I draw the attention of the House to my entry in the Register of Members’ Interests, which lists me as a member of the Union of Construction, Allied Trades and Technicians. I also chair the UCATT group of MPs in Parliament. I am grateful to be granted this Adjournment debate, because it covers an extremely important issue—the number of corporate convictions in the construction industry following fatal injuries. I have three points to make. First, I want to highlight the trend, shown in the report of the Centre for Corporate Accountability, of a fall during the period of the study on the number of corporate convictions following fatalities in the construction industry. Secondly, I want to draw attention to the unacceptable rate of fatal industries in the construction industry, and thirdly, and more importantly, I want to suggest how we might work together to ensure a cohesive health and safety culture in the construction industry.

The study by the CCA is entitled “Levels of Conviction and Sentencing Following Prosecutions Arising from Deaths of Workers and Members of the Public in the Construction Sector” and it examined the figures for 1998 to 2004. I do not want to go into methodology, or the rationale of the statistics. The authors studied the number of deaths in that six-year period and the number of corporate convictions. I emphasise that I am talking about corporate, not individual, convictions. The main finding of the report, which has been questioned in some areas, was that in 1998 convictions followed 42 per cent. of fatal injury cases, whereas by 2004 the rate had dropped to 11 per cent. That is quite a change and has caused great concern among trade unions in the construction industry.

There are no statistics relating to the study for the years after 2004. That is because it generally takes about three years to complete the legal process. Another major finding of the report, and one that I think is a cause for concern, is the great disparity in fines between UK regions. The study includes Scotland and Wales.

Not only the deaths of workers, but the deaths of members of the public on building sites, were included in the study. I understand that that is because the statistics on the Health and Safety Executive website include those for both workers and members of the public. Any death causes distress to the family, and that is all the greater when, following a fatal accident, the legal process does not provide redress. That is a major point. Families who believe that there has been no proper legal redress feel that their loved one is not valued in the eyes of society as other people are. That can lead to people becoming alienated from the democratic process.

Because of the way in which working practices are arranged in the construction industry—it is a complex pattern—some companies, usually subcontracting companies, have been known to go into liquidation to avoid prosecutions by the Health and Safety Executive and to avoid paying compensation. I draw the attention of the House to the recent case of Michael Parr. It involved a company that went into liquidation to avoid a fine from the HSE and to avoid paying the widow compensation. In August 2004 Michael Parr, aged 54, was fatally injured in an accident on the Land Rover site at Coventry. He was working for a company called Haydens which was doing subcontract work for the main contractor on the site. Following an investigation the HSE made it known that it intended to prosecute the company. To avoid prosecution, and presumably to avoid paying compensation to the widow, the company went into liquidation. The case was then brought against the main contractor, but because that contractor disputed liability it was finally dropped.

That case exposes the vulnerability of individual workers and their families in the face of the widespread subcontracting arrangements in the industry. I believe that it also illustrates the need for a proper employment framework in the construction sector. That is all the more important with the increase of migrant labour on construction sites. I shall return to that point because there is a feeling among the unions on construction sites that greater casualisation of work on building sites is under way.

There has been some disagreement about the statistics in the CCA report. However, the data came from the HSE’s database, which was accessed by the CCA in January 2007. To me, the important thing is the drift that can be detected in the statistics. That is worrying, and it is the basis for this morning’s debate. In a previous statement, the HSE estimated that management failure played a significant part in 70 per cent. of deaths at work. Given that according to the statistics the number of corporate convictions following a fatal injury has fallen to 11 per cent., the CCA can be forgiven for drawing attention to the matter as it has. The issue needed to have attention drawn to it.

I am told that, in the recent years that are not covered by the report, corporate convictions have started to rise again. Moreover, the HSE is aware of the complex working arrangements in the construction industry, and knows that there is a need to ensure that prosecutions for breaches of health and safety are kept up, if we are to deter employers in that complex matrix of working relationships from taking short cuts that have tragic consequences.

I congratulate my hon. Friend on securing the debate. He is talking about prosecutions and convictions for accidents and fatal accidents. Does he agree that much more needs to be done in the industry to ensure that there is on-the-job training for apprentices and people who come into the sector? There should be more emphasis on such training in order to reduce the number of such accidents.

I am grateful for my hon. Friend’s intervention. It is important to do something positive in the construction industry to drive a health and safety culture through the sector, and training is a main plank of that. In 2000, the Deputy Prime Minister set up a summit with the aim of providing better training opportunities and driving the health and safety culture forward. Seven years later, there have been some improvements, but they have not been driven through the whole industry. We therefore need a summit to pick up where the last one left off and to revitalise the health and safety initiative.

I realise that not all cases will require prosecution, but the fall in the number of corporate convictions is of great concern. The CCA recently wanted to validate some work that it was doing. Having heard that the HSE had carried out an internal audit, it made a freedom of information request to obtain details of that audit. I am told that the audit showed that the HSE recognised that there was a serious gap in its enforcement procedures. The audit also estimated that the HSE should be prosecuting almost three times as many corporate cases. UCATT tells me that if the HSE had been doing that, convictions would have been secured in as many as 60 per cent. of construction industry cases in the relevant period—1998 to 2004—instead of the actual figure of 20 per cent.

It is clear that convictions are related to the health and safety culture. The HSE takes the view that we need to ensure that there are prosecutions if we are to have a robust health and safety culture. That is why we need to address the regional disparities between fines upon conviction. If a company is fined £50,000 in one part of the country after a fatal accident in which there was a breach of health and safety rules, but a company is fined just £18,000 in another part of the country, that is a great concern.

My hon. Friend the Member for Caerphilly (Mr. David) recently promoted a private Member’s Bill to raise the standard of fines, but it was opposed by the Conservative Opposition. Sadly, that opportunity to raise fines for breaches of health and safety was, therefore, missed. We must now ensure that the Government pick up that issue; I hope that the Minister will take it forward to the relevant Department. We need a Bill to increase the fines for breaches of health and safety, particularly when there has been a fatal accident.

I congratulate my hon. Friend on securing this important debate. I am interested in his comments about companies that go into liquidation to avoid their responsibilities. One of my constituents, Mrs. Karen Stupart, tragically lost her husband in a building site accident in the mid-1990s. The employer was subsequently charged and convicted of offences under the Health and Safety at Work, etc. Act 1974, but when Mrs. Stupart and her two children were awarded £250,000 in compensation, the company immediately went into liquidation. Does my hon. Friend agree that the way forward might be to legislate to introduce a scheme, not unlike the Pension Protection Fund, to ensure that employers pay into a central fund so that even if an employer goes into liquidation, people who are awarded compensation will receive it? Mrs. Stupart has yet to receive a penny of that £250,000.

I am grateful for that contribution. I agree that something positive needs to be done. Companies should all have to contribute to a fund, so that even if they later try to escape liability by going into liquidation, the fund will make good and pay compensation to people who have been injured, particularly in cases involving fatalities as a result of health and safety breaches. We need to consider that idea seriously.

My next point is about the appalling level of accidents in the industry, particularly fatal ones. The construction industry is large, employing 2.2 million workers and contributing more than 9 per cent. to the UK’s gross domestic product. It is a modern industry in which technology is applied, yet we have an appalling record on accidents.

UCATT recently expressed concern about the ongoing casualisation of the industry. It estimates that up to a third of the workers who are employed in the industry could be described as being bogusly self-employed. If a third of 2.2 million people are bogusly self-employed, that is a great loss to the Treasury. About four or five years ago, UCATT commissioned a study on bogus self-employment, which was drawn up by a university lecturer. The study suggested that the loss to the Treasury could be more than £2.5 billion. The Treasury has since responded, and a new scheme to tackle bogus self-employment is being rolled out in the construction industry, but UCATT thinks that the scheme will be less effective.

We need UCATT and Treasury officials to sit down together and to consider how we might make the scheme much more effective, because it has terrific implications both for Treasury revenue and for health and safety culture in the industry. It has been suggested that, if we could tackle bogus self-employment, it would bring in enough additional revenue to the Treasury to pay for all the Olympic stadiums—that is the size of the problem.

On that point, one of the biggest building projects will be for the 2012 London Olympics. Has my hon. Friend seen comparisons between the approach in Australia, where they used a more direct employment model, and that in Greece, where they used subcontractors and obscure contracting arrangements much more? There were far more construction deaths in Greece than in Sydney. Should that not inform the model that we adopt for building the Olympic stadiums in London?

I am grateful to my hon. Friend. I, too, have seen the statistics. They show that more deaths occurred while building the stadiums in Greece than while building those in Australia, because the Australians applied an orderly employment framework. I could suggest to him an example closer to home: the building of terminal 5. It is being built within a negotiated employment framework, delivered on time and there has been just one fatality during the entire construction period. The kind of procedures that are in operation at terminal 5 must be replicated when we build the stadiums for the 2012 Olympics.

Bogus self-employment is a difficult issue to deal with, and it undermines the health and safety culture. Between 1998 and 2004, which is the period of the study that is the basis of this debate, there were 504 construction fatalities. I am told that last year’s fatality figure for the construction industry will be 78, which compares with 59 deaths the year before. In other words, we are talking about a 32 per cent. increase last year. That is just not good enough and we must take positive action to ensure that we drive through the health and safety culture.

In dealing with my third point, I shall suggest to the Minister that we might do a number of things to improve the health and safety culture in the construction sector. First, as I mentioned, we need to ensure that the summit on the construction industry that the Deputy Prime Minister arranged is picked up and taken forward. In so doing, by bringing together all sectors in the industry—the insurance companies, the trade unions, the employers and the solicitors—we could emphasise the need to ensure that we focus on health and safety training in the industry. I hope that the Minister will suggest to the Secretary of State for Work and Pensions, who I know has been interested in some of the construction issues, that the Department ought to put on another summit on health and safety in the construction industry. That would be a way of revitalising the health and safety initiative, which seems to have fallen since 2002.

Secondly, I have no doubt that my hon. Friends will refer to the regional statistics on sentencing, which show that we need to do something positive to ensure that the fines for breaches of health and safety are increased. I hope that the Minister will make the Solicitor-General aware of the concerns and of the need for legislation to increase the fines for health and safety breaches, particularly those following a fatal accident, be it in construction or in industry generally.

Thirdly, there is a need to arrest the fall in the Health and Safety Executive’s budget. By 2008, the HSE will have lost 17 per cent. of the staff that it had in 2002, when comparing like with like. The pressure is set to get worse in this autumn’s comprehensive spending review if the Department for Work and Pensions passes on the 5 per cent. year-on-year cut. Again, the Minister may wish to ensure that that is brought to the attention of the Secretary of State and to investigate what may be done in the Department to ensure that those cuts do not occur.

My fourth suggestion deals with the Corporate Manslaughter and Corporate Homicide Bill, which is about to be made law. I hope that it is, because I support it and believe that it will make it easier to prosecute large and medium-sized companies for manslaughter following a death. There is evidence to suggest that the Bill could be made even more effective, for example, by giving company directors duties under it. I hope that the Minister will draw the appropriate Department’s attention to the fact that we need a change in the Health and Safety at Work, etc. Act 1974 to put duties on directors. Such duties would strengthen the Bill and would help to drive through a health and safety culture, particularly in the construction industry.

Fifthly, in the face of the increasing casualisation and fragmentation of the industry, we need to ensure greater protection for workers, particularly the migrant workers who are coming on to construction sites. In that context, will the Minister consider extending the Gangmasters (Licensing) Act 2004 to the construction industry? I recall that my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) promoted the private Member’s Bill that later became that Act. It is an important piece of legislation, which is now in need of being extended to the construction industry.

Finally, I should draw the House’s attention to the fact that over the past decade, 20 young people between the ages of 16 and 19 have been killed on construction sites. In the face of that, the Institution of Occupational Safety and Health and the HSE got together to produce a hazard awareness course for year 10 pupils. Will the Minister take that up again with the Secretary of State for Education and Skills and ask whether we could make the course mandatory and a part of every curriculum?

In conclusion, I am aware that the Construction (Design and Management) Regulations 2007, which were again opposed in the first instance by the Conservative Opposition, focus on effective planning and risk-management. Given that one worker is killed and 70 are seriously injured every week in the construction industry, it is clear that more needs to be done. The CCA report has uncovered a worrying trend, and the concerns of UCATT, which is the main union in the construction industry, deserve to be addressed in a way that will ensure that positive proposals are put forward to drive through the construction industry a health and safety culture that will protect workers.

rose—

I advise hon. Members that I intend to start the winding-up speeches at 10.30 am.

I congratulate my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) on securing this crucial debate. He has a proud track record of campaigning on issues such as this, and I am sure that the House would like to recognise his efforts in this regard, as many in the trade union movement do.

It is worrying that despite the legislative measures passed by this Government and this Parliament to bolster health and safety in the workplace, the number of fatalities in the construction industry remains so high. The dangers for those in the industry are greater than for those in any other industry: they are seven times more likely to die at work than workers in any other industry and one in three of all work-related deaths occur in the construction industry. No disrespect to our armed forces or emergency services, but if the same number of fatalities was to occur in those professions, there would rightly be a public outcry. Parliamentarians would be asked to solve the problem and we would be looking for solutions. Unfortunately, when someone dies in the construction industry—it sometimes happens daily—it is unheard of and even the press and media no longer report those untimely deaths.

Working in the construction industry is dangerous. No one can ever be 100 per cent. safe all the time, but it is not unreasonable for those in that line of work to expect and to have the right to be protected from unnecessary danger caused by negligence or cost-saving. As with all elements of a construction project, the safety of workers and the public must be managed. Inclusion of safety issues at the start of a project is essential to allow for safety to be considered at the design stage and throughout the construction and operational phases. Unfortunately, that does not always seem to be a priority for those at the top of the construction industry, and for that reason bodies such as the Health and Safety Executive exist to monitor safety practices on site and to take appropriate coercive or legal action when necessary.

Reference has been made to the 2012 Olympics, which is a great opportunity for the construction industry and its skills. However, I hope that the Government will not construct the site on the deaths of people working there. When companies tender for contracts, I hope that their health and safety record and that of their subcontractors is taken into account.

We are here today because of concern among the public, trade unions and politicians about inadequate safety. The increasing number of accidents and fatalities is alarming, and the Union of Construction, Allied Trades and Technicians published a report in April this year which highlights the fact that only 21 per cent. of the 504 deaths in the construction industry between 1998 and 2004 were successfully prosecuted. Coupled with a drop of 75 per cent. in the number of prosecutions following deaths in the industry, it is clear that the Health and Safety Executive has not provided the necessary monitoring and enforcement action to safeguard construction workers, who continue daily to face danger and death on British building sites. It is already clear that too few workplace injuries are investigated and too few companies are ever visited by the Health and Safety Executive. That situation can only worsen when, this time next year, the Health and Safety Executive sheds almost 400 inspectors.

Furthermore, the UCATT report also refers to an internal audit carried out by the Health and Safety Executive, which uncovered the lack of a coherent application of the Health and Safety Executive's criteria for pursuing prosecutions against companies that had placed their employees’ lives in jeopardy. Aside from the obvious concern that violations of health and safety regulations are going unpunished, evidence has emerged of widespread variations in both convictions and sentencing throughout the United Kingdom. That has allowed companies to flout health and safety regulations with impunity, cut costs and endanger people's lives. What is needed is a cohesive approach in all areas of the Health and Safety Executive's operation from inspection to the issuing of improvement and prohibition notices, and particularly the prosecution of those guilty of putting workers’ lives at risk.

During my time in Parliament, I have supported efforts to make companies and particularly individuals responsible for the safety of their employees. It is clear that despite the Government’s best efforts, the current punishment whereby companies are fined for violating health and safety regulations is not a sufficient deterrent. If the directors of those companies were hit where it hurts—in the wallet—and/or faced jail terms, they would take greater care and consideration of employees' wellbeing in the workplace.

The Health and Safety Executive has estimated that management failure contributed to or was directly responsible for 70 per cent. of deaths in the construction industry, and I am sure that my colleagues will agree that that is unacceptable and outrageous.

My hon. Friend did a great deal of research when he presented his private Member’s Bill. Has he given any thought to how that Bill might be applied to the construction industry? The unions are witnessing migrant labour coming and working in similar conditions as those in agriculture where they work under a gangmaster. Could the Gangmasters (Licensing) Act 2004 bring greater protection in construction?

I thank my hon. Friend for his intervention. He is absolutely right. The gangmaster legislation covers only those working in the agriculture industry. There is clear evidence that gangmasters are now moving from agriculture to the construction industry and that is a major issue. It is time we reflected on and reviewed how effective the legislation is, and whether we could extend it to the construction industry.

Things seem to be going from bad to worse. In the past year, there has been an increase of 32 per cent. in the number of construction workers killed over the previous year. That is a worrying trend, and I think it can be traced to the expansion of the European Union which has led to an influx of migrant workers from eastern Europe. I stress that I neither believe nor suggest that the increase in accidents results from foreign workers’ negligence or inability to do the job, but some of them may not have a firm grasp of English and are being put to work on sites without a full understanding of the health and safety practices needed to ensure their own safety and that of their fellow workers and the public. Health and safety must be factored in at every stage of any construction project, and in the global age that should include a multilingual work force.

There is some validity in ensuring that companies hiring staff from outside the UK require all their staff to undertake a skills audit to assess performance, from both a task and process management perspective. Adopting such a practice would ensure that only workers who are appropriately trained and accredited to perform the job they are employed for and who are fully versed in all aspects of site health and safety are working on Britain’s construction sites.

As a trade unionist, I have fought all my adult life to make workplaces safer, and as an MP I work with my parliamentary colleagues to continue that fight. If the construction industry cannot bring itself to protect workers, Parliament must step in and make it happen.

I commend my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) for securing this debate. As we all know, in stature he may not be the largest person in the world, but in Parliament he is a giant in health and safety matters, and a credit to us all. It is typical that he managed to secure this debate.

I praise my trade union, UCATT, and I must declare an interest. I have been a member of UCATT for more than 25 years, and was branch president for more than 12 years, so I know the work that can be done to secure health and safety in the workplace. Its report, horrendous as it is, would be a lot worse but for its work in the workplace. It is self-evident and we all know that the building and construction industry is dangerous. My hon. Friend referred to that fact. One can look at the military situation weekly, and people are in uproar, the press are furious and there is outrage in Parliament when there is a death in Iraq. Large sections of the press, of Parliament and of the community say that we should withdraw from Iraq to save the lives of soldiers. However, what do we also see weekly? Building workers are killed through the negligence of their employers, and the only furore comes from the families and friends of those workers—no one else.

One would have thought that in light of those facts and figures, especially those that the report highlights, we would want to do something about the industry, making health and safety central to its ethos. Sadly, however, the industry does not want to do so. Once again, building industry employers put profits before people.

The report sets out in graphic detail how society, the Government and the industry are letting workers down. In the past six years, there have been more than 500—504—deaths. What is more—and what makes the situation worse—the perpetrators of those deaths are walking away almost scot-free, sometimes with paltry fines of as little as £1,000; that is, if they are convicted.

Does my hon. Friend agree that it is a disgrace that the official Opposition recently blocked a private Member’s Bill introduced by my hon. Friend the Member for Caerphilly (Mr. David), which would have increased the penalties for breaches of health and safety legislation?

