Infrastructure

Jim Shannon Excerpts

Tuesday 12th February 2013 Commons Chamber

[James Morris (Halesowen and Rowley Regis) (Con)]

Unusually, I would like to start by thanking the Leader of the Opposition for choosing the subject of this debate, even if the text of his motion is fundamentally flawed. In the language of “Yes Minister”, it is extremely courageous of the Opposition to choose a debate on a subject on which their own record is so weak, particularly when they would have cut investment by 50% had they won the last election. I agree with the Leader of the Opposition that investment in infrastructure is vital to the economy’s long-term prosperity. It is also vital that we take effective action today to address the infrastructure deficit left by the previous Government.

There is no question that poor infrastructure discourages inward investment. As Professor Dieter Helm wrote towards the end of the last Labour Government in 2009:

“Few would choose to locate in Britain because of its infrastructure”.

He went on to describe it as

“not fit for the digital age”.

Bringing our infrastructure up to a standard that businesses and residents should be able to expect is essential if we are to create the flexible and successful economy on which prosperity will depend.

One of the most damaging legacies the Government inherited was the unsustainable imbalance in the economy that had built up over previous decades. We cannot build the prosperity we need based on London and the south-east alone and we cannot unlock the potential of the whole country without the modern infrastructure that makes doing business across the country and around the world as straightforward as it can be.

The prosperity gap between the black country, part of which I represent, and the south-east grew out of control under the previous Government. Gross value added per head in Dudley and Sandwell fell from 88% of the national average in 1997 to just 74% in 2008. World-class transport infrastructure such as the HS2 scheme will play an important role in closing that gap. We need to make it as easy to do business with Frankfurt, New York and vital emerging markets from our regional cities as it is from the City of London.

Labour left a rail system rapidly approaching capacity. Network Rail forecast that the west coast main line would be completely full by 2004. The inter-city rail network would be unable to cope without the additional capacity that will provided by HS2, and I am proud that the Government are taking the bold steps necessary to take that scheme forward. Businesses thinking of locating in my constituency know that they will have regular connecting services from the three main line stations in my constituency to the HS2 terminal in Birmingham, offering fast routes to London and later to Manchester, Leeds, Edinburgh and Glasgow.

I would like to make one representation to the Minister. That investment, which is so important to bringing our largest cities together, must be complemented by a new focus on the importance of our regional airports. Whatever the rights and wrongs over the debate about expanding Heathrow, there can be no doubting the benefits of making better use of existing and potential capacity at airports outside London. Building a second runway at Birmingham airport, for example, would increase spare capacity to 50 million passengers per year, creating or sustaining 50,000 jobs. Transforming Birmingham, Manchester and other regional airports into additional hub airports would transform our regional economies and relieve some of the pressure on Heathrow.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Gentleman think that we also need to increase the turnover and capacity of regional airports in Scotland and Northern Ireland, particularly Aldergrove, Belfast city and Londonderry airports, in order to strengthen the economy across the whole of the UK?

[James Morris]

The hon. Gentleman makes a very good point. We need to encourage greater use of capacity for all our regional airports, as part of the vital effort to rebalance the British economy in the way I described.

Transport infrastructure is not only vital to business, but essential to people’s everyday lives. As the Minister said, the previous Government explicitly set out to price people out of their cars in order to reduce demand for investment in road infrastructure. Instead, we need to look at how we can make our roads better. My constituents are pleased that the Government are investing more in local roads through the highways maintenance block grant to councils. Unfortunately, Labour’s record in local government highlights the hypocrisy of the Opposition’s motion. People in Dudley borough have benefited from £2 million of additional investment in local road maintenance. Unfortunately, the new Labour administration is cutting the road maintenance budget by the same amount, pound for pound, as the additional funding from the Department for Transport. Labour in local government has shown time and again that, as far as it is concerned, infrastructure spending is a very low priority, but residents know that we cannot build a strong local economy with third-rate local infrastructure.

Financial Services

Jim Shannon Excerpts

Wednesday 6th February 2013 Commons Chamber

[Greg Clark]

The hon. Gentleman makes an important point that will be considered by the commission, which is looking into the culture. It is important that banks recognise that they exist to serve their customers—that is their purpose and the reason why they operate. My recent experience of speaking to some bank boards leads me to believe that they recognise the commercial imperative for that, but he makes a suggestion that I am sure our colleagues will consider.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister firmly for his statement. In particular, I thank him for the £35 million of fines imposed on the banks that will go directly to the armed forces community; £5 million will go to the Imperial War Museum. Will he confirm the criteria by which charity groups such as the Royal British Legion, the Army Benevolent Fund, SSAFA and Help the Heroes can qualify for financial assistance through the fines on the banks?

[Greg Clark]

As I said in my statement, we will make further announcements on the disbursement of the funds, but they have been earmarked and reserved for the military community.

Taxation (Living Wage)

Jim Shannon Excerpts

Tuesday 22nd January 2013 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Harlow (Robert Halfon) on bringing this matter to the House for consideration. I want to give a Northern Ireland perspective and to discuss the importance of small and medium-sized businesses, particularly for my constituency, but also for constituencies across the rest of the United Kingdom.

Times are tough for many families throughout the UK. They face stagnating wages, coupled with rising costs. Many small businesses are struggling and cannot afford annual pay rises. The question in many families is, is it better to be in or out of work? The cold reality of the market out there has pressed many of them to make a decision about that.

The Government have shown that they are attempting to address the situation through the uplift of the personal allowance threshold. That should mean that approximately 250,000 workers on low pay no longer have to pay income tax, which has to be good news. The same uplift will also mean that most basic and higher-rate taxpayers will pay £47 less tax from April, after the Chancellor increased their tax-free limit to £9,440 a year.

The Chancellor has indicated that the steps the coalition has taken have increased the number of low earners lifted out of tax to 2.2 million. Again, that is good news, and things are going the right way. The amount of tax paid by people on the minimum wage will have been cut in half by next year. From next April, the personal allowance will rise by a further £235, so the total increase next year will be £1,335—the highest cash increase ever. Over the past two years, the Government have announced total increases to the personal allowance of £2,965, with the aim of reaching a £10,000 allowance in this Parliament.

I read the report of the debate about paying a living wage, which would help many people. Northern Ireland has the highest proportion of people earning below the living wage in the UK, at 24%, and is followed by Wales, at 23%. The lowest proportion of sub-living-wage earners is in London and the south-east; in both cases, it is 16%. However, the number of people affected in London is 570,000. In the north-west, it is also 570,000, while in the south-east, it is 530,000. In terms of the numbers, therefore, those are the most affected areas, but they do not compare with Northern Ireland in percentage terms.

