which is that the big news from the Budget was the absolutely appalling growth rate. It is the worst in my lifetime—and I am old—and is expected to remain between 1.3% and 1.6% throughout the entire forecast period. It was the noble Lord, Lord Bilimoria, who pointed out that in just 18 months we have managed to go from the top of the growth leagues, at around the time of the referendum, down to the relegation zone, which is where we absolutely sit now.
The noble Lords, Lord O’Neill of Gatley and Lord Haskel, also came in on this, talking about how extraordinary it is at a time when our economic and main trading partners are firing on all cylinders. JP Morgan last week said that the economy of the euro area is “on fire”. It reports all key measures backing a euro area growth forecast of 3.1% of GDP this year. The CBI today made similar comments: a stagnant UK, a thriving eurozone and a global economy expected to achieve something in the range of 3.6% to 3.7% this year and next. It is an extraordinary situation. The drop in our growth rate together with the plummet of sterling has dropped us from the fifth-largest to the sixth-largest economy, and if India had not had a hiccup, we would have been seventh.
However, even that forecast is predicated on a successful Brexit with a frictionless trade in goods with the EU, no new constraints on the export of services including financial services from the UK to the EU, and new trade deals galore. It was the noble Lord, Lord Darling, who pointed out how unreal this all was, saying that the last thing our economy needs right now is Brexit. He was joined by the noble Lord, Lord Livermore, and my noble friends Lady Randerson and Lord Taverne. The one outlier in this was the noble Lord, Lord Dobbs—I could not possibly comment but the noble Baroness, Lady Donaghy, had him absolutely bang to rights. It was an excellent story of fiction.
I am a believer in industrial strategies, but the new industrial strategy was described by the Daily Mail as a “weak upgrade” with “feeble investment” in the economy. I think it is the first time that I have ever agreed with the Daily Mail, but we are facing critical problems in the industrial strategy, to which I will return in a moment.
As for the impact of the divisions within our society, the Resolution Foundation reports that the UK is facing the longest squeeze on living standards in 60 years, with the poorest 20% of families hit hardest. The noble Baroness, Lady Donaghy, talked about that, and the noble Lord, Lord Skidelsky, talked about the low-wage environment. At the weekend, as many noble Lords have mentioned, the entire Social Mobility Commission resigned in response to the Government being all talk and no action when it comes to tackling the deep and growing economic divisions in the country. Does the noble Lord, Lord Balfe, who asked where all the problems are, realise that there are £12 billion more in welfare cuts in the pipeline? There was a very minor amelioration of that number in the last Budget, but there are significant additional cuts, which are falling very much on families, especially on those with more than two children, and on the poor who are actually in work.
In many ways, the timing of this debate is perfect. In looking at that shocking forecast, though, we all agree that it is underpinned by a collapse in the growth of productivity in the UK. Actually it has been tepid for decades; it was running at a trend rate of 2% even before we hit the financial crisis. Still, productivity growth this year is only 0.3%, and in the end the OBR had no choice but to recognise that we would not at any time in the near future return to that 2% trend rate. Indeed, although it is forecasting not the 0.3% where we are now but something like 1.2%, many would say that recovering even to that level of productivity is indeed optimistic.
We all recognise what the elements are of improving productivity. However, my noble friend Lord Razzall talked about training and the Horlicks that has been made of the apprenticeship levy. It has not been a broadly discussed issue in this debate but I want to point out that, while I am totally in favour of T-levels, I am going to be dead before the youngsters training with them are playing a major part in this economy. We have to look at lifelong learning and upskilling people on a regular basis, and none of that was tackled in the context of this Budget.
Then there is the question of investment by business. The noble Lord, Lord Skidelsky, talked about investment, but private investment as well as public has basically fallen off a cliff. The noble Lord, Lord Livermore, pointed out that there was 0.2% growth in private investment in the last quarter, and we cannot survive on that kind of basis. In this context, I have a question for the Government. In the Budget, significant funds were announced to be funnelled through the British Business Bank to support small innovative businesses, but they seem to be pretty much the equivalent numbers to the amount that we are losing through our inability to tap EIF funds. Indeed, when I looked at the research, it seemed to be nothing more than an offset for money that we are losing from European research funds. Is there any additional money, or are we simply stepping in to patch up the losses that are coming because of our Brexit decision? That would be useful for everyone to know.