Anything that Parliament can do to help the cause of health and safety in the workplace should be supported by all parties, because we are talking about deaths. We would not stand for deaths anywhere else in society, so we should not stand for them in the workplace. I agree with my hon. Friend; he makes a very valid point.

The report highlights three areas. First, it highlights the lack of justice and the fact that the investigation and conviction period can be long drawn out. The dead person’s family has to go through murder and pain during the investigation, and at the end of the day, little if anything is done. The report highlighted the fact that in the past year, only one in 10 cases brought about a conviction.

Secondly, the report highlights the level of disparity between regions. Is it not a nonsense that if a worker in the north-east of England is killed at work on a construction site owing to the negligence of his employer, the employer will be fined £15,000 on average, but if the same thing happens in the south-west of England, the records show that the employer will be fined £60,000 on average? That is a nonsense, and something must be done about it. It is a nonsense that a worker can be more valuable in one part of the country than in another.

Thirdly, the report highlights the need for a change of law. In 2005, I introduced a private Member’s Bill on directors’ duties. Unfortunately it was not successful, but my view remains the same: until directors are given direct responsibility for health and safety in the workplace, such deaths will continue. The issue will remain out of mind and out of sight, and people will say, “If it is not my responsibility, I have nothing to do with it.” Changes must be made.

The construction industry is massive: it comprises about 10 per cent. of the economy, it makes billions of pounds of profit every year for employers and it employs millions of workers. The industry is very important, but one fact that comes out of the report is that we are letting those workers down. There is no doubt that a change of law is required to make directors directly responsible for health and safety in their workplace.

It is an excellent report, and all credit must go to UCATT. The report shows that it is time to ensure safety in the workplace, to bring about justice through investigations and the courts, and to place responsibility in the boardroom where it should be and where it should have always been. The Government should act now.

First, I apologise to you, Dr. McCrea, and to my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham), who presented the debate, for missing the first 10 minutes. I was actually late due to train delays, and as frustrating as they are, it is better that the trains are driven safely than that we have an accident. The same should apply to all industries, including the construction industry.

I congratulate my hon. Friend on securing the debate and on his excellent speech. It is an important subject, and the UCATT report that motivated the debate is splendid and informative. He drew attention to that fact, and he has an outstanding record on health and safety campaigning in Parliament. My hon. Friend the Member for Jarrow (Mr. Hepburn) called him a giant, and I echo those words.

I sit on the parliamentary panel of the building trade union, UCATT, but there is no personal financial gain in that situation, and my concern for better health and safety long predates my membership of the panel. A number of hon. Members have a common interest in those situations.

The UCATT report, which has been referred to, considered:

“Levels of conviction and sentencing following prosecutions arising from deaths of workers and members of the public in the construction sector.”

The report, which was published last month, showed that from 1998 to 2004 there were 504 construction deaths, only 21 per cent. of which resulted in a conviction. In that six-year period, prosecutions by the Health and Safety Executive following construction deaths fell by 75 per cent. That is an appalling set of figures and an appalling trend. In 2006-07, construction deaths rose by 25 per cent. In the current year, which started in April, there have already been 11 deaths, one of which was the death of a 15-year-old child. We are only in May, and those are serious matters for concern, but the HSE is prepared to shed 300 inspection posts, which seems to run counter to the trend of the problem.

The Corporate Manslaughter and Corporate Homicide Bill, which I welcome and support, is before the House, and I hope that it will soon be an Act of Parliament. I sat on the scrutiny Committee, and I voted in favour of company directors being directly accountable for health and safety matters. However, it looks as though that provision will be squeezed out of the Bill, so the reliance will be back on fines. I shall address the level of fines in a moment, because the UCATT document mentions them and they are relevant.

It is perverse that company directors can go to jail if they are found guilty of financial irregularities, but that if their direct actions or their neglect leads to the death of a worker, there cannot be a prosecution and they will not be sent to jail. It is wrong. I come from east London, and in my area one of the current stories is about a fine of £5.5 million that has been imposed—admittedly by the Football Association—on West Ham football club for a couple of player transfers. The club has been fined £5.5 million, when employers are invariably fined just a couple of hundred pounds for the death of a worker, which seems perverse.

My hon. Friend the Member for Barnsley, West and Penistone made the point that one of the reasons why deaths on construction sites are so high is our culture of subcontracting and self-employment, which he called bogus self-employment. Alan Ritchie, the general secretary of UCATT, gave a good explanation why that ricochets into deaths in Tribune on 27 April:

“Despite the strong health and safety rules in place, the casualised nature of the British construction industry makes it an unnecessarily dangerous place in which to work.

If Britain’s employment practices were in line with the rest of northern Europe, then only 5 to 10 per cent. of our construction workers would be self-employed. But in this country the figure is around 50 per cent. These are not people who have specialist skills, tools or equipment. The vast majority of self-employed construction workers work in much the same way as normal workers.”

He said that such workers are indeed bogus, because they do jobs and take orders, and are not in any way specialist. He also said that

“sites relying on bogus self-employment are less safe and suffer a higher number of casualties than sites which have direct employment.”

Part of the reason for that is that such workers have no representation for health and safety, but the trade union does a good job in demanding health and safety on site.

My hon. Friend has mentioned the fact that trade union-organised sites are generally safer than non-organised sites. I can attest to that, as a member of the GMB and a former safety rep. Many construction companies employ just five, 10 or 12 people and are therefore exempt from the legislation covering trade union recognition. Does my hon. Friend agree that that is a loophole that should be closed?

I do, actually. Health and safety is so important that there should be the right to trade union representation in those small firms, and certainly on health and safety matters. Even more than that, I would favour trade union representatives playing a role in inspections. They should also have the strength of the law on construction sites or any other site, to back them up if they withdraw their labour, for example, because something is not safe. Personally, that is what I would favour.

Mr. Ritchie continued:

“However good the intentions of the contractor on issues of safety, these get weakened or lost as they pass down the chain of command to a plethora of companies which may only be on site for a relatively short period of time. In such circumstances, it is unsurprising that more accidents happen.

Finally, if a contractor does not have their own workforce and does not know the people working for them, the safety imperative is inevitably reduced.”

That reinforces the point that subcontracting, bogus self-employment and the plethora of companies involved mean more deaths and less safety on sites. We need to move in the direction of more direct employment.

I want to use the last few minutes that I have in this debate to refer to the UCATT report directly, and in particular to its comments about London. Before I do so, however, I note the trend, identified right at the start of the report, on page 3, in the number and percentage of construction sector deaths that resulted in a conviction by year. To focus on just three of those years, in 1998-99 there were 69 deaths and 29 convictions, which meant a rate of convictions per death of 42 per cent; in 2000-01, the number of deaths increased to 113, while there were 27 convictions, resulting in a decrease in the rate to 25 per cent.; and in 2003-04 there were 75 deaths and eight convictions, which meant a rate of just 11 per cent. That trend is incredibly alarming, and it shows that the rate of convictions is going right down.

In the six-year period from 1998 to 2004, there were 75 deaths in London and 19 convictions, with a conviction rate per death of just 25 per cent., which is again very poor. Over that six-year period in London, the total fines imposed on defendants following a death came to £935,500 and the number of defendants convicted following a death was 25, which worked out at £37,000 per defendant found guilty of an offence. That is low, although in certain parts of the country, such as the north-east, which my hon. Friend the Member for Jarrow mentioned, the rate is half that.

The report gives details on some of the cases. In 2000, in a case involving Galliford Try Partnerships, a child died from a fall while playing on scaffold during the refurbishment of occupied housing association flats, because the principal contractor had

“failed to identify and fence foreseeable access route from public walkway over parapet onto the adjacent scaffold.”

The fine, for the death of a child, was just £40,000. In 2001, in an accident involving Dave O’Keefe and Co., the report said:

“Death took place when large slab of masonry from base of foundation fell on workers who were digging underpin excavation. Lack of support precautions. Foundations known to contain matrix of rotting wood. Lack of proper risk assessment and method statement.”

The fine for that category of neglect was just £25,000. Also in 2001:

“A tower crane driver, fell whilst climbing the access ladder to his cab. The ladder up to the crane had a number of defects.”

The fine for that was £5,000. Another example said:

“Deceased fell from a platform due to an insufficiently secured, extended ladder.”

The fine for that was £8,000. The fine for another accident—exactly the same sort of accident, actually—was even worse at just £5,000.

Another example said:

“Fatal fall of self-employed heating engineer, assisting in lifting of boiler unit.”

The fine in that case was £52,000, but that is very low—carrying boilers was that worker’s job, so one would have thought that health and safety would have been in place. Another example said:

“One scaffolder…killed in fall, another…broke his leg when a…scaffold collapsed whilst it was being dismantled. Major…risk to public. Immediate cause was the overbalancing of the rig during the lowering of counterweights”.

The fine for that disaster was just £30,000. In London, Mr. Edward Smith died

“following a fall of 2.4 m. The fall occurred whilst he was attempting to access a scaffold using an inappropriate ladder, no appropriate ladder access had been provided.”

The fine for that was £7,500. My last example from the report said:

“Peter Coldspring, a sub-contract painter and decorator was electrocuted whilst carrying out refurbishment work in a flat. Failure to ensure electricity was isolated during works.”

The company to which he had been contracted was fined £30,000 in that case.

Those fines are pathetically low. Not included in the report are the profits that those companies make, not only overall, but on those individual jobs and contracts. Their profits far exceed the fines, which are little more than a pinprick. Those fines must go up significantly if they are to have any deterrent value for health and safety. It is disappointing that the Corporate Manslaughter and Corporate Homicide Bill has not pinned that liability directly on directors.

My last point is about migrant workers, who are particularly vulnerable. There is bogus self-employment, and because of their language problems, migrant workers are often given the worst jobs in the industry. There is a strong case for the Health and Safety Executive to record employment status, nationality and the name of the client who procured the work. Some of that work might have been procured by the public sector—by the Government or local authorities. If so, we should know that so that there is an opportunity to put pressure on the public authorities to take action.

Those are my comments; I congratulate my hon. Friend the Member for Barnsley, West and Penistone and UCATT on raising an important matter.

We have had a good debate, and I also congratulate the hon. Member for Barnsley, West and Penistone (Mr. Clapham) on raising this extremely important topic. If I may, I shall anticipate what is likely to be the third or fourth line of the Minister’s speech by putting on the record my acknowledgment that, compared with other European countries, the UK has quite a good record on this issue—the Minister is deleting those lines as I speak.

A recent parliamentary answer from the Minister stated:

“Within the European Union, Great Britain now has the lowest rate of workplace fatal injury per 100,000 workers.”—[Official Report, 19 February 2007; Vol. 457, c. 372W.]

That is good, but our debate has shown that there is an awfully long way to go and a lot of scope for increasing workplace safety.

This debate focuses particularly on the construction industry, but the context, which hon. Members have sketched out, is that there are more than 200 workplace fatalities each and every year. What is also relevant—the debate does not touch on this directly—is that there are also a lot of non-fatal accidents that can have serious consequences. In fact, in the last year for which information is available, there were almost 30,000 major-injury accidents that did not involve fatalities but which, as we can imagine, left people with lifelong injuries in many cases.

I do not have the individual figure for the construction sector, but we can all guess that it was likely to have been heavily accounted for in that category. Even in the short period since I was first elected in 2001, I have met quite a few people in my constituency who have sustained serious injuries in the construction sector. Many of them cannot work again in that sector, and sometimes they cannot work at all. That is devastating for them and their families, and it involves a major cost to the taxpayer, because such people will often be stuck on benefits for long periods as a consequence of the injuries. Thirty thousand major but non-fatal injuries a year means that about 100 people experience such injuries every working day. Reducing both sets of figures is a big challenge.

Hon. Members have also mentioned that the construction sector, perhaps understandably, accounts for a large proportion of fatal accidents each year. The hon. Member for Barnsley, West and Penistone cited the figure of 504 fatalities for the six-year period from 1998, of whom the majority were employees. However, as the hon. Member for Leyton and Wanstead (Harry Cohen) has said, we are also talking about members of the public, who can also lose their lives as a consequence of the conditions in those sectors. As the hon. Member for Barnsley, West and Penistone has said, that figure of 504 represents about a third of total fatalities over the period. Alongside agriculture, construction accounts for a lot of fatalities, and both sectors obviously deserve a lot of attention in Government policy.

Members’ speeches in this debate have ranged widely and raised issues for the Government to consider in respect of improving health and safety in the workplace and reducing fatalities, which is obviously the most important issue. The hon. Member for Paisley and Renfrewshire, North (Jim Sheridan) talked about holding companies with a bad safety record to account for future Government contracts, which is sensible.

There is scope for a wider debate than we can have in our restricted time today. Understandably, the hon. Member for Barnsley, West and Penistone has raised not the whole issue of workplace safety, but the specific issue of prosecution and conviction rates in the construction sector. He made a number of charges, based on the report, about prosecution and conviction rates. I hope that the Minister will tell us whether the concerns are justified. In a nutshell, the concerns are that the number of fatalities has been going up in recent years—the figures are bumpy from year to year, but overall they are too high. However, the conviction rate has been falling to a low level—it was 11 per cent. in the last year for which information is available, which is a lot lower than in previous years.

Members also mentioned that the time leading up to trial seems to have lengthened to a large and noticeable extent in recent years and that there are significant regional variations, not only in fines but in the extent of prosecution. That is in the context of the significant job cuts at the HSE as part of the Government’s overall attempts to reduce staff at the Department for Work and Pensions and elsewhere. In its bluntest terms, the charge is straightforward—the HSE is not doing its job of securing enough convictions in cases that involve genuine negligence. That is the case that has been put to the Minister, and we should like insight into it.

When the UCATT report came out, Mr. Podger, the HSE chief executive, made a statement that cast doubt on some of the figures that had been cited. He also said that it was a distraction from the real issue of reducing fatalities rather than simply prosecuting. Most people would see those things as being tied together. Mr. Podger also said:

“There are many reasons why a fatality might not always lead to a prosecution: for instance if during a long investigation a company goes into liquidation”—

something that hon. Members have referred to—

“there is no duty holder to prosecute”.

He added that

“if a self-employed individual were to fall from a ladder whilst working on their own, there are often no witnesses.”

It would be helpful to hear from the Minister the extent to which the low prosecution rate is accounted for by there being a large proportion of self-employed individuals in the sector, for whom there is simply no adequate evidence, and by companies that go into liquidation. Were the arguments deployed in the chief executive’s response to the report relevant only to a small number of cases, or are they serious reasons why the prosecution and conviction rates are so low?

Will the Minister also say something about migrant workers? The hon. Member for Paisley and Renfrewshire, North expressed concern about whether the figures had been inflated by such workers. Is that true? I have not seen the figures, but if it was true, it would be a concern and might hint at loose health and safety regulations in the sector. Will the Minister also comment on what is supposed to be an HSE internal audit report, which a couple of hon. Members have cited? I understand from the original union report that the internal audit report concludes that the HSE inspectors are not prosecuting in enough cases. Does the Minister accept that internal criticism by the HSE? Is that report in the public domain? I genuinely do not know. If it is not, will she consider having it published to cast light on the issue?

I have seen the latest figures on the offences prosecuted by the HSE. If the charges about the HSE’s behaviour in respect of prosecutions were justified, we would expect a general decline in HSE prosecutions. In recent years, there has been a dramatic decline—2,000 or so cases were prosecuted in 2001-02 and only 1,000 in the latest year. The number of convictions has also halved. Why is that? It appears to be a dramatic decline, which in some ways reinforces the concerns that have been expressed.

Will the Minister tell us, in relation to the parliamentary answer to the hon. Member for Worthing, West (Peter Bottomley), why the time between an incident and prosecution has increased so dramatically in recent years? It has almost doubled.

The hon. Member for Barnsley, West and Penistone has raised some serious issues, and I hope that the Minister can address them or at least put our minds at rest.

I, too, congratulate the hon. Member for Barnsley, West and Penistone (Mr. Clapham) and all the hon. Members who spoke in this important debate in order to press the Government on a serious issue, which is getting worse.

In the six years to 21 March 2004, 473 construction workers and 31 members of the public were killed, which means that 504 people in total died from construction accidents. The average figure for all fatal and major injuries between 2000 and 2003 was 111 per 100,000 employees. In 2003-04, that rose to 121 and in 2004-05 it was above 118. On 27 April, the chief executive of the Health and Safety Executive, Mr. Geoffrey Podger, said that he expected a 20 to 25 per cent. increase in construction deaths in the year to 31 March 2007. The situation is regrettably getting worse.

What is happening in the HSE while that is happening? It is reducing the number of inspections, and it is expected to cut some 280 jobs and £8 million from its budget by March 2008. Some £3 million will go from publicity spending, £2.3 million from workplace budgets and a further 5 per cent. cut will be made to the budget between 2008 and 2011.

We know that field operations and inspections fell by 40 per cent. between 2001-02 and 2005-06. There were 55,195 inspections in 2004-05, the lowest on record at the time, and that figure fell again in 2005-06 to only 46,032. As I say, that was 40 per cent. less than the figure for 2001-02. The HSE chief executive’s leaked memo to staff of 10 August said that the cuts would lead to

“difficult decisions and unwelcome consequences”.

I have learned in an e-mail from an official in the HSE, received in February this year, that within the construction division there are plans to have only 171 inspectors, whereas there are 182 now—a reduction of 11. I know that final decisions were going to be made at the end of March on resource allocation. Will the Minister give us the exact figure for the construction division in 2007-08?

The reductions have taken place in the name of the Gershon review, which was announced in the 2003 Budget. The review was supposed to

“ensure that frontline staff get the resources they need to do their job even better, and that the bureaucracy that can get in their way is removed.”

The story seems rather different when we see what is happening on the front line of the HSE.

Of course, not only the HSE has a role in this. We have to consider the Crown Prosecution Service and the courts, too. The HSE is prosecuting less overall. In 2003-04, 963 prosecutions took place, but only 712 took place in 2004-05. We have heard from many hon. Members that in 1998 there was a 42 per cent. conviction rate for construction deaths, whereas in 2003-04 that fell to 11 per cent. We have heard that, according to the HSE, 70 per cent. of construction deaths involve management failure. The HSE internal audit said that there should be a 60 per cent. prosecution rate for construction deaths. Like the hon. Member for Yeovil (Mr. Laws), I hope that the report will be put in the public domain. It would be strange if it were not.

I am wary of prosecuting according to a percentage target alone, but questions have to be asked when the HSE admits that it is prosecuting only about half of the number of construction deaths that it believes it should. We have heard of the regional variations too—

Will the hon. Gentleman give way?

I want to get on quite quickly, if the hon. Gentleman will forgive me.

In the south-west, 31 per cent. of cases of construction deaths are prosecuted, whereas in the east midlands the figure is only 9 per cent. Fines vary hugely. In the north-east, the average fine is £18,650, while in the east of England, my region, it is £78,556.

Will the hon. Gentleman give way on that point?

No, I will not.

Justice is being hugely delayed. In magistrates courts, the number of days between the incident and the approval of the prosecution has risen from 155 days in 2000 to 251 in 2004-05. In Crown courts, the number of days has doubled from 244 in 2000 to 488 in 2004. There were problems with the legal systems in the early years, but why is there that extra delay now?

The CPS has some questions to answer, too, for example, in the case of 17-year-old Daniel Dennis. On 29 December, the High Court ordered the CPS to reconsider its decision not to prosecute. That 17-year-old was killed. He had been given no training in safety or in working at heights; he had no harness, and harnesses are not expensive; and the skylight area that he fell through to his death was not fenced off—yet the CPS decided not to prosecute. That decision has been overruled by the High Court.

