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Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Minister of State, Ministry of Justice (Rory Stewart)
The CRCs currently supervise just over 59% of all offenders and the National Probation Service supervises 41%.
Meg Hillier
The CRC contract has been a dog’s breakfast, so what is the Minister going to do to make sure that CRCs work better to support people, particularly those on shorter sentences?
Rory Stewart
First, I pay tribute to the Public Accounts Committee for its work in looking at exactly this subject. In order to work better, we are consulting on having a closer relationship between the National Probation Service and the CRCs. Secondly, we are making sure we put much more focus on the basics, by which we mean the risk assessment, the plan for probation and regular contact.
Tracey Crouch (Chatham and Aylesford) (Con)
I recently visited the Kent, Surrey and Sussex CRC to see the great work it is doing to support 9,000 low-risk and medium-risk offenders across three counties, including through an excellent partnership with Buckmore Park scouts for community payback. Will the Minister join me in congratulating it on its creative partnership and holistic approach to the offender, which is bringing about positive results in rehabilitation?
Rory Stewart
Yes, I would like to pay tribute to that CRC, which is performing well, and to other CRCs such as Cumbria’s. I also pay tribute to the London CRC for the innovative work it is doing on knife crime rehabilitation.
Kate Green (Stretford and Urmston) (Lab)
There is a lack of information about, and confidence in, how CRCs are using rehabilitation activity requirements. Will the Minister look at how, in the negotiation of new contracts, there can be more precision about the expectations on CRCs as to how they administer RARs and, in particular, how they provide evidence that structured activity is taking place?
Rory Stewart
Very much so; a key part of the new consultation is taking some of the previous flexibility away and defining much more closely the requirements on regularity of contact, type of contact and the expectation on the offender.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
Does the Minister agree that one of the keys to rehabilitation is to ensure manageable case loads for probation officers, so that more time and energy can be spent on each individual?
Rory Stewart
That is correct, which is why we are currently recruiting more than 1,000 new probation officers and probation support officers. But this is about not only the case load per prisoner but making sure we can focus most on the most risky prisoners and getting the right relationship between staff and risk.
Eddie Hughes (Walsall North) (Con)
Does the Minister believe that charities such as YMCA and the Prince’s Trust have a vital role to play in community rehabilitation?
Rory Stewart
Absolutely. YMCA and the Prince’s Trust have a role to play, and indeed more than 15,000 charities in Britain have working with offenders as one of their objectives. The third sector has so much to offer, and, in renegotiating and redesigning probation contracts, we must make it much easier for charities and the third sector to engage in them and bring their skills and knowledge.
Sir Desmond Swayne (New Forest West) (Con)
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
People often come to the courts system when they are at their most vulnerable, and we want to ensure not only that they have a fair system to determine their disputes, but that it is as simple and straightforward as possible. In the family courts, we are making the process not only more simple but less antagonistic. For example, we are making our application processes more straightforward in divorce and child arrangement applications; we are committed to giving the family court the power to prohibit abusers from cross-examining their victims; and we are consulting on taking the requirement of fault out of divorce.
Sir Desmond Swayne
If the courts were to publish clear advice as to what access parents might reasonably expect, fewer of them would perhaps be tempted to litigate, would they not?
Lucy Frazer
As my right hon. Friend implies, every parent who separates wants to continue to have contact with their child. I was pleased to talk about this issue with him and my hon. Friend the Member for North West Leicestershire (Andrew Bridgen). I have taken up their proposal and spoken about it with the president of the family division, as well as with a number of organisations that deal with children and legal representatives in the family courts. I should say that they all have differing perspectives, but we are looking at this matter very closely.
Stephanie Peacock (Barnsley East) (Lab)
It is now two years since the Government made a commitment to ban perpetrators from cross-examining victims of domestic abuse in family courts, which the Minister has just mentioned, but when will she actually follow through on that and finally act on this issue?
Lucy Frazer
We will follow through on this issue, which is a Government priority—
Lucy Frazer
It will be in a Bill as soon as legislation and the parliamentary timetable allow.
Andrew Selous (South West Bedfordshire) (Con)
Does the Minister agree that the consultation on divorce law reform is an opportunity to look into ways to cause less harm to children of all parents who separate, as well as to strengthen families along the lines of the marriage and relationship support initiative brought in by Lord Mackay?
Lucy Frazer
We in the Ministry of Justice are committed to the institution of marriage and recognise the value that it brings to the children of a marriage, as well as to society as a whole. Our proposals and consultation on divorce are about looking at how to make the process easier when the very difficult decision to divorce has been made. Of course, any measures to strengthen families would be welcome.
Jim Shannon (Strangford) (DUP)
Will the Minister outline the steps that have been taken specifically to address the reform of fathers’ rights during divorce proceedings on access to children?
Lucy Frazer
All parents’ rights are incredibly important, but in the family court the heart of every case is the child’s best interests. That is the basis on which judges make their determination. There is a presumption that contact with both mother and father is in the child’s interests, but each case depends on its own facts.
Gloria De Piero (Ashfield) (Lab)
Women’s Aid has long been concerned that although the experiences of victims of domestic abuse are taken seriously in the criminal courts, they are diminished or even ignored in the family courts. That is exactly what is happening to a woman with whom I am in touch, whose spouse is serving time for attempting to murder her. She has been asked to provide pension and bank statements, payslips, proof of the valuation of her home, and even evidence of the medical toll on her health. It is wrong. Will the Minister work with me to change the law to stop those who attempt to murder their spouse reaping any financial benefit?
Lucy Frazer
Domestic violence is a huge issue on which the Government have taken several steps, including by widening the scope of abuse that is caught by the law on coercive control and by the requirements for legal aid. I am pleased to have met the hon. Lady already to discuss the issue that she mentions, and we are looking into it.
Henry Smith (Crawley) (Con)
The Minister of State, Ministry of Justice (Rory Stewart)
I am delighted to say that we have been very successful and are well ahead of schedule. Instead of simply 2,500 extra prison officers, we have 3,653 more than we had in 2016, and job offers have gone out to a further 2,000 potential prison officers.
Henry Smith
I am grateful to my hon. Friend for that answer and welcome those additional prison officers. What protective equipment is being provided to prison officers to keep them and the prison population safer?
Rory Stewart
The use of body-worn cameras and CCTV cameras, which we have rolled out, makes it much easier to monitor what is happening in prisons. For extreme situations, we are rolling out the ability to use pepper spray. The key will be not the protective equipment but having in place the right support and training for prison officers, to make sure that their behaviour to a prisoner is appropriate, both to challenge and to reform. That involves investing in our senior staff to provide that model.
Ellie Reeves (Lewisham West and Penge) (Lab)
Data shows that a third of new prison officers leave the service within the first two years, so even if the Government meet their 2,500 recruitment target, nearly 800 officers will leave within the first 24 months. What steps will the Minister take to address the shockingly low level of staff retention in the Prison Service?
Rory Stewart
I am glad to say that attrition rates are beginning to stabilise, but they are of course a massive concern. More decent, cleaner, less drug-filled and violent prisons will be important for staff morale, and the right training—we are transforming training courses—will be central for prison officers. We have a huge opportunity. These are young, idealistic people, often with fantastic communication skills. We need to invest in them, because they are the foundation for the future of the Prison Service.
Neil O'Brien (Harborough) (Con)
Central to the welcome drive to recruit more prison officers is the need to ensure that they can work safely. Prison officers at HMP Gartree in my constituency are concerned that sometimes, as a result of local police and Crown Prosecution Service decisions, assaults on staff are not prosecuted. Will the Minister assure me that he will look into the matter if I write to him, and that any act of violence against our brave prison officers is unacceptable?
Rory Stewart
This point is central. We need to make sure that prisoners are appropriately challenged and punished, particularly if they assault prison officers. Far too many prison officers who are protecting us —protecting the public—are being assaulted. We are therefore piloting in HMP Isis in London a system whereby the Metropolitan police is putting officers into prisons to follow up and increase the chance of prosecution. That is also why we pay tribute to the hon. Member for Rhondda (Chris Bryant), who has worked with us to double the maximum sentence for assaults on prison officers, and that comes into effect today.
Helen Jones (Warrington North) (Lab)
The Minister would not need to be talking about training for new officers had the Government not got rid of 7,000 experienced prison officers to start with. Does he now accept that that was a massive mistake and has contributed to disorder, the rising drug use and assaults on prison staff within our prisons?
Rory Stewart
To agree with the hon. Lady to some extent, clearly the fact that we are recruiting 2,500 more officers reflects the fact that we think we need 2,500 more officers. Looking forward, the key is to make sure that people are supported both in college and on the landings to have the skill and experience they need. The challenge now is not numbers, but training and the estate.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
As a committed member of the Select Committee on Justice, the hon. Lady knows that we are spending £1.6 billion on legal aid and reviewing the Legal Aid, Sentencing and Punishment of Offenders Act 2012. She raises one of the issues at which we will be looking very closely. I am sure she will be interested to hear that, after the latest legal aid tender, the number of officers providing access to legal aid services has increased by 28% in immigration and asylum, by 188% in welfare benefit and by 7% in housing and debt.
Ruth Cadbury
I thank the Minister for her answer, but a Citizens Advice study estimates that, for every pound of legal aid expenditure spent on housing advice, the state potentially saves more than £2, and that savings are even greater for legal advice on debt and benefits. Will she commit to undertake independent research into the savings that the state could make by returning early legal help as a component of legal aid?
Lucy Frazer
The hon. Lady makes an important point. I have looked at that study as I have many other studies that talk about the downstream impacts of the lack of legal help at an early stage. As she will know, we are in the process of a LASPO review. We are looking at these matters, and I am interested that she highlights the need for further independent study.
Alex Chalk (Cheltenham) (Con)
Citizens advice bureaux do exceptionally important work in providing early advice and assistance, which is invaluable for my constituents. Will my hon. and learned Friend pay tribute to Cheltenham citizens advice bureau for its important work and ensure that it continues to receive the support and assistance that it requires to do it?
Lucy Frazer
My hon. Friend is absolutely right that citizens advice bureaux across the country, including in Cheltenham, as well as many other legal help organisations, help to ensure that the most vulnerable people are getting the support that they need. This week, the Ministry of Justice brought together 200 organisations that help and support people in need to talk to them about what more we and they can do.
Thangam Debbonaire (Bristol West) (Lab)
Investing in high-quality legal advice for asylum seekers at an early stage is critical if we are not subsequently to waste large amounts of public money supporting failed asylum seekers who perhaps do not have a case, but who have been misadvised. What can the Minister do to assure me that all asylum seekers will get the highest-quality legal advice through legal aid at the earliest stage?
Lucy Frazer
It is important to highlight two things. One is that the Government spend about £100 million on early advice every year. The second is that there is a misconception about what legal aid is and is not available. In fact, legal aid is available for asylum work as well as for non-asylum work, including detention, Special Immigration Appeals Commission, domestic violence and trafficking cases.
Chris Green (Bolton West) (Con)
Will my hon. and learned Friend expand on the Department’s current review of legal aid reforms and say what representations have been received from the Labour party?
Lucy Frazer
My hon. Friend makes an interesting point. We have received a large number of representations from across the country about what we should be doing in relation to legal aid, and we are looking at them carefully. The Labour party has not put in any representations.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
At yesterday’s Sanctuary in Parliament event, we heard about the huge importance of family reunion for refugees, but also about the complexity of the application process. Will the Government support the Refugees (Family Reunion) (No. 2) Bill of my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), and restore legal aid in England and Wales for such applications?
Lucy Frazer
Family reunion is an important issue, and I have met a number of Members to discuss that Bill. As the hon. Gentleman knows, we are looking at legal aid broadly and will set out the consequences of our review by the end of the year.
Richard Burgon (Leeds East) (Lab)
Of all the cuts to justice, the slashing of legal advice for sick and disabled people who are unfairly denied their benefits is one of the cruellest. We now have a shameful situation whereby people are first denied the financial support to which they are entitled and then must struggle through a difficult appeal without legal advice. This situation is bad enough already, but it will be even tougher under universal credit. Under the Conservatives, legal advice for welfare benefits cases has been cut by 99%. Is the Minister ashamed that sick and disabled people are paying the price for this Government’s ideological cuts agenda, or was that the deliberate intention?
Lucy Frazer
I am not aware of any representations from the Labour party in relation to any provisions that it would make on legal aid funding. This is an important area involving people who are vulnerable and need help. Prior to LASPO, people did not get help at the representation stage of welfare cases—only at the advice stage. We are making a number of changes to make the tribunal process that people go through much simpler and more straightforward.
Richard Burgon
Let us be clear: legal advice was given to 91,000 people in the year before this Government’s reforms to legal aid. How many was it last year? It was 478 people, not 91,000. Can the Minister honestly tell the House that the need for legal advice has reduced by such a degree, or should we instead conclude that—just as with employment tribunal fees, housing advice, employment advice and immigration advice—the cuts to legal advice for the sick and disabled are really about targeting the weak so that they can enrich the powerful?
Lucy Frazer
As I mentioned earlier, we spend £100 million on legal help and we are improving the tribunals service to enable people to access and liaise with judges to improve their process through the court system.
Marion Fellows (Motherwell and Wishaw) (SNP)
Martyn Day (Linlithgow and East Falkirk) (SNP)
Hannah Bardell (Livingston) (SNP)
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
We laid out our ambition in the policy paper that we produced in August 2017 and again in the most recent White Paper, setting out that we want the closest possible co-operation in civil and family justice matters. We continue to negotiate with the EU on these matters; in the meantime, as a responsible Government, we continue to prepare for no deal.
Marion Fellows
The UK currently extradites more than 1,000 people a year to the rest of the European Union using the European arrest warrant. Does the Minister accept that withdrawing from the European arrest warrant would make extraditing dangerous criminals from the UK slower and much more bureaucratic?
Lucy Frazer
We are very keen to ensure that we have a good relationship with the EU in relation to security matters going forward. I recently spoke to my Home Office counterpart, who is leading the negotiations on the European arrest warrant. I was pleased to see in the European Council’s negotiating guidelines that:
“The EU stands ready to establish partnerships in areas unrelated to trade, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy.”
Martyn Day
Since 2011, more than 760 people have been subject to court proceedings at a Scottish court after being arrested under the European arrest warrant. Will the Minister set out what will happen to schemes such as the European arrest warrant in the event of a no-deal Brexit?
Lucy Frazer
It is both in our interests and the EU’s to ensure that we have a mutual arrangement on these matters that is as good as possible. I look forward to ensuring that we negotiate the best possible deal on this matter going forward.
Hannah Bardell
The recent Scottish Government publication on security and judicial co-operation emphasises the need for Scotland’s separate legal and judicial system to be taken into account during the Brexit negotiation process. Can the Minister give a cast-iron guarantee that any new arrangements between the UK and the EU will respect Scotland’s separate and independent judicial system?
Lucy Frazer
The hon. Lady is right to identify the separate and distinct legal arrangements that we have in Scotland. We negotiate and work very closely with Scotland and the Scottish Government on all these matters. In relation to no deal planning, there is almost weekly contact between my officials and those in the Scottish Government.
Victoria Prentis (Banbury) (Con)
Our legal system is respected throughout the world. What steps are being taken to ensure that that continues through Brexit and beyond?
Lucy Frazer
My hon. Friend makes an important point. Although Europe is a key partner for us throughout our services and legal services industries, there is a world beyond Europe. We in the Ministry of Justice are supporting, through our Legal Services are GREAT campaign, the continued work and co-operation of legal services abroad. We have been to Kazakhstan and to Nigeria.
Matt Warman (Boston and Skegness) (Con)
The effect of a no-deal Brexit will obviously range widely, but how it will affect our justice system has not been much reported. Will the Minister assure the House that we are putting in place all the necessary planning for a no-deal Brexit even though we hope that it will not arise?
Lucy Frazer
My hon. Friend is right. As a responsible Government, we are ensuring that we have our preparations in place. We have published two technical notices, one on civil judicial co-operation and one on legal services. We are putting together our statutory instruments to pass to ensure that our legal system continues to work, and we have £17.3 million from the Treasury for no deal preparations.
Mr Speaker
I can hardly overstate the importance of persistence in bobbing. I say to the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) that to bob once is inadequate. If the hon. Gentleman wishes to participate, he should now bob again.
Mr Speaker
He is bobbing. Persistent bobbing is a very important principle in the House.
Gavin Newlands
Lucy Frazer
There are many areas of security and justice where it is important and beneficial to get the best possible arrangement. The European arrest warrant is an important one, and we are negotiating hard to ensure that we get the best possible arrangement going forward.
Sir Edward Davey (Kingston and Surbiton) (LD)
The former director of Europol, a Brit, has warned that deal or no deal, leaving the EU means that the UK will lose our leadership role in Europol and Eurojust, often both critical for fighting the most serious criminals. How does the Minister believe that leaving the EU will help Britain to bring serious organised criminal gangs to justice?
Lucy Frazer
As I have mentioned, Europol and the European arrest warrant—all these areas where we share data—are incredibly important to us, as they are to the EU. We are one of the largest contributors to security information within the EU. The Home Office leads on these matters, and it is trying to ensure that we get the best possible co-operation going forward.
Joanna Cherry (Edinburgh South West) (SNP)
Contrary to the assurances that the Minister gave to my hon. Friend the Member for Livingston (Hannah Bardell), the process of leaving the European Union has been marred by the UK Government’s consistent failure to consult the Scottish Government or Scotland’s Law Officers about the impact on Scotland’s separate and independent legal system. Can she now give me an assurance that this is not indicative of a plan to use Brexit to undermine Scotland’s independent legal system, which is of course protected by the Act of Union?
Lucy Frazer
We have a devolution Act that sets out very clearly the separate and distinct nature of Scotland. We have almost weekly contact with officials on no deal planning. Paul Candler, who is a director in the MOJ, had a director-level meeting with his colleagues from Scotland and Northern Ireland on 9 November. We are legislating on behalf of Scotland at the Scottish Government’s request and with their permission. We are working very closely with Scotland on a number of SIs. I met the Scottish Law Society chair, Michael Clancy, earlier this year.
Joanna Cherry
It is Government contact I am talking about, not contact with the Law Society, important as that is. The Minister should realise that Scotland’s independent legal system is protected not by devolution, but by the 1707 Act of Union. Scotland’s highest court has made a reference to the Court of Justice of the European Union on the question of whether article 50 is unilaterally revocable, not by the Government, but by this Parliament. The case will be heard on 27 November, but the UK Government are fighting it tooth and nail, even to the extent of attempting an appeal to the Supreme Court, despite the fact that an appeal to the Supreme Court is expressly prohibited in Scots law where there has been a unanimous interlocutory decision of Scotland’s highest court. Can the Minister tell me whether that is part of the plan to undermine Scotland’s separate legal system? How much money are the Government prepared to spend on keeping MPs in the dark about the revocability of article 50?
Lucy Frazer
This Government are committed to the Union and to respecting the distinct Scottish legal system. I am fully aware of the matter before the Supreme Court, and we look forward to its judgment.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Lord Chancellor and Secretary of State for Justice (Mr David Gauke)
The Government remain fully committed to the convention, and we assess the UK’s implementation of article 13 of the convention as part of the reporting process to the UN. The latest report to the UN was this year. To improve access to justice for people with disabilities, we are investing £1 billion in reforming the Courts and Tribunals Service, to continue to ensure that we have a modern justice system that is accessible to all. We are also increasing the use of technology to benefit the mobility impaired, who may have greater opportunity to participate in court and tribunal services without needing to travel to a hearing centre.
Debbie Abrahams
Article 13 of the UN convention on the rights of persons with disabilities, to which we are a signatory, goes well beyond access to and the right to a fair trial and includes all aspects of democracy, rule of law and the effective administration of justice for all people. Given that disabled people have been disproportionately affected by cuts to legal aid for social security cases, and that hate crimes against disabled people are on the rise and employment discrimination is increasing, when will the Justice Secretary ensure that we fulfil our commitments under article 13?
Mr Gauke
We do fulfil our commitments, and I have to point out what we do as a country. We are proud of our record in supporting disabled people, including through the landmark Disability Discrimination Act 1995, and we have some of the strongest equalities legislation in the world, including the Equality Act 2010.
Alex Burghart (Brentwood and Ongar) (Con)
The Minister of State, Ministry of Justice (Rory Stewart)
In order to deal with drones, we need to focus on electronic interference with and electronic interrogation of drones. We also need better intelligence systems, but in the end, a drone is just a delivery system; it is a way of getting things into a prison. Better grilles, better netting and better processes with prison officers to ensure that we inspect the yards will be central, whether we are talking about drones or throw-overs.
Alex Burghart
I thank the Minister for that advice. Drones are undermining the effectiveness of a number of our prisons. Does he agree that on top of what he suggests, we should be working with the manufacturers of drones, to ensure that they are helping to keep criminals under control?
Rory Stewart
Absolutely. There is much more that we could do with the manufacturers of drones. Drones contain geo-fencing equipment, which prohibits them going over civil aviation space, for example. We can do more there, but we cannot just rely on software. In the end, good intelligence and good processes and procedures in prisons are the real guarantee against drones bringing in drugs.
Rachael Maskell (York Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
Criminal barristers play a fundamental role in ensuring access to justice, often for the most vulnerable in our society. Having already increased their fees by £9 million in April this year, we launched a consultation on a proposal to increase fees by a further £15 million. That consultation has recently closed, and we are carefully considering the responses.
Rachael Maskell
Our justice system depends on proper legal representation. A constituent of mine, a dedicated and experienced barrister, works 15 hours a day, six to seven days a week. Two years ago, he earned £8,000; last year, he struck lucky and earned £26,000. Will the Minister commit to honouring the letter and spirit of the advocates’ graduated fees scheme, and make sure it has an early review?
Lucy Frazer
The Lord Chancellor and I take very seriously the importance of having a system of advocates that represents people, and we value the independent Bar as well as the employed Bar. I met the leaders of the Bar Council last week, as well as the leaders—the chair and the vice-chair—of the Criminal Bar Association to hear their concerns, and we are listening very closely to what they have to say.
Mr Speaker
I call Chris Evans, for Question 9—not here. Where is the feller? I hope he is not indisposed.
Emma Reynolds (Wolverhampton North East) (Lab)
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
The hon. Lady is right to highlight that we need to protect debtors from aggressive behaviour by enforcement agents. I have read the report that Citizens Advice has released today, and I am aware of the issues. We intend to launch a call for evidence before the end of the year to help to protect even further those in debt.
Emma Reynolds
A constituent of mine, who is disabled and vulnerable, was petrified when she thought she was being burgled: two bailiffs aggressively entered her house without showing any ID, rummaged in her bag and took £240 out of her purse. She was made to pay another £180 on top of that. She only learned afterwards that this was due to a parking fine because her disabled badge was out of date. Given the shocking figures from Citizens Advice, which the Minister referred to, showing that a bailiff breaks the rules every minute, when will the Government urgently review the rules and introduce an independent body to police the rules?
Lucy Frazer
I am very sorry to hear about the hon. Lady’s constituent’s situation. I would be very happy to discuss the individual case, as we look at evidence, following the call for evidence. As I have mentioned, we intend to launch the call for evidence before the end of the year, when we will look at these matters very carefully.
Richard Graham (Gloucester) (Con)
In relation to Question 9, Bishop Rachel of Gloucester has called for short-term prison sentences for women to be replaced with community-based rehab—
Mr Speaker
Order. The hon. Gentleman is ahead of himself. Let me explain to him that Question 9 was not asked, and he cannot shoehorn his inquiry into a question that was not asked. He can shoehorn his inquiry only into a question that has been asked, if it is germane and within scope. I was trying to be helpful to the hon. Gentleman, whose Question 22 is highly unlikely to be reached. I was very happy to accommodate him on an earlier question, on the premise that his supplementary to it is within its scope. Knowing the intellectual ferocity of the hon. Gentleman and the helpful delaying tactic I have just deployed to give him a little time to reflect, I feel sure that he can now produce a wonderful, perfectly formed and very brief inquiry.
Richard Graham
Mr Speaker
Very well done, indeed. The question was nothing if not roguish.
Lucy Frazer
That was a very intriguing question on one about bailiffs. This matter is reflected in our female offenders strategy, and I am sure that the Minister responsible, the Under-Secretary of State for Justice, my hon. Friend the Member for Charnwood (Edward Argar), will be very happy to discuss it further with my hon. Friend.
Rachel Reeves (Leeds West) (Lab)
Following on from the question asked by my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) about the experience of her constituent, 2.2 million people contacted by a bailiff in the past two years have experienced the bailiff pushing the legal limits—my hon. Friend’s constituent experienced that—including forced entry into a home, removing goods needed for work and refusing a reasonable payment plan. The 2014 reforms clearly are not working. Does the Minister not agree that it is time to have an independent bailiff regulator to get a grip on these abuses of justice?
Lucy Frazer
I know that the hon. Lady cares deeply about the matters under discussion and was quoted this morning in relation to them. I recently met Peter Tutton, who is head of policy at StepChange. He made the point about independent regulation and we will consider it in due course.
Bim Afolami (Hitchin and Harpenden) (Con)
What was the outcome of the review of the implementation of the bailiff reforms?
Lucy Frazer
We reviewed them recently and made a number of proposals to protect vulnerable people. Interestingly, although it criticises enforcement, the Citizens Advice report, which came out this morning, says that the changes we made in 2014 were largely positive.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
It is great to have an opportunity to highlight the important role of staff at Her Majesty’s Courts and Tribunals Service. I have recently visited a number of courts, including in Liverpool, Nottingham and Newcastle, and have been impressed by their commitment to justice. Our reforms, which will reduce staffing levels as they modernise the system and which are delivered by our staff, are improving, not diminishing access to justice.
Luke Pollard
Over the past few weeks I have been participating in the Industry and Parliament Trust’s superb courts and tribunals service parliamentary scheme. The National Audit Office warns that two thirds of the Department’s efficiencies have come from reducing staffing levels. Courts and tribunals staff do an amazing job, but there are simply not enough of them. Will the Minister agree to meet me so that I can pass on my first-hand experience of that excellent scheme, to inform Government policy?
Lucy Frazer
I would be very happy to meet the hon. Gentleman. I am very pleased that he took part in the scheme and that it is excellent. I encourage all other Members to take part in it, too.
Mrs Kemi Badenoch (Saffron Walden) (Con)
Will the Minister provide further detail on how the planned reforms will enable judges to be deployed more effectively?
Lucy Frazer
As my hon. Friend has highlighted, a very effective and efficient measure is in the process of going through Parliament and it will enable judges to be deployed very effectively, to sit in other jurisdictions and to be used in the best possible way.
Tom Brake (Carshalton and Wallington) (LD)
The Minister of State, Ministry of Justice (Rory Stewart)
Reducing reoffending is essentially about many things, but the three most important are making sure that someone has a job, that their addiction problems are addressed and that they have accommodation. We are addressing accommodation in Bristol, Pentonville and Leeds, through new wraparound support to help people into accommodation. We have a new education and employment strategy, and we are working with the NHS on addiction. It is possible to reduce reoffending but, as we learn internationally, it is never easy.
Tom Brake
May I commend to the Minister the report of the all-party parliamentary group on mental health, ably led by its chair, the hon. Member for Faversham and Mid Kent (Helen Whately)? It focuses on the issue of mental health and the support required for people who have left prison. Will the Minister say more about the work he does with the Department of Health and Social Care and the Ministry of Housing, Communities and Local Government to ensure that that support is available?
Rory Stewart
That is absolutely essential. More than half of our prisoners are currently presenting with mental health issues. When I shadowed a prison officer in Wormwood Scrubs last week, I had a long conversation with somebody who had attempted to kill themselves and had been hearing voices. That is not unusual. We have to work much more closely with the NHS. I am very pleased at the progress that the NHS is making, and I hope that future investment in the NHS and mental health will go directly into prisons.
Robert Neill (Bromley and Chislehurst) (Con)
The work being done by the Minister is very welcome, but will he also recollect that we need to start on preparation for release much earlier than the 12 or so weeks currently built into the contractual arrangements?
Rory Stewart
That is absolutely right. The key worker scheme that we are rolling out allows the prison officer to develop a relationship with an individual prisoner, to work with them on their sentence plan and education plan. One reason why it is so important is that it will help us to settle people into the community much earlier in their sentence.
Mike Amesbury (Weaver Vale) (Lab)
Between April and December 2017, National Careers Service advisers aided almost 4,000 prisoners into employment or non-OLASS—offender learning and skills service—learning. How many prisoners have been referred to employment or education since the Government scrapped those advisers in March? The Minister has rightly said that this is important for rehabilitation.
Rory Stewart
First, I pay tribute to the work of the National Careers Service, but there are many other providers working within the prison estate. The New Futures Network, which we are now rolling out, is doing things that were not done by the National Careers Service, in particular bringing more employers into prison to develop those relationships. There is a great deal we could learn, but we believe the current system will deliver better results and our employment figures for prisoners are looking very promising.
Tom Pursglove (Corby) (Con)
The work of Care after Combat with veterans on rehabilitation is making a real difference and meets the needs of the Department of Health and Social Care, the Ministry of Justice and the Ministry of Defence. Will the Minister congratulate Jim Davidson and his team on the remarkable work they are doing on this agenda, and help to take a lead across government to ensure that that wonderful charity can access the funding it needs to continue and expand this important work?
Rory Stewart
Care after Combat does terrific work. I was lucky enough to meet Jim Davidson and his team—indeed, I did so with a Defence Minister. The Under-Secretary of State for Justice, my hon. Friend the Member for Charnwood (Edward Argar), will meet Mr Davidson again shortly. It is a great example of the way a proper wraparound service that addresses mental health, accommodation and employment can really help to prevent reoffending.
Dan Carden (Liverpool, Walton) (Lab)
The Minister of State, Ministry of Justice (Rory Stewart)
The issues in HMP Liverpool were of course shocking. It was a very challenged prison and some challenges still remain, in particular around the issue of self-harm. Nevertheless, Governor Pia Sinha and her team have effected a real transformation. I hope the hon. Gentleman will recognise, from visiting Liverpool prison, that over 100 cells have now been fully refurbished. We have reduced the population and, above all, there is a sense of a much safer, more orderly prison. This is real progress in 11 months. We owe a huge debt of gratitude to Pia Sinha and her team.
Dan Carden
I join the Minister in those comments. In August, he announced the 10 prisons strategy to tackle violence and drugs in 10 of the worst prisons in the country. I am wondering why HMP Liverpool was not included in that project. As the Minister offered to resign should he not be able to reduce the levels of drugs and violence in those prisons, what promise will he make to HMP Liverpool?
Rory Stewart
I will resist the temptation to offer to resign on every single issue within my Department, but I repeat that I will resign if I do not turn around those 10 prisons by August. Why were those 10 prisons chosen? They largely focus on Yorkshire and London. There are many other challenged prisons in the system. Which is challenged day by day alternates a great deal—it depends on the particular population—but I do not think that anybody would suggest that prisons such as Wormwood Scrubs, Nottingham and Leeds, which are among the 10 prisons, are not very seriously challenged prisons.
David Hanson (Delyn) (Lab)
Rory Stewart
I am pleased to say that, at the most recent Budget—I do not wish to get involved in the next Budget and the spending review, on which I am confident—we got a great deal of investment into the prison estate, which makes a huge difference. The right hon. Gentleman is absolutely right to raise the issue of the future budget, but watch this space and see how our negotiation goes.
Richard Burgon (Leeds East) (Lab)
Privatised provision of maintenance at HMP Liverpool was to blame for a lot of the appalling conditions there. Despite that, the Government plan to run two new prisons for private profit. I do not expect the Government to agree with me that the privatisation of justice is wrong, but surely we can get a consensus that companies engaging in fraudulent activity should not be able to profit from the public purse. Will the Secretary of State today commit to G4S and Serco not being allowed to run those two new privately run prisons while they remain under a Serious Fraud Office investigation for ripping off the Ministry of Justice?
Rory Stewart
There is of course one important point here, which is that we need to make very sure that the people we work with are reliable and trustworthy. I absolutely agree on that. At the same time, we have to acknowledge that G4S is running some good prisons in places such as Parc and Liverpool. We need to get the balance right between making sure that these are reliable providers and making sure that they protect the public.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
We know they’re dodgy.
Mr Speaker
Order. The hon. Gentleman keeps chuntering from a sedentary position, “They’re dodgy”. He is entitled to his view. It is better if he expresses it on his feet than from his seat. He is now fast competing with the hon. Member for Kingston upon Hull East (Karl Turner), who has been a model of quiet this morning, but who, it has to be admitted, normally shouts from a sedentary position at the mildest provocation.
Helen Whately (Faversham and Mid Kent) (Con)
The Minister of State, Ministry of Justice (Rory Stewart)
Focusing on education is about getting employers into prisons and making sure that the education that we provide is relevant not just to employment, but to local employment. If there is a shortage, for example, of window cleaners in an area, it is about making sure that prisoners can get education in window cleaning. We have launched the New Futures Network, which helps to settle employers into employing prisoners. Getting this right will mean employers learning, as Timpson has in the past, that prisoners can be among an employer’s most loyal, dedicated employees, changing their lives and ultimately protecting the public.
Helen Whately
Women in East Sutton Park Prison in my constituency get to gain qualifications and work while they are in prison, but the nearest parole hostel is in Reading, so some have to quit their jobs after they leave prison. Could my hon. Friend look into this and see whether something can be done?
Rory Stewart
There is a big challenge about where prisons are located, as the whole House understands. It is often very helpful to have prisoners located near the place where they are eventually going to be settled. We are not able to do that in every case, but the Under-Secretary of State for Justice, my hon. Friend the Member for Charnwood (Edward Argar), is leading an investigation into new forms of women’s centres to provide rehabilitation and resettlement for exactly those women prisoners.
Mr Philip Hollobone (Kettering) (Con)
Will the Minister consider introducing a Queen’s award for offender rehabilitation to encourage employers to employ ex-offenders?
Rory Stewart
I think that is a very, very good idea. We need to recognise and honour employers who do this. A Queen’s award is a fantastic idea. I would like to give credit to my hon. Friend for coming up with it and would like his permission to pursue it.
Mr Speaker
Well, that really is a quick and easy win for the hon. Gentleman. I have a feeling that it will appear in the Kettering media ere long.
I call Matt Western—not here. Where is the chappie? What is happening this morning?
Nic Dakin (Scunthorpe) (Lab)
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
Whenever we close courts, there is of course always a public consultation, and we always carefully consider the consequences of any closure. However, in circumstances where, in 2016-17, 41% of our courts and tribunals used less than half of their available hearing capacity; where any money from the proceeds of sale is reinvested back into the Courts Service; and where we are reforming our courts with technology and bringing them up to date, we have to ask ourselves whether spending money on physical buildings is always the best use of money in our legal justice system.
Lucy Frazer
I am very interested in considering whether it is appropriate to do that in relation to a particular court. In general terms, it is interesting that although we have closed courts since 2012, the magistracy has diversified slightly, so we still have more women and more black and minority ethnic magistrates than we did in 2012. In relation to the wider justice system and other agencies, I am pleased to have visited recently a police station in Lewisham and a prison in Durham to see how our agencies can work better together, using technology as we progress into the next stage of justice.
Mr Speaker
We are running very late but I want to hear the voice of Cleethorpes. I call Martin Vickers.
Martin Vickers (Cleethorpes) (Con)
Thank you, Mr Speaker. Like Scunthorpe, there are reports that Grimsby magistrates court, which serves the Cleethorpes area, is under threat of closure, with the possibility of cases being transferred to Hull, which is a round trip of 66 miles. Will the Minister give an absolute assurance that Grimsby is not under threat?
Lucy Frazer
There is a consultation in relation to remand hearings at the moment, but I am happy to confirm that we are not considering closing Grimsby court.
Yasmin Qureshi (Bolton South East) (Lab)
The Conservative decision to cut 2,500 court staff has caused delays for victims and deterioration in the functioning of our courts, but that is just the start; the Conservatives plan to cut many more thousands of court staff in the next few years. Will the Minister commit today to halting those court staff cuts until this House has debated properly the court reform programme, which, to many, looks like a smokescreen for more austerity and which is being driven through without proper debate in this House and with the public?
Lucy Frazer
In the justice system, we are reforming the courts. We are investing £1 billion in that process. That is not austerity. On staff, we are modernising and bringing in technology to make our systems work more effectively. That is in the interests of victims, witnesses and defendants. We are making our court processes much more effective. There are some reductions in staff as a result of that, but we are increasing access to justice.
Chris Elmore (Ogmore) (Lab)
The Parliamentary Under-Secretary of State for Justice (Edward Argar)
Our female offender strategy, which was published in June, is clear that, while custody should always be an option when the severity of the crime justifies it, we wish to see fewer women sentenced to prison for short periods, and we set out a plan to deliver robust and effective alternatives to custody. Last week, the Secretary of State and I announced the allocation of the first tranche of funding, totalling £3.3 million, to organisations around the country doing great work to further drive forward the implementation of the strategy.
Chris Elmore
Today’s Guardian reports research by Dr Laura Abbott, a specialist midwife and senior lecturer at the University of Hertfordshire, who found that some female offenders give birth in prison cells and do not have access to midwives, even when babies are born prematurely or breech. I am sure the Minister agrees that that is a serious flaw in the medical treatment female offenders receive. If we are to get female offending right and improve outcomes, we must start with very basic maternity services.
Edward Argar
The hon. Gentleman is right to highlight the report by Dr Abbott referred to in The Guardian, which I read about this morning. I reassure him that our key focus is ensuring that all prisoners, female and other, have access to the medical services they need.
Mr Speaker
I say to the hon. Gentleman in all courtesy that it is almost always a great pleasure to listen to his mellifluous tones; however, there is a very strong convention in this place that a Member does not ask two questions in the substantive section. As soon as he started bobbing in hopeful expectation of being called a second time, the Clerk not only consulted his scholarly cranium to advise me that he should not be called, but swivelled round with a speed that would put to shame most professional athletes. My advice to the hon. Gentleman is that if he wants to get in again, he should try his luck at topical questions, to which we now come.
Karen Lee (Lincoln) (Lab)
The Lord Chancellor and Secretary of State for Justice (Mr David Gauke)
I am pleased to inform Parliament that, as the Under-Secretary of State for Justice, my hon. Friend the Member for Charnwood (Edward Argar), announced on Friday, we have awarded £3.3 million to 12 organisations to help to divert vulnerable women from crime and reduce reoffending. We know that a large number of female offenders are in extremely vulnerable positions. Many face issues with substance misuse and mental health problems, often as a result of repeated abuse and trauma. This is the first wave of funding from the £5 million investment in community provision announced in the female offender strategy, which sets out a range of measures aimed at shifting focus away from custody towards rehabilitative community services.
Karen Lee
My constituent Alison suffers economic domestic abuse from an ex-partner, but because of this Government’s cuts to legal aid she cannot afford legal representation to get the fresh start she needs. Will the Secretary of State meet me to discuss Alison’s situation and explain how she can navigate an underfunded legal system that limits access to justice?
David T. C. Davies (Monmouth) (Con)
The Parliamentary Under-Secretary of State for Justice (Edward Argar)
My hon. Friend raises a very important issue. It is important that all prisoners are treated with respect, but it is also vital that the safety of all prisoners is prioritised. Detailed procedures are in place in Prison Service instruction 17/2016 to do that in respect of transgender prisoners. The offences at New Hall are very serious and we are looking at how those rules were applied in that case. In the light of that, I can confirm that I continue to look carefully at the content and application of PSI 17/2016.
Mr Speaker
I do not know whether the hon. Member for Monmouth (David T. C. Davies) knows this yet, but I do know that he will shortly introduce an Adjournment debate on this matter. His views, and the views of others—which, in many cases, are different—will therefore be heard at rather greater length before very long.
Richard Burgon (Leeds East) (Lab)
The Prime Minister told her party conference that austerity was over, and the Chancellor said that austerity was finally coming to an end, but it seems that they did not have the Ministry of Justice in mind. The Treasury’s own figures—I have them here—show that justice budgets will be slashed by £300 million next year, and that is on top of hundreds of millions of pounds of cuts this year. Those cuts risk pushing justice from repeated crises to breaking point. Will the Secretary of State confirm that, as the Treasury says, justice budgts will indeed be cut by £300 million next year, and that these brutal cuts show that we cannot rely on the Conservatives to end austerity, injustice or anything else?
Mr Gauke
In the recent Budget, the Chancellor announced an extra £52 million for the MOJ to be spent in the course of this year. The figures to which the hon. Gentleman has referred are in the 2015 spending review. At the time of the 2017 general election, when the Labour party proposed spending that would increase Government debt by a trillion pounds, there was nothing there for the MOJ. Let us remember that next time the hon. Gentleman stands up and rants about spending on the MOJ.
Jeremy Lefroy (Stafford) (Con)
A firework factory explosion in my constituency killed two members of the public and there was a criminal conviction as a result. The widow of one of those people applied to the criminal injuries compensation scheme, but was refused. Will my hon. Friend look at the scope of the scheme to ensure that such injuries are included in future?
Edward Argar
I was very sorry to hear about the circumstances that my hon. Friend has outlined. As he will know, we have announced a review of the scope, affordability, sustainability and rules of the criminal injuries compensation scheme, but I shall of course be happy to meet him to discuss the specifics of that case if he wishes.
Karl Turner (Kingston upon Hull East) (Lab)
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
The MOJ is investing a significant amount in our justice system—£1 billion on reform. The hon. Gentleman makes a number statements. We are currently reviewing legal aid. As I mentioned earlier, we invested £9 million in criminal advocates’ fees in April, and we are in the middle of a consultation and have proposed a further investment of £15 million. We take our responsibility in relation to justice very seriously and are working hard to ensure that we deliver justice in this country.
Several hon. Members rose—
Mr Speaker
I will call a colleague who promises to ask a short, one-sentence question. If it is a long question, do not bother. Kemi Badenoch.
Mrs Kemi Badenoch (Saffron Walden) (Con)
Will the Minister update the House on the progress of the refurbishment of the prisons estate?
The Minister of State, Ministry of Justice (Rory Stewart)
As the Secretary of State has pointed out, £58 million more has come in the Budget. In individual prisons, we have now invested more than £16 million, which has been spent particularly on replacing windows and refurbishing cells. In Wormwood Scrubs, for example, as I have seen, the whole of the fourth landing on Delta wing has been refurbished. That is good progress, but there is more to do.
Vernon Coaker (Gedling) (Lab)
Mr Gauke
Since the introduction of the minimum custodial term in 2015, people who are caught for repeat possession of a knife are now more likely to go to prison. Recent statistics show that 83% of offenders received a custodial sentence, which is an increase from 68% in the year ending June 2015. It is also worth pointing out that average custodial lengths are also going up—from 7.1 months in the year ending June 2017, to 7.9 months in the year ending June 2018.
Vicky Ford (Chelmsford) (Con)
When a prisoner commits a serious violent offence in prison, will Ministers take action to ensure that prosecutions for such offences result in additions to the prisoner’s sentence, not concurrent sentences?
Mr Gauke
My hon. Friend raises an important point. Of course, the House recently passed legislation to increase sentences for violent crimes committed against prison officers and other emergency workers. It is right that we do so, and these matters need to be taken very seriously. It is important that the police, the Crown Prosecution Service and prison authorities work closely to ensure that we do not allow this activity to continue.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Rory Stewart
It is the responsibility of the police primarily to work on supporting the Prison Service. Our responsibility at the Ministry of Justice extends to what happens within the prison walls. It is true, of course, that with prisons—regardless of whether they are in north Wales or London—there is additional work, particularly on prosecution, but we do not feel that the imposition of Berwyn leads to the kind of financial pressures that would require a rethinking of the entire settlement.
Richard Graham (Gloucester) (Con)
I welcome the Lord Chancellor’s confirmation that the female offender strategy signals a shift from custody to rehabilitation. I am also grateful, as it will be, for the award to the Nelson Trust. Would the Minister like to come and see the astonishing work of the Nelson Trust in Gloucester to help former female offenders?
Kerry McCarthy (Bristol East) (Lab)
Mr Gauke
I am very happy to look at what is happening in Bristol. Clearly it is right that debt collection measures are proportionate, and the hon. Lady raises an important point about that. One of the best ways to ensure that living standards increase and debt levels do not rise is by making sure that we get more people into work, and we are succeeding in that.
Bob Blackman (Harrow East) (Con)
In order to discourage reoffending it is essential that ex-offenders have settled accommodation when they leave prison. What action is my right hon. Friend taking so that prison governors ensure that there is settled accommodation, as is required under the Homelessness Reduction Act 2017?
Mr Gauke
I pay tribute to my hon. Friend for his work on the Homelessness Reduction Act. It is right that local authorities and prison governors work closely together to make sure that we provide that accommodation. There are three factors that help to bring down reoffending: ensuring that an offender gets a job, has accommodation—a roof over their head—and maintains family ties. If we can pursue all those, we will help to bring down reoffending.
Rosie Cooper (West Lancashire) (Lab)
Mr Gauke
As I have already set out, we are seeing more people going to prison and custodial sentences are increasing for these offences following the change in the law. On the question of deterrence, this is in part about sentencing, and these are clearly serious offences, but there are other factors when it comes to the deterrent effect; it is not just about sentences. We have to bear that in mind as well.
Tim Loughton (East Worthing and Shoreham) (Con)
How do we have a “fair and more progressive” way to pay probate fees, as the Minister put it, when the fees for an estate worth £499,999 have risen from £215 to £750, and those for an estate worth £500,000—just £1 more —will rise to £2,500 for not a jot more work on behalf of the Government? How is that fair?
Lucy Frazer
My hon. Friend, as a former Justice Minister, will know that charging fees is an essential part of funding an effective and modern Courts and Tribunals Service and of ensuring justice. We listened carefully to the concerns that were raised in relation to our previous proposal, and we have significantly reduced the levels. This system will lift 25,000 estates out of paying probate fees at all.
Mr Virendra Sharma (Ealing, Southall) (Lab)
Several hon. Members rose—
Mr Speaker
I think the Chair of the Select Committee should have a second bite of the cherry. I call Mr Bob Neill.
Robert Neill (Bromley and Chislehurst) (Con)
I am very grateful, Mr Speaker. The Secretary of State has a particular responsibility to protect the interests of the judiciary. Recruitment to senior judicial office is a continuing problem, and there is a regular shortfall. He has indicated that he intends to consider seriously the recommendations of the Senior Salaries Review Body. When can we expect a response to this, given that a number of important posts are due to fall vacant?
Mr Gauke
My hon. Friend is right to highlight the shortage, particularly at the High Court, and it is right that we should look seriously at the proposals of the Senior Salaries Review Body. I am not going to put a date on when we will have completed that process, but it is important that when we do so, we get judicial recruitment on to a sustainable basis.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
Edward Argar
The proposals in the female offenders strategy, which I look forward to working across the House in implementing, are clear in that they are giving the judiciary alternative routes to custody. We are working on the implementation of those proposals now, and I would be happy to meet the hon. Lady to talk about her specific views on this, if she wishes to do so.
Neil O’Brien (Harborough) (Con)
Amazon and eBay are selling tiny mobile phones that are explicitly marketed for their ability to be smuggled into prisons. Does the Minister agree that they are abetting criminality and that they must stop doing this?
Rory Stewart
These beat-the-boss phones are designed explicitly to be concealed. We must crack down on the people who are selling them but, more than that, we have to get processes right in prison. This includes investing in more sniffer dogs to pick up the phones and in better scanners, and the staff having the morale, the confidence and the training to challenge prisoners, inspect cells and stop this stuff being smuggled in.
Daniel Zeichner (Cambridge) (Lab)
Mr Philip Hollobone (Kettering) (Con)
Given that we have 10,000 foreign national offenders in our prisons, with which new countries are we seeking to sign compulsory prisoner transfer agreements?
Laura Smith (Crewe and Nantwich) (Lab)
What conclusions did the Minister draw from any recent discussions with police and crime commissioners about their future role in our probation service?
Rory Stewart
Police and crime commissioners play a central role in the system, so we are consulting and redesigning it to make that role more influential. It will not be possible to devolve fully to the PCCs, but we will design the system so that the National Probation Service chief in each region works closely with the PCC to ensure that their views determine how the system is run.
Several hon. Members rose—
Mr Speaker
Order. I was awaiting advice on an important matter, so it was advantageous to have a slightly protracted exchange, but that should not be taken as a precedent for future sessions. Other Members who are standing have already asked a question, but the right hon. Member for North Norfolk (Norman Lamb) has not, so we will have one more question.
Norman Lamb (North Norfolk) (LD)
Thank you, Mr Speaker. Does the Secretary of State recognise that it is intolerable that employment and support allowance claimants at the Norwich tribunal are waiting 40 weeks—nine months—for their appeal hearing, and that personal independence payment claimants are waiting six months, particularly when 71% of those appeals are successful? What is he doing to change that?
Points of Order
(6 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Patrick Grady (Glasgow North) (SNP)
On a point of order, Mr Speaker. I would not normally make a point of order like this, but I wonder whether you have received any indication from a Department for International Development Minister about their intention to make a statement regarding the UK’s continued membership of UNESCO. Reports in the press today suggest that the Government are actively considering withdrawing from the organisation, which supports the culture of our cities, sites of historical interest, and academics in the UK and around the world—not least the UNESCO Chair in Refugee Integration at the University of Glasgow in my constituency. Surely such a major decision should be communicated to the House first, not leaked in the press, so what means are open to us to ensure that a Minister comes to the House to justify the decision—if indeed a decision has been made?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order and for his courtesy in giving me advance notice of it. Before I say anything else, I might add that we are of course in a UNESCO world heritage site ourselves, which is a source of some pride to the House. I have received no indication that the Secretary of State for International Development intends to make a statement on the matter, nor have I received any indication that any other Minister intends to do so, but the hon. Gentleman’s observations will have been heard loudly and clearly on the Treasury Bench. If there is a need for a statement, I trust that a Minister will volunteer it. In the absence of any such indication, the hon. Gentleman knows the devices and instruments that are available to him to try to secure parliamentary attention to the matter in question.
I had been expecting a point of order from another hon. Gentleman—
Mr Speaker
Ah. It is the hon. Gentleman’s choice; he should not feel obliged.
Jonathan Edwards
On a point of order, Mr Speaker. I am extremely grateful to you for accepting this point of order. On Second Reading of the Finance (No. 3) Bill yesterday, it was brought to my attention that a fellow Member of this House, rather than engaging with the substance of the issue being discussed, chose to make disparaging remarks about my accent. It is unfortunately not the first such incident in this place. There was a well-documented incident a few weeks ago involving a Scottish Member of Parliament. This House is meant to be representative of all the nations, accents and backgrounds of the British state, and such behaviour serves only to reinforce the perception of Westminster politics as privileged and exclusive. Mocking an accent is a serious matter, as it ultimately undermines the identity of an individual or a group. I seek your advice as to whether such behaviour—a Member mocking the accent of another Member of this House—is befitting of this place. May I also put it on record that I am extremely proud to be Welsh and of my accent?
Mr Speaker
I am very grateful to the hon. Gentleman for his point of order and, indeed, for his courtesy in giving me notice of it. He is absolutely right to raise the issue, not least in view of our recently expressed determination on how we treat everybody in this place—be that person a Member, a member of staff, somebody working with Members or someone present on the estate for other reasons.
Personal mockery of one another—Members come in all shapes and sizes, with a wide diversity of accents, national origins and ways of speaking—is wrong and, to many people, it constitutes a form of bullying. I am the last person to deprecate good humour in the way in which we interact. I may on occasion myself have caused offence by my extraordinarily ineffective mimicry, for which I apologise. I have been known to seek to imitate the Father of the House, the right hon. and learned Member for Rushcliffe (Mr Clarke), who has been a friend of mine for well over 20 years. As I say, my efforts at imitating him are usually pretty feeble, and they have always been undertaken in a friendly spirit, but mores change.
I think it is a safe rule of thumb that people should not mimic others. Let us debate the issues—play the ball, rather than the man or the woman. Very specifically, belittling mockery, which I have had occasion in the past to raise with the powers that be in relation to particular Members, is not acceptable. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) is absolutely right about this, and I hope it will not be necessary for the issue to be raised again, or for me to have to repeat what I have in good conscience just said to him and to the House.
By the way, I think that the hon. Gentleman has a magnificent accent, and I think the House is proud of him, because he is a very good example of someone who debates the issues but does not engage in personal attacks. I have known him for many years, and I have never heard him make a personal attack.
Gypsy and Traveller Communities (Housing, Planning and Education)
Tuesday 13th November 2018
(6 years, 1 month ago)
Commons ChamberRead Full debate Gypsy and Traveller Communities (Housing, Planning and Education) Bill 2017-19 View all Gypsy and Traveller Communities (Housing, Planning and Education) Bill 2017-19 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
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Andrew Selous (South West Bedfordshire) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision about periodical local authority reviews of the housing needs of Gypsy and Traveller communities; to make provision for the conversion of caravan sites into settled accommodation; to require local authorities to provide temporary caravan stopping sites where there is a demonstrated need; to create a criminal offence of unauthorised encampment; to make provision about the education of Gypsy and Traveller children; to require schools to have regard to Gypsy and Traveller culture and heritage in teaching; and for connected purposes.
I present this motion to Parliament today because current Traveller law, created with the best of intentions since the Caravan Sites Act 1968, is not working. My local authority has 40 Traveller sites. Settled residents of the area, Travellers themselves and, especially, their children and many others who live on Traveller sites have all had terrible experiences in recent years. The current policy of segregation has resulted in a failure of integration and poor community cohesion.
We are sent to this place to represent all our constituents, whatever their identity. I will set out the recent experiences of settled residents, Travellers and tenants living on Traveller sites. I want the best outcomes for every one of those groups, and I am convinced that the current legal framework under which we make local authorities work has completely failed.
A growing number of settled residents have recently written to me to say that they are now moving out of my area because they no longer feel safe, as they have been repeated victims of crime, including physical assault, theft from their home and from vehicles, especially vans, and trespass around the home. Others told BBC reporters following my third Adjournment debate on this issue in September 2018 that they wanted to leave the area because of those problems, but are not able to do so.
This disgraceful state of affairs should shame us all, and it should be a wake-up call for the Government to take action. Shopkeepers, businesses and pubs, as well as individuals and families, are regularly raising these concerns with me. Many local farmers and rural businesses live in constant fear, but that fear is also experienced by many people in neighbouring towns. Traveller ponies are often let loose over other people’s property, and levels of fly-tipping are extremely high.
I would not claim for one moment that such crimes are committed by one section of the community alone—of course they are not. There is good and bad in every group across our society, but I would not be honest if I did not point out the considerable police activity expended in relation to Traveller sites, a number of which are, in effect, ungoverned space where it is difficult to enforce the rule of law.
When I look at the standard of accommodation that many Travellers and their children are living in, I am truly shocked. In a large number of Traveller sites there is no proper sewerage system, with human excrement flowing into local ditches. Some sites do not even have proper water supplies and, in some cases, neighbouring settled residents have lost their supply of water when it has been illegally tapped into. I have repeatedly raised these issues with the Environment Agency, which has told me that it struggles to deal with them. It is also a disgrace that we tolerate such deplorable accommodation in one of the wealthiest countries in the world.
We know from the Prime Minister’s race disparity audit that Traveller children have the worst educational outcomes of any group in our society. I was so concerned about this that I asked the Children’s Commissioner for England to visit one of my local schools, which is attended by many Traveller children, and the commissioner wrote back to me after her visit to say that some children were not in school at all during the summer travelling season, which is when children sit exams that open up their life chances to all the opportunities they should have available to them. The commissioner also said that most of the Travellers talked about their children leaving school when they are 14 to 16 years old, and their educational outcomes bear witness to the fact that the home education they may or may not be provided with is not leading to good outcomes for those children. Education inclusion officers—I have some of the best—struggle to get Traveller children into school. There are also concerns about child welfare.
There is also a third group that we should remember: those who are sub-let to on these sites. Many have come to me reporting intimidation, violence, summary rent increases, and failures to provide tenancy agreements or to return deposits. There have also been not one but three incidents of modem slavery requiring massive police resource on one of my sites.
In order to deal with those issues, part 1 of the Bill would seek a unified planning system by amending the current periodical local authority reviews, which force councils to provide separate Traveller sites. Local authorities would have a duty to provide enough settled accommodation for everyone—Travellers and settled residents alike. Some 76% of Travellers already live in settled accommodation, and I have many positive examples of parents joining formal work and children attending school regularly when Travellers in my constituency have moved into settled accommodation. The measure would end the current policy of segregation, which pits community against community and leads to terrible outcomes for both settled residents and Travellers themselves.
Part 1 would also end the current situation in which local authorities that have some Traveller sites are then told by the Planning Inspectorate to build more and more sites, with a multiplier effect. My authority already has 40 Traveller sites, the vast majority of which are privately run—the authority has very little control over them—whereas other local authorities have no sites at all, which is fundamentally unfair.
Part 2 of the Bill would allow the conversion of current Traveller sites to settled accommodation to allow greater integration on existing sites. Part 3, having removed the requirement of local authorities to authorise permanent Traveller sites, would require local authorities, when there is a demonstrable need, to follow the successful policy of Sandwell Council in having temporary stopping sites, for which a deposit and rent would be paid. Such sites would facilitate Travellers in being able to travel.
Part 4 of the Bill would make unauthorised encampments a criminal offence, as is the case in Ireland, a country that is also subject to the European convention on human rights. Part 5 would ensure that schools would have regard to the underachievement of Traveller children, given that the race disparity audit shows that they have such bad educational outcomes. In the same way as we teach Black History Month in some of our schools, Gypsy culture and heritage would be taught as well.
Overall, the Bill would end the current, failed segregation policy, which causes so much misery to the communities affected, allow current sites to become properly integrated into existing communities, allow Travellers to travel on properly authorised and regulated sites, and take steps to deal with the huge levels of illiteracy and underachievement among Traveller children. It is a balanced, humane package that would end the misery that so many settled communities endure at the moment and deliver better outcomes for Travellers themselves.
The Government are examining the submissions to their consultation on unauthorised encampments at the moment. Although that significant issue absolutely needs to be addressed, it is only one part of a much wider issue of which the Government need to undertake a complete review. For too long, the Government have ignored the mounting evidence of the failure of their current policies; all I see is misery, criminality, mounting frustration and real anger at those in authority. As Members have pointed out in previous debates, there is not much point in getting elected to Parliament if it is not possible to do anything about these issues. Current policy contributes to the undermining of our democracy. I know that the inertia bias or the tyranny of the status quo is a significant influence over Governments of every composition, but we are elected to bring about policies that are truly compassionate, that genuinely work for all in our society, and that are based on the evidence of what is happening in our constituencies. I commend the Bill to the House.
Question put and agreed to.
Ordered,
That Andrew Selous, Sir David Amess, Tim Loughton, Steve Double, John Spellar, Priti Patel, Victoria Prentis, Mr Mark Francois, Mark Pawsey, Sir Robert Syms, Ruth George and Jim Shannon present the Bill.
Andrew Selous accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 23 November, and to be printed (Bill 285).
Dr Rosena Allin-Khan (Tooting) (Lab)
On a point of order, Mr Speaker. Have you received any indication from the Secretary of State for Foreign and Commonwealth Affairs of whether he plans to make an oral statement on the forced repatriation of Rohingya refugees to Myanmar in less than 48 hours’ time? Last week, 4,355 Rohingya refugees were placed on a list for return without their consent, with repatriations due to commence this Thursday. Reports today have highlighted how refugees are fleeing the camps or attempting suicide out of fear of returning to the horrors from which they fled one year ago. Having escaped incomprehensible brutality, and despite this move being condemned by the United Nations, they are still due to be returned on Thursday. As a leader in the international community, an oral statement from the Secretary of State would give Members the opportunity to seek clarity on the steps the Department intends to take regarding the ongoing safety of the Rohingya.
Mr Speaker
I am very grateful to the hon. Lady for raising that point of order. Of course I am extremely conscious that she has made a substantial personal and professional commitment to this issue. I know that she has seen at first hand scenes that greatly distressed her and would be the source of widespread sadness to people who similarly observed them. I have not received any indication that the Foreign Secretary plans to come to the House to make a statement on the matter. However, it would be perfectly open to him to make a statement in the House tomorrow. Having keenly listened to what the hon. Lady said, and being aware of the situation myself, I realise that it is a matter of considerable urgency if the House is to discuss it. So there may be a statement tomorrow, but in so far as the hon. Lady is seeking my advice, it is that she should not depend upon there being a statement tomorrow; she could always apply for an urgent question. If she wishes to put in such a question for tomorrow, I do not promise it will be granted, but I do promise that it will be very, very seriously considered.
Opposition Day
(6 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
EU Withdrawal Agreement: Legal Advice
(6 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Keir Starmer (Holborn and St Pancras) (Lab)
I beg to move,
That an humble Address be presented to Her Majesty, that she will be graciously pleased to give directions that the following papers be laid before Parliament: any legal advice in full, including that provided by the Attorney General, on the proposed withdrawal agreement on the terms of the UK’s departure from the European Union including the Northern Ireland backstop and framework for a future relationship between the UK and the European Union.
I will go into the details of the argument in just a moment, but may I first attempt to set out the context for today’s debate? Last December, the Government signed the joint report—the phase 1 agreement. It contained a number of important points, including, of course, in relation to Northern Ireland. I remind the House that the phase 1 agreement committed us, first, to maintaining the north-south co-operation provided by the Good Friday agreement; and, secondly, to avoiding a hard border, including any physical infrastructure or related checks and controls in Northern Ireland. Those, of course, are commitments that will apply “in all circumstances”. The idea is for a legally binding backstop to kick in
“In the absence of agreed solutions”.
That was the commitment made, and I know the Government are solemnly committed to it.
Nigel Dodds (Belfast North) (DUP)
Does the right hon. and learned Gentleman agree that that report also made a commitment, in paragraph 50, that there would be no differences between Northern Ireland and the rest of the United Kingdom, unless it was with the agreement of the devolved legislature in Northern Ireland?
Keir Starmer
It did. A number of other important commitments were made in that agreement, but I am focusing for the moment on the two that relate to the Northern Ireland border. Since then—and it has been 11 months—a number of options have been mooted to meet that commitment. First, the EU proposed a Northern Ireland- specific backstop earlier in the year. The Prime Minister was right to point out the threats that that posed to the UK. Then, the EU proposed a UK-wide backstop, certainly in so far as a customs arrangement or union is concerned, but that runs into the problem that the EU wants an insurance measure that applies until something equally robust replaces it, whereas the UK wants a provision for unilateral withdrawal—and so that got stuck. A third option has been proposed, which is a UK-wide backstop of some sort, with unilateral withdrawal but with a Northern Ireland-specific backstop as a backstop to the backstop. After 11 months, this is unresolved.
I am not going to stand here and pretend that any of this is easy, because it is not—these are complicated negotiations and very serious commitments—but I am sure I am not the only one in this House who feels as though we have lived and re-lived the same week over and over again in the past few months. We begin the week being told, “There is going to be a deal. Cabinet meetings are scheduled. Dates are due—votes are being held in Parliament; there will be emergency summits in Brussels.” By the end of the week we are told, “Next week is decision time.” We have been going around that circuit for some time, and this can go on for only so long. The important point is this: if a deal is reached, it is proposed that the backstop will be legally binding as part of the withdrawal agreement. So it is in the legally binding part of the agreement, not the political declaration. That is a very important provision. Under section 13 of the European Union (Withdrawal) Act 2018, this House will of course be asked to approve that withdrawal agreement, or not approve it, so there is a special statutory process for this House that everybody in this House is well aware of.
On 17 October, it was reported that the Attorney General had been asked by the Cabinet to provide a full assessment of the legal ramifications of the backstop. I pause here to identify and emphasise what it is that the Attorney General has been asked to do: to provide a full assessment of the legal ramifications of the backstop. That is important for later, when I shall get into questions of privilege and non-disclosure.
Lady Hermon (North Down) (Ind)
The right hon. and learned Gentleman will be well aware that the Belfast/Good Friday agreement has particular constitutional significance for Northern Ireland. Do he and his colleagues therefore agree that it is of the utmost importance that the people of Northern Ireland understand and have sight of the legal advice given to the Government about the impact on the Belfast/Good Friday agreement of any Brexit deal negotiated by the Government?
Keir Starmer
I do agree, and I shall develop the point about why we are making an exceptional ask today. In relation to everybody throughout the United Kingdom—
Sir Oliver Heald (North East Hertfordshire) (Con)
Will the right hon. and learned Gentleman give way?
Keir Starmer
I am just answering the previous intervention.
In relation to everybody throughout the United Kingdom, but particularly those in Northern Ireland, this is an important measure, as it is to all those who represent people in Northern Ireland.
Sir Oliver Heald
I am very grateful to the shadow Secretary of State for giving way. Does he not accept that with a live negotiation continuing, the Attorney General is giving legal advice about the situation, probably with several options? That is the sort of advice that is never revealed. It is of course different if we get to the point at which a decision has been made and that decision is being presented to the House, which is when the Government would always justify their legal position, but to give away the Attorney General’s legal advice while the negotiations are still continuing would be completely unacceptable.
Keir Starmer
I understand the point made by the right hon. and learned Gentleman—I had the privilege of working with him when I was Director of Public Prosecutions—and I shall address that directly, because I do understand the distinction between legal advice that is being given in real time and legal advice that may come to be given when a backstop is agreed and presented. [Interruption.] I will address that directly to make it absolutely clear what we are asking for, but I recognise the distinction that is being made and shall address it in due course—
Sir Desmond Swayne (New Forest West) (Con)
But even on the basis of that distinction—
Keir Starmer
Perhaps it is better if I actually get to the distinction between real-life legal advice given in real time and the sort of advice that may be presented when the deal is being put to Parliament. I will deal with it, I am well aware of it and I know the distinction between the two. If I duck it, I am sure to be challenged later. Let me make some progress.
The chronology is this: as I said, on 17 October the Attorney General was asked by the Cabinet to provide a full assessment of the legal ramifications of the backstop. A few weeks later, on 6 November, it was reported that the Cabinet had been provided with a summary of the Attorney General’s advice on the options for the backstop. It was also reported that the Secretary of State for Environment, Food and Rural Affairs wanted to see the advice in full. There is no doubt that there will be final legal advice if the Government are able to reach an agreement with the EU. It is that final advice that we want to see, and I shall develop precisely what I mean by that in just a moment.
Keir Starmer
Just like the Environment Secretary, we want to see it in full. Let me make it clear: we do recognise and understand the convention that Government legal advice should normally remain confidential, and that in ordinary circumstances it would not be appropriate to publish full advice, for good reason. But today I wish to make four points as to why in this case that convention should not apply. I shall summarise them and then develop them. The first is the unprecedented nature of the Brexit decision. It is both legally and technically complex and it is of huge importance across the United Kingdom. This is not just another vote.
Keir Starmer
As I will set out, successive Governments have waived the convention against non-disclosure in exceptional circumstances, and these are clearly exceptional circumstances. That is the first reason.
Secondly, the nature of the advice we are asking to see is general and different from other advice that the Law Officers give. That is important when we consider the convention on confidentiality and legal professional privilege.
Thirdly, although legal professional privilege can attach to legal advice given by the Law Officers, it operates differently in relation to their advice from how it operates in relation to the advice of other lawyers. I shall develop that point.
Fourthly, what cannot be allowed to happen is that the advice, or bits of it, are shown to some Members of Parliament outside Government and not others, in order to persuade them about the deal or the backstop. In other words, once the disclosure goes beyond the Government, or in this case the Cabinet—if it does; I am not suggesting that it has at this stage—it must then be made available to everybody.
Ms Angela Eagle (Wallasey) (Lab)
Will my right hon. and learned Friend give way?
Keir Starmer
Let me just make this point, because I have been challenged on it twice. It is a fair challenge and I need to meet it.
What we are calling for today is the publication of the final advice provided by the Attorney General to the Cabinet concerning the terms of any withdrawal agreement. The final advice. [Interruption.] I am making clear what we are asking for. I am at the Dispatch Box, I am on record, and I know precisely the importance of the words that I am now putting on record.
We are calling for, first, the publication of the final advice provided by the Attorney General to the Cabinet concerning the terms of any withdrawal agreement; secondly, that this should be made available to all MPs; and thirdly, that it should be made available after any withdrawal agreement is reached with the EU, but in good time to allow proper consideration before MPs are asked to vote on the deal. So, it is the final advice, it is available to every MP, and it is available at the point at which the final proposed withdrawal agreement that has been agreed with the EU is being put to this House for this House to consider.
Keir Starmer
I shall give way in just one minute. We are not calling for legal advice to be published in its draft form, or as it is given between now and then, or on a rolling basis.
Kevin Hollinrake
On a point of order, Mr Speaker. I seek clarification, because presumably we are going to be asked to vote on the motion on the Humble Address, which clearly says,
“that the following papers be laid before Parliament: any legal advice in full”.
It says “any legal advice”, yet the shadow Secretary of State is now defining the legal advice that he wants to present. What are we to vote on, Mr Speaker?
Mr Speaker
How the Government respond to a motion, if it is passed by the House, is a matter for the Government. I do not think we need to invest this with greater complexity than is warranted. The motion is clear and people can make their assessment of it. The shadow Secretary of State has made it clear that it is the final advice that he is seeking. It is perfectly possible for a Member, in the course of a speech, to develop an argument. By definition, that speech and the development of that argument will involve the use of a greater number of words than are contained in a simple motion. How the Government respond to the motion, if it is passed, is then in the first instance a matter for the Government. It is probably best if we now proceed with the debate—
Victoria Prentis
Further to that point of order, Mr Speaker. I apologise, but I remain slightly confused by the difference by the difference between what the shadow Secretary of State said and what is in the motion. I wonder whether you could help me. I would specifically like to know whether the motion relates to the legal advice being provided just to MPs or to its being made public and laid before Parliament, which is what it appears to say.
Mr Speaker
Order. I am extremely grateful to the hon. Lady. It might profit her and all Members of the House if they listen to the development of the argument in which the shadow Secretary of State is engaged. Frankly, it is not really very confusing at all. There is a motion, and Members can read the motion and form their own view of it. People can presumably listen to a speech and form their view of the speech. In fact, it is really so very simple that only an extraordinarily clever and sophisticated person could fail to grasp it.
Keir Starmer
Let me clarify the position, and then, as I indicated, I will give way. Just to be clear: it is the publication of the final advice provided by the Attorney General to the Cabinet concerning the terms of any withdrawal agreement; and that this be then made available to all MPs after any withdrawal agreement is reached with the EU and in good time before MPs are asked to vote on the deal. As for the way in which I put the case, when I last dealt with the Humble Address it was in relation to the impact assessments. I made a number of points from the Dispatch Box that were important to how that was handled afterwards and the agreement that we reached with the Government.
Ms Angela Eagle
I thank my right hon. and learned Friend for giving way. Does he agree that the unprecedented nature of the meaningful vote that this House will have in the event of a withdrawal agreement being made makes it imperative for those of us who have to make that decision to have access to the Attorney General’s best view and his legal advice as to what the implications of that decision are?
Keir Starmer
I completely agree. The first argument that I will develop is that this is an exceptional case. There is a convention against non-disclosure; I accept that. There are exceptions to it, and if ever there was an exceptional case it is this.
Mr Dominic Grieve (Beaconsfield) (Con)
I am most grateful to the right hon. and learned Gentleman for giving way. I have great sympathy with the anxieties he is expressing about the legal issues surrounding the potential backstop, but surely he would agree with me that the proper practice is for the Government, at the conclusion of negotiations, to publish a document setting out the Government’s position on the law, and, if I may say, if that differs from what the Attorney General has advised, I would expect the Attorney General to resign forthwith.
Keir Starmer
I will give way to the right hon. Lady, and then I will deal with both interventions.
Anna Soubry
I thank the right hon. and learned Gentleman for giving way. Can he help us with this? Is this a motion that was drafted by the Office of the Leader of the Opposition, which has subsequently been changed quite dramatically at the Dispatch Box? Is it an intervention, yet again, by the shadow Secretary of State to make good the failings of the leader of his party?
Keir Starmer
As the right hon. Lady knows, I have great respect for her, but I really do not think that engaging in that kind of intervention is helpful in this serious debate.
In relation to the intervention of the right hon. and learned Member for Beaconsfield (Mr Grieve) and the general point, my response is this: this issue of the disclosability of legal advice has been discussed very much in the past two or three weeks. As soon as I started calling for it, I made it very clear, when I was pressed as to what procedures we would use to try to obtain the advice, that I did not want to use any. I invited the Government to indicate that they would disclose the advice in full rather than have this fight in the House, and therefore I declined, three weeks ago, to say what procedure we would use. I wanted the ball to be in the Government’s court. I wanted the Government to see the good sense in putting the legal position before the House, for all the exceptional reasons that have been set out, and the Government have not responded in kind. That is why we are here today with this Humble Address.
Several hon. Members rose—
Keir Starmer
I will press on, because the first point that I need to make is that this is an exceptional case—in other words, there is a rule or a convention, and there is an exception to it. First, of course, there is the unique importance of the peace process in Northern Ireland, which plenty of Members have experienced at first hand. There are politicians throughout the House who played an important part in that process. I had the great privilege of working for the Northern Ireland Policing Board for five years in Northern Ireland, where I saw for myself the progress that had been made and the ramifications of the Good Friday agreement. That was of unique importance.
Allied to that is the central importance of the withdrawal agreement itself. That critical document will determine the future relationship between this country and the EU, and it will be legally binding not just in international law, but, it is proposed, in domestic law through the EU implementation Bill. Therefore, the withdrawal agreement will not just be discussed in this House but will become international law and part of our law—a hugely important, exceptional case.
There is, of course, the special procedure in the House, to which I have already alluded, now reflected in section 13 of the European Union (Withdrawal) Act 2018. It is very unusual for us to have that legislative process for a motion on the deal. As has been said, it is critical that Parliament is fully informed of the details and the Government’s thinking. I know that the Government recognise that. They know that all material and detail should be put before the House so that it can consider the withdrawal agreement and future relationship carefully. In the 2018 White Paper, “Legislating for the withdrawal agreement between the UK and EU”, the Government committed to providing “appropriate analysis” before the meaningful vote and went on to say that this information
“will ensure that Parliament can make an informed decision about the implications of our new relationship with the EU in all areas.”
I readily accept that that was in the context of requests for impact analyses, but the same point applies: if we are to make a decision of this importance, it must be an informed decision, and that means that the details in every respect must be put before the House.
There is, of course, precedent for the Government publishing legal advice—albeit, I accept, in different and limited forms. The first is the Iraq war. I remind the House that, prior to the invasion of Iraq in March 2003, the then Attorney General set out in a written question in the House of Lords his views of the legal basis for the use of force against Iraq. He did not publish the full advice before the Commons vote to approve military action, even though many individuals, including me, felt that he should have done so on an issue of that importance.
Importantly, though, in April 2005, the Government did publish the Attorney General’s final advice to the Cabinet on the legality of the war with Iraq. I think there is general agreement now—there is certainly a majority view—that the Attorney General should have provided in 2003 the full advice that he finally produced in 2005, because the decision was so important. Therefore, there are exceptions to the convention in exceptional circumstances.
There is further precedent of advice being made available in the case of other military conflicts. For example, in November 2015 the then Prime Minister set out his justification for military action, including the legal basis, before the House was asked to approve action in Syria. I accept that what he did not make available at that stage was the full advice, but it is a clear precedent for the publication of details before a vote. In other words, when the House is coming to an important moment and making a decision of this kind, the convention of non-disclosure is open to exceptions. This is clearly an exceptional case.
Secondly, the nature of this advice means that it is not the same as other advice that the Law Officers give. The advice here is about what the proposed provisions in a treaty mean, and that is different from the advice that the Law Officers often give. The right hon. and learned Member for North East Hertfordshire (Sir Oliver Heald) may recall that, when he was Solicitor General, he gave a lecture on this very topic and set out that the core function of the Law Officers in giving their usual advice was to ensure that the Government and the Ministers act lawfully. That advice is given, as I and many other people in this House know, on a regular basis, and there are reasons why confidentiality has to be attached to it. It is, by its nature, advice to the Government, or even to individuals, on whether they are acting lawfully. They may often be in a position where somebody wants to challenge them directly about the legality of what they are doing. In those circumstances, the rule of non-disclosure applies.
The advice that would be subject to this motion is a fundamentally different type of advice that the Cabinet is seeking, because it is about the general interpretation of an important provision in the treaty, I assume so that the Cabinet can be assured about how it would work. Equally, the House could be assured about how it would work.
Sir Oliver Heald
The point I am making to the right hon. and learned Gentleman is partly about the sequence of events. At the point where the Government have made an agreement and the matter is being put to the House, clearly the Government will need to be able to justify their legal position and what they believe the agreement means. But at this stage advice is being given, no doubt on a range of options, and often the question whether something is lawful is also a question of how arguable a particular position might be, what the various options are, and perhaps what the Solicitor General or Attorney General thinks is the best option legally. Those points should not be in the public domain. It is the final legal position that should be made clear.
Keir Starmer
I am grateful for that intervention, which builds on our previous exchange. I agree; this is in relation to the final advice about the interpretation of the proposed withdrawal agreement and in particular any backstop arrangement that may be put in place.
Vicky Ford (Chelmsford) (Con)
I am deeply unclear—are you asking for publication of the final advice or of any legal advice in full that has happened during the entire negotiation? [Interruption.] With due respect, I am being asked for my vote regarding the motion on the Order Paper. Are you asking for what is on the Order Paper, which is,
“any legal advice in full”—
that is, during the whole negotiation? Are you asking me to vote in—
Mr Speaker
Order. Will the hon. Lady please resume her seat? I understand that she is seeking clarification, but her intervention is too long and she keeps saying “you”. I am not asking for anything; that is quite important.
Mr Speaker
Well, I am making a judgment that the right hon. and learned Gentleman has heard the thrust of what the hon. Lady has said. I am not debating that point with her. If she wants to intervene again in due course, she can try to do so, but perhaps she would do me the courtesy of acknowledging that I do know how to chair in this place. I call Sir Keir Starmer.
Keir Starmer
No, I will not. I have barely started responding to the hon. Lady’s last intervention.
I have set out clearly three times—not for the sake of an intervention, where there is an element of deliberately not listening, but for the benefit of the House—precisely what we are asking for, and I do not think I could be any clearer.
Mr Jim Cunningham (Coventry South) (Lab)
Like a number of other Members, I was here when we got legal advice over the war in Iraq, so when the Government come back with their proposals—regardless of the wording of the motion on the Order Paper—I will want to know whether what we are doing is legal. That is the important point for me.
Keir Starmer
I am grateful for that intervention. I think that everybody across the House will want to know the legal ramifications of the decision that we are being asked to make, which is precisely why this advice should be disclosed at that stage.
I will now develop my third point, which is that legal professional privilege operates differently in relation to the advice of Law Officers than it does to other lawyers. That is an overlooked legal point, but an important one. Let me give the House two examples. First, legal professional privilege applies in ordinary civil litigation, but in general the Government waive that privilege when advice is central to the importance of the case and withholding it might prevent the court from reaching a conclusion that is fair and in the overall public interest. The ordinary rules of confidentiality that apply to all legal proceedings are waived as a matter of convention by the Government even when they are engaged in civil litigation, which is where such rules would be at their height, if they would prevent the court from reaching a conclusion that may not be fair or otherwise in the public interest. In other words, there is a public interest element that comes into the operation of privilege when it applies to the Government.
Keir Starmer
I see the Solicitor General agreeing; he knows this because he operates this way all the time in the advice that he provides.
The second example is that section 42 of the Freedom of Information Act 2000 provides an exemption for the disclosure of information from the Law Officers that attracts legal professional privilege, but it only applies if the public interest in withholding outweighs the public interest in disclosure. In other words, there is an overriding public interest test in relation to advice provided by the Law Officers that does not apply in the same way to lawyers in private litigation.
My fourth point is a very important one. Confidentiality and privilege can justify non-disclosure, but what the Government cannot do is waive the rule for some MPs and not for others. There are a number of important individuals and groups of MPs whom the Government may well find themselves wanting to persuade to back their deal. In order to do so, they might be tempted to share the advice with those individuals to persuade them of the legal ramifications of the backstop.
I know that the Democratic Unionist party in particular—and everybody who represents anybody in Northern Ireland—is very concerned about that for obvious reasons, and I think I am right in saying that its Members have called for the legal advice to be published. It is acutely important to those in Northern Ireland, but I say to the Government that it cannot be acceptable to share the advice, or bits of the advice, with some in this House and not others. Therefore, if there is any proposal or suggestion that it is to be or might be shared with individuals in relation to this vote, it cannot then not be shared with others, because the ring of confidentiality and privilege will have fallen away, and there could be no justification for it not being available to all.
Wayne David (Caerphilly) (Lab)
Is my right hon. and learned Friend aware of any precedent for such a differentiation?
Keir Starmer
No, I am not. I think I would be right in saying that if any advice was shared outside the ring of confidence, confidentiality would fall away as a basis for non-disclosure to the House. That must be right in principle; it cannot possibly be right that some in this House have seen bits or all of the advice and others have not.
Mr Grieve
I agree entirely with the right hon. and learned Gentleman. If the advice were prepared for the Cabinet in order for it to act collectively in taking its decisions, but it were then shared more widely outside, I agree entirely that it ought to be shared with every Member of this House at that point.
Keir Starmer
I am grateful for that intervention. I had the privilege of working with the right hon. and learned Gentleman when he was Attorney General, so I know how carefully he attended to his work.
Chris Bryant (Rhondda) (Lab)
Will my right hon. and learned Friend also be clear that this must extend to Parliamentary Private Secretaries, who are not members of the Government and are not bound in the same way under the ministerial code? Ministers tend to refer to bits and pieces of the legal advice, which is why it is important to see the whole of the legal advice in the round.
Keir Starmer
I am grateful for that intervention and agree on both fronts, particularly on summary or editing. In my time as a lawyer, I saw various attempts to edit or summarise legal advice. Even done with the best of intentions, it can lead to some misinterpretation of the advice that has been given.
There is a convention, but it is subject to exceptions and this is an exceptional case. There is good reason and good precedent for publishing this advice, and it is the right thing to do. I think there is growing cross-party support for that, and rather than fighting this unnecessary battle with Parliament, the Prime Minster should accept the motion and agree to publish the full advice.
The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Mr David Lidington)
May I first genuinely express my appreciation to the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) for the courteous and constructive way in which he has presented his case? As will become apparent to the House, I take issue with some of his arguments, but I hope that we can continue this debate in such a tone. As he said, we are dealing with issues of the most fundamental, political, constitutional and legal importance—not just to us, but more importantly to the people who send us here and whom we are here to represent.
As the right hon. and learned Gentleman acknowledged, the proposed withdrawal agreement—as it is referred to in today’s motion—has not been finalised. There is a live negotiation still ongoing in Brussels and the Government have consistently said that we will not provide a running commentary on our negotiating position. It is a cardinal principle of our system of government that Ministers and officials need to be able to prepare the British negotiating position in private. After all, the European Commission does not show its hand in negotiations—nor does it publish the legal advice underpinning its position on live negotiating issues—and I do not believe the Government of the United Kingdom should be expected to do so either.
I want to make it clear that I welcome the acknowledgement by the right hon. and learned Gentleman that what he seems to be seeking through this motion is perhaps not quite as all-embracing as a literal reading of the motion would lead the House to conclude. I did have some preliminary analysis done yesterday after we got sight of the Opposition’s motion. The first conclusion we came to is that if we took the wording of the motion literally, then, at a conservative estimate, we could be looking at upwards of 5,000 different pieces of documentation going back over the two years since the referendum and covering, of course, matters deriving not just from the Law Officers’ Department but from legal advisers in every Government Department in Whitehall.
However, I completely understand the concern that the right hon. and learned Gentleman has expressed, which is, I think, felt in all parts of the House by hon. Members of all political parties, that if and when—I hope when—a withdrawal agreement comes forward for debate in Parliament, right hon. and hon. Members should have access not only to an economic and political analysis of what we are being asked to approve or disapprove, but to detailed legal analysis of the meaning and the implications of the agreement.
Of course, one option is that the House or one of its Committees should itself commission its own independent legal advice separate from the Government’s, but I accept that it is a perfectly fair request to be made of Government that we set out the legal implications, as we see it, of the agreement, should we successfully conclude these negotiations. To avoid any risk of misunderstanding, I want to make it clear that when I talk about the agreement, I also refer to any protocols that might be attached to such an agreement.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
I am extremely grateful to my right hon. Friend for the tone that he is using in this debate. In his penultimate paragraph, it seemed that he came quite close to accepting the spirit of what the Opposition are saying. I am no lawyer, but the House is about to vote on this agreement, with Members carefully considering what may be one of the most important votes that we take in our political lifetime, in the light of what is in the best interests of their constituents and their country. Would it not assist the Government in securing the support of the House if, exceptionally and in a spirit of good will on this frankly unprecedented occasion, they released the Attorney General’s advice?
Mr Lidington
I will come on to the specific issue of formal advice from the Law Officers in due course slightly later in my speech, but I first want to conclude the point I was making about the Government’s approach. I hope that, as my right hon. Friend suggested, what I say will be read as an attempt to find some common ground across the House, even if there is not complete agreement.
Tom Brake (Carshalton and Wallington) (LD)
Can I ask the Minister something before he moves on? He referred earlier to the importance of providing not only some legal advice but economic analysis. Can he confirm that that economic analysis will include the merits or otherwise of our staying in the European Union?
Mr Lidington
If I may, I will answer the right hon. Gentleman while also responding to something that was said by the Opposition spokesman when he referred to the commitment that, yes, is there in the White Paper that the Government published earlier this year to provide Parliament with information and analysis ahead of the meaningful vote. I want to agree and accept on behalf of the Government that that information and analysis should include not only such things as impact assessments, which the Opposition spokesman mentioned, but a legal analysis as well.
In specific response to the right hon. Member for Carshalton and Wallington (Tom Brake), we certainly do intend to provide an economic analysis. The Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Fareham (Suella Braverman), will have heard what he has proposed one of the options should be.
Chris Bryant
I am glad that the Minister recognises, I think, that no Opposition Member is trying to drive a coach and horses through the fundamental principle that the Government should be able to take confidential legal opinion and advice during a live negotiation. None of us is seeking to transform that. However, we need to be able to understand in full all the parameters of why the Government, when they come forward with a deal, believe that it is going to be legally watertight and practicable.
Let me give just one example. The Government are saying at the moment that it is impossible to implement the Sanctions and Anti-Money Laundering Act 2018 until such time as we finish the transition period—in other words, not for another two years. Why on earth is that the Government’s legal position? When every other Government in Europe is able to implement their own sanctions, why cannot we do our own now? We would like to see the legal advice behind that.
Mr Lidington
That particular point is a matter to be followed up with the Ministers in charge of that particular legislation. However, I recall from my time at the Foreign and Commonwealth Office discussions with other European Governments about sanctions policy, and it was very clear that, I am afraid, contrary to what the hon. Gentleman said, a number of EU countries have, while remaining members of the European Union, given up the right to set their own policies on sanctions and rely on European Union instruments in order to give effect to those policies.
Chris Bryant
Unfortunately, though, when the Minister was a Minister in the Foreign Office, he himself, quite rightly, introduced sanctions on Iran that were not being implemented by the European Union, so we are perfectly free to introduce our own sanctions, and if they should be against Russia, we should do so now.
Mr Lidington
In the case of the United Kingdom, we have some sanctions, while members of the European Union, that are applied by virtue of European Union instruments, and there are others additional to those that we have had the freedom to apply on our own. It would probably be unwise of me to try to supplant Ministers in the Department for International Trade and get into the detail about this, but I am sure that the Secretary of State will be only too delighted to listen in detail to the hon. Gentleman’s concerns.
I want to return to the main point that the shadow Secretary of State put to me.
Mr Lidington
All right. Then, if the House will forgive me, I will try to make some progress, because there are some really important points that I want to respond to.
Owen Smith
In the light of the Minister’s very welcome admission that the Government are to publish economic analysis on the withdrawal agreement, and in the light of his failure to deny on Radio 4 this morning that Britain may well be worse off as a result of leaving the European Union, could he confirm that that analysis will measure whether we will be worse off leaving versus remaining in the European Union?
Mr Lidington
There will be considerable economic analysis. I do not know quite how great the hon. Gentleman’s appetite for the detail will be, but I am sure that in addition to what is provided by the Government, there will be multifarious pieces of advice and analysis from outside organisations.
I want to make it clear that the Government fully understand the historic nature of the decision that Parliament will be asked to take. Frankly, as someone who feels sometimes as if I have been living through these issues for a considerable number of years, I think that nothing would be served by coming out of the debates that we will have on the meaningful vote and then, if approved, the implementation Bill with people feeling that they were not in full possession of the arguments and the evidence in order to take a decision. When we come through this particular period in our history, we have—all of us, from our different political perspectives—to find a way of moving on, to establish this country’s new relationship with our neighbours, friends and allies in the EU27 and to get on with the debates and the work on domestic policy issues, which I certainly find are what people raise first on the doorstep, rather than the detail of article 50 procedures.
I want to give a commitment to the Opposition and the House. We will make available to all Members of the House, following the conclusion of negotiations and ahead of the meaningful vote, a full reasoned position statement laying out the Government’s political and legal position on the proposed withdrawal agreement, including any protocols that might be attached to it.
In addition, my right hon. and learned Friend the Attorney General has authorised me to confirm to the House this afternoon that he is ready to assist further by making an oral statement to the House and to take questions from Members in the normal way. I think that that would go a lot further than the Libya precedent cited by the right hon. and learned Member for Holborn and St Pancras.
Ministers are also very willing to engage in further discussions with colleagues of all political parties, including the Opposition spokesmen, about how best, in terms of both substance and timing, we can provide analysis in the form that Members will want and need in order to make an informed decision when that is presented to them.
Mr Lidington
I will just refer to the hon. Lady before I give way. I thought it was perfectly reasonable of her to ask for the analysis to include the impact that a possible Northern Ireland protocol might have on Belfast agreement commitments. I would certainly see that as the kind of thing that Ministers should be discussing with her and other colleagues from Northern Ireland, to ensure that we include everything they want.
Lady Hermon
I am grateful to the right hon. Gentleman for allowing me to intervene. Can he be absolutely clear in what he is saying to the people of Northern Ireland and confirm today that the people of Northern Ireland will not be kept in the dark by the British Government as to the exact legal consequences for the Belfast/Good Friday agreement of any negotiated deal by the British Government in good time, before we have to vote on this deal?
Mr Lidington
I am happy to give that assurance, and to say further that the relevant Ministers will be happy to talk to the hon. Lady and other Members representing Northern Ireland constituencies about exactly what form of analysis should be presented to the House, so that people in Northern Ireland can understand clearly both what is being proposed in any potential withdrawal agreement and what the legal, constitutional and practical implications of that might be.
Mr Grieve
I am most grateful to my right hon. Friend for giving way. I was very pleased to hear the assurances he just gave as to how the Government would proceed and how the Attorney General would play a part. Might my right hon. Friend also take on board the fact that, if we come to debate this matter on the Floor of the House, it has been a custom—although one that may have fallen by the wayside—for there to be a Law Officer sitting on the Treasury Bench during the debate who is able to respond to any queries of a legal nature that might arise?
Mr Lidington
My hon. and learned Friend the Solicitor General tells me that he looks forward to being there. It is not really for me to speak for the Law Officers, but I know that both the Solicitor General and the Attorney General are utterly committed to their parliamentary and governmental responsibilities.
Robert Courts (Witney) (Con)
I am grateful to the Minister for the commitment he just gave, but it sounded very similar to the compromise amendment that stands in my name on the Order Paper but has not been selected. Will he clarify that it is a full reasoned position statement laying out the Government’s political and legal position?
Mr Speaker
That was a cheeky endeavour on the part of the hon. Gentleman. We cannot debate the terms of an amendment that has not been selected, and the House will know that reasons are not given for non-selection; I had to make a judgment about how best the debate was served. It is rather cheeky, but I am sure that the Minister can deal with it dexterously.
Mr Lidington
I have been here long enough to know that one should accept rulings from the Chair, but I can say to my hon. Friend that our intention in Government is to provide the kind of analysis that I believe he has been seeking, but which also meets the requests and calls of Members of all shades of opinion on the European issue, not just in my party but in all parts of the House.
I want to put on the record that there have already been discussions through the usual channels on a cross-party basis about how the Government can facilitate the briefing of Members in every party represented in this House. I can give the House a further commitment that those contacts and conversations will continue.
Kevin Hollinrake
What my right hon. Friend is setting out seems to be more or less what the shadow Secretary of State was asking for. Can he confirm that, if we were called to vote on this motion, we would be voting on something entirely different, which would be to produce all legal advice in connection with this matter?
Mr Lidington
I always try to build bridges. I hope that what I have said is of some assurance to colleagues in all parts of the House. As I said earlier, I think that the motion as worded goes wider than what the right hon. and learned Member for Holborn and St Pancras, in all fairness to him, was clear about in his introductory speech.
Neil O'Brien
I am incredibly thankful to my right hon. Friend for his thoughtful tone in this debate and for the important reassurances he has given to the House, but could he give me one more reassurance, which is that he opposes in principle the thin end of the wedge on the Order Paper? I worked with brilliant civil servants for five years, and if they had to give any legal advice in full, written as if it were for publication every single time, their jobs would simply be impossible.
Mr Lidington
I want to come on to that point now. Where I part company with the Opposition motion is over the proposed disclosure of Law Officers’ formal advice. Everyone in the House will know that there is a strong long-lasting constitutional convention, followed by Governments of all political parties, that the opinions of the Law Officers remain confidential. That is reflected in the words of the ministerial code, which seeks to balance the Government’s twin duties of accountability to Parliament and maintaining confidentiality where necessary and appropriate. The code explicitly provides that
“Ministers should be as open as possible with Parliament and the public,”
but also expressly notes that the advice of Law Officers and even the fact that such advice has been sought or obtained
“must not be disclosed outside Government without their authority”—
that is, the authority of the Law Officers themselves.
Furthermore, “Erskine May” on page 447 specifically states that
“the opinions of the law officers of the Crown, being confidential, are not usually laid before Parliament, cited in debate or provided in evidence before a select committee, and their production has frequently been refused”.
“Erskine May” goes on to explain that
“The purpose of this convention is to enable the Government to obtain frank and full legal advice in confidence.”
Successive Governments have upheld that principle because the work of Government—Governments past, present and future, of different political persuasions—benefits from receiving such frank, confidential advice. The convention exists for very fundamental constitutional reasons, and to uphold the rule of law.
The right hon. and learned Member for Holborn and St Pancras referred to the entrenched tradition of privileged legal advice: in this country, we operate on the basis that advice given by a lawyer to his or her client, whether an individual, a corporation, the Government or a political party, should be treated as confidential. Although he cited exceptions to that, those exceptions were about litigation in court, rather than about the circumstances we are deciding here.
Sir Oliver Heald
Does my right hon. Friend accept that, in giving advice, the Law Officers are often looking at questions of a very sensitive nature with an international content, that it is not always about a case that is going to come before a court in the UK, and that often it would be very difficult for our country if all the advice and various options and what the Law Officers’ are saying about them had to be laid out?
Mr Lidington
My right hon. and learned Friend is spot on. The Law Officers’ advice goes beyond other forms of legal advice in its particular complexity, sensitivity and constitutional importance. For that reason, there is a high premium—higher even than that in respect of other forms of legal advice—on protecting that advice.
The Law Officers convention is also a facet of the important constitutional convention of collective Cabinet responsibility. Again, the ministerial code is clear on this. It says that all members of the Cabinet must publicly support collective decisions, but are able within Cabinet to debate and raise concerns privately, and the Law Officers’ contributions to those Cabinet discussions and decisions should similarly be protected, just as the contributions of other Cabinet Ministers or the minutes of Cabinet meetings themselves are protected. That ensures that the public debate is about the Government’s collective decision and the Government’s accountability to this House, rather than about internal processes.
Where the right hon. and learned Member for Holborn and St Pancras was correct was to say that, in the case of the Iraq war and Lord Goldsmith’s advice, an exception was made to this general rule. It is certainly the only one of that nature in modern times that I have been able to find so far. However, it was done some years—two years—after the event, following the appearance in the media of selected verbatim extracts from the advice. However, the key difference between that case and what we are debating this afternoon is that, in the Iraq case, the point at issue was not the legal implications of particular policy options, but whether the Government’s entire action in Iraq was or was not lawful. That was the point at issue then, which is why the then Government decided that it was right for them to make an exception to what is normally a very firm convention.
I believe that, if this convention were to be set aside, there would be an adverse impact on the quality of discussions within Government and of the Government’s collective decision making, which would not be in the interests of any Government of any political party. Whether by means of resolutions of the House or otherwise, if Law Officer advice is made public, future advice is likely to be less frank and candid than at present and less likely to be written down. That is not going to make for good government.
Joanna Cherry (Edinburgh South West) (SNP)
Is there not another aspect to this? A number of the Minister’s Cabinet colleagues have said that they did not properly understand the legal implications of what was agreed to last December. That is of course what has led to the dilemma in which the Government now find themselves about the backstop. If the Cabinet were not able to understand the legal advice last December, surely that means they will not understand it this time round and it is important that this House, which will take the ultimate decision, fully understands the legal implications of what is about to be agreed to, if indeed there is going to be an agreement.
Mr Lidington
I go along with the hon. and learned Lady this far: I have set out how the Government intend to discharge the commitment that we have given to making sure that Members in all parts of the House are fully informed and do understand the nature of the legal, as well as the economic and political, implications of the decision that we are facing. However, at no time in our Parliament’s history has any Government operated in an environment where legal advice is prepared for Ministers one week and then made public the next.
I have to be clear that this motion does go against the Law Officers convention, which Governments of all colours have defended. I hope, therefore, that, during this debate, the right hon. and learned Member for Holborn and St Pancras and his colleagues will reflect on the assurances I have sought to give to the House this afternoon; will take them in the spirit in which I, on behalf of the Government, certainly intend them; and will, having reflected on these matters, decide not to press their motion to a Division, but to go forward in a spirit of cross-party consensus, so that we can work out together how to present to the entire House the information and analysis that Members on all sides rightly expect to have available in order to make an informed decision on a political issue of this historic importance.
Peter Grant (Glenrothes) (SNP)
I am grateful for the chance to lead for the SNP in the debate. May I commend Opposition Front Benchers for allocating time to debate what is clearly a fundamentally important question? While I agree that the wording of the motion could have been tighter, the Government had to amend their own European Union (Withdrawal) Bill about 100 times in the Lords because the version that had passed through the Commons was such a mess that the finest legal minds in the country did not have a hope of making any sense of it.
I note with some encouragement the comments from the Minister, and it seems to me that there is a way of getting some kind of agreement. What is fundamentally important, however, is that when 650 of us take the most important decision we will ever take in our lives—short of a decision to go to war—every one of us is absolutely certain that we are armed with the best information and advice that can possibly be given.
Tom Tugendhat (Tonbridge and Malling) (Con)
Does the hon. Gentleman agree that there are other avenues for getting that advice? I have been approached by any number of legal charities, which have offered advice on many different things, but particularly on the EU. I know that Speaker’s counsel has been extremely generous in giving advice to Select Committee Chairs, and such advice is certainly available to me. I also know that many other people in the House can give advice—not least the Opposition spokesman, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), whose legal intellect is, frankly, second to none. The ability to acquire legal advice in this place is enormous, so it seems odd to force the Government to disclose their own advice, and therefore to undermine their own ability to pursue a case, when other avenues are available.
Peter Grant
I was about to say something very similar. Others in this House are much better qualified than me to decide what mechanism would best make sure that all Members of Parliament have possession of the facts, information and advice that we need. Whether that is achieved through the exact wording of the motion or a better way can be agreed in discussions elsewhere is not for me to rule on.
I come to this debate with one significant disadvantage compared with a lot of others who will take part in it, and with one significant advantage. The significant disadvantage I have is that I am not, have never been and never intend to be a lawyer. The significant advantage I have is that I am not, have never been and have no intention to be a lawyer. That means that I have no conflict of interest in saying that the law and lawyers are there to serve the public. Parliament and parliamentarians are here to serve the public, not the other way round. In this context, the law and lawyers are here to serve Parliament; Parliament is not here to serve the lawyers.
A number of really extraordinary concerns have been raised about what the motion, amended or otherwise, would mean if it was agreed. As far as I can see, this is not about abolishing the convention that legal advice is privileged or confidential, or about insisting that from now on every Attorney General who ever gives evidence has to do so on the assumption that it will be on the front page of the Daily Express by the next day. It is not about that at all. Simply reading the wording of the motion makes it perfectly clear that that is not what is being asked for.
I have heard concerns from Conservative Members. People are worried that they will be expected to vote for something but then, after they have done so, somebody else will interpret what their vote actually means. Some of us have been thinking about that since 23 June 2016, because that was exactly what happened to 33 million people after they cast their vote in the EU referendum. There is a significant danger that that is precisely what has been set up to happen to us when we are asked to vote on the Government’s deal or no deal. We will be asked to give a commitment to agreeing to something without really understanding what we are being asked to vote for. When something is so fundamentally important, that is simply not acceptable.
We should be under no illusions whatsoever about the consequences of our getting it wrong when we come to vote on a proposed deal. Whether we end up with a bad deal or no deal, the Government’s own analysis points to an economic hit that would be bigger than the crash of 2008, including a 9% reduction in economic growth; hundreds of thousands of jobs put at risk; £2,300 per year out of the pockets of every family in Scotland; the rights of millions of citizens called into question; and, as has been mentioned, the very real risk of undermining that precious but fragile peace that allows people on both sides of the Irish border to do what most of the rest of us take for granted—live normal lives. It would be a criminal dereliction of the duties entrusted to us if we willingly took that decision in the knowledge of the possible consequences and the fact that there was expert advice about what those consequences might be, but did not even ask what that advice said.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
My hon. Friend hits on a very important point about the best possible deal for Britain, or a good deal or whatever—I think I heard that on Radio 4 this morning. The reality is that whatever deal is good at the moment is the equivalent of having crashed the Rolls-Royce and heading down to the car shop to get the best second-hand car for Britain. What we have at the moment will not be repeated—things will be an awful lot worse—but the media are parroting a line and misleading the people. What happens under Brexit, deal or no deal, will be a lot worse than what we have today, and the chickens will come home to roost for this Government very quickly.
Peter Grant
I am grateful to my hon. Friend for his comments. My views are perfectly clear: I do not think there is such a thing as a Brexit deal that can come close to being as good a deal as we have just now. If that argument is not going to be rerun—if we are not going to get a chance to correct the mistakes that have been made in the past—so be it, but it is my responsibility, and the responsibility of all of us, to make sure that the Brexit that is agreed is the least damaging that is possible.
I know that some Government Members will be concerned—some have already raised concerns—about setting a dangerous precedent. May I remind them that the Government’s mantra for months has been that this is an unprecedented situation? In an unprecedented situation, precedents do not apply. How can what we do in response to an unprecedented situation set a precedent for what happens next, unless the Government propose to hit us with more unprecedented disasters through their own blundering incompetence?
Paul Masterton (East Renfrewshire) (Con)
Earlier this year, when the Lord Advocate was asked to release some of the legal advice that he gave to the Scottish Government, Mike Russell stood in the Scottish Parliament and said that that would not be done because it would set a very dangerous precedent, repeating much the same justification that we have heard today. Will the hon. Gentleman explain why those justifications made by the Scottish Government were acceptable, but when those same justifications are made by the UK Government, they are objectionable?
Peter Grant
As the hon. Gentleman knows perfectly well, the two situations are not only not identical but significantly different. Members of the Scottish Parliament were not about to be asked to cast a binding and final vote on the most important decision they would ever take, to take part in a vote that could have cost £2,300 for every family in the country, or to agree to something that would take 9% off the economy. They were not about to be asked to vote on anything, so the two situations are significantly different.
I am glad, however, that the hon. Gentleman raises the example of Scotland, because the “Scottish Ministerial Code” explicitly recognises that there will be exceptional circumstances when it is in the balance of public interest to disclose legal advice—either in its entirety or in part—that has been given to Ministers. Having raised the question of Scotland, the hon. Gentleman has actually destroyed one of the biggest arguments that those on his own side make. If the argument is—[Interruption.]
Mr Speaker
Order. There is a mildly disorderly atmosphere in the House. The hon. Gentleman who speaks from the Scottish National party Front Bench is, in my experience, unfailingly courteous and a mild-mannered fellow—[Interruption.] Order. I do not know what he says on Twitter. An hon. Member chunters from a sedentary position that the hon. Member for Glenrothes (Peter Grant) is not quite so obliging or courteous on Twitter. I do not waste my time listening to those ruminations, which are of no interest whatever to the Chair. I am simply saying that the hon. Gentleman ought to be able to develop his argument without excessive noise.
Peter Grant
Thank you, Mr Speaker. As I was saying, if the Government’s key argument is that it is unworkable to have a set of rules that allows legal advice to Ministers to be disclosed under exceptional circumstances, that is shown to be nonsense by the fact that in Scotland a different set of rules applies, and does so very effectively.
Related to the precedent argument is the claim that Parliament is not allowed to see Government legal advice under any circumstances. Why not? The reason given is simply that we are not allowed to. I would love someone on the Government Benches who believes in the absolute sovereignty of Parliament to explain why this supposedly absolutely sovereign Parliament is not allowed to do anything it likes, because that is the argument we often hear from them. I do not believe in the absolute sovereignty of Parliament, but for those who do, how can it be that there are any restrictions on what this absolutely sovereign Parliament can ask or instruct Ministers, who are accountable to it, to do on our behalf?
Peter Grant
I will not take any more interventions.
As has been said, the last time there was such a significant argument about disclosure to Parliament or providing it with Government legal advice was probably in the run-up to the decision to go to war in Iraq. SNP Members and others in the House argued then that Parliament should have sight of the Attorney General’s legal advice before being asked to vote in favour of war. The SNP was vindicated, as were others. We were shown to be right in asking for that advice to be disclosed, but tragically it was too late for it to make any difference. At the time, Parliament was in possession of the equivalent of what today’s non-selected amendment asks for—the Government’s version of advice, and of such parts of arguments, and of information and intelligence dossiers, that the Government wanted Parliament to see—but not of anything that did not suit the Government. Parliament was given incomplete and, frankly, biased and misleading advice, and it made a catastrophically bad decision as a result. If we are worried about precedent, we should think about the precedent that that might set. I do not believe there is any chance that MPs would have supported the invasion of Iraq if they had been in full possession of the facts that the Government had at the time.
Two days ago, I laid a wreath at a memorial to two young men from Glenrothes who I am convinced would be alive today if Parliament had had such advice at the time it took that decision. I am not suggesting, and nobody should suggest, that a bad decision on Brexit will lead directly to thousands of deaths, but it will lead to enormous financial hardship and huge social upheaval for millions of citizens—perhaps tens of millions—and it could set off an uncontrollable chain of events with the potential to result eventually in the deaths of innocent civilians in parts of these islands.
I want the House to be given the best possible opportunity to reach not the best Brexit decision, but the least worst Brexit decision. In order to do that, we need at our disposal all the advice and information that anybody has been able to provide. If parliamentary precedent or convention, or medieval practices, prevent us from doing our job properly, they have be to be either set aside or changed. The situation is too important to allow medieval procedures to get in the way of the right decision. The Government have already set aside the Sewel convention because we are in an unprecedented position. I suggest that the convention on the absolute confidentiality of legal advice has to be varied on this occasion to get us to the correct decision.
I want every MP who shares collective responsibility for the decision we will take in the near future to know that whether our constituents agree or disagree with our decision, each of us will have exercised our judgment in full possession of the facts. We will then be able to take the responsibility for the decisions that each of us will take. I urge the House to support the motion.
Mr Speaker
We are immensely grateful to the hon. Gentleman. The House will hear in a moment from Mr Dominic Grieve. I am not introducing a time limit at the start—I think there are colleagues from whom the House will want to hear—but we will have to keep it under review.
Mr Dominic Grieve (Beaconsfield) (Con)
Thank you, Mr Speaker. I shall endeavour not to repeat what has already been said and to be brief.
First, I entirely understand the motivation that has led the Opposition and the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) to bring this motion before the House. I have, on a personal level, every reason to be deeply concerned about the legal implications of any potential Brexit deal. We have heard enough in the last few weeks to give rise to even greater concern about how it will affect our independence, the integrity of the United Kingdom and our ability to hold it together, and the power of Government in future to take independent decisions and not be fettered by a subsequent treaty to the one we are going to be leaving on 29 March, as well as a concern that those issues may come to a conclusion without being fully understood when we have to vote on them.
I have no idea whether the so-called leaked memo that came out a short time ago was correct or not. If it did come from within the Government, it suggested, frankly, a quite disgraceful timetable by which, on the conclusion of negotiations, the House would be bulldozed into starting a five-day debate and coming to a decision without, on the face of it, even time, as it seemed to be set out, for the Government to set out their position, which I would normally expect to be in a White Paper and supported by the Government’s full legal evaluation of the treaty changes taking place. It is often forgotten that in leaving the EU we may be getting rid of the European Communities Act 1972, but when we come on to consider the EU withdrawal agreement Bill, if we get to that point, we are going to be enacting a piece of constitutional legislation of immense importance which has huge significance for United Kingdom citizens living in Northern Ireland and the potential to give rise to great public disquiet. For all those reasons, the terms of the agreement we hope we reach will be of the utmost importance. In a nutshell, there is a big difference between a break clause and a review clause, as any lawyer will know, and it will be of the utmost importance to understand on which side of the line any Northern Ireland backstop lies.
That said, I have to say to the right hon. and learned Member for Holborn and St Pancras that the course he has sought to press this afternoon is a mistaken one. This goes to the very heart of the relationship between the Law Officers and Government. They are, as he knows, there to stand rather aside from the day-to-day thrust of politics. Indeed, it is noticeable that in recent weeks I should think it has been a nightmare for the current Attorney General. If he goes to have pizza with the Leader of the House, it is immediately assumed that he is siding with one faction within Government rather than another, something that has to be avoided at all costs. He has to maintain his independence. Above all, he has to speak truth to power. That is the absolutely fundamental part of his job.
Anna Soubry
Does my right hon. and learned Friend agree that at best, given the great force with which he speaks as a former Attorney General, the motion should be defeated and we should not be voting for it? Does he share my concern that I have been told I should abstain on this matter? I do not know why. I suspect it is because there is no majority. If that is the case, who is running the country: this Government or the European Research Group?
Mr Grieve
I understand my right hon. Friend’s point. It will be a matter for the Government to determine how they wish to respond at the end of the debate. What I will seek to do now is to set out the reasons why I think the approach the Opposition have taken in the motion is mistaken, and I want to conclude as quickly as possible.
The Attorney General has to speak truth to power. In doing that, he must be in a position to produce legal advice to the Government which is there for their consumption. By demanding that it should be published, we are immediately beginning to skew that process, because it will be prepared with a view to publication. The right hon. and learned Member for Holborn and St Pancras made the point that there may be a difference between advice about what is lawful and a survey of what a treaty adds up to in terms of the obligations it places on this country. I would not be at all surprised if, for example, in the course of doing that the Attorney General might not have to respond to questions that have been transmitted to his office through Cabinet Ministers with queries which, although they may be irrelevant to his advice, might pertain to what had been said in the course of an international negotiation with a third party and therefore would be something we would not wish to put into the public domain. We cannot predict how such advice will be put together.
It seems to me that that precisely highlights why one should distinguish between advice that is produced by a Law Officer, subject to the usual rules of legal professional privilege—I agree with the right hon. and learned Gentleman that if it starts to be published partially it has to be shared with everybody; on that we all agree 100%—but that should be compartmentalised away from what we should be getting from the Government, which is a full statement of the Government’s legal analysis and their collective position. Doubtless, it will be heavily informed by the Law Officers’ advice. As I said, not entirely tongue in cheek, if the document setting out the Government’s legal position and their evaluation of the implications of the treaty is at variance with what the Attorney General has been saying to the Cabinet in informing them as to whether to accept the decision or not, I would not expect the Attorney General to still be in post by dusk that evening. It would be his clear duty to leave office immediately, because he could not continue to work as a Minister within the Government.
I therefore believe, particularly in the light of the assurances given by the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, my right hon. Friend the Member for Aylesbury (Mr Lidington), that in those circumstances and with the assurances he has provided, the House is now beginning to get the reassurance it requires that, first, this process, when it comes to a deal, will be taken in a measured and sensible way, and with a full opportunity for Members to consider the legal implications properly; and secondly, as I suggested, a Law Officer, who customarily can sit on the Government Benches and intervene in debate does so as we go through the Bill to clarify points that may need clarification. That used to be done all the time. I tried to restore it, but for various reasons it seemed to have gone out of fashion when I was in opposition. My hon. and learned Friend the Solicitor General has been pretty assiduous at doing that, and the Attorney General can do it too. That should lead to the House having all the information it needs without breaching a convention which in my view, for the very reasons I have just heard also apply for the Scottish Government, is really important. I do not think it is necessary or desirable that we should be considering such a breach for the purposes of reaching the proper conclusion to these very important debates.
I simply urge the House to consider carefully what has been said and express the hope that it will be possible to proceed in a way that does not breach what I think is a really fundamental and important convention. As I know from my time as Attorney General, it is of the utmost importance that the dialogue between the Law Officers and Government, whom they are there to serve, can be carried—
Sir Oliver Heald
I am grateful—of course, my right hon. and learned Friend and I worked together in the Law Offices. Does he agree that one thing that people may not be aware of is the very wide range of issues of a legal nature, many of them sensitive, that come before a Law Officer? The reason for the precedent and the convention that we do not put advice into the public domain is that it is very important that these sorts of pieces of advice, on confidential matters of a very wide-ranging nature, should be private to the Government.