Overwhelmingly in this debate, one Member after another has talked about housing; I was going to try to name people until I realised it would be easier to name those who had not mentioned it. It was kicked off brilliantly by the noble Baroness, Lady Blackstone, but many others participated. There was a single message in all this—here I do not mean to be insulting; I am simply copying a slogan from the Clinton Administration—“It’s supply, stupid”. I wonder whether the Minister could put that on a piece of paper and tape it up inside the relevant departments. The demand side is not where the problem lies. Member after Member from a wide range of ideologies, from different parties and with a wide range of experience all talked about those fundamental problems. The noble Lord, Lord Beecham, and my noble friend Lord Shipley focused specifically on housing revenue accounts, but the discussion was far broader. Will the Government begin to notice when they hear so many voices in such chorus with so much evidence?
I return to the industrial strategy. There is a huge focus on innovation and new sectors, and that is absolutely necessary. However, there are two points here. First, the noble Lords, Lord Wakeham, Lord Carrington and Lord Haskel, pointed out that it was a very narrow perspective on innovation and that there are much broader issues around the fourth industrial revolution—artificial intelligence and the gig economy, and the impact that all of that will have. The Budget did not begin to tackle those kinds of complexities. Secondly—no one has mentioned this particularly, and that surprises me somewhat—I noticed that there was pretty much nothing for the small, steady businesses that are absolutely the backbone of our economy. That is where productivity is at its lowest and where, if the Government do not focus, make changes and invest in bringing in the capability to introduce innovation at that level, we will never get the change that we need in productivity and the growth rate that we need for our economy.
Lord Davies of Oldham (Lab)
My Lords, this has been an excellent debate and several themes have come through so strongly that I do not need to add a great deal to the clear arguments that have been expressed, which I hope that the Minister will fully recognise in his response. The Motion under debate refers to,
“the economy in the light of the Budget”.
It is not a Budget that throws much light on the encircling gloom. It threw a few flickers, but the informed forecasts that followed, including that of the OBR, showed that the Chancellor and the nation are having to succumb to a pretty dark reality.
As a Financial Times headline put it:
“Grim outlook overshadows housing drive”.
The proposals on housing are of course welcome, and have been debated thoroughly this evening. I very much appreciated the contributions on housing of my noble friends Lord Darling and Lady Blackstone, who spoke with great authority on all the issues that confront the Chancellor in his attempt to increase the number of homes being made available. It is welcome that we are at least talking about some aspects of investment instead of the incessant cuts and austerity that we have had in previous Budgets.
The Chancellor does not call the housing market broken, which we all think it is; he calls it dysfunctional. If he succeeds in making it functional, we will not quibble about the term he uses. What has come through from this debate, however, is that we are highly unlikely to see any real achievement on housing in the near future. The aim is commendable enough—to build 300,000 houses a year—but, as my noble friend Lady Blackstone pointed out, this figure will not be reached until the middle of the next decade. The noble Lord, Lord Tugendhat, also emphasised the delay before such figures will be achieved. Not long ago, the Government promised to build 240,000 new starter homes. We do not have one of them yet, so I am not sure how much trust we can put in a promise which, in any case, is not due to be achieved until 2025.
All noble Lords who talked about stamp duty recognised that some will benefit; it is just that it will not be the aspiring house buyer, at whom this major thrust on housing was meant to be directed. The people who will benefit are those who already own houses, who will see prices increase. The stamp duty change is a gesture, but that is all—gesture politics with no real contribution to improving the housing position for those in real need.
We must recognise that housing sums up the colossally difficult problem that we face of generational inequality in our society. Reference has been made to the older generation and the fact that the triple lock provides all sorts of advantages for them, but the acute problem is for mums and dads who own their homes and watch their children come through their teenage years into maturity with no chance, unless the bank of mum and dad is large enough. Of course, for a large section of our population, that is not the case. Housing was a key feature of the budget, but the Government have an awful lot of work to do to convince this House that their proposals will achieve anything in a reasonable period.
