Debate on the Address

Charlie Elphicke Excerpts

Wednesday 4th June 2014 Commons Chamber

[Edward Miliband]

I am not going to give way.

It is no wonder people lose faith in politics when they know those things are happening and Parliament fails to act. If the House believes those things are wrong, we should do something about them. Responding to the concerns we have heard about work, family and community is the start the House needs to make to restore our reputation in the eyes of the public.

[Charlie Elphicke (Dover) (Con)]

Will the right hon. Gentleman give way?

[Edward Miliband]

I am not giving way.

At the beginning of my speech, I said that there is a chasm between the needs and wishes of the people of this country and whether or not this House and politics are capable of responding. We need to rise to this challenge. This Queen’s Speech does not do that, but it can be done. That is the choice the country will face in less than a year’s time. This is what a different Queen’s Speech would have looked like: a “make work pay” Bill to reward hard work, a banking Bill to support small businesses, a community Bill to devolve power, an immigration Bill to stop workers being undercut, a consumers Bill—[Interruption.]

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[Charlie Elphicke]

Speaking as the Member for Dover, may I add to the point about that concern? I went to the camps in Calais before they were cleared and asked everyone there, “Who here has paid to be here?” Every single hand went up. We need a campaign against international trafficking gangs and an international counter-offensive.

[Sir Richard Ottaway]

I absolutely agree. The key question is what the policy is if an air patrol spots a boat in the middle of the Mediterranean. Is it to persuade the people on it to go back to north Africa, or to usher it to safety in Lampedusa, Italy, Greece or Spain? There is no policy at the moment, and the EU needs to address the issue. We cannot do so on our own. The major powers—Britain, France and the United States—need to get together and come up with a co-ordinated policy. We then need to get our EU partners to row in behind us diplomatically and politically, and in some cases militarily if they are prepared to bite the bullet.

We are all affected by migration. When I became the Member for my constituency in 1992, the non-white ethnic component was 8%. In the 2011 census, that figure had risen to 28%, and in my local primary schools it is 38%. That shows the changing demography, which is particularly relevant to those of us with London constituencies and produces pressures such as the shortage of housing that Members have mentioned and pressures on public services. We have to address all those matters. I believe we have the willpower and willingness to do so, but we have to make more progress than we are at the moment.

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[Mr David Davis (Haltemprice and Howden) (Con)]

It is a pleasure to follow the hon. Member for Stoke-on-Trent North (Joan Walley). I do not agree with everything she has said, but her belief, clarity and lucidity shone through in her very good speech.

The House will probably know that I would not be embarrassed to criticise the coalition Government if I felt it necessary. I was a little nervous in the run-up to the Queen’s Speech by the possibility that, with 10 months to go and two parties anxious to jockey for electoral advantage, it would be a hollow vessel. Indeed, we saw a bit of that in the contribution of the right hon. Member for Gordon (Sir Malcolm Bruce), who is sadly not in the Chamber—his speech was clearly about who gets the credit for the good bits of the speech. In fact, I need not have worried. This is a remarkably good Queen’s Speech, particularly for one that must fit into the last 10 months of the Parliament. I had a wry smile when my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) referred to the comments from Labour Front Benchers about a zombie Government. That is rich coming from them. They depend on rent control, price control and a variety of policies that did such horrible damage the last time they were used that I thought they were dead and buried at the crossroads with a stake through their hearts. It was an interesting comment, but wholly wrong.

I agreed very much with the brilliant speech made by my right hon. Friend the Member for Wokingham (Mr Redwood) and the equally brilliant speech made by my right hon. Friend the Member for Croydon South (Sir Richard Ottaway), the Chairman of the Foreign Affairs Committee. They dealt with much of what I had to say, so you will be glad to hear, Madam Deputy Speaker, that means my speech will be much shorter.

I want to focus on just a few parts of this valuable Queen’s Speech. The centrepiece in domestic policy terms is undoubtedly the pension reform proposals. They have their genesis in all parties, not just the Conservative party. Indeed, they have their genesis abroad, in Holland. In many ways, they are overdue. The Dutch pension provision system has long been better than almost anybody else’s, and it has certainly been better than ours following the difficulties engendered by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as Chancellor a decade or so ago. The Dutch system has been much less expensive and has provided much better returns over a 25-plus year period, which is what we have to look at for pension returns. It is something like 30% to 40% better than what we achieve in this country—it achieves astonishingly higher numbers than we do.

