House of Commons
Thursday 19 October 2006
The House met at half-past Ten o’clock
[Mr. Speaker in the Chair]
Oral Answers to Questions
Trade and Industry
The Secretary of State was asked—
The Royal Mail’s operational performance is just one of the issues that Ministers and officials discuss regularly with the company.
May I refer the Secretary of State to the experience of my constituent, Mr. Alan Sinclair, who received a medium-sized package through the post that had been tampered with and opened, it being perfectly obvious that it was not the result of machine damage? The Post Office did not want to know, Postwatch did not want to know, and the Department of Trade and Industry did not want to know. Everyone has told him to take a running jump. What can the Secretary of State say to my constituent about his very serious complaint about opened and tampered-with mail?
I agree that it is a serious matter. The primary responsibility is of course with the Royal Mail, but if the hon. Gentleman would care to let me have the details, I will look into it. It is worth bearing in mind, though, that well over 99 per cent. of mail is successfully delivered and that the Royal Mail overall does a good job.
That is what the Post Office says, but most hon. Members would agree with the hon. Member for North-West Norfolk (Mr. Bellingham). I welcome the fact that the Minister will look into this. When he does so, will he reconsider the requirement that when sending a gift overseas one has to declare precisely what it is? The use of a bar code instead would at least disguise the nature of the contents from the casual thief. The problem is that declaring what one is sending is an open invitation for the package not to be delivered, which is what is happening.
I do not agree with my hon. Friend. From time to time, things will go wrong and packages will not be delivered, or damaged or interfered with, but the vast majority of parcels and letters are delivered efficiently by the Royal Mail. If there are problems, we will look into them, but it is not right to give the impression that this problem is widespread, because that is not true.
I would say that the problem is far more widespread than the right hon. Gentleman suggests. In response to a recent survey, I received more than 1,000 complaints, an awful lot of which were about not only delivery times but lost and stolen mail. What is the Minister going to do to deal with the Royal Mail, which is not delivering for local people?
As I said to the hon. Member for North-West Norfolk, if the hon. Lady has specific complaints that she would like the Royal Mail to look into, I would be happy to ensure that it does so. Despite the fact that there will be problems from time to time, overall the Royal Mail does a good job in delivering mail.
Is the Secretary of State aware that each week 1,100 car tax discs go missing in the post, as well as many more driving licences, causing great stress and anxiety to those who are waiting for those documents? Does he agree that urgent discussions are needed between the Driver and Vehicle Licensing Agency, the Post Office and his Department?
I am aware that tax discs and licences go missing. Much of the mail that goes missing is the result of criminals targeting mail vans and the like. We take that seriously, as does the Royal Mail. Hon. Members will be aware that some 3 million licences were obtained online as a result of changes made by the DVLA last year, which helps to make their delivery more secure. However, people have a choice, and they have every right to expect that if something is posted to them, they will get it.
Is the Secretary of State aware that the Royal Mail is becoming increasingly secretive about the facts and figures relating to lost and stolen mail, claiming commercial sensitivities? Is not a mail company’s performance on lost and stolen mail a legitimate piece of information for consumers? If he agrees, what action will he take to ensure that we have full disclosure not only from the Royal Mail but from all mail operators on that important piece of information?
As the Secretary of State said, the scale of this problem is shown by the size of the fine that Postcomm has imposed. Will he also consider whether the problems could partly be addressed by allowing sub-post offices to work with carriers other than the Royal Mail? Does he agree that such competition would force the Royal Mail to do more to tackle these failings, have the added advantage of increasing consumer choice, and bring desperately needed new business to the post office network?
As I have said in the past few weeks, we are ascertaining how we can help post offices expand their business, and I shall make a statement to the House in a few weeks. However, it is important that we do everything that we can to help those businesses develop in a manner that is consistent with the Government’s overall objectives for Royal Mail.
Oil Workers (Annual Leave)
In 1998, the Government introduced for the first time an entitlement to four weeks’ paid annual leave through the working time regulations, which came into force on 1 October this year.
We amended the regulations on 1 October 2006. That put beyond doubt the fact that the working time regulations apply to offshore workers on the UK part of the continental shelf. As my hon. Friend knows, that followed a dispute between employee representatives and employers over the jurisdiction of the original regulations.
I thank my hon. Friend for that response. The recent amendment to the working time regulations is welcome and, as he says, puts beyond doubt the fact that they apply to all employees. However, Amicus has brought it to my attention that some offshore employers still try to prevent their employees from receiving full annual leave entitlement. They claim that onshore leave, which is effectively rest time, should be regarded as annual leave. That is as if an onshore employer claimed that weekends and bank holidays constituted annual leave. That is wrong and should be resisted. Will my hon. Friend take steps to ensure that offshore workers receive their full annual leave entitlement?
I do not disagree with the principle that my hon. Friend outlines of entitlement to appropriate annual leave. Indeed, we have just concluded consultation on ensuring that workers are entitled to their eight days of bank holidays as well as the four weeks for which we legislated in 1998. I know that some discussions are continuing between unions and the oil companies. We clarified the jurisdictional dispute that held up resolution to the disagreements and we hope that, as a result of doing that on 1 October, sensible discussions can take place between employee representatives, the oil companies and other companies that work offshore, so that they can arrive at satisfactory agreements for their staff.
I draw the House’s attention to my entries on the oil and gas industry in the Register of Members’ Interests.
The Under-Secretary said that the Government have now clarified the jurisdiction, but both sides would welcome clarification of the way in which they envisage the directive applying offshore. What assurance can the Department give about the implications of the Jaeger judgment and whether it would apply to the situation?
The hon. Gentleman makes an important point. The SiMAP/Jaeger European Court of Justice rulings have an impact on many businesses and services in the United Kingdom. We are examining them carefully to ascertain whether they apply in the case that we are considering. In November, we expect an outstanding tribunal decision, which should provide additional clarity. We do not believe that SiMAP or Jaeger applies to the North sea as matters stand, but we are keen to see the results of the judgment as well as those of the further discussions in Europe about the operation of the two European Court of Justice judgments on working time in the UK.
The clarification of jurisdiction is welcome. However, my discussions with contractors in the summer show that they simply want the issue sorted out. They would like to know exactly how the regulations will work in practice and what they mean for their employees. In some cases, they would welcome the Government defining exactly what the regulations mean in practice. I appreciate that that is not necessarily the view of all the operators and others, but some were reaching it in the summer because of their frustration about the length of time that the issue is taking.
My hon. Friend ably describes the frustration of many involved in the industry about the inability to determine the nature of the agreement. We passed the amendment to the regulations on 1 October to clarify the jurisdictional difficulties that prevented proper negotiations. We do not believe that we have a role in negotiating what the leave arrangements should be but we felt that we had a role in clarifying the leave entitlements under law. Although it is early days yet, and we await the November employment tribunal judgment, we hope that, once it is out of the way, the employers and employee organisations can reach agreements that are satisfactory to both. We will not intervene in those negotiations but we are watching them carefully.
Although most people use credit productively, some end up with huge problems. The Department is most concerned to help such people, and there is much that we are doing.
We are giving grants totalling £45 million over the two years until April 2008 for advice agencies to hire and train 450 new debt advisers, who will help more than 100,000 of those with the highest levels of personal debt. That is part of a package to combat financial exclusion under the Treasury’s £120 million financial inclusion fund.
We are also giving more than £24 million to Citizens Advice and Citizens Advice Scotland to help support citizens advice bureaux, which, among other things, provide help and advice to those in debt.
We have recently funded loan shark pilots in Birmingham and Glasgow with a grant of £835,000 this year. We will assess the pilots, which have helped combat illegal activities.
We have given another grant of £l million this year to National Debtline, which will help tens of thousands of the indebted. We are doing as much as we can to try to help those with the highest levels of debt.
Let me say without qualification that the interest and initiatives of the Department of Trade and Industry and the Treasury in this respect are welcome. Given that there is now a record £1.3 trillion of personal debt in this country, however, will the Minister ensure that his Department conducts a review of credit card charges? Two years ago, both the Trade and Industry Select Committee and the Treasury Select Committee, as well as the DTI, said that although good steps had been taken, much more needed to be done to protect people from being ripped off by small print that they do not understand or by charges that they have not been alerted to.
I thank the hon. Gentleman for his very fair comments. I will write to him on this matter, because I have taken up this issue with representatives of the industry and I am having discussions with them now. I will come back to the hon. Gentleman and the House with further information, following the conclusion of those discussions.
My right hon. Friend will be aware that the voucher company Farepak, which is based in my constituency, collapsed this week, robbing thousands of people on low incomes of their Christmas savings. My constituents use Farepak to avoid falling into debt, and many have lost hundreds of pounds. As one Swindon mum said:
“For so many people, Farepak has been a lifeline because it means we don’t have to get into debt at Christmas, so we want to know why we might all get into debt now, trying to make this Christmas like any other.”
Does the Minister agree that this stinks, especially as Farepak made a £1.2 million profit 18 months ago? Will he meet the administrator, and get the Insolvency Service to look into the matter thoroughly and take action against the directors if needed?
Like my hon. Friend, I understand why those people are hurt, angry and frightened about being fleeced and so badly let down. I have already discussed a way forward with the administrator earlier today. Furthermore, this morning my officials and I contacted the British Retail Consortium, which represents the retail sector. It has no legal obligations, but this is a very successful sector, and the overwhelming majority of the BRC members are socially responsible employers and companies. Its representatives immediately agreed to meet me this weekend at the DTI, with the administrator, to see what the industry can do. They cannot take on the legal obligations of this shocking company, but they will see what they can do in the lead-up to Christmas as a good-will gesture to help the most needy people who have lost out completely.
I have also asked the administrator to report as soon as he can, under the terms of the Company Directors Disqualification Act 1986, on the fitness of the directors, on how they have run the company, and on the extent of their responsibility for any failure by the company to supply goods or services that have been paid for in full or in part. I have also asked my officials this morning to take full advice from the Insolvency Service. I have been in touch with the Hamper Industry Trade Association, and I shall be meeting its representatives in a few days’ time. I shall also be meeting the executive director of the Office of Fair Trading, Mr. John Fingleton, to discuss how we can take this issue forward to avoid such failures again.
The Minister will be aware that a principal cause of personal debt is gambling, including, increasingly, online gambling. Will he therefore comment on recent press reports that the Government are seeking to turn this country into a world leader in the online gambling industry, to the extent of relaxing the regulatory and fiscal regimes? Does he really believe that this country should aspire to become a world leader in an activity that consigns so many of its citizens to misery?
Despite my background as a politician, I am not much of a gambler myself. The industry employs tens of thousands of people in this country, and is well regulated. I recognise, however, that some individuals have gambling problems, and that the consequences for them and their families are indeed great. We will certainly keep a close eye on the industry, as the hon. Gentleman requests, to ensure that it not only operates effectively but provides services to give support and assistance to those who have gambling problems.
To return to credit card debt, although I welcome the activities that the Minister has outlined as attempts to give people who are already in difficulty guidance to get out of it, does he agree that the way the different credit cards are advertised—often in a misleading manner—makes it much harder for consumers who are inexperienced in relation to the existing 30,000 credit cards to make rational decisions? They often get ripped off and end up paying high interest for borrowing small amounts of money. Will he outline his views on how that could be dealt with?
There is no answer to that.
