Post Office Card Account

Kevan Jones Excerpts

Tuesday 16th December 2014 Commons Chamber

[Steve Webb]

My hon. Friend is right; 2010 marked a sea change in the attitude of central Government towards the Post Office. I pay tribute to him and to the all-party group for their work on this issue. I recall attending a meeting of that group. The coalition parties have shown persistently, in very concrete terms, their commitment to the post office network in a way that the previous Government did not.

[Mr Kevan Jones (North Durham) (Lab)]

I welcome the Minister’s statement. In my constituency, the local credit union uses the card accounts to allow people to deposit and access their cash. What discussions has he had with the Post Office about developing further services with local credit unions, such as jam jar accounts?

[Steve Webb]

I am grateful to the hon. Gentleman. We set great store by credit unions. As he knows, we have invested about £38 million in the credit union expansion project. Previous Government interventions in this space were well meaning but did not create a new sustainability for the credit union movement. [Interruption.] The hon. Member for Bishop Auckland (Helen Goodman), who is a former Minister, says, “Rubbish.” The previous Government put up money for loans, the money got lent, and the credit union was no more sustainable at the end of the process than it was at the start. We are taking a different approach whereby we are trying to ensure that there is an infrastructure that makes running a credit union cost-effective. We are also very open to the possibility of a link with the post office network.

Mesothelioma Bill [Lords]

Kevan Jones Excerpts

Monday 2nd December 2013 Commons Chamber

[Mike Penning]

No, no and no. The previous Administration undertook their consultation just before the general election. I will not get into party politics, but as the former Minister started on the subject, I will continue on it. After 13 years, suddenly there was a consultation, which was very wide ranging and did not develop the scheme. I cannot find out exactly what the previous Government wanted to do, because under the rules I am not allowed to see that, but all the indications are that what they would have proposed would not have passed into statute without huge cost to the taxpayer, or to people being insured today. None of that cost is incurred under the Bill.

The Bill is part of the ongoing commitment by the Government and the insurance industry to correct the market failure that everyone accepts there has been in respect of mesothelioma cases. It tackles the problem in two ways: first, by providing a power to set up a payment scheme and, secondly, by providing the possibility of establishing a technical committee that will, where there are disputes, make decisions that are binding on the insurance industry.

Diffuse mesothelioma is a fatal disease caused exclusively—this is crucial to the Bill—by exposure to asbestos. It has a long latency period, often of between 40 and 50 years, but after diagnosis average life expectancy is, sadly, only eight to nine months, with very few exceptions living beyond that. The long delay between exposure and developing the disease, combined with inconsistent record keeping in the insurance industry, means that too often people struggle to trace an employer—the employer may no longer exist—or the insurer who provided the employer’s public liability insurance, against which they can make a claim for civil damages. The insurance industry and the Government recognise that this is unjust, and that a provision must be brought forward in the Bill.

The obvious question is: why is legislation being introduced? Despite recognition of the failure of the market, the insurance industry has not been able to put forward a scheme of its own that would compensate those concerned. Disputes between insurers, and the different interests of companies that still offer employers’ liability cover, or active insurers, and those no longer offering cover, or run-off insurers, have prevented the industry from agreeing a voluntary levy; I think that was looked at in the consultation.

[Mr Kevan Jones (North Durham) (Lab)]

rose—

[Mike Penning]

I want to make progress. I am very conscious of the time, so I will not take an awful lot of interventions. Colleagues will have the opportunity to speak, either later on Second Reading or in the later stages of the Bill.

Industry representatives asked for legislation imposing a levy to support the payment scheme. The Bill establishes a payment scheme that will make substantial lump-sum payments to eligible sufferers from mesothelioma—and, crucially, eligible dependants of sufferers. The scheme will be funded through a levy on insurers active in the employers’ liability market, meaning that the active employers’ liability insurance market will bear the cost of the scheme.

[Mr Jones]

I am grateful to the hon. Gentleman for giving way. I know that the insurance companies are trying to sell this as a generous scheme, but all estimates say that it will be worth about £350 million. Last year alone, the profits of Lloyd’s of London were £2.7 billion. Does he not think that, from that perspective, the insurance companies are getting away very cheaply?

[Mike Penning]

Nothing is perfect, but there was nothing there before, and if we had carried on the way we were going, nothing would be there, going forward, for people who are suffering so much, and who need help today. [Interruption.] It is no good the hon. Gentleman chuntering; he has had an opportunity to intervene, and perhaps later he will make a speech. That would be more useful than chuntering. As a friend of mine, he should know better, because I will not respond to that sort of chuntering. It just wastes time in the House.

The scheme is intended to be an alternative to seeking civil damages, which we still want people to do, if the opportunity arises. The driving principle is that where adequate records are not available—this is why the scheme was developed—the disease has been diagnosed, and there has been negligence or a breach of the statutory duty, a person should still be able to access payment for their injury. That is the crucial part of the Bill. Payments should be made, wherever possible, to the sufferers themselves, while they are still alive; I think that everyone would want that, but sadly it has not been happening. The scheme will therefore be straightforward, simple, and quick to process claims.

Sadly, we expect roughly 28,500 deaths from mesothelioma between July 2012 and March 2024, when the scheme is expected to come to its conclusion. We are seeing a peak at the moment.

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[Kate Green (Stretford and Urmston) (Lab)]

I am very pleased to follow the Minister in opening this debate. As he has said, this Bill marks an important step on the long road to justice for mesothelioma sufferers and their families. I welcome the progress that has been made so far, but the Minister is right to say that we should take this opportunity to see whether we can go a little further before the Bill completes its passage through the House.

I am very pleased to see so many colleagues present, many of whom represent constituencies where the disease is prevalent as a result of their industrial history. I know it will be important for colleagues on both sides of the House to be able to speak about their communities’ experiences, over many decades, of the consequences of this terrible disease. Although I totally share the Minister’s wish for the Bill to make progress through this House so that a scheme can be put in place and payments can flow to victims in the next few months, I do not think we are so pressed for time this evening that we should not give the opportunity to every one of our colleagues to make the case on behalf of their constituents, because this issue is felt very deeply in many of the communities they represent.

I know that many colleagues will want to join me in paying particular tribute to the asbestos victims support groups, which have done so much to campaign for a fairer deal for victims and to keep parliamentarians briefed, not only for this debate, but over many years.

[Mr Kevan Jones]

Will my hon. Friend also add the congratulations of the House to the trade unions, which have not only campaigned on behalf of asbestos victims, but won literally millions of pounds of compensation for people who would not have got it unless they had been members of a trade union?

[Kate Green]

I am very happy to join in that tribute to the work of trade unions, a number of which have worked over many years not only to advocate the cause of individual victims, but to maintain the pressure that has ultimately led to the scheme under discussion.

I also pay tribute to our colleagues in the House of Lords who have already carefully scrutinised and, as the Minister said, improved the Bill. In particular, I acknowledge the work of my noble Friend Lord McKenzie, who, under the previous Labour Government, launched the consultation that has resulted in this Bill. I pay tribute to his assiduousness and his determination to secure justice for the victims of this terrible disease. I also pay tribute to the noble Lord Freud, who has demonstrated his equal determination and commitment to righting a long-standing and terrible wrong by introducing the proposed scheme.

The Bill follows a series of earlier pieces of legislation passed by previous Labour Governments to improve the lot of victims of asbestos-related and industrial diseases. In 1969, Labour introduced the Employers’ Liability (Compulsory Insurance) Act 1969, requiring employers to insure against liability for injury or disease to their employees arising out of their employment. In 1979, Labour introduced and secured the passage of the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, which provides lump sum compensation payments to people suffering from certain dust-related diseases or, if they have died, to their dependants, when a claim for damages is not possible because the employer or employers are no longer in business. In 2008, we introduced the mesothelioma payment scheme, which provides lump sum payments for people suffering from diffuse mesothelioma who are unable to claim compensation from other sources.

--- Later in debate ---

[Kate Green]

There are two questions wrapped up in that one question. First, on present figures, what does it appear the industry can afford? I will say something about that in a moment. Secondly, does the industry have to pass on the cost to its customers, or could it choose to absorb it? We are talking about roughly 10% of the total value to the industry of the employers’ liability market. I appreciate that that is not a small sum, but as colleagues have pointed out, the industry has had decades to accumulate profits as a result of the premiums it has collected.

[Mr Kevan Jones]

It is not just about the accumulated profits to which my hon. Friend and my hon. Friend the Member for Blaydon (Mr Anderson) have referred: insurance companies are still making huge profits. Lloyd’s of London made £2.7 billion in 2012, Royal and Sun Alliance made £233 million between January and June 2012, and Aviva made £605 million between January and June 2013. These companies are not unprofitable, so their attitude to a levy costing £350 million is an insult to the victims.

[Kate Green]

I hope we bring the industry to understand that it would be right and proper for it to be more generous to the victims than the current scheme appears.

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[Mr Stephen Hepburn (Jarrow) (Lab)]

Let me first pay tribute to the hon. Member for Chatham and Aylesford (Tracey Crouch) for the genuine interest and compassion she has shown on this subject for a number of years. I am sure that, at the end of the day, we will get the outcome that we are all looking for.

Last Friday, I sadly attended the funeral of a great and old friend, Terry Smith, a local lad from Hebburn, a town in my constituency. He was a local activist, secretary of the local social club, the Iona club, of which I am a member, too. He was a member of the local church, St Aloysius. He was very active in the Society of St Vincent de Paul, and visited the sick. He was a long-term member of the Labour party, and would go out and distribute leaflets whenever he was needed. I am sure that we all know men of his kind—men who do a lot of work but who are unsung heroes, and who never ask for anything in return. Terry left school and went to work in the shipyards, but after a while he changed his career. He went to college, and then managed to get a job teaching. He taught for 28 years, until he retired.

Two years ago, Terry went to the doctor. After being given a medical, he was told that he had mesothelioma and had three months to live, or, if he had treatment and if he was lucky, he would make it to a year. However, because of his determination, his obvious faith and his medical treatment, he got through two years. It was very sad to be at his funeral last Friday: it was very sad for his friends, and, more important, it was very sad for his family.

Terry has now become part of a statistic. Every week, three people in the north-east die of mesothelioma. What most of those people have in common is that they are working-class, and were employed by a negligent employer who exposed them to the poisons of asbestos.

I welcome the scheme, and I think that the Minister has done a great job, because it has been kicking around in the long grass for long enough. It will impose a levy on the insurance industry, which will compensate victims who cannot trace an employer for whom they may have worked many decades ago and who may have gone bust since then, and cannot trace the employer’s insurance company either. The regional media welcome the scheme because they see it as an end to an injustice that we have witnessed for a long time, and, as I have said, I welcome it because it is an improvement on the status quo. However, the Bill falls far short of what the last Labour Government intended.

[Mr Kevan Jones]

I agree with what my hon. Friend has said about the regional media, but did he feel as concerned as I did about a headline in the Sunderland Echo which referred to a £300 million bonanza for asbestos victims? In fact, many of his constituents and mine will not be covered by the Bill, and will be short-changed.

[Mr Hepburn]

I think that many issues of that kind will be exposed as the Bill proceeds through its stages. The media gave the scheme a warm welcome because they did not know the details and the nitty-gritty.

The Bill falls short of what we intended when we issued our consultation document. It falls short in regard to the cut-off time—in its present form, it will deny compensation to thousands of mesothelioma victims and save the insurance companies millions—and it falls short in regard to the payments, which will be 75% of the average payment made following a civil claim. I think that the proportion should be 100%, and that insurance companies should be fined a further 25% for ignoring their responsibilities over the years. The money could then be used to establish some proper research on a cure for mesothelioma.

Why has the Bill been diluted, and why was it kicked into the long grass? Why has this taken so long? The answer is, quite simply, that the insurance companies’ fingerprints are all over the Bill. That shows the unhealthy relationship that the Tory party has with the insurance industry, which has pumped millions into the party’s coffers over the years. It also shows the value that the Government place on working people, especially those in the north-east. I wonder what would have happened if those people had been professionals in the south-east of England. I wonder what would have happened if, for example, judges had all of a sudden developed an occupational cancer as a result of inhaling hairs from their wigs. We know exactly what would have happened. Those would not have been working-class people breathing in asbestos fibres, and the Tories would have looked after their own people.

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[Mr Robert Buckland (South Swindon) (Con)]

It is a pleasure to follow the hon. Member for Jarrow (Mr Hepburn), who spoke with understandable passion. All of us who know something about industrial life in this country are aware that for too long we were literally in a state of ignorance. I think of industrial deafness, which affected members of my family, and of other respiratory diseases. In particular, I think of mesothelioma, and of the date of knowledge in law, which is deemed to be 1969. It is assumed for the purposes of liability that, until that date, employers, businesses and industries throughout the country—and the people who worked in those businesses, delivering productivity and profit for year after year—were labouring in a state of ignorance. That is a tragedy when we consider the individual stories of the workers and what they went through.

[Mr Kevan Jones]

I agree with the hon. Gentleman’s point about the date of knowledge, but, as he knows, mesothelioma was originally identified in the Meriwether report of 1931. After the second world war, the Government wrote to the British shipowners’ confederation drawing attention to the dangers of asbestos. For all those years the fact that it is a danger to health was denied, although that was known to be the case.

[Mr Buckland]

I was coming to that point. Although for the purposes of liability knowledge of the dangers is defined as having started in 1969, we know that the debate had been going on for many years before that. It is a tragedy that the decision was not made for a generation. Thousands of workers, many of whom are no longer with us, were working in dangerous conditions.

I represent Swindon, a railway town which had the Great Western Railway at its heart, and had a railway works until 1986, and I have heard stories from many former railway workers who worked in and around asbestos every day of their working lives. Asbestos was being transported along the railway system, but it was also being used to line the boilers and pipes, and to insulate the heat generators which are an integral part of a locomotive. More than that, however, asbestos was being used to line all the carriages built at the Swindon works, and asbestos was used in sprays that were applied to surfaces within and without those carriages. It was very much part of the essence of working life in Swindon. For very many people whom I know exposure to asbestos has been a reality, and that means that many people are still carrying a latent disease—a latent disease that can manifest itself as late as 40 or even 50 years after exposure.

I am going to single out one person, not because he would have regarded himself as an exceptional man, but because he rose to become the mayor of our town and because he died this year from mesothelioma. Rex Barnett worked for British Rail from 1953 to 1961. It was while he was there that he was exposed to asbestos and went on to develop what was for many years a latent disease. He was diagnosed with pleural plaques back in the mid ’90s and then was one of the unfortunate people who went on to develop mesothelioma right at the end of his mayoral year in 2011. Rex battled on. He was an indefatigable character who in his mayoral year raised over £60,000 for local charities, an exceptional feat in itself. He battled on for another two years, but finally, sadly and tragically, succumbed this year. In his memory and the memory of thousands of other people who worked alongside him, this measure is a welcome one.

I pause now for a moment to think about the memorial garden we have in Queen’s park in Swindon to the victims of mesothelioma, which is marked by a very simple memorial, and which gives members of my community an opportunity to contemplate and consider the sacrifice— the unwitting sacrifice—that was made by those who were exposed for all that time to lethal amounts of asbestos.

In my early legal career I was trained in personal injury work, which included industrial compensation, and therefore have some, albeit limited, experience of dealing with claims relating to conditions such as mesothelioma. I think that perhaps we are in danger of oversimplifying the position when talking, perfectly naturally, about the need for a swift resolution to the claims made by victims of this disease and their families. There is a danger that seeking to resolve claims before death could lead to a significant under-settlement of claims, which would deprive dependants of the victims of a substantial proportion of the damages they could recover in a posthumous claim.

I think it is right to talk very briefly in this Second Reading debate about the wider position and principles, while recognising the fact that this Bill will deal with a relatively small cohort of people for whom traceability of employer or insurer has not been possible. The following important point has been raised with me by claimants’ solicitors, some of whom have years of experience in practice in Swindon. The regime that applies to posthumous claims for damages is still dramatically different in England and Wales from that which applies to those made during the lifetime of the claimant. For example, bereavement damages are not payable during the lifetime of claimants, claimants cannot recover for future funeral expenses during their lifetime, and living claimants cannot recover damages for services provided to dependants after death; that is recoverable only as a services dependency under the Fatal Accidents Act 1976. It is clear that under that Act income dependency claims will usually be significantly more for dependants than a lost years claim made under common law for a living claimant. It is clear that claims that are brought by widows after death will be about 20%—a fifth—more valuable than equivalent claims made during life. So the dilemma for mesothelioma sufferers going through all the pain and struggle they have to endure is: do they resolve their claims during their lifetime for what will be a lesser sum, or do they die with a claim unresolved?

It is interesting to note that the Scots have legislated to bring the rights of relatives before and after death into some alignment. That is one of way of dealing with this, but there are alternatives that could, and do, deliver a practical solution.

--- Later in debate ---

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

It is a pleasure to follow the hon. Member for South Swindon (Mr Buckland), who has once more shown his expert understanding and knowledge of this issue. I also compliment the hon. Member for Chatham and Aylesford (Tracey Crouch), who has again shown her utter determination to ensure that the right thing is done for those who have suffered so terribly from mesothelioma and for their families. I also congratulate my hon. Friend the Member for Jarrow (Mr Hepburn), who has been a redoubtable campaigner on this issue for many years, on all the work he has done.

Every July on action mesothelioma day, in Lincoln square, Manchester, the Greater Manchester Asbestos Victims Support Group, ably co-ordinated for many years by Tony Whitston, brings together Members of Parliament, other community leaders and the families and loved ones of those who have died as a result of mesothelioma. It is a profoundly moving occasion, and I see in the House hon. Friends who have attended this event in previous years. Doves are released into the sky as a symbol of peace and reconciliation for those families who have faced so much difficulty, and the message goes out that there is still a need for justice for those who have suffered so much.

One of the most profoundly moving things is that many of the women there hold up photographs of their husbands and loved ones, who worked hard in heavy industry or as electricians or joiners, and who lost their lives to mesothelioma because an employer—an irresponsible, negligent employer—did not remove the risk, did not alert them to the risk they faced. I think of people such as Mr Fryers, a constituent of mine, whose voice is included in the excellent Asbestos Victims Support Group’s “Forum UK” briefing. He says:

“I never thought I would be exposed to asbestos diseases and suffer mesothelioma. During my apprenticeship from the age of fourteen as these diseases were never talked about you just did the job given to you. No tradesman knew much about asbestos due to the neglect of the employers who exposed them to it.”

At the event in Manchester—I am sure they take place throughout the United Kingdom—we have a particular focus on the 6,000 innocent mesothelioma sufferers who were unable to find a former employer or insurance company before they died: who were unable, in other words, to get any form of redress or compensation for the illness and eventual death they suffered. The Bill enables us to focus on that group and on those who still struggle to find an employer or an insurance company.

I welcome the Bill, which is a huge and important step forward. It will bring a measure of justice to those who have been unable to trace employers or insurance companies. However, my message to the Minister—one that is coming loud and clear from all parts of the House this evening—is that if we are going to enact this Bill, we should do it properly and gain the maximum possible justice for those who have been affected.

Let us remember that the insurance companies start well ahead on this issue. The estimated value of payments that ought to have been made but never were to those who have suffered and died is at least £800 million. We should also add to that the premiums the insurance companies have collected but have never had to pay out on. I encourage them to participate in the development of this scheme; but we should remember that they start ahead, not behind. Throughout the debate on the Bill through its various legislative stages, we should also remember that the voice and experience of those most affected—the loved ones, the families—must be heard. Over many, many years, they have felt ignored and betrayed, and we have to emerge at the end of this process with something that they feel offers them a measure of justice.

I want to make four brief points, the first of which concerns the level of compensation, which everybody has spoken about this evening. Seventy-five per cent. may be better than 70%, but it is not good enough, and we simply have to do better. Here, there are technical arguments, some of which have already been aired, but in this regard I rely for my view on the view of Parliament. That view was clearly demonstrated during the debate on what became the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which brought about changes to the conditional fee agreement. It was very clear in the debates in this House and the other place that to expect mesothelioma claimants to pay more than 25% of their compensation to lawyers was completely unacceptable. That argument was had here and in the Lords, which passed an amendment to prevent the new conditional fee agreements from applying to mesothelioma claims. Members may recall that we entered a period of ping-pong, and eventually there was a compromise and section 48 of the Act was inserted.