Mr Grieve
Yes. The Government are the client and the relationship is between a client and a lawyer, providing completely disinterested, impartial advice to the best of their ability. Of course, on top of that, it is not holy writ either; it is advice. At the end of the day, if the House gets the Government’s statement of a legal position, it can indeed go to other lawyers, who may wish to pick it to pieces, and that, I am afraid, is often almost inevitable.
Angus Brendan MacNeil
Surely if the Government are the client, the client is at liberty to share the advice, and indeed the client should be sharing it, particularly in this circumstance.
Mr Grieve
I understand the hon. Gentleman’s point, and at the end of the day it is right to say that the Prime Minister can waive the privilege. It is open to a Government to decide to publish the legal advice, but, speaking as a past Law Officer, first I would be dissuading the Government from publishing legal advice for the reasons that I have just given, and secondly, that is a different thing from this House trying to coerce the Government into publishing legal advice. In my view, that undermines good governance and does not serve a purpose that is in the public interest, particularly in the light of the assurances that we now have as to how the Government will proceed, and which, I might add, I shall make it my business to try to ensure that the Government honour—and I am sure they will.
With that, as I promised I would a few moments ago, I bring my remarks to an end.
Hilary Benn (Leeds Central) (Lab)
This has been a very constructive and helpful debate, and it greatly illustrates the power of the House to concentrate the mind of the Government. I would say to the right hon. and learned Member for Beaconsfield (Mr Grieve), who has just sat down, that I do not think Parliament doing its job is coercing the Government; it is Parliament doing its job.
I accept, as my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) did at the beginning of his powerfully argued, forensic case, the argument that in general, Governments should not be required to release legal advice. It is a long-standing convention, contained, as we have heard, in the ministerial code, and the reasons for it are well understood. However, in this specific case, I would argue that we need to take other considerations into account. I note that the Minister quoted from “Erskine May”—he did so at some speed, but there was a word in there that I want to highlight. The sentence says:
“Therefore, the opinions of the law officers of the crown, being confidential, are not usually—
I emphasise “usually”—
“laid before Parliament, cited in debate or provided in evidence before a select committee”,
so “Erskine May” concedes that it is not an absolute bar.
The first consideration—this was the first reason that my right hon. and learned Friend the Member for Holborn and St Pancras set out—is the scale and importance of the decision that we are going to be asked to make. I do not think it is a subject of argument in the House that the withdrawal agreement that is currently being negotiated will have the most significant implications for the future of our economy, society, laws, and international obligations, including the Good Friday agreement. It will also have implications for the EU withdrawal agreement Bill, which the right hon. and learned Member for Beaconsfield referred to a moment ago. When we come to that Bill the House may well be told, “You need to agree to this clause, because that’s what we signed up to when we finalised the withdrawal agreement.” The current draft of the agreement—at least, the March version—is 129 pages; it is already very complex. If there is an agreement, the section on the obligations that we may take on in respect of the Northern Ireland backstop is likely to be even more complex still, judging by the reports that we read.
What seems to be going on at the moment is that the EU is insisting—this goes to the heart of some of the concerns that have been expressed about the withdrawal agreement—that the Northern Ireland-only backstop that it has proposed has to remain in the agreement, whereas the Government are arguing that the UK-wide customs backstop ought to be prioritised, so that the Northern Ireland-only version is never used. As we know, the problem with the UK-wide backstop is that in truth, if it ever comes to be used, it will have to remain in place. There are arguments about a time limit, which I know the Minister understands, and about one party unilaterally deciding to pull the plug on the backstop. Neither of those can possibly be the case, because whatever backstop is applied, including the UK-wide backstop, it will have to remain in place unless and until something else comes along that achieves the same outcome, which is to keep the Northern Ireland border as it is today.
The backstop may well need to be used—how many people in the House actually believe that between now and December 2020, all the issues relating to our future partnership will be negotiated successfully? I bet that almost no one does. Apart from former Government Ministers who expressed great confidence that it was possible, nobody thinks that it will be. Therefore, in the absence of an extension of the transitional period, whatever backstop is agreed in the next day or two, if that is what happens, will have to come into effect. That is why we read that the EU side is trying to get clear commitments from the UK about single market rules, employment legislation, state aid and most recently, fisheries.
The irony is that having initially rejected the idea of a UK-wide backstop because it feared that it would pre-empt the negotiations on the future relationship, the EU then said that it was willing to discuss it, but now it realises that it has to work through and tie down a whole load of things, precisely because the backstop might last for a long time and, in effect, become the future relationship pro tem. The argument we are making is that the House, along with businesses and everyone else affected, needs to understand in particular the bit of the agreement that we have not yet seen and what legal obligations we will be taking on. That is the first point.
The second point is the argument for transparency. It pains me to say this, but it is true: throughout the process thus far, there has been a general reluctance on the part of the Government to release the information that we need. I say that as the Chair of the Exiting the European Union Committee, because it is an issue on which the Committee has expressed strong views. I think I am right in saying that this is the third occasion on which a motion for a Humble Address has been used to try to persuade Ministers to give us information and advice relating to the Brexit process. I will not go over the history of the impact assessments that never were or the exit analyses that we did eventually get to see, but suffice it to say that the magnitude of the Government’s choices about their strategy for implementing the referendum decision has not been matched by careful analysis of the impact of those choices. It still seems extraordinary to me that at the time of the announcement that the UK would be leaving the customs union, the Government had not undertaken a formal quantitative assessment of the economic impact of doing so. That was what the former Secretary of State told us when he appeared before the Committee. It is welcome that the Government have made commitments, repeated from the Dispatch Box today, that we will get a full economic assessment if there is a deal, but I gently say that it is far too late in the process.
It is now absolutely clear that the Government’s red lines have boxed them in, which is why we are having this discussion about the Northern Ireland backstop, and were never tested for their implications before they were announced. We are living with the consequences. The reason why there is a problem with Northern Ireland is precisely that the Government said on the one hand, “We are leaving the customs union and the single market,” and then on the other hand, “Oh, by the way, we want to keep an open border between the Republic and Northern Ireland.” As the negotiators are discovering late into the night and into the early hours, it is really, really hard to square that circle.
My final point is that this decision is not just for the Cabinet. Clearly, whether the Cabinet agrees will be important, but it is a decision for Parliament. Parliament therefore needs all the information it requires to do its job, including the legal advice. Ministers have argued that the advice cannot be released, but the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office said that a statement of the legal position could be published. The right hon. and learned Member for Beaconsfield made the really important point that the two cannot, by definition, be different—they must be the same.
Mr Grieve
The thrust of the two must be the same, but it is possible for them to be worded differently, and for one to take account of all the factors the Attorney General was asked to take into consideration and the other to set out the Government’s collective position. That is the really important constitutional point. Provided that there is enough time for the statement to be properly considered, I think it ought to meet the need the Opposition have rightly raised.
Hilary Benn
I absolutely bow to the right hon. and learned Gentleman’s expertise. I was going to make a second point, which may offer Ministers some comfort: also by definition, the legal advice the motion seeks to have released has not yet been written, because we do not yet have a withdrawal agreement. Only when we have a withdrawal agreement will advice be written about what it means, to advise the Cabinet and, I hope, Parliament.
Angus Brendan MacNeil
The right hon. and learned Member for Beaconsfield (Mr Grieve) has just made clear why the legal advice, rather than a report on it, must be published. Remember Roger Casement, who said he was hanged on a comma—any change in wording seriously changes the meaning of the legal advice.
Hilary Benn
I take the hon. Gentleman’s point, but I think the House agrees that there could not be a difference between the two, for reasons that Government Members have clearly set out.
These are unique circumstances. It seems to me that, in his typically elegant way, the Minister went a long way towards meeting the requirements of the motion. If it is pressed to a vote, I hope he follows the logic of his own argument and supports it in the Division Lobby.
Victoria Prentis (Banbury) (Con)
It is a great pleasure to follow all the hon. Members who have spoken so far—they are certainly some of the gentlemen in this House I most admire. A great deal of sense has been talked in an extremely helpful tone.
I should in all conscience say at this point that, as a Treasury Solicitor lawyer from 1997, I provided legal advice to successive Governments, and from 2003, I provided legal advice on the publication of legal advice. Given my experience in the field, I would like to offer a few ideas that I hope will take us further towards an agreement. I hope the House is able to come to a consensus on this important point at this very important time, without pushing the matter to a vote, not least because we have moved a very long way during the debate from the terms of the motion.
The confidential nature of a lawyer’s advice to a client is very well established—I know you have practised in this field, Madam Deputy Speaker. Lawyers do not make decisions; they provide advice. Clients make decisions. The Attorney General is not a member of the Cabinet. He attends Cabinet, and in his very important position—I am not in any way trying to denigrate it—he provides legal advice. The Government can set out the legal position they have come to. The Attorney General can do no more than provide advice given his view. As hon. Members said, it is of course perfectly possible for every other lawyer, in the House and elsewhere, to provide an alternative view. Only the Government can set out their legal position.
Government lawyers, who I think I may be forgiven for saying are great people who do a marvellous job, sometimes against all the odds, have additional duties compared with other lawyers, as the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) said. They have a duty of candour. They are the guardians of the rule of law and the public interest. I am fully aware that they operate to the highest ethical standards. However, their advice is not of a different status from the advice of other lawyers. It is the same sort of advice, which is covered by legal professional privilege across the piece.
I could give examples of the way we provided legal advice on disclosure in the Iraq and Afghanistan litigation, although I am probably governed by the Official Secrets Act so I had better not make them too detailed. It is certainly true that, as Government lawyers, we went above and beyond—we took our duty of candour extremely seriously—but our advice in effect operated on the same plane and under the same system of confidentiality as that of other lawyers. The long-standing convention that we do not publish Government Legal Service advice or Attorney General’s advice is all part of that.
The separation of powers is at the absolute heart of our constitution. That is why we got so over-excited when a certain newspaper called judges “enemies of the people” last year. That was not acceptable. That is not the proper way for the law, the press and Parliament to operate. It is extremely important if we are to maintain our constitution, which we all profess to uphold so dearly, that we treat those different pillars extremely sensitively and keep them separate. Of course, the Government are often a party to litigation—the essence of my job was to defend them in the courts. The Government must not be hamstrung by having to provide their legal advice in public before litigation.
The Minister, who is no longer in his place, mentioned paragraph 2.13 of the ministerial code, which states:
“The fact that the Law Officers have advised or have not advised and the content of their advice must not be disclosed outside Government without their authority.”
I draw the House’s attention also to paragraph 2.11, which demonstrates that legal officers’ advice is special. Written legal officer opinions, unlike other ministerial papers, are of course made available to successive Administrations.
Sir William Cash (Stone) (Con)
Does my hon. Friend recall that that same ministerial code is clear that Law Officers’ advice is meant to be sought on all critical legal questions, but that was not done before the Chequers proposals, when the Cabinet did not have specific legal advice available to it? I raised that point with the Prime Minister in the Liaison Committee.
Victoria Prentis
As a humble Back Bencher, I unfortunately have no idea what legal advice was made available to the Cabinet. It might assist the House to know that the ministerial code is clear—I cannot remember in which section, but in the same area—that if a Law Officer gives legal advice to the Cabinet, the whole of that advice must be provided as an attachment for the whole Cabinet to read. It is very important in these difficult times that we ensure that the ministerial code is complied with in full.
I pay tribute to the previous Labour Government and to previous Conservative Governments, who worked hard to improve the transparency of the process of government. Great advances have been made, for example in the field of freedom of information. It is relevant that legal officers’ advice is exempted from the Freedom of Information Act under section 42. It is also true that it is ultimately up to the client to decide whether or not legal advice should be published. I am concerned for future Governments, and for future Government legal advisers: I want them to be able to provide the fullest, frankest and most honest advice possible.
Victoria Prentis
I would rather just finish, if I may.
I am very concerned about the wording of the motion, which is why I hope so much that we will be able to reach a consensus this afternoon. It is very broadly drafted. It refers to
“any legal advice in full, including that provided by the Attorney General”.
Keir Starmer
Let me deal with that point. As with the impact assessments, if legal advice were provided in the way that I set out earlier, the question would arise of whether the order, or the Humble Address, had been complied with. In addressing that question, of course anyone judging whether it had been complied with would take into account what had been said at the Dispatch Box, in exactly the same way as happened with the impact assessments. When those were provided, the question arose of whether there had been compliance with what had been asked for, and that was answered by reference to what had been said at the Dispatch Boxes about what was really being asked for. What I have said is important, because it will be me standing here having to make the case that the order has not been complied with. I could hardly stand here and complain about the provision of exactly what I had asked for.
Victoria Prentis
That is extremely helpful. I wonder whether the shadow Secretary of State will go one step further, and make it clear that he would like to import into the motion the point that he made about the information being supplied just to Members of Parliament, rather than laid before Parliament generally.
Keir Starmer
I have put on the record—three times, I think—that that is what I want and that is what we are seeking, and I absolutely stand by that. Not only could I not properly make the argument if that were the arrangement; I would not do so.
Victoria Prentis
I apologise for that slightly unusual exchange, Madam Deputy Speaker.
Angus Brendan MacNeil
A few seconds ago, the hon. Lady was arguing that if the legal advice were to be published and more widely known, that would somehow compromise future advice. Is she suggesting that the skills and the general professionalism of legal people would be compromised in future—that they would compromise themselves, and would not give the fullest, frankest and most honest advice because of what might have happened in the past, and would then become different legal people?
Victoria Prentis
That is absolutely what I am saying, and that is the basis of legal professional privilege. It is critical that lawyers are able to give a range of views to their clients about, for example, the chances of success in litigation, and the chances of success if various options are adopted. That is why legal professional privilege exists. It is absolutely critical for lawyers and their clients to be able to speak completely frankly to one another.
Let me end by echoing what was said by my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) about the ring of confidence. It is important, in my view, that the Attorney General’s advice is sacrosanct and should remain within the Cabinet, because if the ring of confidentiality is broken, that is a very serious matter. It is important for collective government and sensible decision-making that we maintain these conventions, even in difficult times—perhaps especially in difficult times.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. We have limited time, so I will have to impose a limit on speeches of seven minutes. I call Tom Brake.
Tom Brake (Carshalton and Wallington) (LD)
Thank you, Madam Deputy Speaker. I will keep within that limit.
Let me begin by thanking the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) for securing the debate, because this is an essential point that needed to be considered. I also wanted to put my thanks on record at the beginning because I may raise some matters in my short speech for which he may not thank me quite so much.
It is clearly important for us to get the legal advice published. A number of speeches today have made it clear that the scope set out in the motion might be much wider than was intended, and is therefore to be much more focused. That is welcome.
We are about to make what is potentially the single most important decision that we have made in 50 years, and I think that Members of Parliament are entitled to the greatest clarity on the issue, including legal clarity. At present, clarity is distinctly missing—and not just legal clarity but clarity for businesses, although that often means legal clarity. Let me give an example. A business in Bristol that I visited a couple of weeks ago is finding that its trade in the European Union is on a downward turn because the companies with which it works in the EU have no legal clarity on the position for rules of origin. They are saying, “Thank you. We have worked with you for 70 years and you are a fantastic business, but because we do not know how the rules of origin will apply to our products if we incorporate your components, we are simply going to take those components from somewhere else in the European Union.”
On that same visit, I met representatives of a language school. The legal clarity that they need relates to, for instance, whether children from the European Union with identity cards who currently go to Bristol to take language courses might be required to have passports in future. That would mean that children from Spain, France and Italy might instead go to European Union countries that do not require passports, such as Ireland, to learn English. Wherever we look, there are issues involving clarity.
I was pleased that the Minister confirmed that the Government would provide some economic analysis. He seemed to indicate that that would include analysis of what the Government’s deal would look like economically, compared with our staying in the European Union. I am absolutely confident that should the Government come forward with such economic analysis, it would confirm without a doubt that staying in the European Union would be better economically than any deal that the Prime Minister can produce. I think that not only Members of Parliament but everyone in the country is entitled to know that. If Parliament is pushing ahead with something that will be more economically damaging to us than staying in the European Union, people should know that, and they should be able to make decisions in the future about whom they will support when that is imposed on them.
Let me make a couple of points that the Opposition spokesman might wish to leave, including on the subject of legal clarity in respect of the Opposition’s position. I should be interested to know what legal advice they have received on whether Brexit is stoppable or unstoppable. The leader of the Labour party is on record as saying that it is unstoppable, but the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) has said today that it is stoppable. There might be some legal advice behind that, and I should be interested to know its source.
Labour has set six tests for Brexit. The second asks:
“Does it deliver the ‘exact same benefits’ as we currently have as members of the Single Market and Customs Union?”
The third asks:
“Does it ensure the fair management of migration in the interests of the economy and communities?”
I should be interested to know whether Labour Members have received any legal advice about the compatibility of those two tests. If they have, I suspect it is that the two are completely incompatible.
As for legal clarity from the Government, we need it not only in relation to legal advice concerning the withdrawal agreement. Along with the hon. and learned Member for Edinburgh South West (Joanna Cherry)—I do not know whether she will refer to this today—I seek clarity from the Government about the legal position in respect of the revocability of article 50. The Government have consistently failed to respond to that on the basis that it is a hypothetical question. I would say that for Members of Parliament, it is anything but a hypothetical question. For instance, if we get into a scenario in which we are going to crash out with no deal, the ability or otherwise to revoke article 50 is not a hypothetical question but, I would argue, a question of life or death in terms of what happens to the UK economy.
I welcome today’s debate on the specific point about providing legal advice to Members of Parliament without being selective regarding that provision, but there is a much wider issue about legal advice and the amount of information provided—whether on the economy or other aspects of Brexit—that we need to debate further. Members of Parliament need to be much better informed about these matters before we can possibly be in a position to take a sensible decision regarding whether to support any deal the Prime Minister comes forward with, or indeed to allow no deal to proceed, which is what the Prime Minister is threatening us with if we do not support her deal.
Alex Chalk (Cheltenham) (Con)
Like many Members, I am grateful to the Opposition for raising this matter. They are absolutely right to do so, because this is not a dry legal point but something that goes to the heart of the operation of government and, indeed, our constitution. I am also grateful to them for the tone that they have adopted, recognising as they have the sanctity of the principle in ordinary circumstances. The right hon. and learned Member for Holborn and St Pancras (Keir Starmer) has been careful to frame his argument by suggesting that these are exceptional circumstances, and it is to that point that I wish to direct my remarks.
At the risk of stating the obvious, the context for all this is Iraq, because there is no doubt that hon. Members do not want to fall into the same trap that I respectfully suggest the House fell into some years ago when it allowed itself to proceed with the invasion of Iraq without having in front of it the advice about the lawfulness of the decision to go to war. I venture to suggest that it is now near established that such advice should be provided in those cases—those near-exceptional circumstances—but it is important to consider in the context of this debate what the question is not about. It is not about the lawfulness of the decision to leave. Were it about that, I would respectfully agree, or expect to agree, with the point the right hon. and learned Gentleman makes, because in such circumstances, the case would be strong. Instead, however, this is about the legal implications of the withdrawal agreement, which is a completely different animal. It will be about the legal implications of the extent to which trade agreements may be struck, the quantum of financial payments, the rate at which they are to be paid, the scope of citizens’ rights, and the role, if any, of the ECJ. That is an important distinction to make.
If one accepts that point, one has to fall back on the question of whether there remains any public interest in legal professional privilege, and I think it is agreed across this House that there is. Preserving the confidentiality of Law Officers’ advice and their ability to give that advice, and to do so fully and frankly, remains important. This is about not only giving advice fully and frankly, but ensuring that the substance of that advice remains confidential. That is the case for good public interest reasons, because Law Officers might give advice about the legal merits of other parties’ positions in the run-up to reaching a concluded agreement, and such matters might be sensitive—and disadvantageous to the national interest, if I may put it in those terms.
I entirely and genuinely thank the Opposition for raising this matter—it is a one that should be considered. While I have listened with great care to the points that have been made, having heard the clarification from the Government, I feel able to vote against the Opposition’s Humble Address motion.
Sammy Wilson (East Antrim) (DUP)
First I must say that I am not addressing this issue as someone who is qualified in law, but I am addressing it as someone who represents a part of the United Kingdom that is most likely to be impacted by the agreement that is going to be made with the EU because of the insistence of putting Northern Ireland at the forefront in an attempt to tie the United Kingdom to the EU and its institutions for the long term.
Paul Girvan (South Antrim) (DUP)
Does my right hon. Friend agree that the people of Northern Ireland are looking, most importantly, for clarity in relation to our constitutional position? How might any backstop impact on our constitutional position within the United Kingdom? It is vitally important that we have clarity on that at this stage, and it would be good to know if that was included in any of the legal opinion the Government already have.
Sammy Wilson
I want to come on to that point.
I am sympathetic to the arguments the Government have put forward today: we cannot simply open the door and allow the legal advice given to Ministers to be published willy-nilly. However, to be fair to the Opposition spokesman, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), although the wording of the motion may be a bit broader, he has made clear the specific information he requires, and that information is not the legal advice that will currently be given to Ministers as they go into negotiations and thus compromise the negotiating position.
There is an irony here: no one has compromised the Government’s position more than the Government themselves in these negotiations. They willingly accepted the EU agenda and timetable and sequencing for the negotiations. They uncritically accepted the nonsense about a backstop for Northern Ireland—a problem that does not exist and which can be dealt with by the existing trade facilitation measures in place. And over the months we have had Ministers or Departments leaking economic reports that have been used against the Government in these negotiations. We should be careful about suggesting that somehow or other what is being requested today will undermine the Government’s position in the negotiations. What it will do is inform this House and the people who will be affected by the outcome of these negotiations of exactly how they will be affected. It is important that we have that information.
There are a number of reasons why I think this is an exceptional situation. As has been said, this is an important issue. It is important for the people of the United Kingdom as a whole, because there is the prospect of a UK-wide backstop, which would keep us in the customs union and tied to the common rulebook, or tied to the single market rules. It is also important for the people of Northern Ireland, as they would find themselves hived off from the rest of the United Kingdom and kept as some kind of vassal state or annexe by the EU—we would not even have the ability to decide what regulations applied to trade and the production of goods in our part of the United Kingdom.
Secondly, this will all be tied up in a legal agreement. Therefore, if there is any deviation from that, there will be reference back to the agreement made, so it is important that we understand what exactly has been legally signed up to, especially as the EU tends to nit-pick legally on all of these things. It is important that we know exactly what the issues are.
Thirdly, the Government have already been ambiguous about what the backstop might mean. We have been told that it is only an insurance policy and it will never be used, that it will be temporary and will apply only for a certain period of time, and that it will be replaced by a free trade arrangement. But what we need to know is, if it is going to be temporary, who will make the decision at the end of the day as to whether or not it is terminated? What will its scope be? Who will adjudicate on it—who will be the adjudicators of that agreement? And if it is only an insurance policy, in what circumstances will that insurance policy be applied? As has already been pointed out, as some Cabinet Ministers say that when this was presented to them in December of last year what it meant was unclear, and it was not even in a legal form at that stage, it is important that the legal implications of the agreement are spelled out for us.
The arguments that have been made today are clear. I share the concerns of the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), in that I do not want to see a situation in which some Members have the legal position explained to them and others do not. We have not sought that. If we are going to make a decision on this most important issue, we should know the full implications and they should be spelled out to the public and to the people of Northern Ireland. The people of the United Kingdom should know whether the Government are binding them to an arrangement it would be impossible to get out of, collectively or just for the people of Northern Ireland. They need to know what the scope of that would be, and what the lawyers are saying about it.
For those reasons, we will be supporting the motion if it goes to a vote tonight. If the Government have decided that they will make the legal information available, that will be a step in the right direction. I suspect, given what we are hearing from Europe about the shape of the agreement, that that would expose just how damaging it would be to the United Kingdom.
Vicky Ford (Chelmsford) (Con)
It is an honour to speak in this debate. It is also quite challenging, because we have heard from a number of people with deep legal experience, many of whom are hon. and learned Friends, and I am not a lawyer. However, I speak as someone who has a vast amount of negotiating experience. I spent eight years in the European Parliament leading international negotiations—in fact, I participated in more European negotiations than any other Member of that Parliament at that time—on top of 15 years of commercial negotiations, many of which were also international.
As a negotiator, I know how important it is to be able to seek legal advice as one goes along, not just on the final deal but on the deal as it develops. Because of that legal advice, we sometimes change our strategy, and the nuances can have an impact on the final deal. As a negotiator, I know it is important to be able to play our cards close to our chest. Sometimes, if we are forced to disclose our position too early, it can tie us down and remove negotiating options.
It is therefore extremely important that we do not force those on our side of the negotiating table to disclose issues that those on the other side are not having to disclose. These are the most complex negotiations for a generation, and I personally think it is deeply impressive that all parties are still talking to one another, given how complicated the negotiations are. We should not force one side to disclose what the other side does not have to disclose.
The second reason that I am concerned about the motion is that I have spoken to lawyers about the precedent that this could set in other situations. Many Members of Parliament are lawyers, and we know that people go to lawyers for advice on all sorts of things—family law, property law—and that they do that in confidence. It is really important that that confidence should not be broken. We should not force a lawyer to breach that confidence, because that would set an incredibly difficult precedent for other areas.
Joanna Cherry
Is the hon. Lady aware that the privilege attaches to the client and not to the lawyer? It is for the client to decide whether to waive the privilege. We are not asking the lawyer to waive the privilege; we are asking the Government—the client—to do so. That is a crucial distinction.
Vicky Ford
Let me take this further, and move on to the issue of transparency. I believe that transparency is enormously important, and it is important that all Members should understand the full legal ramifications of the deal that is negotiated before we hold our vote. After all, the relationship between the EU and the UK is vital to all of us, and there are highly sensitive areas involved, especially for Northern Ireland, a place that is dear to my heart. That is why it has been extremely helpful that the Government have today clarified that, before we vote, there will be a full and reasoned position on the legal situation and especially on the impact for the Good Friday agreement and the commitments to Northern Ireland. That is absolutely right. Furthermore, I am pretty convinced that before we get a vote, every other QC in the country will have emailed each of our inboxes, and that the noble Law Lords down in the other place will have given their most eminent thoughts throughout the night, which we will be able to read in Hansard. I have no doubt that we will have a vast amount of legal opinion at our fingertips.
Although I support the call for transparency, the final reason that I will not vote for the motion today is that it is incredibly uncertain and unclear. In my experience of international negotiations, and indeed all negotiations, the devil is in the detail. British negotiators have a strong reputation for getting the detail right. I thank the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) for clarifying some of the issues in the motion during his speech, but there are at least four uncertain areas in it. First, is the motion calling only for the final legal advice, or for “any legal advice”, as it states? Secondly, is it calling for the advice on the final withdrawal agreement, as some people have suggested, or for the advice on the “proposed withdrawal agreement”, which is what it says in the motion? If it is the latter, that would include all the advice given during the negotiations. That is what the motion is asking for, and it is important that we should keep our reputation for detail strong.
The third failure in the motion is that it is unclear whether it is calling for all the papers to be “laid before Parliament”, which is what it says, or for them to be made available to MPs, which is what I have heard the Opposition say they would now accept. That would be similar to the process by which we were able to access the impact assessments.
The fourth problem I have with the motion is that it is not clear when the advice would need to be made public. Would it be during the negotiations, or now, or after the negotiations have been finalised? I believe that the Opposition spokesman tried to clarify those points from the Dispatch Box, but that is not good enough. This is a serious vote on a serious issue relating to the most crucial negotiations of our lifetime, and this type of motion is simply not good enough.
Owen Smith (Pontypridd) (Lab)
Many Members contributing to the debate today have commented on its comradely and constructive tone, and I do likewise. In opening the debate, the Minister made his usual elegant and courteous attempts to assuage fears and reassure the House about the Government’s intention to be clear about the legal and political basis on which we will proceed towards the Brexit decision in this place. To some extent, however, the tone of the debate has belied the gravity of the issues that we are debating. In my view, he did not do enough to assuage the concern that the Labour Front-Bench team and Labour Members rightly have. I therefore hope that our Front Benchers will push the motion to a vote. I believe that it would be a cowardly act by the Government if they were to sit on their hands and abstain. That would be an abdication of their responsibility to stand by what they have said in this debate about the sanctity of the principle of impartial, confidentially provided legal advice. I think it would be hard for them to reconcile that with abstaining.
There is a big difference between the Minister’s promise to offer the Government’s full legal and political position on their view of the deal and the provision that my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) has asked for, which is the full and final legal advice given to the Government prior to making that determination on the deal. The gap between those two things is so significant that a skilful rider such as the Solicitor General could ride a coach and horses through it. We have all seen legal advice that has been redacted, provided with omissions, or subject to the Government’s blue pencil, and that is what I fear we will see this time around. This is about a hugely important political decision that the Government are trying to sell to both sides of the House and to the country, so the Government will therefore seek to put the best possible gloss and light on what comes back from the negotiations in Brussels. However, if the decision is to be in keeping with what many people feel that Brexit was about—taking back control for this country and strengthening the sovereignty of this place—it would be inexplicable to many that parliamentarians are not being provided with the full, unredacted, unexpurgated legal basis on which the decisions are being taken.
I do not want to repeat all the points that my right hon. and learned Friend the Member for Holborn and St Pancras made from the Front Bench, but I will row in behind him in saying that the fundamental argument for publication is based on accepting that legal advice is ordinarily and conventionally provided to the Government in confidence. Indeed, I accepted that when I was an adviser to the last Labour Government, working alongside the right hon. Member for Aylesbury (Mr Lidington) on the peace process in Northern Ireland. However, we are not living through a normal set of circumstances. This is a set of circumstances in which the right hon. Gentleman, the Deputy Prime Minister, could appear on the “Today” programme this morning and refuse to refute the charge that the decision that he and other Ministers are taking will make our country poorer. It is an extraordinary set of circumstances that we have a Government who are knowingly pursuing a policy that, according to their own analysis, will make our people and our country poorer.
It is also absolutely extraordinary that we are jeopardising the Good Friday agreement and the peace process that it secured. The right hon. Member for East Antrim (Sammy Wilson) was absolutely right to state that the people of Northern Ireland deserve to know, and must know, the exact basis on which this decision is being taken and what the legal ramifications might be down the track. Nothing less than the constitutional integrity of the United Kingdom is in question here. As many Members have said, it is not a question of the lawfulness of the decision that the Government are taking, as was the case with Iraq, but it is a question of the constitutional make-up and integrity of the United Kingdom. This seems to me, and I suspect to many in this country, an extremely serious and extraordinary proposition—not a normal policy outcome, but one that all of us ought to view as extraordinary, and therefore one around which we must have maximum transparency.
My final point, which my right hon. and learned Friend the Member for Holborn and St Pancras did not make, is about the context in which this decision is being taken. Brexit was born amid a swirl of lies and half-truths, and one of the consequences of the Brexit decision and of the way the campaign was prosecuted—arguably on both sides, but in particular on the leave side—has been a debasing of our democracy and a fundamental erosion of faith in our politics and our democracy. The end point or final decision has the capacity either to compound those problems or to start to solve some of them and to heal some of the broken faith in our democracy. The Government will fundamentally undermine their ability to do that—to bring a decision to the country in good faith that people can believe in and coalesce around, and that can potentially heal some of the divisions in our country—if there are fundamental questions about the manner in which the information is provided. It must be clear to everybody in this place and outside.
If the Government truly want to build bridges between people in this country, there must be maximum transparency, and that includes taking the unusual, unprecedented step of legislating to allow the full legal advice to be published.
Robert Courts (Witney) (Con)
It is a great honour to say a few brief words in this debate, in which I have been preceded by so many hon. and learned Members with much greater experience than I. At the outset, I associate myself with the comments of my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve), who is no longer in his place, about good governance. My objection to this motion is precisely that—the danger it would cause to good governance—and there is a much better way to provide the clarity that we all want.
I have the most enormous professional respect for the shadow Secretary of State, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), who was Director of Public Prosecutions when I was at the Bar. However, I say with the greatest respect to him that this motion is misconceived for several reasons, which I will briefly describe.
I am grateful to the right hon. and learned Gentleman for clarifying exactly what the Opposition are asking for, but it is unfortunate that the wording of the motion—
“any legal advice in full, including that provided by the Attorney General”—
is now being slimmed down to “the advice provided by the Attorney General in the eventuality of a deal.” It is unfortunate that what is now being asked for is so different from what is on the Order Paper, but he has made his clarification, so I will not detain the House any further on that.
As the right hon. and learned Gentleman will be fully aware from his time at the Bar, as will any lawyer, the reason why I object to the suggestion that the Government ought to publish any legal advice that they are given is that any sound legal advice will by its nature consider the strengths and weaknesses of the client’s case, as well as the strengths and weaknesses of the opponent’s case. That is what any lawyer would do, and it is essential that any document is confidential, because to disclose it would be tantamount to showing the other side one’s view of the weaknesses of one’s case, which would be damaging in this context.
It is a shame that the right hon. Member for Leeds Central (Hilary Benn) has just left his place, because I respectfully disagree with his point that the Government’s suggestion of providing a position statement is essentially the same as providing the advice. It is not—the advice would consider both sides of the argument, whereas the position statement, which I entirely support, will lay out the Government’s case and the reasons for it so that that can be scrutinised. That is not the same as breaching the confidentiality that any lawyer would expect when advising their client.
There are good reasons why such advice ought not to be disclosed. I accept the exceptionality argument that legal advice has been and can be disclosed in exceptional circumstances, but it would set an unwelcome precedent in this case. It would constitute waiving privilege and, in ordering it, we may not realise exactly where it will end. Documents that are not already in the public domain may be referred to in advice and may therefore become disclosable, and the same may happen to advice from civil servants. That would be unfortunate and would set in train a precedent that could have unwelcome ramifications for future Governments. In the interests of good governance, we ought to resist that.
I would not wish to see our undoubted desire for openness, with which I wholeheartedly agree, do irreparable damage to the constitutional framework of our country. I would not want this Government, or any other Government, to find themselves unable to get unvarnished, honest advice because of the fear, or the suspicion, that it might soon become public.
My right hon. and learned Friend the Member for Kenilworth and Southam (Jeremy Wright), when he was Attorney General, put it well, saying that
“Members on both sides will have the chance to understand what the legal basis for the Government’s proposals will be, but there is a distinction to be made between the Government’s legal basis for action and the precise advice that Law Officers give. For the reasons I have explained, I do not think it sensible in what is undoubtedly an open and transparent democracy to publish that advice.”—[Official Report, 26 November 2015; Vol. 602, c. 1468.]
That puts the position succinctly, and I agree.
There is a better way of doing this, and I suggest that the motion fundamentally misses the point. However eminent a lawyer is, we all realise that there will be another equally eminent lawyer who disagrees. The old joke is that if there are two lawyers, there are three or four opinions. What we need to scrutinise is not the opinion of one Law Officer, however eminent, but the basis on which the Government make their case—the legal text of the agreement, the case law and the legal practice around which they build their case. That is what we should be looking for, not the disclosure of one particular legal document.
I am grateful to the House for listening to me. The compromise suggested by the Government is a smoother, better way of achieving the openness that we all wish to see, and I am grateful to them for suggesting it. I commend the Government’s course of action to the House.
Joanna Cherry (Edinburgh South West) (SNP)
It is always a pleasure to follow the hon. Member for Witney (Robert Courts), who speaks eloquently and courteously, as always, although I disagree with him on this occasion. I rise to support the Labour party’s motion. In doing so, I declare an interest. Like many who have spoken in this debate, I have previously acted as a Government lawyer. I was a standing junior counsel to the Scottish Executive—as they used to be known before my colleagues came to power and changed the name to the Scottish Government, and quite right, too—and have acted as Crown counsel and one of the Lord Advocate’s deputies.
I understand the particular concern that Government lawyers have, but I have also acted for members of the public. I know there is a balance to be struck and that the interests of the Government are not always synonymous with the public interest. In this particular case, I do not think the interests of the Government are synonymous with the public interest.
My hon. Friend the Member for Glenrothes (Peter Grant) has already referred to the difference between the ministerial code in the United Kingdom and the ministerial code in Scotland on the disclosure of legal advice. The UK Cabinet Office ministerial code says:
“The fact that the Law Officers have advised or have not advised and the content of their advice must not be disclosed outside Government without their authority.”
That is an important qualification, and I will come back to what “Erskine May” says in a second.
By contrast, the ministerial code in Scotland has a section about exceptions to the convention of not disclosing legal advice:
“If, in exceptional circumstances, Ministers feel that the balance of public interest lies in disclosing either the source or the contents of legal advice on a particular matter, the Law Officers must be consulted and their prior consent obtained. Such consent will only be granted where there are compelling reasons for disclosure in the particular circumstances.”
The ministerial code in Scotland envisages that there can be disclosure in exceptional circumstances. Having regard to what “Erskine May” says, and having regard to some of the precedents we have discussed today, I would suggest that that, in effect, is what is recognised by this House. “Erskine May” says that
“the opinions of the law officers of the Crown, being confidential, are not usually laid before Parliament, cited in debate or provided in evidence…and their production has frequently been refused; but if a Minister deems it expedient that such opinions should be made known for the information of the House, the Speaker has ruled that the orders of the House are in no way involved in the proceeding.”
“Erskine May” recognises that the UK Government can make the sort of exception that the Scottish Government are entitled to make in exceptional circumstances, and some historical precedents have already been mentioned today.
What I am saying is that these are exceptional circumstances. Again, as my hon. Friend the Member for Glenrothes said, another parliamentary convention has already been ridden over roughshod in relation to Brexit. The Sewel convention states that normally the Scottish Government should be consulted. The Government have said this is not a normal situation, and they may well be right. Of course, there is great legal debate about what “normally” means in the Sewel convention but, by the Government’s position, we are not in normal times. No, we are in exceptional times. Even if there were no precedent—and there are precedents—it would be appropriate for the Government to publish their legal advice on the finalised deal, if there is one, in full.
In this event, very unusually, I find myself in agreement with DUP Members. The people of Northern Ireland have a right to know this advice in full, as do the people of Scotland, England and Wales. It is this House that will make the decision on whether or not to accept that final agreement, not the Government. They are in danger of mixing up the functions of the Executive and the legislature in relation to Brexit.
Reference has been made to the case in which I am a petitioner, and which is going to the European Court of Justice, on the question of the unilateral revocability of article 50. The Government have fought that case tooth and nail, because they say it is up to them whether or not to revoke article 50, but the highest court, Scotland’s supreme court, has said, “No, it is up to this Parliament.” Just as it will be up to this Parliament whether to revoke article 50, it is up to this Parliament whether or not to accept the deal, so this Parliament should be given the advice that the Cabinet has been given. That is why I cannot agree to the compromise put forward by the Government Front Bencher, because it is a matter of trust now. As has been said by the hon. Member for Pontypridd (Owen Smith), the referendum in 2016 was won on the back of what we now know to have been some lies, some misinformation and, in some cases, breaches of electoral law. Unlike in the Scottish independence referendum, there was no prospectus as to what Brexit would look like. People have lost trust in the process. If trust is to be won back, this Parliament and indeed the people must be fully informed about the deal that is reached before the final decision is made to endorse the deal.
Legal privilege can be waived by the client, and that is what we are asking the Government to do. In the public interest, in these exceptional circumstances, we are asking them to waive that privilege. I am conscious that I have less than a minute left, but on the compromise offered from the Government Front Bench, I have three specific questions I would like the Solicitor General to answer. First, will what the Government are offering be made available to the devolved Governments? Secondly, how much detail will be in the legal advice that they are going to put forward—will it be sufficient for those of us who are going to be looking at it carefully to take an alternative opinion on it? Thirdly, if the Attorney General is going to come to this House to answer questions on it, will he give answers that are meaningful? Ministers so often do not give us a meaningful answer. In addition, will the Government allow a reasonable amount of time to elapse between the provision of their written document and the oral statement, so that the written document can be studied in order that properly informed questions may be asked?
Nick Thomas-Symonds (Torfaen) (Lab)
Throughout this well informed debate, we have rightly heard a great deal about the important principle of the confidentiality of legal advice and lawyer-client privilege. However, it also needs to be said that the Government are no ordinary client and the position of the Attorney General, a political appointment, means he is no ordinary lawyer. Let us be clear about the Law Officers convention on not disclosing legal advice and what it actually consists of.
Reference has been made to the Cabinet Office ministerial code, which states:
“The fact that the Law Officers have advised or have not advised and the content of their advice must not be disclosed outside Government without their authority.”
The 24th edition of “Erskine May”, which has been cited by my right hon. Friend the Member for Leeds Central (Hilary Benn) and other Members, states:
“The purpose of this convention is to enable the government to obtain full and frank legal advice in confidence. Therefore, the opinions of the law officers of the crown, being confidential, are not usually laid before Parliament”.
Then, “Erskine May” specifically refers to the situation where
“a minister deems it expedient that such opinions should be made known for the information of the House”.
Put simply, we on this side of the House wholly respect the Law Officers convention, but it is not the case that the convention means the Government shall not disclose legal advice whatever the circumstances; the convention is not an absolute ban on releasing legal advice given. The Government should not hide behind the convention, because there is clear discretion for them to decide whether or not this is a situation when the advice should be laid before Parliament. It is for the Government to tell us why they want to keep MPs, including their own, in the dark about the full content of the legal advice on the withdrawal agreement and why this situation is not exceptional.
I listened carefully to the concessions made by the Minister for the Cabinet Office in his speech, but my hon. Friend the Member for Pontypridd (Owen Smith) is entirely right to say that they simply do not go far enough. First, we are told that a statement will be published. As many Government Members said, that statement is different from the legal advice. The safeguard that we have been offered—that the thrust of the two documents will be the same and that all nuances and all other things will be included—is, apparently, the resignation of the Attorney General in circumstances in which they were not the same. The Attorney General was not even present to give that assurance; the person who gave it was actually the right hon. and learned Member for Beaconsfield (Mr Grieve), in his thoughtful speech. That is the only safeguard on that that the House has been offered.
Secondly, we are told that the Attorney General will give an oral statement to the House and be questioned by Members, but that actually means that the Attorney General will have seen a document on which Members of Parliament are expected then to interrogate and forensically question him without seeing the same document themselves. That is exactly what the situation would be. The concessions do not go far enough.
There is no point in saying that the publication of the advice will somehow prejudice ongoing negotiations, because by the time it is published, in time for it to be considered before the House votes, the negotiations on the backstop will be completed—if, of course, the Prime Minister has reached a deal. As my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) made clear, we are asking not for a blow-by-blow account, every step of the way, but for a specific piece of legal advice on something of profound importance. That is what is crucial.
Our constituents’ jobs, businesses, livelihoods and living standards all depend on the outcome of the negotiations. The issue is one of fundamental importance for this House and its consideration of a matter that is so vital for the future of our country. As my hon. Friend the Member for Pontypridd put it, the whole constitutional integrity of the United Kingdom is at stake. It is difficult to think of a more compelling case for exceptionality and for the disclosure of legal advice. The idea that disclosing it in these most exceptional of circumstances would somehow damage the Law Officers convention has no credibility at all. Indeed, in these circumstances it is right that all right hon. and hon. Members can see the whole picture—that the Government provide the fullest possible transparency. It is an issue that goes across party lines and that is of great importance to this House and its ability to take decisions on the very best evidence available at the time.
The legal basis for the Northern Ireland backstop—if there is one to be agreed—what it means now, and the implications for what it could mean in future, are central to our considerations. It should be scrutinised and interrogated, and the Government have no good reason to prevent the legal advice from being made available to right hon. and hon. Members so that that can take place. Nor should this House ever be content with edited highlights. We need to see the full consideration of the different arguments provided by the Attorney General. The House should be able to consider every sentence and every nuance.
If a deal is reached, the House deserves to see a properly detailed political declaration, to see a full economic impact assessment that applies both nationally and regionally and covers all parts of the United Kingdom, and to have full time to debate. The legal advice is crucial in informing that debate. This debate has wide implications for our politics and affects the lives of all our constituents. It is about accountability and the Government’s willingness to subject themselves to scrutiny on the most vital of issues. I urge the Government to listen, to respect transparency and openness, and to respect Parliament on an issue of such magnitude. The Government have promised the House a meaningful vote. Such a vote requires Members of Parliament to analyse forensically any deal so that they can fully understand the implications of the Government’s position. The Opposition say publish the full advice, so that Parliament can make an informed decision for the future of this country, to secure our economy, our jobs and our future.
The Solicitor General (Robert Buckland)
It is more than a pleasure—it is a privilege—to speak at the end of this well-informed, wide-ranging and important debate. May I pay tribute to my right hon. Friend the Chancellor of the Duchy of Lancaster for, in the right spirit, reaching across and making a proper and considered offer with regard to the Government’s position? His contribution reflected very much the careful and deliberate argument of the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), who rightly, and perhaps almost inevitably—he will forgive me for saying that—moved away from the wide-ranging terms of the motion and very clearly set out his and his party’s position with regard to the subject matter that he and other Opposition Members wish to deal with.
The hon. Member for Torfaen (Nick Thomas-Symonds) rightly explained the context of the debate. This is an extraordinary time in our nation’s history, with grave decisions to be made by this place that will affect the lives of all of us. I readily accept all that, but I do hope that hon. and right hon. Members will forgive me if, as Law Officers have done in times gone by, and I hope will do so in the future, I dwell a little on the particularly important and unusual role that is filled by both the Attorney General and me within this wonderful unwritten constitution that we all have and celebrate. I will not repeat the proper references made by the hon. Gentleman and others to “Erskine May”, the ministerial code and indeed the Cabinet Office code—they all stand on the record and do not bear repetition.
It comes to this: the quality of collective decision making in government is dealt a fatal blow when, bit by bit, that decision making is subdivided, unpicked and, frankly, made almost impossible even in circumstances as important and exceptional as this. The argument that we are now having boils down to whether Labour Members and others in this House can accept the Government’s clear statement that we wish to provide a comprehensive position statement that deals with not just the economic and political consequences of any withdrawal agreement and future relationship, but the legal consequences of that decision.
We have inevitably and properly focused on the question of Northern Ireland, which the right hon. Member for East Antrim (Sammy Wilson) quite properly raised, together with the hon. Member for North Down (Lady Hermon), who is no longer in the Chamber. We accept all that, but say that, consistent with previous incidences when the Government’s legal position has been set out in a way that has helped debate in this House, that would be the appropriate course of action here, rather than publishing Law Officers’ advice.
Much has been made about the previous occasion when that was done in relation to the Iraq war—in fact it was the only occasion when the full text of Law Officers’ advice has ever been disclosed. It was two years after the event in particular circumstances when, as has already been referred to, the question of the lawfulness of an action by the Government lay at the heart of the debate. We are in a different position now.
Right hon. and hon. Members know that it would be wrong if I were to try to speculate about the content of any advice on this issue that may or may not have been given by Law Officers. I have to remain true to the convention that we have referred to, but doing the best that I can, it would seem to me that using the Iraq precedent, bearing in mind the particular context and the particular circumstances, is not a helpful guide for where we are today.
Instead, I have looked back to the time of a previous Solicitor General, the late Lord Howe of Aberavon— Sir Geoffrey Howe as he was then—who is sadly no longer with us. He was the Solicitor General who took through the accession of this country to the treaties and the European Communities Act 1972. Although he spoke a lot about the legal basis and effects of entry to the then European Economic Community and the other communities, there was no suggestion at that time that any advice that he may or may not have given should be published. That is probably the best parallel that we can draw between the important events of 2018 and the very important events of 1972. If the House can accept that parallel, perhaps it can go on to accept the Government’s position.
The right hon. and learned Member for Holborn and St Pancras sought to make four key points. First, he spoke about the unprecedented context of the negotiations—I agree with that point—and, secondly, he referred to the nature of the advice as general, rather than something specific with regard to an action. Thirdly, he talked about the operation of the convention with regard to Law Officers’ advice and its position regarding privilege. His fourth point was that the advice or parts of it could not be shown to some but not others. These are all fairly reasonable and clear points.
I have already mentioned why I say that although these circumstances are exceptional, there is no reason at all for Law Officers’ advice to be published in the way in which the right hon. and learned Gentleman seeks. However, I want to deal with the point that he makes about—I hope he will forgive me if I use this phrase—a carve-out from the convention on the basis that the Government’s approach should allow for the disclosure of advice when that advice is in general terms. I would resist any suggestion that we should look at the disclosure of Law Officers’ legal advice on anything other than a strict case-by-case basis. In other words, the particular facts of each disclosure will very much depend on whether Law Officers’ advice should be published.
I agreed to some extent with the right hon. and learned Gentleman’s point about legal professional privilege, although I would say that the context of litigation is really the source of any disclosure, rather than a particularly special status whereby Law Officers’ advice is in a different category of legal professional privilege. If anything, there is a particular premium on the care that Government Departments take about the disclosure of Law Officers’ advice for all the consent reasons mentioned by the hon. and learned Member for Edinburgh South West (Joanna Cherry). With respect to the right hon. and learned Member for Holborn and St Pancras, one must look at the context. It is the litigation context that would allow disclosure, as opposed to anything intrinsically to do with the status of Law Officers’ advice.
I have dealt with the past as best I may, but I want to reiterate—I hope for the benefit of the House—why the Law Officers’ convention still remains important. It is important not just when it comes to legal professional privilege, but because it protects the public interest in reflecting collective Cabinet responsibility. That is a vital constitutional principle. Why? Because it would be wrong and damaging to start distinguishing the specifically legal components of collective decision making. This places the rule of law at the centre of Government decision-making processes and at the centre of the minds of all Ministers, not just the Law Officers, and it does not permit a delegation of those important responsibilities by Ministers to me and to the Attorney General.
As one of my illustrious predecessor Law Officers and fellow “sosbanite”, the late Sir Elwyn Jones, wrote:
“the Minister who is advised by the law officers that he cannot do something…is not allowed to say, ‘I cannot do it because the Attorney-General tells me that I cannot.’”
I could not have put it better myself. We are talking about the indivisibility of Government decision making, and I am sure that the House will agree that it is a pretty fundamental point.
It is the role of the Law Officers to guard this principle, however tempting—however convenient—it might be to publish legal advice. We are the stewards; we are here to jealously guard the gate. A decision to disclose Law Officers’ advice requires a very powerful countervailing public interest to override that position. The authority of the Law Officers to disclose the fact that they have or have not advised, and then the actual content of that advice, is rarely sought and rarely given. Contrary to what some people have suggested about the right of the client—in this case, the Government—the content of the advice must not be disclosed outside the Government without the authority of the Law Officers.
In the few short minutes I have left, as I am mindful of the need to move on to other important debates—the Opposition Chief Whip is in his place—I think it would be right for me to refer very briefly to some of the important contributions made by hon. Members. My right hon. and learned Friend the Member for Beaconsfield (Mr Grieve), the former Attorney General, spoke fundamentally about the need to speak truth to power—if Law Officers cannot do that, where are we? I entirely agree with him.
The right hon. Member for Leeds Central (Hilary Benn) made a really important point about the difference between legal advice and the legal position of the Government. I think he accepted the point that my right hon. and learned Friend the Member for Beaconsfield made in an intervention. I do not wish to repeat that, but I simply reiterate the point for, I hope, the benefit of him and everybody in the Chamber.
I pay particular tribute to my hon. Friend the Member for Banbury (Victoria Prentis), who spoke with authority as a former Government lawyer. She rightly reminded us in detail about the litigation position of the Government and the realities of disclosure, and the particular status of the Law Officers’ advice with regard to the deliberations of Government lawyers. Many other eminent lawyers spoke today—and many eminent non-lawyers as well, Mr Speaker, as I know that you regard the non-lawyer with particular affection, so I do not want to miss them out.
Today’s debate has been about not just dusty conventions, but pretty important constitutional positions. We know that the right hon. and learned Member for Holborn and St Pancras fully understands that. Admirable advocate though he is, I could not help but detect perhaps a little sense of sheepishness in his approach to the conventions. I readily forgive that, and I know that it will make him pause for thought in the days ahead. I hope that it can lead him and his colleagues to accept the clear view, and the clear offer, set out by my right hon. Friend the Minister. I readily adopt and repeat that offer. I hope that it will allow the right hon. Gentleman to draw back and, in the spirit of consensus and constructive dialogue, to accept the Government’s position and not press his motion to a vote today.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, that she will be graciously pleased to give directions that the following papers be laid before Parliament: any legal advice in full, including that provided by the Attorney General, on the proposed withdrawal agreement on the terms of the UK’s departure from the European Union including the Northern Ireland backstop and framework for a future relationship between the UK and the European Union.
Keir Starmer
On a point of order, Mr Speaker. I seek your guidance and clarity on the fact that the decision of the House that has just been made is clear, and that the Government must therefore respond but, in fairness, respond in the terms that I set out from the Dispatch Box. If I may repeat them for the record, the motion requires the publication of the final and full advice provided by the Attorney General to the Cabinet concerning the terms of any withdrawal agreement. This must be made available to all MPs. It is to be published after any withdrawal agreement is reached with the EU, but in good time to allow proper consideration before MPs are asked to vote on the deal. I put it in those terms because it reflects what I said from the Dispatch Box in the debate.
Mr Speaker
The House has resolved this matter, in that the motion has been put to it and approved without dissent or objection by it. The right hon. and learned Gentleman is absolutely entitled—both in the course of his speech, as he did, and now via the ruse of a point of order—further and better to explain what he seeks, and there is nothing wrong, exceptionable or disorderly about that.
The ruling I give is simply that the motion is effective—I have been advised thus. It is not just an expression of the opinion of the House; it is an expression of the will of the House that certain documents should be provided to it. It is then for the Government to respond, and we await that response, which it is to be expected will be swift. I hope that that is helpful to colleagues.
Mr Speaker
One can always rely upon a lawyer to have a “further to that point of order”.
Robert Neill
I am grateful for your ruling, Mr Speaker. Will you also confirm that nothing in the resolution detracts from or undermines the obligation upon the Law Officers to consider the public interest when coming to a decision on the appropriate form of any disclosure that is made?
Mr Speaker
The resolution is as agreed, and I do not think any violence to the position of the Law Officers has been done.
In response to the Solicitor General, who concluded the debate with his characteristic courtesy and good humour, I feel sure that the hon. Member for Banbury (Victoria Prentis) will treasure his tribute to her. It is to be expected that it will be framed, and I rather imagine that she will give it pride of place in her sitting room.
Ms Angela Eagle
Further to that point of order, Mr Speaker. I speak as a non-lawyer. Can you confirm that although this is a Government who do not vote when they think they are going to lose, they nevertheless have a duty to honour the motion passed by the House, because it is not just an expression of the Opposition’s view but effective?
Mr Speaker
I hope the hon. Lady will understand if I say that I do not dissent, but I do not really think I have anything to add. I have already said that the motion is effective—it is not just an expression of opinion; it is an expression of will—and the Government should regard the motion as effective and respond to it swiftly. I hope that that is satisfactory to colleagues.
Education Funding
(6 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Angela Rayner (Ashton-under-Lyne) (Lab)
I beg to move,
That this House notes the Institute for Fiscal Studies’ finding that education spending as a share of national income has fallen from 5.8 per cent to 4.3 per cent since 2010, including funding cuts of over two thirds to Sure Start, of nearly a tenth to schools, of over a fifth to sixth forms, and of £3 billion to further and adult education; further notes the Prime Minister’s statement that austerity is over; endorses the Secretary of State for Education’s recent demand for billions more funding and welcomes his comments that there is a strong case for investment in the spending review but notes that the recent Budget provided only small capital projects; offers its full support to the Secretary of State for Education in persuading the Chancellor of the Exchequer that education urgently needs new investment; and calls on the Government to end austerity, not with little extras but by reversing all cuts to education funding.
I apologise in advance if my throat gets a little hoarse; I seem to have caught the Commons cold that we all have at the moment.
I have shadowed three Education Secretaries, but in the last year it has sometimes felt like two in one. There is the Education Secretary who pledged to do more to support teachers and to end the meddling, acknowledged that funding was tight and said that he was trying to squeeze more funding from No. 11. Then there is the Education Secretary who defends austerity, denies the cuts and spends his time and energy making absurd allegations about our policies, rather than fixing his own.
And then we got to Budget day and the Chancellor’s “little extras”. In the Secretary of State’s recent interview, he visibly winced when asked about those words. Perhaps he can tell us his reaction to the Chancellor’s comments at the Treasury Select Committee, where he said:
“I am sure that for anybody who feels it is not worth having, there will be plenty of other schools that will be willing to receive the cheque on their behalf.”
He has said that schools could buy
“a couple of whiteboards, or some laptop computers or something”.
That is incredible—he has taken billions of pounds from our schools, and now he offers them a whiteboard. As my hon. Friend the Member for Dewsbury (Paula Sherriff) put it,
“what use is a whiteboard if there is no teacher to use it?”—[Official Report, 31 October 2018; Vol. 648, c. 912.]
No doubt, if we did face Brexit food shortages, his solution would be, “Let them eat cake!”
It is all very well the Education Secretary cringing at the Chancellor—believe me, we all do, and not just at his jokes—but he has to live up to the promises that he has made since. Just a week after the Budget, he demanded billions more in the spending review, saying there was a “special case” for investment in education. If that is the Education Secretary who turns up today, then our motion offers him the full support of the House, and I hope that Conservative Members will join us in the Lobby and demand that Downing Street makes good on the promise that austerity is over.
However, it was the other Education Secretary who turned up at questions yesterday. He thought he was there to ask questions of the Opposition. It is remarkable. Let us look at what is happening in education in this country. Sure Start centres are closing, children’s services are overspending, nurseries are on the brink, schools are begging for donations, teachers are leaving in droves and universities are facing bankruptcy—and what is the Education Secretary’s top priority? The Labour party. I am of course flattered, and if he wants to swap places I can assure him that we are ready.
It is beyond belief that Ministers spend their time and energy desperately smearing and scaremongering about our policy, when the Government’s policy is in tatters—shredded by their own cuts. Let me point out that last week’s annual academy accounts show the sector running with an operating deficit of over £2 billion, the net financial position in decline and a record number of trusts going bust. The real threat to those schools, their pupils and their staff is not accountability, but austerity. Unfortunately, the Education Secretary was in denial yesterday. He has said that school funding is at a record high, yet school spending is £1.7 billion lower in real terms than it was five years ago.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
I hope my hon. Friend will not forget the crisis we have across the country in special educational needs funding. In Staffordshire, the county council passes on the bare minimum provided by the Government, which is not enough. It has just announced a consultation that represents a real threat to the future of special schools, and to the excellent education and great staff in our county.
Angela Rayner
My hon. Friend is of course absolutely right to talk about pupils with special educational needs, because the funding for them has been frozen and local authorities are facing significant funding demands. It is not fair that the children who need such support the most are being failed by this Government.
Wera Hobhouse (Bath) (LD)
Schools across the board—whether they are academies or local authority-supported schools—are asked to find the first £6,000 of special educational needs funding from their own budgets. Will the hon. Lady ask the Secretary of State where he thinks schools have this money lying around?
Angela Rayner
The hon. Lady makes a crucial and important point. As I have said, I really think the Secretary of State needs to listen more to headteachers and to teachers across the board, up and down England, who are desperately trying to ensure that the funding is available to support all children. Under the previous Labour Government, every child mattered; under this Government, segregation matters.
The Secretary of State was asked by my hon. Friend the Member for West Lancashire (Rosie Cooper) if pupil funding was set to fall in real terms, and he simply said, “No”. The Institute for Fiscal Studies has found that per pupil spending will be falling again next year, so I give him the opportunity now to provide this House with the guarantee he once gave that not a single school will lose a single penny in per pupil funding. Unfortunately, his Government’s guarantees on funding have a habit of unravelling. The Secretary of State seemed bemused by my idea of segregation, and I understand why: the Secretary of State of course dropped the education Bill that would have brought in more grammar schools, but the Government are trying to do that themselves through the back door. The Government said that they would fully fund the pay settlement for teachers, but then offered less than the pay review body, for the first time in its 28-year history.
Mr Jim Cunningham (Coventry South) (Lab)
My hon. Friend raises a very interesting point. The Government are not prepared to fund in full the recommended increase to teacher pay. They are leaving that to the schools to find, which is a further cut in school budgets. That means that schools cannot deal with special needs or assist pupils with special language needs in particular. Schools cannot employ those teachers any more—that is the mess the Government have left.
Angela Rayner
I thank my hon. Friend for his intervention. Of course, one of the myths that keeps being spread by the Government and Conservative Members is that record funding is going into schools, but they do not talk about the record level of costs on schools, which means that schools are facing real-terms financial pressures, and the Government have done nothing to support schools in that regard.
Despite the Secretary of State’s concerns four months ago, he has left 250,000 teachers—most of the teaching workforce—facing a real-terms pay cut. Meanwhile, teaching assistant wages are pennies above the minimum, even as so many of them have had to dip into their own pockets for basic school supplies. Austerity is not over for teachers or their support staff.
Ellie Reeves (Lewisham West and Penge) (Lab)
I have visited more than 30 schools in my constituency where teachers are leaving and it is very difficult for the schools to replace them. In a recent survey the National Education Union found that 81% of teachers have considered leaving the profession. Does my hon. Friend agree that it is clear across our constituencies that austerity is far from over?
Angela Rayner
I absolutely agree with my hon. Friend. The Government have, of course, failed to meet their teacher recruitment targets for the past five years and teachers now face a real crisis. The Department for Education told us that the teachers pay grant would cover the cost of the pay rise, but that does not include the first £250 million needed to give staff a 1% pay rise, and the Secretary of State’s own Ministers have admitted that not every school will get the funding it needs through the grant. Will the Secretary of State tell us how many schools are not getting enough to meet the cost? Austerity is not over for our schools.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
A few moments ago the hon. Lady said that record levels of funding were going into our schools. Does she accept that that is a fact?
Angela Rayner
No. The hon. Gentleman misunderstands what has been said. What I said was that his Government have said that record funding is going into schools, but by not recognising the record costs and additional pupils in our schools they have created a deficit and schools face a real-terms cut. I suggest that the hon. Gentleman look not at my figures but at those of the IFS, which will show him that schools have faced significant cuts, and we know the impact they have.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
I thank my parliamentary neighbour for giving way. In Oldham, pupil numbers have increased by nearly 4,000, but there are 100 fewer teachers in those schools to teach the additional pupils.
Angela Rayner
My hon. Friend and neighbour makes a very important and valid point. We know the impact that cuts have. Frankly, I have heard the heartbreaking stories too many times: schools begging for donations; vital support staff lost; children with special educational needs and disability suffering the most; the school week being cut; and subjects dropped, with sports and the arts the first to go. So austerity is not over for our children, either.
James Cartlidge (South Suffolk) (Con)
If the picture is so negative, why are almost 2 million more children being taught in schools that are good or outstanding than was the case in 2010?
Angela Rayner
The hon. Gentleman needs to look at what the Education Policy Institute and its statistics have to say, because that is absolute nonsense. There are more pupils in schools and he does not take into account the fact that a lot of those schools that are rated outstanding have not been inspected, some for up to 10 years. The hon. Gentleman needs to be very careful about how he uses statistics.
Of course, there is one subject in which Ministers do seem to value creativity—statistics. The Education Secretary said yesterday that he did not recall being slapped down by the statistics watchdog four times in the 11 months he has been in office. I have checked with the UK Statistics Authority and I have to admit that he was right—it was actually five times. Let me remind him. At our very first questions, the Secretary of State claimed that per pupil funding was up in real terms. He had to correct the record. He said that every school would receive a cash increase. He had to admit they would not. He claimed that more pupils were in good schools. He has been told to stop repeating that claim. He said that we had leapfrogged up the international tables. The stats watchdog said that was “not correct” and that his most recent claims on school funding were
“presented in such a way as to misrepresent”.
Perhaps he just objected to the phrase “slapped down”. Fair enough. The Times said he was “rebuked”. The Daily Mirror said he was “blasted”. Schools Week said he was “censored”. The BBC said he was “reprimanded”. And the Daily Mail said all four. Perhaps it is time to open one of his centres for maths in his own Department. [Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Both sides of the House are making it impossible to hear the hon. Lady.
Angela Rayner
Thank you, Madam Deputy Speaker.
Perhaps it is time to open one of the Secretary of State’s centres for maths in his own Department. Even better, he could stop fiddling the facts and start facing the facts. There is one statement he has made that is entirely accurate: education needs billions of pounds more investment. Just look at the services that serve us at the very start of our lives.
Janet Daby (Lewisham East) (Lab)
The current projections are that 71 of 73 schools in Lewisham face cuts, losing £8.8 million from 2015 to 2020. That equates to a loss of £257 per pupil. Does my hon. Friend agree that that is appalling?
Angela Rayner
My hon. Friend makes an important point. Fantastic work is going on in our schools to educate our children, but I am sure hon. Members from across the House cannot go into a school in England today without being told that the cuts have had a detrimental effect on the work they are doing. They are doing tremendously good work, but they are facing real-terms cuts. It is important that the Secretary of State recognises the pressure his Department and the Treasury are placing on our schools.
Gareth Thomas (Harrow West) (Lab/Co-op)
My hon. Friend has quite rightly concentrated the bulk of her remarks thus far on the crisis in schools funding. Will she spare a word for the devastating situation facing many sixth-form colleges which, according to the IFS, have been hit by a 21% cut in real terms? That needs sorting out too, does it not?
Angela Rayner
My hon. Friend makes a very important point. I will come on to that, but he is absolutely right to say that adult education and further education have been the most cut and have faced the most severe difficulties since this Government came to power.
Huw Merriman (Bexhill and Battle) (Con)
I appreciate what the hon. Lady is saying, but she is pointing towards giving schools a lot more funding. How much more would she put in and how would it be funded in terms of parents of pupils paying greater taxes? Surely we should be transparent. Everyone should know.
Angela Rayner
At the general election, we had costings in our manifesto. The Conservative party made no costings and said nothing about the bung they were going to give the Democratic Unionist party to prop up their Government. We have said quite clearly that we are at a time when we need to invest in our education system. As we leave the European Union, our constituents expect us to invest in the vital skills we need. We said we would pay for that by reversing the big corporation tax cuts that were given away by the Conservatives. We fully costed it: 95% of UK taxpayers would not pay a penny more, but those at the top would pay a little bit extra. [Interruption.] This is a very important point and Members should listen. Businesses up and down the UK say they need the skills for their workforce. We have to provide a world-class education system that will provide the skills our future economy needs to do well.
Several hon. Members rose—
Angela Rayner
I will move on, Madam Deputy Speaker, and make a little bit more progress. Education needs that investment. Just look at the services that serve the very start of our lives. Spending on Sure Start has been cut by two thirds—down by more than £1 billion since the Government took office—and over 1,000 Sure Start centres have been lost.
Clive Lewis (Norwich South) (Lab)
In Norfolk, the Conservative-led county council is proposing the closure and loss of 46 of 53 of our children’s centres— [Interruption.] It is a shame. And we know that 75% of the most vulnerable families in our county use these centres. It is terming this a “service improvement”. Will my hon. Friend join me in telling Norfolk County Council that this is an absolute disgrace?
Angela Rayner
My hon. Friend makes a really important point. I hope that Members across the House, including Government Front Benchers, recognise that early years are so vital. If we really care about social mobility and want to help every child to reach their full potential, those early years are so, so crucial, yet the loss of those children’s centres and Sure Start centres is so short-sighted that we will be picking up the cost of it for generations to come.
The Government have refused to give assurances to maintained nursery schools, despite the vital role that they play. Just this month, I, along with my hon. Friends the Members for Salford and Eccles (Rebecca Long Bailey) and for Worsley and Eccles South (Barbara Keeley), campaigned to save Salford nurseries. What response did the Salford Mayor get from the Treasury? A letter from the Chief Secretary talking about the NHS. They literally do not even recognise the issue. Perhaps today the Secretary of State can guarantee additional funding when the transitional £55 million ends in 2020 and recognise the valuable work that our maintained nurseries do across England. Perhaps he could use the £600 million returned to the Treasury because parents are not using the tax-free childcare, even as 85% of local authorities take a cut to the funding rate that they receive for the 30 hours of free childcare. Many parents are actually paying more for childcare now, since the so-called free hours were introduced.
The harshest cuts have fallen in the areas that we discuss least in this Chamber. In further and adult education, budgets have been cut by over £3 billion in real terms since 2010. One pound in every four has been cut and we have seen the consequences. The number of adult learners has declined by over 3 million since 2010. Cutting funding for these programmes means cutting people off from a second chance, like the one that I had in my life and which so many of my constituents need, yet there was not a single penny nor a single word about further education in the Budget. Instead, there was the bombshell of £140 million a year of new pension costs from the Treasury, with no guaranteed funding to match.
Last month, we celebrated Love Our Colleges Week, yet they have had neither love nor money from this Government. The spending review offers a chance for the Government to change approach. If the Secretary of State before us today is the one who sincerely wants more investment, he should have no problems voting with us today. But if not, it is time for him to move aside for a Labour Government that will. I commend the motion to the House.
The Secretary of State for Education (Damian Hinds)
Great schools are all about great teachers, and we have 10,000 more of them in our schools than in 2010. They and their colleagues have achieved quite remarkable things, with our highest ever score in international tests in primary reading, a reformed curriculum and qualifications, more young people doing the subjects that keep their options most open, more young people going on to further study, and more—many more—young people in schools rated good or outstanding.
Damian Hinds
1.9 million, Mike.
But it is not only about overall attainment, it is also about narrowing the gap and evening the odds between the rich and the poor. Here we have seen substantial improvements since the Labour party left office, with the attainment gap having narrowed by 10% or more at both primary and secondary age and disadvantaged 18-year-olds going on to university at a record rate. This decade, we will have created 1 million new school places—the biggest expansion for at least two generations.
Damian Hinds
That contrasts with the reduction of 100,000 places that Labour oversaw between 2004 and 2010—answer that.
Marsha De Cordova
Well, I am making an intervention. The Secretary of State talks about a record number of people going on to university, but because of the £200 tax that his Government introduced, fewer disabled people go to university. Will he address that?
Damian Hinds
We want all people, whatever their background and whatever extra challenges they face, to be able to benefit from all that education, including higher education, has to offer. That is one reason why the Universities Minister, my hon. Friend the Member for East Surrey (Mr Gyimah), works closely with universities to ensure that, and why more than £800 million a year is spent on access and participation arrangements to ensure that access to universities is as wide as possible.
I was speaking about the expansion of the school estate. If hon. Members will forgive me, I will repeat myself. By the end of the decade, we will have created 1 million new places—the biggest expansion in school capacity for at least two generations, in contrast with the reductions I am afraid we saw under the Labour party. The latest data show that there is now less school overcrowding than when we came into government in 2010. The remarkable success of schools is of course thanks to the hard work and dedication of teachers and school leaders—and, let me add, of everyone else who plays a key role, such as school staff, parent teacher associations, governors and trustees.
I recognise that the Government and society ask more of schools than ever before, so I want to take the opportunity to set out the record investment we are making in schools. In the Budget, as well as hundreds of millions of pounds for reforms to apprenticeships, T-levels, the national retraining scheme and children’s social care, there was £400 million in additional capital funding for schools this year. That is additional in-year funding for schools to spend on capital projects to support their own priorities. An average-sized primary school will receive £10,000, and an average-sized secondary school will receive £50,000.
Huw Merriman
It is important that Government Members talk up our record. A fifth secondary school in my constituency has just been rated good—they are now all good or outstanding. That school had a vast injection of money into its capital budget to help make it a good school. We should talk up our record rather than listening to the Opposition.
Damian Hinds
My hon. Friend is absolutely correct. I commend and pay tribute to the teachers and leaders in the schools in his constituency, and to him for the work he does with them.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The Secretary of State briefly mentioned T-levels. T-levels will come into Stoke-on-Trent Sixth Form College in 2020, when the money follows, but its principal, Mark Kent, tells me that its funding pressures will start next year. What help can he expect from the Government next year? Given that the Chancellor did not mention further education in his Budget speech, what will the Secretary of State do about that?
Damian Hinds
As the hon. Gentleman no doubt covered in his discussions with the principal of that college, there is also funding for preparation for T-levels and industrial placements, and for staff preparation. There was also confirmation in the Budget of our party conference announcement of extra capital money for facilities and equipment in preparation for T-levels. I will return to technical and vocational education a little later.
Wera Hobhouse
Newbridge Primary School in Bath is struggling with the maintenance of its buildings and its big grounds. I met one of the Secretary of State’s colleagues, who said that the £400 million would not be available for the maintenance of buildings or grounds. Will the Secretary of State set out precisely what the £400 million is for and how schools can access it?
Damian Hinds
There are published criteria governing how this type of capital can be spent, and I will be happy to provide the hon. Lady with a complete copy. We will be issuing a calculator in December so that schools can work out how much their allocations will be. The allocations themselves will follow in January, and the rules that normally apply to capital of this sort will apply to them.
The £400 million is on top of the £1.4 billion of condition allocations that have already been provided this year for the maintenance of school buildings. The Government will also spend £1.4 billion on condition allocations in 2019-20, and schools can now apply for the first tranche.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Will the Secretary of State give way?
Damian Hinds
I think I must ask for the hon. Gentleman’s forbearance.
We will have provided a total of £7 billion for new places between 2015 and 2021. We also continue to introduce innovative free schools to give parents more choice.
Michael Tomlinson
The hon. Member for Ashton-under-Lyne (Angela Rayner) almost accepted that the Government were spending a record amount on our primary and secondary schools. Can my right hon. Friend tell us how that compares with spending in other G7 nations?
Damian Hinds
My hon. Friend asks an important question. There are many ways of comparing spending on education in different countries, and in most cases the UK is shown to be a relatively high spender. If my hon. Friend will forgive me, I will come to some of those figures a little later.
Jim McMahon
It would be interesting to know what the Government will do to ensure that they get value for money. In my own town they have spent £80 million on a failed university technical college and a failed free school, and since 2012 there have been 16 referrals to the police for financial fraud in academies and free schools.
Damian Hinds
The free schools and academies programme has overwhelmingly been a success, but when there are issues in our schools, whether in the maintained or the academy system, we must deal with them quickly. The difference with the academy system is that there is that much more transparency, so people know what is going on. However, as the hon. Gentleman knows, we continue to develop the system and ensure that it works as well as it can.
Rebecca Pow (Taunton Deane) (Con)
The Secretary of State has made a very good point. Facilities are obviously very important—I recently visited a fabulous new school, West Monkton Primary School, which is already chock-a-block—but is not the quality of the education the most important element? We are getting a lot of barrage from Opposition Members, but under Labour, a third of 11-year-olds left primary school unable to reach the right standards of reading and writing. This Government have completely turned the situation around, and that is thanks to the quality of our teachers.
Damian Hinds
My hon. Friend is, of course, entirely correct. The quality of our education is all about the person standing at the front of the room. It is all about the 450,000 teachers, and I join my hon. Friend in her commendation of them.
Free schools are among some of the highest-performing state-funded schools, and 442 are now open across the country. That includes 41 alternative provision and 34 special free schools, and a further 69 are in the pipeline. Again, parents are being given more choice in selecting the right provision for their children.
Damian Hinds
I think I should make some progress. I have given way a number of times.
As I have said before, spending on education is in a different category from the spending of other Departments. It is about investment in our skills base, about bringing on the next generation, about social mobility, and about fulfilling the potential of all children. So it is right that this Government have prioritised education spending, and that our schools are receiving record investment. The total core schools and high needs budget, which was almost £41 billion last year, will reach a record £43.5 billion by 2020. That is thanks to an additional £1.3 billion put into core schools funding in July 2017 over and above the plans set out at the previous spending review.
Mr Marcus Jones (Nuneaton) (Con)
One of the biggest education funding challenges for areas like Warwickshire is that the last Labour Government left office with a massive gap between funding for metropolitan areas and funding for county areas. What is my right hon. Friend doing to address that, and what will that mean for areas such as Warwickshire?
Damian Hinds
I am grateful to my hon. Friend for that question, and I will come on to questions about the fairer national funding formula that we have put in place.
Mary Creagh
One of the free schools the Secretary of State mentioned is CAPA College—the Creative and Performing Arts College—which is being built in Wakefield after his Department’s disastrous attempts to move it to Leeds, purchasing a site which it later transpired was on the route of HS2. I am genuinely grateful, but that did overshadow last year’s general election to quite some degree. When I looked at the plans for the new free school, I was dismayed to learn that new schools are not being built to BREEAM—Building Research Establishment environmental assessment method—standards, which are the highest environmental standards. Will the right hon. Gentleman look at why that is, and make sure that all new schools and refurbishment projects meet environmental standards, since kids are going to be taught in them for the next 100 years?
Damian Hinds
The Education and Skills Funding Agency follows high standards, but I will be happy to follow up with the hon. Lady separately on some of the specific issues she mentions.
As we were discussing, spending on schools is high by historical standards. According to the Institute for Fiscal Studies, real-terms per-pupil funding for five to 16-year-olds in 2020 will be more than 50% higher than it was in 2000 and more than 70% higher than in 1990.
Several hon. Members rose—
Damian Hinds
I ask colleagues for forbearance: I have given way many times and do not want to try your patience too much, Madam Deputy Speaker, on the length of my speech. [Interruption.] Well, I believe we are having a debate.
Funding for the average primary school class of 27 this year is £132,000, which is £8,000 more in real terms than a decade ago. The same children will be funded at an average of £171,000 when they move to secondary school, a real-terms rise of £10,000 compared with a decade ago.
Mr Kevan Jones (North Durham) (Lab)
The Secretary of State will be aware that there are pressures on all authorities in providing for children with special needs and disabilities. The cabinet member for education in Durham, Olwyn Gunn, has written to the Secretary of State highlighting the plight of Durham, which had a £4.7 million overspend last year and is projected to spend even more this year. What is the Secretary of State doing to help authorities tackle the demand that many are now facing in providing for special educational needs?
Damian Hinds
I do recognise that issue; there are additional demands. We are putting in place some extra capital and there are special free schools, but I recognise that this is a wider issue, and I will say a little more about it later.
UK spending is also high by international standards. According to the latest OECD data—from the 2018 “Education at a Glance” report, which refers to data from 2015, the last year for which comparable data for the various countries are available—on state spending on primary and secondary education, in terms of proportion of GDP the UK was the highest spender in the G7. Our spending was higher than that of the United States, France, Germany, Italy, Canada and Japan. We were also higher on that measure than countries outside the G7, including Australia, the Netherlands, Spain and Ireland. On a per pupil level, the UK ranked lower than the US but above or in line with all the other G7 nations.
As well as ensuring record levels of funding for our schools overall, this Government have taken on the historic challenge of introducing a national funding formula to distribute the money more fairly—something that was ducked by previous Governments. For example, Coventry previously received £510 more per pupil than Plymouth, despite having the same proportion of pupils eligible for free school meals. Nottingham similarly attracted £555 more than Halton—
Rushanara Ali (Bethnal Green and Bow) (Lab)
Will the Secretary of State give way?
Damian Hinds
No, I am sorry.
This year, we have given every local authority more money in cash terms for every pupil in every school, while allocating the biggest increases to the schools that have been most underfunded. It is also worth highlighting some of the funding that schools receive on top of what is distributed through the new funding formula. That includes £2.4 billion this year in pupil premium funding and £600 million per year for universal infant free school meals. We have also estimated that, through the roll-out of universal credit, around 50,000 more children will benefit from a free school meal by 2022, compared with under the previous benefits system, and that even more will benefit in the meantime through transitional protections. I regret to have to say that that stands in stark contrast to the scaremongering and wholly misleading accusations made by the Opposition about eligibility.
Through the primary PE and sport premium, we have invested more than £1 billion of ring-fenced funding in primary schools to improve PE and sport since 2013. The soft drinks industry levy is also enabling us to put up to £26 million into breakfast clubs in the most deprived areas. To fund the biggest increase to teachers’ pay since 2011, our teachers pay grant of £508 million over two years will cover the difference between this award and the cost of the 1% award that schools would previously have been planning for. We are also proposing to fund the additional pressure that the increase in pension contributions will place on budgets next September, for the schools as well as the further education and sixth-form colleges that are affected.
Several hon. Members rose—
Damian Hinds
I am spoiled for choice. I will give way to the hon. Member for Bethnal Green and Bow (Rushanara Ali).
Rushanara Ali
Earlier, the Secretary of State mentioned per pupil funding. In my constituency, per pupil funding will be cut by an average of £448 per pupil. Can he tell me why he is doing that, in an area with the highest child poverty rate in the country?
Damian Hinds
Through the funding formula, additional moneys in cash terms are allocated to each local authority for each child. I believe it is right that the local authority is then able to make adjustments—for example, to cope with the pressures on the high-needs budget for children with special educational needs and disabilities. The local authority has the ability to do that, and I think that that is right.
Paul Farrelly
The Secretary of State has just mentioned help for colleges, as well as schools, with pension pressures. Will he extend that help to provide assistance with pay rises, so that there is no discrimination between colleges and schools? Will he also confirm that all colleges, not just sixth-form colleges and schools, will be eligible for the pot provided for the “little extras”, including Newcastle and Stafford College?
Damian Hinds
The hon. Gentleman will be aware that there are differences in how colleges are constituted. In particular, independent colleges are not subject to the pay and conditions arrangements of schoolteachers, but they are typically in the teachers’ pension scheme—hence that difference.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I acknowledge the record amount of money that is going into schools, but we came up with that funding in order to have a national funding formula. Does my right hon. Friend not agree that in low-funding authorities such as Gloucestershire, a minimum amount of national funding should mean exactly that? Gloucestershire is about to top-slice its budget by 0.5%, so will he look at this and see what can be done?
Damian Hinds
I recognise what my hon. Friend says, and he is right. I thank him for acknowledging the additional money that has gone in, the fairer national funding formula and the additional £1.3 billion in resourcing. It is also true, as I was saying in answer to the hon. Member for Bethnal Green and Bow (Rushanara Ali), that local authorities can move money from schools into their high-needs block, which is sometimes the right thing to do. Of course, we also want to ensure that the facilities are always there to help local authorities manage their high-needs budget as effectively as they can.
We have increased opportunities in technical and professional education by doubling the level of cash for apprenticeships through the apprenticeship levy to £2.5 billion over the course of the decade. By 2020, funding available to support adult FE participation is planned to be higher than at any time in England’s history. At the other end of the age range, high-quality childcare supports children’s development and prepares them for school. That is why this Government are investing more than any previous Government in childcare and early years education—around £6 billion by 2020.
This Government have extended the scope and extent of support in multiple ways. As well as higher reimbursement under universal credit—higher than was ever available under tax credits—and tax-free childcare, we have increased the childcare available for three-year-olds and four-year-olds from 12.5 hours to 15 hours, and that funded early education now has a 95% take-up rate among parents of four-year-olds. There are also an additional 15 hours—so 30 hours in total—for working parents. All of that represents greater entitlement than under the Labour Government.
Then, of course, there was the landmark extension of the 15-hour entitlement to—[Interruption.] Let me start that sentence again. Then, of course, there was the landmark extension of the 15-hour entitlement to disadvantaged two-year-olds in 2013, which has since benefited almost 750,000 children at an investment of £2 billion since the policy began—something that was never made available to disadvantaged families by any Labour Government. Looking ahead, funding for the future comes up periodically at spending reviews. We have a spending review next year, and we are already looking at the approach for this period. Of course, we have a review of post-18 education and funding in progress, and £84 million was confirmed in the Budget for children’s social care to help spread best practice.
Turning to school-age education, I am not the first Education Secretary to stand at the Dispatch Box and say that we need a better balance between technical and academic education. While we plan to invest nearly £7 billion during the current academic year to ensure a place in education and training or an apprenticeship for every 16 to 19-year-old who wants one, I am conscious that funding for 16 to 19-year-olds has not been protected in the same way since 2010 as funding for five to 16-year- olds, but we are ensuring a balance through public policy by developing high-quality routes for technical and vocational education through T-levels and apprenticeships.
On the high-needs budget, funding for local authorities has benefited from the same protections in the funding formula that we have been able to provide for mainstream schools, but there have been increasing pressures. There is a balance to be struck between mainstream and special schooling to ensure that most pupils can be supported in mainstream settings when that works best for them. Finally, we need to continue to ensure, as always, that there is the right level of resource to make sure that the quality of education is at the required level for people wherever they live—in a town, the countryside, the north, or the south.
Alongside all that we need to focus on ways to make the system work better for all schools. Ensuring that we invest properly in schools and distribute funding fairly is clearly fundamental, but how that funding is used in practice is just as important. The education system is diverse, operating between various local authorities, dioceses, multi-academy trusts and individual schools. While that is a strength, it does not always work in the system’s favour when it comes to leveraging the benefit of volume in purchasing, for example. That is why I am working hard to ensure that we come together to help schools get the best value, that expertise is available across the system and that resources that do not need to be purchased or created on an individual basis—from lesson plans to energy contracts—are shared. We will also work to bear down on the £60 million to £75 million that schools spend on recruitment with the new teacher vacancy service and the agency supply teacher deal. By creating financial benchmarking, we are helping schools to share good practice and identify ways to use resources more effectively. All of this allows schools to direct the maximum resource into what they do best—teaching.
Damian Hinds
I am sorry, but I am short of time.
We all want to see standards rise across our schools and across the wider education system and, thanks to this Government’s reforms and the hard work of teachers, this is happening. I say we all want to see standards rise, but every step of the way the Labour party opposed the introduction of phonics checks. In Wales, where Labour runs the education system, PISA rankings for maths, science and reading are lower than those in England.
The Labour party wants to scrap academies and free schools, putting ideology before education and trusting politicians over teachers. In our exchange yesterday, the hon. Member for Ashton-under-Lyne (Angela Rayner) said that Labour’s policy is
“no threat to any new or existing school”—[Official Report, 12 November 2018; Vol. 649, c. 16.]
but she did not, and cannot, reconcile that with her explicit stated policy to stop the free schools programme,
“bring all publicly funded schools back into the mainstream public sector”
and impose the Orwellian-sounding “common rulebook” across the school system.
I have referred to a number of figures in the thousands, millions or billions, but what is clear is that each of those figures would be under threat from the Labour party, because we need a strong economy to invest in our public services. It is a balanced approach to the economy that will mean we can continue to provide our schools and our education system with the resources they need. Labour’s approach of more spending, more borrowing and more debt would take us back to square one and hit ordinary working people, just like last time.
This Government are unapologetic in our ambition for every child and young person in this country. Again, that ambition is backed by more revenue funding going into our schools than ever before—an investment that we are able to provide thanks to our balanced approach to the economy. The benefits of our reforms, backed by that investment, can be seen across the country, thanks to the hard work and dedication of our teachers and education professionals. It is a track record that gives all of us much to be proud of, but the job is not finished. We will always want to do more, and we will continue to do more so that every child, in every classroom and in every part of the country, has the chance to thrive, with none left behind.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Both Front Benchers have been very generous in taking interventions, but inevitably that has put some pressure on time. I will impose an immediate time limit of six minutes, but I warn colleagues that that may fall.
Gareth Thomas (Harrow West) (Lab/Co-op)
I am grateful to you, Madam Deputy Speaker.
The Secretary of State’s first major test was to lead the education sector’s negotiations with the Treasury in the run-up to the Budget. On any basic evidence, he seems to have failed that test spectacularly. Not only did he fail to secure any meaningful increase in funding for our schools and sixth-form colleges, but the Chancellor of the Exchequer’s complacent language of “little extras” suggests that the Secretary of State was not even able to convince the Treasury of the scale of the funding needs of the school system in England, which is profoundly worrying when the comprehensive spending review negotiations are beginning.
I give credit to the Minister for School Standards and the Minister for Apprenticeships and Skills, who has responsibility for sixth-form colleges, for being willing to receive deputations of Harrow headteachers, including the principal of St Dominic’s Sixth Form College. I am grateful to both Ministers for the way in which they listened to the concerns of professionals in my constituency.
I have been given information that underlines the concerns of those headteachers, but first I will set out the broader London perspective, which reflects some of the concerns raised in interventions by London colleagues about the financial crisis facing many of our capital’s schools. London Councils’ analysis of the provisional school funding allocations for 2019-20, which were announced in July and appear to follow a similar structure to the 2018-19 formula announcements, shows that London schools will receive a lower proportion of funding across 2018-19 and 2019-20 than those in any other region of the country. Some 70% of schools in London will receive the minimum—a 1% increase per pupil—between 2017-18 and 2019-20, compared with just 39% of schools across the rest of England. Fifteen boroughs in the capital will see more than 90% of their schools receive the floor of a 1% rise per pupil across these two years. In comparison to the 2018-19 allocations, 21 out of London’s 32 boroughs are in the lower half of schools’ block increases, and two of the four local authorities in the country that are expected to see a funding decrease are London boroughs, including, crucially, my own London Borough of Harrow.
Headteachers in the borough report to me that they face significant financial pressures: non-teaching pay awards; rises in non-teaching pension costs; the impact of the apprenticeship levy; and concerns about whether the funding for teaching pay awards and incremental pay rises for teachers will be provided from central Government. These all point to an average annual cost increase in Harrow of more than £70,000 for primary schools and more than £200,000 for secondary schools. At the same time, funding, notably for the pupil premium grant, is reducing for the average school in Harrow, so schools in Harrow are estimated to be losing some £80,000 a year in income and are profoundly worried as a result. Given that, on average, a teacher costs approximately £50,000 per annum, Harrow Council’s analysis suggests that the funding pressures facing each primary school in Harrow amount, on average, to the equivalent cost of one to two primary school teachers. For secondary schools, it is the equivalent of four secondary teachers per annum.
That assumes that, on average, school budgets are cash-flat. In Harrow, some 25% of schools—14 out of the 54—are currently protected by the minimum funding guarantee, which means in practice that they will lose 1.5% of their per-pupil budget per annum. That could equate to a cash reduction of a further £20,000 to £30,000 per annum. The Secretary of State and other Government Members might like to hide behind the idea that there have been record funding increases, but on the ground in Harrow, headteachers and governing bodies report substantial financial pressures. Similarly, local authorities report profound concerns about the rising demand for high-end special needs funding, and it would be good to hear—
Paul Farrelly
My hon. Friend may have seen a piece in The Observer at the weekend about the crisis across the country in special needs education. My county council has just announced a review, and we fear the worst—it is already removing special needs allowances for mainstream schools. Does he agree that it is time that the Government launched a review of how special needs are met across the country in order to inform a coherent policy and provision?
Gareth Thomas
My hon. Friend makes a good point. The key thing is that extra money needs to be found immediately for special needs provision, particularly high-end provision. Like Harrow Council, many local authorities—particularly in London, but clearly around the rest of the country—are profoundly worried about that. I suspect that the Secretary of State knows full well the scale of the pressures facing headteachers in this country. It would be good to hear from the Minister for School Standards in his winding-up speech what his Department will do about that in negotiations with the Treasury.
Derek Thomas (St Ives) (Con)
Everyone will be aware that it is Parliament Week. Schools up and down the country, in west Cornwall and on Scilly are doing an incredible amount of work to raise awareness about what we do here, our amazing democratic system and politics throughout the country. I commend my local schools on their work to raise awareness about such vital issues.
I also commend the schools in my constituency, particularly St Mary’s Church of England School, on how they have engaged in the world war one commemorations. They have done amazing work. In Penzance, we could not get full access to the cenotaph, so instead the school children made a poppy for every person who lost their life in the first world war and named each poppy in remembrance of that individual. Thousands of people are aware of the commemoration and are visiting Penzance this week.
Every week, I make time to visit a local school, where I find great teachers, committed staff and happy and keen pupils. In fact, some 89% of primary schools throughout Cornwall are good or outstanding, and 83% of secondary schools are good or outstanding. I recognise the pressures on funding and know that they are accepted in the Department for Education. As we look towards next year’s strategic spending review, it is imperative that we really understand how funding is distributed so that we can teach our children and give them the best start in life.
Since I was elected in 2015, I have met various Education Secretaries and Ministers on a number of occasions, and I have always found them to be helpful and that they listen. In fact, I was able to bring teachers all the way from my constituency in west Cornwall to meet a Minister so that they could talk through some of the challenges that they face. That opportunity was well received and appreciated. The Minister has visited my constituency several times, and he has listened, engaged, and even opened a new building.
The national funding formula is welcome in west Cornwall and throughout Cornwall, because we have traditionally had low funding for schools. It is right that the money is fairly distributed throughout the country for every child. We look forward to the formula being fully delivered so that our children receive a fair share of the money available for schools. Even today, a large amount—millions of pounds—is being spent on improving buildings throughout my constituency and building a new school.
I listened carefully to the shadow Secretary of State for Education, but I did not hear her set out any ideas about how we could improve the present situation as it is today, so I thought I could help. There are practical measures that the Government could take today to help schools. This is about understanding not only what money schools have, but how they can use their money better and how we can help them with it.
For example, a multi-academy trust in my constituency started 18 months ago and has 19 schools. It has to show in its end-of-year accounts the value of its buildings, even though it is not allowed to realise its assets—the trust is not allowed to do anything with the buildings, which do not belong to it. Were we to look at its accounts, we would think that it was extremely well off, but in fact the money available to spend is a much smaller amount. Will the Minister or the Secretary of State look into how schools’ accounts are presented so that they will truly represent the money available to schools and no one will be confused about the pressures they are under?
James Cartlidge
My hon. Friend is being helpful with his ideas, so perhaps I might pitch one. When I meet firms in my constituency, they tell me that they are terribly worried about skills shortages. Schools have an even more critical role to play in helping local firms and liaising with them to see what they can do to encourage children’s ambitions to work in those local companies.
Derek Thomas
I shall address that issue when I talk about the apprenticeship levy, but my hon. Friend is absolutely right. There are real pressures on skills in my rural area, so it is imperative that we work with schools to help teachers to understand the jobs and skills that are available and how we can keep people in the area, because it is extremely important in rural areas that we do not have what we describe as brain drain.
I am looking forward to the strategic spending review, because there is no doubt in my mind that more money is needed. However, as I said, there are things that can help schools today. For example, the apprenticeship levy has been mentioned. My local schools are contributing to it, but find it difficult to access apprenticeships, because although they have apprentices, when they go to college the schools have to cover the work that the apprentices do, and therefore have to spend even more money on supporting people. My local schools’ request to me was that their contribution to the levy be scrapped, which would help their budget.
Another idea is about cash flow. It is really important that the Government understand—I know that they do—that if a child starts school in September, they are registered for funding in October and the funding arrives the following April, but if a child turns up at school after October, the funding for that child comes 18 months later. There are schools in my constituency that have very few children leaving. For example, about six children left one school in July, but 31 joined its reception in September. No money will be given to that school for those 31 children until April next year. It is very difficult for a school that is building up, that is becoming popular and that is a school of choice for parents when the money just does not follow the child. I say to the Government that, rather than putting more money into the system, they could make things much fairer for schools if the money could follow the child, rather than be allocated in the April after the intake.
Another area that is proving to be a problem, which is not unrelated to what I have just said, is support for special educational needs. One school in my constituency supported children with special educational needs to such a great extent that nine children joined it after the October date, which meant that £56,000 had to be found to support those children for 18 months.
My time is running out, but I just want to say that I am so in awe of all the teachers and teaching staff in my constituency. They do a fantastic amount of work, but they face challenges, such as finding money to provide sports facilities such as all-weather pitches. I also wish to make a quick plea. If we remember all that we have just said about post-16 pupils—about making sure that we have the skills that we need and that we do not lose children out of the county—we should probably look at plus-16 funding and make sure that our young people can get the skills they need in their own area.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Investing in our schools and improving education standards should be a priority for any Government. Our schools play a vital role in ensuring that young people are prepared for the world of work, positively contributing to our society and economy. However, the inadequate provision in the recent Budget, not to mention eight years of damaging cuts to our schools, demonstrates that education is not a high enough priority for this Government.
The Chancellor’s promise of £400 million for a few “little extras” when schools are on their knees owing to years of crippling cuts has, understandably, angered teachers and parents around the country. That is the equivalent of the Chancellor chucking a few crumbs to our hard-working teachers who are struggling to cope— so much for the end of austerity. It is as if this Government think that if they keep telling us that austerity is over, they will be believed regardless of the facts. As we have heard, the director of the Institute for Fiscal Studies has said that headteachers should be preparing for more difficult years ahead—that is despite the fact that cuts that have already been made. For example, the Government have cut £3.5 billion from the education capital budget since 2010, and £1.7 billion in real terms from schools budgets since 2013. There has been a reduction in spending of 8% per pupil in real terms between 2010 and 2017-18, as well as a 21% reduction in funding per sixth-form student since 2010, not to mention the 8% cut in per student funding in further education and sixth-form colleges. Teachers’ pay is down by £4,000 in real terms since 2010, and the funds for special educational needs and disability are also inadequate.
Insufficient funding means that schools cannot pay their teachers properly. It means rising class sizes, with more than half a million children in supersize classes, fewer special support staff, the end of school trips for many children and much else. The Education Policy Institute found that the proportion of local authority secondary schools in deficit has trebled to more than a quarter of all such schools.
A good education will increase opportunity and lift children out of poverty. In my constituency, schools have been transformed thanks to the investment that began under the previous Labour Government. When the Education Secretary starts lecturing us he should remember how appalling the education system was when Labour came into power. If he wants to give us a history lesson, he should go back to the history of his Government and the way that they treated inner-city areas around the country—it was with contempt. It was the investment of funding in teachers, leadership, management and supporting parents that transformed education across London and other parts of the country. This Government are in a race to the bottom. They are not trying to lift kids out of poverty or to improve education. The Secretary of State should learn lessons from what happened in London and not try to decimate schools in our city. Other areas could learn from the London challenge and much else that was a success. This would be better than turning schools and regions against each other, which is not right and will not serve our children well.
Despite record levels of child poverty—the highest in the country—the children in my area have advanced and have had opportunities because of investment in our education system, and that must not be put at risk. But this Government, with their vicious cuts and failure to invest in the future, are putting all that at risk. Our schools are facing cuts amounting to £16 million between 2015 and 2020 alone. As I said earlier, that is an average of £448 per pupil—in the borough with the highest child poverty rate in the country.
The Government are hellbent on decimating our public services, including schools, Sure Start centres, early years education and the police service; the list goes on. When they face a public backlash or political opposition, they grudgingly cave in, having done the damage, with a few crumbs here and a few there. Education is no exception. I call on the Secretary of State to step up and fight for more resources ahead of the next spending review to ensure that our schools get the investment they deserve and need so that the next generation are not held back by the failures of this Government. I appeal to him to step up and make sure that the Chancellor does not just give our kids and schools a few crumbs, but that he puts in serious funding to ensure that the children of our country can survive, thrive and contribute to the economy.
Kwasi Kwarteng (Spelthorne) (Con)
I am pleased to follow the hon. Member for Bethnal Green and Bow (Rushanara Ali). There is a sense of déjà vu in these debates about public services. We have rehearsed these arguments over many years, but I still find it extraordinary that when we try to bring a degree of order and sanity to public finances, the Labour party—which wrecked the economy and completely destroyed the public finances—makes the specious argument that we have somehow wrecked public services. In fact, we have preserved the ability of this country to meet the level of public service requirement that our constituents and the country expect, by having a sound footing on the economy. It is ridiculous that the Labour party should constantly harp on about devastating cuts when we had to save the economy.
James Cartlidge
My hon, Friend is making a typically robust speech. This debate is about the next generation. Surely the moral point is that it is precisely the people in education today—in our schools and colleges—who will have to repay the national debt that will be accumulated if we are not prudent and careful with public expenditure. Does my hon. Friend agree?
Kwasi Kwarteng
I am delighted that my hon. Friend is talking about public finance, because we also have to talk about education and look at the record of the previous Labour Administration. In the course of effectively destroying the public finances and leaving us with the biggest deficit in our peacetime history, Labour presided over an absolute fall in standards in our schools. This has been well documented by the programme for international student assessment tables and other international records. It was the case—[Interruption.]
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Not too much shouting from a sedentary position, please.
Kwasi Kwarteng
Labour Members are shouting because they do not like to hear the truth—it is embarrassing to them.
We looked at reading statistics and we looked at mathematics. The coalition Government that came in in 2010 not only managed to begin to reduce the deficit but drove up standards through the admirable work of my right hon. Friend the Member for Surrey Heath (Michael Gove). When he was Secretary of State for four years, he managed to begin to drive up standards in schools. He reorganised a lot of the qualifications. On that note, I am delighted about the introduction of the new T-levels, showing innovation and a new approach. We introduced free schools, which have been very successful.
Kwasi Kwarteng
There have been more than 400, and each of them has been—[Interruption.] The hon. Gentleman scoffs, but each of them has been extremely successful and is driving up standards in its locality.
I was particularly surprised to hear that the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), is actually campaigning to try to preserve the free school in his borough because it is a beacon of excellence. This is the kind of hypocrisy—“Do as I say, not as I do”—that we have learned to expect from Labour. It is an absolute scandal that someone like the right hon. Gentleman should be against free schools but actually support one in his own constituency. That school is an excellent initiative. He is being a very good constituency MP, and I am delighted to see that he is supporting a free school in his constituency.
The facts of the matter are very clear. What the coalition Government and the current Conservative Government have managed to do is to bring some degree of order to the public finances while driving standards higher in education. My right hon. Friend the Secretary of State has suggested that we have 1.9 million more pupils in outstanding schools. [Interruption.] These are facts. I know that Labour Members do not want to hear those facts. We have also heard—[Interruption.] I am surprised that I am eliciting a running commentary from the shadow Secretary of State. It is absolutely extraordinary. She does not like hearing the truth, does she? [Interruption.] She really does not like it, so she will not let me continue my speech.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Really, can we just take the temperature down a little bit here?
Kwasi Kwarteng
Thank you, Madam Deputy Speaker. I have never, in my eight years in Parliament, actually had a running commentary on any speech, so clearly I must have hit a nerve. It is absolutely extraordinary, this constant chuntering.
The facts are very clear. We have had higher standards in the past eight years—[Interruption.] I do not think that is particularly funny, if we look at the wreckage of the last Labour Government. We have a comprehensive spending review next year when we will be allocating even more resources to education and to schools than ever before. We have more teachers. We have higher attainment. We have higher standards than ever before. In the context of the disaster that Labour presided over in respect of the public finances, what this Government have done over the past eight years is to be commended.
In my constituency there are six schools in the maintained sector—very good secondary schools. Every single one of them has seen standards improve and has seen additional amounts of money. We have seen, with one exception, additional amounts of money put to pupils’ use for books, attainment and driving up standards. I would just say that we in Spelthorne would like to see some degree of equalisation between the London allowances that London teachers have and the amount that teachers in our borough receive. We are just outside London. Many of our teachers feel that because they do not have London weighting, even though the costs in the borough are level with those in London, we would like some sort of adjustment, if that were possible. Overall, though, while the picture is not perfect—very little is perfect—we are on a much, much better footing than was ever the case, certainly when I started in my role in 2010.
Julie Cooper (Burnley) (Lab)
I speak as a former teacher, as someone who has served for 20 years as a school governor, as a parent and, most recently, as a grandparent. I also speak as someone who was a child from a deprived home. I can tell the Secretary of State that I really understand the difference that education makes to life chances, and I understand that education is the key to social mobility, so I was delighted when the Prime Minister said:
“I want Britain to be a place where advantage is based on merit not privilege; where it’s your talent and hard work that matter, not where you were born, who your parents are or what your accent sounds like.”
When the Secretary of State said that social mobility is a “large part” of the reason we have a Department for Education, I thought we had cracked it, but sadly I was wrong, because the reality does not match the rhetoric.
In my constituency, the average reduction in school funding is £300 per child, and Burnley FE college has had its funding cut by 30% since 2010. Those budget cuts have had serious implications for the educational opportunities of children and young people in my constituency. There are serious concerns, but in the limited time available to me, I want to focus on the provision of early years education.
I want to go right back to the beginning, to the crucial early years. It seems, at least on paper, that the Secretary of State agrees with me on that too. He has said that
“the point of greatest leverage for social mobility is the very earliest time in life.”
I absolutely agree, but too many of our children hail from homes where poverty and deprivation limit experience and stifle early learning, and by the time they arrive at school, they are already behind.
Two weeks ago I chatted with an early years teacher, who told me about a home visit she had made to a three-year-old boy who lives with his mum, dad and sister. The family have one room to live and sleep in, and they share a kitchen and bathroom with three other families. The main room is damp, and mould is growing on the walls. Not surprisingly, there is hardly any room to move around the double bed and no room for a child to run or play. Mum works days, so dad looks after the little boy during the day. Sadly he does not engage with the little boy as much as he would like because he works nights, and he has to sleep sometime. Because no one has much time and doing the laundry is difficult with a shared kitchen arrangement, the little boy is still in nappies. The teacher told me that that case is not unusual. I hope the Secretary of State will take the time to outline how that little boy and others like him fit into his plans for social mobility.
Given that sad reality, is it any wonder that so many children in this country start primary school with language and social skills that are below the expected level for their age group, and that more than a quarter of children finish their reception year still without the early communication and reading skills that they need to thrive? Those children cannot wait until primary school for those issues to be addressed.
Independent research has shown that maintained nursery schools provide the highest-quality early years education, meeting higher standards than others. They provide a different service from other early years providers. They close the achievement gap for so many of the most disadvantaged children in the country, provide expert support for children with special needs, provide family support for some of our most vulnerable children and families, and act as system leaders, supporting other early years providers in their locality to raise standards. Of course, the Secretary of State is aware of the excellent provision in maintained nursery schools, not least because of the valiant efforts of hundreds of nursery school teachers who have made the journey from every corner of this country to make their case in this place.
Even though extensive research shows that every single pound spent in the vital early years is worth £15 spent in later years, it is a sad fact that 325,000 children have no access to a nursery school teacher. That number is set to rise significantly unless the Government put nursery schools on a sustainable financial footing, recognising that they are schools and need to be funded as such. If the Secretary of State is serious about driving social mobility and raising educational standards, I ask him to recognise the phenomenal contribution that this sector makes to the life chances of so many children, and I ask that he goes beyond warm words and today makes a firm commitment to fund it for the future and announce the detail without delay.
James Cartlidge (South Suffolk) (Con)
It is a pleasure to follow the hon. Member for Burnley (Julie Cooper). The point she made about children going into schools without the requisite level of reading was interesting. The feedback I have had from my schools is quite worrying. There are issues of deprivation and so on, but there are also parents who do not read to their children enough; that is a simple point.
Julie Cooper
In the case of the family that I cited, when does the hon. Gentleman think the parents were actually able to read to their child, given that one was in work during the child’s waking hours and the parent who had worked nights was asleep during the day or most of it? I assure him that it would have been very difficult.
James Cartlidge
I was referring to what I have heard in my constituency. That was obviously not specific to the hon. Lady’s case, about which I cannot possibly comment. I am simply saying, given the feedback I have had, that although there are issues of deprivation, there are also parents who are not taking seriously enough their responsibility to read to their children, which is leaving them with lower standards. We have to say that, because it has truth in it, I am afraid.
I do agree with the hon. Lady about social mobility. My right hon. Friend the Secretary of State is absolutely right about the importance of education spending. It is the one form of public expenditure that can ultimately enable people to better themselves, rise up in life, and go on and make the most of their natural talents. Obviously we all support school funding, and we want to see our schools adequately funded.
It is shocking when we hear a speech from an Opposition Front Bencher that does not mention the way in which the cake is divided. There are schools in counties across England facing this problem and many different political representations have been made, but overwhelmingly the shire counties receive a very poor share of the cake. We can increase the whole thing, but if we want to see more spending in Suffolk, we have to change the formula. That is why I am incredibly grateful to the Government for going through the pain and the difficult calculations to come to a formula, which, when it comes in, will see my schools in South Suffolk receive an average of 5.1% more funding. That is generous, and it will enable us to give more support to the children we have been talking about.
Kwasi Kwarteng
Will my hon. Friend enlighten the House about the fact that all these plans would make no sense if the economy was wrecked once again, as the Labour party is too often wont to do?
James Cartlidge
It may be a one hit wonder, but it is sung very well by my hon. Friend. As I always say, we also have a strong employment record. When children come out of school, college or university, they have to get jobs. We want them to thrive, and that means having a strong economy to drive such funding.
The higher spending I have mentioned, which we look forward to receiving in Suffolk when we have changed the formula, is not there for the sake of it. There is a tendency in this debate to talk about spending as an end in itself, but what matters is the outcomes that the funding delivers. I have to say, when we have the statistic that there are 1.9 million more children in schools ranked good or outstanding since 2010, we should be proud of that. [Interruption.] The hon. Member for Wythenshawe and Sale East (Mike Kane) says it is because of the higher school population, but the school population has not gone up by 1.9 million in that time. It is because—surprise, surprise—more schools are rated good or outstanding.
Let us take the example of Suffolk. In December 2013, 72% of schools in Suffolk were ranked good or outstanding; this March, it was almost 90%. We are also seeing real improvement in progress 8 and attainment 8, and all those things show that we are adding value, meaning that our pupils are getting about and making more of themselves.
Leo Docherty (Aldershot) (Con)
Does my hon. Friend agree that driving up standards is linked, importantly, to the increase in choice? It was choice that my right hon. Friend the Member for Surrey Heath (Michael Gove) introduced in his groundbreaking reform of bringing forward free schools in 2010, and it is the freedom for parents to choose that drives up excellence.
James Cartlidge
My hon. Friend makes a very good point, and my experience backs that up. A village can have its own school, but if parents think the school a drive away is better, they will send their children there, because they are exercising choice. Such a choice undoubtedly drives up standards, so my hon. Friend makes an excellent point.
In the last few minutes of my speech, I want to join my hon. Friend the Member for St Ives (Derek Thomas) in suggesting some ideas and adding them into the mix, as one likes to do. The first is about teachers’ pay. It is a great achievement when headteachers in particular show the leadership that enables schools that are in special measures or struggling to improve. In my view, when that happens there should be a financial reward. By the way, that would be paid for, because if more schools become good or outstanding because teachers turn them around, especially from special measures, that will lead to higher productivity, which, after all, is how we pay for higher spending. When teachers put in that sort of effort there should be a financial reward, because the country will benefit and it will pay off.
Another idea concerns school transport. In Suffolk at the moment—no beating about the bush—we are going through very controversial and painful changes to school transport, necessitated by the difficult situation of council funding. I simply remind Opposition Members, before they inevitably start making noises, that they did not protect council budgets in their 2010 manifesto any more than we did, so the situation would have been very similar. Councils have had to make painful decisions. In Suffolk that means that school transport is being reduced. The system is being changed, and I hope that the impact will not be too dramatic.
I find it very difficult to defend this, but I understand why we have decided not to look at pensioner benefits in this Parliament—because of the political situation and the parliamentary arithmetic. However, I have wealthy pensioners in my constituency who get a free bus pass, and we are cutting school transport. I struggle to justify that. To me, that is a good example of the intergenerational problems that are building up in this country, which we have to address. Many constituents of mine who are relatively wealthy pensioners come to me and say it is silly that they get that. That is just a suggestion, and it is funded. I think it would be a brave and good thing to do, because there needs to be more support for those at key stages of life to get school transport and to get to college.
In conclusion, we should be proud of the progress our schools are making. We are seeing genuine improvement, and the best way of measuring that, as other hon. Members have said, is through international comparisons. We are going up the league tables for reading. Our results are far better, and that is because of the leadership shown by a Conservative Government, responsible finances and better standards. That is the right mix for schools policy.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
It is a pleasure to follow the hon. Member for South Suffolk (James Cartlidge). He may not know this, but I grew up in Suffolk and went to school there, so I know exactly the impact that the last Labour Government had on the communities he talks about. Under the last Labour Government, the school that I went to had a new sixth-form building; received capital investment into its home economics and technology centres; and had a complete revamp of its maths block. That all happened under the last Labour Government, who invested in the capital elements of schools. The idea that capital is a new device that this Government have found and that they are the only ones who are spending it is nonsense. I am of a generation that a Labour Government created through schools investment, education investment and capital investment.
Catherine West (Hornsey and Wood Green) (Lab)
Does my hon. Friend agree that it is a terrible pity that the sixth form has experienced the worst cuts of any age group?
Gareth Snell
My hon. Friend makes a prescient comment, because I will come on to that exact point momentarily.
Schools in Stoke-on-Trent are suffering the same problems as those suffered by schools across the country. Their per pupil funding has not been protected, so the costs they have to endure and incur are so significant that their budgets no longer balance. Only on Monday I was at Etruscan Primary School in my constituency where the executive headteacher told me that her school budget’s projected deficit for 2020 was almost £500,000. Through diligent work, she has managed to bring that down to £300,000, but there is still a huge gap between what she will have to spend and the money coming in. She is not the only one. The headteacher of St Thomas Aquinas Catholic Primary School has also written to me to explain that she faced a budget deficit of £100,000 over the past year. Moreover, she does not get sufficient resource from Stoke-on-Trent City Council, which is controlled by the Conservatives and independents, to meet the costs of supporting statemented children in her school who require—and who rightly receive—one-to-one tuition and support. She has to supplement that budget from her general school fund, which was also attacked and top-sliced this year by the Conservative and independent council as it sought to meet its higher needs budget. That budget has been overspent because the council has not got its own house in order with in-house provision and is instead sending children from my constituency and the city of Stoke-on-Trent out of area for the provision of particular educational needs. That is not good for the children, it is not good for school budgets, and it is certainly not good for the economy of Stoke-on-Trent.