I assure my hon. Friend the Member for Wallasey (Angela Eagle) that I am in discussions with APACS—the UK payments association—as are my officials, about the best-practice guidelines. Then we can take the matter forward. Indeed, in only the last few days I met the vice-chair of Barclays bank, who is, on behalf of the industry, keen to work with the Government to bring forward such proposals.
Those guidelines will give security through an understanding across the industry of what best practice is and ensure that competition does not lead to overly complex and difficult situations for the consumer of those products. Therefore, I am quite confident that, along with the industry itself, the best-practice guidelines can be amended in such a way that, for example, the appropriate checks on a customer’s ability to pay and checks between the industries will lead to us not having credit limits that are difficult to meet due to their complexity for the consumer who wants to have a credit card limit increased, or indeed wants to have a credit card in the first place.
The debts of students and young people are especially concerning. Indeed, outstanding student loans are now at more than £19 billion. Given that, and the importance of data-sharing between lenders, why is the Student Loan Company not sharing its data? It is almost a year since Ministers promised us that they would resolve this issue. When can we expect action, not just yet another consultation paper?
My hon. Friend alludes to the shadow Chancellor’s banana republic report on public expenditure cuts and massive tax incentives for the very rich in society. Indeed it is a recipe for economic disaster, but what do you expect? This is just another Tory leader with the same old Tory policies.
Hosting the Olympics provides Britain and British businesses with a unique opportunity to showcase our products and services, and to exploit commercial opportunities in the short term to create a lasting legacy for British enterprise in the long term.
We are working with the regional development agencies and the devolved Administrations to ensure that we provide appropriate business support so that companies are fit to compete for games-related opportunities. We are ensuring that there is widespread access to, and up-to-date information about, procurement opportunities, and we are working with specific sectors, such as construction and information and communications technology, to ensure that we take maximum advantage of the commercial opportunities as they arise.
There is real interest in the Olympics, but there is a genuine need for the firms to get the information in a proper way and for the procurement processes to be open and transparent. Will my right hon. Friend ensure that the contract packaging is right so that the smaller businesses can also get a chance to bid for some of this valuable work? That will enable my region to see some of the benefits from the 2012 games.
I agree with all of that. We are working with regional development agencies to establish a business opportunities network, and we have already started putting online some of the opportunities that exist. My hon. Friend makes valid points, and I will take them on board as we develop our networks and information vehicles.
May I remind the Minister that it would be advantageous to the regions, and Wales and Scotland, if Olympic events were held outside London? In that regard, will she pass on to her colleagues the message that Bala, my home town, has the best white-water canoeing in Europe, and that on Cardigan bay at Pwllheli, arguably, there is the best yachting in Britain?
One of the best and easiest ways that companies in the north-east can benefit from the games is to host a training camp. Gateshead international stadium in my constituency is ready and waiting, offering world-class facilities. The transport links to the north-east are the best, and visitors will receive the warm hospitality of its friendly folk. Can the Minister say whether a timetable has been discussed yet?
The value of additional tourism and so on arising from the games has been estimated at some £610 million. What estimate has the Minister made of the proportion of that income that will be generated outside London? Can she assure me that my Province will get its fair share of the commercial opportunities, along with the rest of the United Kingdom?
We have not made an estimate of the extent to which the benefit will be spread across the whole of the United Kingdom, but we are determined to ensure that we do that. That will happen partly through the way that we distribute the various facilities that the games will require, which is a matter for the Olympic Delivery Authority, the London Organising Committee of the Olympic Games and the Department for Culture, Media and Sport. Part of that is about ensuring that businesses are fit for purpose, which we have taken on board, and that proper information is provided to businesses so that they can take advantage of the games. The fact that so many hon. Members are rising on this question shows the enthusiasm across the United Kingdom for the hosting of the Olympics here in 2012.
Does my right hon. Friend agree that the games represent a great opportunity for the manufacturing sector, particularly the steel industry? Has she had any discussions with the Corus management in particular on how it can take advantage of this great opportunity and play its part?
My hon. Friend the Minister for Energy has responsibility for the steel industry and will take that on board. In general, we have had discussions with the construction industry, and a construction commitment has been signed not only by construction companies but by all suppliers, such as architects and quantity surveyors, to ensure that we use the opportunity of the Olympics to improve our construction practices and showcase the best of British construction as we build facilities.
Tariffs (Far East)
Ministers and officials have regular contact with our European Union counterparts and discuss a wide range of issues.
Is it not disgraceful that we are no longer able to determine our own trade policy? Surely our future prosperity as a country is dependent on promoting our own freer trade policies with countries such as China, rather than being shackled by some inward-facing, backward-looking protection racket. Why does the Secretary of State think that our future prosperity is best decided by the unelected and unaccountable Peter Mandelson in Brussels, rather than by our Government making our own trade policies?
When the right hon. Member for Witney (Mr. Cameron) tells us that his party has changed, he should have a good listen to what the hon. Gentleman is saying. The hon. Gentleman might want to have a word with Lady Thatcher, who in 1986 made a considerable contribution to the very matters about which he is complaining.
The European Union is responsible for trade, and as trade becomes increasingly global, it makes more and more sense to deal with such matters on a larger scale. The United Kingdom plays a very active role, because trade—and, in particular, keeping markets as open as possible and securing a good outcome to the current World Trade Organisation talks—is as important to us as it is to every other country.
Is it true that, as has been reported, the British Government have agreed to support protectionist higher tariffs on Asian footwear in return for Italian support for postponement of the working time directive? If it is not true, will the British Government be voting against those protectionist measures in the Council of Ministers?
The British Government have already voted against them. The vote took place about 10 days ago. I know that the hon. Gentleman is very busy these days, but if he takes a look at the record—I am sure that a record is kept of these things in Europe—he will see exactly how we voted.
On the subject of Peter Mandelson, and in the light of the collapse of the Doha trade round, what assessment has the Secretary of State made of the enthusiasm of the EU Trade Commissioner for bilateral trade deals with countries in the far east and elsewhere?
There are two points. I think the hon. Gentleman will recognise that nothing will happen to the WTO talks and the Doha round before the United States congressional elections in the next few weeks. After that—in our view and, I believe, in the view of all involved—it is essential for the American Government, the European Union and, indeed, all the other players to become seriously engaged. Without movement from all parties the talks will not succeed, and while the price of success is immense, there is a huge cost to be paid if the talks fail.
We are prepared to support regional or bilateral trade agreements, but they must be complementary to an overall settlement. Multilateral agreements are far better, and regional or bilateral agreements cannot be seen as a substitute for them, but to the extent that they are considered to be complementary, we certainly support them.
The Secretary of State will be aware that the EU’s share of world trade decreased and its deficit widened by 7 per cent. in the first quarter of this year. Surely these unfair, discriminatory tariffs will serve only to make the position worse. Is it not true that their only likely effect is people paying more for their shoes in the shops? Does the Secretary of State agree with Alisdair Gray of the British Retail Consortium that they will not save a single job in the EU? What representations is he making to his friend Peter Mandelson to end this situation?
As I said, discussions about tariffs on imported shoes took place throughout the summer, and the vote took place about two weeks ago. As I just told the hon. Member for Twickenham (Dr. Cable), the British Government’s position is on the record. However, I agree that we must aim to break down trade barriers. Protectionism is disastrous for trade and industry in the medium and the long term, and we should be ensuring that we can secure as much trade as possible. Europe will depend on it, and this country depends on it. Our approach has always been to take a very liberal view, and I hope that we shall have cross-party support for that.
We encourage companies to consult their employees before making relocation decisions. We also expect companies to work with their RDAs and local communities to help any employees who lose their jobs as a result of such decisions. However, we have no plans to make consultation a requirement.
I thank the Minister for her reply, but expectations and reality are not necessarily the same. Does she share my dismay at the way in which some absentee owners show contempt for a loyal, hard-working work force, uprooting them and moving them overseas? If she does, would she be kind enough to arrange a meeting with me to discuss the particular problem of a company that may be contemplating doing just that?
I am aware of the company in the hon. Gentleman’s constituency, and I am happy to meet him to discuss it. Many foreign companies invest in the UK. We have become the location of choice for many such companies, especially those that are trying to establish headquarters somewhere in Europe. Many choose the UK, and we should encourage that because it is good for British jobs and for the UK’s wealth.
Is my right hon. Friend aware of the announcement today by MBDA? It is getting rid of 170 manufacturing jobs at Lostock in the constituency adjoining Chorley. Specialist skills in missile technology will not be able to be replicated in the future as and when we need a new missile. These companies such as MBDA come round MPs demanding support and loyalty, talking about investment in the UK and supporting British workers, yet today we have the sad announcement that 170 people will lose their jobs. It is not good enough. What can the Government do?
Again, I share the concern that my hon. Friend has expressed on behalf of his constituents and those who work for the company. I am happy to meet him to discuss the particulars of the situation that he faces. In the end, companies take commercial decisions. What we need to do, and are doing in the Companies Bill that is currently before the House, is to ensure that we have the conditions in the UK to encourage sustainable investment that will bring jobs to the UK and add wealth to the economy.
I am astonished that the hon. Member for Colchester (Bob Russell) thinks that by asking a company to talk to quangos in the UK he is going to stop it from quitting the country. I simply do not know what planet he is on.
Is it not the case that Britain has slipped down the competitiveness league, and that we have to address that problem, which is yet another reason why the tax reform commission that we announced today is so important? In order to create inward investment instead of a flight of capital, will the Minister now announce policies to rebuild Britain’s brand image abroad in a simple and effective way through UK Trade and Investment and, indeed, through our own competitive merits, and put an end to the absurd practice of all our regional agencies costing a fortune by having competing offices in the likes of Shanghai?
I am puzzled by that contribution. I assume that the Opposition have now decided to abolish the regional development agencies as a contribution to finding £21 billion of cuts to fund their tax reductions. I take a much more optimistic, pro-British view of the way we are performing on inward investment. The most recent World Bank report “Doing business in 2007” says that the UK is the best country in the whole of Europe for inward investment. We are one of the top two EU member states on employment law, with Denmark higher. We are in the top two in Europe in terms of protection for investors. We are joint second in the EU for the ease of paying taxes. That is a good record, which encourages foreign investment. It is not the poor record that the hon. Gentleman seeks to describe; he does down businesses and employees in the UK.
The Nuclear Decommissioning Authority and British Energy calculate these costs. At all times, the Department follows HM Treasury guidelines.
That is an interesting answer. It contradicts what Mr. Hugo Robson, one of the Secretary of State’s own officials, told the Public Accounts Committee on 27 March. The DTI first claimed that it had followed the Green Book, then admitted that it had ignored it. The Secretary of State told me on 6 July that he would write to me explaining the problem. I do not know whether he has written to me and the letter has been lost in the post. Could he send me another copy?
I wrote to the hon. Gentleman on 10 July and I will certainly send him another copy. As I understand it, the Department follows Treasury guidelines. As he knows, the purpose of the Green Book is slightly different. It looks at investment appraisal. The discounted rates that the Department has applied in relation to decommissioning costs are in line with the Treasury guidelines. I confirmed that when I wrote to him last July.
The Government have decided to include nuclear energy in the mix and have promised not to provide any taxpayers’ subsidies. It is important for the right level of provision to be made so that future taxpayers as well as current ones benefit. In view of what the Secretary of State has said, will he go back to the Department and ensure that it uses the 2.2 per cent.—not 3.5 per cent.—figure that is in line with the new Treasury guidance?