The will of Parliament was very clear on those occasions, and my argument is that if it was wrong to expect mesothelioma claimants to pay 25% of their fee to lawyers, why is it fair to expect them to pay 25% of the fee that they should have to the insurance companies? That is the practical effect of having a cap at 75%. My starting point is 100%. Other figures have been mentioned—90%, 80%—but the message to the Minister is that the figure has to be substantially higher than 75%. We do not want political game-playing here; there has to be a sensible, proper, grown-up discussion with the industry, Ministers and Members of this House to make sure that we get the best level of compensation that is available. The hon. Member for Chatham and Aylesford was right to suggest that the level of compensation that is agreed on, whatever it might be, should be the level at which benefits are repaid. It would be grossly unfair to set a compensation level of less than 100% and then to expect claimants to repay 100% of their benefits. That would be quite wrong.

My second point relates to the start date from which people should be paid compensation. I make no criticism of Lord Freud. He made his statement to the House of Lords in July 2012, in the last days before the summer recess. If he had not cared about the issue, he could have left it until October when the House returned, but he wanted to make the statement in July because he does care. The start date should be set further back, however—at least to February 2010—and the reason for that is clear. When the Labour Government published the consultation document, it became clear to the industry that things were going to change and that a compensation scheme funded by the industry would be put in place. From that moment on, the industry has had every opportunity to make the necessary arrangements.

[Mr Kevan Jones]

I agree with my right hon. Friend that the date needs to be put back. Does he agree with the point made by the hon. Members for Chatham and Aylesford (Tracey Crouch) and for South Swindon (Mr Buckland) that, because the date of knowledge is 1969 and most of the claimants are likely to be elderly, there is a reasonable case for putting the start date back at least to 1969 because the number of cases involved will be quite small?

[Paul Goggins]

My hon. Friend is very knowledgeable about these issues and he makes an important point. I am saying that the date should be put back to at least February 2010, and there are arguments for going back further. I hope that we will have an opportunity to examine those arguments in Committee.

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[Mr Wright]

My hon. Friend makes an important and eloquent point. He has been a passionate champion on this issue for many years, and I pay tribute to him. I will come to the Bill’s impact on the insurance industry in a moment—

[Mr Kevan Jones]

rose—

[Mr Wright]

—but I will first give way to my fellow north-eastern MP.

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[Mr Jones]

I am grateful to my hon. Friend for giving way. I have heard the argument about accepting the February 2010 date, but that, too, is an arbitrary date, and that is why I do not agree with it. A more sensible way forward would be to go back to 1969 and the date of knowledge. The Minister says that families will be included in the scheme, and that there will be a huge bow wave of claims; my experience in this area makes me think that there will not be, but at least that would be a more logical way of deciding on the date.

[Mr Wright]

Any cut-off date will be arbitrary. We just want compensation for victims in our constituencies. That issue will have to be explored, and I hope it is explored at length in Committee.

Secondly, I am concerned about the fact that only diffuse mesothelioma is included in the scheme. Workers have contracted a variety of diseases as a result of exposure at work, including pleural plaques and asbestosis. It is not good enough that only one, narrowly defined condition can be included. Again, I hope that the Minister will amend that in Committee.

My third point was touched on by the shadow Minister, my hon. Friend the Member for Stretford and Urmston (Kate Green), and by the hon. Member for Chatham and Aylesford (Tracey Crouch). I have great concerns about the fact that clause 2 confines the scheme to those employees who were employed at the time of exposure. In Hartlepool I have had at least two cases—I referred to one earlier—in which the wife of a worker developed pleural plaques, then asbestosis and then mesothelioma as a result of washing her husband’s work clothes, which released the fibres and allowed them to enter her lungs. Those women—there are probably many more—suffered and died as a direct result of asbestos exposure caused by an employer. Surely it is only fair and just that they should be included in the scheme. I hope that the Government will accept that secondary exposure is an important part of what the Bill should provide for.

The third way in which the Bill must be improved relates to the amount of compensation provided. We have heard time and again from hon. Members on both sides of the House that the payments will be only 75% of the value of civil claims. That really is a mean-spirited and petty act from the Government against people facing a terrible, terminal disease. There can be no possible justification for the scheme paying less than 100% compensation. Why should victims in Hartlepool miss out on what could be several thousand pounds in compensation, which could provide a little dignity and comfort in their final days or—let us be frank—provide their families with the money to bury them, just because a deal has been struck with the insurance industry, an industry that might have lost or destroyed the policies for which they took the cash from those employees in the first place? Let us be under no illusions: the insurance industry has got a hell of a good deal out of this Government and out of this Bill.

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[Ian Lavery]

I thank my hon. Friend. I will cover that during the next 30 minutes of my speech.

The regulatory impact assessment estimates that approximately 6,000 mesothelioma sufferers lost about £800 million in compensation due to untraced insurance. If we add the cost to victims of other asbestos-related diseases, the deal cooked up between the Government and their friends in the insurance industry represents a saving to insurers of some £1 billion. On average, the 75% figure means that individuals will lose up to £43,000 in each claim and that victims are absorbing 25% of the ongoing costs due to insurers losing or destroying their policy records.

Secondly, there is the exclusion of other diseases. Why is this about mesothelioma only? The employers’ liability insurance for which the employers paid premiums covered them for claims arising from all “bodily injury or disease”, not just asbestos-related disease, and certainly not just mesothelioma. By limiting the scheme to mesothelioma, the Bill excludes 50% of all victims. Those suffering from asbestos-related lung cancer, asbestosis and pleural thickening have been cast aside. Among other industrial prescribed diseases that might be considered—I pick this one out of the air—is baker’s asthma, a disease that is crippling for people who work in the baking industry, whereby they suffer the same conditions although it does not have such drastic problems with regard to latency and shortened life expectancy. There are all sorts of different diseases, including baker’s asthma and other asbestos-related diseases, that should be covered by the Bill. It is a decent Bill, but we do not want a decent Bill: we want a good Bill.

If the Bill included 50% of asbestos victims, that would represent just 20% of the total cost. It is not acceptable that the scheme is limited to just mesothelioma. The Government’s justification for excluding other diseases is to say that proving causation is simpler for mesothelioma, because asbestos is its only known cause. However, there is already a successful precedent, namely the Turner and Newall Asbestos Trust, which administers payments of claims for not just mesothelioma, but other asbestos-related diseases. The Bill should be extended to cover all long-tail latent industrial diseases prescribed under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979.

The third issue is the cut-off date, which has been mentioned by many Members. The cut-off date of 25 July 2012 is unbelievable, especially given that the consultation began in February 2010. I agree with my hon. Friend the Member for North Durham (Mr Jones) that the cut-off date should be 1969, which was the date of guilty knowledge.

[Mr Kevan Jones]

I have checked the date and I think the hon. Member for South Swindon (Mr Buckland) was wrong. I think that the actual date was 1965.

[Ian Lavery]

I wondered why 1969 was mentioned; I think that 1965 would be more appropriate.

The cut-off date will have a huge impact on lots of people. Geoffrey Leonard Bradshaw was from Pegswood in my constituency. He died of mesothelioma aged 66. He did everything necessary to try to find out which employer and insurance companies were to blame. He approached the Association of British Insurers and sent letters to employers. Mr Bradshaw did everything, but sadly he died before the cut-off date with minimal compensation from the pneumoconiosis compensation scheme. The civil-claim value of his case was in excess of £350,000, but he got less than £25,000. The cut-off date is really important and we need to look at it. It is not fair. I think that 1965 is probably the right date.

The fourth issue is the clawback of 100% DWP benefits when the Bill pays out only 75% in compensation. Why claw back a greater percentage than what is being paid? I want someone from the Government Front Bench to explain that. Why should we accept that under the premise of fairness? It is not and cannot be fair. Why should the state have a greater right of financial recovery than the victim? Why should the state get 100% back and the victim only 75%? I would be glad to listen to any explanation and perhaps even accept it if there is a valid argument behind it. To depart from a principle of like-for-like offset is both illogical and grossly unjust.

I want to place on record my thanks to the Mick Knighton Mesothelioma Research Fund, which was set up by the wife of Mick Knighton, who died of mesothelioma at a very young age. It operates from Wallsend in north Tyneside and has raised more than £1 million for mesothelioma research. It does a fantastic job and continues to help everyone who suffers from this horrible, horrendous disease.

Ideally, the Bill will be enacted before the end of the year. It is broadly welcomed, but it needs to be strengthened for the sake of people who have suffered for so long and those who have paid the ultimate sacrifice, such as Mr Bradshaw in my constituency and the thousands of hard-working people who, through no fault of their own, contracted this deadly disease. Let us hope that, in the name of fairness, decency and justice, this House can bridge the gaps.

--- Later in debate ---

[Mr Anderson]

I did not say that the Minister said that. The issue should have been resolved, because the facts have not changed between then and now.

My hon. Friend the Member for Wansbeck mentioned the Mick Knighton Mesothelioma Research Fund. I have been a patron of that fund for more than a decade. When I was president of Unison I was approached by a former colleague I used to work with in the mines who asked, “Can you help these people out, Dave?”

It is worth listening to the story of Chris Knighton, whose husband was a classic sufferer of mesothelioma. He would think nothing of getting on a pushbike and riding from Newcastle to Berwick and back again on a Sunday morning before going to the club to see his mates, who had just staggered out of bed. They would be standing at the bar, bleary-eyed, asking, “Where have you been, Mick?” He had done a 100 mile bike ride on a Sunday morning.

On one of those Sunday mornings, the lad fell on the floor. The following day he went to see his doctor, who told him he had mesothelioma. “What’s that, doctor?” asked Mick. He told him it was asbestosis of the lungs. “What can you do?” asked Mick. “Nothing,” said the doctor.

Within a matter of months, the lad was dead. His widow set up the research fund with a good friend, Anne Craig, and they pledged to raise £100,000. Two years ago they raised £1 million, and all that money has been put into research into this disease. It is people like them and the men, women, children, daughters, wives and husbands who have suffered that this debate should really be about.

There is a history of people exploiting asbestos throughout the world. I was proud when a member of my trade union went to South Africa and worked alongside Thompsons Solicitors to litigate against companies there. One of the stories they heard in Namibia was that one of the ways in which companies ensured maximum output was by filling big plastic bags with raw asbestos. How did they make sure they were full? They put young Namibian kids in them to tamp down the asbestos as if they were pressing grapes. Those kids were exposed to raw asbestos at the ages of six, seven, eight and nine. Those are the sorts of people behind the desperate negligence under discussion.

Other diseases have been mentioned. When compensation for plural plaques was challenged in the courts in 2007, the case was won and people stopped getting compensation. As I said in an intervention on the hon. Member for Chatham and Aylesford (Tracey Crouch), KPMG announced a £1.4 billion windfall on that same day. That is what the insurers got as a result of the Law Lords’ ruling. Members on both sides of the House tried to get our Government to change the law so that those people could get compensation again.

Other parts of this nation have managed to change the law. Earlier, the right hon. Member for Belfast North (Mr Dodds) intervened on the Minister in relation to Northern Ireland, and the Scottish Parliament has been able to do it, but we were told that it could not be done in this part of the world. We should have done it.

Equally, people may not have mesothelioma or anything life threatening, but the truth is the same: they were negligently exposed at work to substances that the employer knew would be damaging. Employers have known that since 1892, when asbestos was first recognised as a poisonous substance. As we have heard, they have known since 1965 that it should have been illegal to do so, but they kept on exposing people to the substance for days, weeks, months and years.

We are now told that people can have 75% of their compensation. One thing always sticks in my mind in talking about this. I first had real evidence of mesothelioma when I spoke to a lawyer dealing with it, a guy called Ian McFall, who works in the Thompsons north-east office and is a renowned expert on the issue. He told me that the fibres lie dormant for decades, but all of a sudden they become active, the person suffers horribly and then dies.

I used those words when there was a discussion about this issue some years ago. I was approached via e-mail by a woman who was not one of my constituents, who said that I had really upset her. Her family was sitting there, with their father going through the process, and she had tried to be careful to shield her family from knowing the truth.

I am sorry that I have to repeat those words today, but the people of this country need to understand how serious this disease is. It is to the credit of the Government and others that they have accepted that this is a very special case, because it is a killer. There are no two ways about it: if you get this, you are going to die. That is the main reason why the situation has been challenged to the extent it has over many years.

The insurance companies have put forward the compensation as somehow an act of benevolence: “We are being really nice to you, aren’t we?” No, they are not; they have been caught on the hop and forced into a corner to put right what they should have done. The deal struck between the Government and the insurance companies is just that—a deal. It has not involved the people it should have involved to the extent that they should have been involved, whether they are claimants, their support groups or, crucially, the trade unions.

My hon. Friend the Member for Wansbeck spoke about the work of the trade unions, but that had an impact not only on trade union members but on every member of the public in this country. Many people are not in trade unions or in unionised workplaces, but they have the same rights to compensation and legal redress as those for whom the trade unions work.

[Mr Kevan Jones]

I read Lords Hansard last night. Does my hon. Friend agree that throughout all the negotiations the Government have had on the Bill, those in the driving seat have been the insurance companies? The fact is that we are having to accommodate the situation to suit the insurance companies, rather than the victims.

[Mr Anderson]

That is absolutely right. The Government are saying that they can go only so far, because the companies cannot afford more, but they are forgetting the fact that companies have received millions and millions of pounds, which they could and should have put away since 1965, in the knowledge that this might come along one day. Is not the whole point of insurance that people should save for a rainy day? Well, the umbrellas are up now.

[Mr Anderson]

Those people must obviously have realised that there was a potential for that. If the consultation had lasted for a short period, it would have been that date, but without a shadow of a doubt, they clearly could have thought that it might be the start date.

My hon. Friend the Member for North Durham spoke about some of the consultations. I went to some of the meetings, which Ministers opened and then virtually handed them over to members of the insurance companies to run and to answer questions. Civil servants and Ministers were not engaged; it was people from the Association of British Insurers who answered all the questions, and it was clearly in their interests to do what they have now got away with. It is clear that the scheme will not provide full protection or full compensation.

I share the concerns of other hon. Members about the level of payment. For the life of me, whatever the cut-off date, I cannot see why the payment should be anything less than 100%. I made the point earlier that there is 100% liability on the employer and the insurer, while 100% of those with this disease have died. If people go through all the hoops they have to go through, which are the same as those in civil litigation, it is not their fault that insurers, employers or both have disappeared; the fault lies with the industry, which collectively should be putting this right. The insurers have had the premiums and have invested them, so they should pay up.

We are talking about at least 6,000 people who, between them, have lost somewhere in the region of £800 million. Compensation of 75% means that people have to absorb 25% of the ongoing costs. My hon. Friend the Member for Wansbeck said that that is at least £43,000. To somebody who is probably on the sick, and whose family is probably not working because they are taking care of them, £43,000 is a life-changing sum of money. It might not be very much to insurance companies or to some of those funded by insurance companies, but it is clearly a lot of money for people at a time of grief.

I want to pick up what has been said about the exclusion of other diseases. If people have been criminally exposed to a poisonous substance, those who did that should be brought to book, and the way to do that is to make them pay compensation. I hope that we would support that and that as the Bill goes forward we can make that case more and more strongly.

Again, why is the cut-off date not February 2010, which is when the consultation was announced? The written ministerial statement came out two and a half years after that consultation was announced. That was two and a half years of what—things gathering dust and people having discussions? What were civil servants doing? All of a sudden, there was a statement two and a half years later, followed by a discussion period to bring us to where we are now. That clearly is not fair. The minimum has to be February 2010, and I agree with my hon. Friend the Member for North Durham that if we really are serious, we should go back to 1965. My guess is that we probably will not, but we must address that issue in Committee as a matter of real urgency.

[Mr Kevan Jones]

Does my hon. Friend agree that there is at least some logic in that? The arbitrary date of 2010 is when the consultation started. The fact is that when that started in 2010, the companies knew about the liability. My hon. Friend has pointed out that they took the premiums and saved money by not paying out.

[Mr Anderson]

Absolutely. The truth is that the companies knew. What was happening was not a secret. It was not the case that all of a sudden the consultation found that mesothelioma was not caused by exposure at work or employers neglecting their duty in not providing proper safety equipment and so putting people at risk. They knew the likely outcome was that there would be implications for the industry. Clearly, they should have said, “Right, we need to start on this at least as a bottom line.”

The insurers have apparently said that they think the legislation will be retrospective and amount to unlawful interference with insurance property rights. What a load of gobbledegook. They mean, “We want to keep more money in our pockets. We want to deny people their rights.” They are denying people, either those seeing out their last few days or their families, the right to have a decent life.

[Mr Jones]

Does my hon. Friend agree that the sums are in stark contrast to some of the eye-watering figures paid out, for example, for the mis-selling of payment protection insurance? These groups of people clearly need the money, and in some cases the victims have suffered a very horrible and painful death.

[Mr Anderson]

There is absolutely no comparison between the two, and seeing what has happened for people abused by being wrongly sold PPI when they did not need it does not make this situation any better. This is about people deliberately being exposed to this substance at work. To reiterate, I see no logic in the state saying, “We want back 100% of DWP benefits.” Reading between the lines, my guess is that there is probably nothing else the state can do, but if so, it has to get its act together and change that part of the Bill.

Some say that we should feel sorry for the insurers and their balance sheets, because if we go beyond the 3% level they will struggle and so put the costs on to people buying insurance today. My hon. Friend the Member for North Durham has already mentioned Lloyd’s making £2.77 billion; it clearly is not suffering too much. I would be much happier if the insurers were so strapped for cash that they were not donating huge sums to the Conservative party. Every Wednesday, our Prime Minister comes here, talks to my leader and accuses us of being in the pay of our paymasters, the trade unions. Let us look at the Tory party’s paymasters in the insurance industry.

It might be coincidental that the Tory party is bankrolled massively by the insurance industry, but it might not. Let us look at some of the figures. [Interruption.] If I can find my glasses, I might be able to tell hon. Members—aged 60 today, I’m not doing bad! Sir John Beckwith and the Beckwith family have donated £524,000 to the Conservative party at central and local level; Caledonia Investments and the Cayzer family have donated £275,300; Centrepoint Insurance has donated £10,000; Dickinson insurance brokers has donated £2,000; General Insurance Brokers has donated £5,000; Hampden insurance has donated £16,800; Michael Spencer and IPGL—this is eye-watering—have donated £3, 929,892.52; the Keswick family in Scotland have donated, between them, somewhere in the region of £523,000; Norwich Union has donated £8,500; R L Davison and Co., from Lloyd’s, donated £5,000; and Theodore Agnew, who founded Town and Country Assistance, has donated £134,000.

If someone today, instead of those names, was saying, “Unison, T&G, Amicus, Unite, the GMB”, we would be being told, “You’re being bought off by the trade unions,” but I could never be that callous towards the Minister or his friends. It does make us think though. This deal has been hatched between the Government and the insurance companies. The restrictions in the Bill are illogical. The clawback from the DWP, the start date for claims—they really say, “There’s something going on here.” Is the Conservative party worried about going too far and upsetting the insurance companies? I hope we can flush this out in Committee and say, “Listen, this has to be paid, because it’s a moral duty.”

We are in a cleft stick tonight. I will probably vote yes tonight, but I feel abused. I feel abused on behalf of the people I work with day in, day out and the families who are helping them to get through this thing. I feel as though I am being blackmailed, because if we do not support the Bill tonight, we will be accused of stopping the Bill and not supporting what we all need to do for these people. I support the Bill with huge reluctance, therefore, and hope that when it returns here, it is in much better shape than it is tonight.

--- Later in debate ---

[Mr Kevan Jones (North Durham) (Lab)]

Many Members welcome the Bill. I welcome that a move has finally been made on compensation for mesothelioma victims, but I do not welcome the Bill in its present form. Irwin Mitchell, a firm of solicitors in Newcastle that deals with compensation cases, described this as “a second-rate Bill.” I totally agree. A lot has been said tonight on the history of mesothelioma claims. My hon. Friend the Member for Stretford and Urmston (Kate Green), speaking from the Opposition Front Bench, was clear that all the major changes on asbestos-related legislation have been made under Labour Administrations.

The hon. Member for Chatham and Aylesford (Tracey Crouch) is not in her place. She spoke well in summing up some of the issues. She admitted that she was a poacher turned gamekeeper, but her points were well made. She talked about serving on the Public Bill Committee—I am not sure whether the Whips will allow her to be a member of the Committee after that speech. She mentioned the figure of 80% and I will come back to that later on in my contribution. I take the view that in negotiations one should never declare one’s final figure at the beginning. If she is aiming for 80%, she should have started negotiating for a much higher figure. The current figure is totally unacceptable. I pay tribute to Lord McKenzie of Luton for his work when he was Parliamentary Under-Secretary of State at the Department for Work and Pensions under the previous Government, and for his work in the other place in trying to amend the Bill.