Austerity is still to govern the lives of those of our fellow citizens on welfare. Universal credit is the creation of so much hardship in our society, on what is after all a limited rollout; it achieved from the Chancellor a small mitigation, which will cut people’s wait to receive their benefits. However, some people dependent on that benefit will still find themselves without resources and, if you are vulnerable, in rented accommodation and do not have resources to pay the rent, the implications are serious. None of us wants to see a Christmas period when not just young people are living on the streets and under the bridges along the Thames and so on, as they have no home to go to, but families with homes are ejected by ruthless landlords. Let us make no mistake: many recent indications show just how landlords regard the concept of universal credit with absolute contempt. They are not really prepared to give any form of credit or support to those people renting from them, who depend on that.
There was also an indication that the Chancellor recognised the problems of the National Health Service. The NHS is to receive £1.9 billion, less than half of what NHS professionals said they needed just to keep it going at the level of service it offers at present. There is a reference in the Budget to some new pay settlement for the NHS, but with no timescale or amount—and we do not know when that issue will be addressed. Yet for public services, the fact that pay has been held at such a ridiculously tight level for so long is causing real problems for recruitment and retention. We are talking about nurses, firemen and the police —services that we all depend on but are not prepared to finance adequately.
It is clear that aspects of the health service that we thought were a high priority can be ignored. Did anyone hear the phrase “mental health” expressed during the course of the Budget? Yet it was only eight or nine months ago that many of us were heartened by the fact that the Government seemed to have recognised that it was a crucial part of the health service that needed and would repay good investment in terms of increased public resources devoted to it. The Chancellor did not have a word to say about it; nor did he have a word to say on the issue of social care. How on earth could the Chancellor and the Government ignore social care, in circumstances where everyone concerned knows the level of crisis there? The right reverend Prelate the Bishop of Portsmouth was the first contributor to the debate on that issue, but he was succeeded by contributions from all over the House. I very much appreciated the contribution from the noble Baroness, Lady Eaton, who emphasised that the resources available to local authorities concerned about social care are utterly inadequate. So there are no new resources for social care, but—as my noble friend Lady Blackstone also emphasised—the estimate of the deficit is £2.5 billion. That is why local authorities cannot place their people in need in care homes: they do not have the resources to meet the costs. Yet the Budget ignored that.
One thing that the Budget might have ignored, but which became almost the only thing that counted the next day—many noble Lords have emphasised this—is the fact that all forecasters, including the OBR, have shown that the current direction of the economy is wrong and that all indicators presage a very difficult time ahead.
Not a single noble Lord this evening referred to the long-term economic plan. I have read the debate in the other place, and a very small number of Conservative Members did so. When it was created in 2010, no one ever suggested that the long term was a mere five years. In fact, it could not be five years as the Government are only half way towards their objective after five years, so of course it was extended to 2017-18. Now, of course, it is vaguely extended to the mid-2020s. The long-term economic plan may not be a plan at all but a vague aspiration, or perhaps a considerable con trick on the British public. The Government have failed on that crucial issue and the costs to our society will be enormous because, as the noble Lord, Lord Skidelsky, spelled out—as did a number of others—austerity has produced real hardship and does not solve the basic economic problems of the nation.
We have discussed productivity. We all recognise that productivity issues are difficult to analyse. We are always grateful when the noble Lord, Lord O’Neill, gives us the benefit of his insights but I derived from his optimistic speech that all the others are doing well and therefore may buoy us up. However, I did not detect much indication that the Government and the Chancellor have any ideas on how to improve our productivity, yet that is critical to the future of the nation.
