Income Tax (Charge)

Graham Stuart Excerpts

Tuesday 5th November 2024 Commons Chamber

[Lauren Edwards (Rochester and Strood) (Lab)]

This Budget will improve the lives of so many of my constituents in Rochester and Strood. They will see the benefit in their wage slips, see the things they care most about in their community, such as the local pub and their high street, supported, and see their public services finally invested in again.

Investment in the NHS through this Budget is key. It was the No. 1 issue raised on the doorsteps in the election and is perhaps best exemplified by the struggle to book a GP appointment. The simplest of tasks—for someone to seek help from a medical professional when they are ill—was made into what felt like an impossible task after 14 years of Conservative government. I reminded voters many times during the election that the NHS is always safer in Labour’s hands, so I am delighted to see that our first Budget sets us up to meet that promise so quickly. As others have mentioned, we have a record-breaking £22 billion increase in day-to-day spending, a £3.1 billion capital boost to pay for new technology and improve our buildings, and a landmark public consultation to set out a long-term plan for how the NHS develops over the next decade.

I am proud that we are a Government who have been transparent and honest with people about our priorities to fund that investment. The Chancellor has delivered a Budget that protects working people and instead asks big businesses and the well off to contribute. The Budget does not dodge the tough choices just to get through the next media cycle, but instead is informed by Lord Darzi’s thorough point-in-time assessment of the state of the NHS that was handed back to us by the Conservatives. It lays the foundation to take the NHS from the analogue to digital, from hospital to community-led care and from treating sickness to focusing on prevention and promoting good health.

Those approaches will take different forms across the country, but I draw the Minister’s attention to the potential for an elective care centre in the former Debenhams store on Chatham High Street in my constituency. I have written to the Secretary of State about this proposal, and I would welcome a conversation about its merits, particularly as it is a good example of the invest-to-save model that is promoted so well in the Budget. It would not only free up space at the Medway Maritime hospital and help tackle waiting lists, but would have further benefits by supporting town centre economic regeneration.

I welcome provision in the Budget for a £600 million increase in local government spending to support social care. Like many MPs, I have a background in local government and I understand all too well how much the uplift is needed.

[Graham Stuart (Beverley and Holderness) (Con)]

Will the hon. Lady give way?

[Lauren Edwards]

I have only 20 seconds left, so apologies, but I will not. We all know that the social care sector needs to be transformed, and I hope that over time we can move to a more fully integrated health and social care system in this country. Future Budgets may be able to apply the same exemptions to charitable care homes as happens for the NHS. That would be to the benefit of places such as Frindsbury House in my constituency, which is run with great care and compassion by the Mortimer Society.

[Andrew George (St Ives) (LD)]

I have three minutes and three quick points, on which I hope I have the attention of the Chief Secretary to the Treasury. My first point relates to the NHS. I welcome the introduction to the debate by the Secretary of State for Health and Social Care today. Certainly the Government have inherited the worst crisis in NHS history, and they have a massive challenge on their hands. I like how the 10-year plan has been framed in relation to moving from hospital to home, from sickness to prevention and so on.

The Prime Minister was right when he said that those with the broadest shoulders should bear the greatest burden, but the way this Government are raising tax through national insurance is, I am afraid, hitting some of those who will be struggling most. I hope that he will look again at that and how the Liberal Democrats have framed it. We propose to raise the money by reversing the tax cut for big banks and increasing taxes on the oil and energy giants and large social media multinationals. Surely that would be a far better way.

In responding to questions on the impact of the national insurance rise on GPs, hospices and care providers, the Secretary of State clearly recognised that a mistake was made, and I suspect that the impact was overlooked. [Interruption.] The Chief Secretary is shaking his head, but he really needs to address those issues, because a crisis will continue to occur.

[Graham Stuart]

Will the hon. Gentleman give way on that point?

[Andrew George]

I will, although the right hon. Gentleman has only just walked into the Chamber, so I think it is rather cheeky of him.

[Graham Stuart]

Cheekiness accepted. The hon. Gentleman is quite right that the £600 million extra is for both children and adult social care, whereas adult social care alone is expected to have a £2.4 billion hit, so does he agree that if the NHS, however well funded, cannot move its patients into social care, that investment and expenditure will not work?

[Andrew George]

I do, although that is rather rich of the right hon. Gentleman when he knows that he and his party left the country in this state.

Another issue is the housing emergency, which we have not debated much today. I welcome the additional £500 million that the Government announced, which will supplement the affordable homes programme to 2026. That is much needed. I hope that the Chief Secretary will also address the large number of shovel-ready projects that have planning permission and pre-development work in place. I must declare an interest as a former chief executive of a registered provider. I hope that the Government will look at the impact of the significant construction inflation we have seen over the last four years, which is holding up many developments that could be addressing housing need in our communities. Only 9,500 social homes were built last year. We need a great deal more if we are to address the serious housing emergency.

I have a final question for the Chief Secretary—if I may have his attention for a moment—about the announcement of two layers of business rating that will apply to the retail, hospitality and leisure sector. Many holiday home owners have managed to abuse the system by using small business rate relief. I hope that such second homeowners will not have further opportunities to take advantage of loopholes. Will he investigate that and ensure that money goes into first homes rather than second homes? I am afraid that there is a loophole in the system.

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[Mr Tom Morrison (Cheadle) (LD)]

The Liberal Democrats have long been pushing for the Budget to be a Budget for the NHS, so it was pleasing to see so much investment in our national health service. The boost in capital expenditure is particularly welcome, because Cheadle’s local hospital, Stepping Hill, is in dire need of support and investment. Only a few weeks ago, Stockport NHS foundation trust released figures showing that the maintenance bill required to bring the hospital up to scratch was over £130 million, up from £80 million just five years ago. The cost of the previous Government is there for all to see.

Last year, the hospital’s out-patients building was condemned and demolished. In March, the intensive care unit was temporarily closed because the ceiling was coming in. Since January, almost 10,000 people have had to wait for longer than 12 hours in A&E. Some 70% of Stepping Hill’s estate is now classed in the highest risk category. In fact, when I was there just a few months ago, the incredible nurses talked me through how on rainy days they had to place buckets down to ensure that water coming through the roof was caught. That is utterly shameful and my constituents are suffering.

One constituent contacted my office shortly after I was elected to tell me about their experience. After waiting months for a simple surgical procedure, the partial collapse of the ICU led to their surgery being delayed. It was then confirmed again as delayed. Then, after it was rearranged, there was a further delay because there were not enough beds for aftercare. Each time, the delay seemed to be imposed last minute and out of the blue, which of course drives uncertainty and worry not just for my constituent but for their friends and family.

I want to put on record that this is not the fault of the doctors and nurses. The doctors, nurses and other NHS staff do an incredible job in the worst circumstances, and they are suffering also. They are being forced to work in these conditions. They are the ones who have to break the bad news to patients when their surgeries and appointments are cancelled, although it is rarely their fault. Every day those staff show up and deliver the best service that they can for their patients. The fault lies with the Conservatives. For 14 years they sat back and watched as Stepping Hill, like many other hospitals, crumbled.

[Graham Stuart]

Will the hon. Gentleman give way?

[Mr Morrison]

I will carry on; I am nearly done.

For 14 years, the Conservatives ignored health professionals and patients who were crying out for their hospitals to be fixed. As those cries were ignored, the problems became worse and worse. We are now facing a repair bill of £130 million, and without urgent action that will only become more expensive, so the new Government must act now. I am delighted that there is a commitment to our hospital, but they must act now and give the patients, the staff and my constituents the hospital that they need. If they delay further, costs will only rise and even more parts of the building will crumble.

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

This Budget will deliver to communities such as mine. May I begin by welcoming the mineworkers’ pension scheme resolution? It means that £1.5 billion of miners’ pension payments to their fund will be distributed among 112,000 former miners and their families. It is absolutely right that an injustice has been corrected, for those people have waited far too long. It is also shameful that the last Government failed to budget for the resolution of the Post Office Horizon and infected blood scandals, and I applaud our Chancellor for correcting that now. I urge the pensioners who will not receive the winter fuel allowance—those who are just missing out—to apply for universal credit; in St Helens, £6.5 million remains unclaimed. I regret that we have been unable to remove the two-child cap, or deal justice to the WASPI women.

Let me now turn to the issue of local authority funding for adult and children’s social care. Local councils bore the brunt of austerity; successive Government cuts since 2010 have left them in dire straits, which disproportionately affects the people who are most likely to access social care. There have been increasing pressures to find savings, which has not only cut services and jobs but seriously limited the ability to invest in cost-effective preventive services. Some 73% of the budget of St Helens borough council is spent on adult and children’s social care. I welcome the Chancellor’s 3.2% real-terms increase in local government funding, including the £600 million to support social care—

[Graham Stuart]

Will the hon. Lady give way?

[Ms Rimmer]

No.

It is good that, in the short term, a Labour Government will target additional grant funding at the councils that are most in need, but that needs to be the start of a process that will reverse years of financial decline. For too long, local council funding formulas have worked against underprivileged communities, and the areas that need funds the most often do not receive their fair share. Sadly, that creates a downward spiral, with an ever-increasing percentage of local government funding being spent on social care. This is not sustainable.

As I have said, 73% of our council’s budget is spent on social care. Moreover, the 48 members of the Special Interest Group of Municipal Authorities are unable to invest in their local areas in the same way as their counterparts because of the funding formulas. One in four households in England live in a SIGOMA council area. At present, social care services are a postcode lottery, and that needs to be addressed. We need a methodology that takes actual needs into consideration, and ensures that the funding follows. However, I applaud the Chancellor for providing £250 million for children’s social care and £600 million for adults.

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[Kevin Bonavia (Stevenage) (Lab)]

I want to start by saying that we cannot and should not ever underestimate the power and strength of the message that having our Budget delivered by the first female Chancellor in history sends to young women and girls across the country. There should be no limit to their ambition.

In Stevenage and across the country, 14 years of Conservative rule have left a crippling cost of living crisis, record NHS waiting lists, rapidly reducing school funding and worsening public transport. I could go on, but I represent a town of aspiration. The people of my town have had their ambitions and hopes dampened by decline and held back by a broken Britain. However, this Budget sends a clear signal that Labour has started the work of getting politics to work for working people again.

One of the Labour manifesto’s most fundamental promises was to fix the foundations of our broken public services. I recently attended a local older persons day hosted by Stevenage borough council, where we talked about pensioners’ priorities. The Budget maintains the triple lock, which will be worth an extra £470 for pensioners next year, on top of the more than £900 they are receiving this year from the same commitment.

I spend a lot of time speaking to carers in my area who are looking after loved ones in testing circumstances. This Budget delivers the largest increase in the carer’s allowance since its introduction, starting the work of recognising the huge sacrifice they make. However, I know that this work will be complete only when we fundamentally reform our broken social care system, and I very much look forward to that.

[Graham Stuart]

Will the hon. Gentleman give way?

[Kevin Bonavia]

I am afraid not.

I represent a constituency with multiple borough and district councils that have borne the brunt of 14 years of Government cuts. This Budget delivers £1.3 billion extra for local councils to provide essential services that are vital to our communities.

Fifty per cent of patients in my local NHS trust wait longer than the target treatment times, and 31% wait over four hours to be seen in A&E. Despite the heroism and hard work of NHS staff, something simply has to change. The Secretary of State for Health and Social Care has made the brave decision to stand up and fight for our NHS, boldly supported by our Chancellor. I greatly welcome the shift in focus from sickness to prevention, from analogue to digital, and from hospital to community. This crisis cannot be fixed in one Budget, and it may even take a few Budgets, but at least now there is hope where there was none before.

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[Joe Robertson (Isle of Wight East) (Con)]

This is not a Budget for growth. On the Treasury’s own figures, growth will decline from 2% next year for the rest of the decade. On the OBR’s analysis, this Budget is inflationary. It is not on small businesses that the responsibility should land. Small businesses employ people. Small and medium-sized businesses drive the UK economy. If we tax them, we tax growth. If we tax their greatest assets—the people who work for them—then we take away employment opportunities for hard-working people.

I will talk more substantively about the dire impact of the Budget on health and social care, including health and social care providers that are not part of the NHS. The increase in employer’s national insurance contributions will cause great difficulty and hardship for GP practices; charities, including hospices; dentists; pharmacies, which are crucial providers of health services; and social care providers. Those organisations, charities and businesses thought that they might have a friend in a Labour Government, but I assure Government Members that they do not feel as though the Labour Government are a friend right now. I have been speaking to those in GP practices in my constituency on the Isle of Wight. One said:

“Our increase in tax from this Budget is the equivalent of the salary of a practice nurse. There will be no new practice nurse for us.”

[Graham Stuart]

Does my hon. Friend agree that no one would think less of the Government if they listened to these arguments, heard the message and changed? For instance, there is the message about social care being hit by £2.5 billion of extra costs. The £600 million that has been given to local authorities will not cover those costs. If the Government simply listened and changed, people would think much better of them, and we would have a social care system that supported the NHS, rather than one that stops the NHS being able to do what it needs to do.

[Joe Robertson]

I agree with my right hon. Friend. In fact, there has been one common theme running through this debate: GP practices, charities such as hospices, dentists, pharmacists and social care providers are all being taxed by this Government. At a time when they need Government most, these providers find increased pressure on their ability to employ and provide services to the British people. There would be no shame if the Labour Government were to do something about this gross problem with their own Budget.

Moving on to social care, the Secretary of State for Health and Social Care said that there would be no more money for the NHS without reform, yet the Chancellor provides £22 billion for day-to-day spending unattached to reform. She and the Secretary of State are giving the equivalent of just 2.5%—£600 million—of that £22 billion for social care. That is a tiny fraction, yet the biggest reform that our NHS needs is fairer funding for social care. Money would be better spent on relieving the pressure on hospitals, and getting people out of hospital beds who do not need or want to be there, but who have nowhere safe to go to. Through this Budget, social care providers not only face the full burden of increased national insurance contributions, as employers, but receive a small fraction of the funding that the NHS receives. I urge the Government to go back to the drawing board and provide for our GPs, dentistry, pharmacies, hospices and social care.

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[Jack Rankin (Windsor) (Con)]

The theme of this debate is public services, but there has been a distinct lack of discussion from Government Members about what delivers the finances necessary to fund those services; this is the Budget, after all. The answer is simply the productive economy, and small businesses in particular.

The Government talk a good game about wanting better funded public services, and each and every one of us in this House would be hard pressed to find a constituent who disagreed, but the Government’s measures—particularly the jobs tax in the Budget, but also their wider agenda in the Employment Rights Bill, through which we are moving to French-style labour laws—are an attack on where that money comes from.

We must always remember that every single penny spent by the British state has to be earned in the private sector. Chucking money at an unreformed public sector while ballooning public sector pay, and doing that on the back of the productive economy and small business, shows a distinct lack of real world, private sector experience among Government Members. My first memories are of my parents going to night school on alternate evenings to get the qualifications they needed to set up their small business. Their aim was simple: to give my brother and me opportunities that they could never have dreamed of. In doing that, they paid hundreds of thousands of pounds—I ended up with quite a prosperous upbringing, I admit—into the Government exchequer. They created apprenticeships and skilled jobs in a tough part of urban Greater Manchester. They not only transformed our lives but improved the lives of children around them, and created opportunities for local people while paying for public services through their taxes.

[Graham Stuart]

Does my hon. Friend agree that the absence on the Government Front Bench of anyone with any experience of running a business, when businesses create the wealth that pays for public services, may explain why the Budget is so financially illiterate?

[Jack Rankin]

I thank my right hon. Friend. That absolutely shows, as we see from the Office for Budget Responsibility forecasts mentioned by my hon. Friend the Member for Isle of Wight East (Joe Robertson). Putting up taxes unsustainably may mean adrenaline into the public sector from an injection of cash, but the medium and longer-term result will be lower growth, which will mean that public services are just getting a larger slice of a smaller pie.

It is clear to me that the tax burden is higher than is necessarily sustainable. Tax rises now will not necessarily flow into greater revenue, particularly in the medium term. I ask the Government to check their approach, support small businesses first and foremost, and focus their public service efforts in the first instance on productivity reforms.

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[Kevin McKenna (Sittingbourne and Sheppey) (Lab)]

Thank you, Madam Deputy Speaker, for calling me to speak in this debate about the Budget—a Budget I am very proud to support as the first Labour Budget in 15 years.