The tragedy—it is a tragedy—is that asbestos-related deaths have been known for many years, but they have been ignored. It is a cruel and painful death. I saw many cases when I was legal officer for the GMB northern region and no amount of money can compensate for suffering a long lingering death, literally gasping for air at the end, or for the pain that families go through while watching their loved ones die. My hon. Friend the Member for Hartlepool (Mr Wright) mentioned a number of cases relating to traditional industries in his constituency. One tragic case I had to deal with concerned a 44-year-old lagger—I think the proper title is thermal insulation engineer—who used to lag pipes in the shipbuilding and offshore industries. This chap, who was 43, had a wife and three young children, so it was terrible to be told that he was suffering from mesothelioma. The most tragic aspect of this case was mentioned by my hon. Friend the Member for Middlesbrough (Andy McDonald) —that it was a death sentence. This man had to face the fact that he would not live to see his children grow up or to continue the close relationship he had with his family and extended family within Hartlepool. This man was 43, but I have also dealt with cases of people who were a lot older.

Much reference has been made to the fact that the disease might take 30 or 40 years to develop, but in my experience it is quite arbitrary whether the disease develops following exposure to asbestos. I remember speaking to some old boilermakers—I am sure my hon. Friend the Member for Middlesbrough will have done so, too, in his previous life before coming here—who described dealing with asbestos as “lagging it on” and “blowing it on”. They would walk into double bottoms in ships and be surrounded by airborne asbestos, yet some of them have not developed a long-term, asbestos-related condition. I have also seen some very old gentlemen with asbestos still scarring their hands. The arbitrary nature of the disease makes it very difficult to predict who will ultimately develop mesothelioma or other asbestos-related cancers and conditions.

When I was elected in 2001, I shared an office for my first six months with my hon. Friend the Member for Midlothian (Mr Hamilton) and John MacDougall, the former Member for Glenrothes. Some colleagues may remember John—a larger than life character, a dedicated constituency MP and a former council leader. It was tragic that his career in this House was cut short by mesothelioma in 2008. John’s attitude was very positive. He knew, deep down, that he was dying, but he came back to this Chamber, even after quite aggressive surgery on one of his lungs, and maintained the cheerful and positive manner for which we all knew him. Unfortunately, he did succumb to that disease, showing that it can affect people like him who worked in the shipbuilding industry many years ago.

Much of our attention has quite rightly been focused on heavy industry, but this disease does not just affect people working in heavy industries. There are well-documented cases of people who have had very limited exposure to asbestos in hospitals or other public buildings, yet have gone on to develop mesothelioma. Again, that shows the arbitrary nature of this disease.

Personally, I think there are a lot of scare stories about asbestos. Some of the press could be labelled “asbestos deniers”, but asbestos is a safe product as long as it is not disturbed. As was said earlier, we need to educate people about how to use asbestos and how to react to it. As a minimum, asbestos should be marked on any public building. If it is not disturbed, it is not dangerous, but we must ensure that when it is removed, it is done professionally by people who know what they are doing. That should help to prevent any further damaging exposure, which is important for the future.

As I said earlier, the tragedy of this and other asbestos-related conditions is that the danger has been known for many years. Even the ancient Greeks and Romans worked out that if people worked for a while with asbestos, they developed a disease and died. Moving on to the 1930s, there was the Meriwether report, in which the term mesothelioma was first used. We have thus known from the 1930s that the condition was related to asbestos.

I know that the date of knowledge is 1965 for the purposes of the courts, but earlier cases have been documented. The Government wrote to the Confederation of Shipbuilders after the second world war, congratulating it on the work that it had done during the conflict but warning about the dangers of exposure to asbestos. However, nothing was done to protect people from those dangers. Our failure to take the warning more seriously and react to it at the time is a national scandal, and a dark stain on the nation’s history. As my hon. Friend the Member for Jarrow (Mr Hepburn) said earlier, if this had been happening in a leafy suburb, Governments would have paid attention to it more quickly, but those affected were mainly poor working-class communities in areas such as the north-east.

I pay tribute to the campaigning work of the asbestos awareness groups, which have been tenacious in ensuring that the issue has remained in the public eye. They should be given credit for the fact that the Bill has at least reached its starting point. I am not afraid to say that I think we should also congratulate the trade unions on the work that they have done for many years in raising awareness. [Interruption.] The Secretary of State accused me of chuntering earlier, but he is chuntering now. That is obviously because the modern Conservative party considers trade unions to be universally bad. However, the test cases and the education about asbestos that followed them would not have been possible without the trade unions who championed those cases, and they ought to be thanked for that.

I also pay tribute to Ian McFall of Thompsons in Newcastle, who was mentioned earlier by my hon. Friend the Member for Blaydon (Mr Anderson). I worked with him closely when I was the GMB’s legal officer, and he was very tenacious in his efforts to ensure that cases were heard and compensation was secured for people. A difficulty that used to confront me every week was caused by the fact that, in the case of many older men, it was not known that they had contracted mesothelioma until they died. It is awful to have to say to a family “There must be an autopsy to establish what this person has died of.” I remember one alarming occasion when someone rang two days before a funeral was due to take place, and Ian and I had to stop the funeral to ensure that there was an autopsy so that the evidence could be used. Ian has great expertise when it comes to compiling the history of where people worked and trying to trace the insurance companies. It is time-consuming, laborious work, but it can be done.

It is important for anyone who has worked with asbestos to make a record of where they worked with it. I pay tribute to those in GMB Northern Region who, along with their solicitors, set up an asbestos register on which people were asked to log that information. They might not have developed the disease yet, but if they developed it later, at least it would be possible to establish where they had worked. It was not uncommon for people to move around different shipyards on both Teesside and Tyneside, and before nationalisation it was sometimes very difficult to establish who their actual employer was. Another industry that proved notoriously difficult in that regard from the late 1980s onwards was the building industry, in which people moved from site to site—usually on a very casual basis—and were exposed to asbestos throughout their working lives. Trying to put together some of those long employment histories was very difficult. That is why I recommend that anyone who has worked with asbestos make sure that loved ones or solicitors know where they worked, because this disease can develop later on and that is vital information in order to be able to trace the employers and the insurers and companies involved.

My hon. Friend the Member for Hartlepool raised the issue of the north-east, as did my hon. Friend the Member for Wansbeck (Ian Lavery). The north-east has nearly 10% of England’s mesothelioma cases. That will not come as a surprise to anyone who knows anything about asbestos-related diseases, because of the north-east’s heavy engineering, coal mining, shipyards and other industries that dealt with asbestos. Between 1985 and 2005, some 2,387 people in the north-east died of mesothelioma, and that is not counting all the other asbestos-related illnesses people died from. In that period, 192 people died in Durham, 72 of them in my constituency.

I agree that it is very important to talk about the figures, but I have dealt with these individuals and have seen the awful way in which they die and the agony their families go through––and the poverty, because it is the breadwinner who goes from many of these families. I therefore know that we are not talking about people who have access to large amounts of discretionary income or expenditure. They need this compensation. It will not be a luxury for these individuals but something to support their loved ones in future.

The key thing people who are dying from mesothelioma say they want is help so they can leave money and know their families are taken care of. They want to be able to die with the knowledge that their families will be taken care of. That is not always possible. As has been said, thoroughness in these cases is very important. There are certain firms with a specialism in doing asbestos work, but I have come across some atrocious solicitors as well, who have taken on cases but, frankly, should not have been let loose on them at all.

In many cases, these individuals would not have got access to justice through the courts system if it had not been for the trade union movement. That is true not only in terms of their individual cases, but also in taking forward some of the very expensive early test cases that established the case law in this area.

That we have a Bill is welcome, but it is a very disappointing Bill. Much has been said about the insurance companies and, having dealt with them over a number of years, I can tell Members that trying to get money out of them can be very difficult, as sometimes they will try anything in order not to accept a claim, not only in these areas but in other personal injury cases as well.

The insurance companies have done very well out of this Government. They have convinced everybody that there is a claims culture in this country, which there clearly is not if we cut away from the headlines and look at all the actual evidence. They have got assistance through changes in the law that help them rather than the victims in a whole array of personal injury cases, and they are going to get off the hook again under this Bill as it stands, because, basically, what it does is cap their liability.

The estimate is £350 million. That is a large sum of money to individuals, but we also need to consider that the insurance companies have not only not paid out for these cases that they took premiums for over many years, but they have had the premiums and then failed to pay out about £800 million of claims on them. If we add it all up, £350 million is not a great deal of money.

It is also not a great deal of money if we look at the profits the insurance companies have made over the previous few years. Let me mention a few, just to give a flavour. Lloyd’s of London posted pre-tax profits of £1.5 billion between January and June 2012 and its profits for the whole of 2012 were £2.77 billion. Royal Sun Alliance had pre-tax profits of £233 million between January and June 2012. The £350 million being offered here is therefore in stark contrast to the profits that some of these companies are making.

In fact, according to the Bill, these companies will not pay the money themselves anyway, because it will be a levy that they will get from future premiums. In the other place, Lord Freud said:

“The levy will be imposed on active employers’ liability insurers at large, not on the individual insurers who took the premiums and who were on cover in the cases that will come to the scheme.” —[Official Report, House of Lords, 20 May 2013; Vol. 745, c. 691.]

So the insurance companies are not even dipping into their profits for the scheme as it stands. If that is not a good deal for them, I do not know what is. They have been in the driving seat, and the Government’s argument, certainly in the other place, has been that if we do what the hon. Member for Chatham and Aylesford wants to do—increase the compensation level to 80%—that would somehow be a show-stopping moment.

[Andy McDonald]

Does my hon. Friend agree that the insurers have already had a windfall in the form of cases that have been badly pursued—loss of services and earnings claims that have not been pursued properly—and cases that have never emerged? The insurers have already had a windfall, therefore, several times over.

[Mr Jones]

I agree with my hon. Friend. It is true that there has been bad litigation, and certain solicitors have settled for woeful amounts. Also, there are a number of people who had claims but died and never pursued them.

I find it strange that we started with a figure of 70% and ended up at 75%. The hon. Member for Chatham and Aylesford, who was not present when I started speaking, said that she would like to see 80%, but I suggest that she should have started a bit higher and worked down from there. In negotiations, people should never start at the figure they actually want, so perhaps she should have started at 95%. If she is lucky enough to get on the Bill Committee, I suggest that she start at, say, 88% and work downwards to the 80% figure that she wants. There is no rationale for the 75% figure.

The hon. Lady made a very good point about future liability. Since 1972, such insurance has been compulsory, so most future cases will be covered by insurance policies. Potentially, the next biggest area is public buildings and schools, but most such cases will not come under this scheme because it will be possible to prove who the insurer is and who is liable for the risk. It is therefore not clear to me what the 75% figure is based on. The Minister said that he will produce the various figures. It would have been helpful to have had those during the debates in the other place and today, so that we could have examined the basis of the negotiations.

As I said earlier, it seems that the insurance companies have been in the driving seat in these negotiations, which is a very strange way of negotiating on behalf of the victims, which is what I expect the Government to be doing. They will have done the modelling and know exactly the various costs involved. As my hon. Friend the Member for Middlesbrough said, we are not talking about people who do not calculate risk. They calculate risk, and they also calculate the age profiles of the groups that will be affected. I therefore find it odd that we do not have the relevant figures before us today. Again, that should not be the starting point for the insurance companies. The starting point should be to ask what the maximum compensation could be for the victims of this missed justice, and I believe that 100% is the right figure. I know that the hon. Member for Chatham and Aylesford thinks differently, but if we at least start at 100%, we might end up with a better figure than the one that is on the table.

It was also pointed out that the figure is not simply 75%, but 75% of the average. People should not expect payments that are on a par with those resulting from litigation settlements or other insurance policies. These arrangements will not be like that at all, and many of the people who should rightly get compensation because they have been affected by the disease through no fault of their own are going to be short-changed. Let us remember that the insurance companies took the premiums and benefited from them for many years. There is a debate to be had in Committee on that.

Will the Minister tell us how the negotiations have taken place? If the rules were set by the insurance companies, rather than by the Government setting down the starting point, they will have been poor negotiations because they will have started from the wrong premise. I know that my hon. Friend the Member for Blaydon wants to question the Government’s motives in this regard, and he has every right to do so, but if we are on the victims’ side, we should be trying to get the maximum compensation for them irrespective of our political party allegiance.

It is also remarkable that the insurance companies seem to have been in the driving seat in setting the date of diagnosis from which the scheme will apply—namely, 25 July 2012. Lord Freud spoke in the other place about how that decision would affect insurance companies. He said that if an earlier date were set, the levy would go up, which would be unaffordable. Like the hon. Member for Chatham and Aylesford, I would like to see the figures. How did the Government arrive at that position?

It has been pointed out that the insurance companies have known since February 2010 that this change was coming. I doubt that they are so bad that they will not make provision for this in their calculations, but the Government need to explain why that date of July 2012 has been stuck to. Was it at the insistence of the insurance companies? I guess it was, because it will limit their liabilities. Frankly, if I were them, I would be laughing all the way to the bank if I could cut my liabilities in that way.

I accept that, whenever we set an arbitrary date, there will be people who fall either side of the line, but many of those campaigning on behalf of loved ones who died from mesothelioma before that date will not get a penny out of this scheme. What is the logic in what has been decided? People have argued that it would be logical to set a 2010 date because that was when the consultation started and that it would be fair to the insurance companies to give them some warning, but that is complete nonsense. The insurance companies have known about this for years; it has not come as a surprise to them. There would at least be some logic in going back to the date of knowledge of mesothelioma, in regard to the other legal cases, because that argument has been formed in law.

When I suggested this approach earlier, the Minister intervened to say that a huge group would be included, because it would include families. There are two issues involved here. First, a number of people will have died in the intervening period, so we are not going to get any new cases from that—this is about historical cases. I accept that legacy cases could come from families who want to pursue a claim, but there will be very few of those. I have done asbestos work for a number of years and I know the detail of it. In these cases, someone needs detailed knowledge of where individuals worked and were exposed to asbestos. In addition, a lot of these people who died of asbestos-related diseases such as mesothelioma would have died without even knowing this. I find it difficult to believe that the insurance companies have not done some modelling to know what that figure could be. It would have been good for us today, and when the Bill was introduced, if someone had at least asked how many potential cases could be in that group, but that has not been asked. Again, we have just accepted that this would be onerous for the insurance companies—that may be true, but let us find out what the number is. That debate has not been had. That earlier date would be more defendable than even the 2010 decision, which would be arbitrary in that respect. I am not a lawyer, so I look to the lawyers in the room to answer whether or not people will legally challenge a date, if it is agreed, of 2012 or 2010 on the basis that the date of knowledge goes back to 1965. There is a potential there for more delay.

One thing that the Minister said in opening was that we needed to get on with this, and I do not disagree. However, as the hon. Member for Chatham and Aylesford said, it is important that we get it right because once this deal is signed with the insurance companies, there will be no going back. There will be no trying to open this up later for other cases or trying to change the scheme, because the insurance companies will be wedded to this in terms of what they want.

[Stephen Lloyd (Eastbourne) (LD)]

I have heard what the hon. Gentleman said, but am I right in saying that as a colleague in the other place laid this down as a regulation rather than a ministerial order, there is more flexibility for Parliament to improve, change or reorder the scheme as it goes forward? We could improve it specifically by laying it down that way.

[Mr Jones]

The hon. Gentleman is being very optimistic. I do not know whether he has ever dealt with insurance companies, but if he thinks they are going to reopen this one, he is being naive, to put it politely. He is a Liberal Democrat, after all, so that is possibly acceptable. The answer to his question is no, he is not; once this has been done, that will be it. That is the important point.

The other issue I wish to discuss is other conditions. Mesothelioma is clearly a death sentence. [Interruption.] Sorry, I am never fair to Liberal Democrats. The hon. Gentleman may be trying to get some sympathy from me on behalf of Liberal Democrats, but he is certainly not going to get any after what they have done in supporting this Government. If he is looking for sympathy for Liberal Democrats, he can forget it.

There are other diseases involved here, and it is very interesting to read what Lord Freud said in the other place. He said:

“The issue of individuals who have developed other asbestos-related diseases through negligence or breach of statutory duty and are unable to bring a civil claim for damages of course needs to be addressed.”—[Official Report, House of Lords, 20 May 2013; Vol. 745, c. 690.]

It would be interesting to know what other compensation schemes or other redress the Government are considering introducing. I would not hold my breath, given the record of other Conservative Governments. They have never done anything. This is the first time they have done something for asbestos victims. We do need to know though, because Lord Freud, who has a strange relationship with the Conservative party, is clearly sympathetic to looking at some of the other debilitating asbestos-related conditions.

[Gordon Birtwistle (Burnley) (LD)]

The hon. Gentleman comments on what the Conservatives have done over many years. Will he, during his speech, explain what the Labour Government did on this issue for the 13 years they were in power?

--- Later in debate ---

[Mr Jones]

If there is one thing that annoys me it is people who wander into a debate, having not listened to any of the discussion. If the hon. Gentleman wants me to read out all the legislation, I certainly will, but it has already been done. If he could trouble himself to sit through and listen to the debate, he might find it a good way of understanding what is going on. If he reads Hansard tomorrow, he will see that my hon. Friend the Member for Wansbeck read out the long list of what the Labour Government have done for asbestos victims in the past. Not one single piece of that legislation was ever done on a Conservative Government’s watch, apart from this one. Please read with interest Hansard tomorrow—[Interruption.] The Secretary of State is chuntering in a jovial sort of way; he is a jovial sort of chap. He has a nervous smile on his face, which is quite excusable as he has a lot to be nervous about.

The hon. Member for Chatham and Aylesford raised the issue of research. The research into mesothelioma under the previous Government was good but it is time-limited. When we look at the amount of money that has gone into cancer research, it is shocking to realise what a small amount has gone into mesothelioma. That funding has been important for the pioneering research that has been done with the British Lung Foundation. I agree with her that we need to insert some reference to research in the Bill. Without that—I know that she is poacher turned gamekeeper and clearly knows the inside track and how the companies operate—there is no way that the insurance companies will voluntarily give up any money to research unless they have to. I hope that the Bill gets amended in Committee and that the Government support such research, because it has been important in understanding the condition and in looking for possible treatments in the future.

In conclusion—[Interruption.] I can go on if the Minister wishes me to. I am glad that we finally have a Bill before us, but it is not the Bill that mesothelioma victims require. It needs huge change, and I hope that the hon. Member for Chatham and Aylesford is on the Committee and can argue from the Government Benches, in the articulate way that she did tonight, some of the points to improve the Bill as it goes forward.

--- Later in debate ---

[Mike Penning]

I am good friends with the hon. Gentleman, and I know him well. I do not see it that way, as he knows, but I understand why he does. There has to be an arbitrary cut-off date, and the hon. Member for Hartlepool (Mr Wright) said that the date will be arbitrary whatever we do.

We have been in deep negotiations—there is no argument about that; it will all come out—but the insurance companies did not just stroll up to Lord Freud’s office and say, “By the way, can we do a deal?” They were dragged there, otherwise that would have been done under the previous Administration. The Bill is not perfect and it probably can be amended, but it must not be delayed.

[Mr Kevan Jones]

I am interested that the Minister says there has to be an arbitrary date. No, there does not; there has to be a date that is justifiable, and the only such date is the 1965 date of knowledge.

[Mike Penning]

That would be an arbitrary date too, because, as the hon. Gentleman said, mesothelioma was known about before 1965. Whatever happens, if we get bogged down in a legal argument, it will delay the Bill, and the compensation that everyone has worked towards for so many years will be massively and dramatically affected.

Benefits and Food Banks (County Durham)

Kevan Jones Excerpts

Wednesday 3rd July 2013 Commons Chamber

[Phil Wilson]

That is a valid point, and we should pay tribute to the churches up and down the country that are now providing food to half a million of our fellow citizens in Northern Ireland, Scotland, Wales and England.

I would also like to mention the growth of independent food banks. One is run by the Excel church in Newton Aycliffe—known as Excel Local—and it has fed over 1,000 people in the area over the past year or so. In September 2011, the Durham Christian Partnership distributed 42 kg of food, helping 18 people. The latest figures for May this year show that the network of 12 food banks in County Durham has fed 934 people, providing 300-plus meals a day. This figure is increasing month on month. In total, the partnership has distributed in the region of 70,000 kg of food.