On the latter point, the Treasury rate to be applied has, as my hon. Friend knows, been reduced to 2.2 per cent., which is the figure being used. On the broader point, we are talking largely about decommissioning costs that have arisen from the fact that, throughout the 1940s, ’50s, ’60s, ’70s and ’80s, no one sat down to work out how the decommissioning work was to be carried out and costed. That is now being done in respect of a new generation of nuclear power. I believe that it is important to maintain the mix, as my hon. Friend said. We set out the position in July and that remains our position.
The world gas price is only one element of the cost to a supply company. What action is the Minister taking, with the regulator, to ensure that a 30 per cent. increase in the price of gas does not lead to an opportunistic 30 per cent. rise in a customer’s bill?
The regulator Ofgem has recently made strong statements to the effect that it is keeping a very close eye on this. A bit of a time period elapses before wholesale prices can affect the consumer, but I agree that gas prices are coming down at the moment. We cannot predict what they will be in the future, but we back the regulator in adopting a strong regulatory approach to the problem.
Is not the real problem faced by the gas industry the failure of the market in mainland Europe to deliver gas to this country through the pipelines at times when prices here have suggested that it should? What progress is being made in the EU to ensure that all member states actually deliver what they signed up to on energy market liberalisation?
Steps are being taken to put principle into practice in respect of market liberalisation. The UK Government have led the charge on that and we have seen strong action from one of the commissioners, who initiated dawn raids on companies. Let us also remember that, with the opening of the Langeled pipeline, we will soon have about 20 per cent. of our future gas supply coming in from Norway, with liquefied natural gas coming in from Qatar to the tune of another 20 per cent. Continental Europe is important, but we are certainly not putting all our energy eggs in one basket, which would be the wrong thing to do. We are doing the right thing.
Waste Electrical and Electronic Equipment Directive
The latest consultation exercise on the draft implementing regulations for this directive was concluded on Tuesday this week. Subject to a detailed analysis of the outcomes of that exercise, the directive should be transposed into UK legislation early in 2007, leading to full implementation on 1 July next year.
The Minister has caught me slightly unaware with that announcement, as no one was aware that that was about to happen. He has had six consultations, a review and a three-year delay. He now says that it is about to implemented, which is very welcome, but does he recognise that the delay has led to a huge mountain of discarded electronic goods—35 per cent. of them perfectly usable—piling up with nowhere to dispose of them? The UK and Malta are the only two countries that have not implemented so far. It is a very sorry state of affairs and I hope that the Minister will keep on the button and ensure that it actually happens.
It pains me to disagree with my own MP—I will not say whether I voted for him or not, as it is a secret ballot—but I have to say that he is a little out of date. Many people in the industries know where we are on this matter as we have carried through the consultation exercise and people have known about the appropriate time scale. Let us remember what this is about. In Britain alone, we have 1 million tonnes of electrical and electronic waste every year and the amount goes up by about 4 per cent. a year. The European directive is about promoting producer responsibility. As part of a more sustainable economy, it is important that we recycle and reuse electrical and electronic waste.
The Minister knows that the national headquarters of the Furniture Reuse Network is in my constituency and, from the meeting we held with him earlier this year, he also knows how keen the network is to see the implementation of the directive. Can he tell the House how the Government plan to support the community sector to ensure that it has access to reusable waste electronic and electrical equipment from local authority and retailer sites?
I know of a number of good voluntary sector schemes, including one in Croydon, which I visited recently. Although we expect most of the waste to go to local authority sites—we are consulting on that—voluntary organisations are important in making sure that the products can be reused and sold on relatively inexpensively, often to low-income groups. Non-governmental organisations have a vital role.
Under the Postal Services Act 2000, Postwatch was established to monitor changes to postal services and to ensure effective consumer representation. Postwatch has signed a code of practice with the Post Office, which provides a practical framework for consulting on proposed changes.
There is no doubt that Post Office Ltd has to make some difficult decisions and has some difficult challenges ahead, but does my right hon. Friend agree that, often, the way the Post Office goes about involving and consulting local communities leaves a lot to be desired? It was warned about that by the Select Committee on Trade and Industry and others over the urban reinvention programme, but in my constituency, although the Post Office has met me in respect of the proposal to franchise out a Crown post office, it seems to be adopting a tick-box mentality when saying that the local community has been consulted rather than thinking creatively about the process. Will my right hon. Friend have a word with the Post Office about that?
Yes I will. As my hon. Friend says, over the next few months the Post Office will have to make some difficult decisions about the shape and size of the network, and it is important that when there is consultation it is carried out properly. It will always be the case that, if people do not like a proposal, they may feel that there has not been proper consultation—no matter what the outcome—but there are some elementary things that we need to get right, so I would appreciate it if my hon. Friend could let me know precisely what passed between him and the Post Office so that we try to avoid such mistakes in the future.
Does the Secretary of State accept that, when there are changes to local postal services, it is important that there is proper consultation? In my constituency, for example, the sorting office in Kirriemuir, which covers the glens of Angus, decided to stop making newspaper deliveries. That does not appear to be a national process, but there seems to have been a review and cuts are being made by stealth. Where there is a rural service that has an impact on rural businesses, is not it important that there is proper consultation before such actions are taken?
Neither the Secretary of State nor I have held recent discussions on that topic with employer representatives.
That is an extremely disappointing reply, given that the Government are putting the Welfare Reform Bill before the House and that one of the critical issues in the Bill is how to get more disabled people into work. Is the Minister’s hesitation in holding discussions with employers’ groups because the Government’s own record is so lamentable? Nineteen per cent. of the working age population is disabled, yet only 6.8 per cent. of DTI employees are disabled, so what urgent measures will the Minister take to restore the credibility of his Department on that important issue?
There is no embarrassment on the Government Benches. We passed the Disability Discrimination Act 2005 and established an office for disability issues. The Act requires that all public bodies have due regard to promoting disability in all their functions and also that they produce a disability equality scheme by 4 December. The DTI is on target to meet that deadline; the scheme will provide an action plan for work to provide the framework in which we will meet our duty.
One of the largest categories of long-term illness and disability is made up of those suffering from mental ill health. When I talk to groups in my constituency, they report that, despite a transformation in social attitudes to mental ill health, there remain serious problems in terms of returning to the workplace and the difficulties that people encounter in having their applications treated fairly. Will the Minister say whether he agrees and, if he does, what he hopes that our Government will do to tackle that?
My hon. Friend raises an important issue. Mental ill health affects a sizeable proportion of the population. Almost every family—if not every family—has a member affected by it. It is an important aspect of our disability policy and I am sure that it will feature in all the plans that Departments make. It is a difficult area of work that requires a lot of attention to detail. I am sure that we will do that in due course.
Minister for Women
The Minister for Women was asked—
Last month, I published an action plan, in response to the women and work commission recommendations, that set out a comprehensive package of measures across Government that I believe will widen women’s choices, enable more women to realise their potential and reduce the gender pay gap.
My hon. Friend is right to suggest that the issue is not just about legislative change. We have to change the culture within which employers operate. I am determined to build up as many companies as possible as exemplar employers that can showcase their flexible working to others and show what is possible. We have nearly 100 exemplar employers and I hope to build that up further.
What discussions has the Minister had with the Chancellor of the Exchequer to ensure that the comprehensive spending review 2007 will prioritise closing the gender pay gap, set specific gender equality targets for Departments and require measurable progress year on year?
As the hon. Lady knows, I have regular discussions with the Chancellor of the Exchequer on this and many other issues. She will also know that we do have a target for reducing gender inequality. As part of the Budget process, we try to ensure that women are treated fairly and we are making real progress in tackling inequality and the gender pay gap, in particular. I hope that she is also aware of the latest action that we have taken through the women and work action plan, which not only builds up exemplar employers, but introduces equality reps and a quality part-time work initiative and sets out the measures that the Government are going to take, including extending the right to request flexible working.
In my constituency of Hove and Portslade, our further education and sixth-form colleges have pledged to put increased effort and investment into NEET pupils—pupils not in employment, education or training. What advice would my right hon. Friend give those institutions and those pupils on training to address the gender pay gap?
I suggest that the careers advice that pupils are given should emphasise the importance of pay progression and the opportunities that will be available to those young people. I have been trying to encourage girls to consider non-traditional occupations, which they might ultimately find more rewarding in every sense—personally fulfilling, as well as financially rewarding. The Government have introduced a national standard for careers advice to make sure that top-quality careers advice is offered throughout our schools and colleges.
The promotion of science, engineering and technology comes under the Office of Science and Innovation. The Minister for Science and Innovation meets the chair of the ETB regularly. I am pleased to report that the board and the UK resource centre for women in science, engineering and technology are developing a memorandum of understanding to promote the role of women in science, engineering and technology. I met Annette Williams, the director of the UK resource centre, this week to discuss progress.
I am grateful to the Minister for that comprehensive answer. She will have heard her right hon. Friend the Minister for Women say that she has frequent meetings with the Chancellor of the Exchequer. She will also know that the Department of Trade and Industry is a sponsor of the ETB. Will she or her right hon. Friend be saying to the Chancellor of the Exchequer that funding continues to be needed in this valuable area to promote science, engineering and technology?
Of course. I pay tribute to the hon. Gentleman’s role in the engineering board. It is important that we continue not only to get more women into the sector, but to get back into it some of the 70 per cent. of women who have qualifications in the area. The funding that has gone into the UK resource centre has been enormously important and we will of course continue to press for more.
For 13 years, Aberdeen has hosted a science festival called Techfest at the beginning of each September. The festival is aimed predominantly at schoolchildren, although events are also held for adults. May I invite my hon. Friend to come up next September to see what is happening in Aberdeen, the excitement on the children’s faces—boys and girls—and the way in which all businesses have been supportive of the festival and engaged with young people to get them interested in science in the first place?
I congratulate Aberdeen on its efforts. My hon. Friend is absolutely right that it is enormously important that children are enthused at an early age. Great work is going on in this area, and, subject to diary commitments, I would certainly love to look at the opportunity of going to Aberdeen next year.
In October 2007, all the existing equality bodies will be replaced by the Commission for Equality and Human Rights. As was set out in the “Fairness for All” White Paper, one of the guiding principles of the new body will be partnership working, including with the voluntary sector.
In thanking my hon. Friend for that response, may I remind her that the voluntary sector is often at the cutting edge of innovative new ideas, especially in the areas of sexual orientation and disability? The sector’s work has not always come to fruition, but it has often come up with ideas that have later become the norms of behaviour and attitude. The Minister for Women referred earlier to changing cultures. Does my hon. Friend agree that if we are to change cultures in such areas, it is important that we have a flourishing voluntary sector with which the statutory bodies work properly? For example, the Fawcett Society addresses gender equality, and I could go through a list of different aspects of equality in which the sector’s contribution has been enormous. It is important that we get the balance right.
I agree entirely with my hon. Friend. In preparation for the new commission, 15 stakeholder events were held throughout the country, and many voluntary sector organisations attended them. We hope to announce in the near future the commissioners of the Commission for Equality and Human Rights. I am sure that there will be representatives with a great deal of experience of the voluntary sector.