The proposal is therefore a very good one, but it is just the foundation stone. As we saw in 2008, the British financial services industry has something of a habit of using the asymmetry of information between the provider and the consumer to the advantage of the provider. For example, with-profits life policies were similar in principle to the proposal, but they did not work well because the benefits went to pension fund managers and not to customers. Therefore, the Bill must include very strong trustee management to make up for that asymmetry of information and to ensure that schemes are run firmly in the interests of the customers—pensioners.

The proposed schemes must also have very good communications. Even a scheme such as the one proposed must accommodate a tightening of the belt from the point of view of pensioners when the markets turn down dramatically. However, to give the House some context, in 2008, the Dutch had on average a 2% reduction in benefits given. The biggest reduction was 6%. In Britain, annuity values dropped by 20% in the same time. That must be communicated so that pensioners and customers understand it, but the scheme will be far more robust.

The scheme is enabling rather than mandatory, so it will work only if employers take it up. They must understand that it is a defined contribution scheme. Their liabilities will be minimal, so it ought to be beneficial to them and encourage a great deal of take-up. I know that a number of large companies want to take it up. That is why the National Association of Pension Funds, the CBI, the TUC and pretty much all parties in the House are in favour of the proposal. However, I flag up one concern. When there is no controversy between those on the two Front Benches, the legislation is almost invariably bad and flawed and goes wrong later. We therefore ought to be ultra-careful.

The proposal is not of itself a complete policy. Pension policy is one of the neglected areas of modern politics. We need a much more comprehensive policy. My right hon. Friend the Member for Chesham and Amersham mentioned the Equitable Life scandal and the fact that the Government are just about providing appropriate benefits or compensation—it is still not good enough, and they must revisit it.

I have one point to make and I hope those on the Front Bench will note it. The policy must not just be about automatic enrolment and the pension proposal I have described; it must also be about our tax approach to pensions. At the moment, there is hypocrisy in that. The Treasury run by the right hon. Member for Kirkcaldy and Cowdenbeath introduced the lifetime allowance, the purpose of which, I believe, was to stop people using pensions as a tax avoidance facility. That is fair enough and perfectly understandable, but the regime has been tightened so that, currently, somebody on the salary of a head teacher, a GP, a middle-ranking manager or a reasonably successful solicitor—in other words not mega-millionaires, but ordinary people who have had moderately successful lives and who earn about half as much as Cabinet Ministers—will run into pension taxation of 55%.

Currently, that applies to perhaps 1% or 2% of the population, but if the pension scheme works and provides 30% greater returns, it will apply to a much bigger proportion of the population. What is more, when the Treasury is dependent on such a large tranche of money for a while, it is unable to retract it. I therefore ask the Government to think about that. If we are once again to have a successful pension system and one of the best systems in the world, we should think not just about the systems we use, but the tax treatment, which can be unfair on good citizens who have done the right thing and put in money in the proper way.

In what was, I think, a flash of good intentions, the coalition Government promised a recall Bill at the beginning of this Parliament. They have regretted it ever since, because it has proved unpopular with colleagues for fairly obvious reasons. The Deputy Prime Minister’s proposals received pretty rough treatment from the relevant Select Committee for a number of reasons. I support the idea of recall—I guess I am the only person in this House to have recalled myself; I failed and got sent back—but I have one simple concern. I fear that the original proposal—to make a recall subject to a House of Commons trigger—would be very unfair.

Looking back over about 20 years of the Privileges Committee and the other mechanisms that penalise Members for greater or lesser misdemeanours, it is as plain as a pikestaff—I am not going to pick out individual cases, so please do not intervene to ask—that people outside the system, the mavericks who are perhaps not popular with those on their own Front Benches, receive a different standard of treatment from those inside the system such as Cabinet Ministers and shadow Cabinet Ministers. Members do not need to take my word for it, but need only look at the list of the most draconian and least draconian penalties. I therefore resist fiercely any proposal that gives the decision to any organisation controlled or influenced by the Whips Office—I used to be a Whip—by those on the Front Bench of either side, or even by the establishment of the House. I would rather see a solely democratic recall that originates in constituencies—right enough, with a decently high hurdle so that it is not misused—than one under the control, whether indirectly or directly, of the establishment in this House. I give warning to those on the Government Front Bench that I shall be actively pursuing this case and trying to ensure that the vice I have described is avoided.