Lord Freud, the Work and Pensions Minister has made headlines today when he said that the demand for food banks

“has nothing to do with benefits squeeze”.

I rebut those comments by quoting from an e-mail I received from Peter MacLellan who runs the Durham Christian Partnership food bank network. He says that

“from the distribution points and also from calls received in the office that the changes to crisis loans and the other welfare changes have a major impact. Looking at the reasons why people are referred to the food bank up to the end of March 2013 out of 6620 people 18% came because of benefit changes and 34% due benefit delays. For April and May together, of 1,800 fed 22% came because of benefit changes and 40% due to benefit delays. So combining benefit issues the percentage has grown from 52% to 62% which I would regard as a significant rise.”

He goes on:

“I am especially concerned that there seems to be an issue with delays in claim processing and I’m not sure whether this is a local issue or national one or how the benefit claim processing centres are performing against their targets.”

Can the Minister say why there seems to be an issue with delays to benefits?

[Mr Kevan Jones (North Durham) (Lab)]

I congratulate my hon. Friend on securing this debate. Does he think it an absolute disgrace that in 2013 not only are people relying on food banks, but in County Durham children are turning up at school hungry?

[Phil Wilson]

My hon. Friend—a fellow Durham MP—and I both know what is happening in our schools now. Children are turning up hungry, and we know of cases where teachers have paid for food for the children out of their own pockets. That is a crucial issue in areas such as ours.

Will the Minister tell the House whether there are problems with benefit claim processing centres hitting their targets? If there are not, why do data from food banks prove there is a problem? There seems to be a huge difference between what independent charities are saying and what the Government are saying. Other worrying statistics show that just under 20% of those using food banks are in work and use them because their income does not cover the cost of electricity, rent and food, and something has to give. More significantly, a third of recipients are children. Food banks now claim that demand is outstripping supply, and the welfare reforms have yet to be implemented.

Durham county council estimates that 119,600 households in County Durham— just over half of all households in the county—will be affected by universal credit when it is introduced. The council also estimates that changes to benefits and tax credits will see each household lose £680 a year, and that £151 million will be taken out of the local economy. Around 8,500 people in so-called under-occupied properties will be affected by the bedroom tax. That is an insidious measure which, anecdotally, is starting to be seen as another reason people are using food banks.

--- Later in debate ---

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing the debate.

I believe that, in the long run, the process of welfare reform on which we have embarked will enable more people in County Durham to find work, and will help those who are in work but on low incomes. The hon. Gentleman implied that Durham county council was fearful of universal credit, but I believe that the council should welcome the opportunity that it presents. Our intervention and support will encourage and help people to move up the earnings scale.

[Mr Kevan Jones]

What about jobs?

[Mr Hoban]

I shall return to the subject of jobs shortly.

My Department has been asked a number of questions about food banks in recent weeks, and this evening I have listened to what the hon. Member for Sedgefield has said about constituents of his who make use of them. I hope he will be reassured to know that we do not think that they form part of the welfare system. We do not measure their use, but we do “signpost” people to them, just as we might direct people to any charity that provides help and support. I should add, however, that we know from the Trussell Trust’s own figures that only 2% of people say that they were directed to a food bank by Jobcentre Plus.

Under the current benefits system, it is not obvious to people that working will make them better off. The problem lies not with claimants, but with the system. Our reforms will, over time, deliver dynamic benefits as more people are encouraged to work and to increase their earnings. As all the evidence shows, work is the best route out of poverty for individuals and households. Universal credit is a seamless “in and out of work” benefit which will make it easier for people to move into work. Because people should know that work pays and earning more pays more, incentives are built into the system to encourage them to move from low incomes to higher ones. Over the next few months, we shall be identifying ways in which we can help people to increase their earnings and reduce their dependence on the welfare state, thus giving them more dignity and boosting their self-esteem.

Universal credit will make 3 million households better off and will lift a quarter of a million children out of poverty, because we are putting more money into the system. The hon. Gentleman asked about family poverty. Statistics relating to households with below-average incomes show that the number of children in workless poor families has fallen by 100,000 over the past year.

As well as making work pay, however, we must ensure that benefit payments are directed towards those who need them most, that they provide a fair deal for the taxpayer, and that they restore fiscal responsibility to our finances. The reforms that we have introduced are already helping more people to move into work. In the last year alone, there has been a 6% fall in the number of claimants of jobseeker’s allowance in County Durham, and the figure for young people is even better: 14% fewer are claiming the allowance.

The Work programme in County Durham is helping people to find sustained employment. Of the 12,000 who have joined the programme in County Durham, 1,200 have secured jobs, and four out of five of those have remained in work for longer than six months. That demonstrates—here I address the point made by the hon. Member for North Durham (Mr Jones)—that there are jobs there, and that people are staying in employment. We are seeing a break in the pattern of worklessness that persisted under the last Government, who wrote off many of those people.

Let me give an example of what is happening under the Work programme. Wesley McGinn had applied for more than 1,000 jobs since leaving school. His provider worked with him to improve his interview skills and his CV, and helped him to search for jobs that matched his skills and aspirations. Now he is working for Care UK. Wesley has said:

“I'm so glad that Ingeus helped me succeed...I have a good job, I feel I am making a real difference, and I can now pay my own way in life.”

The system that we inherited from the last Government simply wrote people off when they were unfit for work, but in the last two years the number of people in County Durham receiving employment and support allowance and incapacity benefit has fallen by more than 3,000. Some of those people had been receiving incapacity benefit for more than five years. Now, either those people are in work or we are actively helping them to find work rather than writing them off and leaving them stuck on a life of benefits. We are beginning to see real change as a consequence of our reforms.

[Mr Jones]

The Minister is from County Durham, and presumably knows the area well. I must tell him, however, that when people in my constituency obtain work, it is low-paid work involving short-term contracts. Those people cannot secure the long-term security that they need. For instance, they cannot gain access to credit. The proposal in the autumn statement not to pay jobseeker’s allowance for the first seven days of unemployment will lead to poverty, and people in that position have no savings to fall back on.

[Mr Hoban]

People who lose their jobs are paid in arrears and the money we are saving by increasing the period from three days to seven is going to be used to provide more support to get more people into work and to get them into work quicker.

The benefit cap is often cited as a cause for referrals. We have decided to cap the total amount people can receive in benefits, and we will restore the incentive for them to move back into work. That is very important. We are working with Jobcentre Plus and local authorities to get people affected by the benefit cap into employment. We have given more money to councils through discretionary housing payments. In County Durham, only 200 households have been affected by the benefit cap, but we will work with those families to get them into employment.

Crisis loans were mentioned, so let me say a bit about the reform of the discretionary social fund and support for short-term financial need. From 1 April this year, locally based provision of crisis loans is being delivered by local authorities in England and the devolved Administrations in Scotland and Wales, because local authorities are best placed to ensure help is targeted at those most in need. Durham county council has delivered support through HAND—Help and Advice Network Durham.

Crisis support is provided in two forms. The first is settlement grants, where the applicant must have applied for a budgeting loan or advance from DWP if they are eligible to do so and have been declined. This aims to help people to remain in the community or move back into the community after a period in supported or unsettled accommodation. Awards are only available for items such as beds, bedding, furniture, white goods and kitchen equipment. The second is daily living expenses, to help to meet immediate short-term needs for goods or services that arise because of a disaster or unforeseen circumstances. Awards are available only for food, baby consumables, clothing, heating and travel, and for a maximum of seven days’ support. At a meeting last week County Durham local authority confirmed it was receiving about 50 to 60 applications a week, much less than the 250 to 300 per week it had anticipated. National provision is also available in the form of advances of benefit delivered by DWP for those awaiting first payment of benefit.

Provision is therefore available for those who have had a delay. The hon. Member for Sedgefield might want to ask Durham county council why it thinks it is getting far fewer applications for support than it expected.

Jobs and Business

Kevan Jones Excerpts

Friday 10th May 2013 Commons Chamber

[Vince Cable]

The vast majority are in full-time work. The figures show that quite clearly. It is better to be in part-time work than out of work. I hope that there will be some recognition of that.

[Mr Kevan Jones (North Durham) (Lab)]

Does the right hon. Gentleman recognise that when the coalition came into government in 2010 the economy was growing because of the actions of the previous Government? Does he regret cutting capital expenditure straight away and the other mistakes that were made early on, which sent the economy into depression and have caused it, as my hon. Friend the Member for Alyn and Deeside (Mark Tami) said, to bump along the bottom?

[Vince Cable]

I have said that the cuts in capital spending have been too deep. The Chancellor has acknowledged that and changes were made in the autumn statement and the Budget. The hon. Gentleman seems to forget that the decision to slash capital budgets by half was made by the outgoing Labour Government in 2010.

--- Later in debate ---

[Vince Cable]

I spend a good deal of time discussing that issue with the Home Office, and I will come on to students in a moment as they are a crucial category.

In order to clear the decks for an honest discussion of this problem, we must confront the reality that some of the facts, or factoids, used in this context are deeply unhelpful. All parties and commentators use the concept of net immigration as a way of measuring what is happening on that front, but at the heart of that concept lies a logical absurdity. One reason net immigration rises is because fewer British people emigrate—one would have thought it rather a good thing that people feel comfortable living in this country and want to stay here. Net immigration declines if more British people emigrate, which one would have thought is rather a bad thing. We often operate, therefore, with a concept that gives us misleading and unhelpful conclusions.

Similarly, the biggest item in immigration—this relates to the previous intervention—and the biggest category of people regarded as immigrants are overseas students. Of course, overseas students are not immigrants; that is not why they come here. A few stay on—indeed, I probably contributed to immigration statistics 50 years ago when I married someone who was then a student at the university of York. For the most part, however, people come to the UK to study and then go home. They are not immigrants, but by way of a quirk—not in our statistics, but those of the United Nations—they are regarded as immigrants and we must acknowledge that in our debates.

Setting aside prejudices and anxieties, it is important to acknowledge that in some key areas immigration makes an important and positive contribution to the UK. The first category is the one we have just been discussing: students. Overseas students contribute about £9 billion a year to the UK economy. They also contribute in other ways, but education is one of our most successful export industries. The Government have tried to curb abuses that were taking place. People were using bogus colleges as a route to illegal immigration, and those have been closed. Once we have established the principle of legality, students make a positive contribution, and I would see a negative trend in students coming to the UK as a problem rather than an achievement.

[Mr Kevan Jones]

I agree with the right hon. Gentleman’s point about bogus colleges. First-class universities such as Durham rely on a lot of overseas students not only for income but to become more cultural and diverse places. Does he agree that some of the language being used gives the impression to students from the middle east and far east that they are not welcome in the UK?

[Vince Cable]

That should not be the case, and the Prime Minister has gone out of his way—as he did on a recent visit to India—to make it clear that we welcome valid, legal overseas student visitors to the UK. That is our policy and we are encouraging it.

--- Later in debate ---

[Vince Cable]

That is essentially the point I am trying to make. Perhaps the hon. Gentleman can communicate his message to the shadow Home Secretary, who has a slightly different take on those things.

My essential point is that there are positives, and we need to stress them in the current atmosphere. However, we also need to provide reassurance, which is what the Government are seeking to do in two main ways. First, when people come to this country, we should acknowledge a distinction between the rights to work and to claim benefits, which is at the heart of people’s sense of citizenship and belonging. My colleague the Secretary of State for Work and Pensions will explain how we want to ensure that British citizens and not people from overseas receive benefits. The sense of abuse in that sector fuels much of the current anxiety.

The second source of concern is the belief that the laws and restrictions we have should be enforced. There are measures in the Immigration Bill to try to ensure that the private sector, particularly the property sector, plays its role in enforcing them. Those restrictions will have to be subject to a proper regulatory impact assessment and, under the one in, two out principle, they will have to demonstrate that they do not impose red tape on small business. Provided that happens, I hope the combination of actions that have been taken in respect of the benefits system and enforcing the law will be sufficient to reassure the public, or those people who are willing to be reassured, that managed immigration is very much in the national interest.

[Mr Kevan Jones]

The right hon. Gentleman makes a thoughtful speech and brings some balance to the argument on immigration. However, if he looks at Department for Work and Pensions figures, he will see that the majority of immigrants are in work and not claiming benefits. Of those who claim benefits, some have contributed through national insurance. Does he agree that we should look at the facts rather than feed the myths put forward by the press? One fact is that, according to DWP figures, fewer than 2% of applications are fraudulent or bogus.

[Vince Cable]

The hon. Gentleman is right that myth-busting is an important part of what we need to do. However, in order to deal with myth-busting, we must also deal with genuine abuses. I hope he understands that. I am grateful for his first comment—I am trying to lower the temperature of the debate and to get us to deal with fact rather than myth. I am trying to have a proper balance that recognises the very substantial economic importance of managed migration to this country alongside the measures we must take to deal with abuse.

A large part of the Leader of the Opposition’s speech was devoted to the continuing problems in banking and the financial sector, and many of the current problems with the economy relate to the aftermath of the banking crisis. We have got to a situation in which banks—partly under pressure from regulators, and partly as a result of learning from their mistakes—have moved to a position of fairly extreme risk aversion. If we are to ensure that credit flows to small business, which is the motor of the economy, that needs to change.

There is some evidence that the situation is beginning to change. Some banks, such as Lloyds, HSBC and the trade finance market, are showing positive trends, as is Barclays. The head of Royal Bank of Scotland made it clear at the weekend that he has £20 billion-worth above his liquidity buffers and capital requirements available for small and medium-sized enterprise loans. We hope SMEs take advantage of that.

However, the position we are dealing with is genuinely difficult. In the light of banks’ previous misfortunes, they are operating what I call a pawnbroker model of banking, under which people need collateral, whether a gold watch or property, to secure a business loan. That is massively inhibiting for, for example, a creative industry that does not have such collateral, or an export company that is trying to trade on the basis of orders, or simply for a good company with a good business idea and a good business plan that is unable to get into expansionary mode because of the crippling effects of bank credit restriction.

The Government are trying to deal with the problem in a series of practical steps. We clearly need to do more, but it is worth summarising some of the steps we are taking. We have a sophisticated system of developing supply chain finance—the advanced manufacturing supply chain initiative. Work is being done with Kingfisher and others in the private sector to support trade finance outside the banking system. We have a £1 billion fund that now supports non-bank finance, which is proliferating rapidly. We have crowd-sourced funding, invoice finance and non-conventional forms of lending. The Financial Services Authority and, currently, the Financial Conduct Authority, relaxed rules on the establishment of new banks. Within the next year or so, we will hopefully have a lot more banks, based on the model of Aldermore and Handelsbanken.

Probably the most important step, and one that underpins the others, is the work we are doing with the business bank. We have £1 billion of start-up capital. The first £300 million is being marketed to support new banks and long-term patient capital, which can be raised in the City, and to support equity through angel networks. A crucial test of our policy in the coming months will be the speed with which we can get that capital into the market to relieve the genuine constraints.

I listened carefully to try to establish what, if anything, Opposition Members wanted to add to the debate, because the problem is a genuinely difficult one, and because Labour presided over the banking collapse. If I understand them correctly, the big new idea is regional banking. It is a good idea, and I want it to be explained and developed. It has been forgotten that, 15 years ago, we had regional banking—they were called building societies. I have a vivid recollection of that period because I was chairman of Save Our Building Societies, working with one or two Opposition colleagues, particularly the hon. Member for Edmonton (Mr Love), to try to stop the demutualisation of building societies.

I believe demutualisation began originally with Lord Lawson, but it is worth recalling that, in the first five years of the Blair Government, we lost most of our regional banks. It is worth itemising what happened to them: Bradford and Bingley collapsed and was nationalised, and is now part of Santander; Birmingham Midshires bank is now part of Lloyds; Northern Rock in Newcastle collapsed and is now part of the Virgin group; Woolwich is now part of Barclays; Halifax is now part of Lloyds; and Alliance and Leicester is now part of Santander. We had regional banking, and it went. I would love to see it recreated, but that is like turning omelettes back into eggs. I am all ears as to how that can be done. If it can be done, I am very much in favour of it, because we need much more diversity and competition in banking.

--- Later in debate ---

[Mr Kevan Jones]

Do we not also need a bit of consistency from the Conservative part of the coalition, which not only supported that Bill but in some cases, as with the Chancellor, wanted to go further with deregulation of the banking system?

[Mr Umunna]

My hon. Friend is absolutely right, and I was just about to come on to that. The Business Secretary, soon after making that statement in favour of our regulatory framework, said:

“Like the Conservative Opposition, we shall approach the issues constructively. There is no reason to hold back the Bill.”—[Official Report, 28 June 1999; Vol. 334, c. 58.]

My hon. Friend the Member for North Durham (Mr Jones) is absolutely right: neither the Conservative party nor the Liberal Democrats voted against that Bill in opposition, and yet we have had no expression of regret from them for supporting the regulatory framework that we put in place. It is about time that we heard some mea culpa from Government Members.

--- Later in debate ---

[Christopher Pincher (Tamworth) (Con)]

It is a great honour to speak in this Gracious Speech debate on jobs, and a particular honour and pleasure to be called first after the dazzling performances on both Front Benches. It is also a pleasure to follow the hon. Member for Streatham (Mr Umunna), the shadow Secretary of State, who made a typically assured and polished speech—as I am sure his Wikipedia page will shortly remind us.

I shall bear in mind your words of wisdom, Mr Deputy Speaker, and not speak for too long. I am heartened by the fact that you have not set a time limit, because on the last three occasions when I have spoken in the Chamber, I have been given just three minutes in which to do so. That certainly focuses the mind, but I assure you and the House that I shall not be speaking for three minutes or, indeed, for three hours.

I want to speak about the issue of jobs, which is important to my constituents in Tamworth. Notwithstanding the rather gloomy words of the shadow Secretary of State, and the collapse last December of a company called Drive Assist, we in Tamworth have been heartened by a downward trajectory in joblessness. I think that that will be enhanced and encouraged by the measures announced in the Gracious Speech, particularly the proposal to offer an employment allowance towards national insurance, which I am pleased to note that the shadow Secretary of State seems to support. It means that small businesses up and down the country, from Redruth to Redcar—including, importantly, businesses in Tamworth, Fazeley and the district of Lichfield—will be exempt from national insurance, which will enable them to grow and employ more people. I think that the measure will also help us to rebalance our economy, moving back from the over-reliance on the financial services sector and the public sector that was so beloved of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) towards a more sustainable, broad-based private sector—a sector that contracted by some 730,000 places under the last Labour Government.

I was also heartened by the announcement of a deregulation Bill, because regulation is, after all, a form of tax. A small business man must be not just his firm’s managing director and sales director, but its human resources director, logistics director, financial director and IT director. Any piece of bureaucracy and administration, even a small piece, can add to the distraction and detraction from the time when he should be growing his business and selling.

[Mr Kevan Jones]

One example of deregulation in the Queen’s Speech is the removal of health and safety legislation relating to sole traders. Can the hon. Gentleman explain how the economy will be boosted by the exclusion of sole traders from such legislation? Will that make the workplace safer for them?

[Christopher Pincher]

A sole trader will be able to spend more time finding and doing work and making money, on which he will then pay tax to the Exchequer. I think that this is a very worthwhile regulatory change. I am sure that, as an old hand in the House, the hon. Gentleman will have heard many Governments down the years say that they will deregulate. I only hope that this particular Bill will have real teeth, will do what it says on the tin, and will enable business men to spend more time doing business rather than administrating.

[Mr Jones]

Would the hon. Gentleman be happy for a sole trader such as a plumber or even an electrician who had been allowed to have no regard for health and safety legislation to come into his home? Will this really make any difference to economic growth, and will it make the safety of the public and that individual any greater?

[Christopher Pincher]

I hope that it will. We shall see. However, there is certainly an argument for deregulating, and as the hon. Gentleman surely knows, the Bill will need to do what it says on the tin.

The Queen’s Speech also refers to measures to support intellectual property. If we are to focus on and support the extremely important design businesses in our country, we need to help them to protect their intellectual property from countries and businesses that would rather borrow, steal and copy knowhow than buy it.

I hope that the measures will help my constituent Mr Ken Clayton, a photographer who fears that changes proposed, he says, by civil servants will mean that photographs on Facebook and on BBC websites will be automatically stripped of their metadata and will become “orphan works”. As a result, he says,

“individuals and companies will be free to use such photographs with no reference to the person who took the photographs and will be able to license them without any payment to the photographer.”