I welcome what the Minister says about the progress so far, but as the next step towards establishing the new statutory equality body—the Commission for Equality and Human Rights—will the Minister publish as soon as possible the results of the Government’s consultation on the Sexual Orientation (Goods and Services) Regulations? I ask this in the true spirit of co-operation: will she then publish the regulations in draft form so that Parliament can have a meaningful debate on this sensitive and important matter, instead of the wide-ranging and unfruitful debate that is taking place at present?
I can give the Government’s absolute commitment to bringing forward the regulations as soon as possible. I will certainly take back the suggestion of draft regulations, but our priority must be to lay the regulations in Parliament, alongside the religion and belief regulations, and get them implemented next April.
Sexual Orientation (Goods and Services) Regulations
We made clear earlier this month our intention to implement the sexual orientation regulations next April. As my hon. Friend the Minister for Women and Equality has just set out, we will lay the regulations before the House in good time for them to be debated and approved so that they can come into effect on that date, alongside the regulations on religion and belief.
Does the right hon. Lady agree that, subject only to the very limited doctrinal exemption that the Government already propose, the sexual orientation regulations must apply in full to all organisations, religious or otherwise, including adoption agencies, charities, general practitioners, housing trusts, nurseries and youth groups, because the principle of equality before the law must take precedence over the views of a vociferous religious minority which, however sincere, is fundamentally opposed to that important principle?
The hon. Gentleman is absolutely right that we must provide effective protection against discrimination for gay, lesbian and transsexual people. It is right that we take the time to consider the more than 3,000 responses that we have received on the matter. As I am sure he and other hon. Members are aware, there are passionate views on each side. It is only right that we take the time to consider properly such a complex issue, so that we provide protection against discrimination in a way that is effective and appropriate and which gets the balance right so that people are able to hold religious views and beliefs.
I reiterate the call for the regulations to be published in draft form before they are laid in Parliament. That could lead to a much more sensible and rational debate when the time comes. I cannot emphasise too strongly my agreement with the words of my colleague the hon. Member for Buckingham (John Bercow). Any excessive exemptions granted in the regulations would undermine the principle that Parliament has adopted.
I hear exactly what my hon. Friend and the hon. Member for Buckingham (John Bercow) have said. It is important that we have a proper debate that involves people who hold views on both sides of the argument and that we can discuss matters openly and honestly with each other. My first priority is to have the regulations implemented in April. In the consultation, passionate views were expressed on both sides, some of which, I fear, are completely misleading—for instance, the thought that the regulations would in any sense force Churches to marry gay people or schools to promote a homosexual lifestyle. It is 100 per cent. inaccurate to suggest that that might be the case, but given the nature of the responses to the consultation that we received, it is only right that we take our time to analyse them properly. If we can, I will consider laying the regulations in draft form, but my priority must be to implement them alongside the religion and belief regulations in April.
Business of the House
The business for next week is as follows:
Monday 23 October—Motion to approve a Ways and Means resolution on the Safeguarding Vulnerable Groups Bill [Lords], followed by remaining stages of the Safeguarding Vulnerable Groups Bill [Lords].
Tuesday 24 October—Consideration of Lords amendments to the Police and Justice Bill.
Wednesday 25 October—Remaining stages of the Charities Bill [Lords], followed by proceedings on the Parliamentary Costs Bill [Lords], followed by proceedings on the Wireless Telegraphy Bill [Lords].
Thursday 26 October—Remaining stages of the Fraud Bill [Lords], followed by motion to approve a European document relating to A Citizens’ Agenda—Delivering Results for Europe, followed by a debate on the Department for International Development’s White Paper on a motion for the Adjournment of the House.
Friday 27 October—The House will not be sitting.
The provisional business for the following week will include:
Monday 30 October—Consideration of Lords amendments to the Violent Crime Reduction Bill.
I know that colleagues on all sides of the House want notice of recess dates as early as possible. Until we have made a decision about September sittings, which will be before Prorogation, I cannot give all the dates, but for the convenience of the House let me give the Commons calendar until February 2007. We plan to rise for the Christmas recess on Tuesday 19 December and return on Monday 8 January. For the February constituency week, the House will rise on Thursday 8 February and return on Monday 19 February. This is, of course, subject to the progress of business.
I thank the Leader of the House for telling us the business for next week and the available recess dates.
On Tuesday, the House debated a motion to refer two statutory instruments to a Standing Committee. The Deputy Leader of the House battled valiantly to respond to the points raised by my hon. Friend the Member for Eddisbury (Mr. O'Brien), but the debate masked a serious issue about House business. Since 1997, well over 30,000 statutory instruments have been laid before this House. The Government are increasingly changing the law through the use of such secondary legislation, which is rarely debated, and, if it is, usually it is for only about an hour and a half in Committee and often after it has come into force. That smacks of Government arrogance, and it also potentially lays the House open to be a laughing stock. For example, the statutory instrument to set up the new strategic health authorities will be debated next week. It was laid in June and came into force on 1 July, and the authorities started working on 1 October. Little wonder that the Deputy Leader of the House said that if the House failed to pass that legislation
“The consequences would be dire.”—[Official Report, 17 October 2006; Vol. 450, c. 846.]
Will the right hon. Gentleman review the use of secondary legislation and make a statement to the House?
The Leader of the House has in the past said that he wants to make sure that parliamentary questions are answered in a helpful and timely fashion. [Interruption.] He says “Yes” or “Hear, hear” from a sedentary position. My right hon. Friend the shadow Home Secretary has been waiting for the answer to no fewer than 43 written questions to the Home Office since 8 July, which is more than three months. I fully appreciate that the Home Secretary might find it inconvenient to answer the questions, but that is to do with the failure of Government policy. The delay is simply not good enough. Does the Leader of the House agree, and will he ensure that those questions are now answered promptly?
On 11 September, the Minister for Policing, Security and Community Safety issued a written ministerial statement on the operation of control orders. He did not say that there had been any breaches to the orders or risk to the public. Why not? Although the failure to mention that might not have been a breach of the letter of the requirement on Ministers, it certainly was a breach of the spirit of the agreements made when control orders were introduced. May we have a statement from the Home Secretary on that?
Earlier this week, the chief executive of the NHS said that he does not know how many job cuts there will be in the NHS this year—which, of course, according to the Health Secretary is the best year ever for the NHS. We believe that 20,000 jobs will be lost, and NHS employers say that it could reach 20,000. The only people who do not seem to know are the Government. When will the Health Secretary publish a figure for Members?
Yesterday, a petition of 4 million signatures was handed to No. 10 highlighting the fact that the withdrawal of the Post Office card account will lead to yet more post office closures. It was reported this morning that the Minister with responsibility for employment relations and postal services said that
“it is important that there is a successor to the Post Office card account. And there will be and the DWP are in negotiations. There does need to be a clear statement from Government to give reassurance.”
When will the Secretary of State for Trade and Industry make that statement to the House?
Tomorrow, the House will consider a Bill proposed by my hon. Friend the Member for Tunbridge Wells (Greg Clark) to change the definition of brownfield land and to stop garden-grabbing, which is a problem throughout the country. Will the Government come off the fence and support the Bill, and, if necessary, introduce such a Bill in Government time in the next Session?
Let me deal with those points in turn. Anyone listening to the right hon. Lady would think that the Labour Government had invented secondary legislation. Secondary legislation is a fact of British parliamentary life. More than 50,000 statutory instruments were introduced under the Administration whom she supported, before 1997. I accept that the way in which the House is able to deal with statutory instruments is not as satisfactory as it should be, but there is an inherent problem to do with the management of Government time. There is also the simple truth that we cannot in any legislation—her Government did not do it, and we cannot do it—anticipate every change in ministerial power when the primary legislation is introduced. I am very happy—we all are—to discuss and think about changes in the management of statutory instruments to the benefit of the House and good governance. I suggest that she offer some practical ideas that the Conservatives would be willing to introduce, were they in government.
My right hon. Friend the Secretary of State for the Home Department is very concerned indeed about the huge backlog of parliamentary questions. Ever since he took office in May, he has been working very hard with his colleagues to clear the backlog, which in part arose—I do not complain about this—from the massive increase in the number of questions as a result of the foreign prisoners problem. However, I will of course follow up the issue that the right hon. Lady raises.
We have been up hill and down dale on the issue of control orders, and I have looked at what the Minister in question said on 11 September. There was no disingenuity whatsoever about the statement that was made—as, indeed, the right hon. Lady accepted when she had to resort to saying that at least she could not complain about the letter of what was said. The Home Office has been as open as it can be when breaches have taken place.
Let me deal with the two issues that the right hon. Lady raised concerning the national health service and the Post Office. I know that she is running a scare story that 20,000 people in the NHS are going to be sacked. If she looks at the detail, she will see that, so far, the number of redundancies in the health service, particularly compulsory ones, is tiny. She always forgets to acknowledge that since 1997 the number of NHS staff has gone up by 303,000—a huge increase on the very poor start that we inherited in 1997. The implication of what she is now saying about the NHS is that more should be spent on it, and the implication of what she is saying about post offices is that, in addition to the £2 billion in subsidies that we have already spent, more should be spent. The question for her and for the whole of the Tory party is how on earth they can square that with their promise to cut taxes by between £20 billion and £30 billion—
Following the printed and broadcast statements by General Sir Richard Dannatt, the head of the British Army, and President Bush’s acknowledgement that the position in Iraq is comparable to the Tet offensive in Vietnam in 1968, is it not time that this House debated the situation in which our servicemen and women now find themselves in Iraq?
As my right hon. Friend knows, we have been able to debate the matter on many occasions. For reasons that I think everybody understands, I cannot promise a debate on foreign policy before Prorogation, but five days of debate on the Queen’s Speech will be available at the Opposition’s discretion, and I should be astonished if one of them was not on foreign policy.
I congratulate the Leader of the House on finding the lost Bills that I drew his attention to last week; he obviously does not expect prolonged debate on the Fraud Bill, which gives me some cause for concern.
May we have a debate on freedom of information and the application of the Freedom of Information Act 2000? Many people are extremely concerned that the good intentions behind the Act are to be undermined by the introduction of new charges, the sole raison d’être of which is to prevent people from having the access to information from Government Departments that they should have.
May we also have a debate on the fiasco of the Rural Payments Agency? It is quite extraordinary that it should have performed so badly, as has now been outlined by the National Audit Office. It has been outperformed by its Scottish and Welsh equivalents and by every European agency; indeed, even the German agency, which uses the same methodology, managed to outperform it considerably. It is probably the worst payments agency in Europe, yet the chief executive, who was sacked, is still on full pay.
May we have a debate on the Government’s position on cluster bombs? The UN Under Secretary General for Humanitarian Affairs has spoken about their use in Lebanon. I recently saw for myself how one still cannot walk on huge areas of Bosnia and Herzegovina—off the roads but only a couple of miles from Sarajevo—because of mines and cluster munitions. Is not it time that we took a lead in removing those appalling weapons from use in warfare?
Finally, what is the position of the legislation anticipated by the Secretary of State for Northern Ireland? If it is to go ahead, it must do so before 24 November, which is in the middle of the debate on the Queen’s Speech. As I understand it, the House has two options: we could deal with it very late at night, after the Queen’s Speech debate, or we could interrupt the Queen’s Speech debate for a day. I suggest that dealing with the provisions late at night would be an insult to the Province of Northern Ireland and to the people who are depending on the legislation. It would be far better to interrupt our proceedings on the Queen’s Speech in order to have a proper debate in the House.
