House of Commons
Tuesday 26 June 2007
The House met at half-past Two o’clock
[Mr. Speaker in the Chair]
Whitehaven Harbour Bill [Lords]
Considered; to be read the Third time.
Oral Answers to Questions
The Secretary of State was asked—
Since the Health Act received Royal Assent last year, my hon. Friend the Minister with responsibility for public health and officials have worked tirelessly, with local authorities, businesses and others, to prepare for implementation. As a result, I believe that going smoke-free in England next Sunday will be just as successful as it has already been in the rest of the United Kingdom.
I thank my right hon. Friend for that answer. I am sure that history will be kind not only to her but to her Front-Bench colleagues, and, dare I say it, to her Parliamentary Private Secretaries and formers PPSs, for this bold and imaginative move. Lives will be saved, lung function among staff will be improved, and it will be possible to enjoy lovely meals in a restaurant or pub. Does she agree that the initiative will be as successful in England as it has been in Scotland, Ireland and Wales?
I strongly agree with my hon. Friend. I pay particular tribute to my hon. Friend the Minister with responsibility for public health and to my hon. Friend for their contribution. Researchers in Scotland have already found that going smoke-free has had an immediate and positive impact on the health of bar workers. We will see similar effects in England, and over time thousands of people’s lives will be saved, reinforcing the fact that smoke-free legislation will be the biggest step forward for public health in our generation.
Does the Secretary of State agree that Newham council and primary care trust should be congratulated on their work in preparation for this legislation? They have engaged with over 250 businesses and have so far encouraged 2,000 people to quit, in the “Big Quit” campaign.
I readily congratulate Newham borough council on the excellent work that it and local authorities up and down the country have done to prepare for the smoking ban. As a result, not only does almost every business know that it needs to make preparations for going smoke-free on Sunday, but almost every member of the public is aware of the change to come. I am delighted that thousands of people have already taken advantage of the excellent stop smoking services provided by the NHS. Thanks to the efforts of the NHS, local councils and many others, we will go on reducing the single biggest cause of illness and premature death in our country.
I am sure that the Secretary of State is aware of recent reports from Italy that the occurrence of heart attacks has dropped significantly since its ban on smoking in public places. Does she agree that that would be an excellent way of publicising the benefits of the ban in this country?
The hon. Gentleman makes an extremely important point. One of the compelling pieces of evidence from the chief medical officer was that even second-hand smoke, over quite a short space of time, can have a disastrous effect on people’s heart health. Conversely, going smoke-free will save thousands of people’s lives and save thousands of families from the grief of the premature death of a beloved family member.
I have to say that the whole issue of signage was fully debated in Committee, both in the House and another place, before the Health Bill received Royal Assent last year. None of the hon. Gentleman’s Conservative party colleagues raised any complaint or proposed any amendment at the time. The signage regulations introduced in England are less onerous than those in Scotland, which have not given rise to any problems. In Southwark cathedral, for instance, there are already public signs saying, “No mobile phones”, “No drinking”, and even, I am told, “We accept Visa”.
The World Health Organisation framework convention on tobacco control meets in Bangkok next week to agree best practice guidelines for protection from second-hand smoke. Given that all parts of the UK will have legal protection from second-hand smoke from Sunday, will the Government be supporting the guidelines next week?
I thank my right hon. Friend for that question. I also thank him for, and congratulate him on, the superb work that he and his Select Committee did in securing such a large cross-party majority for going smoke-free. I am happy to assure him that we not only endorse the draft guidelines for the WHO framework convention, but have played an active role in developing them. We will support the adoption of the guidelines as they stand at the conference of the convention parties which is being held next month.
On 1 July, prison cells will be one of the very few enclosed public places where people can smoke, yet the health of the prison population is appalling and half of those who enter prison as non-smokers leave as smokers. When the Secretary of State has gone, she will best be remembered for her spectacular U-turn on smoke-free pubs. In the very short time remaining to her, will she assess the health consequences for convicts and prison officers of the exceptional smoking rights that she has granted to prisoners?
I am sorry that at a time when, thanks to a stunningly large majority in the House, to which the hon. Gentleman contributed, England is about to go smoke-free, he takes the tone that he does. We have taken the view, and Parliament took the view, that given that prison is akin to an individual’s own home, it was right to take the approach that we did, but it is also right, and absolutely essential, that we go on working with the prison authorities to reduce smoking in prison and to help more prisoners to give up smoking. I very much hope that the hon. Gentleman and his colleagues in the Conservative party will take the view, which I am sure all my hon. Friends do, that those who are Members of this House or who seek to be Members of this House should support and respect the laws that are made in this place. Otherwise, they might find themselves in prison.
Is my right hon. Friend aware that since the introduction of the smoking ban in Wales on 2 April, there has been a huge increase in the number of smokers who want to give up and, I think, a 30 per cent. rise in the number of calls to the helpline? Does she agree that it is very important that extra resources are made available to respond to the needs of people who want to give up smoking?