Inevitably, Brexit hangs like a pall over this debate on the economy. We are all aware that if we crash out of the EU, the consequences could be very serious. We should remember that in the very early days of Brexit it was suggested that we would extend our role in the global economy, and that the first person we would win over as a friend would be “America First” President Trump. He and the Prime Minister were on very amicable terms. However, it has not looked like that in the last few days and we have not even begun to get near discussing trade with the American President, or indeed with anyone else. We are making limited progress in Brussels as difficulties arose today due to the proper anxieties of the Ulster Unionists. By heavens, if you are a member of the Government, you care a great deal about the uncertainties and anxieties of the Ulster Unionists; you have virtually no option but to do so. However, that difficulty in Brussels may be overcome and we may be moving towards a settlement which is not too disastrous for the country, although we are certainly paying the price for that in hard euros and are not at all sure where the negotiations on the trading relationships will get us.
This is a Government with a very considerable record—an almost unparalleled record of successive failures. They failed with their long-term economic plan; they are struggling to cope with the challenge of negotiating with the Europeans. I say to the noble Lord, Lord Dobbs, that if you are taking on 27 other countries in a negotiation you know that is going to be the number if you detach yourself from the list. There is no point in complaining that they seem to be united and able to deliver a pretty brusque response to some of our interests. I would have thought that was the nature of an international negotiation of such seriousness. We are going to find out the consequences, are we not?
Finally, at the end of the debates on the Budget in the House of Commons last week, the Government followed the very rare procedure of not moving the Motion which renders government proposals open to challenge by the Opposition in the concluding votes. This extraordinary step has been taken before, just after war broke out or when a general election was clearly in the offing, but this exceptional procedure was adopted by the Government because they sought to avoid crucial votes. You bet they want to avoid crucial votes on supply in the House of Commons. They look like a Government whose time is nearly up.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, I thank all noble Lords for their contributions to this extraordinarily good debate. It has focused on all the issues, which tended to coalesce around five themes which I will direct my remarks to: housing; social care and the NHS; living standards and social mobility; business and industrial strategy; and Brexit. It has been good for me and my noble friend Lord Young to have the benefit of all the contributions, but I will single out those from my noble friends Lord Balfe and Lord Dobbs and the noble Lords, Lord Goddard and Lord O’Neill of Gatley. I do so because they began with an optimistic outlook. I confess that I am an optimist: my blood group is B-positive. I am afraid I am drawn to that concept. If the House will indulge me I will take a few minutes to point to the many good things that are happening.
I begin with the noble Lord, Lord O’Neill of Gatley, who has a distinguished record and made observations on the global economy. His forecast—which I trust very much—was that the economy might grow by as much as 4%. If it does, and you take the global economy as somewhere between $70 trillion and $80 trillion, I make that growth of the size of the United Kingdom economy being added to the world economy this year. There is therefore a huge opportunity out there for us to tap into. The noble Lord, Lord Horam, talked about export potential and there is an example of it. The world is growing, markets are growing and most of the fastest-growing markets are outside the European Union. That global strategy therefore strikes a chord.
We should also remember that employment is up by over 3 million, with over 32 million people in work. The noble Lord, Lord Balfe, referred to the hard-working people of this country. The challenge that we face is to add to their hard work increased productivity—which I will come on to later. Unemployment is down by over 1 million since 2010. The unemployment rate has not been this low since 1975. We had lots of nostalgia in this debate, not least for Led Zeppelin and Dusty Springfield. Even Lord George-Brown had a look in among the distinguished figures from the past, including Lord Whitelaw and Lord Healey, the latter’s Budget debate being the first to which my noble friend Lord Wakeham contributed. I believe it was also the first Budget for my noble friend Lord Young.
The noble Lord, Lord O’Neill, mentioned the northern powerhouse and the growth taking place in the regions. It is worth mentioning—the noble Lord, Lord Goddard, echoed this—that employment numbers are growing faster in the north-west than anywhere else in the country. That is something to welcome. It is not happening by accident; it is happening because of a designed policy—a long-term economic plan to rebalance the economy.
We have cut income tax for over 30 million people, taking 4 million people out of income tax altogether. We have frozen fuel duty for eight years in a row, saving the average car driver £850 since 2010. Last month we doubled free childcare, which is worth £5,000 a year to families—an issue referred to by my noble friend Lord Farmer. We have also invested in 3.4 million apprenticeships. The noble Baroness, Lady Kramer, and the noble Lord, Lord Rooker, speculated as to whether the investment plans would be manifested. So far since 2010, we have invested £500 billion in infra- structure projects and have delivered 1,000 such projects.