The hon. Gentleman asked about FOI, but I completely reject his contention that the spirit of the legislation and its effect have been undermined by the possibility that charges will be introduced. In case he has forgotten, I remind him that I introduced the Bill when I was Home Secretary, and that it contained a power to allow for charges. I do not recall any Front Benchers objecting to that power. However, a slight anomaly exists at present. If the hon. Gentleman were to apply, under the data protection legislation, to a public authority for information about himself, he would almost certainly be charged, whereas he would not be charged if he applied for information about the hon. Member for North Southwark and Bermondsey (Simon Hughes), who is sitting next to him. The hon. Member for Somerton and Frome may not wish to be burdened with that information, but that is certainly something of an anomaly. The Government are justly proud of the FOI Act, but we must ensure that its provisions do not undermine good administration in other respects.
The hon. Member for Somerton and Frome will know that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs has been determined to sort out the problem with the Rural Payments Agency. The situation is very unsatisfactory, as today’s NAO report highlights, but I understand that farmers are now receiving payments in almost every case.
The hon. Gentleman asked about cluster bombs. Like my right hon. Friend the Secretary of State for Defence, and his predecessor, I have always acknowledged that we must be extremely careful in the use of cluster bombs. That has been the British Government’s policy.
The hon. Gentleman asked about Northern Ireland legislation, but I simply did not follow his point. We all know about our responsibilities to Northern Ireland, and we have to ensure that the agreement is pinned down. If it is, we will meet the requirement for there to be legislation before 24 November. That will be sorted out through the usual channels.
Will my right hon. Friend ask a Minister from the Department for Constitutional Affairs to make a statement clarifying future investment in the courts estate? We are continually modernising and improving the services that our courts provide, but some of the buildings are clearly outdated and are struggling to house those services. For instance, a new court building has been earmarked as a priority for Newport for many years, but it has been held up by a lack of funding.
My right hon. Friend the Lord Chancellor is well aware of the need to press ahead with the court building programme. He would be delighted to receive any representations that my hon. Friend might care to make to our right hon. Friends the Chief Secretary and the Chancellor.
Today, Sir Hayden Phillips is publishing his interim report on party funding. On Tuesday, the Leader of the House said that he wanted to find a consensus on that important issue, although he then went on to make a number of deeply anti-consensual remarks. Would not both Sir Hayden and the achievement of a consensus be assisted if we were to have a debate, in Government time, on the interim report? That would allow a broader range than is proposed by those who inhabit the two Front Benches.
It is an interim report. I am sorry to tell the right hon. Gentleman that there is no time for such a debate before Prorogation, but if there is time afterwards, we will think about that. I am always searching for consensus, but highly partisan points were made by Opposition Members, including the hon. Member for The Wrekin (Mark Pritchard), who is sitting just in front of the right hon. Gentleman. The hon. Member for The Wrekin led with his chin, because he omitted to mention that although he spent £11,000 within the time limit in April last year, he spent £50,000 outside the time limit, using money from secretive front organisations such as unincorporated associations. When that happens, we are entitled to draw it to wider public attention.
Will my right hon. Friend set aside time for a debate on Farepak, so that we can put on record the anger on the issue felt by Members on both sides of the House? It is a Christmas saving scheme that went into liquidation last week, with the consequence that, for tens of thousands of hard-working families, Christmas is effectively cancelled. The directors should be called to account for their behaviour. Will my right hon. Friend organise a debate on the matter?
I understand my hon. Friend’s great concern, and I hope that he can find opportunities to raise the subject, for example in Westminster Hall or in an Adjournment debate. I know from his early-day motion just how terrible the situation is for some of his constituents and for many others. My right hon. Friend the Secretary of State for Trade and Industry is profoundly concerned, and I know that he is willing to follow the matter up with my hon. Friend.
Given the significance of General Sir Richard Dannatt’s comments on Iraq, and given that he felt that he had to vent his frustration by speaking to the media—despite all the qualifications made since the original interview, the Prime Minister now seems to agree that, in certain parts of Iraq, the presence of British troops exacerbates the problems, yet troop deployments continue—will the Leader of the House further consider allowing the House a proper debate on the specific issues, which are of great importance to the country, and to the 8,000 British troops in Iraq?
We always make statements on Iraq as and when required. As I said earlier, there will be a five-day debate on the Queen’s Speech. It is a matter for the Opposition, and not for us, but I hope very much that one of those days will be used for foreign policy. I would like a better balance in the subject days in this House, so that we have scheduled debates on foreign policy, just as we have on Europe and defence. However, we must sort that out through the usual channels.
Does my right hon. Friend agree that a debate is taking place in the country about our military presence in Iraq? In order to clear the air, would it not be useful to hold a debate on the subject in the Chamber, as many Members would like? It seems odd that the country and the media are discussing the subject, which is of great importance, but that we are not. I therefore suggest an early debate.
I entirely understand what my hon. Friend says and it echoes what the hon. Member for Billericay (Mr. Baron) said a moment ago. We will look carefully to see whether time can be found, but as my hon. Friend will understand, given the pressures on time in the closing weeks of a parliamentary Session, that will be difficult to do. I reiterate that there will be an opportunity to discuss the subject in the debate on the Queen’s Speech, which is only three weeks away.
Will the Leader of the House advise the Home Office that police authorities in Wales are concerned about the £1.3 million that they spent, at its behest, on the botched plans for the amalgamation of Welsh police forces? They were promised repayment six weeks ago, but nothing has happened since. I ask the right hon. Gentleman to pass that on. In addition, may we have a debate on the police funding formula as it applies to Wales, as there are serious disparities within Wales?
I shall certainly pass the first point on to my right hon. Friend the Home Secretary. On police funding, I can say, wearing my hat as a former Home Secretary, that there are always questions about the police funding formula, the policing of rural roads and all sorts of other things. If the hon. Gentleman believes that there are serious anomalies and justifiable concerns, I suggest that he follow the matter up with the police Minister.
May we have an urgent debate on the future of the steel industry in the UK? Steel remains a strategically important industry and a major employer in many parts of the UK, but further moves and speculation about possible takeover bids for Corus can only lead to uncertainty in the sector, so may we have an early debate?
I accept my hon. Friend’s concerns. The steel industry is one of the great successes of British manufacturing, and that is often forgotten, given the background of news of some major closures. I will certainly pass my hon. Friend’s concerns on to my right hon. Friend the Secretary of State for Trade and Industry. I hope that my hon. Friend is able to ensure that the matter is raised, either in an Adjournment debate or in Westminster Hall.
Will the Leader of the House arrange for the Prime Minister to come to the Chamber next week to make a statement, so that he can clear up confusion and reassure the country that he lives in the real world, rather than cloud cuckoo land? On the day that the Prime Minister made his statement at No. 10 that only a few hundred jobs would be lost in the health service, the local hospital in my constituency announced 250 redundancies, which reaffirmed the belief of normal people outside the House that up to 20,000 jobs have been lost in the health service.
My right hon. Friend will be here, as usual, at Prime Minister’s questions next Wednesday. He always enjoys the occasion, and, after yesterday, it will be the Leader of the Opposition who absents himself next week, given the appalling notices that he received this morning. I have two things to say to the hon. Gentleman. First, there have been endless stories about compulsory redundancies in the health service, but in most cases those redundancies have not been made, and any adjustments in head count have been due to natural wastage or voluntary redundancy—mainly natural wastage, in fact. Secondly, as the hon. Gentleman holds out to the good people of Chelmsford the prospect of more spending on the health service under a Conservative Government—
My right hon. Friend is currently contemplating legislation on the reform of the upper Chamber. Will he reassure Labour Members and Members from other parties who are unicameralists that we will have an opportunity, under any legislation that he introduces, to vote for the abolition of the House of Lords?
Yes, I can certainly tell my right hon. Friend that it is my plan that, in any debate on the future composition of the Lords, the first vote would be on the question of whether there ought to be a second Chamber; only if that was defeated would we come to issues about its composition.
As my right hon. Friend is aware, the Modernisation Committee has taken a great interest in the citizenship curriculum in schools, believing that it is important to increase knowledge and understanding of Parliament and the democratic process from an early age. Does he therefore share my concern, and that of other colleagues, that Ofsted has reported poor standards of teaching in citizenship, and will he make time for an urgent debate on that important matter?
First, may I commend my hon. Friend’s continuing interest in, and pushing of, the subject? Secondly, I certainly share her worry; the matter is of concern across the House. The introduction of a compulsory element of citizenship in the national curriculum was welcome, but it is no good if it is squashed in with PE or religious education, as it has been in too many cases. There must be an elevation of the teaching of citizenship as a serious subject that is respected in the staffroom, as well as in the classroom. I shall certainly pass my hon. Friend’s concerns on to my right hon. Friend the Secretary of State for Education and Skills. I hope that, at some stage, it will be possible to have a debate on the matter.
According to credible estimates, there have been more than 100 knife-related incidents in our schools since children returned for the autumn term just last month. Does the Leader of the House agree that an urgent debate is required on that pressing matter, and that more needs to be done to make schools safe and secure environments in which our youngsters can learn?
I am almost dumbstruck. More does need to be done in respect of violent crime, and it would be extremely helpful if the Liberal Democrats voted for such proposals. They have failed to vote for almost every measure that would help to control crime in the past 10 years—[Interruption.]
Will my right hon. Friend arrange for time for a debate on YouTube? I am aware that several hon. Members have found and used that website, but I am more concerned about a posting from my constituency. Entitled “Milton Road Fight Club”, it shows a man being attacked in the street and kicked in the face until he is unconscious. I am worried that acts of violence and instances of happy slapping recorded on mobile phones are being transferred to the web for wider consumption. Will my right hon. Friend ensure that we have a debate in this House so that we can discuss how to stop this?
I am glad that my hon. Friend mentions that. We will discuss the Violent Crime Reduction Bill during the next week, and I hope that he raises the matter in relation to an appropriate amendment. There is a very serious issue about how such videos should better be controlled.
The hon. Member for West Chelmsford has disappeared from the Chamber, presumably because he was shamefaced about asking the question on the very day that the Conservatives are proposing between £20 billion and £30 billion of tax cuts and announcing the most reckless public spending and economic policy that we have seen.
On the other matter, the Conservatives need to be clear about what they are arguing—
May we have an early debate on taxation policy? In my constituency, we have benefited hugely from policies such as the working families tax credit, which has radically changed the life chances of the 20 per cent. of my constituents who live in the lowest quintile of economic activity. They would be hugely disadvantaged if we adopted a taxation policy that took money away from them. It is enormously important that the House has a serious debate about taxation policy to reassure those people that future Governments will support their needs.
I will try to stay in order, Mr. Speaker.
I very much hope that we can find time for a debate on tax policy in which we consider all the available alternatives. Perhaps the Conservatives will decide to use one of their days on the Queen’s Speech to discuss tax policy—they would show great courage were they to do so. If not, we will certainly find an occasion. It would make for a good and timely debate following yesterday’s and this morning’s reports of their “cut tax, spend more” policy and given that the shadow Chancellor has said:
“the framework of our tax policy is now set.”
Last week, it emerged that 1,649 dentists quit the service in the first three months of the Government’s disastrous new dental contract. Given that chaos, will the Leader of the House ask his right hon. Friend the Health Secretary to attend the House to explain the debacle over which she has presided and to tell us what remedial measures she will put in place?