My hon. Friend the Member for Hornsey and Wood Green (Catherine West) has rightly pointed out the scandal that is the funding for further education and sixth-form colleges in particular. Only last week I was talking to the vice-principal of my city’s sixth-form college who said that the cap of £4,000 per learner means that they have to scale back on the extras—not the “little extras” the Chancellor talked about but: the support they put in place for trips; the support they put in place to allow learners who need additional support, but who do not have a statement; the support they put in place through pastoral care; and the support they put in place for their young learners who cannot access child and adolescent mental health services system in our city because of the underfunding of the NHS. They are having to scale back on every single one of those because their costs are going up. Rises in inflation mean that any reserves they had are being eaten into. As a result, the young people in the college are suffering.
The Chancellor announced in his Budget a tax cut for the wealthiest 10%. Everybody in the Chamber will receive a tax cut as a result of the Budget the Chancellor proposed and is being voted through. I was proud to vote against that, because I do not think it is fair or right. I do not know how I can go into a classroom and justify billions of pounds being spent on tax cuts for the wealthiest 10% when headteachers across my constituency are telling me that they cannot afford to buy textbooks and other provisions for their schools.
Gareth Snell
No, because that would take up time and I am sure there are plenty of others who wish to speak.
I cannot go into those schools and justify a tax cut for the wealthiest 10%, while at the same time my schools are going short of provisions. The £10,000 the Chancellor announced for little extras will not go towards closing their budget deficits or towards the provisions they need. It is a disgraceful attack on those schools and their resources.
The Education Secretary looks puzzled by that, but that is the policy of the Government he supports. When I speak to headteachers in my constituency I make it very clear that if they want to see real education funding reform they will not get it from this Government. The Government are simply trying to rig the system to support schools in their constituencies, while cities like mine suffer further. [Interruption.] The Education Secretary asks me what I suggest. What I am suggesting is what I have just said. The funding formula is being re-engineered to move provisions away from areas of deprivation, in cities such as Stoke-on-Trent, towards areas with lower levels of deprivation to placate the electorate in those areas. The hon. Member for South Suffolk said that he knows policies change depending on which electorate they need to placate. That is happening with school budgets. That is why Stoke-on-Trent schools will lose money, while schools in other parts of the country will gain money despite the fact that Stoke-on-Trent ranks 14th for deprivation. [Interruption.] The Parliamentary Private Secretary, the hon. Member for Stoke-on-Trent South (Jack Brereton), is shaking his head. He is an MP for the city I represent—
Gareth Snell
It is true: he is an MP for the city I represent. [Laughter.] He will have sat in the same meetings as me, with the Stoke-on-Trent Association of School, College and Academy Leaders and the Stoke Heads and Principals Executive, while headteachers talked about the funding deficits they face. All I would say to the Government and the Secretary of State is this: please take up the baton for schools. Take up the requests from colleges and get more money out of the Treasury. At the moment, he is asleep on the job. The sooner he realises that he needs to stand up for schools the better.
Kevin Foster (Torbay) (Con)
It is a delight to follow the hon. Member for Stoke-on-Trent Central (Gareth Snell). I hope he will encourage his hon. Friend, the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), to put these views on increasing schools funding in his own literature. Perhaps the Government will alter the funding formula to make it fairer for that constituency.
It is a pleasure to be called in this debate and to reflect on the good news and the good work happening in Torbay to improve school standards and invest in our schools. I am particularly proud of the money that Paignton Community and Sports Academy will be getting to sort out some of its school buildings, some of which have been in a poor condition for some time. I want to pay tribute on the Floor of the House to my right hon. Friend the Member for Putney (Justine Greening) who, when she was Education Secretary, met me and my hon. Friend the Member for Totnes (Dr Wollaston) to discuss the school’s buildings. The school had been knocked back from a couple of bids, but my right hon. Friend was very good and she listened. She took the school’s points on board and now about £4 million will be spent to sort out its buildings and provide the top quality education its pupils need.
In many cases, such debates about Torbay can focus on our grammar schools. I am always very clear that grammar schools should be a choice for those parents who believe it is right for them and their children, but that no one should feel compelled at 11 to take an 11-plus test to get a good education. That is why the improvement of other schools in Torbay has always been so welcome. I look particularly at Torquay Academy, which is now one of the schools with the highest value-added scores in the south-west. Its academy partner is Torquay Boys’ Grammar School and they work very closely together. The academy is excellent in attainment for those of all abilities and a priority in exactly the same way, despite the fact that there is a grammar school down the round. They do not conflict with each other; they complement each other and work very well together.
In terms of aspiration, we are looking ahead to the new £17 million high-tech skills centre that is under construction in Paignton; it will be part of South Devon College. The Paignton Community and Sports Academy sixth form will be provided by the college, taking advantage of many of the fantastic facilities. For me, it is about driving aspiration and giving people opportunities, not just the idea that if someone goes to university, it will be the greatest part of their life—although it is good to see that more people from deprived backgrounds are going to university. Technical skills are as important for driving aspiration and ambition, which is why that investment is so welcome.
Ellacombe Church of England Academy is in one of the most deprived parts of my constituency. After the previous speech, people might think that Torbay is purely palm trees, beaches and retired people, but we have areas with particular challenges, and that does not change just because they happen to be in Torbay rather than another part of the country. The new nursery provision will support a school that has come on in leaps and bounds over the past eight to nine years, partly through the academy process, partly through working with other schools nearby, and party through the work of the superb team of teachers there.
One concern that some schools would want me to raise while I am on the Floor of the House is Torbay Council’s current consultation on its high-needs formula and how the top-slicing might work. I see that the Minister for School Standards is sitting on the Treasury Bench; he will remember meeting the heads of three of my schools to discuss how they have been at the very lowest points of funding and that the top-slicing proposal could push them below the minimum that they have been guaranteed. It would be interesting to hear some thoughts from him either now or in a later meeting on how some of those challenges can be avoided.
There is a lot to be proud of in our schools, not just across the country, but particularly in my constituency. There will be challenges, but to pretend that the challenges are just recent ignores the past. One of my primary schools is a great place to go, but it was saved only due to the election of a Conservative Mayor, because the then Liberal Democrat council, under a Labour Government, wanted to close it as part of a surplus places scheme. That would have been such a short-sighted decision, given that it is now in an area where there is the most demand on school places. Thankfully, Nick Bye, the then Mayor of Torbay, took the decision to keep the school open and looked ahead to a future when numbers would be increasing, so we have not been left in a situation where our area that has the most pressure has even more. I am also pleased to say that a private, independent school that recently closed—it had falling numbers for some years, partly due to the quality of local state schools—has now been acquired to become a new state primary school slap-bang in the middle of Paignton. That would be a positive investment in one of our most deprived communities in Torbay.
It has been interesting to hear this debate. I must say that when it comes to education, point scoring is better on a school sports day than in a political debate. Certainly some of the stuff we have heard is not what people would particularly want in a classroom, and perhaps one or two Opposition Members could do with doing their homework on one or two issues.
Jess Phillips (Birmingham, Yardley) (Lab)
Will the hon. Gentleman give way?
Kevin Foster
No, I will let other people speak. To be honest, the hon. Lady has not been here for much of the debate—[Interruption.] Someone shouting when they have not been here is really not very professional. It has been welcome to have this debate and talk about the schools and what we are doing in Torbay, and to reflect on a few of the issues for my constituents.
Anna Turley (Redcar) (Lab/Co-op)
It is always a pleasure to follow the hon. Member for Torbay (Kevin Foster).
I want specifically to speak about special educational needs funding. A growing number of parents come to my constituency surgeries in real distress because their children just do not get the support that they need in class. Although parents generally have a good experience of support in primary schools, I am afraid that they really struggle when their children transition to secondary education. They find that support just is not there at secondary schools, and that those schools cannot cope with their children’s extra needs. More and more children suffer with anxiety, depression and other mental health challenges, and there simply is not enough support to help them with those things at such a crucial stage of their life.
I have been contacted by several parents whose children simply do not attend school—they have dropped out—because of their anxiety and because support for their special needs just is not in place. Their parents are fined as a consequence. I believe that has also led to a number of informal expulsions of vulnerable children and to the growing use of home schooling, which I am concerned is used to hide the number of children who drop out because they do not get support for their special educational needs in school. Children are being written off and abandoned, and that concerns me greatly.
I do not for one moment blame schools and teachers. I know they work flat out as they suffer real-terms budget cuts. In fact, challenges with special educational needs are often the biggest issue that teachers themselves raise with me. They work with our children and see those challenges day in, day out. However, we know that councils do not have the financial capacity to provide the specialist mental health support that children need.
Across the country, council overspending on children’s special educational needs and disabilities trebled in just three years, from £61 million in 2015-16 to £195 million in 2017-18, yet, as the Secretary of State probably saw, research in The Observer this weekend identified 40 councils that have either cut special needs funding or are considering doing so next year. I am afraid his warm words are meaningless unless councils are given the funding they need by his colleagues.
We know that support staff are the key to supporting pupils with higher needs. They are always the first to be hit when funding pressures bite. Since 2013, there has been a 10% cut in the number of teaching assistants in secondary schools, despite the number of pupils having risen. Teaching assistants provide more than just educational support. They play a fundamental role in supporting learners with a whole range of emotional and behavioural needs, helping to address difficulties such as lack of self-esteem and confidence, and other hidden mental health challenges. However, when their numbers are cut, their work in this area has to be picked up by teaching staff, who already have to deal with bigger classes.
Between 2015 and 2020, schools in my constituency will have lost more than £4 million in real terms. That is a massive per-pupil loss of £226. Given those funding pressures, it is no surprise that disadvantaged and SEND pupils struggle to receive the support they need in schools. I was shocked by reports in the media that the Chief Secretary to the Treasury was cut out of Budget discussions for having the temerity to ask for an extra £155 million for SEN places for some of our most vulnerable children. That is a damning indictment of the Government’s priorities when making Budget decisions. If the education of all our young people—particularly the most vulnerable—is not at the top of the Government’s priority list, they need to take a long, hard look at their position.
We have only one chance to give our children the best start in life. Support should be available to meet the individual needs of everyone. I urge the Government to take a look at education funding, particularly for children who face the most challenges—please do a fundamental review and commit to investing in the next generation.
Huw Merriman (Bexhill and Battle) (Con)
It is a pleasure to contribute to this debate. I do my best to ensure that I always contribute to debates on school funding and the success of our schools and education sector.
I make this contribution off the back of spending a week—the same week as my party conference in Birmingham—visiting 20 of the schools in my constituency and giving presentations about what goes on in this place, the role of an MP, democracy and how it has evolved over the years, and some of the campaigns I am focused on, including on school funding. The pupils I met were so full of life. They are like sponges—they want to soak up everything they are taught. They are taught by outstanding teachers who work incredibly hard. The heads and senior leaders of those schools undoubtedly face a lot of pressures, yet still manage to motivate their pupils to be the best they can. I salute not just those 20 schools in my constituency, but all the schools in the country that do exactly the same. I will always have their back by ensuring that we give them the best we possibly can.
Having heard from the Opposition, let me say that we must give credit where credit is due as far as the past eight years are concerned. The fact that 1.9 million more pupils are in good or outstanding schools is testimony to not just the work that the Government are doing, but the schools themselves. It is the schools that have turned themselves around. I am very proud that all my local secondary schools are at that level, and doing incredibly well. Moreover, a record number of pupils are going to university and doing the best that they can.
The statistics are there. UK Government expenditure is 3.8% of GDP. In France the figure is 3.4%, in the United States it is 3.2%, and in Germany it is 2.6%. While there is more to be done, I think that the Opposition would have more credibility if they recognised those statistics and thought about how they could be built on, rather than trying to take them apart.
Funding has risen by record levels—it has increased from £41 billion, and soon it will be £43 billion. I have lobbied strongly for fair funding in my constituency. We were able to receive an extra 5% for our schools, and I am very grateful for that. However, we are still seeing unfairness in the system. The hon. Member for Stoke-on-Trent Central (Gareth Snell) spoke of funds being removed, as he put it. I ask him to look at the position from my perspective. Schools in my constituency will receive far less than those in his constituency, just as a starting point. That is before we take account of additional measures such as the pupil premium—before we consider the individual pupil. Why should students be worse off at the starting point just because they happen to go to school in East Sussex? This has been going on for decades, and it is just not fair—[Interruption.] Opposition Members should put themselves in my position, and see the situation as I do. It is not fair at all.
I absolutely support fair funding. Every single pupil, no matter where they go to school, should receive the same level of funding as the starting point, before further amounts are layered on as appropriate. Pupils come from Hastings, the most deprived town in the south-east, to schools in my constituency. They face challenges and difficulties, but they do not take the deprivation issues from Hastings. Of course I expect other Members to stand up for the schools in their constituencies, but they can imagine why I am doing exactly the same. I am pleased that the secondary school allocation for East Sussex is to rise from £4,300 per pupil to £4,800, but I shall continue to speak in this way until we have parity at the starting point.
In the couple of minutes remaining to me, I want to touch on a few issues that I have picked up from my visits to 20 schools a month ago. One is teachers’ pay. I lobbied heavily for extra money to be provided outside the schools budget, and I was delighted that the bulk of the pay rises will be funded outside it. However, I think that if a school spends 80% of its budget on staffing costs, it is fair enough to expect it to contribute something towards that, hence the 1%.
I believe that leaders should be paid to lead. I have talked about the challenges for heads and senior leaders. I do not think that a 2% rise on the upper spine and a 1.5% rise on the leadership spine reward what is a very challenging leadership role, and I think that they should be given more. On this point, I take issue again with the hon. Member for Stoke-on-Trent Central. I am sure that he would, like me, campaign for those headteachers to get a larger pay rise, but at the same time he is campaigning and voting against their receiving an extra £860 in the form of the increase in the tax allowance. For him to attack my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), who has actually given the headteachers that pay rise—the average headteacher pay is £68,000—strikes me as somewhat perverse. However, I would like the Government to look at pay, particularly at the senior levels.
Pre-school funding is also of great concern to me. I have lost a further two pre-schools in my constituency. Business rates are an issue, as are the national living wage and the fact that the hourly rate is not high enough to meet their costs. I recognise the £6 billion that the Government have provided for pre-schools, but I think they need to go that bit further and fund fully. That would be a successful policy.
Again, I salute my schools, their heads, and, indeed, the ministerial team, who have made my local schools good and outstanding.
Faisal Rashid (Warrington South) (Lab)
Although there are often disagreements in this Chamber, I am sure that one thing we can all agree on is that every child deserves the best opportunities in life. I am sure that we can also all agree that this begins with a quality education, not just an education. That is something that any Government should be proud to support, yet this Government’s record on education is one of cuts, funding pressures and recruitment crises.
According to the Institute for Fiscal Studies, per-pupil spending in England’s schools has fallen by 8% since 2010, and the cuts are having a very real impact on the quality of education across the country, especially in Warrington, where children and young people have suffered for many years thanks to a legacy of low funding for schools.
Earlier this year, I conducted a survey of schools across my constituency of Warrington South. I did so to better understand the impact of underfunding on pupils and frontline staff, and the response was utterly damning. Some 100% of the 31 schools that responded were either dissatisfied or very dissatisfied with their current funding situation, while 81% said that since 2015 they had had to make staffing cuts due to funding pressures. Some 80% had cut spending on books and equipment. Perhaps of even more concern, many schools reported plans to make further cuts in the next two years to cope with forthcoming budget pressures, with a staggering 91% saying they would need to cut spending on books and equipment, too. I would like to take this opportunity to praise the schools in my constituency, which work tirelessly and do all they possibly can to protect pupils from the cuts, but make no mistake—this is getting harder and harder.
In Warrington South and across the country, underfunding means that our schools are under unprecedented pressure, which is resulting in the loss of school staff and leading to cuts to vital classroom resources and support. Our school leaders are doing an excellent job in the most difficult circumstances, but across the country, our teachers, pupils, parents and campaigners have been crying out for the funding that is so desperately needed.
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
Does my hon. Friend agree that schools are suffering in England, Wales, Ireland and Scotland? Will he join me in praising the 40,000 teachers who marched through Glasgow last month to stand up for our kids’ education—and that is just the start of it?
Faisal Rashid
I totally agree.
I passionately believe that in life you get what you pay for, and without adequate investment, we simply will not have a fit-for-purpose education system that provides young people with a quality education, and staff with the resources they need to provide that quality education.
In Warrington South and across the country under- funding means that our schools face unprecedented pressure. My survey and many similar ones carried out by my hon. Friends—if I remember correctly, my hon. Friend the Member for Bury North (James Frith) did an excellent survey in his constituency—all tell us loudly and clearly that underfunding is having a real impact on the quality of education that our young people are receiving.
This morning, while I was going through my social media, I came across a video of Alex, who was right here in this Chamber last week as part of the Youth Parliament. He made an excellent and passionate speech. We are taking funding away from such children, but they are the next generation. We are talking about Brexit, and about finding new markets, free trade agreements, manufacturing and so forth, but we must provide quality education to take us forward. If we do not provide those skills and that quality education, we will not have any future. These young people are our future and if this Government are serious about the future of this country being bright, it is high time that they started seriously funding our schools.
Chris Green (Bolton West) (Con)
It is a pleasure to follow the hon. Member for Warrington South (Faisal Rashid) and to hear his typically determined championing of his constituency. One of the greatest pleasures of being the Member of Parliament representing Bolton West and Atherton is the school visits, particularly in connection to the events surrounding Parliament Week. I visited Devonshire Road Primary School yesterday and participated in a Q&A session there, and I digitally visited Ladybridge High School last week for a digital surgery that it was holding. That was the first time I had participated in that kind of event, and it was really interesting to see young people engaging in democracy in a way that my classmates and I never did when we were at school.
I also visited Bolton sixth-form college recently to hear its concerns. I understand that the Secretary of State went to a sixth-form college himself, following his studies at St Ambrose College. It is particularly important to represent the needs of those colleges, because that sector of our education system is often overlooked. Let us also remember the contributions that many of our schools made during Armistice Week, including activities by choirs and readings during the celebrations of the 100th anniversary of the armistice and the end of the first world war.
It is important that we get the distribution right between the different boroughs around the country. We have heard today about the unfairness of the historical inequalities in funding, and I think everyone would recognise the importance of balancing out those problems. It would be remiss of me not to reflect the concerns that I consistently hear from headmasters and headmistresses across my constituency as they call for more funding. Bolton West needs more schools and more school capacity. Blackrod Primary School and Chorley New Road Primary School have recently been extended to meet increasing demand, but there is a need for new schools as well. We are seeing a substantial amount of house building in and around the constituency, and a demographic bulge has had an impact on primary schools and is now beginning to challenge the capacity of the secondary schools in the constituency to take more children.
There is constant concern about the lack of sufficient school building and of sufficient investment in schools, which ought, to some extent, to be driven by the council’s vision. However, we are consistently not getting the schools, the medical facilities, the GP surgeries or the roads that we need. That is a really consistent message across the constituency, and it is perfectly highlighted by Bolton Council’s lack of vision for the Horwich Loco Works. That is the biggest housing development in Greater Manchester, with 1,700 houses planned, yet not a single primary school is planned for the site. That is extraordinary. These will be family homes, probably with several children in each of them.
Bolton Council had a master plan and a vision for the Horwich Loco Works, but it has been ditched. The council’s plan is now for the schools around Horwich to double in size. Rather than being single intake, many of the primary schools will double in size. In some ways, that is good. We have good and outstanding primary schools that can increase in size and take more children, but let us look at the challenge that those families will face. For example, we want children to be able to walk to school, but if a primary school doubles in size, many of the children who go there will not be able to do that. Their parents will have to ferry them there in a car. We are looking at an area that is already suffering significant levels of congestion, and the lack of vision from the Labour-led Bolton Council will compound the significant problems that the town already faces. The council should be working with the developers to ensure that we have the leisure facilities, the roads, the medical facilities and the schools that we need.
This is part of a wider problem across Greater Manchester. A powerful vision should have been set by the 10 boroughs for the Greater Manchester spatial framework, which is supposed to combine house building with all the other infrastructure that is required. Consistently, however, the 10 borough councils, all of which are now led by Labour, have failed to set and deliver their vision for roads, medical facilities, leisure facilities and schools. The vision must be developed, and if Greater Manchester cannot sort it out and if the Mayor cannot help to deliver a new vision for Greater Manchester, Bolton and Wigan, I am calling on Wigan Council and Bolton Council to go it alone and set out their own visions. Ultimately, this is about education for the next generation, and we have to deliver skills for children in my constituency.
Jo Platt (Leigh) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Bolton West (Chris Green), although I do not share his view that local government should be blamed for school cuts. It is an even greater pleasure to speak in today’s debate, and I want to give a special mention to the group of female students from Leigh who will be visiting Parliament as part of the RECLAIM project in conjunction with Parliament Week. I am sure that the whole House will welcome them tomorrow. I also pay tribute to all the schools in my constituency. I have had the good fortune to work with them for several years—both in my previous role as a councillor and as an MP—but I have seen the real struggle that they have faced under this Government.
This debate comes just a fortnight after the Budget, which made it clear that austerity is not over for our schools, our teachers and our schoolchildren. Local parents and teachers in Leigh have seen reckless cuts coming from Westminster that will see the per pupil budget fall by £180 for every primary schoolchild and £253 for every secondary school pupil. That is hundreds of pounds per pupil taken away each and every year, with cuts of £3.9 million for primary schools and £4.3 million for secondary schools.
As has been pointed out already, the impact of the situation on our teachers and parents has left them at breaking point. It has somehow become routine in 2018 Britain for schools to set up crowdfunding pages to ask parents for donations or regular direct debits just to fund workbooks and pens. Just last week, a local school sent home a letter asking local companies to sponsor its PE department. Despite that, the Chancellor had the audacity to come to this House and reward our incredible teachers—teachers who are leaving the profession in despair—with some “little extras”. It is insulting to our schools, which deserve nothing less than the funding to give our young people the education and resources they deserve.
Cuts have hit our schools hard, but I want to take a moment to consider the impact on children with special educational needs. As chair of the all-party parliamentary group for attention deficit hyperactive disorder, I recognise not only the enormous potential of and opportunities for those with SEND, but our duty to help harness the incredible educational gifts that they possess. To allow them to thrive, they need the guidance and assistance to draw out their talent and to fit into the archaic educational structures that we still use. To give just one example of where we are letting pupils down, a recent report from the Joint Committee on the National Security Strategy looking at our critical cyber skills gap said:
“We even heard that one of BT Security’s best graduate cryptographers was a music graduate whose ability to recognise patterns in music had proven a useful skill in relation to cryptography. Many of those who provided evidence also pointed to the strengths brought to the cyber security field by ‘neuro-divergent’ individuals, who, we were told, often possess ‘a real talent for logic’.”
There we have a profession with a critical shortage in this country—estimated at around 50,000 specialists—that is crying out for the type of talent and skills that those with conditions such as ADHD possess, and we also know that they are vastly underemployed. However, the processes are simply not there in our education system to bring the most out of these young people. With SEND funding frozen, the future hardly looks bright. Quite simply, society is letting these people down.
Our education system is struggling to cope with the cuts imposed by this Government, but the real travesty is that they come at a time when our education system needs a fundamental, transformative overhaul to raise education standards and become one of the most inclusive education systems in the world. As long as we have a Conservative Government, we will never see the kind of transformation that we need. That is why I support the motion and believe it is now crucial, at this important time for our country, that we end the austerity in our schools and begin investing in our future by creating an education system that truly works for all.
Layla Moran (Oxford West and Abingdon) (LD)
Here we are again, talking about school funding two weeks after a Budget, as the hon. Member for Leigh (Jo Platt) rightly mentioned.
Do not get me wrong, as a Lib Dem I love my potholes—believe me I do—but I think schools deserve more money than potholes. It was absolutely not the right priority that schools got only £400 million in the Budget, less than potholes. [Interruption.] Indeed, Lib Dems pointing at potholes—my dear favourite. But I would much rather have been pointing at a new school boiler or putting my arm around a teaching assistant who did not have to be let go.
That is why the “little extras” comment was so badly judged. I assume the Chancellor’s speech was not run past the Secretary of State for Education. If it was, I am shocked that his special adviser did not spot it. When I heard the comment, I tensed up inside, because I could hear the teachers in my constituency shouting, “Well, what about every time I reach into my own pocket to pay for pens and paper for the students in my school?”
I am a primary school governor at Botley School, and school governors are now having to make decisions about staffing—the system is at breaking point. They have already downgraded middle management and had reorganisations. In Botley we had to submit a deficit budget, as part of which we had to say that we were going to have some kind of reorganisation. In the end, all that does is put extra stress on the current teachers.
Forest School training has been cut or pared down in a number of schools in my constituency. People who have been to Forest School, perhaps as children, will know just how extraordinary that experience is—I wish I had had it—but that is being cut.
Ofsted has also pointed out in various studies that there is now a narrowing of the curriculum as a result of the cuts, and it is not just the EBacc. Amanda Spielman made it clear in a letter to the Public Accounts Committee just last week that that narrowing of the curriculum is real, that Ofsted has seen it and is very concerned about it.
Teachers across the country would like to hear from the Government that they are listening. The Government talk about more money than ever for schools. If we go back far enough in history, we will find that there is more money now, but it is also about the pressures on schools, with higher numbers of pupils and extra asks from pensions, national insurance contributions and an apprenticeship levy that really does not work.
There is a local school in Abingdon that is desperate to spend the apprenticeship levy funding. There is a maintenance chap and an IT specialist that the school would love to be able to skill up, but the local college does not provide those particular apprenticeships. Where is the joined-up thinking in this Government? It is just not there.
When I talked to the chair of governors at Larkmead School in Abingdon, he put it most aptly: “Do you know what we need? We do not need stuff. We need staff.” It is staff that schools need. As a former teacher, I can say it is that one-to-one interaction with students that is missing.
This is all happening at a time when local government services have been decimated, and we know that. We are now beginning to see it in schools. I am sure other Members, like me, were shocked by the BBC’s story over the weekend about the number of children being held in isolation rooms for five days or more. This is not happening of its own accord; it is a direct result of the closure of Sure Start centres, of the decimation of youth services and of the fact that children’s services just do not have the resources they need.
Schools are picking up the pieces. I have a school in south Abingdon that has its own food bank, because there are kids who cannot afford to eat when they go home at night. They greatly welcome the meal they get when they are at the food bank, but they cannot get that money.
Oxfordshire County Council is now running a consultation to top-slice some of the core schools budget and feed it into SEND provision—I have heard this from other Members from across the House. I am so sad that it should have to do this—it should not have to. Oxfordshire is one of the f40 areas of the country. As for fairer funding, I simply wish that the Government had gone the whole hog and decided to make it properly fair, because the historical unfairness in the system remains. Interestingly, the amount of money that Larkmead School would lose is about £50,000, which is exactly the sum it would have got from the “little extras”. I felt that irony keenly.
There are a couple of things the Government could help schools with. If schools want to be run as businesses, they need some level of medium-term clarity. The two issues that keep coming up at the moment are the pay award for staff and the administration of teachers’ pensions. By the way, the pay award for support staff has not been announced yet, so when will it be? Schools have to submit three-year budgets, yet they do not know where that money is going to come from. If we are serious about properly funding our schools, where is the clarity on the budget, what is going to come out of the spending review and when will this Government finally put education first? Let’s face it, there is no better investment in this country’s future than investment in education.
Laura Smith (Crewe and Nantwich) (Lab)
It is an honour to follow the hon. Member for Oxford West and Abingdon (Layla Moran). Every child matters—that fundamental idea should unite everybody in this place whenever we discuss education. I start with that point because the belief that every child matters inspired me to go into teaching. My sense of purpose came from supporting each and every child to reach their full potential. I came into politics because I want to help to build a better world than the one we live in today, and I know millions of others share that dream. But the people who will lead that future are in our classrooms today, and if we fail to invest in them, that vision for the future will be little more than a dream. If we want to make it a reality, we have to be prepared to take a long, hard, critical look at the way the Government have directed and, some might say, designed our education system.
I say that because the IFS figures do not tell the full story. Working in classrooms, I have seen at first hand how Government policy strips resources from schools in other ways, too, with one such resource being teachers’ time. As a teacher, I always recognised the value of balancing knowledge with understanding. The real value of teaching is in equipping children with the ability to problem-solve—to make use of what you have taught them and to apply it to new situations—but it is much cheaper to simply test a child’s ability to retain information. The crude use of league tables, combined with the growth of the commercialised testing regime, has helped to make the curriculum far more content-based and less concerned with problem solving, a tendency helped along by snapshot inspections by Ofsted. When we also consider that this shift has happened at a time when schools have seen their budgets shrink in real terms, it is no surprise that the curriculum available to our children has also diminished, both in scope and quality. The result is that we end up with stressed out, overworked, underpaid teachers under more and more pressure to teach for the test.
As a teacher, I also recognised the value of co-operation between schools to improve provision across a local area. That could come in the form of sharing best practice or solutions for particular local problems, but it might also come in the form of pooling resources to achieve the same aim. The academisation of our education system has made that particularly difficult, as the schools in our constituencies now act, in many ways, as businesses in direct competition with each other. In addition, the direct payment of SEND funding to academies and free schools has resulted in the loss of the economies of scale provided by a central fund in a local authority area. I could talk for much longer about the consequences of academisation, but the point I wish to make in this debate is that it has contributed to the financial pressures in our schools, and we should not ignore that fact. So when we talk about school budgets being £1.7 billion lower in real terms than they were five years ago, the truth is actually much worse.
I truly loved my time as a teacher. Many of the children I taught will never know how much of an impact they made on me, but I hope that in the relatively brief time that I spent with them, I had a lasting impact on their development. As time went on and one colleague after another left the profession, I saw the schools that I worked in change—not just physically, but in every sense of the word. As workloads and class sizes grew and grew, morale plummeted. We lost some fantastic people—the kind of people we really want in our children’s schools, and not just teachers but teaching assistants and support staff too. The trend has only got worse since I left the profession. For the second year running, there are more teachers leaving the profession than joining it. Our children deserve to be taught by qualified, happy teachers who are paid properly. Teachers, teaching assistants and support staff are all thousands of pounds worse off in real terms compared with 2010 wages.
By the time I left the classroom, I had seen teaching change. Book scrutinies, lesson observations, data input, results, progress, benchmarking, always being Ofsted-ready—all of that took over every single teaching day. I felt that in the middle of this cycle were a load of kids whose confidence was shaken. The need to achieve and succeed outweighed their development as a whole person. If I was seen to spend five minutes talking to one child, even if it meant that that one child finally grasped fractions, I would fail a lesson observation. Little children were telling me that they were “stressed” and that they were “not good enough”. Parents were saying that their children would cry about homework for hours at the weekend. There is something seriously wrong when seven-year-old children feel like that. Primary school is supposed to be the most carefree time of a person’s life.
My own son was born on 29 August—he is the youngest in his class—and he recently told me that he was the worst in his class at writing and that he will never be smart. As a parent, it makes me feel so angry and so sad that my beautiful little boy, who improves every day, has to put up with a school report that just says he is working towards where he should be. He is working his socks off every day. What does that teach him?
Andy Slaughter (Hammersmith) (Lab)
One thing that I suspect everybody who is contributing to this debate has in common is that we are immersed in the lives of our local schools and of our constituency. If Members from all parties are honest, I suspect that like me, when they have visited schools over the past two years, or perhaps slightly longer, whether for the Christmas fair, Parliament Week or the school play, they will have found that the subject of school funding comes up in a way that it did not used to come up on such occasions. Often, it will come up not in terms of cash sums, but in terms of staffing cuts; whether the school can support teaching assistants at all; a lack of teaching material; and in particular additional needs funding. Increasingly, it comes up in respect of anything that is outside the main curriculum and the main school day, whether that is breakfast clubs, homework clubs or after-school activities, which are particularly relevant for schools in deprived areas, like much of my constituency. They are really essentials but often are simply not there.
Despite all that, it was something of a surprise that school funding was such a big issue at last year’s general election. I say that because in a general election it tends to be the universal issues that come up. For example, my borough has one of the largest proportions of EU citizens, we have some of the worst housing inequality because of the cost of housing, and the main hospital is under threat of demolition. Nevertheless, not only at the school gates but when I was knocking on doors, the anger over school funding was something that I have not experienced in 35 years of being active in local politics.
Only today, I replied to a headteacher to address some of these points. Let me identify two or three issues from that letter. One, obviously, is the issue of cuts per se. Each one of the 30 schools in my constituency will be losing money over the period 2015 to 2020 because of the disparity that we have heard about this evening between funding and costs. What that will mean is that schools such as Burlington Danes, which has 56% on free school meals, will face a loss of £614 per pupil over that time; Hammersmith Academy, with 60% on free school meals, will face a loss of £644 per pupil; and Phoenix High School, which, with 67% on free school meals, has the most deprived intake of any school in London—probably in the country—will face a loss of £834 per pupil over that five-year period. Those are really unsustainable figures.
In addition to the pure numbers, there are particular losses in particular areas, as we have heard today in relation to early years provision. In nursery schools—yes, we still have some nursery schools in Hammersmith—budgets are under threat. Post-16 education is another area under threat—I have been a governor of the excellent William Morris Sixth Form for the past 25 years, in fact since it was set up. It has had to cut back on staffing in a way that it has never had to do before. These are incredibly difficult decisions to make.
In addition, we have a lack of planning for places. We still have the temporary classrooms that were put up a few years ago for bulge classes. At the same time, because we became the free school capital of the country, we have primary schools that are half empty. This may make me slightly unpopular with my own party, but I have never minded the investment in capital that we have seen—but at what cost? The cancellation of Building Schools for the Future means that redundant old buildings that are not fit for teaching in are still just about standing up, while brand-new schools, which have been built alongside them, are half empty. How is that sensible planning in the education system?
We have talked about fair funding a lot. I am not here to try to take money from other parts of the country, but inner London increasingly gets the worst deal. The Minister will say, “Yes, but historically there has been a higher level of funding in that area.” There are reasons for that—it is because of mobility, because of English being spoken as a second language and because of the real need that does not occur elsewhere except perhaps in other inner-city areas. All those points are made again and again with increasing frustration by teachers, parents, governors and headteachers. This is also happening against the backdrop of an underfunded salaries budget.
In conclusion, I simply say to the Minister that of course there are good things going on in education, and I am sure that he and his colleagues are committed to education, but unless they actually identify the real and genuine lack of resources in our schools, they will never improve standards and they will never turn the corner in a way that I hope all of us here would like.
Several hon. Members rose—
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. I call Mohammad Yasin on a five-minute limit.
Mohammad Yasin (Bedford) (Lab)
It is a pleasure to follow my hon. Friend the Member for Hammersmith (Andy Slaughter).
On the top of overarching cuts to education budgets and undue pressure being heaped on local authorities, Bedford Borough Council has just been hit by an additional cut in its allocation of £1.3 million. That is despite the fact that, by the Government’s own assessment, the council’s funding allocation is below what it should be and it was therefore due to gain from the national funding formula. In reality, per-pupil funding in Bedford is actually falling.
The unexpected cut has come as a huge shock to the council and to school leaders who had planned expenditure based on the expected income, not on the reduced budget as worked out by the Education and Skills Funding Agency. Will the Minister look again at the figures to determine whether, as we believe, an error has been made because the Education and Skills Funding Agency has not allowed for in-year changes connected with Bedford Borough Council going from a two-tier to a three-tier system? The agency has reduced per-pupil school funding for Bedford Borough Council by 0.85% for primary schools and 1.55% for secondary schools. If those sums are not rectified, instead of increased funding per pupil, every average-sized primary school class in Bedford will be £1,000 worse off and every average-sized secondary school class will be £1,600 worse off. That is not what the funding formula promised to deliver. This Government promised extra funding, but we cannot see it anywhere.
The last thing that council officers in Bedford want to do is pass on the loss to schools that are already struggling to make ends meet, but with further cuts to local authorities in the pipeline it will be hard for them to avoid doing so. Hard-working teachers and local schoolchildren do not deserve this. After all, it is their education and their futures that are at stake here. We should be investing in the next generation, not compromising the quality of their schools. At the very least, schools deserve the same funding as before, or better still, the extra funding that the Government promised.
Will the Minister confirm how much contingency funding the Department for Education has in its budget for the dedicated schools grant? Will he also agree to meet me and representatives from Bedford Borough Council to urgently address the issue and order funding to be frozen, rather than cut at a cost of £1.3 million?
Melanie Onn (Great Grimsby) (Lab)
I am pleased to contribute to this well timed and important debate. There are so many issues that we could be discussing today.
I could talk about some of the challenges that schools have raised with me, including the fact that they are facing more children with additional needs, particularly mental health issues, behaviour disorders, Asperger’s and autism. I could mention the fact that schools have had to make cuts, which have pretty much landed on teaching assistants. I could also talk about the high and increasing number of children experiencing neglect, and the schools that are being expected to pick up the pieces of hungry and unwashed kids—going far beyond the core purpose of schools and what they are expected to provide.
I could mention the challenges faced by my local sixth-form college, Franklin College, which has not had an increase in funding and is not afforded the same financial advantages as academy schools. I could also mention the sixth form that so feared loss of funding that it was unable to make provision for a student who was experiencing significant anxiety issues; it could not make reasonable adjustments to accommodate that student. The Government should look at that matter.
While the Secretary of State was lauding the state of education in this country, my hon. Friend the Member for Birmingham, Yardley (Jess Phillips) tells me that her son’s school is shutting at 12 o’clock every Friday to save money, and it is not the only school in her constituency doing so. Things really are not as rosy in the Secretary of State’s garden as he would have us believe.
However, I want to focus my comments on the two state-maintained nurseries in my constituency: Scartho Nursery School and Great Coates Village Nursery School, which are both under threat. They currently provide outstanding early years provision, yet have funding certainty only until 2019-20. There is enormous stress and pressure for the headteachers coping with this uncertainty, trying to reassure parents and keep their staff. In fact, they are more than headteachers as we know them, acting as teaching assistant, playground supervisor, secretary, dinner lady and cleaner to their nursery schools, unable to afford cover staff and told that they must plan to fundraise for the additional £100,000 a year that they will need to keep their doors open.
When I have raised this issue with Ministers previously, they have simply tried to pass the buck and told me that I should go to my local authority to get the additional funding to support the schools. But areas such as my constituency are in significant need. Around 30% of our children are deemed to be in poverty and we have had £80 million cut from our local authority budgets over the past few years. These authorities are so stretched in having to prioritise those who are most in need. When schools are centrally funded, why should state-maintained nurseries be expected to compete in the crowded local authority arena with adult social care, public health and enforcement, given that other schools are not required to do so?
The Secretary of State has referred to a number of outstanding providers, and I have absolutely no doubt that he will have used my nurseries’ outstanding status to reinforce his statistics. So why does he do no more than cherry-pick the benefits rather than giving them the long-term certainty that they deserve? To keep providing this outstanding level of education, they would happily forgo the kind words in exchange for the cold, hard cash. The Government say that they are concerned to give good-quality education to all children regardless of their background, ability or disability. This is precisely what my nurseries do. Children with Down’s syndrome play and learn alongside multilingual children and children with autism—genuinely children of all abilities, with different skills, not segregated but part of a community. My nurseries are the very definition of equality, providing the seeds of social mobility. They deserve far greater consideration than they currently get from this Government.
I know that parents in my constituency value and respect these settings and the excellent start they give their children. They do not want to see quality suffer as attention is lost to fundraising activity. In the social mobility index compiled by the House of Commons Library, on almost every ranking—the school life, youth life and adult life stages—Great Grimsby falls into the bottom 20% in the country. Overall, Great Grimsby is 459th out of 533. On every measure, on every expectation, in every stage of our lives, my constituents are being failed by the Government—except in early years, and that is due in no small part to those state-maintained nurseries.
Anneliese Dodds (Oxford East) (Lab/Co-op)
It is a real pleasure to follow my hon. Friend the Member for Great Grimsby (Melanie Onn), who painted a disturbing picture but one that I very much recognise from my own constituency experience. I want first to pay tribute to Oxfordshire’s headteachers for all the work that they are doing to gather information about the situation facing local schools, which is very similar to the picture painted by the hon. Member for Oxford West and Abingdon (Layla Moran).
Time is very short, so I want to focus my remarks specifically on provision for children with social, emotional and mental health needs. The Secretary of State shied away from offering us much detail on provision for children with special educational needs, beyond saying that we need a balance between mainstream and special school provision. Obviously we would all agree with that. He did not say anything about provision for children with social, emotional and mental health needs, so I hope that the Minister will come to that when he winds up.
SEND provision in mainstream schools in Oxford is under enormous pressure. Specialist resources have been cut in the majority of local schools in my city, and many of my constituents are telling me a very similar story to that outlined by my hon. Friend the Member for Redcar (Anna Turley). Many families are having to home educate their children because they have no other choice now that that support is no longer available in mainstream schools.
Special schools are also under strain. That is being exacerbated by the free schools system, not solved by it. The Secretary of State found the time to write a very partisan letter to me—and, I presume, to other Labour MPs—to ask if I supported my local free school. Of course I support local parents, local teachers and local educationists, but what I do not and never will support, and what he should not support, is a situation where our local authorities are not able themselves to assess the need for new educational resources in their areas. The only possibility of getting new provision is by chance: it is all dependent on whether there happens to be a free school sponsor available, and on where they want to put the new school rather than on where the need is.
A very good example of that is what has happened to Northfield School in my constituency—a special school for boys with social, emotional and mental health needs. It is falling apart. Half the boys from that school are now being educated in Portakabins; the other half are being educated at an outdoor education centre while their school is patched up for the short term. In any rational situation, the local authority would be funded so that it could rebuild the school. Instead, we are in limbo, hoping that a free school sponsor might come along and help to provide a new school in Oxford for children who need that support. It is not good enough for those boys, and it is not good enough for the hard-working teachers who are trying to deliver them a decent education.
The Government have got to get a grip on this, otherwise a whole cohort of children with social, emotional and mental health needs will miss the education that they deserve. There are now families in my constituency who cannot find a single school that is willing or able to educate their child who has social, emotional or mental health needs. I am sure that other Members have spoken to similar constituents. The lack of accountability in our education system is massively failing those children, who are among the most vulnerable. This has got to change, and I hope the Minister will deal with it in his remarks.
Mike Kane (Wythenshawe and Sale East) (Lab)
We have heard today of the impact of Tory austerity on education and of funding being slashed across every area of the Department, with early years, schools and further and higher education all being hit. Education urgently needs new investment right across the board. The Government must finally begin reversing their devastating cuts if they are to implement the Prime Minister’s promise that austerity is over.
The Chancellor of the Exchequer and the Education Secretary have both stated in the House that every school in England will see a cash-terms increase in their funding, yet that flies in the face of what we have heard in the Chamber today and the reality of what parents and teachers are telling us is happening on the ground. The Institute for Fiscal Studies has stated that that is simply not accurate, and the UK Statistics Authority has rebuked the Education Secretary for that inaccuracy. There has been a concerted effort by the Secretary of State and the Minister for School Standards to fudge the figures and deflect attention away from the funding cuts that they have presided over.
To add insult to injury, there was then the one-off £400 million for the Chancellor’s “little extras”—an insult to the teachers, schools and children who have faced year after year of Tory cuts. But we did get one thing today: we got a calculator for every school from the Secretary of State. The whole House should rejoice with me at that.
The fact is that across the whole country, including in the Prime Minister’s own constituency, schools are having to write home to parents to ask for money to buy basic resources. They do not need money for little extras; they need money for the essentials. According to the IFS data, school budgets are £1.7 billion lower in real terms than they were five years ago, which means that 91% of schools are still facing real-terms budget cuts per pupil.
The Minister will again no doubt try to deflect the House’s attention away from the reality of the impact of his Government’s cuts to school funding, but Members in this House—even including Members on the Government Benches—know all too well the impact on the ground already, because headteachers and parents are telling us about it almost daily. An early indication is that the shortfall for 2019-20 will be £3.8 billion. To use the Budget to give potholes more money than schools is a sorry reflection of this Government’s priorities.
Sadly it is clear that austerity is not over for our schools. We are now in the unprecedented situation of unions taking the step of simultaneously consulting their respective members on what action to take next. It beggars belief that the Government have ignored the School Teachers’ Review Body recommendation of a 3.5% increase for all pay and allowance across the board —the first time that that has happened in the body’s 28-year history. To make matters worse, the Government expect schools to meet the costs of the first 1% of the pay award from existing budgets, which have already been cut to the bone.
The picture is no better in early years. Sure Start funding has been cut by two thirds, and more than 1,000 centres have gone since 2010. The Government must honour the commitment to their flagship policy of 30 hours of free childcare with more money from the Treasury. It was recently revealed that most providers are having to increase the fees they charge parents as a consequence of Government’s underfunding, with 85% of local authorities facing even more cuts to their 30-hours funding.
While we have been debating this afternoon, the impacts have got worse. The Secretary of State has slipped out, through a written statement, the announcement that he is sending a commissioner into Northamptonshire County Council, where the children’s services have been found inadequate by Ofsted. He may well take off his glasses and wonder what I am talking about, but this has happened this afternoon. Ofsted has warned that vulnerable children are not being
“effectively assessed, supported or protected.”
As my hon. Friend the Member for Leigh (Jo Platt) said, austerity is not over for our children. Will the Minister commit to coming back to the House to make an oral statement about this, and urge his colleagues finally to tackle the funding crisis facing children’s services across our country?
TES is reporting, as we speak, that children in residential care are waiting for more than three months for a school place. Labour’s national education service will guarantee the needed investment to deliver 30 hours of high-quality education to all two to four-year-olds.
In further education, the theme continues: austerity is not over in our sixth forms and colleges. Further education has suffered the most vicious of all Tory cuts to education, with budgets slashed by £3 billion in real terms since 2010. This is one quarter of all further education funding. Nothing has been done even to begin reversing this. If the Chancellor really means austerity is ending, he must end the base funding rate system and reinvest in sixth forms and colleges.
Neil O’Brien (Harborough) (Con)
The hon. Gentleman says that nothing has been done. Will he at least welcome the 25% increase in funding that comes with the new T-levels? Does he welcome the new T-levels?
Mike Kane
They will not come in until 2022, and the Conservatives have already cut billions from the higher education service.
As a direct consequence of the Government scrapping maintenance grants, our poorest students graduate with the highest debts. No one should be put off university due to a lack of money because of a fear of debt. Labour believes that education should be free. We will restore that principle and reintroduce maintenance grants for the most in need.
It is my great honour to thank everybody who has participated in the debate today.
Mike Kane
I will not give way now because I want to get through the vote of thanks.
Normally I would thank people on my side of the House—I thank you all; well done, the lot of you—but what I really want to do is to thank some Conservative Members, such as the Secretary of State himself. He fails to stand up and say “little extras” to anyone. Just to let him know: the cuts in Hampshire are £16.8 million, Damian. [Interruption.]
May I concur with the hon. Member for St Ives (Derek Thomas) about how well schools and schoolteachers have done to commemorate the armistice brilliantly this weekend and over the past few months? However, I also tell him that the cuts to his local authority are £14.2 million since 2015.
I now come to the hon. Member for Spelthorne (Kwasi Kwarteng)—this is my favourite bit—who makes the same speech every time. Honestly, there is a sparsity of facts, and he does need to mix it up once or twice.
Kwasi Kwarteng
The reason why I make the same speech every time is that the hon. Gentleman finds it very difficult to appreciate the force of the argument, which he never addresses.
Mike Kane
Following a speech that lacked so many facts, I will give the hon. Gentleman one: Surrey, which covers his constituency, has faced £14.2 million of cuts since 2015.
My good friend the hon. Member for South Suffolk (James Cartlidge) was a great left winger on the parliamentary football team as we beat the military veterans today, but he was no left winger in this Chamber. He needs to mix it up as well, because there was a sparsity of facts. Suffolk is suffering from £7.8 million of cuts.
The hon. Member for Torbay (Kevin Foster) actually spoke quite eloquently and has a good grasp of schools and what is needed in his constituency, but Devon is facing £16.3 million of cuts.
Mike Kane
No. I have given way quite enough.
I say to the hon. Member for Bexhill and Battle (Huw Merriman) that east Sussex has experienced £7.7 million of cuts. We missed the hon. Member for Bolton West (Chris Green) at the football today, but he cannot blame the situation on the Greater Manchester spatial strategy or the Mayor of Greater Manchester—this is down to the fact that Bolton has faced cuts of £10.4 million since 2015.
I will wind up. I speak as a former primary schoolteacher. We go into teaching because we believe in the value of education and its power to create social mobility and ambition for all. That is why Labour has worked with parents, teachers and professionals across the land to introduce a national education service, and it is why that national education service does not promise “little extras”. This is about our children’s future—the future of the country—and little extras simply will not do.
The Minister for School Standards (Nick Gibb)
There is nothing more important to the future of a child than a rigorous academic education in an orderly, safe and nurturing environment—an education that allows every child to fulfil their potential and equips them with the knowledge of the world around them so that they can take on the challenges of that world, an education steeped in the achievements of generations of scientists, and the literature, music and art that lies at the heart of our humanity, and an education system that ensures that they have the language, literacy and maths skills that enable them to function and to learn more.
That should be the start of every child’s life, whether that child is from a wealthy family or a family on a low income, whether they are in the north or the south-west, or whether they are in London or in Manchester. That has been the driving force of this Government since 2010: to raise standards in our schools; to improve the curriculum; to put our education system on a par with the best in the world; to close the attainment gap between those from different backgrounds; and to ensure that every child is a fluent reader long before they leave primary school.
Our reform programme has been opposed by the Labour party every step of the way. In office, those complacent, ideological enemies of promise and close-knit friends of the vested interests presided over grade inflation, falling standards and an education system that left too many children starting secondary school still struggling with reading and basic arithmetic, because Labour was too afraid to challenge the status quo.
Labour failed to introduce fairer funding because it was controversial. We have not shirked our responsibility. The new national funding formula ensures that every pupil in the country is funded on the same basis according to need. The hon. Member for Stoke-on-Trent Central (Gareth Snell) needs to read up about that.
Labour failed to rise to the challenge of increasing pupil numbers, cutting 200,000 primary school places at a time when the birth rate was rising. One of the first decisions we took after 2010 was to double the funding for new school places to £5 billion. Since then, we have created 825,000 new school places and committed £23 billion of capital funding for 2016 to 2021.
At a time when we are tackling the historically high and unsustainable budget deficit left to us by the last Labour Government, we have none the less protected overall school funding for five to 16-year-olds in real terms, and now spend a record £42.4 billion, which is rising to £43.5 billion next year.
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. The Minister has made it clear that he does not want to give way. That is his choice and we have to live with his decision.
Nick Gibb
It is our balanced approach to the public finances that allows us to spend record amounts on health and education while at the same time delivering a strong economy with some of the lowest levels of unemployment since the 1970s, unlike in every period of Labour Government, which end with people not working and higher unemployment than when they came into office, as time after time they mismanage our country’s economy.
I listened to the contributions of Labour MPs, but there was almost nothing about standards and, with the notable exception of the hon. Member for Burnley (Julie Cooper), nothing about the importance of children learning to read. Following our focus on phonics and the introduction of the phonics screening check, more children have learned to read more effectively and sooner. England moved from joint 10th in 2011 to joint 8th last year in the PIRLS—Progress in International Reading Literacy Study—international rankings, with our highest ever score in reading.
There was nothing from Labour about the importance of arithmetic, or the reforms to the maths curriculum that have significantly raised standards, with a curriculum on a par with the best in the world to which schools have responded well. We heard nothing from Labour about the importance of children knowing their multiplication tables by heart, nothing about the higher standards following our reforms to GCSEs and A-levels, and nothing about our fairer accountability system, Progress 8, which holds schools to account for the progress of every single child regardless of their ability. There was nothing about the fact that more disadvantaged children are now studying core academic subjects at GCSE with the EBacc. [Interruption.] There was nothing about the fact that under this Conservative Government the attainment gap between children from disadvantaged backgrounds and their more affluent peers has closed by 10% since 2010. We heard nothing from Labour about T-levels or apprenticeships, and nothing from Labour—[Interruption.]
Mr Deputy Speaker
If you are really cross, find somewhere else to show your bad temper. In here, Members have put questions to the Minister and we all want to hear what he has to say. We may not agree with him—that is up to you—but we must hear the Minister.
Nick Gibb
Thank you, Mr Deputy Speaker.
We heard nothing from Labour about our investment of half a billion pounds in arts and music education, including £300 million of funding for music hubs. There was nothing about the fact that the proportion of pupils taking history or geography GCSE has risen from 48% in 2010 to 77% in 2017, with the proportion taking at least two science GCSEs rising from 63% in 2010 to 91% in 2017.
The Labour party opposes free schools—state schools established by teachers, education groups and high-performing schools, rather than local councils—which are disproportionately graded as outstanding. Free schools such as Dixons Trinity Academy in Bradford would not exist but for this Government. With a third of its pupils from a disadvantaged background, Dixons Trinity was ninth in the country last year for Progress 8, and 82% of its pupils entered for the EBacc, rising to 86% this year. Free schools such as Harris Westminster would not exist but for this Government. It told us that, with 40% of its intake from disadvantaged backgrounds, 18 pupils secured places at Oxbridge this year and one at Harvard. Six of those 18 were from a disadvantaged background. The King’s College London Mathematics School would not exist but for this Government. It takes students from all backgrounds, with last year 59% of its A-level grades being A* and 92% of its maths A-levels being A*. The free schools programme would be abolished by Labour, the enemy of promise and the enemy of social mobility.
My hon. Friend the Member for St Ives (Derek Thomas) spoke with sincerity about the exemplary work of the schools in his constituency, which teach about Parliament and the first world war. I enjoyed seeing the high standards and phenomenal work at Alverton Primary School in Penzance and at St Erth Community School in Hayle at his invitation last year. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) spoke perceptively about reading standards and mathematics, and about the improvement in standards in his schools and the importance of T-levels. My hon. Friend the Member for South Suffolk (James Cartlidge) spoke knowledgeably about reading and the rise in Progress 8 and Attainment 8 in his schools.
This is a Government who have put education reform at the heart of their programme, who are committed to ensuring every school is a good school, who have delivered fairer funding, who are spending record amounts on education and schools, on a par with the largest economies—
Mr Alan Campbell (Tynemouth) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question put accordingly and agreed to.
Resolved,
That this House notes the Institute for Fiscal Studies’ finding that education spending as a share of national income has fallen from 5.8 per cent to 4.3 per cent since 2010, including funding cuts of over two thirds to Sure Start, of nearly a tenth to schools, of over a fifth to sixth forms, and of £3 billion to further and adult education; further notes the Prime Minister’s statement that austerity is over; endorses the Secretary of State for Education’s recent demand for billions more funding and welcomes his comments that there is a strong case for investment in the spending review but notes that the recent Budget provided only small capital projects; offers its full support to the Secretary of State for Education in persuading the Chancellor of the Exchequer that education urgently needs new investment; and calls on the Government to end austerity, not with little extras but by reversing all cuts to education funding.
Business without Debate
(6 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Alison Thewliss (Glasgow Central) (SNP)
On a point of order, Mr Deputy Speaker. Some time ago I raised concerns that the hon. Member for Glasgow North East (Mr Sweeney) had been making repeated incursions into my constituency without giving me the courtesy of a notification that he was doing so. I understand from his social media feed that he has done that five times over the past few weeks without sending me an email. Furthermore, he met a UK Government Minister to discuss an issue about a facility that is to be based in my constituency. Mr Deputy Speaker, this is discourteous—it is verging on harassment now—and I am really getting quite fed up with it. Can you advise me on what I might do to bring this matter to his attention?
Mr Deputy Speaker (Sir Lindsay Hoyle)
It is a convention of the House that whoever goes into another’s constituency lets that Member know that they are going. It might be worth taking this up outside the Chamber, but it is a convention that such a thing should not take place. The hon. Lady has now mentioned it.
Petitions
(6 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Martyn Day (Linlithgow and East Falkirk) (SNP)
I rise to present a petition from my constituents regarding the universal credit roll-out. While that is still at an early stage in my constituency, it is causing immense distress, as is evidenced by my constituency casework. By far the greatest concern is the reduction in benefits and the lack of income during the assessment period, but that is not the only concern. Many people are reporting that when they are moving from employment and support allowance, determinations of limited capability for work that should go with them are not doing so, and that is causing great and undue distress. Also, terminally ill claimants are now having to upload their own DS1500 forms, instead of third parties being able to do so on their behalf. I fully endorse this petition from my constituents.
The petition states:
The petition of residents of Linlithgow and East Falkirk,
Declares that the roll out of Universal Credit in the local area will have a devastating impact on communities across the district and will lead to increased foodbank usage and financial misery for some of the most vulnerable people.
The petitioners therefore request that the House of Commons urges the Department of Work and Pensions to halt the roll out of Universal Credit in the Grangemouth, Bathgate and Falkirk Jobcentre areas and fix it without delay.
And the petitioners remain, etc.
[P002287]
Bambos Charalambous (Enfield, Southgate) (Lab)
I rise to present this petition on behalf of the residents of Bowes ward in my constituency of Enfield, Southgate. Three hundred and seventy-seven petitioners have signed it to highlight the serious blight of heavy traffic and pollution on their lives. By way of background, I should explain that the area of Bowes is bound by two sides of the A406 north circular road and, as such, is heavily used as a cut-through.
Extremely high volumes of traffic lead to speeding safety risks, particularly to children, as well as severe pollution, and have a very negative impact on residents’ quality of life. Dangerous levels of air pollution mean that primary school children have regularly been banned from playing outside in their playgrounds. The petitioners therefore urge
the House of Commons to encourage Enfield Council to implement a live trial of a Low Traffic Neighbourhood in Bowes Ward, as well as to encourage Enfield Council, Transport for London, and the Department of Transport to work together to find the funding for this proposal.
Following is the full text of the petition:
[The petition of residents of Bowes Ward,
Declares that a live trial of a Low Traffic Neighbourhood in Bowes Ward should be implemented; further notes that the fact that the ward is bounded on two sides by the A406 North Circular means that the ward is heavily used as a cut-through and for access to the North Circular; further that this leads to extremely high volumes of traffic which, in turn, causes dangerously high air pollution levels, damage to residents’ vehicles, speeding, and safety risks to the students of the nearby primary school; further that, overall, the traffic in the area has a severe impact on the quality of life of residents; believes that implementing a Low Traffic Neighbourhood in Bowes would be of great benefit to residents and the area as a whole; and further notes that a Low Traffic Neighbourhood has already been built in Walthamstow Village and has been an enormous success, providing residents with a quieter, safer place to life in a now much regenerated area.
The petitioners therefore request that the House of Commons to encourage Enfield Council to implement a live trial of a Low Traffic Neighbourhood in Bowes Ward, as well as to encourage Enfield Council, Transport for London, and the Department of Transport to work together to find the funding for this proposal.
And the petitioners remain, etc.]
[P002291]
Health Services: Witham
(6 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Priti Patel (Witham) (Con)
I am grateful for the opportunity to speak about this subject. This is one of many interventions I have made on the health issues that affect my constituency since being elected in 2010. I am sure the Minister will respond appropriately.
Like many other parts of the country, the Witham constituency and mid-Essex are experiencing significant demographic changes, with the proportions of people aged over 60 and over 80 increasing faster than the national average. Those demographic changes, and the population growth that is occurring, place huge new pressures and demands on our services, including our local health economy and the complex network of hospitals, health trusts, councils and providers that support it. One of the most effective ways we can improve our health economy and services is by investing in better primary and community care.
Since being elected, I have campaigned repeatedly for a new multi-purpose health centre in Witham town to address the growing demand in the town and our villages, and to provide more local services to increase the town’s health capacity. Whenever I hold debates on health services in Witham, I highlight the patient to GP ratio. While the national average number of patients per full-time equivalent GP is around 1,700, there are nearly 1,800 in mid-Essex and 1,900 in north-east Essex. However, the overall figure for the four GP surgeries in Witham town is a staggering 2,500, nearly 50% higher than the national average. That number has grown as patient numbers have increased and GP numbers have fallen, and it will worsen as some GPs approach retirement. As a consequence, residents in Witham struggle to get appointments. In fact, in my time as Member of Parliament, some GPs have closed their books and stopped taking on new patients.
Bringing the four GP surgeries in Witham under one roof would add much-needed capacity, integrate health services, grow and strengthen our local health economy, improve access to local services and reduce demand on hospitals. The case is compelling, and the campaign for such a centre is universally supported. Witham Town Council backs it, local politicians from all parties back it, local businesses back it, my residents absolutely back it, and Braintree District Council has backed it from day one. To its credit, the district council has put money aside from a capital receipt to support the development of the new centre. It understands the long-term benefits.
Until recently, it seemed all the plans for the health centre were on track, with GP surgeries in Witham and the clinical commissioning group supportive of it. In fact, the CCG took on a consultant to develop a business case for the centre over the past few years. Shockingly, despite all the lobbying, advocacy and business cases, it appears that either some GP surgeries are rowing back on this opportunity for Witham to join forces to deliver an outstanding health centre for my constituents, or the CCG has not been able to advance the plans.
Only last month, on 15 October, the CCG informed me that it was pleased to say that it had had a “positive response” from three of the GP surgeries. However, just last week, on 2 November, I was notified that during the latest round of discussions their reactions suddenly had been mixed. Douglas Grove surgery is still strongly supportive, but there is less enthusiasm and support from the other practices.
I will touch on many aspects of health, but the purpose of the debate really is to ask the Minister and his Department to go back to the CCG and, where they can, to GPs to ensure that we deliver a new centre for the residents of Witham town and the surrounding area. They want answers, and they deserve action and delivery.
Jim Shannon (Strangford) (DUP)
I have always been here to support the right hon. Lady over the years, and I am pleased to be able to do so again tonight. She mentioned action, and I want to refer to that very quickly. Given the pressure that nurses and healthcare professionals are under in every trust area—including my own, by the way—does she agree that the Government must consider a complete overhaul of the way in which things are done in the NHS? We want to see action rather than words. We do not want to see reviews or reports. We want to see action. Is that not what it is all about?
Priti Patel
The hon. Gentleman is absolutely right. Ultimately, we should be seeking to drive health outcomes. As I have said in the House again and again over the last eight years, we can achieve that through integration of our health services at a community level. Driving outcomes is the very purpose of the facility in Witham town. We should think about the integration of mental health services, ambulance services and all sorts of prescribing, including social prescribing, and about the future of social care and healthcare.
However, this is not just about Witham town. I represent many neighbouring villages. Tiptree, which is well known for its jams—I am sure that you have sampled some of them, Mr Deputy Speaker—has a large and growing population, but it also has just 3.28 full-time equivalent GPs to serve a population of more than 11,000. That is a patient-GP ratio of 3,400 to one, which is more than twice the national average, and it needs to be addressed. Branch surgeries have been lost in Birch and Tolleshunt D’Arcy in recent years, and there is a growing population in Stanway and Hatfield Peverel. All that places more strain on GPs, so the integration of services is vital. We are hoping to increase the GP base through a new partnership at Anglia Ruskin University, at whose new medical school the first wave of GPs will be trained.
One of those neighbouring villages, Silver End, is expanding provision but has a terrible history. I know that the Minister will be aware of Virgin Care Services, which has run the Silver End general practice since 2016. This year’s rating from the Care Quality Commission was “inadequate”. Members speak about money and funds. Interestingly enough, Virgin is paid £134.37 per patient, 60% more than the standard payment of £83.64 that other GPs receive. That is a staggering sum: it seems that Virgin is almost being rewarded for failure. Just two months ago it failed to refrigerate its flu vaccines, which meant that a batch had to be disposed of. That wasted taxpayers’ money, and also caused local problems with flu vaccinations at a critical time.
I want to touch on some wider issues affecting social care in the Essex County Council area. To its credit, the council has worked diligently to address social and winter pressures. I welcome the additional £5.9 million for the council from the £240 million that was announced last month, and, of course, the Budget funding as well, but, as the county council has said, we want to see a meaningful Green Paper when it comes to social care funding. A new Witham multi-purpose healthcare facility will make a positive difference, enabling us to integrate funds and care and drive better outcomes and performance.
That brings me to another company that is in the news. A CQC judgment on Allied Healthcare highlighted a considerable risk of service disruption to the delivery of domiciliary care services, which has caused much concern. Essex County Council is one of Allied Healthcare’s biggest clients, and has been working with the CQC and the company, but we want to be certain that the Department itself is aware of the situation and able to help to resolve it. We need clarity about some of the services that could be at risk.
There is also much more work to do in relation to social prescribing. Last week I held an advice and information fair in Witham, which focused largely on the older demographic in the constituency, but was also concerned with healthcare provision through charities and other voluntary organisations. Another issue that I think we should consider—and a new healthcare centre at Witham would help with this as well—is how patient commissioning and NHS referral systems can be improved.
My final point is about the delivery of mental health services. The Essex Partnership University NHS Foundation Trust has been in the news today because of a police investigation into the deaths of 25 patients who were under its care. The Department knows of a case involving one of my constituents, a mother who has been fighting for justice and accountability for years. Today we have learned that the police inquiry has concluded. What they have found might not have led to a charge of manslaughter, but there are serious problems that still need to be addressed.
There are so many health issues that obviously need to be addressed, but the purpose of this debate is to drive the change and produce the outcomes we want to see in Witham town in terms of the delivery of the new health centre. I trust that the Minister will be able to help us: that he will be able to help my constituents overcome the challenges we are now facing with the CCG and GPs in Witham town to deliver this new health service.
The Parliamentary Under-Secretary of State for Health and Social Care (Steve Brine)
I congratulate my right hon. Friend the Member for Witham (Priti Patel) on putting a lot of things on the record in a very short space of time and on securing the debate.
My right hon. Friend and I entered the House together eight and a half years ago and have known each other for even longer; I know that she is a strong campaigner and has been for years, and was delighted when she got the seat of Witham. She has been an incredibly strong voice for her constituents, alongside her work for our country and Government. Like me in Winchester, she wants to do all she can to make sure her constituents have the very best health services. I know that the development of the Witham primary care centre is a cause that has been close to her heart for a long time; she has mentioned it in this House a number of times, and I am sure she will mention it again.
The Mid Essex clinical commissioning group and the local GP practices are best placed to know how to organise the local health services; it is right that they are making decisions about how people in Witham can have access to the high-quality general practice that I know my right hon. Friend wants them to have, and that they get it when and where they need it. But it is absolutely her place and her right to press them for the outcome and the results that her constituents want and expect, and that she wants and expects as their representative.
I understand that Mid Essex CCG wrote to my right hon. Friend last week outlining its full commitment to the creation of a health hub in Witham and reiterating that developing multidisciplinary centres—which is where we want to see primary care move—to promote the health and wellbeing of the population is a central tenet of the Live Well strategy for her area; so far, so good. I understand that local GP practices also support the multidisciplinary hub, but are concerned about the possible impact of the potential relocation into a new building on the financial stability of their practices.
I have seen the correspondence between my right hon. Friend and the CCG. The CCG feels that it is important to distinguish between the support of GP practices for the new hub and a commitment to wholesale relocation into it. That is why the CCG is working with local GP practices to explore and understand the potential impact on their businesses—these are of course businesses that we contract to the NHS—and to find the right solution to meet the growing needs of the town, as my right hon. Friend outlined.
As my right hon. Friend also said, the Fern House surgery is exploring opportunities to redevelop its existing surgery, and I understand that the surgery’s partners support those plans. The CCG intends to explore them further, but very much hopes that such development might, should it go ahead, give Fern House additional financial security to consider later relocation into the new hub. I further understand that any redevelopment of Fern House should not present a risk to the development of the new hub.
Dr Salau, a GP at the Douglas Grove surgery and a member of the CCG board, tells me that there is sufficient interest from other local GP partners in taking space in the new development, and that it might proceed without wholesale relocation from other practices. The CCG will be undertaking a piece of work with Dr Salau over the next four weeks to understand the viability of his proposal, and I know my right hon. Friend will follow that work closely. The CCG has made it clear to me ahead of tonight that it is working closely with her and ensuring that she is kept fully abreast of developments—although I suspect she would be regardless. I know that she will take the opportunity to keep her foot on the pedal and will not be shy in raising this issue again locally and here in Parliament if things do not go as she wants.
I can say the following, however. The health system in England is devolved; that is what we decided to do under the Health and Social Care Act 2012. We want the NHS locally to structure itself to create multidisciplinary teams. However, when we talk of structures and who has the keys to new buildings, it is important to get that bit right. That is a necessity, of course, but not as a replacement for improved services for our constituents. I think the message that my right hon. Friend has given to the House tonight, which I am happy to echo, is: let us get it right, but let us get on with it. It sounds as though this has been a bit of an old chestnut for her and her constituents, and that it has gone on for way too long. I will support her in saying that we should get on with this, and I can assure her that I will be taking an interest in the work of Dr Salau over the next four weeks.
In addition to talking about the Witham primary care centre, my right hon. Friend has reiterated the need for improved access to GP services for her constituents. As the Minister with responsibility for primary care, I know that primary care literally comes first in our health service, and rightly so. It has always been the bedrock of the NHS, and it always will be as long as we are in office. The Secretary of State and I have made that absolutely clear, but we know that primary care is under more pressure than ever, and we are taking steps nationally to address that. I think that those steps will benefit her constituents and mine, and I take very seriously the ratios that she has put on record tonight. I want to outline a couple of the things that we are doing.
Because we recognise the pressure that general practice is under and the shortage of numbers, we are investing an extra £2.4 billion a year into general practice by 2021. We also have the new investment announced in the Budget at the end of last month. The Government have also recently announced additional medical places at Anglia Ruskin University to train the next generation of Essex doctors. We do not mandate our trainees to remain in the towns and cities where they train, but I am sure that my right hon. Friend will be reassured to hear that doctors are much more likely to stay in the areas where they have trained, and I hope that many will see their long-term future in Essex.
More widely, we know that the NHS needs more GPs, and we are still determined to deliver the commitment to recruit 5,000 additional GPs. That will take longer than we had initially hoped, but we are training more GPs than ever. More than 3,000 doctors are expected to be recruited into GP training this year, following record numbers of recruits last year, so that is positive.
Let me touch on the GP partnership review, which my good friend Dr Nigel Watson is doing for us in Government. We are committed not only to recruiting more GPs but to making general practice a more attractive place to work. The GP partnership review, which the previous Secretary of State set up, will consider how best to reinvigorate the partnership model. We in England believe in the partnership model. We think that it has brought much to general practice and we want to support it, but we understand that it has to change in order to make general practice a better and more attractive place to work. The partnership review has announced its initial findings, and it is now working with Ministers towards its final conclusions. I very much look forward to seeing them.
My right hon. Friend talked about the Silver End surgery and Virgin Care. I feel that I should begin by flagging up the fact that 96% of GP surgeries in England have been rated good or outstanding in the recent Care Quality Commission reports. That shows the excellent work not that we as Ministers are doing but that GPs and their multidisciplinary teams are doing every day, given the pressures on the frontline. However, where quality and safety standards are not in place, robust steps should of course be taken. My understanding is that NHS England and the Mid Essex CCG are having regular improvement board meetings with senior managers from Virgin Care Services Ltd to closely monitor the remedial actions agreed through their overall improvement plans. That includes addressing outstanding areas of concern from the CQC and is all with the aim of ensuring compliance in advance of the next CQC follow-up inspection.
I was very concerned to hear what my right hon. Friend said about the flu vaccine. It is absolutely mission-critical for me, for the Government, for the country and for the NHS that we get the flu vaccination numbers up to where they were last year and beyond, because that is absolutely the best way of protecting against what can be a very dangerous virus as we move into December and the new year.
My right hon. Friend talked about Allied Healthcare, and I can tell her that there is no disruption to any services that it currently provides. Her constituents and those in other affected areas can be reassured that the CQC’s decision allows local authorities the time they need to ensure continuity of care and support. The Minister for Care, my hon. Friend the Member for Gosport (Caroline Dinenage), is speaking to the key parties involved on an ongoing basis to stress the importance of them working together to ensure continuity of care and to provide reassurance to individuals and their families and to staff. My officials and those of my ministerial colleague are working closely with the Association of Directors of Adult Social Services and the Local Government Association to establish whether local authorities need any help to prepare to meet individual care needs if services are disrupted due to business failure.
My right hon. Friend the Member for Witham also highlighted the importance of social care funding. We have given councils access to up £3.6 billion more dedicated funding for adult social care in 2018-19 and recently announced an additional £650 million of new money for social care in 2019-20. That includes an additional £240 million for adult social care to alleviate winter pressures on the NHS next year. She was right to say that we must of course ensure that our care and support system is sustainable in the long term, and our social care Green Paper, which will be published shortly— I cannot be more definitive than that—will set out how we will do that.
My right hon. Friend talked about mental health services, which are a priority for the Prime Minister and this Government. She gave an update on the investigation into the serious incidents reported at the Linden Centre. As the House will appreciate, it would be inappropriate for me to comment on the specific issues of the case, but I do of course extend my sincere condolences to the families who have lost loved ones. Our thoughts are with them. The police investigation has concluded, but the Health and Safety Executive investigation into the care of some patients by the former North Essex Partnership University Foundation Trust is ongoing, and we will of course follow that closely and respond in due course.
I am pleased that my right hon. Friend highlighted the important role of social prescribing. It is playing an increasingly important role in the health service, in primary care in England, and in her constituency. I am huge believer that social prescribing can play a big role in our prevention agenda. We launched the prevention strategy last week, and we are now working on the prevention Green Paper for next year. We recently published our vision to help people live well for longer, because prevention truly is better than cure, something that the new Secretary of State and I passionately believe to our cores. I hope that my right hon. Friend and her constituents will contribute examples of excellent social prescribing practice in Essex to our forthcoming Green Paper. We are all ears and want to hear more about it.
I hope that I have addressed many of the issues that my right hon. Friend touched on. As I said at the start, options for the development of the Witham primary care centre are a matter not for Ministers but for the local NHS, which is best placed to take the important decisions that matter to local people, for the benefit of local patients. However, I reiterate that structures are important but services trump all, and we need to see the situation resolved. I have every confidence that local commissioners and GPs will make the right choices, but they should know that my right hon. Friend and I are watching closely to ensure that every one of her constituents has access to high-quality, modern primary care provision. I have no doubt that my right hon. Friend will stay on their case. I thank her for bringing these matters to the House this evening.
Question put and agreed to.
Draft Double Taxation Relief and International Tax Enforcement (Guernsey) Order 2018
Draft Double Taxation Relief and International Tax Enforcement (Isle of Man) Order 2018
Draft Double Taxation Relief and International Tax Enforcement (Jersey) Order 2018
(6 years, 1 month ago)
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The Committee divided: - Ayes: 9 / Noes: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 9 / Noes: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 9 / Noes: 7 - Question accordingly agreed to.
The Financial Secretary to the Treasury (Mel Stride)
I beg to move,
That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Guernsey) Order 2018.
The Chair
With this it will be convenient to consider the draft Double Taxation Relief and International Tax Enforcement (Isle of Man) Order 2018 and the draft Double Taxation Relief and International Tax Enforcement (Jersey) Order 2018.
Mel Stride
It is a pleasure to serve under your chairmanship, Mr McCabe, as always. As you have suggested, I will speak to all the orders.
The orders before the Committee give effect to replacement double taxation agreements with each Crown dependency. DTAs remove barriers to international trade and investment and provide a clear and fair framework for taxing businesses that trade across borders. By doing that, they benefit business and the economies of the jurisdictions concerned.
I will briefly say a few words about the agreements, which are identical in all material respects. Our current DTAs with the Crown dependencies date back to the 1950s. Although they have been updated on occasion, there was a need for a comprehensive update. The new DTAs extensively modernise the existing texts to reflect updates to the OECD model tax convention and changes to the tax laws and treaty preferences of all jurisdictions.
Like the UK, the Crown dependencies are signatories to the BEPS—base erosion and profit shifting—multilateral instrument, or MLI. However, we could not use the MLI to make changes to our existing DTAs with the Crown dependencies because they are not international law agreements. Instead, the new DTAs include all the provisions that would have been implemented by the MLI.
Instead, we have implemented the treaty-related minimum standards mandated by the BEPS project through the agreements. That means that we have included the new preamble, which clarifies that the purpose of an agreement is not to create opportunities for avoidance and sets out the principal purpose test, which is the mechanism by which benefits can be denied where the main purpose of a transaction or arrangement is to avoid tax.
In line with the OECD model, the new agreements are comprehensive in scope and cover all income and gains, including articles on interest and royalties for the first time. However, benefits in respect of interest and royalties are limited to persons who can demonstrate a close connection to Crown dependencies, which ensures that residents of third countries will not be able to exploit the provisions. The new agreements also provide for mandatory binding arbitration, which ensures that disputes are resolved and double taxation avoided.
The current agreements have been updated twice in the recent past to ensure that they could not be used to frustrate the intention of UK legislation on offshore property developers and leasing in the oil and gas sector. The amendments are incorporated in the new agreements, and this comprehensive update will avoid the need to make such changes in future. Finally, the new agreements also provide for mutual assistance in the collection of tax debts, which will enable the UK to ask the Crown dependencies to recover UK tax from their residents on our behalf.
In summary, these are agreements that the UK and the Crown dependencies can be happy with. They protect UK revenue and provide a stable framework in which trade and investment between the UK and the Crown dependencies can continue to flourish. I therefore commend the three orders to the Committee.
Anneliese Dodds (Oxford East) (Lab/Co-op)
It is a pleasure to serve on this Committee with you in the Chair, Mr McCabe. I am grateful to the Minister for his explanatory comments, but I am afraid that the Opposition cannot support the treaties in their current form.
Let me say at the outset that the Opposition’s concern about the treaties is in no way a reflection of our overall view of the Channel Islands, with whom we are determined to maintain a cordial and respectful relationship, building on our important historical and contemporary ties. Nor would the Opposition view the previous double taxation agreements as fit for purpose. They were not, although there appears to have been confusion in that regard on the Government side. I will return to that later.
Our opposition to the treaties is motivated instead by a deep concern about the lack of appropriate engagement by the Government in advancing the cause of tax transparency, which at rhetorical level they are committed to, but which time and again they seem sadly to have resiled from in practical terms. During debates on the Sanctions and Anti-Money Laundering Act 2018, the Opposition prepared an amendment requiring Crown dependencies to introduce public registers of beneficial ownership, but we were persuaded by Ministers that they were working with Crown dependencies to achieve transparency through other means. The amendment was therefore withdrawn.
What has happened in the intervening six months since the beginning of May? It looks as if even the Government’s responsibility to require overseas territories to introduce public registers of beneficial ownership has floundered. The Government are obliged to do that now by the will of this House, given that the amendment to that intent passed. I understand that there has been one conference call with the overseas territories, and that appears to have been in relation to what the Government are committed by this House to achieving regarding promoting beneficial ownership registers in the overseas territories.
When it comes to the Crown dependencies, the Government appear to be shutting the door on transparency with these treaties, which is unacceptable. From what I can see, the previous tax treaties with the Channel Islands covered only income tax and corporation tax, not information exchange. There was a separate agreement on the latter, signed in 2013 as an exchange of letters, although that does not seem to have been enacted. As an aside, it would be quite interesting to hear from the Minister why that is the case.
Information exchange is now included within the tax treaties, as one might expect given the OECD’s focus on this area and the fact that, as the Minister indicated, the treaties are modelled on the OECD’s multilateral instrument for amending tax treaties. Given that information exchange was a subject for negotiation as part of the treaty process, and given previous assurances, one would have expected our Government to seek to include an increase in transparency for beneficial ownership registers within the negotiations. However, article 26 in the Jersey agreement, replicated in those with Guernsey and the Isle of Man, states:
“Any information received under paragraph 1”,
which contains the provisions on information exchange,
“by a Territory shall be treated as secret”.
That, coupled with the fact that there is no mention elsewhere in the treaty text of public registers of beneficial ownership, appears to close the door on transparency, rather than open it in the manner that the Government committed to doing.
Alex Cunningham (Stockton North) (Lab)
The pensions industry is probably one of the most secretive as far as costs and transparency are concerned, although the Department for Work and Pensions and the Pensions Minister have done tremendous work to try to increase transparency. There is a lesson there for the Minister.
Anneliese Dodds
I am grateful to my hon. Friend. He makes the serious point that we have seen transparency moving forward in many areas, yet with these treaties we appear to be moving backwards.
The Government may say that they began negotiations on the treaties in April 2016, as reported by the then Minister responsible, Jane Ellison, but the fact remains that they were not signed until 2 July this year—after the Government had given an assurance that they would work with the Crown dependencies towards public registers of beneficial ownership. We often hear the Government say that they cannot force either the overseas territories or Crown dependencies to do anything at all. I resolutely state that we must do all that we can to support our friends in the overseas territories and Crown dependencies.
I have frequently met with politicians from both groups of jurisdictions, and I respect their efforts in the field of promoting clean financial services and in many other areas. Many people in both groups of jurisdictions now recognise that the writing is on the wall when it comes to excessive secrecy in the financial sector. More transparency is coming, and it is only a matter of time before it will become the international standard. The British Government must play their part in that.
The treaties were the perfect opportunity for our Government to seek to work with the Crown dependencies to promote public registers after previous commitments to do so, yet that opportunity seems not to have been taken up. It would have been perfectly possible for our Government not to have concluded the treaties until public registers were agreed to, but they chose to ignore that pressing need. Similarly, the Government failed to use the opportunity of the Building Societies Legislation (Amendment) (EU Exit) Regulations 2018 as a means to require change. Instead, the current relationship between the UK and the Crown dependencies is maintained in those regulations without any conditions attached whatsoever.
That is all in the context of the Government acting to defend the interests of UK-linked territories—or what is portrayed as their interests; I would argue that in the long run they are not—when it comes to the secrecy of financial activities. I have previously used freedom of information requests to try to get to the bottom of the lobbying that our Government have undertaken on behalf of overseas territories and Crown dependencies concerning the EU’s tax haven blacklist. Eventually that hit a brick wall, when those matters were classified as “diplomatic” and therefore not open to FOIs. The Süddeutsche Zeitung newspaper was rather more forthcoming, however, when it reported in March that the UK Government had intervened in the blacklisting process, in that case to try and stop the British Virgin Islands being blacklisted.
The British Government cannot have it both ways. They cannot on the one hand argue that they are powerless in relation to our overseas territories and Crown dependencies, and on the other promote a particular view of those territories’ interests—which, as I have said, I do not think are their long-term interests—to other actors such as the EU. Those positions are just not compatible. It would be helpful to hear the Minister’s view on why these treaties do not conform with previous commitments made by the Government with respect to public registers of beneficial ownership for our Crown dependencies.
The Minister will be aware of the eurobond exemption, which has been estimated to lose the Exchequer around half a billion pounds a year in tax revenue. The Channel Islands stock exchange is a recognised stock exchange under section 841 of the Income and Corporation Taxes Act 1988. Securities listed on that exchange enjoy exemptions from withholding tax even though they may be held by opaque companies. A UK company, for example, would make interest payments gross, without any withholding tax, while in many cases the recipient would arrange their tax affairs in such a way that they could escape tax altogether. I understand that, back in 2012, HMRC itself suggested that that could be restricted, so that the connected parties could no longer benefit from the exemption. My party also adopted that position at the time. The Government’s argument against it was that issuers, paying agents and clearing systems for eurobonds might not be aware of who noteholders are or whether they are in the same group as the issuer. Essentially, they would be unable to work out if they were connected parties. It would be good to hear from the Minister whether that matter even came up during discussions about these treaties and, if so, what the treaties do to prevent that kind of distortive activity.
It would be helpful to have a clear indication of how the Government view the process for concluding new double tax agreements. I noted when we ratified the OECD’s multilateral instrument that it did not result in a commitment to alter our treaties with Jersey, the Isle of Man or Guernsey. On that occasion the Minister replied to me:
“The hon. Lady asked why we do not include all the DTAs. She is absolutely right that the UK has a large number—from memory, I think it is around 130—and about 121 will be potentially covered by this measure. The answer is that, in some cases, the DTAs largely conform to the changes that would be introduced were they to be subject to the MLI. In some cases, it is not necessary, as our treaty contains substantial provisions. Our first-time DTA with Colombia would be one example.”—[Official Report, Third Delegated Legislation Committee, 9 May 2018; c. 8.]
That seems to be out of kilter with what has occurred with these treaties, which did not cover many of the measures covered by the MLI, such as royalties or capital gains tax—the treaties and the MLI have very different formats. Now that we see a different approach from what was initially suggested for the Channel Islands DTAs, I would be interested to learn what will to happen with the remaining DTAs, which cover Austria, the Falkland Islands, the Faroe Islands, Switzerland and the United Arab Emirates. Interestingly, the protocol to the Swiss DTA was concluded in 2017, but is still not in force, and it is not clear when it will be brought to the House. It would be interesting to hear from the Minister about progress in that regard.
To conclude, sadly we do not feel that we can accept these treaties. They appear to go against commitments made to the Opposition that the Government would continue to work extensively with our Crown dependencies towards having public registers of beneficial ownership. For that reason, we will be voting against the orders today.
Kirsty Blackman (Aberdeen North) (SNP)
It is a pleasure to be here, Mr McCabe. This is a nice warm-up for all the time that we look forward to spending together in a room like this considering the Finance Bill.
I align myself with most of the comments made by my colleague, the hon. Member for Oxford East, particularly about beneficial ownership. She always asks difficult questions of the Minister, who is left scribbling and trying to come up with the answers. Hopefully, he will have them and we will all leave here happy as a result, but I am not sure that that will happen. In relation the UK’s ability to tackle tax avoidance and evasion, some changes have not been made despite the fact that they have been called for in this place. I would like to highlight a 2017 European Parliament report that said that
“most of the offshore structures revealed in the Panama Papers were set up from Luxembourg, the United Kingdom and Cyprus”.
The UK is one of the three countries specifically mentioned, which shows that there is still a long way to go before it can be recognised as somewhere that does not incentivise these kinds of things and does not allow them to happen.
The Scottish National party has a strong track record in relation to our work on Scottish limited partnerships, and we are still waiting for change in relation to our support for the Magnitsky changes and the work that we have done on that. Finally, to pick up on a point made by the Opposition spokesperson, there is not much point having an international agreement if we do not use it. Some of the agreements that have been made and signed have not come into force. If the double taxation treaties that are discussed in the explanatory notes come into force, particularly on transparency-related issues, it is important that the Government come back to us with information about how regularly the information sharing was used. If there are problems and tax avoidance is going on, but the Government do not use the measures in the Bill that has been introduced to obtain the information that they need to tackle tax avoidance, that would be a major concern. If the orders are introduced—the Government currently have a working majority, so that is possible—it is important that the Government commit to return to the House and report on the application of the arrangements, particularly in relation to the new information-sharing provisions. It is important that we do not just do the right thing but are seen to be doing the right thing. It would give Opposition parties some comfort if we had a commitment from the Government.
Mel Stride
I thank the hon. Members for Oxford East and for Aberdeen North for their contributions to this important debate. I always expect a rattle gun of deep and technical questions from the hon. Member for Oxford East, and I was not disappointed. I will endeavour to answer as many questions as I can, and on those I cannot answer, I am happy to write to her in due course.
The hon. Member for Oxford East raised a lack of engagement, as she termed it, with the treaties that we are scrutinising. I took that to refer both to matters of transparency, on which she elaborated at some length, and also the scrutiny of the treaty, which is an issue that she has raised in relation to other DTAs that we have debated in Committee. I hope that she therefore welcomes the fact that we have made improvements, for example to the information memorandum, which now points out the differences and changes between the 1950s and the later iterations of the treaties and, indeed, the treaty to which we have been asked to give our consent.
I shall make the general points that I usually make on scrutiny. International treaties are complicated negotiations and do not necessarily lend themselves, nor would it be appropriate for them to do so, to discussion and rumination, as the hon. Lady may be seeking. The treaty was published in July this year, so there has been plenty of time to review it. Of course, these international agreements go through the process that we are going through at the moment, giving this treaty scrutiny.
I appreciate that the transparency debate is a hook on which one could add the whole issue of the public registers of beneficial ownership, about which we have had various parliamentary debates. The hon. Lady knows the Government’s position in that respect. It is important to stress that we have a common reporting standard between Her Majesty’s Revenue and Customs and the tax authorities of the three other jurisdictions in question, so we do have an exchange of information relevant to tax affairs between our two authorities, which is an important tool in clamping down on avoidance, evasion and non-compliance.
The hon. Lady asked specifically why we did not insist on the treaties containing a provision that public registers be set up. I think the answer to that is that these matters are outside the general context of these treaties. In addition, the treaties are entered into by bilateral agreement, and I think if we had insisted on that—indeed, had it been our desire to insist on that at this moment—it is unlikely that we would have had the improved version of the treaties that we are discussing today.
Anneliese Dodds
I am grateful to the Minister for giving way, but surely these treaties contain provisions that make it less likely that such a public register, which the Government committed to, will be set up, because they include the commitment to keeping information secret. It is just that these treaties do not include reference to public registers, which one would have expected if the Government were working on this, as they committed to do, to the Opposition; it is also the fact that they include a commitment to keeping information secret, which goes against what the Government said in this House that they would do.
Mel Stride
I do not think that these treaties require further secrecy than the appropriate confidentiality, as some might term it, of information that is, after all, highly sensitive; it involves the tax affairs of individuals and businesses between our various jurisdictions. It would only be right that confidentiality is respected in those circumstances.
Anneliese Dodds
I am grateful to the Minister for that clarification. However, we were just talking about having a register that is similar to the UK register, which is public, and surely any concerns about confidentiality have already been dealt with in our own jurisdiction.
Mel Stride
I had understood the hon. Lady in her earlier intervention to be suggesting that the treaties would make a move to public registers of beneficial ownership less likely. To the extent that I do not think they impose any additional confidentiality on the exchange of information over and above what was there before, I do not think that argument holds water, with respect to her.
On the information exchange issue that the hon. Lady raised, the agreement contains a new “assistance of collection of debt” provision, compared with the agreements that it supersedes. I hope that she would welcome the information requirements around that, and the fact that we can now actively seek the assistance of those jurisdictions to collect tax debt, for example.
On the general issue of anti-avoidance, as all Committee members will know—because they follow these affairs in intricate detail, as they have done during this debate—we have very much been in the vanguard of BEPS programme in the OECD. Members may see the footprints of that in these treaties through the main purpose test, to ensure that we do not have companies or individuals exploiting the tax advantages around these treaties for no other reason than to avoid or reduce their tax liability. Of course, in respect at least of the interest on royalty payments, as distinct from dividend payments, there are different categories of entity, and various tests accordingly that will be required to trigger the reliefs in that respect.
The hon. Lady mentioned the blacklisting process that is going on at the moment and the UK Government’s involvement. We have been actively involved in discussions with our overseas territories to ensure that we encourage them not to be blacklisted—to ensure that they comply with the EU code group’s provisions.
Alex Cunningham
Having anticipated what the Minister said, I should be interested to learn what new areas the Minister is working on to encourage greater transparency within the territories.
Mel Stride
One of the principal areas is that of economic substance when it comes to the activities of those businesses that purport to be operating from those low or no-tax jurisdictions, which is the main thrust of the EU’s move here—that we have genuine businesses involved in those jurisdictions, rather than their just being used as a conduit for the purposes of avoiding or paying extremely low levels of tax.
The hon. Member for Oxford East mentioned eurobond exemptions and restricted connected parties. These treaties do not impinge on that matter, which is dealt with in UK domestic tax law, so it is quite distinct from what we are debating today. The hon. Member for Aberdeen North asked if we could come back with a report on information sharing and how effective it had been. I do not think that, in this instance, there is a need for a specific report. The tools for scrutinising that, whether by way of debates or parliamentary questions, are here in this Parliament. On that note, I shall conclude my remarks.
Question put.
Draft Immigration (Health Charge) (Amendment) Order 2018
(6 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 9 / Noes: 8 - Question accordingly agreed to.
The Chair
I hope that the Committee will forgive me if I conduct proceedings unusually from a sedentary position. I have a dodgy leg, and standing up is hard work. I hope that will be all right.
The Minister for Immigration (Caroline Nokes)
I beg to move,
That the Committee has considered the draft Immigration (Health Charge) (Amendment) Order 2018.
It is a pleasure to serve under your chairmanship, Mr Gray, and I hope that the leg is making a good recovery.
We all rely on the national health service for a range of help and support, often at the most difficult times in our lives. Our NHS is always there when we need it. We believe it is right that long-term temporary migrants make a fair contribution to the NHS’s sustainability, as they will not have built up the same contributions as permanent residents. That is why we introduced the immigration health surcharge in April 2015.
The charge is paid by non-European Economic Area temporary migrants who apply for a visa for more than six months or to extend their stay in the UK for a further limited period. It is paid up front, as part of the immigration application process, and is separate from the visa fee. The charge should not be conflated with NHS charging regulations, which form part of health legislation and apply to tourists and illegal migrants, who may be directly charged for the cost of their hospital treatment. Those who pay the charge may use the comprehensive range of NHS services without further charge for the duration of their valid leave, subject to a few exceptions: they are charged for assisted conception services in England and must also pay the charges that a UK resident would pay, such as those for prescriptions in England. From the point of arrival in the UK, a charge payer can enjoy the same access to the NHS as a permanent resident. They can make full use of NHS services without incurring hospital treatment charges and without having made any tax or national insurance contributions in the UK.
The charge is currently set at £200 per year, with students and youth mobility scheme applicants enjoying a discounted rate of £150. To date, the charge has raised more than £600 million for the NHS. Income is shared between the health administrations in England, Scotland, Wales and Northern Ireland, using the formula devised by Lord Barnett. The charge rate has not increased since its introduction in 2015. The draft order amends schedule 1 to the Immigration (Health Charge) Order 2015, to double the amount of the charge across all routes. Students, dependants of students and youth mobility scheme applicants will continue to pay a discounted rate, and this will rise to £300 per person. The annual amount in respect of all other relevant categories of application will rise to £400 per person. The order also makes a minor clarifying change to the principal order, to set out the exchange rate that the Home Office applies when the charge is paid in a currency other than sterling.
The Government recognise the valuable contribution that migrants make to this country. International students enhance our educational institutions financially and culturally, enrich the experience of domestic students, and may become important ambassadors for the United Kingdom in later life. However, faced with increasing demands on health services, we must ensure that migrants make a fair and proportionate contribution to the NHS. There is a balance to be struck, one that is fair to migrants and to the UK taxpayer and that helps to ensure the long-term sustainability of the NHS while maintaining the UK’s position as an attractive destination for global talent.
The Department of Health and Social Care has reviewed the cost to the NHS of treating charge payers in England, and it estimates that the NHS spends an average of £470 per person per year in respect of those who pay the charge. The new level of the charge will, therefore, better reflect the cost to the NHS of treating those who pay it. In recognition of the important contributions that migrants make to this country, the charge will remain below the average cost recovery level and continue to represent good value compared with health insurance requirements in comparable countries.
Teresa Pearce (Erith and Thamesmead) (Lab)
Currently the price of a child application for leave to remain is well over £1,000. The Home Office has said that the cost is about £372, so it already makes £600 on each application. Is it fair, therefore, to increase the cost of the health surcharge for children?
Caroline Nokes
As the hon. Lady pointed out, children do use the NHS, and we know from the information we have that they are particularly high users of its services. The immigration health surcharge is transferred to the NHS in its entirety, so this is not about the Home Office making a charge. It is about the Home Office implementing a levy for the NHS that enables it to provide ongoing services to those who use it, and provides fairness, both for migrants who will use more than £400-worth of services and for the UK taxpayer.
The new level of the charge will better reflect the cost to the NHS of treating those who pay it. In recognition of the important contribution that migrants make, the charge remains below the average cost recovery level, and the Government’s proposal to double it is consistent with the direction of travel set out in our general election manifesto. The proposed increase is based on the Department of Health and Social Care’s closer analysis of the cost that charge payers present to the NHS, analysis that was not previously available. The exemptions for vulnerable groups set out in the 2015 order will remain, and the charge will continue to be waived if a person’s application fee is waived on destitution grounds.
I am sure there will be questions about the future application of the charge to EEA nationals. The Government are clear that any EU citizen who is resident in the UK before we leave the European Union in March 2019 will not pay the charge, and we have committed to publishing a White Paper on the future immigration system later in the autumn. The charge is being considered as part of that process, and of ongoing negotiations.
The Government believe it is fair that temporary migrants make a financial contribution to the comprehensive and high-quality range of NHS services available to them during their stay. By increasing the charge, we estimate that a further £220 million a year could be raised to support the NHS, helping to protect and sustain this country’s world-class healthcare system for everyone who uses it. In England alone, the additional contribution could fund roughly 2,000 doctors or 4,000 nurses. The new rate compares favourably with private health insurance requirements in other countries, and we believe it continues to represent a good deal for migrants, given the extensive range of NHS services they may use during their time in the UK. I commend the order to the Committee.
Afzal Khan (Manchester, Gorton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gray. The Labour party will be voting against the motion. The costs associated with applying for visas have skyrocketed, and the UK is becoming an increasingly expensive and unwelcoming place for migrants. A family of four will now pay £6,132 in fees for two and a half years’ leave. If the immigration health surcharge were to double, the total bill would be £8,132, which is completely unaffordable for many families. There is a discount rate for students and those on the youth mobility scheme, but under current proposals, the discount rate would be £100 higher than the top rate is now. Meeting the criteria for receiving a fee waiver is notoriously tricky, and most people will not be considered for a fee waiver, but will nevertheless be unable to pay the costs. How many people have been granted a fee waiver, and how many are expected to be granted one once the increase comes into force?
The immigration health surcharge is not a fair contribution. The majority of migrants are taxpayers, so they will effectively be paying twice for any NHS treatment they receive: once through the IHS, and again through their taxes. That double taxation is particularly unfair given that migrants are less likely to use the NHS, as they are on average younger and healthier than the rest of the population. The UK is facing an NHS staffing crisis, and we desperately need to attract doctors and nurses from abroad, to at least plug short-term gaps. The chair of the Royal College of Nursing emphasised that point when she said:
“The immigration health surcharge not only imposes an enormous personal cost on hardworking nurses and health care assistants, but risks driving away overseas staff at a time we need them most.”
We have already seen falling numbers of EU citizens coming to the UK. Will the charge apply to EU citizens in any post-Brexit scenario, posing yet another barrier to EU citizens coming to the UK after Brexit?
The immigration health surcharge goes hand in hand with the Government’s hostile environment for migrants. Requiring them to pay such an exorbitant cost will push people to defer regularising their status. Without regularised status, a migrant cannot access housing, education and health services. This is not only a very difficult personal position, but poses a public health risk. In the end, the cost to the NHS will be greater, as people will not seek treatment until a problem reaches a crisis point.
I would like to highlight the effect that this increasing cost will have on one group in particular. The Minister’s statement described those who will have to pay the IHS as “temporary migrants”, but it will also apply to people who came here as young children, for whom the UK is the only home they know but who are not British citizens. This group is at high risk of being pushed into irregular status. The path to citizenship for these young people is already extremely expensive; they have to pay four times for limited leave to remain before they can apply for indefinite leave. The proposed IHS increase will bring the cost of LLR to £2,033 each time, which is an entirely unaffordable cost for most young people. Many will delay applying or will be forced into debt to pay those costs. The organisation Let Us Learn describes how these young people live in fear of being taken from their families and communities and put in detention if they cannot save enough money in time to pay for the next set of fees.
The Home Secretary has committed to a review of the Home Office’s structures and practices. We already have the Windrush lessons learned review, and in a Westminster Hall debate on 4 September, the Immigration Minister committed to review the Government’s approach to settling fees for visas and immigration and nationality services. I am sure that I am not alone in feeling fed up with review after review.
Andrew Bridgen (North West Leicestershire) (Con)
I have listened intently to the shadow Minister’s speech, and I am sure that people outside the Committee will look at the text in the same way. From his speech, it is clear to me that Labour’s position on this modest increase in charging for our excellent health services in the UK is that it is in favour of more migration and less money for the NHS. Does he not realise how that will grate with the British public and his electors, and does he not appreciate that we run a national health service? We cannot fund an international health service.
Afzal Khan
Doubling the fees is not a modest increase. Labour is interested in having a fair system, not in charging people double for a single service. The hostile environment caused the Windrush crisis and the recent DNA scandal, and it will be the cause of many crises to come. The Government must end the hostile environment, including by setting fees and costs for visas and nationality at a fair and reasonable rate.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
It is good to see you in the Chair, Mr Gray. I want to put on record why the SNP also opposes the immigration health surcharge and the proposed increases. I absolutely echo what the shadow Minister said about the impact on recruiting doctors and nurses and about the terrible effect this will have on children who are on a long route to settlement, who will have to make four applications at intervals of two and a half years. The proposed increase will take the total cost of fees to £10,000 for every single child on that route.
There are two principal reasons why we oppose the order. First, we regard it as an unjustified form of double taxation, which takes no account of the fact that, like everybody else, migrants pay tax towards public services. They also face extortionate immigration fees that this Government have already put in place. It is a form of poll tax as well, because it takes absolutely no account of the ability of a person or their employer to pay. The only thing that I would expand upon a little bit is just quite how out of kilter UK immigration charges are now, compared with those of international competitors.
The Chair
Order. The hon. Gentleman should restrict himself entirely to these fees rather than discuss general immigration costs.
Stuart C. McDonald
I am happy to do that, Mr Gray. At the end of the day, the increase of £200 a year in the immigration health surcharge means that the overall charge for a researcher with a dependent spouse or partner and three kids will be above £11,000. That is between double and 10 times as much as in comparative countries such as the USA, Australia, Ireland, Norway, Canada, France, Sweden and the Netherlands, where a family in exactly the same position would be paying £800, not £11,000. The Home Office speaks of competitiveness, but the figures show how far removed from reality that is. For reasons that the shadow Immigration Minister has given, the order is also far from fair. We oppose the order; it is irrational, unfair and counterproductive.
Caroline Nokes
I am grateful for hon. Members’ contributions to the debate and should like to address some of the points raised. The hon. Member for Manchester, Gorton commented on the concerns about the combined cost of the charge and visa fees, and I am conscious of those, but the charge is set at a competitive level and will remain low compared with the potential benefits—free access to the NHS, including GP care and accident and emergency care, as well as routine scheduled healthcare. It offers far better value than private medical insurance, where premiums are much more expensive. If we consider the international comparison, in Australia, for example, the annual price of an insurance policy would be in the region of £302 per year for a student, but if it was for a student and a partner, that might increase to somewhere in the region of the equivalent of £1,700.
As I said, the Department of Health and Social Care studied very closely the average cost of treatment to migrants and that transpired to be in the region of £470 each per year. The Government are clear that migrants must pay the charge when they make an application and should plan their finances accordingly. Both the cost of the health charge and the application fee are available online and are very clear. Those in a vulnerable situation are protected. Immigration application fee waivers are available on specified human rights routes, where a migrant is exercising the right to remain in the UK based on family but is destitute or would be rendered destitute by payment of the immigration application fee.
Stuart C. McDonald
When I speak to people practising immigration law who are dealing with clients in this position, they say that it is virtually impossible to get a fee waiver. In fact, as I understand it, fewer than 8% of children are successful in obtaining one. That leaves them, as I said earlier, facing a charge of more than £10,000 as they go on the long route to settlement. Surely the Minister cannot be comfortable with that.
Caroline Nokes
As the shadow Minister highlighted earlier, we keep our fees and charges under review, but at £400 per year, the fee is less than the average amount that the NHS spends on treating migrants. That is why the Government regard it as being fair. We know that children are higher users of national health services than their parents.
I am aware that there have been calls for NHS professionals to be exempt from the charge. The Government fully recognise the important contribution that international healthcare professionals make to the UK, but it is only right that they also make a proportionate contribution to the long-term sustainability of the NHS. In that regard, NHS professionals are in the same position as other providers of essential public services, including teachers.
I recognise that there are some concerns about the financial impact on nurses. However, the answer is not to exempt nurses from the charge but to increase their pay, and that is happening. All NHS nurses will benefit from a pay increase as set out in the Agenda for Change framework.
We are in the process of negotiating reciprocal healthcare arrangements with the European Union. We have reached an agreement with the EU on citizens’ rights that will protect those EU citizens and their family members who are resident in the UK by the end of the planned implementation period on 31 December 2020. That will provide the same entitlement to access public services and benefits, according to the same rules as now. In the unlikely event of no deal, the Prime Minister has already confirmed that all EU citizens resident here by 29 March 2019 will be welcome to stay.
The Government believe that it is right that migrants make a fair contribution to the extensive and high-quality range of NHS services available to them during their stay, in line with their temporary immigration status. On that basis, I commend the order to the Committee.
Question put.
Draft Credit Transfers and Direct Debits in Euro (Amendment) (EU Exit) Regulations 2018
Draft Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018
(6 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the Committee has considered the draft Credit Transfers and Direct Debits in Euro (Amendment) (EU Exit) Regulations 2018.
The Chair
With this it will be convenient to consider the draft Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018.
John Glen
It is a pleasure to serve under your chairmanship, Mr Hanson.
An essential part of preparing for a potential no-deal scenario in which the UK leaves the EU without a deal or an implementation period is ensuring that there continues to be a functioning legislative and regulatory regime for financial services in the UK. To deliver that, the Treasury is laying statutory instruments before Parliament under the European Union (Withdrawal) Act 2018, several of which have already been debated in this place and in the House of Lords. Both sets of draft regulations before the Committee are part of that comprehensive programme. They will fix deficiencies in UK law relating to the regulation of e-money institutions, payment institutions and account information service providers, as well as making transitional provisions. They align with the approach taken in other SIs laid under the 2018 Act by maintaining existing legislation at the point of exit to provide continuity, but amending it where necessary to ensure that it works effectively in a no-deal context.
The regulatory regime that applies to payment institutions, electronic money institutions and account information service providers, and the rules for facilitating payments and issuing electronic money for those institutions, are created by various pieces of EU legislation: the EU directives on payments and electronic money, which were implemented in the UK through the Payment Services Regulations 2017 and the Electronic Money Regulations 2011 respectively, and the EU’s directly applicable regulation on credit transfers and direct debits in euro.
In a no-deal scenario, the UK would be outside the European economic area and outside the EU’s legal, supervisory and financial regulatory framework. The existing legislation needs to be updated to reflect that and amended to ensure that its provisions will work properly in such a scenario. Furthermore, in a no-deal scenario, the UK will no longer automatically maintain participation in the single euro payments area, which enables efficient, low-cost euro payments to be made across EEA member states and non-EEA countries that meet the governing body’s participation criteria. SEPA is a key enabler of trade between the UK and other EEA member states and non-EEA participants.
To ensure that the legislation continues to operate effectively in the UK once the UK has left the EU, and to maximise the prospects of the UK maintaining participation in SEPA in a no-deal scenario, the draft regulations will make amendments to retained EU law relating to the 2017 and 2011 regulations and to the EU regulation on credit transfers and direct debits in euro. I will set out the approach taken in each set of draft regulations and the interaction between their provisions and the UK’s future participation in SEPA.
The Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations will make the following principal amendments to the 2017 and 2011 regulations. First, they will create a temporary permissions regime for payment firms. Should the UK leave the EU without a deal, there would be no agreed legal framework under which the passporting system implemented for EEA payment firms under the Payment Services Regulations could continue to function, so firms from the EEA would not legally be able to operate in the UK. The draft regulations will therefore create a temporary permissions regime for such firms that is similar to, but separate from, the regime set out in the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018, which applies to firms regulated under the Financial Services and Markets Act 2000 and has already been debated in the House.
Secondly, the draft regulations will make changes to ensure the continued effective safeguarding of consumer funds. To provide consumer protection in the event of an institution becoming insolvent, the Payment Services Regulations require payment institutions and electronic money institutions to safeguard consumer funds to ensure that they are paid out in priority to other creditors. The most common method of safeguarding funds is for the firm to hold them in a segregated account with a credit institution. A considerable number of UK firms hold safeguarding accounts in the rest of the EU. They will still be able to do so once the draft regulations come into force, but they will also have the option of using safeguarding accounts based anywhere else in the world, subject to adequate guarantees of consumer protection. This is in line with existing practice for protecting client assets and investments.
Thirdly, the draft regulations will remove the provisions that currently require supervisory co-operation with EU authorities. In a no-deal scenario, it would not be appropriate for UK supervisors to be unilaterally obliged to share information or co-operate with EU authorities, so the provisions that require co-operation and information sharing with the EU have been removed. However, that will not preclude UK authorities from sharing information with EU authorities if appropriate, which the existing domestic framework for co-operation and information sharing with countries outside the UK allows for on a discretionary basis.
Fourthly, the draft regulations will transfer to the appropriate UK bodies functions currently carried out by EU authorities. Under the payment services directive implemented by the Payment Services Regulations, responsibility for drafting regulatory technical standards currently sits with the European Banking Authority. In line with the Government’s cross-cutting approach to the transfer of functions, the draft regulations will ensure that those functions are transferred to the appropriate UK body, the Financial Conduct Authority.
The draft Credit Transfers and Direct Debits in Euro (Amendment) (EU Exit) Regulations will make the following principal amendments to the retained EU regulation on credit transfer and direct debits in euro. First, they will introduce the concept of a qualifying area, comprising the UK and the EEA, within which they will apply to UK payment service providers’ euro-denominated transactions. The qualifying area is broadly aligned to the geographical scope of SEPA, but it does not include SEPA’s existing non-EEA country participants; EU law does not include those countries, so it is not possible to include them in UK law under the European Union (Withdrawal) Act.
Secondly, the draft regulations will transfer to the appropriate UK body functions currently carried out by EU authorities. Under the regulation on credit transfer and direct debits in euro, the European Commission may adopt delegated acts to take account of technical progress and market developments. In line with the Government’s cross-cutting approach on the transfer of functions, the draft regulations will ensure that those functions are transferred to the appropriate UK body, Her Majesty’s Treasury.
Finally, let me turn to the interaction between the UK’s future participation in SEPA and the provisions made in both sets of draft regulations. The UK payments industry is required to make an application to maintain participation in SEPA as a non-EEA country in a no-deal scenario; I understand that UK Finance, which represents UK payment service providers, has made such an application on behalf of the industry. Applications from non-EEA countries are determined by the European Payments Council by reference to its published criteria for non-EEA country participation. Through the draft regulations, the Government intend to retain relevant EU law in a way that maximises the prospects of the UK maintaining participation in SEPA.
Should the UK not maintain participation in SEPA in a no-deal scenario, UK payment service providers would be unable to comply with some of the requirements in UK law that presuppose the existence of euro-denominated transactions within SEPA. To cater for that scenario, the draft Credit Transfers and Direct Debits in Euro (Amendment) (EU Exit) Regulations will give HM Treasury limited powers to revoke certain requirements to prevent detrimental effects on UK payment service providers.
In summary, the Government believe that the draft regulations are necessary to ensure that the regulatory regime that applies to payment institutions, electronic money institutions and account information service providers works effectively if the UK leaves the EU without a deal or an implementation period, and to maximise the prospects of the UK maintaining participation in SEPA to the benefit of UK consumers, businesses and the wider UK economy. I hope that colleagues from all parts of the House will join me in supporting the regulations. I commend them to the Committee.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is a pleasure to see you in the Chair this morning, Mr Hanson.
As we are all aware, the draft regulations are part of a large number of statutory instruments related to preparations for a potential no-deal Brexit, of which about 70 are expected between now and February. The Minister and I have broached the first few of them already, as have some of my Front-Bench colleagues. We have covered matters relating to the temporary permissions regime, building societies and counterparty clearing. We shall return to such Committees frequently over the coming months.
The Opposition have voiced our concerns about the adequacy of the process, and I will state them again for the record: the number of Treasury SIs and the speed at which they are set to unfold are deeply concerning with regard to ensuring that the Government are held fully accountable. As the Opposition, we commit to make every effort to do that, but this is a constitutionally unprecedented and enormously resource-intensive task that leaves room for error, as much as we appreciate the time that the Minister, his staff and the civil service have taken to brief us.
We continue to be alarmed that we have reached a stage whereby such contingency measures for a no-deal scenario, which occupy significant time and resource of both the Government and the Opposition, must be laid before a Committee. Financial services firms need to be able to plan with certainty about the shape of things to come. In the absence of such clarity, they have ended up enacting their own contingency measures, such as moving staff and resources to the continent in preparation.
Everyone hopes that we will never have to use the provisions before the Committee today, but the day of reckoning gets ever closer. We still await details following the news reports last week that a potential Brexit deal has been struck for financial services, but nothing has yet been communicated formally to the House. Chief negotiator Michel Barnier has contradicted those reports publicly. Will the Minister begin by kindly providing some further details about that settlement, as it relates to the draft regulations, and saying whether there is any substance to those reports? At face value, it appears that we are looking for enhanced equivalence, which the industry has articulated will fall short of what we need to prevent our industry becoming a rule taker.
The draft regulations bring us specifically to the issue of payments. Much collaborative work was undertaken to bring about the implementation of the single euro payments area in January 2014, to the benefit of consumers and businesses alike. It is vital, therefore, that any detriment to consumers must be mitigated as far as possible and that we do not lose the efficiencies that have made cross-border payments easier for individuals and companies. The European Payments Council, in its report on possible outcomes published in May 2018, optimistically posited that we might be able to remain a member of SEPA after exit through functional equivalence—that is significant.
The explanatory notes on the draft regulations refer to the fact that no formal consultation has been undertaken, but that some stakeholders have been consulted. Will the Minister please elaborate on which stakeholders have been engaged on the issue and how any relevant concerns have been integrated into the statutory instruments?