The courts have questions to answer about the variability of the fines. I have more shocking news on the fines than the hon. Member for Leyton and Wanstead (Harry Cohen) mentioned. In 15 construction deaths, the fines were £5,000 or less. In some cases, the fines were less than £1,000. The worrying thing is that the HSE is recording less data. It no longer records the number of HSE inspections, the number of regulatory contacts, or the median fines for a safety offence. It should do so. I would also like to see it record the nationality of those killed, their employment status, the name of their employer and principal contractor, and their ability to speak English, as well as whether the incident took place on a domestic or non-domestic construction site.

We debated the Construction (Design and Management) Regulations 2007 last week—we voted for them, and encouraged the Government to go further and to extend them to cover an extra 200,000 cases where the design element does not apply. That would ensure that the scope of the regulations to cover the design element was built in earlier, was easier to understand and covered more cases than the Government want to.

We have heard about the problems with English speaking. The Government are reducing funding for English for speakers of other languages and that is a major area of concern. We are concerned that construction employees will not understand health and safety inspections. Speaking to the deputy chief executive of the HSE, I learned of a company that had signs in the canteen telling employees that they had only a certain time for their lunch break in many languages, but out in the workplace area the signs were only in English. I am glad to say that that company was thoroughly inspected as a result, but as we have heard, fewer inspections are taking place.

We support the Corporate Homicide and Corporate Manslaughter Bill, which is before the House today. Indeed, we would like it to go further than the Government would, so that it includes deaths in custody. What is the Minister doing to reply on the subject of the Professor Richard McCrory review and the HSE? We have heard nothing about that from anyone else today. Professor McCrory brought out a report on 28 November 2006 entitled “Regulatory Justice: Making Sanctions Effective”. In relation to that report, he said that criminal prosecution has a role to play—I agree with that—but

“regulators need the flexibility to deal with individual cases appropriately. In some cases rogues find it cheaper to ignore regulations and take the penalty than comply, these proposals will end this situation.”

He set out a number of principles, saying that they:

“Aim to change the behaviour of the offender…to eliminate any financial gain…from a non-compliance”

and

“Aim to deter future non-compliance”.

The report proposes an administrative toolkit of extra fines, profit orders and so on. The HSE is considering it, but given what we have heard today it is urgent that the Minister should tell us when the HSE will be able to use the extra sanctions that the Cabinet Office review of regulators said should be made available. Those are important issues, and it is a scandal that there have been 504 deaths. There are serious questions for the Minister to answer, and we look forward to hearing from her on them.

I am delighted to be able to answer the debate. I congratulate my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) on securing the opportunity to debate this important issue. Like my colleagues, I wish to acknowledge his long-standing interest in promoting health and safety for workers, particularly construction workers. He never misses an opportunity to highlight the dangers in the construction industry.

Many questions have been asked and, to be frank, it will be impossible for me to answer every one. I shall try to deal with some of the general issues that have been raised, and I shall respond to specific points, including the catalogue given by the hon. Member for South-West Bedfordshire (Andrew Selous) in the past few minutes, by written procedure.

I thought that we could have a debate that was not essentially party political, but on penalties, as I said to him last week upstairs in Committee, the hon. Gentleman must reflect on the fact that his own Front-Bench team scuppered a Government-supported Bill to increase the level of penalties. He must take the powerful message that he gave to us today back to his Front-Bench team, of which he is a member. That Bill was well supported across the House, and it was to the Opposition’s shame that they scuppered a Bill that would have dealt with some of the issues that have been raised here today.

We are concentrating on deaths in the construction industry and, as we have heard, although the construction industry work force is only about 7 per cent. of the total work force in the United Kingdom, it has 28 per cent. of worker fatalities. That is why the debate is so important. We can bandy around statistics, but the reality is that each death is a tragic event for a family somewhere in Britain. As we heard powerfully from my hon. Friend the Member for Barnsley, West and Penistone, every week in this country a family suffers as a result of the death of one of its menfolk. I think the fatalities are exclusively male.

I am aware of the issue, as are other hon. Members. In my constituency, only three weeks ago, an experienced construction worker fell from scaffolding and was tragically killed. The issue of deaths in the construction sector has been given greater and welcome emphasis as a result of the publication of the UCATT report on prosecution, conviction rates and sentencing in the industry. I recognise that an early-day motion was tabled by my hon. Friend the Member for Jarrow (Mr. Hepburn), who has long experience in the industry and brought it to his contribution today.

I thank my hon. Friends the Members for Paisley and Renfrewshire, North (Jim Sheridan), for Dundee, West (Mr. McGovern), for Dumfries and Galloway (Mr. Brown), for Leyton and Wanstead (Harry Cohen) and for Jarrow for their contributions. I also thank my hon. Friend the Member for Cardiff, West (Kevin Brennan), who as a Government Whip, as I know from previous experience, cannot say anything. I noticed that he was here for most of the debate. I also thank Opposition Members for their contributions.

I shall deal with some statistics and come to the core of the argument advanced by my hon. Friend the Member for Barnsley, West and Penistone. The HSE has reviewed the statistics quoted in the UCATT report, and its conclusion is that there is a significant underestimate of enforcement action following fatalities. I welcome the fact that my hon. Friend did not go into statistics, because there are issues to consider about the methodology used, and the CCA might want to discuss them with the HSE. Let me be clear and give out the powerful message that the HSE enforces provisions robustly and takes any death at work very seriously. Its staff are committed to investigation and, where it is right, prosecution.

We must recognise, as the hon. Member for South-West Bedfordshire did, the difference between prosecution and conviction, which are different aspects of the process that we need to take cognisance of. Every workplace death is investigated unless there are very specific reasons for not doing so. The HSE always prosecutes if a death was the result of a breach of health and safety legislation, there is sufficient evidence and it is in the public interest to do so. That accords totally with the enforcement policy statement published by the Health and Safety Commission. Following that approach, the true picture in construction is that the HSE prosecutes about half of all fatalities, and about 80 per cent. of those prosecutions result in convictions. There is no question about there being insufficient resources or numbers of inspectors to investigate fatalities and to pursue consequent prosecutions. That will always be the highest operational priority for the HSE.

I recognise that time is running out, but I wish to pick up on a couple of points. There have been comments about the disparity in sentencing, about which we are deeply concerned. Indeed, the Sentencing Guidelines Council is planning to examine the guidelines for death at work cases as part of its ongoing work to produce guidelines for the new manslaughter offences that are to be debated later today. That is being done in England and Wales and will be conducted through the Scottish Executive for Scottish cases. I am sure that that will be of interest to my hon. Friends from Scotland.

On the summit proposal that my hon. Friend the Member for Barnsley, West and Penistone highlighted, there was a summit in 2001 and a follow-up summit in 2004. There is a view that it is probably too early to have another but, given the powerful arguments that he made today, we should keep under review when to have another summit. We are not rejecting the idea in principle; it is just a matter of whether enough time has passed before having another summit.

There are many cases in which it is difficult to prosecute, such as if the person involved is a domestic householder or a self-employed worker and nobody else is involved in the work activity, as in the tragic case in which a self-employed builder took his young child into the domestic property where he was working, which resulted in the young girl being killed. There are all sorts of issues to take into account. Our priority is that the HSE should prosecute, but prosecutions cannot always be seen through to the end, because of the nuances of individual cases.

Sometimes, of course, there is not a conviction. Witnesses may fail to appear, new evidence may emerge or the court may accept a plea, and all those things can result in non-prosecution. I hope that hon. Members recognise that in some parts of the process it is outwith the control of the HSE to pursue a prosecution to the bitter end. I reiterate that every death is a tragedy to the individual and their family, and the HSE’s priority is to ensure that it investigates those deaths fully.

I shall conclude at breakneck speed by saying that my hon. Friend the Member for Barnsley, West and Penistone highlighted the fact that an agenda is shared by the trade unions, the Government and the construction industry. I welcome the opportunities that he has given us to work in partnership, and I hope that we will continue to do so to raise the issue of deaths in the construction industry, which are unacceptable. It is not about international comparisons; it is about what we expect for our workers in our own industry in the 21st century.

It is a pleasure to serve under your authority, Dr. McCrea, I believe for the first time. I initiated this short debate because under the Norfolk primary care trust consultation document—the consultation is taking place between 6 March and 5 June 2007—St. Michael’s hospital, Aylsham, in my constituency could close, along with two other community hospitals in Norfolk. That has caused widespread anger and dismay in Aylsham and the surrounding area, and those feelings are replicated elsewhere in Norfolk, where there are threatened cuts. My primary concern today is the standard of health care available to my constituents. I am not convinced that the alternative proposal of home health care will replace or enhance the facilities that will be cut at St. Michael’s hospital.

The Minister knows that there have been widespread demonstrations against proposed cuts in community hospitals not only in Norfolk but elsewhere in England. People rightly suspect that the cuts have more to do with overcoming PCT deficits than meeting new health care demands. He will be only too well aware that his ministerial colleagues the Parliamentary Secretary to the Treasury, the Minister without Portfolio and the Under-Secretary of State for Health have publicly protested about proposed cuts in their constituencies. I do not think that that ever happened under previous Governments, and it stretches ministerial responsibility almost to breaking point.

In Norfolk, there have been widespread protest meetings, petitions and demonstrations against the proposed cuts. That is not the consequence of some out-of-date sense of nostalgia. Local people, including health professionals, value their community hospitals and are unconvinced that alternative health care delivery is a substitute. I have received thousands of letters of protest and petitions, and I have spoken to both health professionals who work at St. Michael’s hospital and local general practitioners, and all are united in that view. I have not received one letter, e-mail or verbal representation that favours the proposed cuts or supports the view that an alternative home health care system would be a good substitute.

One of the problems is that people in Norfolk have very little confidence in the PCT. The Minister is probably aware that the current chairman of the PCT, Miss Sheila Childerhouse, was an independent councillor on Breckland district council. She lost her council seat to a candidate who supported the campaign to stop the hospital closure. That says something about local feeling.

The Minister should also be aware that my constituents are pretty well convinced that the consultation exercise that is now being carried out is, in the words of one health professional, “a sham”, and that the decision to close St. Michael’s has already been reached. In the consultation document, St. Michael’s is flagged up as a hospital that may close—I believe that “will close” is the view of most of my constituents.

The idea of closing community hospitals flies in the face of what was said in a letter dated 15 March that I received from the Minister’s departmental colleague, the Minister of State, Department of Health, the right hon. Member for Doncaster, Central (Ms Winterton):

“We are committed to empowering citizens to give them more confidence and more opportunities to influence public services in ways that are relevant and meaningful to them, and in ways that will make a real difference to services.”

I am not convinced that closing community hospitals and trying to substitute home-based health care in their place is, in fact, in line with Government policy.

As the Minister knows, many of the problems that we face in Norfolk are a direct consequence of the continual reorganisation of PCTs that has taken place over the past six years. Reorganisation has been incredibly costly, and it has undermined professional morale and public confidence. The Minister will be aware that Norfolk PCT has an annual budget of £900 million but debts of £47 million—it is one of the most indebted PCTs in the country. That is a direct consequence of poor financial management in the past, the impact of Government NHS reforms and, of course, historic debt. Removing the deficit is one of the drivers behind the PCT’s proposals, and I accept the fact that it is not the only driver—there is, of course, a genuine desire to improve health care—but the consequence is the likely closure of St. Michael’s hospital.

The strategic health authority set the PCT a target to cut the deficit of £47 million by £23 million by the end of March this year, and to clear all the debts by March 2008. I understand that at present the PCT has been able to cut only £3 million. How does the Minister think that it can reduce the deficit? Even if the deficit is reduced, what guarantee is there that it will not be repeated, given the fact that only three years ago, under the previous PCT reorganisation, PCTs Norfolk-wide had debts of nearly £30 million?

It is also relevant to bear it in mind that the Government are urging that alternative health care be provided in the community as a consequence of closing community hospitals. The Times stated yesterday:

“A key target in the Government’s health reforms—to have thousands of community nurses treating the most seriously ill patients outside hospital—has been missed”,

and that less than 50 per cent. of the required number of nurses are in place. Can the Minister assure me that we will not have a further reorganisation of the PCTs in the lifetime of this Parliament?

My constituents and most Norfolk MPs, regardless of political party, are frustrated that responsibility and accountability for health care in Norfolk are passed around between the Department of Health, the strategic health authority and the PCT—it is like pass the parcel. It is incredibly difficult to get a grip on responsibility. Ministers say that they have devolved budgets and responsibility downwards, eventually to the PCT, yet it is obvious that PCTs are constrained and often lack the kind of professionalism that is required. The result is that my constituents suffer.

So far, my constituents have not been impressed by the PCT’s consultation process. At a public meeting held in Aylsham on 23 April, the chairman of the PCT and a senior official were unable to answer some obvious and straightforward questions concerning the future of the hospital, alternative health care provision, redundancies among staff and, given that the constituency is a rural one, the ensuing transport problems. In proposing the closure of St. Michael’s and other hospitals in Norfolk, the PCT hopes to make financial savings, hopes to reduce redundant bed capacity, hopes to concentrate facilities and resources on fewer sites and hopes to meet the Government’s policy of providing health care to people in their homes. I emphasise the word “hopes”, because so far I have seen little evidence that it will be able to achieve that. Perhaps the Minister will be able to convince me that it will.

Let me remind the Minister of the important services that are currently being delivered at St. Michael’s hospital. They include physiotherapy, incontinence clinic, occupational therapy, occupational health, chiropody, speech therapy, women’s health, falls clinic, Parkinson’s clinic, splint clinic, dietician, Dr. Woodhouse clinic— Dr. Woodhouse is a Norfolk and Norwich University hospital consultant for the elderly—and a district rehabilitation centre consisting of 24 operational bed spaces and six spare bed spaces for emergencies. I know from talking to local health professionals, particularly local GPs, that those services make up a critical mass that provides total health cover 24 hours a day, seven days a week, which, in their considered opinion, health care teams cannot and will not provide.

Many of my constituents have given me examples where elderly relatives stayed at St. Michael’s hospital for post-operative recovery. Under the PCT proposals, local doctors have told me that many of those patients would have to be taken directly home without a stay at St. Michael’s. If they were to have a relapse, they would find themselves back at the Norfolk and Norwich University hospital, which already has considerable pressure on beds and facilities.

When and if St. Michael’s closes, many of my constituents will have to travel to alternative health care centres at Dereham, Holt or Norwich. The Minister may not have travelled in Norfolk, but as I live eight miles west of Aylsham in the market town of Reepham, I can assure him that, to say the least, public transport is not good. The proposed changes to St. Michael’s will create major transport problems, particularly for the elderly, and for the journey times of mobile health teams.

The closure of St. Michael’s hospital flies in the face of the Government’s aim to enhance community health centres. Localism is an important matter for all political parties in relation to not only health care, but many other delivery systems that central Government were expected to provide in the past. None of the proposed changes takes into account the profile of Norfolk’s population, let alone the projected population profile. Norfolk primary care trust provides services to a population of more than 700,000. It is an ageing population, and more than one fifth of people are over 65 years old, which is approximately 150,000 people. By 2020, the elderly population of the area will rise to 200,000, which is a quarter of Norfolk’s population. Currently, 30.9 per cent. of Aylsham’s population is already over 60 years old, which is above average for Norfolk.

The elderly often require many kinds of intense health care, and if St. Michael’s hospital, Aylsham and at least two other community hospitals are closed, I suspect that in five or 10 years’ time, this Government or a future Government would want to provide the kind of community facilities that exist now in Aylsham. Such facilities would probably be brought back to Aylsham or near to Aylsham. The Government and the PCT have not taken the age profile of the area into account. Furthermore, within the next 10 years, under local government proposals, Norfolk is likely to have an extra 70,000 houses, which will mean a population increase.

In conclusion, I will ask the Minister a number of questions—I contacted his office to inform him of the questions, because I knew that it would be helpful if he had them in advance. Local people are unconvinced that the proposed home care teams will provide a credible alternative to what St. Michael’s currently offers. What is his Department’s assessment of Norfolk PCT’s proposed plan? When St. Michael’s closes, how will the 24-hour services that are currently met, in large part, by the provision at St. Michael’s be met by mobile health teams? If patients have to go for treatment in Dereham, Holt and Norwich, what transport facilities will be provided by the PCT or the strategic health authority in addition to those available to individual families, either by using public transport or their own cars? If St. Michael’s closes, what are the estimated financial savings over five years?

Meeting health care needs is an expensive business. Governments must continually look at how health care is delivered, and rightly so. There are continuing changes in developments in medicine and in the kind of total package that can be delivered. There must be an assessment of how populations change in an area—some areas effectively lose population while others experience population growth. I accept all those factors, but in 10 years of being an MP I have never known so much deep anger and resentment about proposed closures not only in my constituency, but across Norfolk.

This is not just a question of nostalgia, although that is important. The hospital has received much financial support from voluntary organisations in Aylsham. It was originally a workhouse and then became a war memorial hospital. There has been a lot of local investment in the hospital, but the bottom line is that any changes in health care must, as a minimum, provide the same level of health care as my constituents have now. Any changes should, of course, aim to provide much better health care, and my fear is that, as a consequence of Norfolk PCT’s proposals, my constituents in the Aylsham area will receive a reduced level of health care. I hope that the Minister will answer some of my questions.

I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on securing the debate. I have no doubts in accepting that this is a matter of great significance to his constituents and I also accept that there is a lot of local attachment and investment in this particular health facility. I accept all of those points and assure him that I appreciate the strength of feeling that he represents.

As the hon. Gentleman acknowledged, these matters are subject to local consultation and as we speak the consultation is a live process. It is not a get-out to say that the issue is essentially one for local discussion and decision making, and at this point is not a matter for ministerial intervention. I hope that he balances that comment with the further remarks that I will make. If I can, I will also answer the questions put to me.

The hon. Gentleman questioned whether I had often travelled in Norfolk and I assure him that I vividly remember a family holiday to Cromer in the early 1980s—it would be difficult to forget that particular experience. I have also spent many happy afternoons at Carrow Road when following Everton football club, so I have travelled considerably in the area covered by his constituency.

Let us put the debate in context. I know that people allege that Ministers, the Department and, more broadly, the Government are interested in change for change’s sake and think that it is good to continually inflict gratuitous change on the system. That is not at all the case. It is self-evidently true that medicine and medical practice continues to change, and the health service and its facilities must keep up with changes in medicine and science. If it does not, it will be left behind and will not provide the best for patients.

Recently, new technology and the latest drugs and treatments can provide faster, safer treatments and faster recovery and greatly reduce the time that people need to stay in hospital, all of which are positive developments. The NHS today and the service that it can provide are different from the services that were first envisaged when the old NHS infrastructure was developed. For example, 10 years ago it would have been common to spend 10 weeks in hospital to recover from a total hip replacement. Now, supported by community staff, most patients can expect to be home within five days—give or take a few days. That example shows that the more we improve the speed with which we can help patients rehabilitate and the more we support patients and get them active, the less the need for in-patient beds and hospital-based services. Although that process of change can be difficult, it should not necessarily be claimed that it is not progress. In my view, it is indeed progress.

