House of Commons
Wednesday 7 June 2006
The House met at half-past Eleven o’clock
[Mr. Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
My right hon. Friend the Secretary of State and I have regular discussions with ministerial colleagues on a range of subjects, including matters affecting agriculture in Wales.
I am pleased to hear about the Secretary of State’s ongoing discussions with other Cabinet colleagues. What precautions are the Government going to take to ensure that Welsh and other British farmers are not penalised in the next round of common agricultural policy reform? It is generally recognised that we have the most productive farmers, and they should be applauded for that. Europe should learn from that and our farmers should not be penalised—in Wales or in any other part of the United Kingdom.
I totally agree with the hon. Lady. It is important that we take forward the CAP reform agenda, and Britain is now acknowledged as leading in Europe on CAP reform. I can assure her that, although we want to introduce such reforms, the intention is not to penalise our own agricultural industry in doing so. It is clear that the reforms already in place have not penalised our farmers, and we want to continue in that vein.
Does my hon. Friend agree that the lifting of the beef exports ban will bring enormous benefits to Welsh farmers? Will he take it from me, as a Member of Parliament brought up on a Welsh smallholding many years ago, that Welsh beef is the best and will be a good ambassador for Wales?
Indeed—I totally agree with my hon. Friend. It may help the House if I remind everyone of what we lost during the past 10 years because of the bovine spongiform encephalopathy disaster, which happened under the last Government, and the resulting beef ban. In 1995, beef exports from the UK were worth £600 million, and 270,000 tonnes of British beef were exported. We have lost all that in 10 years, and we need to regain those markets. I am glad to say that Hybu Cig Cymru is marketing Welsh beef in Europe, and we have been very successful in securing contracts, particularly in Italy.
I agree with what the Minister has just said, but may I draw his attention to another important, current subject: the failure of the fallen stock scheme? This Government would not allow Wales, and north Wales in particular, to be exempted from the scheme, which, for obvious reasons that we warned about at the time, proved impractical. We now have rotting carcases throughout farms in north and mid-Wales, which is bad for biosecurity and human health and, I am afraid, the economy. Will the Minister please speak to his bungling colleagues in the National Assembly?
The issue is the failure of a company that has provided that service in north Wales, and I am assured that other companies are coming in to tackle the backlog. I agree that it is essential that we deal with the biosecurity issue, which is why the Assembly is tackling it by getting other fallen stock companies to clear up the backlog.
Borders mean nothing to animal disease, so dealing with tuberculosis in cattle and cattle movements between England and Wales requires close co-operation between the Department for Environment, Food and Rural Affairs, the Assembly Government and the British Cattle Movement Service, as the Minister will doubtless acknowledge. What checks has he made on the co-ordination of data relating to pre-movement TB tests, and what percentage and number of TB reactors have so far been picked up in pre-movement testing in Wales?
I readily accept the need in the cross-border areas for both DEFRA and the Welsh Assembly Government’s agriculture department to work closely together, and my understanding is that that is happening. The hon. Lady will understand why I cannot give her the detailed figures that she has requested, but I will write to her with them.
My hon. Friend will recognise that this is an extremely complex area of law. The Government are examining the implications of the Law Lords ruling. It is not possible to provide reliable figures at this stage.
I disagree with the Minister: this is not a complex area of law, and it is up to this Government to legislate to make sure that decent working-class people get what they deserve. Four people die every week in Wales from asbestos-related cancer owing to the negligence of their former employer. What is the Minister going to do about the absolutely disgraceful Law Lords ruling, which deprives working-class people of their rightful deserts?
I pay tribute to my hon. Friend and other colleagues who are rightly campaigning on this issue. It is a vital concern for hundreds if not thousands of people who have been in contact with asbestos during their working lives. The Government fully understand the concerns expressed about the House of Lords judgment in the Barker v. Corus case and we are sympathetic to the claimants. The judgment raises serious and complex issues and it is important to ensure that we get the right answer. We are therefore exploring all options with the relevant stakeholders to achieve a solution that is fair, but also workable.
We support the Government in dealing with asbestos-related illnesses, but will the Minister also consider dealing with the miners who have dust-related injuries and have not yet received their compensation? I refer to one of my constituents, Donald Watkins of Pontneathvaughn, who has been waiting six and a half years. These miners are becoming older and iller by the day and the same sometimes applies to their widows. Will the Minister cut through the crap and ensure that they get the compensation that they deserve?
I chair the coal health monitoring group for Wales and if the hon. Gentleman will let me know the details of his constituent who has been waiting too long for compensation, I will look into it. I should remind him, however, that this is the biggest industrial injury civil action case that the world has ever seen. Throughout the UK, we have already paid out £3 billion to miners; and in Wales the payment is £565 million. As I said, if the hon. Gentleman gives me the details, I will certainly inquire further into why it has taken so long to settle that case.
I want to reinforce the point made by my hon. Friend the Member for Jarrow (Mr. Hepburn). The Barker decision was a disgrace and we must restore the position. The Minister will be aware of the enormous increase in the number of mesothelioma cases both in Wales and the UK more widely. For example, over the last 40 years, the number has increased from 153 to almost 2,000. Will my hon. Friend give his support to other Ministers in calling for an amendment to restore the law to what it was before the Barker judgment?
As I said in reply to my hon. Friend the Member for Jarrow (Mr. Hepburn), we are very sympathetic to the position that claimants are in as a result of the Law Lords’ judgment in the Barker v. Corus case. We are hopeful that an announcement will be made shortly about how the Government intend to tackle that serious issue.
I have regular discussions with the Assembly Agriculture Minister about a range of issues, including the promotion of Welsh food and drinks products to external markets.
If I were to take you, Mr. Speaker, to Dolffanog Fach, or perhaps the Old Rectory overlooking the Tal-y-llyn lake not far from Abergynolwyn in mid-Wales, you would have the opportunity to eat the finest Welsh beef made from Welsh black cattle. We heard about that earlier, but I should not have to take you that far, Mr. Speaker. I could take you to the White Hart in London, but other places do not serve Welsh black cattle beef. What can the Minister do to ensure that England and Scotland enjoy the benefits of the finest British beef—Welsh black cattle?
I am tempted to take the advice that my right hon. Friend the Secretary of State is giving me and suggest that the hon. Member for Lichfield (Michael Fabricant) become an ambassador for Welsh produce. He is quite right that Wales produces some of the finest livestock in the world. Welsh black beef, in particular, is an excellent product. The Welsh Assembly Government have processing and marketing grants that assist in the marketing of Welsh produce, not just in England but throughout Europe. I am sure that the hon. Gentleman will want to join me in congratulating the Welsh chef, Bryn Williams, on winning a chance to cook for the Queen’s 80th birthday celebrations, and I am particularly pleased that he will be sourcing all his ingredients from Wales. That is another way of marketing Wales’ excellent food products.
Has my hon. Friend noticed that much Welsh produce is often marketed in England as English? For instance, many of Burberry’s materials are made in the Rhondda, but say “Made in England” all over them. For that matter, some of the best cricket players in this country who play for the English cricket team are actually made in Wales. Is it not time that we were a bit more honest and reminded the cricket authorities that they are the England and Wales Cricket Board? Would it not be nice if my hon. Friend were able to eat some Welsh—
We may have strayed a bit from the original question, but the National Assembly is concerned to promote the Welsh brand and to brand Welsh products—including cricketers, I expect. Several initiatives are under way on food products, and I welcome the opening last month of Lloyd’s dairy in Islington, a recreation of one of the old Welsh dairy shops that used to proliferate in north and west London. Part of the shop specialises in and promotes Welsh organic produce.
Does the Minister agree that fundamental to the promotion of Welsh produce in England is the ability to transport that produce to England in the first place? Does he therefore share my concern at the continuing closure of the A5 trunk road between Maerdy and Dinmael, which was closed with little warning on 26 May and remains closed with no indication of when it will be reopened? Does he share my despair at the incompetence of the Assembly in dealing with the issue?
I accept the importance of reopening the A5 as quickly as possible. As the hon. Gentleman will know, the closure was because of a serious risk of injury from an unstable cliff face. He will also be aware that while most landowners on the old A5, which could provide an alternative route, are co-operating with the Welsh Assembly Government, one has unfortunately decided not to do so at this stage. The matter needs to be addressed quickly and I understand that Andrew Davies, the Minister with responsibility for transport in Wales, is dealing with it as a priority. Its importance is recognised, but if the hon. Gentleman wants to make his views known, I will pass them on to Andrew Davies. Perhaps he should also make a direct approach.
The Government are fully committed to maintaining a viable Post Office network.
I thank the Secretary of State for that response, but six out of 10 of the sub-postmasters in my constituency are concerned about the viability of their businesses once they lose the income from the Post Office card account in 2010. That has major ramifications for the wider community across rural Wales, which are some of the remotest communities in the country. I urge the Secretary of State to encourage his colleagues to undertake, at the very least, an urgent review of post office service provision in rural areas, and preferably to scrap the proposals to abolish the Post Office card account.
We are looking closely at the matter, but I remind the hon. Gentleman that we are providing £150 million a year to support rural post offices, as part of a £2 billion investment in the post office network since 1999. None of that would have been made if his party’s policy of privatising the Post Office had been implemented.
Does the Secretary of State agree that it is the Government’s rules on matters such as automatic credit transfer and the failure to support Post Office accounts that have led to post offices closing in rural communities the length and breadth of Wales? Will he apologise to the communities affected and tell us what the Government intend to do now to ensure that the post offices that remain continue to be viable?
I have just described what we are doing. This is a difficult issue, and I remind the hon. Gentleman that it costs the Government 1p to pay a benefit into a bank account, but £1 per transaction to a Post Office card account. I know that in many villages in my constituency and, I expect, in his, there are senior citizens who depend on the local post office, and we want to see them kept open if at all possible. That is why we are providing the investment. But the issue is not as simple as just keeping the Post Office card account, and it is certainly not acceptable to support privatisation of the Post Office, as the Liberal Democrats advocate.
Banks have closed branches in rural and valley communities, and one adult in seven in Wales does not have a bank account. Does not the Secretary of State see that the Post Office card account, which is used by 360,000 people, is vital to combating financial exclusion in disadvantaged communities?
I agree that the card account has played an important role in constituencies such as the hon. Gentleman’s and mine, and that is why we are looking at it so carefully. However, another 25 different accounts, including bank services, can be accessed at post offices. This is an issue that we are going to address.
How do the Secretary of State’s warm words square with what the Post Office chief executive said when he reckoned that he could do without 10,500 post offices? The Government are making that easier by removing income from post offices, and by the end of this month people will no longer be able to buy a TV licence at one. At present, they can use the cheque-and-send service to obtain a passport, for example, from the Bethcar street branch in Ebbw Vale, but will the introduction of the new biometric checks for passports mean that another service is to be lost, under Labour, to post offices and local people in Wales?
I regularly meet the First Minister and members of his Cabinet. The Assembly Government is investing record amounts in the NHS in Wales, and is delivering real improvements in the standard of services to patients.
The Secretary of State may be aware that many of my constituents are registered with GPs based in Wales, and that they have to wait longer for treatment than others who are registered with GPs based in England. That unacceptable problem was supposed to have been fixed this April, but the decision has now been deferred until next April. Will he talk to his colleague the Secretary of State for Health and to the Welsh Assembly Government to ensure that the decision is brought forward to as early a date as possible?
I want to tell the hon. Gentleman how massive the improvements in health performance and waiting times in Wales have been. More than 213,000 extra patients have been seen in Welsh hospitals since we came to power. Waiting times have plummeted since 1997: in the past year, only 30 patients in Wales waited more than 12 months for treatment—a massive cut of nearly 14,500. The aim is that, by March next year, no patient will have to wait more than eight months. By the end of December 2009, the maximum total wait, from GP referral to receiving treatment, will be 26 weeks. That is a massive improvement, and the hon. Gentleman ought to welcome it.