In every Queen’s Speech, there is the phrase:

“Other measures will be laid before you.”

All of us hope that that will lead to legislation on matters left out that we would rather see in the speech. I want to raise an issue that will surprise my colleagues on the Government Benches: there is no reference to a national health service Bill. Many will be wiping their brow thinking, “Thank God for that.” In modern times, NHS Bills have always had some ideological content that has divided the parties and often those within parties. The Labour party has had its internal divisions, as has the coalition—of course, one NHS Bill pretty much crashed and burned. That ideological battle has covered up the serial failures of the health service—such as at Mid Staffs, the lack of use of best practice or the tens of thousands of people every year who die unnecessarily for a variety of reasons. A responsible Government—and the coalition Government have shown in the past year that they are a good one to take this up—therefore have the scope to take some non-ideological action on the health service. I shall cite one example, although I could cite dozens, but Madam Deputy Speaker would like me to be brief.

The National Institute for Health and Care Excellence was set up by the Labour Government with the very best of intentions. It was a sensible idea: since we have the rationing of drugs and therapies, we should have a rational approach to that. Sadly, although it has done a reasonably good job, over the years it has become apparent that many of its approaches are incredibly judgmental. It is clear that the so-called quality adjusted life years are very judgmental. It makes forward-looking judgments or predictions on the effectiveness of drugs, and that is done as a rationing and cost control mechanism. It has become out of date in the last year or two, because there is now a deal between the Government and the pharmaceutical industry that limits the maximum spend on drugs. A rebate will be paid back from the industry to Government in the next two years—I think it is £12 billion—and, after that, there will be a limited growth rate. This means that new drugs have, in effect, a zero marginal cost.

Nobody in the health service has thought things through. The problem has been raised once or twice, but we ought to change NICE’s approach to make it far more aggressive, far more experimental and far more willing to try out a drug for a year or two in the marketplace to see if it actually delivers. That will have two effects. First, it will save thousands of lives. Secondly, because of the way the rebate mechanism works, the innovators will gain and the non-innovators will lose. I put that out as one example, but it is by no means the only one.

[Charlie Elphicke]

My right hon. Friend’s idea is interesting and powerful. What would he say to those who worry about new drugs and massive innovation in the marketplace? New drugs sometimes go wrong and people worry about negligence claims and the claims that are made against pharmaceutical companies.

[Mr Davis]

Drugs already have their safety protocols established by the time they are put in front of NICE, so safety would not be a problem. In an article the other day, Professor John Waxman cited the use of drugs for those with prostate cancer who are going to die. The drugs are for the extension of life, not complete rescue. Safety is not an issue but the use of such drugs affect the prospects of life for people with terminal diseases, so they are well worth using.

Finally, I would like to make a constitutional point, precipitated by the comments of my right hon. Friend the Member for Chesham and Amersham, on collective responsibility. One of the most contentious issues in the past year or two within and outside the coalition has been a referendum on the European Union. Last year, of course, the Conservative party, in effect, introduced a private Member’s Bill. Why did that happen? Although there are approximately only 60 Liberal Democrat MPs on the Government Benches, both sides of the coalition have an effective veto on introducing legislation. That is entirely improper and undemocratic. Let us take my example of the referendum Bill, although the problem does not just apply to it. If there is an argument inside the Government, why not let the House of Commons decide by putting the Bill to the House of Commons? After all, we no longer accept that a vote lost in the House of Commons will lead to a fall in the Government. That is explicitly prevented in the Fixed-terms Parliament Act 2011, so why not put such things to the House? When we go into the next election, people would then be able to see exactly how everybody voted and we would no longer be relying on the promises of parties, but on their actions. Something has gone wrong in the structure. It may well be something in the civil service or the original coalition agreement, but if we are going to have a proper coalition, it should be more open than closed. It should give more power to the House of Commons, not less. If we did that, it would really make this an extraordinarily good Queen’s Speech.