I hope that when we come to debate the Bill, Mr Clayton will be reassured by it.

The Secretary of State, who is no longer in the Chamber, made a very balanced speech about immigration and the role that it plays in relation to jobs. Although the last Government created many jobs—some 1.5 million, I believe—a staggering 98.5% were soaked up by migrant labour. If we are to get the many people in the country who are trapped in dependency back into work, or in many instances into work for the first time, we must not only reform welfare so that it will always pay to work, but deter those who may wish to come to this country and provide a low-cost alternative, which would be a cost to our work force, and would put a strain on our infrastructure, services and housing, which would be a cost to the taxpayer.

I hope that, while the Opposition may ask some searching questions when the immigration Bill is debated—as they have tried to do this morning—they will support it in the end. I think that if they do not, they will find themselves on what the broad mass of the British people consider the wrong side of the argument.

The Secretary of State referred to the importance of infrastructure. I am pleased to note that the Energy Bill is to be carried over. After a decade of neglect, it is essential for us to invest in our energy infrastructure—in power stations, especially nuclear stations, and in the transmission infrastructure that conveys energy around the country. It is important for investors to see that both major parties in the House, and indeed our Liberal Democrat coalition colleagues, support the regulatory system.

--- Later in debate ---

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

It is a pleasure to follow the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) who, with his usual enthusiasm, delivered an entertaining and informative speech.

I want to mention a number of issues this morning. Although not all of them are covered by the subject of today’s debate, it is important that we get them on the record. I want to discuss three main areas, and then to propose one in which we as a Government could go further. There is no doubt that we face huge challenges as a country, and the biggest challenge remains our economy. It colours everything that we do and it is the backdrop to every decision we make.

It is worth reiterating the facts of the toxic inheritance we acquired when we came into government. We were running a deficit of 11% and had borrowed the equivalent of £1 million a day for the past 4,000 years—since the pyramids were topping out. We must deal with that. We are dealing with it and we are tackling it, but there is no doubt that the waters are choppy. Rather than talking down our economy, which we so often take great glee in doing, we need to start talking it up and looking for some of the positives that we can find out there. The fact that there are 1.25 million new private sector jobs is a positive, as is the fact that there are more people in employment than ever before.

[Mr Kevan Jones]

The hon. Gentleman talks about talking down the economy, but what did the coalition Government do in their first six months if not talk down the economy? They tried to scare people, saying that if we did not take the draconian action they have taken, our levels of debt could be on a par with those of the likes of Greece.

[Stephen Metcalfe]

My understanding is that our levels of debt are on a par with those of Greece as a percentage of GDP. They certainly were at the time. Yes, when we came into government—

[Mr Jones]

rose—

[Stephen Metcalfe]

Shall I answer the hon. Gentleman’s first point before I take a second intervention?

The hon. Gentleman’s other point was about our explaining to people when we came to power the inheritance we were left and the measures we had to take to tackle it. I was slightly confused earlier this morning when listening to the hon. Member for Streatham (Mr Umunna) who said that the only additional borrowing that Labour had mentioned was the VAT cut, which would add an additional £12 billion to the overall borrowing we have identified. I assume that means that he would stick to every spending plan we have in place. Our spending plans have resulted in spending reductions across Departments, every single one of which have been opposed by the Opposition. I am slightly confused about their current line. Do they agree with the cuts and just want to borrow an additional £12 billion to cut VAT, or are they saying that they do not agree with the cuts, that they will backtrack on all that and that they will raise additional taxation?

[Stephen Metcalfe]

People in my constituency are suffering because of the toxic economic inheritance we acquired when we came into government. [Interruption.] I am sorry; it is simple. If we had not inherited the largest deficit in the developed world and a huge debt, we would not need to make the decisions that we are making now. We never hear a credible alternative from the Labour party; we just hear opposition.

[Mr Kevan Jones]

rose—

[Stephen Metcalfe]

I shall move on.

I shall structure my remarks around the national insurance contributions Bill and what more we can do to support business, but first I shall mention two issues that are of great importance to my constituents. Along with the economy, one of the issues that we struggle with is what we should do about immigration, and how we should handle that quite sensitive issue. We have to get the balance right. Undoubtedly, as a nation we have benefited from immigration. We are a global trading nation; we have sat at the heart of world economic development for very many years, and people come to this country to add to our economic vibrancy. But I share with my constituents a concern about how we handle that fairly—how we achieve a balance. Some of the announcements made in the Gracious Speech will be very welcome. It strikes a sensible balance between my constituents’ rights and those of migrants or immigrants who then commit a criminal offence. It seems to strike people that the pendulum often swings too far in support of the perpetrator rather than the victim.

We are a fundamentally fair nation. We are respectful, we are tolerant, and we believe in fair play, but we do not believe that a person who abuses that tolerance has a right to remain here. I am therefore very pleased with some of the announcements in the Gracious Speech, and I hope the Bill will demonstrate to my constituents that we are tackling a serious problem. They really do not understand how people who break the law here are able to continue to benefit from our good standards of respect for them. Those people should return to their own country when they break the rules here; they forfeit the right to stay.

--- Later in debate ---

[Mr Kevan Jones (North Durham) (Lab)]

The hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) has just spoken about talking the economy down. I know it was three years ago, which seems a long time, but we need to remind people of who in 2010 was talking this country’s economy down—it was the Chancellor of the Exchequer and this coalition Government. They expressed the ridiculous notion that without the draconian cuts that they brought in, which the Business Secretary said earlier they now recognised were a mistake, we would end up with an economy like that of Greece. We heard the nonsense, which was repeated by the hon. Member for South Basildon and East Thurrock, about the fact that we had the largest debt in the developed world.

Let us look at the facts. In 1997 the Labour Government inherited a debt to GDP ratio of 42%. At the beginning of the financial crisis in 2008 that had been reduced to 35%, so irrespective of the Prime Minister’s claim in opposition that we were not mending the roof while the sun was shining, that is exactly what we were doing, which left us in a strong position to weather that financial crisis. The deficit that we inherited in 1997 was 3.9%. That was nearly halved by 2008 to 2.1%. The hon. Member for South Basildon and East Thurrock throws around figures suggesting that we had the largest debt. In cash terms, yes, but for the millionaires in the House— I do not know whether there are any in the Chamber today, although there are plenty in the Front-Bench team of the Conservative party—

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)]

Not guilty.

[Mr Jones]

I accept that.

If one looks at the debt of a millionaire in cash terms, of course it will be larger than that of someone who is earning the minimum wage. To compare the size of the UK economy to that of Greece takes no account of that.

We need to recognise who talked the economy down and who took the disastrous decision in those early days to take demand out of the economy. We were growing, as the shadow Business Secretary, my hon. Friend the Member for Streatham (Mr Umunna), rightly said. That destructive early cut, along with talking the economy down, sucked confidence out of the economy. Getting that confidence back is very difficult. Clearly, many people, and certainly those in my constituency, are very cautious about what they are spending.

Let us have this debate based on the facts. I accept that we in the Labour party missed a trick. We were self-obsessed for nearly six months as we selected a new leader of the party, so we did not rebut the nonsense that was put out at the time.

The Business Secretary said, strangely, that the Queen’s Speech is not the mechanism for getting the economy going. I find that remarkable. This is a lost opportunity. The Queen’s Speech was so thin on substance that it could be marketed by WeightWatchers. There is nothing in it that will help the 20% of young people who are in long-term unemployment. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) spoke about a lost decade. That is so, and we need to remind the House that that has consequences for individuals. The 20% who are now unemployed—and their number is increasing—will have their lives affected for ever. We must recognise the human cost behind the statistics. The problem will not be solved for those individuals in the short term and will have long-term implications for constituents such as mine and those of my hon. Friend that will need to be addressed in the long term.

[Ms Abbott]

Does my hon. Friend agree that there will be not just a lost decade but a lost generation? Academics have said that young people graduating now from college and university who do not go into employment can look forward to a future always on the fringes of the employment market.

[Mr Jones]

Indeed. It is even worse because those who are graduating now are burdened with the debt of student loans, which the Deputy Prime Minister, when he was fighting the general election, said he would not bring in. I worry about those individuals. In the north-east of England, after the destruction of heavy industry under the previous Conservative Government, I saw how whole communities were written off. My fear is that we are writing off a whole generation of young people to long-term unemployment amid low levels of economic growth.

In the Queen’s Speech, as in much that the Government are doing, one has to look at the detail of the proposals. A lot of that is presented for the headlines, but it is worth looking at some proposals which do not have a great deal of substance to them. I shall refer first to the Mesothelioma Bill. Before I was elected to the House, I was a full-time trade union official and legal officer for the GMB. I dealt daily with people who were suffering from the effects of exposure to asbestos. It is heartbreaking to speak not only to the individuals who know there is a death sentence hanging over them, but to the families that they leave behind. Some of the victims are older, but many are young. It is a terrible disease. Some people can be exposed to quite high levels of asbestos and not have long-term health effects, but others are affected.

This country’s approach to asbestos-related issues has been a national scandal. After the second world war the Government wrote to employers organisations saying that exposure to asbestos was dangerous to health. Was anything done? No. We continued for many decades to deny that there would be any health effects. Successive Governments’ response to the issue is a shame and a scar. If the disease had affected middle-class communities in leafy Surrey, for example, it would be a front-page headline in every paper—it would be a national scandal. But because it is concentrated in the north-east and other poor communities who do not have the strong voice that other communities have, the victims have been overlooked.

The Bill builds on what the previous Government intended. We proposed setting up the employers liability bureau and a tax on insurance companies to pay for the individuals who developed asbestos-related disease and who could not trace the insurance companies of now-defunct employers. The Bill was trumpeted as a great step forward. Even a great journal such as The Shields Gazette announced:

“Asbestos victims across South Tyneside are set to share in a £355m compensation bonanza.”

Well, I just wish that local papers would write stories the old-fashioned way by having a journalist who actually understands the issue, rather than, as seems to be so common now, simply responding to press releases.

If we look at what is proposed, we see that it is nothing of the sort. First, it covers only those individuals who developed mesothelioma after 24 July 2012, so a whole group of mesothelioma victims and their families will get no compensation at all. Secondly, it does not cover other asbestos-related diseases like lung cancers, asbestosis and pleural plaques, so there is a group of individuals who, even after that date, will get no compensation at all. Even for the victims who will qualify for the scheme, there will only be a flat fee of 70% of the average compensation payout.

Also, the scheme will take no account of an individual’s circumstances. One of the youngest victims I dealt with as the union’s legal officer was 46 years old and had three young children. Under the scheme, if he could not prove who the insurance companies were, that would not be taken into consideration. That needs to be amended as the Bill goes through. It is important to remember that it is the trade unions that have fought over many years to ensure that those individuals get the compensation they are entitled to.

One wonders whether this scheme does not represent a very good deal for the insurance companies—I think that it does. The Union of Construction, Allied Trades and Technicians has worked to expose the fact that, simply by coincidence, from October 2010 to September 2012 Lord Freud, the Minister responsible for the scheme, met the Association of British Insurers, Aviva, Royal Sun Alliance and Zurich on no fewer than 14 occasions. That shows how effective their lobbying has been in limiting their exposure to the scheme, and that needs to be changed.

[Jim Fitzpatrick]

My hon. Friend makes an important point. As a former asbestos worker, from my time in the London fire brigade, I know a number of former colleagues who have died as a result of this disease. The medical evidence on asbestos has been known since 1928. I am very disappointed by what he is saying, because I did not realise that there has been some attempt to manipulate the story. When I read the headline about a compensation Bill, I thought that it was good news, but he is suggesting that it might not be as good as it is being presented in the media. We will have to look at that very carefully.

[Mr Jones]

Like a lot of the things the Government do, we have to take the shiny wrapping off carefully and look at the contents. In so many areas we find that there is either very little in it, or a stinking mess of incompetence, which is now becoming a trademark of the Government.

[Stephen Pound (Ealing North) (Lab)]

If I may interrupt my hon. Friend’s unwrapping for a moment, he is probably the best qualified of all Members to link the armed forces and the problem of asbestos. I urge him to look at those men—they are mostly men—who served in the Royal Navy in the ’50s and ’60s and often had to use flash hood protectors, which were imbued with asbestos. Looking at that issue has been very difficult in the past because of the confidentiality of procurement.

[Mr Jones]

We made some progress on that when in government in relation to Crown immunity and the fact that people can now access war pensions for such things, but it is very difficult. It is easy to argue that their exposure to asbestos was quite limited, but it can still cause some debilitating diseases. The proposals do not represent a great victory for victims.

The deregulation Bill has been trumpeted as something that will remove the burdens on business and civil society in order to facilitate growth. The great idea seems to be that sole traders will somehow be exempt from health and safety legislation. We wait to see how that will generate growth. It will also create some problems. For example, will we have a two-tier work force on certain sites, with some people having, quite rightly, to follow sensible health and safety legislation, which was put in place to protect not only them but the public, while others will be able to do what they want? As I asked the hon. Member for Tamworth (Christopher Pincher) earlier, if I invite an electrician into my house as a sole trader, will I be signing up to the fact that he can completely ignore any type of health and safety legislation, whether in relation to me, my family or anyone else?

[Stephen Metcalfe]

The point that the hon. Gentleman is making would be a fair one if it was accurate, but the actual wording refers to exempting the self-employed from health and safety law where they pose no potential risk of harm to others. That addresses the point he has just made, because an electrician working in his house could cause harm to others and so would have to comply with all the regulations relating to the work being undertaken. The purpose of that part of the Bill is to prevent the ridiculous amount of records that have to be produced and kept when people work for themselves.

[Mr Jones]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We need short interventions, because they are taking up a lot of time and many more Members wish to speak.

[Mr Jones]

I would be intrigued to know which piece of health legislation would not be covered by the proposal. Again, I think that it is simply one of the issues that have been trumpeted by certain Members on the deregulatory wing of the Conservative party, who have clearly been prevented from pursuing the worst excesses of Beecroft by the Liberal Democrats. I just think it is complete nonsense.

On immigration, I consider the announcements in the Queen’s Speech to be a knee-jerk reaction from the Prime Minister to the threat he sees from his Back Benchers and from the UK Independence party. We have heard a lot of strong language about a crackdown on migrants, and in relation not only to migration but to access to health care and benefits. I understand that a ministerial group on immigration has been meeting, but it has not yet come up with a great deal because most of the plans that have been put forward have been blocked. The Health Secretary has been saying that we have a problem with health tourism, but he cannot tell us how much it costs.

The only real legislation put forward on immigration is secondary legislation that will enshrine the rules on deporting foreign prisoners and on getting private landlords somehow to check whether their tenants are entitled to be in the country. The first one is already law and so will affect nothing, and I do not see how the second can work without some type of registration scheme. Also, it will not apply to the bulk of immigration in this country, which it is threatened will come from Romania and Bulgaria, because that will be perfectly legal.

It is interesting that Nigel Farage says that he is now the heir to Thatcher. I remind Members that it was Margaret Thatcher who signed the Single European Act in 1986, which allowed the free transfer of labour across Europe. These proposals will have no effect. The Prime Minister is trying to act tough, but in practice he can do very little about the transfer of EU migrants. In many ways that transfer of labour has been good for British people, because many people in the north-east who were made redundant when the shipyards closed now work all over Europe, making a contribution not only to the economy of those countries but here.

My hon. Friend the Member for Poplar and Limehouse referred to the fact that we are at the fag-end of this Parliament. I have to say that the Business Secretary looked very unhappy this morning. He reminds me a little of the father of the bride at a shotgun wedding who is now going round saying, “I told you it wouldn’t last very long.” The Prime Minister obviously has a problem with his children on the Back Benches who are now in open revolt. It will be very interesting to see how it all ends. The lack in this Queen’s Speech of a positive economic stimulus over the next two years will add to the misery that is being faced day in, day out by many thousands of people in this country, many in my constituency.

--- Later in debate ---

[Gordon Birtwistle]

My hon. Friend makes an excellent point. I was about to move on to the oil industry, to which former members of the armed forces make a substantial contribution. I was on an oil rig in the North sea about 12 months ago and quite a number of ex-military personnel were working there. The medical officer was an ex-Army officer and some of the cooks in the restaurants were ex-Army personnel. It is good to see that they are making such a contribution.

The oil industry, which is more or less a forgotten industry, contributes billions of pounds to economy. One national oil company is about to invest $11 billion in the North sea. The site is about 100 km off the coast of Scotland, but every bit of kit is being provided from overseas. That is an outrageous scandal. That kit should be produced in the UK. Unfortunately, we do not have the companies to do that any more because we have let them disappear over the past 20 years. The previous Government let them disappear without batting an eyelid because they thought that the financial sector could bail us out of anything.

[Mr Kevan Jones]

The hon. Gentleman is speaking complete and utter 100% rubbish. If he goes to the north-east of England or to Scotland, he will see first-rate British companies that are providing not only hardware for the oil industry, but vital support.

[Gordon Birtwistle]

Exactly; once the kit has been provided, the support comes from those companies. No company on the north coast of Scotland can build a 17,000-tonne jacket or a topside that weighs more than 45,000 tonnes for the North sea. Those pieces of kit are being built in Spain and South Korea.

[Mr Jones]

If the hon. Gentleman goes to the technology park at Walker in Newcastle, he will see that 80% of the world’s under-sea umbilical cable is built by two companies in the north-east. That is a success story not just for the north-east, but for UK plc. I am sorry, but his notion that there is no productivity in this country for the oil and gas sector is complete rubbish.

[Gordon Birtwistle]

I refer the hon. Gentleman to what I said earlier about major structures. I agree that sub-sea equipment is built here. I used to own an engineering company that still builds sub-sea equipment. However, we can no longer build major structures.

--- Later in debate ---

[Mr Jones]

That’s not where the money is!

[Gordon Birtwistle]

I do not want to have that debate across the House, Mr Deputy Speaker.

I will move on to trainees and apprenticeships, and the national shortage of skilled people for the jobs of the future. I was told yesterday that of the £106 million budget for the National Careers Service—bear in mind that 1 million young people are out of work— £84.5 million is spent on people over 25, £15 million on prisoners and £5 million on offering careers advice to young people. I think that that is the wrong way round. We should be spending at least half the money on getting young people into the jobs of the future and a little less on people over 25 years old and prisoners. I was shocked to hear that we spend three times more money on careers advice for prisoners than on careers advice for young people who are leaving school. That is outrageous and I hope that the Government will look at it. We need to increase the number of apprenticeships and traineeships to provide people with the skills and the jobs that will be required for this country’s economy in the future.

--- Later in debate ---

[Mark Hendrick]

That is right. If we look at the history of immigration in this country, first we have the Irish, then the West Indian immigration—

[Mr Kevan Jones]

What about the Huguenots?

[Mark Hendrick]

That is going back even further. We have had successive waves of immigration to this country, and every wave has benefited this country and made it greater. One of the greatest nations on earth, the United States, is a nation of immigrants. One of the emerging nations, which will be very powerful, Brazil, is a nation of immigrants. Immigrants bring far more to any community than people could possibly believe. Scapegoating them, as some political parties are in this country, is an absolute disgrace. It is opportunism that blames the European Union for our economic woes and foreigners for the state of our public services.

Finally, I want to say something about health tourism, which is also practised by some 1 million to 2 million British people working abroad or living in other parts of Europe, many of whom come back to the UK when they need the national health service, while paying taxes and working in other countries. I have no problem with paying taxes or living in other countries, but we should look at health tourism as a whole.

To leave the EU would be to cut off our nose to spite our face. The only losers would be the UK, and that would be bad for business and bad for Britain.

--- Later in debate ---

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is a great pleasure to wind up this debate on the Gracious Speech, but on a topic as serious as this, I cannot help but express a little disappointment at the fact that there have been twice as many speakers from the Opposition Benches as we have heard from the Government Benches. Often, as we have looked at the Government Benches in the course of the debate, we have found them as empty as the Queen’s Speech. There appear to be very few people on the Government Benches who are prepared to defend this Queen’s Speech, just as there were very few people to defend the Budget earlier this year.

[Mr Kevan Jones]

I agree with my right hon. Friend’s observation. It obviously reflects the amount of support that the Prime Minister has from his Back Benchers. He was so desperate in the earlier stages that he had to have his Parliamentary Private Secretary intervening in the debate.

[Mr Byrne]

My hon. Friend makes a good point. Looking at the Queen’s Speech, perhaps it is not a surprise that so few people in the Government party are prepared to defend it.