Does my right hon. Friend agree that the dramatic turnaround in the health service in Wales is due to the hard work of NHS employees there? No patient now waits more than 12 months for in-patient or day-case treatment. Is that not a tremendous tribute to the work of the health service in Wales?
I fully agree with my hon. Friend. When we came to power, people who needed orthopaedic operations, such as ex-miners and so on, had to wait years and years. That was what we inherited, but our investment in and reform of the health service in Wales have caused those figures to plummet. Moreover, since we came to power, we have been able to recruit 450 more consultants and more than 7,300 more qualified nurses in Wales. That is another sign that Labour invests in the NHS, and that the health service in Wales will be safe only under Labour.
Is the Secretary of State aware that the Telford and Wrekin primary care trust board plans to withdraw from the process of re-providing Shelton hospital? The lack of mental health provision in mid-Wales means that cutting that vital facility would have serious consequences for the whole of central Wales. Will he make representations to the Telford and Wrekin PCT, which is an English health trust, to protect a service that is crucial and irreplaceable?
Sometimes I think that the Secretary of State lives on another planet and does not spend enough time in Wales. With the NHS in Wales £71 million in debt, the former chief executive of the ambulance service claiming that the service is in crisis and that lives are being lost, hospitals such as Withybush, Bronglais and Llandudno under threat, and 60 per cent. more people waiting for treatment than when the Assembly Government came to power, does the Secretary of State think that the Welsh Health Minister is fit for purpose?
That really takes the biscuit. The hon. Lady does not even represent a Welsh constituency. I live in Wales. I am in Wales every weekend in my constituency, so she should not make accusations like that. When she looks at the record of health investment in Wales, plummeting waiting times, extra nurses, extra doctors, improved health performance, and 10 new hospitals being built or already built in Wales under our Government compared with all the hospital closures that the Tories were responsible for, she will realise that people in Wales know that it is only under Labour that the health service is safe in Wales.
My right hon. Friend and I, along with the Welsh Assembly Government, are working to maximise the benefits brought to Wales by the London Olympic and Paralympic games. Wales has many excellent training facilities and will offer a warm welcome to visiting teams and their supporters, and I am delighted that the Millennium stadium in Cardiff will host part of the Olympic football tournament.
I am grateful for that answer. Will Ministers in the UK and Welsh Governments realise that, if we follow the example of the Sydney Olympics, where much of the training was done a long way away, there is a great opportunity to use the swimming facilities at Swansea, the velodrome in Newport, the Millennium stadium in Cardiff and, I am sure, the wide range of facilities in Blaenau Gwent? Will they all be put to maximum use and can we have a commitment?
I can certainly give that commitment to the hon. Gentleman. He is quite right that, at the Sydney Olympics, more than £400 million was spread throughout the economy in New South Wales in 2000. We intend to ensure that as much of the benefit as possible is spread throughout the UK—particularly in Wales. As he rightly says, we have a wide range of facilities: the velodrome, the national pool in Swansea and the Menai sailing centre. All those are good potential training facilities for teams and we will certainly push that forward.
The Olympic Delivery Authority has given a commitment that the 2012 Olympics will be the most sustainable ever. Given the strength of Wales’s renewable energy manufacturing industry, such as Sharp UK in my constituency, which makes photovoltaic cells, will my hon. Friend meet me to discuss the potential for Welsh manufacturers to serve the Olympics in 2012?
I can certainly give my hon. Friend that assurance. He may know that my right hon. Friend the Secretary of State has already written to the Secretary of State for Culture, Media and Sport to push the importance of renewable energy facilities in the new buildings related to the Olympic games. I will be able to give him further information when we meet in the near future.
I am grateful to my right hon. Friend for that response. I welcome the Government White Paper, which is building a consensus for pensioners for the future. At present, many pensioners throughout Wales, including in my constituency, benefit considerably from the pension credit. Will he ensure that, during the transition period to the earnings link, pensioners on pension credit do not lose out; and will he further urge the Department for Work and Pensions to campaign vigorously so that there is a greater take-up of pension credits throughout Wales by our neediest pensioners?
We will certainly do that. Indeed, the pension credit has been of enormous benefit to pensioners in Wales and, in particular, to some of the poorest pensioners in Blaenau Gwent, where 4,760 of them have benefited from it. The people of Blaenau Gwent and Wales as a whole need to be told by the Leader of the Opposition whether he will maintain his policy of abolishing the pension credit system.
Does the Secretary of State accept that many people in Wales are disappointed by the Government’s pension proposals and would much prefer a citizens pension that is paid to everyone at a decent level to be a right of Welsh citizenship?
The Prime Minister was asked—
Before I list my engagements, I know that the whole House will join me in sending our condolences to the families of Lieutenant Tom Mildinhall and Lance-Corporal Paul Farrelly, who, sadly, were killed in Iraq last week. They were doing a vital job for their country and the security of the wider world, and we should be proud of them.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.
I am sure that the whole House will wish to be associated with the Prime Minister’s remarks.
My right hon. Friend will be aware that there are political groups in the European Parliament that are opposed to women standing for election, that are homophobic and that wish to ban bicycle riding on Sundays. Will he undertake to keep this Government in the mainstream of European politics, rather than on the extreme right-wing fringe, where the Opposition would like to put us?
It would be a gross error of judgment and leadership to leave the mainstream groupings in Europe, because that would marginalise a party in Europe—and if the Conservative party were ever to be the Government, that would marginalise the Government. If one wants any proof of that, one can see that the Conservative party website boasts about the role played by one of its members in the services directorate as a spokesman for the European People’s Party, although the party now wants to leave that group. I suggest that the right hon. Member for Witney (Mr. Cameron) show some leadership and ditch that policy as well.
May I add my tribute and those of my hon. Friends to the soldiers who died in Iraq serving their country? I also add a tribute to the members of the camera crew who lost their lives in Iraq.
In the past week, we have discovered that in each of the past two years almost 2 million households have been overpaid tax credits, by £2 billion. Some of the poorest households in Britain are now having that money painfully clawed back. The Treasury Committee says that the Department was incompetent. Will the Prime Minister tell us which member of the Cabinet is responsible for this piece of incompetence?
Let me just point out to the right hon. Gentleman that tax credits provide support to some 20 million in this country, including 6 million families and 10 million children. They are responsible for lifting 700,000 children out of poverty and 2 million pensioners out of acute hardship. The Government are proud of the role that tax credits are playing in alleviating poverty in our country.
The Chancellor is responsible—and it has come to a pretty pass when the Prime Minister cannot even bear to say his name. Citizens Advice says that the Chancellor’s system has left families in “severe hardship” and that the number of people coming for help has not dropped. The right hon. Member for Birkenhead (Mr. Field), who was the first welfare reform Minister in this Government, says that the Chancellor’s approach is
“like attempting keyhole surgery with a hacksaw”.
What is the Prime Minister going to do to ensure that the Chancellor takes responsibility and sorts out this mess?
With the greatest respect to the right hon. Gentleman, let me point out to him what tax credits have enabled us to do. We have 2 million more people at work in this country. That is in part not just because of the minimum wage, which he opposed, but because of the working families tax credit, which makes work pay for people. As a result of the children’s tax credit, we have been able to give help to millions of families in this country. Those families were let down by the Tory years of boom-and-bust economics, high unemployment and poverty, which was why we made the change, and we are proud of it.
But all our surgeries are full of the victims of incompetence—[Interruption.] Yes, his incompetence—the Chancellor designed and administered the tax credit system, yet he has not made a single statement, or answered a single oral question in the House of Commons, on tax credits in the past year. Yesterday, the Prime Minister said that Ministers should not just blame officials when things go wrong. I agree with that. But is not the Chancellor’s behaviour typical of this Government? Ministers create a massive bureaucracy that becomes a painful paper chase for hard-working families, so why do they refuse to take responsibility when it all goes wrong?
The right hon. Gentleman talks about families coming to his constituency and other constituencies—but we remember when families used to come to our constituency surgeries at the time of 10 or 15 per cent. interest rates, with kids who could not get jobs for years. There were families with kids living in poverty, and nothing was done about it. Yes, it is true—tax credits have helped millions of families in this country. The problems that are there will be dealt with. We are glad that under this Government families have not just a stable economy, but a Government who back children and families, and help them out of poverty into work and into a decent standard of living.
The Prime Minister has indicated that the nuclear energy option is back on the agenda for policy review. Will he recognise that many of us, particularly people on the east coast of Ireland, are totally opposed to the expansion of nuclear energy because of our experiences of the output, the outfall and the discharges from Sellafield? What cognisance and what weight will be given to the opinion of the people of Northern Ireland and of the Republic of Ireland, who will be affected if the policy is pursued?
Of course we will give full weight to that. That is one of the reasons why we have reduced discharges considerably over the past few years. However, I must tell my hon. Friend that this is not about an expansion of nuclear power. The fact is that over the next 15 or 20 years we will lose that 20 per cent. of our electricity presently generated by nuclear power. It is in the interests of people in Northern Ireland and in the whole of the United Kingdom that we have secure supplies of energy for the future. Therefore, we need a balanced energy policy. A major component of that will be additional renewable energy and a big push on energy efficiency. My own view is that we need a mix of all these things if we are to safeguard the future of the country.
May I begin by associating my right hon. and hon. Friends with the expressions of sympathy and condolence for those who have died in Iraq? Such events happen too often on the occasion of these proceedings.
Can the Prime Minister confirm that the United Kingdom has given no logistical support for rendition to the CIA nor provided any information to be used in torture?
I think that the Prime Minister might find careful reading of the Council of Europe report particularly rewarding. It says that rendition involves disappearances, secret detention and unlawful transfers to countries that practise torture. On 7 December the Prime Minister told the House that he fully endorsed rendition. Does he still do so now?
I think that what I actually said was that rendition had been the policy of the American Government for a long period, under the last Administration as well as this Administration. We have kept Parliament informed of all the requests that we are aware of: four in 1998, two of which were granted and two declined. As for the rest of what is in the Council of Europe’s report, that concerns other countries, and obviously I am not in a position to speak about them.
Last year the Derbyshire asbestos support team helped nine people in Amber Valley suffering from asbestos-related diseases, two of whom have since died from mesothelioma. Will my right hon. Friend discuss with his Cabinet colleagues whether the excellent Compensation Bill that will be discussed in the House tomorrow can be amended to reverse the appalling House of Lords Barker judgment that denies justice and compensation to many people suffering from that long-drawn-out disease?
I totally understand my hon. Friend’s concern. As I said a short time ago in the House, we are looking at this very carefully in the context of the legislation that she described, and I hope that we will be in a position to make an announcement shortly.
What I can tell the hon. Gentleman about the waiting times in his area—[Hon. Members: “Answer!”] Well, he was talking about people who have been put on waiting lists, and the fact is that the number of people waiting more than six months for treatment was 5,000 when we came to power, but it is zero today. What is more, in-patients are being treated more quickly. Under this Government, we are investing more and the national health service is getting better.
My right hon. Friend knows the joys of family life. He knows, too, that this Saturday is national infertility day. Thousands of couples remain childless, and they desperately hope to access the medical intervention of in vitro fertilisation in the hope that it will give them the precious gift of a child. Will he restate the commitment that he gave in February 2004 that every infertile couple should be given one NHS IVF treatment, and will he join me in condemning the 25 per cent. of primary care trusts that deny people access to IVF and other PCTs that claim that it is only available to couples over 30, when the intervention process is seriously dysfunctional?
We are working with the leading organisation for patients requiring fertility treatment—the Infertility Network UK—to help them in their relationships with the primary care trusts to make sure that their voice is heard. Ultimately, those are decisions for primary care trusts, but it is important that the cycle of treatment is available to people. Obviously, it is agonising for the families involved, which is one reason why we asked the National Institute for Health and Clinical Excellence to produce a report, which was published last December. We will do all that we can to take it forward.