The notes also acknowledge the benefits of SEPA, as did the Minister in his speech. It sounded as if the Minister was confirming that the Government see maintaining access to SEPA as a priority. Will the Minister confirm beyond question whether that is the case? If we crash out without a deal, what mitigation of detriment is being planned? The Minister explained that the draft regulations will set up the temporary legal regime, but will consumers see any difference in how they go about their business?
Finally, I note that the draft regulations will extend safeguarding of assets to an approved foreign credit institution anywhere in the world. Will the Minister please explain the driver behind that policy decision to expand beyond EU institutions, and what the criteria would be for foreign institutions to be assessed for their suitability? Those are the only questions that I have this morning.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to join you and everyone else in the Committee today, Mr Hanson.
I reiterate the concerns expressed by the hon. Member for Stalybridge and Hyde about this process and the necessity for it. From the Scottish National party’s point of view, whatever processes and procedures we put in place, all of these regulations will fall woefully short of what we have at the moment as a member of the European Union and the customs union. The Government cannot hide from this: regardless of what deal comes back, it will not be as good, effective or efficient as the system we have at the moment as a full member state. However the Government try to dance around that, it is the reality.
I appreciate what the Minister said in his statement this morning, but there is still an awful lot of uncertainty around this issue. Membership of SEPA is not a done deal and we will not know for some time when it will be a done deal. It would be incredibly useful if the Minister elaborated on the timescale, because we do not even fully know what it will look like to be an adjunct or extra member of this scheme. The reality is that we will have to continue to align with the scheme. We will be a rule taker, accepting all that comes as part of being an additional member of SEPA, without having much influence over how its rules work and how they affect us.
That is detrimental not only for financial services, but for consumers, who have seen the huge benefits of being able to make transactions in euros easily and efficiently, almost without thinking about it. We all see that when we go abroad on holiday and use our credit card or whatever else. We no longer have to have travellers cheques and things are no longer difficult when we go away. Financial transactions have become something that we do not need to think about, because they happen so easily and quickly, whether online or in person. That has been a huge benefit of being in the European Union. I do not think we have talked enough in the debate on the EU referendum about the simplicity that this has brought to people. They no longer need to think about these technical matters—these things just happen.
In moving out of the regime, we will have to set things up ourselves. The Minister mentioned that the FCA will take on some of the financial regulatory framework and standards, and that HM Treasury will take on other matters to do with credit transfers. Again, that creates further burdens on Government, such as the costs of setting up the regimes and ensuring, as I have mentioned previously, that we have the necessary staff, expertise and continuing engagement with the SEPA regime to ensure that we are not caught out if something else changes that we are not involved in setting up. We will have to take whatever comes, or we will risk falling out of the system altogether.
The Minister mentioned that we could offer to share our information on a discretionary basis. Is the reverse also true? Will the regimes under SEPA engage with us on the same basis? We do not know that yet. I ask the Minister to clarify that. It is all very well saying, “We will do our bit and we will help,” but if there is no reciprocal arrangement, it is pretty much worthless.
Finally, it would be worthwhile if the Minister outlined clearly the full implications of not being in SEPA. Will it mean, in a no-deal scenario, that transactions will cease? That would have a detrimental impact across all industries and areas. We have to know absolutely clearly what the implications are of no deal and not getting some kind of membership arrangement with SEPA, because if we do not have that, the impact on our economy will be hugely detrimental. We need to know what kind of catastrophe we may face.
John Glen
I will respond to the substantive points raised by the hon. Members for Stalybridge and Hyde and for Glasgow Central. First, I remind the Committee that these statutory instruments are needed to ensure that the regulatory regime that applies to payment institutions, electronic money institutions and account information service providers works effectively if the UK leaves the EU without a deal or an implementation period, and to maximise the prospects of the UK maintaining participation in SEPA.
The hon. Member for Stalybridge and Hyde spoke about the undesirability of this process. I acknowledge that going through 30 or so debates in this place is an interesting experience, but we are doing it to ensure that, in the unlikely scenario of no deal, we have a comprehensive regime in place.
On the overall situation with financial services, the negotiations are ongoing. I acknowledge the speculation over whether we have reached a deal. I am not able to confirm anything, but we are seeking to establish a strong bilateral relationship with EU regulators to fully mitigate the risks of being subject to equivalence decisions that are, at the moment, inadequate. I cannot comment further on that, nor on the progress on the deal as a whole. Members will appreciate that, as a relatively junior Minister at the Treasury, I am not privy to that information.
I can comment on some meaningful points. Concerns were raised about changes to consumer safeguarding as a result of the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations. The Payment Services Regulations 2017 require that payment and electronic money institutions safeguard consumer funds to protect consumers in the event of an institution becoming insolvent. The most prevalent method used to safeguard funds is for the firm to hold them in a segregated account with a credit institution. A significant number of UK firms hold safeguarding accounts in the rest of the EU, and they will still be able to do so once the statutory instrument comes into force. They will also have the option of using safeguarding accounts based elsewhere in the world, subject to adequate guarantees of consumer protection. That is in line with existing practices for protecting client assets in investments.
On the consultation undertaken, the hon. Member for Stalybridge and Hyde quite reasonably said that the usual process has been somewhat truncated. None the less, the draft regulations were published on 5 September and laid on 9 October. Consultation took place with key lobby groups in the industry, in particular UK Finance. We held a series of bilateral conversations with banks, FinTechs, payment providers such as PayPal and lawyers to verify the credibility of the statutory instruments. Although we have not undertaken a formal consultation on the statutory instruments, we have submitted them for approval in terms of the impact assessment and we expect that to come through imminently—next week, I hope.
I was asked about the impacts if the UK loses access to SEPA. SEPA enables efficient, low-cost euro payments to be made across participants. If, as expected, the UK secures a withdrawal agreement from the EU, EU law will be applicable in the UK during the implementation period and the UK will automatically remain within the geographical scope of SEPA. The Government’s approach to onshoring legislation is designed to maximise the prospects of the UK maintaining participation in SEPA in a no-deal scenario.
On the determination of the application to SEPA, which was raised by the hon. Member for Glasgow Central, UK Finance has made an application. Applications from non-EEA countries are determined by the European Payments Council, which is an international not-for-profit association; it is not part of the EU institutional framework. I cannot give the hon. Lady a categorical assurance over the timetable, because it is a matter for the EPC. UK Finance is in dialogue with it and has made the necessary provisions to do that in a timely way.
The hon. Lady also raised the impact of the UK losing access to SEPA. I think I have covered that.
John Glen
I am sorry: what are the impacts if the UK loses access to SEPA? In the unlikely scenario that the UK does not maintain participation in SEPA, UK consumers could face higher transaction costs and longer transaction times when making euro payments. That is precisely why we are making these provisions and I am happy to concede that. That is what underpins the whole of this legislative effort through statutory instruments.
The hon. Member for Stalybridge and Hyde asked why safeguarding goes beyond the EEA. In order to protect consumer interests, we wanted to make it possible for firms to use as wide a range of safeguarding accounts as possible. Restricting them only to UK accounts could place a burden on firms and restricting them only to EEA accounts would not be legally viable under World Trade Organisation rules on a most favoured nation status.
I hope that I have answered all the questions that were raised. There are two more, possibly. The hon. Member for Glasgow Central asked if the EU will engage with UK authorities on the same information sharing basis. Obviously, that is ultimately a matter for the EU and will be determined by EU law after we leave, but we hope that the UK authorities and the EU authorities maintain a constructive working relationship. Having visited two EU countries last week, I think there is a lot of good will towards the maintenance of that relationship, and that underpins our approach to the negotiations.
We should not assume that in a no-deal scenario there would be outright hostility to the UK; we hope we would be able to manage that. [Interruption.] I am seeking to be as constructive and reasonable as possible. I do not mean to be flippant about it. We are doing everything that we can to ensure that those relationships are as strong as possible. Throughout the last 40 years, we have played a leading role in influencing the regulation of financial services and many are uncomfortable with us leaving, but that means that the dialogue can still be very constructive in terms of our influencing future regulation.
Finally, the hon. Member for Stalybridge and Hyde asked about the prioritisation of the SEPA measure. It is a priority, as part of the Government’s approach to onshoring legislation. It is designed to maximise the prospects of the UK maintaining participation in SEPA. We are having a complex series of engagements in these Committees, but I am reassured that we have had a full discussion. I hope that the Committee is reassured and has found the sitting informative, and that we will now be able to support the regulations.
Question put and agreed to.
DRAFT ELECTRONIC MONEY, PAYMENT SERVICES AND PAYMENT SYSTEMS (AMENDMENT AND TRANSITIONAL PROVISIONS) (EU EXIT) REGULATIONS 2018
Resolved,
That the Committee has considered the draft Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018.—(John Glen.)
Agriculture Bill (Tenth sitting)
Tuesday 13th November 2018
(6 years, 1 month ago)
Public Bill CommitteesRead Full debate Agriculture Bill 2017-19 View all Agriculture Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 13 November 2018 - (13 Nov 2018)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 97, in clause 17, page 12, leave out lines 39 to 44 and insert—
“(2) In this Part ‘exceptional market conditions’ exist—
(a) where—
(i) there is a severe disturbance in agricultural markets or a serious threat of a severe disturbance in agricultural markets, and
(ii) the disturbance or threatened disturbance has, or is likely to have, a significant adverse effect on agricultural producers in England in terms of the prices achievable for one or more agricultural products, or
(b) if, on the day after exit day, the United Kingdom has not entered, or secured an agreement to enter, into a customs union with the EU.”
Amendment 117, in clause 17, page 12, line 40, leave out paragraph (a) and insert—
“(a) there is or has been a significant disturbance in agricultural markets or a serious threat of a significant disturbance in agricultural markets, or”.
This amendment and Amendments 122 and 123 would allow a declaration of exceptional market conditions where there is, or there is a serious threat of, a significant disturbance in agricultural markets; and would allow a declaration to be made in respect of events in the past.
Amendment 122, in clause 17, page 12, line 44, after “achievable for” insert
“or costs incurred in the production of”.
See explanatory statement for Amendment 117.
Amendment 123, in clause 17, page 13, line 2, after “are” insert “or have been”.
See explanatory statement for Amendment 117.
Government amendment 6.
Jenny Chapman (Darlington) (Lab)
It is a pleasure to be back in Committee this afternoon. I look forward to hearing the hon. Member for North Dorset’s account of his lunch; he is not here—he is probably finishing his cheese and biscuits.
When you adjourned the Committee this morning at 25 minutes past 11, Sir Roger, I was about to speak to amendment 122. To give colleagues their bearings, we are on page 12 of the Bill and dealing with clause 17. The amendment would insert just a few words about exceptional market conditions. What we are asking for is difficult to explain without reading out a whole subsection of the clause, so please bear with me. Clause 17(2) states:
“In this Part ‘exceptional market conditions’ exist where—
there is a severe disturbance in agricultural markets or a serious threat of a severe disturbance in agricultural markets, and
the disturbance or threatened disturbance has, or is likely to have, a significant adverse effect on agricultural producers in England in terms of the prices achievable for one or more agricultural products.”
All we want to do is to include, in addition to the reference to an impact on the prices achievable, a reference to the costs incurred in the production of such products, because the issue is obviously not just the prices that can be obtained for them, but how much the costs of producing them may be affected.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
When the hon. Lady talks about events that may have a severe impact on British agriculture, could she by any chance be referring to the points made by the shadow Chancellor of the Exchequer yesterday, when he talked about the collective ownership of land? Surely that is a policy that, when enacted by Stalin, killed millions of people in the Soviet Union.
Jenny Chapman
I think that if that were the policy, it would indeed count as an exceptional market condition, and I expect that the Government might want to intervene in some way.
Let me move on. As drafted, the power to act applies only if there is an impact on prices, but obviously there could be a situation in the sector that resulted in excessive additional costs for farmers but did not necessarily have an impact on the price of the product. Examples would be the costs of taking emergency action, such as cleansing and disinfecting, or input costs such as those for fodder. If the clause included our wording, that would enable the Secretary of State to act, or would just make it clearer that he could act when there was an effect on not only the prices achievable but the costs incurred.
Widening the scope, subtly but importantly, beyond just the impact on agricultural product prices would make the measure more flexible and reflective of the nature of exceptional conditions. In an enabling Bill, it is better to have powers with the full scope to deal with the unexpected. For now, that concludes my remarks on this group of amendments.
The Chair
Amendment proposed, 97, in clause 17, page 12, leave out lines 39 to 44 and insert the words on the amendment paper. The question is that the amendment be made.
The Minister for Agriculture, Fisheries and Food (George Eustice)
Apologies, Sir Roger: there is quite a large number of amendments in this group, and I am just finding my way to amendment 46. This is another attempt to replace the word “may” with “must”. Again, the argument is that the use of the word “may” is wrong. The Agriculture Act 1947 has not been referred to at all today, and I know that the hon. Member for Stroud likes it a great deal, so let me try this quotation:
“Where…it appears to the appropriate Minister expedient so to do, or if it appears to him otherwise expedient so to do in the public interest, he may by order fix or vary any such price”.
Even provisions in the 1947 Act, in this case relating to deficiency payments or a price support mechanism, use “may”.
The important thing to note about all these sorts of powers is that, by definition, there is a wide element of discretion. We are talking about dealing with crisis scenarios. The aim is not to intervene routinely all the time but to intervene expeditiously and in a fleet-of-foot way when a crisis needs to be addressed. The wording we have used in the clause and in many other areas in this part of the Bill is largely borrowed from what currently sits in EU legislation. The European Union also has discretionary crisis powers for exceptional circumstances, and its wording and approach are similar to what we have here, and, indeed, what we have here is similar to what we had in the 1947 Act.
Amendment 97 would add an additional definition of “exceptional market conditions”: if, on the day the United Kingdom leaves the EU, it is not in a customs union, that, of itself, should be an exceptional market condition. The hon. Member for Darlington comprehensively set out her views on these matters. I do not want to drift too far into the debate about customs unions, because we will have hours and hours of fun in the months ahead debating the agreement that comes back before Parliament.
However, we do not have to be in a customs union with the EU to avert a so-called exceptional market circumstance. We have been clear that we want a comprehensive free trade agreement and, crucially, a customs agreement—although not a customs union. We also seek a transition period. We are clear, as a Government, about what we seek in this negotiation, which is in its closing stages.
George Eustice
Yes, I can. If the hon. Lady reads the proposal that came out of Chequers, she will see that a customs agreement is one that allows us to strike trade deals with the rest of the world and in which we would collect and process, on behalf of the European Union, the duty due on goods destined for the EU.
George Eustice
I will not, because, as I said, I want to deal with the substance of the clause.
The Government are clear about our approach to getting in place a new free trade agreement and a partnership. However, there are several other flaws with the amendment. First, we have to bear in mind that the impacts of a no-deal Brexit will vary from sector to sector; it is not possible to determine exactly what they will be. For instance, we know that the sheep and barley sectors export quite a lot of their goods to the European Union. However, we are net importers in virtually every other sector, so although there may be an impact on sheep, there would almost certainly not be on beef, because there will be less import competition.
I do not think it is wise to put this proviso into the Bill. The reality is that, if the terms on which we left the European Union—be that with no deal or any other circumstance that led to restrictions on trade—led to a severe disturbance in the agricultural market, and if that disturbance threatened to have a significant impact on agricultural producers, the power is already there to act. We do not need to artificially bring a current debate around the customs union into a Bill that is built to last for the long term.
Dr David Drew (Stroud) (Lab/Co-op)
One little snippet I learned last week is that the milk that makes Baileys Irish Cream goes backwards and forwards seven times across the Irish border. If there is not some sort of union—or agreement, as the Minister calls it—that will be catastrophic. Given that the backstop is the thing stopping us getting any sort of agreement, would he care to speculate on how he would overcome the downside of those movements not taking place?
George Eustice
The issue in all those circumstances is less about the customs union and more about border inspection posts. That is why we have outlined in our approach a commitment to a common rulebook on those areas that require a border inspection, so as to reduce or even eliminate the need for border checks, and then an agreement on equivalence in other areas of legislation. So the border issue is less about customs.
Let me give another example. Scotch whisky is currently our most successful export, and yet it is always sold as a bonded product in an individual national market, because you have different alcohol duties in national markets, even within a single market. We already have examples of some of our most successful exporting sectors having no problem at all dealing with variable tax rates within a market.
Mr Philip Dunne (Ludlow) (Con)
Is the Minister able to confirm what I learned last week? Scotch whisky sales to China amount to £35 million, but pork exports to China, which were opened up by this Government in 2016, I believe, amounted to twice that last year—£70 million in one year.
George Eustice
My hon. Friend is absolutely correct. In the agri-food sector, as in most other sectors, our trade with the rest of the world is growing far faster than our trade with the European Union.
Martin Whitfield (East Lothian) (Lab)
It is also the case that Scotch whisky is created and bottled within Scotland and travels as a single product. The issue with Baileys is that it passes to and fro during its production.
George Eustice
That is the case with a number of other things that we import from other countries, including Iceland, which we import a lot of fish products from. We have ways of dealing with these issues.
As I said, the approach that we have adopted with the common rule book and the customs agreement will address those issues.
George Eustice
I will not give way. With these interventions, a number of Members are giving the impression that they would rather be in the main Chamber taking part in the EU debate than in a debate about future farming policy.
The purpose of this amendment is to define not being in a customs union as being a crisis in and of itself. That is absolutely wrong, because we can have a highly successful partnership and trade agreement that does not require us to be in a customs union with the European Union. Many nations in this world are not in a customs union with the European Union.
Jenny Chapman
Some of the contributions have been helpful in giving the lie to the idea that you cannot trade successfully and extensively with countries in other parts of the world while in a customs union, but that is not the point I wanted to make. The Minister says that not being in a customs union is not a crisis, but can he name any border anywhere on the planet where the kind of frictionless trade on which our industry depends is achieved without being in a customs union?
George Eustice
There are many successful economies in the world that are not in a customs union with the European Union.
I come back to my point: if as a consequence of the agreement—or indeed of there being no agreement—with the European Union, there are market disturbances that have an impact on agricultural producers, the power is there to act. There is no need to try to define additional powers in the way that this amendment does.
Amendments 117 and 123 seek to downgrade the test from a severe market disturbance to a significant market disturbance. It is wrong to lower the threshold in that way, for reasons I want to explain. We had evidence from one of the academics that suggested we needed something akin to the old deficiency payments system in that famous 1947 Act. The world has moved considerably since that point, and in many sectors we are seeing the development of viable futures markets to help farmers manage risk. In some countries—notably the US, in places such as Chicago—they put in place legislation to deliver the transparency needed to get a functioning futures market that enables farmers to defend themselves against price fluctuations.
We also have some interesting projects being developed in the UK. We are world leaders in issues such as agricultural insurance. There are some interesting projects on forming mutual funds—effectively, mutualised risk insurance models—that help farmers to insure their margin and protect a given quantity of milk, for instance, at a given price. Moving these powers away from just intervening where there is catastrophic risk, and away from a “severe” to some sort of “significant” disturbance, is the quickest way to snuff out the development of those private futures markets and risk management models.
Dr Drew
The Minister quoted the US a minute or two ago. I have some experience of the way in which the US operates its agricultural policy. Whenever there is any challenge to US farmers, it brings the Farm Bill out and openly subsidises its farmers—it is a straight subsidy. That is one of the problems I have with a free trade deal with the US: it is not a level playing field if we get rid of direct payments. I ask the Minister again: how do we defend against exceptional market conditions in this country when another country has already decided that it is going to defend its farmers by taking action through subsidising them?
George Eustice
We are adopting an approach to agriculture policy that is all around investing in farmers to help them reduce their costs to improve their profitability and to reward them for the work they do for the farmed environment. Part four, starting with clause 17, which we are debating now, is all about intervention powers in exceptional circumstances. We have deliberately not defined what those are because there should be a strong element of discretion here, and the Government have to be able to move, decide and act in an expeditious way to tackle a crisis.
The hon. Member for Darlington mentioned this morning what sort of circumstances these powers might be used in. Bearing in mind that they have largely been borrowed from existing EU provisions, we know when the EU has used powers of this sort. For instance, it was possible when we had the dairy crisis in 2015 and prices slumped for a long period during the latter part of that crisis, for the EU to fall back on these exceptional intervention powers to make grants and payments available to farmers to reduce their production. That is the kind of example where it would be absolutely appropriate to use these powers. However, there are other times when we have short-term fluctuations in the market, and when it would not be appropriate to use the powers.
Dr Drew
The Minister is being very patient with me, but I want to get this on the record: if another country, which we may have a trading arrangement with, chooses to subsidise its farmers in extremis because of a particular circumstance, which may be—dare I say it—an act of God, or the market may just be in a difficult position, would we use this particular power to support our farmers?
George Eustice
If that crisis in a third country led to a market disturbance here that had an impact on our producers, then yes, the power is there to do so. There is wide discretion in how this power could be used. In practice, the reality here is that when we have a crisis, we know what will happen. The Minister of the day will have representations from Back-Bench MPs who have met their farmers and he will have to make a judgment about whether this warrants declaring that exceptional market circumstance and taking action thereafter to address it.
This is a wide discretionary power, but I am certain Parliament will be plugged in to advocating that we should declare this exceptional market circumstance and act. It is right we enable it to be a flexible power that can be used in emerging crises that we cannot yet predict.
Dr Drew
I am sorry to intervene once again, but this issue is a minefield, because if a group of my farmers come to me, and I then go to the Government and say, “Well, this is an exceptional circumstance”, and the Government say, “No, it’s not”, but the United States has treated it as an exceptional circumstance, that will surely lead to all manner of legal actions against the Government. Clearly, farmers will defend their rights and their incomes when they feel another country that is trading with us is getting an unfair advantage. Is he not opening a can of worms?
George Eustice
No, I do not think we are. We are largely replicating what already exists. It is already the case that if there was a crisis in the US, and the US intervened but the European Union chose not to, there would be some disparity—
George Eustice
We should deal with the situation in our market. The test we should apply before acting is whether there is a severe market disturbance that affects our agricultural producers. We should not be worrying about what other countries happen to be doing.
Simon Hoare (North Dorset) (Con)
May I explore this point, because the shadow Minister is right that it is incredibly important? If an agricultural commodity was, in effect, being dumped into UK markets—analogous to the steel dumping from China—would that be a severe market disturbance and would it trigger some level of support, on the proviso that it was not possible to do anything about the dumping because a free trade agreement allowed it to take place?
George Eustice
In all international trade law, there are provisions on dumping—it is literally referred to as “dumping”—that enable us to restrict imports from other countries where under-priced, under-valued produce was being dumped in our market. That can therefore be dealt with elsewhere.
Sandy Martin (Ipswich) (Lab)
Would the Minister characterise all exports from a country that subsidises its agricultural production as “dumping”?
George Eustice
No, because we export and have some subsidies for our farmers. We have a range of different approaches that we can take to—[Interruption.] We are moving away from subsidies. We will support farmers in a different and better way. We will reward them for what they do for the environment.
I return to clause 17, not clause 1, which we debated earlier. Amendment 122 would broaden the scope of this exceptional market conditions power to enable the Secretary of State also to consider the costs incurred in production. This is neither necessary nor wise. We want this power to be aimed at markets, as it is now, and applied where there is a market disturbance, not necessarily where there is an increase in the cost of production.
The point about agricultural input costs is that there is a strong link between the main input costs, and the cost of oil, movements in exchange rates and weather events, and that also has an impact on output values. Typically, if the cost of animal feed rises, the value of the animal also rises, either because exchange rates, the price of oil or a weather event has driven it in that direction. That linkage is a natural hedge against the cost of inputs.
Sandy Martin
Will the Minister accept that the costs of labour and the costs associated with the exchange rate may well become much heavier for British farmers, especially those in horticulture or fruit and vegetables, than in the EU as a result of Brexit and that therefore our fruit and vegetable production might well be undermined by changes resulting from our leaving the EU?
George Eustice
I do not accept that. We learned from the exchange rate mechanism crisis in this country that floating exchange rates work, and work for our economy. The ERM caused a deep recession in this country, and it was only by leaving it and allowing our currency to float and find its correct value that we saw that boom. We know that the existence of the single currency eurozone is throttling growth in countries such as Italy and Greece and causing massive unemployment, particularly youth unemployment. We know, too, that, since the referendum result, sterling has eased back against the euro, which has led to the biggest boost in farm incomes for more than a decade. In the two years since the referendum decision, farmers have benefited from the pound’s slightly softer rate against the euro.
On the amendments, I believe that the issues have already been addressed or that they seek to constrain or fetter the discretion in the power, so I hope that the Opposition spokespersons will not press them.
Dr Drew
This has been an illuminating discussion. The Minister has done well with a bad set of cases. Farm systems throughout the world are subsidised; they might be subsidised in different ways, but they are subsidised. In the normal course of events, that is not a particular problem—we can deal with it, partly because we are in the EU and so have a bulwark. The difficulty is that the clause puts an enormous responsibility on the Secretary of State—I would not want it if I were Secretary of State—to decide whether something is an exceptional market circumstance. I would want to know with my Cabinet colleagues that I had the power to insist on action.
The clause will make it difficult for a Minister to make the right decision, because farmers, understandably, will say, “You have to support us—the Americans support their farmers,” but here it is at the Minister’s discretion. That has always been our problem, and it is why I will press the amendment to a vote. I think my hon. Friend the Member for Darlington will do likewise with her amendment.
This is the crunch point of the Bill that we are asking the Government to consider. We do not want to fetter a future Administration, but we would want that Administration to understand their responsibilities, and that can be more clearly spelt out in terms of a duty—not a power, but a duty—so that if exceptional market circumstances were affecting the operation of agriculture in this country, the Secretary of State, or whoever was making the decision in government, had to respond, because of how the legislation had been framed. That is why I will press the amendment to a vote. I want to make it clear that the Bill is deficient in that regard.
We have heard many other interesting things that we will read back over with the benefit of hindsight. The Minister needs a few more examples to give us certainty that what is going on is coherent. At the moment, this seems a woolly set of arguments. We are protecting British farmers. We are also protecting British landowners, who might also be affected, as we can sadly see in California at the moment. I referred earlier to President Trump. He was hardly on the front foot. In a sense, the amendment would help the Secretary of State because he or she would know they had to act and that it was the Government’s responsibility. We can argue about what exceptional circumstances are, but the action should be clear, and that is why I will press the amendment to a vote. I think that my hon. Friend the Member for Darlington will be so moved as well.
Question put, That the amendment be made.
The Chair
As you know, the Chairman never makes mistakes, but on this occasion I did. Because the debate on this group started when I was a young man, or before lunch, I proposed the question on amendment 46 before lunch, but when Jenny Chapman sat down, I also proposed the question on amendment 97. If you wish to press it, you may; otherwise, withdraw it.
Amendment proposed: 97, in clause 17, page 12, leave out lines 39 to 44 and insert—
‘(2) In this Part “exceptional market conditions” exist—
(a) where—
(i) there is a severe disturbance in agricultural markets or a serious threat of a severe disturbance in agricultural markets, and
(ii) the disturbance or threatened disturbance has, or is likely to have, a significant adverse effect on agricultural producers in England in terms of the prices achievable for one or more agricultural products, or
(b) if, on the day after exit day, the United Kingdom has not entered, or secured an agreement to enter, into a customs union with the EU.”—(Jenny Chapman.)
The Chair
With this it will be convenient to discuss the following:
Amendment 82, in clause 20, page 16, line 2, at end insert—
“(2A) Regulations under this section may not amend or repeal any part of retained EU law (within the meaning of section 6 of the European Union (Withdrawal) Act 2018) relating to—
(a) the protection of the environment, or
(b) consumer rights.”
Amendment 83, in clause 20, page 16, line 17, after “section” insert—
“may only be made following a public consultation and”.
This amendment would ensure that there are checks and balances on the use of Ministerial powers and that Ministers may not make regulations that deviate from retained EU law without consultation with industry experts.
Dr Drew
I shall be very quick, because this is the same argument as I used earlier—we make no apology for bringing it back. Clause 20 may not seem to be the most important in the Bill, but the success of any farming operation nowadays depends on marketing. The measure will take effect in a number of different ways. Far too much discretion is allowed to the Secretary of State. These important responsibilities should be encompassed within duties not powers, which is why we make no apology for trying to make it a duty.
Amendment 47 is simple. We do not understand why the Minister has been reticent throughout the Bill to include duties so that successive Governments will know their responsibilities. This is a monumental clause that entails all manner of different requirements on the Minister: classifying different types of animal and plant variety, and how they are presented in terms of the way in which they are sold. Traceability is the issue that consumers feel most strongly about following the difficulties we went through with BSE and the cockle pickers. They want to know that what they are buying is produced in the manner best for animal welfare and that it is safe. They want to know where it comes from, and that the people who produced it have been paid fairly and are looked after.
This clause is important because it has all sorts of ramifications. We ask the Minister to consider when he will include duties if not in clause 20. This is about consumer protection as much as it is about the protection given to producers. My hon. Friend the Member for Darlington is going to follow up with other issues that are specified, relating to where we would be with our withdrawal from the EU, but this amendment is plain and simple. We are asking the Minister to put at least one duty in the Bill. That is crucial and would enable consumers to know the Minister is doing something because he has to do it for their benefit, and not doing something just because he wants to. I hope he considers clause 20 important and that he listens to us.
Jenny Chapman
I will speak to amendments 82 and 83. As my hon. Friend the Member for Stroud said, this argument is to some extent a rehash of the arguments we made earlier when we insisted that the Government should deprive themselves of the ability to amend regulations on the protection of the environment or consumer rights, which are so exceptionally important and valuable to the country that ideally they should not be watered down, dispensed with or altered by Ministers without the use of primary legislation—it should not be done by regulation.
In amendment 82, we seek to safeguard any part of retained EU law relating to the protection of the environment or consumer rights. Clause 20 allows the Secretary of State to amend regulations relating to marketing standards, including the power to amend or revoke standards set out in retained EU legislation. That is quite some power. Current EU legislation pertaining to marketing standards will become retained EU legislation in section 6 of the withdrawal Act. The Secretary of State obviously understands that this is a significant power because even the Government have said that they recognise that they will need to use the affirmative procedure. However, he wants to be able to change the legislation whenever he sees fit.
The Government ought to be aware of just how extensive that power is, and that Parliament will want to be involved and concerned about how the power will be exercised in future. It is welcome that the Government accept the need for the affirmative procedure, but we ask that they accept safeguards in the Bill so that we can be confident that, as a consequence, environmental protections and consumer rights cannot be watered down—or at least that it will be difficult to do so.
We have not debated those important issues as much as others such as support for farmers. We do not want these important measures to be diminished in any way through lack of insufficient debate during the progress of the Bill. The measures were the subject of considerable concern on the Floor of the House during debates on the withdrawal Act. Committee members may remember that many amendments were tabled along the lines of the ones we are discussing. There was great frustration and suspicion that future Governments would be able, through regulation, to make changes to these important safeguards, which have been copper-bottomed up until now because they have been part of EU law, much to the irritation of some Members.
I can see the argument that Members will be pleased when such safeguards can be changed by this Parliament, but that needs to be done in the right way. It is no good saying that things are protected just because power resides in Westminster with the UK Government or in a devolved Administration.
Sandy Martin
Is not the nub of the issue that the changes and decisions will not be made in this place but in Whitehall?
Jenny Chapman
A procedure would take place in Parliament but we have all sat on those Committees and seen just how thorough the examination of regulations can be.
The protection of the environment and consumers is very important. We would argue that, if anyone wants to change those important rules and the law of this country, they should introduce a Bill. We can then scrutinise it properly, with votes on the Floor of the House and the involvement of both Houses. Let us have the warranted scrutiny because these incredibly important issues affect how our country perceives itself and is perceived overseas, and the protection of the environment. The protections warrant the hard work that would need to be undertaken by Ministers, which is what people put their hands up for when they voted to leave—they wanted the ability to make their laws properly, as they saw it. To do that by regulation, through whatever procedure, is not what the public had in mind when they voted in 2016.
I am afraid that warm words from the Minister will not do this time, nor will assurances that Parliament can be involved when future regulations are proposed. We are very concerned. Subject to what the Minister says, we might want to test the opinion of the Committee on these amendments.
George Eustice
It is important to note that amendments 47 and 82 are to some extent antagonistic. On amendment 47, as the shadow Minister said, we have debated the issue of “may” or “must” on many clauses. I simply reiterate that having that power conveyed through the term “may” is how comparable legislation is drafted and is the approach we take. In addition, in this instance, there is another reason why “may” is absolutely the appropriate word to use rather than “must”.
The hon. Member for Stroud should read the clause in the context of the fact that all existing EU marketing standards will be brought across through the European Union (Withdrawal) Act 2018 and placed on a UK statutory footing. It is therefore not the case that, in the absence of immediate action by the Secretary of State, there will be no marketing standards. In the absence of any action under clause 20, the position would be that retained EU law on marketing standards endures and remains after we leave the EU as it was when we were in it. Paradoxically, if there were a requirement that he “must” introduce regulations in all areas, the Government might be forced to change retained EU law that they were perfectly content with and not in a hurry to change.
Jenny Chapman
Let me reassure the Minister. I am not saying that we should keep things as they are and never, ever change anything. I just think that, if he intends to change these things, he ought to introduce an environment Bill or a consumer protection Bill so that we can decide where the country is going, and not just leave it to the Secretary of State.
George Eustice
Of course, at the moment it is just left to the European Union, and we have no input at all. The hon. Lady will note that the set of regulations set out in clause 20 will be subject to the affirmative procedure. We recognise that these are important issues and that retained EU law may be replaced—there is the option to do that—so we have made them subject to the affirmative procedure. Parliament will have a role.
Amendment 83 is about the duty to consult, which we have covered on many occasions. I say again that DEFRA loves consultations. We have consultations on all sorts of matters. I can give the hon. Lady an undertaking that, before making any changes under clause 20, there will indeed be a consultation—not only because we always consult on matters of this sort anyway, but for another reason: as I explained, on issues of food standards, and food safety in particular, there is already a statutory requirement to consult. It is currently contained in article 9 of EU regulation 178/2002, which requires consultations on changes to food law. That EU regulation will come across in the retained EU law. In addition to my normal argument, there is an even stronger argument, which is that there is already a statutory requirement for changes in many of these areas, because they relate to food standards.
Having addressed hon. Members’ concerns and explained that retained EU law will be the starting point, and that we need not be in a hurry to change these things if we do not want to, I hope that the amendment will be withdrawn.
The Chair
Order. I am looking at you, Ms Chapman, in case you want to speak before Mr Drew winds up. I was not able to allow you to speak last time because he had wound up the debate.
Jenny Chapman
I am grateful, Sir Roger. We are all learning as we go. The teamwork that you see on the Opposition Front Bench is seamless, but it requires us to get up in the right order.
I accept what the Minister said. His undertaking on having a consultation is welcome, and I look forward to holding him to it. I remain concerned about the subject of amendment 82. I hear what he says, but we are at a turning point, and we must to start as we mean to go on. The point we are making to the Government is that we want these things to be done properly and as transparently as possible, with as much involvement of MPs as we can manage, because that is how we involve wider society in our deliberations. These are matters of intense importance and I would like to test the Committee’s opinion on amendment 82.
Dr Drew
I beg to move amendment 118, in clause 20, page 15, line 30, at end insert—
“(da) the indication on any labelling or packaging of a product of any allergen that the product is known to, or might reasonably be expected to, contain.”
This amendment would explicitly provide for labelling regulations to cover the presence of allergens in products.
The Chair
With this it will be convenient to discuss amendment
New clause 15—Mandatory labelling of animal products as to farming method—
‘(1) The Secretary of State shall make regulations requiring meat, meat products, milk, dairy products and egg products (including those produced intensively indoors) to be labelled as to the method of farming.
(2) The labelling required under subsection (1) shall be placed on the front outer surface of the packaging and shall be in easily visible and clearly legible type.
(3) Regulations under subsection (1) shall (among other things) specify—
(a) the labelling term to be used for each product, and
(b) the conditions that must be met for the use of each labelling term.
(4) Regulations under subsection (1) may exclude from the labelling requirement products containing meat, eggs, milk or dairy products where the total proportion by weight of one or more of these items in the product is less than fifteen per cent.
(5) Regulations under this section are subject to affirmative resolution procedure.”
This new clause would strengthen Clause 20 to require the Secretary of State to make labelling regulations that require meat, milk and dairy products, and egg products, including those which have been produced intensively, to be labelled as to farming method. Eggs are not included as legislation already requires eggs to be labelled as to farming method.
Dr Drew
This is something different, and again we are here to help the Government. Everyone will be aware of the allergen issues that have sadly affected a number of families, some of whom have lost loved ones. This is an opportunity that the Government should take, because we can insert in the Bill a provision that will at least put into law what many of us feel should already be in law, but has not yet reached the statute book. This amendment would insert a new short phrase
“the indication on any labelling or packaging of a product of any allergen that the product is known to, or might reasonably be expected to, contain.”
We are all aware of two specific cases, and the subject was debated through an urgent question put by my hon. Friend the Member for Great Grimsby (Melanie Onn) on 9 October. It is interesting that a Government Member, the hon. Member for Nuneaton (Mr Jones), stated in response
“These are tragic cases, and it is clear that the law needs to be updated. Will my hon. Friend tell us how quickly he expects the law to be changed in this regard? Will they also say more about what the Government are doing to provide guidance to retailers, to ensure that this type of tragedy does not happen again?”—[Official Report, 9 October 2018; Vol. 647, c. 127W.]
Here is the opportunity. By making this simple amendment, we could make sure that products containing allergens are properly labelled, and that if someone does not label a product properly or takes a risk with it, they will be held responsible according to the law. Sadly, at the moment they are not.
The two recent cases are but the tip of the iceberg. I am allergic to corn—as a vegetarian, that is not much fun, because corn is one of the staple replacements. I get terrible tummy aches, or stomach problems, if that is proper parliamentary language. I am also allergic to penicillin and I know that. Sadly, some labelling not very clear, and although you can go online and find out, these things should be known. It is like anything: the consumer should be aware and learn through mistakes to some extent, but for some people that is a tragic line to take.
Martin Whitfield
Do we not live in a time when the make-up—the ingredients—of products changes so rapidly that relying on previous knowledge of whether a product is safe is not good enough? People need to check virtually every time a product is purchased.
Dr Drew
I agree. Perhaps we just know a lot more about allergens nowadays and people are more willing to be overt in coming forward to say what should happen. This is a simple amendment that gives the Government the opportunity. The Government, through the Minister, may want to say there is a different way of doing it, but here we have an Agriculture Bill that is about food production.
I will be interested to hear what my hon. Friend the Member for Bristol East has to say about her new clause, but clause 20 is a place where we could put a measure that will be immensely important to people who have allergies, so they know that they are being protected. We have various assurances from the Food Standards Agency that it is able to pursue cases; it is just not able to pursue cases because of the gap in the law, which should lead to criminal proceedings when someone been wilfully negligent.
Again, we are having to learn. In a post-Brexit situation—if we get to that situation—the British Government must have fool-proof security in how they deal with food standards and food safety. Given the a huge call on the Government to do this, I hope they will respond positively. If the Government will not remedy the problem at this stage, it would be interesting to know when they will act. Having stated that they intend to address a legislative gap, they are obliged to do so. Clearly, we cannot do this via a specific bit of legislation because we are waiting for Godot. You have to grab the opportunity when it comes around.
I hope the Minister will consider amendment 118 to be helpful. It will save lives, while also telling people who have lesser conditions but who want to know, if they are allergic to nuts or whatever, that a product has been properly labelled. If food is not properly labelled, the law should take its full effect.
Kerry McCarthy (Bristol East) (Lab)
I endorse what my hon. Friend says about amendment 118. There are so many calls now for better labelling of food and more information that we run the risk of getting to the point where the information is in such tiny print that it becomes meaningless, particularly for people who, like me, have reached the age where their eyesight is not as good as it used to be. It is important that consumers get as much information as possible.
New clause 15 would strengthen the Bill by requiring the Secretary of State to make labelling regulations that require meat, milk, dairy and egg products, including those that have been produced intensively, to be labelled as to farming methods. Eggs are not included in the legislation because they are already labelled. Surveys show that eight out of 10 consumers in the UK would like to know how farm animals are reared.
The Government have a role to play in ensuring higher animal welfare. We talked about that in the context of public money for public goods and the definition of higher animal welfare that will come out in 2020, and on that basis farmers will be rewarded, but the market also has a role to play. Consumers only shop around for the higher welfare products if they know what higher welfare is and is not. That includes how meat and dairy products are being reared.
Sandy Martin
Does my hon. Friend agree with me that the clearness of labelling on eggs has resulted in a massive increase in the number of eggs from higher welfare sources, rather than from caged hens, and that that is a good indication of how effective this sort of legislation can be?
Kerry McCarthy
I agree entirely with my hon. Friend. The EU introduced a law in 2004 that required eggs and egg packs to be labelled as to farming methods. That was the result of consumer demand. It did not ban anything, but it gave consumers the information they needed to shop in the way that they wanted to shop. It led to a substantial shift away from cage eggs and 50% of UK egg production is now free range, but in other respects information on method of production is not available. Unless food is organic, it is quite difficult for higher welfare farmers to get the information across, so that shoppers will be prepared to pay a premium. There are some voluntary and assurance schemes, but it is all a bit of a muddle.
Mr Goodwill
Of course we are all keen to ensure that animal welfare standards are maintained and indeed improved. On eggs, the public easily understand the difference between a caged bird and a bird that has had access to the outside, but it is much more difficult for milk production. Can the hon. Lady explain how, for example, cows that are housed in winter for good welfare reasons would be characterised in her way of describing type of production?
Kerry McCarthy
I have spoken to dairy farmers and organisations such as the Pasture-Fed Livestock Association about the number of days animals would have to be outside grazing to meet the criteria. Nobody is suggesting that they would have to be outdoors year round, round the clock, no matter the weather. That is something that could be addressed in the guidance. The problem with milk is that, at the moment, most milk is pooled together, so it is impossible in most cases to distinguish the source of the milk when it comes to be marketed, so consumers are in the dark—unless it is organic of course.
Mr Goodwill
I understand the point the hon. Lady is trying to make, but would this provision not just hand the market on a plate to the New Zealanders, who can keep their cows outside for very long periods, and in that way freeze out British farmers who, because of the weather we have in winter, have to house their livestock for the best of reasons?
Kerry McCarthy
That depends on the criteria set. I have heard 120 days mentioned as a possible benchmark.
The problem is not just that the information is not being made available; one of the main reasons I tabled the amendment is that there is quite a lot of misleading marketing that gives consumers the impression that goods are higher welfare when they are not. A pork product from a factory-farmed pig may carry a label that says something like “farm fresh” or “all natural”. Packaging can carry images of green fields or woodlands. I was praising Tesco this morning for its work on food waste and modern slavery, but there was an issue, either earlier this year or last year, where Tesco meat and fresh produce had been labelled with the names of British-sounding farms, such as Boswell Farms beef steaks and Woodside Farms sausages, and it transpired that not only did those farms not exist, but in some cases the produce had been imported. That is certainly misleading the public, and I might use stronger language to describe that behaviour.
Simon Hoare
I have concerns about an arbitrary number of days being set. Broadly, farmers bring stock in and out as the weather permits. If there is an arbitrary number of days, it is the target that dictates the welfare, not the requirements of the animal. There is a tendency in the narrative of veganism to focus, perfectly properly, on animal welfare. Would the hon. Lady agree that, in that drive for transparency, many consumers would be very interested to know the health of the soil in which their vegetables were grown and how much insecticide and pesticide was used on them during production?
Kerry McCarthy
I have no idea why the hon. Gentleman is bringing vegans into the debate, as they do not eat any of this produce and, therefore, I would imagine, are not particularly concerned with where it comes from. The Environment, Food and Rural Affairs Committee, chaired by one of his hon. Friends who is a dairy farmer, recommended twice in 2018
“that the Government introduce mandatory method of production labelling”
to support the existing market for higher welfare products and to encourage more producers to move into that higher value market.
I met various members of the National Farmers Union in Gloucestershire during the mini recess. Most were higher welfare beef and dairy farmers who struggled to get a decent price and to get recognition of the fact that they put more care into producing their products. They are keen to support this proposal, so the idea that it is some sort of vegan crusade is a bit tedious, to be honest, but also wide of the mark.
Simon Hoare
I was not intending to be tedious; perhaps my tedium was unintentional. I was trying to tease out the hon. Lady’s answer, which I presume be “yes”, on whether clear and relevant information about the type of food production is of use to consumers. That was the point I was driving at. I was slightly concerned to hear the hon. Lady say that because vegans do not eat meat, they have no interest in the conditions in which animals are raised. I would have thought that would unite everybody in this country, whether they eat those animals or not.
Kerry McCarthy
Of course vegans are interested in that, but they are not the consumers who are trying to decide between one pack of sausages and another—unless they are Linda McCartney vegetarian sausages, for example.
I think that the hon. Gentleman is trying to take this whole thing off on a tangent. During the referendum campaign, the Government blamed the European Union for tying their hands, making them unable to move further on production labelling. The Farm Produce (Labelling Requirements) Bill was introduced by the hon. Member for St Albans (Mrs Main)—I remember it well. Making progress on production labelling was put forward as one of the reasons why we should leave the European Union, and that Bill was supported by a number of Brexit-supporting Tory MPs.
At the beginning of this year, the Secretary of State announced at the Oxford farming conference that the Government were considering extending mandatory labelling, and when that issue was highlighted in the “Health and Harmony” Command Paper, it received very positive feedback. Respondents to the question, “Should government set further standards to ensure greater consistency and understanding of welfare information at the point of purchase?” were overwhelmingly in favour: 72% either said “Yes” or “Yes, as long as it does not present an unreasonable burden to farmers.” As I said, we need to have a discussion about what producers need to do if they are to be deemed higher welfare, pasture fed, and so on. No matter what sort of scheme we have, some hurdle will have to be met, but setting those rules is obviously a matter for the Government.
Colin Clark (Gordon) (Con)
The hon. Lady is making a powerful point, and in many ways, I sympathise with her. As I have said to the Committee, I am an organic and a conventional farmer, and once upon a time, I had interests in a vegan food company, which, strangely enough, made sausages and bacon out of soya, which I never quite understood. However, I am a bit concerned. My cousins are organic dairy farmers, and their cows spend quite a lot of time inside, because they are in the north of Scotland, so obviously the weather is pretty cold. Lambs spend most of their time outside, because farmers cannot really farm sheep inside a building; they tend to die, although they die outside as well, as it is a pretty harsh climate. Many Members have constituencies where sheep are kept in the hills.
The United Kingdom almost certainly has the highest food standards in Europe; we definitely have the highest standards in the whole of Europe for pigs, for example. I am concerned about trying to differentiate by saying that one thing is a significantly higher standard and another is a lower standard, and therefore is unhealthy, not good for people, or bad for farming. I am concerned that the vast majority of consumers, who spend only 10% to 15% of their income on food, are going to be told that a £2 chicken is an unnatural and unhealthy thing to eat. Chicken is the main source of protein for the majority of people on lower incomes.
Kerry McCarthy
The hon. Gentleman might want to make a speech after I have finished, rather than an intervention. Nobody is proposing anything like the traffic light system that was suggested for food containing lots of sugar, which I know the Government have not backed. Nothing will be labelled “bad”, but when farmers have put in more effort and spent more money, they want to get a higher price. That has happened with eggs, and the market has responded. As I said, eight out of 10 people want to know how their food is produced, so this is about rewarding the good, rather than badging the bad.
Colin Clark
What is the difference between organic dairy cows that spend some of their time inside and some outside, and conventional dairy cows? Why is that a higher standard?
Kerry McCarthy
If people want to choose to buy organic, they can do so. They can do that at the moment. There is not going to be any judgment as to whether organic is better; it is a personal choice. I thought the Conservatives were all in favour of personal choice.
On the non-meat varieties of bacon and sausages, we do not object to the taste of things; we object to the fact that animals are killed to make them. If they are made from plant-based sources, all well and good and we can all have a nice bacon sandwich without worrying about the little pigs and other creatures. I hope that explains to the hon. Gentleman why we might want to have a veggie-burger occasionally, if he struggles with the concept.
Mr Goodwill
On that point, does the hon. Lady think we should follow the lead of France, which, following an initiative by French MP Jean-Baptiste Moreau, has banned misleading words such as “sausage” and “steak” unless they are attached to produce actually containing meat?
Kerry McCarthy
No, I do not. I am aware of that move, but I do not think that people are remotely misled. Nobody is going to buy a vegetarian sausage thinking that it has pork in it. It is the same with soya milk and almond milk—everyone knows perfectly well that they have nothing to do with dairy cows. We are underestimating the intelligence of the British consumer if we think that they are going to be misled by things like that.
Simon Hoare
Can I share with the hon. Lady my absolute speechlessness when a set—if that is what you call them—of vegetarian sausages arrived on a lunch plate that I had ordered? The menu only said “Glamorgan sausages”; it did not say that they were vegetarian, so one can be misled through the use of the word “sausage.” I think that the French are on to something here.
Kerry McCarthy
Perhaps that says more about the hon. Gentleman’s ability to read a menu.
Tonia Antoniazzi (Gower) (Lab)
It is an interesting but futile debate to talk about vegans in this way. The hon. Member for North Dorset talks about Glamorgan sausages. Given his Welsh heritage, I would have thought he would have known better.
Kerry McCarthy
I seem to be here to provide light entertainment, basically by giving the lads over there the chance to do a little bit of vegan bashing in the afternoon.
Martin Whitfield
In no way should my hon. Friend’s amendment offer anybody light entertainment. It simply offers to give the information to those people who are purchasing the produce so that they can make a decision, as she has rightly expressed in relation to eggs, which has been so successful. The amendment does not define how many days cows are kept or otherwise; it simply provides a vehicle for giving customers the information they need to make a choice.
Kerry McCarthy
I thank my hon. Friend for bringing the debate back to a more serious note. Basically, consumers are being misled. They would like more information, and farmers would like to give them more information so that when they have put more effort into producing their produce, they can be rewarded for that. That is all the new clause is about.
George Eustice
This group contains two important amendments that have touched on some interesting issues, on which I will update the Committee. The first is amendment 118, tabled by the shadow Minister, which relates to an incredibly important issue. As he pointed out, the problem of allergens leading to deaths has been in the news most recently with the tragic story of 15-year-old Natasha Ednan-Laperouse, who died due to an allergy to sesame in a baguette that she bought from Pret a Manger. This is an important area and we are going to look closely at the review of food law, particularly for the labelling of allergens. We intend to publish our proposals around the turn of the year, to update colleagues further.
It is important to say that there has been a growth in food allergies in recent decades. Nobody is quite sure why that is, but it is real. If we look at the number of people who have allergies, particularly to nuts and sesame, we see that it has grown considerably in the past 20 to 30 years. Another change is that chains such as Pret a Manger, and many others, are increasingly making their sandwiches on-site, which is a relatively new model. That has happened in the past 15 to 20 years. The combination of the growth in the prevalence of allergies and the growth in the practice of preparing sandwiches on-site means that there is a gap in the law. A simple, small derogation that was intended to be used by small family bakers, for instance, so that they did not have to label foods being produced, is now being used on a much larger scale, which had not been envisaged at the time.
Sandy Martin
It is welcome to know that you already have the powers to make those amendments. Can you tell us when you are going to do so?
The Chair
Order. That is about the third time, and the hon. Gentleman is not the only person to have done so this afternoon. We really must work in the third person, please.
George Eustice
As I said a moment ago, we are currently reviewing this. We intend to publish the results and our thoughts on how the law should be changed in this area early in the new year. We can make the amendments we need through secondary legislation. Obviously, because there is now a food safety issue, given the problem with allergies, once we have decided what is necessary we intend to move quite quickly.
New clause 15 relates to another important area. The Government have already signalled that we are keen to look at this issue further. Before addressing method of production labelling, I draw the attention of the hon. Member for Bristol East to subsection (2)(d) and (g) of clause 20. Paragraph (d) refers to
“the presentation, labelling, packaging, rules to be applied in relation to packaging centres, marking, years of harvesting”,
and so on, and paragraph (g) stipulates
“the type of farming and production method”.
Taken together, those two provisions already give us the powers we need to do all the things the hon. Lady is seeking to achieve with her new clause. Although this is an important area, and one that we want to look at, I do not think that this specific new clause is necessary. I hope that it is a probing amendment, given that the Bill already covers this in subsection (2)(d) and (g).
However, I would like to touch on the substance of the issue. The debate that we have had, with its many interventions—as I said, the hon. Lady is here to lighten the mood of the Committee—highlights how important this is, but also how complex. There are lots of descriptors: we have “grass-fed”, which is not necessarily the same as “pasture-fed”; we have “pasture-fed systems”; we have “outdoor-bred” pigs or “outdoor-reared” pigs; there is “organic” and “free-range”—and often those terms mean different things. It is quite an undertaking to try to define all those in one bound. Probably the more likely thing would be to pick something, such as “pasture-fed livestock”, just as we have done for free-range eggs, where we can draw the criteria and roll out these types of descriptors on labels as we are ready to do so effectively, rather than bite off more than we can chew. The regulations would enable us to do that, so we could bring in schemes as we were ready to roll them out.
Another slight complication is the nervousness I have always had about going too far down the line on method of production labelling, because there could be unintended consequences. For example, at the moment there is a substantial market for outdoor-reared bacon, because people look for that on the packet. They are less inclined to do so if they are buying a pork pie, for instance. Some manufacturers of pork pies might buy from high-welfare farms parts of the carcase that are not used for bacon and that are maybe outdoor bred, but they might also buy pigs from other, more commercial producers.
We have to be careful that, by having onerous labelling requirements for some of those sectors where people are less inclined to seek out the descriptor, we do not create an unintended barrier to high-welfare producers accessing the market for parts of the carcase that they would not necessarily market on the high-welfare brand. I am attracted to moving in that direction, but there are complexities and difficulties around the definitions and potential unintended consequences. I hope that the hon. Member for Bristol East will agree that the intentions behind her new clause are already reflected in subsection (2)(d) and (g) of clause 20.
Dr Drew
I am partly assuaged by what the Minister has said. I hope he will commit to ensuring that there is an overt process by which the statutory instrument comes forward, so that we can allay the fears of those who clearly now have worries. That is why it is so urgent, and why we have provided an opportunity to make this amendment. People literally do not know what to eat because of their particular allergens. The Minister says that nobody knows quite why this has taken off in the way it has. I suspect that it is because we have become more susceptible to particular foodstuffs. Maybe it is because we know a lot more about why people have difficulties when they eat certain substances. It is right and proper that we give them the protection they deserve.
I will not push my amendment to a vote, but I will hold the Minister to account on this. We seem to have a very busy end of the year, and all manner of things will be coming forward. My hon. Friend the Member for Darlington might wish to take a slightly different course of action; I think the Minister has given certain assurances, but we will not let go of this, because people’s lives are threatened. We feel that, at the very least, it is important for people to know that what they eat is safe and will not affect them adversely. I know from various correspondence that Government Members feel the sam.
I hope that the Minister has heard what I have said and will act on it, and that he will bring the SI forward as a matter of extreme urgency. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 82, in clause 20, page 16, line 2, at end insert—
“(2A) Regulations under this section may not amend or repeal any part of retained EU law (within the meaning of section 6 of the European Union (Withdrawal) Act 2018) relating to—
(a) the protection of the environment, or
(b) consumer rights.”—(Jenny Chapman.)
Question put, That the amendment be made.
Deidre Brock (Edinburgh North and Leith) (SNP)
I beg to move amendment 56, in clause 22, page 16, line 30, leave out “to the Secretary of State”.
See explanatory statement for Amendment 59.
The Chair
With this it will be convenient to discuss the following:
Amendment 57, in clause 22, page 17, line 5, leave out “to the Secretary of State”.
Amendment 58, in clause 22, page 17, line 13, leave out “to the Secretary of State”.
Amendment 59, in clause 22, page 17, line 31, at end insert—
‘( ) An application under subsection (1), (3) or (5) is to be made to and determined by—
(a) the appropriate authority for the part of the United Kingdom in which the applicant has its registered office or principal place of business, or
(b) where the applicant is made up of producers, producer organisations or, as the case may be, businesses operating in more than one part of the United Kingdom, the appropriate authority for any of those parts.”
This amendment would require organisations of agricultural producers, associations of recognised producer organisations, and organisations of agricultural businesses to apply for recognition to the appropriate authority in the country of the UK where the applicant is principally based.
Amendment 60, in clause 22, page 17, line 38, leave out “The Secretary of State” and insert
“The appropriate authority to which an application is made under this section”.
Amendment 61, in clause 22, page 18, line 5, at end insert—
““appropriate authority” means—
(a) in relation to England, Wales or Northern Ireland, the Secretary of State,
(b) in relation to Scotland, the Scottish Ministers;”.
Amendment 62, in clause 23, page 18, line 30, leave out “the Secretary of State” and insert “an appropriate authority (within the meaning given in section 22(11))”.
This amendment would require the delegation of functions to require permission from the appropriate authority (as set out in amendment 61).
Amendment 63, in clause 24, page 18, line 37, leave out “the Secretary of State” and insert “an appropriate authority (within the meaning given in section 22(11))”.
This amendment would allow regulations to give the power to delegate functions to an appropriate authority (as set out in amendment 61)
Amendment 64, in clause 24, page 19, line 5, at end insert—
‘( ) Regulations under section 22 or 23 containing provision that extends to Scotland may be made only with the consent of the Scottish Ministers.”
This amendment would ensure that regulations under section 22 or 23 containing provision that extend to Scotland may be made only with the consent of Scottish Ministers.
New clause 5—Quality schemes for agricultural products and foodstuffs—
‘(1) Subsection (2) applies to any function of the Secretary of State under—
(a) Regulation (EU) No 1151/2012 of the European Parliament and of the Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs (“the EU Regulation”),
(b) the delegated and implementing Regulations,
(c) any regulations made by the Secretary of State under the EU Regulation, and
(d) any regulations made under section 2(2) of the European Communities Act 1972 relating to the enforcement of the EU Regulation or the delegated and implementing Regulations.
(2) The Secretary of State may exercise the function only with the consent of the Scottish Ministers.
(3) In subsection (1), the “delegated and implementing Regulations” means—
(a) Commission Delegated Regulation (EU) No 664/2014 supplementing the EU Regulation with regard to the establishment of Union symbols for protected designations of origin, protected geographical indications and traditional specialities guaranteed and with regard to certain rules on sourcing, certain procedural rules and certain additional transitional rules,
(b) Commission Delegated Regulation (EU) No 665/2014 supplementing the EU Regulation with regard to conditions of use of the quality term “mountain product”, and
(c) Commission Implementing Regulation (EU) No 668/2014 laying down rules for the application of the EU Regulation.
(4) The references in subsection (1) to the EU Regulation and the delegated and implementing Regulations are to those instruments—
(a) as they have effect in domestic law by virtue of the European Union (Withdrawal) Act 2018, and
(b) as amended from time to time whether by virtue of that Act or otherwise.”
This clause relates to the replacement of current EU Geographical Indicators in future UK legislation. It requires that the exercise of relevant functions conferred on the Secretary of State in this area including in relation to its enforcement, should be subject to the consent of Scottish Ministers.
Deidre Brock
I still consider the lack of focus on food production a fundamental flaw of the Bill. It is a serious omission at a time when food security has become a major concern. Farmers already have a very clear interest in protecting the environment, and the sensible approach to supporting those endeavours would surely be along the lines of the work that the Soil Association is already doing in Scotland with the support of the Scottish Government: education and exampling to encourage more productive but environmentally friendly farming. I urge hon. Members to look at Future Farming Scotland, Farming with Nature and the Rural Innovation Support Service—three excellent programmes from the Soil Association to improve farming in Scotland that are far more effective than asking farmers to fill in more forms to show environmental progress.
It would be easier for larger enterprises to do that form-filling and comply with the rules for gaining that cash than it would be for small farms, and potentially easier for grouse moors and stalking estates to access funding than for small family-run farms producing foods for local markets. That offsets any possible benefits of so-called public goods. As food miles grow, the environmental benefits surely diminish, and, similarly, as the air miles and road miles of shooting enthusiasts grow, any environmental benefit from proper management of shooting estates and grouse moors vanishes, and perhaps even turns negative.
Mr Goodwill
I represent a very large moorland area on the north Yorkshire moors. Does the hon. Lady not agree that the management by keepers and shooting estates maintains the delicate environment for the benefit not only of the sheep and grouse that graze, but of the people who enjoy those areas?
Deidre Brock
Management is certainly an important aspect, but as the air and road miles of shooting enthusiasts increase, so the environmental benefit of the proper management of shooting estates and grouse moors vanishes and can even turn negative.
I would argue that smaller enterprises providing produce for local consumption start from a more environmentally friendly base, and it makes sense to encourage them rather than larger interests. With respect to the Bill and agriculture in general, we in the Scottish National party see farms and land management as vital to rural communities, as well as being primary producers—that is especially true of crofters. The community cohesion function becomes even more important as communities become more remote. Hon. Members from across some areas of England and Wales will of course have examples to offer, but Scotland is a very different place, particularly when one heads into the Highlands, into the far north, or on to the islands, where farming is by no means an easy living and where there is a different culture and calendar to farming, and markedly different outcomes. Scotland is different and requires a different framework in which to operate.
I quote the evidence given by the National Farmers Union Scotland to the Scottish Affairs Committee recently. It said that
“significant elements of the Agriculture Bill are clearly about policy and policy delivery in England, and they would give us significant cause for concern if they were to be applied in Scotland. Quite simply, Scotland’s agricultural landscape is very different from that of England and much of the rest of the United Kingdom. That is why we must have agricultural policy delivered in a devolved capacity. There is clearly a trajectory within DEFRA England’s policy thinking that it wants to phase out direct support payments over a seven-year period and replace them with a public support for public goods approach, and that is clear within the Bill. Now, if you took that very distinct and very clear ‘first and fast’ approach in Scotland….that would be extremely detrimental, in many senses, to huge tracts of Scottish agriculture.”
Simon Hoare
The unique beauty of Scotland is clear for everybody to see and a precious resource within the United Kingdom, but I fail to understand how the hon. Lady can argue that that uniqueness means that Scotland needs bespoke policies and devolution, while, at the same time, her party wishes to adhere to the common agricultural policy and the common fisheries policy by remaining a part of the European Union, given that there is no opportunity for bespoke policies within the EU.
Deidre Brock
All four Administrations of the UK take very different approaches to CAP implementation, and there has been no impact on, say, the internal market as a result. I would have thought the hon. Member would be clear on the SNP’s policy regarding the CFP. It is not our proposal to continue with the CFP as it is. We have long called for its reform. That is on the record and has been the case for years. The damage to Scotland would be immense, because 85% of Scotland’s farmland is less favoured area land. Scotland needs a different framework from England.
Martin Whitfield
Just for clarity, NFU Scotland has indicated it feels there is a lot of politicking going on between the Scottish Government and the Westminster Government over the Bill.
Deidre Brock
There are significant areas of dispute between the two Governments; it is not politicking. We are hearing from NFU Scotland that there are issues it would like to see pursued by both Governments—I am quite prepared to acknowledge that it is both Governments—and I will be raising some of those points later.
Chris Davies (Brecon and Radnorshire) (Con)
The hon. Lady’s description of Scotland could have been mistaken for a description of Wales—only Wales is a bit more beautiful perhaps. Is it not important for Scotland to align itself with Wales and support the Bill?
Deidre Brock
It has been said before that Wales has a different approach to the Bill. Of course, it is up to the Welsh Labour Government to choose to have a schedule inserted, but Wales voted to leave, and that puts a different spin on the Welsh Government’s approach.
Colin Clark
The hon. Lady is making a powerful speech, but she spoke about evidence from NFU Scotland, and its evidence is that it wants to see Scotland involved in the Bill. It says the engine is running and that it wants to get on board. In its position statement the other day, it said it would like to see Scotland involved in new clause 3, which we have already debated. Does she not agree that NFU Scotland has been absolutely clear that it would appreciate the Scottish Government either getting on board with the Bill or legislating in Holyrood? It has clearly said the engine is running on the Bill. Does she agree that the Scottish Government should get on board?
Deidre Brock
No, I do not in this instance. The hon. Gentleman is one of those who tried to table an amendment to schedule 3 last week. That demonstrates the vulnerability of inserting a schedule into the Bill. It would potentially allow a Member who is not even a member of the Government to alter something and control the Welsh Government’s ability to make payments to whoever they wish under that schedule. It is quite amusing, therefore, that he makes that contribution.
Jenny Chapman
I am trying to understand this. As I understand it, the Welsh Government put forward a schedule that one could call a power grab—they have helped themselves to some quite nice powers here—and the Government accepted it. I cannot see any attempt to amend the schedule getting anywhere, so I am not sure what lies behind the hon. Lady’s reluctance to submit a schedule.
Deidre Brock
We do not need a schedule inserted into the Bill. We do not need anyone to legislate for us on devolved matters. We have been producing our own legislation in such areas since 1999, when there was devolution to the Scottish Parliament. In terms of rushing into making legislation, I would have thought the hon. Lady would share my concerns about the views expressed by the Delegated Powers and Regulatory Reform Committee in the House of Lords on the Bill. It clearly demonstrates what happens when we rush into making legislation. The Scottish Government knows that it does not legally have to do it. They would much rather take their time, consult all the necessary organisations within the sector and arrive at stability and simplicity, which is of course the name of our document.
Ben Lake (Ceredigion) (PC)
My hon. Friend is making a very important point, which is perhaps best illustrated by the fact that the Welsh Government themselves have concerns about the schedule that they are trying to address, which they must do through this Committee, over which they have no direct control.
Deidre Brock
That is a perfect point and well illustrates my point, so I thank the hon. Gentleman for his remarks.
I have already commented, in my reference to the hon. Member for Brecon and Radnorshire, on the difficulties with thinking that a schedule to a Westminster Bill will protect devolved interests. The amendment I referred to came not from the Welsh Government or the UK Government, but from three Back-Bench MPs, so relying on a schedule for absolute protection is trusting to luck.
Although the Bill extends to Scotland in great part, it does little that would support Scottish agriculture. I will seek to amend and improve it where I can—much of it so far has been subject to the English votes for English laws process, meaning that I am unable to vote on it—but there is no amendment that will make it completely fit for purpose for Scotland. That will be a running issue in Scottish farming and for all the support mechanisms devolved to Holyrood. The flexibility of the EU support mechanisms gave some room for manoeuvre to allow support for Scotland’s farmers, but that is missing in the Bill, and I expect that Members representing parts of England are also a little concerned about that apparent rigidity. It will not come as any surprise that the Scottish National party would far rather all responsibility and power for managing Scottish agriculture rest in Scotland, but we are here and I will be looking to improve the Bill where I can. We will be back for the rest.
I turn to clause 22 and new clause 5 and amendments 56 to 64. The clause strays into devolved territory and could do with a bit of tidying up, just to save DEFRA Ministers having to deal with Scottish issues down the line, which would be tiresome for them. Amendments 56 to 64 would amend clause 22 to require that applications for recognition of producer organisations be made to the appropriate Administration. In other words, an organisation operating in Scotland would make its pitch to the Scottish Government, rather than leaving DEFRA to deal with it. That would save work for DEFRA officials and Ministers, but also has the virtue of respecting the devolution settlement.
Simon Hoare
This is a slightly philosophical point, which I think all members of the Committee, with the exception of the hon. Lady and the hon. Member for Ceredigion, will get. It would be a travesty to suggest that Ministers of the Crown or indeed this Westminster Parliament would find dealing with anything in Scotland tiresome or a nuisance. We are unionist parties that believe in the strength of the United Kingdom. The hon. Lady can make her point, but we will not be flippant with her nationalism, and she should not be flippant with our unionism.
The Chair
Order. That is a debating point; it has nothing to do with the amendment before us.
Deidre Brock
Thank you, Sir Roger.
Passing the amendments would kill two birds with one stone, relieving UK Ministers of a burden and going some way to show that the devolution settlement can be respected in legislation passed here, which I would argue is a fairly important point.
Under new clause 5, protected geographical indicators would continue to have the input of Scottish Ministers. There is currently no provision in the Bill for PGIs, but they are vital for Scottish goods. In the evidence sessions on the Bill and in evidence to the Scottish Affairs Committee, on which I sit, we have heard time and again about the importance of PGIs, for a whole rack of goods, including those from various parts of England and Wales, and I think—I would have to double-check—Northern Ireland. A while back, a Minister suggested that PGIs could be bargained away to get a trade deal, which is a real worry for producers and exporters. The proposed new clause would ensure that Scottish Ministers get a say in any new scheme for PGIs, in order to protect Scotland’s unique place in the market.
While I am in full flow, I will address the Government’s amendments. I have concerns about amendments 9 and 11, in that they seem to dilute the purpose of a producer organisation and invite disparate entities to form one. That might also encroach on devolved areas, and I ask the Minister not to press it for those reasons.
Martin Whitfield
On that point—before we leave the question of recognised producer organisations—the Government’s wording certainly seems loose. Does the hon. Lady envisage a producer organisation that could cross the boundaries of Scotland, England, Wales and Northern Ireland?
Deidre Brock
That is certainly possible, and my proposal would allow for that possibility. Amendment 10 is odd; it is not clear why there should be no legal form defined for an entity in legislation. I hope the Minister can clarify.
Dr Drew
I will be brief because it is important to hear from the Minister. This is one of the real issues with the Bill. We have no schedule for Scotland; we do have a schedule for Northern Ireland, and I visited there last week to get some clarity on what they think it implies for Northern Ireland’s participation in the Act. Officials were clear that they see the schedule as a political decision-making requirement. As there is no Government in Belfast at the moment, they feel it inappropriate to support the Bill as it stands. They feel strongly that the current direct payment system will remain in place—they want their £300 million, by the way, Minister.
The Bill is very interesting, but, effectively, it is a Bill only for England and Wales. It is not a Bill for Scotland or Northern Ireland, yet these things are under the aegis of a Bill for the United Kingdom. It is a funny Bill, with two parts of the United Kingdom not participating in it.
Now, it might be a case of the officials misunderstanding. Clearly, we could move to direct rule, and the Government would then have to take decisions. I thought I had better check with the Democratic Unionist party spokesperson on agriculture. He reaffirmed that the DUP does not support the movement towards an environmental approach and it will, in due course, vote against it. The DUP believes that direct payment should stay in place as the only way for farmers in Northern Ireland to be secure. Having also visited the Republic, I am not sure that it will move, even though the CAP is up for redesign at the moment. There are indications that it will move towards environmental payments, but it is not there yet.
The hon. Member for Edinburgh North and Leith’s point is interesting, to put it mildly. I am unclear where the Bill stands as a United Kingdom Bill. To me, it is very unclear. The devolution settlement means that, effectively, Scotland and Northern Ireland can do their own things, because agriculture is a devolved matter. If it were not a devolved matter, we would be discussing the agriculture policy of the United Kingdom. However, we cannot and we will not, and we might get a nasty shock when we come to final votes on the legislation.
There may be some interesting alliances, because I do not think we have understood the degree of the problem. I will make some more points on this when we reach schedule 4. I am laying down what I think is a very big dilemma. We have assumed that when this Bill becomes the Agriculture Act it will carry the four countries. I do not think it will. It will not carry Scotland, and it is increasingly evident that Northern Ireland will not be carried. I would welcome the Minister’s response to that. How does he intend to overcome that huge hurdle?
Jenny Chapman
I will not say very much; I just want to echo some of my hon. Friend’s points. I was involved with the withdrawal Act, and today I have been reading the latest common frameworks document, which was released earlier today. A lot of it is about agriculture and the progress that has been made on agreeing frameworks for the UK after we leave the EU. It says:
“Further detail on the specific arrangements that are subject to ongoing discussion in relation to agricultural support is available online.”
Unfortunately, the detail is not in that document, so I have not had a chance to look at it. It is important for the Minister to indicate where the Government are at with this to inform how we proceed on these issues.
I have a few more questions about that. Our deliberations about devolution issues took place on the Floor of the House, so many hon. Members here might have taken part in them. Devolution is very contentious and important, and every now and again it is used to make points not directly related to the issues under consideration. I have a few questions about how the amendments might work and what the Minister thinks of them, because I have some concerns about them.
The Labour party is fairly relaxed about the approach set out in amendment 59. We can see the logic behind it, but we would like to ask the Minister and the hon. Member for Edinburgh North and Leith how they see it fitting with the ongoing negotiations about the establishment of common UK frameworks. That is the document that I have just referred to. Where are we? This is a moving thing, and the Minister is asking us to make decisions about a process that is still incomplete.
Amendment 60 works in conjunction with amendment 59, and seeks to remove the role of the Secretary of State and replace him with
“the appropriate authority to which an application is made under this section.”
I assume that it is consequential, given that amendment 59 seeks to redesign the process by which an application is made. Again, we are reasonably relaxed about that.
Amendments 60 and 61 seek to ensure that Scottish Ministers have the ability to grant consent to applications made to become a recognised producer organisation. What effect do the Minister and the hon. Member for Edinburgh North and Leith see that having in practice? How would it actually work? The Labour party is not stuck on this; we do not mind it. In truth, and I hope the hon. Lady does not take this the wrong way—I say this as a neutral observer representing a town in the north-east—these amendments look a little like politicking, rather than serving a true purpose. Can she assure me about what impact the amendments would have on the capacity of Scottish Ministers to process applications?
Amendment 64 is unfortunately a bit problematic, as it goes further than the devolution settlement currently allows. I am not trying to be provocative. I do not want to get into somebody else’s fight. The sticking point, if I have understood the amendment correctly, is that it seeks to ensure that the consent of Scottish Ministers is required for all regulations under sections 22 and 23, which extend to Scotland. As I understand it currently, the devolution settlement from the Scotland Act 2016 says that Westminster will not normally legislate in areas where the Scottish Parliament has competence. Admittedly, the Government have not shown great respect for that principle with the passage of the European Union (Withdrawal) Act 2018 and, as noted previously, this is not an area where the Scottish Parliament or Scottish Ministers currently exercise competence. If that is correct, the amendment would go further than the devolution settlement does at the moment.
The word “veto” has been overused in these debates in the past, but given the contentious relationship—if I can put it that way—between the UK Government and the Scottish Government at the moment, I am raising a concern and would be interested to hear what others feel about this. Were amendment 64 to be agreed, the Scottish Government could refuse to grant consent for provisions that relate to Scotland, which would be in the vast majority, given that the amendment covers the UK as a whole. Then we could be in a constitutional deadlock, which is not something that anybody wants to see. This process is all about avoiding that.
Officials in the Scottish Parliament are quite clear that they are committed to not diverging in ways that would cut across future frameworks and they agree that this is a necessary approach to take. I do not want to see anything that we might agree here interfering with other processes. The important people in all this are the Scottish farmers and producers, and I cannot help thinking that they would be looking at this and wondering where they stand.
I would like the hon. Member for Edinburgh North and Leith to clarify whether this amendment is seen as consequential to the others that she has tabled, as this is not an area where the Scottish Parliament or the Scottish Government have jurisdiction, and therefore consent would not currently be required when regulations are made. I am not trying to be provocative or to insert myself in the middle of an argument between the Government and the Scottish Government, but we need to be mindful of the potential impact that any row might have on the lack of support for producers in Scotland, because they need to come first.
The Chair
Order. I will call the hon. Gentleman in a moment. Before we go too far down this road, I am wrestling with what is and is not in order in connection with this group of amendments. The hon. Gentleman leading for the Opposition indicated he wanted the Minister to illustrate whether this embraced the four corners of the United Kingdom. That is not strictly in the context of these amendments. The hon. Member for Edinburgh North and Leith went a bit further down the same route.
Clause 34 covers the extent of the Bill. That is probably the appropriate moment to raise this issue and for the Minister to respond. If the Minister could forget that he heard a lot of what was said in the last 10 minutes or so, that might facilitate the response. The last thing the Chair ever wants to do is curtail debate, particularly about important subjects. This is an important issue, and I understand that. However, I do not think this is the right place for this particular line of discussion. If we could stick to the amendments before us, we might all make a little more progress.
Martin Whitfield
On a point of order, Sir Roger. I would like an indication from you, following your determination, about the references in the amendment to the removal of the Secretary of State and the insertion of Scottish Ministers. Part of what I struggle with is whether that would extend Scottish Ministers’ powers to have an effect on England, Wales and Northern Ireland.
The Chair
That is a very fair point, and I have been struggling with that as well, trying to decide how far we allow the debate to go down that road. I ask colleagues to exercise a degree of restraint, because there will be an opportunity to discuss the extent of the Bill later, on clause 34.
Mr Goodwill
During the comments by hon. Member for Edinburgh North and Leith at the start of this short debate, the point was quite rightly made that nobody here is representing Northern Ireland, so I rise to speak as a member of the Select Committee on Northern Ireland Affairs. She asked if there were cases of protected geographical status in Northern Ireland, which indeed there are: Lough Neagh eels, Irish whisky, Comber early potatoes and Armagh Bramley apples. Indeed, there is also an all-Ireland protected status—there is no reason why that should not continue after we have left the European Union—for salmon.
My point is that, although we have no Government active in Northern Ireland, the Department of Agriculture, Environment and Rural Affairs—DAERA, Northern Ireland’s equivalent of DEFRA—is engaged in a consultation on these issues. It is grappling with the challenges that need to be faced, whereas the Scottish Government seem to be pretending that this will not happen and are not engaging with it at the level they should be.
Martin Whitfield
Aware of your earlier comments, Sir Roger, I shall be relatively brief. I rise merely by way of seeking an indication, or an answer to my question, from the Minister, or indeed the hon. Member for Edinburgh North and Leith, who moved the amendment, if they find chance to do so. I reiterate what NFU Scotland asked for, which is that the Governments on both sides of the border should sit down, discuss this and sort it out. That is what should happen. It is not a case for politicking. As my hon. Friend the Member for Darlington said, stuck in the middle is a very important industry in Scotland, England, Wales and Northern Ireland. The agricultural industry is desperate for certainty and understanding, and needs it sooner rather than later.
On the amendments, will the Minister confirm the evidence that he gave to the Scottish Affairs Committee? Some elements clearly affect the devolved settlement. With the greatest respect, more attention should have been paid to the consequences of that earlier.
I am concerned about the question of recognised producer organisations that cross the borders of the four nations. Yes, the amendment takes account of that, but there is the question of what happens if there is an argument about certification. If one side says yes and the other says no, who will take precedence?
The other point I want to make is about Government amendment 10. What sort of legal entity does the Minister envisage? Is it, or might it be, a collection of simple individuals? In that case, the Government might it challenging to find a legal entity to pass down those rights.
George Eustice
Following your steer, Sir Roger, I will reserve wider discussion of the scope of the Bill, or parts of it, for a later debate.
Amendments 56 to 64 are all linked, and many are the same. In essence, they would all delete references to the Secretary of State and instead insert “relevant authority”. I appreciate that behind this whole group of amendments is a belief, put forward by the hon. Member for Edinburgh North and Leith, that this is a devolved and not a reserved matter. I want to explain to her why we are very clear that that interpretation is incorrect and potentially based on a misunderstanding.
We have to look at the context of the clause, where we are recognising producer organisations. What are we recognising, and why are we recognising them? In this context, it is for one purpose only, which links to clause 23, which we will come to: we are recognising producer and inter-branch organisations in order to make them exempt from elements of competition law. It is incontrovertibly the fact that competition law is a reserved matter. That is absolutely the case. Clause 23 points to schedule 2 to the Bill, which amends schedule 3 to the Competition Act 1998 in a way that is advantageous to organisations that are recognised under the provisions of clause 22. Clauses 22 and 23 are fully reserved because they relate directly to competition law.
Some of the misunderstanding arises because of the possibility for joint ventures, or groups of farms or bodies coming together, to qualify for grant aid from the Scottish Government, if they put in the right legislation in future. Under clause 1(1), the UK Government for English farmers, or the Welsh Government for Welsh farmers, will be able to give a grant to a co-operative group of people who have come together. They have the power to do so. However, the power to recognise a producer organisation in this context for the purpose of exempting it from competition law must be done UK-wide because it is a reserved matter.
Martin Whitfield
Could that work not be done within Wales or Scotland for the UK Government to rubber-stamp, much as the Minister has indicated the European Union do at the moment?
George Eustice
That is broadly what would happen, and it is quite possible that the Scottish Government, Northern Ireland Administration and Welsh Government will already sometimes be involved in giving advice or supporting individuals who want to bring forward those designations. However, the assessment and designation of them has to be done by the UK.
I hope that, having been given this clear explanation as to why clauses 22 and 23 are reserved, the hon. Member for Edinburgh North and Leith will accept that there has perhaps been a misunderstanding about the difference between the ability to award grants and the process of recognition for the purposes of an exemption from competition law, which is reserved, and will withdraw her amendment.
Deidre Brock
I am sorry to disappoint the Minister but I will be calling for a vote. We believe part 6 and clauses 22 to 24 in particular require the Scottish Parliament’s consent as they are for a devolved purpose, namely the promotion of an effective agricultural market. The fact that in order to do this it is necessary to exempt producer organisations from the Competition Act 1998 regime does not mean that the provisions relate to competition law. Their purpose is not to regulate anti-competitive agreements, which is the precise element that is reserved. I am afraid we have to disagree with the Minister on that.
I understand that new clause 5 will be voted on later, but I want to tackle one thing. I did not realise that some of these things will be discussed when we look at new clause 34 later.
Deidre Brock
Sorry, clause 34. I will leave the hon. Member for Darlington to speak to that. The hon. Member for East Lothian attempted to suggest, perhaps inadvertently, that the Scottish Government is relaxed about what happens to farmers in Scotland later on. The Scottish Government were the first in the UK to come out with a consultation paper “Stability and Simplicity” to provide some certainty for their farmers. We are very clear that things can continue as they are after 29 March and there is no need for the schedule in the Bill that some have called for.
Martin Whitfield
That is not what I was suggesting. I was merely pointing out that NFU Scotland feels that both Governments are politicking on the Bill.
Deidre Brock
Perhaps I misunderstood his intention, so I appreciate his correction. Sir Roger, I feel that the amendments in my name stand or fall together. If I pressed amendment 56 to a vote as the lead amendment, is it right that the rest of the amendments would follow that?
The Chair
The system is fairly clear. We deal with the lead amendment, which is amendment 56. It is up to the hon. Lady, in discussion with the Chair, whether she moves any of the other amendments. I advise her that if amendment 56 falls, most of the others will fall. However, I noticed while she was speaking that the hon. Member for Darlington indicated an interest in amendment 59. I am unclear whether the hon. Member for Edinburgh North and Leith or anyone else wishes to move that amendment, but that is separate from the other sequence. Let us take the amendment that has been moved first, and perhaps the hon. Lady can have a quick think about what she would like to do after that. Does she wish to press amendment 56 to a vote?
The Chair
By virtue of the arcane process we follow there is a sequence and the hon. Member for Edinburgh North and Leith is not in it at the moment, because we must move on to Government amendments 9, 10 and 11. After that, I will return to the hon. Lady if she decides she wants to move any of her other amendments.
George Eustice
I beg to move amendment 9, in clause 22, page 16, line 33, leave out “a single agricultural sector” and insert “one or more agricultural sectors”.
This amendment changes one of the conditions for applying to become a recognised producer organisation so that the condition is met if each member of the organisation is an agricultural producer operating in any one or more of the agricultural sectors listed in Part 2 of Schedule 1 to the Bill (rather than each member being required to operate in the same sector).
George Eustice
All three amendments relate to trying to reduce some of the burdens that existing producer organisations have mentioned to us, and restrictions that they regard as unnecessary. Some of the EU rules on which we modelled the initial clauses, for instance, require all producers to be from a single agricultural sector, when actually we think there may be circumstances where groups of producers want to come together that span more than one sector. We think that is an unnecessary restriction that does not achieve anything.
In amendment 10, we propose to delete paragraph (d) from clause 22(2) in its entirety, so that a body corporate with legal personality is not necessary; we believe that to recognise a producer organisation there may be other models, including joint venture arrangements, that may stop short of being a body corporate. Again, we do not believe that that requirement is necessary; some might choose to do it but we think there should not be a requirement on them, and that they could convene themselves in other ways. Amendment 11 is linked to amendment 9 and also removes the reference to a “single agricultural sector” to allow there to be members from more than one sector.
On the EU fruit and veg regime in particular, we have had issues with Angus Growers in Scotland and with other producers in England too. Although fruit and veg producers welcome the grant support that they get through the fruit and veg producer organisation regime, many of them tell us that there are lots of problems with it. We frequently end up in litigation with the European Union because of poor or imprecise drafting or requirements that serve little purpose. The feedback from the people who have to deal with the schemes is that we should take the opportunity to sort it out, declutter it and make sure we have an equivalent scheme to offer them the support that they want, but with some of the frustrations removed. That is one part of what the Government amendments seek to achieve.
Martin Whitfield
Referring to my earlier point, does the Minister envisage the recognised producer organisations being made up of people from different legal entities? If so, how will he ensure the appropriate payment with regard to some bodies that will not be pursuable and some that will?
George Eustice
There are lots of other conditions. Subsection (2)(e) requires that the constitution of the organisation meets certain requirements. There are other such provisions as well, so we do not have to define them as a body corporate in law in order to have express conditions that mean they would all be jointly and severally liable were something to go wrong.
Dr Drew
My hon. Friend the Member for East Lothian has covered one of the points that I was going to raise. Can the Minister give us some examples of the actual changes that mean that he sees the amendment as necessary? I think I understood the original way in which it was placed in the clause, but what representations has he received, apart from the one he mentions? Are we changing the legislation because of one piece of representation or have others come up with cogent points for a necessary change?
George Eustice
I can tell the hon. Gentleman about that. I have had experience of the EU scheme in the past and there have been instances where, for instance, some growers have said to me that they would like to come together for a purpose other than just marketing, and they would like the freedom to be able to do that. That is quite restricted in the new scheme. On the amendments, the representations came from Co-operatives UK. After we published the Bill the co-ops told us that some of the provisions were unnecessarily restrictive and might stop some of their members from being able to have a recognised body for the purposes of clause 23, so we responded to those representations, which made salient points, and we were happy to acknowledge them and table the amendments.
Amendment 9 agreed to.
Amendment made: 10, in clause 22, page 16, line 39, leave out paragraph (d).—(George Eustice.)
This amendment removes the condition for applying to become a recognised producer organisation relating to the legal form of the organisation.
The Chair
In sequence, amendment 57 is effectively the same as 56, 58 and 60, so I am not minded to call those. However, once we have disposed of amendment 11, which will be the next item on the agenda, if the hon. Member for Edinburgh North and Leith wishes to move either 59 or 61, which are different, I am prepared to allow that. So we will proceed on that basis.
Amendment made: 11, in clause 22, page 17, line 9, leave out “a single agricultural sector” and insert
“one or more agricultural sectors”.—(George Eustice.)
This amendment changes one of the conditions for applying to become a recognised association of producer organisations so that the condition is met if each member of the association is a recognised producer organisation operating in any one or more of the agricultural sectors listed in Part 2 of Schedule 1 to the Bill (rather than each member being required to operate in the same sector).
Amendment proposed: 59, in clause 22, page 17, line 31, at end insert—
“( ) An application under subsection (1), (3) or (5) is to be made to and determined by—
(a) the appropriate authority for the part of the United Kingdom in which the applicant has its registered office or principal place of business, or
(b) where the applicant is made up of producers, producer organisations or, as the case may be, businesses operating in more than one part of the United Kingdom, the appropriate authority for any of those parts.”—(Deidre Brock.)
This amendment would require organisations of agricultural producers, associations of recognised producer organisations, and organisations of agricultural businesses to apply for recognition to the appropriate authority in the country of the UK where the applicant is principally based.
Question put, That the amendment be made.
The Chair
This will be the last bite of the cherry, but if the hon. Member for Edinburgh North and Leith wishes to move amendment 62 I will allow her to do so. I do not think it is going to add greatly to the scheme of things.
Clause 23
Recognised organisations: competition exemptions and further provision
Amendment proposed: 62, in clause 23, page 18, line 30, leave out “the Secretary of State” and insert
“an appropriate authority (within the meaning given in section 22(11))”.—(Deidre Brock.)
This amendment would require the delegation of functions to require permission from the appropriate authority (as set out in amendment 61).
Dr Drew
We are getting there, slowly, Sir Roger. I want to pick up the point made by the Minister on clause 22 about how organisations will be identified. I am a Co-operative MP; I put that on the record. The Co-operative movement has been somewhat wary of this part of the Bill—whether it is clause 22 or, in this case, schedule 2, on which I have the opportunity to make these points.
I welcome the amendments that the Minister has moved, at least recognising that the Co-operative movement has been unhappy to be labelled as purely part of the competition arrangements, given that co-operation is a key part of the agricultural sector. Many farmers and farm organisations are, by their nature, co-operative: whether it is NFU Mutual, equipment changes or buying feed or pesticides, they tend to act in a co-operative organisation. I am raising the issue under schedule 2 to put on the record that there is still some unease. The Minister has recognised that, given the amendments that he tabled to clause 22. He has explained why he changed the wording, and I am very happy with that.
The issue is about the impact assessment on the Co-operative movement, given that the producer organisations, the associations of producer organisations and the inter-branch organisations—all lovingly acronymed —are by nature not just competitive organisations. They are also co-operative organisations. The Co-operative movement has felt that there has been increasing uncertainty and regulatory risk. Having agreed to the amendments that the Minister brought forward to clause 22, I am asking him also to say something in our discussion about schedule 2. That clearly relates to clause 23, given that one follows from the other.
Established co-operatives fear that they might find themselves outside the new settlement. They are likely to manage most of the uncertainty well, but they want to know that the Government have heard what they have been saying. In a sense, they want the Government to mount a robust defence of where co-operation comes within agriculture.
The biggest risk is where established co-operatives feel uncertainty about how the Competition and Markets Authority might interpret the joint selling arrangements. That is an important issue for those who want to protect co-operatives, one of whom is myself. At the very least, the additional challenge they might be faced with will put a cost obligation on them, increasing the transactional costs of collaboration. They want reassurance from the Minister about how they should handle the situation.
Will co-operatives be subject to those types of challenges, if the legislation is passed as it is currently drafted? Will it at least make farmers less inclined to co-operate, given that the nature of the Bill is to look at different ways in which environmentally-inclined changes could lead to new ways of working? This is a very old way of working, but it may be given an enhanced status if and when the Minister can clarify whether co-operation would be a key element of how the Competition and Markets Authority would see the matter. The co-operatives did look at various amendments. The Government have listened, and the co-operatives are happy with what they have done through amendments 9 and 11 to clause 22. However, they want further reassurance, as the same logic applies to schedule 2.
This is a probing amendment, but it is important because the message the Minister gives will reassure or cause further doubt in the minds of those who wish to look at new forms of business organisations in terms of how they do their agricultural trade. Will the Government at least look again at the issue and ensure that what they have done with clause 22 will apply to schedule 2? If the Minister can assure me that the Government will do that, I will certainly not press the amendment, but we may have to revisit it on Report if the Government have not done what they should to ensure that the CMA can incorporate co-operation as well as pure competition.
Again, that is part of the current common agricultural policy arrangements and its interpretation of economic efficiency within the acquis. We want to know that it will be rolled over into British legislation and particularly how it will be rolled over into schedule 2.
George Eustice
I can give the hon. Gentleman that assurance. We have been in discussion with Co-operatives UK, which raised the issue about eligibility and the fact that the requirements for a corporate body and to have all members from one sector could affect some co-operative working. We listened to that and addressed it.
I do not think that there is a spill-over of that problem—for want of a better term—in schedule 2, because that schedule is essentially all the technical clauses needed to disapply what competition lawyers call “the chapter 1 prohibition”. In essence, schedule 2 determines and sets out in some detail the process by which producer organisations can come together to collaborate and co-operate in a range of areas and co-ordinate their activities in a way that would otherwise be considered a breach of competition law.
In particular, paragraph 9(1A) of schedule 3 to the Competition Act 1998 lists activities such as planning production, optimising production costs, concentrating supply, placing products on the markets and negotiating supply contracts. Schedule 2 gives licence to a recognised producer organisation to do all those things and to disapply those elements of the 1998 Act.
Simon Hoare
Would the Minister clarify a concern of mine? He has referred to sub-paragraph (1A), but I refer him to sub-paragraph (1C)(a), which says that condition B is that:
“in the case of a PO, none of the producers concerned are members of any other PO as regards the products covered by the activities”.
If someone had six dairy farms, one of which sold 55% of its produce through Arla, but they wanted to create a more local co-operative and the sixth Arla-related farm wanted to be part of it, would that bring the whole house down or would there be some scope and flexibility, perhaps based on percentages? That absolute restriction may need a bit of refinement.
George Eustice
My understanding is that that is effectively an anti-avoidance provision to stop people from being members of several co-operatives and having a genuinely dominant market position that goes above and beyond what is envisaged by producer organisations. Under the current EU scheme, one producer organisation can have a market share of up to 33%, but if there were overlapping producer organisations, it could create market distortion. My understanding is that the provision seeks to address that.
In conclusion, I am a huge supporter of bio groups, co-operative working and collaborative working. We all know that one of the challenges we face in the agricultural industry, as we think about the future, is that it is sometimes a fragmented sector and sometimes does not have the clout it needs in the market or the ability to do joint collective buying to get those costs down. We want to facilitate collaborative working; this part of the Bill and the particular schedule that the shadow Minister has raised go some way to addressing that.
Dr Drew
The Minister makes an interesting point. I thank the hon. Member for North Dorset for getting my little grey cells working. Let us take Arla, for example—a co-operative that operates across a number of countries and that is not likely to fall foul of the CAP by being seen as a monopoly with more than 33%.
I do not have the current figures for the percentage of the milk supply that Arla processes, but if the Competition and Markets Authority took it as a purely national organisation and it fell foul of that 33%, could this new legislation mean that it ended up having to be broken up? I will need some assurance from the Minister before we go any further, because that is a good example of a co-operative that everyone would support, but which could now be in a disadvantageous situation if we take this as a national definition of its market control. Will the Minister clarify?
George Eustice
There is already national competition law set out in the Competition Act 1998, enforced by the Competition and Markets Authority. In the past, for instance, that famously led to the break-up of Milk Marque, which led to the situation we have today. There have been instances of that in the past under existing national provisions on competition law. I know the hon. Gentleman said he might come back to this on Report; I am happy to give an undertaking to look at this issue further and explain in further detail exactly what each of those clauses delivers. The clause that my hon. Friend the Member for North Dorset mentioned is an anti-avoidance clause—[Interruption.]
George Eustice
Yes. My understanding is that we have addressed the issues he has raised about the schedule, which are linked to the concerns that Co-operatives UK raised, through our earlier amendments.
Schedule 2 agreed to.
Clause 24
Regulations under sections 22 and 23
Amendment made: 12, in clause 24, page 19, line 7, after “unless” insert “section 29(4A) applies or”—(George Eustice.)
See the Explanatory Statement for Amendment 2.
Clause 24, as amended, ordered to stand part of the Bill.
Clause 25
Fair dealing obligations of first purchasers of agricultural products
The Chair
With this it will be convenient to discuss the following:
Amendment 93, in clause 25, page 19, line 22, leave out “the first”.
This amendment would extend the fair contractual dealing provisions of Clause 25 to all purchasers of agricultural products through the supply chain.
Amendment 112, in clause 25, page 19, line 22, after second “of” insert “all”.
This amendment would ensure that powers to introduce sector-specific codes are not confined to certain sectors (i.e. not only those where voluntary codes have been unable to significantly improve contractual relationships) but to all sectors.
Amendment 65, in clause 25, page 19, line 23, at end insert—
“( ) Regulations under this section containing provision that extends to Scotland may be made only with the consent of the Scottish Ministers.”
This amendment would require that regulations containing provisions that extend to Scotland may be made only with the consent of Scottish Ministers
Amendment 94, in clause 25, page 19, line 24, leave out “the first”.
This amendment would extend the fair contractual dealing provisions of Clause 25 to all purchasers of agricultural products through the supply chain.
Amendment 66, in clause 25, page 20, line 24, at end insert—
“( ) Before making regulations under this section, the Secretary of State must consult persons—
(a) who are representative of—
(i) producers of, or
(ii) first purchasers of,
the agricultural products to which the regulations will apply, or
(b) who may otherwise be affected by the regulations.”
This amendment would ensure that before making regulations the Secretary of State be required to consult with representatives of the producers and first purchasers.
Amendment 95, in clause 25, page 20, line 28, leave out “first”.
Amendment 111, in clause 25, page 20, leave out line 30 and insert—
“‘producer’ includes—
(a) an individual producer within or outside the United Kingdom,
(b) an entity within or outside the United Kingdom which sells agricultural products after they have been aggregated from more than one producer, and
(c) a business within or outside the United Kingdom operating a packhouse;”.
Dr Drew
We are making some progress. I blame the hon. Member for North Dorset; he has been holding us up, but now that he has gone we are racing through. These are quite important amendments. I will not labour the point on “must” and “may”—I think the Minister will be keen on that—but I do want to talk particularly about amendments 93 to 95, which stand in my name and those of my hon. Friends. I know that my hon. Friend the Member for Bristol East also has amendment 111 in this group, so we will take a little bit of time going through this, because it is quite important.
Amendments 93 to 95 would remove the requirement restricting new statutory codes to first purchasers at the farm gate, addressing unfair dealings along the whole supply chain—beyond first purchasers—to ensure that that regulation applies to all stages of the supply chain not currently covered by the Groceries Code Adjudicator. I must say that we feel the Bill has been somewhat hurried here. We have made the point of who we did not hear evidence from, one of whom was the Groceries Code Adjudicator, whose powers we feel very strongly have been somewhat hamstrung by the Bill. We either value the Groceries Code Adjudicator’s work or we see it as fairly irrelevant.
This matters because it has been a bone of contention that producers can only ever take action through the Groceries Code Adjudicator relating to certain parts of the food chain, principally improprieties at the retail stage. I understand that the farming organisations have always wanted to extend those powers—powers, not duties—so that they can take action against intermediaries in the food chain. This is important, and we want clarity on this at the very least.
There is this thing about whether they are able to derive evidence of harm. The Government have noted that smaller suppliers—including the majority of farmers— growing our food, both in the UK and overseas, are vulnerable to abusive treatment by their buyers; that is why we have a Groceries Code Adjudicator in the first place. That behaviour can involve: paying invoices late, which is the classic one; changing orders at the last minute; cancelling orders, because we all have examples in our constituencies of particular producers feeling that they have been hung out to dry by the way in which certain buyers are able to manipulate the market; and charging suppliers unexplained fees to keep their food on the shelves.
We know that food supply chains are complex, with behaviour in one part of the chain obviously having an impact in another. Again, we want clarity here, because we think that this part of the Bill could be improved; we are trying to help the Government, not damn them. Limiting the clause’s focus to the relationship between a farmer and their immediate buyer sadly misses out what happens in the intermediary parts of the food chain. It will be interesting to know whether the Government see this as a role for the Groceries Code Adjudicator, or whether they are unhappy about it.
There was widespread support for putting the Groceries Code Adjudicator in place; it was a cross-party arrangement. It took longer than some of us would have liked, given that we started talking about it when I was last a Member, but eventually it came to fruition. The sad thing is that there is still a belief that the Groceries Code Adjudicator’s powers are too limited and that it is too constrained in where it might want to intervene to right wrongs. On these three amendments, we are asking the Government at least to be clear about what they see as the role of the Groceries Code Adjudicator in relation to the Bill.
At the crux of this are the circumstances in which the body might need to appropriate precise costs and take a more forensic approach when indirect suppliers request adjudication on a case in which unfair dealing had been perpetrated by other parts of the supply chain. It is about looking at whether we can improve the powers of the Groceries Code Adjudicator, and at the very least we want clarity on how the Bill will either do that or not. Again, we may want to revisit this on Report if we do not feel confident that the Government have listened and acted.
Regulations are about how this will be implemented in relation to the supply chain—of course, this is largely about statutory instruments—but the Government need to say something in the Bill about their priorities, and their willingness to listen and act on what many of our producers have identified as a serious issue. In terms of primary legislation, it is important not to leave out what those trading relationships are and could become if there was a more level playing field.
The enforcing body, which presumably is the Groceries Code Adjudicator, needs not only the powers to act but the resources. From talking to producers and from my knowledge of the Groceries Code Adjudicator, I know that cases are often not pursued because there are not the resources to do it. These are terribly complicated issues. Again, it is not something that the law has ever embraced, because it is so complicated. We set up the Groceries Code Adjudicator to get away from that particular legal quagmire.
It is worth noting that the EU, blighted as it might be, is currently passing a law that would set up an enforcement authority. At the very time that we are leaving the EU—supposedly—it now recognises that it has to take additional powers to deal with these unfair trading practices along the whole of the agriculture supply chain, from the farmer to the retailer. That received support from Conservative and Labour MEPs.
This is an important issue, which we make no apology for bringing up at this time in order to look at where we are in terms of the powers invested in the Groceries Code Adjudicator, whether those powers should be increased on the face of the Bill—something we could do here—and whether that would deal with some of the intermediary abuses that, at the moment, are not within the aegis of the Groceries Code Adjudicator. I look forward to the Minister’s response.
Kerry McCarthy
I hope to be fairly brief. I will address amendment 111 first, because it links directly to amendments 93 and 94. In the event that amendments 93 and 94 are unsuccessful, and therefore the fair dealing measures in the Bill cover only the relationship between a farmer and the first buyer, amendment 111 has been tabled to address a potential unintended consequence of imposing these obligations on first purchasers, namely that producers who act as aggregators for their neighbours could potentially be classified as purchasers.
It is common practice here and overseas that if one producer has the infrastructure, skills or time, they may collate the produce on behalf of local farmers. A farmer with a big barn or storage facility may aggregate apples in a packhouse for neighbouring growers in his or her part of Kent or East Anglia. A bean grower in Kenya may do the same for neighbouring farmers. Amendment 111 ensures that those aggregators will still be classed as producers, and that they are then within the scope of protection.
Amendment 112 is about the sector-specific statutory codes. We have been told that they will initially be introduced in sectors where voluntary codes have been unable to significantly improve contractual relationships. I know that in evidence it was suggested that dairy would be the first sector to have the code applied, because it is seen that the current arrangements are not working that well. There is concern that certain sectors will have priority and that the Government will never get around to actually bringing other sectors into the scope of the statutory codes, for example for the fruit and veg sector. There would then be powers to support fair purchasing in the dairy sector, but not other sectors. Amendment 112 is simply about ensuring that the codes are not confined to certain sectors but apply to all sectors. I have lengthy notes on the rest of it, but I think I will leave it at that.
The Chair
Order. May I say to all Members that, if you wish to be called, it helps if you make it very clear by rising?
Deidre Brock
Thank you, Sir Roger.
I am minded to support the other Opposition amendments in this group, barring amendment 111, mainly because I am not entirely clear what its purpose is and I am a bit concerned that it could encroach on devolved responsibilities. Amendment 65 seeks only to ensure that the devolution settlement is respected. It would ensure that Scottish Ministers are able to exercise their powers under the devolution settlement. Agriculture is devolved, as the Secretary of State said in his most recent letter to the Scottish Government, and that should be respected.
Amendment 66 would ensure that those who are directly affected by the regulations are consulted. The Minister has made clear his liking for consultations and has said how much he values the input of those affected, so I am sure he will welcome the chance to put that into the Bill.
George Eustice
I shall begin by touching on amendment 48. Since the shadow Minister has not sought to remake an argument we have had many times, I will refrain from quoting from the Agriculture Act 1947 on this occasion.
I turn to the more substantive collection of amendments—93, 94 and 95—which seek to broaden the measure and to remove the requirement for it to apply to the first purchaser of agricultural produce. I understand the shadow Minister’s point, but I want to explain why we have adopted this approach. As he is aware, the Groceries Code Adjudicator enforces the groceries code for the 10 largest supermarkets—those with the largest turnover—and is funded by a levy on those retailers. It has been successful because it is focused on the key task of improving the relationship between the very sizeable retailers and their suppliers, which are often far smaller.
However, for a couple of years now people have raised concerns about the fact that some farmers do not directly supply the supermarkets. Indeed, although in sectors such as fruit and veg it is quite common for an individual farmer or grower to supply a supermarket, in other sectors—notably beef, lamb and dairy—farmers supply processors and abattoirs instead; they do not supply their produce directly to the supermarket. The point has been made that they do not benefit from the protection of the groceries code and the Groceries Code Adjudicator.
Anecdotally, there are sometimes problems with processors finding it easier to pass costs and breaches of the code on to the farmers than to have a difficult conversation with the retailer and tell it that it is in breach of the code, or to report it to the Groceries Code Adjudicator. For that reason, we said, “Let’s also address the problem at the other end of the scale.” The problem we are trying to address in the Agriculture Bill is that primary producers—farmers—are price takers and are often not sure what they will be paid until their animal has gone through the slaughter line. They can then end up with all sorts of costs that they did not expect and penalties that they could not have predicted. We therefore tried to address that unfairness by keeping the focus of these provisions on the first purchasers.
Sandy Martin
Does the Minister accept that large companies are extremely good at creating wholly-owned subsidiaries, often for fairly spurious purposes, such as avoiding taxes or legislation? If this measure is restricted to first purchasers, it is entirely possible that completely new and unnecessary organisations will be created to be the first purchaser simply to avoid the regulations that would otherwise apply to everybody along the food chain.
George Eustice
The only way that a processor could do that would be if they literally became a farmer. Setting up a sham subsidiary company that buys from the farmer and sells to a middle man would still be caught by these provisions, because the vehicle company would still be required to abide by the terms that are set out through these regulations. We thought about this hard and our conclusion was that if the challenge is the fact that farmers are too often price takers, are too fragmented and do not have sufficient clout in the supply chain, let us have a very targeted, focused approach to ensuring that we address that unfairness.
The problem with broadening the provision to anyone in the supply chain, so it could be a haulage company transporting lettuces or someone who has bought something and sold it on, is that it is broadened to many more relationships. Then it becomes difficult to justify all the requirements and purposes set out, because they are very much designed for farm businesses.
Mr Goodwill
We have heard about the case where milk crosses the Irish border on a number of occasions—it was almost like trying to hit a moving target. That is why these amendments are not really practical.
George Eustice
My hon. Friend makes a good point. We should remain focused on the challenge we are trying to address: why do farmers not get a fair price for the food they produce? Why do they end up too often being price takers and why do they need public support and subsidies in order to break even? The answer is often in the way the supply chain works to their disadvantage. Let us tackle the causes of that disadvantage and have an Agriculture Bill that is specifically targeted at agriculture.
Martin Whitfield
With regard to agricultural products, where does the Minister envisage timber to be covered?
George Eustice
Amendment 112, tabled by the hon. Member for Bristol East, sought to state “all agricultural products” rather than “agricultural products”. However, we believe that we have already addressed that through part 2 of schedule 1, which we will come to. That lists agricultural sectors relevant to the producer organisation and fair dealing provisions. It is pretty exhaustive, and for the hon. Lady it has the term “other plants” at the end, which will capture everything that might be of interest to her particular diet. [Interruption.] Timber is another issue, but part 3 of schedule 1 creates the power to add to that.
We based the list on the contours of EU law and tried to have quite an exhaustive list. Timber is not on that list at the moment but there would be nothing to stop us from adding it, although we would have to consider whether it is appropriate to do so. We are predominantly looking at farmers and their relationship with processors. We have a particular problem with the dairy, beef and sheep industries, and that is the primary purpose here.
Martin Whitfield
The process in the timber industry is quite complex and crosses a number of bodies. Will the Minister look at that sooner rather than later?
George Eustice
The regulations that we can make under part 3 of schedule 1 give us the power to add additional things. Although I am Agriculture Minister, I do not cover forestry and timber, so I will need to discuss that with my ministerial colleagues. It is certainly an option and the provision is there to enable us to add products.
Chris Davies
There are concerns on this side of the House—as well as on the Opposition Benches—about the forestry and timber industry. I doubly emphasise the need for the Minister to look at that.
George Eustice
I feel that this will be one of those unexpected issues that returns on Report. I will undertake in the meantime to talk to my ministerial colleagues responsible for the forestry industry.
Amendment 65 is a similar provision to that which we discussed in an earlier debate on producer organisations. It seeks to ensure that we could make measures in that area only with the consent of Scottish Ministers. We have adopted that approach because it is a competition matter that deals with the ability to have contractual changes linked directly to competition law—that is why it is a reserved matter. We are not doing anything new in that regard. The current Groceries Code Adjudicator is a UK-wide body; it operates UK-wide and the legislation that underpins it is UK-wide. The EU milk package is an example of a contractual fair-dealing provision under EU law. It applies UK-wide and can only be switched on and implemented on a UK basis. It is therefore a well-established fact that such issues, which pertain directly to competition law, are a reserved matter to be handled by the UK Government. That is why we do not accept that the provisions are necessary or acceptable.
Deidre Brock
I thank the Minister for his explanation but the Scottish Government do not agree with his interpretation of that; nor do I. We think that it requires the Scottish Parliament’s consent because it is for devolved purposes, namely the regulation of unfair contractual terms in commercial contracts by agricultural producers in Scotland. It does not relate to the competition law reservation, which is specifically directed at the regulation of anti-competitive agreements.
George Eustice
Although it might do so in a different way, it relates to competition law and is not an exemption from the chapter 1 requirements that we discussed earlier. The hon. Lady has not complained about the Groceries Code Adjudicator, which is administered on a UK basis and operates UK-wide; nor has she raised huge concerns about the way that the EU has always approached those matters, which is that they are a UK-wide competency and that switching on elements of the milk package is a UK decision and can be done only on a UK-wide basis. I hope that I have addressed the issues raised by the hon. Member for Edinburgh North and Leith about the role of Scotland in this reserved matter, and reassured the shadow Minister and the hon. Member for Bristol East that their amendments are unnecessary since they are provided for in part 2 of schedule 1.
Dr Drew
I hear what the Minister says and he will be pleased to learn that I will not press amendment 48 to a Division, but I am very concerned that the Bill has not been as clearly and cleverly scrutinised as it could have been because we were not able to meet a number of the organisations. I would have liked to ask the Groceries Code Adjudicator how the Bill could have made the authority more effective, but we did not get that chance. I do not know why she did not come; perhaps we were not as enticing as we might have been, or perhaps she did not get the push from Government.
It is important: this part of the Bill is about competition, fairness and accountability, yet we are in the dark, hoping that some of it will be carried through. The Minister has kindly given way on timber and we might see that somewhere in a schedule on Report, when he has talked to his colleagues. We are somewhat less than impressed by the Bill, and we need to nail down the legislation, in that we have producers believing that the Groceries Code Adjudicator is not able to function as effectively as she could, yet when we get the opportunity with some legislation to allow her additional powers those powers are not forthcoming.
The Chair
We have finished that section. I am terribly sorry. The hon. Lady has to be on the ball.
Deidre Brock
Forgive me. I rose earlier, so I thought that I would be called.
The Chair
No. I am sorry. We have taken the vote on the lead amendment. Well, to be more exact, we have taken a vote on another amendment.
Dr Drew
I beg to move amendment 86, in clause 25, page 20, line 9, at end insert—
“(aa) for the identity of any person who has made a complaint relating to alleged non-compliance to be held in confidence and not disclosed during any investigation into their complaint;”.
This amendment would provide for the confidentiality of persons who raise complaints under the fair dealing obligations provided by Clause 25.
The Chair
With this it will be convenient to discuss amendment 87, in clause 25, page 20, line 9, at end insert—
“(aa) for an investigation to be launched where there are reasonable grounds to suspect that there is non-compliance;”.
This amendment would provide for investigations to be undertaken under the fair dealing obligations provided by Clause 25 where there are reasonable suspicions, but no complaint has been made.
Dr Drew
I hope not to delay us that much longer, because I think we are past the bewitching hour and we keep losing members—at this rate, the Whips are going to have to find someone non-existent to pair with—but it is important that we dwell on the issue for a few minutes.
Again, this amendment may not be that crucial to the Bill in the great import of things, but a number of organisations feel quite strongly about where this part of clause 25 is taking us. It is all about fair dealing and the obligations of the first purchaser of agricultural products. We have argued that that should not necessarily reside with the first purchaser, but should be across the food chain.
Amendment 86, which has the support of a number of non-governmental organisations, is about maintaining the confidentiality of complainants. That is vital, because they would not necessarily pursue a complaint without that confidentiality; evidence from the Groceries Code Adjudicator’s review highlighted that as an ongoing issue. The imbalances of power in many grocery supply chains create a climate of fear in which small suppliers are unwilling to speak out for fear of commercial reprisals. This reticence is understandable, because once a supplier is blacklisted regarding their ability to supply a particular food chain, that tends to become total and ongoing. Smaller players often rely on a single buyer for large proportions of their business—sometimes it is 100%. Even when a regulator is in place, suppliers still have concerns about coming forward. There is a need to ensure that there no single supplier is exposed to possible retribution by a more powerful mid-tier supplier and retailer.
Following an investigation, the new body should make relevant recommendations to deter poor practice, including penalising mid-chain suppliers or retailers found guilty of breaching the code. It is important to be clear that the confidentiality provided by this amendment is different from anonymity. We recognise that if the party bringing the complaint wants compensation regarding their specific case, they will of course need to be identified. It is not as though that confidentiality can be kept in place indefinitely, particularly where monetary compensation is required. The principle of the confidentiality of the identity of the complainants being waived only with their express consent is critical in ensuring that producers feel confident coming forward. That is exactly how the Groceries Code Adjudicator works, so we want to extend it along the food chain.