I also thank the various Members who have made their maiden speeches in this debate, particularly because like myself, so many of them have worked in the NHS. Many of us have felt the urge to get selected for, and elected to, this House because of our experiences over the past 14 years. I understand that among Opposition Members, there is a feeling that Labour Members do not understand business, but I can tell them that we understand the public sector, public services and our communities—and actually, that is a disservice to all the Members on the Labour Benches who have run businesses. It is particularly important to me that a couple of Labour Members have previous experience as NHS managers. In his report, Lord Darzi made it very clear that one of the problems the NHS has faced is an undervaluing of the management side, as opposed to the clinical side, so those Members’ voices will be really important in this debate.

This Budget gives us solid foundations for investment and rebuilding this country—of that, I have no doubt. This Budget is also what people in my constituency have been crying out for, because they know that our public services are frayed to a point that is almost beyond repair. Honestly, that is what people in my constituency keep telling me. Unlike some Members, who have apparently had some very negative responses to the Budget, I can tell those Members from canvassing at the weekend and from what is in my inbox that I have seen a really positive response to this Budget. People are really glad to see that the investment has started, and frankly, there is a sense of reality—a recognition that this is not going to be a quick fix.

On the health service and social care in particular, I applaud the fact that the Secretary of State has not just commissioned the diagnostic investigation from Lord Darzi, but has now commissioned a 10-year plan for the NHS.

[Graham Stuart]

Will the hon. Gentleman give way?

[Kevin McKenna]

I do not think so.

That plan will be needed to get the NHS back on its feet, and as a counter to some of the comments about national insurance and burdens on businesses, the Secretary of State was very clear that he is going to look at the NHS allocations to GPs and other people supplying the NHS—that comes with the plan. Beyond that, it is really important to recognise the damage that has been done to businesses over the past 14 years by all the other costs that have been accrued. The mental health crisis damages recruitment and retention, and businesses have had to cope with all those extra costs across the board.

Government Policy on Health

Graham Stuart Excerpts

Monday 9th September 2024 Commons Chamber

[Wes Streeting]

I am delighted to see my hon. Friend here representing Bishop Auckland. The people of his constituency will be struck by the fact that this afternoon the Conservative party has chosen to create a mountain out of a molehill about a former Health Secretary coming in to lend his advice and experience to a Labour Government. On covid corruption, my hon. Friend is absolutely right to be angry, as indeed the country is, too. That is why my right hon. Friend the Chancellor of the Exchequer has been very clear that, when it comes to cronyism and corruption in covid contracts, we want our money back and the covid corruption commissioner is coming to get it.

[Graham Stuart (Beverley and Holderness) (Con)]

There is just one standard and it applies to whichever party is in power, and that should be respected. All this whataboutery relating to what may have gone on under a Conservative Government! Anyone who has done something wrong should be pursued. Anyone in authority should be accountable. It is the failure of accountability, a failure of recognition, by the right hon. Gentleman that lets down the House today. Can he confirm to the House that Alan Milburn did not have access to official sensitive papers? Anyone who visits a Minister—they come in all the time—sits on one side of the table and the official sensitive documents are on the other side. Can he confirm that Alan Milburn did not have access that no other visitor would have?

[Wes Streeting]

In the meetings that I asked my right honourable friend to attend—I need to make sure that I get this absolutely right—I tend to think that I saw him on the other side of the table in the corner. I cannot guarantee that he sat at that point in every single one of the meetings, but he certainly was not sitting next to me. With regard to the papers for the meetings that he attended, they were discussion papers about the challenges facing health and social care. They were not Government decision papers or recommendations for Ministers. There is a distinction between those two things. I decide who attends meetings in the Department, and, when it comes to wide-ranging policy discussions, I decide what reading material people receive.

Automated External Defibrillators: Public Access

Graham Stuart Excerpts

Thursday 18th November 2021 Westminster Hall

[Maria Caulfield]

The hon. Gentleman makes an excellent point. Some of the developments have been over the past two years and, during covid, they have not necessarily had the publicity they deserve. We all have a role in promoting initiatives. There is work to be done so that people are aware of the apps and initiatives.

In our communities, defibrillators are available at airports, shopping centres, train stations and community centres. School-age children are at low risk, but it can still happen, as I said earlier. As a result, and thanks to the work of the Oliver King Foundation, huge pressure was placed on the Department for Education, so defibs are now available for schools and other education providers across the UK to purchase through the NHS supply chain. They can get those important pieces of equipment at reduced cost. As of January this year, more than 5,000 defibs had been purchased through the defibrillators for schools programme, so we are getting defibs out into our schools.

Since May 2019, the Government have required all new and refurbished schools in Department for Education school building programmes to have at least one defib in their buildings. We are pushing that out for new and refurbished schools, but that does not cover all schools in the network.

[Graham Stuart (Beverley and Holderness) (Con)]

To get defibrillators into the community, I established the Community Access Defibrillators for East Yorkshire campaign. I formed a committee and worked with the highly estimable Warren Bostock of the Yorkshire ambulance service, challenging him with the question: “What would a complete network look like?” His initial response was, “How long is a piece of string?”, but he came up with rules and a map showing all the communities that did and did not have defibrillators—60-plus did not—and over the past two or three years we have been working on that. We now have that figure down to fewer than 20 and hope that in the next 12 months we will have it down to zero. Colleagues might be interested to hear the history of that, to get a template that can be applied elsewhere. If we have clarity about where we ought to have defibrillators, we can ensure that we have them there. In parallel, if we work on awareness and confidence, as discussed, we could save even more than the 4,000 lives that the Minister so rightly highlighted earlier.

[Maria Caulfield]

I thank my hon. Friend for his hard work in his community. There are some excellent examples of where defibrillators have been rolled out. Many communities now have them, but if we have them mandated in public buildings, we can address the gaps outside them with excellent work such as my hon. Friend’s. That is the point that the hon. Member for Strangford is making with his forthcoming private Member’s Bill.

We are also providing training, and CPR training is so important. From September of last year, all state-funded schools have been required to teach first aid as part of the new subject of health education, which was introduced alongside relationship education. Primary school children are taught basic first aid now, and pupils in secondary schools are taught further aid, such as administering CPR and the purpose of defibrillators, so hopefully the next generation will be far more confident than perhaps we are in performing CPR and using defibrillators.

Separately, Sport England has announced that it is working with the Football Foundation in support of the Premier League initiative to put £3 million into providing defibs for grassroots football clubs. A number of people mentioned Christian Eriksen. We also had the case of Fabrice Muamba in 2012. Very often in sports facilities, these are crucial pieces of kit that can save lives. We heard about the supporter at Newcastle who also benefited.

This is an incredibly important issue. I want to reassure the hon. Member for Strangford and all hon. Members here today that we absolutely take it seriously. It is an absolute priority to improve the lives and healthcare outcomes of people who suffer cardiac arrest outside a hospital. I hope that the work in the last two years, although perhaps it is not as well known, as the hon. Member for Delyn points out, shows that we are making key progress in some of the really important areas. But there are gaps in provision. We have heard that what matters is not just where defibs go but that they are outside, with 24-hour access. There are tricky issues such as whether to have a code on a defib. All these things need to be nailed down. I am happy to work with colleagues. This work does not involve just the Department of Health and Social Care; some of it needs the Department for Levelling Up, Housing and Communities, the Department for Education, or the Department for Digital, Culture, Media and Sport. It is a cross-Government approach, and I am happy to work with Members to bridge any gaps that still exist.

Cities and Local Government Devolution Bill [Lords]

Graham Stuart Excerpts

Monday 7th December 2015 Commons Chamber

[Norman Lamb]

I continue to argue strongly that we should have a democratically elected second Chamber, and we sought to achieve that during the coalition Government. Sadly, Conservative Members managed to block that long-overdue reform. [Interruption.] I think the hon. Member for Nottingham North (Mr Allen) is agreeing with me from a sedentary position. But we are where we are, and because Conservative Members ensured during the last Parliament that we still have to put up with an unelected second Chamber, it will just have to do the job as best it can. It is a revising Chamber and I hope that it will again make the argument that 16 and 17-year-olds should have the right to vote. I hope that I have responded adequately to the hon. Member for Gainsborough (Sir Edward Leigh).

David Willetts made the case strongly that there had been a break in the generational contract. I believe that it is incumbent on all of us to address that serious issue and to ensure that all political parties start to show a real interest in the interests of young people. If 16 and 17-year-olds had a vote at local and national levels, there is no doubt that the parties would focus more attention on their interests.

[Graham Stuart (Beverley and Holderness) (Con)]

The right hon. Gentleman said that the interests of young people are not properly reflected, partly because they do not vote, but he then said that giving the vote to even younger people who were even less likely to vote would somehow change the way in which the Government operated. I just do not understand the logic of that. Will he also tell us what is so special about 16? Why not choose 15? Is this about paying tax? We have to draw the line somewhere. What is the principle on which he is basing his argument?

[Norman Lamb]

On the hon. Gentleman’s last point, I of course accept that this is an arbitrary line. The current age at which people can start to vote is also arbitrary. We have chosen to make it 18. My argument is that we can reduce it because people aged 16 and 17 have rights and play a significant part in society. For example, they can join the armed forces, they can work and pay taxes on their income and they can marry. Those are all significant rights and responsibilities, and if they have such rights and responsibilities they ought surely to have a say in the election of our national Government and in the election of local authorities as well.

[Graham Stuart]

If the right hon. Gentleman were charged with a serious offence, would he really want 16 and 17-year-olds serving on the jury and deciding on his guilt or innocence? I certainly would not. We are talking about a certain level of maturity, and the line we have drawn is an appropriate one. If we would not want a 16-year-old sitting on a jury deciding whether or not we went to jail for 10 years, I suggest that we would not want to let them play a part in the election of the Government of the country.

[Norman Lamb]

With all due respect, I think that that is a distraction from the issue we are debating today. I repeat my argument that if 16 and 17-year-olds are able to join the armed forces, pay taxes on their income and marry, which are big responsibilities and rights, they ought to have a say in the election of their Government, either at national level or locally.

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[Mr Chope]

I instinctively think that the hon. Gentleman is right. I say that not only because I have on my wall at home a picture of his constituency that was presented to me by his council when I was a junior local government Minister—a picture that I chose—but because I think that his experience means that he understands the complexity of these issues and their potential impact on ordinary people.

The Government can sometimes give the impression that they get rather intolerant of those us who want to raise issues such as this.

[Graham Stuart]

I have tried to follow this closely but I may not have understood amendment 56, which I am trying to square with the assurances from the Minister. If his assurances are right, why would the Government support amendment 56, which will allow the imposition of this if only one affected local authority says so?

[Mr Chope]

My hon. Friend makes a good point, and perhaps the Minister will reply to it. If we are talking about genuine consensus—in other words, agreement between local authorities—then we do not need amendment 56, which is designed to enable the Government to intervene when some local authorities do not do as the Government think they should be doing. That is essentially what this is about. We might as well face up to the reality that this is a very centralising part of the Bill because it brings power back to the Government to enable them to change the structures of local government boundaries in areas such as Dorset.

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[Mr Chope]

Absolutely. I am very supportive of that amendment, but I have not yet had a chance to talk about it because I am so concerned about amendment 56 and amendment (a). I am not going to restate the case about the referendum, but I think it is a necessary safeguard.

If we look at the history books we see the unintended consequences that can flow from local government reorganisation. It was only because Wandsworth council started a campaign to abolish the Inner London Education Authority that education was given back to the inner-London boroughs, which were then able to gain economic growth as a result of having good-quality education within their boundaries. The same thing happened with the Greater London Council. The Greater London Council was interfering in the lives of the boroughs in inner London and outer London, so those in charge of the boroughs at the time persuaded the Conservative Government to abolish it. As a result, parks such as Battersea park are run by the local authority—Wandsworth council—rather than by a remote authority for Greater London.

If we are not going to put proposals like this to the electorate, we must have the necessary safeguards. None of this stuff was in our manifesto. There was no suggestion that a Conservative Government were going to restructure local authorities so as to try to squeeze out small councils that are closest to the people. If we are not going to test this in a general election and amendment 56 is going to be on the statute book until the end of March 2019, it is all the more important that we should be able to have the safeguard of a referendum—the very safeguard that the Poole People party and the Liberal Democrats have sought, in vain, from the leaders of Poole, Bournemouth, East Dorset and Christchurch Borough Councils.

We are on the threshold of a big spat at local government level between different councils at different tiers and different councillors with different personalities and political parties. This threatens completely to preoccupy local government for the next three or four years. We will look back and say that this all started with the Government wanting to interfere in areas where they should not be interfering at all. They should be trusting local councillors and local people to decide what is best for them. They should not be taking away from Dorset County Council or East Dorset District Council, for example, the power to veto any proposals to change the boundaries in which they operate.

I very much hope that the House will not accept amendment 56 as proposed to be amended by the Government but will push them back to their previous position, which was that this is genuinely for local councils and local people to decide, and the Government are not going to interfere.

[Graham Stuart]

I will try to keep my comments brief, because contrasts are always a pleasant thing. It is a pleasure to follow my hon. Friend the Member for Christchurch (Mr Chope), who spoke powerfully about this issue.

[Jon Trickett]

And lengthily.

[Graham Stuart]

And at length, it has to be said.

I want to tell the House about something that happened in the East Riding of Yorkshire. For many years, people who think about these things have looked at the boundary of the city of Hull and thought it is too constrained and has too little of the hinterland within it. A lot of people thought that it would make sense for it to be expanded, but East Riding of Yorkshire Council is a very successful council and the residents are relatively happy with it. The city of Hull announced that it would set up a commission to look at the boundaries—in effect, at the possibility of Hull expanding outwards. It did so with little or no involvement from East Riding of Yorkshire Council. The response of the council was to call a referendum for the surrounding communities of Hull to see what they thought. This was a one-off referendum: nothing else was going on at the same time. One might think that the arcane issue of boundaries could occasionally capture the public imagination, but generally people would just accept a sensible top-down solution given to them by leaders and Governments and so on.

We need to be careful. I do not have the figures to hand, but, off the top of my head, there was a 75% turnout and a Ceau?escu-esque election result—96% said that they did not want the expansion to go ahead. I mention that in the context of amendment 56 and the argument that, because not all councils are quite in line, perhaps all they need is a little push to get a sensible result. We should be remarkably sensitive to how strongly the population can feel about such things.

--- Later in debate ---

[Sir Greg Knight]

Does the experience of the East Riding and Hull referendum lead my hon. Friend to be in sympathy with amendment 56 or against it?

[Graham Stuart]

It leaves me in a position of having profound doubts about amendment 56. I really appreciated the Minister’s interventions setting out what the Government want to do. The police reorganisation under the previous Labour Government was top down and people did not like it. It is not that we are neutral—my hon. Friend the Member for Christchurch was wrong to say that the Government have always said they would be neutral. The Government have a position and a vision, but I think it is much smarter to offer reassurances and tell people that, whatever we think, we are not going to push it on them, because we have seen that that does not work. People have to consent to it. There will be difficult council leaders who we will think are being a pain because of their own individual interests, but we should bind our hands and restrain ourselves from just pushing them aside. We need to listen and say to everybody, “Unless you can bang heads together yourselves and get a consensus, we’re not going to come piling in, because we’ve seen where that ends up.”

It might be a Labour Government’s instinct to think that they know better than the people, but it should be a Conservative Government’s instinct to recognise that they do not know better and that even if, in their opinion, the people are wrong—and history might show that they were wrong—it is the people who get to decide, and if they feel strongly about something that should be respected.

[Mr Chope]

Will my hon. Friend give way?

[Graham Stuart]

My hon. Friend has had a fair crack and I am going to sit down.

[Mr Steve Reed (Croydon North) (Lab)]

This group includes a number of new clauses and amendments, so I want to focus primarily on those in my name and those of my hon. Friends, although I will also touch on some of the others as I go along. I do not want to detain the House for too long and there is quite a lot of ground to cover, so I shall try to romp through it at a reasonable pace.

New clause 10 proposes votes at 16. The Government seem to be a little confused on this issue: the Secretary of State has said that there is a debate to be had; the Minister for the northern powerhouse says there is not; and the Prime Minister is against it altogether. Yet we know that the Government are considering it for the European Union referendum and that they supported it for the Scottish referendum.