A study showed that workers in the hospitality industry are the worst affected, with 90% of bar staff, and more than four out of five waiters and waitresses, or 85%, paid less than the living wage. The study also showed that 75% of kitchen and catering assistants, as well as launderers and dry cleaners, were paid less than the living wage. Similarly, 70% of cleaners and florists received less than the living wage. Clearly, those figures are of some concern.

[Mr Jim Cunningham]

There has been a whole range of price increases on things such as travel, as well as benefit cuts. In tax terms, would the reintroduction of the 10p tax rate offset that and take people to the level of the living wage?

--- Later in debate ---

[Jim Shannon]

I wish I knew how that would work. I cannot answer that question; the person who can is perhaps the Minister. I hope that that would happen, but I cannot say that it definitely would. Perhaps the Minister can comment on that when he responds.

Small and medium-sized businesses make up more than half the UK’s business population. As such, they are not a minority, and they should not be overlooked or ignored. That is what I want to focus on. The Federation of Small Businesses has said that Northern Ireland has the highest concentration of SMEs—companies with fewer than 250 employees—in the UK. There is not one business in my constituency that employs more than 250 people, so SMEs are very important for the people I represent. Those SMEs account for 81% of all private sector employment and 79% of all private sector turnover. In contrast, less than 1% of the private sector consists of large firms, which account for less than 20% of total employment and 21% of turnover.

Small businesses employ 65% of the private sector work force in Northern Ireland, compared with 62% in Wales, 48% in Scotland and 46% in England. Small businesses account for a greater proportion of turnover, contributing 60% of all private sector turnover, which is, again, higher than in Wales, at 46%, in Scotland, at 40%, and in England, at 36%. Some 54.5% of gross value added was produced by small businesses, which are those with nought to 49 employees, while a further 27% was produced by medium-sized enterprises, which are those employing between 50 and 249 people. In total, SMEs accounted for 81.6% of GVA.

Those figures indicate the importance of SMEs, which are critical for the future, particularly in my constituency. The Prime Minister has indicated that he wants to build up the private sector, but we need to do that before we try to downsize the pubic sector. The statistics show how essential those businesses are to the economy. I wonder how many of them could afford, in these difficult days, to up their wages bill when they are already struggling to stay afloat.

This year will be critical for a great many industries, in my opinion and the opinion of many others more expert than I am. I know of more than one business in my town that has downgraded from two shops to one, but which has kept the same staffing levels in the hope of reducing overheads and not having to make staff redundant. For the owner, the most important thing is not to make staff redundant—not to send people to the unemployment queue. He cares about his staff and does not want them to be out of work. However, he has children to feed, as they do, and if we asked him to pay his eight staff more wages, he could not. He would either have to lay some off, or close altogether. I know that that story is being replicated throughout the UK, as even businesses that were thought to be established call in the administrators and close their doors. Can we honestly expect the small retailer to take up the slack? We hope that he or she can do it, but we are not sure.

Can we force the onus of economic recovery on to shop owners, or does it lie in this place? I believe it lies in Parliament and with the Assemblies. We must encourage small businesses to pay their staff what they can; but there is also a need for decisions for growth and the encouragement of business investment in local economies, and for the creation of employment and spending power. A living wage is a great target to aim for, but that will be brought about not through legislation but through good governance from the House and the devolved Assemblies; the Northern Ireland Assembly has a particular role to play. We need to focus on those issues, and when economic conditions are right—which we hope will be soon—we can expect employers to play their part in making things better for their employees.

Outsourcing of Public Services

Jim Shannon Excerpts

Tuesday 18th December 2012 Westminster Hall

[Chris White (Warwick and Leamington) (Con)]

I called for a debate this afternoon on the outsourcing of our public services. I am grateful to Social Enterprise UK, in particular Celia Richardson, for putting together the report, “The Shadow State”, and for raising this important matter and providing fresh insight.

Although politicians can easily become fixated on the high-level discussions in politics, we need to remember that one of the most important roles of government for most people is the provision of high-quality, front-line public services. Over the past 200 years in Britain and throughout the world, Government have become more and more central to the delivery of services vital for millions of people: health care, child care, policing, prisons, helping people back to work, education and transport are just a few of the areas that the public sector reaches. Since 1945, Britain has seen a vast centralisation of such responsibilities away from the local level and from independent organisations and towards central Government. In 2010 prices, the budget has gone from £234 billion in 1945 to £660 billion.

A large proportion of the budget has been spent on public services, and we have seen massive improvements in many areas. I am proud of some of the achievements that have been secured, but we face difficult economic times and cannot expect to keep spending large quantities of money in order to increase the quality of public services. The vast structures of the public sector, which were appropriate in the 1940s and ’50s, are now starting to struggle to deliver the improvements in services and the productivity increases that we need for the decades ahead.

Over the past 20 years, Governments of all colours have increasingly turned to the private sector for delivery of public services, in order to reduce costs and to provide better outcomes. Oxford Economics has estimated that the current outsourced market for public services has an annual turnover of £82 billion, representing 24% of the total spend on goods and services by public services. Rightly, therefore, in July 2011 the Government released their “Open Public Services” White Paper, which sought to lay out the future direction of public services through five key principles: first, wherever possible to increase choice; secondly, to decentralise public services to the lowest appropriate levels; thirdly, to open public services to a range of providers; fourthly, to ensure fair access to public services; and, fifthly, to make public services accountable to users and taxpayers alike.

[Jim Shannon (Strangford) (DUP)]

Is the hon. Gentleman aware that a recent Confederation of British Industry report stated that more opportunity for private and independent sourcing of public services could produce savings of £22.6 billion, while maintaining the quality of service? Is that what we should be looking at?

[Chris White]

I appreciate both the point made by the hon. Gentleman and the CBI’s report. I will be coming to some of those issues later in my comments.

I support those five principles, which I am confident that Members in all parties support as well. The Government have been clear that they are seeking to increase the amount of public services delivered by independent organisations. Seymour Pierce has predicted that the value of the public services sector will increase to £140 billion by 2014. That is a huge amount of public money and, rightly, we should be concentrating on how that money is spent and on how we ensure maximum benefit for our community. A concern, however, is that the principles outlined in the “Open Public Services” White Paper, to make our public services more accountable, more transparent and more in the control of communities, have not been realised in practice.

One deep concern is explained in the Social Enterprise UK report, “The Shadow State”, which has highlighted a significant lack of transparency and accountability, with information from those delivering our public services hard to come by. It also highlighted the increasing dominance of our public services by a small group of large multinational businesses and the difficulties that small business, charities and social enterprises have experienced in accessing provision of our public services.