The hon. Gentleman asked whether the situation has more to do with deficits. We announced details yesterday of the spending plans of each primary care trust. In the last financial year, Norfolk PCT had a budget of £839,900,000, which will rise to £932,400,000 this financial year. I hope he would agree that that is a significant increase in resources for his local community. As departmental officials tell me, it is very rarely the case that a hospital reconfiguration delivers savings straight away, if that is the intention, in order to address immediate financial problems.

From the work that Sir Ian Carruthers has done within the Department on hospital reconfiguration, and looking across the country, scheme by scheme, he said that, in the vast majority of cases, if not all of them, the schemes were aimed at making better use of resources and providing better services to patients; they were not driven by financial considerations. I hope that the hon. Gentleman will accept that although some of the decisions might be difficult and might be asking people to accept changes to services that they have long known, PCT management and staff need to be supported in making those difficult and often challenging decisions in their local communities.

On a point of clarification, I welcome warmly the extra money to Norfolk PCT, but can it use it to wipe out its deficit, or must that be met separately?

The PCT is agreeing a recovery plan with the strategic health authority so that it can get itself to a sustainable position. I am informed that by the end of the next financial year that recovery plan should have been implemented fully. No new national targets are being handed down through the system this financial year. Admittedly, there is the 18-week target and there are other challenging targets on MRSA, but over and above those we want people to use the money to respond to local priorities and needs. The hon. Gentleman’s PCT is no different from any other; we want it to have that freedom.

On a further point of context, hospital lengths of stay have fallen by 20 per cent. in the last few years, and 70 per cent. of surgery is now carried out on day cases, with no need to stay in overnight. More and more people do not have to go to hospital at all, and up to half of the 45 million out-patient appointments each year can be provided in the community, along with minor surgery. It is recognised that people greatly value their local community hospitals; I hear what the hon. Gentleman says. St. Michael’s Hospital is no exception. However, the public are telling us also that they want more convenient and appropriate services available at times and in places more convenient to them. That was very much the conclusion of the Government’s White Paper of the same title as the local consultation that his PCT is running. After extensive consultation with patients, that became the paper’s main theme. It is not some policy diktat from Whitehall; it is the message that has come over repeatedly to the Department through public consultation.

We want more services in the community and, where possible, in the home, but in that regard we do not compare well with other countries. For example, in Germany all out-patient appointments take place in the community, and that is true in other countries as well. Public consultation on the PCT’s proposals began on 6 March and will end on 5 June. The PCT’s aims in taking those proposals forward are to provide flexible, patient-centred care delivered at home, or as close to home as possible; to provide health care in the most suitable place, and not, for example, in a hospital just because it is the only option available; to achieve a balanced and consistent range of services across the whole PCT area; and to achieve better outcomes for patients, helping them to maintain an independent life for longer.

I want to dwell on that point for a moment because, without commenting directly on the proposals and whether they are right or wrong from a departmental point of view, it is important to draw attention to the fact that the PCT is saying that it can provide care to 25 per cent. more patients than is currently the case. Although I understand the strength of local feeling, it is important that the message is heard that the proposals are about providing people with more convenient services. They will allow 700 people to be cared for in their homes, rather than in a hospital. I accept that we have some way to go before we can convince the public conclusively that that is better, but the more that patients experience those kinds of services, where proper support is provided in patients’ homes, the more minds will be changed. Some of the proposals announced yesterday demonstrate that lots of PCTs are taking forward the idea of the “virtual ward” where intensive support is provided for more elderly patients, or those suffering from a long-term condition, with the specific aim of preventing unnecessary admissions to hospital.

In my view, that must be the aim of the health service. It should not just be about building big hospitals and filling them, but about keeping people out of hospital in the first place, which the health service has not always done particularly well. It is right to move money around the system with that aim in mind—that is human progress and health progress.

I understand that the PCT has organised a series of public meetings throughout Norfolk to give people the opportunity to express their views on the proposals, and I have been informed that they have been well attended; clearly, people are engaging with the process. I believe that I have signed many letters to the hon. Gentleman responding to his constituents, and obviously we will continue to respond to concerns raised.

I shall address some of the specific points that the hon. Gentleman raised. He asked whether the PCT will be further reorganised. I recognise that the more recent changes caused disappointment among some NHS staff. There were good reasons for those changes—for example, to make them more coterminous with local government services. That was a very important part of the rationale for those changes. At the moment, I cannot envisage any reason for further changes or reorganisation of the PCT. Indeed, I would not welcome that at all, as he would not. I cannot tie the hands of a successor Minister, but from my point of view, there will be no discussion of that, and nor should there be. We want the new PCTs to bed down and work closely with their local authorities in order to provide the kind of co-ordinated services that I am talking about.

The hon. Gentleman asked how the deficit can be reduced. I hope that he will agree that we are working with the SHA, which believes that there is a way forward for the PCT to tackle its overspending, but at the same time improve services to patients. That might require some difficult decisions, but I believe that a good plan is being formulated to ensure that it happens. He asked also about population growth in his area. I can assure him that in the next round of PCT allocations, adjustments will be made and consideration given to areas experiencing population growth, or likely to. The formula can be adjusted to pick up those pressures.

The hon. Gentleman talked about the difficulties of people travelling around the county. I understand that fully and know that many of the villages are some distance apart. It can be difficult to get older people to use public transport, but let us remember that, as I understand it, the proposal is to provide many more services in patients’ homes and greater convenience, thereby avoiding the need for the individual to be in hospital and for their family to visit them. So there are potentially huge benefits.

I cannot say a great deal more because it is a live consultation. I know that the hon. Gentleman is representing his constituents’ views clearly and directly in the consultation. I hope that he will allow it to run its course and then take the right decision in the best interests of his constituency.

This is not the first time that I have had to initiate a debate on the problems with the tax credits system on behalf of my constituents. I would love to believe that today is the last time that I will be required to do so. On the previous occasion, I was very grateful to the Paymaster General for the speedy resolution of the cases that I raised. I hope for a similarly positive response today. I would also like to send her my best wishes for a speedy recovery.

When I last had the opportunity to speak in the House on the issue, I and other hon. Members raised a number of key concerns: the unfair way in which Her Majesty’s Revenue and Customs is attempting to claw back funds; the complexity of the system; the fragile and failing IT system; and fears that the tax credit office is acting improperly in some cases in its attempts to reclaim overpayments. I cannot help but feel a sense of déjà vu today, as in many areas the problems remain.

Last week was a week of change in British politics, with the Prime Minister announcing that he was stepping down and the Blair era drawing to a close. However, last week’s report on tax credits from the Public Accounts Committee showed that some things in British politics never seem to change. The tax credits system remains in disarray. It is still failing to help properly many of the families whom it was set up to help.

Perhaps most worrying of all is the nagging feeling that, despite all the damning reports and newspaper headlines, the Government have still not fully accepted the scale of the problem. I am not alone in saying that the Government, crucially, are dragging their heels over essential reforms. Hardly a week goes by without constituents of mine turning up to advice surgeries having experienced problems with tax credits. I am sure that most hon. Members here today could say the same. However, for every constituent who contacts their MP, asking them to take up a case, there are many more who in effect decide to suffer in silence. Today’s debate should not be just for our current casework issues; it must also be for our constituents who have had problems with tax credits, but have decided to accept the failings of the system when their overpayments have been clawed back—they have decided simply to pay up.

I hope that the Minister will not attempt to pretend that I or others are blowing problems out of proportion. The scale of the problem is considerable, and real people are paying the price. One clear example of that is the number of people who do not want to claim tax credits for fear of discovering at a later date that money that they have spent must be repaid. I cannot estimate their number. If the Minister can, I hope that he will share it with us today.

The other number that I cannot give is the number of claimants who are spending their tax credits today in the belief that it is their money, but who will find out in the future that they should not have been given it and they are expected to repay it, even when they supplied all the information asked for, and in proper time. I will come later to the possible scale of the problem.

I will not be so churlish today as to suggest that the tax credits system has not helped people; of course it has. However, I hope that the Minister in his reply will accept that it has made life a misery for too many families and that the Government must take responsibility for the failings that have still not been dealt with.

The figures will be all too familiar to most hon. Members, but it is worth reminding ourselves of the scale of the problems facing the system. As last week’s Public Accounts Committee report outlined, overpayments totalled about £5.8 billion over the first three years—a staggering total. The Department has attempted to recoup some of those overpayments, but has not always been able to do so. As a result, more than £500 million has so far been written off, and it is estimated that in excess of another £1 billion-worth of debt might be impossible to recover.

In my own city of Edinburgh, the most recent figures for overpayments show that 11,200 of 34,000 tax credit awards were overpaid—about one third of all awards. Figures from 2004-05 show that a total of £9.5 million is due to be repaid by Edinburgh recipients whose tax credit awards have been overpaid. That will result in an average due repayment across the city of about £850—enough to throw the budgets of most families out of the window.

I could give numerous examples of individuals who have contacted me since 2003, but today I will give just one or two, because they capture what is at the heart of the problem. Deborah Karimi, a 48-year-old mother of two who lives at 72 Muirhouse green in my constituency, is one example of a person who works hard—she is employed in a Sainsbury’s supermarket—but who has been through such a bad experience that when advised recently that she might qualify for other benefits, she said that she would not apply for them after her experience with tax credits.

Mrs. Karimi was earning about £10,000 a year when she was granted a rent rebate from her local authority. She had supplied her three most recent wage slips to the authority and was advised by it that she might qualify for tax credits. Her most recent P60 at the time was only about one month old. It was just after the end of the tax year and the document showed her earnings at about £10,000, yet she was asked for the details of her previous P60, for the previous year, when she worked part-time and her earnings were between £6,000 and £7,000. She repeatedly offered details of her current pay, but was told that that was not how the system worked. She was told that her award would be calculated using the old P60. Some four months later, she would be asked for details of her current P60, showing that she was earning £10,000 a year.

At the same time, Mrs. Karimi received correspondence from the tax credit office saying that the payments would stop, and more correspondence confirming that the payments would continue. She was receiving £115.28 a month, which was thankfully received and spent every month. She was a low earner in full-time employment—exactly the kind of person who needed help to stay in work, rather than living on benefits. She was earning about £11,000 a year and was told that her overpayment total was £1,280.47, based on the fact that her income was too high to qualify. That is the income on the P60 that Mrs. Karimi offered to supply in the first instance, but which was refused. One has to ask just exactly how she could have been more helpful. She is an honest individual.

I sympathise with my hon. Friend’s constituent. I wonder what his view is of the case of one of my constituents, who was told that they had been overpaid to the tune of £5,300 and that that had to be repaid within one year. Surely by definition families who are in receipt of tax credits cannot find the money required to repay sums of £400-plus a month. That causes huge stress and in some cases makes people ill with worry. The system is so complicated and is letting people down.

The case that my hon. Friend raises is, sadly, all too typical. Some people have not only spent the money; they may also have taken on hire purchase agreements, based on the estimated new income. They cannot live on the basic income, which is obviously low in order for them to qualify for tax credits. They have then spent that money and taken on further debts. They have the worst of both worlds. It is perfectly reasonable to accept, as is in the rules, that if hardship will be caused, in some cases these debts must be written off.

Mrs. Karimi is an honest individual who is working hard to this day. She is repaying her debts by working every alternate weekend and she is currently paying off an outstanding council tax debt at £50 a month. That is no mean feat on earnings of about £11,000 a year, but as she has told me, “You can’t get blood out of a stone” and the threat to take her to court for the money will result in legal fees for lawyers and nothing much else. If ever there was a case of a debt causing hardship and needing to be written off, that case and the case raised by my hon. Friend are two examples.

Mrs. Karimi had gone to the tax credit office with the correct up-to-date information and was told that no, she needed to provide out-of-date information, which both she and the tax credit office knew would result in overpayments. Yet because that is the way in which the system operates, she is told that that is the way it has to be. It is surely a recipe for disaster.

Just yesterday, I was contacted by Citizens Advice, which is increasingly concerned about the rising number of cases in which citizens advice bureaux are having to advise clients about overpayments when the clients have no idea why they have been overpaid and find it difficult to obtain explanations. In many cases, even the amount owed is unclear. At the same time, in the past few months the number of clients who have been threatened with legal action for recovery of overpayments, even in those circumstances, has increased.

The Minister might be interested to know that Citizens Advice is conducting an online survey asking the public to report their experiences of the tax credit system. So far, 80 per cent. of respondents have reported being overpaid, most of whom did not find it easy to understand why.

I am listening carefully to the detailed case that the hon. Gentleman is making. Does he accept that one of the system’s great weaknesses is that when people receive a notification telling them that they have been overpaid, there is usually no breakdown of the relevant calculations? Those people are then suddenly required to pay back the money, which is sometimes quite a large sum, without even knowing how the debt was arrived at.

It must be very simple to supply people for whom an overpayment has been calculated with details about payments. One of the tests as to whether overpayments should be paid back is whether the individual could reasonably have worked out the correct amount. I would say that it is reasonable for an applicant to presume that the Government’s calculations are correct, and that it is unreasonable to expect a low earner who receives tax credits to assume that the Government have made a miscalculation. If details about payments were supplied, more people would know right away what the calculations were, and the problem would be solved. While overpayments remain so common, there is an urgent need for an improvement in the way in which overpayments are explained, as the hon. Gentleman suggests.

Citizens Advice is calling for a 30-day delay before the recovery of the overpaid amount starts. I entirely agree. If constituents of mine have been open and honest in their dealings with the tax credit office, but internal mistakes have led to an overpayment, it is simply unacceptable to demand large amounts of money back from those people, who reasonably assumed that the Government got their sums right. It is nothing short of outrageous that decent, honest, hard-working people are being forced into financial hardship as a direct result of incompetence in the system.

Several of my constituents who have had their fingers burnt by the tax credit system tell me that they will not bother to apply for tax credits again, not because they do not need the extra help, but because they cannot cope with another round of wrangling with the tax credit office about entirely avoidable overpayments. Evidence from Citizens Advice shows that more and more eligible families who have had problems are now reluctant to claim what they are entitled to. Some 2 million people who are eligible for tax credits do not claim them. I wonder how many of them have simply decided that the short-term benefits are not worth the headaches in the long-term.

I could list more examples of overpayments, but it is more important to discuss what the Government are doing to get to grips with the problems, and whether they have been effective. The most important change that Ministers have made to reduce overpayments has been to raise from £2,500 to £25,000 the threshold for in-year income increases that are ignored when awards are finalised. The Government contend that that change will eventually reduce overpayments by a third. However, a recurring complaint is that there is not enough data about the problems in the system to be able to say definitively what difference such a measure will make. Either way, the move does nothing to address the failure and unfairness at the heart of the system. What is needed is a fundamental rethink of the benefits system and a move towards a fairer system of fixed awards and clearer notices. I am sure that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) will go into that in detail when he sums up on behalf of the Liberal Democrats.

The general problem with the complexity of the system is at the root of many of its woes. Nowhere is that more obvious than in the Department’s struggle with error and fraud. Tax credits suffer from the biggest error and fraud rates in Government, but, crucially, there are neither routine estimates of fraud and error nor targets set for reducing them. In 2003-04, between £1.06 billion and £1.28 billion—almost 10 per cent. by value—was incorrectly paid to claimants.

I look forward to hearing the Minister’s response to the recommendation of the Public Accounts Committee that targets and estimates should be introduced urgently. This issue highlights the recurring difficulty of establishing the true scale of the problems in the system and how effectively they are being tackled, because we simply do not have access to sufficient information to make those judgments. We desperately need earlier estimates of overall levels of error and fraud to use as benchmarks to assess the effectiveness of action to combat those problems. As was outlined in the Committee’s report last week, the e-portal system was deficient from the outset and was entirely unsuited to the inevitable onslaught from organised criminals. The entire system was unable, by its very design, to give proper protection against error and fraud.

Many of my constituents feel that the Government have placed greater priority on trying to chase and claw back money from hard-working families who have been unwittingly overpaid instead of rolling up their sleeves and dealing with the internal problems that have allowed such high levels of fraud and error to occur. The Chancellor is searching around for new ideas for his first 100 days in No. 10, but I suggest that he should concentrate first on sorting out the mess in the tax credit system. The Government seem to be perpetually in denial about the scale of the problem, but the ongoing difficulties can no longer be passed off as teething problems that are common to any new administrative system. They are deep-rooted difficulties at the heart of the system.

The first steps to solving the overall problem are to accept its seriousness and scale and to get to grips with the problems and their causes. The recent parliamentary ombudsman’s report, “Tax credits: putting things right”, made 12 key recommendations that were widely supported by families and Parliament alike. Many months on, however, I believe that only four of those recommendations have been implemented. If the situation has changed substantially, I would welcome some clarification from the Minister. If the other eight recommendations still have not been accepted, I should like to know why. Why have so many of the ombudsman’s recommendations been ignored? Why are 2 million eligible people now deciding that applying for tax credits is not worth the risk? Why are hard-working families being made to pay for mistakes that they have not made? I look forward to hearing the Minister’s replies.

I am delighted to participate in the debate. This is about the fifth time that I have debated this issue this year, given my role on the Treasury Committee.

In 2002, the Chancellor said:

“Our new Tax Credits are both symbol and substance of this Government’s ambition for Britain.”

If they are a symbol for anything these days, it is error, fraud and incompetence. The substance, as we have heard from the Public Accounts Committee, is the £5.8 billion that was overpaid to claimants in the first three years of the current tax credits scheme; the £1.9 billion of overpayments that have either been written off or are likely to be written off; and finally, the increase in the income disregard, which was intended to reduce complexity and errors, that is costing £500 million a year. The Paymaster General must be sick and tired of coming before the House to explain the latest sorry tale on tax credits, and she must also be tired of being used as a human shield. I am sorry that she is unwell and is unable to be here, and I wish her a speedy recovery.

At the time of the Treasury Committee’s Budget hearing, the Chancellor had not answered a direct oral question on tax credits for 1,050 days. Another 48 days later, he still is not prepared to accept that the buck stops with him. Perhaps, after 1,100 days of avoiding the issue, he will see fit to use his first 100 days in his new office to confront some of the issues that three separate Select Committees have raised with such monotonous repetition.

On the theme of repetition, I have three points to make, and I look forward to hearing the Financial Secretary’s response in the Paymaster General’s absence. According to Her Majesty’s Revenue and Customs—the latest facts that I have go up until 2005—two fifths of the moneys paid out involve overpayments and one fifth of them involve underpayments. So, three fifths of the money that is paid out to claimants is paid wrongly. I shall go into that later, but given an uptake of only 25 per cent., only two fifths of 25 per cent. of the people who should be getting money are receiving the right sum. That is the tragedy.

I should cite a comment made by the hon. Member for Newcastle upon Tyne, Central (Jim Cousins), who serves on the Treasury Committee with me. He gave his verdict on that state of affairs during the Treasury Committee’s follow-up session, and I shall repeat it for the record. He said that

“under or overpayments of tax credits”

—I cannot use the emotion that he did—

“is a shocking, devastating damage to the whole welfare reform policy…these administrative deficiencies have a major impact on the Government's welfare reform policies.”

In that view, the hon. Gentleman joins other, equally distinguished colleagues on the Labour Benches. The right hon. Member for Sheffield, Brightside (Mr. Blunkett) has said:

“The tax credit system is a shambles—such a shambles that I’ve had to help out one of my constituents financially, only the second time that I have ever done this, and the first was for a child. I don’t know if I will ever get the money back, but what else can you do when the tax credit system is such a total mess?”