At the same time, we have seen corporation tax for small businesses—a concern of my noble friend Lord Wakeham—go down from 28% to 19%, making it one of the lowest tax rates in the G20. An interesting point in looking at the yield from corporation tax is that, as the noble Lord, Lord Darling, will recognise, it is not just the tax rate that counts but the tax take. When we had a corporation tax of 28%, the revenue was about £43 billion a year. With a current tax rate of 19%, the amount of money being brought in is close to £50 billion. Therefore, although the rate has come down, the take has gone up. Should any opposition party be foolish enough to postulate that reversing that beneficial and benign occurrence of falling taxes and rising revenues would somehow be a way to reduce the deficit, I suggest that it might not be the way forward.
Perhaps I may address some of the points that were raised concerning international attitudes towards this country. The noble Lord, Lord Lea of Crondall, talked about foreign direct investment here. The UK remains the leading foreign direct investment recipient in Europe, attracting a record total of 1,144 financial foreign direct investment projects since 2016—an increase of 7% over 2015. So people here may be losing confidence in themselves but it is noticeable that the world is not losing confidence in Britain. With our world-class universities, our incredible market and our technical abilities, the UK attracted $254 billion in 2016, second only to the United States.
At the launch of the industrial strategy, referred to by the noble Baroness, Lady Randerson, we also celebrated two major new investments in cutting-edge pharmaceutical companies—MSD, which will develop a research facility in London by 2020 aimed at finding new drugs, and Qiagen, a leading diagnostics company, which, partnered by Health Innovation Manchester, will develop genomics and diagnostics at its campus in the city. Facebook announced just today that it will create another 800 new jobs in the UK in 2018, and not quite the low-skilled jobs that some noble Lords referred to. Toyota announced a £240 million investment to upgrade its car plant in Derbyshire, Rolls-Royce announced a £150 million investment in UK aerospace, and BMW will build a fully electric version of the Mini in the UK. All these are investments in the UK. They express a belief in the United Kingdom and what we, the people of the United Kingdom, have to offer. That point was touched on by the noble Lord, Lord Skidelsky, who then rightly asked us to focus on the importance of investment. I will come to that point first.
In the Budget, we proposed that an increased amount will go into the productivity investment fund. This will bring investment in R&D to its highest level in over 40 years—again, another welcome forecast.
The OBR forecast that the UK contribution to the EU, net of public sector receipts, will be £7.7 billion over 2017-18. This figure does not include receipts received by the private sector.
On the points raised by my noble friend Lord Maude, obviously he did a tremendous amount of work in raising activity across the public sector during his time as Cabinet Minister in the Cabinet Office. The figure he quoted of £50 billion saved in the delivery of front-line services has made a tremendous difference to the working of government and to the impact on our financial position. My noble friend Lady Neville-Rolfe said that we ought to maintain pressure on this and not let up, because the battle was not won, and she is right that we should focus on that.
Perhaps one of the most inspiring contributions was from my noble friend the Duke of Wellington, who talked about the King’s College maths pilot school. Of course, we recognise that if we are to compete in the world and attract more foreign direct investment of the type we are talking about, building more tech companies in this country, we need to attract high- quality maths teaching. That is why we announced in the Budget that we will invest £42 million in a pilot teacher development premium. We will also triple the number of fully qualified computer science teachers from 4,000 to 12,000, raising maths attainment packages through a support plan. I am happy to convey my noble friend’s recommendation of the noble Baroness, Lady Wolf, who was behind that particular school, and I commend them for their work.
A number of noble Lords referred to social mobility issues: the noble Lord, Lord Tunnicliffe, the noble Baroness, Lady Donaghy, my noble friend Lord Farmer and the noble Lord, Lord Skidelsky. It is worth recognising at this point that some other things are of note. The number of young people from the most disadvantaged areas who attend universities has increased to its highest level on record—19.5% for England—and, as my noble friend Lord Balfe mentioned, income inequality is down to its lowest level. The noble Baroness, Lady Donaghy, referred to the impact of the Budget on women; in April 2016 the gender pay gap for full-time employees decreased to 9.4%, and there are record numbers of women in the workplace.