Fatal stabbings have increased by almost a fifth in the past eight years, and now represent a third of all recorded killings. Six months ago, the Labour party voted against our proposal to increase the sentence for carrying a knife. Will the Prime Minister confirm that he will support a tougher sentence, and will he tell us when it will be introduced in the House?
As I think the Home Secretary has made clear, we will look carefully at the issue of whether we need to toughen the minimum standard for sentences for individuals who are in illegal possession of a knife. As my right hon. Friend explained when this was debated, there are issues about whether it is possible to do this in a sensible way, but I totally agree that knife crime is extremely serious. That is why we have extended the types of knives banned under the legislation, and why we have made sure—for example, in sentencing guidelines—that sentences are tough for individuals who carry knives.
A lot has happened—[Interruption.] May I just explain what has happened? Following the introduction of the legislation, if a knife is listed as an offensive weapon, the maximum penalty for carrying it is four years. Since 1997 we have added stealth knives, disguised knives and batons to the offensive weapons list. We are raising the minimum age at which someone can buy a knife from 16 to 18. There is a new offence of using someone to mind a weapon, and there are extra powers, along with extra resources, for head teachers to search pupils for weapons. In addition, there was a national knife amnesty a short time ago. I will look at whether we need to increase minimum sentences. As I said, the issues were explained in detail when the matter was last debated, but in principle, we want to make sure that anybody who is found in illegal possession of a knife is subject to the toughest penalties possible. May I point out to the House that in respect of firearms, we introduced a mandatory minimum five-year sentence, which is now in operation?
At about the same time as Kiyan Prince was being murdered with a knife, a head teacher at a school in my constituency was being forced by the independent appeals panel to take a boy back into school. The boy had been found in possession of a knife, and had been found guilty of violent conduct. Understandably, the head teacher is angry and in despair at this perverse judgment of the appeals panel. Will my right hon. Friend look into the case, with a view to changing the procedures so that such a perverse judgment cannot be made again?
No, they will not. There is provision for the additional homes that are to be built to have the proper water supply. We work carefully with Ofwat and with the water companies to achieve that. It is all very well for the right hon. Gentleman and some of his colleagues to say that they are against the building of new homes—but let me read to him what the shadow Chancellor said just a few days ago, when addressing something called Property Week, which I suppose is intended for property developers. He said:
“We should increase supply of affordable new homes…We should see if we can make new land available for development, but we should demand that developers do not simply bank it but bring it forward for building.”
So I think there is a slight instance of the hon. Member for Tatton (Mr. Osborne) saying one thing and the right hon. Member for Bracknell (Mr. Mackay) saying another.
As you are aware, because of your generous support, Mr. Speaker, 100 Members from all parts of the House will be taking part in the Westminster mile for Sport Relief in the next hour or so, to be started by Roger Bannister. Will my right hon. Friend pass on his congratulations to Sport Relief on its work and the projects that it runs? Will he commit himself to taking part, as he did in 2004? Most importantly, will he put at the heart of the Government’s approach tackling poverty both at home and abroad, to make sure that in the future projects like Sport Relief are not needed, because we have the means and the technology—now we just need the political will—to tackle the worst causes of poverty across the globe?
I am taking part in the mile run in aid of Sport Relief, and my hon. Friend is right to say that it is important. I understand that more than 100 hon. Members have signed up to run. My briefing tells me to say that I hope that the sight of MPs in their running gear will encourage all people to participate in the run. That may be slightly sanguine, but it is an excellent idea none the less, and Sport Relief does a huge amount of work right across the globe to relieve poverty.
The most important thing is to work with the new Serious Organised Crime Agency, which has a specific remit, along with the intelligence services, to try to track down those who are engaged in people trafficking. The hon. Gentleman is right to describe it as a problem, but the only way of resolving it is by means of the measures that we have introduced, which will allow us to seize the assets of people engaged in this trade. I hope that when we introduce new measures, which we will do in the autumn, specifically to tackle organised crime, of which people trafficking is a part, his party will support those measures. The last time we introduced such measures—[Interruption.] I am afraid that the Opposition did not support them. It is important that the next time we do, they do.
I do, and my hon. Friend is quite right to say that this is not just a problem here but a global problem. We are working closely with the Medicines and Health Care products Regulatory Agency, the industry and other key stakeholders and international counterparts to combat the threat of counterfeit medicines, so I can assure him that we take it very seriously indeed.
Crossrail is important for London and the whole country, but what would be absolutely disastrous for Scotland would be to separate Scotland from the United Kingdom. That would be devastating for jobs in Scotland, devastating for the economy and devastating for the Scottish people, which is probably why the hon. Gentleman supports it.
Will my right hon. Friend accept my personal gratitude for his swift response to a recent meeting that I had in his office, along with the hon. Member for Castle Point (Bob Spink) and representatives from the Association of Children’s Hospices, in granting an additional £27 million over the next three years to children’s hospices? That is fantastic news, but will my right hon. Friend give me his reassurance that the Government will continue to have discussions and engage with the association, not just in the short term but in the medium and long term, on children’s palliative care?
I congratulate my hon. Friend, the hon. Member for Castle Point (Bob Spink) and others who made their case in an extremely persuasive way, along with the children’s hospice movement. We are pleased that we have been able to find £27 million over the next three years. My hon. Friend is right that we also need to review the long-term arrangements for the way in which hospices are funded—a point that was impressed on me very strongly. That review will now take place, and we will work closely with the children’s hospice movement and others, including my hon. Friend, to find the right solution.
I am sure that it is important that we engage in a dialogue with all interested groups, including the Centre for Alternative Technology, but the hon. Gentleman will realise that we must balance the energy interests of the whole of the United Kingdom.
That is important, of course, particularly when dealing with pensioners, but my hon. Friend is right to say that as a result of the pension credit, there are people who are receiving £40 a week more. These are pensioners who under the previous Government in the winter months would very often have to choose between heating and eating. Now they have not merely the winter fuel allowance, but the extra support for energy and home insulation. The pension credit gives literally hundreds of thousands of pensioners a decent standard of living for the first time in their lives, and we can be very proud of having introduced it.
Is the Prime Minister aware that ending the sale of television licences at post offices, together with ending the Post Office card account, will cause a catastrophic loss of income for many thousands of post offices, as well as serious inconvenience for many people living in rural areas? Will he meet a delegation of postmasters from the highlands to discuss how his Government can better support post offices, rather than undermining them at every turn?
It is not our intention to undermine post offices, but as technology and people’s lifestyles change, it is necessary to make reforms. The problem is that we already subsidise our post offices to the tune of hundreds of millions of pounds, and we must look carefully at how we manage to make ends meet within the public finances while providing rational and logical support to post offices. I am sure that the hon. Gentleman will make his point to the Secretary of State for Scotland.
I certainly agree that it is important that the company gives the unions’ alternative proposal to keep Ryton open the most serious consideration, and we will do what we can to make sure that it does. In the end, the matter is a commercial decision for the company, and I think that everyone understands that, but if anybody is made redundant, the partnership that has been set up in the area will do its utmost to make sure that they are given the fullest possible support. I agree with my hon. Friend that it is important that every alternative is considered, because the closure of that plant would mean difficulty and hardship for hundreds of families.
Is the Prime Minister aware that there will be great delight at yesterday’s acquittal of the guardsmen? However, there will also be bewilderment, and indeed a degree of shame, that men with such fine service should have been placed in such a position on such flimsy evidence. Can the Prime Minister imagine what it is like to be a young soldier in Basra, having to look ahead for bombers and snipers and behind for the Attorney-General?
That last point is wrong and unfair. I am delighted that the soldiers were acquitted, and I hope that the lessons will be learned by the prosecuting authorities. As the hon. Gentleman knows—I hope that he will not suggest otherwise—decisions to prosecute are entirely separate from Ministers.
As my hon. Friend has said, it is important that we tackle the remaining areas of unemployment in our country, and inner-city regeneration is one way of doing so. In our view—this is a major point of difference with the Conservative party—we should expand and extend the new deal for the unemployed, rather than closing it down, which the Conservative party would do. If we want to tackle unemployment, the new deal for communities and the new deal for the unemployed should be deepened and strengthened and should not be cut back. I will certainly consider my hon. Friend’s remarks in that context.
Will the Prime Minister agree to discuss with his Secretary of State for Education and Skills the range of inspection grades available to Ofsted teams, which are currently “outstanding”, “good”, “satisfactory” and “inadequate”? In a recent inspection at the Sacred Heart of Mary girls’ school in Upminster, which was very good overall, its achievement levels were described thus:
“no underachievement in any group”
and “students achieve exceptionally well”. The team did not seem able to describe that performance as “outstanding”, so it was described as “good”. Does the Prime Minister agree that there is a huge gulf between “outstanding” and “good”? Will he agree to discuss with his Secretary of State the introduction of an in-between grade of “very good”?
I will certainly consider what the hon. Lady says, but she will probably understand that in the end it would not be wise for me or the Secretary of State to make those judgments; that has to be left to local inspectors. I am sure that the people in her local school of the Sacred Heart at Upminster do a superb job for their children, and I congratulate them on the strong showing that they made in the report—but it is difficult for me to intervene in the way in which reports are written.
My hon. Friend is right to draw attention to the problems of antisocial behaviour. As a result of the new powers, drug dealers’ homes can be shut down and people can be evicted from them, and antisocial behaviour orders and dispersal orders have a real effect in many communities. However, we are looking to see how we can strengthen this still further. We particularly want to ensure that those who are evicted and then receive new tenancies do so under the strictest possible conditions and restraint, and that we have a system to ensure that where people move across different areas there is some sharing of the available information. Antisocial behaviour is still a huge issue for people in very many communities, but the new powers and resources are making a real difference where they are being applied. I make it clear again that if the police and local authorities want even further powers to deal with it, we shall give them those powers.
With permission, Mr. Speaker, I wish to make a statement about the NHS chief executive’s report and NHS finances for 2005-06.
Sir Ian Carruthers, acting chief executive of the NHS, today publishes his first report on the performance of the NHS, including the provisional financial out-turn for the last financial year. A copy has been placed in the Library, together with a more detailed report on the finances from the Department’s director of finance, Richard Douglas. This information also forms part of the Government’s evidence to the Select Committee on Health, which is conducting an inquiry into these matters.
I should like to begin by reminding the House of the context. Following decades of growth averaging around 3.1 per cent. a year, since 1997 the NHS has received annual average growth in funding of 6.4 per cent. The NHS budget, which has already doubled compared with 1997, will have trebled by 2008. That unprecedented investment has enabled the NHS to employ an additional 307,000 staff, including 85,000 more nurses. I am sure the whole House will want to express our thanks to all NHS staff for their outstanding dedication and hard work. With that investment has come reform, giving patients more choice for elective operations, using the independent sector to add to the capacity and innovation of the NHS, and establishing NHS foundation trusts with more freedom to respond to local people’s needs.
Sir Ian’s report shows that NHS staff are continuing to improve patient care. Waiting times are continuing to fall. Virtually no-one now waits more than six months for an operation, compared with 270,000 patients who were waiting more than six months for an operation in 2000. The majority are treated much more quickly—the average wait for an operation is around just seven and a half weeks. There is now a maximum 13-week wait for an out-patient appointment. Again, the average wait is much shorter, with four out of five people getting their first out-patient appointment within eight weeks.
Nearly 99 per cent. of people with cancer are treated within a maximum of 31 days of diagnosis, and more than 91 per cent. are treated within 62 days of an urgent referral from their GP, compared with only 75 per cent. one year ago. Early deaths from coronary heart disease, cancer and suicide continue to fall. Patient care is improving everywhere but some parts of the country face significant financial problems.
The provisional unaudited figures for 2005-06 show a net overspend across the NHS, excluding foundation trusts, of £512 million. That is made up of a gross deficit of £1.27 billion, offset by surpluses of £765 million. Although we clearly cannot allow that position to continue, we also need to put it into perspective. The net deficit in the NHS is less than 1 per cent. of the NHS revenue budget and is concentrated in a minority of organisations.