My hon. Friend is absolutely right. I am glad to say that the NHS in England is already seeing an increase in the number of people who are coming forward and asking for support from stop smoking services. With more than £8 billion of additional funding going into the NHS this year, I have no doubt at all that primary care trusts all over the country will be ensuring that stop smoking services, nicotine replacement therapy on prescription and so on will all be available to support the growing number of people who want to give up smoking.
Next month we plan to issue guidance on the introduction of emergency short breaks to councils, and £25 million will be made available to support implementation of the guidance from October of this year.
I am grateful to the Minister for that response. Some of the most impressive people that I have met in my constituency are the young people, sometimes still at school or in other full-time education, who for whatever reason are also the sole carers for parents, grandparents or other family members. Obviously, times are tough for them on a number of occasions, particularly when they try to balance their aspirations with their caring responsibilities. What are the Government doing to ensure that, when times are tough, emergency respite care is available for those young carers?
I entirely agree with my hon. Friend. There is no doubt that young carers do a tremendous job and in many ways are the hidden heroes. On the other hand, their caring responsibilities often undermine their education and have a negative impact on their life chances. Therefore, we have a duty—a responsibility—to give the needs of young carers a much greater priority than we have in the past. They will be able to access the new emergency respite care funding that we are announcing, which will be available from October. They will be central to the consultation that we are undertaking on a new national strategy for carers. We want to hear the voice and the real-life experiences of young carers as we develop a new deal for carers in every part of this country.
The Minister will be aware that the recent national carers week had as its objective widening access to support services for carers. Will the recently announced review of the national carers strategy include an expansion of emergency respite care for carers who need it, and if not, why not?
My hon. Friend raises an important point. It is essential that the review of the future new deal for carers takes account of every element that affects carers’ responsibilities and life. Carers want a system that is on their side, in terms of the NHS and social care, but they also want a life of their own and access to employment, lifelong learning and leisure opportunities. Therefore it is essential that our new deal for carers expands emergency respite care, but also touches on every single aspect that affects a carer’s caring responsibilities and their right to a life of their own.
Help the Aged estimates that 500,000 people in this country are victims of elder abuse, many of whom live in care homes. Given that, does the Minister feel that the current inspection and regulation arrangements are adequate to ensure that we identify and eradicate elder abuse in our care homes?
The hon. Gentleman raises an important issue. The demographics of our society are changing. People are living longer and longer, but in doing so they have more and more challenging conditions, such as Alzheimer’s and dementia. As a consequence, we face new questions as a Government, as politicians and as a society. One of those questions is the abuse of older people. A shocking report last week talked of the abuse that takes place in people’s homes, mainly—it has to be said—by relatives. However, there is also the issue of the abuse of older people in care establishments of one kind or another. Of course the existing regulatory system for the protection of vulnerable adults seeks to address that, but as people live longer we need new solutions to tackle one of the great challenges that our society now faces.
I thank the hon. Gentleman for a simple question. Leonard Cheshire does an entirely appropriate job. The bigger point is the relationship between statutory organisations and the voluntary sector, and their capacity to work together to improve dignity, respect and support for older people and their families. We need a new understanding that those responsibilities are shared, that some are the responsibility properly of Government and the state, and others of families and carers, but that the voluntary sector has a unique and important role to play in offering people innovative and responsive services.
Does my hon. Friend recognise the vital role of day care for the elderly in providing respite for carers? If so, will he ask Staffordshire county council to reconsider its over-hasty plans to close day care facilities for elderly people, because that would put an impossible burden on their carers?
I am sure that my hon. Friend will accept that it is not for me to intervene directly in the decisions that are taken by local authorities where people are democratically elected to serve their local community—[Interruption.] I thought that the Conservatives believed in localism and local decision making. Let us be consistent about that position. Having said that, in a society in which the demographics are changing and people are living longer, we need the full range of provision—domiciliary care, respite care, day care and support for carers—to be available so that older people who, rightly, want to remain in their own homes with maximum dignity, respect and quality of life, can do so. Therefore, in every locality, that full range of services must be provided by the NHS, local government and the voluntary sector, working in a far more integrated way than they have done historically.
In response to our call, the £25 million for emergency respite care may go some way to mitigate the cuts in planned respite care. Given the enormous disparity in care provision across the country, how many people stand to lose £38 a week towards their long-term care by next year from the reductions, which have just been announced in today’s national framework for continuing care, in the high-band registered nursing care contribution? How will the Minister justify that to the new Secretary of State?
I have to say that that is complete nonsense. Today, we announced an ending of the postcode lottery for the funding of continuing care. That has been demanded by the Opposition, charities, relatives and residents’ groups through the years. As a result of decisions by the ombudsman and rulings by the courts, we have today issued national guidance that will end the postcode lottery. That means that people in different parts of the country with the same needs will have access to the same level of NHS funding for their continuing care.
With respect to nursing care, the existing three bands have been swept into one. More than 80 per cent. of people who were on the lower or middle band will benefit significantly as a consequence of the £101 a week. A significant proportion of the remaining 20 per cent. will fall into the continuing care category and be entitled to full funding for that care. The burden will not fall on the remaining individuals in that 20 per cent, but will be borne by the care homes, 80 per cent. of whose residents overall will benefit.