The Economy

Jim Shannon Excerpts

Tuesday 11th December 2012 Commons Chamber

[Ms Ritchie]

I thank the hon. Gentleman for his intervention. I agree that the banking regime in Northern Ireland is stringent at the moment. We have a unique situation in Northern Ireland. Some of the banking institutions are owned by the south of Ireland, but some have direct links to the Royal Bank of Scotland and Danske Bank. So there is that sort of mix as well. Suffice it to say that small and medium-sized enterprises are facing difficult economic challenges, and to have banks unwilling to lend or provide the necessary credit at this difficult time is not helping economic growth. That needs to be explored by the Treasury and, in the case of Northern Ireland, in some instances, directly with the Department of Finance in Dublin.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady think that one way of boosting the economy would be to encourage the construction industry, which, as all Members know, has had particular problems? Does she think that the banks should be more sympathetic to the construction industry in particular?

[Ms Ritchie]

I agree that the construction industry, along with agriculture and tourism, is a vital economic lever in Northern Ireland, but, owing to the economic challenges of the recession, many people employed in the construction industry have found themselves without work and many businesses have gone to the wall. They did not meet with a sympathetic reception from the banking institutions, but they need assistance because they are necessary to pump-prime our local economy.

The Chancellor’s welfare plans will remove more than £4 billion from the welfare budget by uprating benefits by just 1% a year until 2015. With a legacy of physical and social neglect from the troubles, this will remove the necessary level of support from many of our people and a substantial sum of money from the local economy. Instead of addressing their own shortcomings, the Government are vilifying the poor and those on welfare as a smokescreen for their own appalling economic record. That will place those most needy and vulnerable in the current economic climate in an even more precarious situation and will hurt not just the unemployed, but those who rely on in-work benefits. It is nothing more than a real-terms cut for those most in need by the same Chancellor who handed out a tax cut for the wealthiest in society at the last Budget. It would seem that some of us are more “all in this together” than others.

The autumn statement might have been politically more surefooted than the Chancellor’s last Budget, but I fail to see what it will do to address the core problems facing the economy. It might reassure some Tory voters here, but I do not think that my constituents or the people of Northern Ireland will find much to cheer about. I fear that we will be having this same debate, with similarly poor economic figures, come the next Budget.

Public Service Pensions Bill

Jim Shannon Excerpts

Tuesday 4th December 2012 Commons Chamber

[John McDonnell]

I fully concur with my hon. Friend. I received—perhaps he did too—an e-mail from Inspector Nick Smart, who wrote:

“I am a serving police inspector in West Yorkshire of 17 years. I am about to see my life plans thrown into chaos with the proposed pension changes, with my retirement age extended by at least two years plus a 20% cut in my lump sum—about £40,000—and a significantly worse annual pension.”

It is no wonder that people are demoralised and do not trust the Government. They thought there was at least a 25-year guarantee, but we now know that that is not the case, because the Government are giving themselves the power to change schemes at will in the future.

[Jim Shannon (Strangford) (DUP)]

The hon. Gentleman, like other hon. Members, will be aware of the indication that teachers will be asked to pay 50% of their contributions up until 2015, and they are not even safeguarded beyond 2015. Does he agree that, if the Government are not careful, they will create a breeding ground for discontent among teachers?

[John McDonnell]

Exactly, but I think it is across the piece. Whether or not we agreed with the last negotiations, or whether they were imposed or signed up to, at least some people felt there was some security for the future. People are becoming demoralised, which is why it is important that we insert in the Bill provisions for full consultation and agreement with organisations representing employees and for full openness and transparency. That is why new clause 3, moved by my hon. Friend the Member for Nottingham East, is critical. As has been said, at least in the private sector there is full display and transparency in what people sign up to, but there is no display or transparency in the public sector, particularly now that the Government have given themselves these powers.

--- Later in debate ---

[Sajid Javid]

I agree. All scheme members, one way or the other, should receive annual information. That is the type of amendment we will table in the other place. However, there are different types of members of schemes, such as deferred members and active members. That needs to be taken into account when they receive that information.

[Jim Shannon]

I seek clarification and perhaps also reassurance in relation to those who are members of small public bodies. They have been informed that their pensions will transfer to larger schemes where they feel that they will lose out more than anyone else. What assurance can the Minister give the House and people in small public bodies that their pension rights will be guaranteed or assured?

[Sajid Javid]

I thank the hon. Gentleman for the question. We will come to a related issue later, which may be a better point at which to discuss that.

We had a robust discussion of new clause 3. The Government have set out their commitment to retaining the fair deal, but reforming it. Staff who are transferred from the public sector to an independent provider will be provided with continued access to the public sector pension scheme. This commitment has been made on numerous occasions by my right hon. Friend the Chief Secretary, as my hon. Friend the Member for Bognor Regis and Littlehampton rightly mentioned in his contribution. It was announced on 20 December 2011 and confirmed in the Chief Secretary’s announcement on 4 July this year. We also reaffirmed this in our response to the fair deal consultation which was published on 19 November this year.

The Opposition say that the Government have not made a commitment to the fair deal in the Bill. That is not entirely correct. Both clauses 22 and 26 allow for the new fair deal policy to be implemented. The Bill has been deliberately crafted so that the new fair deal can be delivered under these provisions. Let me be clear. The current fair deal, which Members are rightly keen to retain, has never been statutory. The new fair deal does not need to be statutory to bind non-public sector providers to the policy. The contracts that independent contractors enter into when tendering will ensure that the fair deal is applied.

The right hon. Member for Wentworth and Dearne referred to my comments in Committee, and it is important to be clear. We are consulting on how the fair deal should apply to those employees who have already been transferred out under the existing fair deal, but we are not consulting on the commitment that we have already made, which is that public sector workers who are transferred out under the new fair deal will retain a right to public sector pensions. We are also consulting on what to do when an existing contract that has already been tendered out is retendered under the new fair deal. There is work to be done to determine how and when the new policy will be implemented. We want to be sure that the contracts put in place will safeguard the legal rights of employees and employers. As the Government, rather than the independent providers of the services, will be retaining the risk of providing these pensions, we need to get this right.

The amendment would also bind the local government pension scheme. However, the fair deal does not apply to staff transferred out of local government. It would not be appropriate to accept the amendment as the implications for local government and the LGPS need to be fully explored. This is work that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), is already doing. For all these reasons, we believe the amendment is unnecessary and would pre-empt the ongoing work on the local government scheme.

On amendment 11, we will no doubt look at Scotland in more detail later in the debate, but let me try to set hon. Members’ minds at rest on the issues raised in the amendment. Legislative competence for the local government pension scheme in Scotland sits with this Parliament. The approval of the Scottish Parliament is therefore not needed under the Sewel convention or the Scotland Act 1998 for primary legislation on Scottish local government pensions. This is a position accepted by the Scottish Government and emphasised by the Scottish Finance Minister on 28 November. He told the Scottish Parliament that the Bill does not contain any provisions

“over pensions for local government, the national health service, teachers or police and fire staff—that would trigger the Sewel convention.”—[Scottish Parliament Official Report, 28 November 2012; c. 14014.]