There are more than 1.5 million 16 and 17-year-olds in the UK. They can get a job or an apprenticeship, get married, pay taxes and join the armed forces, but apparently they are not responsible enough to be able to vote for their local councillor to take decisions about the local services in the area where they may well have bought a home and live with their family. The Bill is the ideal place to bring about change. Incremental change is how the British constitution develops, and allowing votes for 16 and 17-year-olds in local elections seems to me to be a good place to start.

The Electoral Reform Society argues that lowering the voting age will improve registration rates. Nearly 90% of eligible 16 and 17-year-olds registered for the Scottish independence referendum, and a high proportion of them took part in it. Research in other countries suggests that the turnout rate for 16 and 17-year-olds is higher than that for 18 to 34-year-olds. Establishing the habit of getting involved and voting in elections at an early age makes a lot of sense if we want people to continue voting throughout the rest of their adult lives. The Scottish referendum set the precedent. It is unreasonable to extend the vote in one part of the Union and not in another. Local elections suffer from low turnout, so that is a good place to start, but if the Minister thinks that this is not the time to introduce the change, perhaps he can answer the question: if not now, when?

On new clause 11, the Government have been very unclear about plans to devolve fire and rescue to mayors or police and crime commissioners, but we know that the Home Office is pushing for it and it is included in the Greater Manchester devolution deal. Our new clause calls on the Secretary of State to publish a review of how the Bill affects fire and rescue services. As we have seen over the weekend, and as we heard in the flooding statement earlier, the fire and rescue service is doing an incredible job, despite extremely severe cuts that have limited its capacity and reduced the number of jobs by almost a third. The cross-party Local Government Association believes there is “no pressing need” for police and fire services to merge. Any changes of the kind being considered will heighten public concerns about safety. The new clause would simply add a level of scrutiny and oversight to the provisions, so I hope that the Secretary of State and, indeed, the Minister will welcome and support the proposal.

Since 2010, local government has faced cuts of 40%, and last month’s spending review imposed a further 56% reduction in central support to councils. We know there will be changes to business rates once they are localised, and we were promised details in the autumn statement about how an equalisation mechanism would work, but no such details were given. Councils have simply been left to plan their future budgets in the dark, despite cuts on a scale that they have never been asked to deal with before. The LGA has warned that local authorities are struggling, and that is even before the spending review hits them. Lord Porter, the Conservative chair of the LGA, says:

“We know we’ve got probably 12 or 14 councils that are very close to the edge now.”

They need to know what is going to happen to them in future if they are going to be able to avoid falling off the edge of that particular financial cliff.

The funding settlement is deeply unfair. The 10 most deprived communities have suffered cuts that are 18 times higher than those made to the least deprived communities. Councils with the highest rates of children in care have suffered cuts that are three times higher than those made to councils with the lowest number of children in care. Although Labour councils are disproportionately hit by the cuts, they are also the ones that are protecting front-line services. Tory councils have shut half their youth services since 2010.

The unfair funding settlements are made worse by England’s local government finance arrangements, which are among the most centralised anywhere in the industrialised world. Councils lack the freedom to innovate so that they can spend on local priorities. Even London, which currently is more devolved than anywhere else in the country, is reliant on central Government funding for three quarters of its revenue. That is far higher than 30% in New York and just 25% in Berlin. London is the world’s greatest city, and yet this Government insist on keeping it on far too tight a financial leash. The Communities and Local Government Committee concluded that local authorities in England

“have limited control over local taxation and, as a consequence, rely…disproportionately on central Government funding.”

Our new clause 13 does not prescribe a particular settlement, but calls on the Secretary of State to publish plans for a package of fiscal and financial devolution that addresses three areas. First, on business rate retention, councils need an equalisation mechanism to ensure that those communities with the least capacity for economic growth are not left to sink. Labour supports the localisation of business rates, but it has to be done in a way that incentivises areas to grow, without penalising areas that have less capacity to do so at the time or in the future.

Ministers promised at the Dispatch Box that details of the equalisation mechanism would be made available during the autumn statement, but that did not happen. It still has not happened and we have not been given a date by when it will happen. We simply cannot allow rich communities to get even richer while everywhere else struggles to provide basic services. The new clause calls on the Secretary of State to introduce an equalisation mechanism to ensure that the least well-off are not hammered by the change.

[Graham Stuart]

The hon. Gentleman, as an expert in this area, will be aware that people in rural areas are on average poorer than people in urban areas. He will also be aware that his Government—the Government of his predecessors—left a system in which there was 50% more support per resident in urban areas, which are wealthier than rural areas, than in rural areas, and that it is more expensive to deliver services in rural areas. It is no surprise that we are not seeing the same reductions in services in rural areas as in cities, because such services do not exist in the first place. His party left it that way. Are Labour Members now committed to a fairer system?

[Mr Reed]

The hon. Gentleman seems to support my case for a fair equalisation mechanism, which I am pleased to hear.

Secondly, on greater local control over tax rates and discounts, England has one of the most centralised funding arrangements anywhere in the world. Whitehall takes the key decisions on council tax, which means that it is barely local at all. The previous Secretary of State capped rises, while the Chancellor is now encouraging councils to push up council tax to make up for his cuts. Labour wants the Government to publish plans to introduce greater local freedom over tax rates, banding, valuation and discounts.

Thirdly, on multi-year finance settlements, every successful organisation needs to be able to plan for the future, and local authorities cannot plan complex services without knowing what level of funding is available to pay for them. As powers are devolved from Westminster, local authorities need to know that they have the resources to exercise those powers properly. Local enterprise partnerships could operate more effectively if they had longer-term funding streams. Indeed, the regional development agencies, which LEPs replaced, could make single, three-year funding agreements, while LEPs have access to a smaller budget, with too many small funding pots and with constraints on their use. We want to make sure that combined authorities do not suffer from the same problem. Our new clause 13 calls on the Secretary of State to publish plans to allow for multi-year funding agreements, which would give combined authorities the resources and time to ensure financial stability, and allow them to make better long-term decisions about local services.

On new clause 14, we welcomed in Committee the proposal that new sub-national transport bodies must consult adjoining authorities before taking decisions. On transport, the Government have recognised that the devolution of powers to combined authorities concerns neighbouring authorities that do not wish to, or cannot, join a combined authority. That is an important principle, but it extends to areas beyond transport, and the Minister’s response to our amendment in Committee was disappointing. The Minister said it was not “necessary or appropriate”, so perhaps he will reconsider and support this new clause. For example, local authorities on the periphery of the Greater Manchester combined authority have concerns about health service decisions that will affect them, but which they are unable to influence. We want to give them the right simply to be consulted. If the Government are prepared to concede that such authorities should be consulted on transport, then why not on health or other key services?

Whatever the Government say, they are imposing mayors by making them a non-negotiable condition of devolution for metropolitan areas. We believe that the spirit of devolution demands that local areas should choose their own model of governance instead of having it imposed from the centre. If areas want a mayor, that is fine, but it should also be fine if they do not want a mayor. Government amendment 7 and related amendments are disappointing. They will allow the Secretary of State to impose a mayor on a combined authority even if one or more constituent councils do not want one. It is no surprise that the Local Government Chronicle wrote about amendment 7 under the headline, “Boost to government powers to impose elected mayors”. The Government are acting in opposition to their own claims to support local decision making in that respect.

If the powers are agreed to this evening, they must be used with extreme caution. Where a potential combined authority is divided on the details of a deal, which it may well be, local co-operation must be the preferred way forward. I would welcome a statement by the Minister or the Secretary of State to that effect. Our amendment 58 would reintroduce the change made in the Lords, stipulating that devolution deals cannot be made dependent on having a mayor. That view has support from Members on both sides of the House, as we have heard again this evening.

On amendment 59, we discussed the general power of competence earlier. The Localism Act 2011 introduced the general power of competence, which was intended to give local authorities more power and freedom to innovate. That is a good idea, but LGA research shows that the power is

“limited by significant constraints set by central government”,

and that local government needs far more independence from interference by central Government. The constraints the LGA identifies are financial, structural and regulatory. Our amendment encourages the Secretary of State simply to review the power of general competence to learn how to make it more effective and to encourage greater take-up than the disappointing level so far.

--- Later in debate ---

[Graham Stuart]

I am struggling to square the amendment with what the Minister has just said. There is no talk about streamlining or tests. The amendment simply states that if one council is in favour, all the others can be pushed aside. That is what the amendment says. Our job is not just to listen to reassurances from Ministers, however brilliant, but to look at the words of the Bill, and the Bill appears to give great power to the Secretary of State. If he has that power already, I do not see why we need it in an amendment; if he does not have it already, I am a little reluctant to give it to him.

[James Wharton]

I hear what my hon. Friend says, but it remains the case that a council or group of councils can now, regardless of the Bill, ask the Secretary of State to implement a proposal for structural change through the traditional processes of the Local Government and Public Involvement in Health Act 2007, even where not all councils agree or where there are competing proposals for different councils. He has those powers, but only as part of a convoluted and lengthy process. This is not about forcing unwanted change on areas just because we have the power to do so; it is about enabling the flexibility to deliver the right devolution deals for areas and in a timely and flexible way. I know that hon. Members have raised concerns, but there are none the less statutory tests that have to be satisfied in doing that. This place would need to approve any change, but the fast-track process, with its significant safeguards, is a welcome one.

The new process would still require the Secretary of State to lay before Parliament a report on the fast-track process, including on matters he has taken into account when deciding to use it, and I reiterate that it could not be used without Parliament’s approval. Having carefully considered and weighed the arguments; having listened to the comments of my hon. Friend the Member for Carlisle and others; and having considered the need to ensure flexibility if we are to make devolution last, we have decided to support the amendment. We have tabled a manuscript amendment so that it is for a trial period and not something that would necessarily last in perpetuity; none the less we welcome the flexibility in the amendment.

Green Investment Bank

Graham Stuart Excerpts

Thursday 29th October 2015 Westminster Hall

[Graham Stuart (Beverley and Holderness) (Con)]

I beg to move,

That this House has considered the future of the Green Investment Bank.

It is a pleasure to serve under your chairmanship, Mr Crausby. I thank the Backbench Business Committee for awarding the time for this debate. It is good to see that so many colleagues from across the House are present. I thank all the other Members who requested the debate for their support. They are drawn from the Labour party, the Liberal Democrats, the Scottish National party and the Green party—the ultimate rainbow coalition, which reflects the widespread interest in and concern for the Green Investment Bank.

The GIB was a major success story of the 2010 to 2015 Parliament. In 2010, the Government’s Green Investment Bank commission highlighted

“the urgent need for a new public financial institution to unlock the investment needed for Britain to deliver a timely transition to a low carbon economy.”

That investment is focused on the five objectives set out in section 1(1) of the Enterprise and Regulatory Reform Act 2013 and in the bank’s articles of association: the reduction of greenhouse gas emissions; the advancement of efficiency in the use of natural resources; the protection or enhancement of the natural environment; the protection or enhancement of biodiversity; and the promotion of environmental sustainability. Since the bank was established in November 2012, it has delivered on those principles. As of August this year, it had invested in 52 green infrastructure projects; I think that figure was updated to a larger number in the evidence given yesterday to the Environmental Audit Committee.

The GIB has also invested in seven funds in more than 240 locations around the UK, ranging from anaerobic digestion on Teesside to a £241 million stake in the Westermost Rough offshore wind farm and, indeed, new streetlights in Southend. The bank’s chief executive, Shaun Kingsbury, anticipated that by the end of this week it will have committed £2.3 billion of funding as part of wider projects worth a total of £9.8 billion. In other words, the next deal that the GIB does will take to more than £9 billion the total invested in the low-carbon transition that this country has not only said it will deliver but, in the Climate Change Act 2008, set out in law that it must.

Those numbers reflect the assurance, given by Mr Kingsbury to the Environmental Audit Committee in 2013, that the GIB would “crowd in” an additional £3 of private capital for every £1 invested by the bank. Unlocking that level of investment in the green economy is a serious and substantial achievement, topped off by the GIB’s annual report showing that the company moved into profit in 2014-15, albeit marginally. Of course, it takes a long time for the types of projects it funds to come to fruition and for the cash-flow to flow. Nevertheless, the bank is successful—indeed, that very success has led to today’s debate.

In June, the Secretary of State for Business, Innovation and Skills, with whom I had a meeting last week, issued a written statement to the House that said that the Government

“have concluded that the best approach is to move GIB into private ownership subject to ensuring we achieve value for money…It has always been our intention that GIB should leverage the maximum amount of private capital into green sectors for the minimum amount of public money.”—[Official Report, 25 June 2015; vol. 597, c. 27WS.]

I do not think anyone would disagree with that last intention. I understand the Government’s concern to ensure that the GIB can borrow from financial markets and so increase its impact. I should also emphasise that I certainly do not object to privatisation per se; I am a keen champion of the private sector and believe strongly that it can be a force for good in driving quality, efficiency and innovation.

The Green Investment Bank is, though, a special case, and its transfer into private ownership will be more complicated than most. There are important questions that need to be resolved about the move to private ownership and the form that the transfer will take. Those questions centre on the extent to which the market failure identified when the GIB was established has now been corrected and how the Government will ensure that a majority-privatised GIB continues to deliver its green purposes when its ownership and statutes have changed.

This week, the Government introduced amendments to the Enterprise Bill in the Lords that will repeal part 1 of the Enterprise and Regulatory Reform Act 2013, section 3 of which protects the GIB’s articles of association from being altered unless they continue to meet the green objectives mandated in section 1 of the Act, and provides that any change under section 3 must be approved by a resolution of each House of Parliament. The bank’s objectives are delicate. It was clearly felt that legislation had to be put in place at the outset to ensure that protection, even when the bank was owned by the Government. Without it, what assurances can the Minister provide that a future purchaser will continue to focus on providing not simply capital for green or greenish projects but specifically the funding for the kind of novel technologies that the GIB has helped to support to date?

[Caroline Lucas (Brighton, Pavilion) (Green)]

I pay tribute to the hon. Gentleman for his role in securing this important debate. Does he agree that it is likely that a profit-maximising Green Investment Bank will be unable to perform precisely that key role of reducing risk in important green sectors in order to crowd in private investment? There is a real risk that if the bank is put into the private sector it will crowd out other investors, rather than crowding them in.

[Graham Stuart]

I am grateful to the hon. Lady for that point. In so far as it was necessary to have a publicly controlled and funded green investment bank in the first place, what has changed so that such a bank can now be transferred to the private sector without ending up simply acting like and emulating all the other banks, even if it has a greater degree of green expertise than most? How do we know that it will continue to play this unique role? That is the nub of what we want to hear from the Minister.

A good deal of the GIB’s success has come in the form of delivering what its CEO has called “financing firsts”. To use Mr Kingsbury’s own words:

“We have taken on complex projects that would otherwise not have gone ahead and we have been innovative, helping new technologies into the financial mainstream.”

The Westermost Rough offshore wind farm I referred to earlier is a particularly good example of that. The GIB took a stake in the project in 2014. The project was unique, in that it was the first large-scale application of the new Siemens 6 MW turbines, which are significantly more efficient and better suited to the marine environment than previous turbines deployed to date. Of course, they had not been used in 2014, so there will have been natural caution about a move to a new technology.

The project will help to drive down the cost of offshore wind, which has already fallen by 11% in the past four years, and also has supply chain benefits—including, not least for me as the MP for Beverley and Holderness, the fact that Siemens will manufacture the turbines in Hull and East Riding. Over the coming years, we hope to see the supply chain develop around that initial investment. Indeed, there is hope that other manufacturers might see the supply chain and combination of specialties in Hull as something worth coming to and investing in.

The project simply would not have taken off if only private investors had been involved. When I spoke to Mr Kingsbury earlier in the week, he talked about the fact that DONG Energy, which was pushing the project, wanted to find a partner—it did not want to take on the responsibility and risk alone. It found a Japanese investor, but the partner company was looking for comfort. The comfort it sought came in the form of the Green Investment Bank’s expertise and particular positioning, which provided the reassurance needed for it to invest. The GIB got involved, negotiated—as Mr Kingsbury would say—high returns for high risk and used its expertise to help and give comfort to both the Japanese investor and DONG. The project then went ahead, with the positive ramifications being not only the lowering of the cost of wind energy but the delivery of investment in my local area and beyond.