My hon. Friend the Member for Burnley (Kitty Ussher) mentioned young carers. As a group, they are very difficult to reach, but we know that thousands of them care for 50 hours a week, which puts a great strain on them. Will my hon. Friend the Minister talk to colleagues in the Department for Education and Skills to see whether we can get schools to do more to identify young carers, so that more of them can have access to the help that he has talked about?
I agree entirely with my hon. Friend. Raising educational standards and performance is, of course, related to teaching and learning, but also to good leadership. The content of the curriculum is also relevant, but so are the factors that impact on the lives of children and young people before they arrive at the school door every morning. The fact that young people have to fulfil the responsibilities of the young carer, or suffer bullying or antisocial behaviour inside or outside school, has a direct impact on our ability to raise standards and ensure that every child fulfils their potential. A core part of a school’s responsibility should be to identify the problems of students and pupils. For me, young caring is a fundamental part of a school’s responsibility in the modern world.
Currently, there are no national waiting times targets for access to psychological therapies in primary care. Waiting times standards are being developed and will be tested in the 10 new pathfinder sites in 2007-08. They will include appropriate access times for the different stages of treatment set out in the National Institute for Health and Clinical Excellence guidelines.
When I tabled a question asking the Secretary of State how long my constituents had to wait for these services, she did not know. However, the Bolton, Salford and Trafford mental health trust tells me that, whereas patients in Salford have to wait only eight weeks for a first appointment, my constituents in Timperley have to wait a staggering 22 months. Does she agree that that is entirely unacceptable, and will she advise her successor to deal with the problem as a matter of urgency?
The hon. Gentleman is quite right: waiting times for psychological therapies are too long in many places, including his constituency. However, I hope he welcomes the work being done by his local mental health trust to cut those waiting times, for example by reducing the levels of non-attendance. The trust is introducing new ways of working that are based on best practice elsewhere, and it expects to see improvements by September of this year. In addition, it would appear that the hon. Gentleman is asking for a new national target, even though the Opposition recently said that they intend to scrap all targets. I am grateful that he at least recognises—
Does my right hon. Friend keep records of cases in which people are treated with medication compulsorily because access to psychological therapies is not available? Does she agree that, in the 21st century, such a practice is unacceptable?
My hon. Friend raises an important point. The NHS keeps detailed records on every patient who is subjected to compulsory treatment of whatever kind, but she is absolutely right to say that, as we give patients access to psychological therapies often at a much earlier stage in the development of mental health problems, it is likely—this would be of great benefit to those patients and their families—that we can avoid the need for more acute treatment, and particularly compulsory treatment, further down the line.
It is already clear that we will need to continue to increase the number of clinical psychologists, psychiatrists and other mental health care professionals, as we have done over the past 10 years. We have already established demonstration sites in Newham and Doncaster, and the early results in Newham show that one in three patients are improving their employment prospects as a result of psychological therapies. That gives us real heart that continuing to build up the service—as we have promised to do and as we will do—will bring enormous benefits to patients, their families and the wider community.
In my constituency, we have a high incidence of mental health problems, and we have good organisations, including, among others, the Psychiatric Rehabilitation Association, which provides psychological services. What can my right hon. Friend say about improving access to those services, particularly out of hours, so that people’s whole lives are not disrupted because they have to take time off work to go to quite difficult sessions? Perhaps more sessions could be provided in the evenings and at weekends.
My hon. Friend raises an extremely important point. One of the great advances that the NHS has made in recent years has been the establishment of more than 700 new community mental health teams, whose services are available to patients when they need them. I have talked to mental health staff who meet the users of their services in the community: in a local café or in their own homes. In particular, the crisis resolution team is available at all hours to meet the needs of the patient, rather than expecting the patient to go on suffering until the service is ready to meet their needs.
Why did the clinical director of the Leicestershire Partnership NHS Trust, in the Secretary of State’s constituency, find it necessary earlier this month to write to the GPs in her constituency encouraging them to get their patients to stump up their own money for private treatment for cognitive behavioural therapy? The letter stated:
“If you have any patients who would like to pursue private treatment for CBT we would be grateful if you could mention our service…We offer a fixed cost service at £110 per session”.
That is private treatment using NHS facilities and staff. The clinical director was subsequently forced to withdraw that letter in a hurry. What advice would the Secretary of State give her successor on how to reduce the alarming waiting times for talking therapies without sacrificing the guiding principle of the NHS—that treatment should be free at the point of delivery?
As the hon. Gentleman indicated, that letter was withdrawn almost as soon as it was issued. If he were more aware of the situation in Leicester and Leicestershire, he would know very well that there have been some significant difficulties in that trust in recent years. There is now a new chief executive in place, and I have no doubt at all that the trust will move rapidly to improve its services and will certainly not depart from the principle that is absolutely central to the national health service—at least as long as there is a Labour Government—that care will be provided on the basis of clinical need and not the ability to pay.