On comments by the noble Lords, Lord Lennie, Lord Beecham, Lord Goddard and Lord Shipley, particularly on the north-east of England, people who work in that area will benefit from an ambitious devolution deal in the north of Tyne area, covering Newcastle, North Tyneside and Northumberland, which will give them greater freedom—which my noble friend Lady Eaton called for—to get on and do the work they are supposed to be doing on investment and looking after their local communities. That will be worth a significant amount—£600 million over the next 30 years or, more precisely, £20 million per year. There is also the mayor of Tees Valley’s initiative on the SSI site, to which the noble Lord, Lord Lennie, referred as well as the investment in rolling stock on the Tyne and Wear Metro, which again is something that should be welcomed and shows that investment and prosperity are heading out across the UK.
I turn now to universal credit. The right reverend Prelate the Bishop of Portsmouth referred to that and the measures that were being taken. We are ensuring that households that need it and have an underlying entitlement to UC will have access to a month’s worth of support within five days via interest-rate-free advances. Universal credit is paid monthly and in arrears to mirror the world of work. We have listened to representations from your Lordships’ House, among others, and have made changes that will continue with the principle but ease the impact as the programme is rolled out.
Housing was raised by my noble friends Lord Ryder and Lord Horam, the noble Lords, Lord Darling and Lord O’Neill of Clackmannan, and the noble Baroness, Lady Blackstone. The issue that we have at the moment is one of unaffordability. The noble Baroness, Lady Kramer, referred to the issue of supply. Of course it is about supply, which is one reason why we have announced the housing White Paper, Fixing Our Broken Housing Market, and announced a whole series of initiatives within that package of £15.3 billion about how we release more sites for development. That is entirely a supply measure. The housing infrastructure fund at £5 billion is a supply measure. Oliver Letwin has been asked to undertake a review about the situation referred to by the noble Lord, Lord Shipley, and my noble friend Lord Ryder where developers are granted planning permission but do not go on and build the houses that are necessary. That is looking at blockages in the supply area. It has to be seen that the focus is not just on demand, such as the measure on stamp duty; there are supply measures as well.
The noble Lord, Lord Beecham, and my noble friend Lord Horam referred to the Homelessness Reduction Task Force. That has been established to develop a cross-government strategy with the initial focus on delivering a commitment to halve rough sleeping by 2022 and eliminate it by 2027. There will be three housing pilots—the first in Greater Manchester, the next in the West Midlands Combined Authority and then another in the Liverpool City Region.
The noble Lord, Lord Campbell-Savours, asked about online VAT fraud and how HMRC will implement and monitor it. HMRC has discretionary powers that it will use on a case-by-case basis where there is clear evidence that a UK business trading via an online marketplace is not complying with VAT rules. Compliant UK sellers who are legitimately trading below the VAT registration threshold or are VAT registered correctly accounting for all VAT due will need to be addressed in this particular context. The requirement to display a valid VAT number applies to those companies that are provided with one.
My noble friend Lord Balfe asked whether we could introduce a surcharge on foreign-owned empty residential properties. The Government are keen to encourage owners of empty properties to bring the properties back into use, which is why the Budget announced we will give the power to local authorities to increase the council tax premium on empty homes from 50% to 100%.
The noble Lord, Lord Ryder, asked about stamp duty and observed its impacts on the housing market. Stewart Baseley, executive chairman of the Home Builders Federation, has said that first-time buyer’s relief will provide the certainty of demand to allow builders to invest with confidence, directing and increasing supply.
The noble Baroness, Lady Young of Old Scone, asked about housebuilding measures and whether they will have a negative impact on standards. The Budget confirms the Government’s commitment to maintain existing green belt protections. We are consulting to make sure that minimum densities are set at the right level for all concerned, including local people who will live in the homes. I will take her suggestion of green villages back to the Treasury, if I may.