I do not think that I can promise that. The truth is that we have been trying to sort out a long-term problem that goes back to much earlier changes in dentists’ contracts in 1991 and 1992, which were the mother and father of all the difficulties that we have faced subsequently. I know that some dentists have refused to accept the contract. I do not have the figures in front of me, but I looked at them last week. Overall, however, I think that going back to the base of 1997 there are more NHS dentists doing more NHS treatments.
May I press the Leader of the House again on a debate about Iraq and Afghanistan? It seems absolutely extraordinary to many people outside this House that we should have had the report by The Lancet, rumours of policy changes in the USA, and the general’s comments about the presence in Iraq, and yet no debate in this House. May I press him, seriously, to have an urgent debate on the presence of British and American troops in Iraq and Afghanistan so that we can debate the alternatives, which I believe should be withdrawal from those places?
I note what my hon. Friend says and fully accept the importance of this. I hope that he accepts, too, that there is pressure from legislation at this time of year. Without making promises, I will discuss the matter with my right hon. Friend the Patronage Secretary. Let me also say, at the risk of repetition, that I want to see more regular debates on foreign policy. We have regular debates on all sorts of things, but there have never been scheduled debates on foreign policy. I hope that that will require us to have slightly fewer debates on other subjects that are much less well-attended than they should be.
Could we have a debate on the efficacy of the immigration service? One of my constituents, who was born in this country, whose parents were born in this country, and who is married to someone born in Turkey, is now expecting their second child since they first applied for what ought to be perfectly proper permission to live and work here. Many decent people are unable to work for more than 20 hours a week and to keep their families although they have, in every sense, a right to be here. They have been told that it will be another two years before this incompetent service provides them with an answer to a very simple question.
I have a very heavy immigration caseload myself. I suggest to the right hon. Gentleman that in such a case, which in my experience is rather unusual, he asks to see the Home Secretary or the Minister responsible for immigration to try to sort out the matter. If the facts are as he stated, as I am sure they are, a decision should have been made long ago.
One of the Government’s major achievements in education policy is the reform of the 14-to-19 curriculum and the planned introduction of vocational diplomas. While some people may have preferred the Government to take on board more of the recommendations of the Tomlinson report, I welcome the fact that the first five vocational diplomas are due to be introduced in 2008. I understand that there are serious concerns about the likelihood of that time scale being achieved and that a considerable amount of work is yet to be done in terms of preparation of the curriculum and materials and of the training of teachers. Does my right hon. Friend accept that it is crucial for the credibility of the qualifications system that a time scale is adhered to and that the process is managed effectively; and may we have a debate to ensure that everything is in place?
May we have a debate on the availability of Alimta for the treatment of mesothelioma? I am sure that the Leader of the House is aware that a postcode lottery is operating in relation to that drug, which is the only one available for victims of mesothelioma. On 27 October, the National Institute for Health and Clinical Excellence will rule on whether it could be made available on the NHS. Many Members such as myself who have local factories where workers have suffered from asbestosis are seriously concerned about this.
I understand the great concerns in areas where there were asbestos factories. We had a gas mask factory in Blackburn during the war, and the effects of the use of asbestos there are still continuing. It is reasonable to await the decision by NICE. I am glad that there is an increasing consensus that that process is the way forward.
Will my right hon. Friend have a word with my right hon. Friend the Secretary of State responsible for the BBC? Given that both the charter and the licence fee are under discussion, is not it fair to have a debate subsequent to the decisions, with substantive votes, so that we can evaluate the role of the BBC properly? There has been continual debate about the change in the licence fee arrangements and the way in which the fee is now collected. That point arose in the debate on Monday. Given that the BBC is a state corporation, it is right and proper for this place to have a proper say in the way that it carries out its duties.
I will certainly pass on my hon. Friend’s concern to my right hon. Friend the Secretary of State for Culture, Media and Sport, aka the Secretary of State responsible for dealing with the BBC. I accept the need for a debate and understand my hon. Friend’s case for it to be on a substantive motion, although I cannot promise to provide that. He will acknowledge that, when possible, I have introduced greater use of substantive motions, because that is the way forward instead of basing subject debates entirely on Adjournment motions.
May we have an urgent debate on why thousands of car drivers in the borough of Telford and Wrekin have their journeys disrupted every day as a result of the decision by the council’s Labour leadership to introduce new traffic signals at the Ketley Brook and Trench roundabouts? If the Leader of the House does not believe me, I invite him to come and see for himself.
It has already been said that the tax credits system has been a huge success in alleviating poverty and helping low earners. That is certainly true in my constituency. However, will my right hon. Friend find time for a debate on the possibility of amending the law on tax credit appeal rights so that we can consider extending the jurisdiction of the independent appeal tribunal to cover overpayments of tax credits, as happens with other welfare benefits? Tax credits are a huge success but extending the jurisdiction of the independent appeal tribunal would be a fairer system of dealing with overpayments.
I am sure that the Leader of the House well knows that it is a serious matter for a senior service chief to put himself publicly at variance with Government policy. I believe that most hon. Members are more concerned about the unreasonable pressures on the armed forces and the lives of our troops than the pressure of business in the House. May we have a debate on the consequences of General Sir Richard Dannatt’s remarks either on a Friday or on the Monday before the state opening of Parliament? The matter is urgent and should not have to wait nearly a month for a day in what is effectively Opposition time, which would have happened anyway, and will be cluttered with many other subjects that people want to raise.
The days of debate on the Queen’s Speech do not quintessentially constitute Opposition time. There is a five-day debate on the Government’s proposals for legislation. However, by convention, the Opposition determine the priorities for debate, and that is entirely proper. I hope that they use one of the days to debate the important issue that the hon. Gentleman raised. I repeat that I understand the importance of the matter, but we are in difficulties with finding time at this stage of the Session.
My right hon. Friend may not know that, earlier this year, his predecessor promised a debate in the House on the forthcoming energy review. It has since been published and it raises as many questions as it has provided answers and has spawned a series of reviews. However, it is overwhelmingly important, especially in relation to our climate change policy. Will my right hon. Friend facilitate a full debate in the House on the future direction of our energy policy?
Will the Leader of the House find time for a debate on the treatment of members of our armed forces who are injured while on operations? Yesterday, the Prime Minister said in answer to a question from my hon. Friend the Member for Gosport (Peter Viggers) that the Government had received no complaint. That is not the case. I have a constituent who was discharged from the Army while waiting for an operation after being injured in Iraq. The Government should give us time for a debate and give some support to our troops, who fight on their behalf, but receive shoddy treatment when they return and leave the armed forces.
Of course the hon. Gentleman is right to say that we should do everything that we can for injured service personnel and give them every support. My right hon. Friend the Secretary of State for Defence regards that as a high priority in the Ministry of Defence and throughout the world, as I know not least from a conversation that I had with him yesterday. However, it is not appropriate for the hon. Gentleman to imply that one party has a monopoly of caring about the armed forces.
Orders of the Day
Companies Bill [Lords]
[3rd Allotted Day]
[Relevant document: The Twenty-eighth Report from the Joint Committee on Human Rights, Session 2005-06, Legislative Scrutiny: Fourteenth Progress Report, HC 1626.]
As amended in the Standing Committee, further considered.
New Clause 15
Duty to provide information about exercise of voting rights
‘Institutions to which section 1241 applies shall publicise on their website, in relation to each opportunity that they have to exercise voting rights attached to shares to which that section applies, whether or not they have exercised such voting rights.’.—[Mr. Djanogly.]
Brought up, and read the First time.
With this it will be convenient to discuss the following amendments: No. 434, in page 603, line 22, leave out clauses 1241 to 1244.
No. 435, in clause 1241, page 604, line 4 at end insert—
‘(7) Regulations under this section shall be subject to public consultation prior to publication, and shall be the subject of a cost benefit analysis.’.
As we begin the third and final day of Report on the longest Bill ever produced, I want to make a few brief remarks. Unfortunately, an urgent engagement requires me to leave the debate shortly before Third Reading, but my hon. Friend the Member for Rutland and Melton (Alan Duncan), the shadow Secretary of State, will step in. I should therefore now like to thank my advisers and researchers, who have been magnificent, and the Committee team, especially my hon. Friends the Members for Putney (Justine Greening) and for Hornchurch (James Brokenshire)—he joins me today—who made their impressive debuts at the Dispatch Box yesterday.
We have experienced problems with programming and some points of principle. However, progress has been made in a generally good spirit of co-operation with Ministers and we are pleased that many of our points have been fully addressed. All in all, we believe that company law will take a step forward through the Bill.
The new clause and amendments deal with information on the exercise of voting rights by institutional investors. The Bill compels institutional investors to provide information about the exercise of voting rights. On Third Reading in the House of Lords, my noble Friends and Liberal Democrat Members excluded clause 1241 on a vote. However, the Government reintroduced clauses 1241 to 1244, albeit in slightly amended form. Unfortunately, they did not allow proper debate of clause 1241 in Committee and we are therefore left to discuss it on the last day.
The amended clauses deal with some of the technical difficulties that have been brought to our attention. For example, they tackle aggregate voting provisions and allowing only the top fund to make the disclosure if an institution holds shares in a company through more than one fund. The provisions have polarised opinion. On one side stand the CBI and many institutional investors who resent being forced to disclose how they vote, and on the other stand the Government, who frequently appear to be taking orders on clause 1241 from the trade unions.
I am interested to hear where the hon. Gentleman and the Opposition stand on this matter.
If the Minister will give me half a chance, I will certainly come to that.
The Government have not listened to the overwhelming consensus in the business and financial communities. They have reintroduced the clause, yet they have not taken the time to carry people with them by considering a suitable compromise between the two sides that would suit all parties. I am at a loss to understand why the Government have been so last minute with these provisions. It is therefore essential that important stakeholders’ views be heard on the general principles behind the clauses. We have received comments from organisations such as the Association of Investment Trust Companies and the Investment Management Association.
A number of other stakeholders are also against the introduction of the clauses, including the CBI, whose October briefing states:
“At House of Commons Committee stage, we opposed the re-introduction into the Bill of provisions or powers to require mandatory disclosure by institutional investors as to how they have exercised their voting rights. CBI members accept that there can be practical problems involved in exercising voting rights by some investors but consider that much has been achieved in recent years by market participants working to resolve the problems. Disclosure of voting is an area where several institutional investors are already disclosing their actions and so we do not see the regulatory need for these Bill provisions. In the absence of deletion of these provisions”—
as is proposed by amendment No. 434—
“there should be full public consultation on any proposal to implement any proposals under the powers taken”
in the Bill. That is what we are proposing in amendment No. 435.
This request has also been made by the Investment Management Association, which states that the reintroduction of the clause as drafted would run counter to the Government’s aim of reducing Government red tape. The IMA, while supporting transparency, believes that it would be counter-productive to make this the subject of statutory regulation. The IMA’s briefing sets out the reasons why the new clause should be opposed:
“The voluntary system is working and increasing numbers of managers are making certain of their voting records public.”
The briefing provides a lot of statistics to back that up, stating that many more managers than in the past are making their voting records public by putting details of how they have voted on their websites, and that mangers such as Fidelity Investments and, recently, Hermes have also stated their intention to do this. It goes on:
“All this clearly shows that the ‘culture of secrecy’ in the asset management industry that some have claimed exists, does not.”