That tragedy, and the emotion shown by my colleagues on the Treasury Committee, is driven by the fact that the poorest members of society—some 97 per cent. of people who earn less than £10,000—should be receiving the tax credits. They deserve them, and they should be receiving the right amount. As we heard so eloquently from the hon. Member for Edinburgh, West (John Barrett), this situation puts an enormous amount of stress on these families.

I live in a fairly well-to-do constituency, but 25 per cent. of the people who come to my surgery do so because they have received the wrong amount. These people have received letters that come across, to them at least, as highly aggressive and put even more stress on them, because they are being asked to give back, in some cases, thousands of pounds, and they simply do not know what to do.

The financial problem is compounded by the fact that an enormous amount of money has been written off. When we had our Treasury Committee hearing, the amount was £400 million, but I believe that the Public Accounts Committee recently said that the amount to be written off was a whopping £1.9 billion. Braintree has been waiting for a community hospital for a couple of years, and we have been told that it will cost about £5 million—for the sum we are talking about, we could build 200 community hospitals in Braintree. I believe that the hon. Gentleman used the word “shambles”, but that is an understatement of the gross financial mismanagement of tax credits.

My second point concerns the enduring complexity of the system, which has shrugged off all previous attempts at simplification. As I have said, the tax credit system is relied upon by millions of the poorest people, which is why the failures in its administration are such a scandal. Large numbers of people are put off from applying for money to which they are entitled simply because of the complexity of the system. In the poorest communities, where people should be applying for tax credits, word gets around very quickly. The word on tax credits is that they are often more hassle than they are worth. If nothing else, that is a condemnation of a system that the Chancellor, with the best will in the world, wants people to take up.

I have brought a copy of the forms with me, and they illustrate the problem. I know that this is not show and tell, but I do not know whether the Financial Secretary has even seen a copy—he probably does not use the system. I admit that these forms date from 2005, so it is, at least, conceivable, if not probable, that things have got a little better. For the benefit of the Hansard reporter, I should say that there is a 12-page main form, with four additional pages to use if, like me, someone has more than two children, and a whopping 56 pages of guidance notes. I have at least two degrees, one of which is a finance degree from Harvard business school, and I find it challenging enough to deal with the complexities of the forms. Of course, the most useful information to claimants does not even come from HMRC—it is the four-page advice guide from Citizens Advice on what to do in the event of an overpayment.

I repeat that tax credits are intended for the poorest and most vulnerable members of our society, who often lack the time and education to deal with them. The sheer volume of criticism that the system has attracted does not seem to have dented the commitment of Ministers to carry on regardless. Even if HMRC can improve fraud and error rates from their current woeful levels, there is little evidence that anything is being done to confront the root cause of that fraud and error, which is the complexity. HMRC is sticking its fingers in the dam and, as the Public Accounts Committee report from last week has shown, it is running out of fingers.

My final point also concerns uptake, but it relates to the more cynical side of uptake—the extent to which it is budgeted for. I tried to get answers straight from the horse’s mouth when the Chancellor appeared before the Treasury Committee earlier this year but, to stretch the analogy, it was a bit like pulling teeth. HMRC’s report on child tax credit and working tax credit take-up rates, published in March this year, forms the basis for budgeting uptake. For public expenditure purposes, the Treasury assumes that take-up will continue to be in line with current rates.

This was an issue when the Treasury Committee examined the Budget, because we were worried that the Chancellor’s abolition of the 10 per cent. starting rate of income tax would result in a leap in the take-up of working tax credit, which had not been budgeted for. The Treasury has in fact budgeted for an uptake of about 25 per cent. Should one create a system in which one assumes that only 25 per cent. of people will apply and take up the tax credits which are their due and which they richly deserve? The answer is no. If everyone who was entitled to working tax credits claimed them, I believe that there would be a hole of more than £1 billion in the public accounts.

Again, I tried pushing the Chancellor on this issue. Those of us who come from a business background would do some sort of financial model—we would do a sensitivity analysis—and we would ask, “What would happen if there were 50, 60 or 80 per cent. take-up?” Those are the aspirations mentioned by the Chancellor. He wants more people to take these things up, but he could not answer my question. I suspect that he and his team had done no financial analysis on a much greater take-up of working tax credits.

The Chancellor would not comment on any potential increase in take-up, because he thought that any figure I gave him above the level of his projection was hypothetical and, therefore—in a leap of logic—impossible. I was delighted when he admitted to a group of schoolchildren recently:

“I did maths at school and one year at university but I don’t think I was…very good at it—and some people would say it shows.”

I guess that I am one of them. If there were less wastage, which HMRC now seems to accept as a fact of life, perhaps the system could afford to sustain an uptake of working tax credits of more than 25 per cent.

My final concern about the tax credit system is that after all the mistaken payments, the write-offs, the fraud and the wastage, the Chancellor is counting on people not to use it to capacity. It is tempting to think that the system has been designed to fail, but fail it has, and that is the Chancellor’s legacy.

I congratulate my hon. Friend the Member for Edinburgh, West (John Barrett) on securing this debate on this important subject. He has been a doughty campaigner on the issue, as shown by the number of times he has succeeded in winning Adjournment debates on it. I am sure that the way in which he made the case on behalf of his constituents found an echo with all hon. Members here today. We have all dealt with similar cases.

I may as well resume from the very beginning. I was paying tribute to my hon. Friend the Member for Edinburgh, West for his assiduous campaigning over a number of years, which has gained him a strong reputation as someone who takes a close interest in this subject. He is one of a group of MPs from both sides of the House whose assiduous work has put a lot of pressure on the Government to make changes, and they have done so, although I shall argue that the changes need to go much further.

Like both previous speakers, I extend my good wishes to the Paymaster General. I hope that she makes a speedy recovery and I am sure that that sentiment is shared on both sides of the Chamber.

The debate follows the very useful discussion that we had in this Chamber in March, in which many of those present were involved. That debate was in response to the Treasury Committee’s recent report on tax credits, which made some pretty pungent criticisms. Indeed, we appear to get a report making strongly worded criticisms of tax credits every month or so, given that we have also had the 22nd report of the Public Accounts Committee since then. That report also makes significant criticisms and comments regarding the operation of the tax credit system, and I shall bring one or two of those to hon. Members’ attention today.

It is worth saying at the outset that Liberal Democrat Members see the idea of the tax credit system and of boosting the incomes of low-income families to make work worthwhile as a good one, and it is important to see the issue in that context. Sadly, that good idea has been badly let down by the implementation and the way in which the system is administered.

As we know, not least from recent speeches by the Chancellor of the Exchequer, Ministers, and perhaps Treasury Ministers in particular, seem to be in the mood to admit past mistakes. That is particularly true of the Chancellor, although he seems largely to be admitting mistakes on behalf of other Departments rather than his own. None the less, perhaps the Minister will have a chance today to admit to one or two mistakes in relation to the tax credit system.

I wonder, however, whether we are being over-optimistic in expecting the Chancellor to take responsibility on this issue. I noted with interest a report in The Mail on Sunday about a documentary that went out on Channel 4 on Monday or Tuesday of this week, although sadly I was unable to see it. The article quoted Sir Nicholas Montagu, the former head of the Inland Revenue, who told Channel 4 that the Chancellor had apparently disappeared during the tax credits controversy. Sir Nicholas continued:

“What was disastrous and I don’t mince that word was that the system was fundamentally flawed. I did not actually see the Chancellor during the worst of that period”.

In his own inimitable way, the hon. Member for Braintree (Mr. Newmark) made the same point when he said that, until recently, the Chancellor had not answered oral questions on tax credits on the Floor of the House for more than 1,000 days.

Is that not symptomatic of the Chancellor’s character? He is rather like Macavity: every time there is a problem, he is nowhere to be seen.

I am not a psychologist and I would not wish to comment on the Chancellor’s character, so I will leave that to others. In this context, I am more interested in commenting on his policies and his attitude to them, which seems to be characterised by taking the credit when things are good and running to hide when they are not so good.

I apologise for not being able to be here for the opening remarks by the hon. Member for Edinburgh, West (John Barrett) and I congratulate him on securing the debate. One of the conclusions of the report published by the Public Accounts Committee, on which I serve, was that the complexity of the system invented by the Chancellor and the Treasury was such that the Treasury itself could not work out the impact of some of the measures that it had put in place to reform and improve the system. It took months of persistent questioning by my Committee and other Committees to get the Treasury to admit the cost to the Exchequer of increasing the income disregard from £2,500 to £25,000. That measure was designed to get the Chancellor off the hook so that he would not have to deal with the monthly, weekly and daily criticisms that many of our constituents made to us.

I have just a second quick question, if you will indulge me, Dr. McCrea: the reform failed to deal with some of the many difficulties that are inherent in the system, not least of which is what to do when incomes decline and circumstances fluctuate for individuals, and what happens when couples split up. Who is responsible for the overpayment?

I certainly think that the points that the hon. Gentleman has made, to which the excellent report of the Public Accounts Committee drew attention—I congratulate him on his work in ferreting out the information—are important.

The point about the flow of information on tax credits is one that I want to return to. The glacial pace at which information is forthcoming is one of the most frustrating aspects of the debate, for those of us who want to scrutinise the system and hold it to account in real time. Too often we appear to be debating on the basis of information about what the system was like two, three or four years ago, when we know from the experience of our constituents today that many of the same problems still exist. It is hard to get to the bottom of the issue and find out the extent of those problems, because the Department seems to be quite unwilling to bring forth even basic management information of the sort that, for example, the Department for Work and Pensions seems perfectly able to produce on benefit administration. The Treasury could learn a lot from that Department. It is not often that I say that anyone could learn a lot from the Department for Work and Pensions, but in this case, on information provision, certain lessons could be learned.

Before the hon. Gentleman intervened I was dwelling on a point about responsibility. Sadly, it seems in the case of tax credits that while Ministers are not willing to take responsibility for their own mistakes the system requires claimants to take responsibility for the mistakes made by officials. That suggests a topsy-turvy world where responsibility is assigned completely wrongly. That point was initially made in the excellent report by the parliamentary ombudsman, to which my hon. Friend the Member for Edinburgh, West referred in his speech. As far as we can ascertain—I have asked about this several times before, and perhaps the Minister will find a way to respond today—it seems that only four of the 12 recommendations that the ombudsman made in her report “Tax credits: putting things right” have been accepted and implemented. If the Minister could give a definitive answer about what has happened on the implementation of the other eight recommendations, that would be of great benefit to the House.

The most important of the ombudsman’s recommendations seem not to have been implemented. She recommended, for example, that when an overpayment is alleged, the claimant should be sent a letter, clearly stating how it occurred. The point was made earlier that not only should claimants be told that an overpayment has been made; they should be given details of the calculation that led to the overpayment. The system has serious shortcomings in that regard. The recommended approach would give time for a challenge to be made before recovery of the overpayment began. My hon. Friend pointed out the need for a pause, and Citizens Advice and the Child Poverty Action Group have also argued for a pause before the reclaiming of overpayments. I understand that the Department has been looking into the matter, and I should be grateful for an update on progress, and on whether such a change will be implemented soon.

The ombudsman also made the point that there should be a statutory test for the recovery of overpayments, consistent with the social security benefits test, and with a right of appeal to an independent tribunal. It is utterly unreasonable for Revenue and Customs to assume that claimants should take responsibility for identifying errors made by tax credit office officials. Yet that is the system at the moment. Hon. Members will often have encountered constituency cases, as my hon. Friend mentioned, in which constituents have continually updated the tax credit office on the changes in their circumstances. A constituent of mine, in a recent example, had kept the office up to date with changing circumstances at every stage, but, having failed to spot one error in a blizzard of 13 different award notices sent in a short period, was held responsible for the overpayment. The burden of responsibility and proof is the wrong way round. That was among the most important of the ombudsman’s recommendations: that HMRC should reverse the burden of proof, where the error has been caused by HMRC itself. The assumption should be that an overpayment is not recoverable unless it is reasonable to think that the mistake would have been obvious and, clearly, if the mistake was obviously made by the claimant.

The Public Accounts Committee report is the result of the fourth occasion on which the Committee has had to investigate the system. It concludes that the Treasury has still not developed adequate systems or an adequate response to the large-scale chaos that it has caused. That is in line with the impression of many Liberal Democrat Members, and the impression that hon. Members seemed to have formed in the Westminster Hall debate in March, that the Treasury continues to be in denial about the level of maladministration, passing it off as teething problems. More importantly, it is in denial about the impact that that has on the individuals who are directly affected. It is clear from both the Treasury Committee and the Public Accounts Committee reports, couched as they are in moderate parliamentary language, that members of those Committees share the anger and frustration about the system that many hon. Members feel on behalf of their constituents.

The Public Accounts Committee concluded:

“Tax credits suffer from the highest rates of error and fraud in central government, undermining HMRC’s reputation for accuracy, fairness and proper handling of taxpayers’ affairs.”

That is a pretty damning indictment. The Treasury Committee report made it clear that progress on the problem had been inadequate in the past year, commenting that it was

“not convinced that the Paymaster General and the Department fully realise the extent to which HMRC needs to re-focus its administrative structures for tax credits around the needs of claimants.”

The needs of claimants are the real issue. That is what motivates so many Members of the House to become involved in the issue; because as well as causing losses to the Exchequer, overpayments cause real hardships to claimants. The Treasury Committee report highlighted the case research that showed that the incomes of low-income families are especially volatile. Tax credits—especially overpayments and the reclaiming of those—can make matters much worse, causing people to live on a financial rollercoaster.

The reasons for overpayments are often unclear to the claimants, who are often held responsible not just for their own mistakes but for those of officials. My hon. Friend referred to such instances. He also made the point that, sadly, such mistakes—and the last figures that are available, for 2004-05, show about 2 million families being affected by overpayments—undermine confidence in the whole system. His account of having to persuade people to reapply to enter the tax credit system, when they are reluctant owing to their own or their friends’ experience, is borne out by the point made by the hon. Member for Braintree about take-up—of working tax credit in particular. That shows that the perfectly fair amount of negative publicity that the system has received, given the incompetent administration that has beset its early years, has affected claimants’ attitudes and experience.

Claimants who engage with the system have recently encountered other problems, including when they use the telephone helpline. That is not a criticism of the staff, who I know, through my dealings with the MP hotline, try to be helpful. A beneficial feature is that it is now possible to get hold of recordings of claimants’ telephone conversations on the helpline, to try to understand the information that was provided. There are examples of claimants who felt that they were offered reassurances that an overpayment would not be recovered until the following year, and of claimants who were advised to appeal, only to be told much later that in such circumstances an appeal was not possible. Often, therefore, false expectations were raised.

It is clear from listening to phone calls that despite the best efforts of the staff, some do not necessarily understand the operation of the whole system, perhaps because of the way in which they are separated into different management areas of the organisation. However, when making contact via the telephone helpline, the claimant fully expects to deal with someone who fully understands the operation of the whole system.

I am concerned that staff reductions at HMRC will have an impact on the service that tax credit claimants receive. There is already a great deal of centralisation in call centres, but staff reduction in district offices such as the Inverness office will undoubtedly affect claimants’ ability to obtain face-to-face service and assistance. Many claimants find it useful, because it is sometimes the only way in which they feel that they can get their point across, given the difficulties that they experience with the telephone helpline. I hope that the Financial Secretary will address that point in his response.

It is also clear that the appeals process has been made increasingly tough. While millions of people still suffer overpayments, the number who have had their overpayments written off has substantially reduced, causing even greater hardship. In 2005, there were 351,000 disputed overpayments, of which 162,000 were written off. In 2006, there were 350,000 disputed overpayments, of which only 14,000 were written off. The rate of written-off overpayments has fallen from one in every two disputes to more like one in every 25, suggesting that the process by which disputed overpayments are assessed and decided on has become increasingly harsh. Taking up cases on behalf of constituents, Members from all parts of the House have experienced that situation.

Recent parliamentary answers show that the number of cases in which the tax credit office and HMRC have taken legal proceedings to recover overpayments has increased dramatically in the past year. Again, I should be grateful for the Financial Secretary’s comments on HMRC’s increasing willingness to use legal proceedings to pursue families, who are still sometimes on very low incomes, through the courts for the money that they owe.

The provision of information is important in understanding the system and in holding Ministers to account for its operation. In the next week or so, the latest tranche of information on tax credits will be published, probably for 2005-06—18 months to two years ago. The Paymaster General explained the reasons for that situation, but it highlights the difficulty in getting hold of up-to-date information from the Treasury compared, for example, with the Department for Work and Pensions. That point has been made in the recent reports to which I have referred, and the Public Accounts Committee was critical about the lack of up-to-date information on levels of fraud and error.

There is a particular issue about the Social Security Advisory Committee. It has a statutory relationship with the DWP, but the committee does not have a statutory duty to be consulted by the Treasury on the benefits—tax credits and child benefit—that it administers. I should like that duty to be introduced, and particularly, the reports to be made public, so that people can understand the advice that that body of experts—the SSAC—offers.

What needs to be done? The ombudsman’s recommendations should be implemented in full; the pause has already been mentioned; there need to be greater appeal rights; and the forms must be clearer and simpler. Even after recent efforts, the award notices would still make the Scottish elections’ ballot paper look simple. Given those problems, it is hardly surprising that many people find tax credit award notices hard to understand.

In the long term, the Liberal Democrats would like much more stability in the system, and the reconsideration of fixed awards. That would strip away the instability—the financial rollercoaster—that causes hardship for so many hard-working low-income families whom the system was designed to benefit.

For the information of Members, this debate will conclude at 4.15 pm, because of the suspension for a division. However, I am not seeking to encourage you to extend your contributions just to fill the time up, as we have two further debates.

I am mindful of your guidance, Dr. McCrea. My only challenge is that there has been an incredible amount of business in the tax credit system in the past week alone, so I do not want people to miss their opportunity to be represented.

I congratulate the hon. Member for Edinburgh, West (John Barrett) on securing this Adjournment debate and on introducing it so clearly. It is also a pleasure to be in the Chamber opposite the Financial Secretary this afternoon. I should normally debate the issue with the Paymaster General; indeed, I have done so in the Chamber several times. However, we are well aware why she cannot be here this afternoon, and I, like many other hon. Members, hope that she will continue to recover well. I ask the Financial Secretary whether he would be good enough to pass those sentiments on to her when they next speak.

On 15 March, we debated tax credits in the Chamber based on the sixth report of the Select Committee on the Treasury in the 2005-06 Session, entitled, “The Administration of Tax Credits”. That report was very critical of the operation of the tax credit system, which was designed specifically by the Chancellor of the Exchequer. The report highlighted areas such as IT system error, the level of overpayments, the recovery of overpayments, fraud, error and organised crime, and even the availability of information about the tax credits regime as a whole.

Tellingly, in terms of the extent of fraud and error within the system, the Treasury Committee concluded:

“We are concerned that it is now over two years since the end of the 2003-04 tax year, and yet HMRC is still to establish final levels of claimant error and fraud in the tax credits regime for that year.

That point was well highlighted in the very good contribution from my hon. Friend the Member for Braintree (Mr. Newmark).

Moving forward to today, we can take as our text the more recent report by the Public Accounts Committee, entitled simply, “Tax Credits”, which was published on 9 May, representing the fourth time that the PAC has investigated the new system of tax credits that the Chancellor introduced in 2003. The report was excoriating, pointing out among other things that almost £6 billion has been overpaid to claimants since 2003; that

“tax credits suffer from the highest rates of error and fraud in Government”;

and that the Treasury

“failed to design the tax credits scheme to give proper protection against error and fraud.”