Extra-statutory Concession A19

Jim Shannon Excerpts

Tuesday 4th December 2012 Westminster Hall

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to serve under your chairmanship today, Mr Streeter. I can assure you that we are discussing a tax issue and not a road or an aeroplane, which is probably a relief to the Treasury Minister responding.

Several of my constituents who sought to make use of the A19 concession have expressed concerns after, in their view, being unreasonably denied. For the record, that is the concession whereby if a taxpayer has underpaid tax because the Revenue failed to use information that it was provided with in a timely way, it can agree not to collect that tax from the individual. That is particularly relevant when collecting that tax, which may cover several years, would cause hardship to the individual. The most severe cases I have seen are those involving pensioners who have been presented with a sizeable bill.

I want to raise three aspects this afternoon. The first is how HMRC currently applies concession A19 or, in many cases, does not apply it. Secondly, I wish to ask what an appropriate appeal or review process for those decisions might be. Thirdly, I will say a few brief words about HMRC’s consultation on changing the concession from next year.

The easiest way to illustrate my concern is to talk through the case of one of my constituents. I will not name him for confidentiality reasons, but he had a job working in a factory from 1997. In 2001, he started to receive an occupational pension from a previous job. Everything worked well, and his tax was collected accurately, his employer had a coding notice with his personal allowance, and his pension was taxed at the basic rate.

Everything worked fine for five years until June 2006 when, for reasons unbeknown to the Revenue and certainly to my constituent, it decided to change the tax code for the pension, effectively giving him a personal allowance on two sources of income. That went undetected until February 2011 when, following a reconciliation process, the Revenue sought to collect the tax from my constituent for the previous four tax years—a bill of £5,000.

The Revenue issued the demand to my constituent, and did not think to go after either his employer or the pension fund. I believe that the pay-as-you-earn regulations state that in the first instance the Revenue should go to the employer if it believes that it has misapplied the rules. It would be helpful if the Minister confirmed that that is his understanding of the process. It does not happen often, sadly.

My constituent eventually took advice from a local firm of accountants, which advised him that concession A19 might apply. However, the Revenue rejected that on a couple of occasions, and there is concern about the thoroughness of the review and the fairness of the summation of facts. It rejected the application because its only failing was that it had not reviewed forms P14 and P35 provided by the employer and the pension fund and realised that the personal allowance was being used twice. Its reason was that the purpose of the forms is not to inform the coding notice process, as required by the wording of statutory concession A19.

That logic is bizarre, because the best information that the Revenue receives to decide whether someone is paying the right tax is those two forms, which all employers must file within so many days after the year end, and I suspect that that is how the Revenue has reconciled people’s tax affairs manually in the past. I think it now uses the information electronically to make that reconciliation, so I struggle to see much logic in saying that the information about what an employee has earned in a year and what tax they have paid is not relevant to the coding process. That process is designed to find out what income and benefits someone has had in previous years, and to work out what tax they should pay in the next year and therefore what code they should have. The issue has been raised with the Minister by the Association of Taxation Technicians, the Chartered Institute of Taxation, and the Institute of Chartered Accountants in a letter that they sent him in August.

The Revenue’s other argument was that the taxpayer should have understood that the coding notices were wrong. That is even more bizarre, because it was arguing that my constituent had started his employment in 2005, not 1997, and that his employer had never told the Revenue that he was working for it, so it did not issue any coding notices. That was all complete rubbish, because he had been employed for much longer, and the employer had issued coding notices, which had been applied correctly.

It is strange that in its letter the Revenue said that my constituent should have been able to work out that he was receiving two personal allowances by comparing the one coding notice it thought he had with his payslip or P60. That was surprising. The Minister and I might just about be able to work out how our tax code has been arrived at, and to divide it by 10 and add a random letter at the end depending on whether we owe it money or not, but I suspect that when benefits are added the process is much harder, and it is not easy for an ordinary member of the public to work out what a coding notice means. The explanation of how various adjustments are calculated is not clear, and to expect someone to do that by working back from a tax code that they might spot on their payslip is somewhat unreasonable.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for highlighting this issue. As an elected representative, I have had to deal with several A19 concessions in the last few years. I have been successful with most of them, but the one thing that keeps coming through is that people are not aware of the concession. Does the he agree that HMRC should publicise it more?

A record is taken of telephone calls and registration in every case, and that should show that people have expressed concern over a period. That helps when someone applies for an A19 concession, and they may receive the concession and a reduction in payments. Some of the people I have dealt with owed £7,000 or more, which we got reduced.

[Nigel Mills]

I agree with most of what the hon. Gentleman says, and I will come to some of his points. My constituent was not as lucky as those he helped, because he had no idea that his tax affairs were wrong. He was receiving two sources of income, and tax was being taken from both, so he did not realise that a mistake had been made sometime during the process. One could argue that he should have realised that his income had increased slightly, but the impact was not hugely significant on a weekly or monthly basis. Such matters are complicated when personal allowances change every year, and recently they have rightly been changed by quite a lot every year. If someone’s income fluctuates because they are working overtime, they might not notice that their weekly pay is £25 different from what it would be if the tax was deducted correctly.

We must be careful about expecting people in this country who do not have to file tax returns, and who do not generally have dealings with the Revenue, to understand what the complicated bits of paper that come through their door mean. If we base a system on relying on people understanding, we must make sure that what they receive is clear and complete, so that they can work through the calculations and understand where they are wrong. That is not the case with the current coding notice.

My constituent’s advisers and I thought that his experience had met all the requirements for an A19 concession. It had continued for several years, and the fault was clearly not his but either his employer’s or, more likely, the Revenue’s because he had been in the same continuous employment for much longer than the Revenue seemed to realise. Even if HMRC thought it was the employer’s fault, it made no effort to make contact with that employer while it existed. Sadly, it ceased to exist in mid-2011, about six months after the issue came to light.

To the adviser, it looked as if the Revenue was just refusing to accept an A19 claim based on a new policy that it should resist more such claims. The purpose of the concession is to provide fairness in the system if something goes wrong for an innocent victim. Yes, they should have paid the tax and, yes, they have received money that they should not have had, but if that has gone on for several years there might be severe hardship if they were required to find that money several years later. I suspect that we all believe that that concession is right, and it is important that it is applied consistently and fairly, and that people understand when it should and should not be applied. I am not sure that that is the case now, and perhaps that is why the Revenue has considered redrafting the concession, although there is significant concern that the redrafting will not help the situation much, which I will come to.

If an individual goes to the Revenue and has their request turned down, they have almost nowhere to go. It does not count as a tax assessment in the Revenue’s view, so they cannot appeal through the normal tribunal system. The only option is to make a complaint and go to the adjudicator, but even that is not ideal, as the adjudicator is only allowed to make recommendations to the Revenue that are consistent with the law or its own internal policy. Unfortunately, I do not think that the Revenue has even published all its internal guidance, although I am aware that some freedom of information requests have been made for details of the grounds for refusing A19 claims. It is hard to think that there is much chance of success when someone’s only route can be turned down if it is inconsistent with guidance that they have not actually seen.