Likewise, the GIB has joined Aviva Investors in financing NHS energy centres. A good example of that is the £18 million investment the bank made in the £36 million energy centre project for Cambridge University Hospitals NHS Foundation Trust. That project is emblematic of the market failure affecting the financing of non-domestic energy-efficiency projects. It required the installation of a combined heat and power unit, a biomass boiler, efficient dual-fuel boilers and heat recovery for medical incineration. The project will lead to a saving of £20 million on the hospital’s energy bill over the 25-year project period and an annual reduction of 25,000 tonnes of carbon dioxide.

I know the Secretary of State is confident that the eventual purchaser or purchasers will want to buy the GIB precisely because of its expertise in that kind of work. That is the nub of the Government’s argument. In a helpful briefing earlier this week, Mr Kingsbury told me that he is adamant that the GIB is a marketable proposition precisely because the decision was taken not to use the bank simply to offer cheap Government borrowing to the renewables sector, but to develop specialist teams with deep-sector knowledge that are capable of managing sophisticated and challenging financial deals and negotiating high rates of return, as it did with Westermost Rough. Mr Kingsbury was clear that he believes that makes the bank a great business and an attractive proposition to potential purchasers.

Concerns persist, however, about the fact that in private ownership the GIB may yet come to resemble more conventional competitors, such as Bank of America or Macquarie. I do not want to criticise those institutions in any way, but they are driven by the shareholder value that the hon. Member for Brighton, Pavilion (Caroline Lucas) rightly mentioned, and they come to different decisions, take different approaches and have different team assemblies from those of the Green Investment Bank, which has a very specific brief.

[Kevin Brennan (Cardiff West) (Lab)]

The hon. Gentleman is making a thoughtful presentation on this issue, and he has come to one of the key points. Ministers have responded to questions about the future of the green focus. In his statement, the Secretary of State said that the Government

“also want and expect a privately owned GIB to continue this clear focus on green sectors”.—[Official Report, 15 October 2015; vol. 600, c. 21WS.]

In a written answer to the hon. Member for Brighton, Pavilion (Caroline Lucas), the Minister for Small Business, Industry and Enterprise said:

“The Government wants a privately owned GIB to continue this focus on green sectors”.

Does the hon. Gentleman agree that we need to hear something stronger than that before we can be convinced that that will actually happen when the bank goes into private hands?

[Graham Stuart]

The hon. Gentleman, who has served in Government, will know that even within Government it is not enough to wish that institutions will behave in a certain way. We know that the incentives must be understood. For example, it is necessary to understand how schools will behave—the hon. Gentleman and I have experience of that. It is not enough for people to sign up in name to deliver a certain thing and for politicians to say that they will do it, because they will be moved by the complex sets of incentives in which they find themselves. If we do not understand how those incentives collectively impinge on those institutions, we will not truly understand how the institutions will behave. That is as true for education as it is for a bank.

It is not enough simply to say what we want and what should be aimed for; we have to understand how the framework of incentives for a private owner of the bank will lead them to behave in the way that Ministers and the rest of us want. I am impressed by the chief executive of the Green Investment Bank; I think he is passionate and honest in his belief about where the bank will go. Nevertheless, I want to understand how it will go there.

[John Mc Nally (Falkirk) (SNP)]

Does the hon. Gentleman agree that the assurances that the Scottish Government sought from the Tory Government remain unanswered? We seek assurances because we are still unconvinced that the purpose and direction of the bank will not be lost unless we retain some sort of public sector control.

[Graham Stuart]

I will come to that point on the continuing role of Government in a minute or two. It is not enough to say that something will be privatised. It could be privatised 100%, or it could be privatised 100% with strings attached, whose value we would have to try to estimate in advance—if something is sold 100%, the strings are not normally worth a great deal. Then there is the issue of whether a minority stake is retained and, if so, how it will be used. I will come to that point later, but the hon. Gentleman is right to say that such questions, not least those of the Scottish Government, persist.

[David Mowat (Warrington South) (Con)]

I am listening very carefully to my hon. Friend. Surely the principal factor protecting how the bank will operate is the fact that the green purpose is still in the 2013 Act and the articles of the company. It therefore cannot do anything outside the green purpose. That is set out in the five points that my hon. Friend mentioned, or did I misunderstand his point?

[Graham Stuart]

My hon. Friend is quite right. What happened—given the late tabling of amendments in the House of Lords this week, I think it came as something of a shock to the Government—is that the Office for National Statistics decided that if this place continues to determine the purpose of a supposedly privatised institution, such as this bank, that institution continues to be controlled not by its shareholders but by this place, and it is thus linked to the Government. Therefore, the ONS said that those ties have to be cut.

The nub of the matter is that those statutory guarantees and safeguards are being removed, albeit at the last minute—that was announced recently and will be coming to the House of Lords this week. We are asking how much the remaining wish-fulfilment requests will be worth in the real world of private finance, where people seek the maximum return for their money and often have a fiduciary duty to do so.

The senior directors of E3G—an environmental non-governmental organisation that works in these areas across the world—who were involved in the conception and creation of the bank, have heard worrying views from financiers that the bank may lean towards investing in safe, established technologies. Worse still, it could be attracted to purchases purely because of the virtue of the assets and cash flow that will come forward in due course, rather than because they are going concerns in their current form. It is possible, therefore, that it would be a zombie investment vehicle, rather than a genuine project-developing bank.

Those views were echoed by Bob Wigley, the former chief executive of the Green Investment Bank commission at the recent summit held by the Aldersgate Group. He warned of an “inherent tension” between the GIB’s continuing to invest in novel, more complex projects that are profitable in the long term, and shareholder pressure to maximise short-term returns on high-value investments, given their focus on quarterly performance. Such an outcome would defeat the objectives of the bank. It was and is intended to capitalise new green technologies and to invest in projects that other market operators shy away from. In doing so, it makes strides in environmental protection while simultaneously stimulating economic growth.

I went to the Conference of the Parties in Montreal in 2005, and from there I got involved in an organisation called Globe International, a global legislators’ organisation for a balanced environment. I am chairman of that group. I have been involved in the issue of climate change over the years; when I first came to this place, I was a member of the Environmental Audit Committee. It seems to me that the central challenge in tackling climate change, despite all the complexities, is to drive down the cost curve of clean and green approaches as quickly as possible.

For all the jobs that are created and for all the economic benefits, we cannot do that for free. One of the big challenges is to speed up the reduction in cost and ensure we have the institutions and frameworks to incentivise that. I say that because, for all the complexities around climate change and all the conferences I have been to over the years, I have always thought that we have to get the cost down as quickly as possible.

We have subsidised renewable technologies to try to make up for market failure, and successive Governments have struggled to create a dynamic regime that controls the level of public subsidy while encouraging investment. In that landscape, in which it is so hard to create dynamic frameworks that maximise value for money for the public purse but accept the need to pump-prime and drive the implementation of new technologies and lower costs, the bank is an important component.

On the bank’s next deal, it will have brought in a total of £10 billion into the UK green mix alone, of which less than a quarter has been from the state. To those outside who think the Green Investment Bank is rather arcane or marginal, I say that it is pretty fundamental to meeting the requirements of our industrial strategy and our desire for people to have affordable bills. We have got to ensure that we get it right. I urge the Government to consider how we can guarantee that the balance that I mentioned will be maintained under private ownership. For precisely that reason, I would be grateful if the Minister explained how the transfer will affect the shareholder relationship framework document that sets out the bank’s operating principles and strategic objectives.

Alongside primary legislation, the shareholder relationship framework document is an important safeguard to define the GIB’s role in the green marketplace. Article 3.1 states that the bank shall

“seek to align its activities with HM Government’s green policy objectives”

and

“seek to overcome market failures and improve market effectiveness”.

Article 4 lists the priority policy sectors and is clearly intended to be updated on a rolling basis in line with changing needs. It is hard to see how the SRFD could survive the sale of the Government’s shares. The Department for Business, Innovation and Skills is described in the SRFD as the bank’s “sole shareholder”, and the document as a whole appears designed for precisely that arrangement. It is likely that the SRFD would fall away if BIS ceased to be the sole shareholder. If the SRFD does survive a share disposal, the Government would not be able to protect it if their shareholding dropped below 25% and if the other shareholders or shareholder decided otherwise. If the Government retain a sufficient minority to resist any change to the SRFD, they would still lack the power to update the priority policy sectors that the bank invests in and supports.

How do the Government intend to safeguard the shareholder relationship framework document following a sale—or at least preserve its effect? Do they intend to maintain a significant minority holding in the bank? What assessment have they made of the implications of different sizes of shareholding that they may have going forward? Has any consideration been given to any form of arrangement, contractual or otherwise, to prevent the bank’s core purposes from being distorted or discarded after sale?

Before closing, I want to raise some related issues on which clarity would be helpful. The European fund for strategic investment is a pot of €21 billion of off-balance-sheet capital. That sounds a bit dodgy, but it basically means that it does not go on to national accounts for debt when used, which is quite important given the fiscal retrenchment that this country is going through and the commitments to eliminating debt and moving to surplus and so on.

The capital can be used by EU member states to finance energy and infrastructure projects. While the UK has committed an additional €8.5 billion to the fund, there is currently no effective intermediary within the UK to help British projects access the funds. Would a privatised Green Investment Bank be able to access the EFSI? If the privatised bank is an unsuitable vehicle to access it, will the Minister say what would be and how the UK’s green economy would be able to benefit? It would be a significant missed opportunity if there were no plan in place to ensure that we can leverage off-balance-sheet funds to which the UK is a key contributor. Indeed, if the UK were unable to access the funds, that might alter the whole calculus as to whether we stand to gain or lose by the privatisation of the bank.

While discussing alternative sources of finance, I also want to touch on the potential for the GIB to explore citizen investment. As I explained earlier, the bank has deliberately sought to make itself sustainable by operating a higher risk, higher return model, but one of the bank’s key aims since its inception has also been to accelerate delivery of the UK’s low-carbon future at the lowest possible cost—quite right, too. With that in mind, relatively cheap capital could be available from citizen investors investing via Green Investment Bank bonds. In Germany, such citizen investors are willing to accept lower returns on equity than traditional investment—more like 4% to 6% than 7% to 9%—because their motivations are not solely financial. Given the capital-intensive nature of most low-carbon investments, scaled-up citizen finance has the potential—only the potential—to make the delivery of large-scale infrastructure more affordable.

To get a sense of how important that is, a 2012 study by the Crown Estate showed that every 1% increase in the cost of capital leads to a 6% increase in the lifetime cost of an offshore wind farm. Similar analysis exists for the solar sector. The nature of both is that up-front investment is huge with relatively low costs thereafter to get a return. A huge premium must be paid when funding becomes more expensive for projects that require so much capital up front and there is therefore a huge incentive to secure the lowest possible financing costs for the GIB. Has the Minister considered the idea of encouraging citizen investment in the GIB? Might the Government pursue such a concept?

To conclude, we are at a crossroads when it comes to the development of the Green Investment Bank, with both new opportunities and old dangers presenting themselves. Failure to provide reassurance about the bank’s future role would send negative signals to low-carbon investors, who might feel that they have received a lot of negative signals already. That has the potential to threaten inward investment flows and undermine the low-carbon sector’s contribution to our ongoing economic recovery.

It is essential to get the privatisation process right and to remember that many investors and Governments will be watching how we decide to proceed with the GIB. As we head towards the UN climate summit in Paris this December, we have a responsibility to ensure that the Green Investment Bank remains a world leader in its field and a driver of investment and innovation in cutting-edge, low-carbon technologies.

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[Mr Wright]

I agree with my hon. Friend, although my concerns have changed since the Bill Committee three years ago. Then I was concerned that without sufficient powers to borrow the bank would be only a fund. Now I think that, given the privatisation plans, the Green Investment Bank will become simply another bank, and a very small bank at that, and will therefore lose its distinctiveness, which plays a major part in the leveraging or crowding in of other private sector investment.

[Graham Stuart]

Will the hon. Gentleman give way?

[Mr Wright]

I will mention one point, because it is central to my concerns, then I will certainly give way.

Given that the bank will be small, I am concerned that it will be vulnerable to a takeover by another institution, whose concern for its shareholders would be the pursuit of short-term profits rather than long-term value maximisation. That would be a real danger.

[Graham Stuart]

The bank will not be able to borrow, because it is at too early a stage—it does not have the cash flow to borrow against, so it would not be able to borrow. That is one of the reasons why it either uses the £3 billion—now £3.8 billion—provided by the Government, or gets private equity investment for the long term. Borrowing is probably out of the window, because there is nothing for the bank to borrow against, apart from future cash flow, which people do not normally lend on.

[Mr Wright]

I disagree, because of the bank’s financial track record so far. We are talking about a policy decision by the Chancellor. Throughout the bank’s life to date, he has stopped the ability to borrow. He has said in the past that once overall public debt is falling as a proportion of GDP, the bank might be allowed to borrow. He seems to have changed his tune now. However, based on the bank’s track record, the banks could leverage in further private sector money through borrowing as a means of strengthening its balance sheet.

I have mentioned the risk profile, which is another concern. As I said, the bank turned a profit quickly, which is welcome, but a scaled-up bank could diversify its investments, concentrating to an extent on higher-risk and innovative technologies. In many respects, what the bank has done in the first three years of its life is to invest in important and environmentally sustainable, but commercially lucrative opportunities, such as offshore wind, and in driving down costs by investing in, say, product and process innovation. In the next phase of its life, there is a real opportunity to think about the products and technologies that have not even been invented yet. A traditional market will not consider that unless a state-backed development bank both de-risks and crowds in further investment. In this field, Britain could have first-mover advantage, thanks to investments led by the Green Investment Bank. That would have positive effects for UK prosperity and employment opportunities.

In giving evidence to the Enterprise and Regulatory Reform Bill Committee in June 2012, the CBI told us something that stuck with me: that the bank could encourage

“investment into technologies that are not entirely proven yet, or that will require a little assistance to get going. The Green investment bank is part of helping private sector investment and it could have a role in topping up investment in new technologies.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 19 June 2012; c. 5, Q5.]

I certainly agree, and we are putting that at risk with the Government’s plans. The Government have talked about securing safeguards and reassurances, but they cannot provide them because by sacrificing control and repealing the bank’s green purposes, they will have no input whatever. Clearly no safeguards can match legislation on the statute book.

The repeal sends out entirely the wrong message. The Minister is a decent, good man on a whole range of different matters, and I know that this is not his policy area—he has been cast into the lion’s den—but when he responds to the debate, I would like him to answer this question. If he cannot provide adequate safeguards now and he cannot articulate the criteria for the safeguards that would reassure us, why do the Government expect Parliament to repeal the part of the 2013 Act that provides the green purposes?

The Government have got themselves in a real bind. They want to scale up the bank’s operations, but they do not want it on the balance sheet. They have had conflicts with the Office for National Statistics, which said it was not possible to do anything and retain control without completely repealing part of the legislation.

The Government will have no direction whatever because they had to go for the nuclear option of repealing part 1 of the 2013 Act. They will therefore have no control over what the Green Investment Bank does, which leaves it entirely vulnerable to its private ownership. The strategic direction of the bank could completely alter.

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[George Kerevan]

Having spoken to the chief executive I totally concur. The bank wants the facility to borrow more money. After all, for it to be a bank rather than a fund it will need to be able to think strategically and have funds in place; as we all know, it takes a long while to broker and deliver infrastructure projects. The projects delivered to date have been small scale, so if it wants to step up a quantum it will need large amounts of money in the pipeline. But that is covered in the existing legislation, under which it is allowed to borrow.

The worry on the Treasury’s part, one that I am happy to accommodate, is that if the bank borrows more money, that money will be counted by the various statistical agencies as part of overall debt. But that possibility is absolutely notional. The City is not worried—it supported the creation of the Green Investment Bank and has been backing it; indeed, it would not lend money in the medium term unless it was convinced that the GIB was a sound proposition as a bank. The impact of any loan on public debt will therefore be notional.

The Government—in particular the Treasury, which is driving this agenda—are trying to sell off available assets. Others, such as Channel 4, are in the pipeline. They are doing so to find capital to prove that they can begin to reduce the overall level of debt, which they have not managed to do so far. One accepts that that is the Government’s agenda, but in this case it would mean sacrificing something that the Government themselves have worked to bring about and that is successful. It would be a cheap sacrifice for a minimal impact on the overall debt.