Seven out of 10 hospitals and other NHS organisations are not only improving patient care, employing more staff and paying them better than ever, but doing so within their budget. Two out of 10 have relatively small levels of overspending and only one in 10 NHS hospitals and other organisations account for more than two thirds of the overspending.
My decision to publish those unaudited financial figures, together with the director of finance’s report to me, reflects our commitment to greater transparency in the NHS. In future, we will publish quarterly reports on NHS finances.
In the past, because the focus was largely on the overall financial position of the NHS, overspending organisations had little incentive to improve their performance but relied on other parts of the service to bail them out. The system was unfair because most of the overspending occurred in better-off areas with a generally healthier population and most of the underspending was in places with far greater health needs and health inequalities. We are not prepared to allow that unfairness to continue.
By the end of the financial year, we will return the NHS as a whole to financial balance. The turnaround teams that I announced to the House in January are helping organisations with the biggest financial problems to implement recovery plans that will allow them to maintain and improve patient care within their budgets. As most of the NHS demonstrates, and Sir Ian confirms in his report, there should be no trade-off between improving patient care and sound financial management. They go together.
We are aiming for all organisations with deficits to reach monthly balance of income and expenditure by the beginning of April next year. However, there will be some exceptional cases when an organisation needs longer to make the necessary changes while maintaining patient care. However, because overspending in one organisation has to be balanced by underspending elsewhere, we will continue to challenge and expect that minority of organisations to return to monthly balance as quickly as possible.
We have also asked the new strategic health authorities to establish a regional reserve that will support organisations while they return to balance. That means asking primary care trusts that have stayed within their budget or delivered a surplus to contribute some of their growth money, which averages 9.2 per cent., in the current year and to postpone some of the improvements that they were planning to make for their patients. However, that money will not be lost to those communities. It will be repaid, normally in the three-year allocations period. I have stressed to the health authorities that the areas with the greatest health needs should be repaid first.
There will be difficult decisions to make, especially in the minority of trusts with substantial deficits. In some cases, that will mean work force reductions and we all understand the anxiety and uncertainty that that causes for staff who have dedicated their lives to the NHS.
However, there will not be the wholesale redundancies across the NHS that some commentators have forecast. In most cases, as Sir Ian stresses, work force reductions will be achieved by natural turnover, reduced spending on expensive agency staff, redeploying staff and freezing some posts. Compulsory redundancies will be kept to an absolute minimum and those affected will, of course, be given as much support as possible to find a new post.
The NHS is treating more patients and saving more people’s lives than ever before. Of course there is still more to do to meet the public’s rising expectations, as people are living longer and a revolution is taking place in medical care and scientific knowledge. But Sir lan’s report today shows that the NHS is on the right track, and I commend it to the House.
I am grateful to the Secretary of State for giving me the opportunity to see her statement and the financial performance report 40 minutes ago. After her excursion into a parallel universe, it is about time we came back down to earth. She has come to the House today to admit that, for the fourth year in a row under this Government, the financial situation in the national health service is deteriorating, and that the deficit is a great deal larger than in the previous year. She says that there was a net deficit of £512 million in the last financial year. On a like-for-like basis, it was £216 million in the previous financial year, so it is now more than two and a half times greater.
The Secretary of State’s policy has failed, but of course it is the civil servants and the managers in the NHS who will get the blame. Trusts will be singled out and told that they are responsible for the deficit. Sir Nigel Crisp resigned in March. If everything was going so well in March, I wonder why the chief executive of the NHS had to leave in those circumstances. Since then, there has been an exodus from the Department of Health, with people either jumping or being ejected from the sinking ship. Many of them have rightly said that the NHS is suffering from the void of leadership in the rudderless Department of Health. The growing gap between the hard-working staff in the NHS and the leadership that ought to be coming from the Department of Health is causing a crisis of confidence.
The Secretary of State’s statement purported to give us financial information about the past year. She gave us the unaudited figures, and mentioned a sum of £512 million. Did she go on to tell us that the unaudited figures last year were out by 80 per cent. compared with the audited figures? The audited figures were £112 million higher than the unaudited figures. We do not yet know what this year’s audited figures are going to be.
The Secretary of State told us that the gross deficit was £1.27 billion. That is about 1.5 per cent. of the total NHS allocations. She then said that that was being offset by surpluses. Well, yes indeed—there are £760 million of surpluses. But she did not tell the House that more than £500 million of those surpluses have been generated by the strategic health authorities. That means that they have cut their budgets, and they are planning to do so again this year. Most of those cuts will involve training budgets, which will mean fewer posts for doctors and nurses coming into the profession seeking to pursue their vocation. If there is a 10 per cent. cut in training budgets this year—as postgraduate deans across the country expect—that will affect 4,000 training posts for doctors. In Stoke yesterday, a lecturer in nursing at Keele university told me that—[Interruption.]
That lecturer told me that 120 student nurses who are finishing her course at Keele university will not find jobs.
Did the Secretary of State mention that deficit switching has led to cuts in mental health services that have been deplored by her own national clinical director? Actually, she did not say anything at all about mental health services. She talked about the reductions in waiting times, but did she mention the waiting times for diagnosis? Her own figures, to which she did not admit, now show that waiting times—including waits for diagnosis—can be up to four years for trauma and orthopaedics.
Did the Secretary of State admit that, but for the strategic health authorities cutting their budgets, the deficits would be more than £1 billon—precisely the amount that we predicted last November? In December, the Secretary of State told the Health Committee that the deficit would be managed down to £200 million across the NHS by the end of the financial year. Actually, she said £250 million, but she had to be corrected by her officials because she did not have the figure in her head. However, the deficit has not been managed down to £200 million. It is now two and a half times greater than the figure to which the Secretary of State committed herself in front of the Select Committee.
Did the Secretary of State come here with any apology? No, she did not. Did she come here with any clarification of what will happen this year? No. There may be a chief executive listening to this out there. Are chief executives required to achieve balance over the whole of the current financial year? We do not know. Are they required instead to achieve what the Department is now calling—we shall hear this term again—“run-rate” balance, which means balancing monthly income and expenditure in the last month of the financial year? That is a very different discipline. Perhaps they are expected to achieve such a balance; perhaps they are not. Are they required in all cases to recover earlier deficits? We simply do not know.
The Secretary of State is promising that by the end of this financial year the NHS will have returned to financial balance. Will she tell the House that if by the end of this financial year the NHS is recording a further net system-wide deficit, she will resign?
Yesterday the Prime Minister told the public service to speed up reform, but it is the mismanagement of reform that is holding the NHS back. Public servants want to deliver better services continuously, year by year—of course they do—but they cannot do that under a Government who have let them down. It is policy that is failing. It is not only consultants in the British Medical Association who are saying that. We have a Government who fail to allocate resources in line with the real burden of disease and demand across the country, with the result that some health economies are going into serious deficit.
The Government grossly miscalculated the cost of new contracts, and failed to link those contracts to productivity or reform. They are spending billions on the NHS IT programme, but it is over two years late and is not delivering the system that the NHS wants. Last year the Government imposed central targets—the Secretary of State did not mention them—which cost hundreds of millions, distorted clinical priorities, and caused some of the deficits. The Secretary of State talked of 300,000 extra staff for the NHS, but she did not tell us that 106,000 of them were administrators. She has doubled the number of managers, and financial management in the NHS is clearly woefully lacking.
This is a Government who have let the NHS down. Policy failures and mismanagement have left the NHS in serious and growing deficit. Hard-working front-line NHS staff deliver good, indeed excellent, care to patients, but they complain bitterly—and with justification—that that is not because of the Government, but in spite of them. They want to be free of damaging interference by Labour Ministers.
I find it extraordinary that the hon. Gentleman made no mention at all of the dramatic improvements in care that have been delivered in the NHS over the past eight years and, indeed, the past 12 months. I am very surprised that he did not choose to mention that whereas in 1997 the number of patients in South Cambridgeshire who were waiting more than six months, in pain, for operations that they needed was 1,790, the figure in March 2006 was zero. It is extraordinary that the hon. Gentleman failed to mention improvements in his constituency and elsewhere, but I have to say—[Interruption.]
Thank you, Mr. Speaker.
Not only did the hon. Gentleman fail to mention the improvements in care for patients; he was clearly very disappointed that the deficit was not higher—that it had not reached the levels that he had predicted. In fact, it is lower than the forecast figure that we published at the half-year point.
The hon. Gentleman asked specifically about surpluses in the strategic health authorities. Many of those surpluses come directly from primary care trusts and other NHS trusts; but instead of being transferred directly to the accounts of overspending organisations, where in the past they have served to conceal the real problem of overspending, they have been held in strategic health authorities.
The hon. Gentleman said that newly qualified nurses and other staff were finding it difficult to obtain jobs. Of course, with more staff in the NHS than ever before—85,000 more nurses alone—it is more difficult for newly qualified nurses to find jobs than it was in the days when it was scarcely possible to find nurses to fill the vacancies that so desperately needed to be filled. What we are doing in response is ensuring that much more effort is made throughout the country to match our newly qualified staff to the vacancies that exist for every kind of staff in some parts of the NHS.
Let me make it clear once again that I am determined that the NHS as a whole will be back in financial balance by the end of March next year. Of course, as Health Secretary I will be accountable to the House and the public for achieving that goal. We have said that we expect individual organisations to sort out their problems and achieve monthly financial balance as quickly as possible. A small number of them—largely those that have been overspending for several years and have large accumulated deficits—will not even be able to get to monthly financial balance by the end of next year. However, as I said, we will go on helping them to make the difficult but essential changes so that they get back into balance and deliver the best possible care within their budgets without expecting other parts of the NHS and other patients to bail them out.
My final point is that the hon. Gentleman needs to decide whether he wants the NHS to deliver the best value possible for the money—the increased money that he and Opposition Members voted against—that the public have put in. Does he really think that poorer areas, which typically are those that have been underspending, should go on bailing out better-off areas that have been overspending? Does he agree with the right hon. Member for Witney (Mr. Cameron), who wrote to the Prime Minister on 18 May asking for the deficit in Oxfordshire—one of the overspenders—to be wiped out? Does the hon. Gentleman recognise that in that area funding has risen by more than £38 million in the past three years? Does he recognise that it will increase again by more than £36 million in the next two years? Does he believe that south-west Oxfordshire, to take one example, which has 64 GPs per 100,000 population, should be given money from, for instance, Sedgefield, with 52 GPs per 100,000 population? Does he really believe that money should be taken from the poor to bail out the overspenders, or does he, like us, believe in fair funding across the NHS, and the best care and value for money everywhere?
I thank the Secretary of State for her statement. Will she confirm that she just told the House that the NHS deficit has doubled in the past year? Will she confirm that one in three trusts are in deficit and that one in 10 are in serious deficit, which is more than last year? Will she confirm that the scale of the deficits is so much that the deficit trusts between them have run up a deficit in excess of £1 billion, which they will have to sort out, including paying back any assistance that they get from other trusts? The Secretary of State gave figures excluding foundation trusts. What are the figures including foundation trusts?
Who is responsible for the financial crisis? If the Government set the pay rate for GPs, doctors and consultants, set “Agenda for Change” and NHS staff rates, set the tariff for how much trusts get and set all the targets, is it someone else’s fault or is it the Government’s fault if the sums do not add up? Will the Secretary of State take responsibility for the deficit in the NHS? How much of it is due to Department of Health mistakes, creating bodies that get abolished a few years later and negotiating contracts that result in overspending—the GP contract and the consultant contract? Is that her fault or someone else’s fault? Can we believe her when she says that the NHS will be in balance at the end of the year when Sir Nigel Crisp said in December that the deficit this year would only be £200 million and then, just a few months later, she told us that it would be two and a half times as big? Why should we believe her when she says that she will get the deficit under control this time around?