The PAC’s critical analysis provoked considerable comment in the media, including remarks on almost all national news bulletins, on national radio and in the press. Despite the best efforts on that day of the Chief Secretary to the Treasury to limit the damage, I have a sample of just a few comments that followed in the press.

First, The Daily Telegraph summarised the situation:

“Gordon Brown’s flagship tax credits system has handed out nearly £6 billion of overpayments in the space of just three years, a damning report by MPs reveals today”—

9 May.

It continued:

“The scale of the problem is so large that officials have already been forced to write off more than £500 million of overpayments and are ‘unlikely’ to recover a further £1.4 billion, the report said. In a withering analysis the MPs stressed that a further £1.28 billion of tax credits was lost in a single year as a result of ‘unacceptable’ fraud and error.”

The Daily Mail, in an article entitled “£2 Billion Lost to Fraud and Error in Tax Credits Fiasco”, said:

“MPs on the Public Accounts Committee blasted ministers for failing to tackle the ‘unacceptable flood’ of tax credits overpaid or lost through mistakes and fraud.

The all-party committee found Chancellor Gordon Brown’s flagship system was…in meltdown, despite repeated promises that it was being improved.”

In the interests of balance across the political spectrum, I can also tell the Chamber that the Daily Mirror concluded:

“The report slams Ministers and officials for failing to get a grip and Revenue and Customs for not stopping the ‘flood of money wasted’.”

The Guardian, in slightly more detail, put the matter like this:

“The Treasury is poised to write off £2 billion—equivalent to 1p on income tax—as uncollectable from Gordon Brown’s tax credit scheme, a report by MPs reveals today. The figure is almost four times higher than disclosed a year ago.

The complex scheme, which pays out money to the low paid, has been dogged by fraud and error since it was introduced in 2003. Ministers have already admitted that £5.8 billion has been paid to people who should not have received the money.

In evidence to MPs which is published today, the Treasury admits £1.9 billion cannot be recovered. The report details that money collected has often caused hardship to the low paid who were suddenly landed with big bills. The scheme was also vulnerable to fraud and error, and internet claims had to be abandoned in 2005 after ‘sustained’ attacks by criminals.”

Scotland has very much been in the news recently and we would not want it to miss out, so for good measure, here is how The Scotsman put it:

“Billions of pounds are still routinely overpaid to tax credit claimants, years after errors in the system were pointed out to ministers.

The government’s response to the tax credits fiasco, which will cost taxpayers unforeseen amounts, is still inadequate”.

In case the Financial Secretary thinks that I have over-egged the pudding, I have left out quotations from the Daily Express, The Independent and The Sun.

For the sake of completeness, the hon. Gentleman should know that the press in the far north of Scotland covered the report in a similar tone and in similar language. That emphasises how widely felt the problems with tax credits are: they are felt across the length and breadth of the United Kingdom.

I am grateful for the hon. Gentleman’s intervention. As I am a great believer in the Union, I am relieved to hear that tax credits got the same panning in the north of Scotland as they did in much of the rest of the United Kingdom.

The fundamental problem with the new tax credits system, which the Chancellor has designed, is its inherent complexity, which makes it both difficult to understand by claimants and complex to administer by HMRC. My hon. Friend the Member for Braintree gave the good example of the complexity of the forms and the 56 pages or so of guidance notes, which are available to help claimants to try to fill them in. In short, the currently configured system is not user-friendly—in fact, quite the reverse. As a result, the levels of error are becoming staggering. Of some 5 million families who now claim tax credits, around 2 million are overpaid, while just under 1 million are underpaid. In other words, more than half of all the payments in the entire system are wrong.

Senior HMRC officials recently admitted to Parliament that many claimants do not understand the system because it is so complex. Sarah Walker, the director of credits and benefits at HMRC, said in evidence to the Treasury Committee on Wednesday 14 March 2007,

“we are making it clear to people what we expect them to check around their award and what we do not. We do not expect them to be able to understand the whole calculation because that can be quite difficult”.

The problem of immense complexity, to which even HMRC admits, was well summarised by the Yorkshire Post on 9 May in the following terms:

“Gordon Brown’s masterful use of obfuscation and complexity has born much bitter fruit, and one of the nastiest is his tax credits system.

Since his introduction of the present system in 2003, taxpayers have seen nearly £6 billion of the money they have paid to the Treasury incorrectly handed out.

That loss is galling, but perhaps the worst aspect of this fiasco has been the ‘claw-back’ which HM Revenue and Customs has engaged in when recovering money from families which had been paid too much. The Commons Public Accounts Committee says that collecting overpayments has caused hardship to many people…Mr Brown’s brainchild is so shambolic that it continues to be riddled with problems. He has refused to answer Commons questions on these problems for many years. It is time that the Chancellor faced up to this shambles which is entirely of his own making.”

Quite.

All hon. Members who have spoken have raised the problem of overpayments, which appears to be at the heart of the system’s difficulties. The Public Accounts Committee pointed out that since 2003 almost £6 billion had been overpaid, £500 million of which had already been written off. In reality, many families had absolutely no idea that they had been overpaid until they suddenly received an official notice from HMRC stating that they had been, but often without telling them how that had been calculated and nevertheless demanding that they pay the money back.

By definition, many of the families claiming tax credits have few if any savings. Overpayments therefore present them with a serious difficulty, not least because in most cases they honestly did not realise that they were in the wrong in the first place, because the system is so complex. We are now in a situation where HMRC officials admit to Parliament that many claimants do not understand the system because it is so complex, yet they are held responsible for not reporting to HMRC that they have been overpaid, by a system that it acknowledges they do not understand. When claimants appeal, they come up against code of practice 26, which says that they must not only prove that HMRC made an error, but pass a reasonableness test, to which I shall return.

All those problems have been well highlighted by Citizens Advice, both locally, to many Members of Parliament, and nationally. John Wheatley, the social policy officer of Citizens Advice, said the following about the weaknesses in the system, in a press release of 11 April 2007:

“Some families have been left seriously out of pocket and confused because they are being asked to pay back tax credits, which they believed they were entitled to. Challenging the recovery of overpayments is not easy and currently thousands of families are being threatened with court action. People often say that they have received contradictory award notices, or been told that the money definitely is theirs; overpayments can even happen when no mistake has been made.”

The hon. Gentleman is covering well-trodden territory, albeit in his characteristically thorough way, but I am not clear about one point. Would he waive all overpayments?

No. The Conservative party would not be in a position to give that commitment, because of the large amount of money involved. What surely must happen is for the administration of the system to be reformed, so that overpayments do not occur on anything like the scale on which they currently occur. Hopefully much of the misery would then be reduced.

Despite the problems that they are up against, more than 750,000 families appealed against a demand to recover an overpayment in 2005-06. However, the latest figures show that, whereas around half of all claimants might previously have had a part or all of the money waived, the rate of successful appeals is now down to below one in 20. The system is now massively weighted against those who appeal, because they are up against the strictures of COP 26, for the reasons that I have already illustrated.

The hon. Gentleman argues that the system should be reformed, but it is not clear how he would propose to reform it. Would that include ending the flexibility in the system and going to a rigid payments system, as we used to have before tax credits?

The Financial Secretary anticipates me. If he will bear with me for another minute or so, I shall give him at least one specific example of how we might reform the system so that it operates more effectively. I have not whetted his appetite unnecessarily; I shall help him in a minute.

Given the problem of overpayments and the appeals system, nearly 90 Labour Members of Parliament have now signed early-day motion 545, which calls for a reform of the tax credits system and, in particular, of the appeals system for dealing with the whole issue of alleged overpayments. The Labour party has a lot on its mind at the moment; we all realise that. Nevertheless, it is an indictment of a system that was supposed to be one of the jewels in the Chancellor’s crown that not a single Labour Back Bencher has taken the trouble to come to Westminster Hall this afternoon to defend it—even at a time when one would think that they were keen to curry favour with the Chancellor. That speaks volumes about the problems in the system.

I want to make a specific recommendation to the Minister that might assist the situation and would constitute an element of reform. At the very least, when claimants are assessed as having been overpaid, could they not be sent a detailed calculation at that time that showed exactly how the alleged overpayment had been arrived at? In many cases, claimants get that degree of detail only once they have appealed to the tax credit office against the recovery of the overpayment. If the TCO has that information, why can it not be provided to the claimant with the overpayment demand so that the claimant can reasonably assess the calculation, go through it themselves and take an informed view on whether to appeal against the attempt at recovery?

Will my hon. Friend give way?

Yes; I am tight for time, but I will.

I shall take only a few seconds. Perhaps I could make another suggestion, although I appreciate that that is not really the prerogative of Opposition Back Benchers. The Government could also simplify the forms. If they were simpler, there would be fewer errors and the Government would not need to write off almost £2 billion.

My hon. Friend makes a good point. Many of those who claim tax credits are on marginal incomes, and they do not necessarily have detailed financial training. Therefore, making the system and guidance as easy as possible to follow would be of great assistance to the more than 5 million families who currently claim.

I should say that HMRC has improved the quality of the awards notices that tell claimants how much they have been awarded. However, it has not provided the same detail and quality when it demands an overpayment. That is a gap in the system, and I have offered the Financial Secretary a specific suggestion.

In summary, the situation looks like this. The Treasury is now well and truly losing the argument on its current tax credits system. It has been criticised by the Public Accounts Committee, the Treasury Committee and the parliamentary ombudsman. Now even significant numbers of Back-Bench Labour MPs are calling for reform. To make it worse, the Comptroller and Auditor General has had to begin to qualify HMRC’s own accounts because of the level of fraud and error in the tax credits system. That is galling for taxpayers: their returns can be disputed by HMRC, yet the Government’s national auditor has to qualify HMRC’s accounts himself because of the failures of tax credits.

In the past week alone, the Chancellor’s highly complicated system has also been criticised by the BBC, ITV, Channel 4, The Times, The Daily Telegraph, The Guardian, The Independent, The Sun, the Daily Mail, the Daily Express, The Birmingham Post, the Yorkshire Post, the Bristol Evening Post, the press in the north of Scotland—and even the Evening Standard in London, which called the current system the “economics of the madhouse”. HMRC now admits that many of the claimants do not really understand the tax credits system, yet it still blames them rather than itself when things go wrong. As it operates, the system is the exact opposite of user-friendly, as anyone who has ever tried to contest an overpayment can testify.

The administration of the system needs to be considered again. It simply must be reformed. I hope that the Financial Secretary will agree.

Like the hon. Member for Rayleigh (Mr. Francois), I should like to start by congratulating the hon. Member for Edinburgh, West (John Barrett) on securing this debate. It is almost a year to the day since he initiated his last such debate, which is almost becoming an annual fixture. I am just sorry that for this match I am a substitute for the Paymaster General. I shall endeavour to do the job as adequately as I can. This is my first debate on tax credits; I pay tribute to the hon. Member for Braintree (Mr. Newmark), for whom this is the fifth tax credits debate this year. I shall pass to the Paymaster General the good wishes of those who have spoken this afternoon.

The hon. Member for Edinburgh, West does not just pursue his concerns in set-piece debates such as this; I know because I have checked. Like many MPs, he presses the case of his constituents when there are individual problems. I am glad that the Paymaster General was able to resolve the problem that he mentioned at the start of his remarks. I cannot promise the same result, but I shall certainly look again at the case that he set before the Chamber this afternoon.

That said, the hon. Gentleman made one or two sweeping assertions about the tax credits system that I cannot simply glide over or let rest and with which I must take issue. The tax credits system is not in disarray, nor is it failing the people whom it was set up to help. Difficulties are caused when some people have obligations to repay the taxpayer for overpayments, when there is a basis for regarding them as due for repayment. We are conscious of the problems that that can create, and we are dealing with them—not least through the set of reforms that the Paymaster General set out in the pre-Budget report 2005.

With all respect to the hon. Gentleman, I felt that he was a bit grudging when he conceded that tax credits may have helped some people. Tax credits today provide support for almost 20 million people, including about 6 million families and 10 million children throughout the United Kingdom. Our figures show that in his own constituency 7,700 families benefit from tax credits. On average, the annual worth of those tax credit payments is more than £2,300 each year.

It is important to keep the issue in perspective. As constituency Members, we all come across individuals who are struggling with the system and have difficulties. Sometimes in such cases, HMRC has clearly made mistakes. However, let us keep things in perspective: 7,700 families benefit from tax credits in the hon. Gentleman’s constituency; in that of the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander), 9,700 families benefit; in that of the hon. Member for Rayleigh, 7,100 families benefit; and in that of the hon. Member for Braintree, 10,600 families benefit. The hon. Member for Ludlow (Mr. Dunne) is not in his place but made a contribution earlier, and in his constituency, 7,100 families benefit from tax credits.

It is also important to compare the system with the one that predated it to underline both the significance of tax credit support and the scale of the investment that we, as a Labour Government, are putting in to support lower-income families. The spending each year to support tax credits—to support those lower-income families—is almost eight times greater than it was each year under the family credit system. Take-up, particularly among those with the lowest incomes of less than £10,000 a year, is at about 97 per cent. of those who are entitled. That compares with a 57 per cent. take-up of the old family credit system and only a 62 to 65 per cent. take-up under the first working families tax credits system.

Although rather in passing, it has been recognised today, particularly by the hon. Member for Inverness, Nairn, Badenoch and Strathspey, that tax credits have been central to helping people move into work and to making work, rather than welfare, pay. Tax credits, combined with our economic stability, have played a large part in the fact that 2.5 million more people are working in Britain now than 10 years ago. They have played a central role in reducing the net tax burden to those on low and middle incomes, ensuring that about four in every 10 families pay no net tax.

In setting out the benefits of tax credits and the numbers of recipients, I am sure that the Financial Secretary does not seek to trivialise the experience of those people who have suffered overpayments. He mentioned that there are 9,700 recipients in my constituency. Based on a statistical calculation across the country, that would suggest that some 4,000 families in my constituency have suffered overpayments. The fact that many of those families might not appeal or might not go to their MP for assistance does not necessarily mean that the overpayment was correct, but it reflects the fact that when people receive a letter from HMRC they feel that it is bound to be correct and go along with the system when it would sometimes be in their interest to challenge the conclusion, as those of us who have challenged other cases on behalf of our constituents can testify.

As I have said, I am not trying to downplay the difficulties with some cases of overpayment and the anxiety that they can cause. I want to ensure that we conduct the debate with a proper sense of perspective that sets the understandable concentration on individual cases and problems in the wider context of the large number of people who are being helped by a system in which the Labour Government are prepared to invest a great deal in order to support more lower income families, to make work pay better and to help to tackle child poverty—the number of children in relative poverty has been reduced by well over 600,000 in the past decade. Those aims are important, and the hon. Gentleman recognised that when he said that tax credits were, in principle, a good idea.

Let me turn to the Public Accounts Committee report, which was mentioned by the hon. Members for Rayleigh and for Edinburgh, West. The PAC provides an important and valuable role in scrutinising Departments so that they provide good value for money and effectively deliver what they set out to deliver. It shares a close interest in doing that with the Treasury, and as Financial Secretary to the Treasury, I am privileged to be a formal member of the Committee, although I do not actively participate. We will respond fully and formally to the PAC report, as usual.

We have not resolved all the problems in the tax credit system, but I want to keep a degree of perspective. The arrangements are improving, and it is important to note that the PAC report is largely based on out-of-date data. Things are improving, and arrangements are being put in place to ensure that they improve for those who claim entitlement under the system. End-year adjustments that lead to an overpayment have already fallen by one fifth and improvements to the accuracy of processing and calculating awards are evident, but once the measures announced in the 2005 pre-Budget report come fully into effect, the level of end-year adjustments is expected to fall by a further third in future years.

HMRC is making some good progress in implementing the reforms laid out by my right hon. Friend the Paymaster General. Income disregard has been increased to £25,000, ensuring that almost all families with increasing incomes will not have their tax credit entitlement reduced in the first year of the increase. The renewal period has been reduced to five months, reducing the length of time for which some customers received payments based on out-of-date information, which has reduced overpayments. This year, the renewal period will be further shortened to four months.

I appreciate that this is not the Financial Secretary’s regular brief and that he is in the Chamber as a substitute. Nevertheless, will he confirm that when the Chief Secretary introduced what was known as the “PBR package”, which included at its heart the tenfold increase in the disregard, he followed that up with a written statement in 2006 that admitted that even that would reduce the number of overpayments by only a third? We now know from the National Audit Office and the PAC that the estimated additional cost of that package, and particularly of the increase in the disregard, is £500 million a year.

The hon. Gentleman is wrong. The reforms need to be considered together as a package. The cost of the package was disclosed at the time of the pre-Budget report, and it was £50 million a year. The adjustments that would lead to an overpayment were already falling, and they will fall further as a result of the package of reforms that we are putting in place. The big increase in the income disregard plays an important part in the reforms.

I want to report on the progress on the other two reforms. The changes to make reporting certain changes of circumstances compulsory have been implemented.

rose—

I have given way to the hon. Gentleman twice and I want to respond to other hon. Members. However, I shall give way one last time.

The Financial Secretary said that I was wrong, but I am not. When the summary of the PAC report discussed the increase in the disregard, it said:

“This change will reduce the level of overpayments and increase the overall cost of the scheme by some £500 million each year.”

The PAC said that, not me. I am not wrong.

Those figures are about the increase in the entitlement. The figures that were reported at the time and that I was talking about were the cost of the overall package of reforms. There is no inconsistency between the two figures.

Finally, the amount by which payments can be reduced in order to recover an in-year overpayment has been restricted significantly for low-income customers. The hon. Gentleman mentioned the debate that he had on this subject with the Paymaster General after the Treasury Committee report was published. She announced that HMRC was about to start a pilot designed to help a group of claimants at one of the most difficult times of their lives, when relationships break down. It has conducted that pilot and is now carefully considering the results. I hope that we will be able to draw conclusions about a potential approach this summer.

Will the Financial Secretary give way?

If the hon. Gentleman does not mind, I shall turn to some of the points that he raised. If there is time towards the end, perhaps he can come back to me on any other points.

The hon. Gentleman tackled me on a number of points about the ombudsman. First, he was concerned about claimants getting information about how overpayments arose. Since November last year, a full playback has been introduced. It contains a summary of the changes in circumstances that have been reported to HMRC and that have an impact on the award. When claimants receive the finalisation notice, which is sent to the claimant at the end of the tax year to confirm the tax credits to which they were entitled, it will contain information on their award throughout the previous tax year.

The hon. Gentleman was also concerned about the availability of more general information about tax credits. HMRC publishes a huge amount of information on tax credits. The next publication will be on 22 May, and he referred to that. Inevitably, the annual system of tax credits means that some data cannot be produced in real time. For instance, let us consider fraud estimates. In order to produce such estimates, they must be based on an examination of or inquiry into a sample of finalised awards. They take time to work through and to establish, and so information of that nature cannot possibly be produced in real time, as the hon. Gentleman has urged.

The hon. Gentleman took me to task on the ombudsman’s recommendations. I do not know whether he has seen the statement that she issued in July last year to accompany her annual report, which said:

“Ms Abraham commented on the positive way in which HM Revenue and Customs…had worked constructively with her office on the issue of tax credits. HMRC responded to her report to Parliament in June 2005 with some substantial changes to the administration of the system and agreed new ways of handling complaints.”