I shall start where my hon. Friend the Member for Streatham (Mr Umunna), the shadow Business Secretary, concluded. After three wasted years, we have this year had a wasted Queen’s Speech. The task on Wednesday was simple—to give us a legislative programme as big as the challenges that face our country. What we got instead was practically nothing. It seems that this Government are incapable of proposing any ideas that they can agree on. They are a weak Government who are out of ideas, and that is why the public want them out of office. They have chosen to fight the biggest economic battle confronting this country for decades by arming themselves only with pea-shooters.

We should be clear about the task that we confront. It was set out brilliantly by my hon. Friend the Member for Streatham. We have an economy that is flatlining. We have growth of just 1.8%. That is a third of the level of growth seen in the United States. Living standards are falling. The wages of our constituents have fallen by £1,700 a year since the election. Our constituents are getting poorer. GDP per capita has fallen by £1,500 since the election. Unemployment is rising and is 90,000 higher than at the election. The consequence of all this is a catastrophe for the public finances. Borrowing is now £245 billion more than forecast. Worst of all, perhaps, is what is happening to the fundamentals of our economy.

The hon. Member for Tamworth (Christopher Pincher) expressed some confidence that the economy is beginning to rebalance. If only. Consumer demand is flat. Business investment is stalled. We had great hopes that economic growth would come from some kind of rebalancing towards exports. As the Business Secretary said in his lengthy but rather good essay in the New Statesman not long ago, there is not necessarily a problem with global demand. The problem is that we in these islands are not tapping into that demand.

Our exchange rate has fallen by roughly 20% since 2007, but exports have grown by 1% or 2%. Once upon a time the OBR forecast that net trade would add 1.2% to GDP. Now it admits that net trade is a drag on growth, not a boost. That is a huge contrast to what we saw in the 1990s, when sterling depreciated by about 20% and exports grew by a third. If our economy is to grow at the level that the OBR forecasts it should between now and 2016-17, we need to grow exports by 45% over and above the level we saw in 2009, but we are simply not on track to deliver that change.

Budget Resolutions and Economic Situation

Kevan Jones Excerpts

Friday 22nd March 2013 Commons Chamber

[Mr Duncan Smith]

I do love these little exchanges with the right hon. Gentleman—I am sure we could become quite friendly—but the reality is that he is dancing around what was actually happening. I remind him that Labour’s capital spending programmes would have resulted in a real cut of 7% compared with our plans. It is all very well for Labour Members to talk about this now, but under the plan they left, capital spending was falling fast. We are spending more than their plan proposed, which would have resulted in a net 7% cut.

Borrowing today is lower than under Labour. It was £159 billion at its peak and it is now £120.9 billion, which is £38 billion lower, and forecasts approved by the Office for Budget Responsibility show that by the end of this Parliament it will be £63 billion lower and falling. [Interruption.] I say to the right hon. Gentleman that the public do not believe that Labour’s plan would have been any better. In fact, it would have been a lot worse and now Labour Members want to make it even more so, because they want to spend more, borrow more and see the deficit rise.

[Mr Kevan Jones (North Durham) (Lab)]

Does the Secretary of State not recognise that the difference between this Government’s plan and the one we left is that the economy and capital investment were growing? The Chancellor’s emergency budget in 2010 caused damage by ripping the heart out of the capital programme, and that led to a depression.

--- Later in debate ---

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

rose—

[Mr Kevan Jones]

rose—

[Mr Duncan Smith]

Let me finish my point. That is one coalition measure of which I, as a Conservative, am incredibly proud. I am incredibly proud that we struck that agreement, and that, a year early, before the end of the Parliament, we will raise the threshold to £10,000. That will do more for poorer people who are struggling to make ends meet than almost anything the previous Government did. I should remind the House that they did exactly the opposite. They got rid of the 10p tax rate. They tried to pretend that that was somehow a tax cut, only to find that they spent billions of pounds—borrowed billions—to try to rectify it.

[Mr Jones]

The right hon. Gentleman has pledged to produce figures by constituency of how much each will benefit from the £10,000 income tax cap. Will he produce the constituency figures on those who have lost in terms of tax credits, bedroom tax and VAT?

[Mr Duncan Smith]

During the passage of our last Bill, we were clear about who was winning and losing in those circumstances, and I am happy to engage with the hon. Gentleman on that. There are two important things to remember. The Opposition go on about this, but the reality is that in every year of this Government, the wealthiest in society—the top 1%—will pay nearly a quarter of all income tax, and the top 5% will pay nearly half of all tax. The richest will pay more in every single year of this Parliament than they would have paid under the previous Government’s plans. The 14,000 people in the UK who earn more than £1 million a year will pay £14.2 billion in tax this year. Conservatives did not say that they were pleased for people to be filthy rich; Labour did. The previous Government allowed wealthy people to boast that they paid less tax than their cleaners. We need take no lectures on upper rate tax from the Opposition.

--- Later in debate ---

[Steve Baker (Wycombe) (Con)]

I am glad to follow the hon. Member for Glasgow North East (Mr Bain), who talked about bad economics, which will be the central theme of my speech. He also asked why there has not been growth. I refer him to the report “Thinking the Unthinkable”, which has the unfortunate subtitle “Project Armageddon—the final report” by Tullett Prebon. It explains that three of the UK’s eight largest industries—real estate, financial services and construction—accounting for 39% of the economy, are incapable of growth now that net private borrowing has evaporated.

The report goes on to say that another three of the top sectors—health, education and public administration, plus defence—account for a further 19% and cannot expand now that growth in public spending is a thing of the past. That means that 58% of the economy is ex growth, a figure that could rise to 70% if, as seems probable, growth in retailing is precluded by falling real consumer incomes. That is why there is no growth, and it is important to understand properly why we are in this mess.

The Budget was one of two halves. I certainly welcome all the tax cuts—the £10,000 personal allowance and so on. I am sure that my constituents will be glad to know that fuel duty will be 13p lower per litre than it would have been under Labour’s plans. However, I want to talk mostly about credit market interventions and monetary activism. I am particularly reminded of the curious fact that the general disinclination to explain the past boom by monetary factors has been quickly replaced by an even greater readiness to hold the current working of our monetary organisation exclusively responsible for our current plight.

The same stabilisers who believed that nothing was wrong with the boom, and that it might last indefinitely because prices did not rise, now believe that everything could be set right again if only we would use the weapons of monetary policy to prevent prices from falling. The same superficial view sees no other harmful effect of a credit expansion but the rise of a price level now has it that our only difficulty is a fall in the price level caused by credit contraction. I thoroughly recommend the preface to “Monetary Theory and the Trade Cycle”, published in 1932, since which little has changed when it comes to the error of the monetary stabilisers.

We need to ask ourselves what is holding the economy back. I refer particularly to feedback from Stewart Linford chair makers in my constituency. Stewart Linford is a great man, and chair making is what made High Wycombe a great town. As costs rose in Britain, Stewart remained competitive by increasing the quality of his product and exporting. Yesterday, he said to me:

“What’s holding me back isn’t red tape. It’s not taxation. It’s not even foreign competition. It’s HSBC bank holding our money against an interest rate swap we didn’t need.”

That swap was originally sold to him by RBS. I fully support the Government’s efforts to change the culture of banking. Previously, they have talked about the need for a responsibility revolution and it is firms such as Stewart Linford’s in my constituency that demonstrate the great David and Goliath battle that is going on.

Why is that battle going on? If we look at debt in the past 10 or 13 years, we find that the big story of banking and money is a great transformation in borrowing. In about 2002-03, under the previous Government, mortgage lending rose substantially. Eventually, the banking system blew itself up and mortgage lending collapsed and deficit spending by the Government took over.

If we look at the money supply back to 1997, we find that under the previous Government it tripled. In 1997, M4 was £693 billion; by 2010, it had risen to £2.2 trillion before stagnating. That chart, if well understood, is remarkable. It tells us that there was an accelerating rush to destruction in debt. Shortly, we will realise that while we were originally told that this was a banking crisis and then that it was a debt crisis, we will have to face up to the reality that what we use as money is debt—debt that was loaned into existence in response to incentives created by central bankers lowering interest rates.

[Mr Kevan Jones (North Durham) (Lab)]

Is it not a fact that when the Labour Government came into office in 1997, debt stood at 42% of GDP? When the banking crisis hit in 2008, it was down to 35%. The reason for its increasing was the fact that we had to bail out the banks and carry out the economic stimulus, which made the economy grow—all that, including the spending targets, was supported by the hon. Gentleman’s party when in opposition.

[Steve Baker]

I am grateful to the hon. Gentleman. I came here to speak today because I expected to have 20 to 30 minutes, and if I had, I would have given him a full explanation. In many ways, I am trying to help him. If he looked at price inflation going back to 1750, he would discover that for the whole of my lifetime, since 1971, we have been living in an inflationary era unprecedented in industrial times. That is why the banking system was broken. If money is pumped into the economy at that rate, that is bound to create asset price bubbles. An independent Bank of England therefore found itself controlling the money supply by looking at price inflation without looking at house prices, which were rushing away. That was bound to end in catastrophe.

Let me explain the problem with the Chancellor’s policy on credit market intervention. When we look across the range of things that were intended, we can see that there is a clear objective, which is to restart the process of credit expansion—credit creation—into the economy. In the short term, that is indeed bound to create an increase in trade and housing and to create a small housing boom. The problem is the damage it does to the rest of the economy. If I had more time, I would talk at some length about the problem being that for far too long people have persisted in believing that there is a simple mechanical linkage between aggregate demand and total employment, but unfortunately that is not true. What matters is the distribution of employment and the use of capital across the structure of the economy and through time.

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[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

It is a great pleasure to follow my hon. Friend the Member for Lewisham East (Heidi Alexander). I can only apologise for breaking the gender/London cabal by heading to north Staffordshire and being a male Member of Parliament.

It would be nothing less than churlish not to begin with the keynote policy of this week’s Budget: the climate change levy exemption for the ceramics industry in my constituency and also the steel industry. There is satisfaction at the highest level in the city and among our industrialists for this welcome tax break. Only last night, at the opening of Hanley’s wonderful new bus station, designed by Grimshaw Associates, which is like the inside of a whale—[Interruption]—from Victorian prints—grizzled Labour councillors and old potters were full of admiration for this welcome policy. It will make a genuine difference to the bottom line of companies. They will now be able to hire more people, invest in kit, innovate and design.

[Mr Kevan Jones]

My hon. Friend is being modest by not paying credit to his campaign for this move. Does he think the people of Stoke-on-Trent should perhaps think of erecting a statute or making a memorial mug to mark his valiant efforts?

[Tristram Hunt]

I am grateful for my hon. Friend’s interjection. I would also pay tribute to my hon. Friends the Members for Stoke-on-Trent South (Robert Flello), for Stoke-on-Trent North (Joan Walley) and for Newcastle-under-Lyme (Paul Farrelly).

[Mr Jones]

Three more mugs.

[Tristram Hunt]

I hope the kilns are firing up as we speak.

I hope this change is part of a broader shift on energy-intensive industries. I think we have realised that we can no longer tax such businesses out of production in the UK. It does no good for our economy or our manufacturing base if we export these jobs. The production then goes abroad, where environmental controls are less rigorous and pollution is often greater, so we increase global carbon emissions and also lose worthwhile jobs. We have already lost the aluminium industry in this country thanks to cumulative taxation and we do not want to see the glass, paper, steel or ceramics industries go the same way.

I also welcomed the new tax regime for shale gas in the Budget. I regard shale as a potentially important new energy source that we need to see exploited in an environmentally sound manner. We are seeing it exploited right around the world. The technology behind it is improving at every stage. People have rightly expressed fears about contamination of water supplies, which are beginning to be addressed, but shale has a potentially paradigm-shifting capacity. What we have seen in America will not necessarily occur in the UK. It is absolutely right that we begin to explore shale—just as the Chinese and other European countries are—both onshore and, potentially, offshore. We need the technology and innovation to do that and we need a suitable taxation system.

Those involved in shale gas production need to take the communities with them and to have a social licence to produce it, but I urge Ministers to think more creatively. The great loss from North sea oil was that unlike Norway we did not create a sovereign wealth fund out of our oil riches. If we gain riches from shale, should we not consider a sovereign wealth fund? I will leave Ministers to mull on that idea.

While I am focused on industry and energy, let me highlight a contemporary crisis affecting industry here and now. As we speak, gas storage in this country is under 10% and this morning the Bacton gas connection to Belgium broke down. The price of gas hit £1.25 per therm when it is usually about 60p per therm. There is a real danger that kilns will have to close in north Staffordshire and that brickworks will close down, and I do not think that there is the necessary urgency from Ministers in Department of Energy and Climate Change or the Department for Business, Innovation and Skills about what is happening with the gas supply. That points towards a broader issue about gas storage: if we want rebalancing and want our industries to improve, we must ensure that we have a much greater system of gas storage in this country.

I am proud to represent an industrial constituency and I welcome some of the pre-Budget announcements on an industrial strategy, particularly that about the aerospace technology institute. I also welcome the adoption of 81 out of 89 of Lord Heseltine’s recommendations, particularly those on a single local growth fund. That is exactly the devolution of funding we want to see and a rightful acknowledgement that those in town halls often know a great deal more than those in Whitehall. As the Financial Secretary is on the Front Bench, let me say that we look forward to the upcoming announcements on city deals. I know that Stoke-on-Trent and Staffordshire have been working very hard to ensure that the Treasury is happy with what they are doing. It is quite right that the Government have allocated an extra £3 billion for infrastructure.

Behind all that must lie the acknowledgement that it is all too little, too late. The spending on infrastructure should have happened at the beginning of the Parliament, not more than halfway through it. As the Deputy Prime Minister has said, the Government should have not come to power and unleashed such capital spending cuts. The local growth fund could have been managed by regional development agencies, but the Government came in and abolished them. They are now realising that local enterprise partnerships often do not have the capacity and co-ordination to deliver the resources we are asking of them.

We should not have had to wait until the second half of a Parliament for an industrial strategy. In 2007-08, when we were in government, we were beginning to develop a credible industrial strategy that the Government should have continued rather than ripping it up in that terrible June Budget and beginning again. Over the past few years, we have seen a textbook example of how not to manage a recession, which will be taught in universities across the world. This is a catch-up Budget that is trying to undo the mistakes embedded in our economy three years ago.

The austerity agenda has spectacularly failed. Growth has collapsed, debt has mushroomed and the deficit at the end of the Parliament is expected to be £96 billion, five times more than the £20 billion the Chancellor expected at the beginning. As my hon. Friend the Member for Walthamstow (Stella Creasy) suggested, any board member who came to a board with such figures would be sent packing. As the shadow Chancellor warned in his celebrated Bloomberg lecture, that is the product of slashing spending, sucking demand out of the economy, the rhetoric of doom and gloom and the undermining of confidence. That is being borne witness to by the remarkable collapse in sterling, which is a sign of weakness, not strength, and by the collapse and loss of our credit rating. The austerity is not working, and, as my hon. Friend the Member for Lewisham East (Heidi Alexander) said, it is just hurting.

As the IMF chief economist suggests, we need a plan B. We need a VAT cut, a house building strategy and concentration on vocational skills and infrastructure. We need a different model, because this one simply is not working. Although I am happy to welcome the micro-element of this Budget in the context of the climate change levy, the macro-element fails spectacularly.

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[Mr Kevan Jones (North Durham) (Lab)]

It is clear that plan A is not working—growth is down and borrowing is up by £245 billion. The Chancellor can meet the target set by the Office for Budget Responsibility only by doing the equivalent of hiding behind the curtains when the debt man comes, or saying when answering the door, “No, I can’t pay this week; I’ll pay next week.”

As has been mentioned, the OBR also said that people will be worse off in 2015 than they were in 2010. My hon. Friend the Member for Ilford South (Mike Gapes) has just said that the blame game in the early days was “This is all because of the mess Labour left the economy in.” I am sorry, but the Chancellor cannot get away with that after three years in power. Let us also look at the facts. In 1997, the debt inherited by the Labour Government was 42% of GDP, and the figure was 35% in 2008—the last Labour Government actually paid down debt. Debt then went up because of the economic downturn and the massive effect of the world banking crisis in 2008, as my hon. Friend mentioned.

It is also said that there was profligate spending. In 1997, we inherited a 3.9% deficit of GDP, which was down to 2.1% by 2008. I was in the House at the time, but never heard the then Opposition argue that our spending targets were reckless or that we should reduce spending at all. In fact, in some areas—including defence, which I know about—they were asking for more expenditure.

[Dr Matthew Offord (Hendon) (Con)]

Does the hon. Gentleman acknowledge that the Labour Government who came to power in 1997 followed the Conservatives’ spending plans for their first two years? Those plans were laid by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke); he achieved the reduction in the deficit that the hon. Gentleman mentions.

[Mr Jones]

Following that logic, the hon. Gentleman cannot argue, as his party has continually done since the last election, that a mess was left by the last Labour Government. The situation was due to the economic downturn.

We are now three years into plan A, and who is to blame now? We have slightly moved away from the Labour party—now it is all Europe’s fault.

[Lilian Greenwood]

Does my hon. Friend remember that when the Chancellor was in opposition, he specifically said in September 2007:

“The result of adopting these spending totals is that under a Conservative government there will be real increases in spending on public services, year after year”?

He and his party agreed with our plans.

[Mr Jones]

I totally agree. In defence, for example, the Conservatives called for a larger Navy and larger Army and more expenditure. What have we seen? Cuts, cuts and more cuts.

This morning we again had the nonsense from the Secretary of State for Work and Pensions that somehow if the austerity plan does not continue we will end up like Cyprus—it used to be Greece. The right hon. Gentleman conveniently ignores the fact that the wonderful triple A rating, so coveted as the great prize, has now been lost. We need to lay the blame for the country’s problems with this Government.

We used to hear the nonsense about Labour being irresponsible, and not having mended the roof while the sun was shining, but the house has no roof now. All we have seen in the Budget is tinkering at the edges. It is a little like suggesting to someone who has lost the roof that new double glazing should be put in. The important point, which has been made by several colleagues, is about demand in the economy. The way to get the economy going is to stimulate demand, and capital expenditure is one way of doing so. I welcome the announcement of £3 billion of additional capital expenditure, but it is only from 2015, and we need it now.

My hon. Friend the Member for Hyndburn (Graham Jones) rightly referred to the effects of the downturn for housing on other sectors. The emergency Budget slashed housing spending and capital expenditure on schools and so on, and that meant that demand went out of the economy. We are now spending £7.7 billion less than the Labour Government would have spent in the same period. There is an idea that this is somebody else’s fault, but it is not. Deflating the economy and taking demand out of it, while telling everybody that it is in dire straits, will depress demand not only for housing but in other sectors.

The housing proposals in this Budget are very ideological. Am I opposed to encouraging people to buy their own homes? No, I am not. However, it is nonsense to think that someone living in my constituency who has a low-paid job in local government, and is having their pay cut in real terms because of the cap, is going to save up the deposit for a mortgage. It would have been better if the Budget had provided a massive injection of resources into affordable housing and housing for rent. If my local housing provider, Derwentside Homes, was given the ability to borrow money to build new houses, it could do it now. That would provide the housing that we need.

[Michael Ellis]

Will the hon. Gentleman give way?

[Mr Jones]

No.

My fear about these proposals is that if we do not get right the balance between demand and supply, we will end up with a housing bubble and the sub-prime situation that landed us in this mess in the first place.

The other thing that could make a big difference, as it did in my constituency when we were in power, is investing in improvements to local authority housing and social housing. Cestria Housing spent £67 million on improving local housing. That not only made a real difference to those houses but regenerated the local economy. I agree with one thing that the hon. Member for Wycombe (Steve Baker) said; frankly, most of it was complete nonsense. If this Government really want to get the economy moving, they have the instruments to do it through banks such as RBS. However, RBS is crucifying small businesses in my constituency, including Ambic, which is run by David Potter. He has a very successful business, but he is being absolutely hammered in trying, in effect, to get RBS’s balance sheets down because this Government want to get it off the asset books as quickly as possible.

Much has been trumpeted about the new cap on the level at which people pay income tax. In my constituency, many low-paid workers will benefit from this, but they will also lose through the bedroom tax, VAT increases, and the loss of child credit. Earlier I challenged the Secretary of State to publish information, constituency by constituency, on how many people were going to gain from this measure. I challenge him again to say how much these individuals are losing through the Government’s welfare cuts.