The surpluses in the NHS are in different places to the deficits, so the gross deficit of £1.2 billion is huge. Is not it the case that it takes incredible mismanagement to spend record sums of money on the NHS and to come to the House admitting the worst deficits in years? How has the Secretary of State achieved that? How did she manage to do that?
Is not it the case that what is going on is breakneck NHS reform, because the Prime Minister said that he will not go until the NHS is sorted out? How quickly will it be sorted out? Is not it the case that what we are getting is not measured organisational change, with long-term planning and rational reorganisation, but emergency cuts packages to deal with a short-term financial crisis? Does the Secretary of State accept that that is no way to run the NHS?
I have already given the specific answers to the questions that the hon. Gentleman asked initially. I have made it clear, and I shall make it clear again: seven out of 10 NHS organisations are in balance or delivering a surplus. Two out of 10 have a relatively small deficit, which is quite manageable. One out of 10 organisations, many of which have been overspending for several years, have serious financial problems. The financial figures for the foundation trusts were published earlier this week by Monitor. Their overall deficit is £24 million, making an overall deficit of £536 million, which is still significantly less than 1 per cent. of the overall NHS budget.
If the cause of the deficits was pay rises for staff or targets for better care for patients, there would be deficits everywhere, and there are not. The majority of trusts in the NHS are employing more staff and paying them better, treating more patients faster than ever before, and saving more people’s lives—and they are doing it within their budgets. It is entirely reasonable—I am surprised that the hon. Gentleman does not support this—to say that the NHS should be doing that everywhere.
I am proud of the fact that we are paying our staff better than ever before. I am sure that they will note with interest that the Liberal Democrats are not so keen on that. It is perfectly true that the GP contract cost more than we and the British Medical Association initially anticipated. There is a very good reason for that: it is a performance-related contract and the GPs have delivered more and better care than we and the BMA expected. The additional costs in the GP contracts—somewhat below £300 million—have delivered better care for patients. Indeed, thousands of people are alive today as a direct result of that GP contract.
I stress—I tried to make this point earlier—that in the past the financial reporting systems within the NHS had the effect of concealing persistent overspending in a minority of organisations. In some cases, the underlying financial problems were wholly unclear even to the organisations themselves. We have stopped that. As a result of the changes and reforms that we are making, we have much greater transparency right across the NHS as we give patients more choice, as money follows the patients, and as hospitals, particularly foundation trusts, have greater freedom to respond to what patients need while taking responsibility for their performance and for delivering the best possible patient care within those increased budgets. In other words, our reforms are helping to reveal the problems and to deal with them, rather than causing them.
As Health Secretary, I take responsibility for the NHS, for getting the policy framework right, and for ensuring that we have got the right support within the Department of Health to make sure that our front-line staff go on doing a superb job for patients. I regret that the hon. Gentleman, like the hon. Member for South Cambridgeshire (Mr. Lansley), failed once again to acknowledge all the improvements taking place in the NHS for patients.
Does my right hon. Friend agree that the statistic that she just quoted—that seven out of 10 NHS organisations are improving patient care and employing more staff and paying them better—belies the siren voices of both Opposition Front Benchers, and of the BMA consultants this morning? Would not they do better to find out why three in 10 organisations cannot do what the majority can do?
I entirely agree with my right hon. Friend and I know that he, in his capacity as Chair of the Health Committee and in the inquiry that he is undertaking, will help us to do exactly what is needed, which is to ensure that we deliver the best value and the best possible care for patients everywhere—within the enormously increased budgets that we have given to the NHS.
Does the Secretary of State accept that it is not a surprise to anyone that every Member present wants a health service that is fair, effective and improving? She says that money will follow the patient, but will she look into what is happening in Worthing—in my constituency and that of my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton)—where the hospital trust is expected to save 8 to 10 per cent. of its budget in-year, with an option of moving accident and emergency services far away from Worthing, which is the largest town in West Sussex? Would that be a case of moving the patients and the money following them—or would it be better to bring the money to the patients and to let them be treated in their own town?
I am sure that the hon. Gentleman will readily acknowledge that in his constituency, as everywhere else in the country, far more money than ever before is going into the NHS. I am not aware of the specific proposals for changes to the accident and emergency services to which he refers, but I will look into that and, if necessary, write to him with further information. I stress that such changes in NHS services have to be subject to full public consultation before decisions are taken and changes made.
Brokerage was clearly the drug to which the NHS should never have become addicted. Anyone who has run a large public organisation will recognise the need to drive out overspends on a continuing basis. Where trusts still have to recover debts and the financial recovery plans that protect patient services take perhaps two years, rather than one, to take effect, will the fund that the Secretary of State hopes that strategic health authorities will hold enable trusts—where such a fund is available—to deliver over the longer term, rather than the shorter term?
Yes, but as I stressed earlier we want that to happen only in exceptional cases and for the reason that I gave, which is that, where an organisation is taking longer to return to balance, another organisation will have to underspend and thereby postpone improvements that they want and need to make for their own patients.
Barking, Havering and Redbridge Hospitals NHS Trust is entering a year of great change, in which services and patients will have to be transferred from two old hospitals to one new one. That in itself is an enormous management challenge and has cost implications. Does the Secretary of State agree that it is almost too much to ask the trust to achieve that and to recover its budget deficit in one year? Will she seriously consider allowing the trust to recover its budget deficit over two years, or even three, in order to protect services to the public?
I am sure that the hon. Lady and her constituents will warmly welcome the new hospital and the far better facilities that it will offer patients. I have no doubt that the point that she makes is also being made by many hospitals that have been overspending. The chief executive and chair of her local hospital will of course be discussing this matter with the London strategic authority, which has a reserve power; it has the discretion—but only in exceptional circumstances—to allow longer for that recovery to take place.
I appreciate my right hon. Friend’s acknowledgement that some trusts and local health economies will have serious problems in coming to terms with the deficit. I ask her to continue to take a keen interest in our efforts to move the north Staffordshire health economy out of deficit, which will take longer than the time that the Government are allocating. Will she make sure that, in addition to the £60 million that has just been announced for the new building programme, we can get early closure in respect of the fit for the future project and an early decision on the North Staffordshire community hospital?
My hon. Friend has been assiduous in supporting staff and her constituents in the very difficult situation that North Staffordshire hospital faces. I will continue to stay closely involved as their hospital and health community are supported in returning to balance, and I am sure that she will wish to join me in thanking the new chief executive of the hospital, the primary care trust and the acting chairman of the hospital for the work that they are doing with front-line staff to ensure that difficult decisions are taken in a way that has the least possible impact on patients, and that any staff affected are given all the support that they need.
Let me explain one of the reasons why there is such a problem with finances in West Hertfordshire Hospitals NHS Trust, which is in my constituency. Sedgefield, for instance, gets £1,210 per head, whereas last year in Hemel Hempstead, Dacorum primary care trust received £960 per head. There is a clear problem across the country in this regard. On Monday night, the health trust announced, in essence, the closure of Hemel Hempstead hospital, as it is facing £450 million-worth of debts. My constituents will be astonished at the complacent and patronising way in which the Secretary of State has addressed this problem. Their hospital, which was built for their community, is to close.
As the hon. Gentleman knows, the deficit and overspending problems not only in Hemel Hempstead but across Bedfordshire and Hertfordshire are extremely serious. They have to be tackled, and there has been lengthy debate and full consultation on the changes that are needed in respect of different hospitals in that area. He talked about funding, but I should point out that in his constituency there are 65 general practitioners per 100,000 population, which is significantly more than the average and significantly more than in a constituency such as Sedgefield. I am sure that the entire House and the public will be interested to hear that what the hon. Gentleman is asking for is less money for areas such as Sedgefield, which have far greater health needs, and more money for his area. However, his area has already received enormous increases in its NHS budget, and, on average, it has a healthier and wealthier population than the areas from which he would seek to take money.
I say to the Secretary of State on behalf of people such as me and Ronnie that age does not travel alone, and that we use the national health service. He has got a brand new knee—and he is proud of it—and I have been in the cardiac and cancer wards and the rest, and, like Eartha Kitt, I am still here. I have got the national health service to thank for that.
It is high time that there was some balance in this debate. If the Rover plant had had financial figures of the kind referred to today, it would still be open. If Peugeot had been able to produce the same results, its workers would still be at work, and if the National Coal Board had been able to produce those results, there would be 200 or 300 pits open today. The truth is that this is nothing other than a success story for people like me and the 30 others who had open-heart surgery. But the BBC, which joined with the Tories, refused to come to Brompton hospital and do a success story about the 30-odd people who had open-heart surgery and managed to survive.
At 12.30 pm today, the National Audit Office published the summarised accounts for 2004-05. The Secretary of State has announced today an unaudited deficit for 2005-06 of £512 million. For foundation hospitals, that will rise to £536 million. However, if we look at the audited accounts for 2004-05, we see that the audited account deficit was almost twice as much as the unaudited deficit. In light of what has happened in the last year, what credence can we give to these figures, which are unaudited, and how much trust can we have in financial management in some parts of the NHS?
I made it clear that the figures are unaudited, but I thought it right to publish them for the House, as I undertook to do and as I did last year, rather than wait for the audited figures, which are some months away. The hon. Gentleman is quite right: last year saw a significant shift between the unaudited figures and the audited accounts. Obviously, we do not yet know what the audited accounts will show this year, but for several months the finance and turnaround teams have been crawling over the accounts of the organisations with the biggest financial problems, which has revealed problems that had not been acknowledged or discovered at the point of the mid-year accounts.
The hon. Gentleman mentions the National Audit Office report, of which I have had early sight, and I am grateful to the NAO and the Audit Commission for their recognition that our reforms to bring about greater transparency in the NHS are helping to uncover, and therefore to tackle, some of the longstanding problems.
As I said earlier, I am proud of the fact that we are paying our staff more. “Agenda for Change”, in particular, has been a huge step forward, ensuring that we can guarantee our staff equal pay for work of equal value and reward them for taking on greater responsibilities. We have put more than £1 billion additional funding into the NHS simply to fund “Agenda for Change”. The great majority of NHS organisations are meeting those obligations, paying staff more and employing more staff, but doing so within their budgets, which we expect the rest of the NHS to do.
Is the Secretary of State aware that it has been announced today that Royal Cornwall Hospitals Trust—it covers not a better-off area, but the poorest region in the UK—has an estimated deficit of £15.7 million, which is double what was announced only three months ago? Will the Secretary of State inform the House who is responsible for that? Is it the trust, which is appointed by her; is it the perpetual and expensive Government gimmicks endorsed by her Department; is it the funding formula that leaves Cornwall at the bottom of the earnings league table; or is it, in fact, the Secretary of State herself?
There are different specific reasons for the deficits that have arisen in a minority of organisations—there is no single cause. If it were the targets or the pay rises, the deficits would arise everywhere, which is not the case. The Royal Cornwall hospital and the health community there must look into the same issues as other parts of the NHS are having to look into. For instance, are they doing enough day case surgery? Are they doing enough in the community to reduce the number of emergency admissions? Are they carrying out all the proven measures that are being used in other parts of the NHS to deliver better care to patients, with better value for money? The hon. Gentleman mentioned the funding formula, which we have made fairer. It now takes account of issues such as the demands of a rural economy, the proportion of elderly people living within the community and, above all, social and economic deprivation. That is why, over this year and the next, the poorest areas with the biggest health needs that are furthest from their target funding will get the biggest increases. I think that that is fair, and I regret the fact that the Opposition parties do not agree.
I welcome today’s statement, not least because my own strategic health authority and two primary care trusts are in reasonable financial positions. However, can the Secretary of State guarantee that people in Denton and Reddish and elsewhere in Greater Manchester—areas with real health inequalities and real health needs—will not lose out to other areas, often more prosperous, which have run up financial problems?