I want to touch on the comments made by the hon. Member for Ludlow, even though he is not still in his place, because he is a member of the Public Accounts Committee and I think it right to do so.

The Minister indicated that he is keen for information to be provided on tax credits, and I welcome that. Will he ensure that information about the pilot in relation to couples is published, so that those of us on these Benches, and indeed organisations outside the House, can scrutinise and evaluate it along with Treasury officials?

In the Treasury and HMRC, we are keen to respond when we can to suggestions or requests for greater information about how the tax credit system is working. We shall certainly aim to do that, and the pilot is clearly of significance to not only HMRC and Treasury Ministers, but a much wider audience.

The hon. Member for Ludlow basically said that the tax credit system is complex. With the important aspect of flexibility in the system inevitably comes a degree of complexity, and in the end the judgment has to be whether the advantages of the flexible system outweigh the disadvantages and difficulties that can be caused by the system becoming more complex to understand. The flexible system of tax credits means that families can get extra support when their needs are greatest. That is particularly important in today’s modern labour market, in which in any one year 3 million people change jobs and at least 200,000 men and women move into new, better jobs and see their family income rise by more than £10,000.

The only way to avoid end-of-year adjustments would be to have a system in which the payments were fixed and based on past information. In 2004-05, 700,000 families had a fall in their income but increased entitlement to tax credits. Under a fixed system they might have had to wait for up to two years before their income was reflected in their tax credit entitlement. If their income were to fall by £5,000, that could mean that they would lose out on about £2,000 of tax credits each year. Similarly, if someone receiving tax credits for a child had a second baby, they would have to wait until the end of the tax year to get any extra money. That would mean that they could lose out on nearly £2,400.

HMRC is keen to deliver better improvements to the system, and it has clarified the reasonable belief test that it uses to determine whether an overpayment is recoverable. The test is based on long-standing practice in the system and sets out that tax credit overpayments will be written off when there has been a mistake by HMRC and it was not reasonable for the claimant to have spotted the error. I wish to dwell on that for a moment, because a couple of hon. Members have asked me about it.

Let me be clear: HMRC does not expect people to check whether their award has been calculated correctly. If the helpline wrongly tells a claimant that their award is correct, even though they have questioned it, HMRC will rightly accept that as passing the reasonable belief test. In short, it expects claimants to check the factual information on their award notices, such as how many children they have and what their income is. It also expects them to check whether the amount going into their bank accounts matches the amount in the award notice. Building on those improvements, a pilot will start in the next few months to provide an independent review of HMRC decisions on whether to recover an overpayment caused by official error. That will give claimants the option of having their cases reviewed by the adjudicator by a fast-track process.

The hon. Member for East Dunbartonshire (Jo Swinson) was concerned about hardship. The measures recently put in place to help that include reduced recovery rates for those on low incomes. For those who no longer receive an award, 12-month instalment plans are available with longer repayment periods where necessary. Where there are difficulties in the system, we are working hard to deal with them.

In debates such as this and as Back Benchers in Committee, hon. Members play a useful part in ensuring that HMRC’s attention is concentrated on the problems. However, tax credits have helped to increase the number of people in work, improved the incentives to work, reduced the tax burden for many families and helped to reduce child poverty dramatically in the past decade.

I thank Mr. Speaker for granting permission for the debate to be held. I welcome the Minister and look forward to hearing his response in due course. I am pleased to welcome my hon. Friend the Member for Wellingborough (Mr. Bone), who, with your permission, Dr. McCrea, will also participate in the debate and concentrate on some aspects of the future funding of the hospital.

People in and around Kettering are extremely proud of our local hospital. It was founded in 1897, so this is its 110th year on the same site in Kettering. It would be remiss of me to proceed further without placing on the parliamentary record my thanks and those of all my constituents to the doctors, nurses and ancillary and administrative staff at Kettering general hospital for their wonderful work for local people, which is widely appreciated.

Kettering general hospital does wonderful work, and a report by the Healthcare Commission, its latest in-patient survey, which was released today, shows that 95 per cent. of patients at the hospital have rated the overall care that they received as either excellent, very good or good. Only 4 per cent. rated it as fair, and only 1 per cent. as poor. That is a tremendous record. Having said that, it would be remiss of me not to say that there are people in serious circumstances who have been let down by the hospital. The situation of those patients—I am sure that you have such patients in your constituency, Dr. McCrea—is extremely serious, and it is our job as Members of Parliament to ensure that they get the appropriate redress.

I wish to invite the Minister to visit Kettering general hospital. His colleague the Prime Minister visited in February 2005, but his visit was wholly inappropriate. He visited the hospital not as Prime Minister but as leader of the Labour party and held an election rally on the hospital premises. That was a black day for the hospital. I would welcome the Minister, in his capacity as Health Minister, visiting the hospital to see the wonderful work that goes on there and learn first-hand about the challenges that it faces in the years ahead. I hope that he will give that invitation, which I deliver on behalf of the Kettering General Hospital NHS Trust, full and proper consideration. He would get a warm welcome.

I applied for this debate because Kettering general hospital faces real challenges in the next 10 or 20 years, primarily because of the rapid growth that will take place in the local population up to 2031 as a result of the sustainable communities plan promoted by the Department for Communities and Local Government. In north Northamptonshire an extra 52,000 houses are to be built by 2021—in other words, over the next 14 years. The local population will increase by at least a third, and possibly more, which is one of the fastest rates of population growth anywhere in the country. One does not need to be a rocket scientist to work out that if the local population is to increase by at least a third, the medical needs of the population will also increase by at least at third. That, crudely, means that we will need one third more GPs and a one-third increase in hospital facilities.

Unfortunately, against the background of rapid and significant population growth there are significant capacity shortfalls at Kettering general hospital, and the staff are working flat out to meet the health needs of the local population, not least in the accident and emergency department. The situation has been made worse by the forced merger of the local primary care trusts by the Department of Health last year. That was bad news for Kettering general hospital because the now combined Northamptonshire PCT has a cumulative deficit of £44 million, which is to be shared out across the whole of the county. The problem for Kettering general hospital is that it is an extremely efficient hospital, in the way that such things are measured, and the deficit of the Northamptonshire Heartlands PCT, which was responsible for the north of Northamptonshire, was not anything like the deficit of the Daventry and South Northamptonshire PCT.

In other words, health services for constituents in Kettering, Wellingborough and Corby are being cut back because of financial overspends elsewhere in Northamptonshire, and the effect of that has been that Kettering general hospital has had to cut back on some of its procedures. It had to delay the opening of its wonderful new treatment centre in October last year until this April, wards have been closed, procedures have been cancelled and waits have been extended. All of that was the result of the Department’s wrong decision to merge the PCTs in Northamptonshire, against the wishes of the county’s Members of Parliament, including myself.

The cuts have not helped the serious infection control situation at Kettering general hospital. Local people are rightly proud of the work that the hospital does, but it is sad indeed that in 2006 it had the worst record in the whole country for clostridium difficile infections. The figures are slightly distorted because the method for collecting them means that community-based infections are included with the hospital’s infections. Nevertheless, there were 641 cases in 2006—the country’s worst. That rather contrasts with the Prime Minister’s remarks when he visited in February 2005. He said that Kettering was a world-class hospital, but since his visit we have seen not only ward closures, further underfunding, the country’s worst record for hospital-acquired infections and some of the highest mortality rates in the country but also staffing levels driven to what one member of staff who I spoke to in preparation for this debate described as crisis levels. Those are the problems that the hospital has faced, and I commend all the staff for the way in which they have tried to address challenges that have been made worse by some of the decisions made in Whitehall.

I have spoken with consultants at the hospital, and they are confident that measures are now in place to ensure that the hospital’s record of hospital-acquired infections improves. The Department has granted a further £300,000 to help in the fight against clostridium difficile infections. One medical ward is to be fully refurbished, a decontamination room for cleaning hospital equipment is to be set up, hand-washing facilities are to be upgraded and large, high-impact floor signs will be installed to remind all staff, patients and visitors of the need to wash their hands. I hope that the clostridium difficile infection rates at the hospital will improve as those measures work themselves through. Nevertheless, for every one of my constituents who goes into hospital to be treated, only to find themselves staying there longer because they have acquired an extra infection while in hospital, there is a tragic and unacceptable tale.

In preparation for this debate, I was careful to engage with as many representatives of the local health service as I could. I spoke to senior managers at the trust, local GPs, members of the local patient and public involvement forum, consultants and staff. There is very much a shared sense of Kettering general hospital being a valued community facility in which everyone is doing their best against a difficult background. I know that the Health Minister must receive many representations from Members of Parliament across the country for extra resources for their hospital, but as my hon. Friend will demonstrate in a moment, Kettering general hospital faces an almost unique background of consistent and persistent central Government underfunding going back some time. Although attempts have been made to address that, the cumulative underfunding over many years will not be caught up with overnight.

The crisis is made worse by the increase in the local population, and I urge the Minister to ensure that the population statistics that his officials give him match the reality on the ground. If he were to accept the trust’s invitation to come and see the hospital for himself, he would see the pressure that accident and emergency is under, especially at weekends, and the pressure that other wards are under as they do their best to treat local patients.

I will give way now to my hon. Friend, but I would like to impress on the Minister the fact that local people are proud of Kettering general hospital. Everyone wants it to succeed. I hope that the Government recognise the challenges that it faces, and that the Department will do its best to ensure that whoever the Member for Kettering is in another 110 years’ time, they will be able to look back at this debate and say, “Yes, the Government understood the problems that local people faced in respect of their hospital and responded to the challenges.”

I congratulate my hon. Friend the Member for Kettering (Mr. Hollobone) on securing this very important debate. The Minister is very able. I often find that when he is wheeled out, it is because the Government are defending the indefensible, so he appears on television and in debates quite often. I appreciate his attending today.

I am here to talk about Kettering general hospital, because it is the hospital for Wellingborough—there is no hospital in my constituency. My constituents have to go to Kettering, which sometimes involves a journey of up to three quarters of an hour. One of the biggest concerns expressed in surveys in Wellingborough and Rushden is the health service and the fact that we do not have our own local hospital. More than 94 per cent. of local people think that there should be a community hospital in Wellingborough with minor accident and emergency facilities, partly to offset the problems at Kettering general hospital. Kettering would be the major hospital, but a lot of my constituents could go to Wellingborough.

The Minister might say, “That is all well and good, but how are we to fund it?” The problem in our area has been consistent underfunding by central Government. The figures are not mine but the Minister’s—they are Government figures. The situation is perhaps best explained by Sir Richard Tilt, who was chairman of the Leicestershire, Northamptonshire and Rutland strategic health authority. In a letter to the Secretary of State for Health on 15 August 2005, he stated:

“We have an impressive track record of achieving national targets and delivering financial balance. The SHA was categorised as ‘high performing’...We are however the worst funded SHA relative to the national capitation formula which seeks to enable a fair, equitable distribution across the NHS...Kettering General Hospital for example has a reference cost index of 89. Indeed North Northamptonshire is our most pressurised health community. Northamptonshire Heartlands PCT which covers this population (including Corby with its severe health problems) is 32 million pounds (9.9%) below capitation...I am sure you will not be surprised that we believe we cannot deliver both financial and non-financial targets in 2005/06...It will be a simple and inevitable consequence of a growing gap between our allocated funding and the monies we need (as defined by the national formula) to meet the needs of our population.”

That was Sir Richard Tilt in August 2005.

The crux of my argument is that we have a wonderful hospital and terrific staff, but the Government work out what the hospital should get through the PCT and then deliberately and systematically underfund it. I have not heard any Minister defend that and say why it is the case. It is not good enough to say that other areas get more money. That is not an argument to underfund Kettering hospital, and we are not talking about a small amount of money.

In 2003-04, when the Government allocated funding directly to PCTs for the first time, the PCT that covers Kettering hospital received 90 per cent. of the funding that it should have had. The Government said they would give a certain amount, but they gave only 90 per cent. of that figure, which created a shortfall of £22.2 million. In 2004-05, again we received only 90 per cent. of what the Government said that we should have got, which was a shortfall of £24.4 million. Almost unbelievably, in 2005-06 the figure fell to 89 per cent., which increased the shortfall to £29.37 million in that year. The following year the shortfall was £20.16 million, and this year it is predicted to be £15.08 million. If the figures for the past few years are added together, the total underfunding is £111.21 million. That is not the level of underfunding that I have worked out; it is the Government’s own figures.

The Government spend a lot of time trying to work out an equitable and fair funding system for across the country, so why are Kettering and north Northampton consistently underfunded? I am not asking for an unfair share of the national health service budget; I am just asking for what the Government have said the area should have. I hope that the Minister will take that point on board.

I know that the Minister understands the problem and that the Government are trying to reduce the funding gap, but when there is £111 million of underfunding and then the Government say there is a deficit, there is something wrong with the Government’s accountancy and thinking, and it needs to be corrected.

I congratulate the hon. Member for Kettering (Mr. Hollobone) on securing the debate and thank the hon. Member for Wellingborough (Mr. Bone) for taking part. I do not doubt the sincerity of their commitment to Kettering General Hospital NHS Trust and to improving the national health service in their constituencies.

I will try to rebalance the debate slightly, because I do not believe that either hon. Member was entirely fair on the Government’s record of investment in the hospital trust that we are discussing. On the record, it is important to emphasise the significant investment in capital, buildings and people who work for the trust. In the health service in Northamptonshire, there are 357 more GPs, 725 more consultants, more than 6,856 additional nurses and midwives and more than 3,000 additional health care assistants. That is within the East Midlands strategic health authority area, and it represents a big investment in the work force of the national health service. Such investment is having a big impact on improving patient care.

There has also been unprecedented improvement in the fabric of the health service during the past 10 years, and Northamptonshire and Kettering are no different in that regard. In April this year, a new £16 million treatment centre opened at Kettering general hospital, which will enable the trust to increase the proportion of its operations as short-stay procedures. Indeed, it is instrumental to the trust’s plans to deliver the maximum 18-week target for the constituents of the hon. Members for Kettering and for Wellingborough. The treatment centre is the largest single development at the trust in 30 years, and I had hoped that I would hear something about that in the remarks of the hon. Member for Kettering. Other improvements at the trust include a £4.7 million cardiac catheter laboratory, which is being completed on site to improve care for people with heart problems, two new CAT scanners, a new MRI scanner, a new skin care unit, which opened in February 2003, a new ophthalmology unit and an extension to the intensive care unit. In fact, there is a long list of recent improvements to Kettering general hospital.

The hon. Member for Kettering questioned the motives of my right hon. Friend the Prime Minister in visiting the hospital. Given the levels of investment in bricks and mortar, capital, and services that the Government have made since 1997, the Prime Minister was perfectly entitled to visit Kettering general hospital. I challenge both hon. Members to answer a direct question: is Kettering general hospital better provided for today than in 1997?

Yes it is. However, my point is not party political. The population will grow so fast that, although investment is welcome, far more will be needed. Will the Minister look favourably upon the trust’s application for foundation trust status? That decision will be made in the next few months, and it is critical for the future health of the hospital that the Minister grants that application.

I appreciate the hon. Gentleman’s honesty in answering the question directly and admitting that the hospital is significantly better today than in 1997. The question on foundation trust application is extremely important and, if I understand him correctly, he strongly supports the application. I welcome that. The hon. Member for Wellingborough is nodding, and I welcome that support, too.

At the start of his speech, the hon. Member for Kettering mentioned patient satisfaction. A lot is said about our national health service and the quality of services. Today, a survey has been published by the Healthcare Commission, which the hon. Gentleman mentioned. It states that 95 per cent. of patients at Kettering general hospital rate their care as good, very good or excellent. That is a tremendous tribute to the staff who serve his constituents, and I was pleased that he began his remarks by recognising the outstanding service that has been provided to local people.

I am also pleased that waiting lists continue to fall at the trust. As of 31 March 2007, there were no patients waiting more than six months for in-patient treatment and no patients waiting more than 13 weeks for their first out-patient appointment. Of course, the trust faces challenges, and I will turn to infection control in a moment, because the hon. Gentleman mentioned that issue. I do not make these introductory remarks to suggest that everything is rosy and that the trust and the local health economy do not face important issues. However, it is important to place on the record the substantial commitment that the Government have shown to improving health services in his constituency.

Both hon. Members mentioned funding, and I know that they have talked about that issue in the House on many occasions and that it is an important concern for them. In our last round of allocations to PCTs, we recognised that areas of the country have historically received less than their fair share of funding. In the last round of allocations, we accepted that such areas should be moved more quickly to receiving their national fair share. In 2003-04, the most under-target PCT was 22 per cent. below target, which, from memory, was Easington primary care trust in the north-east. As a result of our decision to move PCTs more quickly towards target, no PCT will be more than 3.7 per cent. below target at the end of the current financial year. Along with other PCTs that are below target, Northamptonshire PCT has benefited from an increase in allocations over and above the national average.

In 2006-07, the allocation to the PCT increased to £730 million, which is a cash increase of 12.7 per cent., and in 2007-08 it will receive £817 million, which is a further cash increase of 12 per cent. Over those years, that amounts to a cash increase of 26.3 per cent. compared with the national average of 19.5 per cent. I understand the concerns raised properly by Opposition Members today, but I hope that they agree that that represents a significant dent in the problem and significant investment in their local health services. That increase in funding is the joint largest for any PCT in the country.

I appreciate what the Minister has said and understand his point. However, will he acknowledge that Northamptonshire PCT remains in the bottom range with the biggest difference between what it should get and what it will get? And will he tell me when that gap will finally be closed?

We will look at those issues during the next funding round. In particular, we will look at the pace of change policy in order to see how quickly we can move PCTs from below target to target funding. However, I suggest that the hon. Gentleman directs his questions to the shadow Health Secretary, the hon. Member for South Cambridgeshire (Mr. Lansley). Like mine, his PCT is under its target allocation and has benefited from the changes that the Government made in order better to pick out deprivation when health funding is being allocated. I ask the hon. Gentleman to direct his questions to his Front-Bench colleagues, because their proposals for changing the funding formula, as I understand them, would leave the constituencies of both Opposition Members present worse off. Perhaps they need to pursue that with their Front-Bench colleagues.

On foundation trust status, I welcome the support indicated for the trust’s bid. In my view, it is absolutely the right way for the trust to go in order to build on the sense of improvement that, it would seem from my discussions with the trust’s management, has got going. I think that, elsewhere, foundation trust status has galvanised momentum and maintained local pride and focus. That is the right way forward, and I hope very much that the support of hon. Members today will be replicated throughout the community and that the trust can make that important step forward.

The hon. Member for Kettering mentioned infection control. It is true that the trust has recognised that it has a particular problem with levels of clostridium difficile. In July last year, it recognised that action was needed to improve matters significantly, and action has been taken—in the first quarter of this year, a significant reduction was made in C. difficile rates compared with the first quarter of 2006. From memory—I do not have the figure to hand—that represents about a 36 per cent. decrease. However, he is right to say that there can be no complacency on that important issue. I was grateful that he acknowledged the money that has been made available by the Department to improve infection control—the £300,000 to which he rightly referred. In my view, that will help the trust further to improve its infection control.