Amendment 87 would allow the enforcement body to undertake investigations without specific complaints, and again this is where we want to boost the power of the Groceries Code Adjudicator. An effective enforcement body must be able to hold the trust of suppliers and keep any evidence confidential until there might be some monetary arrangement, which would require going on the record. To achieve this, an enforcement body should also have the power to investigate potential transgressions under its own initiative, rather than require the submission of compelling evidence before it acts. My understanding is that that is what the Groceries Code Adjudicator has herself asked for. It would be surprised if she has not, because it completes her powers and responsibilities. The spotlight is taken away from suppliers and potential complainants, so it is on the Groceries Code Adjudicator herself to take those complaints forward. Without this clause we may see the enforcement body unable to identify issues that are either specific to one chain or one problematic behaviour activity, but where no single producer has been able to complain, directly for fear of delisting—that is a more appropriate term, I accept.
As I explained about amendment 86, there is a climate of fear. Therefore, we feel that proactive action by the regulator is vital. We want the Government to look seriously at this and use this legislation to enhance the powers of the Groceries Code Adjudicator, something that a number of us across the House have called for. We are seeking to use this legislation to do that because our producers feel that too often the Groceries Code Adjudicator is constrained by her inability to work across the food chain and to guarantee confidentiality and, when there is monetary consideration concerned, that this has been through due process.
I hope the Minister will give us the opportunity to consider how he can ensure that confidentiality is guaranteed, but also guarantee the enhanced powers of the Groceries Code Adjudicator. Again, this may not be the most important part of the Bill, but for producers who feel that they have fallen foul of the process and have, as my hon. Friend the Member for Ipswich said, felt bullied, intimidated or delisted from selling their products in the right and fair manner, we should use the Bill to put that right.
George Eustice
The amendments are linked to a common sentiment that we hear from farmers. There is no doubt that a number of people will say that they fear reprisals, consequences of being delisted or losing business if they were to complain. That has been recognised for some time. That is why we made changes early on to the remit of the Groceries Code Adjudicator, to enable her to receive complaints anonymously and pursue investigations when she had reasonable cause to believe there was a problem with a particular supermarket, and indeed to allow a trade body such as the National Farmers Union to pass on intelligence about the conduct of a particular supermarket that could inform an investigation. Even within the GCA, which is predominantly a complaints body, we have found the scope for anonymous whistleblowing and for third-party organisations to pass on concerns.
I draw the hon. Gentleman’s attention to subsection (5)(a) and (b). The specific issues he raises can be addressed through regulations. Subsection (5)(a) makes provision for regulations
“for complaints relating to alleged non-compliance to be referred to a specified person”.
And, crucially, subsection (5)(b) states
“as to how those complaints are to be investigated and how an allegation of non-compliance is to be determined”.
It is absolutely within the powers set out in subsection (5) for us to introduce regulations that would guarantee anonymity and enable complaints from third-party organisations, when they can hand on intelligence or create the scope for a regulator to investigate, when there is reasonable cause to believe there is a problem. I hope the hon. Gentleman will recognise that we think the particular issue that he seeks to address in amendment 86 is already provided for in subsection (5)(a) and (b).
Finally, although we hear a lot about this, Christine Tacon from the Groceries Code Adjudicator says that one of the most powerful things that can be done is for people working for processors and dealing with supermarkets to have assertiveness training, because we can put in place all the right regulations and have all the abilities in the world for people to report things anonymously, but there is a point at which people have to take responsibility and be willing to say to a supermarket buyer, “You know I cannot agree to that, because it is a breach of the code and what you are asking me to do is in breach of the law.” She said that when the GCA has placed people from those organisations’ sales teams on to assertiveness training, they have learnt how to use the code themselves without having to always run to her for an intervention.
Dr Drew
I find this quaintly interesting, because my experience of the milk trade is that they lack anything but assertiveness. There are more four-letter words in their way of trying to do business than could be heard on a football pitch on a Sunday morning. Sadly, it is not just about assertiveness, but fairness and the way in which this can be taken up by the Groceries Code Adjudicator. That is why a number of organisations—as always, at the top there is a whole series of different bodies—feel strongly that this needs additional powers to be vested in the Groceries Code Adjudicator. I hope the Minister has listened to that and will act on it.
George Eustice
As I said, the GCA already has the powers to receive complaints anonymously and to investigate, where she has reason to suspect a breach of the code. That is already in place.
My point is not that this is not a legitimate issue—of course, as I said, the regulations can provide for anonymity—but that at some time we need people to have the confidence and courage to say, “I will not agree with that. It is against the code—you know it’s against the statutory code—and you shouldn’t be asking me to do it.” For such things to work properly, we need the farmers and sellers also to hold people to what is a legal requirement. They can play their part and, where they are willing to do so, that can make all the difference.
Amendment 87 is similar—it is about being able to launch investigations when there are reasonable grounds to suspect non-compliance, rather than when there is a complaint. Again, we believe that we can provide for that. It is important to note that whatever is set out as a legal requirement in clause 25(3) will be a legal requirement whether or not there is a complaint. Subsection (5) deals predominantly with complaints and how they are handled, we do not envisage the body as simply a complaints-handling one; we see it as an enforcement body that will enforce all the legal requirements introduced under the Bill, specifically clause 25. It will not only handle complaints and pass them on.
Chris Davies
Conservative Members, too, have concerns about the powers of the Groceries Code Adjudicator. Farmers and suppliers tell me regularly that the GCA’s teeth are not sharp enough. Will the Minister reassure me, as he has the Opposition, that there are provisions not only in the Bill but in other places where the powers are strong enough, and that if we need to increase the powers there is a mechanism to do so?
George Eustice
The clause provides quite strong powers, including those to impose penalties for non-compliance on the first purchaser of agricultural products. If such a first purchaser happens to be a major retailer— perhaps one not currently covered by the groceries code, because it is below a certain threshold—it will be covered by the Bill. By addressing the problem from both ends of the telescope, we have a workable solution that means we can really deliver for the interests of farmers while not losing the successes of the Groceries Code Adjudicator model.
Having given that reassurance that the issues raised by the hon. Member for Stroud in amendments 86 and 87 can already be addressed through regulations under subsection (5), I hope that he will accept it and withdraw his amendments.
Dr Drew
I thought that the intervention made by the hon. Member for Brecon and Radnorshire was apposite. We are improving the legislative framework, including toughening up the powers of the Groceries Code Adjudicator, and specifically—in my amendments—we could ensure that people feel confident that there is a confidential arrangement between them and the Groceries Code Adjudicator so that they may pursue their actions.
As much as I like the Minister and hear what he says, this is how we improve legislation—we want to put something very important in the Bill. We know why so many producers do not choose to pursue a course of action against someone who has treated them unfairly: they are frightened. We will press the amendment to a vote—though we might not win—and the Minister is hearing from his own Back Benchers that this needs to be revisited on Report. We want to ensure that the Groceries Code Adjudicator can exercise all her powers, including along the food chain—because at the moment it seems to be very much a one-way street, which is why she is less effective than she could be. Also, producers feel that they are often let down, because they are not able to carry through regarding the unfair practices that they face.
This little amendment—it is very small—would dramatically change the power relationship. I hope the Minister will accept in good faith that we are pressing it to a vote so that he can reflect on it when it comes back on Report and strengthen this bit of the Bill.
Chris Davies
I thank the hon. Gentleman for his praise—as praise indeed it was—but, unlike him, I am happy with the Minister’s response and I shall be voting with the Government.
Dr Drew
Sadly—I thought we might have enticed the hon. Gentleman over to this side. It could have made all the difference, and the Government would have, in due course, thought that it was great that Back Benchers spoke for themselves and voted accordingly. One always has these hopes that might be dashed at a later stage. We will press the amendment to a vote, but we hope the Government will understand that we are willing and able to see how this can be improved on Report.
Question put, That the amendment be made.
Agriculture Bill (Ninth sitting)
(6 years, 1 month ago)
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The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
Good morning, ladies and gentlemen. May I remind you of the housekeeping arrangements? Please switch electronic devices to silent. Although we do not recognise the Public Gallery, it would be helpful if that could be done there as well. Tea and coffee are not allowed—but I cannot see any, so that is all right.
On line-by-line consideration of the Bill, the ground rules apply as usual. I decide whether there is a stand part debate. You can have a stand part debate, if it is convenient to you, during the debate on the clause or at the end, but not both. You have to exercise your judgment.
Clause 11
Support for rural development
Jenny Chapman (Darlington) (Lab)
I beg to move amendment 79, in clause 11, page 7, line 35, leave out “simplifying or improving” and insert
“making a change or changes which the Secretary of State believes to be necessary to”.
The Chair
With this, it will be convenient to discuss the following:
Amendment 80, in clause 11, page 8, line 19, leave out “negative” and insert “affirmative”.
Amendment 81, in clause 11, page 8, line 19, at end insert—
“(5) Before making regulations modifying legislation under this section, the Secretary of State must consult persons who, in his or her opinion, are representative of the sector to which the regulations will apply, or who may otherwise be affected.”
This amendment would ensure that there are checks and balances on the use of Ministerial powers in relation to rural development that would be granted under Clause 11.
Jenny Chapman
It is good to be back after our week’s rest last week. Clause 11 concerns support for rural development and I am afraid, looking back at our previous deliberations, I must rerun some of the arguments we applied to previous clauses. The issue that runs through the Bill is what the Secretary of State may want to do with the powers, and the inadequate definition of that. In the present case, the Minister wants the powers to be subject to the negative resolution procedure, which we went over in some detail the week before last.
Clause 11 states that the Secretary of State “may by regulations modify”
“retained direct EU legislation relating to support for rural development”
and
“subordinate legislation relating to that legislation.”
That is quite a broad power. Subsection (3) sets out some of the measures that the Secretary of State would be able to modify. It begins:
“In this section ‘retained direct EU legislation relating to support for rural development’ includes in particular—”
but it is not clear to me, and I should like the Minister’s view, whether the list of measures that follows is intended to be exhaustive, or whether the Secretary of State would be able to add to it. If he could add to it, and could use the powers in other ways, too, would the use of the negative procedure be appropriate in all circumstances, and not just the instances specified in the list? I should like the Minister to enable the Committee to understand the aim of the clause properly.
Amendment 79 relates to the Secretary of State’s power, under the clause, to simplify or improve the measures. The amendment would make the quite modest but important change of replacing the words “simplifying and improving” with
“making a change or changes which the Secretary of State believes to be necessary to”.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
Would the hon. Lady rather give powers to the Secretary of State to complicate legislation or make it worse? It seems she is opening a door for that to happen.
Jenny Chapman
No—clearly, that is not the intention. If the Minister needs to table something to make that clear, we will gladly discuss that.
Sandy Martin (Ipswich) (Lab)
Does my hon. Friend agree that although additional, more specific regulations might be more complicated, they would be clearer?
Jenny Chapman
I agree, yes. The change we are seeking in the amendment is to include “necessary”, because the Secretary of State has powers under the clause to make changes that he or she thinks would simplify or improve, but that is so subjective. The power that the Government seek would be through the negative procedure, so any change ought to be needed and not just used for things that the Secretary of State desires to do, for motives that we could not discern.
If the Secretary of State wishes to change the scheme in ways that today we can only guess at, we want to know more about how that power can be used. It could be said that it is very generous to allow the Secretary of State to make changes that, in his or her opinion, simplify or improve—he or she could say that just about any change was an improvement if he or she wanted to.
All amendment 79 seeks to do is to place a duty on the Secretary of State to ensure that any future changes are really needed: these measures will potentially have a significant impact on rural communities. The Secretary of State may decide to do nothing in this policy area, despite having the powers. People watching our deliberations will want to know an awful lot more about what will happen as a consequence of the clause.
I move on to amendment 80, which subjects regulations under the clause to the affirmative procedure—not the negative procedure, as the Secretary of State desires. We went over this point at length last time when we discussed the difference between the two processes. I do not see any benefit in going over all that again. It would be helpful if the Minister justified why he thinks the affirmative procedure is not appropriate in this instance.
As we discussed at some length previously, amendment 81 requires the Secretary of State to consult persons who,
“in his or her opinion, are representative of the sector to which the regulations will apply, or who may otherwise be affected.”
The Opposition believe that that is a necessary safeguard. We want the amendment on the face of the Bill because the clause affords such great power and discretion to the Secretary of State.
We know, because he said it last time, that the Minister has good intentions to consult, but the majority of consultations conducted by his Department take place because they are required in legislation. We talked about there being several hundred consultations—could he tell us how many of those come about because they are required in legislation? How many happen because the Department feels that it is the right thing to do?
There is no requirement at all in the clause to consult, but perhaps there ought to be. The Minister is asking us to rely just on his good will and the custom and practice that he says exists in the Department, but I question whether that is the case and whether the consultations that take place in the Department for Environment, Food and Rural Affairs are by and large required by legislation. They are often required for very good reasons and are an important safeguard that ought to apply when we are talking about support for rural development.
As we discussed last time and as is worth repeating, done correctly, consultation improves decision making and avoids costly mistakes and unintended consequences. Why does the Secretary of State believe it is not appropriate to require consultation in this case?
Dr David Drew (Stroud) (Lab/Co-op)
I am delighted to be back, Sir Roger. I spent much of last week in Northern Ireland and Ireland, and will no doubt be referring to that in Committee.
A couple of points are important to the clause. We need to understand that the Bill should encompass pillar 2 of the common agricultural policy. I am not sure whether it does, although this is the closest that we get to it. I am aware that in due course we will be debating my amendment 115, so I am not going to talk about timetables.
I want to talk about the substance of rural development: it is very important that we understand that although agriculture is crucial to rural development, it is not the totality of it. I would argue that the Government have not got a rural policy, and they need one. Things are going on in rural England, to which the Bill largely refers, that are not good at the moment. Anyone who has read the material that has come out about the relative decline of market towns should be very clear that we need to invest in those communities and the villages around them.
The worry is that the Government not only do not have a rural policy, but they have no one to speak on a rural policy. They dismissed all rural advocacy. I am not saying that new Labour was wonderful in this area, although we did have a good rural policy between 1999 and 2004—principally around the countryside White Paper of 2000 and what the £1 billion earmarked for rural areas implied. It made a significant difference. Sadly, that has all gone: we have lost the rural tsar and the Commission for Rural Communities. That worries me when it comes to this Bill; I do not know how pillar 2, which largely invested in rural communities through the common agricultural policy, transfers into the Bill.
I will be interested to hear what the Minister says. We are back again to the usual game of powers and duties. The Minister and Secretary of State do not need to do anything. They can make lots of warm noises about rural areas, but the reality is that unless we have vibrant rural areas, we will not have a vibrant farming sector because those are inextricably linked.
It is important that we get clarity from the Government on how pillar 2 is embedded in the Act, to make sure that rural areas are not forgotten. The Agriculture Bill is the nearest we will get to being able to talk about rural areas and their need for investment and support through the nature of farming—obviously, a lot of the people who get the benefit of rural development are farmers or farm businesses along the food chain.
Will the Minister clarify what guarantees there are in respect of pillar 2? It was never perfect, but a lot of the academic and support work that goes into rural areas came through that channel. We all know that that sort of funding is highly questionable at the moment. I hope the Government will make some real statements today about how they intend to fund rural development.
The Minister for Agriculture, Fisheries and Food (George Eustice)
I want to begin by addressing the shadow Minister’s over-arching point about rural development and the pillar 2 scheme. I will respond to that specific question, which is not directly relevant to this clause but is picked up in other parts of the Bill.
Pillar 2 and pillar 1 are an EU construct: that distinction will no longer exist, but the policy objectives, currently delivered under pillar 2, will be delivered in the following ways. Clause 1(1) is all about the farmed environment and supporting farmers to farm in a more sustainable way and enhance the environment. The objectives delivered by the current countryside stewardship schemes and the previous entry level stewardship and higher level stewardship schemes, which account for the lion’s share of the funding in pillar 2, will be picked up in clause 1(1).
Jenny Chapman
This gets to the nub of the problem. As we have said, the Secretary of State may give financial assistance for those things, but the Bill does not say that the Secretary of State is going to do any of those things.
George Eustice
We had a long debate about the drafting protocols that we have always had in this country, and “may” is the wording that has been used in a number of Acts, including the Natural Environment and Rural Communities Act 2006 and a number of other Acts that Opposition Members are passionate about, such as the Agriculture Act 1947. We covered that in detail last week when we debated this issue.
I want to return to the point that clause 1(2) enables us to make grant aid and loans for farm productivity, and that picks up a number of the other components of the pillar 2 schemes—notably what we currently call countryside productivity schemes, which are all about supporting farmers to invest in new equipment.
Finally, as I also made clear in earlier debates, there will also be a shared prosperity fund with a rural dimension, which will pick up some of the other objectives currently delivered in pillar 2, such as the LEADER scheme. We have a clear plan, both in the Bill and the development of a shared prosperity fund, to deliver rural development and support.
This clause, in common with clauses 9 and 10, is all about the power to modify retained EU law. That is very important because our frustration at the moment with the bureaucracy around the current schemes is horrendous. The amendment seeks to change “simplifying” or “improving” the operation of the scheme to saying simply to make
“changes which the Secretary of State believes to be necessary”.
I am not sure that the hon. Lady’s amendment narrows the scope—it might, in fact, give more discretion to the Secretary of State. We are clear we want that power to be used to simplify and improve. A number of people have asked what “simplify” and “improve” mean. I think that is understood: it is to simplify and improve. As my right hon. Friend the Member for Scarborough and Whitby made clear, we would not want to make the situation worse and more complex.
Jenny Chapman
It is not sufficient to say that people have asked what “simplify” and “improve” mean and then to say that they mean to simplify and improve. It might help if the Minister gave a couple of examples so that we have a clearer idea of what he intends.
George Eustice
Yes, I was coming on to do just that. One frustration at the moment is having LEADER groups up and down the country regularly complaining to me about the process that they have to go through in the application. The current regime has been made more onerous with the number of checks and the amount of paperwork required.
We have had problems in the past when people with relatively small grants have been told that they have to get three or four quotes for the job to be done. There is nothing wrong with that in principle but, if there is a slight modification to their plan and they have to make an adjustment to their investment, they have to go out to the market again and get a whole new set of quotes. They find that kind of bureaucracy deeply frustrating. This provision would enable us to improve that.
Another example comes from the countryside stewardship schemes. People get deeply frustrated about the amount of photographic evidence they have to send in; we have even had complaints that people have had to send in photographs of invisible boundaries because that is a requirement of the scheme rules. Again, that has all been done because of pressure from the IACS regime, as it is called: the integrated administration and control system, enforced by the EU. The provision would give us the ability to take off some of those rough edges.
At the moment, we get about £100 million of disallowance fines a year from the European Union, and a large amount of that is for trivial points around the way something is recorded. One example that I remember particularly well is that we ended up with fines from the European Union because it did not like how we had recorded how we checked whether companies were VAT registered; they were large companies with grants under the fruit and veg regime in that instance. We had checked that they were VAT registered. The check took place and was recorded through an email exchange, but the EU said we should have recorded it on a particular type of form.
That is the monstrous complexity and bureaucracy that bedevils all these schemes, and that is why it is right that we strike down that unnecessary bureaucracy and administration, as we seek to do in clause 9.
Mr Goodwill
I was in the European Parliament for some time, and it strikes me that the way EU regulations are drafted makes the assumption that every farmer is a crook who is trying to dodge the system; in the UK, we have a long tradition of great honesty from the agricultural community in the way they work through these schemes.
George Eustice
I will answer that important point first. The regulations are drafted in a way that assumes guilt—often, it is worse than that. For example, farmers might have made a number of innocent and minor record-keeping errors and we might have chosen to write warning letters instead of imposing fines. Under the penalty matrix, the EU auditors take the view that there almost has to be a quota for guilt: if we were to be more lenient on some farmers because they had made innocent errors, we would have to apply higher penalties to other farmers, deeming them to be guilty. It is an EU process that is completely inconsistent with British notions of justice and the rule of law, but it is a system that we have had to endure for many years.
Jenny Chapman
People watching this will be astonished that we are being asked to assume that one group within society is somehow to be treated differently when they are in receipt of public funds, because they have a tradition of honour and not being misleading and should be viewed differently from other people who are getting support. There will have to be rigorous procedures around all this. The Government are in for a huge shock if they think that the scrutiny and pressure from the EU will not be replaced by pressure from constituents and taxpayers.
George Eustice
That was not my point at all, and it was not my right hon. Friend’s point. The point was that we should allow farmers and other landowners to be treated the same as everybody else; apply the principles of justice and rule of law that we have in this country; and not have an arbitrary system of penalties coming from the EU.
To come back to my point about the areas in which we can improve, clause 9 will be an important area for some of our evidence requirements and rules on deadlines and dates; we would be able to show more flexibility. The powers in clause 11 will probably be more modest, but they enable us to sort out some of that unnecessary administration—on the LEADER scheme, in particular. They would enable us, for instance, to vary the length of agreements when we thought that was appropriate, particularly if we wanted to extend and roll forward some of the legacy agreements for a few years.
Dr Drew
The problem with the LEADER scheme is that it is pan-European. With exit from the EU, will there be the opportunity to allow institutions in this place, and communities, to indulge themselves in a pan-European sense because of the nature of that rural development? We have always learned from other parts of Europe and they have learned from us. Will that be possible or will this expenditure be very constrained?
George Eustice
The LEADER scheme is probably the most devolved of all the EU schemes, in that we literally have local action groups—LAGs, as they are called—which are local committees that appraise individual local projects for small grants. The scheme does not require a pan-European architecture; it has just ended up that way. In fact, those types of local grants, which are often administered or certainly appraised locally, lend themselves to a more national scheme.
Dr Drew
I hear what the Minister says, and that will be all right from the UK’s perspective, but we will be dealing with countries that are subject to the CAP and continuing LEADER obligations. Do the Government intend to negotiate with the EU post-March to ensure that those cross-country arrangements can continue? Otherwise we will be precluded. Whatever money we choose to put into a new LEADER, we will not be part of LEADER, so what is the Government’s plan?
George Eustice
Our plan is to leave the European Union, which means leaving the common agricultural policy and LEADER, but also putting in place superior schemes that we will design nationally. That is what we intend to do.
Mr Philip Dunne (Ludlow) (Con)
If I can take the Minister back to his comments about the duration of existing schemes, perhaps he can take this opportunity to inform the Committee that he will have the powers to continue to pay under the existing higher-level, entry-level and countryside stewardship schemes, which in many cases run for up to 10 years. As I understand it, we had commitments from the Treasury that that amount of money would continue to be made available. Will he confirm that he will have the power to ensure that those existing agreements will be honoured?
George Eustice
That is a very important point. I can absolutely confirm that existing schemes will be honoured for the lifetime of those projects. I know that we will probably come to this when we consider later amendments, but the grant agreements between the Government and individuals will be honoured even after we leave the European Union. The Bill, together with the European Union (Withdrawal) Act 2018, gives us the power to bring across retained EU law and to continue to make payments under it.
Simon Hoare (North Dorset) (Con)
Yesterday morning, I met an organic farmer in my constituency. His is quite a small farm, and his question about the stewardship scheme, and others through which he receives payment, was whether size will be important when determining who receives money and how. LEADER+ and other types of support system are important, but there is an anxiety that the small and beautiful smallholding, as it were, is likely to miss out as people look to scale up. Can my hon. Friend assure me that there will be a range of support within the new system that he proposes, irrespective of the size of an operation?
George Eustice
Yes, I can. We discussed this when we touched on clause 1, which is about the way in which we will support people. We heard representations from people engaged in small projects, such as agroecology projects, about whether they could have support. They are often not entitled to support under existing schemes, but I absolutely said that clause 1 will enable us to support those. Indeed, this is an area that we are looking at closely. Clause 1(2) gives us the power to award grants to some of those smaller businesses, including new entrants.
Chris Davies (Brecon and Radnorshire) (Con)
Following the question from my hon. Friend the Member for Ludlow, the Minister mentioned that the schemes and their financing will continue. Can he reassure me and colleagues from across the various borders that the devolved nations will also continue to have the money over the period of the schemes?
George Eustice
Yes. The devolved nations have that retained EU law through the EU withdrawal Act. We have discussed previously that Scotland requires some kind of clause to be able to continue to make payments after we leave the European Union, but that is relatively easy to remedy. A combination of this Bill and the EU withdrawal Act gives us the power right across the UK to honour all those commitments that have been entered into.
Returning to clause 11, the hon. Member for Darlington asked whether subsection (3) is an exhaustive list or whether we can add to it. It is not exhaustive but it covers the bulk of the regulations. I will explain why we drafted it in that way. The regulations listed under subsection (3) are effectively all the current in-force rural development regulations. However, we have kept open the option to broaden the list slightly because we have some legacy schemes—older agreements under previous countryside stewardship or productivity EU schemes that are no longer technically in force—and we might still want the ability to modify and tweak them. The best way to describe it is to say that the list is not exhaustive, but is close to being exhaustive. It covers all the regulations currently in force, but we need just a slight amount of room to capture the previous legacy schemes that are no longer in force.
Jenny Chapman
If there are not many of those additional measures, why did the Minister not include them, just to ensure more clarity in the Bill?
George Eustice
The problem with EU regulations is that they are often chopped and changed all the time. We can capture the snapshot of what is there at the moment, but some of these regulations will have repealed and replaced elements of previous ones, but often not all elements. This is a complex area. Often there will be a grant agreement in place where there are binding requirements between the two, but where the initial regulation under which it was made has lapsed and, sometimes, been partially—but not fully—replaced by new ones. There is a constant churn of EU regulations, so we have tried to capture the vast majority of those in force now, but we need that movement to cover areas that might have been missed.
Amendment 80 proposes that regulations under this clause should be made under the affirmative rather than the negative resolution procedure. We discussed this issue in debates on earlier clauses where we are seeking to modify retained EU law. We are talking about technical changes and improvements to legacy schemes that are going to be wound down anyway, and it is not appropriate to have lots of affirmative resolutions for that type of change. We envisage making a single sweep of changes to improve and simplify these schemes in one point, and that would be the end of it.
However, I can give the hon. Lady some reassurance on her amendment 81. As I explained earlier in relation to a similar amendment, DEFRA needs no encouragement to hold consultations. We love consultations. My constant refrain to officials is: “Are we sure we really need a consultation on this?” We often hold consultations where we have just a couple of dozen people who can bear to respond to them. While we do not need to put this requirement in legislation—the only legislative requirement for consultation in the DEFRA sphere, for obviously good reason, is for food safety, which is in the Food Safety Act 1990—I can give her an undertaking that, before making changes to the scheme under the powers of clause 11, we would hold a consultation to ensure that all relevant parties could be engaged.
Jenny Chapman
I have such concerns about this, because it could become a free-for-all, where the Government can do what on earth they like. We cannot sit back and allow that to happen. Minette Batters said in evidence that she did not wish this kind of support to become politicised. I do not blame her for that, and I would not wish that in her position either, but the fact is that it is going to be politicised, and the Government have no idea what they want to do. I am not accusing the Government of having some sort of sneaky plan up their sleeve that they wish to inflict on rural communities, but I do not think they know what they want to do. They have therefore decided to come up with this clause, to give themselves as much flexibility as possible. I accept the Minister’s undertaking on consultation. I take him at his word and will be holding him to that, but the Government have not been clear. I do not think they know what they want to do. The list is not exhaustive, as we would have hoped.
I will not push each amendment to a vote—aspects of this issue will undoubtedly be dealt with in the House of Lords—but we have genuine concerns. We are not just trying to make a point; it is a real problem for Parliament and, potentially, rural communities that the Secretary of State is being allowed these kinds of sweeping powers under an inadequate procedure, which cuts out parliamentary scrutiny and Members’ ability to voice their concerns. I will therefore put amendment 80 to a vote.
The Chair
The hon. Lady needs to say that she first wishes to withdraw the lead amendment, if that is what she intends.
Jenny Chapman
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Drew
I beg to move amendment 115, in clause 11, page 8, line 18, at end insert—
“(3A) Regulations under this section must make provision for any schemes entered into under the retained direct EU legislation relating to support for rural development prior to the date of enactment of this Act to continue until those schemes come to an end in accordance with their specific terms.”
This amendment would ensure that existing agri-environment and rural development schemes, and those entered into prior to the Agriculture Act coming into force, remain in place and continue to operate.
The Minister will be pleased to know that I will be a bit quicker on this amendment, which is about timing. Although we have debated the substantive meaning of the changes to rural development, the amendment deals with how they will work in practice, which we are still a little confused about. Let us see if we can tease out from the Minister at least whether existing schemes will continue.
The amendment is clear: it asks what happens to the retained direct EU legislation on rural development from before the Act and how schemes can continue when people have signed up. Farmers are affected, but so are communities, because they may be part of the LEADER scheme, which the Minister has intimated will be no more. There may be a new scheme, but it certainly will not be LEADER unless we can have some relationship with other European countries. The amendment is about the functionality of these schemes. Many of us know them and feel strongly that they have considerable merit. The question is how we take them forward post-Brexit—if that happens.
Many of the schemes have gone on for a long time; they should have a proper run down, or perhaps they can be reinvented in a different guise. Farmers have made heavy investment in time and money in the existing arrangements, but it is important that rural communities also have certainty and security in the knowledge of where those schemes will go. It would be unfair if Ministers were to force the end of the schemes before they would have ended anyway—they are all time limited—and, more particularly, the existing agreements must be met with the full benefit of money and support from DEFRA and other agencies that have been crucial to the schemes coming about. The amendment is designed to maintain continuity, so we have genuine knowledge. People have invested a great deal of their time, and they are very good schemes.
We have done the work on how to develop a revitalised rural community. I hope the Minister looks favourably on the amendment. It may be that today is not the time, but we will be happy to consider a Government amendment, either on Report or in the other place. If the Minister is not prepared to give us that assurance, what assurance will he give to farmers and communities that want the schemes to continue? The worst thing possible would be if people were to start dropping out of them now. That would be a total waste of money. It is important, because we need to know where these types of scheme will fit in the transition scheme. Will there be an understanding that money will be available to keep the schemes going for a period of time, as intended?
George Eustice
I am grateful for the opportunity to clarify our intentions regarding the current schemes—the higher level and the entry level stewardship schemes—and, more importantly, some of the countryside stewardship schemes that are being entered into now. My hon. Friend the Member for Ludlow also spoke about the importance of continuity for existing schemes. I am grateful for the opportunity to clarify that the UK Government have already guaranteed that all pillar 2 agreements signed before 31 December 2020 will be fully funded for their lifetime. Even as we leave the European Union in March, until the end of December 2020 we will honour any agreements entered into before that date.
The amendment is unnecessary, because the current regulations do not in fact set an end date in EU law. Had the EU regulations stipulated a cut-off point for agreements, of course we would have needed to address that in the clause, but they do not. We have agreements that are binding under the public sector grant agreements protocols that we have in government. Effectively, that is akin to contract law: we have entered into public sector grant agreements with agreement holders, and that is legally binding for the duration of those agreements.
The underpinning EU regulations set out only limited circumstances in which we could terminate an agreement. First, and quite reasonably, the agreement can be terminated if there is a massive breach of the agreement—for instance, if the agreement holder is not doing any of the things that they said they would. Secondly, if there is a transfer of land and the agreement does not go with the new owner of the land or they do not agree to abide by the agreement, for similar reasons it is right to discontinue the agreement. Thirdly, an agreement can be terminated early by mutual agreement—that is, if the parties choose to do so. That is important in terms of transition to the new order and the new types of schemes.
To answer the shadow Minister’s question about how we envisage moving from these legacy schemes to the new schemes, it may be that in the later years of some of these schemes, agreement holders opt voluntarily to convert their agreement into one of the new environmental land management agreements. They will not have to do so if they choose not to: the agreement that they have will be legally binding. However, if they were to choose to convert their agreement into an environmental land management scheme and both parties thought that was the right thing to do, we would be able to have that option.
I hope that I have reassured the hon. Gentleman. Although he highlights an important point, our intentions are clearly set out, and we are already bound by the public sector grant agreements. The amendment is therefore unnecessary and I hope that he will withdraw it.
Dr Drew
I will not press the amendment to a vote—obviously, that would be nonsensical—but I am worried about the tenor of what the Minister is saying. It is easy to find fault with the existing arrangements, but we have to give people confidence that what they have been doing is right. The biggest hurdle arises when the schemes are coming to an end. No one is going to invest time and money then, so ending the schemes early is quite possible, not because farmers and communities necessarily want them to end early, but because they see no future in them.
We need to give a great deal of encouragement to those who have entered into these schemes. They are more than farming schemes: they are to do with the development of our rural communities. It is vital that the Government get the message that the sooner they say what will replace LEADER in particular—all of us with rural constituencies could hold up LEADER as wonderful practice—the better. The sooner we can get some clarity about what will replace it and the degree to which it will allow flexibility to work with other communities and countries, the better for all concerned. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 80, in clause 11, page 8, line 19, leave out “negative” and insert “affirmative”—(Jenny Chapman.)
Question put, That the amendment be made.
Kerry McCarthy (Bristol East) (Lab)
I beg to move amendment 113, in clause 14, page 9, line 45, at end insert—
(ia) achieve a reduction in food waste of no less than 50 per cent by 2030, from a 2015 baseline”
This amendment would require the provision of transparent data of food wasted in agri-food supply chains to meet the UN’s Sustainable Development Goal (SDG 12.3) of halving per capita food waste from farm to fork by 2030, against 2015 baselines.
The Chair
With this it will be convenient to discuss the following:
Amendment 114, in clause 14, page 10, line 5, at end insert “(including terms of employment and pay for persons within the meaning of section 13(3)(b) or (c))”
Amendment 116, in clause 14, page 10, line 7, at end insert—
“(ca) promoting the welfare of creatures of a kind kept for the production of food, drink, fibres or leathers”
This amendment would ensure there is provision in clause 14 for the processing of data for the promotion of animal welfare.
Kerry McCarthy
Amendment 113 revisits the issue of food waste, which we discussed last week. I declare that I am chair of the all-party group on food waste. We submitted a response to the “Health and Harmony” consultation paper, along with organisations involved in food waste campaigning—This is Rubbish and Feedback. I am pleased to see that the Government have made some progress recently, particularly in the food waste reduction road map, but their approach still seems to be based on voluntary action. It is important that we see something more specific that binds the Government to future action.
There are powers in the Bill that could be used to require those in the agri-food supply chain to supply information on waste in the supply chain. The explanatory notes state that clause 14(4)(f)
“allows data to be collected for minimising waste from agri-food supply chains, which may include food waste”.
Mandatory food waste audits are crucial if we are to get any idea of the scale of the food waste problem and who is responsible for where it occurs in the supply chain. We said last week that too often there is a focus on the consumer end, and I am keen to ensure that it is not just the farmers who are blamed for this. Many of the problems are caused by what happens in the middle—the pressures that supermarkets and food manufacturers put on farmers, and the way that products are marketed and sold to consumers .
Sandy Martin
We had a debate yesterday about plastic packaging. One of the barriers to the reduction of plastic packaging in supermarkets is that they are very reluctant to let anybody know exactly what is happening. If we are going to reduce food waste, we need to make sure that supermarkets give that information.
Kerry McCarthy
That is true. Some supermarkets have been a lot better than others. Tesco has taken quite significant steps in auditing the waste in its supply chain; others have only paid lip service. One of the problems with the way that the Courtauld commitment works is that everyone is bundled in together and they report in aggregate, so we do not know who is making progress and who is not. We are also committed to meeting sustainable development goal 12.3, and I believe we should make that a binding statutory target, which must be done in legislation.
Mr Goodwill
Obviously, crop yields vary according to the season and often farmers need to grow plenty to ensure that they can supply their contracts. Would the hon. Lady define stock feed potatoes or carrots used to feed livestock as waste, or would that be exempted from her definition?
Kerry McCarthy
Let us be clear: this is a discussion we have had in part about whether, if certain produce is ploughed back into the field, it should count as waste. This is not about pointing the finger at farmers and blaming them for what happens on their farms; it is about trying to ensure that the data is there, so that we can see what processes are needed to reduce avoidable waste. In the food waste hierarchy, the aim is to ensure that any food produced that is fit for human consumption is consumed by humans, and then, working our way down the hierarchy, by livestock, and then used in processes such as anaerobic digestion. At the bottom of the hierarchy is landfill—an absolute no-no, I would say.
Although there is a legal obligation for that food waste hierarchy to be enforced, we know that it is not and there are no consequences if people do not follow it. One of the reasons it is not enforced is that we do not have the data on where food waste is occurring. I say clearly that this is not about blaming farmers for anything; it is about trying to reward farmers for doing the right thing. We need the information to be available.
Mr Goodwill
May I press the hon. Lady further? On our farm, we used to grow swedes, which by and large were for livestock, but we would harvest and net up one in 10 or one in 20 for human consumption. It would be hard for any farmer to collect data on her description of food that is fit for human consumption but then finds its way into the animal food chain.
Kerry McCarthy
I am trying to get at where the policies of the supermarkets and the buyers lead to food waste on farms. We are talking about when food is produced and supermarkets reject the produce—sometimes on spurious cosmetic grounds, but usually because of poor predictions of when they will need it. Perhaps it is a bad summer and the supermarkets are not selling as many salads or other summertime foods as they otherwise would. That is what we are trying to get to the bottom of.
This is not about farmers choosing to do certain things with their produce; it is about trying to get to the bottom of the unfair relationship. We have the Groceries Code Adjudicator, but although there are measures in the Bill to strengthen that role, they still do not go anywhere near far enough. The Groceries Code Adjudicator has said that she does not believe she needs any more powers, whereas I know that farmers and a significant number of people throughout the supply chain are crying out for that relationship to be made fairer and be more firmly enforced.
Martin Whitfield (East Lothian) (Lab)
Is it not the case that the data is not with the farmers, but with the supermarkets through the buyers’ decisions on what they take and what they reject? Surely we cannot expect the farmers to differentiate the uses made of their crops?
Kerry McCarthy
Yes, that is entirely the case. This is about the food supply chain. If we are only to look at our food system in relation to farming and treat that as something segregated, we cannot help farmers in the way they need to be helped.
Mr Dunne
I am listening carefully to what the hon. Lady is saying; perhaps I could illustrate to her, with a current example from my farm, the difficulty with what I think she is suggesting. We have a potato crop, and the very dry conditions through the summer, followed by some rain in August, have led to a large proportion of the potatoes in unirrigated fields developing what are called “dolly heads”, where there is an extra spurt of growth, and the potato, instead of being a single shape, has a misshapen bit alongside.
To get buyers to accept loads that contain those shapes, we have to send samples off to them. They decide whether to accept or reject them; sometimes, we send the entire load off and it is rejected on sight and sent back to the farm—we cannot anticipate precisely how the supermarket or intermediary will react until they see the load. What is being suggested can lead to extreme complication for the farmer in deciding what should happen to the particular product. What happened to the product is not their fault, but is to do with the climatic conditions.
Kerry McCarthy
There is certainly evidence that, whereas under the Groceries Code Adjudicator regime produce should not be rejected because supermarket buyers have just decided they do not actually need what they are contracted to buy, they are increasingly using cosmetic reasons as an excuse, because they are still allowed to reject on cosmetic grounds. A crop of potatoes in one period might be entirely acceptable to the supermarkets because they need those potatoes, but then, on cosmetic grounds, they will reject produce that looks almost identical, because they have got their predictions wrong and do not actually need the potatoes they thought they would. Sometimes this produce is not going to be sold as nicely smooth and rounded baking potatoes packaged up in the supermarket; it will be going into products where the shape does not matter, but the supermarkets have got their predictions and buying calculations wrong and do not actually want it, so they use cosmetic reasons as an excuse.
The memorandum on the delegated powers in the Bill says that clause 20 provides powers for new marketing standards that could be used to
“reduce food waste (for example, by having the flexibility to change any standards that are purely visual)”.
That picks up the contention about EU marketing specifications being responsible for some produce being rejected. As I understand it, the supermarket standards are actually much higher than the EU marketing standards, so the fault does not lie with EU standards; the issue might be supermarkets trying to employ them as an excuse. I think that having more flexibility in relation to marketing standards is unlikely to make a difference, and I hope that the Minister addresses that point.
My key point is this. When we discussed amendment 85, I think, the Minister said we should not make farmers responsible for meeting the food waste target, as most of the time they are not responsible for food waste, and I absolutely agree. That is why the mandatory target should sit in this part of the Bill, where we are talking about the supply chain.
I have said that the Courtauld 2025 commitment is a helpful tool, but it is not ambitious enough. The fact that participation is voluntary means that it will never achieve as much as we would like and will certainly not get us towards the sustainable development goal. However, when Courtauld 2025 was announced, the Waste and Resources Action Programme was meant to be generating a baseline for primary production by the end of 2018. Can the Minister update us on that? My understanding is that it might now be only an estimate rather than a set figure. The fact that there have been funding cuts to WRAP and the industry is still being secretive with its data means that we cannot come up with the baseline that we would like to see.
Finally on amendment 113, I just reiterate the point that we want to see a level playing field. At the moment, 89 businesses have signed up to the food waste reduction roadmap, but that is fewer than half of the top 250 food businesses. Again, the good guys will sign up and get a lot of credit, and then the Government can say, “This is really working. We’ve got companies that are doing their best to reduce food waste.” But what about those companies that have not signed up? I will leave the food waste side of things there.
Amendment 114 is a probing amendment to follow up on a debate that I had a few weeks ago, on international Anti-Slavery Day, about modern slavery and labour exploitation in supermarket supply chains. We know that the sector has a really serious problem with that. The International Labour Organisation estimates that agriculture, if grouped with forestry and fishing, is the sector with the fourth highest proportion of victims of forced labour worldwide. Other sectors, such as apparel—the fashion or clothing industry—seem to be getting to grips with the problem, but the food sector does not appear to be. I mentioned many examples during that debate, so I will not go into detail now, but they ranged from organised crime in the Italian tomato-growing sector to workers in the Thai seafood industry—cases of torture, enslavement and workers being kept at sea and passed from ship to ship for years at a time, with 59% of workers, I think, saying that they had seen the murder of a fellow worker. In this country, we still very much have an issue with gangmasters and poor conditions in the sector.
Oxfam has sent up the Behind the Barcodes scorecard, which rates supermarkets on their transparency, accountability and treatment of workers and farmers. There is also a gender element, because women tend to be more likely to be victims. On that scorecard, Tesco again comes out best—at 23%. It did actually come along to a meeting of the all-party group on human trafficking and modern slavery, which I thought was good. It listened to the clothing industry talk about what it had done, and it seemed keen to do more. So Tesco was on 23%. Morrisons and Lidl are on 5%, and Aldi is on 1%, so we have a discrepancy between the supermarkets trying to do the right thing and others not taking it seriously at all.
Sandy Martin
Does my hon. Friend share my frustration that, when supermarkets or anyone else involved in the agri-food supply chain do not want to give information that would enable some of the problems to be dealt with, they can hide behind the cloak of commercial confidentiality? Amendments 114 and 113 would enable the Secretary of State and people engaged in the purposes of the Bill to overcome the commercial confidentiality blanket used by some.
Kerry McCarthy
Supply chains can be so opaque and so long. I am very much in favour of shorter supply chains so that we know where the produce comes from. Again, as I mentioned in the debate in the Chamber, when the horsemeat scandal broke and we were discussing lasagne that might contain horsemeat, it was astonishing to discover that it had been on an around-Europe trip to at least a dozen different countries—perhaps more—before it ended up as a finished 99p lasagne in the frozen food section of a supermarket. It is amazing how something so cheap can be produced by going on that journey. Some products have dozens and dozens of ingredients, and it becomes almost impossible to trace the origin of those ingredients. I am all in favour of shorter supply chains and less-processed food.
The key point with both amendments, as my hon. Friend the Member for Stroud said, is that it is all well and good for the Government to put transparency provisions in the Bill, but we would like to know a bit more about how they intend to use them to ensure that we root out not only food waste but labour exploitation in supply chains. The information I was given—in a new briefing from the Independent Anti-Slavery Commissioner and the University of Nottingham—is that only 19% of companies in the agriculture sector abide by the terms of the Modern Slavery Act 2016. It is not enough to say that we already have the legislation when fewer than only one in five adheres to it. We need a wider definition of supply chain liabilities, so that participants in that supply chain cannot feign ignorance or rely on real ignorance. The companies are huge, and they need to know what is going on in their supply chain.
I also want to ask the Minister about the EU’s unfair trading practices directive and how we will seek to replicate that in the UK supply chain. We have been told that the UK supports the broad aim of the directive but that we want to do our own thing. I am interested to know how that will relate to the supply chain provisions in the Bill.
Dr Drew
I thank my hon. Friend for this group of amendments, which are important in terms of both food waste and how our food chain operates. This is the Agriculture Bill, rather than a waste Bill, but it is appropriate for us to look to amend and improve it. I strongly concur with what amendment 114 is trying to do. We clearly welcome the reintroduction of an Agricultural Wages Board. We always thought it was a real loss when the coalition Government got rid of it. There are reasons why it is difficult to attract people into the agriculture sector, including the employment limitations caused by that change, so we would always concentrate on reintroducing that body.
George Eustice
We have had an interesting discussion on a range of issues in this collection of amendments. I want to touch on each in turn.
First, I turn to amendment 113 in the name of the hon. Member for Bristol East. The amendment attempts to insert an additional paragraph in clause 14, adding to the list of purposes for which information can be collected, to cover a target for food waste. I think this may be a probing amendment; we had a discussion of a similar nature last week.
Food waste is incredibly important and the Government recognise that, which is why later this year we are going to publish a new waste and resources strategy that will cover the issue. As I explained in a debate on an earlier amendment, WRAP is doing a piece of work at the moment looking at waste in the primary sector. Between 2007 and 2015 we have seen a 19% reduction per capita in the amount of food that is being thrown away that could have been eaten. As the hon. Lady pointed out, the quartal 2025 commitment is a commitment for a further 20% per capita reduction by 2025. There are ambitious targets already set through quartals, and we are working with WRAP, which is a DEFRA-supported agency, to deliver that objective.
In terms of the specific amendment, I draw the hon. Lady’s attention to clause 14(4)(f), which states a purpose as
“minimising waste arising from activities connected with agri-food supply chains.”
My contention would be that we already have a clear purpose stated in the clause, which enables us to collect information. It is about minimising waste arising from activities. I think her amendment is unnecessary because it duplicates what we have already provided for in clause 14(4)(f).
Kerry McCarthy
I have given my notes to Hansard now, but I think I am right in saying that the clause I cited says that it could be used for that purpose. I am trying to make sure that it is used for that purpose.
George Eustice
It is a point that we have often heard here, about the powers or the duties. We have set out our commitments and our targets, such as through the quartal 2025 and our waste and resources strategy, and we have the power here to do what is necessary to collect data, so that we can minimise risk in the supply chain. It is there, listed with all the other purposes, so I believe that the hon. Lady’s amendment is unnecessary. It is an inappropriate place to introduce a target. We can have a debate about targets and whether there should be targets of this nature in a future environment Bill, for example, or whether we should continue to work with the quartal commitments. As I said, they have already made solid progress. This particular clause is about the collection of information and I do not think it is the appropriate place to set a target in the way that the hon. Lady has outlined.
I turn to amendment 114, also in the hon. Lady’s name. Again, it links to an earlier discussion we had about the Agricultural Wages Board, which was removed. Fairness of employment contracts is an important issue, but it is dealt with in other ways. We have the national living wage, introduced by this Government. It is currently £7.83 per hour for over-25s and in April next year it is due to rise to £8.21 per hour. The regulations are already set out and are enforced by Her Majesty’s Revenue and Customs, which enforces all the national minimum wage legislation. In addition, we have the Gangmasters and Labour Abuse Authority, which deals with some of the practices that I know the hon. Lady is concerned about, such as modern slavery and abuse in the labour market. We have the GLAA already, which has powers to tackle and investigate that issue.
Dr Drew
I understand all that. We can have all sorts of regulations quoted back to us. The simple fact is that we are ploughing fruit and vegetables back into the ground again this year, because of the lack of a suitable seasonal agricultural workers scheme. I know this is slightly different from domestic wage rates, but the reality is that we cannot attract people to work on the land because both the wages and the conditions are not seen to be suitable. That is why the Agricultural Wages Board was so crucial. It was not just about wage setting, but setting the environment. Although I accept that the National Farmers Union always campaigned to get rid of it, many farmers welcomed it, because now they have to set those rates and conditions themselves, subject to the national minimum wage and the national living wage, which is always a difficult process. I hope that the Government will, at some future date, think again about this whole area.
George Eustice
The hon. Gentleman has strong views on this. We debated this at an earlier stage of the Committee. Our view is that the Agricultural Wages Board became redundant, first with the introduction of the national minimum wage and then, more importantly, the introduction by this Government of the national living wage, which provides new protections, so the Agricultural Wages Board was no longer required.
Kerry McCarthy
I appreciate that there are problems with enforcement of the living wage, such as people trying to get around it by offering accommodation at extortionate rates. The Gangmasters and Labour Abuse Authority—I have looked at the figures for prosecutions—could do more. I am not so concerned about what is happening in this country as about the supply chain. None of the measures the Minister talks about make any difference to rooting out exploitation and modern slavery in the supply chain. We import millions of pounds’-worth of seafood from the Thai sector, which we know is rife with slavery and exploitation. They come into our supermarkets and are sold on our shelves. The legislation the Minister talks about does not help us deal with that, which is why we need transparency, and to put an obligation on the supermarkets and food processors, to know what is going on and who is doing what. If we have cheap food on our shelves it is cheap for a reason, and I think the Government have an obligation to find out why.
George Eustice
I understand that point, but there is obviously a limit to what we can deliver internationally. We have international forums through which we argue for such issues to be addressed.
Coming back to this particular clause, which links to another point that the hon. Lady raised about unfair trading practices in the EU dossier currently under discussion, the purpose of this part of the Bill around collection and sharing of data, and this requirement in clause 14 for people to provide information, is linked to unfair trading practices. The purpose of subsection (4)(b) is to promote transparency and fairness around the price of goods, and it is about the terms and conditions that individual purchasers or processors might have for farmers. The purpose is to improve fairness for producers, so that they have better transparency and can make more informed choices about who they sell their goods to.
Sandy Martin
Clause 14(3) states:
“Each purpose specified must be in, or covered by, the list of purposes in subsection 4.”
If these amendments are not passed, is there not a danger that various players within the supply chain might wish to use the fact that these were not specified in subsection (4) to say that they would not give information to the Secretary of State in the pursuit of the purposes for which the Bill stands?
George Eustice
In the precise design we have, clauses 12 and 13—particularly clause 12—create quite a big power for the Secretary of State to require people to provide information. Therefore, we need clause 14 to place boundaries and scope on that. We have had criticism from Committees in the House of Lords and from hon. Members on this Committee, saying that there is too much free power for a Secretary of State—it is not defined or constrained enough. In clause 14, we are placing clear parameters on the purposes for which we will require data to be provided. That is right and proper, and what we are trying to achieve with clause 14. We do not want it to be an open-ended power.
Sandy Martin
Surely, you have reinforced what I am trying to say. You are placing parameters.
Sandy Martin
I am sorry. The Minister is placing parameters around what the Secretary of State may do. Those parameters do not include, in terms of employment, pay for persons, welfare for animals or reduction of food waste. There is a real danger that the Secretary of State will not be able to bring in the information he needs to achieve the purposes of the Bill.
George Eustice
Subsection (4)(f) provides for a purpose to collect data on food waste. That purpose is covered, but the other purposes the hon. Gentleman mentions are not covered. I will turn to animal welfare in a moment, but in terms of wages and conditions, as I pointed out, that is rightly picked up by regulations in other parts of our legislation, already enforced by the GLAA and HMRC to ensure that we adhere to those. On matters such as terms and conditions and pay, the object is to have the right regulation, which applies equally to everyone. It is not necessarily about just requiring people to publish the regulation and leaving them to their own devices. As I said, the purpose of subsection (4)(b) is to promote transparency in the supply chain.
I turn now to amendment 116 relating to animal welfare. I completely agree with the hon. Member for Stroud about the importance of animal welfare. I was very clear that it should be listed in clause 1 as a purpose for financial assistance. He says it should be recognised as a public good; it is. It is declared as a public good in the very first clause of the Bill. It is not appropriate, however, to have it in this particular clause for reasons that I will explain. If we want to deliver animal welfare outcomes, we can use a number of tools to approach that. We can raise the baseline of regulation and if we do so, we would do so using provisions such as those under the Animal Welfare Act 2006, as we did with CCTV in slaughterhouses. That should be legislation that applies equally to everyone.
The second approach that we can take is to introduce financial incentives to support farmers for adopting an approach to livestock husbandry that is better for the welfare of the animal. We make explicit provision for that in clause 1. It gives us the power to give grants to farmers to invest in new livestock housing that enables more enrichment of the sort the hon. Gentleman describes. It gives us the power to award financial incentives to farmers who sign up to holistic animal welfare accreditation schemes, such as RSPCA Assured or others. It also gives us other powers to help support objectives around animal health and welfare.
The third option is to improve labelling, which I know a number of hon. Members have raised in the past. Things such as method of production labelling or method of slaughter labelling can be introduced, and there are often debates on these issues. Those are the three key areas. They are not necessary in this particular part of the Bill. We can—and do—deliver our animal welfare objectives in many other parts of the Bill. We do not need a requirement here for information on animal welfare to be disclosed, because it should be either a regulation that is enforced uniformly or an incentive scheme. I draw the hon. Gentleman’s attention to clause 3, which links to any payments made to incentivise high animal welfare. Clause 3(2)(e) gives us the power to require people to keep records and subsection (2)(a) has the power to make provisions around information. In the context of the financial incentives that we intend to offer, we can already require the disclosure of information to support the enforcement of those schemes.
Martin Whitfield
On that point, does the Minister envisage that the regulation will facilitate the Secretary of State’s collecting the information, or is he hoping it will just be volunteered, because it is being retained by the farmer?
George Eustice
In the context of any financial grant or incentive awarded to a farmer under the powers in clause 1, the regulations provided for in clause 3 could stipulate a legal requirement to provide certain information. If farmers enter such incentive schemes, there are already powers in clause 3 to require that information. As for animal welfare in the wider context, that is a regulatory issue that should apply equally to all.
I hope I have been able to reassure the hon. Member for Stroud about the importance I place on animal welfare, but we pick up those policy objectives elsewhere.
Dr Drew
I hear exactly what the Minister says, but in a sense he is arguing against himself. Why are we restating health and traceability in the clause? All I am saying is that it would be very neat to put, “health, traceability and welfare of creatures”. Animal welfare is important to both health and traceability; it is the third leg of the stool. I do not understand why that cannot happen.
Welfare may be mentioned elsewhere, but so is animal health. This would reinforce in the legislation that this is a key element within the data collection process, which is what this bit of the Bill is about. More particularly, it is about the way we intend the new farming regime to make animal welfare an important part of how farmers should operate, in terms of animal health and traceability.
George Eustice
I can clarify precisely why there is a difference. It comes back to the purposes we envisage with these data transparency clauses. We are trying to tackle two issues. The first is fairness in the supply chain, with transparency of market data and terms and conditions. Secondly, we seek to support the roll-out of a new, much more innovative approach to livestock identification and traceability in the food chain.
The joint livestock information programme involves the farming industry, meat processors and DEFRA, to bring together what we currently have, which is a hotch-potch of different ID schemes for different species, coming from EU laws, and put that into a new single traceability database for animal welfare. That would give us the power to support that particular objective. Animal health and traceability are explicitly provided for because they support that.
Dr Drew
As my hon. Friend the Member for Bristol East said, animal welfare is a vital element in the reason why consumers should be made aware of lower standards when they buy foreign products. If we do not put that in legislation, we are effectively saying that we worry about health and traceability but the welfare of the individual animal is less important. So, we will continue to import animals that have been raised in the most inhumane ways.
Because this is a matter of data and information sharing, surely we should share that information with the consumer. I would like to ban such products outright, but that may be difficult with free trade agreements. At the very least, that information should be shared with consumers and I do not understand why the Minister is so reluctant.
George Eustice
It is because we have taken quite a large power to require the disclosure of information and we think it is important that we give people clarity and certainty about the purposes for which that will be used. Animal welfare is an incredibly important issue, which is why it is addressed in many other parts of the Bill—not least in clause 1, where it belongs.
To come to the hon. Gentleman’s point, if we were to have, for instance, a scheme requiring labelling on method of production, that could be done under other legislation. We already have the Food Safety Act 1990, for instance, which provides powers regarding labelling of food. There are other powers in other pieces of legislation that would enable labelling to be addressed. We do not believe that it is required in this clause of the Bill.
We have a joint passion about the importance of animal welfare, so I hope I have been able to reassure the hon. Gentleman that it is addressed elsewhere in the Bill, and that it would not be appropriate to include it in this clause, for the reasons I have explained. I hope that, on that basis, he and the hon. Member for Bristol East will withdraw the amendment.
Kerry McCarthy
My amendment was a probing one, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 ordered to stand part of the Bill.
Clauses 15 and 16 ordered to stand part of the Bill.
Clause 17
Declaration relating to exceptional market conditions
Dr Drew
I beg to move amendment 46, in clause 17, page 12, line 35, leave out “may” and insert “must”.
This amendment would require the Secretary of State to make and publish a declaration if the Secretary of State considers that there are exceptional market conditions in accordance with Clause 17.
The Chair
With this it will be convenient to discuss the following:
Amendment 97, in clause 17, page 12, leave out lines 39 to 44 and insert—
‘(2) In this Part “exceptional market conditions” exist—
(a) where—
(i) there is a severe disturbance in agricultural markets or a serious threat of a severe disturbance in agricultural markets, and
(ii) the disturbance or threatened disturbance has, or is likely to have, a significant adverse effect on agricultural producers in England in terms of the prices achievable for one or more agricultural products, or
(b) if, on the day after exit day, the United Kingdom has not entered, or secured an agreement to enter, into a customs union with the EU.’
Amendment 117, in clause 17, page 12, line 40, leave out paragraph (a) and insert—
“(a) there is or has been a significant disturbance in agricultural markets or a serious threat of a significant disturbance in agricultural markets, or”.
This amendment and Amendments 122 and 123 would allow a declaration of exceptional market conditions where there is, or there is a serious threat of, a significant disturbance in agricultural markets; and would allow a declaration to be made in respect of events in the past.
Amendment 122, in clause 17, page 12, line 44, after “achievable for” insert
“or costs incurred in the production of”.
See explanatory statement for Amendment 117.
Amendment 123, in clause 17, page 13, line 2, after “are” insert “or have been”.
See explanatory statement for Amendment 117.
Government amendment 6.
Dr Drew
I shall be quick, because although I am moving the amendment, I think it is more important that I ask my hon. Friend the Member for Darlington to spend some time on it. It is important in relation to the ways in which the Bill could be improved. I ask the Minister to consider amendment 46, and then I am sure that my hon. Friend will have some other things to say.
The issue I am concerned about is the usual one about powers and duties. I make no apology for asking the Government once again to look at where they would consider toughening up the legislation. Unless we have some certainty about what the Minister must do, the Bill will just be a recipe for any subsequent Government—it will not be the Minister; it will be, understandably, his successor—to choose to cherry-pick what to do. We are again considering what duties the Government are prepared to put in place.
It is essential to define exceptional market conditions—that is what the clause is about. I am not sure that the Bill does so, and perhaps the Minister could enlighten me on that point. More specifically, it is a question of an obligation on a Minister to take action at the relevant time. We have already discussed this year’s unusual climate change. My hon. Friend the Member for Bristol North West (Darren Jones) has obtained a debate on the impact of exceptional weather conditions this morning, and we should all be attending it, if we were not here enjoying ourselves on the Bill Committee. The Government must do a bit more joined-up thinking about it, and consider whether they are serious about it.
We can see the impact of climate change, and the Government have carefully inserted a clause in the Bill about a declaration relating to exceptional market conditions. However, everyone wants to know when they would intervene to take those exceptional market conditions seriously. There is a power for them to do that, but it is a power that means the Government would sit back, rather as President Trump did until he got the message that things in California are rather more serious than he originally thought. He sits back and says, “Well, it’s nothing to do with me; it is up to the state to sort it out.” Now, of course, he is looking for emergency powers.
That is usually the way things happen. The pressure of the public and sometimes politicians means that Governments have to intervene and do what people want them to do. However, it should be a duty, not a power. Can the Minister give me some assurances on exactly when the Government understand they would have to intervene, when market conditions are severely or significantly disruptive? It would be helpful if he could do that.
This is our food industry. If people do not eat because of exceptional market conditions, they do not tend to see that as being acceptable. We must identify what the Government must do—not “may” do, but “must” do—in relation to these conditions. That is why we make no apologies for pushing this, and it is important that we see it at this stage. I hope that the Government will put at least one duty into the Bill, and there is no more important duty than to feed the population of this country. That should have the word “must” rather than “may”.
Jenny Chapman
I shall speak principally to amendment 97 and what it seeks to do. To an extent it is probing, but we are incredibly concerned about this. As my hon. Friend the Member for Stroud just pointed out, clause 17 talks about “exceptional market conditions”. We are trying to understand more precisely what the Government want us to understand by that. As paragraph (b) of amendment 97 states—this may be imminent—we would consider it an exceptional market condition
“if, on the day after exit day, the United Kingdom has not entered, or secured an agreement to enter, into a customs union with the EU.”
We are concerned about that. Exit day is at the end of March next year, about 150 days from now. That would be a significant threat to the livelihoods of farmers and others in the food and drink industry up and down the country.
We want to understand whether the Government agree that that is a significant threat and what, if anything, they intend to do to support producers through it, should it come about. The Minister may be able to say, “Actually the circumstances that would emerge in that case are covered by elements of the clause in the Bill,” but it would be good to hear him say that, so that we can at least be assured to that extent as we continue to follow the Government’s progress through these negotiations—I hesitate to use the word “progress”.
I am particularly concerned, when we are talking about a customs union, that we have no Members from Northern Ireland on this Committee, so that voice is missing. I understand that the Assembly is suspended at the moment, and I wish the Secretary of State for Northern Ireland well in her endeavours to re-establish the Assembly. It is a great pity that there is currently no access to the Assembly, particularly for the citizens of Northern Ireland, and the voices of that part of our country are limited as a consequence. That is a real problem, particularly when we consider farmers in Ulster. There are farmers along the border whose farms cross the border. It is a border of 300-odd miles, intersected by far too many roads to be able to have any meaningful customs checks.
We have all heard many times in the Brexit debates the concerns about border infrastructure and what it would mean for security and identity in Northern Ireland. That insecurity and concern is felt particularly by strong Unionist farmers I have met in Northern Ireland who tell me very clearly—as I am sure that they will have told the Minister, if he has been there, which I expect he has—that they want to be in a customs union. They have a very plain way of telling you this. I was shocked to hear how one Ulster farmer, a strong Unionist all his life, talked about it. He said that he would rather have a united Ireland than a border on the island of Ireland. That stuck with me, and we all need to keep it in mind, because it shows the strength of feeling in Northern Ireland.
I regret that we have no member of the Committee who can speak with first-hand knowledge of Northern Ireland, and that we have to rely on people like me. Although I have visited many times in recent years to talk about Brexit and its implications, it is a real missed opportunity that we do not have someone on the Committee. I am sure that the opportunity will be taken to hear those voices in later stages of the Bill.
There is growing concern that the Government’s understanding of the way that food gets in and out of our country is lacking. The Secretary of State for Exiting the European Union recently remarked that he did not realise how dependent we were on the Dover-Calais crossing, which was shocking to many people, including me. It was extraordinary to hear that at this late stage in the negotiations. If that lack of appreciation finds its way into the agreement, it could have catastrophic consequences for food producers in this country.
Mr Goodwill
The hon. Lady is absolutely right to identify some of the concerns, but is that not why, when we get a deal, which I am confident we will, we should all vote for it, rather than have more uncertainty?
Jenny Chapman
Nice try, but whatever the deal is, let us see it and judge it according to its merits. One of the tests that we will apply is the effect that it will have on manufacturers, food producers, communities and the devolved Administrations, and whether it respects the nations of our country and keeps our Union together. Those are the things that we will be thinking about, and we think that having a customs union is essential. We could have referred to a single market deal or any number of things, but we have chosen to be specific in the amendment. We want to understand what the Government expect to happen should we leave without a deal and without being part of a customs union with our nearest neighbours at the end of March next year. We are deeply worried about that.
Martin Whitfield
Is it not the case that, because of the circumstances surrounding the Bill on the question of no deal or deal, and because the Bill represents scaffolding, a lot of people are seeing what they want to see in it, when there is actually very little to see? The sort of certainty that is proposed in these amendments would go a long way towards giving our farmers and rural communities confidence about what is expected and intended.
Jenny Chapman
That is a really important point. If I was a farmer, I would be incredibly worried by the Bill in general, but my anxiety would be heightened by this clause and by what I might anticipate happening, given the reports we are reading in the press. I do not think that any hon. Members present have any certainty about whether a deal will be reached, what a deal will look like if it is reached, whether it will be approved by Parliament, or whether it will be approved by the Cabinet, so to blithely assert that there will be a deal and that everything will be fine is not good enough.
We have one opportunity to get the Bill right. This clause could be the lifeboat for many people in the industry. It is important that we understand what the Government intend and what they would do, under the powers given to them through the clause, should we leave without a deal and without being in a customs union.
The National Audit Office report states that the Government are generally underprepared for a no-deal outcome. To be fair, DEFRA has done more than many Departments, but that is because it has had to, because so much of its activity is affected by Brexit. Because the Government are underprepared, there is now panic. A year ago, we anticipated having a deal in October, then it was last week, this week and probably next week. Where is the deal? The anxiety in Parliament is palpable, and it is starting to be felt in the country too. There is an emerging sense of panic, whether about transferring staff from valuable wildlife protection work in Natural England or about the need to stockpile food. We know that the industry has already rented out virtually all the available food storage in the country, and people are incredibly worried about that. Given the lack of clarity and information, their concern is understandable and valid.
The Government have a duty to ensure that there will be food in the shops in April. I know I will be accused of “Project Fear” mark II, mark III or whatever—I understand that, and I am being careful not to enter into that kind of thing—but we must be honest. I do not know whether hon. Members had a chance to read the Government’s technical notices, which were published this summer, but they make pretty grim reading. The Government now acknowledge and anticipate many of the concerns that were deemed to be part of “Project Fear”.
Sandy Martin
Does my hon. Friend agree that one of the points made in amendment 122 is that Brexit is likely to have a serious impact on the cost of production? It is not just about markets for produce; it is also about the cost of production. We already see some of those costs changing as a result of the decision to leave the European Union.
Jenny Chapman
My hon. Friend is right to highlight that this is about not just trade but many other things, including access to labour, certification, standards and future trade deals. People in this industry are worried about many unknowns. It would go some way to reassure them to know that the Government were mindful of these risks and have used the Bill to make some commitments about the measures they would put in place should those exceptional market conditions come about.
The Opposition have what we think is a helpful answer: to remain in a customs union with the European Union. I do not intend to enter into a long debate about that today—we could spend the rest of the day discussing the benefits or otherwise of a customs union, and I am sure we will do so in the Chamber when we talk about the legal advice later this afternoon. The Opposition have been incredibly clear about wanting to be in a customs union for many reasons. It would deal with many of the risks surrounding trade certification, access to markets and our ability to export as we do now—“friction-free” has become the standard phrase to describe it. That really matters to this sector. It would be good to hear the Minister acknowledge that, because many voices in the sector have been increasingly clear about that as understanding has grown and the debate has progressed. I anticipate that, as we approach exit day without clarity or anything concrete from the Government, the calls for remaining in a customs union will be amplified. The sector needs certainty. It needs to know what it is doing.
The NFU reported that its modelling shows that the removal of the beef tariff and the opening of the UK beef market to imports from around the world would result in a 45% fall in farmgate prices and a 30% fall in the price of sheep. That obviously has a huge impact on producers. Would it qualify as one of the exceptional market conditions in the Bill? What if there is some kind of barrier to trade with the EU of animals and animal products, if we fall out without a deal at the end of March?
Westminster Hall
(6 years, 1 month ago)
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Climate Change: Extreme Weather Events
(6 years, 1 month ago)
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Darren Jones (Bristol North West) (Lab)
I beg to move,
That this House has considered extreme weather events related to climate change.
It is a pleasure to serve under your chairpersonship, Ms Dorries. Several hon. Members send their apologies, because of a clash with an Environmental Audit Committee visit about sustainable fashion. Many of the normal suspects were sad not to be present. I thank the Backbench Business Committee for granting this important debate. It is a particular treat to be given the opportunity to lead it, not least because it is my birthday.
When the Intergovernmental Panel on Climate Change released its recent report on 6 October, I assumed that we would have time to debate it on the Floor of the House. Any IPCC report should warrant that level of political attention, but that special report tells us that all the warning lights are on red and that we have 12 years to limit global temperature growth to 1.5 °C above pre-industrial levels or face extreme changes to the way we live our lives.
I welcome the Government’s clean growth strategy and the passing remarks of the Minister for Energy and Clean Growth about the IPCC report in her statement on Green GB Week, but, with respect, heralding a letter from the Government to the Committee on Climate Change asking for advice on what to do next is not good enough. The House of Commons is supposed to be at the heart of the national and international debate. What we do here adds volume to the news that people across the UK see and hear. Shamefully, the IPCC report was covered prominently in the newspapers, on the radio and on the TV, but not in the House of Commons.
The Government’s response to that significant report was not proportionate to the report’s conclusion, which was that limiting global warming to 1.5 °C above pre-industrial levels
“would require rapid, far-reaching and unprecedented changes in all aspects of society”
through
“transitions in land, energy, industry, buildings, transport, and cities.”
Global net human-caused emissions of carbon dioxide need to fall by 45% from 2010 levels by 2030 and reach net zero around 2050.
That was a lot of information, but the degree and scope of change required to limit and stop temperature growth is enormous. I fail to understand why this debate was not led prominently on the Floor of the House of Commons by the Prime Minister, rather than in Westminster Hall for 90 minutes at the third attempt by an Opposition Back Bencher to force the Government to the table. The report is not just a warning about the future or an academic hypothesis; it is about what is happening around the world today. The co-chair of the IPCC working group said:
“One of the key messages that comes out very strongly from this report is that we are already seeing the consequences of 1 °C of global warming through more extreme weather, rising sea levels and diminishing Arctic sea ice, among other changes.”
I will read through some of the headline extreme weather events of this year. In January, a mud slide following rainstorms in California resulted in 18 deaths. Since March, floods in east Africa have accounted for almost 500 deaths. In May, a dust storm caused by high temperatures in India killed 127 people. In June, a monsoon followed by a landslide in Bangladesh caused 12 deaths. A summer of heatwaves across the northern hemisphere, experienced in Britain too, resulted in 65 deaths in Pakistan, 80 deaths in Japan, more than 90 deaths in Canada, 42 deaths in South Korea and 20 deaths in Greece, and, on the best available data, up to 259 deaths were attributed to high temperatures in the UK.
In June and July, floods in Japan led to 225 more deaths, and more than 8 million people were advised to evacuate. In July, wildfires in Greece resulted in 99 deaths. Throughout August, we saw the news of floods in Kerala in India, which caused 483 deaths as of 30 August and forced more than 1 million people into relief camps. Throughout the summer, wildfires in California, which are being dealt with again as we speak, resulted in tens of thousands of evacuations. In September, a typhoon in Japan caused 1.19 million evacuations and seven deaths. A typhoon in the Philippines, China and Taiwan led to nearly 2.7 million evacuations and 134 deaths.
A hurricane in the USA led to up to 1.7 million evacuations and 51 deaths. In October, in another hurricane in the USA, half a million people were ordered to evacuate and there were 45 deaths. In October, flooding in the south of France left 13 dead. Towards the end of August, another typhoon in the South China sea left 15 dead. Those are only some of the extreme weather events in 2018 alone.
My hon. Friend the Member for Southampton, Test (Dr Whitehead) tabled urgent questions on our return from the summer recess to try to debate the issue, but he was unsuccessful. When Parliament is not sitting in the summer, we cannot debate. It is vital that we understand the consequences today of world climate change.
To put that list into an historical frame, the World Meteorological Organisation claims that there was a 20% increase in extreme weather-related deaths between 2001 and 2010, which means that at least 370,000 people have died as a consequence of extreme weather around the world—an increase in the number of heatwave-related deaths from 6,000 to 136,000. Extreme heat in the Arctic, coral bleaching in the Great Barrier reef, increased wildfires in the western United States, extreme rainfall in China and drought conditions across South Africa are not just bad weather; they are costing lives, and an estimated $660 billion in economic loss, which is a 54% increase in the costs associated with extreme weather since 2001.
The issue does not just affect other countries; it is about Britain too. We have already heard about the increased number of deaths as a consequence of heat in Britain. The Met Office helpfully published a report in November that concluded that the extreme weather we are facing today in the UK is due to climate change. The report shows that it is hotter for longer in the summer and wetter for longer in the winter, with more rainfall from extreme weather events than ever before.
That is why we are building flood sea defences in Avonmouth in my constituency to prevent my constituents from being flooded by sea level rises due to climate change. It is also why I and so many of my constituents are trying to build renewable energy solutions, albeit without much luck to date on tidal energy, given the Government’s decision to pull funding for the Swansea bay tidal lagoon. My constituency has two islands in the Severn estuary—Steep Holm and Flat Holm—which means my boundaries include a big chunk of the second-largest source of tidal power in the world, but nothing is there to harbour its energy. The Government need to move much more quickly.
The National Farmers Union has made a clear case about the impact of extreme weather on British agriculture. Flooding on farms causes damage to critical infrastructure and property, loss of power, impassable roads and bridges, damage to farmable land and a cost of at least £70 million in direct losses to businesses, before the indirect costs of damage to infrastructure and regional economies are even considered.
In other parts of the world, people are having to live in the most unsatisfactory of conditions. Otto Simpson, a doctoral student from Oxford University, recently emailed me. He had partnered with a Swedish filmmaker to produce a documentary in Bangladesh that shows how women and girls are being disproportionately affected by climate-related displacement. It tells the story of an unnamed women, now 18, whose family home in Bangladesh was washed away by floods. She and her family moved to Dhaka to look for work but arrived in an overcrowded city already struggling to meet the needs of climate migrants, with no jobs to hand and a shortage of food for those looking for it. Today, forced into being a sex worker, she is the main provider for her family and brings home between $120 and $180 per month, which is merely enough to pay the rent for one room for her, her parents and her younger siblings. That is a direct consequence of the extreme weather—the flooding—in Bangladesh.
The Internal Displacement Monitoring Centre in Geneva estimates that more than 20 million people around the world have been forced to leave their homes temporarily or permanently due to ever more extreme weather. We have seen the official statistics today about the millions of people being advised to evacuate their homes. That may seem unusual for us in Britain, but we should pause and think about what that means. Imagine if the whole of Bristol or London were asked to evacuate. What would that mean for people’s lives? What would be the consequences for the way we manage cities and the country? Imagine if homes were flooded and we had climate migration in our country. The Government’s response would be significant and robust. That is happening around the world today, and as a global partner we have an obligation to ensure that this issue remains high on the agenda. We must not lose focus on the size of the challenge, the speed at which the change is coming and the impact on us and other humans across the globe.
The immediate challenge is to limit temperature growth to 1.5 °C. The Paris accord said that we must limit it to 2 °C or less, but the IPPC said we must meet 1.5 °C within the next 12 years. If we fail to stop global temperature growth, the world will radically change. Models published in the New Scientist suggest that a world that is 4 °C warmer than pre-industrial levels would result in the United States, South America, central and southern Europe, Africa, the middle east, India, China, Japan and most of Australia being uninhabitable—gone. A 4 °C rise means a world without the United States, China and India—that could happen within my daughter’s lifetime. We would be left with a world dominated by Canada, the United Kingdom and Ireland, northern Europe and the Nordics, Russia and whoever ends up owning western Antarctica, which would have thawed in the 4 °C model, and might be somewhere that people need to live.
Our ability to grow and ship food around the world would change fundamentally. The way in which we build our cities and live would change. The way we generate and distribute energy would radically change. If we think we have a problem with countries relying on gas from Russia today, imagine a world in which Russia is the main place to live and the main source of our food. The geopolitics would be very different. Climate migration would dwarf the demands of today’s immigration flows, which are caused by war or economic migration. If we think the immigration that Europe faces is a problem, imagine dealing with a world in which many countries are no longer places that humans can live.
We must do everything we can to ensure that that is not the legacy we leave to our grandchildren. This is not just about where we live, what we eat and our energy; it is about national security, defence and geopolitics. If Russia is connected to the United States because the ice in the northern hemisphere has thawed, the way in which defence is resourced in the world will change fundamentally.
The UK has a proud record on tackling climate change, but we must do more at home and, fundamentally, more abroad. What role is the Foreign and Commonwealth Office playing in ensuring that every country in the world signs up to the Paris accord? We are missing Russia, which accounts for 5% of global emissions. We are missing Turkey and Iran, whose oil and natural gas exports account for 77% of its carbon emissions—again, that is an example of why we need to move at speed to a world in which we are not reliant on oil. We are missing Colombia, which has 10% of the Amazon rainforest within its borders. Illegal tree logging accounts for more carbon emissions than transportation. We are also missing a handful of others.
This is not just about the countries that did not sign up to the Paris accord in the first place. The President of the United States has signalled his intention to withdraw the country’s support, and the new President of Brazil has threatened to do the same. Brazil, of course, accounts for 4.1 gigatonnes of carbon emissions due to deforestation.
I find this amazing. I am disappointed that this debate is not receiving the highest levels of attention and that the UK is not forcing this issue up the national and international agenda. I applaud the efforts we are taking with the clean growth strategy and investment under the industrial strategy and on our own carbon emissions. The previous Labour Government had a proud record: they instigated the Climate Change Act 2008, and the Energy and Climate Change Committee is very good, but the speed and breadth are not good enough. Of course, we can be as good as we wish in the United Kingdom, but if the rest of the world does not follow, we all suffer.
I hope the Minister will take the opportunity to help raise the volume, and I hope she agrees that we should have a proper debate on IPPC reports on the Floor of the House of Commons annually. Perhaps the first should be after the Energy and Climate Change Committee’s advice is received next spring. I hope she will set out the work being done across Government to ensure not only that this is a strategy in the energy team at the Business, Energy and Industrial Strategy—as important as that is—but that it affects every Department. What requirements have been placed on the Department for International Trade to drive this agenda as it secures new trade deals around the world?
I also hope the Minister will set out how the Government will build on their current plans to significantly increase the speed and breadth of their clean growth strategy. I again remind her of the IPPC report’s words: it said that we need “unprecedented changes” in all areas of our lives. I hope she will confirm that the Foreign and Commonwealth Office, with all its diplomatic might and soft power around the world, is keeping this issue high on the agenda so that we bring every country with us on this historic and vital journey to a sustainable planet.
Ms Nadine Dorries (in the Chair)
Order. May I just say that it is usual for MPs to discuss terms of address with the Chair before the debate begins? I prefer “Ms Dorries”, “Chairwoman”—“woman” being the noun for an adult human female—or simply “Chair”, but not “Chairperson”.
Zac Goldsmith (Richmond Park) (Con)
It is a pleasure to serve under your chairmanship, Ms Dorries.
I thank the hon. Member for Bristol North West (Darren Jones) on initiating this hugely important debate. I share his disappointment that it has not attracted a slightly larger audience, although my colleagues on the Environmental Audit Committee have a legitimate excuse: they are at the Victoria and Albert Museum as part of a session looking at sustainable fashion.
It is always tempting to point to individual weather extremes and ascribe them to climate change. This year, we had heavy snowfall in March and the joint hottest summer on record. This is not about taking individual weather events and attributing them directly to climate change. That would be bad science, and would be easy to debunk and discredit. It is about looking at the overall trends, both here and globally, which do show a significant increase in extreme weather. The hon. Gentleman has given lots of examples, and I will briefly look at some additional ones.
The most recent Met Office report, of 2 November, which has already been cited, makes really depressing reading. It compares UK weather data from 1961 to 1990—30 years—with the 10 years between 2008 and 2017. It is pretty clear that the UK is experiencing an increase in weather extremes. The hottest days have become hotter, the number of warm spells has increased and the coldest days are not as cold. On average, the hottest day in each year over the past 10 years is 0.8° C hotter than it was in previous decades. The coldest days are also warmer: temperatures were an average of 1.7° C warmer in the past decade. So-called tropical nights, on which temperatures remain over 20° C, have also increased. In the 30 years between 1961 and 1990, there were eight such tropical nights. In the 10 years between 2008 and 2017, there were four, and we had two more this year.
The Met Office’s conclusion is that those extremes are consistent with overall man-made warming of the UK climate over the past 50 years, and the global trends are showing the same pattern. Globally, the five warmest years in recorded history have taken place since 2010, and 2014 was the hottest year ever recorded until 2015 and 2016. The warmest year on record was 2016, and eight months in that year were the warmest individual month recorded.
If the science is right and the trends continue, we will see appalling consequences: increasing food shortages, lands becoming uninhabitable, and refugees on a scale that we as a species have never had to deal with before. The United Nations High Commissioner for Refugees tells us that already, on average, 21.5 million people are displaced each year because of weather-related, sudden-onset hazards. It describes climate change as a “threat multiplier” for people in conflict zones—and it goes without saying that it is bad news for the balance of nature as well.
The difficulty with climate systems is that they are so complex that no computer model on earth can fully capture and take on board the full range of feedback, positive and negative. That means that those who seek to pour doubt on the overwhelming scientific consensus on the subject will always be able to do so, if that is what they want to do. The same goes for the consequences of climate change.
However, there is a fairly basic calculation to make. On the one hand, what would be the effect of listening to the sceptics, ignoring the overwhelming body of scientific evidence pointing to man-made climate change, and then being wrong? The turbulence and change would likely bring about an end to civilisation as we know it. The impacts on the natural world would be incalculable. It is not inconceivable that this fragile, precious planet that we live on would be altered to such an extent that it would no longer be able to sustain us as a species. That is the downside.
On the other hand, what would be the effect of listening to the scientific consensus, taking the necessary action and then being proven wrong? Accidentally, we would end up with a cleaner and eventually much cheaper energy system, protecting more of the world’s forests and ecosystems, and with an economic system that is more circular and less wasteful. It has always amazed me, in fact, that there is anyone who would look at that basic calculation and conclude that we are better off doing nothing. That just makes no sense. Indeed, almost everything that we need to do to tackle climate change is something that we would want to do irrespective of climate change.
What is interesting or, rather, infuriating is that over the years that I have been engaged on this issue—20 years ago, I used to edit The Ecologist magazine—the debate has consistently and conveniently shifted. At the beginning, we were told for years that climate change simply was not happening. Then we heard from the same people, “Well, it is happening, but it is nothing to do with our species.” A few years later, we would hear from the same people, “Well, it is happening and we are probably contributing to it, but the cost of tackling it is just too great—it’s punitive—and, by the way, it’s great because we might get a bit of wine in the UK”—that is, better wine; we already get some wine here.
I do not doubt that the challenge that we face is colossal, but action is well within our reach, and we now more or less know exactly what we need to do. The IPCC report, which has already been mentioned, lays it out pretty starkly. Almost the most alarming part of that report is the difference, according to the world’s leading climate scientists, between the effects of keeping the rise in warming to a maximum of 1.5° C, and keeping it to 2° C. They tell us that that half-degree would massively worsen the risks of floods, drought, extreme heat and, as a consequence, poverty for hundreds of millions of people. That half-degree is the difference between losing all the world’s corals, and managing to hold on to 10% of them. The number of people exposed to water stress would be 50% lower if we kept to a rise of 1.5° C instead of 2° C. That half-degree would mean hundreds of millions fewer people, particularly in the world’s poorest countries, being at risk of climate-related destitution. A half-degree of extra warming would lead to a forecasted 10 cm of additional pressure on coastlines.
Currently, we are not heading for that apocalyptic 2° C rise; more likely, we are heading towards a 3° C rise. We will have to change profoundly so much of what we do: not only how we generate electricity, but how we use it; how we manage land; and transport, food and industry. That will require profound change, and investment on the part of Governments, individuals and businesses.
We can be proud that the UK helped to make the Paris agreement more ambitious, and of the cross-party Climate Change Act 2008, which set the target of an 80% cut in carbon emissions from 1990 levels by 2050. I am delighted that the Minister for Energy and Clean Growth, my right hon. Friend the Member for Devizes (Claire Perry), who has responsibility for climate change, is looking at how we can go further and make net zero emissions a reality. Renewable electricity capacity in the UK has quadrupled since 2010, and we are world leaders in offshore wind.
However, given the scale of the challenge, as outlined in detail in that IPCC report, clearly we have a very, very long way to go; at the current rate of progress, we will not meet our fourth and fifth carbon budgets. Domestically, that means doing absolutely everything we can now to encourage a transition to electric vehicles, and not waiting until 2040. It means saying no to infrastructure projects such as the third runway at Heathrow, which will increase carbon emissions; rejecting the Government’s proposal to allow fracking without proper local consent; and creating the friendliest possible environment for the accelerated development and roll-out of new, clean technologies.
There is a lot more that we can do globally as well. We need to build on the success of the international climate fund by using much a greater proportion of our overseas aid budget to protect nature. The IPCC maps out four pathways to capping the rise at 1.5° C, and reforestation is critical to all four of them. Apart from transport emissions, deforestation is the single largest source of carbon dioxide emissions; deforestation alone accounts for up to a fifth of all carbon emissions. Forests are, I think, one of the world’s largest carbon sinks; they absorb around 2.5 billion tonnes of carbon every year and they store billions more. However, we are losing 18.7 million acres of forest every year—the equivalent of 27 football pitches every single minute. That is lunacy; it is madness. Protecting forests means helping to protect the world and insulate it against climate change.
However, protecting forests is so much more important even than that. Around 1.6 billion people, which is about a quarter of the world’s population, rely directly on forests for their livelihoods, and many of them are the world’s poorest people. I do not like the crudeness of the calculations that we sometimes hear, but I will cite one all the same: we are told that forests provide around $100 billion a year in goods and services, such as clean water, healthy soils and the like. They are home to 80% of the world’s terrestrial biodiversity.
Although the UK can be proud to be the only nation in the G7, or indeed the G20, to hit the UN’s target on overseas aid last year, and proud of being the third largest donor in the world after the US and Germany, a minimal fraction of that overseas development money—possibly as little as 0.4%—goes to nature. That is such a wasted opportunity. The aim of the Department for International Development is to tackle poverty; how on earth can we expect to do that if the very world on which we all depend is annihilated? Of course, the world’s poorest people depend much more directly on nature than richer people for the free services that it provides. If we destroy nature, we will plunge whole communities into desperate poverty. We have learned again this month of the sheer extent to which our species is denuding the natural world. Since 1972, which is more or less the year in which I was born, we have lost around 60% of the world’s animals.
I do not believe there is any real argument around the science of climate change, and I do not think that there is any argument at all around the annihilation of the planet that is happening right now, on our watch. Logically, this has to be the defining issue of our age. Very simply, if the scale of our response as a Government does not match the scale of the problem, we are failing. My plea to this Government, via the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), who speaks today for the Minister with responsibility for climate change, is: let us be world leaders, as we can be, in restoring ecosystems on a scale that matches the problem.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate and also a pleasure to follow the hon. Member for Richmond Park (Zac Goldsmith), who has a deep knowledge of this matter. He is someone we all listen to every time he speaks, because he speaks with authority and knowledge, and I thank him for that.
I am pleased that the hon. Member for Bristol North West (Darren Jones) has brought this issue to the House. Last night, during a different debate, I said that the probable reason we are here in Parliament is that we might have different opinions—perhaps on farming, for example—but on this issue we are all in the same boat, if I can use that terminology, and, as always, we look forward to hearing what the Minister has to say and, in particular, to her response to our questions today.
In the last few years, we have experienced a great deal of adverse winter weather, often resulting in schools having to close their doors. In fact, there is concern in some schools about the number of days that children have to take off because of adverse weather. We can all think back to our parents telling us how they walked 5 miles to school, come hail, rain or shine, but it only takes seeing a sliding school bus once to realise suddenly that there is a safety issue and that safety must come first. I know also of churches that get funding to run programmes having to continue those programmes into the summer months to meet their allocation a certain number of weeks.
The weather is certainly affecting us. In Northern Ireland—and probably here on the mainland—the first thing someone says to a person they meet in the street is, “It’s a cold one today”, or “It’s very warm.” In any conversation, that seems to be the natural introduction before we get down to the nitty-gritty of what we are really talking about. The weather is a topic of conversation every day, and it has been more so in the last year because of the clear changes we have seen. We have to look at how best to create a better environment.
I will speak on a number of issues not raised by the previous speakers. The diesel scrappage scheme, which encouraged people to get rid of gas guzzlers, was a tremendous way of lowering carbon emissions. It was greatly encouraged by my council, Ards and North Down Borough Council. We are pleased that the Government supported and encouraged the initiative. Looking at some of my council’s initiatives, its new recycling and food waste disposal endeavours have taken the equivalent of 10,000 cars off the road. Councils have led the way.
When, wearing a previous hat, I was on the council—the Ards council as it was then; it is now a joint one—the recycling initiative came in. We were perhaps not all that sure of what it was, but we knew we had to do something. We set targets, because setting targets means that everyone tries to achieve them. The councils have achieved those targets, with the co-operation of local people. Something that came up in the Westminster Hall debate yesterday on the e-petition about plastics was the education of children at a very early stage—in primary and secondary schools—to get into their minds the importance of recycling, and that is one way in which the councils have achieved the targets. Very often, it is young children who come home and say to their mum and dad, “We should be putting that in the blue bin.” There is a bit of an education programme for parents, but it also comes through the children, which is great to see.
We must do that kind of thing to help our environment, and I congratulate those who have worked so hard with these initiatives. I believe in being a good steward, and to me that means doing the best we can environmentally. Burning less coal is good for our health as well as for the environment; we need companies to step up when it comes to reducing coal use. In 2012, coal supplied two fifths of electricity; this year so far it has provided less than 6%—a massive change.
In his introduction, the hon. Member for Bristol North West referred to something about which we must express concern: the President of the United States unfortunately seems not to be focused as much as other countries are on environmental issues. We would like to have that commitment by him and the USA. Other countries also have a responsibility. We are not pointing the finger and accusing other countries, but there is a strategy, of which they have to be a part. We look at China, the States, India and Brazil, to which the hon. Member for Richmond Park referred. In the press just last week there was a picture of Brazil from the sky showing how much of the rainforest has disappeared—an enormous amount. That cannot go on. Our incredibly fragile ecosystem, which benefits everyone, needs the rainforest to be there as the lungs of the world, yet we see large tracts of forest being decimated and put to other uses. All countries across the world have a role to play.
Other energy sources have provided well, and if we use more renewable sources we can become more self-reliant and less reliant on other nations in a changing world and economy, which can only be a good thing. I look, again, to Government initiatives. The hon. Member for Kilmarnock and Loudoun (Alan Brown) is here on the Front Bench; his party, the Scottish National party, has shown a strong lead on wind turbines and has encouraged that through its own Parliament. The Government have done that as well, and we have seen some benefits in my constituency: the wind turbines there—they are probably smaller versions—have been incredibly important in getting the right mindset and providing renewable energy. We have also had a dam project. It is a smaller project, but it is enabled by Government money, and it feeds into the grid. We also have solar energy, which is another big benefit in my constituency. It is hard to envisage this, Ms Dorries, but focus on 10 acres of solar panels, with sheep grazing on the land between them—it is possible to have both things together. Farmers have diversified. We have a really good scheme just outside Carrowdore in my constituency, and a couple more up the country in Mid-Ulster and the northern part of Northern Ireland.
The Government could perhaps do more with tidal lagoons projects. In my constituency, through Queen’s University and others, and some private partnership moneys, we are looking at how we can better harness the tidal movements at the narrows between Portaferry and Strangford. The power of that water is incredible, and it could provide green energy. As technology increases, we will probably be in a position to provide such energy at a lower cost. Wind turbine energy was very costly at the beginning, but the cost has dropped now and it is economical.
There was a Government initiative announced in the Budget around electric cars; that was talked about yesterday in the Chamber, in debate on the Finance Bill. Electric cars will work only if the prices are right, the cars run well and there are enough charging points, but at the moment, there is a dearth of these. It is no good if we do not regularly have charging points across high streets, villages and rural constituencies. Only then can people depend on electric cars. I was listening to a story on the radio last week about people who have dual-purpose cars—those that run on both electricity and fuel—resorting back to the fuel because charging points are not always available. That is a real issue for the Government and, to be fair, I think that they, and others, recognise that it is something that we need to look at.
I would like quickly to refer to coastal erosion, because my constituency is subject to it. We have the very active Ards peninsula coastal erosion group, and I am very conscious of the good work that it does. The Government need to set some moneys aside—regionally, not from here centrally. There is erosion in 96 locations in the Ards peninsula. We used to refer to there being a one-in-100-years storm, but there is now one every three years.
It has taken time, but in my home county we have now bought into making changes to be more environmentally friendly, such as enforced recycling and no more free plastic bags, which has been a real success in Northern Ireland. Although the changes were difficult to begin with, we have come out better on the other side—more environmentally aware and proud of what we have achieved. That should be the goal of any environmental agenda—ensuring that people are brought in, buy in, and feel a part of changes that are good for us all in the long run.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
I thank my hon. Friend the Member for Bristol North West (Darren Jones) for introducing the debate so well. He is a University of Plymouth graduate, and I know that there are a lot of people back in Plymouth Labour who would want to wish him a happy birthday for today.
Climate change is real. Some 97% of scientists believe that it is happening, and it will continue to happen whether the remaining 3% agree with it or not. The extreme weather produced by climate change is becoming more and more commonplace and its impact on our lives is becoming more profound, obvious and inescapable. A report by Oxfam has shown that, between 2008 and 2016, 23.5 million people were displaced by extreme weather. If we do not wake up, that will get worse and worse. The report by the Intergovernmental Panel on Climate Change, which my hon. Friend the Member for Bristol North West mentioned, predicted that if we do not act to stop a temperature increase of more than 2° above pre-industrial levels, on the current trajectory we will see a sea level rise from melting ice of up to 1 metre by 2100—only 80 years away. That would cause severe coastal flooding and super storms that would easily flood most major Western cities and submerge many low-lying islands, and would mean homes, roads and train lines under water.
Rising sea levels and elevated acidity mean that coastal communities such as mine in Plymouth are on the frontline of climate change and extreme weather. Far too often, more intense and more frequent storms are battering the south-west, and a lack of investment to create proper resilience—especially in our transport links—is cutting people in Plymouth off from the rest of the country. That is what I would like to speak about, because it is a good example of the challenges that we must face if we are to truly mitigate the impacts of climate change and extreme weather on our economy.
Members will know that in 2014, the Great Western rail line between Exeter and Newton Abbot was badly damaged by storms. The train line was washed away, leaving the rails hanging like a Peruvian rope bridge above the waves, and as a result, the far south-west and the rest of the country were cut off from each other. The hon. Member for Strangford (Jim Shannon) mentioned coastal erosion, which is most apparent from the coastline at Dawlish. I went to university in Exeter, and the place where I studied in the summer months, on the cliffs overlooking the sea, has now been washed away. Those cliffs are no longer there, and when I go past on the train every day, going back and forth to Westminster, I look at that little bit of air and remember that I used to study on it. Coastal erosion is real, and the threat it poses to our train line is apparent.
The Great Western train line was closed for two months in 2014, which affected our entire region, costing us around £1 billion in lost economic activity. It was our one and only train line—our spinal connection, our lifeline for business and leisure travel, daily journeys, holidays and investment—and its closure exposed a gaping hole in Government policy towards the far south-west. Ministers did not care enough to find the funding that we needed to make our train line resilient to the increasing extreme weather that this country faces. The former Prime Minister, David Cameron, came down to Dawlish in the wake of the storms and said, “Money is no object” in making sure that such a closure would not happen again. However, last week, the train line closed. A month before, it closed again. It has closed dozens of times since that incident in 2014.
Strong winds, heavy rain, and large waves crashing over the sea wall affect the resilience of the Great Western train line and cut us off. Thanks to the good work of Great Western Railway and Network Rail staff, our train line is now operational again, but more extreme weather is going to have more impacts on that precarious and fragile train line. The Minister will know that in bad weather, when the waves crash over our train line, CrossCountry trains cannot get through. The design of those precious and precarious Voyager trains means that they short-circuit when they come into contact with salt water, meaning that if waves hit those trains at Dawlish, they short-circuit and block the track. That is not good enough. Now that Ministers recognise the chaos in our rail franchising system, they have pulled the franchise competition, but that has removed the opportunity to create trains that can get through that particular bit of track.
Network Rail has carried out studies of extreme weather conditions. Those studies show that by 2065, anticipated environmental changes could result in an increase of 4° in extreme summer temperatures, potentially buckling tracks; a 36% reduction in summer rainfall, but a 15% increase in winter rainfall; a 30 cm increase in sea level; and a 23% increase in river flows. When we look at the precarious nature of much of our transport infrastructure, especially along our coasts, rivers and estuaries, we can see what an impact that change in water level could have on the resilience of that infrastructure. The low sea wall at Dawlish will not be enough: the line will flood, and we will be cut off again. That is why we need resilience upgrades to preserve the line, steady the cliffs, and ensure that trains can get through Dawlish while a Dawlish-avoiding line is built. Nothing else is acceptable.
The lack of investment in much of our transport infrastructure, coupled with the more commonplace extreme weather that is being caused by climate change, means that we need greater focus on, and investment in, resilience in our transport system. The Secretary of State for Transport told me in the Chamber that the work on Dawlish was his No. 1 priority, but yet again, no money for Dawlish was announced in the Budget, and it is still the case that no money has been announced by Ministers. I say to the Minister—who I appreciate is not a transport Minister—that the patience of the south-west is wearing thin. We know that we are getting more extreme weather: we can see it year in, year out, and we can see the impact that it is having on our resilience. The betrayal, the breaking of promises, the frequency of closures, the disruption, and the damage to our reputation and attractiveness as a destination are all due to the failure to invest in and secure that train line. That cannot go on. We risk more and more disruption from climate change unless Ministers stop sitting on their hands and blaming others. They must put their money where their mouth is and fund proper, long-term resilience, particularly in Dawlish and Teignmouth.
Warnings about extreme weather can seem far distant from our shores. We sometimes look at extreme weather in far-away countries—hurricanes, tropical storms and mudslides—and think of it as happening to other people, not to us. However, the reality is that climate change and increasing extreme weather are occurring in countries far away, but also here at home. If we do not adjust the way we run our economy, invest in low-carbon technologies, and fundamentally change the way our country operates, we will see more extreme weather—not just far away but in the UK. That is something that we desperately need to avoid.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairwomanship, Ms Dorries. I congratulate the hon. Member for Bristol North West (Darren Jones) on what is clearly a timely debate, and I wish him a happy birthday.
The hon. Gentleman would not have realised when he secured the debate that it was going to coincide with the worst wildfire to have hit California. Sadly, when I looked at the news reports this morning, the death toll had increased to 42. It is impossible to imagine what it must be like to be surrounded and engulfed by flames, and trying to flee those flames, or to be caught up in another natural disaster such as a tsunami and trying to flee the coming carnage. Those disasters are happening too often.
The hon. Gentleman detailed the other extreme events that have been happening recently: mudslides in California and Bangladesh; floods in east Africa and India; dust storms in India; heatwaves across the world, causing deaths even in the UK; typhoons; hurricanes; and extreme rainfall. He explained well that such events come at a human and a financial cost, and gave illustrative examples of the disproportionate impact that they are having on women and girls in some developing countries. It is sobering to think that 20 million people annually have to evacuate their homes and uproot their lives because of extreme weather events.
While other hon. Members also spoke about those issues, it was good that the hon. Gentleman not only highlighted the events that are happening here and now, but explained what a 4° increase would mean—Armageddon, frankly. That shows that we need to take action.
The hon. Member for Richmond Park (Zac Goldsmith) reminded us that we are on course for a 3° increase in temperature compared with pre-industrial levels, yet the IPCC report focuses on the difference between a 1.5° increase and a 2° increase, so we need urgent action. The hon. Gentleman also highlighted the clear environmental benefits of taking action: irrespective of climate change, that action will improve the environment of the world we live in. We need to remember that, and look beyond financial costs.
No debate would be complete without the hon. Member for Strangford (Jim Shannon). It was interesting that he highlighted his concern about the impact on education due to school closures because of extreme weather. I remember fondly when, back in my day, we had school closures because of extreme cold, or snow days. I am not sure about their impact on education, but they certainly gave us a lot of fun in the outdoors, so we took full advantage of them.
The hon. Gentleman mentioned the diesel scrappage scheme, and councils leading the way in that area, but I suggest that it is the UK Government who need to lead the way. The reason we have so many diesel cars on the road is that incentives were introduced by the UK Government. Clearly, the UK Government now need to take action to get those diesel cars off the road, because people are being penalised through no fault of their own.
The hon. Gentleman and the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) both highlighted the impact of erosion on coastal communities, and the example that the hon. Member for Plymouth, Sutton and Devonport gave—the cliffs that he once studied on, which no longer exist—was certainly a stark illustration of the effects of erosion.
The hon. Gentleman also highlighted both the impact of erosion on general transport infrastructure and the closure of the great western rail line, which cut off the south-west of England. Again, that illustrates the need for action and for resilience planning, as he said.
The IPCC report effectively looks at the lesser of two evils: limiting global warming to 1.5° C versus a 2° C increase. As the hon. Member for Richmond Park touched on, a 1.5° C increase would mean global sea levels being 10 cm lower in 80 years’ time than they would be with a 2° C increase. Coral reefs would decline by only—I say “only”, but this is frightening—70% to 90%, rather than being completely wiped out by a 2° C increase. That is a stark illustration of what is going on. With a 1.5° C increase, the Arctic ocean would be free of summer ice once every 100 years, rather than once a decade.
Apart from the head-in-the-sand deniers, people know that climate change is happening. We have the proof and we can see it happening with changing weather patterns. In my lifetime, I have seen winters get milder. As I was growing up, people said, “It used to be far colder in my day,” so there is that generational change. We know people’s memories might play tricks on them, but if we look at old maps of Scotland from the turn of the 20th century we can see they are littered with outdoor curling ponds. Those sites are marked on the maps, but not one of those curling ponds exists any more. That shows the change in winter over the past 100 years or so.
Met Office statistics also back up the changes, which have accelerated in the past decade. The hottest day is on average 0.8° C warmer than for the period 1961 to 1990. Winters are an average of 1.7° C milder as compared with that same period. We now have longer spells where temperatures exceed 25° C. We have fewer ice days, longer wet spells, shorter dry spells and higher extreme wet days. It is obvious that action needs to be taken at a UK level, within the devolved Administrations and at the international level, though the international level clearly becomes more difficult with a climate change denier such as Trump in the White House. I hope his tenure is short lived.
Unlike the hon. Member for Bristol North West, I welcome the Government writing to the Committee on Climate Change asking for updated advice on reaching a net zero carbon economy, on long-term greenhouse gas emissions, on when the UK should reach zero emissions of carbon dioxide and greenhouse gases, and the implications for emissions in 2050. I take his point that the UK Government need to take action, and I will come on to that. When that analysis and advice come at the end of March 2019, they will need sober reflection and concerted planning and action. This will have big implications for UK carbon budgets.
As the hon. Member for Richmond Park said, we are already on track to fail to meet those carbon budgets, so strong leadership will be needed from the UK Government and we will need proper parliamentary scrutiny. As the hon. Member for Bristol North West said, we need more debates on the main Floor of the House to bring that level of scrutiny to Government policy.
Lord Deben has confirmed that, as part of its work, the Committee on Climate Change will look at how the UK can effectively eliminate carbon emissions and set out the necessary steps to clean up the UK’s homes, industry, transport and agriculture. That will clearly be critical, but I have a few suggestions of my own. First, direct Government action will be required. They cannot continue to try to hide behind things such as the green deal and hide how borrowing happens; they need to take a lead and invest. They need to move away from the obsession with nuclear as a means of low-carbon transition. That will free up billions of pounds for investment in renewables and energy efficiency measures. They should follow the Scottish Government and invest directly in energy efficiency for homes. As the hon. Member for Strangford said, the UK Government need to embrace the renewables sector.
Greater investment is required in carbon capture and storage to try to recover from the shameful pulling of £1 billion of funding. That remains a continual reminder that Departments need to work together and that the Treasury cannot have carte blanche suddenly to pull funding streams because it wants to impose austerity. CCS can decarbonise energy production and energy-intensive industries, and it can produce hydrogen, which is a carbon-free source of fuel. Onshore wind must be allowed to bid in future energy auctions, and the UK Government should not end the generation export tariff in March 2019.
Figures from the Renewable Energy Association show that changes to the energy market rules already mean that employment in the photovoltaic sector in 2016-17 was down 30% as compared with 2011-12. The number of companies in the PV supply chain was down 60% over that period, and turnover was approximately 50% in real terms. Government policy changes have a massive impact on the renewables sector. It is little wonder that the UK has once again slipped down the EY renewable energy investment attractiveness index, which compares countries all over the world. We know we need to develop energy storage, but I would suggest that the funding for the Faraday challenge is insufficient, especially when we consider that the failing nuclear industry has been given a £200 million sector deal. The UK Government need to step up with an oil and gas sector deal to help that sector to realise the 2035 vision and carbon reductions in those industries.
Before I became an MP, I spent my career as a civil engineer working in the sewerage sector. Much of my work related to sewer flooding. I have seen the number of houses affected by internal sewer flooding. I cannot think of anything worse, but the numbers over the years have increased massively. That is due to the increase in the frequency of intense rainfall. That is coupled with changes to lifestyle and the urban environment, where more and more runways are put in. People change from soft landscaping to hard landscaping, which increases run-off and water gets into sewers quicker. That is causing problems and leads to internal sewer flooding. To solve that retrospectively is expensive.
Going forward, we need to try to mitigate those things—there is demand to build more and more houses—by taking stock of those factors. In Scotland, any housing development of more than two houses must incorporate sustainable urban drainage systems, or SUDS. That has been the law for a number of years, yet in England SUDS are still voluntary. SUDS are a way of minimising the run-off into sewers or water courses, thereby preventing any detriment.
In Scotland—I know this from experience as well—any new development must get permission to connect to the sewer system from Scottish Water, which has the right to say no. The developer must pay for any upgrades to the sewer system or any mitigation measures that are required. That becomes part of the planning conditions, yet in England the UK Government have steadfastly refused to end the right to connect. The Environment, Food and Rural Affairs Committee has made that recommendation over a number of years, yet the UK Government refuse to act. I do not understand that. If we are going to mitigate the impact of future housing and climate change, we need to start looking at this.
When it comes to building houses in Scotland, the Scottish Environment Protection Agency does not allow houses to be built on flood plain land with a predicted flood frequency of less than one in 200 years. Critical infrastructure cannot be built on land with a flood frequency of less than a one in 1,000 years. In England over the years, too many houses were built on flood plains, and we are now seeing the consequences of that.
The Government must take independent advice. They cannot listen to the lobbyists from the nuclear industry and the big housebuilders, which only want to make money. We need to take control and change where we are going just now. I have made a few suggestions, and I look forward to hearing from the Minister.
Dr Alan Whitehead (Southampton, Test) (Lab)
I congratulate my hon. Friend the Member for Bristol North West (Darren Jones) on taking the initiative of writing to the Backbench Business Committee to suggest we have this debate. I congratulate him not only on persuading the Committee to allow it but on putting the case this morning that his achievement in bringing this debate reflects the non-achievement of the House as a whole in putting the issue firmly on the Floor of the House. The fact that we are debating this matter here this morning with the cream of the usual suspects indicates that we are still a very long way from getting the issue debated with the importance and urgency it deserves. I therefore fully back and support the suggestion from my hon. Friend the Member for Bristol North West that the IPCC report should have been debated fully on the Floor of the House. Indeed, the developments from that report should be debated regularly on the Floor of the House from now.
The subject of this debate is extreme weather and climate change, which has been debated in this House previously. Climate change deniers have come to the Floor here and indicated that this extreme weather stuff is nothing to do with climate change; that it is all a bit of a hoax and we should just accept the fact that the weather changes, as I think a certain President of the United States recently opined, and we should not worry too much about it. Well, I think that has been comprehensively demonstrated to be not only a completely false conclusion but an alarming and complacent conclusion, because we know what action we will have to take on climate change over the next period.
The IPCC report, as hon. Members have mentioned this morning, is not just a wake-up call but a blueprint. As the hon. Member for Richmond Park (Zac Goldsmith) said, if we do not tackle the speed at which temperatures are rising and how much they are rising across the world, we will inevitably face a very difficult future. The extreme weather events that we are seeing at the moment are simply a signpost of the long-term enormous effects, as the hon. Gentleman set out, on the world’s economy and the livelihoods and lives of millions of people across the planet, and on the liveability, as my hon. Friend the Member for Bristol North West set out, of large parts of the planet in future. So the extreme weather events that we increasingly see are a harbinger of much wider effects in future—harbingers that we ignore at our extreme peril.
Hon. Members have drawn attention to a recent report by the Met Office on the changing nature of the climate in the UK. The report demonstrates to me that the issue is not only about hurricanes in the United States, flooding in south-east Asia or forests catching fire in northern Sweden but is very much here at home now and is the future that we will face to some considerable extent if we do nothing about it. The Met Office report is a stark reminder of how much and how rapidly things are changing. The creep of red across the map of the UK over the past 50 years shows the daily maximum temperatures of hot summer days and dry spells. Conversely, the creep of white across the country shows how icy days and daily minimum temperatures in winter change across the country. So we can see a clear change in climate.
As the hon. Member for Richmond Park has rightly said, we cannot attribute particular weather events to the effects of climate change, but elementary physics teaches us that—I speak as the proud possessor of a relatively good grade in O-level physics, so I am at the elementary level—if the temperature of water increases, as we know is happening, the water expands. It is not just a question of global icecaps and various other things melting that adds to sea level increases across the world; it is just the fact that water expands as it gets warmer.
As water expands as it gets warmer, the air above it is affected and becomes more turbulent. It absorbs more energy and takes up more water vapour, resulting in more precipitation, exacerbating the effects on the weather. It is not the case that climate change causes tidal surges or hurricanes in the southern United States, but it exacerbates them and changes them. They are longer in duration, more severe and more frequent, and are the consequences of the physics of climate change, as I have described.
So we know what our future holds if we do not take urgent action not only to mitigate climate change but to adapt to it. My hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) set out clearly what is in store for our own country’s infrastructure as a result of the changes. Indeed, I have observed the substantial effects of tidal surges and extreme tidal weather; a vital part of communication infrastructure has been severed. To a much lesser extent, I have had a small attempt in my constituency area to get much greater attention paid to flood defences for the Itchen valley. For certain, that valley will be flooded to an increasingly frequent extent as a result of tidal surges and changes.
Southampton put together a scheme for dealing with tidal surges and possible flooding. It obtained some funding through the local enterprise partnership to assist with flood relief, but the funding was then taken away on the instructions of the Government and placed into a road scheme. Unless we take the issue seriously, get our priorities right and adapt our country for what we know will be a future of far greater extreme weather events, with all the consequences that that will have on infrastructure and our daily lives, we will surely pay the price. Likewise, if we do not take seriously what the IPCC says about the global scale, we will pay the price.
I am worried about the extent to which past performance is prayed in aid for not doing as much on climate change and global warming as we might do. It is true that the UK has performed better than many other countries in taking action on climate change, but the sheer scale of the task facing us means that one country’s performance cannot be set against another’s.
The hon. Member for Richmond Park indicated that our clean growth plan is good in many ways. It has many good things in it, and includes many good responses to the requirements of the fourth and fifth carbon budgets from the Committee on Climate Change. However, the clean growth plan itself acknowledges that it will not get us to the terms of the fourth and fifth carbon budgets. Indeed, it states that it will fall short by about 5% in terms of emissions by the time of the fifth carbon budget. The failure between the fourth and fifth carbon budgets is much worse; the clean growth plan gets us only about 50% of the distance between them.
Given what we know about the difference between 1.5° C and 2° C, as the hon. Member for Richmond Park mentioned, we have to do so much more. I was therefore dismayed that when the Government wrote to the Committee on Climate Change to ask what it thought about a 1.5° C, net-zero target on climate change they specifically excluded action to change the terms of the requirements of the fourth and fifth carbon budgets. We are looking at what we can do about a world increase of 1.5° C, with the enormous differences that the hon. Member for Richmond Park says would result from 2° C. Yet we are proposing no change at all in the current carbon budgets, which, even by the Government’s own plans, we will not reach anyway.
A theme of this morning’s debate is that far more needs to be done and we have, as the IPCC report tells us, a very limited amount of time in which to get it done. We therefore need at the very least to express that urgency in the House, to ensure that the debate is shared among all Members. The urgency, effort and additional activities that are needed to combat climate change, and to adapt, must be properly brought before the whole House. As a result of this morning’s debate that call might be heard.
Alan Brown
In terms of parliamentary scrutiny, does the hon. Gentleman agree that the Government sent out the wrong signal when they abolished the Department of Energy and Climate Change and subsumed it into the much bigger Department for Business, Energy and Industrial Strategy, where these issues get lost among all the other stuff that the Government are looking at?
Ms Nadine Dorries (in the Chair)
Order. Dr Whitehead, I am sure that you would like to hear from the Minister after you answer that question.