Does the Minister have any ideas on how we can end up with a proper independent review of some of these cases? R.E. Clark v. HMRC was a tax case in which Mr Clark tried to make a formal appeal based on the P800 assessment notice that he had received being some kind of informal assessment. Interestingly, at the first stage, the judge hearing the appeal refused to accept HMRC’s request to dismiss it out of hand. Probably luckily for Mr Clark—although it not so good for us—the case was settled out of court and we did not see how the tribunal would have taken it. This is an issue of fairness. The concession is a policy that we think should exist, and it is important that a clear, impartial review is available, so that when HMRC has perhaps not come to the right answer, a clear resolution can be found.

The final topic I want to raise in the time that I have left is the recent consultation, which was intended to make the issue clearer. In some ways, it is possible to become cynical after a few years of doing this; clarity appears to mean that a document goes from being two thirds of a side of paper long to more than three sides. Greater length may make things clearer but it can also add a lot more complexity, ending up with a lot of references that have to be chased around, and I am not sure that that makes things clearer.

The consultation raised a more fundamental concern, which was that the new words seem to restrict the application of A19 in future. It is not just a clarification but a restriction, and it seems to impose a duty on taxpayers to ensure that their tax code is correct and up to date, which implies a continuing duty for people throughout every tax year to ensure that nothing is changed, and that their car benefit has not gone up, or whatever else. That is an onerous position to put people in. We all hope that with real-time information and more regular reconciliations, we will not see the sort of situation that we saw in 2010, when several years were unreconciled. The ongoing reconciliation process has been throwing out errors, and we hope that in a year’s time, when things are done in real time, no more people will face the hardship of getting a multi-year tax demand. However, if we are going to have this thing in place, it needs to be clear and only impose realistic burdens on taxpayers. It is right that we all try to understand our tax affairs and check things that come to us, but where things are complicated and the mistake is the Revenue’s, not ours, we should allow the concession to be in place.

I hope that the Minister will help me and my constituent to understand whether there has been a change of policy by the Revenue in how it handles A19. Has an instruction been sent out centrally? An article in Taxation a few months ago seemed to allege that the instruction was almost, “Thou shalt not agree any of these and if any of you do, you will get some kind of action taken against you.” I suspect that that was a little exaggeration, but it was what the article suggested. It would be helpful if the Minister could give us some data on how many A19 applications have been made in recent tax years and how many have been accepted and rejected. I suspect that he may not have that information to hand, but if he could let me have it in writing, that would be helpful, as it would show whether there has been a trend in the last year or so for a lot fewer of them to be approved.

Finally, will the Minister confirm that what the Revenue should do in PAYE cases is go after the employer first when it is their mistake, and only then going after the taxpayer if they are somehow jointly at fault or if there is some reason why the employer cannot be pursued? Various answers would bring much greater clarity to the situation and help people who get caught in this sort of mess.

Transferable Tax Allowances

Jim Shannon Excerpts

Wednesday 28th November 2012 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I am glad to have the opportunity to contribute to the debate on transferable tax allowances. I commend the hon. Member for Peterborough (Mr Jackson) for securing time for hon. Members to consider this important subject, on which, as the Member of Parliament for Strangford and a member of the Democratic Unionist party, I have received considerable correspondence. It is an important issue.

At Westminster, the DUP has been pushing the Chancellor to introduce recognition of marriage in the system. We are keen to support the Government on that policy, which the Conservative party advocated in opposition. That party’s proposal envisaged a system whereby married couples would be able to transfer part of their personal tax allowance to their spouse. An individual in the UK could earn £8,105 per year tax free under the Conservative party proposals, and if someone did not use their full personal allowances, up to £750 could be transferred to their spouse, which would amount to a tax cut of £150 for that family. Reports in the media have led us to believe that that might be on the way. The Minister will perhaps respond; he may not have Pandora’s box or all the answers today, but if the proposals are in the Budget or the autumn statement, we will give them our full support on the Floor of the House.

Until relatively recently, the UK recognised marriage in the tax system, but that changed as a consequence of decisions taken by the Labour Government. There is only one Labour Member here, and I usually support Labour on many issues in the House, but I am very much opposed to its position on this. The absence of Liberal Democrats from the debate tells a story in itself.

We find ourselves in the minority in the OECD. Only 20.1% of people in the OECD live in countries that do not recognise marriage or have a spousal allowance. In that context, it is not surprising that married couples get a bad deal. In “The Taxation of Families”, Pearson and Binder, using the latest figures from the OECD, illustrate that in 2011 a one-earner married couple on an average wage with two children faced a tax burden 42% greater than the OECD average. The hon. Member for Peterborough mentioned that in his contribution.

The UK tax system currently is intensely individualistic. Taxation gives single people with no family responsibilities a relatively easy ride, by comparison with married couples. That can be clearly seen in the fact that in 2011 the tax burden on a one-earner married couple on an average wage with two children was 73% as a percentage of that placed on a single person on the same wage, while the OECD average was just 5%.

The statistics illustrate that the UK makes things more financially difficult for married couples than our compatriots in the OECD do. To my mind, and the minds of most of us here, that is deeply concerning. I have always believed that marriage is a hugely important social institution, which provides significant benefits to the couple involved, the children born to the couple and society at large. We certainly should not make it more difficult for couples to marry in this country than it is in other developed countries, such as France, Germany and the USA. Why would we not want to recognise the importance of marriage and show our support for children being brought up by parents in the stable environment of marriage?

For the couple, marriage produces significant benefits, including public benefits that are not without consequence for the Exchequer. The figures have already been outlined. Research indicates that even the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples. Marriage has a positive impact on the mental well-being of the couple. The health gain of marriage could be as large as the benefits of giving up smoking, for example. Such examples are only a small portion of the benefits that marriage can often bring to couples who enter into it.

The social science evidence on the impact of marriage on children demonstrates significant public benefit. The scale of the benefits to children raised in married families is striking. The hon. Member for Peterborough outlined the differences between the outcomes of children of married parents and of unmarried parents. I will not go over that again, owing to the lack of time, but the need for a change has been clearly illustrated.

It is important to stress that I am not so naive as to suggest that Governments have the capacity to make marriages happy and strong—they are not marriage guidance counsellors or Relate. The Government do however have a role in not making it more difficult for couples, who fall in love and want to be together, to marry in this country than in it would be in another country. The current policy position is misguided and we urgently need to change direction.