In conclusion, I shall pick up a couple of further issues. The hon. Gentleman made a general point about the need for health services in the Northamptonshire area to keep pace with anticipated population growth. I think that both Opposition Members present made that point, and it was a point very well made. The hon. Member for Kettering will know that in the last PCT allocation round an adjustment was made to the funding formula to recognise the latest figures on projected population growth, and I assure both hon. Members that the same thing will happen this time. There is no debate about it: a significant increase in population is expected in their area, and it is vitally important that the health service keeps track of it.

I would like to point out to the hon. Member for Wellingborough that there were some 528 beds in his trust in 2003-04 and that today the number is 598. So there is evidence that the capacity of the service is increasing, and I believe that the trust is looking at increasing further the level of services provided in the surrounding towns. I hope that that is of some comfort to him.

The hon. Member for Kettering said that everyone is doing their best against a difficult background, but I do not accept that. I think that the background is positive. A lot of investment has gone into the trust, which is responding well and improving services, as patients are telling us. However, we are not complacent. I shall work with him to improve matters further and accept his kind invitation to visit the trust and see the improvements for myself.

I welcome you to the Chair, Dr. McCrea. I think that this is the first occasion on which I have had the pleasure of serving under your chairmanship.

I am very grateful for the opportunity to raise an issue that is, of course, of general application, but which is of particular concern to people in the northern isles and remote and peripheral communities throughout the country. In the course of today’s debate, I hope to raise a number of issues concerning digital switchover that are of particular concern to the northern isles, including the assistance available to vulnerable groups, the degree of coverage that we can expect on the islands after switchover, the type of service that local people will be able to access, and, briefly, digital radio.

From what has been revealed to date, we know that the digital switchover help scheme will provide one set-top box and assistance with installation and operation to individuals aged 75 or over, to those receiving disability living or attendance allowance, and to those registered blind or partially sighted. The help will be free for those who are eligible for pension credit, income support or jobseeker’s allowance. Others will have to pay a modest charge.

It is my understanding that the assistance scheme will not be retrospective, which means that people who have planned ahead and who would have been eligible for assistance will be penalised, which seems to provide an incentive for inaction until the period in which assistance becomes available. Surely the Government should be encouraging people to prepare for digital switchover as soon as possible.

As I shall explore in a moment, surely there is an issue about end-loading the way in which people convert to digital television. I am concerned that the period during which people will be able to apply for assistance might be too short. Help will be provided only for the eight months prior to the date of switchover and for one month afterwards, which seems to be a very tight time frame. In a written parliamentary answer to me, the Minister stated that 649,000 Scottish households would be entitled to assistance. If all those households applied for help, a small army would be needed to ensure that assistance is provided in the nine months in which it is available.

As things stand, I do not see such an army in place. Indeed, in a written answer to my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore), the Government indicated that as of 30 September last year, just 42 people had completed the training necessary to become a registered digital installer. An additional 15 people were enrolled in training in the Border region, four in Grampian and none in the Scottish TV region. Such a small number of people simply will not cope, if they are required to help more than 500,000 Scottish households.

In a spirit of Celtic solidarity, I invite my hon. Friend to reflect on the position in Wales, where 440,000 households are entitled to the assistance scheme, but where, as of the same date, we had only 32 trainees on the registered digital installer scheme. We have the same concerns: we are working to a very tight time scale, and the end result will be, sadly, that many people will miss out on the assistance available to them.

I am grateful to my hon. Friend for his intervention. His analysis of the situation is much the same as my own—it is acute. The only issue that I would take, of course, is that my constituents are not Celtic, but Nordic. The Celts start somewhere south of the Pentland firth. However, with that small proviso, I take issue with very little in that intervention.

I would be grateful if the Minister could indicate how many people across Scotland have completed the training and how many installers are currently being trained. Is he confident that enough people will be in place to help those who apply for assistance with digital switchover?

As well as assistance for vulnerable groups it is important that all local people understand the digital switchover process. Figures provided to me by Digital UK suggest that in the STV north region, just 56 per cent. of people are aware of what they need to do to switch compared with a national figure of 64 per cent. How does the Minister intend to ensure that those figures rise dramatically in the months ahead? Has he considered the particular challenges of raising awareness of digital switchover in remote and rural communities?

On the question of coverage, in 1999 the Government set a target of 99.5 per cent. of homes being able to receive digital terrestrial reception. In June 2005, however, Ofcom announced that 98.5 per cent. of households should be covered by the digital network. For most people, those figures would be comforting, but if people live in a community such as Orkney or Shetland, their hearts sink when they hear them, because they know that they will be in the 0.5 or 1.5 per cent. of the country that does not receive the full service. In the previous debate that I initiated on the issue, we questioned the Minister on the applicability of regional targets. I would be interested if, when responding today, he could say whether he still insists on national targets or whether he will seek to achieve the 98.5 per cent. target within each region.

The figure of 98.5 per cent. is equivalent to the proportion of people who currently receive analogue reception. However, once switchover occurs, not all those who currently receive analogue reception will be able to receive digital terrestrial television. Viewers in rural areas who receive weak television signals are the most likely to be affected, because weak analogue television signals can often be picked up by aerials and converted to reduced-quality television pictures, but digital signals are either received or they are not. The flipside is that many people who currently need to use a satellite to access television stations might find that they can access digital using a normal aerial once switchover happens.

I was interested to read in the briefing material provided to me for the debate by Digital UK that 98.5 per cent. of people will be able to get a digital signal, but that a further 1.2 per cent. of households will get what it terms a “mostly reliable service”. That was news to me—I had not come across the term before—and it causes me concern. I wonder on whose judgment the service will be deemed “mostly reliable”. I would be grateful if the Minister in his reply could expand on exactly how reliable a service has to be to be “mostly reliable”.

The problem for many people in Orkney and Shetland is that they simply do not know what reception they will be able to receive after switchover. That means that people do not know whether it makes sense to purchase set-top boxes. I understand that Ofcom has looked into the matter, but its research has not been made public. Will the Minister ensure that as much information as possible is made available, so that people can make informed decisions?

Of course, it is important to ensure that the people who will not be able to receive a digital terrestrial signal have affordable alternatives. I welcome the fact that the BBC Trust has brought forward Freesat, but can the Minister tell us what assistance will be available to households that have to purchase Freesat in order to receive a television signal once switchover happens? Will the digital switchover help scheme, for example, include the cost of installing satellite equipment where there is a poor digital terrestrial signal? Can he also guarantee that the households that have to rely on satellites to access television stations will receive the same level of service as other viewers?

It is essential that people who live in rural and remote areas can access the same level of service as people who live in other parts of the country. I am particularly concerned, therefore, about the situation with regard to relay stations. In rural areas, many people rely on relay stations to receive a television signal. However, only the public service broadcasters—the BBC, ITV, Channel 4, and Five—are obliged to broadcast on relay stations. Surely other commercial operators should also broadcast on relay stations. If that is not sorted out, it will mean that, after digital switchover, many people who live in rural areas will receive a worse service than those who live in towns and cities.

I am eager to allow sufficient time for the Minister to give as full a reply as possible and to take any interventions that he can from hon. Members who are present, but before I conclude, I would like to ask a few questions about the future of digital radio. The Minister will be aware that more than 85 per cent. of the population can currently use DAB—digital audio broadcasting—radios and the BBC is committed to increasing that to 90 per cent. However, although the BBC has what it terms “outline plans” for transmitting stations to serve Orkney and Shetland, it has not shared with people in the isles what those plans involve. In March this year, I was informed that, as the BBC put it:

“many issues need to be considered including funding”

before the plans are realised. It is the lack of openness and perhaps the reliance on the funding issue that cause us some concern.

I receive a steady stream of complaints from constituents who cannot use DAB radios, and it is frustrating to have to tell them that we have no idea when that situation will change. It is made worse by the fact that many retailers now stock only digital radios. One notices that the larger, nationwide retail operations in Orkney—we are fortunate that we do not have too many, yet—often introduce DAB radios, which they offer tremendous deals on and which I am sure must generate more work for their customer complaints departments and more returns than anything else.

One e-mail on the issue was sent to me by a constituent on Christmas day. I never particularly like the business of hon. Members naming constituents in parliamentary debates, so I will not name the constituent, but he is known to a number of people in this place—he was, until not long ago, Scotland’s Deputy First Minister, and he ought to know better than to send his Member of Parliament an e-mail on Christmas day. He had received a digital radio from his wife for Christmas. It would be a belated Christmas present for him if the Minister could commit to ensuring that everyone can use digital radios in the future. Until that is the case, many of my constituents will continue to complain, with some justification, that it is unfair that they have to pay the licence fee in full, but can receive only in part the services provided by the BBC.

I, too, welcome you to the Chair, Dr. McCrea. I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing this important debate on digital switchover.

It might be helpful to remind hon. Members that according to Ofcom, by the turn of the year three in four UK households received digital television services on their primary television. The Digital UK and Ofcom quarterly tracker shows that awareness of switchover nationally is 82 per cent. and it is even higher in the areas that will switch at the beginning. The figure for Border, the first region to switch, is 96 per cent. The figure for the Grampian/Scottish TV region, which switches in 2010, is 82 per cent.

Far be it from me to come between the hon. Members for Orkney and Shetland and for Ceredigion (Mark Williams) in their Nordic-Celtic alliance, but I will offer a word of advice, particularly to the Celtic dimension of that alliance. I would be presumptuous to assume that what we have seen is in line with Liberal Democrat campaigning, but it is important to have up-to-date figures. The hon. Member for Ceredigion issued a press release today, a move that I absolutely understand, entitled “Digital Help Scheme must reach all in need”. The answer is that it is doing so.

It is terribly important that the hon. Gentleman checks his facts. In his press release, he says:

“Despite the awareness campaign, Ofcom revealed that only 54 per cent. of people in Wales knew when digital switchover will happen, and what to do when it does.”

I refer him to the published figures from Ofcom for the first quarter of this year, which show awareness in Wales at 86 per cent. He may be out of touch with a significant proportion of the public, but I want to reassure him on that front that awareness in Wales is now tracked at 86 per cent. and in the STV/Grampian region it runs at 82 per cent. That provides an opportunity for him to revise his press release. He will probably want to leave this Adjournment debate to go and do so at the earliest opportunity.

I thank the Minister for those updated figures, and I am heartened by them. I stand corrected as to their precise nature and give full praise to Digital UK for getting the message through. I think that the Minister will acknowledge, however, that there is some way to go. That is the point.

There is some way to go, but there is a significant difference between suggesting that the majority of people in Wales do not know that digital switchover is happening, and recognising that there is only 14 per cent. of the population in Wales left to go.

We do not for a moment underestimate the task. However, I reiterate to the hon. Gentleman that it is important not to scare people. We should be reassuring people, but the tone of his press release was more scaremongering than reassuring. We should pay tribute to the work of the agencies that we have put in place to carry out this huge project, which is bigger than decimalisation was. There have been huge successes, and it is incumbent on us to ensure that our figures are up to date when we communicate them to our constituents.

I repeat that I stand corrected on the precise figures, and I am sure that the Minister is going to address the point that I made in my intervention. It is not scaremongering to suggest that the time frame in which people can take advantage of the scheme is too short, and that there are serious concerns about the training of professionals to deliver the scheme that the Government have put in place. Those are legitimate concerns to raise, and they have been expressed by many people in Wales, Scotland and elsewhere.

To avoid the semantic debate over scaremongering and being reassuring, let me remind the hon. Gentleman that we are not starting from scratch. As I said in my opening remarks, three in four UK households, including in many parts of Wales and Scotland, already receive digital television services on their primary television set. He must recognise that a great deal has already been done. We do not underestimate the task that lies ahead, but I am confident that we are on track.

It is important that the hon. Gentleman should raise awareness among his constituents, but it should be based on current, rather than grossly inaccurate, information. The figures that he gave in today’s press release were not marginally inaccurate; they were wildly different from Digital UK’s official figures. It is important that he should use accurate figures.

I move to the substance of the debate and the points made by the hon. Member for Orkney and Shetland. He asked why the help scheme is not retrospective. Let me clarify this issue again for the benefit of the House. The scheme is designed to help those who are most likely to need help in making the switch to digital. We recognise that a number of people who are eligible for the scheme will nevertheless choose, and be able, to go digital without assistance. By definition, the many people who have already gone digital do not need that help.

Evidence shows that people who can go digital are already doing so. Some 56 per cent. of people aged 75 and over have already converted their primary television set, and 78 per cent. of people under 75 who receive a disability living allowance or an attendance allowance have made that conversion. We certainly encourage people to make the switch earlier rather than later so that they can enjoy all the benefits of digital television. There is no evidence that the scheme is acting as a break on take-up or introducing a level of retrospection that will make it more expensive and complicated to run for no obvious benefit.

The hon. Gentleman asked whether the window for applications to the help scheme is too short. It is not. Rather than wait for applicants to ask the scheme for help, it will contact those who are eligible. The first contact will be made eight months before switchover in the region. If the applicant does not respond, he or she will receive a reminder later in the process—on top of TV and other advertising. That should be a more than adequate period for a person to participate in the scheme. I remind hon. Members that awareness of switchover amongst people aged 75 and over is running very high, at about 81 per cent. There is more work to do, but we are starting from a good place.

The hon. Gentleman asked whether if everyone who is eligible in Scotland were to apply, there would be a shortage of people to provide the help. There might be some misunderstanding on this point. First, not all of those who are eligible will apply, because many of them already have digital television. None the less, we will assume that there will be quite high levels of take-up—two-thirds of those who are eligible in the UK.

Secondly, not all of those who are eligible will need to be helped by a registered digital installer. RDIs are trained aerial installers, but hon. Members must realise that only 10 per cent. of those who are eligible will need a fitter to come and do the job. Again, it is important to get the figures into context, because there is a genuine problem of alarming people with concerns that there are not enough registered fitters around. In fact, even if everyone applied, only 10 per cent. of those who would need help would need a registered installer.

We are making progress on having qualified RDIs in Scotland. A scheme to provide distance learning and mobile assessment facilities is in preparation, which will help areas with low population densities. There are already 39 installers registered to undertake RDI training in the Scottish/Grampian and Border Television regions. Although RDIs will be trained and come on stream in one part of the country, they will go to other parts of the country to work, because people will want to use their expertise. The Scottish figures should not be viewed in isolation from the figures for bordering areas.

The Minister is giving an exceptionally helpful exposition of the current position. In my constituency, there are particular geographical issues. It is quite foreseeable that installation will be a fairly smooth process on mainland Orkney, but there are 32 more islands in my constituency, some of which are very small and some of which get only one ferry service a week, although they will have a daily air service. Those circumstances present particular challenges. Will the Minister ensure that when the nuts and bolts of the scheme are being devised, it will have sufficient flexibility built in to ensure that those communities can be catered for?

The hon. Gentleman makes an important point, and I wish that he had extended to me an invitation to come and tour his constituency, as some of his hon. Friends did for their constituencies. I suspect that any such tour would be almost Victorian in length, but extremely enjoyable none the less. However, to address his serious point, which is well taken, of course we are taking into account constituencies’ particular conditions as we prepare for digital switchover region by region. I will also take into account his comments today.

The hon. Gentleman asked what percentage of people in the north of Scotland are sufficiently aware of what they need to do to make the switchover. Context is, again, important, not least because the figures show that more than half of the households in the region have already converted their sets. Nevertheless, I reassure him that communications in the region will be stepped up in the run-up to switchover.

The effect of such an approach on awareness in the Border Television area illustrates the success there. Some 52 per cent. of households in the STV/Grampian area have converted all their television sets, and 75 per cent. of people in the Border area understand what to do for switchover. The purpose of the survey is to continue to monitor trends. What matters is that the trends improve. In comparison with other countries that have been handling digital switchover, the UK is at an advanced stage. I am not complacent, but I remain confident of our preparations.

The hon. Gentleman asked about awareness being increased in remote and rural communities such as his own. The survey shows that at the beginning of this year, 88 per cent. of people in rural areas were aware of switchover—interestingly, that is several points higher than the figure of 81 per cent. for those in urban communities. I am not sure what one should extract from that, except that it probably demonstrates that his constituents are wise, regardless of how they vote in elections, and that he is fortunate to represent such highly aware people.

I believe that the hon. Gentleman indicated that once switchover occurs, not all those who receive analogue reception will receive digital terrestrial television. Unfortunately, his figures date from June 2005. It might be helpful for him to know that in December 2006, Ofcom updated its assessment of the expected level of digital coverage following digital switchover. Its current view is that

“all of the communities currently capable of receiving analogue terrestrial will be able to receive digital terrestrial after switchover”

and that

“the coverage of digital terrestrial will be at least as good as analogue terrestrial”.

The hon. Gentleman asked whether viewers in rural areas who receive weak television signals are likely to be those most affected. As I have said, Ofcom’s view is that the coverage of digital terrestrial will be at least as good as analogue terrestrial. This is based on a computer simulation, so there may be a margin of error and there may be marginal changes in reliability, for example, under certain weather conditions. In so far as we can prepare, we believe that we have that matter adequately covered, but again we have no complacency.

The hon. Gentleman asked how people will know whether it makes sense to purchase set-top boxes. People can use the Digital UK postcode check to see whether they have to wait for switchover to receive the signal.

I give way.

Could the Minister illustrate some of the lessons that can be learned from the flagship pilot project in Whitehaven in Copeland, particularly how local authorities and the voluntary sector can help with the implementation of the switchover process?

My hon. Friend makes an important point about lessons to be learned. I congratulate Digital UK on its work in his constituency. That work would not have been done without the partnerships that we envisaged would have to take place, not only in his constituency, which is leading with switchover, but in all constituencies.

I pay tribute to my hon. Friend whose role in bringing together the voluntary sector, particularly that of Age Concern, has been exemplary for all of us. He has worked extremely hard with the local authority and with local charities, but particularly Age Concern because it represents and has knowledge of a particular sector that will be affected. If hon. Members work with their local organisations, such as Age Concern, they can have a huge impact on ensuring that the switchover happens smoothly and effectively. The lesson that we shall draw, particularly from Whitehaven, is to look at the way in which my hon. Friend has worked there to lead his constituents and ensure that they will all benefit from being the first to roll out switchover later his year.

The hon. Member for Orkney and Shetland asked about the assistance that will be made available to those who must purchase Freesat to receive digital. The help scheme will provide vulnerable households that qualify and are outside the DTT coverage area with the option of satellite at no additional charge. He asked whether I could guarantee that those households relying on satellite will receive the same level of service as other households. Digital UK will ensure that all households can enjoy the same level of service.

The hon. Gentleman asked a specific question about relays carrying fewer channels than the main transmitters. The short answer is no. Switchover will bring around 18 channels, including Five, to those areas that have only four analogue services at present, so they will not carry fewer channels than the main transmitters.

When switchover takes place in Orkney and Shetland in the first half of 2010, the power of the digital terrestrial signals will be significantly increased, and all the relays will broadcast digital signals so that all households that can receive analogue at present should receive reliable digital terrestrial reception.

The final issue that the hon. Gentleman raised was about extending digital radio to Orkney and Shetland. That is a matter for the BBC, but I understand his point in a personal capacity, and I am sure that eventually we will, as it says on the Mars bar, be able to entirely satisfy him.

I hope that I have dealt with the issues that the hon. Gentleman raised, but if other hon. Members have issues to raise, I shall be more than happy to correspond with them.

Question put and agreed to.

Adjourned accordingly at twenty-three minutes to Six o’clock.