[Graham Stuart]

We may or may not hear from the Minister today about whether there has been an evolution in Government thinking. I am a fiscal hawk and believe in balancing the books. Paying down the debt is a reasonable thing to do with a successful organisation. But when the Government set off on all this, they did not realise they would have to repeal the very statutes that give the bank its focus. There could therefore be a case for saying, “Let’s look at this again. We respect your need to raise money from assets, but maybe we might like to make sure we are not going to lose out here.” It would be a shame to cut off our nose to spite our face.

[George Kerevan]

The hon. Gentleman could not have made the case better. He has more chance of convincing the Chancellor than I have, so I am glad that, even if we achieve nothing else today, we have at least given him a public facility to make that point.

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[George Kerevan]

I absolutely agree. Underlining the achievement of the climate change targets is a vast capital investment in major renewable energy projects. To date, the Green Investment Bank has invested in essentially small pilot projects, but the scale of overall investment needed to meet the climate change objectives is huge.

That brings us to the issue of how we fund major infrastructural investment. Single banks and single funds will not undertake all the risk, so most major investment projects are undertaken by a consortia of capital groups. They do not trust one another. It takes a long while to broker such consortia. That is the fundamental weakness in the market, and it has been exacerbated since 2008, when we had significant bank failure. That has made banks or funds worry about whether they will get their money back—they know what they are doing, but will the other partner really be in a strong position five years down the line?

If we want infrastructure development, energy development and capital investment, we need consortia. We need an honest broker to put the consortia together. That is where the market fails, and that is why many countries have put together some public body that is trusted by everybody, has seen the books and does not provide a full commercial guarantee if there is failure but takes an element of the risk. That is what brings everybody else to the table.

It is not a question of us wanting the Green Investment Bank to be a public body, risking public money. We want it to essentially be an honest broker. That has proven brilliantly successful in the past three years. What we are about to do is what fundamentally destroys the model of the Green Investment Bank: if we weaken the public guarantee behind it and the public involvement in it, it ceases to be an honest broker. It just becomes another player in a crowded field and eventually, because of its small size, it will be snaffled up by some hedge fund and that will be it. The team will go off to do something else.

[Graham Stuart]

That was a rather brilliant exposition of the issue. What the honest broker role is and why it is often some minority investor bringing in all this cash is quite a subtle point. On the subject of market failure, the other aspect is that this particular market, of course, relies on subsidy. It relies on trust of Government, and there is not a lot of that either. People who do not trust one another and who do not trust the Government are therefore given a little bit of solace when they see going into a project Government money that, just like their money, relies on the Government honouring their pledges to pay the subsidy over the period and to not change the rules or lift the carpet out. That is another element that could have more of a knock-on effect than is immediately obvious.

[George Kerevan]

The hon. Gentleman adds immeasurably to my contribution. Trust is a limited commodity, but in a sense, it is about how we add incrementally to get everybody around the table. The chief executive at the Green Investment Bank proved something fundamental by his ability to get people round the table. We are threatening to lose that.

Ultimately, the Government are arguing that we could still protect things by having the articles of association. I look around the room and see many people—my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Philip Boswell), for example—who have worked in major companies in this area. I, on a much smaller scale, have been involved in creating a couple of dozen companies over the past 30 years. Articles of association are meant not to tie a company down. They give a company a general direction, but a coach and horses could be driven through most articles of association I have seen. We cannot rely on that.

We need to keep the primary legislation intact, at least for a period. I would be happy if the Government came back and said, “Give us three or five years, then we will come back and revisit it,” but if they move now and change the primary legislation, the Green Investment Bank as we know it will disappear—maybe not next week and maybe not three years down the line, but within 10 years. This may be of more local interest to SNP Members, but, as one of the people who initiated the campaign to get the Green Investment Bank to Edinburgh, if we remove the legal protection, the headquarters will become a nameplate in Edinburgh and, significantly down the line, it will cease to be in Edinburgh. Indeed, if the Asian Infrastructure Investment Bank is successful, the Green Investment Bank may end up in Hong Kong or Shanghai.

I come to my final point. We might look at the model of how the Treasury is approaching its investment in the Asian Infrastructure Investment Bank if the Treasury wants an out when it comes to dealing with the Green Investment Bank. The British contribution to the funding of the Asian bank is about 3% of the overall capitalisation. The Treasury proposes to put some paid-in capital to the Asian bank and provide the rest as a capital guarantee, which of course is a contingent liability but does not lead to immediate borrowing. The Treasury is desperately trying to promise that we will never have to have that contingency—ever—because the Asian bank will be so successful.

It seems to me that if the Green Investment Bank needs more capital in the next two to five years, a guarantee could be given from the Treasury of that capital. It would be a contingent liability, but that would not impinge on the real level of debt. The Government could look at funding models, if they wanted to keep the present green model, without that impinging on overall debt. I urge the hon. Member for Beverley and Holderness to go back and see whether he can persuade the Treasury to discuss some of those models and bring in some of the people it sent off to help set up the AIIB to see whether there might be a crossover. And with that, I will sit down.

--- Later in debate ---

[Kevin Brennan]

Yes, I agree. I am tempted to quote Kermit the Frog, who said, “It’s not easy bein’ green.” It is not easy, actually—why make it more difficult? That is the problem with the proposal. Everything that my hon. Friend said is absolutely right. There is nothing currently in the proposal that will make any of those things any easier. That is why all of us, in all parts of the House, are asking the Minister to go away and think again about the current proposal with his colleagues.

I do not intend to rehearse, once again, everything that people have said about the success so far of the Green Investment Bank. I remember it as a very embryonic idea when I was in Government, all those many years ago now. It was certainly mentioned by Alistair Darling in one of his Budgets and it was kicking around the Cabinet Office and BIS when I was a Minister in both those Departments during the previous Government. I was very pleased when the coalition Government brought forward proposals, the Bill was passed and the bank was set up and am also pleased about what a good start it has had—how well it has got under way. There have been criticisms about the straitjacket that the Treasury may have put on the Green Investment Bank. Nevertheless, it has genuinely been able to participate in the financing of projects that otherwise would not have taken place and which make a real contribution, as the hon. Member for Beverley and Holderness said at the outset, to meeting our commitments under the Climate Change Act. Essentially, it is a good story.

[Graham Stuart]

It is touching to see the hon. Gentleman paying such tribute to this creation of a Conservative-led, now Conservative, Government, especially because at the end of Labour’s period in power, when he was a Minister, only Luxembourg and Malta had a lower share of renewables as part of their energy mix. I am delighted to say that whatever questions need to be asked about the Green Investment Bank, the record of this Government is a paragon compared with the abject failure of so many years of Labour, sadly.

[Kevin Brennan]

I have known the hon. Gentleman for a long time. All I will say is that he has let himself down slightly by injecting a slight note of partisanship into our proceedings; I knew it would inevitably come. Given the sort of person I am, of course, I would never respond to anything of that kind.

--- Later in debate ---

[Kevin Brennan]

We were indeed, Mr Crausby. All I will say is this. The notion that, had the Conservatives carried on in power after 1997 we would have had a much greener Government than the Labour one, who passed the Climate Change Act 2008, is one that I find slightly difficult to believe. Anyway, without labouring the point too far, I was saying that in my view—

[Graham Stuart]

We have time. Will the hon. Gentleman give way again?

[Kevin Brennan]

I will give way one last time on that point.

[Graham Stuart]

The hon. Gentleman is extremely generous. A little partisanship does not go amiss. It is important to have the perspective that the current Prime Minister, then Leader of the Opposition, was the first major party leader to call for a climate change Act. That same day, the Liberal Democrats followed, and it was only because it felt that it was going to be left behind that Labour joined in. It was thanks to the current Prime Minister that we got the Act, and it is within that framework going forward that we can have confidence that we can meet these challenges. That is why it is so important that Ministers get their policies right.

[Caroline Lucas]

rose—

--- Later in debate ---

[Kevin Brennan]

I will.

[Graham Stuart]

It’s all my fault.

[David Mowat]

It is indeed the fault of my hon. Friend; we can all agree on that at least.

We have the Climate Change Act—no other country in the world has come up with an Act that has also required an 80% reduction. It is also true that the level of carbon emissions in this country is lower than the EU average and one third lower than in Germany. We should be pleased about where we have made progress.

--- Later in debate ---

[Kevin Brennan]

I most certainly will. I am sure that my hon. Friend will lend me his copy so that I can do that as soon as possible. I look forward to receiving it shortly in the post or perhaps by a more green method: he can hand it to me personally.

It is a myth that privatisation is necessary and is the only way the Green Investment Bank could go out and borrow in the marketplace. That could be done, as I understand it, under the current legislation in any case, but because of that financial orthodoxy and the desire, which I understand, for the Government to be able to say what they want to say about their deficit targets, they are extremely reluctant to allow the Green Investment Bank to do it.

As the hon. Member for East Lothian said, in a sense this is a notional concept; it is the sort of debt on the books that really is not of great concern to the City or to the markets. It is part of the obsession of the boffins at the Office for National Statistics that where the Government, in any minor way, have an influence over what an institution such as the Green Investment Bank does, by setting out to limit the types of investment that it makes in any way shape or form, it has to be counted as being in the public sector for the purposes of Government debt.

[Mr Andrew Percy in the Chair]

It is an incredibly esoteric and technical reason for requiring the Green Investment Bank to be privatised even though there is clear evidence of real problems with that process, as we have seen from today’s debate.

The decision to privatise the Green Investment Bank was announced in June. Was it a premature decision? I believe a lot of people thought it was. Many commentators expressed concern at the time. The Government were able at the time at least to give the assurance made by the Secretary of State for Business, Innovation and Skills in his written statement on 25 June, in which he said that he was going to privatise the bank:

“This should bring a number of important benefits, giving GIB greater freedom to operate across a wider range of green sectors in accordance with its green purposes, which are enshrined in legislation.”—[Official Report, 25 June 2015; Vol. 597, c. 27WS.]

A key part of the Secretary of State’s announcement, emphasised in that written statement, was the fact that the green purposes of the Green Investment Bank were protected by the legislation in which its duty to pursue them was enshrined. Obviously, something has gone horribly wrong in the meantime.

The advice from the Office for National Statistics that I referred to earlier has led the Government to say that they intend to repeal the very legislative protection that they prayed in aid when deciding to privatise the bank on 25 June. By October, they had to say, “Do you know what? That is not so important after all. It doesn’t really matter if we repeal all that to make sure that the Green Investment Bank doesn’t appear on the books.” That requires a great deal of thought, scrutiny and debate. I thank the hon. Member for Beverley and Holderness for pointing that out—and, indeed, for ensuring that we are having this debate.

I do not think it is unfair to say that so far, the Government have no answer to the question of how we can ensure that the Green Investment Bank maintains its green purposes. The letter from the Secretary of State for Business, Innovation and Skills of 15 October, in which he announced his intention to repeal the relevant measures in the Enterprise and Regulatory Reform Act 2013, offers no assurance that those green purposes will definitely be maintained. The Secretary of State does say:

“We want to ensure GIB’s green principles continue to underpin its business in future and this will form an important part of our discussions with potential investors.”

That is all very well, and I am sure that potential investors will come along and happily assent to the green purposes of the Green Investment Bank prior to privatisation. That is not the question, however; the question is what happens after privatisation. At that point, when the bank is either fully or partly in the private sector—we do not know the full details of the Government’s proposals for privatisation—how are we to ensure that it maintains its green purposes and does not, as other hon. Members have suggested, simply become yet another bank, albeit a very small bank that can easily be, and is likely to be, gobbled up by somebody else?

Although the Secretary of State says in the letter that the Government want to ensure that the green principles will be maintained, he cannot ensure that they will be. The Government can only entreat; they cannot ensure. We need to hear more about how Ministers will pursue this proposal, and how they will ensure that the green purposes remain if the current proposal is implemented. There has been no answer yet from the Secretary of State or Ministers.

I referred earlier to a written question from the hon. Member for Brighton, Pavilion to the Minister for Small Business, Industry and Enterprise. In response, the Minister repeated that the Government want a privately owned Green Investment Bank to continue the focus on green sectors, but she did not explain in any way, shape or form how the Government can ensure that it does. We need to know more about that, and I would be interested to hear more from the Minister when he responds to the debate. That absolutely central question has to be answered if we are to have any confidence in what is happening. Otherwise, the situation would seem to be a bit of an unholy mess, and we need to know how the Government will unravel it.

I will ask a few other questions, because there will be a reasonable amount of time for the Minister to respond when I have finished my remarks. Will he admit that he cannot guarantee that privatisation will not dilute the green purposes of the Green Investment Bank? Is the Government’s policy simply: “Fingers crossed”? Have the Government discussed or considered the possibility of some form of penalty for the privatised company should it depart from the green purposes currently enshrined in legislation when the legislative guarantees are removed? Can he confirm that the legislative lock on the green purpose is being repealed purely in order to get the Green Investment Bank off the books? Is that the only reason for removing that lock? Can he tell us a bit more about the stake that the Government expect to retain in the Green Investment Bank following privatisation? Some clarity on that would be greatly welcomed by the House and the country.

What about the £1.8 billion that the Government have set aside to fund the Green Investment Bank and its projects, which is yet to be committed? Do the Government intend that £1.8 billion to be committed to green projects as originally intended, or do they intend that money to be taken back into the Treasury during privatisation? If the latter, what will the Treasury do with that money? Will it simply be set aside against the deficit, or will it be used instead for other green projects and priorities? We need some clarity on that, because some of the claims made about the Green Investment Bank will ring pretty hollow if that £1.8 billion is not devoted to the purposes for which it was intended.

Can the Minister give us a ballpark figure for how much the Government expect to raise through the privatisation of the Green Investment Bank? I do not expect him to be precise, because it is impossible to be precise about that, but can he give us some idea of the parameters that we are talking about? How do the Government intend to avoid the sorts of criticisms that they encountered about the lack of value achieved for taxpayers in the privatisation of Royal Mail? I will not put it any more strongly than that, because we have raised the tone of the debate again since the partisan interventions of the hon. Member for Beverley and Holderness; I do not want to lower the tone again or tempt the hon. Gentleman out of his slumber. [Interruption.] He is not asleep; I apologise.

[Graham Stuart]

It is contentment.

[Kevin Brennan]

I do not want to tempt the hon. Gentleman out of his contentment. What advice were Ministers given when the guarantee was first enshrined in legislation? Was there any suggestion at that time that putting the green purpose in legislation might jeopardise any future privatisation? Is it possible that when the bank is privatised and its purposes are widened, its funds might be used to invest in things such as fracking?

--- Later in debate ---

[George Freeman]

I respect that. The point I am making is that the Government have a strategic commitment to the British people, and it was not the least of the reasons we were returned to office—to get our public debts under control. The hon. Gentleman’s party may take a more cavalier view of public debt, and I respect that, but our view is that we need to get it under control. For that reason, but not only that reason, institutions that can borrow today, thus contributing to exacerbating the public sector debt problem, need to be liberated to get access to the flourishing private capital markets that the Green Investment Bank has played no small part in creating. The figures that I gave earlier on the extent of the global sector are relevant to that.

To complete my comments on the rationale for the decision, I looked this morning at research on market interest, and interest in acquiring a stake in the Green Investment Bank is likely to come from large-scale institutional investors such as UK pension funds, infrastructure private equity funds and sovereign wealth funds—specialist investors with an interest in green infrastructure. The bank has already successfully attracted similar investors into its managed fund for investment in offshore wind. Many of those investors do not currently invest in individual green projects. Allowing them to acquire a stake in the bank will provide a vehicle for them to invest in the area for the first time. That is a part of developing a more active private sector market in renewables and green energy. Through the bank’s portfolio of renewable energy and green infrastructure projects we hope to widen the pool of investor exposure and stakeholders in the sector. The sale of the bank is partly about enabling that new pool of capital to be brought to bear, helping to accelerate investment.

[Graham Stuart]

Do the Government have any preference, then, as to the number of investors that might come to the Green Investment Bank? He has talked about some taking a stake—perhaps pension funds; but what if a major international bank offered for 100% of the bank, and that was the highest offer? Would they sell to a single institution, and would there then be a danger that that would just be swallowed up in a much larger organisation, so that the purpose of the bank could eventually be diluted?