My noble friend Lady Neville-Rolfe and the noble Baroness, Lady Randerson, asked about railway investment, Heathrow, local roads and the national planning infrastructure fund. That £1.7 billion fund will be used for transport in cities. It is spread across the regions, with £250 million for the West Midlands, £243 million for Greater Manchester and £377 million for the north-west for intra-city transport.
The right reverend Prelate the Bishop of Portsmouth asked about UK defence. The UK will meet the NATO target to spend 2% of GDP on defence. In the 2015 spending review, the defence budget was protected and increased by 3.1% in real terms until 2019-20.
The noble Lord, Lord McKenzie of Luton, referred to debt falling only due to the housing association reclassification. My answer is no: we would have met the fiscal targets in 2021, regardless of the change to the classification of housing associations.
The noble Lord, Lord Tunnicliffe, asked whether deficit reduction has failed, to which the answer is no, it has not. Of course, we inherited a deficit of 9.9% of GDP in 2009-10; that has been reduced to 2.3% in 2016-17.
The noble Lord, Lord Livermore, questioned whether we will reach the Government’s targets. In November 2017, the OBR forecast that the Government will meet both their fiscal targets for this Parliament. The deficit is forecast to be 1.1% of GDP in 2022-23—the lowest level since 2001-02—and debt is forecast to peak in 2017-18 at 86.5% of GDP, then fall every year of the forecast period to 79.7% in 2022-23.
My noble friend Lord Balfe asked about tax avoidance and evasion. Since 2010, we have introduced 100 measures, including in this Budget, to tackle tax avoidance and evasion. As a result, the tax gap is now at its lowest level and is one of the lowest in the world—some 6% of the total forecast.
I come to social care. The noble Baroness, Lady Bakewell, asked me to ensure I mention social care in my winding-up speech. I am happy to do that, as I mentioned it in my opening speech. There is a critical element that we need to bear in mind. One of the most staggering statistics we have come across is that there are some 15,000 centenarians living in the UK. From the population in this country living now, that figure will rise to some 10 million. Therefore, the issue to address in social care is intergenerational fairness, which was referred to, and the impact on areas such as those mentioned by my noble friend Lord Freeman, including pension funds. Those are vast concerns that will have to be addressed over the long term and reflected on. There will have to be Green Papers and discussion papers. Some £2 billion was announced in the Spring Budget. That will have to be kept closely under review in the light of any Green Paper.
I think I have addressed a number of the questions, though I am sure not all the points raised. In conclusion, I simply say that this is a Budget that invests in the infrastructure, skills and technology we need to succeed while providing immediate support where it is needed the most.
Lord Bilimoria
I am so sorry to interrupt the Minister as he is winding up after 23 minutes. He has addressed so many issues. Right up front he said, “And I will address Brexit”. Many Members have mentioned Brexit. It is the elephant in the room that overshadows the whole of the Budget and the Minister has not given it one minute.
Lord Bates
I am grateful to the noble Lord for giving me this opportunity. Many in this House have stood where I have when there have been, let us say, fast-moving events happening in other parts of Europe. I thought I would get a very helpful steer as to the line I was to take on the Brexit negotiations so that I could give an authoritative update. However, it basically distilled down to that there will be a Statement in the other place tomorrow, given by the Prime Minister, which will probably be repeated here, which will give noble Lords a full update on these matters. It is of course a matter of critical importance. The Prime Minister and the Secretary of State are in Brussels, trying to secure the right deal for British business and the British people so that we continue to have access to that very important market.
I can certainly say to my noble friend Lord Dobbs, having been invited to comment on Brexit, that nothing is agreed until everything is agreed. The talks have over the last couple of days made some good progress, but there are some final issues to resolve. As President Juncker and the Prime Minister said, both sides are confident that we will conclude this positively ahead of the December Council.
That particular aspect is to be continued, but this Budget strikes the right balance between addressing short-term priorities and seizing long-term opportunities. It capitalises on the changes ahead and will build an economy fit for the future. I once again thank all those who have participated and I beg to move.