[Andrew Bingham (High Peak) (Con)]

As the hon. Gentleman said, it is not the Government’s role to be marriage guidance counsellors, but does he agree that introducing transferable allowances, as my hon. Friend the Member for Peterborough (Mr Jackson) outlined, would send a strong and clear message to the whole population that we support marriage? I have been married for 26 years—I hope I have got that right! It is a fantastic institution and has been for many years.

[Jim Shannon]

As someone who has been married for 25 years—just a year less than the hon. Gentleman—I wholeheartedly endorse what he says. Marriage is important for a great many of us.

The problem can be remedied in a positive way by introducing a transferable allowance for married couples, as the hon. Member for Peterborough suggested. The Prime Minister and the Conservative party have promoted the idea, but the main barrier has been the Liberal Democrats. The Deputy Prime Minister has said that

“we should not take a particular version of the family institution, such as the 1950s model of suit-wearing, breadwinning dad and aproned, homemaking mother, and try and preserve it in aspic.”

That statement clearly demonstrates immaturity and inconsistency on his part. The proposal is not about keeping women away from work and forcing them to stay at home, but about allowing the flexibility that we should have in the tax system, so that if either one of the couple does not use their full tax allowance, a portion of it can be passed to the other. At the same time, the Deputy Prime Minister has called for paternity leave to be increased from two to six weeks, but he does not want to make it easier for parents who already stay at home and do not use their full personal allowance. I suggest that that shows double standards.

Such an allowance would make the tax burden more sensitive to family responsibilities. It would also disproportionately benefit families in the poorer half of the income distribution. The Institute for Fiscal Studies, commonly referred to by all parties in the House, says that 70% of the benefit from a transferable allowance would go to those in the lower half of the income distribution. In other words, it would benefit those who need it most in a fair and balanced way, as it should.

We are all interested in reducing child poverty. The introduction of a transferable allowance would particularly help to address it by reducing the number of children living in households with an income below 60% of the median. In considering that point, it is important to remember that how materially wealthy individuals are depends not simply on income but on the size of their family.

A couple on £35,000 with two children is likely to be better off than only 37% of the population, even when tax credits and child benefit are taken into account, whereas a single person on £35,000 is in the top 20% of the population. We can blind people with figures, but they illustrate a clear trend—those in a marriage are disadvantaged under the current system. A two-earner couple with an income of £35,000—one working full-time and one part-time—is also in the poorer half of the population, but better off than the one-earner family. If the income were split equally, they would probably be in the fifth sector—better off than 44% of the population.

Some 2 million children are in one-earner couple households. Around 900,000 of them are in households with an income below 70% of the median. Of those, between 600,000 and 700,000 live in households with incomes below 60% of the median. A transferable allowance would reduce the number of households with incomes that fall below 60% of the median. It makes sense to make changes and to make them soon. A transferable allowance would reduce the number of households currently facing a 73% marginal tax rate. In so doing, it would particularly help the poorest one-earner families, whose efforts to earn their way out of poverty are jeopardised by the extraordinarily high tax rate.

The 73% marginal effective tax rate is a direct consequence of the UK tax system’s failure to recognise family responsibilities in any way. It places the burden entirely with the benefits system, rendering the withdrawal of benefits a more significant event for marginal effective tax rates. In the current tax year, a quarter of all families have an effective marginal tax rate of 73% or more: income tax accounts for 20%; national insurance contributions for another 12%; and the tax credits taper accounts for a further 41%. A family with two children and an income below £31,356 will pay 73% on any additional income. A family with four children will pay 73% on incomes below £43,838.

The figures do not take account of pension payments, so in many cases the 73% tax rate reaches even higher up the income scale. When pension contributions are taken into account, that 73% could apply to families earning £45,000. Around 2 million families are in that position, so one in four of all families in the United Kingdom of Great Britain and Northern Ireland faces a marginal rate of 73% or higher. That is deeply concerning and is an important reason for change.

Things will get even worse with the introduction of universal credit. The marginal effective tax rate of such families will actually increase from 73% to 76%—another three percentage points. Only 300,000 people have been affected by the top 50% rate, but, by contrast, 2 million will be locked into a system in which the Treasury will take back more than 76p of every extra pound earned. They are not “welfare spongers” but hard-working families, whom we are here to represent, which is why we are discussing this proposal today. I commend the hon. Member for Peterborough for securing the debate.

The economic and social costs of such a high marginal rate on such an important section of the community might be difficult to calculate, but they are considerable. The only way to reduce the number of families trapped by high marginal tax rates is to reduce the number who need to receive credits. The way to do that is to change income tax rates so that they become more sensitive to family responsibilities and place less of a burden on families, who will therefore not need to be compensated through credits. Transferable allowances are an obvious way of doing that.

The Government are right to place the economy at the top of their agenda—I support that—and to try to cut the deficit to reduce our debt burden. However, underlying problems in our country are contributing to the financial burden on the state. Strong marriage and strong families are key to fixing what the Prime Minister has called “broken Britain”, which is why I support them.

In parliamentary debates and questions, I have put it on the record that, as others have stated, it will take 12 months from the passing of legislation to make changes and implement them. If the Government introduce such changes in March 2014, they will be too late; it needs to be done in this autumn statement to come into effect next year.

Supporting the transferable tax allowance and addressing the double penalty of tax credits and the benefit system would send a significant message and signal the importance that this Government—our Government—are placing on marriage. The proposal will have the full support of the Democratic Unionist party. Today’s debate is exactly a week from the autumn statement, so I call on the Minister and the Chancellor to prioritise the announcement next week that the transferable tax allowance will be in the 2013 Budget. That is the best way forward.

[Several hon. Members]

rose—

--- Later in debate ---

[Catherine McKinnell]

As I said, I am going to set out clearly why we do not agree that this policy is the right way to go about supporting the families Members believe it will support.

When the Minister without Portfolio told The Daily Telegraph that married couples should not count on getting a tax break before 2015, the party machine swung into action to correct it. A retraction was issued within 24 hours, and the Minister without Portfolio now completely accepts that a tax break will be introduced and that tax is a matter for the Chancellor. It is therefore good that we have the Exchequer Secretary with us to clarify what the Government plan to do, because it has been two and a half years, and Members on both sides of the House are waiting to hear the Government’s proposals. As Members have said, the Conservative party set out in its election manifesto its view of what a tax break for married couples might look like, but times have changed significantly. I therefore look forward to the Minister telling us what the policy might look like and whether it will be implemented, and I am sure other hon. Members look forward to his remarks in the same way.

The strength of feeling on this subject is clear from the number of Conservative Members who have contributed, and that is entirely appropriate. There are, however, serious concerns about the proposal, and Members have referred to the Liberal Democrat party.

[Jim Shannon]

I should say that the Democratic Unionist party is also on record as supporting the transferable tax allowance.

[Catherine McKinnell]

I apologise to the hon. Gentleman; I was going to pay tribute to his comments a little later. I am facing the Conservative Benches, and I take his point.