[George Freeman]

The overriding principle is that we want to ensure that the bank is put on a footing where it has the freedom to operate and is able to raise the necessary capital without being jeopardised by having an investor base that is too fragmented and small to be effective, or too small or too large an interest to be sustainable. Both of those represent risks. We will need to take a view and ensure that we give it the best possible chance to be able to carry on and fulfil its remit. I will say something about its green remit in a minute.

[Graham Stuart]

I know that it is difficult and, I imagine, sometimes commercially sensitive but I would like to press the Minister. Is it the Government’s view that the sale to a very large global bank would be a bad thing? He has described it as a risk. I know that the Government will take a view but do they have a view that they can share with the House today? We are trying to find out what the Government are going to do with this bank.

[George Freeman]

Our view is that we want to give the Green Investment Bank the best possible chance of having a stable and secure future and being able to raise the sort of money that it needs out of the market. Having been an investor myself in much smaller companies, I would say that anyone involved—my hon. Friend is aware of this—will know that there is no perfect shareholder structure. Often having a very small number, particularly if it is one, can create risks of its own. Having far too many small investors can mean that it is a struggle to raise the capital needed. A happy balance will need to be struck, but the judgment will have to give the Green Investment Bank the best chance of fulfilling its remit. I will say something about its green remit in just a moment. My hon. Friend made an important point.

Crucially, the plans are not being imposed by the Government on a reluctant bank. They have the full support of the company and its independent board and chair, Lord Smith of Kelvin, and others. Lord Smith of Kelvin said:

“I welcome this. You can’t keep going back to the Government for more and more money. If we want to build something that is sustainable and durable, we need private capital. This was always going to happen.”

He also said:

“The UK Government led the world in their vision and commitment in setting up the world’s first dedicated green investment bank, so we are delighted to have their support as we enter a new phase and seek additional investors in our business.”

Shaun Kingsbury, the chief executive officer, said:

“That is why I believe the decision announced by the Business Secretary is the right one. It is the option that gives us the best chance of creating the greatest green impact.”

Other important commentators have concurred. Richard Howard, head of environment and policy at the think-tank Policy Exchange, said at the evidence session of the Environmental Audit Committee yesterday that the legislation may not be needed to maintain the green focus, and that if we remove that legislation and allow someone to invest, that investor would come along and invest because they are interested in supporting what the Green Investment Bank is doing. He said that private capital funds have got involved precisely because the bank has a track record in these areas and that they are buying into a pool of expertise in investing in green projects.

The Environmental Audit Committee’s report on green finance in March 2014 said that the Green Investment Bank

“needs to be able to raise significant further private sector capital for investment alongside the Bank’s programmes, and to borrow itself to enlarge the scale of its work…The Government must make an early and clear statement about the Green Investment Bank’s long-term future beyond the 2015–16 horizon of its Spending Review funding settlement”,

which answers one of the points made earlier.

--- Later in debate ---

[Kevin Brennan]

rose—

[Graham Stuart]

rose—

[George Freeman]

I will take these two interventions, and perhaps I can then crack through the questions.

[George Freeman]

I want to take specific advice, but I will write to the hon. Gentleman on whether any constraints are envisaged on what may or may not constitute green investment. My understanding is that we want to give the bank the freedom to invest in a range of different technologies. Indeed, part of the bank’s mission is to be able to catalyse investment in a much wider range of technologies that will be key to building a 21st-century green economy.

[Graham Stuart]

The Government announced that they will privatise the bank so that it can access capital, as the Minister has set out. The letter announcing that privatisation stated that the bank will be guaranteed by the statutes. Those statutes have suddenly gone, and promises have been made to the Treasury. It feels as if the Government machine has already decided to privatise this bank, but the basis on which the Government are privatising the bank has changed. Will it be possible to go back? The Treasury is rightly trying to address the deficit and the debt, but there is a conversation to be had, because the bank is not being privatised on the basis that was originally proposed. There is a risk that this thing will not do what we want it to do. The Climate Change Act 2008 commits us to action, and if that action costs more, we would be back to cutting off our nose to spite our face.

[George Freeman]

My hon. Friend makes a good point, and I know he has raised it with my right hon. Friend, the Secretary of State for Business, Innovation and Skills. It flows from everything I have said that we are determined to ensure that the Green Investment Bank is able to continue being a green investment bank. Given the constraints under which we are operating, we need to be creative in exploring every option. I am open to my hon. Friend’s suggestions about how we might be able to do that in a way that does not compromise the bank’s ability to operate in the way we want.

--- Later in debate ---

[George Freeman]

Well, the shadow Minister should see the list of questions I have been asked, not least by the shadow Minister himself. I will try to answer those questions and, if I fail, the hon. Member for Hartlepool (Mr Wright) can intervene at the end.

I was asked whether the management of the Green Investment Bank would prefer a statutory lock. The chief executive officer allegedly said that he is “agnostic” about privatisation, but he did say that he prefers a statutory lock. He also said that he wants the ability to raise funds from the private sector, and he understands the need to remove the statute and the statutory constraints.

My hon. Friend the Member for Beverley and Holderness asked how the shareholder framework document will change. Clearly, the framework document will need to change as the shareholding changes. When the bank was set up in 2012, the document’s primary purpose was to set out that the bank should operate independently so that the Government could not interfere in its investment decisions and to ensure the bank’s green ethos. Privatisation will further increase that operational independence, but the bank’s green ethos is now entrenched. The Green Investment Bank is what it is, and it is what is in its business plan, which will be a material document in the shareholder subscription round.

My hon. Friend also asked whether the market failures that the bank was set up to address have now improved to such an extent that we no longer feel the bank needs to operate in the same way. He is right that the bank was set up shortly after the banking crisis in the depths of the dark period of 2010, 2011 and 2012, when the economy was moving very slowly, to rectify a lack of long-term liquidity in the market. It is true that long-term funding for infrastructure projects has recovered strongly, as illustrated by the data I gave earlier. There was a lack of specialist green infrastructure investors, particularly at scale, which is what the bank has now become. The bank has helped to support such infrastructure projects, and we intend that the bank will remain a specialist green investor after privatisation. That is what the bank does, and it is what an acquirer will be buying. We want to let the bank off the leash to do more of that.

The hon. Member for Brighton, Pavilion (Caroline Lucas), who is no longer in her place—she gave her apologies—asked whether a profit-maximising bank would be in danger of crowding out investment because it would be just like any other bank. In fact, the Green Investment Bank is already profit maximising; it has turned its first profit. It exists to prove that it is possible to be green and profitable. That is in the bank’s very DNA; we want to show that the green economy is a real economy. That is how we will attract the private sector capital that we need. The GIB’s expertise can do so regardless of whether it is in the private or the public sector, of course, but we want to give it the freedom to raise that money.

The hon. Lady also asked whether other countries are copying us. It is true that we were in the vanguard when the Conservative-led coalition set up the Green Investment Bank, and we have been copied. It is our ambition to be in the vanguard as we take the market forward. We need to raise not just hundreds of millions or billions, but tens of billions—actually, over the next decade or so, we need to raise hundreds of billions—of money for green infrastructure. There is no way that any Government could fund all of it, even if they wanted to. We need to go to the next stage by leading private sector capital into the market.

Several hon. Members, including my hon. Friend the Member for Beverley and Holderness, asked whether the bank cannot raise debt anyway, and whether we had explored all the options. The truth is that equity raising by the bank will effectively score like debt to the public sector once that equity is invested, so this is not just about debt, but about ensuring that the bank has the right financial mix to operate. My hon. Friend also asked about the European fund for strategic investments, a £300 billion pot for capital raising, and whether the bank will still be encouraged and able to access that money.

The Government are aware of the European funding for infrastructure investment, and are examining how best to make use of that facility—my hon. Friend makes a good point. In our view, that does not alter the case for moving the bank into private ownership. We absolutely need to ensure that it can access funding. The Government and devolved Administrations are actively considering, along with other UK institutions, how they can work alongside the bank to maximise the impact for the bank and others of accessing that European funding. The EFSI guarantee can be used by the bank to co-invest in and co-finance with both public and private institutions, so privatising the bank does not in itself preclude benefiting from the European fund.

[Graham Stuart]

For the record, is the Minister saying that the bank’s change from its current status to privatised will have no impact whatever on its ability to access those funds, to which we are contributing so many billions of pounds?

[George Freeman]

I would not want to go as far as to say that it will have no impact. What I am saying is that we are actively ensuring that the bank will still be able to access funds from the EFSI. It may have to do so through consortiums with other parties, in a slightly different way from how it did when it was a state-owned bank.

My hon. Friend asked whether citizens would have the opportunity to invest directly. We are exploring all options as part of the sale. I would point out that the bank is still a very young company that has only just broken even, meaning that it is pretty unlikely to have a sufficient track record to attract much interest from the retail market, but we are obviously keen to grow the level of retail investor exposure into the market as it matures. He and others asked whether we and the bank had considered raising green bonds. Issuing bonds is absolutely one of the things that the bank will be free to do if it chooses. At present, it is prevented from doing so, as it would score against public sector debt in the same way as borrowing.

Several hon. Members have asked why we are repealing the legislation. I have touched on this already, but in order to grow in line with its ambitious green business plan, the bank needs the freedom to borrow and access much larger pools of private capital, and it will have that freedom if it can borrow without affecting public sector net debt. That means getting the bank reclassified as a private enterprise and off the Government’s balance sheet. To do so, we must do two things: sell a majority of the company, and repeal the legislation. Otherwise, the company could still be classified in the public sector, even after a sale.

One or two hon. Members have asked why we cannot just retain the bank in Government ownership and allow it to borrow, citing the statement by my right hon. Friend the Chancellor that as and when debt starts to fall as a percentage of GDP, we can release borrowing restrictions on the economy generally, so why not on the bank? The problem is that, in Government ownership, the bank’s borrowing and capital raising would still count against public sector debt. Equally, it still has to compete for funding, along with all Government expenditure needs and with the pressure on the Exchequer, even as we get the debt under control. In my own field of health, for example, health demand is rising substantially, and we want to liberate the bank from having to fight in the Whitehall corridors in the same way as every other Department in spending rounds.

On top of that, private ownership will give the bank much greater freedom to operate, removing a number of constraints. It is worth pointing out that it was always envisaged that the bank should aim to mobilise maximum private capital, and it fits our strategic policy aim of getting the market to work on tackling green policy challenges. As I said, we have the full support of the management and the CEO of the company.

Let me turn to the important question of how we will protect the bank’s green mission and remit in the absence of the legislative lock. As a key part of any sale discussions, potential investors will be asked to confirm their commitment to the bank’s green values, green mission and green business plan, and set out how they propose to protect them. We envisage that that will involve new shareholders agreeing to various specific things: retaining the green objectives in the bank’s articles of association; ensuring that the bank continues to invest in a way that achieves maximum positive green impact; maintaining the bank’s existing standards for reporting on its green investment performance; and providing independent assurance of that.

We fully expect that, as part of a subscription round based on the bank’s offering to the market, its green business plan with clear long-term investment in a range of sectors and projects will deliver the safeguards that Opposition Members have asked for without the need for legislation that would curtail those freedoms. We are absolutely committed to ensuring that the bank continues with that green mission, and I am happy and open to explore mechanisms suggested by any party for safeguarding the bank’s green remit in a way that does not fall foul of those public control tests.

[Graham Stuart]

On that point, as we all know, when a company goes to market, it depends on the conditions at the time. It is at least feasible that when the bank goes to the market, those who wish to invest on the basis that the Minister is discussing will disappear, leaving those who will simply buy the capital and assets invested and treat the bank as a zombie fund, immediately sacking as many of the staff as possible, running it at a minimal level and calculating a reasonable return. What guarantee can the Government give, if those turn out to be the only buyers around, that they will not stay so committed to privatisation—in order to meet, rightly, the need to sort out the national debt—that they end up giving the bank away to be turned into a zombie fund, not only avoiding innovative green projects but not really developing anything at all?

--- Later in debate ---

[George Freeman]

Proceeds will depend on how big a stake is sold, on the outcome of negotiations with investors about the value of the company and on how the company’s business plan is judged. We will need to be satisfied that any transaction represents value for money for the taxpayer, and fits with the Government’s wider policy interests and with the best interests of the bank. The hon. Gentleman would obviously not expect me to speculate this afternoon on what figure we would expect and thus undermine the process.

Importantly, the hon. Gentleman also asked me about the £1.8 billion of funding that is left. As he has highlighted, the bank can carry on for at least another year, given that it has £1.8 billion—roughly—in reserves; he suggested that after that period it could start recycling capital. The truth is that to grow its business and invest in accordance with its green business plan, the bank will need access to a much greater volume of capital from a wide range of sources.

The hon. Gentleman asked why there was urgency about this process. What we do not want is to get to a point where the bank has no reserves and badly needs capital. Anyone who has raised money knows that the time to raise it is not when there is no choice but to raise it, because money is desperately needed, but when a company is in a strong position, and has a pipeline, assets and a good track record. We think the bank is in that situation now. We are confident that we can attract private capital into the bank because of its track record and because it is operating successfully.

[Graham Stuart]

I am grateful to the Minister for giving way again; he is being very generous with his time. My understanding is that the funding agreement runs out in March next year, and that the steady state activity of the bank for the last couple of years is £700 million to £800 million a year. There is not clarity about what happens from 1 April 2016 onwards, and the bank will have no access to that £1.8 billion; according to my calculations, the reserves were more like £1.5 billion, but whatever the exact figure is, it will be quite a lot of hundreds of millions of pounds. Perhaps the Minister, while answering other questions, might seek advice elsewhere about this issue; I would be grateful if he could respond to me about it. I am interested to know how the bank will be taken care of between its current funding provision running out in March 2016 and whatever date it is sold, and how we ensure that there is not a chilling effect.

[George Freeman]

My hon. Friend makes an important point. A key part of the rationale for proceeding with this move now is that the bank’s momentum—its existing status—is a strength; it is an asset rather than a liability in the context of the bank’s fundraising. So we are actively looking at everything we can do to ensure that clarity about the bank’s status, position and momentum is provided to potential investors. It is not in our interests that there is confusion, and we are addressing that issue.

--- Later in debate ---

[Graham Stuart]

It has been an excellent debate, with involvement from all parts of the House. The COP21 conference will soon take place in Paris, at which the intended nationally determined contributions—the national promises about action on climate change in a domestic context—will be discussed. The INDCs that have been put forward cover 87% of the world’s population and roughly the same percentage of the world’s emissions. We are looking at a world in which we are recognising the need to act, but within that context, we have to ensure that greening our country and doing what is right for the climate and the environment is done at the lowest possible cost to our constituents, many of whom are struggling on low incomes to pay for their heating.

The Green Investment Bank has been a triumph of the past few years and has made an enormous difference—all sides are agreed on that. When the privatisation was announced, it was on the basis of the statutory duties on the bank continuing. I am not saying that it will necessarily be exactly the same—there may still be concerns—but its solace is that the constraints of fighting against schools and hospitals for capital investment, rather than going to the markets in the context of Paris and beyond, mean that it is better to be privatised. One of the vital ingredients of that—namely, the ability for those statutory duties to remain in place—will be gone. My purpose today is not to say that the sell-off is the wrong thing to do, but to ask the Government to think carefully and ensure that the bank delivers, as it has delivered before, and goes forward. The Minister so ably explained to us that that is what the Government would like it to do.

The chief executive of the bank regrets that the statutory duty will be gone. He has said that any contractual duty and any other effort used to hold people to that is not the same as a statutory duty. There are some real issues to look at there. I hope that the bank’s sell-off, which seems to have unstoppable momentum, will not go ahead if on reflection the likelihood is that it will not deliver as we might hope. On such issues as the European fund, if we do not have the mechanisms to bring that money into this country, we could end up exacerbating the problems.

I leave the Minister with something I mentioned earlier, which is the Crown Estate report of a few years ago. A 1% increase in capital costs leads to a 6% through- life increase in the costs of a major energy project, such as an offshore wind farm. That is years and years of higher energy bills for people who can least afford to pay them. If those of us who believe that we have to meet our international obligations are to deliver a greener, cleaner Britain as part of a global compact while retaining people’s confidence and support, we have to do so at the lowest possible cost.