Dr Whitehead
Indeed, Ms Dorries; I was just about to come to my last sentence when the hon. Gentleman asked me that pertinent question, to which I will take one second to reply. Yes—when the Department of Energy and Climate Change was subsumed into BEIS that gave out a bad signal about the Government’s seriousness about these issues. Whether or not that Department is re-established, the status of climate change within Government needs to be uprated, not just in BEIS but across all Departments, in terms of what we know we need to do.
I hope that the Minister will be in concord with what has been set out in the debate, and that she will take from it the message that more effort is needed, that the urgency is real, and that we look forward to the Government grasping the issue with the seriousness that it deserves. I am sure that she will agree that it deserves to be taken seriously and that action is essential. I am sure that she will set out exactly what that action will be.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate the hon. Member for Bristol North West (Darren Jones) on securing today’s important debate, and I wish him a happy birthday. I am pleased to respond to today’s debate, and I note his creditable concerns regarding climate change and extreme weather. I assure him and other hon. Members that the Government take those issues seriously. A Government’s first duty must be to guarantee the safety of their citizens. That is why the Government are taking steps to limit the causes of climate change and to prepare for the impacts of extreme weather.
The science is clear: our world is warming, and will warm further as emissions of greenhouse gases continue. Climate change is one of the greatest global challenges of our time, but it is a large-scale and long-term problem that it is often hard to grasp. Today’s debate touches on important points. It is often through local and immediate extremes of weather that we notice what is happening—record temperatures, droughts or downpours, or fewer, milder cold snaps. As the hon. Gentleman highlighted, around the world we have seen striking examples of extremes in recent months: the drought in Cape Town, wildfires in Alaska, and record-breaking rain over Texas from Hurricane Harvey to name just three.
In the UK we are not immune. As my hon. Friend the Member for Richmond Park (Zac Goldsmith) identified, fresh in our minds is this year’s summer, which led to discomfort for many elderly and vulnerable people, and problems for farmers growing food. Provisional statistics from the Met Office showed it to be the joint hottest on record, together with 1976, 2003 and 2006, and one of the top 15 driest. Also, the winter floods of December 2015 and January 2016 involved the most intense rainfall at a national scale on record. Storm Desmond killed three people, contributed to severe flooding of more than 5,000 homes and businesses, and left more than 60,000 people without power in the north of England.
The risk in talking about extremes is that we rely on anecdotes—memorable events that might not really be part of a trend. Of course, not all extreme weather is directly because of climate change. That is why it is important to have recent, careful analysis by the Met Office, which shows that many extremes in the UK are indeed changing compared with the period 1961 to 1990. In the last 10 years we have seen higher maximum temperatures, longer warmer spells, lower minimum temperatures, and more rainfall on the wettest days. Those changes are consistent with a warming world.
The Met Office report was funded by the Government as part of our ongoing support for world-leading science. Thanks to cutting-edge research by scientists around the UK, the link between global warming and extremes is becoming clearer, even at the level of individual events. In Texas last year, the record rainfall during Hurricane Harvey led to 80 deaths and 100,000 flooded homes; researchers at Oxford University have found that human influence on the climate tripled the chance of that rainfall. To give an example closer to home, the scorching Europe-wide summer of 2003, which led to 70,000 deaths, was made twice as likely by climate change, according to studies by the Met Office. What is more, such summers are projected to become the norm by the 2040s.
The Government have a duty to protect our citizens, which means ensuring that the UK is resilient to damaging weather. We are therefore investing £2.6 billion between 2015 and 2021 in England in 1,500 new flood defence schemes to better protect 300,000 homes. When extreme weather is on the way, the Met Office makes weather warnings available to the public. Through the national risk register, we ensure co-ordinated emergency responses to possible major incidents, including flooding, storms, low temperatures, heavy snow, heatwaves and drought. We are also working to help other countries to deal with extreme weather. We have endorsed the UN’s Sendai framework for disaster risk reduction, which sets out targets and actions to reduce existing risks and prevent new ones, including risks from climate change.
We not only have measures in place to deal with today’s risks of flooding, drought, storms and heatwaves, but are actively planning for the changing risks that the future climate will bring. Last year, colleagues in the Department for Environment, Food and Rural Affairs published the second national climate change risk assessment, and this July they produced the second national adaptation programme to address the key risks that they identified. Later this month, with the Met Office, DEFRA will publish UKCP18, a new set of UK climate projections that will be a key tool to help Government, businesses and the public to make climate resilience decisions.
It is vital that we maintain our resilience to present and future weather, but that is not enough. Unless we limit climate change, we will face ever-increasing risks, some of which we cannot simply adapt to, as last month’s report by the Intergovernmental Panel on Climate Change on global warming of 1.5° C made clear. My Department is therefore leading steps to cut the UK’s emissions of greenhouse gases while growing the economy. We are also encouraging other countries to do the same.
The UK was a vital player in securing the 2015 Paris agreement, which has been a game changer in bringing pledges of action from nearly all countries and collectively raising ambition. At this year’s UN General Assembly, the Prime Minister spoke about the importance of global co-operation and the value of such multilateral agreements.
We are among the world’s leading providers of international climate finance, having committed at least £5.8 billion between 2016 and 2020. That finance, which is mobilising further public and private finance globally, is helping developing countries to deal with the impacts of climate change by taking action as well as reducing emissions.
The UK is a world leader in reducing emissions. We were the first country to introduce a long-term, legally binding emission reduction target through the Climate Change Act 2008. Since 1990, we have cut emissions by more than 40% while growing the economy by more than two thirds—the best performance per person of any advanced nation.
Just last month, we held the first ever Green GB Week, with more than 100 events nationwide that demonstrated the strength of the UK’s commitment to a cleaner world: we hosted the European launch of the 1.5° report by the Intergovernmental Panel on Climate Change, dozens of companies made pledges, the London Eye was lit green and it was even mentioned on “EastEnders”.
Our ambitious clean growth strategy sets out our plan until 2032 for decarbonising the UK economy, on the path to our target emissions reduction of at least 80% by 2050. However, we are not resting there. In the light of the IPCC’s report, we have joined with the Scottish and Welsh Governments to ask the independent Committee on Climate Change for advice on the UK’s long-term emissions target, and on whether we should move to a goal of net zero emissions. We will consider that advice carefully when it is complete in March next year. Going low carbon is not only good for the environment; we also see it as good for business, which is why we have put clean growth at the heart of our modern industrial strategy.
I thank my hon. Friend the Member for Richmond Park for his speech. He is a passionate campaigner on the subject and has a long track record of raising these issues in Parliament. On international work, I should point out that we invested £3.87 billion between 2011 and 2016 in our multi-agency international climate finance programme and, as I have outlined, we have committed a further £5.6 billion. We spent £1.4 billion on adaptation projects between 2013 and 2016 and have helped 47 million people to cope with the effects of climate change since 2011. That has helped to deal with extreme weather, which is a priority for developing countries. The Government’s climate finance aims for a balance between adapting to climate change and limiting emissions. The Department for International Development leads several projects and delivery programmes to improve overall resilience to extreme weather.
On deforestation and overseas development, we support countries in taking steps to protect natural forests and make economies more sustainable. With Germany and Norway, we pledged £5 billion between 2015 and 2020 to incentivise ambitious behaviour such as Partnerships for Forest programmes, which catalyse forest-friendly businesses, creating employment in Asia, Africa and Latin America.
My hon. Friend the Member for Richmond Park raised the issue of deforestation in Brazil. The UK and Brazil have a close dialogue on issues of mutual interest and concern globally and bilaterally. Brazil receives the third largest UK climate finance contribution in Latin America, the majority of which goes to forests and land use projects.
Hon. Members mentioned our influence and our work with global partners. The Government played a key role in securing the agreement of 195 countries to the landmark 2015 Paris agreement, and we remain fully committed to its implementation. We disagree with the US decision to exit that agreement.
Time is short, but let me touch on just a few other points raised by hon. Members. I thank my hon. Friend the Member for Richmond Park for highlighting the work of my right hon. Friend the Member for Devizes (Claire Perry) as Minister for climate change. Sadly, she cannot be present to respond to the debate, but I know that she would have enjoyed the challenge. I thank the hon. Member for Strangford (Jim Shannon) for raising a wide range of topics relating to the impact on all aspects of our lives. I reassure him that climate change is part of the curriculum for young people.
I thank the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) for raising an issue relating to the trains in his constituency, which I understand must be particularly stressful for him as a constituency MP. I can tell him that the Department for Transport is working to build improvement and plan resilience, but I encourage him to engage directly with the DFT.
Finally, to touch on a point made by the hon. Member for Kilmarnock and Loudoun (Alan Brown), the Government take this issue very seriously. That is why we have a Minister for climate change who attends Cabinet meetings and is heard at the highest level. Unfortunately, that is why she is not able to be present to respond to the debate.
I thank all hon. Members for their thoughtful contributions to the debate. The Government will continue to work to deliver a clean, resilient and prosperous society for all our constituents. I believe that everyone in this Chamber would agree with that.
Darren Jones
I thank the hon. Members for Richmond Park (Zac Goldsmith), for Strangford (Jim Shannon), and for Kilmarnock and Loudoun (Alan Brown), my hon. Friends the Members for Plymouth, Sutton and Devonport (Luke Pollard) and for Southampton, Test (Dr Whitehead), and the Minister for taking part in the debate.
The Minister’s response was a defence. It set out what the Government are doing but failed to admit the IPCC report’s findings: that we are not doing enough and not acting quickly enough. That admission needs to be made, on the basis of that evidence about us and other countries around the world. As my hon. Friend the shadow Minister said, we must ensure that the matter continues to be raised in the House of Commons and throughout the country. I hope that our debate this morning will raise the prominence of this vital issue and allow it to be debated on the Floor of the House in a more routine fashion in the years ahead.
Question put and agreed to.
Resolved,
That this House has considered extreme weather events related to climate change.
Superfast Broadband Delivery: Somerset
(6 years, 1 month ago)
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James Heappey (Wells) (Con)
I beg to move,
That this House has considered superfast broadband delivery in Somerset.
It is a pleasure to serve under your chairmanship, Ms Dorries. I know the Minister is swimming in unfamiliar waters this morning, but I am very grateful to him for coming to respond to this debate.
The Connecting Devon and Somerset intervention area, or CDS, is the biggest in England, and it is connecting some of the hardest-to-reach communities in the country. CDS did not have an easy task by any stretch of the imagination, and it is important to say right at the outset that the purpose of today’s debate is not to beat up CDS for the Gigaclear contract unravelling as it has. In fact, rather than starting with criticism of CDS, I would like to pick out Matt Barrow, an employee of Devon County Council who has been working on the Connecting Devon and Somerset project since its beginning, and who has spent hours by my side in public meetings in village halls across my constituency. I know he has done it with many colleagues elsewhere in their constituencies, helping residents to understand the differences between fibre to the cabinet and fibre to the premises, the way that CDS is working and when they will get their broadband.
There is absolutely no shortage of effort or expertise at Connecting Devon and Somerset, and the organisation has all the right intentions to deliver the best possible quality broadband to the residents of Devon and Somerset as quickly as it can. The reason we have this debate this morning is that the Gigaclear contract, which was signed for the delivery of phase 2 of the state aid intervention, has not run to time. Indeed, at the very first check after only six months of its anticipated delivery, Gigaclear is already well behind and has admitted that it needs to relook at the programme for delivery.
There are three key areas for our discussion this morning. The first is the soundness of Gigaclear’s position. Can it actually deliver what it has said it can? The second is the continued case for state aid in some parts of Devon and Somerset. The market has changed over the last year or so, and commercial providers are now delivering fibre to the premises, which raises a question about the legitimacy of state aid in those circumstances. Thirdly, how can we get on with the final 5% of premises that are now awaiting connection?
Rebecca Pow (Taunton Deane) (Con)
I commend Connecting Devon and Somerset on the biggest roll-out of rural broadband in the country. A great deal has been achieved, but it must not be forgotten that many of my constituents, and indeed those of my hon. Friend, have been ill-served. They have waited all this time, but nothing has been delivered. It has been a catalogue of incompetence and things that have arisen by the way, and many of my constituents are still not receiving broadband. The most important point in all this is that we resolve it as quickly as possible.
James Heappey
I think my hon. Friend means that nothing has come yet as a consequence of the phase 2 contract, and she is absolutely right. The phase 1 contract, which was a fibre to the cabinet deal, is now complete in its delivery. Tens of thousands of homes and businesses in my constituency have benefited from that, and I am sure that my hon. Friend has seen the same in hers. She is absolutely right that we are more than six months into the delivery window, and it has been over a year since the contract was signed. Not one constituent of mine is a Gigaclear customer yet, and I know from my hon. Friend’s intervention that it is the same in her constituency, too.
Gigaclear’s position is what it is because they were supported by the Carillion group, which met its demise. I think it is now clear that Gigaclear has quite inexplicably failed to understand that a lot of roads in Devon and Somerset are single-track lanes, which require somewhat more endeavour to dig up and somewhat more planning around road closures—it is not possible simply to go down one side of the road or even on the verge to the left or right.
I am inclined to agree with some of the comments from the county councils. There was overconfidence on the part of senior management at Gigaclear: they were telling the Connecting Devon and Somerset leadership and our county councils that all was fine, when it was obvious that things had not progressed as they should have. In the light of that, we need to ensure that what Gigaclear now says it is capable of doing is realistic. It has already overpromised once. As it seeks to put together a remedial plan to deliver the contract, we must ensure that it is at a realistic pace, so that, crucially, our constituents can have certainty about when their broadband will arrive. The Government, the Broadband Delivery UK programme and the county councils will want to be certain about the continued financial support that Gigaclear has secured.
I will raise some issues later that make the business case slightly less sound. It needs to be tested by BDUK and CDS to ensure that Gigaclear is still the answer, especially since the market has changed and commercial delivery is happening. When Gigaclear gets to communities as part of the state aid programme, it may well find that they already have fibre—it will have already been taken up. Gigaclear might not hit its uptake targets or realise the customers that it was expecting to. Now that Gigaclear is operating in a more competitive environment than the one that it negotiated when it took on the CDS contract, we need to look robustly at whether their numbers still stack up and whether we need to relook at the intervention area. In the briefing to MPs last week, which was the first indication that we had had of what the remedial plan would be, Gigaclear said that by the summer of 2020 it would deliver 40% to 50% of all that it had promised to have completed by 2020. That is a significant reduction in the pace of delivery, and Gigaclear now wants to deliver the remainder of the contract by 2022.
Rebecca Pow
On that point, is it not the case that the Government funding secured by Gigaclear needs to be spent by March 2020? One of the key issues is whether we could ask for an extension of the funding in order for Gigaclear to get its house back in order and to roll out the new, proposed programme that they are suggesting to us.
James Heappey
My hon. Friend is ensuring that the Minister gets the message loud and clear, because that is one of the key questions for today’s debate. The remedial plan presented by Gigaclear already runs beyond the date that the Government have said that all available money for the delivery of phase 2 will be spent. Clearly, if Gigaclear’s remedial plan is accepted, the Government will need to be willing to extend the period over which the money is spent from 2020 to 2022. I hope that the Minister will be able to give us some good news on that.
Given that only 40% to 60% of properties that were due to be connected by 2020 will now be connected by that time, we might also look at whether we should offer a voucher scheme to people who now find themselves in the 50% to 60% that will not be connected, so that they can take some sort of interim measure themselves. We did exactly that for those who were going to be in phase 2 or in the final 5% when the phase 1 delivery programme was rolled out; we offered voucher schemes of £500, so that people could take interim measures within their homes.
The second issue is the ongoing case for state aid, which we have spoken about a number of times. When the delay in the Gigaclear delivery was first announced, I was straight on local TV and radio, and speaking to my local newspapers, because I was very, very cross. My expectation was that my mailbag was about to explode and that I was going to be contacted by hundreds, if not thousands, of very angry people who were concerned that the broadband they had been waiting for for years and they thought was just weeks away was actually going to be years away again.
The reality is that I have had hardly anything, and that makes me wonder why. If I go back to my former employment, there is a very important part of the military planning process. When assessing the orders to be given in order to achieve a mission, we keep asking ourselves whether the situation has changed, in order to make sure that we are not problem-solving against a situation that no longer exists. I have come to realise in the last few weeks that the reason why so many of my constituents have not been in touch with me about the Gigaclear delay is that they have sorted themselves out.
They have gone to Openreach and put in place a community fibre partnership, or they have gone to companies such as TrueSpeed or Voneus that have cell-to-build business models. Those companies go out into communities and engage, they get 30% sign-up and then draw down the money from Aviva, which underwrites the delivery of the infrastructure, and they build the fibre into those communities. When the Gigaclear contract was delayed, there was complete silence from all those communities that were flashing red on the whiteboard in my office as those which most urgently needed broadband. The reason is that the market is already providing, and has already provided, for a number of them.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
My hon. Friend is making a strong point and is representing his constituents extremely well. I am old enough to remember, because I was here before this started with CDS, that we were originally promised a level, as he quite rightly said, and it has not appeared. BT, slightly duplicitously, is getting in behind and setting up in villages that we were not expecting to come on. They were going to come on with Airband or Gigaclear, which is the point that my hon. Friend has made, and have actually come on behind. We should celebrate the fact that BT is still opening up in some areas—I hope the Minister takes that point—as it is a good fibre system. I accept that Gigaclear has problems and I understand that, but we must not just put BT to one side, because its infrastructure is what they all use.
James Heappey
My hon. Friend and neighbour is absolutely right: the market is delivering. Whatever the business model, and whether that is cell first and build second, I now have hundreds, perhaps even thousands, of TrueSpeed, Voneus and Openreach fibre-to-the-premise customers in my constituency—a situation that has been delivered through an open-market solution, within the area that the open market review had identified as requiring state aid.
A key question for the Government today is whether state aid is even legal in areas where the market has already provided. I am not sure that we should be using taxpayers’ money to subsidise the delivery of a competitor into an area where a commercial company has already set up. TrueSpeed is underwritten by Prudential. How absurd that we would be spending taxpayers’ money to subsidise the delivery of an infrastructure underwritten by one pension scheme while another, Aviva, has underwritten the money on a commercial basis without the need for taxpayers’ intervention. As the market has changed, we need to be very clear about whether we need to go back and look at the open market review again to understand where the market is now providing.
It is certainly the case that my constituency and those of my hon. Friends the Member for Weston-super-Mare (John Penrose) and for North East Somerset (Mr Rees-Mogg), of my right hon. Friend the Member for North Somerset (Dr Fox) and my hon. Friends the Members for Somerton and Frome (David Warburton) and for Bridgwater and West Somerset (Mr Liddell-Grainger) will benefit more quickly because TrueSpeed is working away from the transatlantic fibre link that lands at Weston-super-Mare. TrueSpeed has accessed that link to fibre and is fanning out from there. The delay in the Gigaclear contract is an opportunity for us to look again at whether the market has changed, and whether Gigaclear’s priorities need to be tweaked.
Rebecca Pow
My hon. Friend is making a very expansive case. On the point about extra funding and the money going to the different companies, I believe that Connecting Devon and Somerset has just received £5 million from the Rural Development Programme. I wonder whether we might push to see where that money is going to be spent and whether the Minister has any revelations to make about that. I believe it is for phase 2, and some of it is destined to go to Airband, Gigaclear and the various companies providing the different methods of rolling out the service.
James Heappey
My hon. Friend is an excellent pacemaker—she runs slightly in front of me. I am coming to that point, but it is very helpful for the Minister to hear such things twice.
There is another part to the point about the change in the market and whether state aid is relevant. There is also the frustration that communities feel when they have got themselves motivated to bring in an alternative provider, such as TrueSpeed, Voneus or Openreach, and when they have fibre to the premise already, and yet their roads are now being closed and dug up with their tax money to deliver something that causes huge inconvenience to them while it is being put in, and which they have already got. A number of communities have written to me not to criticise the delay in the Gigaclear programme but to ask, “Why on earth are you still digging up our roads and blocking off our village when we have already got ourselves sorted and we have got it? Can we not have our tax money spent on improvements to our junction or a new road or something else?”
I know that is not how it works, but it certainly underlines the case for reassessing the priorities that Gigaclear has been set by Connecting Devon and Somerset, so that Gigaclear focuses on areas where we know the market will not be able to provide over the next 24 months, rather than focusing on areas, as is the case at the moment with its early areas, that are in direct competition, particularly with TrueSpeed. I am not sure that that is the most effective spending of Government money.
As my hon. Friend the Member for Taunton Deane (Rebecca Pow) pointed out, we have been given extra money by the Government to look at further broadband improvement in rural areas. There is a real opportunity to take the money that the Government have announced—I know that the Minister will be enthusiastic to remind us of the vast sums of money that the Government have made available to Devon and Somerset—and to add it to the £5 million-plus already available in gainshare from Openreach from phase 1 of the CDS roll-out, and the substantial additional money that is still to come as part of that gainshare, and look at where that combination of funds could be used as an intervention to deliver the final 5%.
We know now, by definition, what the final 5% is, because phase 2 delivers everything but the final 5%, so surely we can deliver that final 5% concurrently rather than waiting until we have connected the 95th percentile to get on with connecting the 96th through 100th percentiles. It seems to me that the money is already available. The gainshare is coming onstream very quickly. We have a real opportunity to get the whole thing cracked in a few years by taking advantage of what the market is now providing.
In some ways, we have an embarrassment of riches, because in some parts of Somerset we now have two entirely independent fibre-to-the-premise networks being dug in on very remote rural lanes, which is a slightly absurd situation. In small communities such as Badgworth, Biddisham and Lympsham, people will soon end up being able to choose which fibre-to-the-premise provider they want to use—not the internet service provider, but actually who is going to put the fibre to their front door. I am not sure that that is actually what taxpayers’ money should be being used for.
Mr Liddell-Grainger
I remind my hon. Friend that places such as Exmoor and the more remote parts of Somerset do not have that choice. Gigaclear’s cheapest package, for instance, is £35, with an activation fee of £120. Sometimes we have no choice. I know my hon. Friend is fully aware of that, because he covers the Mendips, but it is worth reiterating to the Minister that there is a cost differential here that people have to pay.
James Heappey
That intervention perfectly underlines the final line of my speech. There is absolutely no point in spending taxpayers’ money in areas where the market is providing. There are areas of my hon. Friend’s constituency and mine, and other parts of the Devon and Somerset, where the market will definitely not provide. Let us ensure that Gigclear’s priorities are those areas and that we do not use taxpayers’ money to compete in areas where the market is providing.
The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Michael Ellis)
It is a pleasure to be here. I thank my hon. Friend the Member for Wells (James Heappey) for securing the debate and my hon. Friends who have spoken. The debate allows me the opportunity to update hon. Members on the Government’s plans and progress towards ensuring universal high-speed broadband.
Broadband connectivity is just as, if not more, important in rural communities across the UK as in urban centres. That is why the Government and local partners are investing £1.7 billion in the superfast broadband programme, which has provided superfast coverage with speeds of more than 24 megabits per second to around 5 million premises in areas that would not otherwise have been covered by commercially funded roll-out. Coverage of homes and businesses in the UK continues to increase beyond the 95% policy objective that was achieved less than a year ago in December 2017—up from just 45% in 2010, when this Government entered office. That is a significant achievement.
At least £210 million of funding will be available to support further investment as a result of efficiency savings in the initial roll-out. High levels of take-up mean that gainshare funding from the additional profits from the network is projected to reach at least £712 million. That means a total of £922 million will be available to support further roll-out. Of that, £4.7 million will go on work that will cover areas including the constituency of my hon. Friend the Member for Wells, and that is being modelled by Openreach as we speak. He and other hon. Friends present will recognise that a substantial improvement has been achieved in their constituencies over the past few years, but that there is still more to do, which I accept.
Superfast coverage in my hon. Friend’s constituency has increased from 15.6% in 2013 to over 90%, while more than 96% of premises have speeds of 10 megabits per second or above. Connecting Devon and Somerset, or the CDS project, which is delivering across both Somerset and Devon, has to date provided superfast broadband access to over 300,000 premises that would have otherwise been left behind.
It was inevitable that reaching more rural homes and businesses would require building entirely new networks, which requires major civil engineering. Gigaclear seemed well placed to provide that following the open procurement exercise. The contracts were awarded on the basis of the supplier being financially robust enough to support the roll-out, providing the necessary broadband speeds under state aid rules, and representing good value for money for the required public investment. My hon. Friend asked a question about state aid; the short answer is that all projects begin by testing the market. We take the view that state aid is legal in an area where the market has delivered. I will write to him about that in more detail in due course.
There are a number of reasons why there has been a delay up until now. These include poor operational capacity and, frankly, poor decision making within Gigaclear linked to their supply chain management. Partly as a result of the adverse impact of the collapse of Carillion earlier this year, it has become apparent that the resources were not in place for the contracts to be managed successfully.
I recognise that communities that have not yet got the expected coverage, such as those in the beautiful rural parts of the constituencies of my hon. Friends the Members for Wells, for Taunton Deane (Rebecca Pow) and for Bridgwater and West Somerset (Mr Liddell-Grainger), will feel left behind. We recognise that that is not good enough, especially when timescales extend, potentially, out to 2022.
Outline remedial plans that push delivery back to mid-2022 have been provided. Both CDS and BDUK will, however, require key reassurances regarding capacity and resources, a commitment to accelerate deployment and robust evidence that these new proposals can be delivered. We are expecting those reassurances in the coming days.
James Heappey
While I accept that the state aid is still legal, does the Minister agree that it should—at the very least—force a reassessment of the priorities that Gigaclear is given, so that the Gigaclear state aid programme complements what the market seems to be providing?
Michael Ellis
Yes, I do. The BDUK superfast programme is being delivered under a European Commission decision from 2016, which followed on from another in 2012. As my hon. Friend will know, the 2016 decision expires in 2020. Government policy is that the state aid regime will stay in place, and the Competition and Markets Authority will take on the Commission’s role in approving schemes. My Department is working closely with the CMA to ensure that BDUK can continue to deliver projects after the 2016 decision expires.
Even with this further delivery, some premises will remain without coverage. We are working hard on our commitment to ensure universal high-speed broadband of at least 10 megabits per second by 2020. We have set out the design for a legal right to high-speed broadband in secondary legislation. Ofcom’s implementation will meet the Government’s commitment to give everyone access to high-speed broadband by 2020. In the meantime, the better broadband scheme is available for any home or business with speeds below 2 megabits per second, and provides a subsidy of up to £350 for any eligible premises for satellite broadband or, where available, other solutions. The scheme has now supported almost 20,000 homes and businesses, particularly in acutely remote locations.
In the light of the findings and recommendations of the future telecoms infrastructure review, we need to move to ensure a transformation in the UK’s digital infrastructure based on fibre to the premises—or full fibre, as it is called. Despite their delay, the contracts awarded by the CDS project already adhere to this goal and overall objective. Currently only 5% of premises have a fibre-optic connection. That is not good enough. We have a target of at least 15 million premises having a full-fibre connection by 2025 and nationwide full-fibre coverage by 2033.
That is achievable according to recent industry announcements. BT Openreach, CityFibre, Virgin Media, KCOM, Hyperoptic, Gigaclear and others all have plans for significant new fibre coverage. Fibre would, of course, make a huge difference compared with copper technology. CityFibre recently announced a £2.5 billion investment in fibre, and Openreach has announced its plans to reach 3 million premises by 2020, and 10 million by 2025 if the conditions are right.
The digital infrastructure investment fund, involving Amber Fund Management and M&G Investments, is now in place. It provides £400 million of investment capital, alongside private capital, for new expanding providers of fibre broadband. Network operators such as WightFibre and Community Fibre have already leveraged that funding. Our barrier-busting taskforce is established and tackling the barriers to fibre roll-out across the UK, and includes the production of a framework for fibre delivery to provide best practice guidance. We also introduced a five-year relief from business rates in England for new fibre infrastructure.
There is no doubt that there are challenges ahead. My hon. Friends made sound points that represent the best interests of their constituents. There is also no doubt that we are making good progress in providing rural broadband coverage. I recognise that there are issues with the remaining harder-to-reach localities. We do however need to finish the job and it is our strong intention to do that. We will also continue to push hard on full-fibre coverage, including through the project in Somerset. I welcome the continued interest and support from hon. Members ably representing their constituents—they keenly require and have a right to broadband service—as we continue to ensure we deliver our goal of a full-fibre future for the United Kingdom.
Question put and agreed to.
Taxi and Private Hire Licensing
(6 years, 1 month ago)
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Daniel Zeichner (Cambridge) (Lab)
I beg to move,
That this House has considered the Task and finish group report on taxi and private hire licensing.
It is a pleasure to serve under your chairmanship, Sir David, and to see the familiar faces of those who have been discussing the issue for a long time. I pay particular tribute to the former Transport Minister, the right hon. Member for South Holland and The Deepings (Mr Hayes), who instigated the task and finish group’s review in this very Chamber some 18 months ago.
I will praise quite a few people in my speech, but the main praise must go to Professor Mohammed Abdel-Haq, who has brought together a diverse range of voices from the industry and users to produce what my right hon. Friend the Member for Birkenhead (Frank Field) has called “a superb report”. Not everyone will agree with all of it—that is partly why we are here to debate it—but we all agree on our thanks to the professor for producing it.
Let me give a couple of quotations from the report that set the scene rather well. The professor’s introduction says that he trusts
“that Parliament and the Department will lead the cultural change which is necessary to ensure that passengers, workers, operators, and neighbouring authorities are treated fairly. I look forward to the Government’s prompt response to this report in order to maintain the momentum for improvement. Undue delay would risk public safety.”
If one message comes out of our debate, I hope that is it: undue delay would risk public safety.
We have only an hour and a half, so I will not go through the report line by line; that needs to be done on another day when legislation is introduced. However, perhaps there is a little to be said about how we got here, or possibly about how we did not get here. I am afraid that the Government have to take some responsibility.
In paragraph 3.7 on page 16, the professor refers to the Law Commission’s 2011 review and notes that
“it is deeply regrettable that the Government has not yet responded to the report and draft bill which the Commission subsequently published in 2014. Had the Government acted sooner the concerns that led to the formation of this Group may have been avoided.”
That seems to me quite a strong charge, and quite a strong point. However, we are where we are. Looking back tells us something, but we have to concentrate on looking forward. I very much hope that we will get a strong response from the Minister, whom I congratulate on his recent promotion; perhaps it was not in circumstances that he would have sought, but I commend his predecessor for her very principled decision.
Many thanks are owed to those who contributed strongly to the report, some of whom are in the Gallery today. I highlight the work of the Licensed Taxi Drivers Association, GMB, Unite the union, the Suzy Lamplugh Trust, Guide Dogs, Transport for London—Helen Chapman and Val Shawcross have both spoken personally to me about the issue—and the Local Government Association. I must also praise the cross-party approach that has been taken, and I have had good help and support from the Under-Secretary of State for Transport, the hon. Member for Wealden (Ms Ghani), in promoting my private Member’s Bill.
I want to say a little about where my Bill has got to, how the report refers to it and how I hope it will go forward, and then pick up on one or two of the more controversial issues in the report that bear discussion. First, however, let me say how extraordinary the industry is and how dramatically it has changed, even since the Law Commission report—to be honest, if the Government ever finally responded to that report, I suspect that they would find it was way out of date.
We have seen huge changes in the past few years, with changing technologies and huge numbers of private hire vehicles and taxis on our streets. I do not think everyone quite realises the scale of the industry: there are now 285,400 licensed taxis and private hire vehicles and 361,500 driver licences, of which more than 137,000 are in London. The number of private hire vehicles in London has increased by 120% since 2005.
Behind the numbers, there are many different stories, and a point that I have consistently tried to make is that they are not always the same. The all-party parliamentary group on taxis, chaired by my hon. Friend the Member for Ilford North (Wes Streeting), produced a report last year that stimulated the debate that I referred to earlier—an excellent report, but, as I said at the time, somewhat London-focused. That is not to say that London is not hugely important, but any solution that we suggest has to work not just for London, which operates under different legislation anyway, but for the rest of the country. That is part of the challenge.
Theresa Villiers (Chipping Barnet) (Con)
Does the hon. Gentleman agree that the reports published by the all-party group and by the task and finish group indicate that we need new primary legislation to adapt to the changes in the taxi and private hire sector that he is outlining? That legislation should include national minimum standards to ensure that we protect passenger safety and security.
Daniel Zeichner
I will come on to that point, because one of the headlines in the report is that we need consistent national standards; the question is the extent to which they can be tailored or lifted to suit appropriate local circumstances. First, however, let me say something about accessibility issues. Our London taxis have a fantastic record: all 21,000 are wheelchair-accessible, but the story is not the same across the country. I am told that in metropolitan areas outside London, 83% of taxis are wheelchair-accessible, but in some rural areas the figure falls as low as 15%. One of the challenges that we face is making our taxi and private hire fleet more accessible to people throughout the country.
There is a lot of variation in the approach to disability awareness training, which only 41% of local authorities require for taxi drivers and only 38% require for private hire vehicle drivers. Over the past few years, the percentage of local authorities that require taxi and private hire vehicle drivers to complete training on the subject of child sexual abuse or exploitation has risen to 70%, partly in response to some very sad incidents in some parts of the country. However, that leaves nearly 100 licensing authorities that still do not require drivers to undertake such training.
I became interested in the subject when I had the privilege of serving as a shadow Transport Minister for a couple of years. When I later had the opportunity to introduce a private Member’s Bill, I chose to try to do something about safety issues, on which there is cross-party consensus. Since I introduced my Bill—the Licensing of Taxis and Private Hire Vehicles (Safeguarding and Road Safety) Bill—some 18 months ago, I have had the opportunity to discuss the issue with enforcement officers and officials from Knowsley to London and with taxi and private hire firms from Brighton to Manchester.
Grahame Morris (Easington) (Lab)
I congratulate my hon. Friend on securing this important and timely debate. The Select Committee on Transport recently visited Bristol, where we saw problems with traffic congestion, including the number of private hire vehicles from outside the city that were causing additional air pollution and congestion problems. He cited huge figures for the number of private hire vehicles—is there not an overwhelming case to cut the number outside London?
Daniel Zeichner
My hon. Friend and I had a fascinating trip to Bristol with the Transport Committee yesterday and, from that, I observe that the same kinds of issue crop up all around the country in different forms. For some years before I came to the House, and then as a constituency Member, I tried to understand the complexities of the taxi and private hire industry in my own constituency in and around Cambridge. Exactly the same issues arose, with licensing standards in a city often set at one level, but many private hire vehicles came in from an adjacent area. We heard that yesterday in Bristol, where the vast majority of private hire vehicles are actually registered in South Gloucestershire, creating a conundrum for the people and local council of Bristol. That goes to the heart of one of the questions, and to the point made earlier by the right hon. Member for Chipping Barnet (Theresa Villiers), which is that of national standards.
Louise Haigh (Sheffield, Heeley) (Lab)
I congratulate my hon. Friend on securing this important debate. The point that he is making is very pertinent to South Yorkshire, where we had the terrible child sexual exploitation scandal in Rotherham. As a consequence, both Rotherham and Sheffield have very high licensing standards for our taxis, with CCTV required in Rotherham. However, operators and licensed drivers from other areas can come in and completely undercut those measures, as well as all the efforts to tackle the prevalence of grooming gangs and their ability to exploit young children in South Yorkshire. I add my voice to the cross-party call for national minimum standards, which are vital to prevent such exploitation.
Daniel Zeichner
My hon. Friend is absolutely right. That was one of the issues that I spent much of my time discussing with people—trying to get that balance, with very high standards that we should rightly expect where there are specific problems, but without damaging an industry in other areas by putting undue costs and burdens on it, which could leave people in some areas with no taxi or private hire vehicle service at all. It is a challenge, yes.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate my hon. Friend on securing this debate on the report. Equally, I thank my hon. Friend the Member for Ilford North (Wes Streeting), because he has done a lot of work on the matter, which I have discussed with him. At the same time, we should pay tribute to the ex-Minister, the right hon. Member for South Holland and The Deepings (Mr Hayes). We have had a number of meetings and, in all fairness, as we are being cross-party, he was the man who initiated the report in the first place. He should get a lot of credit for that.
Having said that, we have a similar problem in Coventry, and there have been a number of incidents between the private hire taxis and drivers from Uber—let us be frank about that. To my way of thinking, the report should be implemented in full. People tend to forget that, originally, it was the coalition that weakened the legislation, but we are being cross-party, so I will not go too far down that road. Often, some of the drivers work 12 to 13 hours a day, just on a minimum. In fact, a documentary set in the west midlands was on a couple of weeks ago, in which someone had gone out and spent the day with a driver, who was just making ends meet. The situation is not fair on drivers, who should be given proper employment rights, like everyone else, and the zero-hours contracts should be stopped. I hope that the Minister will address that and put it right, whether it takes primary legislation or not.
In actual fact, the black cab is made in Coventry. Two years ago, everyone was paid off, but a new investor came in and the business is now thriving. But this situation threatens that, so lots of jobs are at stake as well.
Daniel Zeichner
I am grateful to my hon. Friend. It is so valuable to hear the different stories from around the country. Some years ago, I visited Coventry and talked to some of the taxi drivers represented by Unite about exactly some of the issues he raises. However, although the issues and problems are similar, they are not the same everywhere and will not require exactly the same solutions. That is the conundrum we face. Nevertheless, I pay tribute to the report, because issues such as the ones he mentioned—a complex mix, especially in relation to rewards and employment protection for drivers, which I will come on to—are part of the package.
John Howell (Henley) (Con)
The hon. Gentleman is being very kind in giving way. There is a lot in the report about the influence of new technology on how the taxi fleet should operate. He might be coming on to this, but what impact does he think new technology will have on the taxi industry?
Daniel Zeichner
I am grateful to the hon. Gentleman for mentioning that. I fear that were I to divert into a disquisition on the impact of new technology it would be very lengthy. I will say only that it has clearly had a huge impact over recent years and that, as so often with new technology, the impact is mixed. The new app-based technologies have, without doubt, not only created great opportunities for some but led to difficult working conditions for others. Some people, for example, question where some of the operators pay their taxes—no pun intended—and so on. A whole range of issues have come up, and the challenge for legislators and this place is to make some attempt to keep up. That, I am afraid, is one of my criticisms of the Government. As the years have passed, the legislative void has opened more and more problems, leaving local authorities and enforcement officers with considerable problems. We have seen people out there in the real world respond quite quickly to technological change whereas, quite frankly, we seem to struggle to set the right frameworks.
Going back to the report, one of its strengths is that in a relatively short document of 30 or 35 pages it has managed, in language that most of us—and probably the wider world—can understand, to summarise a range of issues in a readily understandable way, including sections on working practices and changes in technology. I suspect that if a Committee were to take it forward, or legislation was necessary, it would probably end up being a much longer document, as the Law Commission document of some years ago was. It is, however, welcome that we have a comprehensible and comprehensive account that deals with a number of the issues. One of the key recommendations is national minimum standards, and—this is the key point, in recommendation 2—we could build on them.
My Bill looked at the other side of the coin, which is enforcement. Anyone who goes out with taxi or private hire drivers, or with enforcement teams, will pretty quickly realise that the situation is very complicated and, indeed, it is made much more so by the examples that we have referred to—drivers might be licensed somewhere else, and enforcement officers can apply rules only in their own area. To put it simply, the system is clearly not working. My Bill would have made it possible for local enforcement officers to enforce in their area against drivers from another area plying their trade. I am pleased that recommendation 9 in the report makes a similar proposal.
My Bill also suggested a national database. In the existing situation, sadly—we have seen some notorious incidents—someone can lose their licence in one area but still apply to a different authority for another. Because a local authority has no way of knowing about any previous record, it can issue another licence to a driver who, because people work out of area, can be back on the same streets where the local authority had tried to protect the public against them, sometimes within a matter of weeks. The intention of my Bill was therefore to create a national database; local authorities would record their refusals, revocations and suspensions, and any authority issuing a new licence could check that database.
That might sound like a complicated process but, through the work of the Local Government Association, such a database has been established—not at a huge cost; at a fairly minor one—and it is run by the National Anti-Fraud Network. The problem at the moment, however, is that it is voluntary, which probably means that, as so often is the case, all the people who comply and do the right things take part, whereas the ones whom we seek to catch out, or to check up on, might not. One of the recommendations in the report is that that should become mandatory.
I was extremely grateful to the Government and the Minister for supporting my Bill, and it was worked up very effectively. Sadly, as sometimes happens to a private Member’s Bill, it fell foul of one or two individuals, which is a great shame, because we might well see incidents over the next few months or years that could have been prevented had the legislation gone through with all-party support. But we are where we are and importantly, the recommendation is in this report. The question is whether the Minister can find a way of taking it forward.
Of the 34 recommendations, many of which I think we would all agree with, I would like to comment on one or two. We have already talked about the national minimum standards. The report retains the two-tier approach to private hire vehicle and taxi licensing that sometimes has been questioned. The cross-border issue, which has already been referred to, has been one of the most controversial in recent times. It is directly affected by new technologies that make the place-based legislation that we inherited and have been using for a long time seem woefully out of date. One of the strengths of the report is that the chairman was good enough to allow members of the committee to put their comments in the appendices at the end, so we can see the differing views.
The report comes down on the side of a recommendation that was also made by the all-party group last year—that journeys should start or end in the area in which the vehicle operator and driver are licensed. There are some downsides to that; in some places that could make life a little more difficult and complicated, but on balance it seems to be the right way to go. I am sure that others wish to comment on that. Some say to me that implementing that could create great difficulties, including unnecessary driving to and from destinations; potential damage; problems for chauffeur services, particularly to airports—that is a very extensive trade, although most of us hope it may be diminished to try to improve our air quality and surface access to airports. It does not seem to be beyond the bounds of possibility to find a way through those difficulties. A close reading of some of the comments in the appendices shows perhaps a growing consensus that that basis could be achieved without necessarily causing the complete set of problems that is claimed.
The other controversial proposal, recommendation 8, is a cap on private hire vehicle numbers. Those who have followed these debates for many years will know that there was an extensive period of discussion about whether there should be a cap on hackney carriages. My city is one that has been through both, and the cap has been widely considered to be for the best for everyone. The evidence in the report from Helen Chapman on behalf of Transport for London puts it very well, and my hon. Friend the Member for Easington (Grahame Morris), who is no longer in his place, made reference to it, following our visit to Bristol yesterday. The congestion levels in our cities are partly attributable to the significant rise in private hire vehicles, and to other issues as well. To tackle the air quality issues, local authorities need the opportunity to consider a cap. There is not a blanket suggestion that numbers will be capped everywhere; there would have to be a public interest test and it would have to be part of a wider strategy. It seems that that, too, is the way forward.
My final general comments are on workers’ rights. The report rightly says that there are bigger, wider issues that go beyond the taxi and private hire industry. Obviously, there are proposals from the Taylor review. This is a controversial and contested area, and I certainly would not suggest that the issues are simple. I fear there is growing evidence that some of the rates for drivers, even using the new technologies, are being forced downwards. There is not exactly an equal balance of power for potentially vulnerable workers.
Action should be taken; I want stronger support for drivers. The suggestions made in the report are driven by passenger safety, which is very important, but it has been pointed out to me by people who work in the industry—Unite, Steve McNamara and others from the LTDA—that some of them have been tried before. Having a tachograph in a cab is different from having it in a lorry or a bus—there is much more waiting time in a cab. We will have to find other ways of dealing with that issue, rather than those suggested in the report. I agree with Steve McNamara that if drivers were better recompensed and wages were not being driven so low, there would be less incentive to work long hours. We need evidence—that may require more work—to know exactly where long hours are leading to safety issues. In the end, the overriding issue has to be safety.
I return to where I began. In the introduction I quoted, the chairman clearly says that there must not be further delay and prevarication. He says:
“Undue delay would risk public safety.”
That is a strong message. There have been too many years of delay. This is a hugely important industry for many people, especially in areas where public transport can no longer provide the kind of 24-hour service that people need to get to work and to go about their business. It is a fantastic industry, with a proud tradition and an important future. The problem is that a few people sometimes abuse the licensing system and create some of the awful incidents that there have been in some parts of the country.
We owe it to the industry, to the people working hard in it and to passengers to ensure they are safe. In this report we have an opportunity to move swiftly to implement a range of things that are not contentious and to take some decisions—as Governments ought to do—on some of the things that may be more contentious. There would be widespread support for a Government who implemented this report pretty well in full. That would make our country safer and the industry much more secure, and would offer it a vibrant future.
Several hon. Members rose—
Sir David Crausby (in the Chair)
Order. I will call the first of the Front-Bench spokespersons at 3.30. If they keep their remarks below 10 minutes each, Mr Zeichner will be able to make some closing remarks. Four Back-Benchers wish to speak; if they keep their contributions at around eight minutes, everyone will have the chance to speak. I call Iain Duncan Smith.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
Thank you, Sir David. I congratulate the hon. Member for Cambridge (Daniel Zeichner) on securing this debate, and I echo his congratulations to Mohammad Abdel-Haq on what is essentially a comprehensive and good report. We do not have to agree with everything in it, but I hope the Government will realise that there is much agreement across all parties on the need to drive a lot of it forward to make the changes necessary to improve taxis across the UK.
I will focus my remarks fairly narrowly on London, and particularly on the effect on black cabs of the enormous increase in the number of hire vehicles, which is mostly down to Uber. The people who have quite rightly lobbied me to ask me to be present at this debate have found that their incomes have fallen quite considerably. I want to focus on some of the issues that have arisen, and I hope that the Minister will take them on board.
Uber is massively adding to London’s congestion; the figures show that. The hon. Gentleman made a point about the increased numbers of vehicles on the road. I think a significant amount of that is down to the arrival of Uber. It is time to look at its business model. I hope we all agree that Uber does not pay its fair share towards the upkeep of the roads that it runs on, through the normal tax base. To echo his comments, whether or not people like the flexibility of its business model—I think flexibility is important, and that the gig economy opens up huge amounts of competition—there comes a moment when we must recognise that Uber drivers are treated pretty unfairly. They are scraping by in many cases and often are not very well supported by the organisation that says it does not employ them, which I always find rather bizarre, because it does. The idea that somehow they are going to be incredibly successful as a direct result of this has mostly proved quite incorrect.
There is a lot of talk about how Uber got prices down, but the truth is that its model is about arriving in an area, undercutting everything else there and eventually driving people out of business, and building up a model that allows it to raise its prices. I am interested to hear that it even uses an algorithm that allows it to jack up its prices when there is demand, whereas the black cabs that it competes with are not allowed to do that. Black cabs have a fixed price set for them: they charge the same figure, regardless of whether one cannot find a taxi and it is pouring with rain. That is an area that causes great concern. Many people, in my constituency and others, who ply their trade in black cabs comment that this has led to all sorts of problems. Often, black cab drivers get complaints from passengers that they have recently been paying much more when taking an Uber, and they wonder why that is.
I recognise that the report covered much of that. The hon. Member for Cambridge mentioned an area that I think we need to focus on much more. This is not just a free-for-all. After all, the scale of the increase in traffic on the roads in London is quite staggering. Notwithstanding that, the previous Mayor managed to significantly cut down various traffic lanes for reasons to do with cycling. I am sure we all want more cyclists on the road, but the reality is that as a result, in London there are more cars on slightly fewer traffic lanes.
The number of private hire vehicles has increased by more than 50%. Transport for London data shows that between 2011 and 2017 there was a 39% increase in private hire licences, taking the total to over 87,000 vehicles, which is up by 40,000 in the space of only a few years, so the hon. Gentleman is absolutely correct; in fact, I would have liked him to have stayed on the subject for longer, because it is such an important point.
The side effect of the increase is significant, and we London MPs see it every single day. We see complaints about productivity in London being affected dramatically by the inability of vehicles to get around and make deliveries, because the scale of traffic inside the city is astonishingly large. It is a matter that the Government need to look at carefully, because of the way that the gratification of some people becomes a serious problem for others.
I am conscious of time, but I want to touch on another point as quickly as I can. I am concerned—anybody should be—that Uber’s business model, which I mentioned earlier, is alright for a short period of time when things are getting going. We want companies to get those opportunities and not be trammelled by too much tax—I am an absolute believer in that. However, when an organisation is as large as this and so dominant, there is a genuine reason why we need to look again at the business model. The figures that are most startling are that Uber paid £411,000 in corporation tax in 2016, on a turnover of £23.3 million, and that masks a number of payments. It has set itself up in Holland.
I understand about competition, but my concern is about who ultimately will pay for the roads and the condition that they are in if Uber will not. Black cabs are contributing through their tax and national insurance, as well as other private hire vehicles, many of which have been used regularly and are absolutely above board. They all have to pay through tax and through the way their company tax and regulations are applied, but Uber gets away with making next to no contribution to the state of the roads that it uses in plying its business. Uber keeps saying that it is not the one plying that trade; rather it is the drivers, who are independent, even though the drivers would not be able to ply their trade if Uber was not there. It would be a very different game.
I want to mention some constituents who have seen me about this issue: Ron Nicholson, Martin Franks, Mark Diggin, Steven Tyson and Trevor Board. They are all straightforward people who are trying to earn a living. London’s black cab system is arguably the most admired in the world. It is on all the posters, and I notice that the Ministers for Trade go out selling the idea of coming here to get black cabs. We regulate it incredibly highly. It has to have disabled access; I am enormously proud of that fact. Unlike places such as New York, where it tends to be more of a free-for-all, we genuinely have a seriously good service, with straightforward people who want to do a good job. We regulate black cabs, yet because of the app, they are in competition with an organisation that has to do none of those things, and which has broken the point about hailing from the road. The app makes that almost ancient history. The reality is that Uber drivers are, in essence, getting passengers from the road.
We need to rethink this. We cannot have it both ways; we have to decide. Either we admire and want to continue with a service of regulated vehicles and drivers that produces an excellent service, particularly in central London, or we do not. We cannot have this unfair competition and this unlevel playing field, with higher congestion as a result.
I urge the Minister to take into consideration the consensus, among both London MPs and those who come from other constituencies and use the excellent service here. Now is the time not just to take the report into consideration and do something about the issue, but to genuinely ask the question: do we really value what we have? If we do not, we will lose it, and if we lose it, we will end up in an absolute free-for-all.
Wes Streeting (Ilford North) (Lab)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Cambridge (Daniel Zeichner) on securing the debate, and on his consistent work over the past three years in keeping these issues on the agenda, not least through his private Member’s Bill. I hope that as a result of this debate and the excellent report we are here to consider, many of the commendable measures he suggested through his Bill will finally find their way on to the statute book.
I rise to speak today as chair of the all-party parliamentary group on taxis. This is a particularly important issue for my constituency; well over 1,000 of my constituents are either licensed London taxi drivers or private hire drivers. During its short lifespan, the all-party parliamentary group has sought to make the case for urgent and far-reaching reform of the taxi and private hire licensing architecture. As we have seen this afternoon, we have a growing and strong cross-party membership.
There are three points I want to make to the Minister. I congratulate him on his promotion in the reshuffle, and I commend the Under-Secretary of State for Transport, the hon. Member for Wealden (Ms Ghani) for her diligent attention to these issues and for her engagement with the all-party parliamentary group.
Firstly, there is strong cross-party consensus on the need for urgent change; that is an important point to make, particularly given the current arithmetic of Parliament. I hope that Ministers will be reassured that if they bring forward legislation at the first opportunity, as I hope they will, they will find strong cross-party support for the proposals that we are discussing today.
Secondly, passenger safety and accessibility must be at the heart of the system. We have seen in two reports—the report published by the all-party parliamentary group on taxis and the excellent report we are discussing today—that clearly the current system has fallen well short of our expectations, and of the bar that we should rightly set to keep our constituents safe.
Third, we urgently need to address the working conditions of many people, particularly those working in the private hire industry. It should not be left to unions such as the GMB to drag big multinational corporations through the courts to ensure that workplace rights and protections, which have been fought for and won by working people over the best part of a century, are respected.
I thank Professor Mohammed Abdel-Haq for an absolutely outstanding report. I also pay tribute to the right hon. Member for South Holland and The Deepings (Mr Hayes), who was an excellent Minister. We would not have the report were it not for his efforts. We welcomed his engagement as a Minister with the all-party group and we are delighted he is able to join us this afternoon to add his considerable voice and weight to the debate. To his enormous credit, Mohammed Abdel-Haq has engaged widely with others in producing the report. The quality and quantity of that engagement is reflected in the report’s strength. There will obviously be differences and competing interests, but he has succeeded in listening to everyone, engaging with them properly, and coming up with a comprehensive and coherent set of reforms that will address the widespread concerns of many different parts of the taxi and private hire industry.
Mr Jim Cunningham
I echo my hon. Friend’s remarks about the professor, who did a considerable amount of work and produced a good report. In fact, I met him with a trade union official. I was remiss earlier in not identifying the professor as having done a hell of a lot of good work on the report.
Wes Streeting
I strongly agree with my hon. Friend, and thank him for his consistent engagement with the all-party group, for raising the issues, and for bringing them to the attention of Ministers.
The report contains a whole package of reforms, and I strongly emphasise to Ministers and the Department that they ought to be implemented in full. We have already heard that there is clear consensus on the need for national minimum standards that apply across the country. My hon. Friend the Member for Sheffield, Heeley (Louise Haigh) alluded to child sexual exploitation and local issues. Of course, for very good reasons, there will always be areas where local authorities will want to enhance standards and protections, and develop appropriate local tools and solutions in order to regulate the taxi and private hire industry properly in their area, but our starting point has to be clear minimum standards. I think that point is accepted by the Department. Taking that into account, I will turn to why I think it is important to give some of the recommendations an airing, not least because persuasion might still be required.
On cross-border hire, as we have heard, local authorities in places such as Rotherham and Sheffield have had particular issues with safeguarding children and young people. Girls have been sexually assaulted and raped, and private hire vehicles have been used to carry out that dreadful exploitation and those horrendous crimes. Where local authorities have rightly responded and put in place enhanced safety standards and protections, it cannot be right that people can flout those protections simply by getting their vehicles registered in another licensing authority, where there are lower standards. That wild west of regulation is where we find ourselves.
The issue is not only safety. I strongly believe that some licensing authorities give out licences like sweets because they enjoy the revenues. They know that the drivers securing the licences have no intention of driving in the licensing authority area where the licence is issued, and they know that the drivers will be somebody else’s problem. That simply is not fair. It is not a sustainable position, but it is the position that we find ourselves in. The proposal to address that, whereby any journey must either start or finish in the area where the licence is issued, is common sense and practical. It is known as the A to B and B to A model, or ABBA for short.
Since we know that the Prime Minister is a big fan of ABBA, I hope that we will take on board the report’s recommendation to end the practice of cross-border hiring. It would stop local authorities thinking only of the “Money, Money, Money”. Local authorities support the proposals and the Local Government Association recognises the challenge. Lots of local authorities are victims of the practice, which is why the LGA issued the “SOS” in its briefing ahead of this debate, hoping that Ministers would take it on board; there is strong support for it, so I would not want Ministers to face their “Waterloo” if they did not. I promise that is the end of the ABBA references, but I hope Ministers will look carefully at the strong evidence for the need for change, and at the practical proposals.
It has been mentioned that licensing authorities in some parts of the country are small in scale, and some are in close proximity to each other, so there might need to be a pragmatic approach whereby drivers could operate across different licensing authorities, but we have to make it absolutely clear that that should not prevent drivers from being licensed in a number of authorities where they intend to work. Luckily, we have a London-wide licensing authority, but let us imagine for argument’s sake that we did not, and that drivers in my constituency in the London Borough of Redbridge also wanted to operate in Barking and Dagenham, Havering or Newham. They ought to be able to be licensed in those areas.
Local authorities might want to join together to create larger licensing areas. The Government ought to be permissive about such approaches, so that appropriate local solutions can be adopted, but we simply must end the wild west regulation. We must end the scope for drivers to flout important safety regulations, and end the practice of local authorities dishing out licences like sweets.
I turn to the proposal to give local authorities the power to cap the number of vehicles in their licensing area. It is important to emphasise that the proposal is for a permissive power. It certainly would not be the expectation—in fact, it would not be desirable—for every licensing authority to impose unnecessary caps, but particularly on the streets of London and in other big cities, the number of private hire vehicles has exploded beyond all reasonable proportions. The number of such vehicles in England reached record levels last year, having increased by 37% since 2011, whereas there was just a 3% increase in taxis. In London, the number of private hire vehicles jumped by 39% to 87,400, and the number of drivers increased further to 117,700.
The problem with the situation in London is that it does not benefit anybody. It does not benefit consumers, because even if they find it easier to order a private hire vehicle via an app, or to ring up a minicab office, it is no good to them if they are then stuck in heavy congestion trying to get to wherever they are going. It does not work for private hire drivers, who tell me they have seen their hourly wages go down. It is all right for a big multinational company with loads of drivers on their books, because they still rake in the revenues from the drivers’ hard work.
Companies such as Uber saturate the market, not just to drive the competition off the road, but at the expense of their own drivers. In central London, huge concentrations of Uber drivers operate in the same area, so they compete for the same number of customers. Even if, as we accept, the market for private hire in London has grown in recent years, they still compete for the same number of passengers, so what we get is a scourge of drivers driving round and round the streets of London, pumping toxic chemicals into our air and reducing our air quality. Even if those vehicles are not the most polluting, the congestion that they create on the streets of London allows the most polluting vehicles to pump more and more fumes into our air.
Those are some of the many reasons why the Mayor of London and Transport for London have requested from the Government powers to cap the number of private hire licences issued in London. I hope that is a permissive power that Ministers will consider carefully, and introduce, and I hope that they will put trust in local licensing authorities to make decisions appropriate to their areas. It does no good to keep talking about localism if we do not give local authorities the powers and tools that they need to do the job.
The third issue that needs to be addressed is the running sore of plying for hire. It is years since the Law Commission recommended that the Government introduce a statutory definition, but we have still not seen one. The situation should be clear, as the right to be available for immediate hire, and to be hailed on the street or at a taxi rank, is reserved to taxis alone. That has been a key privilege, in recognition of the fact that licensed taxis are held to higher standards, with higher hurdles to jump, and that taxis are more highly regulated than any other part of the system. However, it is increasingly clear that companies such as Uber flout the spirit of the law on plying for hire. It is time for the Government to strengthen the letter of the law, so that there can be no room for confusion or ambiguity about where we stand on the issue.
Finally, I would not expect mandatory disability equality training to be a source of controversy, but it has so far been a bit too difficult to persuade the Government of the need for reform in that area. As things stand, the Government are committed to guidance, rather than an obligation on drivers to undergo mandatory training. The problem, as we have heard from a range of disability charities, is that the experience of disabled people when using vehicles has not overall been a happy one, with the consistent service that we would expect. For example, Guide Dogs, which has a training facility in my constituency and has given evidence to the all-party parliamentary group on taxis, notes that discrimination against assistance dog owners is widespread. The worst offenders for refusing access to assistance dogs are private hire vehicle and taxi drivers. According to Guide Dogs, in a one-year period, 42% of assistance dog owners were refused by a PHV or taxi driver because of their assistance dogs. We have also heard complaints from people with a range of disabilities about their needs not being properly met. The proposal has widespread support from the Transport Committee, the Law Commission, the House of Lords Select Committee on the Equality Act 2010, and the all-party parliamentary group on taxis.
I want to impress on Ministers again that the case for reform has been clearly made. The need for it is urgent; but happily for Ministers and Government business managers, as we have seen this afternoon from the contributions of Members from across the House, including former Cabinet Members and former Ministers with responsibility for this matter, there is clear cross-party support for the entire report. I hope that the Department for Transport will urgently proceed on the basis of that report.
Several hon. Members rose—
Sir David Crausby (in the Chair)
Order. I did not set a time limit, so I cannot really now limit the length of Members’ speeches. I shall probably be able to call only one more Member before the Front-Bench speeches. I call John Hayes.
Mr John Hayes (South Holland and The Deepings) (Con)
Dr Johnson spoke of the virtues of travelling hopefully, but travelling hopefully depends on travelling efficiently, effectively, securely and, most of all, safely. The foreword to the excellent report before the House, by a group led by Professor Abdel-Haq, states that it was necessary
“to chart a future which ensured public safety for all”.
Public safety lies at the heart of the work, and of our endeavours in debating this today.
The recommendations in the report are focused on how taxis are licensed and how that licensing is enforced and complied with. Compliance and enforcement are critical to a number of the recommendations. Recommendations 23 and 24, on the database and the exchange of information between licensing authorities to check on the bona fides of applicants, are critical. Throughout the report there is a focus on ensuring that those who apply for licences are fit and proper people, on whom the public can rely.
A second issue, to which my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) referred, is the working conditions of drivers. It is clear to me that there is exploitation of drivers, whose working conditions are at best—I put it generously—variable, and that minimum standards are not currently being enforced. There is a need for urgent reform. I am not speaking, of course, of our blackcab drivers, who are largely self-employed and determine their own working day and year, and who, as my right hon. Friend is right to say, are celebrated, worldwide, for their quality. It seems extraordinary to me that we should jeopardise that worldwide reputation for what modern economists call a disruptor. I am not a great fan of the disruption of what works. I say that what matters more is doing what matters in the interests of the public, not fixing things that ain’t broke—which largely applies to blackcab drivers.
Recommendation 33 addresses working conditions, referring to the exploitation of drivers and the need to enforce the national living wage, while recommendation 34 addresses the question of restrictions, on safety grounds, on the number of hours that private hire vehicle drivers typically drive. There are other recommendations on the proper treatment of disabled people. It is appalling that some blind people have been refused their proper entitlement to take their guide dog with them on a private hire car journey, and I am delighted that there is a recommendation on that in the report.
The Under-Secretary of State for Transport, my hon. Friend the Member for Wealden (Ms Ghani), has been remarkable in her willingness to listen, and I pay tribute to her, as well as to Professor Abdel-Haq. The cap that has been discussed by a number of Members seems to me to be localism in practice. We can hardly argue for reinforcing the role of local authorities in regulating the circumstances of private hire vehicles and taxis, and then say that they cannot make a judgment about the appropriate number of vehicles in a locality.
There is, however, something more worrying still to consider. We know that in Rotherham, Rochdale, Oxford and Newcastle taxis were a key element in allowing the widespread abuse of vulnerable young women. The use of taxis for criminal purposes is a direct consequence of a regulatory system that is simply not fit for purpose. We cannot allow that to continue and the Government would be unwise to hesitate for a moment in putting in place the changes necessary to avoid such an eventuality. That is about more than taxis. It is about public confidence, social cohesion and building communal faith in a system that works for all, as Professor Abdel-Haq has argued.
There cannot be a cherry-picking exercise. The report must be adopted in full, for there is not a single recommendation in it with which I do not agree. It would be quite wrong if the Government were to cherry-pick, and I know that the newly promoted Minister, who must be basking in the glory of his seemingly unstoppable rise up the greasy pole of politics, will be listening closely to the debate, and will want to work with my hon. Friend the Under-Secretary to make sure that the report is implemented speedily.
Sir David Crausby (in the Chair)
Order. Can I ask you to wind up? I am going to have to move on.
Patricia Gibson (North Ayrshire and Arran) (SNP)
It is a pleasure to participate in this debate. Like the speakers before me, I thank the hon. Member for Cambridge (Daniel Zeichner) for initiating this debate.
As we have heard, taxis are now an integral part of our lives, providing jobs and opportunities to people across the UK and enhancing transport links to our local and rural communities. The report by the task and finish group on taxi and private hire vehicle licences, which we are focusing on today, urges the UK Government to overhaul the regulatory regime for the taxi and private hire vehicle sector and has recommended minimum standards for drivers, vehicles and operators in taxi and private hire vehicle licensing.
There have been calls for the UK Government to convene a panel of regulators, passenger safety groups and operator representatives to determine what those minimum safety standards should be. It has been suggested that licensing authorities should be able to set additional, higher standards in safety and all other aspects, depending on the requirements of particular local areas, as the hon. Member for Cambridge and the right hon. Member for South Holland and The Deepings (Mr Hayes) pointed out.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Cambridge (Daniel Zeichner) on bringing this debate to the House for consideration. The lines between a hackney carriage, a black taxi and a private hire vehicle have become blurred; there are those who know how to play those blurry lines to their benefit and those who have paid the price, through fines and even the loss of their licence. Does the hon. Lady agree that this report gives the opportunity for regulation, and that that regulation should be across the whole of the United Kingdom of Great Britain and Northern Ireland?
Patricia Gibson
The hon. Gentleman makes an excellent point about the blurring of the boundaries. I will go on to talk about this in a wee bit more detail, so I will simply say for now that taxi licensing is devolved in Scotland, Wales and Northern Ireland. There are pretty slight but pretty important divergences across the UK that deal with the kind of issues that he has raised.
The Suzy Lamplugh Trust’s research on taxi and private hire vehicle drivers revealed that only 46 out of 316 local authorities were able to provide it with detailed information about drivers’ criminal histories on request. Indeed, the research went on to reveal a significant number of licensed drivers with serious criminal convictions. The fact is that the “fit and proper person” test that is used for anyone applying to drive a taxi or private hire car is pretty ambiguous, and means that some local authorities are granting and renewing licences that perhaps we would not want them to.
The Local Government Association in England is creating a voluntary register, as we heard from the hon. Member for Cambridge. That, of course, is an interesting idea, but if it is voluntary, inevitably its impact in bringing about the changes that many of us would like to see will be limited. We know that the advent of smartphone apps is already having a significant impact on the way taxis and private hire cars operate, which is challenging existing businesses and regulatory models all the time. We have heard a lot about that today.
We need all and any taxi or private hire companies to comply with the existing licensing requirements set out in legislation and to ensure that all vehicles and drivers are properly licensed. We heard much about that from the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). We also need to pay attention to unfair working practices and ensure that those working in the so-called gig economy have fair, protected and decent working conditions. If work must be flexible, it should still be fair; the two are not mutually exclusive. Workers should have appropriate rights and protections, including sick pay and holiday pay. It was disappointing that the Taylor review did not quite match up to many people’s hopes in tackling the real issues facing workers in insecure employment.
As I said earlier in answer to the hon. Member for Strangford (Jim Shannon), of course taxi licensing is devolved in Scotland, Wales and Northern Ireland. The licensing systems across the UK are similar, but there are important differences. One of the major differences, something that campaigners have flagged up and that has been made much of today, is cross-border hiring of private hire vehicles.
In Scotland, private hire vehicles are required to return to their licensing area to accept a booking after travelling outside that area. A private hire vehicle driver in, for example, Glasgow can accept a fare in Glasgow that takes them out of the city, but they cannot pick someone up outside the city. They must return to Glasgow to pick up another fare. I see no reason why the Minister cannot give serious consideration to the regulatory system in England.
There remains the problem of drivers illegally picking up off the streets without prior booking, which often overlaps with cross-border hiring. These so-called pirate cabbies have an impact on the livelihoods of other taxis and private hire cab drivers who follow the rules. They can also potentially put the public at risk, and I would wager that these pirate cabbies are causing problems across the entire United Kingdom—even in Scotland, where cross-border hiring is illegal.
Most particularly, I suggest it is likely to be a problem in big cities such as Glasgow, Belfast, London and Cambridge on the busiest nights of the week, especially Fridays and Saturdays. Clearly, more enforcement would help. The practice is a breach of cab licensing restrictions and invalidates car insurance. I know that in Scotland illegal taxi touting, where the illegal pick-up is often charged way over the odds for their journey, is an issue that Police Scotland are particularly interested in.
There is also the contentious issue of over-provision, about which we have heard much today. In Scotland, until fairly recently local councillors had no power to limit the number of private hires on the streets, but new legislation allows the licensing authority to refuse to grant an application for a private hire licence on the very grounds of over-provision of private hire cars in the area in which the driver plans to operate. Any assessment of over-provision must of course look at current provision, as well as the use of and demand for the service of both taxis and private hires, to ensure that demand can be fulfilled and there is fairness to all in the industry.
Local flexibility is important. It is also important that there should be a minimum number of wheelchair accessible vehicles, as the hon. Member for Cambridge pointed out. We have heard calls for CCTV licensing in cabs, but that is more controversial, because as well as cost considerations there are concerns about intrusion.
As the way we live our lives and access our leisure pursuits is increasingly reliant on technology, and as public transport can be challenging for some of our communities at certain times of the evening, taxi and private hire licensing also becomes more challenging. Our priority must be to keep the public safe, as well as to create a fair and reasonable environment for those who make their living providing this important service. Today we have heard some of those concerns and a little bit about some of the divergences and the different direction we have taken in Scotland. The concerns raised are important and require our attention; I am keen to hear what the Minister intends to do to answer them, whether he has had a look at how things operate in Scotland and whether any of those measures are perhaps things he would wish to adopt.
Matt Rodda (Reading East) (Lab)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Cambridge (Daniel Zeichner) on securing this important debate, and on the work he has been doing on the licensing of taxi and private hire vehicles. With his private Member’s Bill, he has shown more initiative than the Government to ensure that we legislate in this Parliament to require taxi and private hire vehicle licensing authorities in England to share information with other local authorities, to prevent unsuitable people from being granted licences. I should say that in our manifesto at the general election last year, the Labour party pledged that we would reform the legislation governing taxi and private hire services, introducing national standards to guarantee safety and accessibility.
I thank the right hon. Member for South Holland and The Deepings (Mr Hayes), who instigated the task and finish group’s report, and I hope his colleagues on the Government Benches will now act on it. While we welcome the many recommendations in the report and the work of Professor Abdel-Haq, it is frustrating that the Government have so far failed to legislate during their eight years in power, despite the calls from Labour and other Opposition parties, trade unions and campaigners.
Frank Field (Birkenhead) (Ind)
I intervene merely to put on the record the thanks that the whole country should give to Professor Abdel-Haq for leading this working party, to the working party itself, many of whom I see in the Public Gallery, and to the Minister who set it up. Even if the Government do not want to move generally, they can say that licensing authorities may act against companies such as Uber by insisting that people get the legal minimum rate for the hours that they are clocked on for work.
Matt Rodda
I share my right hon. Friend’s concerns about the role of Uber in this and the need for urgent action to tackle abuses.
While we welcome the recommendations of the report, eight years in power is a long time to leave this issue and not tackle it. It is now time to move on. The Government’s hands-off approach to taxis and private hire vehicles means that they have presided over a race to the bottom on quality, accessibility and, as we have heard, safety. Several serious incidents have demonstrated that taxi and private hire vehicle passengers are simply not adequately protected.
As technology and the industry have evolved, our regulation of the taxi and private hire industry has simply failed to keep pace. The industry is changing rapidly, yet the legal framework governing taxi services is almost 200 years old, while private hire services legislation dates from the mid-1970s in most of England and Wales and 1998 in London. The piecemeal evolution of the regulation of taxi and private hire services has resulted in a complex and fragmented licensing system, with services differing greatly depending on where in the country they are. There are no national standards, resulting in a very variable picture, primarily regarding quality, safety and accessibility.
One of the most significant challenges facing the taxi trade that Ministers have stalled over, but which the Bill introduced by my hon. Friend the Member for Cambridge addresses, is cross-border working by private hire vehicles. There have been concerns about private hire vehicles operating outside their licensed geographical areas, as we have heard. That puts taxis at a competitive disadvantage, as unlike private hire vehicles they have to return to their licensed area after taking a fare outside their borough.
Some councils in the country hand out too many licences, clogging up the streets and worsening congestion and air quality, as my hon. Friend the Member for Ilford North (Wes Streeting) mentioned. Illegal levels of air pollution are the UK’s most severe public health crisis and cause 40,000 premature deaths each year. Despite being repeatedly dragged through the courts, the Government have refused to act, including by failing to include taxi and private hire vehicle policy as part of a wider clean air strategy, which I believe is a serious omission. Greater investment in charging infrastructure and greater support for taxi and private hire vehicle companies that wish to switch to electric fleets are also required.
However, it may be better to reduce the total amount of traffic in areas with illegal air quality, so I note with interest the task and finish group’s recommendation that the Government should legislate to allow local authorities—where there is a proven need—to cap the number of taxis and private hire vehicles that they license. That proposal could help authorities to solve challenges around congestion, air quality and parking and ensure appropriate provision of taxi and private hire services for passengers, while at the same time maintaining drivers’ working conditions, which is important and which we have heard about today. I am interested in hearing the Minister’s response to this specific point.
The implications of cross-border licensing arrangements for safety are deeply worrying, as was said earlier. Local authorities are presently permitted to set their own “fit and proper” criteria for licensing. Dangerous private hire drivers are therefore able to operate even in an area with stringent safety criteria, as my hon. Friend the Member for Sheffield, Heeley (Louise Haigh), who is no longer in her place, mentioned. That needs to be tackled. As a result, local authorities such as Rotherham and Oxford, which set strict criteria following instances of child sexual exploitation, are powerless to act.
Rather than addressing that problem, the Government’s Deregulation Act 2015 permitted the subcontracting of licensing, which has made the situation worse. Enforcement by local licensing authorities is now more difficult, and passengers are stripped of their right to choose which operator they wish to travel with. The Government should include in future national minimum standards the requirement for all taxi drivers to undertake safeguarding and child sexual abuse and exploitation awareness training, which should include the positive role that drivers can play in spotting and reporting signs of abuse and neglect in vulnerable passengers.
Further, in the interests of passenger safety, the report recommended that Government standards should mandate that all vehicles be fitted with CCTV, subject to strict data protection measures. In the light of threats to passenger safety, there is indeed a strong argument for this measure. The report also found that such standards would support greater consistency in licensing, potentially reducing costs and assisting in out-of-area compliance.
What steps will the Government take to combat the problems associated with cross-border working? One obvious measure to mitigate the problem is the introduction of national standards for licensing authorities. The Labour party has repeatedly called for such standards, and I hope that the Minister will now commit to introducing them. The Government have previously stated that many of these issues should be the responsibility of licensing authorities, but issues such as disability access and safety standards should not be at the discretion of local authorities and should not vary greatly across the country.
In May 2014, the Law Commission published a report recommending wholesale reform of taxi and private hire vehicle licensing. It found that:
“The balance struck between national and local rules lacks an overarching rationale, resulting in duplication, inconsistencies and considerable difficulties in cross-border enforcement… The outdated legislative framework has become too extensive in some respects, imposing unnecessary burdens”.
The Government did not respond to the report beyond saying that they were “considering it.” Surely they should not simply ignore it. The industry has changed significantly throughout the years, and continues to do so, increasingly spurred on through technological change.
I am conscious of the time, so I will move to my closing remarks. The former Mayor of London, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), planned at one point during his tenure in City Hall to introduce a minimum five-minute wait for customers requesting a car and beginning a journey. That was motivated by concerns about the impact of Uber’s business model on London, which we heard so much about earlier. Those plans were abandoned after intense lobbying, but I think it is worth reviewing them again. The advent of smartphone apps is changing the industry and presents many clear benefits to passengers, but companies such as Uber currently enjoy unfair competitive advantages because they do not have to follow the same regulation as other businesses.
Licensing authorities should use their existing enforcement powers to take strong action where disability access refusals are reported, to deter further cases. We welcome the recommendation that central Government and licensing authorities should level the playing field by mitigating additional costs that the trade faces where a wider social benefit is provided, such as when wheelchair accessibility or other measures are offered. We have seen real progress in London on these matters. I look forward to hearing what steps the Minister will take on the many questions I have asked him.
The Minister of State, Department for Transport (Jesse Norman)
It is a pleasure to serve under your chairmanship, Sir David. If I may briefly state the Government’s position, very much in the spirit of the hon. Member for Ilford North (Wes Streeting), I would say in the first instance “Mamma Mia”—we cannot allow this to be “One Last Summer”, nor can it be “Hasta Mañana”. It is not quite “SOS”, but we cannot allow the taxi trade to say “Take A Chance On Me”. Above all, as my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) said, it cannot be that “The Winner Takes It All.”
I congratulate the hon. Member for Cambridge (Daniel Zeichner) on securing the debate on the task and finish group’s report on taxi and private hire vehicle licensing. Unfortunately, as Members will have detected, the Minister responsible for taxi and private hire vehicle policy is unable to be here; she is overseas on a ministerial visit. However, I have noted—as will she when she reads the account of the debate—the very warm words that colleagues from across the House have for her work and for that of my right hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), in whose steps in the Department it is a pleasure to tread.
I know that better regulation of this sector is something that hon. Members from across the House regard as important, and we in the Department very much share that view.
Jack Lopresti (Filton and Bradley Stoke) (Con)
I add my grateful appreciation and thanks for Professor Abdel-Haq’s brilliant, well-informed and well-intentioned report. May I say to my hon. Friend the Minister that if we embrace modern technology, it will not and need not be too expensive, onerous and complex to adopt most of its recommendations?
Jesse Norman
My hon. Friend tempts me to comment on the contents of announcements that will be forthcoming relatively soon. I do not think I should do that, for reasons that the House will understand, but his point is well made. Certainly many of us have been beneficiaries of increased technology in our lives as well as in our travel.
Ministers in the Department very much regret that the private Member’s Bill promoted by the hon. Member for Cambridge appears unlikely to be successful. We all know, and he has reminded us today, of his considerable efforts to increase safety and of the support that he received from officials in the Department to introduce that Bill, which the Government were pleased to be able to support.
I shall make some general remarks and then pick up the questions and specific matters that have been touched on. In recent years, the taxi and private hire industry has experienced rapid growth and significant change brought about by innovation and the application of new technologies, which my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) has just mentioned. Those changes contributed to the announcement of the formation of the task and finish group. Hon. Members will recall that that announcement was made at a Westminster Hall debate last July by the former Minister, my right hon. Friend the Member for South Holland and The Deepings.
The goal of the group was to consider issues raised about taxi and private hire vehicle licensing and their potential remedies. The group first met in September of last year, with an intention to submit a report later that year. The work that it did revealed a degree of agreement—a high degree of agreement, in many ways—but also very strongly held and disparate views on solutions. It is important to put that on the record, but I am sure that it will come as no surprise to anyone who has engaged with taxi and private hire vehicle regulation over the years.
The report was delayed, but that enabled the already well-informed group to consider the numerous submissions from organisations across the country and a wide range of stakeholders. They included those working in the trade, regulators, the police, disability organisations and trade unions, to name just a few. The longer timeframe gave the group the opportunity to question many of those organisations to learn more about their concerns and the specific matters relating to them.
As I trust colleagues will understand and as I have said already, I cannot advise them of the Government’s response at this stage, but I can reassure them that the work being done in the Department is near completion and that a Government response, setting out how we intend to reform the regulation of the sector, will be issued very shortly.
Jesse Norman
It really would not be appropriate for me, not least because I am not the Minister directly responsible for this area, to comment on the timing of the response, but “very shortly” are encouraging words when uttered by any Minister and I hope that the right hon. Gentleman will take comfort from that.
I, too, would like to take this opportunity, on behalf of the Under-Secretary of State for Transport, my hon. Friend the Member for Wealden (Ms Ghani), as well as, of course, on my own behalf, to thank the chair of the task and finish group, Professor Abdel-Haq, for his work. It has been much said across the Chamber that his work has been welcomed and is well regarded for its clarity and the ingenuity with which he brought the disparate voices together. The recommendations that he made in the report may not be unanimously supported in every case, but the professor has achieved a great deal of consensus and on that he should be congratulated.
The report sets out the professor’s view of what is needed, from both central and local government, to ensure the safety of passengers and the long-term success of the sector. There are 34 recommendations, some of which focus on short-term fixes. A number need to be achieved by licensing authorities using their extensive existing powers. In the medium term, the recommendations focus on greater consistency in licensing. They call on the Government to legislate to set national minimum standards, as discussed today, and to enable effective enforcement through greater powers for enforcement officers and better sharing of information between licensing authorities.
As I have said, the Government will respond to the report very shortly, but we are already seeking to increase the consistency in licensing. Ministers will very shortly launch a consultation on safety-related statutory guidance to be issued to licensing authorities. The draft guidance has been the subject of extensive discussion and engagement, including a review by the task and finish group. The guidance represents an important first step in ensuring that all passengers will be carried by someone who has undergone rigorous checks to ensure that they are “fit and proper”, as legislation requires. That should apply regardless of where they travel and by whom the driver and vehicle are licensed—both issues have been raised here today.
Some of the recommendations made in the statutory guidance and in the task and finish group report will impose additional burdens on the trade. Although we would prefer that those measures were unnecessary, Ministers recognise that it is vital to act on the lessons from the Casey and Jay reports. It is a well-known remark and, I think, agreed by all that a single attack is too many. We must protect passengers from any driver seeking to abuse their position of trust.
The task and finish group’s remit extended beyond the vital area of safety. The way in which the sector is regulated and the welfare of those working within it have also been the subject of increasing concern and have been raised in this debate. Many of those concerns stem from the innovation and application of new technologies. The requesting of a vehicle, whether a taxi or a private hire vehicle, via an app is increasingly popular, but the fundamental difference between what private hire vehicles and taxis are permitted to do, in law at least, has not changed. There may be blurring, but the fundamental basis of it has not changed.
Taxis alone have the hard-earned right to ply for hire, and action must be taken against those who break the law in that regard. Taxis offer a premium service to passengers, providing confidence that drivers have knowledge of the local area and, in some areas, guarantees on the accessibility of vehicles—another matter raised today. Private hire vehicles provide a different range of services and, although there is a wide range of views as to the relative merits of some of the new entrants to the sector, we must not forget that many of these services are popular with the public. The Government support consumer choice and want to see both the taxi industry and the private hire vehicle industry prosper.
Local authority enforcement officers have a vital role in maintaining the differentiation and fair competition between the two sides: taxis and private hire vehicles. They also play an important role in ensuring that unlicensed, unvetted, uninsured and unsafe drivers and vehicles are prohibited from circumventing the regulations and stealing business from the legitimate trade.
The emergence of “disruptive” businesses, though the application of new technologies, has created new products and services with the potential to meet still better the demands of consumers. These developments have also provided greater flexibility in working arrangements and increased employment opportunities, but of course one recognises—this has been raised today—that they have drawbacks as well. The implications of gig working extend far beyond this sector. That is why my right hon. Friend the Prime Minister commissioned Matthew Taylor to conduct a review of modern working practices.
Let me pick up some of the other points raised. The report raises the issue of accessibility training, and the Government are considering that very closely. The same is true with regard to the need for national standards. As I have mentioned, the Government expect to consult soon on statutory guidance on safeguarding. As regards the question of a national database, the Government are considering all things that could be done to improve safety, and the response will include that question, too. I think that it would be unfair for me to continue to say, “The response will include,” and that I should allow the hon. Member for Cambridge the chance to wind up his own debate.
Daniel Zeichner
I am very grateful to the Minister for giving me the chance to wind up. I thank everyone who has contributed to a full debate. We have not been able to cover every single issue, and I want to raise a couple of things that were not touched on: the use of CCTV, and the anxieties, if we have larger licensing authorities, about potential clustering of vehicles in city centres.
I would like to finish by echoing the wise words of the right hon. Member for South Holland and The Deepings (Mr Hayes). He said that he was not in favour of disruption. I think that I am more disruptive than he is, but one thing that we would not want to disrupt is things that are precious, and the most precious thing is safety. That is the theme that has come through the debate this afternoon, which is why I was pleased to hear the Minister promising action very shortly. We will keep him to that promise, because it is very important that we heed the messages coming through from this excellent report—we again thank the professor and his group for producing it—that safety is paramount and we need swift action.
Question put and agreed to.
Resolved,
That this House has considered the Task and finish group report on taxi and private hire licensing.
Parental Leave for Parents of Premature Babies
(6 years, 1 month ago)
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Mr Steve Reed (Croydon North) (Lab/Co-op)
I beg to move,
That this House has considered parental leave for parents of premature babies.
It is a pleasure to serve under your chairmanship, Mr Pritchard. Having a premature baby is one of the most traumatic experiences that any parent can go through. Instead of the healthy baby that they longed for, traumatised parents watch their tiny baby struggling for its life inside an incubator surrounded by tubes, wires and bleeping monitors. That is terrifying and it can go on for weeks or months, until the baby is well enough to go home.
By the time that they take their baby home, many parents find they have already used up an awful lot of their maternity and paternity leave, so their child suffers twice: first, from the serious health conditions and trauma of premature birth and, secondly, because mum and dad have to go back to work much earlier in the baby’s development than the parents of a baby born at full term. Losing this vital time for bonding and nurturing can hold the child back throughout its life. I met a young mum whose baby spent three months in intensive care, and all that time was taken out of her statutory maternity leave.
Jim Shannon (Strangford) (DUP)
This is a topical subject. In the last week in Northern Ireland, six small babies have been born prematurely to parents who were not expecting to see them this soon. Those parents then have to change their plans for coming home. Common sense dictates the normal things that happen when a baby comes home, but does the hon. Gentleman agree that those parents should have the additional time to deal with their child’s acute needs, which arise from being premature, and that they should be given additional leave for that purpose? At that critical moment, they need that extra time.
Mr Reed
The hon. Gentleman makes the point extremely powerfully and I hope he has persuaded the Minister that action is needed to support these families. It is not just the baby who suffers; so do the parents. Two mums in five of premature babies suffer mental ill health because of the stress of watching their tiny baby fight just to survive. The expense of daily journeys to hospital, overnight stays in nearby accommodation and eating in cafés pushes many parents into debt.
I first raised this issue in Parliament in October 2016 on behalf of a group of fantastic campaign organisations, including Bliss and The Smallest Things, which is based in my constituency. We were delighted when the then Minister agreed to pilot a voluntary scheme for employers, drafted by the Advisory, Conciliation and Arbitration Service, encouraging them to offer parents of premature babies the flexibility and time they need to look after their little baby. The pilot started in November 2017 and was intended to run for a year, ending in October this year. We are now well into November, but there is still no word from the Minister on her view of how well the pilot went, or whether she agrees that legislation is needed.
Instead of action, the letter that the Minister kindly wrote to me proposes—regrettably—a further delay until next summer. The charities recently met with officials from the Department, but the officials said they had not yet worked out how to assess what impact the voluntary guidance has had. I would be grateful if the Minister explained the point of running a pilot if we do not know from the start how to assess it.
The truth is that we do not need any more pilots. The best employers are providing the flexibility that parents need, but too many others are not. Voluntary guidance will never coax employers who do not understand—or who do not want to understand—into doing what is right. These parents need the full force of the law behind them to ensure that their babies get the love and care they need.
Andrea Jenkyns (Morley and Outwood) (Con)
I fully add my voice to those calling for extra parental leave for those with children born prematurely. As the hon. Gentleman says, many parents use large amounts of, or even all, their leave entitlement watching their babies develop in incubators. As the mother to a young baby, I can only begin to imagine the stress those parents must go through. Extra maternity and paternity leave is needed. Does he agree that parental leave should begin when a new-born baby is well enough to go home?
Mr Reed
I absolutely agree and I echo the hon. Lady’s sentiment. I hope the Minister will reflect those views in her comments. It seems extremely unfair that if a child is born prematurely it does not get the same time with its parents after it has reached full development phase as a child born healthy after a full-term pregnancy.
These parents need the full force of the law behind them to ensure that they have the time to give the love and care that their baby needs. The baby needs time with mum and dad at its side, fully focused on helping their little baby to survive and without the worry of losing their job or falling into debt, which has happened to far too many parents whose babies were born too soon.
The Government have delayed by two years so far, partly because they were carrying out a pilot, but that pilot has finished. Another year’s delay is not acceptable. It is hard to imagine something more precious, vulnerable or deserving of our support than a tiny premature baby fighting for its life and so small that it can fit into the palm of your hand. Does the Minister agree that these families need not more delays, but action, and that they need that action now?
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Croydon North (Mr Reed) on securing this important debate and thank him for his passionate speech.
I sympathise greatly with the experiences of parents of premature babies, especially those whose children spend extended periods in neonatal intensive care. I am sure we all have personal experience of friends or constituents who have been in this situation. I absolutely understand the hon. Gentleman’s point and sympathise. I assure the Chamber that this Government are committed to supporting working parents, including those of premature babies.
The UK’s system of maternity leave is one of the most generous in the world. Pregnant women and new mothers are entitled to take up to 52 weeks of leave as a day-one right and up to 39 weeks of statutory maternity pay, if they are eligible for pay. In the case of premature births, eligible fathers and partners have the flexibility to take up to two weeks of paternity leave and pay within eight weeks of the expected date of birth, rather than within eight weeks of the actual date of birth, if they wish.
Employed parents also enjoy other employment rights that enable them to take time off work following the birth of their child or agree a working pattern with their employer, which gives them the flexibility to combine work with caring for their child. Subject to meeting eligibility requirements, employed parents now have the right to request flexible working and the right to take shared parental leave and pay. Shared parental leave and pay enable eligible couples to share up to 50 weeks of leave and up to 37 weeks of pay. They can use the scheme to take up to six months off work together or, alternatively, stagger their leave and pay so that one of them is always at home with their newborn child. They can also have periods of leave within periods of work. Parents can use this flexibility to take time off work according to their and their baby’s needs—for example, fathers and partners might wish to take time off work when their child is born and later in the first year.
We are also undertaking a short, focused internal review of provisions for parents of premature babies. We expect to conclude that in the new year.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
One of the issues that I hope the Government will look at in the review is the voluntary conduct of employers and whether they want to support additional leave for parents of premature babies. We must remember that a baby could be born at 24 weeks, which is many months before its due date. The problem with voluntary codes is that, although some employers might be exemplars, many might not be. What more can the Department do to ensure that all employers recognise the special needs of parents in this difficult situation?
Kelly Tolhurst
My hon. Friend is absolutely right. Voluntary codes are there to try to change culture and to give businesses and employers the opportunity to do the right thing in the best way they can.
As I was saying, we are undertaking a short, focused review of provisions for parents of premature babies. We will work with ACAS to see whether we can improve the guidance. When the outcomes of that review have concluded in the new year, the Government will hopefully be able to come back with further activity and make further provisions.
Kelly Tolhurst
I always have an open mind about everything, but we are conducting a review, which is being led by officials. We are looking at the impact and at what we can do. My officials are engaging with the charity—
Kelly Tolhurst
Exactly—it is in the hon. Gentleman’s constituency. I hope to review what comes forward and to be able to come back. I look forward to discussing the outcomes with him at that time. My officials have already had productive and informative meetings with The Smallest Things and Bliss, and will be meeting the parents of premature babies this month.
It is important to strike the right balance between giving parents the flexibility that they need and giving their employers and co-workers the certainty that they need to plan. It will be important to canvass the views of organisations representing employers, particularly small businesses.
Mr Reed
One of the problems with premature birth is that it is difficult to plan for—the fact that it is premature means that people do not necessarily know that it will happen. I met one father who was required by his employer to go back to work the day after his baby was born prematurely. I am sure that the Minister agrees that his baby needed him more that day than his employer.
Kelly Tolhurst
I take the hon. Gentleman’s point, and that is one reason we are conducting the review. We are aware, and we want to be able to assess what we can do more of and what needs to happen to support that group of individuals.
I am aware that the parents of premature babies have several issues to contend with, particularly in cases where their child is very premature. I am keen to explore what more can be done to support parents in that position. The review will inform our policy, and I hope the fact that we are undertaking it reassures the hon. Gentleman that we are far from complacent and that we are already taking steps better to understand the needs of parents and employers in this situation. As I have outlined, I look forward to discussing the review’s findings with him in due course and I will ensure that that happens.
I thank the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Morley and Outwood (Andrea Jenkyns) for their interventions on the hon. Member for Croydon North. It is good to see other hon. Members supporting the hon. Gentleman on the issue. I hope they will be able to engage further as we look at and come forward with the findings of the review that we are undertaking.
We are committed to creating more flexible and supportive work environments for parents. In the last few years, we have taken important steps towards that, from introducing shared parental leave and pay to mandatory gender pay gap reporting for large employers. Although our maternity leave policies are some of the most generous in the world and can cater for a wide range of circumstances, we want to gain a better understanding of the difficulties faced by the parents of premature babies and we are already conducting that work. I thank the hon. Gentleman for raising this important issue. I would be delighted to meet with him at any time to discuss it further.
Question put and agreed to.
Local Sporting Heroes
(6 years, 1 month ago)
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Nick Smith (Blaenau Gwent) (Lab)
I beg to move,
That this House has considered the importance of local sporting heroes.
It is a pleasure to serve under your chairmanship, Mr Pritchard.
This debate is about recognising local heroes. We are lucky to have bags of them in Blaenau Gwent—Nye Bevan, for one—but it is those from the field of sport who I will look at today. They are people such as Sam Cross, the Olympic medallist from Brynmawr; Ashley Brace, the female super-flyweight boxing champion from Ebbw Vale; and Mark Williams, the three-time snooker world champion from Cwm.
Nick Smith
We had a vote on that in the Whips Office and we all agreed that it was; I think it is. However, I will focus on one local sporting hero in particular and that is Steve Jones.
Nick Thomas-Symonds (Torfaen) (Lab)
I am grateful to my hon. Friend for giving way and indeed for securing such an important debate. Before he moves on, will he join me in commending Ken Jones, who is from my home town of Blaenavon in my constituency? His achievements in athletics, as an Olympic medallist of course, were outstanding, but he was also a quite outstanding rugby player, who scored the crucial try when Wales last beat New Zealand at rugby in 1953.
Nick Smith
I am very pleased to say what a brilliant athlete, rugby player, journalist and schoolteacher Ken Jones was; he was renowned across the valleys for his rugby pedigree. Today, however, I will talk about Steve Jones, from Blaenau Gwent.
The unusual thing about Steve is that he is a world-class, record-breaking athlete who hardly anyone knows about. He is one of the most successful long-distance runners ever produced in our country. Despite his multiple achievements, however, many people know little about this British athletics hero. So I will start telling them today.
Steve is a Blaenau Gwent-made and self-trained sporting hero. The son of a steelworker, he grew up in Ebbw Vale. Steve had been a cross-country runner, but it was while he was a technician with the Royal Air Force that he really began running competitively. He pulled himself up by his bootstraps and he reminds me of what Michael Parkinson has just said about George Best—namely, that while Best was the greatest player he has ever seen:
“He did not arrive as the complete player; he made himself one.”
Steve made himself the complete runner.
Training in what spare time he had, Steve began working his way up and competing, all the while serving his country full-time. After a ligament injury put his leg in a cast, Steve soldiered on, saying later:
“If anybody says I can’t do it, I end up doing it...I don’t like to be told that.”
That was an understatement. The tragic death of Steve’s dad in 1978 had a major impact on his career. His dad had been extremely proud of his achievements and, after his dad’s death, Steve wanted to push himself even further, and to be the best.
Steve burst into the top tier of world athletics in 1984 by completing the Chicago marathon in just over two hours, beating a reigning Olympic champion in the process. He set a British marathon record that stood for 33 years, until it was broken just this April by Sir Mo Farah.
In the years following Chicago and after receiving generous sponsorship from Reebok, Steve racked up further first-place marathon finishes in London in 1985, in New York in 1988 and in Toronto in 1992. Taken together, his achievements add up to a remarkable contribution to British athletics.
Now 63, Steve works as a running coach in Colorado, supporting athletes from across the world. In Blaenau Gwent, his legacy is seen every weekend in our local parkrun and other initiatives that Tredegar’s Parc Bryn Bach Running Club uses to encourage new runners; I am a newish member of the club. It has also been leading the charge for proper recognition for Steve. A local dynamo, Lee Aherne, has launched a campaign to build a statue of Steve, which has already raised more than £2,000.
The key issue is this: we have this great man, who accomplished incredible things and inspires people to follow in his footsteps, but he is simply nowhere near as widely recognised as he should be. Steve’s achievements are a great source of pride for many in Blaenau Gwent, but he is barely known outside our borough.
John Howell (Henley) (Con)
On that point, as I come from Henley it will be no surprise if I mention our rowers, many of whom are—like the hero the hon. Gentleman is talking about—not widely recognised outside the town, even though they participated in an international sport. Will he join me in celebrating the achievement of all these local heroes, particularly in attracting young people to their sport and giving them something to live for?
Nick Smith
I am very pleased to support the commendation that has just been made.
There have been other positive steps in Blaenau Gwent, such as installing plaques for some of our other sporting heroes, notably Spurs football legend Ron Burgess. Over the next few months, I will write to the Welsh Government, the Cabinet Office and Welsh Athletics to seek proper recognition of Steve’s substantial contribution to sport.
However, I also want to look at one of the best ways to do justice to the record of local sporting heroes—harnessing their achievements to improve public health. Groups such as the Blaenau Gwent Sole Sisters and the Parc Bryn Bach Running Club already do a great job with the Couch to 5k programme and parkrun, which are coming on in leaps and bounds. However, I think that Steve getting the recognition he deserves would inspire even more people to participate.
What do I think the Government could do more of? First, it is important to assess the criteria for the official UK Government honours system, to make sure that people such as Steve are not overlooked. Understandably, many honours are awarded to people who have recently won a major competition, and some are awarded to athletes who are still competing, which is great. However, it is also important to recognise those who have made a sizeable contribution during their career—local heroes, whose good will keeps on giving.
Secondly, successes in local sport need to be given due credit. There is space for awards for services to sport at the devolved or local level, with a project similar to Australia’s Local Sports Stars scheme, which seems to be a tremendous initiative.
Thirdly, we need to encourage links between our local sporting heroes and key public health initiatives. Local sporting heroes know the areas they come from and their communities, so they are ideally placed to continue encouraging others.
Some Welsh athletics stars came to our parkrun recently to celebrate the 70th anniversary of the NHS and they went down a storm—the response was absolutely fantastic—so I ask the Government to consider engaging local sporting heroes as part of the childhood obesity plan’s local partnerships, which are in train. I will suggest a similar approach in my discussions with the Welsh Government and my own local authority.
Great sporting achievements of any era show us what is possible, whether they are Steve’s marathon records, Mark Colbourne’s Paralympic cycling achievements or Mike Ruddock’s delivery of a grand slam as Wales rugby coach—we can all be inspired by the examples that such sports people have set—but when we see others reaching the pinnacle in any field, if they are from our home town, the thought “that could be me” strikes home a bit harder.
I hope everyone here has learnt a little more about Steve, his achievements and how he continues to make a great contribution to Blaenau Gwent, and I bet that other people here today have their own sporting heroes to celebrate. Finally, I would like to hear other suggestions on how we could build on the good work that these local sportsmen and women have done.
Nic Dakin (Scunthorpe) (Lab)
It is a great pleasure to follow my hon. Friend the Member for Blaenau Gwent (Nick Smith), who I congratulate on securing this debate.
As my hon. Friend the Member for Islwyn (Chris Evans) said while we were gathering for this debate, a famous pub quiz question is this: which three England captains played for Scunthorpe United, the Mighty Iron, whose tie I am wearing this afternoon? Of course, the answer is Ray Clemence, Kevin Keegan and Ian Botham. I understand, Mr Pritchard, that Ian Botham played for Scunthorpe against Hereford United, not always successfully.
There are many local sporting heroes that we should celebrate—that is a very important thing to do—and I would like to talk about two of Scunthorpe’s sporting heroes, from different generations and different sports: Tony Jacklin and Tai Woffinden.
Tony Jacklin, as people will probably know, was the first person to hit a televised hole in one in Britain, at the 16th at Royal St George’s, Sandwich. That was an achievement, but Tony achieved much more in his life as a professional golfer. Scunthorpe born, he became the first British/European player to win on the Professional Golf Association—PGA—tour since the 1920s. He ended a 17-year British drought by lifting the British Open championship trophy at Royal Lytham & St Annes, and the following year he won the US Open. He is the only British golfer to hold both the British and the US Open.
Jacklin should also be remembered for rejuvenating the Ryder cup. We recently had a very successful Ryder cup series that would not have happened but for the inspirational leadership of Tony Jacklin, who led the European team to win the tournament in 1985, 1987 and 1989. The 1987 victory was the first ever on US soil by a European team.
Jacklin deservedly entered the world golf hall of fame in 2002, but he is perhaps one of those sporting heroes who has been overlooked in honours from his own country. In former times, people often had to wait until they were older to get their honours, but in these times they often get them fairly close to their achievements. Next year will be the 50th anniversary of that amazing sporting occasion when, in the Ryder cup, Jack Nicklaus conceded to Tony Jacklin on the 18th hole, and it would be an absolutely ideal year in which to recognise Jacklin’s massive achievement and his contribution to the world of golf and sport, and to this nation.
That is Tony Jacklin. We have the appropriately named Jacklins Approach in Scunthorpe, which is a street in Bottesford, and recently, when I was visiting my parents in Leicester, I passed Jacklin Drive, so there are street names, but it is time to recognise Jacklin’s achievement even more.
Tai Woffinden was also Scunthorpe born and, riding for the Scunthorpe Scorpions in 2006, he completed a clean sweep of conference league trophies, winning the championship, the conference trophy, the conference shield and the knockout cup. It was clear back in 2006 that Tai was someone special. Since then, in 2013, he has won the speedway grand prix to become world champion. Woffinden was the eighth British rider to become world champion, and the first since 1992 to hold the British championship and the world championship in the same year. He is also the youngest world champion in the modern-day grand prix competition.
In 2018, Tai became the first British rider to win three individual speedway world championships, and he is the current world champion. That is a fantastic achievement, in a sport that is sometimes a little overlooked but one that many people enjoy in the same way as many enjoy football, rugby—I should mention the wonderful people who play for the Greens in Scunthorpe—and, of course, golf, which is where I started, with Tony Jacklin.
John Howell (Henley) (Con)
It is a pleasure to serve under your chairmanship, Mr Pritchard. I was not going to participate in this debate, but I will do for a short moment. Each year in Henley we have something called the Regatta for the Disabled, which has been going on for the past 10 or 11 years. I have gone along and supported it every year. I will come on to the sporting hero associated with the regatta in a moment.
The regatta has a great impact on disabled people, showing them that the river is theirs; that it belongs to everyone. There is a good deal of fun about the day. I do a bit of the commentating on the dragon boat races, which is something to behold, but what I want to mention is that one of the really important people in the whole regatta is Helene Raynsford.
Helene is a world-class rowing champion and also a Paralympic champion. Her involvement in the regatta means a great deal to all of us who are involved, and it sets an absolutely brilliant example to everyone of what can be achieved despite a disability. It has always been a great pleasure to welcome Helene and to participate with her during the day. I offer her up as a local sporting champion and pay tribute to the enormous role she plays.
Chris Evans (Islwyn) (Lab/Co-op)
I refer to my entry in the Register of Members’ Financial Interests. I am chair of the all-party parliamentary group for boxing, a steward of the British Boxing Board of Control and the author of “Fearless Freddie: The Life and Times of Freddie Mills”. I think that Members will, therefore, know what I am going to talk about today.
The primary focus of my speech is boxing and how it inspires people, but I first want to talk about something that is happening in my constituency at the moment. All sporting heroes, wherever they come from and whoever they are, have to start somewhere. They need facilities and coaches and, more importantly, they need inspirational people. The week before last, I joined my predecessors as MP for Islwyn, Lord Kinnock and Lord Touhig, to march with the community through Blackwood against the proposed closures of leisure centres in Pontllanfraith and Cefn Fforest. The leisure centres are well-used community facilities and resources, and 5,500 people have signed a petition to save them. I have been honoured to support the community in their campaign and they can rest assured that they have my wholehearted and continued support against the closures. I hope that when the council makes its decision it will bear in mind the voices of the people and keep the leisure centres open. We have seen in the past that once such community facilities are gone, they are gone forever.
I mentioned the all-party parliamentary group for boxing because we had a meeting this morning that was particularly pertinent to this debate. We were talking about how boxing has turned people’s lives around. Among others, we heard from the chairman of Matchroom Sport, Barry Hearn, who told us that inspirational role models are absolutely key to turning people’s lives around. We heard how Mike Tyson, the famous world heavyweight boxer, started fighting. He was in a correctional institute in New York state when Muhammad Ali came along, and watching Ali perform and say his rhymes for the children suddenly set a light off in Mike Tyson and he too wanted to be a boxer and follow in the footsteps of the greatest fighter of all time.
In Wales, we have a rich seam of boxers. People ask me, “How did you get involved in boxing? What was your interest in it?” and I often consider saying this: “It’s an old pair of worn-out dusty leather gloves that hang in my grandfather’s shed”. He was a fighter in the boxing booths, which were well known in south Wales. They came around every summer and many miners used to fight in them to get extra pennies, because the mines closed down for the last week of July and the first week of August and there was no holiday pay in those days. My grandfather was one of those miners and his family of 18 needed to look for an alternative form of income. He would put those gloves on and hit the carpet to knock the dust out for my grandmother before, even though he had been blinded many years previously in a pit accident, fighting his heroes, including Percy Jones.
Percy Jones is long forgotten. He died in 1922 and had a very sad life. He has a unique place in Wales, as Wales’s first flyweight world boxing champion, long before Jimmy Wilde who lived up the road in Tylorstown—they were the same weight but never fought. Percy Jones’s life is very pertinent, especially the week after Remembrance Day, because he served in world war one, was hit by shrapnel and lost his leg. He would not take a stretcher, in case he used up one for a less able-bodied man. That is how brave he was. When Percy went to a fundraiser in Cardiff at the age of 29 with his former coach and friend Jim Driscoll, people did not recognise him because he was so underweight. He was suffering from all the symptoms of trench disease, and he succumbed to it on Boxing Day 1922, at just 29 years of age. His story was lost to the mists of time, but the bravery he showed in the trenches was also demonstrated in the ring.
I want to mention not only Percy Jones but Jimmy Wilde, “the ghost with a hammer in his hand”, and other names that trip off the tongue. Even now, most recently and sadly in Newbridge in my constituency, we had Joe Calzaghe, undefeated over 40 fights. He has a unique bond with his father Enzo, to whom I want to pay tribute. They were a special team—a father and a son—and as Enzo said, “I went to war with my son, and I supported him.” Each of those boxers, whether Percy Jones, Jimmy Wilde, Jim Driscoll, Joe Calzaghe, or Muhammad Ali—I should not really mention Mike Tyson, given everything that happened—has an inspirational story. As we heard today in the all-party parliamentary group for boxing, when we talk about turning people’s lives around, we are mainly talking about people who have had contact with the criminal justice system, many of whom are inside. My hon. Friend the Member for Tooting (Dr Allin-Khan), having been a boxing doctor and having attended meetings of the APPG in the past, knows Anthony Joshua well, and will know that he was tagged. When Anthony Joshua goes into a prison, unlike myself or many Members here, he can talk the language of those prisoners. He can share experiences with them, and may even have friends who were in that prison. He can tell those prisoners how boxing turned his life around.
The problem is that people see boxing as violence. People think that it is all about who can hit the hardest, and that the bigger man will always win. It is more technical than that; it is about tactics and thinking, and—as I think my hon. Friend the Member for Tooting will say, having been ringside a number of times—it is about discipline. It is that discipline that turns people’s lives around. As Barry Hearn said this morning, people who have been absolute devils, when they get in the boxing ring and see they are good at it, suddenly become like angels.
I have to take the Government to task, since there is so much good news showing that boxing in prisons can turn people’s life around. I cite other American boxers such as Bernard Hopkins, who lost his first fight after being released for armed robbery, and Sonny Liston, who famously fought Muhammad Ali over two fights many years ago. Both were prisoners who turned their life around. On 11 August 2018, the Ministry of Justice published Rosie Meek’s independent review of sport in youth and adult prisons. In that report, she highlighted the beneficial role that sport can play in our criminal justice system. She drew on extensive evidence from community groups and academic research to show that sport and physical activity, including boxing, can help to reduce antisocial behaviour and violence in prisons. Moreover, her research demonstrates the value of sport as rehabilitative in prison settings, specifically in relation to educational and employment opportunities. Recommendation 7 of that report urged the Ministry of Justice to
“re-consider the national martial arts/boxing policy and pilot the introduction of targeted programmes which draw on boxing exercises, qualifications and associated activities.”
Rosie Meek argued:
“Where these are offered (in some Secure Children’s Homes and Secure Training Centres), they are well received and highly valued, both as a behaviour management tool and as a vehicle through which to facilitate education, discipline and communication.”
Unfortunately, in the wake of that report—which only asked for a pilot—the Government decided not to take forward recommendation 7. In their response to the review, they stated:
“We acknowledge that there is a great deal of evidence about the way in which participation in boxing and martial arts programmes in the community can have positive outcomes for individuals, however there is currently limited evidence about how that translates into the custodial environment.”
Without the pilot, how are we going to have evidence? I say to the Government and the Minister—although I know this is not her direct responsibility—that they should think again about promoting boxing in prisons, and the discipline that it can encourage.
Boxing, like rugby, is entwined with our valleys communities, whether in Blaenau Gwent, Islwyn, Rhondda, or the other places I have mentioned. The boxing booth was a familiar sight in our communities. Boxing turned around not only the lives of people who might have been drawn into the criminal element but the lives of people such as Jimmy Wilde from Tylorstown, who might have been resigned to a life in the pits. It turned around the life of Percy Jones, and countless others such as Jim Driscoll and Tommy Farr. All of those people are now lost in the mists of time, but boxing turned around their life. Freddie Mills would not have been heard of if boxing had not come into his life at an early age; he would have remained a milkman in Bournemouth. He was a young criminal who turned his life around. The discipline of boxing, introduced first by his brother and then by the boxing booths, took him from driving around in a milk cart in Bournemouth to the Royal Albert Hall, and eventually to a media career. Those are inspirational stories, and there are countless others. I urge the Government to allow the boxing community to share them with those who have found themselves in trouble in life.
Mark Pritchard (in the Chair)
We have extra time so there will be six minutes for the SNP spokesman, seven minutes for the shadow Minister, and 10 minutes for the Minister.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is a pleasure to serve under your chairmanship, Mr Pritchard. I welcome the Minister to her place. She follows a Minister who advocated for sport with great passion; she will, I am sure, follow in her predecessor’s footsteps. I thank the hon. Member for Blaenau Gwent (Nick Smith) for securing today’s debate, because sport is close to my heart, having played rugby—and any other sport that I possibly could—for 17 years. He outlined that one of the main reasons for the debate was the lack of recognition given to Steve Jones, and the campaign to ensure that he gets the recognition he deserves. I wish that campaign well.
I think we all enjoyed hearing from the hon. Member for Scunthorpe (Nic Dakin) about the plethora of sporting greats that Scunthorpe has produced, notably three England captains. The hon. Member for Henley (John Howell), my colleague on the Select Committee on Justice, spoke about Henley and its rowing regatta. The hon. Member for—
Gavin Newlands
I thank the hon. Member for Islwyn for filling in the gap there. He spoke with clear passion about boxing, and about facilities and coaching. I will touch on coaching later. Of course, my constituency has its own local heroes, including Archie Gemmill, scorer of the best goal in World Cup history; Bernie Slaven; Callum Hawkins; David Hay; Paul Lambert, the Champions League winner; and great Scottish cup winners such as Frank McGarvey, Billy Abercromby, and Tony Fitzpatrick, who recently had the great honour of having a council gritter named after him: Tony Gritzpatrick. I can hear the groans from here, although I prefer Ploughlo Grittini, named after Paolo Nutini.
When we talk about sporting heroes, we often talk about modern-era greats such as Andy Murray or Dame Kath Grainger, or old greats such as Denis Law or Rose Reilly. However, the positive impact of sport is felt most at the local level, thanks to the real local heroes: the coaches and volunteers who give up their time to allow all of us, old and young alike, the chance to participate and compete. Scotland has always been a sporting nation. We are proud to have a pantheon of heroes that rivals that of nations many times our size, and 2018 has been another proud year for Scottish sport. We have witnessed the emergence of new household names to join those we have already recognised, such as the fantastic Laura Muir, who achieved a gold medal at the European athletics championships, and Duncan Scott, who was named the national lottery’s athlete of the year after exceptional performances at the Commonwealth games and the European athletics championships.
Of course, as an SNP MP, it would be remiss of me to not take the opportunity to boast about Scotland’s victories over England in rugby—I was there that glorious day—and, even more impressively and unlikely, in cricket.
Gavin Newlands
Wales will get its come-uppance in the six nations.
Scotland is one of the first countries in the world to publish a national action plan following the World Health Organisation’s global action plan on physical activity. Empowered by local sporting communities, the Scottish Government aim to cut physical inactivity in adults and teenagers by 15% by 2030. That will mean rigorously addressing all the factors involved, using a variety of approaches, including active travel funding, support for formal sports and informal physical activity, and targeted partnerships across the transport, education, health and planning sectors.
Sport and physical activity bring massive benefits to physical and mental health. Those benefits include improved self-esteem, the learning of new skills and, most importantly, fun and the forming of new relationships. The “Active Scotland Outcomes Framework” sets an ambitious vision for a more active Scotland, and is underpinned by a commitment to equality, in recognition of the extra barriers that women and girls often face when getting involved. The Scottish Government set up the Women and Girls in Sport Advisory Board and the sporting equality fund. They have also announced a £300,000 fund to be awarded to 14 projects that will work to tackle the long-standing challenge. All those actions will make Scotland a healthier and happier nation, and ensure that our sporting heroes, locally and nationally, will become more representative of our diverse population.
Sport truly does have the ability to promote wellbeing and inspire communities through the empowerment of local heroes. Scottish football is just one example of how sport can bring communities together. Scottish football was recently the focus of a UEFA study on the social return on investment in sport. Many will recognise the story that the study tells us, namely that sport has clear, acute social benefits that play out most locally. That is thanks to countless community role models who organise kickabouts, coach youth teams, and play for their local amateur or junior teams.
The report shows that the immediate economic benefits of football in Scotland total around £1.2 billion through participation alone, with nearly 800,000 people playing in some way. It also shows £667 million in savings for the Scottish NHS and a direct contribution of £212 million to the economy, creating thousands of jobs. It finds that investment in girls’ and women’s football has paid off massively, through excellent social benefits, as well as excellent results in the game itself: the women’s team have been hugely successful, qualifying for the World cup next year for the first time, and I congratulate them on that. That amazing achievement far outstrips anything that the male team has achieved in the past couple of decades.