Many Members have mentioned the Liberal Democrat party, which was very ready to abandon its principles on tuition fees and the VAT bombshell, which it campaigned so hard against. However, Liberal Democrat Members have said clearly that they refuse to support this policy in principle, although no concrete proposals have come forward, so we still do not entirely know what they will do or whether they will support the proposal in its final form. We await clarification on that too.

At a time when families up and down the country are being hit hard by cuts to tax credits, a squeeze on their living standards, rising prices and frozen wages, with pensioners losing their tapered relief, and young people finding it harder than ever to get into work, many people will find it regrettable that Conservative Members’ focus today is on securing a tax break for a limited number of married couples. The previous Labour Government based their help for families on need and on a clear and targeted approach to alleviating child poverty, rather than on distinguishing between particular family structures.

If the policy the Government announce is the same as that set out in the Conservative party’s manifesto, it will, as Members have acknowledged, be worth just £2.88 a week. Furthermore, it has been targeted at an extremely narrow group: the only people who will be able to claim this tax benefit will be married couples where one partner earns above the income tax threshold and the other does not; whether the couple has children will be entirely irrelevant.

Fuel Duty

Jim Shannon Excerpts

Monday 12th November 2012 Commons Chamber

[Albert Owen]

No. I want to make progress. The serious problem is that our constituents are paying 15p per litre more for petrol under this Government than they paid under the previous Government. Government Members can use nonsense hypotheticals, and say, “It would be 10p more expensive under a Labour Government,” but the fuel escalator was introduced by the Major Government. We could use the same argument, and say, “Had we stuck to that, fuel would by so many pence more expensive.” The reality is that it is 15% more expensive today.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Albert Owen]

I will not give way—I want to make progress.

VAT is hurting families and businesses. Hauliers and small businesses in my constituency are paying extra fuel duty and VAT on their fuel. The impact is on goods—[Interruption.] The Lord Commissioner of Her Majesty's Treasury, the hon. Member for Scarborough and Whitby (Mr Goodwill), says from a sedentary position that they get the money back, but he should listen to businesses. They tell me that fuel duty and VAT impacts on their businesses. Are they wrong? He needs to listen to businesses rather than make silly party political points in the Chamber. That is the reality of the situation: they pay more for fuel.

There is a double whammy because, as the Minister said, businesses also pay more for raw materials. They are being badly hurt. The debate should concentrate on what our constituents are telling us.

[Jim Shannon]

rose—

[Albert Owen]

I will give way once more, and then I need to make progress.

[Jim Shannon]

In Northern Ireland, 25% of every worker’s wage is spent on fuel getting to and from work. Another 10% is spent on heating oil. Does the hon. Gentleman believe that the VAT increase should not go ahead for that reason, and that concessions should be made for people in Northern Ireland, where the price of fuel is higher than anywhere else in the UK?

[Albert Owen]

The motion calls for a freeze on duty, but Labour introduced a previous debate on temporarily cutting VAT to help hard-working businesses and people across the country. Businesses are being hurt.

We rightly say that road transport is hit hard, but ferry companies—this is a serious point that nobody raises—must, because of the high prices, put fares up and cut back on the time their service takes so they can cut fuel costs. The problems that British businesses face are real. In my part of the world, the extra fuel duties mean problems getting goods to market and getting people to the workplace. This is a real issue for real people. I hope hon. Members remember that tonight.

The hon. Member for Strangford (Jim Shannon) mentioned periphery areas. Northern Ireland has the highest fuel duty in the UK, but it is closely followed by periphery areas of Wales. The hon. Member for Aberconwy (Guto Bebb), who is not in his place, made a political point about council tax in Wales. The reality is that the Government cut revenue and capital spend in Wales, so those authorities have to make their decisions, but they are not responsible for fuel tax. Fuel tax lies at the door of the Government. Incumbents have the opportunity to increase fuel duty when they believe that is necessary and to reduce it when it hurts business and our constituents. Now is the time for this Government to think seriously about that.

The Minister is listening—he says the Government always listen and that they are in listening mode—but he needs to take action, and to tell businesses tonight whether or not he intends do so. It is no use the Chancellor and Government Back Benchers getting together, cloak and dagger, to say that the motion is opportunism. The reality is that many of those same Back Benchers have introduced the same motion and supported it in a Back-Bench debate. We need consistency from Government Members, because they know their constituents are feeling the pinch.

Employment and Support Allowance (Blackpool South)

Jim Shannon Excerpts

Wednesday 5th September 2012 Westminster Hall

[Mr Marsden]

I thank my constituency neighbour for that question. I do not think that the two questions are separate. The inadequacy with which some of these issues are treated inevitably casts light on the strength or otherwise of the process. If the hon. Gentleman is asking whether I am in favour of disabled people being given every opportunity to expand their capabilities and to work if that is proportionately possible, the answer is an unqualified yes—and that would be the case for most hon. Members—but that issue is not under discussion today.

The Minister also needs to think about the effects on the families and carers of people who are knocked back. One of my constituents, a lone parent of two sons in their teens, one of whom has Asperger’s, was knocked back last month. My constituent says, “Two days before being admitted after a series of operations on my shoulder, I received a letter to inform me of the results of the medical I had to attend with Atos, saying that I was fit for work and that my claim for ESA had ended from yesterday. Both my sons live with me, but my housing benefit will stop because my ESA claim has ended. I don’t want to be claiming benefits. I would rather be back working, but with the pain I am in, I am unable to do that.” I have already mentioned what happens to the income of the carers of partners judged fit for work.

Another claimant who was knocked back, who had had long-term depression, wrote to say, “Is there any way you could possibly have the appeal process speeded up? I have been told it could take up to eight months. I feel so lost and powerless.”

The stress falls not just on the person with a disability, but on the partner, particularly when, as a number of my constituents have told me, they were discouraged from going to the assessment because of the restrictions of the venue. That is a denial of human rights, as well as, practically, a very silly thing to do.

Another constituent with chronic pain has been through this revolving door and says, “I am now mentally preparing myself for the fact I will have to take my case to a tribunal. I have been without any payment from DWP since April and although my partner has taken on extra duties during the lunch hour, we still cannot meet our outgoings—full-time hours where she works will not be available.” That is the reality of these people’s lives in Blackpool; it is the reality of the work process there.

Ministers and officials needs to address some fundamental questions. Leaving aside the individual inadequacies of the Atos process, what are the jobs for which these people are alleged to be fit? How much will it cost the Government and the taxpayer to support them properly in those jobs and, in particular, given some of the new Government restrictions on working tax credit, will they ever be able to earn from them a living wage? I have already said that I fully support proportionate and fully rounded initiatives to enable such people to use their abilities, and I feel strongly about that, having had a mother disabled by osteoporosis for 25 years. However, there is a balance to be struck.