The IMA is also concerned that
“a ‘one-size-fits-all’ requirement would undermine progress. As well as looking at the number of managers that disclose, the survey analysed voting details published on web-sites. This showed a wide variation in the matters reported, indicating the complexity of this matter and the difficulty of introducing regulations that would require uniform disclosure. In effect, imposing a ‘one-size-fits-all’ legislative requirement would undermine the progress made to date.”
The IMA also believes that the
“introduction of an enabling power could bring this voluntary progress to a halt. Managers considering public disclosure would face the dilemma that if they went ahead in advance of regulation they could face the expense of completely changing their systems, and incurring costs all over again, when regulations are introduced. A number have already told us that they have shelved disclosure plans for this reason.”
The IMA states that
“Government-mandated disclosure would be costly. The Regulatory Impact Assessment published with the draft clauses…addressed the ongoing costs of disclosure. It did not address the costs of: setting up systems; determining whether voting rights have actually been exercised; vetting the information; and monitoring compliance with legal requirements. These costs are likely to be significant.”
As we can see, the IMA has made some serious points.
The Association of British Insurers believes
“that the principle of transparency is right. Market forces are, unsurprisingly, supporting the development of voluntary transparency in this area and reflecting this, major institutional investors including ABI members…are all making their voting information public.”
However, the ABI also believes that
“the costs of legislating in this area have been underestimated and since statutory rules would impose a very significant regulatory and compliance burden that would dwarf any benefits. Indeed, it would be likely to lead to less considered voting, as resources are devoted to legal compliance or to the outsourcing of both decision-making and disclosure functions. The possibility of introducing future requirements under the reserve powers of the Bill could deter those companies seeking to voluntarily disclose voting information.”
There is a growing movement among many in the investment management community voluntarily to disclose how they vote. Hermes, one of the country’s largest and most successful fund managers, has now taken this step. It is the 12th UK fund manager to decide to publish its entire voting record at annual shareholder meetings, and many others have also done so.
The Conservatives welcome this voluntary disclosure. We are in favour of business moving towards greater transparency of its own accord, rather than of the Government issuing edicts from on high as to how investment managers should act. Self-regulation from the bottom up will always be more effective than forced regulation from the top down in this complicated area. The Conservatives fully support transparency from institutions, towards their own investors and towards third-party stakeholders. We welcome the sector’s move towards voluntary disclosure and encourage it to go further. An open and transparent institution is likely to be a successful one, but if an institution wishes to maintain secrecy with its investors, that should be its choice, and we should respect that. People do not have to invest with it.
A good middle view on this matter was put forward by the ABI, which has stated:
“The proposed clauses provide sweeping and ill-defined reserve powers which provide little, if any, intimation of their purpose or of their justification of being in the public interest. They are targeted in a discriminatory way, imposing duties on certain types of shareholder whilst leaving others unaffected. This is a violation of the principle of equal treatment of all shareholders.”
The ABI goes on to state:
“For example, the clauses do not apply to important categories of investor such as hedge funds and overseas holders. Their stake is nowadays frequently as large, if not larger, than that of traditional UK institutional investors. If the latter should disclose their voting record in the public interest, then surely this should be an obligation on the former. As the requirement is constructed, it appears to be UK institutions and their clients who will have to bear the costs of disclosure…Furthermore, the clauses as drafted would require disclosure by fund managers even when they are passing on voting instructions on behalf of their clients. Where these clients have different views the fund manager’s public disclosure would show that it gave instructions to vote for, against or abstain on the same resolution. It is evident that disclosure of this nature will frustrate the presumed purpose of these provisions, to inform those with an interest in a particular fund how the shares in which they have an actual interest have in fact been voted.”
The ABI briefing goes on to state:
“Clause NC433 (4)(a) allows any person to whom disclosure should be provided to institute civil proceedings if this does not happen. If it is intended that the obligation will be to publish information, this means that any member of the public would be able to instigate legal action against a shareholder or fund manager even though that member of the public has no interest in the shares in question.”
The ABI concludes:
“The practical effect of introducing regulations is likely to be to reduce the quality of institutional shareholder engagement with companies—a process which can add real value to the beneficiaries’ holdings. Institutions will become less concerned with considered voting as their resources are switched instead to compliance with these complex disclosure requirements. There will be an increase in outsourcing of voting decisions to proxy lodgement agencies, and in some cases, a decision to refrain from voting as a conscious policy in all but exceptional circumstances.”
That is pretty forthright stuff.
Let us be clear: what we are being told by those independent bodies that represent people in the industry is that the effect of the Government proposals will be fewer institutions being likely to vote so that they do not have to disclose how they voted or intend to vote.
In addition to transparency, an important issue, which is not covered by these clauses, is participation. We in the Conservative party very much want to encourage institutions to vote and participate. That the effect of these Government provisions could be to replace participation with non-voting is, to our mind, a potential disaster. In reality, the Government are addressing the wrong issue with these provisions. Our amendment would reconcile those views and find a middle way.
As we have made clear, the Government’s threats of compulsion are cack-handed and over-regulatory. Accordingly, we have tabled new clause 15, which seeks a compromise that would be acceptable to all parties. We support institutional investors having to disclose whether they have voted, rather than how they have voted, although, as I have said, we support more institutions declaring voluntarily how they have voted, after the event.
That is why the amendment would require institutions to publish whether, rather than how, they had voted. That in turn would enable institutions to show engagement in the companies in which they invest. Individuals and larger funds whose moneys are managed by those institutions could take more part in running the company that they part own. The cause of shareholder democracy would be advanced in a non-heavy-handed manner, whereas if the provision is left as it is, there will be a real danger that some institutions do not vote at all to avoid having to disclose how they would have voted.
We believe that that would defeat the purpose of the clause by preventing institutions from engaging with companies, so we take this opportunity to warn the Government that this potential disaster is what we shall face if the clause is left intact. Over recent days, the Minister seems to have been saying that if the institutions continue to move towards voluntary disclosure, the clause might not be needed and might not be enforced by the Government. We have to say that that threat approach is counter-productive, and indeed sounds arrogant to those who are subject to its provisions.
I hope that the Government will now see reason on those provisions and simply get rid of them, as proposed through our amendment No. 435.
It is true that a number of legitimate concerns have been raised about the practicalities of introducing institutional disclosure in the way proposed in the Bill. The Liberal Democrat team in the House of Lords thought those practical problems serious enough to raise the question of whether these powers should be supported at all.
On Second Reading, my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) said that, on further reflection, our view is that there is a case for the reserve powers, but only if the Government make it clear that they will not go for a one-size-fits-all approach and that they will consult carefully with the industry before introducing any regulations under the powers that the Bill will grant.
To put it briefly, our view is that it would be highly preferable if amendment No. 435 were agreed to, because it would make it clear that there would be consultation with the industry and careful consideration of the costs and benefits before any regulations were introduced using the new powers.
In those circumstances, we believe that the fear expressed by the hon. Member for Huntingdon (Mr. Djanogly)—simply having the reserve power will result in fewer institutions moving towards voluntary disclosure—is misplaced. We believe that as long as the industry is reassured by the Government, preferably by the amendment being accepted, although the Minister could attempt it in other ways, further progress towards voluntary disclosure will continue.
The question laid down by the hon. Member for Huntingdon is, why have the reserve powers in the first place? The answer is that it is perfectly legitimate for the Government to take the view that there will be institutions and institutional investors that follow practices that are not as transparent as others, and that there might come a time when, to provide a level playing field for the whole industry, some regulation is necessary.
I hope that that time does not come and that the Government will use the powers that the Bill will grant them in a way that helps the industry to move further, although we recognise that there is a legitimate case for those powers as they stand.
I am interested in what the hon. Gentleman is saying. Does he envisage the majority of institutions following a voluntary procedure and it then becoming necessary to force a minority to come on board with disclosure, or does he think that perhaps two or three large institutions will continue to refuse to disclose when the rest are disclosing? Would that be acceptable to him?
To make things clear, I should say that I envisage there perhaps being some recalcitrant institutions, which it would then be necessary to coerce. I was about to say that the exact shape of the regulations needs to take into account industry practice, so even if it is proposed, at some stage, to coerce the final few, it will be much better if the Government draw on the experience of the industry as it has developed in the intervening period.
I hope that the Government do not evince an intention to use the regulations early. They need to consider the practice of the industry and to use that practice as a way to shape any regulations that they are thinking of introducing.
I must say first to the hon. Member for Huntingdon (Mr. Djanogly) that this is not a last-minute idea. These provisions were in the Bill when they were introduced, but were overturned in the House of Lords. We reinstated them in Committee. They have been part of the Bill from the start.
I have to say further, to all hon. Members, that a theme running through the Bill is our attempt to ensure better shareholder engagement. We think that this is part of it. The hon. Gentleman, in a very lengthy contribution, quoted every business organisation he could—the CBI, the ABI et al—and I found it extremely difficult to work out whether he was working in the spirit of what his leader said. Whether the hon. Gentleman was standing up for business or was willing to stand up to it in the interest of shareholders; I could not get it at all.
On the other hand, the contribution made by the hon. Member for Cambridge (David Howarth) was perfectly valid, and I hope to give him the undertaking that he wants. We want a practical scheme and we want to ensure that we do not have a one-size-fits-all approach. We also want a proper cost-benefit analysis and consultation, although not in the terms of the amendment. This is a good move—a reserve power that will not allow again, in the words of the hon. Member for Huntingdon, an institution that wants to maintain secrecy to do so. We do not think that is appropriate. We would rather back shareholders in this instance.
There are people who appear to oppose transparency of voting on principle. That seems to me pretty fundamental, so it was good that Lord Hodgson said in Committee in the Lords that
“shareholders whose shares are held through nominees or are managed on their behalf are entitled to know what is being done with the shares that they own.”—[Official Report, House of Lords, 25 April 2006; Vol. 681, c. GC69.]
I could not agree more. They are entitled, which means that the entitlement goes to the shareholders, not the companies. Nor is that an isolated view. The hon. Member for Huntingdon talked about a number of business interests, but John Bogle, the founder of the $500 billion Vanguard funds group, has said:
“Vanguard’s founding principles stand for the simple proposition that it is the duty of an agent to faithfully serve his principal…Viewed in this light, it would seem self evident that each Vanguard Fund shareholder has the right to know how the shares of the corporations in his or her portfolio are voted”.
I find that rather a tenuous point—[Laughter.] The hon. Gentleman laughs, but if institutions have chosen to vote in a particular way on a particular issue, I can see nothing wrong with that being open. I will deal with some of the concerns that he expressed about how openness on voting intentions or voting record, which are among the practical issues that we need to address, might lead institutions to choosing not to vote or making secret deals, which appears to be his line of argument.
Is not another argument that many institutions, such as pension funds, are very big, and it would be much cheaper for them to put the information on their website for those who are interested, rather than having to go back to all the investors in that institution?
Indeed. In discussions that we had about information being given by companies to indirect shareholders, the companies made it clear that they preferred to use e-information channels. I suppose that the hon. Member for Huntingdon would make a distinction between reports and accounts and, for instance, information on voting on particular resolutions. I cannot, however, follow the qualitative difference between the two that would lead to secrecy on one and openness on the other. I therefore agree completely with the intervention of the hon. Member for Angus (Mr. Weir).