Building a nation in which good physical and mental health is promoted and the norm for the majority of people would be difficult without our sporting role models nationally and locally, but it would be impossible without our heroes in local communities, who champion their sports and give their own time freely to enable, encourage and educate our youngsters. As I hope I have demonstrated, Scotland champions its sporting achievements, and we are well on our way to creating the next generation of sporting heroes.
Dr Rosena Allin-Khan (Tooting) (Lab)
It is a pleasure to serve under your chairmanship, Mr Pritchard. I thank my hon. Friend the Member for Blaenau Gwent (Nick Smith) for securing this important opportunity to discuss the role played by sporting heroes in our local communities.
It will surprise no one to hear that as shadow Minister for Sport, I spend a lot of time thinking about the role that sportspeople play in our daily lives and society. In the past, it might have been considered self-explanatory that “Sportspeople play sports, people come and watch said sports, and society benefits by having sports entertainment—and that is that.” Occasionally sports stars would break the mould—people such as Muhammad Ali or Billie Jean King, who challenged authority and told truth to power—but they were few and far between. If we asked someone today about the role sportspeople can play in society, I think the answer would be very different. We live in a period where sports stars are doing more than ever before to break the mould, to inspire a sense of possibility in our young people, and to educate. In America, LeBron James, an athlete at the top of his game, sets up public schools for underprivileged children.
Sports heroes are vital for society in general, but especially for the next generation, and it is important that we recognise that. They truly can make a path for others to follow. Representation matters. For many young people, seeing people who look like them, sound them like and grew up in their communities succeed in such high-profile arenas is inspiring. Nicola Adams, a normal young woman from Leeds, grew up to be our first woman boxing champion in Olympic history. We should think about how important it is for people to see themselves represented in these incredibly public settings—to see women of colour achieve so much. Women, particularly women of colour, are often told to stay in our lane, but to borrow the phrase of Elizabeth Uviebinené and Yomi Adegoke, Nicola showed that we should not stay in our lane; we should slay in our lane.
I firmly believe that the only limits that truly exist are the ones we put on ourselves. Sporting stars today do so much to personify that theme, especially for the local communities they represent. It is one thing for someone to see someone like them make it, but it is another thing entirely if they grew up in the same place. My constituency of Tooting has its fair share of sporting talent. Frank Bruno was born in Wandsworth and boxed in Earlsfield. Darren Bent was born in St George’s Hospital, where I still work as a doctor. Commonwealth heavyweight title-holder Joe Joyce boxes at Earlsfield boxing club. We are definitely very lucky with our plethora of local sports stars.
Today I would like to draw attention to one particular type of local sporting hero—the kind who almost never makes it into the headlines and never gets the medals or accolades, but is just as important to our local communities. I am talking about the parents who drive their kids to matches, meets and practices every weekend. I am talking about brothers and sisters who take their little brothers and sisters to the park for a kickabout. I am talking about people who volunteer for sports clubs, not only coaching, but offering a safe space that people can come to, where young people can be themselves and share their problems. I am talking about people like Sid and Clare Khan, who run Earlsfield boxing club—clearly Tooting has a thing for over-achieving Khans—and Winston and Natasha, who run Balham boxing club.
As my hon. Friend the Member for Islwyn (Chris Evans) rightly said, boxing clubs in the heart of our communities can change lives. Sid, Clare, Winston and Natasha perform vital roles as mentors and friends to young people who might otherwise not have reliable adult role models in their life. I still box at Balham boxing club. I sit ringside as the boxing doctor during shows. I know the difference the clubs can make. We can talk about it in these rooms and go home to our wonderful, comfortable lives, but for many young people, the boxing club is the only place they can find someone to trust. They can be the only place where they can go to find solace, speak their truth and admit that they might have a mental health problem, or that they are about to join a gang. That is the case for any sporting facility, not just boxing clubs. We have to recognise the role such facilities can play.
The people in the clubs are mentors. They spot mental health issues and problems at home. They provide guidance, and they often offer a confidential conversation where there is no other. I have seen with my own eyes how young people who probably would not talk to their parents or teachers instead come to someone like Winston at Balham boxing club. These people are local sporting heroes. There are people like Phil and the team at Tooting and Mitcham football club. When their nearby rivals Dulwich Hamlet had their ground seized by greedy property developers and their entire club seemed to be hanging by a thread, Phil offered Tooting and Mitcham’s ground. Within a week, Dulwich Hamlet had agreed terms and were able to continue playing until the dispute with their property developers was resolved.
John Howell
I want to pick up on the hon. Lady’s reference to boxing clubs. I have a very poor village in my constituency that has a boxing club. It plays a fantastic role in providing some organisation for the young people who live there. The only thing one has to bear in mind is that last time I went there, I sat next to the ring, and I had to put my hand over my wine glass to stop blood from spurting into it after one boxer punched another completely on the nose.
Dr Allin-Khan
I thank the hon. Gentleman for pointing out the dangers of mixing sweat and blood, and of sitting ringside. He sounds like a true sporting hero himself for being there and supporting his local club, which I am sure was very grateful.
As we know from the contributions from my hon. Friend the Member for Scunthorpe (Nic Dakin) and the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), this country has a rich history of sporting heroes; nowhere was that better demonstrated than at the 2012 Olympics, where Team GB had its best Olympics since 1908. That is something to be proud of. So many stars were made in that summer that it is hard to keep track of them.
We can speak all day long about the sporting heroes we hold dear, but we must also speak about the legacy that we leave behind as representatives of our communities. The proportion of over-16s playing sport for at least 30 minutes each week remains virtually unchanged since 2005. Teenagers are being taught almost 35,000 fewer hours of physical education in school. Hundreds of sports facilities close each year, and local authority spending in sport has been rapidly cut under this Government. Sporting heroes are important; sports facilities are vital.
I welcome the Minister to her post, and look forward to working with her in future. I hope that she will use today’s debate as an opportunity to show in concrete terms that the Government will prioritise sport. We owe it to our sporting heroes, and to the people we represent.
The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Mims Davies)
It is a pleasure to serve under your chairmanship, Mr Pritchard, responding to my first debate in my new role. I thank the hon. Member for Blaenau Gwent (Nick Smith) for securing the debate; I have no doubt that it will be the first of many in my new portfolio. I am hoping to do more actual sport now I am in this role, rather than just talking about it. Hon. Members’ contributions on local heroes have been fantastic. Even so early in my tenure as Minister, it is clear to me that sport can inspire communities to achievement and activity at every level. I am delighted that we are celebrating that this afternoon.
Let me turn to Steve Jones, who headed to Chicago back in 1984—before the running gels and the great trainers—and ran a two-hour marathon. That is fantastic. A statue for Steve would be the only time he was seen standing still. I have gone to London, New York and Toronto to run, although not always in marathons. His contribution to British athletics should be celebrated in the Chamber, and I am pleased to do that. We must also remember what got Steve running—opportunities like parkrun and support for people in Tredegar getting out in trainers. We should absolutely celebrate him. Of course, people called Jones, as we heard this afternoon, are also very inspiring.
My hon. Friend the Member for Henley (John Howell) spoke about rowing, boxing, blood, sweat and tears and being the person on the mic at the dragon boat races. This morning, I met representatives of Activity Alliance, a disability inclusion charity whose focus is getting active lives for everybody—it is doing so much work on that. I am delighted to hear about the Henley Royal Regatta. I have not been to it, and I think there is a huge opportunity there.
We heard about the Scunthorpe stars—three of them shining England captains—and the hon. Member for Scunthorpe (Nic Dakin) reminded us of the marvellous Tony Jacklin. I must confess that I was slightly distracted at the Conservative party conference this year by the Ryder cup—I think we all were. It was wonderful to hear about the 1980s Ryder cups where we really saw some successes.
The hon. Member for Islwyn (Chris Evans) made a passionate speech about facilities, coaches and community; the power of change through boxing; Percy Jones and Jimmy Wilde and bravery shown in this sphere; and the importance of tactics, discipline and focus in boxing, which can be seen at the highest level through the teamwork of Joe and Enzo Calzaghe.
We also heard about Anthony Joshua. I agree that sport and physical activities give opportunities to communities. People in prison or perhaps in need of support in the community can be given opportunities through martial arts and boxing. In my very short time in the Department, I have made it clear that we should be agile, open-minded and focused on outcomes for people. It is easy to talk about the Government putting in investment, but ultimately it is about outcomes.
We heard from the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) about Archie Gemmill and that wonderful moment, and Laura Muir. I have followed her as an athlete—a slip of a girl, she has achieved so much. When they are seen to be doing so well, the cold dark mornings when they put the slog in can be forgotten about. As a former Paisley rugby captain, the hon. Gentleman will know about getting out on the field and doing the work when needed. It was great to hear about Active Scotland doing so much work focused on women’s and girls’ participation. When I was lucky enough to be asked by the Prime Minister to do this role, that was the focus that she looked to me to move forward.
It was wonderful to hear from my opposite number, the hon. Member for Tooting (Dr Allin-Khan), about the work in Tooting, and about Frank Bruno and Joe Joyce. I have two boxing clubs in my patch that do great work: Eastleigh boxing club, which celebrated its 70th anniversary at the beginning of the year, and Poseidon, based at the Ageas Bowl, which has been going only since 2013, but looks after 400 people and gives them opportunities to get into sport.
It would be remiss of me not to highlight the work of some amazing people across Eastleigh. The sports awards are coming up, and coaches, officials, clubs and schools all have the chance to be nominated by the beginning of February. Some great people have already done so much in the community. David Smith, a Paralympian, is now over at Swansea. He is an MBE, and he has won so much in boccia. He is the champione, and he is an Eastleigh guy. Eastleigh walking football club won the national finals. Getting involved in walking sports is a great opportunity for our local heroes to bring in people who perhaps have not seen such opportunities before to participate. At my seniors’ fair last week, Eastleigh rugby club was also looking for people to participate.
I think we do have a sporting hero here in the hon. Member for Blaenau Gwent. Despite the foot injury, he could be back doing the marathon for the Hospice of the Valleys—I see a comeback on the cards. As a councillor, I had the chance to meet Tim Hutchings and set up a staggered marathon. That was an opportunity to inspire people into sport. It gives public health benefits and encouragement in terms of the challenges that we face with obesity and childhood inactivity.
Chris Evans
It would be remiss of the Minister not to mention my hon. Friend the Member for Scunthorpe (Nic Dakin), who I understand was the only MP to run a faster time this year in the London marathon than he had run before. He should be congratulated on that.
Mims Davies
Runners get very affected by their times, whether fast or slow. Seconds really count, so congratulations to the hon. Member for Scunthorpe.
Mims Davies
That is a quick reminder that I did not start this year, but I feel a bit of competition coming on next year.
Moving on to the elite level, which I feel not at all close to, in Rio we saw the result of UK Sport’s no-compromise approach. Yesterday, I met with and spoke to Dame Katherine Grainger and heard about her plans. It was an amazing performance at Rio in 2016—366 athletes travelled to Brazil and 130 of them won Olympic medals. More recently, we had record-breaking performances at Pyeongchang. We absolutely look up to our elite stars, but if they are in our midst how wonderful that is.
Of course, we are building on that with our athlete days scheme, ensuring that our sports stars find some time, if they are funded, to inspire our children in schools and to go to local clubs to ensure that the story of how they got there becomes clear to our youngsters. Much of what our athletes do to inspire is vital. Since 2012, there have been more than 30,000 athlete volunteer days around the country.
We have heard about the power of UK Sport partnering with parkrun. Over 250 funded athletes have attended events this year, which has led to record-breaking attendance. The national lottery awards now include a new “athlete of the year” category. Seven shortlisted athletes were selected by a judging panel for their sporting achievements and their passion for sport. Swimmer Duncan Scott won the £5,000 award from the national lottery this year—congratulations to him.
All these people continue to keep our interest going. Football clubs across the country are doing more as part of their fixture calendar, and it is absolutely right that we allow this to happen at every level where there is an opportunity to engage and inspire. The Government are looking for lots of different outcomes with our sports strategy, but ultimately it is vital that we look for inspiration.
I feel that time is starting to push on, so I will move forward and talk about sports volunteers. The hon. Member for Tooting rightly mentioned the reliance on our volunteers, families and communities to do so much to inspire locally. There are 6.7 million sports volunteers at grassroots level; without them, we would not have the major events or sports opportunities that we see. Sport England is investing over £20 million between 2017 and 2021 to increase the number of volunteers and to allow meaningful volunteering experiences for everybody. Those mums, dads, supporters and coaches are absolutely vital.
We must talk about nominations for public honours and the opportunities to recognise people who do so much. Recipients of honours make a difference in their communities, and the guidance for nominating an individual for a national honour is readily available and can be found on the Government’s website—or people can come to Westminster Hall to make their bid and hope that it is heard by the Department for Digital, Culture, Media and Sport.
There are many ways to recognise the local sector. County sports partnerships do a great job in my own community at providing the nominations for the Eastleigh sports awards. Those are under way in many areas, and this is a way for local businesses also to get involved. The Prime Minister has the daily “points of light” award, which recognises inspirational community volunteers. In Hamble, there is an opportunity for everybody to experience sailing on one of the Wetwheels boats, which has been launched at Royal Southern yacht club in my own patch. This organisation for disabled people, which disabled yachtsman Geoff Holt has led, has allowed 3,000 people to get out on the water. That is an area where getting engaged is probably more difficult, but there is a fully accessible powerboat.
Dedicated athletes, volunteers and coaches, as well as people who wash kits or who get out and inspire, are vital to our communities at every level, and they should be celebrated. I have been delighted to contribute to the debate and will continue to use this platform to ensure that there are sporting heroes in our local communities who can continue to do so much and to be rightly recognised.
Nick Smith
This has been an interesting and really important debate, and it has been good for me to celebrate the athletic brilliance of Steve Jones. It has been interesting to hear about Scunthorpe’s Tai Woffinden and Tony Jacklin; to hear more about our south Wales heroes, Joe and Enzo Calzaghe; and to hear about Hannah Rainsford from Henley, who sounds absolutely fantastic.
We heard from my hon. Friend the Member for Islwyn (Chris Evans) about the importance of boxing in our justice system for helping prisoners to build a new life, get out of crime and play a part in our mainstream communities. I thank him for that powerful point, which he made very well.
I hope that the key message coming from this debate is that our local sporting heroes support greater physical participation and good public health across our country, which has certainly been my takeaway from today. Like my hon. Friend the Member for Tooting (Dr Allin-Khan) and the Minister, I want to give a very loud shout out to sporting volunteers across our country. Week in, week out—sometimes in all sorts of terrible weather—they ensure that our teams and individuals perform at their best.
Question put and agreed to.
Resolved,
That this House has considered the importance of local sporting heroes.
Written Statements
(6 years, 1 month ago)
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EU (Withdrawal) Act: Common Frameworks
(6 years, 1 month ago)
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The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Mr David Lidington)
I have today laid before Parliament a report, “The European Union (Withdrawal) Act and Common Frameworks— 26 June 2018 to 25 September 2018” as required by paragraph 4 of schedule 3 to the European Union (Withdrawal) Act 2018. The report will be made available on gov.uk and details the progress made in discussions between the UK Government and devolved Administrations regarding common frameworks in the first reporting period covered under the legislation, and sets out that no “freezing” regulations have been brought forward under section 12 of the European Union (Withdrawal) Act.
[HCWS1078]
Bovine TB Strategy Review
(6 years, 1 month ago)
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The Minister for Agriculture, Fisheries and Food (George Eustice)
I am pleased to report that a review of the Government’s 25-year bovine TB strategy, led by Sir Charles Godfray, has been published today. The Government welcome the report and I extend my thanks to Sir Charles and his team for their hard work.
The report, which was commissioned by the Secretary of State in February 2018, aims to explore different approaches to disease control to inform future policy and maintain progress towards our target of achieving officially TB free status by 2038.
As a Government we are committed to eradicating bovine TB and have always been clear that there is no single measure for tackling this disease. That is why we have pursued a range of interventions, including cattle movement controls, vaccination, and controlled culling in certain areas.
Sir Charles’ report is an important contribution that will inform next steps and help us to take the strategy to the next phase. The Government will consider its recommendations carefully. A formal response will be published in due course.
[HCWS1077]
Local Government
(6 years, 1 month ago)
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The Secretary of State for Housing, Communities and Local Government (James Brokenshire)
In May, I appointed commissioners to undertake the strategic finance and governance functions in Northamptonshire County Council as a result of the findings of the best value inspection published in March this year.
In October, Ofsted conducted a two-day visit to look at children’s services in the council, and has published its findings today. Children’s services in Northamptonshire were rated “requires improvement” overall by Ofsted at its last inspection in 2016, but have deteriorated significantly since then. There are particular concerns about the relatively high number of unallocated and unassessed cases, and a social care workforce that are highly dependent on agency staff. The letter from Ofsted states:
“when children in Northamptonshire are referred to children’s social care, they are not consistently or effectively assessed, supported or protected.”
A copy of this letter is available in the Library of the House.
The commissioners have also written to me and the Education Secretary to highlight their concerns about children’s services, recommending that an additional commissioner is appointed to strengthen the Government intervention in this area.
Having carefully considered the evidence and having spoken to the commissioners, my right hon. Friend the Secretary of State for Education and I agree that we should act swiftly to strengthen the focus on children in the current intervention, by appointing an additional commissioner to the existing commissioner team. Keeping vulnerable children safe is one of the most important duties local authorities carry out and any deterioration in the performance of Northamptonshire children’s services cannot continue.
The Secretary of State for Education has therefore announced that he is minded to appoint a children’s services commissioner for Northamptonshire under the powers granted to him by Parliament under section 497A(4B) of the Education Act 1996. This will help to stabilise and improve the service so each and every child receives the protection they deserve. The commissioner would also help the authority decide how best to deliver children’s services after the potential local government reorganisation in Northamptonshire. The Secretary of State for Education and I will receive regular progress reports from our commissioner team.
The Secretary of State for Education sees Malcolm Newsam CBE as a very strong candidate for the role of children’s services commissioner. Mr Newsam is an experienced director of children’s services. He has worked in a number of local authorities, including as children services commissioner in Sandwell, and previously as an executive commissioner for children’s services in Rotherham, working closely with other Government commissioners as part of a wider Government intervention.
Additional children’s services capacity has also been brought in through the Department for Education’s Partners in Practice programme, with Lincolnshire County Council providing practical support and improvement advice.
The Secretary of State for Education will consider any representations on his proposal, which are made in the next week by Northamptonshire County Council, before deciding whether or not to appoint a children’s services commissioner.
[HCWS1079]
House of Lords
NHS: Staff
(6 years, 1 month ago)
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Lord Clark of Windermere
To ask Her Majesty's Government what plans they have to ensure that British citizens are recruited and trained to staff the National Health Service.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord O'Shaughnessy) (Con)
My Lords, the Department of Health and Social Care is working with a range of partners to improve the recruitment and retention of staff required to deliver safe and effective NHS services. In England, we are increasing domestic doctor training places by 25%, there are now more than 52,000 nurses in training, and we have made more funding available to universities. Furthermore, we are increasing midwifery training places by 3,000 over the next four years.
Lord Clark of Windermere (Lab)
My Lords, I thank the Minister for his Answer, which is a little disappointing. I remind him that there are currently 100,000 vacancies in the National Health Service. There is a shortage of doctors, nurses, physiotherapists and radiographers, and I could go on. There is a shortage throughout the service, and it is no good the Government telling us what their aspirations are. In the light of the Chancellor’s Budget Statement, in which he concealed that there is to be a £1 billion cut for the NHS in the year beginning in 2019, will the Minister explain how the cut in funding for the training of nurses, doctors and other members of staff coincides with the aspirations he has told us about? And please, do not give any excuses whatever about the pension miscalculation.
Lord O'Shaughnessy
We agree that there is a need for more staff, and indeed there are more NHS staff than ever. I can tell the noble Lord that we are increasing doctor, nurse and midwife training places, and more GPs than ever started training in the NHS this year. With an ageing and growing population, we absolutely recognise the need for more doctors, nurses, midwives and many other professions. The Budget made no changes to health spending.
Lord Forsyth of Drumlean (Con)
My Lords, will my noble friend acknowledge that, as nurses are not paid highly, they will not repay the loan for their maintenance grant or tuition fees? Therefore, would it not make sense to allow them to go back to bursaries? In the long run, this would save the taxpayer money and mean that 30 years from now we would not have to write off a substantial loan—or, rather, the nurses who have not benefited from that support would not have to pay to write off that loan. Is it not time that the Government looked at the fiscal illusion that has led to this state of affairs and moved instead to a system that would help in the recruitment of more nurses?
Lord O'Shaughnessy
I greatly respect my noble friend on this topic, which we have gone around several times. As he knows, I defend the current system as being the most progressive. Nevertheless, I am grateful for his report, which he sent me and which I am reading with interest. However, at this point, we are confident that we have the right policy.
Baroness Emerton (CB)
My Lords, how are the Government determining the safe level of staffing? In the Health and Social Care Act, one of the requirements was to look for safe levels. Could the Minister tell us how the Government will assure us that they are safe levels?
Lord O'Shaughnessy
I am grateful to the noble Baroness for that question. First, we have safe levels by recruiting more staff. We recognise that there is a need for it, and we are recruiting more staff in every category. The actual safe level of staffing is a trust-level issue that needs to be determined in response to the case load they have at any moment.
Baroness Jolly (LD)
My Lords, I understand that medical students in England could soon be fast-tracked through their studies, advancing registration by a year. This would put them on wards one year earlier, with a year’s less training than their predecessors. What is the Government’s current thinking on this? Who are they consulting? What risk analysis will be done in making this decision?
Lord O'Shaughnessy
The noble Baroness will understand that the safety of NHS patients, and the NHS as a whole, is paramount when considering workforce. We are looking at whether additional flexibilities can be explored, but that will only be done if we can assure ourselves and others of that safety. These issues are being considered in the workforce plan.
Baroness McIntosh of Hudnall (Lab)
My Lords, the Government have placed great emphasis on mental health recently. Could the Minister tell the House what is the current shortfall of mental health professionals—particularly psychiatrists, and particularly child psychiatrists—in the National Health Service, and how the Government intend to address that shortfall?
Lord O'Shaughnessy
The noble Baroness is right to highlight that issue. Only around 30% of those who should be seen for treatable mental health illnesses currently are, which means that we have an important and urgent task to expand mental health places. There simply are not enough mental health staff in any category. This affects all developed countries. A big expenditure is being made, and around 21,000 new posts are being created across all specialties.
Lord Lansley (Con)
Does my noble friend agree that the production of a workforce plan by Health Education England for the first time is a significant step forward for the health service and for healthcare in this country? Will he assure the House that providing Health Education England with the resources to deliver that plan is a priority in the forthcoming spending review?
Lord O'Shaughnessy
I am grateful to my noble friend, who set the foundation for this long-term workforce plan—indeed, the long-term plan for the NHS. He is right. It is not just a workforce plan for health workers but also looks at care workers. We need more staff, and that decision will be taken at the spending review, but it does have the highest priority.
Lord Laming (CB)
My Lords, does the Minister agree that the concerns expressed in this Question apply equally or even more to social care services? Unless social care is adequately staffed, the rebound on the health service will be enormous. I hope that, in future, social care will be given priority along with the health service.
Lord O'Shaughnessy
I agree. Indeed, my Secretary of State has made workforce one of his top priorities. We are responsible for health and social care, and the Green Paper we will publish this autumn will contain more detail on the social care workforce plan.
Baroness Thornton (Lab)
My Lords, 63,000 NHS staff in England are EU nationals; that is 5.6% of all staff. London in particular relies on staff from EU countries, with one-third of all EU NHS staff working in London. We seem to be facing a Brexit emergency here. How will the Government manage both the transition and the long-term recruitment and staffing of the NHS under these circumstances?
Lord O'Shaughnessy
EU nationals and staff from across the world play a vital role in delivering our NHS and social care and we absolutely want them to stay. I can tell the noble Baroness that there are 4,300 more EU 27 nationals in the NHS now than in June 2016. I hope that is a reflection of the fact that they know they are wanted and welcome. We are making sure that the settlement scheme is open to them. Health and care staff will be the first cohort of staff to use the scheme, so that we can give them the opportunity to remain where they are very much wanted.
Vaping
(6 years, 1 month ago)
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Lord Vaux of Harrowden
To ask Her Majesty's Government whether they have any plans to restrict or ban the advertising or sale of flavoured nicotine vaping fluids.
Lord Vaux of Harrowden (CB)
I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare that I hold shares in British American Tobacco, which are below the threshold for registration.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord O'Shaughnessy) (Con)
My Lords, strong controls are already in place. Vaping fluids containing nicotine are regulated through the Tobacco and Related Products Regulations 2016, which include measures to restrict their use by children. The nicotine inhaling products regulations 2015 make it illegal to sell such liquids to anyone under the age of 18. The Advertising Standards Authority includes a provision in its codes to ensure that advertisers do not target or feature children.
Lord Vaux of Harrowden
I thank the Minister for his Answer. However, the regulations do not seem to be working. Flavours include bubblegum, sherbet lemon, unicorn blood and strawberry delight, and come in colourful packaging with cartoon characters and pictures of sweets, for use with high-tech shiny gadgets. It would be hard to design something that was more appealing to children. According to recent tests, four in 10 retailers are willing to sell without age restrictions. In the US, the FDA says that underage use has surged recently and reached epidemic proportions. Does the Minister agree with the commissioner of the FDA, who said:
“I believe certain flavors are one of the principal drivers of the youth appeal of these products”?
Will he please look again at the rules and how they are enforced, just as the US is now doing aggressively, before we too have an epidemic of childhood nicotine addiction?
Lord O'Shaughnessy
The FDA has certainly said that it is facing an epidemic of childhood use, but the numbers are quite stark in their difference. In America, many more young people use e-cigarettes compared to in this country, where only 2% of 11 to 18 year-olds are using once a week. Generally, those are young people who smoke already—around 7% of 15 year-olds smoke. America did not restrict tank sizes until recently, but we did; it did not restrict bottle sizes, but we did; it did not ban advertising, but we did; and it does not have restrictions on nicotine, but we do. We have a very sensible system. I am not complacent about the need to make sure that young people do not use, which we are not seeing yet, and there are severe restrictions and punishments for any retailer who sells such products to children.
Lord Hunt of Kings Heath (Lab)
My Lords, is it not clear from the evidence that, while we have to be very careful about use by young people, this is the most successful tobacco prevention or stopping measure we have ever had? It is important that we keep a measure of balance in our approach to this.
Lord O'Shaughnessy
I completely agree with the noble Lord, and I think that we have the right balance: 57,000 people a year quit smoking through e-cigarette use and that is just about the most important thing you can do to improve your health.
Lord Brabazon of Tara (Con)
Is my noble friend aware that the majority of people who use e-cigarettes—an enormous majority—are those, like myself, who have given up smoking cigarettes, and those who are trying to give up smoking cigarettes? All health professionals now recognise that e-cigarettes are the way forward and the best way to give up smoking. To introduce a ban on the sale of vaping liquids would be a complete catastrophe. Not only would people go back to smoking but those who wanted to give up would have no incentive to do so.
Lord O'Shaughnessy
I completely agree with my noble friend. Interestingly, ONS data shows that 48% of people said that the main reason for using an e-cigarette was as an aid to stop smoking, and just 1.5% cited the range of flavours available as their main reason.
Baroness Jolly (LD)
My Lords, the European tobacco products directive bans all broadcast media in the EU from advertising e-cigarettes. Will the Minister tell the House what the Government’s post-Brexit plans are?
Lord O'Shaughnessy
Our post-Brexit plans are the same as our pre-Brexit plans—to have a sensible policy which provides e-cigarettes to stop smoking and to make sure that they are not abused by people who should not be using them.
Baroness Thornton (Lab)
The noble Lord, Lord Vaux, asked a legitimate Question about the flavoured nicotine substitutes that are on sale. If the Minister believes that we might see the emergence of vape flavours such as unicorn milk and rocket popsicles—which can only be designed to appeal to young people—can he confirm that the Government have plans for dealing with that?
Lord O'Shaughnessy
I am not sure who unicorn milk would appeal to—maybe my five year-old, but she is not smoking yet. Seriously, the point here is about advertising. It is quite right that they cannot be advertised to promote them but they can be advertised for public health reasons. They are incredibly effective at stopping people smoking. As I have said, we are not seeing the kind of abuse and the epidemic of youth usage that we have seen in the States, but we are alert to any signs that that may be the case.
The Lord Bishop of Chelmsford
My Lords, the Minister’s joke makes the point. Does he agree that such flavours appeal to children and one needs to be careful about that?
Lord O'Shaughnessy
The right reverend Prelate is right. However, as I say, we do not see evidence of what is going on in the States happening in this country. The reason for that is that we have many more restrictions, and the US is now playing catch-up by introducing them.
Lord Foulkes of Cumnock (Lab)
My Lords, is the Minister aware that one of the consequences of the welcome ban on smoking in public places is that when you go out of a hospital or an airport you face a curtain of smoke and a carpet of fag ends? Will the noble Lord, as Health Minister, with his colleagues, do something about ensuring that that does not take place and that there are secluded places for people to smoke where the rest of us do not have to go?
Lord O'Shaughnessy
I agree with the noble Lord from personal experience. Organisations are encouraged to make sure that there are outside places for people to smoke which are in discreet areas and do not interrupt others.
Earl Cathcart (Con)
My Lords, vaping has been a phenomenal success in helping millions of people like myself to stop smoking or to cut down. What plans does the Minister’s department has after Brexit to remove the restrictions imposed by the EU’s tobacco products directive?
Lord O'Shaughnessy
I am sorry to disappoint my noble friend but at this point we do not have any specific plans. We have a sensible policy which allows the promotion of e-cigarettes to help people stop smoking but does not encourage people to take them up in the first place, which may lead to smoking. We have struck the right balance at the moment.
Brexit: Welsh Economy
(6 years, 1 month ago)
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Lord Wigley
To ask Her Majesty's Government what representations they have received from Ministers of the Welsh Government concerning the impact of Brexit on the Welsh economy.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, Ministers from my department and across the United Kingdom Government hold regular discussions with Welsh Ministers on a range of issues, including EU exit. Most recently the Secretary of State met the Welsh Government’s Cabinet Secretary for the Economy, and at an official level there is an open and continuous dialogue.
Lord Wigley (PC)
My Lords, have not repeated representations from Wales stressed that the future success of the Welsh economy depends on manufacturing and agriculture having ongoing access to the single market and the customs union? That is vital for companies such as Siemens, Airbus, Toyota and Ford. Is the Minister aware that, over recent months in Wales, polls have indicated increasing support—if such guarantees are not forthcoming—for a people’s vote, and that that becomes overwhelming in the case of a no-deal Brexit?
Lord Bourne of Aberystwyth
My Lords, the noble Lord is right about the importance of Welsh agriculture and Welsh industry. I have no illusions about that. He will know that agricultural spending in Wales is protected until 2022. In relation to industry, obviously discussions are ongoing about the shared prosperity fund. Two weeks ago the Secretary of State and I met the CBI and, although there are challenges, Welsh industry is remarkably up for some of the opportunities that exist.
Lord Bridges of Headley (Con)
My Lords, 18,000 jobs in the Welsh economy are dependent on the automotive sector, which is highly reliant on just-in-time delivery processes. What progress has been made to ensure that our borders continue to function smoothly in the event of no deal, in the light of the NAO report last month which found that 11 of the 12 major projects to replace or change key border systems were at risk of not being delivered on time or not being of an acceptable quality?
Lord Bourne of Aberystwyth
As he has just indicated, my noble friend is aware of the issues and the importance of open ports and borders. Specifically in Wales, we are concerned about Holyhead, Fishguard, Milford Haven and Pembroke Dock in particular; it is important that they stay open. He will be aware of the commitment to that in the White Paper, so that the new arrangements ensure free flow at the borders. Welsh officials and government officials are already talking with stakeholders to ensure that this is the case post Brexit.
Lord Morris of Aberavon (Lab)
My Lords, the original Clause 11 of the Brexit Bill totally ignored the devolved legislatures. Eventually the Government did a U-turn, following pressure in this House. What is the Government’s reaction to the blockbuster report of this House’s Delegated Powers Committee on the Agriculture Bill, which expresses its dismay at the major transfer of powers to Ministers, bypassing Parliament and the devolved legislatures? Can we expect a U-turn here as well?
Lord Bourne of Aberystwyth
I have the greatest respect for the noble and learned Lord, as he will know. In relation to the legislation he referred to, it was always the case that a legislative consent Motion from Wales was necessary; that Motion was forthcoming, as he will be aware. On the agricultural issues he referred to, discussions are ongoing between officials from the Wales Government and the UK Government. Progress is being made in that regard. I have already indicated that farm support will be protected; it will have the same level of funding as under Pillar 1 of CAP until 2020, and farm support is protected until 2022. A good dose of Welsh and British common sense will see us through on these matters.
Baroness Humphreys (LD)
My Lords, speaking of the likelihood of a no-deal Brexit and the possibility of the company abandoning plans to build aircraft wings in Britain, the chief operating officer of Airbus said:
“Far from ‘Project Fear’, this is a dawning reality for Airbus”.
It is also a dawning reality for the people of north-east Wales and the 7,000 Airbus jobs that make such a vital contribution to our economy. If Brexit happens, how do the UK Government intend to create new employment for these workers?
Lord Bourne of Aberystwyth
My Lords, I must take issue with what the noble Baroness said. I have the greatest respect for her local knowledge but I do not think that those jobs are in the serious jeopardy she suggests; they are very valuable and it is not right to create that scare. We must continue with this. She will know that the north-east Wales economy is very buoyant and that we have created jobs there, including recently in relation to the prison that is to go there.
Lord Bourne of Aberystwyth
That may be a matter for jokes to some people but it is very important to the people of north-east Wales and their livelihoods. It is worth noting that the Welsh economy is growing faster than those of the other home economies.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, with jobs in mind, will my noble friend join me in commending the announcement from Jim Ratcliffe and Ineos of their plan to develop the Land Rover Defender in the Ford motor factory in Bridgend, thereby preserving the 1,700 jobs that would otherwise be at risk?
Lord Bourne of Aberystwyth
My noble friend is absolutely right. I have no hesitation in saying how welcome that news is, but once again I stress the fact that we are not just protecting jobs in Wales, as many new jobs are being created there. The removal of the tolls on 17 December will be a welcome boost to the south Wales economy. Generally, the position in Wales is very healthy.
Lord Elystan-Morgan (CB)
Would Her Majesty’s Government be prepared to publish a document setting out their best calculations on the effect of Brexit on life in the whole of Wales?
Lord Bourne of Aberystwyth
My Lords, that is a constructive and useful suggestion; I shall take it back. It would be very useful in relation to Wales. The Secretary of State will obviously want to consider it.
Lord Anderson of Swansea (Lab)
My Lords, will the Minister give an assurance that Wales will be fully compensated for the loss of Objective 1 status and the regional benefits that go with it?
Lord Bourne of Aberystwyth
My Lords, the noble Lord is right about the importance of cohesion funding. As things stand, there is no guarantee that Wales will qualify for Objective 1 funding in the next round —in many ways, one hopes that it does not; it is not a badge of pride. In relation to the future of cohesion funding, he will be aware that the shared prosperity fund is being discussed on a UK basis, with full consultation with Wales to ensure that Welsh interests are properly protected.
Rogue Landlords
(6 years, 1 month ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what projects they anticipate the funds announced to tackle rogue landlords will be used for.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my relevant interest as a vice-president of the Local Government Association.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, the fund will target approaches that local authorities have told us would make a real difference to local enforcement, tackling rogue landlords who make tenants’ lives a misery. Projects can be of any size and could include better ways of gathering intelligence on housing stock, improved data sharing within and across local authority boundaries, and new software to make housing inspections easier. The Government are looking for approaches that could be shared across local authorities.
Lord Kennedy of Southwark
My Lords, there have been some disturbing reports in the media of individuals convicted of various serious offences still operating in the private rented sector. While the additional money announced is very welcome, does the Minister accept that the most pressing thing to do in respect of rogue landlords is to enter some names on the database, to allow public access to it and to find parliamentary time to make that happen? “When parliamentary time allows” is not an adequate response to this question.
Lord Bourne of Aberystwyth
My Lords, I have some sympathy with what the noble Lord suggests. He will know in particular that we are committed to opening the register to the public as soon as parliamentary time is available. On the broader issue of entries in the register, there are two things to bear in mind. First, there has been some inaccurate reporting in some newspapers of matters that are not banning offences and could not be entered in the register. Other matters that could be put on the register relate only to offences that have been committed since 6 April this year. Not only do such matters have to go through the courts but there must then be an application for the landlord to be put on the register, and time is allowed for the person who would be put on the register to appeal against that. So it is relatively early days, but I agree with the noble Lord that, in the fullness of time, we would expect—indeed, hope, in the light of circumstances—that names will go into the register.
Lord Naseby (Con)
What my noble friend is saying is all very well, but it is all pretty complicated. Is not the key issue that rogue landlords are out there and that properties are being let that are not fit for purpose? We need a regulatory body operating either through local government or with some other function. This cannot just drift on for another 12 months. We need some action from Her Majesty’s Government. I accept that some initiatives have been taken already, but the whole lot needs pulling together so that rogue landlords can be driven out from letting properties that are unfit for purpose.
Lord Bourne of Aberystwyth
My Lords, I do not disagree with my noble friend’s desire, but he will be aware that, just next week, the Homes (Fitness for Human Habitation) Bill, which will improve enforcement in relation to rogue landlords, will start going through this House. The Bill has already gone through the Commons with cross-party support, and I am sure that the same will happen here. That is an important part of this. I repeat that it is very early days; we are six months in from the first occasion when there could be a conviction under the new offences, with entry in the register. In the fullness of time, I trust—and I am sure that people will be watching like hawks—that this will be put right.
Baroness Grender (LD)
My Lords, does the Minister agree that we need an open register urgently and cannot afford to wait for it, given that nearly a quarter of households in the UK now rent privately? Can the Minister explain the difference between an open register of that nature for landlords and, let us say, food hygiene ratings? Surely it is just as important to have a rating for where you live as it is for where you eat.
Lord Bourne of Aberystwyth
My Lords, to reiterate the point I made to the noble Lord, Lord Kennedy, we are committed to ensuring that the register is open: it is now only a matter of finding parliamentary time in order to put that right. The noble Baroness is right about the importance of that and we are committed to doing it: just as soon as we are able to do so we will bring it forward and I am very pleased that we will be getting her support for that.
Lord Alton of Liverpool (CB)
My Lords, will the Minister say what is being done to ensure that, where landlords own properties that are empty, they will be listed on the register? What can be done to incentivise landlords who own empty properties to put them into use for people who are in housing need? Can he tell the House how many properties owned by private landlords are standing empty in the country today?
Lord Bourne of Aberystwyth
My Lords, I am not able to give the noble Lord that information from the Dispatch Box, but I will write to him with those figures, in so far as they are available. In relation to empty properties, he will be aware that some time ago we took legislation through this House to increase the ability of local authorities—indeed, we increased it further here than did the Commons—to charge a higher council tax for empty properties. I think that that will go some way towards dealing with the important issue he refers to.
Baroness Gardner of Parkes (Con)
My Lords, I declare my interest in the register. Is there a suggestion that here we might at last have a licensed register of people occupying these properties on short lets? Most of them now are not declared by the landlord and many are giving absolute agony to the other residents in blocks of flats where their leases really prohibit these short holiday lets.
Lord Bourne of Aberystwyth
My Lords, that was a not unexpected question from my noble friend. I refer her to the Short Term Accommodation Association, which is doing very valuable work in policing this area and ensuring that it is not abused by people going for short-term lets. As to any breaches of leases, she will be aware that that is a contractual issue between the landlord and the tenant.
Lord Berkeley (Lab)
My Lords, will the Minister explain the lack of parliamentary time? We are not sitting to anything like 10pm on weekdays now. We may all be waiting for other legislation, but is it a real excuse that we do not have parliamentary time to bring in this important register?
Lord Bourne of Aberystwyth
Yes, my Lords, it is a very real reason, because it will take parliamentary time in both Houses. I will take back the noble Lord’s concerns, but I am very confident when I look at the parliamentary timetable in the months ahead that we do really have important business to get through. This is important business and something we are pushing hard upon—and, believe me, as soon as my department can find the time we will bring it forward.
Tenant Fees Bill
(6 years, 1 month ago)
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Lord Bourne of Aberystwyth
That the Bill be reported from the Grand Committee in respect of proceedings up to Amendment 26; and that for the remainder of the Bill, the order of commitment of 10 October be discharged and the Bill be committed to a Committee of the Whole House.
Voyeurism (Offences) (No. 2) Bill
(6 years, 1 month ago)
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Lord Keen of Elie
That the order of commitment of 23 October be discharged and the Bill be committed to a Committee of the Whole House.
Courts and Tribunals (Judiciary and Functions of Staff) Bill [HL]
Tuesday 13th November 2018
(6 years, 1 month ago)
Lords ChamberRead Full debate Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 View all Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 108-R-I Marshalled list for Report (PDF) - (12 Oct 2018)
Baroness Chakrabarti (Lab)
My Lords, I shall not trouble the House for long. Notwithstanding some differences of principle between us, I am very grateful to the Minister and his Bill team for the limited movement towards safeguards in the Bill, but it is a shame that the Bill was not a possible vehicle for the prohibition of cross-examination of domestic violence victims in the family courts. It is government policy and it would surely command cross-party and non-party support, so I hope the Minister will talk to his colleagues in government and make time for this discrete but vital measure before too long.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, we are conscious of the need to address this measure and have of course addressed it in the past. I note what the noble Baroness, Lady Chakrabarti, has said on that topic but, nevertheless, I beg to move that this Bill do now pass.
Lord Marks of Henley-on-Thames (LD)
The noble and learned Lord has pre-empted me but I wanted to add to what the noble Baroness, Lady Chakrabarti, said, with our thanks for the co-operative way in which this Bill was handled. I also thank the noble and learned Lord, Lord Keen, his ministerial colleague the noble Baroness, Lady Vere, and the excellent Bill team who did so much work on it. We on these Benches are very grateful for the way in which new Sections 67A and 67C of the Courts Act 2003 were inserted, limiting the functions of delegated officers and providing for judicial reconsideration of delegated decisions. They were dealt with co-operatively and it is a tribute to the way this House can deal with matters co-operatively and achieve improvements to the Bill. We are content with the Motion.
Lord Keen of Elie
My Lords, I apologise to the House for pre-empting the noble Lord and I am obliged for his observations. Again, I move that the Bill do now pass.
Ivory Bill
Tuesday 13th November 2018
(6 years, 1 month ago)
Lords ChamberRead Full debate Ivory Act 2018 View all Ivory Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 119-R-I Marshalled list for Report (PDF) - (22 Oct 2018)
Lord Taylor of Holbeach (Con)
My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Ivory Bill, has consented to place her interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, I express my gratitude to all noble Lords for their interest in the Bill and their contributions. Whatever else, we are all united in our desire to protect such a magnificent animal in the wild.
I bring it to your Lordships’ attention that I have placed in the Library of the House, with their permission, copies of letters received from my noble friends Lord De Mauley and Lord Carrington regarding Clause 7, “Pre-1947 items with low ivory content”, and my response to them. Specifically, these letters concern the definition of “integral” and the means of assessing the 10% de minimis threshold. In particular, the letters confirm that the ivory content of an item for the purpose of the de minimis exemption is to be determined as a percentage of the total volume of material in the item.
I am grateful for the positive engagement and support of the noble Baroness, Lady Jones of Whitchurch, and the noble Lord, Lord Grantchester, on the Opposition Benches, and the noble Baroness, Lady Bakewell of Hardington Mandeville, and the noble Lord, Lord Clement-Jones. I also express my gratitude to the Constitution Committee, the noble and learned Lord, Lord Judge, and the Delegated Powers and Regulatory Reform Committee. The Government responded positively to the recommendations made by these committees and I agree with the comment made by the noble and learned Lord, Lord Wallace of Tankerness, on Report that this was,
“a very good model of how this House works”.—[Official Report, 24/10/18; col. 948.]
I am also grateful to the noble Earl, Lord Kinnoull, for raising insurance transactions and for the subsequent discussions that led to the resolution of this matter on Report. I also place on record my gratitude for the contributions that my noble friend Lord Hague made during the passage of the Bill, and for the experience he brought of what is really happening in the worldwide threat to the elephant.
I take this opportunity to thank each of the devolved Administrations for their productive engagement and the support they have shown for the Bill. Finally, I thank my noble friend Lady Vere and the hard-working Bill team, my private office and the clerks for their work and support.
Baroness Jones of Whitchurch (Lab)
My Lords, the Bill represents a significant step towards ending the illegal elephant-poaching crisis. It will enshrine in UK law the commitment made at the 2016 CITES convention to close down the domestic ivory markets that fuel illegal poaching. We believe that the exemptions permitted, carefully crafted in consultation with stakeholders, strike the balance between being robust and pragmatic. I welcome the Minister’s clarification that we can help by taking the value out of the market.
The Minister raised the question of items containing voids and the de minimis issue. While we agree very much with the advice that he has now given, there may be occasional cases where assessing the ivory content of an item is not straightforward. We believe that such items ought to be rare and can be picked up in the guidance that will follow.
Lord Cormack (Con)
My Lords, the noble Baroness, Lady Jones, referred to guidance. I do not want to rehearse again the arguments that we have been through in Committee, on Report and, indeed, at Second Reading, but she will recognise that while there is a unanimous support for the Government’s central aim of dealing with ivory poaching, those who poach and those who deal in illicitly obtained ivory, nevertheless there remain real concerns among those who have legitimately acquired ivory objects in the past and now find that their possessions may well be worthless in the market. There are also many musicians, particularly those who have been in touch with me recently, who are very concerned about the bows of stringed instruments. A lot depends on the sensitivity with which regulations are drafted and guidance is given. I hope that my noble friend, a sensitive as well as sensible man, will take a particularly close interest in the drafting of regulations and the giving of guidance. What we do not want, and what there is a real danger of, is an overwhelming bureaucracy that makes innocent people feel guilty and makes musicians who travel the world feel apprehensive.
As I say, this is not the time to develop these arguments in detail, but it is the appropriate moment to mention them for the last time, and I urge my noble friend to respond with the sensitivity of which I know he is capable so that those who have legitimate concerns about the Bill and its implications can, to some degree, have their minds put at rest, just as those who were concerned, as I was, and as the noble and learned Lord, Lord Judge, was about the civilian officers. My noble friend met us on that point by signing some of the amendments that I had tabled and by endorsing the general line of the noble and learned Lord, Lord Judge. Could that please be a precedent for the way in which he now issues his guidance and drafts his regulations?
Lord Berkeley (Lab)
My Lords, I support the Bill very much, but will the Chief Whip say why it was necessary to get the consent of the Queen? Is it because she is worried about the value of the ivory that she might own if it were sold, or is she worried about elephants? They are both good causes, but it seems a bit odd. We should be pleased to have her consent, but does the Duchy of Cornwall own ivory? Why did we not seek the consent of the Duchy as well?
The Earl of Sandwich (CB)
My Lords, I join in the congratulations to the Government, who have worked for several years on this really important Bill. I beg for one minute at the end of this Third Reading. I said in Committee that I wanted to see some form of impact assessment or annual review of the effectiveness of the Bill. I recognise how hard that would be to achieve because, as the Minister pointed out, statistics on control are already kept by many different organisations.
I was hoping to encourage DfID and its partner organisations, mainly in Africa, to redouble their efforts in halting the devastating attacks on elephants. DfID is a major partner in this government initiative because, unlike the FCO and Defra, it has the mandate and resources to help control the ivory trade at its roots in the countries concerned. We have heard almost nothing of the trade at its source and the predominant methods of poaching. So I am a little disappointed, but I hope the Minister can reassure me that he will encourage colleagues to report back in a year’s time, not only on the effects of the Bill but on the valuable work that DfID will have done in the interim.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I apologise to the House for not being here to hear the Minister’s remarks; I was running across the road.
Baroness Bakewell of Hardington Mandeville
May I speak? Thank you, my Lords. I will be brief. The UK has shown that it can lead the way in protecting the elephant. We have adhered to CITES and have moved forward tremendously in banning the trade in ivory objects in our country. Prior to the Bill, a large percentage of new ivory was being laundered through our country, masquerading as being of pre-1945 and pre-1918 vintage. There is still some way to go before the Bill can be implemented but there is now a clear timetable for how that will progress. I look forward, once the Bill is enacted, to a consultation on the other animals with the misfortune to have expensive trophies as part of their anatomy: the narwhal, the hippo and the rhinoceros, as the noble Baroness, Lady Jones, said. It is important that in banning elephant ivory we have not substituted another animal for the poachers to target.
I thank the Minister for his briefings and his patience and the Bill team for their very helpful information that was provided at all stages of the Bill. I also thank the noble Baroness, Lady Jones of Whitchurch, for the leading part that she has played during the passage of the Ivory Bill. The plight of the elephant is of great importance to all those who sit in your Lordships’ House. Often our debates fall into party-political camps but that has not been the case with the Ivory Bill; the House has been united across all Benches to ensure the passage of this legislation. I am extremely proud of having played a small part in that process. I look forward to a similar meeting of minds on some of our future legislation, but I am slightly more pessimistic about that in the near future.
Lord Gardiner of Kimble
My Lords, I have listened to all the remarks that have been made. It has been an honour for us all to have been a part of this legislation. I will reflect on all that has been said. This is an international effort. I beg to move that the Bill do now pass.
Economy: Budget Statement
(6 years, 1 month 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 the Chancellor of the Exchequer set out the autumn Budget to show the British people that their hard work is paying off: eight straight years of economic growth, with more than 3.3 million more people in work, wages growing at their fastest pace in almost a decade and debt beginning to fall—an economy that is back on its feet again and fit for the future. This Budget signals that austerity is coming to an end but maintains fiscal discipline. This Budget rewards the British people and their cherished public services but reminds us that financial discipline must still prevail.
Let me first set out the forecast contained in the Office for Budget Responsibility’s Economic and Fiscal Outlook. The UK’s economic outlook continues to exceed expectations, and the OBR expects growth to be resilient across the forecast period, improving next year from the 1.3% forecast at the Spring Statement to 1.6%, then 1.4% in 2020 and 2021, 1.5% in 2022 and 1.6% in 2023. The Budget forecast, taking into account all announcements made since the Spring Statement, shows the deficit down from almost 10% before 2010 to less than 1.4% next year under this Government and falling to just 0.8% by 2023-24. Borrowing this year will be £11.6 billion lower than forecast at the Spring Statement—just 1.2% of GDP—and is then set to fall from £31.8 billion in 2019-20 to £26.7 billion in 2020-21, £23.8 billion in 2021-22, £20.8 billion in 2022-23 and £19.8 billion in 2023-24, its lowest level in over 20 years.
So we meet our structural borrowing target three years early and deliver borrowing of just 1.3% of GDP in 2020-21, maintaining £15.4 billion headroom against our 2% fiscal rules target. We are no longer borrowing at all to finance current spending, and the OBR confirms that our national debt peaked in 2016-17 at 85.2% of GDP, and then falls in every year of the forecast period from 83.7% this year to 74.1% in 2023-24.
Due to the hard work of the British people and this Government’s prudent public finances, we can provide additional support for public services in the spending review. The Prime Minister announced the single largest cash commitment to our public services ever made in peacetime by the Government—an £8.4 billion five-year deal for our precious National Health Service. As the Chancellor made clear, we are delivering this historic £20.5 billion real-terms increase for the NHS in full over the next five years.
As we have been remembering this past weekend, the bedrock of this nation’s security is a strong defence. Our Armed Forces are a vital pillar of the UK’s past, present and future. This is why the Budget commits an additional £1 billion to the Ministry of Defence to cover the remainder of this year.
The Budget also made provision for £400 million in-year capital payment to schools.
Along with investing in our vital public services, this year’s Budget includes a record set of spending commitments focused on boosting industry and our world-breaking technologies: with £1.6 billion of new investment to support our modern industrial strategy, ranging from nuclear fusion to quantum computing; £150 million for fellowships to attract the brightest talent to these shores from around the world so that our scientific research can continue to lead the world; and our commitment to infrastructure, including expanding the national productivity investment fund once again to more than £38 billion by 2023-24, so that over the next five years, total public investment will grow by 30% to its highest sustained level in 40 years.
As we finalise our departure from the EU and deliver a deal that secures Britain’s future trade, we must unleash the investment that will drive our future prosperity. So the Budget increases the annual investment allowance from £200,000 to £1 million for two years, delivering on a long-standing ask of the British Chambers of Commerce. Other initiatives also boost this country’s businesses, such as targeted relief for the cost of acquiring intellectual property-rich businesses, and a permanent tax relief for new non-residential structures and buildings.
Backing business means backing every type of business: large and small; online and offline. But we must also recognise that there is one part of our economy that is currently confronting that challenge in spades: our high streets. The Budget provides £675 million of co-funding to create a future high streets fund to support councils to draw up formal plans for the transformation of their high streets. The fund will invest in the improvements they need and facilitate redevelopment of underused retail and commercial areas into residential purposes.
We will consult on how modernisation of the use classes order and compulsory purchase order regime can help to facilitate the transformation of the high street. We went further by committing to ease the burden of business rates. At the next revaluation, in 2021, rateable values will adjust to reflect changes in rental values, but I want to help retail businesses now. So for the next two years, up to that revaluation, for all retailers in England with a rateable value of £51,000 or less, business rates will be cut by a third. That is an annual saving of up to £8,000 for up to 90% of all independent shops, pubs, restaurants and cafes.
We are increasing the transforming cities fund to £2.4 billion and providing an additional £90 million to trial new models of smart transport. We are funding 10 university enterprise zones. There is £115 million for digital catapults in the north-east, Northern Ireland and the south-east and for the medicines discovery catapult in Alderley, £70 million to develop the Defence and National Rehabilitation Centre near Loughborough, £37 million of additional development funding for the northern powerhouse rail project, and £10 million for a new pilot in Manchester to support the self-employed to acquire new skills. Here, in our capital, we are supporting the delivery of a further 19,000 homes by improving the Docklands Light Railway with housing infrastructure fund money.
The decisions announced in this Budget mean, in 2020-21, an additional £950 million for the Scottish Government, £550 million for the Welsh Government and £320 million for a Northern Ireland Executive.
As well as backing all parts of the United Kingdom to invest and grow, we will make sure that British workers are equipped with the skills that they need to thrive and prosper. We have introduced a new system of T-level vocational training, we have put the first £100 million into a new national retraining scheme, and through the apprenticeship levy we are delivering 3 million high-quality apprenticeships. That system is paid for by employers, and it has to work for employers. The Budget recognises this and announces that, for smaller firms taking on apprentices, we will halve the amount that they must contribute from 10% to 5%. In total, this is a £695 million package to support apprenticeships.
As our economy evolves in the digital age, so must our tax system, to ensure that it remains fair and robust against abuse, and raises the revenues that we need to fund our public services. That is why we are proposing in the Budget a ground-breaking digital services tax to ensure that large digital firms pay their fair share of tax to support our public services. The employment allowance was introduced to incentivise businesses to take on employees, but at a flat rate of £3,000 per employer, it does not provide any real incentive for larger employers. So from April 2020, we will target it at small and medium-sized businesses with an employer’s national insurance bill of less than £100,000 a year.
We cannot resolve the productivity challenge or deliver the high standards of living that the British people deserve without fixing our housing market. The Budget extends first-time buyers relief to all first-time buyers of shared ownership properties valued up to £500,000. It also makes this relief retrospective, so that any first-time buyer who has made such a purchase since the previous Budget will benefit. The focus on £500 million of investment for the housing infrastructure fund will unlock a further 650,000 homes; the next wave of strategic partnerships with nine housing associations will deliver 13,000 homes across England; and up to £1 billion of British Business Bank guarantees will support the revival of SME housebuilders.
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 programme. This particularly focuses on the implementation and delivery of universal credit. It is an enormous undertaking, and we have been clear that we want the migration process to be as smooth as possible. This is why the Budget introduced a package of measures, worth £1 billion over the next five years, to aid the transition. We have listened to the concerns about the rates and allowances within the design of the system. In response, work allowances in universal credit are being increased by £1,000 per annum, at a cost of £1.7 billion annually once rollout is complete. That will benefit 2.4 million working families with children, and people with disabilities, by £630 per year. Universal credit is here to stay, and we are putting in place the funding it needs to make sure it is a success, because we ardently believe that work should always pay.
Under this Government, the poorest 20% have seen their real incomes grow faster than the richest 20%, and the proportion of jobs that are low paid is at its lowest level for 20 years, thanks to the national living wage introduced by a Conservative Government in 2016. From April, this will rise again, by 4.9%, from £7.83 to £8.21 per hour, handing a full-time worker a further £690 annual pay increase and taking his or her total pay rise since the introduction of the national living wage to more than £2,750 a year. We accept the Low Pay Commission’s recommendations on national minimum wage rates and will support young people and apprentices with further above-inflation increases. The Low Pay Commission’s current remit is for the national living wage to reach 60% of median earnings by 2020, subject to sustained economic growth. Next year, we will give the Low Pay Commission a new remit, beyond 2020. We will want it to be ambitious, with the ultimate objective of ending low pay in the UK. We will also want to be careful, protecting employment for lower-paid workers, so we will engage responsibly with employers, the TUC and the Low Pay Commission itself over the coming months, gathering evidence and listening to their views to ensure that we get it right.
As well as making work pay, we want working people to keep more of the money that they earn. When we came into office, the personal allowance was £6,475 and the higher rate threshold was at £43,875. In April, the Chancellor raised this figure to £11,850 and the higher rate threshold to £46,350, as steps towards our manifesto commitments of £12,500 and £50,000 respectively by 2020. The Budget met our manifesto commitment a year early, and it committed to raising the personal allowance to £12,500 and the higher rate threshold to £50,000, before indexing both in line with inflation from 2021 to 2022. That is a tax cut for 32 million people: £130 in the pocket of a typical basic rate taxpayer, meaning that, since 2015, we have taken 1.7 million people out of tax altogether and nearly 1 million people out of higher rate tax.
How successful our future is depends on how successfully our country comes together and faces the challenges and opportunities that lie in wait. More than ever, it has shown the British people that their hard work has resulted in better living standards, a stronger economy and better and more sustained funding for our great public services. As we prepare to leave the European Union, this Budget lays the foundation for an economy that is fit for the future, and I commend the Statement to the House.
Baroness Smith of Basildon (Lab)
My Lords, today’s debate takes place against a backdrop of huge uncertainty for the future of this country. I listened to the Minister with great care, but I suspect that my analysis of the Budget is somewhat different from his; I do not share his great enthusiasm for some of the measures he spoke of. We have come a long way from the Prime Minister’s mantra of “Brexit means Brexit” because, under the stewardship of the Government, no one has a clue what Brexit will mean or of its implications for the economy. Yet again, we are told that it is crunch time, but today’s Cabinet did not even discuss the so-called deal; we are advised that there is “cautious optimism”—whatever that means.
At one time the Government had what they called a long-term economic plan. They said that it would make public services more efficient, ensure that work would pay, and they promised it would make our economy more resilient. To provide this, we would all need to tighten our belts through an extended period of austerity. Times would be tough, but we were all in it together, and it would be worth it as we emerged into the promised bright economic future. Now, however, it is clear that the ideological commitment to austerity has failed our country both economically and socially. It has brought misery to communities, families and individuals.
It is also clear that it has failed politically, with Theresa May telling her party’s conference that, “Austerity has ended”. But yet again, she was addressing the internal problems of the Conservative Party rather than those of the nation. The Prime Minister needs to shore up her support with her own MPs, many of whom defend the ideology of austerity but are unable to justify it to struggling constituents. So, with that long-term economic plan now abandoned, the Chancellor had to deliver a Budget, boxed in by that quite desperate political pledge, when he wanted to take a more pragmatic, longer-term approach. This was evident at last week’s Treasury Select Committee, where the Chancellor displayed a more realistic pragmatism than the Prime Minister. He advocated a balanced approach to deficit reduction rather than an ideological commitment to austerity.
Let us examine the detail of the Budget. The OBR forecasts are just slightly better than last year, although it warns of slowing growth in business investment, and unsecured debt rising as a proportion of household income. It recognises that inflation remains slightly higher than was forecast, and has revised down its growth predictions. Also, while employment has marginally increased, there has been no significant improvement in wage growth. It is hardly a rosy picture. As one commentator concluded, the Chancellor,
“claims strong growth, but it’s mostly froth”.
However, the reduced borrowing forecast from the OBR provided flexibility for the Chancellor and more money to draw on for this year. But it is described as a “gamble” by the independent IFS, given that the OBR could easily reverse that decision next year. This would leave the Chancellor in a pretty tricky situation. He is unlikely to reimpose austerity, so he would have two options: increase borrowing or raise taxes. Despite that warning, the Chancellor has chosen to spend rather than save, with decisions predicated on a smooth Brexit and a two-year transition phase. But does that spending help those who need it most or provide a coherent strategic approach to strengthen the economy?
Back in June, we welcomed the announcement of additional funding—£20 billion—for the NHS, which is repeated in this Budget. But it is now clear that other public services will pay the price. Day-to-day public service spending, outside health, is 19% lower than in 2010-11, and is set to stay broadly flat between now and 2023-24. No wonder the IFS has described the situation as unsustainable, with the likelihood of tax rises. In addition, despite extra funding for the NHS, how much of this could end up spent on existing loans and deficits?
Last year, the NHS in England overspent the Government’s budget by £4.3 billion, while trusts owe £7.8 billion in loans. That is almost £12 billion, just under 60% of the new money the Government have announced. Meanwhile, decisions on non-NHS budgets for social care, public health and training are being parked until the spending review. How can we possibly address the crisis in social care unless we look at these issues together and set out a broader strategic plan?
On education, one of the most depressing announcements in the Budget was the £400 million schools funding for—here I quote the Chancellor—those “little extras”. This is barely more than 10% of the £3.5 billion cut from education since 2010. We are still seeing a cut in pupil funding, so however clever the Government think they are being with the figures, teachers know the real impact in our schools. It continues post school, with investment also lacking in skills and training. It is not just the futures of today’s pupils that the Government are stifling, it is all our futures if we fail to properly educate and train the young people that we need to build the society of tomorrow.
The Government have talked of devolving powers and responsibility, but it is really about passing the buck because those who are given that responsibility can operate only within the financial constraints handed down by the Government. Local councils, having already borne much of the brunt of so many austerity cuts, are being hit again with reductions next year of a further £1.3 billion, leading to a funding gap of £7.8 billion by 2025. Prisons, meanwhile, face cuts of £510 million through to 2023 on top of the 21% reductions since the start of this decade. Moreover, unprotected departments will still face real day-to-day cuts of 2.9% per person through to 2024.
Elsewhere, the Government are not even trying. There was not a single penny in the Budget for regular policing where the impact of cuts continues to be felt in all of our communities. With the loss of 21,000 staff, 999 calls are not being responded to and the police are having to make decisions about the crimes they can or cannot investigate. We are all paying the price because of the lack of resources.
Then there is a sleight of hand in other areas, from defence to pothole repairs, where new money does not extend beyond a year. Does the Minister really understand the depths of frustration of police officers, teachers, those working in social care and other public servants? Pushed to the brink, they are unable to fulfil their responsibilities because of the failed austerity policies of this Government. We see a lack of strategy for welfare, a lack of strategy for health and care, a lack of strategy for education and skills, and a lack of strategy for defence, roads and policing, along with a lack of anything resembling a strategic vision for the future of our country. This seems to be a blatant attempt to apply sticking plasters to open wounds.
The Government have made much of their plans to reverse the intended cuts to welfare benefits, but in reality it is only a quarter of the £12 billion-worth of cuts planned by 2020. The other 75%, as announced in 2015, remain the Government’s policy, with half the amount yet to be rolled out impacting directly on families. Not only does the benefits freeze remain, but the tax cuts will cost far more than the changes being made to universal credit. As demonstrated by the Resolution Foundation, those tax cuts will see 84% of gains go to the top half of earners in the country, with 37% going to the top decile alone. When you take the tax cuts and universal credit changes together, the top 10% of households will see a 14 times greater benefit in cash terms than the bottom 10%.
The impact of austerity may not have reached Downing Street, but it has reached millions of our citizens, including many in low and medium-paid employment. For those workers, pay packets are not expected to return to pre-crisis levels until the end of 2024. Any extra money in their pockets is welcome, given the hit that they have already taken, but the balance is wrong. This Budget has failed to live up to the anti-austerity hype. In reality, there will be no meaningful end to austerity for hard-working people and their families.
Where are we now? Looking at this Budget alongside the disorderly approach to Brexit, it feels as though the Government are taking a blind corner at speed. In proclaiming the end of austerity but failing to offer or deliver any alternative other than disjointed giveaways, the Government have destroyed their own self-proclaimed assertion of economic competence. They have abandoned that long-term economic plan with nothing credible in its place. Talk of an emergency Budget in the event of a no-deal outcome inspires little confidence that Ministers are prepared for what could happen to the economy and to our public services in such a situation. Indeed, are they at all prepared for any kind of Brexit?
The principle objective of the Government appears to be their own survival, with short-term decisions that do nothing for the longer-term future of public services or the economy. Paul Johnson from the independent IFS has said:
“If I were a prison governor, a local authority chief executive or a head teacher, I would struggle to find much to celebrate. I would be preparing for more difficult years ahead”.
He could have said much the same about a parent or a carer. The first priority of a Government to their citizens is security and safety. But they must also offer hope and optimism—that the future will be brighter; our children will have greater opportunities; hard work, training and education will pay off; taxes will be fair and public services good; and that when things go wrong there is a reliable safety net and support. But the Government have spectacularly failed even to acknowledge this, and to understand how their policies, and lack of competence and direction impact on that hope and optimism.
This has to change. Anything less is a dereliction of duty. We should start by getting the Government not just to talk of ending austerity, but to offer a new, strategic, open and forward-looking approach that invests in our people and economy and, most of all, gives a genuine reason to be optimistic for the future.
Lord Fox (LD)
My Lords, it will come as no surprise to hear that those of us on this Bench do not share the ebullience that the noble Lord, Lord Bates, displayed when describing the Budget. That is because, when we are out in our communities and back at home, we see a country that is very divided. We talk to people and they are extremely cynical about what goes on in this place. When you see the Budget, you can see why they have that cynicism.
Since the banking crisis, most people have seen their livelihoods eroded. While the very latest data shows that wages are at last exceeding inflation, the story of the last 10 years has been one of people’s spending power being eroded. This is particularly true for those working in the public sector. It is no good the noble Lord or the Chancellor relying on growth to get the Government out of that hole. The latest uptick in GDP more likely reflects—I apologise to Welsh, Scottish and Irish Peers in the House—England’s success at football than it does a major change in the economy. Overall, growth remains stubbornly low and holding below 2% in the next five years of the OBR’s forecast.
That has consequences. The Resolution Foundation—while not necessarily agreeing politically with the Conservative Party, it is a well-resourced, authoritative economic group—warns that day-to-day spending on things other than the NHS, overseas aid and defence will face real-term cuts of 3% per person by 2023. That is a huge consequence, yet even this dreadful prospect is overshadowed by the damaging impact that Brexit—if it happens—will have on the UK’s public finances. These costs could reach £80 billion per year in the event of no deal, some people say. To be honest, no one can estimate it, but we do know that it will cost many tens of billions of pounds. Meanwhile, as I have said, the underlying problem of the economy remains: the wealth gap, the difference between the richest and poorest in this country, which is widening. It has not been helped by the penny-pinching and debacle over universal credit; indeed, it has been hindered massively.
That brings us back to the mood of the nation. People feel that there has been no justice, and it is easy to see why. The acknowledged source of most of the problems arising from the crash was the banking industry, yet it enjoyed massive government bailouts and support to survive, with virtually no repercussions for its collective bad behaviour and certainly with no individuals really being brought to book. Indeed, there are signs that the banking industry is still finding innovative ways of storing up problems for the future, and the Bank of England has recently warned about toxic corporate loans. Meanwhile, in the wider corporate sector, executive remuneration is pushing all the wrong buttons for the rest of the country. Therefore, is it any wonder that voters are cynical? Should we be surprised when people whose pay rates have been frozen for so long feel sore, and can we really complain when collectively they tell us that politics is wrong and has a bad name?
Budgets are as much about theatre as they are about economics, and we saw some theatre last week. Often, what they achieve is as much an indication of the direction of travel as an indication of any major movements, and so it is with this one. The noble Lord, Lord Bates, should be congratulated on his optimism. His colleague the Chancellor generally has a well-deserved reputation for dullness but, among the spectacular ruins that we see in other elements of political life today, even Philip Hammond felt the need to shed his reputation, play politics and try to do more exciting things with his Budget. We have heard from the noble Lord, Lord Bates, some of the eye-catching things that were put forward.
Of course, the Chancellor’s real wriggle room was blunted by his boss’s promise of a birthday present for the NHS. Therefore, as the noble Baroness, Lady Smith, pointed out, he spent most of the borrowing improvements in the OBS’s forecast on the NHS, and I am sure that my noble friend Lady Jolly will say more about that later in the debate. As the noble Lord, Lord Bates, pointed out, the Chancellor has left the country with £15 billion of headroom against future borrowing targets, but I am sure that he will need much more than that if Brexit occurs.
However, it is not just healthcare by which we should judge this Budget or this Government. This and any other Government should be judged by a number of fundamental criteria, and those were touched on by the noble Baroness, Lady Smith. I propose three main touchstones for seeing how well a society is performing. I would judge it, first, on how well it equips its young people to embrace the future; secondly, on how well it looks after its elderly and frail; and, thirdly, on how safe and secure people feel in their homes and neighbourhoods. On all three counts, Her Majesty’s Government are failing.
I turn, first, to schools. As we heard, the Chancellor scattered some crumbs for schools but the minimal joy that that might have given them was banished by the throwaway phrase about “little extras”. That indicated just how little the Government grasp the financial plight that our schools are in, and just how little they understand that schools are looking not for treats but for money to pay their teachers and classroom assistants. The Budget does not address the unfunded pay rises, and even more pain is looming for our schools. The spectre of increased employer contributions for pensions next spring will create another financial black hole for many schools. I was speaking to a head teacher who has just been brought in to rescue a failing school. He is already looking at what he will have to do to meet the shortfall in his budget due to increased pension contributions. It will mean losing classroom assistants and possibly teachers. I ask the noble Lord to take that back to colleagues and to remember that a big issue is looming—one that we have not really seen yet because so many other things have been going on.
There are, of course, other crises in education. The funding of children with special educational needs is really important and has plunged a lot of our councils, if not all of them, deeper into the red. As with many elements of public expenditure, the Government are underfunding the local authorities while expecting them to bear the brunt and maintain—or enhance—levels of service. The Government do not seem to understand that this cannot go on for ever. They cannot do things with nothing.
The same is true in the care of older people. There is a crisis in social care. While the NHS did get a raise, social care did not get anything near the black hole of £2 billion that it faces. It is taking a cut every day. It is up to the Government of the day to lead on this issue and fund the care needed by people up and down the country now. The here and now of social care is that many people are suffering because the system is being bled of resources. It is no good just floating ideas for future possible solutions, having yet another inquiry, and not backing that up by embracing the problem and funding the solution today. I would like to hear what the Government will do today to address today’s problems.
The third measure was personal safety—in other words, policing. However the Government choose to judge themselves, they are not doing well on policing. It is going very badly, and this is not the fault of police officers. I know an officer in a response unit with a few years’ experience. To start with, his unit is short of 10 vehicles, which have been carted off to another region, so he already has one arm tied behind his back. Then, in addition to being asked to respond to incidents, he has been given eight cases and asked to clear those up in the meantime. This gives an indication of how front-line police officers are being stretched, and why many are considering their future in the force. Without changes, the police system is going to really collapse, and we have to do something about it. That is one anecdote, and many other police officers have similar anecdotes to tell. The situation in our police forces is not sustainable.
Those are the three factors by which we can judge a Government. Yet what does the Chancellor do? He gives a little money here and a little there, but then proposes tax cuts, which, as we have heard from the noble Baroness, Lady Smith, benefit the most well-off and not the poorest in this country. The Liberal Democrats would ensure that the wealthy paid their fair share. We have proposed alternatives that would help to fix the tax system. We would tax wealth and commercial land value, and would use that to invest in public services, schools and police. The commercial land value tax would also help hard-pressed local businesses.
At the outset, I said that a Budget indicates a direction of travel. This being the case, it is clear that the Government do not grasp the big issues facing people. In deciding to maintain cuts in corporation tax and in reducing personal tax for the most well-off in the country, the Government are rewarding the wrong people. It is the opposite of virtue signalling. Meanwhile, the majority of people are experiencing no or low growth—and sometimes falls—in their income. They are prey to catastrophically underinvested public services. This Budget, coupled with the spectre of Brexit looming over the horizon, just demonstrates that the Government have a tin ear to the real issues facing the United Kingdom.
Lord Wakeham (Con)
My Lords, the last time I followed the noble Lord, I had never heard him speak before. I was at a considerable disadvantage, because I had received a message—which came from his mother—asking how he was doing. I waffled on a bit about how good and effective he was, but I had actually never heard him say a thing in the House. This year, I am at least able to report—through my friend, who is a friend of his mother’s—that he is doing pretty well. I do not agree with what he says, but he made a good contribution to the debate.
I have been around long enough to have lived with a lot of Budgets. It is surprising how often, if they are a great success in the first few days, they are not too good a week later. That is the way it normally works. This Budget was not like that at all. Members on this side of the House, both here and in the Commons, were, by and large, supportive of it, and the opposition parties were opposed to it. Frankly, not much has changed since the original Budget, which is not the normal pattern.
I want to say one or two things about the taxation policies. I have some concerns, and there are some things that I think are right. First, I want to talk about stamp duty. In my view, stamp duty is a bad tax because it is a tax on change. We want change in our country, and for all my political life, that is what we have been seeking. There are many examples of where change is not happening because of the high rate of stamp duty. Take, for example, downsizing in housing. I would like the Government to look more at the economic costs of stamp duty to see whether there are ways—I believe that there are—to raise just as much money without the same amount of damage that stamp duty causes. It must be 25 years since I was in the Treasury. Then, it absolutely loved stamp duty, because it is an easy tax to collect. Ministers will have a hard job persuading the Treasury that stamp duty is not the right way forward, but they should have a try.
Secondly, the Government are absolutely right to try to get a fairer amount of tax from the enormous tech giants, which play an important part in our economy. But this brings into focus a problem that has been around for a long time: corporation tax itself is not a terribly fair tax. A UK-based company with no overseas affiliates pays the full rate, whereas if you are part of an international group and organise yourself in the way that these companies seem to be able to do, you get a lower tax rate. The Government are right to tackle this, but there are wider issues that they have to consider. The Government are also right to be cautious about what they do, because we as a country earn a great deal of money from intellectual property that is sold abroad. If we move too quickly and without agreement on the way to deal with the problems, we might find that we are paying more tax not less. The Government have made the right start, and I want to encourage them.
The third thing I want to talk about, very briefly, is the massive change in the way that we collect taxes, which was not even mentioned in the Budget speech. I refer, of course, to making taxation digital. Originally, this required all businesses, however small, to file their accounting information online four or even five times a year. About a year ago, in a Select Committee report, some of us said that while the object is right, it was likely to have the most disastrous consequences for the way that a lot of people operated. To its credit, HMRC persuaded the Chancellor—somebody did; I am giving it the credit—to delay the introduction by one year and to exempt many smaller businesses from its proposals. It is to be congratulated on that.
There are, however, still some pretty massive problems. According to a survey by the Institute of Chartered Accountants—of which I have been a member for over 60 years; it does not even charge me a subscription anymore, I have been a member for so long—only 51% of businesses registered for VAT have ever even heard of making taxation digital, and only 58% of the businesses that next year will have to file their returns under this new system have made any provision at all to go down that road. The Government and the Inland Revenue have got to work hard if they are not to have a disaster or difficulties on their hands.
The next stage in the revolution which will come is to make everyone file their income tax information in the same way. The Government have rightly said that they will not do this until they are satisfied that the first stages of it are working properly. That is an important pledge. I am glad that they have given it and I hope that they stick to it. Let us get the first thing done. It is the right policy—I am not arguing about that—but the changes are dramatic for many people.
The last thing I wish to address—this was not in the Budget but hardly a day goes by when it is not on the front pages of newspapers regarding business affairs—is the understandable concern about the significant number of audited company accounts that turn out to be in serious error. There are legitimate calls for inquiries into the role of the auditors. I am perfectly happy that those inquiries should happen to see whether some of the things they got involved in were not quite as they should be. However, I would also make the simple point, which seems to be elective, that it is not the auditors but the directors who prepare the accounts of the companies. It is with the directors who have presented phoney or incorrect accounts for their auditors to audit that the prime responsibility for inaccurate accounts lie. I like to take every opportunity to remind people that it is not always the auditors’ fault. Sometimes it is the auditors’ fault, but not as often as it is the fault of the directors of the companies. They need to take more care and perhaps make more provision to ensure that they present to their shareholders and the tax people accurate information.
Lord Wood of Anfield (Lab)
My Lords, I will follow on seamlessly from the noble Lord, Lord Wakeham, and talk about who pays tax and how much we as a country pay in tax. Those are two points—one on which the Budget was silent and one on which it was loud but misleading.
The first is an issue that gets less attention than it should because it is important to our nation’s fiscal health—the state of our tax base. The Budget continued the trend of all Budgets since 2010 by raising, once again, the personal allowance threshold—this time to £12,500, a year earlier than planned—as well as increasing the higher-rate threshold to £50,000. I suspect that across the House there is agreement that taking low-income earners out of taxation has the right goal, at least, in mind—but the consequences of doing so for the breadth of our tax base should give us pause for thought.
The personal allowance has increased by 120% in a decade. That is 94 percentage points more than inflation. Decisions by successive Chancellors since 2010 will reduce income tax receipts by £24 billion alone through the personal allowance threshold increases. That is 1% of GDP by 2021. In the past decade the proportion of That is 2 million fewer people paying any income tax at all, despite population growth.
The narrowing of the tax base has been accelerated by the boom in self-employment, which has been concentrated among low earners. The proportion of self-employment incomes below the personal allowance threshold has nearly doubled in 10 years, from 30% to 60%. There is a similar story of narrowing the tax base elsewhere—in business rates, in stamp duty land tax and perhaps also in capital gains tax. Across the spectrum, government policy decisions mean that we are reliant on an ever-lower number of tax payers.
Why is that a problem? Because increasing our dependence on a diminishing number of taxpayers exposes the public services that they fund to the risk of economic volatility and the risk of losing tax revenue as wealthier taxpayers’ behaviour changes to reduce their tax payments or avoid them. The richest members of our country face a tax system that taxes their income but hardly makes a dent in their wealth or property. From an economic point of view, that is madness. No wonder so many high earners reduce their income tax bills by swapping 45% tax rates on their high income for considerably lower taxes on the companies they form to hold their income.
If we are to preserve the health of our tax base, we need to return to making distributional decisions through varying tax rates and using existing taxes on the books that we are scared to touch—such as the fuel duty escalator, which sits in mothballs in our tax system—rather than by eroding the tax base. We also need to extend the tax system to encompass wealth, rather than just income, to broaden the tax base and have a tax system that matches how people make their income.
The second issue is connected to the tax base. It is the question of ending austerity and how to finance the turning on of the public spending tap that the Chancellor claimed to have rediscovered in his Budget speech. The overall strategy of the Chancellor’s Budget is quite easily summarised: he got a windfall from the OBR and decided to spend the lot. I applaud much of the philosophy behind that. In particular, the Chancellor has acknowledged in theory what every decent economist has been saying since George Osborne went to the Treasury in 2010: the consequence of austerity is lower growth. In contrast to George Osborne, the Chancellor now wants to boost growth, partly through more spending—and, as the IFS remarked, he has therefore given up on meeting his surplus target by the mid-2020s.
I welcome that, as well as the decision to ensure that overall spending on day-to-day public services will rise, not fall. But we have to get real about this. First, spending the windfall in one Budget to make the direction of public spending tick upwards instead of downwards is not an end to austerity. Existing promises on spending in health, aid and defence mean that a host of public services, from prisons to social housing, social care and local government, still face cuts. As the Resolution Foundation commented, unprotected departments’,
“per capita real-terms budgets are set to be 3% lower in 2023-24 than 2019-20. If allocated equally this would mean real-terms per capita … cuts between 2009-10 and 2023-24 of 48%, 52% and 77% for the departments of Justice, Business and Transport respectively”.
The bigger point is that, even after the Budget’s spending spike, the growth in overall spending remains significantly below historic norms. In 2010 the share of GDP spent on day-to-day public services was 18%. In 2022 it will be 14%. The amount of uncommitted public spending outside protected areas is rapidly dwindling. Astonishingly, the IFS forecasts that health spending will constitute 38% of all public spending by 2023.
The truth is difficult for all parties. We are a country that does not spend enough on its public services. The Budget does not change the legacy of austerity of the past eight years for the long term. In the EU, which we are still just about in, we are ranked 21st out of 27 countries for the percentage of GDP devoted to government spending; that is 4.5% below the EU average. The Chancellor rejected his predecessor’s orthodoxy on austerity—rightly, because it has been catastrophic. But reversing it will take more than a Budget spending spree. If we want to use public spending to support growth and protect and rebuild our depleted public services in a sustainable fiscal way, we have to bite the bullet and raise the percentage of GDP we pay in tax.
There is lots we could do to make a start on this. We could whittle down the tens of billions of pounds that currently go to the best-off in our country in pension tax relief; we could examine ways of taxing wealth assets that generate so much undertaxed value for the best-off; and, as I said earlier, we could use existing taxes more rationally and fairly. The funding of public services is for our lifetimes, not just for Budgets and elections. Since 2010 we have been subjected to a multiyear experiment in what happens when you deliberately target public services and the public sphere to reduce spending. The results are now in and they are not pretty. If we are to turn the page on those years, rather than simply give lip service to the idea of the end of austerity—as I fear the Chancellor did—we need to change fundamentally our approach to the tax base and the tax system.
Lord Macpherson of Earl’s Court (CB)
My Lords, this is a Budget of our times, overshadowed by the interminable uncertainty of Brexit, which hangs over the economy like a dark cloud. Understandably, it is a Budget designed to offend no one and to avoid at all costs controversial votes in Parliament. It is hard to object to the measures; indeed, some of them are very sensible. I welcome the increase in resources for the National Health Service, the focus on public investment—in particular, in the roads programme—funding for the pensions dashboard and the careful and considered way in which the Government are going about preparing a digital services tax.
In passing, I should say that I agree with my noble friend, or rather the noble Lord, Lord Wakeham—he should be a friend; I want to make that clear—who made a good point about stamp duty. Stamp duty is an extraordinarily inefficient tax. It taxes mobility and transactions. This country should have followed the fine example of Ireland, which used the crisis to reduce stamp duty rates and introduce a sensible, self-assessed property tax.
It is the macroeconomic stance that I want to focus on today. We are now nine years into a recovery. The economy is at full employment. Last year was the first year since 2001 when public debt fell as a percentage of national income. Even this year, public debt will be a mere 1.5% of GDP below its peak. By way of comparison, by this point in the recovery after the 1991 recession, public debt was 8.6 percentage points below its peak.
The one thing that I learnt from 30 years at the Treasury is that, when the forecasts give you a fiscal windfall, it is imprudent to spend all of it. As Robert Chote, the chairman of the Office for Budgetary Responsibility, has said,
“what the sofa gives, the sofa can easily take away”.
But spending the windfall is what the Government have chosen to do. Next year, the Chancellor will spend some £11 billion of the £12 billion windfall. By 2022-23, he plans to spend £18.8 billion of a windfall of £18.2 billion. I question this decision for two reasons, the first structural and the second cyclical.
It is over the next decade when the long-predicted demographic time bomb finally arrives. Sound fiscal principles suggest that Britain should have followed Germany’s example and reduced the national debt now the better for future generations to shoulder the burden when spending pressures increase. To use the phrase much beloved by a previous Prime Minister, we should be fixing the roof while the sun is shining. If there is an economic downturn, the probability of which increases with each year of growth, the Government will need all the firepower available to support economic activity. If the debt level is still more than 80% and rising, their room for manoeuvre will be pitifully small.
Looking at the numbers, I see two things which make the public finances even more vulnerable. First, the revenue forecast looks difficult to sustain. This year, taxes and national insurance are projected to be 34.6% of national income. That is the highest tax take since 1969-70. I congratulate the Chancellor and Her Majesty’s Revenue and Customs on getting so much revenue in, but history suggests that such a high tax take will be difficult to sustain.
Secondly, the spending settlement for the NHS looks like the bare minimum necessary to keep the service on an even keel. The Government have yet to provide for long-term care for the medium term. They have provided extra resources for the Ministry of Defence only over this year and next. They have heralded the end of austerity, but if they are to continue to protect health, schools, the triple lock and overseas aid while providing more resources for the MoD, there is not enough in the spending projections to cover the programmes which are really coming under pressure: the police, the Prison Service and local services. At some point, the NHS will be back for more; it always is.
I encourage the Government to prepare for such an event by initiating a debate on the balance of spending and taxation in an ageing society. In my view, the triple lock uprating formula for the basic state pension is unsustainable and the case for a hypothecated tax for health and social care remains compelling. But it needs to be one which everybody pays. The elderly have had a very good run over the last 20 years. I should declare an interest: I am due to receive my free bus pass in eight months’ time. It is time for us older people to share more of the burden.
Another worry I have about the macroeconomic stance is the Bank of England’s ultra-loose monetary policy. Quantitative easing worked initially, but it is like heroin: to have any impact, the Bank needs to inject more and more money into the system. QE has distorted asset prices and, despite the Bank’s protestations, it has helped the haves over the have-nots. I am surprised that the Bank has not yet signalled its withdrawal: it has missed an elementary trick by insisting on reinvesting the proceeds of debt as it matures. Had it allowed the quantity of QE slowly to run off as debt matured, monetary policy would be in a much more sensible place. As it is, we have an expansionary fiscal and monetary policy when the economy least needs it. Both the Treasury and the Bank of England have little to fall back on if the economy stalls.
I shall finish with a few words on the Budget process itself. Here, I have great sympathy with the Treasury: in a world of considerable uncertainty I can understand why the Prime Minister and the Chancellor would want to leave decisions to the last possible moment. It was ever thus. I recall sitting in a room over in the House of Commons with John Major and Ken Clarke. John Major was arguing that we should remove VAT on fuel from the Budget which Ken Clarke was due to give the next day. I had to bring the discussion to a halt by saying that it was too late—the Red Book was already printed. Now that we have the independent Office for Budget Responsibility, it is important that that institution is given the time necessary to cost proposals and feed that into the fiscal forecast. I am troubled that the OBR points, on page 2 of its report, to,
“repeated failures to observe the forecast timetable”,
agreed with the Treasury. I note that the OBR will be seeking assurance that this will not be repeated at fiscal events. I wish it well, though I am not optimistic. I would be grateful if the Minister would tell the House whether the Chancellor or the Treasury have yet given that assurance.
Lord Higgins (Con)
My Lords, research in the Library reveals the extraordinary fact that I have now spoken 59 times in Budget debates. This will be my 60th. Looking back on that period, there have been many memorable Budgets—by the late Lord Howe of Aberavon, by my noble friends Lord Lawson and Lord Lamont, and so on. This, I think, will not be a particularly memorable Budget, but it is certainly unique in one respect: there has never been so much uncertainty about the overall economic situation as we have today. The Chancellor faces an immensely difficult task and I think that, on the whole, the Budget is the best that can be done at this stage, until we have a little more certainty about the outcome of Brexit.
I will mention two points of detail. The first is that I certainly welcome the measure the Chancellor has taken to help the high street. I think that it is very important and I am glad that he has taken the opportunity to do it: it may be necessary to do more. There is also rumour in the press that there will be an increase in the charge for probate—but that will not be included in the Budget. Perhaps my noble friend will say how that is to be introduced. I think that all of us know from personal experience that after a death the whole issue of probate and so on is very difficult, and to use this as a form of taxation, rather than simply covering the Government’s costs, seems wrong.
Looking at the Budget overall, the Institute for Fiscal Studies has pointed out that this is the largest discretionary fiscal loosening that we have seen since 2010. That is remarkable, but it raises the whole question of the end of austerity. I am very strongly of the view that we have had no option in recent years but to adopt the policy of austerity that we have because quite clearly we have not been living within our means, and we have to try to get back to that situation. It is therefore perhaps a little surprising that, instead of continuing, given that he had a certain amount of windfall in that progress, the Chancellor decided to spend the windfall instead on the National Health Service, help with various tax changes, and so on. The overall position is that the Prime Minister and the Chancellor have indicated that this is the end of austerity—but that does not mean that we must not continue to try to live within our means. This really must be reinforced in looking forward, particularly against the very difficult economic situation created by Brexit, which I have just mentioned.
It is not entirely clear what proposals the Chancellor has, depending on the different ways in which the Brexit problem develops. A lot of problems will be ones that cannot be helped at all by either fiscal or monetary policy. If there is no deal, for example, we are likely to find enormous problems with blockages in the Channel ports and so on. There is nothing the Chancellor can do about that. What he will need to do is make efforts to stimulate the economy if we find that the outcome of the Brexit operation creates problems, as it seems likely to do. I am slightly puzzled by his expression “Brexit dividend”. He seems to be saying that if Brexit works all right, we will not have to take the nasty measures we were otherwise going to take. That is a slightly strange interpretation of what is meant by a dividend.
At all events, we may find ourselves in a number of possible circumstances, ranging from no deal to a deal which is not too bad—although there is some debate on whether that will be Chequers—or one where we decide that we really ought not to leave at all. The reality is that the House of Commons and the House of Lords have had no opportunity to vote on the result of a referendum which was, as I have stressed many times, advisory. We did not legislate in this House or the other place for a mandatory referendum. We should therefore consider—we really have a duty to consider—whether the interests of our people and the economy depend on going ahead with Brexit in one form or another, with no deal or with whatever it may be. The people had a vote when they voted for their Members of Parliament—but their Members of Parliament, instead of being delegates, have been made representatives by the way in which the operation of the system has inhibited them from doing what needs to be done.
I am not at all clear what one might do by way of stimulus or as a more stringent approach in the light of the various Brexit changes. However, we have to consider very carefully which of the possible ways in which the situation may unfold needs to be dealt with. Having said that, this Budget seems to be as good as can be done in the circumstances. I thought that my noble friend on the Front Bench set out the Government’s position clearly—perhaps more clearly than the Chancellor, although he did not include any jokes. Be that as it may, this Budget is the best that can be done in the circumstances and we should support the Government.
Lord Livermore (Lab)
My Lords, the Budget presented two weeks ago by the Chancellor revealed a Government incapable of being honest about the true state of the British economy, about the real impact their Brexit plans will have or about the ongoing austerity the people of this country continue to face. Far from being a Budget for hard-working families, as the Chancellor claimed, it was a dishonest Budget with the sole purpose of delivering a dishonest Brexit.
In his Budget Statement, the Chancellor claimed he had an economic record “to be proud of”, as he announced growth forecasts of 1.6% in 2019 and 1.4% in 2020. What he failed to mention was that, in each of those years, growth was forecast before the referendum two years ago to be substantially higher, at 2.1%. Neither did he mention that for the two subsequent years, 2021 and 2022, his forecasts are now actually even lower than they were just this time last year. He also did not mention that at no point since the Second World War have there ever been five consecutive years of GDP growth below 2%, until now. Nor did he say that, having been at the top of the G7 growth league before the referendum, Britain is now at the bottom or that we are now also at the bottom of the EU growth league.
The truth is, as the director of the IFS has observed, that these growth forecasts are dreadful compared to what we thought in March 2016, dreadful by historical standards, and dreadful compared to the rest of the world. The Chancellor in his Budget also sought to highlight the new fiscal forecasts from the OBR, and of course the improvements in forecast borrowing since March are very welcome, but what he again failed to tell the country is that borrowing this year will actually be £30 billion more than was forecast in March 2015. He did not own up to the fact that borrowing next year will be £40 billion more than was forecast in March 2016, immediately before the referendum, and neither did he say that while pre-referendum plans were for a £10 billion surplus next year, he now forecasts a £30 billion deficit. The reality, which the Chancellor at no point acknowledged, is that we have seen over the past two years an enormous Brexit-induced borrowing downgrade. The Chancellor has now given up any serious desire to eliminate the deficit by the mid-2020s, and he has also abandoned his fiscal objective of achieving a budget surplus in the next decade.
Throughout his Budget Statement, the Chancellor seemed intent on concealing the damage already done to our economy by the vote to leave the European Union, but nowhere was this desire to conceal more shocking than in his denial of the longer-term economic consequences of Brexit. His claim in the Budget that he would,
“harvest a double ‘deal dividend’”,—[Official Report, Commons, 29/10/18; col. 654.]
must surely be one of the most egregious falsehoods ever spoken by any Chancellor. It was disgraceful to hear a Chancellor claim what he knows to be untrue. This Government’s own impact studies, produced by his own department, show a 5% reduction in GDP from leaving the single market. They show future trade deals making up only 0.2% to 0.7% of that reduction. They show a devastating hit to every nation and every region of the UK, with an 11% reduction in GDP in the north-east and an 8% reduction in both the north-west and the West Midlands, not from no deal, but from their own preferred Brexit plans.
Far from delivering a boost to the public finances as the Chancellor claimed, his own figures show that the Government’s preferred Brexit outcome would result in an increase in borrowing of some £40 billion a year—a cost of Brexit of some £615 million every week. These falsehoods were made not out of strength or confidence, but out of weakness and fear. The Chancellor is now too afraid of the Brexit extremists in his own party to be able to be honest with the British people about the real impact Brexit will have. So, rather than now preparing cautiously for such an uncertain future or showing the prudence that this moment requires, when he was handed a £74 billion windfall by the OBR he was so frightened that he gambled on the public finances and spent it all, acting not in the long-term national interest but in his own narrow short-term party interest, trying to persuade his own MPs to back a deal that he knows will make this country immeasurably poorer.
The Chancellor used that short-term spending to claim that,
“the era of austerity is finally coming to an end”.—[Official Report, Commons, 29/10/18; col. 653.]
Yet he knows full well that this is not the case, either for the hard-working families of this country or for the public services on which they depend. While announcing tax cuts costing £2.8 billion—from which 90% of the gain goes to the top half of the income distribution, and nearly half of the gain goes to the top 10% alone—he chose to maintain £4 billion of cuts to working-age welfare over the next five years. As a result, a couple with children in the bottom half of the income distribution will lose £200 a year while a single parent working full-time on the minimum wage will be £1,940 a year worse off. Looking at the overall impact of tax and benefit changes since 2015, the IFS has calculated that the poorest decile will now be £1,100 a year worse off, while the poorest working-age families with children will lose £3,000 every year—15% of their income. This is hardly the end of austerity for those families.
In our public services, while extra money for the NHS is of course welcome, the Chancellor’s numbers imply ongoing cuts in other day-to-day public services, from prisons to schools and local government. Unprotected departments will see cuts in every year from 2020 and their per-capita real-terms budgets are set to be 3% lower by 2023 than in 2019. At the same time capital limits were cut in the Budget by £7 billion for 2021, further undermining long-term investment in our economy and infrastructure. Again, this is hardly the end of austerity, as the people of this country were led to believe.
The Chancellor cynically pretends that austerity is over, solely with the aim of delivering a Brexit deal that he knows will decimate the public finances, making further, far more severe and long-lasting austerity inevitable. Yet with every cynical, short-term, false promise that they make, this Government build expectations that they know can never be met, further fuelling the betrayal myth that unscrupulous politicians of both left and right are only too ready to exploit. What will the Chancellor tell the people of this country when he delivers not a “double dividend” but the destruction of jobs, living standards, livelihoods and public services?
Surely it is now time for an honest conversation about the real impact that Brexit will have. It is time for us now to ask: is this really the right path for our economy? Is it really the future we want for our country?
Baroness Jolly (LD)
My Lords, I join others in thanking the noble Lord, Lord Bates, for tabling this timely debate and for his excellent speech. I also thank fellow Peers for their thoughtful contributions so far on this topic.
I shall use my time today to discuss the health of our population, a topic that goes hand in hand with a strong economy. There are clear links between good health and good economic performance. We know that when health and social care services are limited, it is the most vulnerable in our society who lose out. When services are strong and the Government fund progressive programmes to improve health, workers are more likely to stay in their jobs, children are more likely to thrive in school and the result is that the economy is made stronger. Not all health interventions need to be large or to take place at a clinical level. There is fantastic work being undertaken in public health by businesses, communities and local authorities across the country, which indirectly helps to support our economy by keeping people healthy and in work.
The headline figure of £20.5 billion by 2024 for the NHS in the recent budget, while welcome and laudable, is not enough to continue to grow this kind of upstream support, which helps keep individuals out of hospital and relieves pressure on primary care. Indeed, I was dismayed to note a cut of almost £1 billion in the non-NHS England parts of the Department of Health and Social Care budget this year, most of which will be felt in public health and social care services. I welcome the uplift to the national minimum wage, but regret the lack of funding for local authorities which have to pay for the increase in the wages of care workers.
The economic implications of Brexit are likely to add further strains to those services, which already face a funding gap far deeper than the most recent commitment will fill. Will the Government follow the Liberal Democrats in thinking strategically and on a cross-party basis about the future funding of help, including how it relates to our economy and workplaces?
To elaborate my point, consider for a moment an issue that affects all of us in our lifetime. One in four of us will have a mental health condition, and that means that someone well known to us or to our family will be affected. Mind estimates that 70 million work days are lost each year due to mental health problems in the UK. This costs employers billions of pounds each year in lost productivity and recruitment costs for those who ultimately feel forced to leave their jobs due to illness. Investing now to protect people’s mental health will pay dividends in future for employers and employees. Although I am pleased that the Government have highlighted this important issue in the Budget, I am disappointed by the funding allocation of £2 billion, which falls far short of the amount that experts say is needed to deliver vital improvements to services and achieve real equality between mental and physical health in future.
Mental health support is also crucial for younger people, who will soon be entering the workforce. The Budget recycles commitments set out in the coalition Government’s blueprint for children’s mental health, which pledged a named mental health lead in schools, as well as a dedicated professional in specialist NHS services. Will the Government consider investigating a similar programme for the workplace, perhaps along the lines of a mental health first aider? We are used to there being a first aider in all businesses above a certain size—I think it is those employing above 12 people. Perhaps we need to consider a mental health first aider. They need not be a professional, but rather someone trained to provide confidential advice and signposting for those who are suffering with their mental health who may not know where to turn. This is in line with existing efforts of employers to support the health of their employees. Let us consider some schemes that already exist which could be adapted.
Here in the Houses of Parliament, for parliamentarians and staff alike, the Parliamentary Health and Wellbeing Service offers mental health counsellors for anyone who needs them, away from their local GP and support network. Big White Wall, which provides emotional support for employees in the workplace, uses a virtual messenger service to provide advice. Fantastic work is being done by employers to encourage people to be open about their mental health and reduce stigma. It is surely also worthy of bolstered government commitment. There are plenty of lessons to learn about how we can improve our health in a cost-effective manner and save on lost work days. Do the Government support that view, especially considering the Statement of the Secretary of State for Health and Social Care on 5 November about prioritising prevention, including strengthening public health initiatives and local authority services to reduce strain on primary care?
We should remember that a lot of health conditions are caused or influenced by people’s work. To help keep individuals in their jobs and happy in those jobs, we need to be open to recognising that. In particular, it is important to fund research into conditions that are often exacerbated by the stresses of the workplace. The Migraine Trust quotes recent research by the Work Foundation suggesting that migraine is the least publicly funded of all neurological illnesses relative to its economic impact. It is estimated that absenteeism from migraine costs £2.25 billion per year in the UK, calculated on the basis of 25 million lost working days.
In addition, there is the phenomenon of “presenteeism”, in which workers attend their jobs, but are minimally productive due to their underlying and often unappreciated health conditions. Clearly, it is difficult under the Government’s current financing to fund some of these asks. But there may be other, creative ways to source funds. Possibly some health components could be funded in future by a system such as a citizen’s wealth fund—if you like, a sovereign wealth fund for the NHS. Under this system, the fund could be used to actively invest in stocks, bonds and physical assets. It would enable the country as a whole to benefit from the returns on investment typically available only to the wealthy. Once the fund became large enough to generate a substantial annual return, it would represent a new source of public funding, which could be used, for instance, to promote underresearched areas of health, or to bolster the much underfunded public health funding. This fund could also be used to raise awareness and identify conditions that are currently underdiagnosed—for example, structural heart disease, atrial fibrillation and bipolar conditions. It could help to normalise and prevent illnesses that affect thousands every year.
Overall, I see the state of the economy, and the state of our health, as closely linked. Tackling health in the workplace, and for the workplace, makes sense. It makes sense at a pragmatic level, a moral level and an economic level. I hope that the Minister can give me a positive response to guarantee the workforce, and so the economy, of the future.
Lord Gadhia (Non-Afl)
My Lords, the adage that one should never drive a car simply by observing the rear-view mirror applies equally, if not more so, to the stewardship of the economy. The Chancellor’s room for manoeuvre in his 2018 Budget benefited significantly from the hard decisions taken over the past eight years, especially the buoyancy of current and projected tax receipts. It has also been underpinned by a relatively resilient UK economy, supported by continued global expansion, fuelled by the sugar rush from US tax cuts.
However, it is all too easy to fall victim to lazy economics by using models based on extrapolating past trends—something which even the OBR has previously experienced. Witness the way in which it badly overestimated the recovery in UK productivity. During the late stages of a business cycle, the disclaimer that the past is not a reliable guide to the future applies more than ever.
Despite our 43-year record-low unemployment levels, and accelerating real-wage growth, the economy is showing signs of softening. One of the most reliable lead indicators, the PMI, is already on a declining trajectory and business investment is anaemic. It is possible that lifting the Brexit uncertainty could produce what the Chancellor describes as a “deal dividend” but it is equally possible that the perpetuation of uncertainty through a fudged Brexit deal could tip the economy into a more aggressive down cycle as businesses and consumers lose patience and confidence.
The world economy is undoubtedly more vulnerable to shocks as the interest rate cycle turns, trade disputes intensify and the oil price advances. Our own Brexit-related issues could amplify the domestic impact yet further. The most likely source of economic shocks will come from the global tightening of monetary policy now under way. The effect of cheap money is like morphine—the pain comes back when it is no longer there.
As we mark a full decade since the financial crisis, the biggest piece of unfinished business is how central banks should unwind their use of unconventional monetary policy, as referenced by my noble friend Lord Macpherson. Quantitative easing, or QE, in the form of large-scale asset purchases by major central banks, has swelled their combined balance sheets almost fourfold to $16 trillion. In the UK, the Bank of England has purchased £445 billion of assets, predominantly gilts, from the private sector, with the aim of stimulating the economy at a time when interest rates were already low. It created a breathing space for macroeconomic adjustment during a period when fiscal policy was severely constrained by high deficits and debt. It is welcome that the deficit is now comfortably below 2% and debt is falling.
Although the path to recovery for western economies has been slow and erratic, the original purpose of QE has been accomplished and it is now facing diminishing returns. The Bank of England has gradually tightened monetary policy, with two interest rate rises in the past year and more on the horizon as the Financial Policy Committee seeks to bring inflation back to the 2% target. However, there has been very little public discussion about how and when QE will be unwound. The Bank of England’s own website simply says: “If inflation looks like it is becoming too high, we can sell the assets we have purchased to reduce the amount of money and spending in the economy”. In effect, this is a straightforward reversal through quantitative tightening, or QT.
Behind the scenes, the Bank of England will undoubtedly have developed more detailed plans for QT. In the near term, the official position is that interest rates will remain the primary instrument of policy. Unwinding the holding in gilts, which represents 25% of all government debt, through market sales, is not a straightforward process. If executed poorly, the disposals could create a significant dislocation for financial markets with unintended real economy effects. It is also plausible that we will never completely unwind QE and there will be a permanent increase in the monetary base. That is why the Government cannot just sit back and hide behind Bank of England independence.
Rising interest rates and the implementation of QT will arguably be more important than the Budget in determining our economic prospects and the Government’s political fortunes. I have therefore suggested a more radical option for unwinding QE through transferring some of the assets—say, £100 billion—into a UK sovereign fund, mandated to liquidate the gilts gradually, over time, and reinvest into real assets, focused on infrastructure. This would expand the productive capacity of the economy in a non-inflationary way. It might also provide a more permanent structure for the national productivity investment fund—first announced by the Chancellor in his 2016 Autumn Statement and expanded further at successive fiscal events—now standing at over £38 billion. The first national infrastructure assessment, published in July, recommends the creation of a dedicated UK infrastructure finance institution, particularly if we cannot retain access to the European Investment Bank after Brexit. Coupled with the Chancellor’s block on any new PFI projects, we urgently need a coherent alternative strategy for funding UK infrastructure.
However, my proposal would blur the distinction between monetary and fiscal policy, which is seen as heresy by most central bankers, who fear the inflationary consequences. Increasingly, though, economists are revisiting this orthodoxy. Researchers at UCL have highlighted several cases where fiscal-monetary co-ordination proved useful, such as the Reconstruction Finance Corporation used to implement President Roosevelt’s New Deal after the great depression, and Canada’s Industrial Development Bank, which was created to support SMEs. QE is openly described as unconventional monetary policy. In unwinding this unprecedented intervention, it is equally appropriate that the Government and Bank of England should consider alternatives that run against convention. The idea of a UK sovereign fund is not new, but the circumstances for its creation might now be ripe as policymakers grapple with the dilemma of how to unwind QE in the most orderly way and find a sustainable vehicle for funding long-term infrastructure.
If the chain of events triggered by the collapse of Lehman Brothers 10 years ago ultimately leads to the creation of a UK sovereign fund, mandated to invest in our country’s long-term productivity and prosperity, that would be an altogether more positive legacy from the turmoil of the financial crisis, and something that I hope the Government will consider seriously.
Baroness Eaton (Con)
I declare my interests as a vice-president and former chairman of the Local Government Association.
It is a pleasure to make a brief contribution to this debate on the Government’s set-piece financial statement. The 2018 Budget contained a range of measures that can be welcomed. The Chancellor’s Statement shows that the Government are beginning to listen to local government’s call for much-needed investment in local services. Much more investment will certainly be needed in the long term, but it is good that the Chancellor has acted to provide some new money for councils.
Having served as leader of Bradford Metropolitan District Council and as chairman of the LGA, I know of the pressures facing local services. Indeed, the LGA’s analysis shows that there will be an overall funding gap of £7.8 billion facing local government by 2024-25. Of this, adult social care services face a £3.56 billion gap, just to maintain existing standards of care. It is pleasing, therefore, to see a cross-party consensus that adult social care is in desperate need of support, which is why the additional funding of £240 million for winter pressures is welcome. It will allow councils to better plan their services. Although vital, that funding will address only some of the short-term pressures facing adult social care. That is why a sustainable funding model is now long overdue. I refer noble Lords to the LGA’s timely green paper, and ask the Government to work with councils as they develop their own proposals.
Children’s services are also facing significant funding pressures. The LGA’s latest study shows that social workers are starting new cases for more than 1,000 children each day. The investment of £84 million for children’s social care over five years for programmes in some areas is good news, but councils face a £1 billion shortfall in the next year alone just to keep services running at current levels. With demand rising for special educational needs and disability support, it is important that the Government consider whether adequate funding is available to councils. The proposed changes to high-needs funding should address this. As local leaders gather for the National Children and Adult Services Conference in Manchester this week, I am sure that government Ministers will be taking their messages on board.
Investing in infrastructure is also an important objective of any Government. I am glad, therefore, that Budget Day marked the official abolition of limits on councils’ borrowing to build houses. We must not underestimate what a difference this will make to many communities. Councils are now eager to get on with the job of helping to tackle the housing crisis. It is welcome that they are moving towards resuming their historic role as major housebuilders.
It was also pleasing to see the Chancellor allocate £420 million in additional spending to local roads in 2018-19. This will help councils tackle one of the most important issues for local residents, and will make an impact immediately. The LGA’s latest resident satisfaction survey found that public satisfaction with the condition of local roads is falling. Taking urgent steps to plug the £9 billion roads repair backlog will help to reverse this. Everyone is affected by damaged roads and areas across the country will benefit from the initial funding provided. To maintain our local network, we must now move towards a strategic funding stream for road maintenance.
I commend the Government on a Budget that starts to deliver for local areas. The Chancellor has laid the groundwork for the spending review to address some of the long-term funding issues in areas such as children’s services, adult social care and infrastructure. We must all speak up for these vital services. Investing in local government is good for the nation’s health and well-being, as well as for our economic growth. I know that the Government are listening to this message and I look forward to seeing them work with councils to deliver the much-needed funding for our communities.
Lord West of Spithead (Lab)
My Lords, I know that the House would be disappointed if I did not refer to a naval anniversary, so I thought I would mention that 15 years ago today I accompanied Prince Michael of Kent when he rededicated the RN Division memorial on Horse Guards Parade, which is well worth a visit. The division was formed by Churchill in 1914 from battalions of sailors and Royal Marines. The Royal Naval Division fought in defence of Antwerp in 1914, at Gallipoli and on the Western Front from 1916 onwards as the 63rd Division. It is little known to the general public but it suffered huge casualties and was the most highly decorated division in World War I. But enough of this digression because I intend to talk about the impact of the Budget on defence.
There is a welcome change in that defence is actually mentioned in this Budget, which it has not been for the last two. I congratulate the right honourable Gavin Williamson on pressurising the Chancellor into giving the MoD some help, although I have to say that it does not resolve the deep-rooted parlous state it finds itself in. The right honourable Philip Hammond, when he was the Secretary of State for Defence, trumpeted about a spending black hole he had discovered and how cleverly he had sorted it out. The black hole, if it can be described as such, still exists and there is a £20 billion shortfall between the planned equipment programme and the funding available.
More damaging is the hollowing out of our Armed Forces that is being undertaken to achieve the promised efficiency savings that were predicated to make the MoD programme affordable. I do not believe that anyone really believed that they were achievable. However, it would be churlish to sniff at what has been given to us in this Budget. It is a significant sum of money.
Earlier this year, £800 million was given to bring forward the Dreadnought programme and now part of the £1 billion given in the Budget is apparently going the same way. Can I ask the Minister how much of the £1 billion that is being given is for the Dreadnought programme? The remainder is for anti-submarine warfare and cyber, both of which are crucial. We have seen a staggering growth in Russian submarine operations out of area. The Russians are operating off our west coast clearly hoping to stumble across our Trident submarines. Why would they be doing that? They are threatening our undersea cables. Why would they be doing that? We have seen nothing like this since the Cold War. As regards anti-submarine warfare, it is an art as well as a science, and at the end of the Cold War we were without a doubt the best proponents of that art in the world. We have lost that edge, so the extra funding is very much to be welcomed.
What is unfortunate is that the clear national requirement for a minimum of eight nuclear attack submarines—I am not asking yet again for more ships; do not worry—and indeed programme plans for eight Astute-class craft have been watered down to seven. In a Written Answer to me, the Government stated that the MoD had always planned for seven. I have to say that that was certainly not the case when the Astute programme was started by a Conservative Government in the mid-1990s or post SDR 1998. There must have been some sort of lapse of memory in the MoD about that. As for cyber, we are among the best in the world but it is absolutely crucial that the MoD and GCHQ work closely alongside each other, and the money coming through in this Budget is very welcome to help those initiatives along.
But the problem of underfunding has not gone away. If the two tranches of money from the Treasury into the Dreadnought programme are an indicator that there is an acceptance that the capital cost of the new deterrent submarines should be funded outside the defence budget, I welcome it. That will make a dramatic difference to the MoD programme. This of course was the plan until changed by George Osborne in 2010. Can the Minister tell us whether it is now the plan again? I hope that it is.
The Armed Forces are at a cliff edge; they cannot do what our nation expects of them. It will be fascinating to see what comes out of the much-delayed modernising defence initiative, which was due to report this summer and will now presumably inform next year’s spending round. That spending round will be crucial for the future defence of our nation. The House of Commons Defence Committee and others have stated that the percentage of GDP spent on defence should be higher; indeed, the figure of 3% is being bandied around. I tend to shy away from percentages, but what is needed is a clear articulation of what exactly our nation needs in defence and security terms in a highly dangerous, chaotic and uncertain world—and what is necessary needs to be properly funded.
As a simple sailor, I am delighted to see the MoD gain something from the Budget, but I am not so simple that I cannot see that it is just a temporary sticking plaster. In the final analysis, we can be wealthy only if the security of our nation and its people and global stability are assured. Strong defence forces ensure that security.
Baroness Neville-Rolfe (Con)
My Lords, I declare my interests in the register in a number of businesses that would benefit from a strong economy. As his predecessor on the Front Bench, I also express my sympathy for my noble friend the Minister in the testing task of responding to quite so many different concerns.
It is always difficult to know where to focus on these occasions and, in particular, whether to tackle the macroeconomic picture or microeconomics. Today I will devote myself to macroeconomics, with a couple of riders.