North Yorkshire Trust Deficit
Although the NHS overall delivered a net surplus of £510 million in 2006-07, we recognise that a number of organisations—North Yorkshire and York PCT among them—continue to face significant financial challenges. Despite financial difficulties, all parts of the NHS are consistently delivering for patients against national priorities.
I am informed by the strategic health authority that the budget of the NHS trust in York will rise by £6 million, despite the deficit in North Yorkshire. York hospital will, however, be closing beds because a greater number of patients are being treated in the new £8 million day unit at the hospital. Will the Minister therefore reassure me and my constituents that the same full range of NHS treatments will be available to patients in York as are available elsewhere in the country?
I congratulate my hon. Friend both on how he has championed the needs of patients in his constituency and the surrounding area and on his frankness about the need for financial discipline and budget control in the NHS—a responsible balance. Of course he is right to demand an appropriate balance of treatment, from social care and community health services to acute NHS provision, to ensure that patients in his constituency receive appropriate, high-quality and responsive health care. I give my hon. Friend that assurance today.
Since April last year, primary care trusts have commissioned a growing volume of new dental services. Once those services are fully up and running, approximately 500,000 patients will gain access to NHS dentistry.
In the past 12 months, the number of adults seen by an NHS dentist has fallen by 63,000. The latest figures show that 45 per cent. of the population have not seen a dentist in the past 24 months—a figure that has remained stable over time. How can the Secretary of State claim that the new contract has increased access to NHS dentistry, and when will she implement an urgent review of the system?
In the hon. Lady’s constituency, some 14 of the 33 practices in the PCT are accepting new patients. We know that the number of units of dental activity commissioned has increased from 77 million last April to 78 million; some of them are yet to be provided, but they have been commissioned. We know that NHS dentistry is expanding, and that new contract is working. We have a review group to ensure that we continue to discuss the implementation of the contract with the profession and representatives of patients. The hon. Lady is quite wrong to say that the new contract is not making a difference. It is.
In the past couple of months, I have had 7,000 health survey responses returned to me, and 70 per cent. of respondents said that getting access to an NHS dentist was extremely difficult. Furthermore, according to an orthodontist I met yesterday, the situation will get worse when the contracts expire in 2009. What discussions has the Minister had with PCTs about provision after 2009? At what point would she expect PCTs to inform the dentists of their plans, so that dentists can prepare their own investment plans and budgets for post-2009?
I am not saying that the situation has been fully resolved—far from it. What I am saying is that the new dental contract is proving that we can increase access to NHS dentistry. As I said, already approximately 500,000 more people are able to get access to an NHS dentist. One thing is absolutely clear: if an NHS dentist leaves the NHS, we now have the money at local level to recommission NHS dentistry. That is the difference between the old contract and the new one—now, local people have power to recommission at local level.
My right hon. Friend needs to stop making excuses for the primary care trusts. She has given them the money and they have it, but they are not providing the dentists. We do not have NHS dentists. The waiting lists are growing and there are no vacancies for the people in Chorley. Please get a grip: make the PCTs spend the money and make them provide NHS dentists. They are letting her down.
The PCTs are not allowed to spend the money allocated to dentistry on anything else; they cannot switch it to other services. We work closely with the PCTs, through the strategic health authorities, to make sure that if an NHS dentist leaves the NHS, the PCT recommissions at the local level. If my hon. Friend knows of examples in which that is not happening, I am more than happy to meet him to discuss the issue.
Does my right hon. Friend agree that denturists, the highly skilled people who make dentures, particularly for older people who may not have been able to look after their teeth as well as people can now, are an important facet of dental services? I am deeply grateful to her for the many letters that we have exchanged, and she is to see me and one of my constituents, a denturist, about the issue. Will she say whether there might be any changes to the rules to allow people direct access to denturists, or any other changes that might be helpful to many thousands of people?
Obviously, the issue of denturists being able to treat patients directly has been discussed. It is difficult, because the regulations insist that proper training be undertaken. If people who had not undertaken that training practised directly on patients, it would be illegal. We have had to consider that carefully. It is important that proper training be available to people performing that health care task.
I clearly have an interest in the subject. People outside the House in NHS dentistry do not quite recognise the glorious oil painting that the Minister just painted. Will she tell the House what changes she has introduced through the implementation group that she set up at the beginning of the contract—or was that just a sop to keep the dentists quiet?
The issues that we are considering, particularly as we come to the end of the first year, have to do with the banding system and units of dental activity. We are looking carefully at whether dentists are able to meet the targets that have been set relating to units of dental activity. The evidence is that the vast majority have been able to meet the requirements of the contract. The group is a way of keeping an open dialogue about any difficulties that occur. I will write to the hon. Gentleman. On a number of occasions, we have been able to issue further guidance to PCTs about some of the issues raised through the review group.
Milton Keynes primary care trust has used the new system very effectively to open new dental surgeries and completely clear the waiting list. Will the Minister take steps to make sure that that good practice is spread to those PCTs which do not seem to be performing as well as that PCT does?