My hon. Friend raises an extremely important point, which is why I stressed to strategic health authorities that money contributed by primary care trusts such as my hon. Friend’s to help manage the deficit in a different part of the north-west will be repaid, and it should be repaid to areas with the biggest health problems and the poorest populations before it is paid to others.
I am grateful to the hon. Gentleman for acknowledging the superb work that is being done. He reflects the fact that an enormous amount of change is and has been going on in the NHS for some years, and of course that is enormously demanding for staff. The reason that change is continuing is, first, because it is working. I am sure that the hon. Gentleman would, like me, welcome the fact that the latest survey of patients showed that 90 per cent. believed that their NHS care was good, very good or excellent—the highest-ever level of patient satisfaction. That places demands on staff and we have to continue to change within the NHS in order to meet all the challenges of which the hon. Gentleman is so well aware, including the need to release resources for the new drugs and treatments that are becoming available, which patients quite rightly want to receive as quickly as possible.
Does my right hon. Friend agree that it would be unacceptable if deficits created a new postcode lottery whereby patients from one area had to wait longer for treatment than patients in a neighbouring area? Selby and York primary care trust has the worst deficit by far in the north of England. If it had been required to balance its books in a single year, it would have had to cut spending by more than 15 per cent., which would have had devastating consequences for patient care. I welcome my right hon. Friend’s decision that some PCTs with the worst deficits will have longer than a single year to balance their books, but would she be prepared to meet me and senior health leaders from York and Selby to discuss the recovery strategy and reassure herself that she is not imposing conditions that would lead to an unacceptable postcode lottery?
Let me stress that our targets—the six-month maximum wait, or for dramatically improved cancer care—apply everywhere. We expect them to be achieved even in organisations with serious financial problems. Of course, I readily agree to meet my hon. Friend to discuss those matters in more detail.
I welcome the increased investment in the NHS, but is not the introduction of practice-based commissioning, payment by results, patient choice, the merger of the primary care trusts, the abolition of the strategic health authorities, the roll-out of foundation trusts and the introduction of a new IT system simply imposing too much change at the same time? The people trying to manage those changes are currently having to bid for their own jobs. Does not the NHS really need a period of stability and fewer initiatives from Whitehall?
When the Minister of State, Department of Health, my hon. Friend the Member for Leigh (Andy Burnham) recently announced, in my unavoidable absence, changes to the primary care trusts, they were widely welcomed. I know from my own city of Leicester that people have felt for some time that it was wrong and unnecessary to have two PCTs when one PCT, coterminous with social services, could do even better than the existing organisations. I believe that those changes were necessary. The right hon. Gentleman mentioned practice-based commissioning, and I am delighted that already a number of GP practices are signing up to it. That work will continue because it provides a way of ensuring that we can deliver better care more conveniently for patients and closer to home. We want to provide better care and better value for money as well.
My right hon. Friend will be aware that South Birmingham primary care trust is one of the better-managed PCTs that has kept to budget and contributed to improvements in patient care. Indeed, some of the local hospitals, such as University hospital, also have a good financial record. Although they and I understand the logic behind the reserve and the fact that they will need to contribute to it, does she understand that they need some more reassurance that, while the much-needed improvements that they have planned may be delayed somewhat, they need to come on stream, so that their health needs and the needs of those communities, which are often uneven but nevertheless very severe, will be addressed and so that they will not have to wait an unreasonable time for that to happen?
I can certainly give my hon. Friend that reassurance. One of the reasons I am being so tough on the overspending organisations is that I am not prepared to allow the areas with the greatest health needs, such as his constituency, to go on bailing out overspending in areas that often have more NHS services than those poorer areas. I know that he and his constituents very much welcome the recent announcement that University Hospital Birmingham Trust will have a badly needed new hospital, which will enable it to go on improving the care that it offers to the people of Birmingham and the west midlands.
By the Secretary of State’s own admission, three out of 10 NHS organisations are in deficit. Although she tried to diminish the importance of that figure by making excuses, the reality is that 30 per cent. of NHS organisations are in deficit, the impact of which is felt by thousands and thousands of people who receive less treatment than they would otherwise. It is regrettable that the Secretary of State cannot bring herself to admit that failure under her stewardship, but it is worse still that she cannot bring herself to apologise to those thousands and thousands of people. I invite her to review the position and to consider apologising to the thousands of people who are suffering.
The hon. Gentleman, whose party voted against the increased investment in the NHS, really ought to acknowledge the fact that thousands of patients who were waiting in pain for months—sometimes years—for operations under the Conservative Government are now being treated better and faster than ever before. It is high time that he acknowledged that and praised the NHS staff for those achievements.
What extra resources will my right hon. Friend provide to those areas, such as my constituency in Hull, whose PCTs are in balance and well managed, despite the huge health challenges that they face?
The extra funding that is going into the NHS this year and next year will be more than 9 per cent. of budget, and because of the fair funding that we are introducing, the areas with the greatest need will get the greatest funding increases. I know that that will be welcomed by my hon. Friend and her constituents.
There has undoubtedly been a massive increase in expenditure on the NHS, but in some areas, particularly in Northern Ireland, substantial and significant problems remain. Will the Secretary of State confirm that the Government will undertake a comprehensive and radical review of NHS funding, along with many more preventive measures aimed at the higher risk groups in society?
The NHS in Northern Ireland is, of course, a devolved matter, but we have already undertaken a substantial review of NHS funding; the report of Sir Derek Wanless, in particular, made it clear that we have the fairest and the most efficient funding system in the world. Labour Members would certainly never want to depart from the basic values of the NHS: funding from general taxation and treatment based on clinical needs, not on ability to pay.
The James Paget health care trust, which runs my local hospital, has no deficit. It has met and, indeed, exceeded all its waiting list targets and every other target that it has ever been asked to meet. That is why it is a well-managed, three-star hospital. Waveney primary care trust has a small but manageable deficit. We are delighted that we are about to be merged with Great Yarmouth PCT. I thank my right hon. Friend for that decision. The Great Yarmouth PCT has no deficit, but the strategic health authority is requiring it to loan about £3 million to other trusts. Will she guarantee that we will get that money back? Can we be in the first group of trusts to get it back, bearing in mind our levels of deprivation and health inequality?
My hon. Friend, as ever, makes a powerful case on behalf his constituents and his local NHS. The James Paget hospital has achieved some outstanding innovations in the organisation of its surgeries. That is one of the reasons why it is performing so well. He refers to the reserves and the contribution that his PCT is making towards them. Of course, as I indicated earlier, those in his health community will have the ability to spend restored to them. That will be done as quickly as possible, and I have made it clear to the SHA that the areas in the greatest need should get their money back first.
My constituency has never had a higher level of health care than we have at present. That is partly due to the funding coming from the Government, but is mainly due to the dedication and professionalism of the staff. However, what would the Secretary of State advise me to tell my constituents who are seeing a ward close—not as the result of inefficiency; the hospital is run effectively—while the salaries of the foundation trust’s chairman and board members are being doubled? Right across the country, every foundation trust’s non-executive members’ salaries will double. Sometimes, those people are earning more than £50,000. How can we justify sacking nurses and closing wards when we are paying unelected people those huge salaries? What added value do they bring to the system? Will she look radically at their work?
Board members’ salaries are entirely a matter for foundation trusts. The hon. Gentleman’s foundation trust, like others, will have local members and a local governance arrangement, and it is up to the members and the governing council to decide what those salaries should be. He refers to ward closures. There are many reasons why a hospital might want to reorganise wards. It might need and want to reduce the number of beds. For instance, if it is doing more day case surgery or if it is bringing people in for an operation on the morning that it takes place rather than the day before, that is better for patients, but it has the effect that fewer beds are required and therefore resources can be released for use on other improvements in care for other patients. I thought that he would welcome that, as well as the strong leadership that is provided by those on the good board of any well-performing organisation, rather than criticising them in the shallow way that he did.
I am fed up to the back teeth with siren voices talking down the NHS. I have a lot to thank the cardiothoracic centre in Broadgreen hospital and the Countess of Chester Hospital Foundation Trust for my health. I have been looking around at the fantastic work that has been done on GP referrals for cancer patients in my constituency. The figure is now up to 99.9 per cent.—a fantastic result. Let us talk up the NHS. However, on the PCTs in my area, will my right hon. Friend ensure, as part of her commitment to the more disadvantaged areas, that there is no disproportionate slicing of resources from mental services in the recovery programmes?
Last week, the chief executive of my hospitals trust announced 150 sackings. Yet, only four years ago, the same chief executive told The Daily Telegraph:
“The NHS is people-hungry. It needs skilled and qualified people and that is why we are scouring the world.”
Employment has gone up immeasurably in the past four years, only to have 150 sackings announced last week. Is that not a clear case of Labour’s boom and bust in the NHS?
The hon. Gentleman has fallen into precisely the trap that so much of the media have and that I warned against earlier: those are not sackings. [Hon. Members: “Yes they are.”] The hospital is making difficult but necessary decisions because it has a serious financial deficit and it is part of a broader health community in north-west London that accounts for a very large part of the deficit across the country, as he will see when he looks at the more detailed figures. Hammersmith hospital and the other hospitals in that part of London need to consider whether they are doing enough day-case surgery and organising their services in the best possible way, and they are already telling us that they can organise those services more effectively and continue to deliver patients very good care indeed.
Points of Order
On a point of order, Madam Deputy Speaker. I should be grateful for your guidance on a point of order about the future of the Nuffield speech and language unit, which I raised with the Secretary of State on Tuesday 9 May and in which I declare an interest as the parent of a two-and-a-half-year-old boy who might in future require its services. I am not trying to make this point in a partisan way: I am simply anxious. The Secretary of State promised on 9 May to write to me directly, but has failed to do so, and I have still not heard from the Under-Secretary’s office about the meeting promised to me. It is most unsatisfactory when Ministers make promises and then do not keep them. [Interruption.]
Order. I understand that the hon. Gentleman has raised this situation on more than one occasion. Ministers from the Department of Health are present and I am sure that they will have heard what he said. It is, of course, not a point of order for the Chair.
Further to that point of order, Madam Deputy Speaker. I wrote a letter six weeks ago to the Minister of State, Department of Health, the hon. Member for Doncaster, Central (Ms Rosie Winterton) , asking for a meeting to bring local mental health charities to visit her to discuss cuts in my local mental health service. What can I do to secure a positive response and advance that meeting?
Fire Safety (Reduced Ignition Propensity in Cigarettes)
I beg to move,
That leave be given to bring in a Bill to align cigarette manufacturing standards with international best practice so as to reduce the number of fires and fatalities in the home caused by cigarettes.
This Bill would require that tobacco firms modify their cigarettes so that they have a reduced ignition propensity. Essentially, that means that such cigarettes go out if left without being drawn on for more than a few seconds. The House is of course well aware of the toll of premature death and disease caused by smoking. As a result of recent debates, if nothing else, we are also now well informed about the damage that breathing in other people’s smoke can do to one’s health. However, there is a third element of the misery caused by smoking that is perhaps less well understood, and that is the number of deaths and injuries from fires started by cigarettes. I commend the Fire Brigades Union and Action on Smoking and Health for the work they have done to highlight the continuing risks associated with smouldering cigarettes.
Despite some success with “stub it out” campaigns, the number of tragic and avoidable deaths in such domestic fires has proved hard to drive down. The Government report “Fire Statistics for the United Kingdom” shows that in 2004, 3,500 fires in dwellings were caused by smoking materials, not including cigarette lighters and matches, and a further 1,600 in other buildings. Over the previous 10 years, the number of such fires totalled more than 60,000. Fires in dwellings caused in that way resulted in 114 deaths in 2004 and 1,260 non-fatal casualties. Smokers’ materials are the most frequent source of ignition causing accidental dwelling fire deaths, accounting for around a third of such deaths every year. The vast majority of those fires were caused by manufactured cigarettes.