The important principle of openness must be underpinned by clear benefits. What are the benefits? First, it can only increase the confidence of savers in the governance being exercised on their behalf by institutional investors, that they are engaging with companies and that they are doing that well.
Secondly, greater transparency makes institutional investors more accountable for the governance decisions that they make on behalf of savers, providing stronger incentives to cast votes and to do so thoughtfully. It will put more pressure on institutional investors to explain their decisions. That cannot be a bad thing. The hon. Member for Huntingdon used the argument—I cannot remember whether it was from the ABI—that this would encourage uninformed voting decisions. How can that be right? An institution that chose to vote unthinkingly would be exposed to ridicule. Why would it choose to do that, when delegating decisions to a fund manager or using a voting advisory service are simple options to ensure considered voting?
Thirdly, greater transparency will help institutional investors manage potential conflicts of interest arising from voting decisions, thus deterring decisions that might benefit the institutional investor rather than savers. Such conflicts can influence behaviour. Research by the university of Michigan using data acquired under the American disclosure rules found that business ties between the institutional investor and a company made it more likely that the investor would vote with the company’s management. That is natural, but not right, and transparency would reduce that risk.
Fourthly, greater transparency enhances shareholder engagement between institutions and investee companies, which is one of the key objectives of the Bill. Again, it has been argued that that will harm behind-the-scenes engagement. Of course, some discussions are more effective behind closed doors. But if a company knows beforehand why an institution is not supporting a resolution, how does disclosure after the fact of the vote cause damage? And if it did so, why are a dozen major UK institutional investors, including institutions such as the Pru and Standard Life, making voluntary disclosures of their voting records?
Of course, there are important issues to deal with in designing the disclosure regime. I accept that it must be cost-effective, and we are confident that it will be. The disclosure data in question are already available, as required by the industry’s own best practice guidelines. Institutions that already publish voting records, such as Co-operative Insurance Services, confirm that the costs are not excessive, and John Bogle said that they were a “drop in the bucket”. That might be why there is a strong existing trend towards voluntary disclosure, which the hon. Member for Huntingdon accepted. In the UK, of 35 major fund managers, the number making voluntary disclosures has increased from two in 2003 to 10 in 2005, and two more have now joined them. Alternatively, the reason might be pressure from clients. A recent survey among pension fund trustees found nine out of 10 agreeing that fund managers should publicly disclose their votes.
I am also encouraged by the growing number of international precedents. The US in 2003, followed by Canada, have mandated voting disclosure. In the US, that covers 3,700 mutual funds with approximately $2 trillion of investments, and it has been implemented without the dire consequences that the hon. Member for Huntingdon predicts for the UK. Action is also being contemplated in South Africa and France.
During the passage of the Bill, it has been interesting to note that fewer people are saying that disclosure is wrong in principle. I do not think that the hon. Member for Huntingdon is saying that. Increasingly, people are saying, “It’s a good thing, but you don’t need the power, it’s going to happen anyway”. Even the industry may be moving that way, if the vigorous debate on a voluntary disclosure regime is anything to go by. But the argument goes the other way. If it is going to happen anyway, why is there all this angst about taking a power? The positions adopted by the Opposition and others are inconsistent.
In the Government’s view, taking the power is still necessary. While we are keen to see how market practice evolves before considering a mandatory regime, we need back-up if the voluntary movement does not deliver. Of course, there will be a full consultation and cost-benefit analysis, and parliamentary approval through the affirmative procedure, to ensure that any mandatory regime is proportionate. The case for disclosure of voting is clear. We want to work with all stakeholders to make sure that we achieve that sensibly and practically, at least cost. This power lets us do that, and I ask the hon. Member for Huntingdon to withdraw his amendment.
Amendment No. 435, to which the hon. Member for Cambridge referred, would require the Government to consult and undertake cost-benefit analysis on regulations. I have already made clear that we will do that. Do we need a provision in the Bill that tells us to do that? Our view is that we do not. Consultation on such proposals is in line with normal practice and Government guidance. We have made a formal commitment—I have done so today two or three times—to full public consultation. In the circumstances, we think it unnecessary to introduce such a requirement in the Bill. I note that an amendment in the other place that would have had a similar effect was withdrawn after the Government gave their assurance.
New clause 15 would require the institutions to which the disclosure applies to disclose on a website whether they had exercised voting rights attaching to shares. They would have to make the disclosure in respect of each opportunity to exercise such rights. The new clause suggests that we share common ground on the principle of introducing provisions governing institutional investor voting, and we welcome that acknowledgment. We also agree with the logic behind the requirement for website disclosure. As was suggested by the hon. Member for Angus, that may be the best way of ensuring that disclosure is cost-effective. However, the new clause interacts with clauses 1241 to 1244, and two problems may arise.
First, the new clause makes compulsory the disclosure of certain information on the exercise of voting rights. That means that the Government would not have flexibility to adjust the requirement—as suggested by the hon. Member for Cambridge—even if that was supported by the results of consultation and analysis. Secondly, in the absence of clause 1244, the new clause would limit disclosure to whether or not voting rights had been exercised. The Government would not be able to require the disclosure of information about how the votes had been cast. That would prematurely restrict the scope of the Government’s flexible enabling power before we had consulted on the best way in which to achieve a proportionate disclosure regime.
I believe that the knowledge of how votes were intended to be cast is important to understanding how the institutional investor is exercising ownership responsibilities. However, I do not want to prejudge the outcome of the consultation to which I have committed us.
I do not consider the new clause, as drafted, to be appropriate. I hope that the hon. Member for Huntingdon will not press it or his amendments to a Division, and that he will support the more flexible and principled route that the Government have taken.
The Minister’s final comments suggested that she accepts the principle behind new clause 15 as long as there can be consultation beforehand. Perhaps she will come up with some suggestions to be dealt with in the other place.
Of course we in the Conservative party wish to encourage transparency. I said that quite clearly, and I think the Minister acknowledged it. I also think we have both acknowledged that the industry is moving in the right direction without the need for a Bill. Although I disagree with none of the Minister’s reasons for saying that institutions should be open, we do not feel that they should be forced to accept the provisions of clause 1241. The Minister mentioned shareholder engagement, and I tried to explain earlier why we think the clause could damage that. Institutions that must say how they voted and do not wish to do so will simply not vote. The impact of the clause could be purely counter-productive.
We note that the Liberal Democrats have become a little less forthright in their opposition to the clause than they were in the other place or in Committee. Having said that, I note their support for amendment No. 435, which I wish to press to a Division.
I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
Power to require information about exercise of voting rights
Amendment proposed: No. 435, page 604, line 4, at end insert—
‘(7) Regulations under this section shall be subject to public consultation prior to publication, and shall be the subject of a cost benefit analysis.’.—[Mr. Djanogly.]
Question put, That the amendment be made:—
Disclosure of information under the Enterprise Act 2002
With this it will be convenient to discuss the following amendments: No. 436, in page 606, line 10, after ‘Kingdom’, insert
‘or, if such proceedings relate only to intellectual property rights, in any jurisdiction’.
No. 437, in page 606, line 35, leave out
‘annulment in pursuance of a resolution of either’
and insert ‘affirmative resolution of each’.
No. 438, in page 606, line 36, at end insert
‘and after prior public consultation on the terms of a draft statutory instrument’.
The amendment will permit disclosure to be made for civil proceedings overseas. In Committee, I agreed to consider a useful proposal made by the Opposition to allow disclosure for overseas proceedings by intellectual property rights holders. I agreed to consider this, as I recognised that brand owners and those with an interest in intellectual property rights would have a particular interest in enforcing their rights overseas. However, the disclosure provisions in clause 1245 have been drawn up on the basis that business and consumers are treated equally. Therefore, I asked my officials to discuss further with a range of stakeholders whether we should amend the clause to enable disclosure for overseas civil proceedings with respect to business and consumers and not just limit it to IP rights holders.
In general, the feedback from our consultation with stakeholders was positive in supporting disclosure provisions for overseas civil proceedings for business and consumers, and we agree with that view. Consumers are increasingly likely to purchase goods and services from overseas, so it makes sense to allow them the information that they need if they choose to seek cross-border redress. I recognise that businesses have some concerns about widening the gateway, but I simply point out that, as with the existing gateway for overseas disclosure, we have excluded from what may be disclosed sensitive information provided in connection with competition inquiries.
On the basis of that explanation, I hope that amendment No. 740 will be accepted, so we will not need to consider amendments Nos. 436, 437 and 438.
Moving on to the disclosure of information under the Enterprise Act 2002, I shall speak specifically to amendments Nos. 436, 437 and 438. The amendments come from the CBI and are put forward on a probing basis. The proposed new section 241A in clause 1245 provides wide powers to amend part 9 of the 2002 Act in respect of all kinds of legal proceedings. That is because, in Committee, the Government wanted to include consumer rights within the gateway. The CBI opposed that, but there was general agreement that part 9 should extend to information concerning intellectual property rights and proceedings to counter the ever-increasing problems of counterfeiting and piracy.
The CBI also told us that it strongly opposes any further reform that would weaken the part 9 safeguards and seriously undermine business confidence in the arrangements provided for in the Enterprise Act 2002. The consumer and competition enforcement regime rests on the fact that a wide range of information is provided to public authorities by business on the basis that it will not be disclosed. In general, the gateways work well and there is no justification, the CBI says, for making any wider changes than those needed in respect of infringements of intellectual property rights where genuine problems have been identified.
Proposed new section 241A(1)(b) requires amendment so that it refers to intellectual property proceedings “in any jurisdiction”—not limited to the UK. It is often the case that counterfeits found on the UK market have been imported. For brand owners to take effective action to reduce the trade in counterfeiting and piracy, they need to be able to pursue everyone in the supply chain, including the manufacturer. That may involve criminal, administrative or civil action, depending on applicable local laws. It is also essential to be able to use such information to feed the worldwide intelligence-gathering exercise that is required. However, exclusion of the limitation to the UK is needed only in respect of information relation to IPR proceedings where there are specific international problems and obstacles to pursuing counterfeiters resulting from the fact that information gained in this country cannot be disclosed overseas. That is not the case in other areas, and the CBI strongly opposes any lifting of the limitation on overseas disclosures in other circumstances.
As the Minister said, she took our comments into account in Committee and undertook to discuss the issue with stakeholders over the summer. She has just told us that that is what happened. We therefore take note of Government amendment No. 740. If an amendment is to be made, however, we point out that some organisations, such as the CBI, wish to limit the provision to intellectual property rights, as suggested in amendment No. 436.
We firmly believe that the secondary legislation proposed in clause 1245 should be subject to full prior public consultation and to an affirmative resolution in both Houses—rather than the negative resolution currently proposed—to ensure full debate and parliamentary scrutiny. Will the Minister tell us the level and type of consultation that she intends to undertake on these provisions?
Briefly, we take the same view as we did on the previous group of amendments. In principle, we favour the Government view on extending the permission—it is only a permission, not a duty—to disclose information in civil proceedings abroad in favour of consumers, rather than just litigants in intellectual property disputes. That strikes us as right in principle. The hon. Member for Huntingdon (Mr. Djanogly) has a point about the importance of proper consultation on the detail of any regulations, but we accept that the result of such consultation will be very similar to the consultation undertaken over the summer on these very provisions. We take the Government’s rather than the Conservatives’ view on that.