The welfare cuts that will begin in April will hit some of the poorest parts of the United Kingdom, including my own. The thing about poor people that many Conservatives might not realise is that they do not save money: they spend it. That is not because they are profligate or irresponsible but because they have no choice. These cuts will take money out of poorer communities in North Durham, and in the constituency of my hon. Friend the Member for Easington (Grahame M. Morris), who can ill afford to lose it. Unemployment is rising. As my hon. Friend the Member for Walthamstow (Stella Creasy) said, these people do not want to be unemployed, but there are no jobs. The jobs that are being created are part time, low paid—[Interruption.] The hon. Member for Northampton North (Michael Ellis) says “Rubbish.” He should look at the figures, which show that people are holding down two or three jobs to make ends meet. He will also see that productivity is coming down.

This involves a bigger debate about what type of society we want to live in. I congratulate those who work hard in food banks up and down the country; they are very good and worthwhile citizens. However, I feel very uncomfortable in 2013 living in a society where I have constituents relying on charity and food banks. That is not the type of society that I want to live in. We also all need to be conscious of the fact that, while things might be easy for all of us here, including millionaires such as the Chancellor and other Treasury Ministers, each unemployed person faces individual consequences, and suicides are on the increase because of the economic downturn.

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[Michael Ellis (Northampton North) (Con)]

I start by congratulating the Chancellor of the Exchequer. In speech after speech, Labour Members seem to have forgotten the note left by the outgoing Treasury Minister—

[Mr Kevan Jones]

Not the old chestnut!

[Michael Ellis]

Oh yes, the old note that was left: “There is no money left.” That is the legacy Labour left this country. After 13 years of a Labour Government who brought this country to its economic knees and a position worse than that of Greece, the Chancellor of the Exchequer and the Treasury team have picked the country up from where it was left, and will continue to do so.

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[Michael Ellis]

Exactly. The Labour habit of spending money that the country cannot afford almost brought this country to ruin. The lack of an apology grates, but it is difficult for Labour Front Benchers to offer one, because the team that wrecked the country’s economy and trebled the national debt are still on the Opposition Front Bench.

The Budget has been welcomed by the International Monetary Fund, the OECD, the Bank of England, the CBI, the Institute of Directors and the British Chambers of Commerce—it has been rightly welcomed by everyone who knows what they are talking about as far as the economy of this country is concerned. I say to the Chancellor that he should stick with it. We cannot have a situation in which Labour is allowed to borrow more, or we will end up with a Mili-shambles.

Plan A works. It tackles the appalling structural debt legacy. An IOD official has said:

“Deficit reduction is not an option…it is an absolute necessity”.

The Government started in 2010 with the worst debt to GDP ratio of any country—it was worse than that of Greece. Other countries with better figures than ours in 2010 had been put into special measures by the IMF.

[Mr Kevan Jones]

In opposition, the Conservative party not only agreed to, and did not question, Labour’s spending, but asked for more. As for the figures he quotes, will he explain to the House the difference between the size of Greece’s economy and that of the UK?

[Michael Ellis]

In common with most Labour Members, the hon. Gentleman’s understanding of the economy is limited. The reality is that the country’s debt is the responsibility of the Labour Government. However hard Labour Members try to transfer the blame on to the Conservatives, we did not spend that money.

When the current Government took over, £1 for every £4 spent from the public purse went on interest. Borrowing is now £3 billion lower, and the deficit is down by one third. What is Labour’s plan? Labour wants to borrow £200 billion more. I wish we had that money, but we do not have it. That is Labour’s plan.

Meanwhile, the OBR forecasts, post-Budget, 600,000 more jobs in 2013. What is the Labour party doing about jobs? Labour Members pretend that the 1.2 million jobs that have been created are fictional, not real, low-quality and part-time jobs. That is a complete fiction, and they should be embarrassed about it. They should talk the economy up and promote industry, trade, manufacturing and jobs. Are they holding jobs fairs in their constituencies? I have a jobs fair in Northampton North on 17 May. A number of companies will attend. I am doing what I can to improve the jobs market, but all we hear from Labour Members is that they will spend and borrow more, and yet they complain.

Corporation tax will be 20%, which is one of the lowest rates in the world. If we had stuck with Labour’s figures, we would have 3p a pint more in beer duty. Not only has that escalator been cancelled, but 1p has been taken off beer duty, but I have sat in Chamber and heard Labour Members criticise even that. They cannot bring themselves to acknowledge positives.

What is more grating is the self-righteousness of Labour Members. They believe that only they can have any compassion or think in any way of the most disadvantaged in society. Well, I have news for them. My colleagues on the Government Benches are equally if not more compassionate. We do not need to be lectured by those who put this country into such debt.

The dramatic fuel duty measures taken by this Chancellor—[Interruption.] If Labour Front-Benchers want to intervene, I am happy to give way.

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[Michael Ellis]

The chambers of commerce have accepted that this is an excellent Budget. Of course there are issues that need to be addressed, but we are dealing with a dramatic deficit. Not everything can be done overnight.

The measures that we have taken on fuel duty mean that it will be £7 per tank cheaper to fill an average car, such as a Vauxhall Astra, than it would have been under Labour’s fuel duty plans. Under Labour, fuel duty went up dramatically. It was costing more and more. The Chancellor’s fuel duty cuts will have a dramatic effect on the cost of filling up the average car.

Measures are being taken across the board in very difficult times to improve the economic position that we inherited. All that Labour can do is whinge, whine, moan and be judgmental.

[Mr Kevan Jones]

Will the hon. Gentleman get a tax cut for earnings over £150,000 and what type of car does he drive?

[Michael Ellis]

I am quite happy to answer that question. I will not be getting a tax cut and I have been driving the same car—a Toyota Prius with several dents and scratches—since well before I was elected to this House. However, I would not want to spoil the situation for the millionaires on the Labour Front Bench. There are a fair few of them, driving around in their Mercedes.

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[Mr Jones]

The Toyota Prius is made in Japan. Why is the hon. Gentleman not supporting the UK car industry?

[Michael Ellis]

Not only does Toyota build cars in the UK, but thanks to the measures taken by the Government, this country is exporting more motor vehicles than it is importing for the first time since 1976. That is a measure of the manufacturing improvements made by this Government. It is just one of this Government’s excellent measures, which is why I support the Chancellor of the Exchequer and the Budget.

--- Later in debate ---

[Dr Matthew Offord (Hendon) (Con)]

I welcome the Budget, which I recognise has been produced in difficult economic times. I should like the Government to make further tax cuts, but I realise that that may not be acceptable to some of our constituents who are feeling the increases in their cost of living. As a consequence, I am pleased that the Chancellor has decided to abolish the 3p rise in a pint of beer. I am also pleased that he has decided to cut the price of a pint by a further 1p. Only last week the Adam and Eve pub in Mill Hill and the Bodhran bar in Hendon thanked me for lobbying the Chancellor to do just that. Perhaps on Sunday night we will all say “Cheers” to the Chancellor.

Those proposals, alongside the abolition of the fuel duty escalator, are welcome. I certainly feel the pressure every time I put petrol in my car, and I know that many of my constituents feel the same as they have e-mailed me to say so. That measure, in conjunction with the freeze in council tax in the London borough of Barnet, is helping my constituents. Most significantly, raising the amount of money that people can earn before paying tax—the personal allowance—to £10,000 is welcome. In my constituency, 49,360 will benefit from paying £700 less in income tax than they did in 2010, and 4,967 will be taken out of tax altogether, which is a very good thing.

It is interesting that in many contributions from Opposition Members, I have heard repeated mentions of the so-called bedroom tax. The use of the word “tax” just goes to show how out of touch Labour Members are. As many people who work in this country will know, tax is levied on income earned. Housing benefit is paid to those who either do not have an income high enough to pay their appropriate accommodation costs, or do not have an income at all. In both those scenarios, if someone finds that they do not have enough income, they need to change their accommodation circumstances. I must make special mention of an hon. Member who spoke about her 17-year-old constituent who will receive a reduced income for his two-bedroom flat. The most shocking aspect of that to Government Members is that the Government are paying a 17-year-old to live in a two-bedroom flat. I wonder how many of my 17-year-old constituents would like a two-bedroom flat paid for for them.

[Mr Kevan Jones]

Would it not cost the Government a hell of lot more to keep that person in care?

[Dr Offord]

Yes, of course it would, but I think we need to focus on ensuring that families do not break down, rather than putting someone into care. I know that the circumstances the hon. Gentleman is talking about—[Interruption.] Members are chuntering from a sedentary position, but unless they wish to intervene—

Housing Benefit Entitlement

Kevan Jones Excerpts

Wednesday 23rd January 2013 Westminster Hall

[Phil Wilson (Sedgefield) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Mr Bayley. I wanted to select the rules on the under-occupancy of social housing and housing benefit entitlement, which start this April, for this debate today because the Government’s proposal is divisive legislation. In fact, it is not only divisive but arbitrary, spiteful and deeply cynical. It has been devised either by those who have no understanding, knowledge or experience of social housing and do not care, or by those who have understanding, knowledge and experience of social housing and should know better.

The under-occupancy rules say all that anyone needs to know about this Government—tax cuts for the rich and a bedroom tax for the poor. The bedroom tax is being created by a mindset that believes only those who own their own homes can live in a community and those who rent with Government support, even though many of them are in work, are deemed to be a burden on that community and not entitled to, or deserving of a home and that they should be moved at the behest of others and not themselves.

What do the under-occupancy rules mean for social housing and council tenants? If a household rents from a social landlord and is in receipt of housing benefit, and it is deemed to have one spare bedroom, the property is seen to be under-occupied. The tenant’s housing benefit is reduced by 14% for one bedroom and by 25% for two bedrooms. It has been estimated that about 660,000 tenants will lose an average of £728 a year, starting from April.

[Mr Kevan Jones (North Durham) (Lab)]

Does my hon. Friend agree that these proposals will also affect those who are in work? I had a constituent in my surgery a couple of Saturdays ago who had been made unemployed. He had gone out and got a part-time job in a filling station. His wife is a local carer as well, and because they live in a three-bedroom house—they have lived there for 30 years—and their family have left, they will be affected by the bedroom tax. Is that fair for striving people like that?

[Phil Wilson]

It is obviously not fair, but the bedroom tax is hitting people whether or not they are in work. This regulation is just plain wrong. The reality is that if a married couple have lived in a three-bedroom house for many years and had two children who have grown up and left home, the two children’s bedrooms are now deemed to be spare. The house is seen as under-occupied and the couple’s housing benefit entitlement is cut accordingly.

--- Later in debate ---

[Phil Wilson]

My hon. Friend makes an excellent point with which I do not think any Opposition Member would disagree.

The gentleman who came into my constituency office is an example that exposes the modern Conservative party and, indeed, the coalition. Conservatives like to see themselves as the party of the family, but they are not the party of poor people who need support to keep their family together.

To address those issues, the Government have offered additional discretionary housing payments to help people with disabilities remain in properties adapted for their needs. As those payments are often limited to just a few months, however, they are not a viable long-term solution, because they fail to give people with disabilities the assurance that their housing needs are secure. Also, the payments are made from budget-limited discretionary funds. The payment budget distributed by local authorities will come under significant pressure, following major cuts to local housing allowance for private sector tenants, and local authorities might choose to prioritise those who are at risk of homelessness, rather than social tenants with disabilities.

The Fostering Network—the voice of foster carers throughout the country—successfully campaigned for a £5 million addition to the discretionary housing fund to compensate foster carers who may have their housing benefit cut from April. The network is hearing from foster carers who have received under-occupancy letters. Some housing departments either do not know about the fund or will not use the money for foster carers. The network reports that 9,000 foster families are needed to meet the foster carer shortfall in 2013. There is already a recruitment crisis, and the network is concerned that the situation will worsen as a result of housing benefit reform.

The Minister will no doubt say that the under-occupancy rules will bring the social housing sector into line with the private sector, but the new rules are retrospective and penalise people who brought up their families in a council house in which they may have lived for years—the average tenancy for social housing is some seven years. The bedroom tax penalises couples who have done the right thing and who over the years may have spent their own money on decorating and maintaining the property. The property is not theirs to keep, but they have respect for what is their home anyway.

No doubt the Minister will also say that the change is required to help to pay off the deficit, because the Government expect the bedroom tax to save £450 million to £500 million. The Government’s plans are spiteful and cynical, because the only way that the £500 million will be saved is if those who live in under-occupied properties cut their standard of living still further by trying to remain in their home, by not downsizing and by paying the additional rent. The Government are trying to get tenants to pay their own housing benefit out of money that they do not have.

[Mr Kevan Jones]

My hon. Friend’s constituency, like mine, is a recruitment area for the British armed forces. Is he aware of the case raised by my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop)? A mother, whose son has joined the armed forces and is fighting in Afghanistan, will be hit by the tax because her son is not at home and she has an extra bedroom. Is that fair from a Government who say they are standing up for our armed forces?

[Phil Wilson]

That is not the way to treat the armed forces, especially when they are on active service in Afghanistan and elsewhere.

The Government say that they are trying to save money, but that is impossible for the great majority, who will be forced to choose between their home and a basic standard of living. There is a shortage of one-bedroom properties. If people choose to move into the private sector, rents and housing benefit claims might be higher. The changes hit right across the board, including members of the armed forces, the disabled, the vulnerable and sick people who sometimes, but not always, need a carer.

Atos Work Capability Assessments

Kevan Jones Excerpts

Thursday 17th January 2013 Commons Chamber

[Robert Halfon]

I want to carry on for a moment.

The Labour Government were right to introduce the work capability assessment in the last 18 months before the 2010 election. The right hon. Member for Stirling (Mrs McGuire), the shadow Minister for disabled people, was also right at the Labour conference to defend the idea of testing in the personal independence payment, when she said:

“The principle of an arm’s-length assessment is not wrong.”

Whatever party politics might be involved, there is consensus on the principles and on what our aims should be, and that is welcome.

[Mr Kevan Jones (North Durham) (Lab)]

The hon. Gentleman is correct in saying that the first contract with Atos was introduced by the previous Government, but why did the present Government renew and extend that contract even though they knew about all the problems that he and others have raised in the House?

[Robert Halfon]

This is where I agree with the hon. Gentleman. I was very disturbed when Atos got the contract for the personal independence payments.

[Mr Jones]

That happened under this Government.

[Robert Halfon]

Yes, that is what I am saying. The reasons that were given included the fact that the infrastructure was already in place, and the cost of changing the contractor.

--- Later in debate ---

[Heather Wheeler (South Derbyshire) (Con)]

I apologise for not being in the Chamber for the beginning of the debate, owing to another commitment. Mr Speaker kindly put my name towards the end of the list for today’s speeches.

Interestingly, the scheme has worked relatively well in South Derbyshire. We have quite a high level of returners-to-work as a result, but equally, issues have come to my surgery and I have had occasion to write to the Minister and his predecessor. I welcome the Backbench Business Committee’s decision to hold the debate.

I have had conversations not only with my local citizens advice bureau but my jobcentre, which has highlighted a few points that I hope the Minister will take on board. I hope that he will answer them in his winding-up speech. I heard about a number of harrowing cases—not from the CAB, interestingly, but from the jobcentre, whose staff see people coming back into training and what have you after the assessment. Those staff are incredulous at times at the cavalier approach of Atos to people’s health conditions.

Long-term disabled people have come back into the work arena; unbelievably, within three months of being told that they are perfectly fit for work, they have dropped down dead. I would not like that on my conscience, and I find it surprising. I am sure that such cases are relatively rare, but when do they happen? If the Minister does not know the answer, perhaps he will be kind enough to write to me.

Does anybody go back through the files to check on what happened with Atos? There needs to be a review. Folk in the Chamber know that I used to be the leader of a district council. Our job was to put out contracts and make procurements, but we always had penalty clauses, clawback arrangements and the ultimate option of getting rid of a firm if it was not performing.

One of my early letters to a previous Minister asked about the point when we say that the system is not working; frankly, I have not had an adequate reply. When someone drops down dead within three months of being assessed as being perfectly capable of going back to work, what is the review process for Atos?

We have heard about the Harrington report and the need for mental health champions. Only last week, a constituent, who, frankly, did not know what time of day it was, went through the process. Not only were they not allowed to have their carer with them, but no mental health champion was there.

[Mr Kevan Jones]

I am sorry, but I do not think the hon. Lady understands the notion of mental health champions. They are not for the clients but to advise the health care professionals doing the assessment.

[Heather Wheeler]

I do get that point; I am saying that the champions ought to be there when the interviews are taking place. I find the juxtaposition astonishing—according to Professor Harrington’s report, people need that extra bit of care. I find it interesting that we have just heard that there will be 60 champions in the country. Patently and obviously, that is not enough. Perhaps the Minister will advise us that that number represents a pilot and, notwithstanding what we are saying in this debate, it will be increased in short order.

--- Later in debate ---

[Mr Kevan Jones (North Durham) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Hayes and Harlington (John McDonnell), and I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing this important debate.

The system is not working for those suffering from mental health conditions. My hon. Friend the Member for Hayes and Harlington has just mentioned the Mind survey. Some 87% of those surveyed said that the system caused distress and 75% said that it had worsened their mental health condition. As my hon. Friend rightly pointed out, 51% said that they had suicidal thoughts as a result of it.

My right hon. Friend the Member for Oldham West and Royton referred to the deaths of people who have been through the Atos system. Through a freedom of information request, I understand that the DWP keeps a figure for the number of people who have died but does not record the causes and how they died. It has been asked to record the suicide cases, for example, but has not done so. As my hon. Friend the Member for Hayes and Harlington eloquently demonstrated, there are a number of well-publicised cases where people have taken their own lives because of this system. It is not too putting it too strongly to say that this coalition Government have blood on their hands for the deaths of those individuals.

Like my hon. Friend the Member for Bridgend (Mrs Moon), a lot of constituents come to see me at my surgery about this, and I should like to give an example. I also referred to several cases in the mental health debate on 14 June. I suggest that people look at the Mental Health Matters website, which gives some very heart-rending examples of people in the north-east with mental health conditions. The individual I mentioned is a 59-year-old who suffers from severe schizophrenia. He failed the Atos interview and is now being told by the DWP that he should be retrained as a security guard because that was the last job he did 10 years ago. What a waste of resources. This is despite his GP writing a letter on his behalf, which I have seen. I know his GP, because he is my GP as well.

Much has been made of the Harrington reviews, and we have heard a lot about the mental health champions, but they are there not to help applicants but to give advice to the health care practitioners. There are only 60 of them, and there are some 140 assessment centres throughout the country. Paul Farmer, the chief executive of Mind, who was on the scrutiny panel, resigned because the system was clearly failing people with mental health conditions. The Minister’s predecessor then tried to rubbish him by saying that he had been asked to resign because Mind had a conflict of interest in a legal case, but it did not. Mind is very clear that the system is failing.

The system is also costing the taxpayer money, not only through the additional health care provision for those with mental health conditions but through the extra work load on GPs, the tribunal system, which is at breaking point, and the reassessment system. The other week a 60-year-old nurse with osteoporosis, who has spent 38 years in the NHS, came to see me. She failed the work capability test. She is 61 in April and is now being told that she will be retrained for a new career until she is 62, when she gets her pension. What on earth is the point in wasting money on individuals like that? There are also cases such as the 21-year-old young lady who ended up in the local psychiatric hospital because she failed the Atos interview. What is the cost of that to the NHS?

I raise serious questions about the capability of the individuals who are doing the Atos assessments. We see from today’s very welcome briefing from the BMA that it is concerned about the turnover of GPs. Let me tell people—I do know a bit about mental health—that GPs are not experts on mental health. It is wrong to get someone who has no training in mental health to assess these cases. We need a new start for people with mental health conditions. We need to take them out of the system and we need a separate work stream for dealing with them. They should be assessed by people who are qualified psychiatrists and people who understand mental health. If we do not do that, we will continue to have the torture—I will use that word—that people are going through in this system and the deaths to which my hon. Friend the Member for Hayes and Harlington referred. If the Minister can have that on his conscience, so be it; I do not think that I could if I were in his shoes.

--- Later in debate ---

[Mr Hoban]

Just because the statistics do not suit the hon. Lady’s argument does not mean that they are wrong. A lot of this debate is about constituency casework and experience. Sometimes we also need to look at the overall stats and figures behind this issue to put those cases in context, which is why I made the point about the overturn rate.