The victims of those fires are more likely to be from low-income households and of course they include non-smokers as well as smokers, children as well as adults, and firefighters as well as members of the public, so this is no trivial matter. If the dry statistics are not enough, the human stories behind them are all too evident. For example, the Edinburgh Evening News of 16 May this year reported on a fire that left a child aged less than 18 months with burns over almost half his body, requiring the amputation of two of his toes. It also left his family without a home. By great good fortune, and thanks to the presence of a smoke alarm, no lives were lost. Investigators believe that that fire, like so many others, was most likely to have been caused by smokers’ materials.
Tobacco manufacturers have long dismissed the link between cigarettes and fire deaths as “merely a public perception”, but for more than 20 years, as internal industry documents clearly show, the tobacco industry has known full well that many of those fires could be easily prevented. It argues that the introduction of cigarettes with a reduced propensity to ignite would lead to more negligent behaviour, but that is not a valid argument as the changes needed to the cigarette are slight and unlikely to be noticed by smokers. There are also many examples of safety standards being imposed on consumer products to protect public health without triggering dangerous or irrational behaviour, such as seatbelts and airbags in cars. If that argument were accepted, nothing would be accomplished by any attempt by the authorities to impose safety standards on consumer products. To avoid misleading descriptions, I suggest the use of the term “reduced ignition propensity”—as used in Canada—rather than “fire safe” or “self-extinguishing”.
In January 2000, the tobacco firm Philip Morris introduced a reduced ignition propensity cigarette into the market, using small speed bands on special paper, which ensured that the cigarette rapidly went out if not actively smoked. In August 2000, New York state passed fire safety regulations requiring that all cigarettes sold there had to meet reduced ignition standards by June 2003. Early figures suggest that that may have reduced the number of fire deaths from smoking materials across the state by at least a third. Similar standards now apply in Canada, and the regulatory impact assessment there forecasts a reduction in the number of fires caused by manufactured cigarettes of up to two thirds. In the US, Illinois and Vermont have already followed the example of New York.
In this country, a fire research report done for the former Office of the Deputy Prime Minister estimated that, had cigarettes in the UK conformed to the highest standards in New York, the number of fires caused by cigarettes would have fallen by nearly two thirds. The ODPM figures suggest that that would have meant 78 fewer deaths in 2003 alone.
Such standards could be introduced across the European Union, under the general product safety directive. Indeed, the European Commission is believed to favour such a move. Therefore, I hope very much that we can now discount early rumours that officials at the Department of Trade and Industry might not support further progress on this issue, when the relevant Committee meets in Brussels on 13 and 14 June next week. I understand and accept that the DTI rightly seeks to protect business from unnecessary regulation, but I do not accept that the bulging bank accounts of the tobacco industry really need such diligent defence by Government officials. Surely the experience of that child in Edinburgh and the thousands of other victims of fires caused by cigarettes merit a little consideration.
If DTI officials are really so worried, let me reassure them that reduced ignition standards could be introduced at minimal cost to business and without threatening sales. Many of us may say in relation to cigarettes that that is not something to be given undue priority in any event. I hope that, now this matter has been drawn to the attention of Ministers, they will instruct their officials to take a more constructive approach. However, this House does not need to wait for the cumbersome processes of the European Union and the internal workings of Whitehall Departments to bear fruit. My Bill would require this simple and overdue measure to be introduced in the United Kingdom.
Smoking is a lawful activity in a free society, but it brings with it terrible problems and it is surely our job as legislators to ensure that they are minimised as far as possible. In this case, we could introduce reduced ignition standards without affecting anyone’s freedom to any significant extent. The number of fires would be reduced. The number of deaths and serious injuries in fires would fall too, and insurance costs would fall with them. The Department of Health would be assisted in its hugely important aim of reducing health inequalities. The Department of Communities and Local Government would be helped to meet its equally crucial public service agreement target of cutting the number of deaths from fires in the home by a fifth by 2010. And fewer young children like the Edinburgh toddler would be exposed to horrific accidents and injuries.
In my own county of Leicestershire, a 55-year-old Anstey man would still be alive today if this Bill had been on the statute book, as would a 70-year-old woman from Fleckney. Residents in Thringstone and Ravenstone, wards that I have represented at various stages in my local government career, would not have had some serious fires occur in their homes—so it is not surprising that the Bill is supported by firefighters who, all too often, have to risk their own safety to deal with fires caused by cigarettes. That is especially true for those in the Leicestershire fire service, whom I thank for their research into one element of the Bill.
In short, everyone would gain from my Bill—and even the tobacco industry would barely notice its effect. The recent historic votes in this House on the Health Bill show that there is overwhelming support for action to reduce the burden of death and disease caused by smoking. We must disregard the rather odd conclusion reached yesterday by the Economic Affairs Committee in the other place, which suggested that we should have legislated to prevent passive smoking in the home—how on earth would we do that?—instead of taking the historic step of eliminating it in workplaces and enclosed public spaces. I chair the all-party group on smoking and health, and I respectfully suggest that their lordships are somewhat detached from reality on this issue.
I recently tabled early-day motion 2290, which draws attention to the hundreds of lives being lost in fires caused by smoking-related materials. I am gratified at the extent of support already shown by parliamentary colleagues for that motion.
Where we cannot persuade people to quit smoking altogether, we can—and must—act to reduce the harm caused by that habit and addiction. My Bill is a simple and overdue measure that is designed to achieve precisely that. I commend it to the House.
Question put and agreed to.
Bill ordered to be brought in by David Taylor, Norman Baker, Mr. Kevin Barron, Mr. Peter Bone, Colin Burgon, Mr. David Drew, Dr. Ian Gibson, Mr. Lindsay Hoyle, Helen Jones, Mr. Gordon Prentice, John Robertson and Bob Russell.
Fire Safety (reduced Ignition Propensity in Cigarettes)
David Taylor accordingly presented a Bill to align cigarette manufacturing standards with international best practice so as to reduce the number of fires and fatalities in the home caused by cigarettes: And the same was read the First time; and ordered to be read a Second time on Friday 20 October, and to be printed [Bill 192].
[Relevant document: The Sixth Report of the Treasury Committee, Session 2005-06, HC 811, on the Administration of Tax Credits .]
I beg to move,
That this House notes the overpayment, fraud and incompetence in the administration of the tax credit system; is concerned about the impact of this incompetence on the most vulnerable members of society; and calls upon the Chancellor of the Exchequer, the author of the tax credit policy, to explain to this House what measures are being undertaken to address these problems.
The incompetent administration of tax credits touches the constituents of every Member of this House. This debate could not be more timely: last week, the Inland Revenue revealed that almost half of the 6 million people in receipt of tax credits were paid the wrong amount. That is a staggering level of error, and an increase on the previous year.
I welcome to the debate the Chairman of the main Treasury Select Committee, and his counterpart on the Treasury Sub-Committee. The Treasury Committee, of course, is made up of Members from all parties. Yesterday, it published a report identifying Government error as a key cause of the overpayments. In its briefing for this debate, the National Association of Citizens Advice Bureaux reminds us that, four years after the introduction of tax credits, it continues to see
“thousands of families who face hardship and genuine confusion as they have been told that they have been overpaid but given no explanation and no warning before payments are suddenly cut”.
Yet the Chancellor of the Exchequer still lacks the courage to defend a policy that he designed and implemented. We are told that he is at ECOFIN—the first such meeting that he has attended since December. Two days ago, he was planning to send the Paymaster General. We know that because we have the list of the week’s events produced by No. 10 Downing street. It clearly states:
“EU ECOFIN Council meets in Luxembourg — Paymaster General Dawn Primarolo attends.”
Then this debate was called and, for some reason, the Chancellor of the Exchequer changed his mind. Is it not strange how the right hon. Gentleman is always around to take the credit if things go well, but always happy to let others take the blame when things go wrong? Not once in the past year has he made a statement, taken part in a debate or even answered a question on tax credits. It is the policy that dares not speak its name, from a Chancellor who dares not open his mouth. Prime Ministers need many qualities, but political cowardice is not one of them.
In the Chancellor’s absence, we have the poor new Chief Secretary to the Treasury. He, at least, must know something about the chaos in the tax credits system as he happens to represent the constituency with the largest number of people who are overpaid and the largest number who are underpaid in the entire country. Half of all the hon. Gentleman’s constituents in East Ham who claim tax credits receive the wrong amount from the Department that he helps to run.
The Chief Secretary will undoubtedly tell us that the amount being overpaid across the country has fallen a little, to a mere £1.7 billion. When he does so, perhaps he will confirm that the number of people being overpaid has risen, with almost 3 million people getting the wrong award. When he tells us that help is going to the poorest families, will he also confirm that more than 100,000 of the poorest families—those on incomes of less than £5,000—did not receive the level of support to which they were entitled? When he tells us about what he has called in the past couple of days the “improved performance” of the tax credits system, will he explain why the number of people in his constituency being overpaid has doubled in a year? Why did NACAB tell me yesterday that there was no sign of a reduction in the number of families contacting it?
Will the hon. Gentleman give way?
In a moment.
The tax credits system is a shambles. The Chief Secretary knows that, as does every MP in this House. The millions of people caught in the system’s web know it, too—it is a shining monument to the incompetence of this Government. On that note, I give way to the Chief Secretary.
As my hon. Friend the Member for Buckingham (John Bercow) suggests, I support a tax credits system that works. Towards the end of my speech, I shall speak specifically about whether the system should be flexible or fixed. I note what the Treasury Committee report says about the variability of low incomes, and its request that the Chancellor keep an open mind about moving to a more fixed system.
The hon. Gentleman has said that his party supports tax credits in principle and that it wants a system that works. However, does he accept that the variability of low incomes is bound to mean that a substantial number of claims will have to be adjusted at the end of the financial year, under any system? I used to be an accountant, and I speak as one used to dealing with complex forms. Does the hon. Gentleman also agree that, to understand the statements that people receive, one needs a post-graduate qualification in encrypted Sanskrit?
The hon. Gentleman makes his point extremely well and I had better support his ten-minute Bill now.
Today’s debate should focus not just on the mistakes of the past, but the prospects for the future. I have four questions for the Chief Secretary to answer when he responds. They lie at the heart of whether the Chancellor’s tax credit system, designed by the Economic Secretary, can ever be made to work in future. First, can the Chief Secretary confirm that the huge annual overpayments—almost £4 billion in two years—are not the result of what the Paymaster General once dismissed as “teething problems”, but are now a permanent feature of the tax credit system? He admitted as much last week when he set out the latest emergency reforms to the way in which the credits operate. He said—this is a striking statement—that once the changes are
“fully implemented, we expect them to reduce overpayments in future years by around one third”.
So, even if the reforms work as well as he hopes—let us face it, nothing else that the Government have promised on tax credits has worked—two thirds of the overpayments will remain. Almost 2 million people a year will go on receiving the wrong tax credit payment and will face having the money clawed back off them, with all the hardship that we know that brings.
I am happy to give way because I have been checking on the figures in the hon. Lady’s constituency. In Northampton, North, 1,800 people were underpaid and 3,800 people were overpaid. That is almost half of all the people in her constituency who received tax credits.
Yes, and quite a lot of them came to see me. I helped them with that, which has given me a good understanding of the tax credit system. [Interruption.] It was a special surgery. Does the hon. Gentleman accept that the reduction of one third would follow from the change in the income disregard, but that the other overpayments should also be reduced by the changes to the reporting requirements? That was another really important recommendation made in the pre-Budget report.
As I understand it—there is an opportunity for the Chief Secretary to clarify this—the reduction of a third would occur if all the changes, both the reporting requirements and the increase in the disregard, were to take place. The increase in the earnings disregard simply reclassifies overpayments as disregarded income. That is one of the ways in which the Government are dealing with the problem.
As I said, the Chief’s Secretary’s admission was extraordinary. As the Child Poverty Action Group reminded us last week:
“behind these figures are thousands of families struggling to survive when the overpayments are clawed back”.