On the big picture, I want to lend my voice to those who say we are by no means out of the woods yet. The inheritance of the financial crisis and its dismal treatment by the then Labour Government lives on. Debt is now growing more slowly than GDP, albeit only just. However, we have not solved our fiscal problems; by declaring an early end to austerity and spending over £100 billion, the Chancellor has reduced his ability to cope with a crisis or a downturn. At the same time, he has promised another, tougher Budget if it is needed because of Brexit. If adopted, this would mean that we would have to impose expenditure cuts or increase taxes at a time when uncertainty will be rife and people will be blaming one another. This seems peculiar. What happened to prudence? A helpful Library Note tells us the worrying answer: the OBR expected debt to fall from the 2016-17 peak of 85.2 % of GDP to 83.8 % in the current financial year and then to 74.1% in 2023-24. Its graph shows that, as recently as 2001-02, debt was well below 30% of GDP. There is still a risk that overweening debt will cripple our grandchildren.
Our economic situation is comparatively weak and, to move on, I agree with the Red Book that the sustainable way to boost economic growth and prosperity is to increase productivity. The Chancellor chose to spend less time on this than usual, suggesting it had gone down the agenda. The truth is that, although there has been a slight ticking up recently, productivity has disappointed overall since the financial crisis and today’s ONS figures are a further wake-up call. The ONS statistical bulletin suggests that the usual spurt back to the trend rate of growth has not happened, perhaps because of a combination of hours per worker rising and weak output growth. My take is that it may also be due to a lack of the dynamism in new sectors such as we saw in information and financial services in the 1990s and in the noughties. Chapter 4 of the Red Book sets out most of the areas that can change the paradigm—innovation, investment, new technology, education and skills, and regional growth—but it is bitty. On current plans, as paragraph 1.13 says, productivity growth is expected to be 0.9% in 2020 and 1.2% in 2023. The trouble is that this is poor by historic standards, and the international comparisons are not encouraging. So what do we need to do?
First, I would point to enterprise, ambition and focus. I am clear that we need a more supportive approach to enterprise in this country. Sadly, both parties often kick business, and the immediate response to a problem is often to announce further regulation. The impact on economic dynamism and the huge costs cut into profitability and raise consumer prices. This appears to be barely considered in many government circles. Impact assessments are largely ignored, and the section of the Red Book on regulation is all about new interventions and controls. We need a change of attitude and a supportive climate for enterprise, especially for smaller businesses. After all, it is the taxes paid by businesses and their employees that pay for schools, welfare, the NHS and the rest of it. All that said, the Conservatives, however bad, are never likely to challenge the anti-business sentiment of a Corbyn-led Labour Party.
Secondly, there is investment. The Government are right to continue to set aside money for R&D, for infrastructure—as was rightly emphasised by my noble friend Lord Gadhia in his interesting speech—and for tech investment, and to do this right across the UK, for example in the northern powerhouse. The new metropolitan mayors can also be a really dynamic force and use government funding to leverage private investment. Private investment is in the doldrums because of Brexit and the helpful increased allowances announced in the Budget might, I think, encourage a post-Brexit bounce as businesses begin to spend the money sitting on their balance sheets. However, I am a bit depressed about the time that it takes in government to spend investment money. Broadband rollout has been disappointingly slow, and I just hope that we do not see the same delays with full fibre to premises and 5G mobile. I would add that I believe we have, for generations, been bad at infrastructure planning. When I stand on a crowded Tube—an increasingly common experience—I think back to the clear cost-benefit numbers that I remember as a case study in the university library and being told that the Treasury was against the proposed construction of the Victoria line, which is now obviously so vital.
Thirdly, we come to education, skills and management. The biggest long-term driver of productivity growth and international competitiveness is education. We inherited a disastrous situation, but I am glad to see the improvement in many schools, especially in London, thanks to Teach First, the introduction of phonics and the dynamic of competition from free schools and academies. However, the international PISA scores of 70 countries recorded by the OECD are depressing. We are still stuck at 27th for maths, 21st for reading and a better 17th for science. I am particularly concerned about the weakness of vocational education. The apprenticeship levy was meant to usher in a new German or Swiss-style dawn, but in fact so far it has increased business costs and reduced overall numbers. Therefore, I was very glad to learn of the review by the Exchequer Secretary and the Minister for Apprenticeships. I ask the Government to learn from employers big and small how to make this work. For many, including the board on which I sit, the levy is just a tax.
Finally, I would like to say something about retail, where I spent the heart of my career. It is a job creator and gives young people the chance to be part of a team and reach their potential in ways never imagined. It is a wonderful engine for social mobility, as Sir Terry Leahy reminded some of us again last week in a speech celebrating 30 years of Retail Week—the legacy of its first editor, my noble friend Lady Wheatcroft.
The Budget was a disappointment for retailers because the unfairness of the rating system was not tackled. The £940 million-worth of relief over two years for rates paid by small businesses was of course extremely welcome, but it is not transformational. With a very uncertain consumer outlook—confirmed by weaker advertising sales—margins are under pressure, and I had hoped for a bigger initiative. I commend the Chancellor for proposing a tax on the digital companies that are wrecking the high street, but here again it is perhaps too low and too slow.
In conclusion, I return to my central message. The Budget was a risky one. Let us hope that my worries are unfounded.
Lord Leigh of Hurley (Con)
My Lords, it is, as always, a great honour to speak in what has become one of our great set-piece debates and to follow such distinguished contributors, not least my noble friend Lady Neville-Rolfe—I agree with much of what she said—and the noble Lord, Lord West of Spithead, who is not in his usual place. I was disappointed that, in his wide-ranging speech on the economy, he did not mention the enormous success and impact of the “Queen Elizabeth” visit to New York, marrying defence and the economy.
I draw your Lordships’ attention to my entry in the register of interests, not least that I am a member of the Chartered Institute of Taxation. Your Lordships will be pleased to know that I last gave tax advice in 1988—some say the recipients are still suffering.
None the less, the Budget gives me great cause for optimism, not least because of one seminal phrase, which my noble friend Lady Neville-Rolfe mentioned, in its opening paragraph. It says that higher productivity remains the only path to sustainable growth and rising living standards. The gravity of this statement should give us pause, as well as a lens through which to view this Budget, to see whether its contents reflect it.
On productivity, I see two aspects. One is that we should provide, where possible, a much needed direct boost to the UK, whose productivity, at first glance, tends to compare unfavourably with that of some of our competitor nations. The second is the vital issue of how we measure it. On the first aspect, unlike some speakers this afternoon, I see much to be optimistic about, not least the National Productivity Investment Fund, which the noble Lord, Lord Gadhia, mentioned. This will provide a £37 billion boost to areas in chronic need, which have historically been subject to underinvestment in housing, transport, digital infrastructure and R&D. However, I commend the Government on what is now a long-standing commitment to R&D that has seen science largely protected from budget cuts.
But let us not kid ourselves. Productivity in the UK is also low due to the cheap labour we have had for many years. This will change after Brexit, and hopefully wages will rise—not a bad thing. Business will, as a result, invest in AI and labour efficiencies. I have been to many factories where migrant labour is predominant and where dedicated, hard-working, wonderful people give their best but perform low-paid, menial tasks. These should and must be mechanised to improve productivity as we currently define it, on an output-per-hour basis.
I will also speak on two other enablers of productivity: tax and regulation. Before I do, I ask my noble friend the Minister where we are in our quest for better measurement of productivity. We are all guilty of worshipping at the altar of a measure that is surely outdated, geared as it is toward manufacturing, not services, and surely not capturing as well as it might the transition of the UK to a digital economy, which is well under way. It fails to measure the long hours that many, particularly in services in the City of London and elsewhere, give to our economy but that, if anything, yield a lower productivity headline, because it is measured only as output per hour.
I turn now to tax, which is a significant influence on the productivity of businesses. For too long, we have operated in an environment where our economy is global but our tax system is local, with businesses able to exist betwixt and between these two paradigms. As such, numerous measures have targeted abusive corporate behaviour to ensure that tax is properly paid in the location where business activity is conducted. I am pleased to see that profit fragmentation, whereby UK businesses can arrange for UK-taxable profits to be booked to entities resident in lower tax jurisdictions, will be addressed in the Finance Bill, and this corrosive practice outlawed. This will upset our friends in the Office of Tax Simplification, owing to the reams of paper that will be required to put this on the statute book correctly, but it is the right direction of travel. Looking at the tax yield anticipated from it in the Red Book, I suggest that it is a very modest measure. In fact, I understand from sources close to the tech companies that they were expecting a lot worse. I ask my noble friend to encourage the Chancellor to seek ways of increasing the share of tax that these multinational, internet-based entities pay.
Similarly, I commend new legislation to create international disclosure rules on offshore structures that would facilitate tax evasion. This will complement the updated offshore tax compliance strategy, which, the Red Book confirms, is forthcoming. While I accept the tightening of the rules for entrepreneurs’ relief, it remains an absolutely key part of our offer to entrepreneurs, who really are incentivised by this opportunity to make capital to invest in businesses and then to use it to reinvest in new businesses. The implication of the Chancellor’s small tweaks and changes to entrepreneurs’ relief is that it is here to stay. Why not state that publicly to silence the siren voices of certain left-leaning think tanks, largely run by people who have never faced the struggle of starting a business, which call for its abolition and cause so much uncertainty for entrepreneurs? Why not state that entrepreneurs’ relief is here to stay? I have some interests to declare here, as my day-to-day business advises recipients of entrepreneurs’ relief, and some eagle-eyed Members of your Lordships’ House will note that I am personally about to benefit from entrepreneurs’ relief as well.
A short word on regulation, which entrepreneurs tell me is the single biggest impediment to productivity growth. We await the Government’s response to a consultation to look at measures to boost productivity for SMEs. This is a worthwhile initiative and the gains are surely significant. However, I am concerned that, in certain respects, efforts will be undermined by an overzealous approach to regulation, not least in my area of financial services. The Red Book welcomes the FCA’s plans to expand access to the ombudsman for SMEs with a turnover of up to £6.5 million, as well as increasing the award limit to £350,000. The idea is that the ombudsman provides a more effective, and certainly cheaper, form of redress than going through the courts. However, expanding the role of the FOS at a time when questions have been raised in the financial services press over its competence seems premature. Given its status and reach—there is barely any long-stop on cases and no right of appeal against the ombudsman’s judgments—the Government should first reflect on whether it, and the system in which it operates, is really fit for purpose.
This matter should not detract from the broader and more positive narrative emerging from this well-received and welcome Budget for economic growth. I cannot help but shudder at the alternative we might have faced last week if Labour had been in government. We would have been talking today about shutting down entrepreneurs’ relief and BPR, and raising top-rate taxes, ignoring the fact that the top 1% of people in this country pay over 25% of all income tax. To add insult to injury, Labour wants literally to take equity away from those who legally own it and give it to some fuzzy employee group.
In conclusion, in the Chancellor’s Budget there is significant investment going into physical and digital infrastructure, as well as into research. The UK is still the second-largest recipient of FDI in the world and this Budget will make the biggest difference. That will be especially true when we finally update our tools for measuring productivity to make them fit for a modern economy. On tax and regulation, two key enablers, the Government are increasingly playing a global leadership role, with an approach that is rightly optimistic and pro-business but which has fairness and transparency at its core.
Lord Hain (Lab)
My Lords, in September the International Monetary Fund concluded this year’s review of the UK economy by noting that Britain had moved,
“from the top to near the bottom of the G7 growth tables”.
We are now vying with Italy and Japan for the G7’s “Bringing Up the Rear of the Year” award. The UK growth trend is downwards. The British economy is still growing, but it is also slowing: it has grown slower every year for four years in a row. Growth this year is expected to be under half what it was in 2014. The British Chambers of Commerce has warned that growth will slow to “a snail’s pace” this year—barely 1.1%. Surely we should all know why. Years of austerity have stymied UK growth, leaving most people no better off now than they were a decade ago, when the global financial crisis pitched the real economy into the great recession.
Despite this dismal record, the Chancellor would have us believe that he is the bearer of good news about public finances, that the Budget deficit is shrinking fast and that things are looking up. But good news can indeed be relative. Back in December 2014, the Chancellor’s predecessor promised that this year, 2018-19, would be the breakthrough year—the year when the Budget would finally move out of the red and into the black, from deficit to an overall £4 billion surplus. Today the OBR expects this year’s Budget still to be in deficit to the tune of £25 billion. I repeat: not the predicted £4 billion surplus but a £25 billion deficit. The slippage has not stopped. The Government are still behind schedule with their deficit-reduction plans, and still overpromising and underdelivering, despite the misery, despair and economic vandalism of never-ending austerity.
Earlier this year the Chancellor’s Spring Statement envisaged a £37 billion deficit for the current year, 2018-19. That figure was the very target that George Osborne set for 2014-15 in his infamous June 2010 emergency Budget—by the way, exactly half the target set for that year by Alistair Darling in his final March 2010 Budget. It has taken the Tories eight years to hit their four-year target. All their 2010 talk about Britain being on the brink of bankruptcy and needing urgently to close the budget deficit before we sunk into the Greek abyss—all that nonsense has been exposed as the hogwash some of us always said it was.
Many Members of this House will have noticed a new study of the financial crisis that appeared during the Summer Recess—Crashed, by Professor Adam Tooze of Columbia University, New York. On page 350 he notes George Osborne’s claim that by 2015 he had slashed £98 billion in annual spending from the UK budget, and OECD evidence that only Greece, Ireland and Spain endured worse contractions than those inflicted on the British people—which is why it took GDP two years longer to recover to pre-crisis levels in the UK than in the United States, where President Obama did the very opposite: rather than cutting spending, he invested and expanded, and US growth picked up where ours went down.
For all the talk of a giveaway Budget and the Tory fiscal squeeze coming to an end, the reality is that Philip Hammond is pressing on with austerity. Office for Budget Responsibility figures show that between 2010 and March 2018, the Tories squeezed £130 billion of spending out of the economy in tax rises and public spending cuts. This latest Budget does not mark the end of austerity—it prolongs it. By 2020, 10 years of Tory austerity will have squeezed over £150 billion of spending out of the economy, 80% of which will have come from public spending cuts.
That £150 billion is 30% bigger than the whole of this year’s budget for NHS England. Figures from the House of Commons Library show that a quarter of that £150 billion in lost spending will be due to cuts in working age social security. Some of the greatest falls in living standards are being experienced by the worst off. So much for the Tory slogan, “We’re all in this together”. This is not a new chapter as the Chancellor claims: it is the same old story, and the Government plan to make it last into the mid-2020s.
Austerity is the reason why care homes are closing, why police numbers are down and why prisons are short of staff. Austerity is the reason why we hear cries of anguish over the lack of elderly care places and cries of desperation over the lack of housing for our young people. Instead of responding to Britain’s urgent social needs, the Chancellor committed nearly £10 billion to income tax cuts over the next five years, which will benefit the better off and the richest the most. Utterly wrong priorities, surely.
A disturbing new chapter in UK economic policy has now opened. The balance of fiscal and monetary policy is shifting towards monetary restraint, even before the austerity-induced slowdown has ended and before the full effects of Brexit uncertainty have become clear. Premature rises in interest rates can only hinder rather than help Britain’s recovery. Yet the fact that the Bank of England has begun to raise interest rates seems to have passed the Chancellor by. He is sticking to his tight fiscal grip when he should be offsetting the drag of higher interest rates by giving the economy a substantial Budget boost. Worse still, instead of encouraging growth he is preparing further cuts in the event of a no-deal exit from the European Union.
The economy really needs a Budget boost in infrastructure investment, skills and training, and low-carbon, greener growth. I welcome the recent call from the Institute for Public Policy Research commission on economic justice for a £15 billion increase in annual public investment spending over and above current plans, taking it to 3.5% of GDP, the average for the G7 countries. That would be double the current rate. It would help to correct decades of underinvestment in UK infrastructure and consequently generate greater growth which will in turn reduce borrowing and debt.
To those who say it cannot be done, I say this: we did it. It is exactly what the last Labour Government did at the height of the global financial crisis. We increased public investment by £14 billion in 2008 and by £15 billion in 2009, over and above previously planned levels, taking it to a 40-year high, and growth began picking up—until the Tories won in 2010 and it collapsed under the weight of savage austerity.
Maintaining infrastructure investment on a permanently higher plateau would encourage faster economic growth, deliver higher living standards and provide a better quality of life for all of our people. The Chancellor’s Budget falls short on all those criteria. He has dismally failed to provide the kind of fillip that is desperately needed for our economy—especially as the Government drives forward, lemming-like, towards an economically suicidal Brexit.
Lord Northbrook (Con)
My Lords, in contrast to the noble Lord, Lord Hain, I believe there is much to welcome about the Chancellor’s recent Budget in the current circumstances. The Chancellor has been given an unexpected windfall by a major change in the independent Office for Budget Responsibility’s forecast in his favour. According to the Financial Times of 30 October:
“The magic ingredient enabling this … according to the Office for Budget Responsibility, was a ‘windfall’ of additional tax revenues and lower projected spending needs—now reflected in a huge change to the UK’s fiscal watchdog’s forecast”.
The expected windfall, amounting to £68 billion over five years, has come from higher tax revenues, and the OBR chairman, Robert Chote, has predicted that this will continue for the coming period.
Looking at the current economic scenario, I would like to focus on the latest quarterly GDP figures. There was good news that the economy grew by 0.6% in the three months to September, following 0.4% growth in the previous quarter, considerably higher than the recent trend. Less good news was that the economy lost momentum in August and September when growth and GDP fell to zero. By September, only construction was powering ahead. Retail sales after a strong start fell at the end of the quarter. Looking at 2018 as a whole, it seems sensible that the OBR has cut the GDP forecast from 1.5% to 1.3%, but it has raised the estimate for next year from 1.3% to 1.6%, which may be a little optimistic.
Considering overall the economy in the light of the Budget, it is hard to make any firm predictions because of the uncertainty over Brexit. Anecdotally, businesses seem to be delaying expenditure decisions, together with possible relocation of staff, until they see what Brexit deal, if any, emerges. For example, the exodus of the financial community from the City—such an important contributor to tax revenues—has yet to materialise. However, I am told that this could still happen due to the loss of passporting rights and could even be worse in the case of no deal.
No one has convinced me that life will be very easy for some parts of industry. The automotive sector, with its just-in-time manufacturing, will have major problems with customs procedure if a sensible deal is not reached.
Also, I worry about the Northern Ireland border situation. According to fullfact.org data of February this year, if we discount sales to the rest of the United Kingdom and count only exports to foreign countries, 35% of Northern Ireland’s exports go to the Irish Republic and £7 billion go to the EU, including the Republic, which represents almost 13% of our exports, according to Trading Economics. Disruption to the Irish border trade could have a significant effect on UK exports. I am also concerned about the customs situation at ports generally.
Another economic figure to be watched carefully is UK inflation. At the moment, it seems under reasonable control, but recent figures for wage rises of more than 3%—the fastest for a decade—could be a cause for concern and may necessitate interest rate rises if the trend continues.
There is much in the detail of the Budget that I welcome. I applaud particularly the raising of the level at which the 40p rate and the basic rate of tax start. I also applaud the sizeable increase in the investment allowance. The relief measures for business rates are also welcome. The increase in spending on roads of £29 billion over five years and the £420 million for pothole repairs are sensible. The extra digital services tax is overdue. Extra money for the NHS is necessary. In my view, however, there needs to be a major cross-party debate to determine spending priorities to stop it becoming a bottomless pit. The extra £1 billion for defence was also a good measure. The additional funding for universal credit was very sensible. I claim a small amount of credit as part of the team that made that case to the Chancellor recently.
However, I am concerned about other Budget measures. The increase in national insurance was not mentioned in the Budget speech; the announcements on it that were sneaked out later are unwelcome. Sadly, to correct my noble friend Lord Higgins, the new probate charge is not just a rumour. Essentially, it is a tax, but it was also not referred to in the Budget Statement. That seems an attack on Conservative supporters, as it means a charge of no less than £6,000 at the top end of the scale. That is in addition to inheritance tax. Not surprisingly, the Daily Mail vigorously attacked it, which may or may not be helpful. Delaying cutting fixed-odds betting terminals’ maximum stakes to October next year is inexcusable. It may well be overturned in the other place, which I would applaud. I am sorry that the police are not getting more resources, as major crime problems in both cities and the countryside suggest that they desperately need them. Also, the prison situation does not look good; I am not sure how to focus extra funding there. Surely some of the international aid budget could be diverted to those two areas.
I want to focus now on the tax burden. According to the FT on 29 October, tax revenues are,
“scheduled to rise from 36.6 per cent of national income in 2017-18 to 37.2 per cent by 2023-24, the highest level since 1986-87”.
I fear that I may be in the minority in continuing to suggest that, within reason, lower taxes can yield higher revenues.
Finally, I want to return to the budget deficit. Clearly, the Chancellor’s measures will put back the days when the books will be balanced. Although the Government deserve high praise for reducing public sector net borrowing from £153 billion in 2009-10—I remind the noble Lord, Lord Hain, of that—to a forecast £40 billion in 2017-18, they keep pushing back the date when the deficit will be cleared. There seems to be a general belief that the current forecast level of deficit does not matter because many other countries are in an equally bad financial state. This budget year, debt interest alone is forecast at £41 billion, and to be in the 40s for the foreseeable future. That situation is fine as long as the markets tolerate it. However, a bad Brexit deal could upset the market and international investors could require a higher return from investing in UK debt. That could cause a serious rise in the UK deficit and have a major effect on the UK economy.
Lord Skidelsky (CB)
My Lords, I welcome the general thrust of the Budget. As the OBR says, it represents the “largest fiscal loosening” since 2010. Noble Lords have suggested that the Chancellor is spending his windfall, but I mistrust the language of “windfalls”. Windfalls are only forecasts of revenue based on forecasts of growth; they are not there under the bed, so to speak, and should be given the credence they deserve—which is very little.
Let us put that aside. We are not here to discuss the Budget, over which we have no control. We are here to discuss, as per the terms of the debate, the economy in the light of the Budget Statement—that is, how the Budget will affect the economy. The answer is: very little. The loosening of which the OBR speaks is much too small to repair the damage caused by eight years of austerity. An adequate loosening would have required an economic understanding and a moral compass beyond the reach of this Government.
The Conservative Party’s narrative has been unchanged for 10 years. The Conservatives say that the recession was caused by the Labour Government; Mr Hammond twice called it “Labour’s Great Recession” in his Budget speech. He said that the austerity policy had nothing to do with ideology: it was simply necessary to clear up the mess Labour had left. Let me put it as bluntly as I can: this narrative is economically illiterate and morally fraudulent, yet the Conservatives have lived off it for the past eight years. That makes me very angry. Take the myth of “Labour’s Great Recession”. The idea that Labour was somehow responsible for the recession is ludicrous. The banks caused it, and Governments were left to clear up the mess. The Chancellor would have been more honest had he talked about the “Bankers’ Recession”—but no Conservative Chancellor can talk that way about his friends.
A slightly more reasonable version of Mr Hammond’s story is that the Labour Government left a fiscal mess. This does not run, either. The economist Simon Wren-Lewis of Oxford University has made a detailed—and far from uncritical—analysis of Labour’s fiscal policy between 1997 and 2010. I will quote just two sentences. He said that,
“any claim that the UK fiscal position was dire before the onset of the Great Recession is not tenable”.
He also stated:
“The line that the Labour government was responsible for leaving a disastrous fiscal position … is pure spin”.
I want to emphasise that, although Professor Wren-Lewis supports Labour, no competent analysis of Labour’s fiscal record would differ greatly from that summary. In any of its forms, the story of “Labour’s Great Recession” is a myth.
Let us exclude the myth and ask whether austerity was a necessary policy in 2010, as the Chancellor claimed and as the noble Lord, Lord Higgins, who is not in his place, accepted. The answer is no. The economics of the matter are straightforward. If the private sector reduces its spending, the Government have to increase their spending to plug the gap. If they cut their spending as well, it deepens and prolongs the recession. The only counterargument is that austerity was needed to give confidence to the markets. But the evidence is unarguable that any confidence-boosting effect of cutting spending—on the poor, it must be said—was overwhelmed by its depressive effect on total spending.
No competent economic authority now disputes that this is what happened—so why go on denying it? Martin Wolf of the FT called austerity a “large unforced error”. That well-known left-wing firebrand Mark Carney, Governor of the Bank of England, estimated at the end of 2016 that austerity had,
“on average, subtracted around 1 percentage point from demand each year”.
Cumulatively, that has left the British economy about 6% smaller than it would have been; in round numbers, it knocked £125 billion off the economy in that period. We are told that the divorce settlement from the EU will cost £35 billion or so, but the coalition Government cost the economy £125 billion.
I do not want to claim that the past eight years have been a tragedy like the First World War, which we remembered recently, or even the great depression. I do claim that the coalition Government inflicted quite unnecessary harm on the British people, which they have never acknowledged or apologised for.
The Budget has to be judged by the extent to which it sets about repairing the damage. It is not enough to say that austerity is coming to an end; it has to be reversed sufficiently to make up for the harm that it has done. This cannot happen unless the harm is acknowledged.
The damage is most clearly seen in the low growth figures, which other noble Lords alluded to. Far from bouncing back as vigorously as is usual after a deep collapse, the British economy has been growing at less than 2% a year since 2010. That is well below its historic trend and, as the noble Lord, Lord Hain, pointed out, things are expected to get worse. The OBR forecasts growth to be 1.5% on average over the next five years.
These are dreadful figures. Britain is near the bottom of the G7 countries. If we take into account the growth in population and the large inequality in income distribution, there is little room for an improvement in the real living standards of most people in the next five years.
The reason for low economic growth is the collapse in productivity. British workers work longer hours than workers in Germany, the Netherlands, France and Denmark, but they produce less for those hours. Annual growth in productivity has plummeted from average annual rates of about 2.3% before the great recession to 0.4% in the past decade. The Resolution Foundation states that,
“had the pre-crisis trend continued, productivity would be more than 25 per cent higher than it is today”.
I agree with Andy Haldane of the Bank of England when he says that we have a “long-tail problem”, but our tail has become longer than it was because our path back to headline full employment—in itself very welcome—has consisted largely in multiplying the number of low-productivity jobs at the expense of high-skill services and manufacturing. Look at the cuts in investment in housing, education and public services since 2010 and you have a pretty good explanation for the collapse in productivity.
The Budget could at least have begun to reverse this trajectory. Instead, we are promised a bagatelle for the British Business Bank, “a little extra” for schools, public toilets and potholes, a little relief here and there—and yet another inquiry into the productivity puzzle.
Over everything hangs the fear of the deficit. Some commentators even fear that the Chancellor has given away too much, too soon if he is to balance his books—but balancing the books should never have been an objective of policy. Balancing the economy should have been the objective, with a balanced budget as the happy by-product of sensible policies for ensuring strong economic growth. The hard-working British people, whose praises the Chancellor never ceases to sing, deserve better than he is prepared to give.
Baroness Altmann (Con)
My Lords, I declare my interest as chair and adviser to pension firms and as adviser to a social enterprise specialising in helping employees manage high-cost debt with workplace loans.
It is an honour to speak in this debate and to follow so many excellent contributions from noble friends and colleagues from all sides of the House. I welcome this Budget, but it may be entirely irrelevant, because Brexit and the terms on which we may leave the EU are far more important for our economy.
In general, the Budget had giveaways for many different groups. I commend the sensible, time-limited encouragement of business investment, help for the high street, the plans—albeit limited—for a digital platform services tax and the announcement of austerity coming to an end. The national productivity fund, mentioned by my noble friends Lord Gadhia and Lord Leigh, is definitely welcome. Productivity in the workplace has been impacted by ongoing financial concerns among those becoming ever more indebted. Therefore, I welcome the help for those struggling with excessive debts, the £55 million from dormant assets to help the problem of unaffordable credit and the 60-day breathing space.
It is also vital to build on the national retraining scheme plans—I welcome the £100 million from the Government to help job-specific training. I urge my noble friend the Minister to ask the Chancellor to make sure that this works for older employees, too. Men and especially women face ongoing discrimination in the labour market, within both the workforce and the recruitment process, which undoubtedly damages productivity and growth.
I welcome in particular the absence of radical pension reform—there have been so many changes. I am pleased that the basic framework remains for now while auto-enrolment continues to roll out until next April when it reaches the full rates. Small changes such as pension funds being allowed to invest in growth assets and encouragement of moves towards a pensions dashboard are also welcome. Increasing the personal tax threshold to £12,500 next April will help protect the pensions auto-enrolment programme from a rising number of opt-outs as employee contributions rise from 2% to 4% of relevant earnings.
However, this rise has a major downside because it worsens the social injustice in pensions inflicted on low earners, who are mostly women. More than 1 million people earning between £10,000 and the personal tax threshold, which is currently £11,850 but will rise sharply next April, will be forced to continue paying 25% extra for their pension if their employer chooses the wrong type of administrative arrangement, as so many have done. This scandal has been ignored time and again. I hope that my noble friend will urge the Government to show that they care about these lowest-paid workers and remedy the injustice.
There were some other missed opportunities, in particular on social care. There is no money in the system, at public sector level, local government level or at individual level, to pay for social care. We need urgently to ensure that measures are introduced to incentivise people to put money aside for funding long-term care needs. A Green Paper is promised “shortly”. Meanwhile, families are unprepared for care needs. Baby boomers, that huge demographic chunk of the population, have not planned to set aside money for care. If we were to introduce incentives to help families put some funds away to pay for care, they would be able to choose when, where and how, and what quality of care they might prefer, rather than just relying on whatever the state might provide. Eight million over-60s have more than £300 million in ISAs and billions of pounds in pensions. Those baby boomers could be incentivised to keep some of that money for their 80s in case they need care. If we do not act soon, more of that money will be spent.
I declare an interest in that I own an electric vehicle. I was disappointed that benefit-in-kind company car tax rates were not addressed in the Budget. They will rise next year from 13% to 16%, which goes entirely against the thrust of policy and the Road to Zero strategy. Sales of zero-emission cars are flat year on year, and we are falling ever further behind other countries. The rise in the benefit-in-kind tax will hit demand in that most important company car market, yet in the following year the tax will drop to 2%. Clearly, people will delay purchasing electric vehicles. I hope that the Chancellor might reconsider at the very least bringing forward the 2% tax rate or perhaps abandoning altogether for a year the company car tax for electric vehicles—the benefit-in-kind tax. If we want to be a leader in this area, it is a shame that the Chancellor has not responded favourably to the letter that I and many others sent to him requesting such action.
There is one more issue I want to mention. I understand my noble friend Lord Northbrook’s concerns about the post-Budget announcement on reform of probate fees, but I find the criticism rather harsh. I am pleased that the Government have listened to previous concerns and reduced the planned fees that they announced in 2017, but under the new plans 60% of estates will pay just £250, similar to today. The cost of legal or professional fees are far larger than this probate fee. For example, an estate of £100,000 is estimated by Which? to be charged, on average, £4,000 by a bank, while a £500,000 estate would face bank charges of closer to £10,000 to £20,000. In that context, a few hundred pounds from the probate fee is desperately needed to keep the court and tribunal system up to date and ensure that there is continued free access to justice in cases such as child support cases, domestic violence cases, mental health reviews and female genital mutilation protection cases. I think that all such cases deserve some small cross-subsidy from the biggest estates.
I was also encouraged to see the clear threat from the Chancellor that the giveaways in this Budget will not be available in a no-deal Brexit scenario—presumably to entice the ERG to support any deal put to Parliament. In that context, I remain horrified by the continued talk of no deal. Let me be clear: if we do not reach any deal with the EU, we will be undoing far more than this Budget. Our 40 years of industrial success are at risk. National security, the national health, food supplies, manufacturing jobs, peace for Northern Ireland— the list goes on. How any even semi-responsible Member of Parliament could seriously still be considering leaving the EU on so-called WTO terms is beyond my comprehension. This game of bluff must stop. Our country has large debts—it needs business success and international co-operation, especially with our nearest neighbours.
I believe that this Budget was judiciously judged, but quite frankly, whatever is pencilled in for next year or thereafter in terms of taxation and spending could be entirely swept away by a damaging Brexit. I hope that the Government will ensure that the voices in our party who seem determined to risk our future on a kamikaze no deal, or even a Canada-style agreement, are sidelined as soon as possible.
Lord Haskel (Lab)
My Lords, my noble friend Lady Smith is absolutely right: this Budget is designed to deal with the political problems of the Government and not the economic and social problems of this country. Most people would simply not recognise the picture painted by the Minister in his opening speech. Perhaps this Budget had to be short term while Brexit negotiations continue, but how much more inspiring it would be if the Chancellor had also recognised the real economic and social problems described by many noble Lords and started to take steps to rectify them—steps to even out the inequality of wealth; steps to review the basis on which we pay tax; steps to get the country working more efficiently by lifting productivity and moving towards the high-wage, high-skill economy that we all seek.
The noble Lord, Lord Fox, spoke of the direction of travel. Surely the direction of travel for the Budget has to be away from an economy which puts us near the bottom of the G20 for productivity and investment yet number five in size, and where one-third of households will depend on universal credit while most of those households are in work. Low-productivity work with high employment is the classic formula for inflation. The Minister will know of numerous visits to Germany to learn why their productivity outstrips ours. They all report that it is largely due to vocational training, training which has evolved over time. Together with investment, this seems to be the key lesson. Lowering corporation tax does not seem to have encouraged this. Indeed, we have seen many companies investing in buying back their own shares to enhance executive pay.
The Minister spoke of the apprenticeship levy, which is meant to improve skills, but it is not working. He spoke of 3 million apprenticeships yet, as the noble Baroness, Lady Neville-Rolfe, told us, it is not working. Yes, the Chancellor has instituted a review of how the levy will function, but that is after 2020. What is the point of a review of the levy system when the private sector firms that deliver training are performing so poorly? The largest one, for the retail sector, went bust. Learndirect had to be rescued with public money. Virtually all the training companies received very poor ratings from Ofsted. The result is that large companies are doing it themselves or recruiting from overseas and the rest struggle with a reduced public sector.
In the public sector, FE colleges are being starved of funds and, as the House of Commons Education Select Committee recently reported, only eight of the 24 Russell group universities offer degree apprenticeships. Because of inflexibility in the education system, part-time students have dropped by 51% since 2010. This is to the detriment of reskilling and learning while remaining at work, which is an opportunity most of us would like to have. This is one reason we have low productivity, low earnings, high employment but a huge shortage of skills. It is the economy that the noble Lord, Lord Skidelsky, described. Where are the effective steps that the Budget could have taken to reverse this direction of travel?
We are told that the Government are being less rigid about austerity. That is a step in the right direction, but the size of the step the Chancellor has taken is very small. This is well illustrated on page 89 of the Red Book. Table B1 sets out the full list of expenditure items in the scope of the welfare cap. On the right are those items now not in scope; a total of five. On the left are those items still in scope of the welfare cap: a total of 26. Yes, austerity may have been moderated, but three-quarters of the £12 billion in welfare cuts, including next year’s benefits freeze, will still go ahead. What this tells us is that if we are to return to the quality of welfare and the standard of living we had before the recession, we will have to raise more government revenue. The fact is that we do not raise enough tax. I hope we will raise more tax by growing the economy and making it more productive.
Meanwhile, the Budget could have taken steps towards a fairer, more acceptable tax system that raises more revenue. For instance, it could have moved towards taxing wealth rather than income, by equalising income tax and capital gains. It could have broadened the tax base and helped local councils by revaluing property, so that expensive houses really do pay more council tax. This is long overdue and it is these disproportionate property taxes that have contributed to the rigidities of the housing market. Yes, of course it could have taxed higher earnings. A national insurance scheme for care, which includes premiums paid by pensioners, seems to have attracted interest and support and would help the NHS by reducing bed blocking in an ageing society. And what about a financial transaction tax, as a sign that the Government support their own industrial strategy, a strategy that creates wealth and does not support activities which extract wealth or simply transfer it? That would be much preferable to lowering the VAT threshold, which would place administrative burdens on a lot of small businesses, as the noble Lord, Lord Wakeham, explained.
The digital services tax—if it is ever implemented—is a small part of the taxes that Tax Watch tells us have been avoided by the main internet platforms. A so-called unitary tax would raise more money and be a lot more equitable; that is why it is finding favour in the EU. Yes, the Government have introduced a future high streets fund but this money is not new. It is allocated from the national productivity investment fund and is a good example of short-term tinkering. I put it to the Minister that increased spending by raising revenue is a lot more prudent than increasing spending based on a theoretical windfall, which came about because the OBR has rebased its calculation for the short-term forecasting of revenue. The noble Lord, Lord Macpherson, warned us about this.
There is nothing in the Budget about climate change or tackling wealth inequality, and very little about making work pay. This Budget continues to commit us to a low-growth, low-skill, low-pay and low-standard-of-living economy. We should be doing a lot better than this.
Lord Horam (Con)
My Lords, I hope that the noble Lord, Lord Haskel, will forgive me but I am not familiar with Table B.1 on page 89 of the Red Book. I am afraid I have not got quite that far into the detail of the Budget but I want to make a couple of other points, which he might agree with.
First, the central objective of economic policy should always be to keep economic growth going at the maximum sustainable level. I am looking directly at the noble Lord, Lord Skidelsky, as I make those remarks. If you keep economic growth going in that way then every other problem, whether it is deficit, debt or inflation—I see that the noble Lord, Lord Skidelsky, is nodding and I feel a glow of pride at that—becomes more manageable. That is the point of getting economic growth at the maximum level where you can sustain it. By that token, therefore, the Chancellor is entirely right to do what he did in the Budget because the fact is that economic growth is very anaemic at the moment, as many noble Lords have pointed out. The Chancellor was right to give a boost and he did so, and all the indicators and predictions by economists are that that will give a mild stimulus—a very mild stimulus, of course—to growth.
The second good thing about the Budget is that it was a restrained boost and rightly so, because he had to keep in his back pocket or behind the sofa—wherever Chancellors put these things—some money for the difficulty that we will face if we have an even worse problem over Brexit than we appear to face at the moment. It was the right call, first, in that it gave a boost and, secondly, in that it was a restrained boost. However, it was of course short-term to face the present situation over the next six to nine months. We all know—the point has been made several times during the debate—that there are other big issues which we have to face.
Here, I think the noble Lord, Lord Haskel, will agree with me: we cannot deal with these issues other than by raising taxation. These are issues such as poverty and what has been revealed by the rolling out of universal credit, for example. There are some of the decisions that we have taken in previous years, not just on the levels of benefit—I certainly welcome the Government’s improvement on those—but on the actual framework. How has it come about that people in some circumstances have been left for five weeks between the end of benefit and the beginning of universal credit? How could anyone conceive of that being a sensible thing to do? These are people who have no savings. They probably have debt, never mind any savings. How are they to manage for five weeks with nothing coming in?
Equally, despite many people thinking the other way, I am afraid I was always opposed to having benefits paid under universal credit every four weeks. Most of these people are used to budgeting every week, not every four weeks. I know that can be changed and that there are arrangements under universal credit for it to be adjusted if circumstances dictate so, but I bet that they have to go through a very bureaucratic process to get that adjustment made. This is therefore a fundamental error, which I deplore, with the system. None the less, it is being tackled and I am very glad that it is.
The other issue, among many others I might mention, is skills. Many people in this country now have credentials, diplomas, degrees and all the rest of it but they do not have skills. Employers and businesses need skills but too many people have chalked up a huge debt from tuition fees to get something almost irrelevant to a prospective employer. That needs to be tackled in a major way.
To do these things, as well as all the other things many noble Lords have mentioned, taxes will have to rise. My noble friend Lord Northbrook quoted some figures but I slightly disagree with him. The figures I have from the Institute for Fiscal Studies suggest that, at the moment, taxes in the UK are 35% of national income. In Germany, the equivalent figure is 39%; in the Netherlands, it is 41%; in France—I love the French—it is 47%. This shows that, by comparison with our European neighbours, we are a lightly taxed country. We are also a lightly regulated country, I might add to some people who think the reverse. There is therefore room for us to increase taxes to deal with some of the serious social and economic problems that we face.
For example, why are capital gains and dividends not taxed as highly as earned income? They were under Margaret Thatcher and I am a Thatcherite on this: let us go back to what she did. They were taxed at the same rate and so they should be. Again, when councils are short of money, why is a house worth £1 million taxed at the same rate for council tax as a house worth £10 million? Why do we not have two extra bands of council tax to deal with the issues? That would surely give local authorities more money to deal with the problems that they face.
One eminent tax accountant made a point the other day about all the allowances, remissions and loopholes in the tax system. He reckoned that there are 1,200 such reliefs, taking away £400 billion from the Exchequer. He gave as an example the entrepreneur’s relief if a person sells his company or small business. Why should he get any relief at all? That costs the Exchequer £2.7 billion. If you invest in the AIM stock market, you get relief on that. Pension relief costs us £30 billion; I defer to my noble friend Lady Altmann on that, but surely anyone who can squirrel away more than £40,000 does not need a greater incentive to do so. All this is available. Then there are more unconventional ideas, such as those mentioned by my noble friend Lord Gadhia, about unwinding QE and having an infrastructure sovereign fund, which is a very attractive idea.
There are immense long-term social and economic problems that we need to face. There are the resources to deal with them if we tackle them in a sensible way. I applaud the Budget for what it was—as a short-term, judicious fix—but I hope that the next Budget is much bolder and much more ambitious.
Lord Shipley (LD)
My Lords, I remind the House that I am a vice-president of the Local Government Association. I appreciate the opportunity to follow the noble Lord, Lord Horam. I agreed with almost everything that he said, in particular on the need for two extra bands on council tax, which would increase local government revenue, but also his reference to the need to solve long-term economic and social problems. In that respect, he is absolutely right.
This is an important debate. It gives us an opportunity to consider some strategic issues arising from the Budget. The Chancellor said that,
“the era of austerity is finally coming to an end”.—[Official Report, Commons, 29/10/18; col. 653.]
That is not the case for the funding of local services, as we have heard, nor for low earners, who will not see much of the £3 billion in tax cuts because they earn under the threshold or because of the impact of universal credit or national insurance contributions. As the Institute for Fiscal Studies said, the Budget announcements are “sticking plasters” with no sign of a long-term strategy, particularly in relation to the need to find more money for adult social care.
I agree with all those who have said that taxes will have to rise. As my leader, Vince Cable, said, we need a mature debate about that because it will involve people paying more tax. I agree with the noble Lord, Lord Wood of Anfield, who earlier this afternoon raised the issue of the tax base and the need to think about the scope for the taxation of wealth, as opposed to just income or personal spending, to reduce the impact of an eroding tax base. I add to that the need to review business rates, which are proving very difficult for many business to pay in the face of competition from internet companies which can have significantly lower levels of business rates. The Chancellor has made a start, and I am pleased that he has, but we need to go much further and much more quickly.
I fear that the Budget will cause rising inequalities. Inequalities weaken our democracy and trust in our institutions. Inequalities show themselves greatly in housing, where there is now a very sharp divide in housing wealth that seems to be worsening, not getting better. I note that, according a report launched today by the Building Societies Association, one-third of first-time buyers now rely on family financial support. Such financial support is much bigger, the BSA tells us, than Help to Buy. Help to Buy features in the Red Book. I accept that it has been important in helping a lot of people. Without it, a lot of people might not have been able to purchase their own home. I concede that point, but I am bothered by the now substantial evidence which shows that Help to Buy has put up house prices, placed some people in negative equity, been used by many who were not first-time buyers to upgrade, and led to huge profits—and huge and utterly unjustifiable bonuses—for some large builders. The Budget has extended Help to Buy but with greater limitations. It will apply only to first-time buyers. It has been extended from 2021 to 2023. I am unclear why that is happening when there is such a need for more social housing.
In terms of housing overall, I found the Budget a disappointment because it does not deliver a fast enough build-out of housing. I welcome the lifting of the housing revenue account cap, which could build 10,000 homes a year, and the removal of stamp duty on shared ownership is also welcome.
Earlier this afternoon, the noble Lord, Lord Wakeham, talked about stamp duty being a tax on change. He has a point that we ought to consider more fully. He asked whether stamp duty could be reduced for those who are downsizing their property to release it for younger people. There is a proposal in waiting there which I hope the Government might be willing to do some work on.
The Government are committed to building 300,000 new homes, not conversions, a year and say they will do that within a few years. However, I do not think they will achieve that commitment. Indeed, I notice that in paragraph 4.54 of the Budget book it is now referred to as an ambition. Until recently, it was a firm target and prior to that it was a commitment. I will say again what I have said on a number of occasions in this Chamber: the figure will be achieved only with a large increase in the number of affordable and social homes, and that requires government intervention.
That brings me to the Letwin review, stage two of which was announced in the Budget. I welcome one or two things in the final part of the Letwin review. Large sites will be constructed as single large sites for which councils will need clear statutory powers, and I hope they will come very quickly. However, if this happens, the process of building will be speeded up, so that part of the Letwin review is right, but I cannot understand the extraordinary conclusion that there is,
“no evidence that speculative land banking is part of the business model for major house builders”.
I do not wish to get into the realm of semantics, but there is evidence of huge profits and utterly unjustifiable bonuses for major housebuilders, partly because of the shortage of housing. In other words, private builders will generally build between 150,000 and 170,000 homes a year, but we need them to build more than that, and they have to build out more quickly. We need to look again at why the Letwin review—the Government will respond to it early in the new year—thinks that the big builders are building out as quickly as they might.
There is another problem because local authorities are being threatened with losing planning control if they fail to meet housebuilding targets. This is the housing delivery test. I hope due account will be taken of the difficulties that local authorities face if big builders do not build. We must get local authorities building. We need to allow them to capture some of the rising land values created by planning permissions and give them first refusal on public land for social and affordable homes.
My last point relates to second homes. I am very pleased to see paragraph 3.38 in the Budget book, which relates to the business rate treatment of self-catering and holiday-let accommodation. A consultation is promised. As the Minister for Local Government said in a reply to the Members of Parliament for North Norfolk and Westmorland and Lonsdale a few days ago:
“We are aware of concerns that some second home-owners may be exploiting what has been termed a ‘loophole’ to reduce their local tax liability by declaring that a property is available for let, but making little realistic effort to actually let it out, potentially giving them access to Small Business Rates Relief”.
There is to be a consultation. I hope it is speedy and that legislation will speedily follow it.
Baroness Byford (Con)
My Lords, it is a great honour to follow my noble friend the Minister, who has so clearly set out the Budget details. This Budget reflects that the hard work of British people has created a stronger economy, with unemployment at its lowest level since 1970 and more than 3 million more people in work, which is to be welcomed.
The Government look forward to a positive future, investing in public services and supporting business across the piece. In my time, I shall look at three aspects referred to in the Budget book: first, digital infrastructure; secondly, apprenticeships and skills; and thirdly, clean growth.
I welcome the Government’s commitment to full-fibre networks, which will ensure a much faster, reliable system that is cheaper than its copper predecessor. However, it is still unacceptable that there are areas of the country where there is currently no broadband coverage and others where the speed is inadequate. To overcome this problem, the Government are allocating £200 million to pilot innovative approaches using primary schools in some of our most rural areas. This surely is to be welcomed.
Additionally, I bring to my noble friend’s attention the inadequacy of mobile phone connections and connectivity. I hope the Government will take steps to ensure that universal coverage is a realistic goal, sooner rather than later. If the Government wish to encourage more small business starts, it is crucial to have good connectivity in all areas, particularly rural ones.
My noble friend Lady Neville-Rolfe spoke with great passion about the importance of small and medium-sized businesses and of enterprise and business, which brings employment and taxation, and about the need to invest in new businesses. I totally agree.
I am personally delighted to hear of the Government’s proposals to reform and strengthen the programme on apprenticeships and skills. For many younger people, university study is not necessarily the most appropriate route to take. More are looking to gain skills while working on the job but they need to be confident that this brings worthwhile qualifications for future employment. The Government have committed three sums of money to strengthen the scheme: first, by providing £240 million to halve the co-investment rate for apprentice training to 5%; secondly, with a figure of £450 million to enable levy-paying employers to transfer up to 25% of their funds to pay for apprenticeship training in their supply chains; and, thirdly, with a further £5 million in 2019-20 to identify gaps in the training provider market.
I have a question for the Minister. The third bullet point in paragraph 4.48 of the Red Book refers to this £5 million, saying that it is,
“to identify gaps in the training provider market and increase the number of employer-designed apprenticeship standards available to employers”.
It goes on to say:
“All new apprentices will start on these new, higher-quality courses from September 2020”.
Does that therefore mean that if the current courses being offered are not up to that standard, employers will no longer be able to continue giving help on the skills and retraining?
The world of work is going through an industrial revolution, with modern technologies opening up all sorts of new possibilities every day. Digital, computer, cyber, technology, robotics and precision engineering all have a direct impact on businesses. Who would have thought that, for example, a field of barley could be prepared, planted, grown and harvested by machinery without a human hand working on the machinery in that field? In future we will need a workforce who are skilled. No doubt they will hold many different jobs during their lifetime, so retraining will be essential. I welcome the Government’s commitment to that end, and am glad to see that £100 million has been allocated for the first phase of the national retraining scheme and an additional £20 million allocated to skills pilot schemes. I reiterate the comment made by my noble friend Lady Altmann about the need for older employees to be able to access that facility as well.
I turn to clean growth. The Budget Statement identifies areas in which improvements can be made to air quality, flood-risk management, plastic and waste reduction, tree funding and food waste, to name a few—there were more in there. It is a total disgrace that our country and cities are blighted by people failing to take responsibility for creating and then abandoning their own waste on other people’s doorsteps. The Government are kindly making £10 million available to the Environment Agency to clear up the worst abandoned waste sites. It is surely wrong that waste abandoned on farms or private holdings has to be cleared at a cost to the individual landowner. This illegal dumping of waste is becoming an increasing problem, particularly in rural areas, and I suggest to the Minister that a review of the current non-payment for clearance might well be undertaken.
The Government have committed £20 million to tackle plastic recycling, with additional money being available for plastic research and development projects, and are pioneering innovative approaches to boost recycling. It is dreadful that in this day and age so much is thrown away and a great deal dumped in our seas, when we could take a much more individualistic approach and take responsibility not to add to that.
Lastly, I welcome the Government’s commitment to provide some £15 million to charities and others who distribute surplus food. However, I challenge all of us to reflect on the way in which we use food. It is a precious commodity, yet we waste one-third of the food that we produce in this country. With an ever-growing population to feed, we need to be growing more food from less available land.
I have highlighted but three aspects of this Budget. Overall I believe it is a good Budget, and one that gives hope and opportunity for all.
Baroness McGregor-Smith (Con)
My Lords, I declare my interests, as set out in the register of interests, in a number of businesses that would benefit from a strong economy. It is a pleasure to be able to speak today.
As I read through the Budget Statement, I was struck by the Chancellor’s comment that,
“the era of austerity is finally coming to an end”.—[Official Report, Commons, 29/10/18; col. 653.]
I really hope we can move away from the word “austerity” now, as many millennials have grown up in the UK and deserve much more positive commentary going forward.
Having spent my career working in business, I feel there needs to be a relentless focus on enterprise, and that is what I shall focus my comments on today. It is absolutely at the heart of economic growth and prosperity. The excitement that comes from running and growing businesses is truly exciting, and we need to excite more of our citizens to want to do this.
I shall start with some reflections on start-ups. Start-up companies are critical to our future success in the UK. StartUp Britain has said that over 650,000 businesses were started in 2016. I would like to see that number double. The transformation for our businesses through technology and AI provides us with an opportunity to invest significantly more into start-ups in the UK and deliver on the industrial strategy. I welcome the announcement on the new Industrial Strategy Council, which will hold the Government to account, and urge its members to look closely at the positive impact that start-up companies and our continued investment in them have on the economy.
I also welcome the announcement in the Budget to extend the start-up loans programme, backing up to 10,000 entrepreneurs, but I would like to see even more done, particularly on mentoring and the financial encouragement for more and more people to start and grow their own businesses here. The House of Commons Business Statistics paper, published in December 2017, says there were 5.7 million businesses in the UK, with over 99% of them being small and medium-sized businesses employing up to 249 people. Of those, 96% were microbusinesses employing up to nine people, and microbusinesses account for 33% of employment in the UK. As so many of us are aware, 74% of all SME businesses are service businesses, a sector that I have worked in throughout my whole career.
The investment that we make over the next few years in young emerging businesses, particularly on the technology and AI side, is critical to our future economic success. We need to be creating technology enterprise zones in every town in the United Kingdom. Please let us create a wave of excitement now about the art of the possible and ensure that the next generation of tech giants starts here.
I note many other key investments in a number of areas in the Budget, including the annual investment allowance and more incentives for business to spend on buildings, which I truly welcome. I also note the end to PFI projects. My only question here is what new commercial structures will exist to deliver large-scale projects for the Government. I ask that the provisions of the social value Act are put at the heart of all public procurement going forward.
On taxation, I was delighted that we will deliver the lowest corporation tax rate in the G20. We must continue to be mindful of the fact that inward investment to the UK from many companies around the world will always consider our tax regime, and it must continue to be attractive. However, I was pleased to see the introduction of the new digital tax, which I think is a little low, despite my fundamental belief in low taxes for business. This tax must be introduced and increase while the international corporate tax framework is further developed, but that needs to be urgently assessed.
On some of the investments being made by the Government, I urge them to remember our rural areas as well as our cities. We need our rural economy for so many small businesses to thrive, and digital connectivity is still a challenge for many. The Countryside Alliance estimates that 1.1 million premises still have no access to decent broadband, meaning that 17% of our rural homes and businesses cannot receive decent broadband and 82% do not receive a 4G signal. In this environment, businesses will be driven to invest where there is excellent connectivity, and this will challenge the rural economy even further.
I also note the Future Telecoms Infrastructure Review, which sets out the changes needed to give the majority of our population access to 5G, connect 15 million premises to full-fibre broadband by 2025 and provide full-fibre coverage across all of the UK by 2033. However, the funding strategy is still not clearly defined after 2021, and I urge that be done now. That would really support the growth of our economy.
On business rates, I am pleased that we have made a start, with premises with a rateable value of up to £51,000 being given one-third off their business rates for the next two financial years, but I urge the Government to go even further. A review of the business rate is urgently due because of the changing dynamics of the high street. As much as I am pleased that we have the new future high streets fund, I am concerned about the challenges of those who have a presence on the high street in the uncharted waters of digitalisation and online buying. As consumer buying habits fundamentally change, we cannot allow more and more organisations to fail. I agree with the evidence given by Rain Newton-Smith, chief economist of the CBI to the House of Commons Treasury Select Committee, when she described the business rates system as a “real barrier to investment”. This needs to be listened to.
Finally, on housing, it was pleasing to see that the housing infrastructure fund will be increased to £500 million and that the housing revenue cap will be abolished. That is ultimately positive for enterprise, but let us not underestimate the challenges that remain to build enough homes—successive Governments have not found this easy—and a housing strategy council to hold the Government to account on the number of houses needed, where and for whom, should be set up now to hold all of us to account.
In conclusion, from a business perspective, I saw the Budget as positive, but let us ensure that all our businesses, particularly those in the SME community, feel that every level of support is being given to them and that they are truly excited by what they can now achieve. Let us ensure that, throughout any transition on Brexit, businesses are given the continued ability to grow and prosper. We need to support them, give them certainty and put no barriers in their way. Their success is critical to the UK economy, and that will increase critical funding to all our public services.
Lord Suri (Con)
My Lords, I am pleased at the array of policies set out in the Budget Statement, and I am confident that when they are implemented, we will continue to build on a growing and confident economy.
Amid the gloom and investment worries over Brexit, we must be careful to look at the facts, not just what we and our colleagues here in London might think. The data from the past quarter shows that our economy remains attractive to overseas investors, with 0.6% growth comparing favourably with 0.2% in the eurozone and 0.4% in France. Brexit is the defining policy of our times, and we must do our best to find a deal that safeguards jobs and investments, but the relentless talking down of the economy by those who would like another vote is simplistic and damaging. Ultimately, the other place voted to defer that decision to the people, and we can only advise when the meaningful vote comes. In the meantime, we ought to focus our energies on the new areas of policy which will be under our sovereign control when the deal is passed.
I was pleased to see the Chancellor pivot back to a more recognisably domestic agenda in his Statement, and there are plenty of policies to praise. One area on which I think that much more could be done is housebuilding. At the end of last month, the Member for West Dorset published a very good piece of work on build-out rates, to which the Chancellor alluded in his speech. Having read it, I think that it gives the Government adequate cover to pursue a significant new package of cross-party reforms designed to free this sclerotic and often monopolistic market.
I was pleased that Help to Buy is soon to come to an end. I spoke recently on how the surplus went mainly to housebuilders and landowners. There was evidence of an inflationary effect for first-time buyers. On the subject of landowners, it was Churchill who said it far better than I could:
“Roads are made, streets are made, railway services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains—and all the while the landlord sits still”.
I was disappointed not to see some more radical measures on hope values in the Budget. The new Housing Minister has shown himself to be an advocate of some groups that are put upon—namely, leaseholders and the opponents of brutalism—but not enough tenacity on tackling some serious blockages. Landowners can demand an inflated and unjustifiable price for their land, even when they do not enhance the value at all. The aforementioned report made clear that action needs to be taken to redistribute the proceeds of building so that those who put in the labour and investment get a fairer share.
I welcome the Chancellor’s plan to make funds available for regeneration of high streets. It would be un-Conservative to try to keep shops open when there is not enough demand to sustain them, which appears to be Labour policy. Turning these spaces into homes will ensure that our high streets remain thriving and happy places, rather than boarded and windy ghost towns. I am happy to endorse the Budget and look forward to seeing its rapid implementation.
Lord Kerslake (CB)
My Lords, I first declare my interests as president of the Local Government Association, chair of Peabody, and chair of Be First. My other interests are listed in the register.
In my contribution to this debate I will talk about two issues: first, the wider economic context to the 2018 Budget, and, secondly, the specific implications for local government. There are common features to both issues—some welcome short-term actions that demonstrate the Government have listened, but, at the same time, some very significant longer-term issues that have still to be properly addressed.
Taking first the wider context: this was necessarily a short-term and contingent Budget, given the uncertainties of Brexit. The Chancellor had the unplanned benefit of higher receipts and lower spending than originally anticipated, and he has chosen to spend all of this benefit, particularly on increased funding for the NHS and bringing forward the planned increase in tax thresholds. But we should not be in any doubt that a bad Brexit would quickly wipe away all of those gains. The Financial Times has calculated that the UK economy is already 1.2% smaller than it would have been without Brexit. That is equivalent to £870 per household per year. A bad Brexit, as others have pointed out, would dramatically increase the economic cost and require a fundamentally different approach to the Budget.
Brexit or no Brexit, however, there are deep and long-standing issues with the UK economy that the Budget does not adequately address. These were laid bare in the recent report from the Commission on Economic Justice, of which I was a member. Put simply, the UK economy has stopped working for most ordinary people. We have had a decade of stagnant earnings and low growth, as the noble Lord, Lord Skidelsky, said, along with low investment and productivity, rising house prices and widening inequalities of wealth. As the noble Lord, Lord Wood, pointed out, we do not at the moment have a sustainable, long-term taxation policy to fund our public services. To have any chance of addressing these deep-rooted issues, we will need to see many more radical policies than we have seen so far.
The commission report sets out in some detail what those policies might be. What is clear is that once we are clear of Brexit—in or out—we need to develop a long-term economic plan that promotes both prosperity and justice. It will not be a quick task. We have taken a while to reach this point, and it will take us a while to get out of it.
That brings me to the second area that I want to talk about—local government. By common consent, local government has borne the brunt of austerity. The Budget contained some welcome news for local government in the additional £650 million funding for adult and children’s services over the next two years, and the additional investment in transport infrastructure. I personally was also very pleased to see the speedy lifting of the cap for local authority borrowing on housing and the increase in the Housing Infrastructure Fund. These are important steps towards building more genuinely affordable housing—necessary, if not sufficient. But we should be in no doubt again that, apart from lifting the cap, these measures are short-term and one-off.
Austerity continues for local government, and we have still to resolve the long-term funding challenge for social care. Local authorities have been able to manage the damage of austerity by moving away from annual budgeting and introducing long-term financial planning. This is welcome, but I have talked to a lot of local authorities and pretty much all of them say that their position will become unsustainable over the next few years unless there is action on funding and social care.
The LGA has calculated that social care services will still face a £5.8 billion funding gap by 2024-25 just to cover the costs of the national living wage and to maintain existing standards—so no improvement, just to stand still. Adult and children’s services combined represent over half of the local authority budget. If they are going to defend those care services, as they all want to, they have to make disproportionate cuts in other universal services such as street cleaning, street maintenance and libraries—which are the very services that the public think they pay council tax for. Bluntly, there is a democratic deficit.
The LGA has called for the forthcoming Green Paper to be bold and ambitious—it is right about that. It should build on the excellent Green Paper produced by the LGA itself. It also needs to be published soon; we are now some seven months beyond the planned publication date. We must have some indication of the Government’s intended direction of travel on social care well before the conclusion of the 2019 spending review, likely to be not until the autumn of next year. My view is that we need a hypothecated health and care tax, linked to a repurposed national insurance. If we have to spend a higher proportion of our national income on health and care—and there is general consensus in the House that we do—any party will find this hard to deliver unless it can say that the money is going towards health and care. That is why I support a ring-fence.
Finally on local government, I want to raise an issue that is in some sense tangential to the Budget but very important—the fair funding review. It is hard to argue against reviewing the funding formula to make it fairer, but it adds another huge level of uncertainty to the sector at a very difficult time. There are bound to be winners and losers in this review, and that will be incredibly hard to manage with falling, or even static, resources. The existing plans and provisional timetable look very challenging—unless significantly more funding is planned for local government. I would be very interested to hear the Minister’s view on this issue. In my view, it is a ticking time bomb.
The Chancellor may now be regretting his decision to move away from a spring Budget, as it has greatly limited his room for manoeuvre. Despite the rhetoric, there is a great deal of difference between actually ending austerity and moving towards ending it, particularly for those working in local government and in public services outside the NHS. Brexit or no Brexit, we desperately need a longer-term and more radical plan for renewing the UK economy.
Baroness Stroud (Con)
My Lords, in the run up to this year’s Budget Statement, my message to the Chancellor was to be bold, and take action on universal credit. It was an opportunity to take a transformational step forward in restoring a robust approach to tackling levels of poverty faced by too many. Universal credit is a reform that began with universal cross-party support and which, through multiple decisions, had its potential eroded. This was the moment to correct this and the Chancellor is to be congratulated on taking that opportunity.
As we in this House know, universal credit was designed to make work pay and tackle poverty in a way that supports those who cannot work and rewards the move into work and progression in work. We all agreed that it was a better way forward, correcting many of the complexities, clawbacks and cliff edges of the benefit and tax credit system that it replaced.
The Social Metrics Commission’s new poverty measure—I refer to my entry in the Members’ register of interests—made clear the size of the poverty challenge facing policymakers today and would, I hope, have focused the Chancellor’s mind at the time of the Budget. It shows that 14.2 million people in the UK experience poverty at any one point in time: about 8.5 million working-age adults, 4.5 million children and 1.5 million pensioners. Of these, nearly 3 million people live in families where all adults work full time yet are still in poverty. These families are doing everything we could ask of them and yet they are still struggling.
However, part of the bigger picture for the Chancellor as he made his Budget decisions, is that Britain is also experiencing record high levels of employment, so as people are transitioning from no work to part-time and full-time work, they are themselves on a pathway out of poverty. This is by far the best way for a family to work themselves out of poverty. However, as the Social Metrics Commission demonstrates, for that pathway to be effective it really needs to be full-time work. Yet even then about 8% of families who work full time are still in poverty. This is a structural issue that needs to be corrected; it reveals the fragility of the lives of many of those on low incomes and the entrenched nature of poverty for some.
The situation is even more fragile than many realise. Close to one million people are living in families where someone works but they are only just above the poverty line. There are another one million people living in families where someone works who are less than 5% below the poverty line. This is why small changes in work allowances can be the difference between supporting many of these families out of poverty and tipping many of them below the poverty line. Therefore, although it has taken until 2018 to go even part of the way to restoring the investment in universal credit, I hugely welcome the Chancellor’s announcement of restoring £1.7 billion to the universal credit work allowances and investing £1 billion in smoothing the transition. This will help ensure that the situation of in-work poverty is stabilised, at least, for families with children.
This investment by the Chancellor is hugely welcome as it stops a cut in tax credits—which this House resisted—being applied to universal credit. I pause to pay tribute to Baroness Hollis for her work in preventing this cut impacting on the lives of tax credit claimants. I know that if she had been here on Budget Day she would have been relieved to hear the news about the reinvestment in universal credit. But she would also have reminded us, in the way she always did, that it does not take us forward; it prevents us going backwards.
What would it take to take us forward? The long-term ambition is, of course, to tackle poverty by helping families to a position where they are earning well above the poverty threshold. In this respect, there are a number of factors that are important in their potential impact on poverty. The Government could improve support for childcare in universal credit from 85% of costs for two children only, to all costs for multiple children. This would be one way of ensuring that, for those on low incomes, it always pays to work. The Government could also take steps towards tackling future debt problems: any action to further reduce the number of waiting days in universal credit would have the impact of reducing debt levels, as would ensuring that historic debt is not brought across from HMRC on to UC claimants. We need to consider taking action on tax credit legacy debt, to ensure that the move to universal credit does not leave people trapped in historic tax credit debt. These are some of the next challenges for the Chancellor to address in future fiscal events, along with much discussed issues such as ending the uprating freeze.
All these recommendations would ensure that the system rewards work and supports families when they need it most and when they are doing everything they can to change their family’s trajectory. By reinvesting in the work allowances, the Chancellor has taken a big step towards a comprehensive approach to tackling poverty and signalled his intent to protect living standards for those who are doing all they can to make ends meet, but who are still struggling. If the Government were going to ease austerity, this was the most impactful place to do so first, but we all know that, however much heavy lifting the Government can—and do—do, they cannot do it all themselves. People want to know that, when they go to work, it is their hard work that is supporting their family. They want to know that if they do everything right, take a job and work full time, they will not be in poverty.
There have been many debates on what constitutes an appropriate entry-level or basic wage. Some argue that if you raise wages you will create unemployment. I can even remember being part of a team at No. 10 which was concerned about whether raising the minimum wage by just 50p would cause job losses. This has not happened. Others argue that the market will set wages fairly. However, that simply is not the case when you factor in the impact of the welfare state on what should be a basic wage. Employers have no clear idea of what the real market wage is for employees who are also in receipt of tax credits, because their wages have been subsidised by the Government for so long.
The only way to fix this problem for good is for employers to be reconnected with their employees, not in a gimmicky way but by asking the very real question: can my staff actually live on the wage I am paying them? There is a solid business case for employers taking this seriously. Research has shown that companies that have moved their lowest paid on to a living wage reduce staff turnover and absenteeism and achieve greater productivity. However, this is also about businesses simply doing the right thing, investing in their people, and ensuring that nobody who goes out and works full time lives in poverty. I therefore welcome the Government’s commitment to raising the national living wage to 60% of median earnings by 2020 and to hearing from the Low Pay Commission on how it plans to exercise its ultimate remit of ending low pay.
Government is responsible for thinking through the economic systems and structures that would see all people flourish, but all companies can restore that very natural human connection between employers and employees by talking a hard look at where they could step up to make a real contribution to the lived experience of their workforce. Tackling poverty in this country will not be done by the Government alone—it will take all of us—but credit where it is due to the Chancellor for taking a big step forward to avoid any step backwards.
Lord McKenzie of Luton (Lab)
My Lords, I thank the noble Baroness, Lady Stroud, for her comments about Patricia Hollis. If Patricia were here today, rather than pat the Government on the back for what they have done, she would be using the full power of her intellect and eloquence to point out what they have not.
Brexit overhangs this Budget just as it infects so much of our public debate. There have been various attempts to model both the longer-term macroeconomic consequences of Brexit and the short-term consequences for the UK. Despite a range of estimates, the former point overwhelmingly to a lower GDP than would otherwise have been the case. Whether or not they knew it at the time, Brexiteers voted for our country to be poorer. The extent to which there is a smaller GDP will be influenced by assumptions made about access to the EU market in the future and any restrictions we might face. There is also a view that there will be a short-term negative shock to the economy, with the main factors depending on judgments about the extent to which the referendum has deterred investment and the transitional costs of shifting to a new trade and investment regime.
The OBR forecasts are based on the assumption that there is a Brexit deal, although we are told that a disorderly Brexit would have severe short-term implications for the economy, the exchange rate, asset prices and the public finances. Given the debacle of the negotiations to date, are we under this Government not already close to the point of not securing an orderly Brexit? In any event, are the Government seriously maintaining that they can deliver a deal dividend? If so, will the Minister enlighten the House on the nature and size of it?
We should also judge this Budget, as the Government want us to, on the basis that austerity is finally coming to an end. At its least benign, this should mean no more cuts; at its most significant, a repairing of at least some of the damage which earlier measures have inflicted on people’s lives. How can austerity be over when Age UK reports that 1.4 million older people are not getting the care and support they need; when £19.6 billion is needed to stop further cuts to departmental budgets; when the extra money for universal credit—welcome as it is—is less than one-third of the £7 billion of social security cuts still to come?
How can austerity be over when the Budget has not provided a penny extra for day-to-day costs in our schools, given the 8% loss since 2010? How can austerity be over when 1.3 million people still avail themselves of food banks in the rich country that we are? In making a judgment on whether the economy is working for all, we might reflect on the recent publication from Credit Suisse which reported that the ranks of the ultra-rich in the UK have risen by some 400 over the last year—that is those with assets of over $50 million.
But we know the UK economy is not working for everyone, and this Budget does not change that. This is the stark message from the IPPR commission, referred to by the noble Lord, Lord Kerslake—I congratulate him and his colleagues on the work that they have done. The economy is no longer delivering rising living standards for a majority of the population. Too many people, the commission says, are in insecure jobs; young people are set to be poorer than their parents; and the nations and regions of the UK are diverging further.
The cause is not fundamentally addressed by this Budget: it is continuing weakness in productivity, investment and trade. We are not faced with a choice between a fair economy and a strong economy. We should strive for both. I agree with the point that it is not a quick fix. We do not have to deal with things on an incremental basis. We were bold in the 1940s and, as my noble friend Lord Hain said, we were bold in tackling the banks’ recession in the 2000s. Of course, being bold does not mean that we are always right; we were also bold in the 1980s.
The Red Book makes reference to the Government’s efforts to crack down on avoidance, evasion, aggressive tax planning and unfair outcomes. It claims that they have secured over £185 billion in tax that would otherwise have gone unpaid. We obviously support such efforts but, for the avoidance of doubt, can the Minister set down for the record which taxes and which years are included in that calculation? It has always been a bit of a mystery. Perhaps he could also set down how the Government calculate the tax gap, which is claimed as 5.7%, and in particular the treatment of profits diverted from the UK.
We welcome the announcement that the Government are to proceed with a ban on pensions cold calling, and now is the time to make progress. Too many people have lost out to scams, although some recent press reporting may offer some comfort.
The digital services tax is a belated attempt to get the tech giants to pay their fair share and is to be welcomed, notwithstanding the low level of its ambition: some £400 million a year by 2022-23. It is understood that this is to be a holding measure until the reform of the international corporate tax framework is secure, but I wonder what consideration has been given to the fact that the DST is seemingly a tax on revenue, not profits, and what the double tax relief implications of this might be.
We note the determination for the pensions dashboard to proceed, but express our concern about its potential governance. As originally envisaged, this was to be delivered by the DWP—an ambition we shared with the Government. If it is to work—and the need for it has been made very clear by recent press coverage of pensions pots being unaccessed—there will be a need for robust governance arrangements.
It appears to be the case that the Budget does not herald any change of approach to a long-standing anomaly referred to by the noble Baroness, Lady Altmann, concerning how tax relief on an employee’s pension contributions can be given. In short, as we have heard, there are two systems, one of which—net pay arrangements—does not secure effective relief up to a point for the lower paid. It is the employer who determines which of the two systems is to operate. HMRC has previously suggested that it would not be straightforward to unravel this, but the Chartered Institute of Taxation begs to differ. Perhaps the Minister will undertake to look at this.
Given the uncertainty described by my noble friend Lady Smith at the start of this debate, which has been reinforced by many other noble Lords who have spoken today, we should stand ready to revisit all of this before too long, given the spectre of Brexit.
The Lord Bishop of Chelmsford
My Lords, for many on these Benches there are measures to welcome in this Budget: for instance, the decision to increase the work allowances within universal credit for families with children and people with disabilities, as other noble Lords have mentioned. This goes a substantial way towards reversing the cuts announced in 2015. Likewise, the announcement of measures to aid the transition to universal credit, worth £1 billion over five years, is also welcome, as is the additional and non-repayable run-on support for new claimants to help people manage during the five-week waiting period before their first payment. However, I am disappointed that the run-on support does not cover the child elements of universal credit.
This House has heard my views before, and indeed the views of many Bishops, on the two-child limit. We hoped the Budget might have addressed this. A policy that penalises children through no fault of their own seems unfair and damaging. Furthermore, there is disappointment that, having made the courageous decision to reduce fixed-odds betting limits from £100 to £2, the Government have delayed implementation. As many are saying, if it is right to do, it is right to do as soon as possible. However, the subject of this debate is,
“the economy in the light of the Budget Statement”,
and some of us were hoping for a greener economy as a result of this Budget. I express some dismay that hardly any mention of this has been made from all sides of our House, although with some exceptions.
There are some things to welcome, such as the investment of £20 million next year to,
“improve sustainability and innovation in tackling single-use plastic waste”,
which will be a benefit if plastic producers actually modify their methods to increase recycled content above 30%. I know that this coming Thursday the noble Baroness, Lady Neville-Rolfe, is to move,
“that this House takes note of the threat of plastic to the environment”.
The urban tree-planting initiative will do something to help offset our carbon output and improve the immediate environment for many of our citizens. The £20 million for local authorities to tackle air quality is also welcome. It remains to be seen whether the Government’s industrial energy transformation fund to encourage businesses with high energy use to switch to greener sources will be effective, especially in light of the discontinuation of enhanced allowances for energy and waste-efficient equipment.
However, it seems that these measures in the Budget, although welcome, simply do not go far enough to tackle and reduce our contribution to climate change and the ongoing damage to animal and bird habitats in this country and beyond. Some of your Lordships may recall the damage that was done to Wanstead Flats, in the diocese where I serve, this summer at the height of the heatwave. Over 200 firefighters battled for four days to contain a grass fire. Wanstead Flats is a magnificent resource for the people of east London. It is the gateway to Epping Forest and a home to rare skylarks and migrating birds. Of course, urban grass fires always have and always will break out, but we can no longer ignore the evidence that our hottest summers are, on average, getting hotter and our coldest winters are getting colder. It is therefore more likely that rural and urban wildfires, and all kinds of other disasters, will be more common and more devastating. Yet although this Budget came in the wake of the Intergovernmental Panel on Climate Change and the warning that we have about 12 years to substantially cut our emissions, it did not substantially address our increasingly desperate environmental situation and the stark predictions that the IPCC reports. What was needed was a Budget containing measures that would seriously reduce our carbon emissions through more wide-ranging environmental taxes and a more intentional shift in departmental spending budgets away from activities and suppliers that damage our environment.
Care for our environment is about survival, of course, but it is also the bedrock of human flourishing. Fiscal policies and investment that enhance our environment will create a decent and productive place in which all of us can live and work. Now, I am well known as being a prolific drinker of the highly delicious flat white, which seems to have the right proportion of coffee to frothy milk. I drink a lot of it. Nevertheless, I was disappointed that even a simple thing like a reusable cup levy was rejected in this Budget. I am sure that it would have had an immediate effect, like the very successful plastic bag levy, and I for one will go on the record as being happy to try to carry a reusable cup, just as I now carry a “bag for life”. As the Government consider spending £291 million to extend the Docklands Light Railway to help serve the 18,000 new homes that are planned in east London and they consult on the creation of a “Great Thames Park”, the Budget has missed the opportunity to gird these exciting developments with strong environmental protection.
Like the Government and all of us, I am sure that the Church of England must do much more to improve its environmental position. The Church will do all it can to help and is indeed leading the way on issues such as ethical investment, but so much more is needed. It is the earth itself that is crying out. The poorest in the world are suffering first and suffering most. We have a moral duty to keep global warming well below the 2 degrees centigrade above pre-industrial levels and limit temperature increase to 1.5 degrees, as the Paris Agreement commits us to, and we simply need to develop policies that will make this happen.
Christians say the following words several times every day—indeed, we say them each day in this House—“give us today our daily bread”. It means learning what constitutes enough and not asking for or expecting anything more. It is an uncomfortable but urgently necessary economic corrective to many of our policies and all our expectations. My hope, and indeed my prayer, is that the Treasury will begin work now on planning for and scoping more profound environmental measures as it prepares for the next Budget. I fear that our planet cannot sustain many more missed opportunities.
Lord Flight (Con)
My Lords, I welcome this pragmatic Budget, which addresses a lot of the issues that voters have seen as needing to be fixed for some time. There is within the Budget an exhaustive list of such issues, both large and small. The Chancellor is fortunate that the public finances have improved substantially at a particularly convenient time. Economic growth for next year has been revised upwards to 1.6%, while employment has been revised up by 800,000 more jobs, and wages are forecast to rise above inflation for the next five years, considerably increasing living standards. We have met our borrowing target three years early and the annual deficit is down to 1.9% of GDP. Borrowing is £11.6 billion lower than forecast. We have also met our debt target three years early and delayed recovery from the 2009 recession implies that tax revenues are likely to continue to be better than forecast for some time, as was the case in the recovery from the 1990 to 1992 recession, for over 10 years.
Some improvement in productivity growth is forecast, but not enough; growth is forecast at 1.65% per annum rather than 2.6%. The main cause remains that it is cheaper and lower risk to produce more by taking on more staff than by committing to major capital investment. The 800,000 increase in employment by 2022 reflects this very point. The increase in the minimum wage addresses this issue in part, but employees will still benefit substantially from wage subsidies channelled via universal credit. History has shown us that where pay is subsidised by the state, productivity suffers.
Most of the budget stimulus comes from increased government spending as opposed to tax reductions, in particular the huge increases in NHS spending, amounting to some £20 billion per annum over five years. Interestingly, this is mostly NHS England catch-up. The other main increases in government spending are on universal credit at more than £1.7 billion, £1 billion on defence and £1.6 billion on local authorities, along with a total, looking seven years ahead, of £28 billion of investment in roads.
The main items of lower taxation are the increases in personal allowances and the higher rate of income tax band, together costing £2.8 billion, and reducing business rates by a third for values below £51,000. PFI has been abolished, but leaving some £200 billion to be paid off. The extent to which this and some £50 billion of student loans that are unlikely to be repaid have been provided for is not clear. There is also an undefined spending provision of £58 billion in the Red Book for “other, including EU transactions”. I wonder what that is about.
There are three main measures to help more people into home ownership, which others have addressed in more detail. I am disappointed and surprised that the Chancellor has not addressed the crackpot stamp duty regime introduced by George Osborne that is killing the housing market in London and the south-east and preventing people of my age trading down, thus vacating larger houses for people with young families. Among the welter of statistics in the Budget is one showing that the 2004 stamp duty take was a disaster. The confiscatory tax on more expensive property failed to raise the expected revenues. The Government got it wrong and forgot about the Laffer curve. Stamp duty revenue is forecast to fall by £1 billion this year and to decline in each of the next five years. At an affordable level of stamp duty, revenues should be at least double. The uncommercial hike in stamp duty flies in the face of the long-standing economic truth that if marginal rates are too high, revenues will fall. The Government should forget about being scared of cutting for fear of being attacked by Labour as the party of the rich. Osborne’s stamp duty was a mistake that has damaged the housing market and needs correcting urgently.
Baroness Noakes (Con)
My Lords, I will not pretend that speaking at the tail end of the Back-Bench speakers is a pleasure. I have clearly upset the Chief Whip in some unknown way. When I saw my place on the list, I contemplated the pleasure of an early night, but I want to use the opportunity of this debate to talk about something that was omitted from this Budget and is the cause of much distress to a large number of individuals.
Before I get to that, however, I should like to congratulate the Government on their economic stewardship over the past eight years. I will not repeat what my noble friends have said, but the highlights of the economy are record levels of employment—the lowest rate of unemployment since 1975; rising real wages; solid growth, even in the face of Brexit uncertainty; and, of course, no sign of the recession that the Treasury’s “Project Fear” promised us if we dared to vote to leave the EU. As an optimistic Brexiteer, I am hopeful that our exit from the EU will open prospects for economic growth that will outperform the cautious OBR forecasts, but I fear that whatever Brexit deal has apparently been concluded today will cast a long shadow over that; I shall save my views on that for another debate.
The underlying message of the Budget is that, even with the cautious OBR forecasts, the economy is doing well. The Chancellor had room to reduce the deficit and see the total debt burden on a downward path. At the same time, he reduced the burden of taxes on individuals and increased spending, particularly on the NHS. The Budget may not have set many pulses racing, but it was unashamedly good news.
I will not go on about how well the Government are managing the nation’s finances, much as my noble friend Lord Bates might like me to do so. I want to devote the rest of my remarks to a little-noticed change first launched in the 2016 Budget, the impact of which is now being felt. This concerns the 2019 loan charge, which is part of the attack on tax avoidance. It came to my attention during the Finance Bill Sub-Committee of the Economic Affairs Committee, which is ably chaired by my noble friend Lord Forsyth of Drumlean. This year we are looking at making tax digital for VAT and HMRC powers, and we issued a call for evidence on that basis. Our reports on both aspects will be available shortly for those of you who I know cannot wait.
What the sub-committee did not expect was a deluge of evidence from individuals and their advisers about the impact of the 2019 loan charge. The loan charge is expected to produce over £2.5 billion of tax revenue, with the largest part this year and next. It is thus not an insignificant part of the fiscal arithmetic underpinning the Budget. The legislation is in the Finance (No. 2) Act 2017. It is highly technical and I will not weary noble Lords with the details. In summary, some taxpayers worked as contractors rather than employees and received income in the form of loans that were not taxed. The legislation treats these loans as income received on 5 April next year; since it goes back as far as 1999, as much as 20 years’ worth of income could be taxed in one go.
When the provisions were debated in the other place in Committee, there were approximately two Hansard columns of general commentary by the Financial Secretary and his opposite number on the theme of tax avoidance. The actual legislation was not scrutinised in detail and the impact on the individuals affected was not explored. The upshot was that the provisions found their way into law with ease. I remark—as I have before in your Lordships’ House—that the expertise of this House as a revising Chamber could be put to extremely good use if we were allowed to cover finance Bills.
That aside, what is now becoming very apparent is the profound impact on the individuals caught by these provisions. None of us has much sympathy with tax avoidance schemes. We probably feel little sympathy for all those famous names now facing big bills from film schemes or other exotic schemes which do not work to shelter large amounts of income from taxation. The loan charge is not like that. It deals with ordinary people earning ordinary levels of income. At the lower end are people on the minimum wage; for example, low-wage employees made redundant and immediately re-employed via agencies who put them into companies which operated these schemes. There are some who earned higher amounts; for example, IT contractors who chose to work under contract rather than as employees. But the people caught up are not the ultra-rich. They all entered into schemes that were cleverly marketed and appeared to have HMRC approval, which of course they did not. These schemes are not illegal, as the Financial Secretary has often said; they just do not work for tax purposes.
It is easy, with the benefit of hindsight, to say that if something looks too good to be true it probably is, but the tax returns were often not challenged by HMRC at the time, which led many to believe they were in the clear. A demand for tax on 20 years’ income has come as a massive and unsustainable shock to many. I have no doubt that many people were foolish. What is very clear from the cases I have seen, however, is that the individuals concerned have spent the money on living expenses. They would find it difficult to pay one year’s worth of tax, let alone 20 years’ worth. Faced with HMRC’s demands, many now face losing their homes. Some will opt for bankruptcy. The Government knew this when the legislation was enacted. Their December 2016 impact statement chillingly stated:
“The Government anticipate that some of these individuals will become insolvent as a result”.
That is now coming to pass.
It has been reported that some people are suicidal and that personal relationships have often been destroyed. The financial demands appear overwhelming. HMRC has some arrangements in place for deferred payment but this will often not mitigate the extraordinary impact of the debts now being created. I hope there is a beating heart somewhere in the Treasury that will understand the personal misery and havoc that this legislation is creating. It is clear that the individuals have obtained an unwarranted tax and national insurance advantage, but is the cure worse than the disease?
I know my noble friend the Minister has a strong sense of right and wrong. My only request to him is to go back to the Treasury after this debate and judge for himself whether what is being done is fair.
Baroness Kramer (LD)
My Lords, I begin by echoing the words of the noble Baroness, Lady Noakes, in reference to the loan charge. I am also on the Finance Sub-Committee of the Economic Affairs Committee. This House will know that, in the other place, my colleague Stephen Lloyd, the MP for Eastbourne, put down an Early Day Motion on this issue; 100 MPs have signed it across all parties, reflecting the experiences of their constituents. These are ordinary people such as hospital cleaners, social workers and nurses, who found themselves moved out of their normal employment and did not have the scope or understanding to realise that they were being put into tax-fragile arrangements when they were moved over to work as contract workers. I ask the Minister to take this back. The public pronouncements that have been made, both by the Chancellor and the Financial Secretary, seem to suggest they do not understand that this is the kind of person affected rather than a handful of glamorous celebrities or footballers. It is crucial that that is drawn to their attention.
That was the first of the wind-up speeches; it is clear that the big announcement in the Budget was the £20.5 billion for the NHS. However, I pick up the point made by the noble Baroness, Lady Jolly, that this equates—if one looks across the whole budget for the Department of Health and Social Care—to a rise of only 2.7% in 2019-20, which is £3.2 billion short of the minimum increase of 3.3% necessary for the NHS and the full department just to stand still.
There is an impression created by the Budget that the problems in health have been solved. They have not. Health is still facing continuous cuts year on year. We have to be honest about that and many of us are very worried. Again, on mental health, to which the noble Baroness, Lady Jolly, drew attention, the money promised of £2 billion falls about £1.5 billion short of delivering the programme that was described. While additional money is welcome, it is well below the necessary promise. On social care, £650 million barely touches the borders of an overwhelming problem.
The noble Baroness, Lady Altmann, talked about how unprepared families are to deal with social care issues, saying that this Budget could have been used to deal much more widely with that underlying problem. The noble Lord, Lord Kerslake, and others referred to the LGA work which shows that by 2024-25 adult social care alone will face a £3.5 billion gap just to fund the national living wage and maintain existing standards of care. So even in health we are still in a cutting regime.
On the subject of non-protected budgets, the noble Lord, Lord Haskel, talked about further education but I should like to focus on schools. There was money for bits and bobs but we need £2.8 billion a year just to reverse the real-terms cuts per pupil since 2015. Schools need teachers to function but that has not been dealt with in this Budget.
Other non-protected budgets are those for prisons, police and local government, the latter of which was referred to by the noble Baroness, Lady Eaton. Picking up the point made by my noble friend Lord Fox, there are a few patches for this year but non-protected budgets will still be facing a 3% cut per person in real terms by 2023. I think that everyone in this House recognises the inadequacies of many of those departments when it comes to delivering the services needed by a reasonable and civilised society.
The noble Baroness, Lady Stroud, congratulated the Chancellor on the additional money for universal credit. However, I do not think it is adequate and nor, quite frankly, do most Members of this House. The money put back into work allowances equated to only about half the cuts made in 2015. The benefits freeze continues for another year and the newly self-employed continue to face overbearing minimum income requirements.
The noble Baroness, Lady Stroud, also talked about the tax credit debt rollover problem. According to the IFS, £4 billion more in welfare cuts is still to come—something that I think we all find reasonably challenging. I personally find it very unacceptable, and I wanted to pick up the point made by the noble Lord, Lord Horam. I am appalled that nothing has been done in this Budget to tackle the waiting time problem for people going on to universal credit. I have a personal friend—so I see it personally—who, because of the loan she had to take out to cover that period, is trying to live on £20 a week after rent. That is simply impossible and we should not have a universal credit system that puts people into that situation. The Chancellor missed an opportunity.
I was absolutely thrilled when the right reverend Prelate the Bishop of Chelmsford raised the green agenda, which we did not hear much about during this debate. This was a real opportunity to put down a marker, as the right reverend Prelate said, particularly after publication of the intergovernmental report on climate change. Why do we not have a 5p levy on plastic cups? I would have thought that the Treasury would welcome the money, as well as the impact that it would have on the overall plan to reduce plastics. Surely this would have been an opportunity to ban single-use plastics within three years, which is entirely doable.
The noble Baroness, Lady Altmann, talked about ultra-low emission vehicles and electric cars, the subsidies for which were cut, even though there were goodies in the Budget for oil and gas. That industry has real potential for the future of the UK. This would have been the occasion to reinforce that future and to make a substantial difference to the environment and the critical circumstances that we face.
I join various people in this House who have talked about our need to face up to the challenge of raising additional taxes. I think that we have a broken tax system and this should have been the Budget that began to deal with it. If we are to restore public services to the level at which we wish to see them and to do so in a fiscally responsible way, tax will be necessary. I do not just want a conversation on this; I want action. I have no problem with raising the personal allowance threshold for low earners, but at this time and in these circumstances it is surely inappropriate to raise the threshold for higher earners. I suspect that many, if asked, would gladly have forgone the promised £520 for the average high earner in order to help those left on the fringes of society. As one friend said to me, “It’s pretty hard to think I’m a priority when I see homeless people asleep in so many doorways”.
The Government could have made real headway with our public services and welfare crises if they had supported Liberal Democrat proposals to put a penny in the pound on income tax and dedicate it to the NHS and social care. Although they did not talk about the amounts, the noble Lords, Lord Kerslake and Lord Macpherson, pointed out the benefits of a hypothecated tax. The Government could have made real headway if they had returned corporation tax to 20%—I do not think that a penny of investment has been stimulated below that level. If they had restored capital gains tax to equate with income tax, if they had overhauled inheritance tax—many people talked about the importance of the challenge of taxing wealth as well as income—and if they had changed pension relief as we proposed, they could, as I said, have made real headway with our public services and welfare crises, delivering something like another £29 billion a year by 2020 to spend on those necessary and fundamental services.
Here I disagree with the noble Lord, Lord Skidelsky, because I think that fiscal responsibility is absolutely key to the future, and that is why I turn to tax-raising measures. I remember the Brown Government, and spending being based on the assumption that boom and bust had ended for ever. However, never underestimate the cycle—it comes back to bite you. His Government assumed that there would be no external events but we ended up with a phenomenal banking crisis. They also assumed a flow of taxes based on very high profits within financial services that, frankly, derived from abuse. When that abuse was ended, that revenue source disappeared. Therefore, I disagree fundamentally that there was no need for adjustment.
Lord Skidelsky
I intervene simply because the noble Baroness mentioned me. I am not against fiscal responsibility. Why on earth does she think that I am? I think that fiscal responsibility includes preventing crises, such as the one in 2008, and taking the right measures when a crisis has happened to restore the economy. I am not against fiscal responsibility. In fact, who is?
Baroness Kramer
I think that we will have to debate this off-piste or I will talk for too long.
Lord Hain
I am sorry to intervene. I was agreeing with everything that the noble Baroness was saying until she embarked upon a disastrous defence of her party’s complicity in Tory austerity for five years. If she looks at the record until the banking crisis blew everything out of the water, she will find that borrowing was lower than we inherited from the Tories, the deficit was lower than we inherited from the Tories and debt was lower than we inherited from the Tories. Those three indices were much lower than the average of comparable countries.
Baroness Kramer
And Liam Byrne left us with the message that there was no money left. I shall try to move on quickly.
Much more could have been done for small businesses. It is time to deal with the underlying problem of business rates, which is a defunct way of taxing. I very much recommend that the Government look at our call for a land value tax—the commercial landowner levy—which would reward people for investing much more in both machinery and equipment.
Much of this debate has been about growth. I say to both the noble Lord, Lord Bates, and the noble Baroness, Lady Noakes, that I join others who are stunned that the Government are satisfied with the growth rate forecast that we face. Over the next five years, the best number is 1.6%, and it looks as though it will be 1.3% this year. That is awful and completely unacceptable. I am very worried that the Government are complacent about a number like that, and the noble Lord, Lord Livermore, highlighted that issue as well. Productivity is forecast to be at a trend rate of 1.2%, which will produce no future for any of our children. This year, I think that it is running at 0.8%.
On growth and investment, this year private investment has fallen from 3.3% growth, which is much closer to its norm, to 1%. The Bank of England has said that business investment growth has been 3% to 4% lower over the past two years as a result of the referendum. Those investment numbers are absolutely devastating. When people point to full employment, I ask them to look at the demographics. We have a demographic shortage of working-age people. It is not hard, in those circumstances, to have full employment. I ask the Minister to check the dependency ratio, because—although my calculation may not be right—I believe it is currently 1.7:1. So one person supports themselves plus 0.7 of another person, rising rapidly to 1.9:1, which is completely unsustainable.
We have to face up to the issues of productivity, our rising pensioner tail and our falling working-age population. With our migration policies, we are about to make that situation significantly worse. We are certainly not going to achieve economic recovery in a Budget like this.
I have not even touched on Brexit; many people raised it and it is absolutely pertinent, as it sets the framework. We know now that there is a technical agreement between the EU and the UK. It will be fascinating to see whether tomorrow, by the time the Conservative Party has worked through it, there is anything more substantial than that.
No matter what we do, by the Government’s own figures there is no scenario for Brexit that does not harm prosperity—a point made by the noble Lord, Lord Livermore, in great detail, and by the noble Lord, Lord Kerslake. From talking to City players today, I understand that the financial services industry has either paid, or is committed to pay, something in the range of £15 billion to cover the cost of adapting to Brexit—this assumes not that there will be a no-deal Brexit but a Brexit more in the Chequers mould. I have no idea what is falling on manufacturing, but those numbers are quite damaging to any kind of economic future.
This was a sticking-plaster Budget. In this atmosphere of uncertainty, without knowing where Brexit goes, the Chancellor has chosen—perhaps rationally—to do only the few things that impact on this year. Let us not overstate what he has done. We still face huge cuts to public services on every front. We have not dealt with the challenge of putting our taxes on a long-term and sustainable basis and we have not dealt with the underlying challenges of growth and productivity.
Lord Davies of Oldham (Lab)
My Lords, this has been an excellent debate. The Minister began it in the normal way that Ministers do; he described the Budget and took us through it in considerable detail as if these were normal times. The noble Lord, Lord Higgins, said it was his 60th Budget, and he is therefore in a position to know that there is something a little abnormal about this Budget. The noble Lord, Lord Skidelsky, called on us to talk about the economy and not the Budget. The Budget, in a sense, was not the Chancellor’s creation. We cannot recall him earlier talking about the end of austerity or the sunny uplands now facing the economy. He is always referred to as the cautious, somewhat gloomy Chancellor. But there was a conference speech by the Prime Minister on the necessity of ending austerity, and the Chancellor found himself forced by that speech—and by the pressure of public opinion; we should not underestimate the extent to which the country is reacting against austerity—to follow her will as a consequence. He took the opportunity to follow the somewhat fortuitous forecasting advantages and found himself able to predict greater expenditure than he otherwise would have done.
As my noble friend Lord Wood of Anfield pointed out early in the debate, the expenditure proposals fall a long way below the level necessary to make a real dent in austerity. The most graphic area of government responsibility identified has been local government, as the noble Lord, Lord Kerslake, referred to, among others. It is quite clear that the kind of crisis that came to public attention in the Conservative authority of Northamptonshire—and is common to so many other local authorities—is not remediable by a small, one-off addition from the Chancellor. It may be an earnest of intent—that if things go well with other matters, such as Brexit, local authorities may be promised greater resources—but at present everybody is aware that there is a crisis, to whose resolution this Budget makes a very limited contribution indeed.
The Budget terminates not austerity but the long-term economic plan. Do we all remember that Chancellor Osborne in 2010 set out to eliminate the deficit by 2015? There was a slight extension, which enabled the Conservative Party to edge the next election—shedding its colleagues in coalition as it went—on the basis that it was still fully in control of the major priority that it had identified for the nation: the elimination of the deficit. The Conservatives would do it in three years—fairly shortly after the 2015 election. There is none of this nonsense from this Chancellor, is there? He does not make any pretence or question that the realisation of that objective will obtain in the mid-2020s. Most commentators, even the OBR, think that is rather optimistic. The major priority of the Conservative Administration over the past eight years—carrying all the consequences, some of them very detrimental indeed, for so many people—has been the elimination of the deficit. They are nowhere near achieving even that as yet. But they have hit departmental spending, and the services that the Government are responsible for providing to the nation, very hard indeed. The Chancellor indicated that we should not take the present situation quite so seriously, because departmental decisions would be taken next year, when he deals with the spending plans. So this Budget gives a very limited indication of what is to be done; the real work comes in almost a year’s time. Perhaps that helps to explain why, as every noble Lord who has spoken in this debate in any kind of critical mode has identified, extra expenditure for departments falls a long way from the position that the departments actually face. It does not matter which area of policy one chooses. It is quite clear that the Chancellor’s decisions at this stage are inadequate to be much more than even a token towards ending austerity.
The second point the Chancellor makes is that this is a very difficult time in which to draw up a meaningful Budget. Have we ever seen greater uncertainties? The answer almost certainly is no. Brexit is creating such turmoil across the whole economy, and no one can foresee the outcome with great accuracy. You can see enough, and with sufficient accuracy, to put a spending plan for a huge amount of money on the side of a bus, but no one who is actually serious about allocating public resources thinks that this is a time in which fruitful decisions can be taken. The Chancellor indicated that he might have to bring another Budget in mighty soon if, in fact, the Brexit position proves that to be necessary. Far from this Budget being the focal point of a change in the economy and a big advance in the nation’s fortunes, it is pretty well a holding mechanism until things begin to clear, so that the Chancellor can identify his priorities later.
That does not alter the fact that in every policy area, as my noble friends were keen to point out in this Budget debate, the additional resources that the Chancellor has allocated are inadequate. The most insulting concern the schools budget. In circumstances where schools have taken cuts over the past eight years, that they should be beneficiaries of the “little extras” that the Chancellor can find seems a gratuitous insult.
I applaud the recognition on the other side of the Chamber that, however welcome the £1.7 billion towards social credit is—and it is of course welcome—it is a long way below the amount necessary to pick up all the needs of those who depend on benefits. The Chancellor would have to allocate £7 billion if he was going to ensure that the freeze on the rates of working-age benefits destined for next April would be taken off the agenda. So the story goes on, through all policy areas.
I pick up a point made most strongly by colleagues on my side of the House, I must admit, but that should be borne in mind by the whole House: austerity has failed the economy. As the noble Lord, Lord Skidelsky, said from the Cross Benches, and my noble friends Lord Hain and Lord Livermore said from behind me, this past eight years has in fact been a period of growth below the period after the Second World War. It has cost this country dear. When you operate from a position of 1.6% growth, you are selling the country short on economic success. In that period, we saw not just the fall in government resources available to people but wages not rising for the most extraordinary length of time.
As my noble friend Lord Haskel presented in his very clear speech, investment is falling in the United Kingdom. At present, UK business investment is the lowest in the G7, and public sector investment is £18 billion less than it was in 2010. There was also, of course, considerable discussion on the issue of the United Kingdom’s productivity. I agree that we need to think clearly about what would improve our productivity. But it is absolutely clear that this Government, in almost every Budget speech, continually emphasise their concern about productivity, yet it is 15% lower than in the other major economies in the G7. As my noble friend indicated, if in fact we had been serious about improving productivity, we would have put more investment into training and into supporting those sectors that specialise in vocational education. Instead, those sectors have been decimated. Further education colleges have taken a devastating cut over these past eight years and part-time education, which was always looked upon as a possible source of people changing jobs in a changing economy, has been almost wiped out.
This is not a Budget of success. It is an indication by the Chancellor of the fact that he had to pay more than lip service to the question of austerity. He would never have chosen that as his objective, given the mammoth task that awaits the country in ridding itself of the costs of austerity. But the Chancellor did what he was obliged to do. He presented a Budget that the whole party on the other side will try to sell to the nation as a huge success, and as the end of austerity and the expansion of the economy, even when the predicted growth rates are lower than they have been over recent years.
Lord Bates
My Lords, I begin by mentioning a moment of cross-party consensus. The noble Lord, Lord Davies, began his speech by saying that this had been an excellent debate, and I want to endorse that wholeheartedly from the Government Benches. It has indeed been an excellent debate.
It was particularly helpful, as we sat through the long hours of the debate, to hear such thoughtful contributions on the long-term issues faced by this country. I think here of the contribution on adult social care from my noble friend Lady Eaton, on which the noble Lord, Lord Kerslake, came in; the noble Baroness, Lady Jolly, referring to the funding of mental health care and how assets could be used in that context; the noble Lord, Lord Gadhia, discussing the unwinding of quantitative easing and the role of potential funding mechanisms for that, a suggestion shared by the noble Lord, Lord Macpherson; my noble friend Lady Neville-Rolfe talking about how to reintroduce dynamism into the retail sector; the noble Lord, Lord Shipley, contributing on the issue of housing, born of his great experience in that area; and my noble friend Lady Stroud, speaking also from experience, commenting on pathways out of poverty. I pay tribute to all that she has done over many years in raising this issue and seeking those pathways and ladders out of poverty for the poorest in our society. The noble Lord, Lord Leigh, made an interesting contribution on productivity measures in the information age—he shared that element of the debate with the noble Lord, Lord Skidelsky—and how we effectively measure productivity in the new economy. The noble Baroness, Lady Byford, talked about the future of the rural economy and gave a picture of the potential effect of AI, even in farming. The noble Baroness, Lady McGregor-Smith, continued on the theme of technology and spoke about how we create an economy that is fertile ground for tech start- ups in this country. It has been an excellent debate.
In the debate I was struck by a number of revelations. The outstanding opening speech of the noble Lord, Lord Fox, will be great news to Mrs Fox because my noble friend Lord Wakeham will report back on it. To add to Mrs Fox’s joy, I echo the fact that it was a very good speech. If my noble friend Lord Wakeham happens to know Mrs Bates, perhaps he might offer a similar view about my contribution. One of the most intriguing contributions was the revelation from the noble Lord, Lord Macpherson, who played a distinguished role in the Treasury, serving as Permanent Secretary to three Chancellors at least—perhaps more—of his insight into that fateful Budget for those of us on this side of the House when VAT was applied on fuel. John Major was opposed to that measure and it is reassuring to know that the reason it could not be changed was not because of opposition from the Chancellor but because the Red Book had already gone to the printers. Having suffered severely at the general election that followed on from that issue, I would have offered my services to make manuscript amendments to every copy that had been produced at that time.
This is the third time I have participated in these debates—my noble friend Lady Neville-Rolfe has done more—and I was momentarily heartened when the noble Lord, Lord West, began his speech by saying, “I am not going to be asking for more ships”. We all breathed a sigh of relief at that point, but then he went on to ask how the money would be spent. I shall come back to that in a minute. Another thing I have learned from doing these debates is that when the noble Lord, Lord Skidelsky, whose reputation in the field of economics I have great admiration for, says that he gives the general thrust of the Budget a broad welcome, I know that is when I start quaking in my boots and hope that a flow of paper will come from the far end of the Chamber to help me out.
There has been a great number of contributions to the debate, and I will try to get through as many of the specific questions raised as possible in the time that I have. The noble Baroness, Lady Jolly, began by asking whether £2 billion is enough for mental health. Funding for mental health will grow as a share of the overall NHS budget over the next five years. The NHS will invest up to £250 million a year by 2023-24 in new crisis services for that purpose.
My noble friends Lord Wakeham and Lord Flight and the noble Lords, Lord Macpherson and Lord Shipley, touched on stamp duty land tax. My noble friend Lord Flight was particularly critical of the impact it was having. We reformed stamp duty in 2014 to improve the fairness and efficiency of the tax. The Government continue to support first-time buyers, including by increasing the price at which property becomes liable to stamp duty to £300,000 at the Autumn Budget 2017. This relief means that 80% of first-time buyers will no longer pay stamp duty.
The noble Baroness, Lady Byford, and the right reverend Prelate the Bishop of Chelmsford called for further action on plastics and food waste. The right reverend Prelate declared his passion for the flat white, which henceforth will be in a reusable cup. Defra will be publishing resources on its waste strategy in 2019, which will set out the further actions we intend to take. He also asked about what more we are doing for the environment, as did several noble Lords, including the noble Lord, Lord Hain. The Budget announced a £350 million industrial strategy transformation fund to support businesses in transitioning to a low-carbon future and action on single-use plastics as part of the Government’s wider strategy to address plastics waste, with further detail to be set out in the resources and waste strategy later this year. Subject to consultation, a tax on plastic packaging will be introduced from April 2022. It is not right to say, however, that coffee cups are so rarely recycled. However, there is no practical way to apply the tax to just hot drinks. It would have to be levied on all types of disposable plastic cups, which at this time would not be effective in encouraging reuse.
I pay tribute, as did the noble Lord, Lord Davies, to my noble friend Lord Higgins. The making of his 60th speech on the Budget is worthy of celebration. It is a diamond jubilee. I was going to say it was a diamond speech to go with that anniversary, but we all appreciate the assiduousness and the service he has given to scrutinising the public finances and fiscal measures over the years, in this House, of course, and in the other place as chair of the Treasury Select Committee.
My noble friend Lord Higgins also asked me a specific question about the change to probate fees, as did my noble friends Lord Northbrook and Lady Altmann. I will attempt to respond to it. Charging fees is an essential element of funding an effective, modern Courts & Tribunals Service, thereby ensuring and protecting access to justice. We are introducing a more progressive fee for obtaining a grant of probate, lifting 25,000 estates annually out of the need to pay a fee. The proposed fees range from £250 to £6,000, in line with the value of the estate. No estate will pay a greater fee than 0.5% of its value.
In leading off the debate, the noble Baroness, Lady Smith of Basildon, was concerned that 84% of the benefit of tax cuts goes to the top half of earners. The income tax system is highly progressive. The top 1% of income tax payers are forecasted to pay nearly 28% of all income tax in 2018-19—a higher proportion than in any year under the previous Labour Government.
The noble Lord, Lord Livermore, and my noble friends Lady Altmann and Lord Suri were concerned about the impact of Brexit. They raised a number of concerns; I will not attempt to turn this into a debate on Brexit because there will be many more opportunities for that. I assure them that the Chancellor has established a £15 billion fiscal headroom to be kept aside for Brexit contingencies. With a good deal, which we all hope for, that money can be invested in public services.
The right reverend Prelate the Bishop of Chelmsford and my noble friend Lady Stroud talked about the moves on universal credit and gave some insights. I join my noble friend Lady Stroud in paying tribute to Baroness Hollis. For a brief and painful time, I was the Lords spokesman for the DWP until I put in a plea to the Chief Whip and anyone else who would listen to move off to the Department for International Development—or anywhere else—to get me out of her line of fire. The power of her delivery was incredibly effective; she always narrowed things down from the big picture and the big numbers to individual families and cases, which made what she did so powerful. I take the point made by the noble Lord, Lord McKenzie, that if she were privy to this debate, she would be urging for more and pointing out where more needed to be done.
Some noble Lords referred to comments made on this side in relation to universal credit. A couple of responses from the Resolution Foundation were cited. Its director, Torsten Bell, said that the Budget will benefit some families because it includes giveaways on both the benefits side and the tax side. He went on to say that the Chancellor has delivered a,
“very welcome … £630 boost to low-income families”,
on universal credit. This will mean that the Government’s flagship welfare reform,
“is now more generous than the benefit system it is replacing”.
The noble Lord, Lord West, asked about the increase in defence spending. In the Budget, we invested an additional £1 billion in defence. Page 76 of the Red Book highlights how that will be spent. Of course, that comes in addition to the £1.8 billion announced in the Spring Statement, which will be for defence but will also include maintaining the pace of the Dreadnought programme to ensure our continuous at-sea deterrent.
Lord West of Spithead
I also asked whether this presaged the Treasury’s acceptance that it will use central fund money to fund the capital cost of the Dreadnought programme, which had been agreed until 2010 when it was cancelled by Chancellor Osborne.
Lord Bates
Can I write to the noble Lord on that, just to make sure that I get it absolutely right? I will certainly undertake to write to him and place a copy in the Library.
The noble Lord, Lord Shipley, asked about Help to Buy and questioned its effect on house prices. He also questioned why the scheme had been extended. Housing developers need notice of any changes, and ending the scheme abruptly in 2021 could disrupt housing supply. Instead, we will have a two-year transition period.
My noble friend Lady Altmann asked about pensions. Some people who earn between £10,000 and the personal allowance are missing out on tax relief on their pension. To date it has not been possible to identify any straightforward or proportionate means to align the effects of the net pay and relief at source mechanisms more closely for the population. The Government are already committed to ensuring that we can deliver a modern digital tax system to make it more effective, more efficient and easier for customers to comply and to reduce the amount of tax lost through avoidable error. This may present opportunities to look afresh at the two systems, and I welcome my noble friend’s continued engagement in this important area.
My noble friend Lady Byford asked about digital infrastructure top lines. The Government are committed to 15 million premises being connected to full-fibre broadband by 2025, with nationwide coverage by 2023.
My noble friend Lord Northbrook struck a chord with a number of noble Lords, including the right reverend Prelate the Bishop of Chelmsford, when he talked about the delay in the introduction of the measure on fixed-odds betting terminals. I know that it is a contentious measure. Fixed-odds betting terminals have been in operation since 2001. We undertook the review. It has now been decided that the maximum stake will be cut from £100 to £2, which is extremely welcome. There has been a well-argued debate in the other place on the timing of that. The Chancellor has set out his proposal for it to be in the autumn of next year. To counter that, there has been a proposal that it should be earlier. However, whether it is in the spring or in the autumn, the reality is that, after many years, that welcome change will be brought in to help alleviate the deleterious effects of that side of the gambling industry.
My noble friend Lord Horam talked about the importance of growth in raising all boats and solving all problems. We agree with that and we need to do more to address that issue.
I was with my noble friend Lord Northbrook almost all the way through his excellent speech until he trespassed on the holy ground of the international aid budget, at which point I broke away a little, because that 0.7% is a badge of hope to the world—I see it day in, day out around the world. We live in a world where 29,000 children under the age of five die every day from completely preventable diseases, which makes us realise that, whatever the demands we face in this country, there are some immense needs around the world, and we have rightly been recognised for introducing that and standing by it.
My noble friend Lady Altmann asked what we are doing for skills. We have funded a £20 million skills pilot to help workers develop digital skills. The noble Lord, Lord Kerslake, asked about measures for local authorities in the short term. The spending review will set budgets from 2020-21 onwards, but the Chancellor used the Budget to announce additional funding to support services. This includes an additional £240 million in the current year.
The noble Baroness, Lady Smith, and the noble Lords, Lord Fox and Lord Macpherson, asked about the effect of ongoing spending on unprotected areas. The Government have been clear that the NHS is their number one spending priority, with an £84 billion increase over the next five years. The noble Baroness also mentioned policing. Police funding was protected in real terms in the 2015 spending review. The 2018-19 settlement gave an additional £450 million to police forces.
The noble Lord, Lord McKenzie of Luton, asked which taxes had helped to recover the more than £185 billion in tax. Since 2010, the Government have secured and protected more than £185 billion of tax that otherwise would have gone unpaid. The noble Lord, Lord Gadhia, asked about PFI and an infrastructure bank. We already have a range of financing support options to deliver infrastructure, including the UK Guarantees Scheme and the British Business Bank.
My noble friend Lady McGregor-Smith talked about the importance of corporate tax revenues and rates for encouraging start-ups, as did my noble friend Lord Wakeham. It is great that we have seen the corporation tax rate fall from 28% to 19% today, and have legislated for it to fall further to 17%.
My noble friend Lady Neville-Rolfe asked what we are doing to increase productivity. The national productivity investment fund has been increased from £31 billion to £37 billion, driving key investments to boost productivity and innovation. I have been given a highly technical note on the points made by the noble Lords, Lord Gadhia and Lord Macpherson, on quantitative easing. In the interest of time, I may write to them on that and place a copy of the letter in the Library.
I have to mention my noble friend Lady Noakes, simply because I noticed from social media that she asked whether I would be listening to her, so I have to show that I did—it is easier for me than replying on social media. My noble friend and the noble Baroness, Lady Kramer, talked about the disguised remuneration loan scheme. There are a number of points here—I think that my noble friend, for whom I have great respect, covered most of them—but HMRC actively encourages anybody who is worried about being able to pay what they owe to get in touch as soon as possible. I will undertake to take her concerns back to the Treasury and respond to them.
I want to end on a note of optimism. I share with the noble Baroness, Lady Smith, that desire for optimism: my blood group is B positive and I like to think that I do not disappoint, so I just say to the noble Baroness that employment is at record levels and wages are growing at their fastest rate for 10 years. Income inequality is at its lowest level since the 1980s. The number of people living in workless households is at a record low. Unemployment is at its lowest level since 1975. Some 1.74 million people have been taken out of tax. We have the highest sustained level of public investment of all time. We have doubled the amount of free childcare. Debt is falling as a percentage of GDP. The deficit is down by four-fifths. The income of the lowest-paid 20% is growing faster than that of the highest-paid 20%. We have seen the largest peacetime increase in spending on the NHS in its 70 years and in the public record. Forbes has declared that the UK is the number one place to do business in the current year, despite all. Exports are at record levels— £620 billion and rising. Some 2,265 overseas investments have been made in the UK. Britain’s hard work is paying off and our economy is fit for the future. I commend the Statement to the House.