It has been suggested that GPs should make the assessment. The British Medical Association has been prayed in aid. Let me quote what the BMA said about that idea:

“However, it is not part of the GP’s role to provide any opinion…on the patient’s capability to work as part of this process. It is vital that these two roles are kept separate and that GPs are not asked to provide an opinion on their patient for the purpose of receiving the Employment and Support Allowance; doing so could damage the doctor-patient relationship.”

It has also been said that the work capability assessment does not take full account of mental health conditions. Let me say a bit about that important issue. We have sought to improve the process and the support for the health care professionals who are undertaking the assessments. All Atos health care professionals receive specific and additional training in assessing mental health conditions—

[Mr Kevan Jones]

Will the Minister give way?

[Mr Hoban]

No, I am going to continue.

[Mr Jones]

You are talking rubbish, that’s why.

[Mr Hoban]

We do ensure that those professionals receive the support that they need to assess those conditions.

Following Professor Harrington’s recommendation, Atos has 60 mental health function champions in place to spread best practice. My right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) asked whether they had specific training in autism. I can assure her that that is the case. She also asked, as did other hon. Members, whether we could review the effectiveness of the mental health champions. It is not for me to dictate the work that Professor Harrington’s successor will undertake as part of the fourth review, but I think that that is a good suggestion. We need to look at the effectiveness of the recommendations that Professor Harrington has made.

Welfare Benefits Up-rating Bill

Kevan Jones Excerpts

Tuesday 8th January 2013 Commons Chamber

[Ian Mearns (Gateshead) (Lab)]

As someone who has been in this House for two and a half years and who in the past has been unemployed and has held low-paid jobs, I think that the mirth with which parts of this debate are being greeted will be seen with dismay by many people outside this Chamber.

The Bill is yet another example of the Government demonising and punishing the most vulnerable in our society and making the poorest live in greater poverty. The most important fact to take into account is that the Bill does not target only those who are out of work, whom I refuse to refer to as skivers, but those who are in work on low wages. It does not affect just those in part-time work, but people who are in more than full-time employment—people who regularly work long hours or complicated combinations of part-time jobs just to make ends meet.

[Mr Kevan Jones (North Durham) (Lab)]

Does my hon. Friend agree that the problem is not just with the 1% cap? A constituent came to see me before Christmas who had been made redundant last year by a local factory. His wife is a cleaner and he has now taken employment in a local garage serving petrol at night. He will lose about £20 a week when the bedroom tax comes in because the family home of 30 years is now deemed to be under-occupied.

[Ian Mearns]

I could not agree more. My surgery in Gateshead is regularly populated by people with similar problems. This is a society that Government Members do not understand. In the whole town, the average income of a household is not much more than £20,000 a year. That is the income for the whole household, not for an individual.

--- Later in debate ---

[Jessica Lee (Erewash) (Con)]

It is a great pleasure to follow the hon. Member for Aberdeen South (Dame Anne Begg), who brings great expertise and experience to the topic. While I may not always agree with her on how to resolve welfare benefit issues, I always respect what she has to say.

For me and many others in the House, the central motivation for being here and practising politics is simple: it is to try to improve the country in which we live, to give opportunities to everyone, and to create an environment in which businesses can flourish, jobs can be created and young people can be equipped with the education and skills that they need to do well. At the heart of every civilised society is the protection of those who cannot work or care for themselves and need help.

It is unlikely that many people will disagree with that opening statement, but, as ever, it is where the balance falls. It is how fairness is achieved that often divides us in this place. The underlying focus of the welfare state must, of course, be to help to prepare and equip people for a life back in work. My concern is that over the years—in particular, under the previous Government—the admirable and compassionate aim of the welfare state, of getting people back on their feet, in some circumstances provided an alternative lifestyle and lifelong income. That is the issue that the House has to address on Second Reading, and in other legislation.

The work ethic was a central part of my upbringing. I stand here as the first person in my family to study A-levels, let alone go on to university. I am very proud of my background. My mother was the main breadwinner in our family—she was a children’s nurse in the NHS for more than 40 years. My late father worked in shops, in retail, and unfortunately had periods when he was not in work. However, he always remained focused on the importance of getting back to work, and my parents instilled in me a strong work ethic, a desire to work hard and to achieve my goals.

Role models are important in life, and the lack of hard-working supportive role models can make the challenge of getting back to work even harder. We now have nearly 2 million children growing up in homes where no one works. Nearly 900,000 people have spent at least 10 years claiming incapacity benefit. It can be difficult to find the self-esteem and motivation to move back into work after such a period of time, but I have seen from this Government a commitment to encourage people, and to provide and facilitate a way to get them back and to reach their potential.

In my constituency of Erewash, many churches and community groups are undertaking excellent work. One church in particular, the Arena Church, undertakes a vast programme of outreach and supportive work. It tells me that it has seen people in the last year blossom, find their self-esteem and move back into employment, often after years of not working.

[Mr Kevan Jones]

What would the hon. Lady say to the 59-year-old gentleman who came to see me on Saturday at my constituency surgery who suffers from schizophrenia and has failed the work capability test? He has now been sent on a security guard course by his local jobcentre, which is totally inappropriate. Why do we have a system that is so cruel to such individuals?

[Jessica Lee]

I thank the hon. Gentleman for his intervention, and he takes up the case on behalf of his constituent in this House. However, I put the responsibility squarely on his Government, the previous Government, who expanded the welfare state with tax credits and left people on incapacity benefit who for too long were never reassessed. That is unfair to those people and we need to recreate the entire welfare system to improve it.

--- Later in debate ---

[Hywel Williams]

This point has been done to death this afternoon. It says a lot about the quality of the hon. Gentleman’s argument that he repeats it continually. I do not think I will bother with it any further.

Some 6.8% of households in the south-east of England, for example, claim working tax credits. In Wales, that figure is 7.1%. In Gwynedd—my own area—9,200 families are on tax credits of some form out of 53,000 households. That is 17.5% of the population—nearly three times the Welsh rate. The point is that any cuts to in-work benefits for the low-paid will hit Wales and my constituency particularly hard.

[Mr Kevan Jones]

Does the hon. Gentleman agree that the individuals receiving those types of benefit do not save the money, but spend it in their local communities? In areas of high unemployment, such as parts of my and his constituencies, it will have a knock-on effect on the local economy.

[Hywel Williams]

Clearly, the hon. Gentleman is blessed with clairvoyance, because that is my next point. People on low incomes tend to spend locally and to spend all their money. The Welsh economy is overwhelmingly made up of small businesses. That is a point for the hon. Member for Vale of Glamorgan (Alun Cairns) to consider. Working tax credit reductions will suck demand out of local economies and make matters even more difficult for small businesses struggling to survive in the recession.

The uprating will also hit those seeking work. The Prime Minister talks of unemployed people abed while others are at work. We can almost see him in Shakespearean mode paraphrasing King Henry: “Gentlemen in England now abed shall think themselves accursed they were not out seeking work”—I can see him doing it anyway, but less extravagantly. Unlike the Prime Minister and his friends, I do not think that the overwhelming majority of unemployed people are abed; they are seeking work. They want to work; they want to improve their lives and those of their children. For those who do not seek work, there is a system of sanctions, and there has been for a long time, as the Secretary of State knows full well.

Poorer areas of Wales have long suffered from high levels of worklessness and low levels of job availability. To end the misery of unemployment, we need not only to help individuals with their skills and, in a small number of cases, their motivation, but to ensure there is real work for people to do. Recently published Work programme figures for Wales show that success there was the lowest in the UK, with only 1,380 of 42,380 people getting a job that lasted six months or more. That is a miserable success rate, at only 3%. In Wales, more than 77,000 people are looking for work and claiming jobseeker’s allowance, while only 20,000-odd vacancies are being posted in jobcentres. Across Wales, there are four people chasing every job, with 11 people chasing every job in Blaenau Gwent and 21 people chasing every job in the Rhondda.

That brings me to Labour’s amendment. I have a question, to which I would like an answer—which might persuade me to back the amendment—in the wind-ups. Long-term unemployed people might still be unable to find a job after 24 months of searching. Large-scale work opportunities are just not available in many Welsh constituencies, so my question is: under Labour’s scheme, would those people face penalties after 24 months? If Labour’s scheme were adopted, would we see benefit cuts 24 months down the road for people who are not refusing to find work, but who just cannot find a job?

We in Plaid Cymru have been as good as our word—to the extent we can be—to the people of Wales, securing thousands of extra apprenticeships as part of the Welsh Government budget deal. We are now pushing for a new procurement policy that would create 50,000 jobs by sourcing public sector contracts locally. However, Wales needs proper job-creating levers to improve our economy, not just handouts and certainly not workfare. For example—this might be a domestic matter as far as most Members in the Chamber are concerned—we want full and early implementation of part 1 of the Silk commission proposals. We also want the transfer of responsibility for Jobcentre Plus to the Welsh Government. There are answers to joblessness and dependence on benefits. At present, we in Wales look in vain to London and the London parties for those answers.

[Mr David Ward (Bradford East) (LD)]

This is not a difficult one for me. I believe that benefits are far too high—I think most people accept they are at an unsustainable level.

[Mr Kevan Jones]

Too high?

--- Later in debate ---

[Kris Hopkins]

I do not think that it will. I think that the 900,000 or 1 million new jobs created by the Government represent the solution to the problem. We need to face up to the drama in the welfare state. The hon. Member for Wigan (Lisa Nandy) says that this is not about a dependency culture, but I can take her to places where people are trapped in a way of life that gives them no incentive to go and look for jobs. That is the tragedy of the situation.

[Mr Kevan Jones]

I understand what the hon. Gentleman is saying about the dependency culture—he thinks that if he repeats it enough, people will start to believe him—but what would he say to two people whom I met in a local jobcentre last week? They were made unemployed by AEI Cables in Birtley a year ago. They have the work ethic. They are aged 51 and 52, they had worked for the company since they were 16, and they have applied for literally hundreds of jobs without success. Are those people part of the dependency culture?

[Kris Hopkins]

No, obviously not, because they are going out there to seek a job. That is the key thing. I thank the hon. Gentleman for the extra time.

We have put a benefit cap at £26,000, and that is net. The vast majority of my constituents would be delighted to take home or have access to that amount of money. Far from doing something outrageous by increasing the amount of money that people are going to get by 1% in this climate, it is an admirable move by those on the Front Bench to facilitate that, bearing in mind the crisis that the previous Government left.

We have made some choices about who we are going to protect and who we will not. There is a debate about disability, but I am pleased that we are protecting pensioners. It was a commitment by this Government to protect pensioners and we have continued with that. I am very concerned that the unemployed, those who are dependent, those who are uneducated and have no skills, those with limited opportunities to offer young people, are the families that are growing in my constituency. That is a tragedy for the future of towns such as mine. We must break that cycle. It cannot be right that it pays to live on the state.

The resentment and anger are real in people who are working hard. They have seen generations continue to claim benefit. Some of those are trapped, but some have no desire to go and work. People are making life choices based on the fact that they can get money from the Government. As was pointed out earlier, that is taxpayers’ money. That cannot be right. When families see no increase in their income after their hard work and they see people on benefits receiving twice the increase, as has been shown statistically, that promotes resentment in our communities. It is not just about strivers or skivers. Failure to address the issue promotes racism and tension in communities, because somebody sees or perceives that somebody else is getting something that they are not getting. After all their efforts they do not see the benefit of working so hard.

--- Later in debate ---

[Mr Aidan Burley (Cannock Chase) (Con)]

In the short time available, I want to nail a couple of myths that have come up in the debate and give the view from Cannock Chase.

The first myth is that we are giving a tax break to the wealthiest in society. The answer that the shadow Secretary of State would not give earlier is that over a 13-year period, the Labour Government had a 50p tax rate for 37 days. The idea that we are giving the rich a tax cut is just a sixth-form debating point; the Labour party had 13 years to introduce the 50p rate, and they introduced it for 37 days.

Let us nail another myth. Although many people in work get benefits, there is evidence of a culture of worklessness, whatever the Joseph Rowntree Foundation says. If hon. Members do not believe me—[Interruption.] Give me a second. Let me read the House a summary of an interview on LBC radio in December. A man called Paul phoned in to say that it was not his fault that there were no jobs out there. He said:

“Why would you work for low wages, can’t really understand that, what’s the point? I was offered a job two weeks ago; they wanted me in there at 8 am in the morning.”

The presenter said:

“And you didn’t want to do that job?”

Paul replied:

“It’s ridiculous, that time!”

The presenter asked:

“What time would you finish if you started at 8?”

Paul answered:

“Well it finished about 4, but that time in the morning is too early. Most people start at 9 don’t they?”

The presenter, getting angry now, said:

“No, people start work at all hours. If I was in charge and you turned down a job for that reason I would cut your benefits. You lied you said no work out there. There are people out there struggling every single day who would love to get that job, frankly you can’t be fagged can you?”

Paul said that he would love to have the job but he was not willing to start at 8, only at 9.30, to which the presenter replied:

“I am outraged by what you just said.”

Let us not pretend that there are not some people who cannot be bothered to work.

[Mr Kevan Jones]

I am not sure whether that anecdote should lead us to any wider conclusion. The only worklessness in the Chamber today is on the Tory Back Benches—there has been an average of only 12 Tory Back Benchers all afternoon.

[Mr Burley]

I have been here since the beginning of the debate, waiting patiently to speak.

I move on to my constituency. The House of Commons Library shows that average wages in Cannock Chase rose by 6% between 2007 and 2012. During that same period, benefits went up by 20%. Where is the fairness in benefits going up by 20% when pay has gone up by only 6%? Do not take my word for it. This is what a local police officer e-mailed me last year when we uprated benefits by 5%:

“Why has the Conservative Government given a recent rise in benefits money…to the unemployed when Nurses, Police Officers, Fire and rescue workers and all other public sector workers have not received a pay rise for over two years?”

It is a fair question, and I do not know the answer. What I do know is that if the rate of inflation is not sufficient to warrant an increase in public sector pay beyond 1% in April this year, it cannot be so high as to require an increase in benefits beyond that either.

This is what another constituent who recently contacted me said:

“I have a friend who has a partner, neither she or he work and have not worked for as long as I can remember. They are both fit and healthy and perfectly able to work they just do not want to. They openly admit there is no point in finding work as they would not have enough money to live on. She stated to me that in order to get close in wages to what they receive in benefits that they would both have to get a job.”

This is the perverse reality of where we are now—that it pays people not to work and they are better off at home on benefits even though they could work and in many cases want to. Tellingly, the constituent went on to say:

“Some time ago she”—

her friend—

“let it slip out that she claimed £500 a week in benefits, I was…astounded and furious and pointed out that it was twice my wages. I am…aware that some people are unable to work and in genuine need…but surely people on benefits who are MORE than capable of working should not be living a life of…luxury and be financially better off than those who…earn a living? These people are playing the system…whilst…genuine hard working people struggle to have a life.”

Those are the real words of a real constituent in an area where the average salary is £22,500, and Labour Members ignore those words at their peril. [Interruption.]

Atos Healthcare

Kevan Jones Excerpts

Tuesday 4th September 2012 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

I, too, congratulate my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) on securing this debate about a matter of huge importance to hundreds of thousands of people, as well as on the work that he has done to highlight the problems that people face. I give the Minister my hearty congratulations on his appointment as Secretary of State for Justice and thank him for turning up to discharge his final responsibility in his old job. I am also very pleased that my right hon. Friend the Member for Stirling (Mrs McGuire) is in the Chamber because she and I have had a close interest in this issue for a long time.

The previous Government introduced the work capability assessment and employment and support allowance to provide support for people who are out of work for health reasons, but who are able to plan for a return to work. The current Government chose to take a drastic short cut by curtailing the bedding down period for the new benefit and rolling out the assessment without any improvement, even though by that stage improvements had been identified and proposed. The predictable result of that has been severe problems. Ministers are failing in their task of managing the contract with Atos, of ensuring that people who claim employment and support allowance are treated as they should be, and of reviewing and reforming the test so that it works as it should. The test needs major improvement. Two of Professor Malcolm Harrington’s reviews have reported so far—the hon. Member for Enfield North (Nick de Bois) was right—and while the Government say that they have accepted most of the recommendations, they simply have not implemented them, and that is the heart of the problem.

One simple example that shows the muddle that the Minister has got into has been raised several times in the debate. The year 1 Harrington review recommended that Atos should pilot the audio recording of work capability assessments, and a pilot of 500 claimants followed. Atos said that it was a good idea, but we have heard what has happened in practice from my hon. Friends the Members for Makerfield (Yvonne Fovargue), for Stoke-on-Trent North (Joan Walley) and for Airdrie and Shotts (Pamela Nash).

In a previous debate secured by my hon. Friend the Member for Rutherglen and Hamilton West, the Minister made a commitment that

“we will offer everyone who wants it the opportunity to have their session recorded”.—[Official Report, 1 February 2012; Vol. 539, c. 291WH.]

He has not delivered on that pledge, and it turns out that the problem is a shortage of tape recorders. I was contacted by someone who struggled for weeks to get her assessment recorded. Eventually, Atos wrote to tell her that she could not have a recording or a rescheduled appointment. I wrote to the Minister about that and reminded him of the commitment that he had made. He said that he thought it would be unreasonable to delay the assessment indefinitely for such a reason, but that was not the commitment he gave to the House in February. I am afraid that this mess and shambles shows all we need to know about the Minister’s management of this process. The Government need to get a grip on Atos. I wish the Minister great success in his new job, but I wish he had put a bit more effort into this aspect of his old one.

We have also had a series of mishaps. For example, the Minister made rather farcical efforts to suppress a YouTube video giving advice to people who were claiming against their work capability assessment. It turned out that the subversives who were responsible for this pernicious video were his colleagues at the Ministry of Justice.

Perhaps the most harmful thing to the credibility of the work capability assessment has been the delay in making the changes needed so that the test can work. Professor Harrington’s first review in 2010 asked Mind, Mencap and the National Autistic Society to propose better descriptors for people with mental health conditions. They produced recommendations in November 2010, and Professor Harrington commended them to the Department in April 2011. Further recommendations went to the Department in November 2011 about changes to the descriptors for fluctuating conditions.

[Mr Kevan Jones (North Durham) (Lab)]

Several announcements that have been made, including about having mental health champions, have not been rolled out to assessment centres. Atos is still being inconsistent about allowing support workers or friends to assist those with mental health illnesses who are going to assessments.

[Stephen Timms]

I agree that commitments have not been delivered, and my hon. Friend cites a good example.

The work capability assessment must not be a snapshot of someone’s condition on the day they attend the medical assessment. By definition, that is likely to be a good day, because otherwise they would not be able to show up. The assessment needs to take account of the frequency with which they can do work-related tasks and that with which they suffer the ill effects of their condition. The alternative descriptors proposed do just that. They are now in the public domain thanks to the Grass Roots disability blog, without which we would not have known what they were, and they look like a real step in the right direction.

The Department has had the recommendations on mental health descriptors for 17 months and those on fluctuating conditions descriptors for nine months, but hardly any progress has been made in that time. On 25 June, in a written answer, the Minister said that

“we have been carefully considering how to build an appropriate evidence base around the proposed new descriptors…Terms of reference have been agreed and we aim to publish a report of the Evidence Based Review in the spring of 2013.”—[Official Report, 25 June 2012; Vol. 19, c. 54W.]

The Minister’s successor will need to get a grip on this. If that ambiguous deadline is even met—and that would be a first—it will be two years after expert guidance was received on how to improve the assessment for people with mental health conditions, and a year following the other recommendations.

Welfare Reform Bill

Kevan Jones Excerpts

Tuesday 21st February 2012 Commons Chamber

[Andrew Percy]

I do not know the circumstances of that case, but in my time as a councillor we had a number of properties that were very difficult to let because people did not want to live in them. That was particularly true of the maisonettes. In Old Goole in my constituency, a two-bedroom maisonette has recently been let to an individual after about 20 years. He will be under-occupying because of the spare bedroom, but we are grateful that he has taken the property off our hands.

[Mr Kevan Jones (North Durham) (Lab)]

Given my time in local government in my constituency, I totally agree with the hon. Gentleman on that. Does he recognise that for many years, the Housing Corporation, which funds a lot of social housing, has not given grant to the building of one-bedroom properties?

[Andrew Percy]

Indeed. The standard for many housing associations is to provide two bedrooms—there is a programme in my constituency to renew such properties at the moment. In a few years’ time, we could end up with a lot of people who, through no fault of their own, are under-occupying homes because the standard has changed.