My hon. Friend is absolutely right. There have been good instances of PCTs taking real action to recommission services and really prioritise dentistry. Lincolnshire, which is represented by the hon. Member for Grantham and Stamford (Mr. Davies), has taken real steps forward in recommissioning dentistry, and I am sure that he appreciates the works of the Labour Government.
The Minister may not be aware that the incidence of tooth decay among under-fives in my constituency is above the national average. What specific measures is she taking to ensure that some of the resources that she has described this afternoon will be targeted on the dental health of that important group?
We have introduced a number of initiatives, such as Brushing for Life, which works through schools. It is about teaching young children how important it is for them to keep brushing their teeth, using fluoride toothpaste. There are a number of public health initiatives that have been very successful. Obviously, local authorities and PCTs can now consult on the issue of fluoridation, which can in itself be very helpful in improving dental health.
Will my right hon. Friend congratulate County Durham PCT on the opening of the new Pelton Lane Ends NHS surgery in my constituency, as it not only offers provision for existing NHS patients but extends NHS provision to those of my constituents who were abandoned by the private sector?
My hon. Friend is quite right. At our meeting yesterday it was encouraging to look at the steps that the PCT has taken to deal with an area with poor access to NHS dentistry. The majority of people are on quite low incomes, so they could not purchase private sector dentistry. That is therefore a very good example of the way in which PCTs that prioritise dentistry can provide for many thousands of people care that has been severely lacking for some years.
NHS Trust Deficits
I meet the chief executive of the East of England strategic health authority on a quarterly basis to discuss finance and other topics. For 2007-08, all PCTs in East Anglia and the east of England are forecasting financial balance.
Can the Minister explain why he and his ministerial colleagues allowed the new Norfolk PCT to start operating with a £50 million deficit? Is he aware of the widespread concern in East Anglia that a number of accident and emergency units are under threat, and can he confirm that there will be no linkage between strategic health authority deficits and the closure of A and E units?
As I said a moment ago, the health economy of which the hon. Gentleman’s PCT is a part is forecasting financial balance this year. In addition, it will make progress on our 18-week target, effectively bringing an end to waiting and to waiting lists. All PCTs in the country have to plan for their own local services and get services in the right places that are convenient for the population. I wish that the hon. Gentleman and his colleagues would stop trying to perpetuate the myth that financial pressures are causing cuts to services such as A and E, because it is simply not true.
The East of England strategic health authority figures show that even though Cambridgeshire PCT has the highest funding allocation per head, it was the biggest overspender in the eastern region. My own PCT has successfully managed down its own modest deficit, but the strategic health authority took some of our money to bail out Cambridgeshire. Will my hon. Friend tell me when we will get it back?
My hon. Friend has just put his finger on the unfairness of a health funding system that allowed overspending to continue, thereby taking money from other parts of the country that needed the resources to improve the health of the population. I pay tribute to his PCT, which moved from an in-year deficit in 2005-06 to a surplus last year. If his PCT has got its house in order, others can do so too.
As the Minister reflects on how those trusts are struggling to cope with deficits and to deal with a substantial programme of reform at the same time, is he minded to agree with the chief executive of the NHS, who said:
“How can you drive through this degree and nature of change from the centre? The answer is that you can’t”?
Does he agree that the current structure is hopelessly over-centralised and that independence, as proposed by the Conservatives, will not change that at all? What we need is local, democratic accountability for local health services.
If I can decode what the hon. Gentleman said, he wants to retreat to a comfort zone where we tolerate practices that allow overspending to continue. Parts of the reform programme, however, have shone a spotlight on areas where inefficiency has been tolerated for far too long, and the tariff system has made people ask questions of their own operation so that they can achieve more efficiency. Our 18-week target is hammering out unnecessary delays in the patient journey, and making sure that there is better and more productive use of resources. The reform measures that we have put in place therefore do not contradict at all the goal of financial balance. In fact, they help trusts to achieve it.
Complementary and Alternative Medicine
The Department has published guidance on practice-based commissioning which enables the delegation of indicative budgets for services including complementary and alternative health therapies. “Our health, our care, our say” states that primary care trusts will be expected to support practices that are innovative and provide services that promote patient choice—for example, complementary medicine.
That sounds fine. The trouble is that there is no specific direction that there should be guidance, although 75 per cent. of the population want those services on the health service. What, for instance, does the Minister intend to do now that the scientific survey on Echinacea has been published, which shows that that remedy can cut colds by 50 per cent., as well as the duration of a cold? Is not that the sort of guidance that should be offered through the primary care trust? Will she revisit the subject and see what she can do?
I am sure the hon. Gentleman agrees that it is very important that clinicians are on the front line in deciding what is required for patient care. Clearly, doctors are accountable for any treatment that they give their patients, both conventional and complementary. The National Institute for Health and Clinical Excellence has produced guidance in certain areas—in relation to multiple sclerosis and on supporting care for patients who have cancer. We are working with the foundation established by the Prince of Wales for integrated health to look at ways in which we can encourage voluntary self-regulation in certain areas. We also have some outstanding work on which we hope to report by the end of the year; it concerns bringing aspects of acupuncture and herbal medicine under statutory regulation. No doubt the hon. Gentleman would agree that, like medicine, politics has alternatives. I am so pleased to see that the hon. Member for Grantham and Stamford (Mr. Davies) has chosen an alternative called Labour.