Yesterday, in my local newspaper, The Blackpool Gazette, in a piece written by the feature writer Jacqui Morley, the wife of one of the constituents who had come to me, who is a gentleman with a severe degenerative condition akin to motor neurone disease, said that her husband’s former bosses had moved heaven and earth to keep him until he had realised that he was taking more than he was giving. She said that unless the Government were prepared to give disabled people all the support they need—in her husband’s case, certain facilities, personal assistants, and aids and equipment that cost a fortune—this is just a tick-box exercise about integration, not real inclusion. The system also dictates that the man will have to go through the process again in three years’ time to be reassessed on that progressive degenerative condition.

Alan Reid, who manages Disability First, our Blackpool disability information service, has commented that many people in the town who are genuinely in need are being dumped by these assessments. He says, “They come to us desperate and, in some cases, suicidal.”

Some of these concerns were raised during pilots of the process—indeed, disability group representatives in the Blackpool area took part in those pilots—so it is not entirely surprising that some of the problems have come to pass. I strongly stress that there is a sense of waste and people saying, “Working for what?”

The same constituent’s wife who was quoted in the Gazette put her finger on the problem in the letter that she wrote to the decision maker at Jobcentre Plus. When talking about the test, she said that the question should be about to what end people could press a button and use a keyboard and mouse, and whether they could do so at a speed—and without the need for continued support—that would facilitate meaningful input and a financially viable outcome such that their employment could be sustained by an employer. Surely that should be one of the elements considered in the process.

I have cited all those examples in the context of Blackpool, but the truth, of course, is that this is a country-wide issue. That is why various disability groups, such as the disability benefits consortium, the Royal National Institute of Blind People, Parkinson’s UK and Scope, have all raised serious doubts. The DBC has said that the work-capability assessment is poor at identifying disabled people’s needs.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on illustrating very clearly the position in Blackpool South. He is right to say that the situation is replicated across the whole country. Does he feel that when it comes to ESA appeals and the medical evidence that is used, there should be direct contact with the GP and consultant as a matter of course? That is not always the case, but if it happened, there would be better knowledge of the person’s medical condition for the tribunal and the appeal.

[Mr Marsden]

I thank the hon. Gentleman for his intervention. He leads me to the series of recommendations that the disability benefits consortium makes in that area. They include the fact that evidence is not routinely gathered from the health-care professionals who know the claimant best, such as consultants and nurses; that evidence is often ignored. I accept that that cannot be the sole deciding factor, but it certainly seems ludicrous that it should be excluded entirely. The other side of the coin, as I have mentioned in relation to an individual we had concerns about in Blackpool, is that some of the health-care professionals who carry out the process that we are discussing have limited knowledge of complex or uncommon conditions.

The DBC also discussed the issue of people with long-term degenerative conditions, especially progressive forms of multiple sclerosis, being reassessed far too frequently. Even people in the support group are being reassessed very regularly. Of course, there has been the revelation—this was subject to freedom of information—that more than 1,000 people died shortly after their work capability assessment. That does not take into account the others who died shortly before.

Those mistakes—they are mistakes—must not be replicated when personal independence payments are introduced in 2013. It is no surprise that disability organisations have expressed concern about that. I want to quote just a couple. Mr Ford, chief executive of Parkinson’s UK, has said:

“It is hugely concerning to see that Atos have been given the green light for the Personal Independence Payment contract.”

He says that its assessments

“have led to many people being forced to appeal against decisions that are plainly wrong. How can someone with Parkinson’s—a progressive neurological condition—have an assessment report that implies they will be ready for work again in six, 12 or 18 months?”

Others have written in the same vein.

The concerns in this area have been emphasised by the sheer complacency and smugness—I use the words advisedly—with which Atos has responded in relation to these processes. I received, as no doubt have other hon. Members in the north-west, a very bland letter from its general manager that told me that it had been awarded the contract for the north-west of England. It said:

“Engagement with MPs and the wider stakeholder community was an important element of our successful bid”.

As far as engagement with MPs is concerned, I am not aware that it ever engaged with me in any way, shape or form whatever. As far as the wider stakeholder community is concerned, it may well have engaged with them. That stakeholder community expressed concerns and reservations, most of which it completely ignored. The British Medical Association has also expressed serious concerns in this area.

Blackpool offers a sample what is going on nationally. It may be a particularly strong sample, for the demographic reasons that I have described, but it is a sample. The comments made in yesterday’s debate by my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) and others showed the depth of concern in the House about the process. My hon. Friend the Member for Birmingham, Northfield (Richard Burden) put his finger on it when he talked about “a weird revolving door”: people get assessments, question them and wait ages for an appeal. He said that they

“may or may not win the appeal, but by the time the appeal comes up, they have had another assessment and…they go through”

another

“revolving door”.—[Official Report, 4 September 2012; Vol. 549, c. 19WH.]

My hon. Friend the Member for Aberdeen South (Dame Anne Begg) who, as most Members will know, knows a great deal about such things, not least through her chairmanship of the Select Committee on Work and Pensions, said that she did not think that this

“Government have grasped how disastrous the ESA assessment system is…In too many cases, genuine claimants are not scoring any points in their initial assessment. There is something fundamentally wrong with the system and the contract that Atos is delivering.” —[Official Report, 4 September 2012; Vol. 549, c. 27-28WH.]

The Minister and his officials could and should take notice of the proposals on the table, not least those from the DBC. They should think about proactively gathering relevant written evidence, about reassessing it only when changes in circumstances are likely and ensure that there is an appropriate assessment venue for the full range of disabled people. Atos decision-makers should be trained in a wide range of conditions and share their reports and observational evidence with claimants. The supreme irony in all of this is that the storm is gathering during the Paralympics. Atos is one of the sponsors of the Paralympics. I will leave others to judge the appropriateness of that, but as Prime Minister’s questions demonstrated today, it is a major issue.

I have already welcomed the Minister to his position. He has come from the Treasury, and is, I am afraid, inheriting this mess. I do not envy him. I urge him to reflect not only on what I have told him about the situation in Blackpool and the individual miseries of the affected constituents who have come to me, but on what so many organisations are telling him. It is rare that Ministers are given the opportunity to have an open mind and open the books—normally, it is only at the beginning of their tenure. I ask him to look at what the RNIB and the DBC have said. I urge him to consider whether the Select Committee on Health and others should not look at the quality of some of the doctors; at empowering decision-markers; and at seriously re-examining the target-based approach, considering a qualitative, not only a quantitative, approach.

The Minister should be in no doubt that if he does not address the problems, that will be on his head, and on his reputation—the fiasco will indelibly imprint itself on his record. Seventy years ago, the great parliamentarian, Nye Bevan, laid down the principle that Ministers should not allow outsourced officialdom to play with or ruin people’s lives without a source of redress. The buck very much rests with the Minister.