Some may think that privatisation is per se the wrong thing, but we have had thoughtful speeches from all parts of the House. Let us get this matter right. We all agree on how important and useful the bank is, so let us ensure that we do not accidentally lose the benefits it brings, not least in ensuring that we deliver clean energy at the lowest possible cost for our constituents, many of whom struggle to pay their bills. With that, Mr Percy, I finally bring the debate to a close.

Question put and agreed to.

Resolved,

That this House has considered the future of the Green Investment Bank.

Managing Risk in the NHS

Graham Stuart Excerpts

Wednesday 17th July 2013 Commons Chamber

[Andy Burnham]

My hon. Friend has made an extremely important point. The conclusion to which he has referred may well have been missed by many people up and down the country yesterday, but it is worth repeating and putting centre stage in today’s debate, because the Government certainly will not make any reference to it.

NHS hospitals in England, including the 14 covered by the review, have reduced mortality by 30% in recent years. That is an incredible achievement, which we should surely be celebrating. Of course the NHS is not perfect. It does fail people, and when it does, we are truly sorry for the effect on their families. The fact is, however, that the NHS and its hospitals have improved over the past decade, and that needs to be repeated and repeated to counter the scare stories that are emanating from the Conservatives and the fears that they are stoking among people about going into hospital.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I wonder whether the right hon. Gentleman is aware of the work of Professor Sheena Asthana, who has studied hospitals with higher mortality rates and found a correspondence between hospitals serving clinical commissioning groups—formerly primary care trusts—in areas with older populations which are receiving lower funding allocations than those with younger populations. She believes that funding allocations could be one of the causes of higher mortality across the system.

[Andy Burnham]

I would not close my mind to that suggestion, but I think it important also to take account of what Keogh said about other similarities between those hospitals—and, probably, between them and Mid Staffordshire. What they have in common is geographic isolation. Hospitals serving smaller market towns are not supported by the same clinical networks as others, and may find it more difficult to attract qualified staff. I agree with the hon. Gentleman that there are a number of important issues that need to be considered.

--- Later in debate ---

[Mr Hunt]

I take the risks the right hon. Lady talks about very seriously, and we need to be very careful in managing any change, but there are also big risks in not making change. South London Health Care Trust is one of the worst-performing in the country, and it was used by her constituents. I have a duty to sort out these problems in the NHS, which have been left unsorted for many years.

The right hon. Member for Leigh said we should look at our record since 2010. Let us look at that record: the numbers of people waiting longer than 18 weeks, 26 weeks and 52 weeks to start treatment are lower than at any time under the last Government; as I said, we have 5,600 more doctors; and we have a £650 million cancer drugs fund, giving more than 30,000 people access to cancer drugs—his Government refused to set up such a fund; the number of mixed-sex wards is down by 98%; and hospital infection rates have halved. These are real achievements for a service under great pressure, and we should recognise the hard work and dedication of the NHS staff who have delivered them.

[Mr Graham Stuart]

My right hon. Friend will have heard me earlier referring to the work of Professor Sheena Asthana and will know of my concerns about the allocations underpinning some of the risks in the NHS. Will he agree to meet Professor Sheena Asthana and me, perhaps over the summer recess, to discuss the matter further?

[Mr Hunt]

I would be delighted to do so. I have studied her work and am an admirer of it, so I would be more than happy to meet my hon. Friend to discuss further the issues he wants to raise.

I want to turn to the substance of the motion, which is about risk for the NHS. Two big risks face the NHS. They face not only the NHS, but all major health care systems. The first is financial sustainability and the second is an ageing population. The litmus test for the success of the NHS in the next 65 years will be whether it confronts those huge challenges while looking after people with dignity, compassion and respect. I believe that there are three pillars on which we must build to make that possible. The first is a radical transformation of out-of-hospital care. We know that a consultant is responsible for us when we are inside hospital, but who is responsible for a vulnerable older person when they leave hospital? Too often, their care falls between the cracks, with no one being accountable. The NHS could lead the world in this, but we have made it impossible for GPs to look after people proactively because of how the GP contract works. We need to change that, so that in an integrated, joined-up system of care, there is always an accountable clinician or named GP and the patient knows who it is. In the consultation on the changes to the NHS mandate for next year, therefore, I have asked NHS England to ensure a named clinician responsible for every vulnerable older person.

The second of the three pillars we need to reduce risk in the NHS is technology. The technology revolution has transformed many other sectors, but has barely touched the NHS. A and E departments cannot access GP notes and so give medicine without knowing people’s medication history. Ambulances pick up the frail elderly without knowing whether they are diabetic or have dementia. This has to change. Technology can also cut costs. Retail banks have reduced their costs by a third, and we need those precious savings for the NHS, which is why I have said I want the NHS to go paperless by 2018 at the latest, with online prescriptions and booking of GP appointments by 2015. Technology is also a vital key to delivering integrated care, which is why data sharing will be a key condition of accessing the £3.8 billion joint health and social care fund announced by the Chancellor in the spending review.

The final pillar to help the NHS cope with new risks is science. It might surprise hon. Members that I mention that today, but the UK has a long track record as a world leader in medical science. We were the first to unlock the secrets of DNA in 1953; we did the first combined heart, liver and lung transplant; we invented in vitro fertilisation, alongside many other advances, and we must play to those strengths. Science can transform our understanding of disease, and help us deliver truly personalised care. Our aim is by 2015 to put the UK at the forefront of the genome revolution worldwide, and I have set up Genomics England, led by Sir John Chisholm, to deliver that vision.

In conclusion, the NHS faces many risks, but it also delivers many successes day in, day out. No organisation anywhere in the world has more staff dedicated to the noblest ambition anyone can have—to be there for us and our loved ones at our most vulnerable.

Oral Answers to Questions

Graham Stuart Excerpts

Tuesday 16th July 2013 Commons Chamber

[Mr Hunt]

I congratulate the right hon. Lady, who is a long-time campaigner on dementia issues. She has raised a really important issue, and I will certainly talk to Public Health England about raising awareness. For those groups, as for everyone, we need to ensure that there is a good care plan in place when they are diagnosed. There is some resistance in the GP community to giving a dementia diagnosis, partly because many GPs worry that not much will happen as a result. We need to ensure that there is a good plan in place, and that is particularly the case for ethnic minority communities.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

Does the Secretary of State agree that areas that are grappling with the highest burdens of chronic illness and disability should receive the highest NHS allocations? Does he have any idea why the NHS Commissioning Board has rejected the advice of the Advisory Committee on Resource Allocation and decided instead to perpetuate the systematic underfunding of areas that serve older people?

[Mr Hunt]

My hon. Friend is absolutely right to say that NHS resources must be allocated in a way that fairly reflects the need for the NHS in every area. Rurality and age are two important factors in that regard. I can reassure him that the current allocations are not set in aspic. The problem with the recommendations from the Advisory Committee on Resource Allocation that NHS England received before was that they would have meant increasing resources to the areas with the best health outcomes at the expense of those with the worst ones. NHS England thought that that would be inconsistent with its duty to reduce health inequalities, but it is looking at the issue this year and we all hope that it will make good progress.

NHS Funding

Graham Stuart Excerpts

Wednesday 12th December 2012 Commons Chamber

[Mr Hunt]

I am going to make a little progress, if I may.

The right hon. Member for Leigh rather helpfully spelled out the difference between his position and our position when he admitted in the New Statesman that we are spending more than he wanted to spend on the NHS. He said of the NHS budget:

“They’re not ring-fencing it. They’re increasing it.”

In respect of NHS spending, he said:

“Cameron’s been saying it every week in the Commons: ‘Oh, the shadow health secretary wants to spend less on health than us’…it is true, but that’s my point.”

It was a good point, because we are spending more and he would have spent less. So why on earth call an Alice in Wonderland Opposition day debate condemning levels of spending in the NHS when he has so clearly put it on the record that he wanted that spending to be less?

[Mr Graham Stuart (Beverley and Holderness) (Con)]

Does my right hon. Friend agree that it is disingenuous, should it be allowed by the Deputy Speaker to say that, of the shadow Secretary of State and Labour Members—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We are not going to be disingenuous, are we? We are going to be friends together, and I am sure that a good experienced Member like you, Mr Stuart, could word it better.

[Mr Stuart]

Thank you, Mr Deputy Speaker, for that correction, which I required. Obviously, it is an inadvertent tendency towards disingenuousness on the subject. I would like to apologise for pointing out, on behalf of patients right across the country, that for the Opposition to have a debate on health funding, when they were proposing to cut it—when they are actually cutting it in Wales—and when productivity fell, is the height of hypocrisy.

[Mr Deputy Speaker]

Order. I do not think we can have “hypocrisy” either, so we will have the Secretary of State instead.

--- Later in debate ---

[Dame Joan Ruddock (Lewisham, Deptford) (Lab)]

Today’s debate centres on the Prime Minister’s broken promise to protect the NHS, which was expressed as a commitment to increase spending on the NHS year on year. That is not the only promise that he made. In opposition, he spoke passionately about retaining essential local services and named my local hospital, Lewisham, as one of the 29 hospitals that he would personally defend. Today we can offer him and the Secretary of State for Health that opportunity. The bottom line for NHS spending has to be the provision of safe, quality health care that meets the needs of the local population and is free at the point of need. Nothing is more important to the vast majority of our people.

The four tests that the Government have set for any local reorganisation proposals are: that they should have the support of local GPs; that they should have strong public and patient engagement; that they should be backed by sound clinical evidence; and that they should provide support for patient choice. Not one of those criteria has been met by the current proposals for Lewisham hospital by the trust special administrator.

[Mr Graham Stuart]

The right hon. Lady is speaking movingly about local services. Does she welcome, as I do, the £12.5 billion increase proposed for the NHS budget during this Parliament? Does she disagree with the right hon. Member for Leigh (Andy Burnham), who believes that such increases are irresponsible?

[Dame Joan Ruddock]

If the hon. Gentleman will be patient, he will discover that I find it impossible to see the increase. What I see on the ground are cuts, cuts, cuts. That is what I want to speak about today.

As I was saying, not one of those criteria is met by the trust special administrator’s proposals for Lewisham hospital. The TSA was appointed in July by the Secretary of State for Health to sort out the considerable financial problems of the neighbouring South London Healthcare NHS Trust. His remit required him to find tens of millions of pounds of savings from the services provided by the trust’s hospitals in Woolwich, Farnborough and Sidcup. That could not be done, so the TSA’s response was to grab a successful, solvent and highly regarded hospital, Lewisham, and propose to destroy it to raise money from the sale of two thirds of the site currently occupied by the hospital, a fact that was not even mentioned in the consultation document.

--- Later in debate ---

[Mr Dorrell]

I agree completely with the hon. Gentleman’s characterisation of the challenge. I was looking forward to him congratulating the Government on taking a step in the right direction, although it is not a total solution, by investing in prevention some of the resources in the health care. [Interruption.] The hon. Gentleman indicates that it is only a little and that it should be more.

We need to look across the statutory divide that reflects history, but not the demands of today’s generation of patients. The key thing that we must recognise in the debate about health and care is that we have inherited a system, which all of us have supported through most of its history, that is built on the assumption that the typical patient will be restored to good health. In Bevan’s day, that was true of the typical patient in the health and care system, but it is not true of the typical patient in today’s system. The majority of the resources in today’s health and care system go towards delivering care to people who will not be restored to full health. That, not surprisingly, requires a different set of institutions, shaped in a different way from the institutions that we have inherited from history.

The challenge that faces all of us in this House who care about the health and care system is not to protect the different bits of the system as though they were listed buildings, but to change the system so that it uses today’s technologies to meet the needs of today’s patients. That is the core challenge that faces my right hon. Friend the Secretary of State and his colleagues and, if I may say so, the right hon. Member for Leigh and his shadow ministerial colleagues.

[Mr Graham Stuart]

Will my right hon. Friend give way?

[Mr Dorrell]

If my hon. Friend will forgive me, I will not.

For the second half of this Parliament, we could have a reprise of the first half and we could trade party political slogans about a system that increasingly thinks that the political debate has nothing to do with it, or we could engage with the people who understand what real life feels like on the front line of the system, which has been described by one or two Opposition Members, and we could show that we in this House support the need for change in order to use taxpayers’ resources to meet taxpayers’ health and care needs. That is the real challenge that faces the House this evening.

--- Later in debate ---

[Mr Barron]

I recognise that there has been underspend, but I take this debate, and the debate we had running up to the general election, a bit more seriously. The chairman of the UK Statistics Authority said that there had been an underspend, and what we have just heard is not true. As my right hon. Friend the Member for Leigh (Andy Burnham) said, the Conservative party manifesto stated:

“We will increase health spending in real terms every year.”

[Mr Graham Stuart]

Will the right hon. Gentleman give way?

[Mr Barron]

I will give way in a few minutes. When the Conservative party was in opposition, the current Prime Minister said in 2009:

“With the Conservatives there will no more of the tiresome, meddlesome, top-down re-structures that have dominated the last decade of the NHS.”

I want to keep reminding hon. Members of that because, as my right hon. Friend the Member for Leigh pointed out, we may be able to take £20 billion out of a budget over four years—that is a big ask and has never been done anywhere in the public or private sector—but to do it while we are also having mass reorganisation is creating chaos in the health service. I will refer to what is happening in my local health service in a few minutes.

In 2007 the right hon. Member for South Cambridgeshire (Mr Lansley) was shadow Secretary of State for Health, although he has now moved to Leader of the House. He said that the NHS needed

“no more top-down reorganisations.”

Indeed, in terms of expenditure the coalition agreement stated:

“We will guarantee that health spending increases in real terms, in each year of the Parliament, while recognising the impact this decision will have on other departments.”

It also stated:

“We will stop the top-down re-organisations of the NHS”

so we can take that with a pinch of salt as well.

[Mr Graham Stuart]

rose—

[Mr Barron]

I will give way to the hon. Gentleman before I move on to what is happening to the NHS in the real world.

[Mr Stuart]

Like my right hon. Friend the Member for Charnwood (Mr Dorrell), the right hon. Member for Rother Valley (Mr Barron) is a former distinguished Chairman of the Health Committee. My right hon. Friend rightly said that spending on the NHS is broadly flat, and that the most important question we should be debating, rather than scoring points over 0.1% of spend, is how to use the money most effectively. Does the right hon. Gentleman agree with that, and that we must look at the allocation of spend around the country? I represent a rural area and it does not seem as if funds are fairly allocated now.

[Mr Barron]

The issue of allocation has been looked at by many Select Committees, including by the Health Committee when I chaired it in the last Parliament. We did not find the level of unfairness that people, particularly those from rural areas, used to say there was. We looked for it but we did not find it.

Let us look at what is happening in the real world. My local Rotherham hospital foundation trust is not a bad hospital trust in any way and scores quite well in many areas. It received foundation trust status a number of years ago, and when this Government took office, it is fair to say that the efficiency factor was there already. On 16 March 2011 the trust announced that more than 60 jobs were to be axed at Rotherham general hospital, and confirmed a potential reduction of 62 posts in medical and surgical areas. Earlier this year on 6 March 2012, the local BBC announced that more than 70 NHS staff were facing the threat of redundancy, and the trust is seeking to save about £4 million. On 26 October 2012, an internal report given to the local media stated that the trust now intends to cut 750 jobs—about 20% of its work force—by 2015.

The NHS trust said that it needed a smaller hospital with substantially fewer beds and a smaller work force to save £50 million over the next four years. The internal report—aptly named, “Creating Certainty in an Uncertain World”—said that it was necessary to save £50 million from the £220 million budget before 2015 to meet Government targets. That was confirmed by the trust in a press release.

On 5 November 2012, the chief executive of the trust said that it would show staff the plans and invite them to come back with alternative views on how things might be done differently. The trust stated:

“We’ve made it very clear that there may have to be redundancies, but to be honest with you until we have gone through the process, I don’t know how many we will be able to lose through natural turnover and how many will have to be made redundant.”

What type of planning is there in any of this when we have such a situation in a district general hospital on which about 80% of my constituents rely if they have to go into secondary care?

On 20 November 2012, the chief executive announced his retirement. On 3 December 2012, the hospital announced that staff will be informed about the decision to postpone the formal consultation launch into work force restructuring. It went on:

“We realise this an anxious time for all members of staff, but it is imperative that we do what is right for the Trust, our staff and our patients. This means that we need to take more time to ensure our workforce proposal is exactly what the Trust requires and we anticipate the launch to take place later in the month.”