As my hon. Friend knows, the rise in obesity and type 2 diabetes is causing enormous problems, particularly among young children and those growing into adulthood. What is she doing to ensure that part of the health budget is used for physical activity and sport, rather then relying on the Department for Culture, Media and Sport and others to provide those facilities? Will she ensure that GP referral schemes are available throughout the country, and that people are encouraged through marketing to take up physical activity?
I thank my hon. Friend for that question. In the framework of health and well-being on which we are consulting, there are a number of examples showing how GPs can be innovative in the referrals that they make, including referrals for physical activity. We have just completed the physical activity care pathway, which is a tool that doctors and others can use in order to determine what levels of physical activity are needed by adults and young people. I hope that in future, in line with value for money and effectiveness, we will see much greater emphasis on preventive care and on ways of encouraging people, young or old, who are suffering from obesity to tackle that problem through exercise, with the support of others, and most importantly, through personal responsibility.
Accident and Emergency Services
It is a matter for the local NHS to ensure that it has arrangements in place to plan for and respond to increases in demand. Where demand comes from outside a primary care trust’s area—for example, because of a large tourist population—providers can recover costs from the patient’s home primary care trust.
My hon. Friend knows that in a town such as Blackpool, which has almost 10 million visitors a year, the extra pressures are considerable—some 8,000 people seen out of hours, some 4,500 seen on a temporary resident basis, and some 11,500 seen at the walk-in centre. Although I accept my hon. Friend’s point, that hard work provides testament that the additional pressures on Blackpool and other seaside towns are not fully met by the procedure that he set out. Will the Department examine the funding formula with other appropriate Departments and see whether the pressures of day visitors as well as temporary one and two-week residents are properly catered for? That was funded by the Department of Health—
I am indeed aware of the pressures that my hon. Friend talks of, as a regular visitor myself to the Sandcastle water park with my son. Indeed, I have nearly had cause myself to visit his local walk-in centre and A and E. I have looked in detail at the issues that he raises, and I believe that he is raising a genuine and fair point. There are changes proposed in relation to payment by results that would effectively de-host, as we put it, A and E services, which would mean that A and E costs could be reclaimed from another PCT—the PCT responsible for the tourist in question. Having looked at the figures, it appears to me that his trust is not succeeding in recovering the money that it spends on treating patients from elsewhere in the country. It appears that he has a valid point, and I shall look further into it.
The Government’s policy is to include provision for compulsory indemnity cover as a condition of registration for each profession as the opportunity arises in wider legislative change. No date is set for the implementation of the policy specifically in respect of midwives.
There is a real issue of professional indemnity, but we do not want to create a situation in which we make life impossible for independent midwives. That is why we are working closely with their representative organisations to try to find a solution. Before professional indemnity was required of midwives, secondary legislation would be required in this House. We are not at that stage yet, and we intend to do absolutely everything we can to work with midwives to see a satisfactory way forward.
The Royal College of Midwives, of which I am an honorary vice-president, has clearly stated that if “Maternity Matters”, which is a Government policy, is to be fully, properly and effectively implemented, there will need to be 22,000 whole-time equivalent midwives in England’s NHS in the relatively near future. Currently, there are 18,949 midwives. Would not the Minister—this is a non-party political question to him—support my hon. Friend the Member for Kettering (Mr. Hollobone) in saying that we need to give encouragement to the independent midwives if this service is to be properly managed and effective, and that they must therefore have some—
If we are to make a reality of choice for women throughout the country, which we are committed to do by the end of 2009—home birth, midwife-led birth and consultant-led birth—there will undoubtedly be a need for more midwives in some parts of the country, possibly including the great place of Macclesfield. It has been made absolutely clear to every local health economy that that is the expectation.
May I ask the hon. Gentleman, as a grandee, how he feels about the belated decision of the hon. Member for Grantham and Stamford (Mr. Davies) to say “It’s time for Labour”?
GP Out-of-hours Services
We have no immediate plans for another formal review of out-of-hours services, but we will be emphasising the importance of high quality GP out-of-hours services as part of the network of urgent and emergency care provision in the forthcoming framework document.
The present Chancellor of the Exchequer recently said:
“We need more access to doctors, we need drop-in centres, we need local health care centres to be more effective, we need NHS Direct to be working.”
In the light of that criticism, made after 10 years of government, does the Minister agree that it was naïve to allow GPs an opt-out from the out-of-hours care provisions?
I must remind the hon. Gentleman that the GP out-of-hours service was close to collapse when his party left office. It was simply not sustainable, and the changes that we have already made with the introduction of NHS Direct are a major improvement. Only today, we have announced that six PCTs are taking forward proposals to tender for new primary care services, which is real action to address the quality of GP and primary care services in some of the more deprived communities. What did his party do?