Not that we need reminding—we see that every week in our constituency surgeries. A disabled young constituent of mine told me that she was
“at the point of despair”
because of the clawback of tax credits that were rightfully hers. The chairman of the Inland Revenue wrote to me about the case earlier this year. He said:
“I am sorry to say that when we processed your constituent’s claim we missed including her new income details”.
How can one possibly miss including the income details when one processes a tax credit claim? That reveals a deep flaw in the system.
The new changes announced by the Government include new obligations on claimants to fill in more forms and to file them more quickly—any bureaucracy’s answer to any problem. Why do not the changes also include new obligations on the Treasury? The parliamentary ombudsman recommended a year ago that the Government introduce a statutory test for the recovery of overpayments that gives people a right to appeal to an independent tribunal when they think that the Revenue has got things wrong. That is the same test that exists for other benefits. The parliamentary ombudsman said that the test would
“strike the right balance between the obligations on the part of the administrators and those on the part of the recipients”.
NACAB says today that the test would
“build confidence in…the decisions being made”.
Why have the Government refused to introduce that statutory test? Why are they instead imposing new obligations on the recipients that are not matched by new obligations on the administrators?
Surely the impenetrable complexity of the system is such that it is understood only by the Chancellor of the Exchequer, if at all. Is it not distinctly shameful for him to have devised a system that is even more complicated than the Schleswig-Holstein question? At least three people understood that—even if one of them went mad, the second died and the third forgot what the answer to the question was.
Believe it or not, I studied the Schleswig-Holstein question at university, but I am not going to go into it. My hon. Friend makes a telling point. It is a remarkable achievement of the Chancellor that he has made the tax affairs of the poorest almost as complex as the tax affairs of the richest.
I was interested in what the hon. Gentleman said about the new forms. What good is there in changing forms if part of the problem is that the information does not seem to get on to the computer system in the first place? The people who return forms still end up with overpayments or the wrong payments because the information goes missing, does not get put on to the computer or the computer seems unable to recognise it.
That is one of the rare issues on which I agree with the hon. Gentleman.
The other question for the Government on overpayments is, why have they not implemented their own promise last year to pause before proceeding to recover an overpayment so that they can work out whether it is the Revenue that has made the mistake? Again, the parliamentary ombudsman recommended that approach. So, too, did NACAB. The Select Committee said in its report yesterday that that was
“crucial, in the interests of natural justice.”
However, the Committee also said that it feared that the Government promise had been “sidelined”. Why have the Government reneged on that promise? Perhaps the Chief Secretary can explain.
If multi-billion pound overpayments affecting millions of people are to be an annual feature of the tax credit system, the Government need to implement the changes needed to protect the rights of our most vulnerable families. That brings me to the second question—when will the ongoing fiasco of the computer system be resolved? Again, I recently dealt with a case in my constituency of a single parent who repeatedly tried to tell the Inland Revenue that she was being overpaid. She was ignored for months, only for her tax credits suddenly to be suspended altogether two weeks before Christmas. She wrote to me to say that she could not buy her two young children presents because she was struggling to provide them with even the basics. A month later, after Christmas, the Revenue wrote to me admitting that it had got the case wrong because of
“a technical fault we are experiencing with our computer.”
That was this year. That was the same computer that the Paymaster General told the House a year ago was “stable and performing…well”. Does the Chief Secretary still think that the computer is stable and performing well? Will he repeat that phrase when he gets up to speak?
The Government amendment says that the IT problems affected only
“the early stages of implementation”.
If Ministers really think that that is the case, I am afraid that they are living in a fantasy world. Certainly the Select Committee does not agree. It says in its report that IT error remains a “significant” cause of the tax credit mistakes. Do Ministers not realise what is going on in their own Department? The report goes on to talk about the Paymaster General’s evidence. It states:
“The factors cited by the Paymaster General…as contributing to the problem of overpayments do not appear to give us a comprehensive account of the reasons why overpayments have arisen”.
“It is obvious to us that the Paymaster General’s account makes no reference to causes which have arisen as a consequence of the Department’s own processes—for example official error and IT error”.
Does my hon. Friend agree that the position on information technology is even worse than he has set out? Is he aware that in my constituency I have a case in which a lady was overpaid repeatedly? She told the authority that that was happening and the reply was, “Yes, we know, but the computer won’t let us put it right.”
It is an extraordinary example—one of many. I suspect that every Member could produce similar examples of computer errors.
The Government finally sacked EDS, the company that provided the computer, and announced triumphantly that the company would pay them compensation. However, as yesterday’s Select Committee report shows, the deal done by Ministers means that—this is truly incredible—full compensation is paid only if EDS wins other Government contracts. In short, the company that Ministers believe is guilty of messing up the tax credit computer will pay full compensation to taxpayers only if it is given a chance to mess up another Government computer system. Only this Government could negotiate such an incompetent deal, and now they refuse to discuss the details of the deal on the ground of commercial confidentiality. The Select Committee is right—Ministers should be accountable for the mistakes that they make and subject to parliamentary scrutiny on the arrangements into which they enter on our behalf, instead of hiding behind commercial contracts.
Of course, it is not only the computer that has cost the taxpayer millions of pounds, but fraud, which brings me to my third question—what is the true cost of tax credit fraud and what are the Government doing to tackle it? The Government refuse to tell us the true extent of tax credit fraud. According to the Paymaster General, there have been
“persistent attempts by organised criminals to obtain tax credits by using stolen or fictitious identities”.
We know that the Government had to abandon their online application system six months ago after systematic abuse. We know, too, that although Ministers say that they are acting tough, there were just 211 prosecutions for tax credit fraud, with only two for organised tax credit fraud, out of 6.5 million applications. However, we do not know when Ministers knew for the first time that systematic fraud was taking place or how much money has been lost. Does the figure run into hundreds of millions of pounds, or even billions?
Ministers were warned about the possibility of fraud before the tax credit system was introduced. Why did the Chancellor ignore the series of security checks that was proposed by the right hon. Member for Birkenhead (Mr. Field) when he was Minister for welfare reform? The right hon. Gentleman said earlier this year:
“After I resigned … the counter-fraud measures were not carried out and now it shows in the figures”.
Why were those counter-fraud measures not carried out?
What about stopping fraud in the future? Surely the Select Committee is right when it warns that increasing the earnings disregard to £25,000 creates an incentive for further fraud as people deliberately fluctuate their incomes from year to year, but the Government have done nothing to prevent that from happening. Will the Chief Secretary address that problem today, too?
The Paymaster General promised the House that the Treasury would provide
“more comprehensive information on the level of claimant error and fraud … in spring 2006.”—[Official Report, 10 January 2006; Vol. 441, c. 551W.]
I know that winter has descended early on the Labour party and it is getting its seasons muddled up, but it is now June. Where is the information that we were promised for the spring?
For the second year running, ministerial incompetence and computer chaos have caused hardship for hundreds of thousands of people and cost the taxpayer billions of pounds, so I ask my final question—is it not time that the Government looked at the design of the tax credit system? The Government say that money has got to the poorest, but after spending more than £15 billion a year, it would be extraordinary if it had not. However, that comes at a price. In the words of the right hon. Member for Darlington (Mr. Milburn), a great friend of the Economic Secretary to the Treasury, in the Budget debate in the House:
“poverty has become more entrenched.”
The right hon. Gentleman said:
“the number facing marginal tax rates of 60 per cent. or more has increased by nearly 1 million, largely as a consequence of the workings of the tax credit system.”
Will the hon. Gentleman give way?
I do not, and my constituency is West Bromwich, West, if the hon. Gentleman wants to tell me how many overpayments there have been in my constituency. Something like 8,000 families in my constituency are benefiting from tax credits, but over the past three years, just 37 people have come to my surgery with tax credit problems. Will the hon. Gentleman tell us what comparable reforms he would introduce that would allow families with children on an average income to be £1,500 a year better off, with those who are poorest being £3,500 a year better off? That is the true nature of the issues about which he is talking.
As the hon. Gentleman does not know what is going on in his constituency, I can tell him that 3,600 people there were overpaid. He will have to ask them why they did not feel that it was worth their time to go to his constituency surgery.
The right hon. Member for Darlington told us that the tax credit had left us with an
“80-20 society, in which 80 per cent. do OK but 20 per cent. are left behind”. —[Official Report, 28 March 2006; Vol. 444, c. 710-11.]
[Interruption.] It is no good Members saying that he was wrong. Did the hon. Member for Dudley, North (Mr. Austin) say that?
There we go. The hon. Gentleman is one of the Chancellor’s henchmen and a proponent of what was called the “Kill Mil” operation. No doubt he is getting to work on the Education Secretary as we speak.
The right hon. Member for Darlington is not the only person who has criticised the operation of tax credits. As my right hon. Friend the Leader of the Opposition pointed out during Prime Minister’s questions, the right hon. Member for Birkenhead has said:
“using tax credits as an anti-poverty weapon is like attempting keyhole surgery with a hacksaw”.
That is Labour’s verdict on Labour’s record.
At question is not the existence of tax credits—we support tax credits, but want tax credits that work—but the system that the Chancellor chose of annual awards, annual income assessments, annual overpayments and annual clawbacks. That system means that almost half of all families get the wrong tax credit payment.
Perhaps the Economic Secretary to the Treasury has not even read the parliamentary ombudsman’s report, but if he did, he would see that she says that there is
“the fundamental question as to whether, for people on modest incomes who have to budget and plan their finances carefully to manage their lives, such inbuilt instability or uncertainty really works.”
The Treasury Committee, in its first and perhaps most important recommendation, points to the new evidence that shows that the family incomes of many of the poorest have become more variable and unstable as a result of tax credits. That all-party Committee asks the Chancellor to consider fixing awards over shorter periods than a year, and I ask him again to do so. The time has come to give serious consideration to moving to a tax credit system that is based on shorter, more fixed payments, that brings greater certainty to family incomes and that avoids the hardship of overpayment.
It is great to hear the hon. Gentleman giving advice, but in his interview in last month’s edition of Magill, the well-respected Irish magazine, he said:
“anyone who says that I haven’t known adversity hasn’t looked at my CV—I worked for John Major when we lost the 1997 election”.
He then said that he worked for the right hon. Member for Richmond, Yorks (Mr. Hague) when the Conservatives lost in 2001. He went on to say:
“That doesn’t say much for the quality of my advice”—
so why should we listen to him now?
An absolutely devastating intervention. I should refer the hon. Gentleman to the figures on awards in Livingstone, which has pretty much the worst record on errors of anywhere in the country outside East Ham and West Ham. If he wants to toddle off and look at the figures, he can do so.
Examining the design of the tax credit system does not mean scrapping tax credits, but trying to make them work. In a rare admission of error, the Chancellor, too, opened up that possibility at the end of last year when he said that the Government might have to examine fixed payments. However, I doubt that he will do that considering that he designed the flawed system and has presided over its incompetent administration. Today’s tax credit system is his creation and no one else’s—[Interruption.]
Thank you, Madam Deputy Speaker.
The Chancellor remains stuck in the past. He is refusing to listen and is the road block to reform. He is too proud to admit that he has got it wrong and too lacking in courage to defend the system in public. It will be up to the next Government to fix the broken tax credit system and give millions of lower-income people the social justice that they deserve.
Today’s debate gives us the welcome opportunity to reflect immediately on yesterday’s report from the Treasury Committee on the administration of tax credits. We will, of course, respond to the report in full in due course. In the mean time, I welcome it as a constructive contribution to the debate, and I hope that it offers the prospect of a new consensus throughout the House on the advantages of the tax credit system.
The hon. Member for Tatton (Mr. Osborne) said, in introducing the report, that tax credits are right in principle. I agree. The report rightly drew attention to the wide support among non-Government organisations, such as Citizens Advice, for the tax credit system. It underlined the importance of improving the quality of service provided to tax credit claimants. I agree about that as well.
It is a shame that the speech of the hon. Gentleman did not reflect very much of the now