On 7 December 2012—last Friday—a headline in the local newspaper stated that the trust had recently engaged the services of a director of transformation on a time-limited basis. The acting chief executive said:

“It is important that the trust acts quickly to take the action required to safeguard the future clinical and financial sustainability of the Trust. This appointment, which was made after a competitive process, is required to provide additional expertise and impetus to the changes we need to make, whilst allowing others to remain focused on delivering the healthcare services that the people of Rotherham need and deserve.”

I do not stand here and support the way the NHS has been structured now or in the past, and I have been critical about many areas of that. I agree with the chief executive of the NHS, David Nicholson, who said at the NHS confederation conference this year:

“We need to change the model of care to one which supports patients and focuses more on preventing ill health from happening in the first place...and move away from the default position of getting someone into a hospital bed.”

At the same conference the then Health Secretary said that closure decisions were not an issue for national politicians, and my right hon. Friend the Member for Leigh said that the current Health Secretary said very much the same thing—“It’s nothing to do with me, guv.”

Let me say to the Minister, and other hon. Members who have made relevant interventions, that if changes and reconfigurations inside the national health service are getting better care to more patients, that is fine. However, the chaos in my local health service is about cutting back and saving money. I have played an active role in health care in my constituency over many years and, as far as I know, there has been no debate with local Members of Parliament, patients, patient groups, local doctors or people engaged in health provision in Rotherham. There have been no discussions whatever about reconfiguring the district general hospital to improve the position of patients and of the people of Rotherham and the surrounding area. Instead there is a drive to save money, which is creating chaos in my local health service.

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[Andy Sawford]

Will the hon. Gentleman accept, though, in the interests of being transparent with the public, last week’s letter from Andrew Dilnot, the chair of the UK Statistics Authority?

[Mr Graham Stuart]

Move on.

[Andy Sawford]

The letter stated unequivocally that

“we would conclude that expenditure on the NHS in real terms was lower in 2011-12 than it was in 2009-10.”

Until both Government parties acknowledge that truth, which independent experts have told us about, they will not have any credibility in health debates.

Business of the House

Graham Stuart Excerpts

Thursday 6th September 2012 Commons Chamber

[Mr Lansley]

The hon. Lady will have an opportunity to raise that issue during questions to the Secretary of State for Work and Pensions next Monday.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I, too, welcome the new Leader of the House, who I am sure will do an excellent job. May I take him back to his old brief for a moment, and ask for a debate about the gross distortions in health care funding that we inherited from the last Government? For instance, in Dorset, which I believe has the largest elderly population in the country, £4,000 is being spent on each cancer patient, while in Tower Hamlets, which contains very few elderly people, the figure is £13,000. We have a grossly distorted inheritance from Labour. In the name of deprivation, Labour distorted health funding and cheated people of the health care that they deserve.

[Mr Lansley]

A consultation is taking place on the mandate of the NHS Commissioning Board. It will deal with, among other topics, the board’s responsibility to allocate NHS resources on the basis of equal access for equal need. If my hon. Friend wishes to make his points again, the board will be able to take them into account when it receives recommendations from the Advisory Committee on Resource Allocation.

National Health Service

Graham Stuart Excerpts

Monday 16th July 2012 Commons Chamber

[Andy Burnham (Leigh) (Lab)]

I beg to move

That this House regrets the growing gap between Ministers’ statements and what is happening in the NHS; notes mounting evidence of rationing of treatments and services by cost, despite Ministers’ claims to have prevented it; further regrets the increasing number of cost-driven reconfigurations of hospital services, despite the Coalition Agreement’s promise of a moratorium on changes to hospital services; further notes growing private sector involvement in both the commissioning and provision of NHS services, contradicting Ministers’ claims that the NHS reorganisation would not increase levels of privatisation; recognises that, according to the Government’s Public Expenditure Statistical Analyses figures, actual Government spending on the NHS in 2011-12 fell by £26 million, the second successive real-terms reduction in NHS spending, following a reduction of £766 million in the Government’s first year in office, in breach of the commitment in the Coalition Agreement; believes the Government’s decision to reorganise the NHS has distracted its focus from the financial challenge, with seven out of 10 acute hospital trusts in England missing savings targets in the first half of 2011-12; calls on the Government to take action to prevent rationing by cost in the NHS, based on the evidence presented; and further calls on the Government to honour pledges on NHS spending in the Coalition Agreement, and the commitment that future savings will be reinvested into the NHS front line, and to return at least half of the underspend to the Department of Health budget.

The year 2011 was the first full year of the coalition Government and the year of the biggest ever fall in public satisfaction with the national health service. As I shall set out, those two facts are not unconnected. The NHS in England is reeling from the Government’s catastrophic decision to reorganise it at a time of huge financial pressure. Warnings by Opposition Members and others during the passage of the Health and Social Care Act 2012 of a postcode lottery, of destabilised hospitals and of increasing privatisation are, sadly, beginning to materialise.

For the coalition, attention has moved to other battles—more pressing priorities—but for the NHS the moment of greatest danger is now, as the unstoppable force of reorganisation hits the immovable object of the financial challenge. That is why the Opposition make no apology for introducing this debate, or for bringing the House’s attention back to where it should be: our country’s most important public service and the struggle it faces.

I am grateful for the Secretary of State’s letter—[Interruption.] I can hear him mumbling away on the Government Front Bench. I would have thought the debate would justify his attention, as it justifies that of the Minister of State, the right hon. Member for Chelmsford (Mr Burns). The Opposition have introduced this debate to support NHS staff. We thank them for what they do. They have a huge capacity to deal with whatever is thrown at them, but they have been set mission impossible by the Government. One can only wonder how they felt on hearing the news that the Deputy Prime Minister had the chance to stop this reorganisation but chose to prioritise House of Lords reform. A million hearts will have sunk.

It was not just the Government’s decision to reorganise that was wrong; the way they have gone about it was wrong as well.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The right hon. Gentleman will know that the Chair of the Public Accounts Committee said that productivity fell continuously for a decade under the previous Government. Does he regret that and recognise that radical change is required to get the productivity improvements this country desperately needs if we are to be able to afford the NHS we all want?

[Andy Burnham]

I am afraid the hon. Gentleman is out of date, because the figures cited by the Government are wrong. NHS productivity was improving by the time Labour left office. The independent and authoritative Commonwealth Fund pronounced the NHS the most efficient health care system in the world in June 2010. That was the legacy of the Labour Government, which the Conservative party is putting at risk.

As I have said, it was not just the decision to reorganise that was wrong; the way the Government have gone about it is also wrong. Before the ink was dry on their White Paper, Ministers set about dismantling existing NHS structures before the new ones were in place. That is a dangerous move at any time, but disastrous at a moment of financial crisis.

We have therefore had drift in the NHS: a loss of focus at local level and a loss of grip on the money just when it was most needed. At a stroke, the Government demoralised the very work force who would be crucial to managing the transition, with primary care trust managers dismissed as worthless. Experienced people left in droves. Those who stayed hoping for jobs in the new world were issued with scorched earth instructions: “Get on and do the unpopular stuff now—the rationing and the reconfiguration—so the new clinical commissioning groups don’t have to.”

We can now see the consequences across England: brutal, cost-driven plans for hospital reconfiguration being railroaded through on an impossible timetable without adequate consultation; walk-in centres being closed left, right and centre; and people left in pain and discomfort, or facing charges for treatment, as PCTs introduce restrictions on 125 separate treatments and services.

--- Later in debate ---

[Andy Burnham]

rose—

[Mr Graham Stuart]

rose—

[Mr Burns]

I will give way to the right hon. Gentleman and then to my hon. Friend, but then I will make some progress.

[Mr Burns]

What the right hon. Gentleman rather cunningly does not mention—[Interruption.] I am answering the question, if the hon. Member for Copeland (Mr Reed) can just keep quiet for a second. The right hon. Gentleman says that the NICE guideline refers to a BMI of 40, and that is absolutely correct, but I point him in the direction of one area in central London that does not go by that guideline, because it uses a BMI of 35, which is lower.

[Mr Graham Stuart]

Is my right hon. Friend as confused as I am by the Labour party’s policy? The right hon. Member for Leigh (Andy Burnham) could not explain where public health would go; he wants to repeal the Health and Social Care Act 2012, although he wants the services to be shaped as the Act says; and on funding he said in June 2010:

“It is irresponsible to increase NHS spending in real terms”.

That is the Labour party’s policy: it is chaotic and makes no sense. Can my right hon. Friend please tell us whether he sees more sense in it than I do?

[Mr Burns]

I am afraid that I cannot help my hon. Friend, because the policy is contradictory and does not make sense.

The right hon. Gentleman talks about repealing the 2012 Act, which includes the clinical commissioning groups, but if he abolishes them there will be no other mechanism from 1 April next year to commission care for patients, so there will be no one available to commission care for patients, which seems stunning.

The right hon. Gentleman talks about funding, and his quotations—my hon. Friend the Member for Beverley and Holderness (Mr Stuart) mentions one—are quite clear: he disapproves of giving real-terms increases in funding to the NHS. In Wales, the Welsh Labour Government have taken him at his word and are cutting spending, which we are not very enthralled by.

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[Mr Stephen Dorrell (Charnwood) (Con)]

It is a pleasure to follow the hon. Member for Easington (Grahame M. Morris), who is a member of the Health Committee. I hope he will forgive me if I do not follow him down the specialist course of radiotherapy services.

I want to address my remarks primarily to the shadow Health Secretary and to begin with an echo from a different era. When I first came to the House, there used to be something called “Whitelaw’s law”, which, obviously, referred to the late Willie Whitelaw. “The more he blusters,” we used to say, “the less he believes it.” The shadow Health Secretary gave us an Olympic-class demonstration of the principle of Whitelaw’s law. He blustered from the Dispatch Box and got himself into several dead ends. It became clear that he did not really believe that he had answers for the challenges facing the NHS.

I refer the right hon. Gentleman to a point that he made and which I agree with. The most important statement about the current state of the health service was not made by him as Secretary of State—and, with great respect to my right hon. Friend the Secretary of State, it was not made by him either. It was made by Sir David Nicholson in his annual report to the national health service in May 2009, and it was endorsed by the right hon. Gentleman. Sir David said, looking forward to the period of this Parliament:

“we must be prepared for a range of scenarios, including the possibility that investment will be frozen for a time. We should also plan on the assumption that we will need to release unprecedented levels of efficiency savings between 2011 and 2014—between £15 billion and £20 billion across the service over the three years.”

I agreed with what the shadow Secretary of State said about the importance of what we, in the Health Committee, dubbed “the Nicholson challenge”. I believe that that is the central challenge facing the national health service. The sadness in this debate was that the right hon. Gentleman gave us no hint as to how he believes the health service should address that central challenge about which he and I agree.

[Mr Graham Stuart]

Meeting that challenge, and dealing with the challenges in the NHS generally, would be all the more difficult if one believed, as the right hon. Member for Leigh (Andy Burnham) does, that real-terms increases in investment in the NHS are irresponsible.

[Mr Dorrell]

I agree with my hon. Friend, but let us not go down that route. At the time when Sir David Nicholson was writing, the Labour Government were contemplating the possibility not of a real-terms freeze, which is in effect what is planned under the coalition, but of a cash freeze, which would have been substantially more difficult to achieve.

The main issue now is how we deliver services that meet the demands placed on the system against the background of a resource allocation to the health service that was always going to be dramatically less generous than it was during the earlier years of the Labour Government. We heard from the right hon. Gentleman a commitment that an incoming Labour Government would go through a clean-sheet-of-paper redrawing of the map—

--- Later in debate ---

[Andrew Gwynne]

I will not, as I do not have time now.

In the Secretary of State’s annual report to Parliament, he dismissed restrictions on bariatric surgery as “meaningless” and continued to say:

“Time and again, he says”—

that is my right hon. Friend the Member for Leigh (Andy Burnham)—

‘“Oh, they are rationing.’ They are not”.—[Official Report, 4 July 2012; Vol. 547, c. 923.]

But Opposition Members all know the truth. Aside from the evidence presented by the Labour party and the GP magazine, verified by Full Fact, primary care trusts acknowledge that they are restricting access to bariatric surgery. The National Institute for Health and Clinical Excellence recommends surgery for anyone with a body mass index of 40 or a BMI of 35 and co-morbidity. Many PCTs, including NHS Stockport in my own constituency of Denton and Reddish, impose additional restrictions.

Recent freedom of information requests of PCTs and shadow clinical commissioning groups across England have revealed that 149 separate treatments, previously provided for free by the NHS, have been either restricted or stopped altogether in the last two years, with 41 of those being entirely stopped in some parts of the country. This provides the clearest evidence yet of random rationing across the NHS and of an accelerating postcode lottery, which appears to be part of a co-ordinated drive to shrink the level of NHS free provision. From our study, it is clear that many patients are facing difficulties in accessing routine treatments that were previously readily available, and there is evidence that some patients are being forced to consider private services in areas where the NHS has entirely stopped providing the treatment.

Of course, there has been a real reduction in the number of nurses working in the NHS. The Government have claimed that there are only 450 fewer nurses, and at Health questions last month, the Minister, the right hon. Member for Chelmsford said that the figure was “nowhere near 4,000”. But now we all know the truth: figures for the NHS work force in March 2012 showed clearly that there are 3,904 fewer nurses than in May 2010. We have seen broken promise after broken promise, including on reconfigurations.

It was this Government who, when in opposition, spent millions of pounds during the general election putting up posters throughout the country reassuring the electorate that under the Conservatives there would be a moratorium on hospital and A and E closures. Indeed, in opposition, they pledged to overturn some very difficult reconfiguration decisions taken by the previous Labour Government. Yet, as we have seen, the moratorium has not materialised, and there is now evidence of major changes to hospital services across the country.

It is worth remembering that the Prime Minister gave a firm pledge not to close services at Chase Farm hospital, but in September 2011, this Secretary of State accepted the recommendations and approved the downgrading and closure of services at Chase Farm. And there are several others, such as the Hartlepool, the King George hospital in Ilford, the East London, the Trafford General, the North London, the St Cross in Rugby and, as we have heard today, the West London, too, that have either closed or are set to close. What is becoming clear is that when it comes to reconfiguration, Ministers are hiding behind their new localism and are happy to blame the soon-to-be-abolished structures for the forthcoming closures.

In the brief time remaining, I want to deal with Government spending on the health service. As we have learned, actual Government spending on the NHS in 2011-12 fell by £26 million.

[Mr Graham Stuart]

Will the hon. Gentleman give way?

[Andrew Gwynne]

No, I will not.

This was the second successive real-terms reduction in NHS spending, following a reduction of £766 million in the Government’s first year in office. This is in clear breach of the commitment given by the Conservatives and Liberal Democrats in their coalition agreement.

Of course, a long line of professionals have come, one after the other, to express their concern about the damage that will be done to the health service if hospital is pitted against hospital, and doctor against doctor. That is where we start. The Health and Social Care Act 2012 now allows hospitals completely to change character over time. The Government have essentially set everybody on their own. Hospitals are being told, “You’re on your own. There’s no support from the centre any more; no more bail-outs.”

We know that there are problems with the NHS meeting efficiency targets. Indeed, a survey of NHS chief executives and chairmen found that one in four believe that the current financial pressures are the

“worst they have ever experienced”,

with a further 46% saying they were “very serious”. More than half of foundation trusts missed their savings plan targets, according to Monitor’s review of the last financial year.

Ministers have said that every penny saved will be a penny reinvested to the benefit of patient care, but in reality £1.4 billion of the £1.7 billion not spent by the Department of Health has been returned to the Treasury—more broken promises. It is therefore clear for all to see that there is an increasing gap between what the Government are saying and what is going on in the NHS, and the experience of ordinary patients on the ground.

The Government have increasingly broken their promises on the NHS. They promised no top-down reorganisation and a moratorium on hospital closures and they promised to maintain spending levels in the NHS. They have broken all those promises—they are the three biggest broken promises in the history of the NHS. There is clearly a yawning gap between what the Prime Minister and others say and the reality of patients’ experience.

During the general election, the Prime Minister said:

“I’ll cut the deficit, not the NHS.”

It is now clear that the Government are cutting our NHS. The NHS is important for the people of our country, and they deserve better. I commend the motion to the House.