I cannot be alone among MPs in having a continuing trickle of constituents who are concerned about the deficiencies of out-of-hours care. Such cases are often moving, and occasionally they are tragic. One common feature is the out-of-hours doctor not having direct access to the patient’s medical details. Will the Minister say whether the Connecting for Health IT programme includes provisions to allow organisations such as Primecare to have remote access to that information, in the interests of the patient and their family?
I thank my hon. Friend for his question. He is right to say that the quality of out-of-hours provision needs to improve in some areas. There is a set of national quality requirements against which all PCTs must monitor their out-of-hours service. He is right to raise information transfer, because the report into the tragic death of Penny Campbell highlighted the need to transfer information between clinicians, and we reiterated that point to the wider NHS in response to the coroner’s report. My hon. Friend is right to say that the Connecting for Health programme has the potential to bring major improvements in patient safety by giving any clinician in the country access to relevant and up-to-date records for the patient before them.
The Minister will recall that the Public Accounts Committee said that the introduction of the new out-of-hours contracts was shambolic. Privately, Ministers say that they inherited that situation from their predecessors, so what advice would they give to their successors on how to improve out-of-hours care?
I can confidently say that we have improved out-of-hours care. Indeed, the National Audit Office review of out-of-hours services found that those services are broadly on track and improving. Indeed, satisfaction levels for out-of-hours care show that eight out of 10 patients say that their care is satisfactory. Again, I remind the hon. Gentleman that the out-of-hours service was close to collapse in parts of the country. GPs were not joining the profession, because they were not prepared to take on a 24-hour commitment to providing out-of-hours services. The hon. Gentleman should remember the facts and the history before lecturing us at the Dispatch Box.
Tell that to the people in Cornwall. The Minister might at least have shown some evidence of what needs to be done to improve out-of-hours care. Why, for example, are there so few occasions when GPs have used practice-based commissioning to take responsibility for commissioning out-of-hours care, even if they are not personally responsible for its delivery?
The Secretary of State and Ministers can cheer up, because they have only got 24 hours to go. They could use that 24 hours to save the NHS, but unfortunately they have no idea how to do it.
Ministers have regular meetings with Members of Parliament and other stakeholders about spending on health services in London. We also receive a regular flow of correspondence from across the country, including London.
The Minister will be aware that there has been a large increase in PCT spending in the borough of Islington in the past 10 years and that the number of doctors has doubled. In the next five years, the borough’s population is likely to rise by 14,000, and there are already enormous demands on overstretched mental health services. What consideration is he giving to the needs of mental health, as funded through the PCT, in future spending rounds and the future allocation of funds for inner-city areas such as mine?
There has already been an average increase of about 19.5 per cent. over the past two years in my hon. Friend’s local primary care trust. We recognise that population changes and demographic changes, as well as the fact that we want mental health services to be regarded as a priority, will be a central part of the deliberations that inform the comprehensive spending review discussions, which are still under way. Those discussions will be concluded in the autumn, when the level of resource available to my hon. Friend’s primary care trust and those of other Members will be clear.
With permission, Mr. Speaker, I should like to make a statement on the serious flooding that has affected large parts of England in the past 24 hours. As the House will know, the flooding was caused by the most exceptional weather conditions: up to 100 mm of rain in 24 hours in several places. This follows an unusually wet month with up to double the normal average monthly rainfall, which has saturated the ground and caused rivers to rise above their normal levels for the time of year.
Sadly, I have to report the confirmed loss of three lives: a 68-year-old man and a teenage boy died in separate incidents in Sheffield, and a 28-year-old man died in Hull. I am sure that the whole House will want to join the Prime Minister in extending our very deep sympathy to the families and friends of all those who have lost their lives in these tragic incidents.
It is estimated that some 1,000 properties have been flooded in and around Sheffield, Nottingham, Leeds, Hull, Grimsby, Rotherham, Doncaster, Cheltenham, Shropshire and elsewhere. We all know that flooding is every householder’s nightmare. Within the past two hours, the Minister for Climate Change and the Environment, my hon. Friend the Member for Dudley, South (Ian Pearson), has attended the Gold Command meeting, and he is visiting some of the affected areas in south Yorkshire today. He will see for himself, and will report back to me on, the major impacts that the floods have caused. These are traumatic events, especially for the elderly people involved, and every effort will be made to support them.
This morning, the Environment Agency had in place 25 severe flood warnings, 133 flood warnings and 129 flood watches, mainly concentrated in Yorkshire, the midlands and Lincolnshire. The situation does, of course, remain subject to regular change. River levels are dropping in the upper catchments today, although they will still rise further downstream. Flood defence operations are in place, including, where appropriate, temporary defences.
The House will have seen reports of very real dangers associated with the Ulley reservoir near Rotherham. The emergency services are working to control the situation, utilising high volume pumps that have recently been bought for the fire and rescue service through the good offices of my right hon. Friend the Secretary of State for Communities and Local Government. The situation is potentially serious. Gold Command is monitoring developments very carefully and contingency arrangements are being made. Two hundred and fifty people from the downstream area have been moved from their homes, and the M1 motorway has been closed as a precautionary measure.
The founding principle of the emergency response system is for decisions to be taken locally through an integrated structure, with the police in charge once Gold Command is activated. I am sure that the House will want to pay tribute to the heroic efforts of the many who have responded so magnificently to this event at local level. These include the staff of the fire, ambulance and police and other rescue services, local authorities, the Environment Agency and the voluntary sector. We know just how hard the fire and rescue service worked in the ultimately vain attempt to rescue the man trapped in the drain in Hull, and saw on television the RAF search and rescue helicopters airlifting people at risk in Sheffield. Otherwise, there has been no requirement for armed forces support. However, armed forces liaison officers were deployed to Gold Commands yesterday afternoon, notably in Humberside and Sheffield, and are ready to provide support if required. Overall, some 1,400 people have been provided with emergency shelters and other temporary accommodation. The community spirit in all the affected areas has, from all the reports that I have received, been outstanding.
It is clearly much too early to make a full assessment of the event. All relevant lessons will be learned once the immediate priorities have been met. However, I have been assured that the Environment Agency’s new Floodline Warnings Direct system performed well in issuing warnings to very large numbers of people in areas affected.
Some water flowed over the flood defences as the unprecedented rainfall exceeded what they were designed to deal with, but there had been no reported structural failings of flood defences. The local authorities are responsible for the short and longer-term recovery effort in the affected areas, and I am sure that elected members and officials will rise to that challenge. The relevant Government offices and other agencies will work with the local authorities to support them in that process.
Emergency financial assistance is available to local authorities under the Bellwin scheme to help with non-insurable clear-up costs incurred in taking immediate action to safeguard life and property following a disaster or emergency in their area. Local authorities have one month from the end of an incident to notify the Department for Communities and Local Government that they intend to apply for activation of a Bellwin scheme. If approved, that Department will usually reimburse an authority for 85 per cent. of its eligible costs above a threshold related to the authority’s annual budget.
I am also pleased to note that insurers are playing their part in the recovery, and that the Association of British Insurers has advised that its members have staff in place to ensure that claims are tackled promptly.
Ministers and officials in my Department and elsewhere in Government have kept in close touch with the events around the country without getting in the way of the local delivery effort. I spoke last night at 10.40 pm to the chief executive of Sheffield city council and this morning with the chair of the Environment Agency. It is clearly most efficient that decisions on how to manage the event are taken locally, drawing on local emergency plans. Again, those seem to have operated well.
For many people, the immediate task is one of clean-up. However, it is also vital to prepare for any further wave of extreme weather. Heavy rain later in the week remains a real threat and all the appropriate agencies remain on high alert. I will report any further significant short-term developments to the House.
I thank the Secretary of State for his statement and the advance notice that he provided of it. I entirely endorse his remarks about the three people who tragically lost their lives. Our thoughts and prayers are with them, their friends and families.
I join the Secretary of State in paying tribute to the immense hard work of the emergency services and those in the police, local authorities, the Environment Agency and the armed forces, who responded to the crisis with courage and the highest standard of professionalism. Will he join me in sending a message of admiration to the people of Leeds, Sheffield, Hull, Rotherham, Doncaster, Shropshire and so many other places, who have shown great resilience and fortitude in the face of the worst flooding in living memory? Our thoughts are with them as they struggle to come to terms with what has happened.
Clearly, the weather conditions that led to the events are almost unprecedented, but how satisfied is the Secretary of State that the warning systems in place were operated effectively? The Met Office issued a weather warning on 12 June, which stated:
“The worst affected areas are likely to be northern parts of England, where rainfall totals over a few days may be close to the monthly average for June.”
On 15 June, my right hon. Friend the Member for East Yorkshire (Mr. Knight) raised his concerns in the House and called on the Secretary of State to make an urgent statement on the action that he would take to prevent people from facing the misery of having their homes flooded.
In the light of those warnings, what action did the Secretary of State take in advance of the problem? They were not the only warnings that the Government received. On 14 June, the National Audit Office issued a damning report on the adequacy of our flood defence systems. It noted that the north-east had received less funding for flood defences than other parts of England, where the risk of flooding was assessed as less acute. The Chairman of the Public Accounts Committee also drew attention to the imbalance in spending. In other words, several warnings were issued within days of each other and of the dreadful events. Is the Secretary of State entirely satisfied that his response to them was not complacent?
The statement stressed the importance of the local response system, but what of the Government’s responsibilities? Does the Secretary of State regret the fact that the Environment Agency was forced to make cuts in its flood protection budget last year to compensate for financial mismanagement in his Department? Does he know that the Environment Agency and the Association of British Insurers have been urging the Department to take the risks of flooding far more seriously for several years? Does he regret that he has failed to do that? He said that he is keen to learn lessons. Is not one of them that it is normally a good idea to listen to the experts when they provide expert advice?
In Sheffield, much of the damage has occurred in Brightside, one of the poorest districts. Can the Secretary of State make an assessment at this stage of the amount of uninsured losses that have occurred?
The Environment Agency has said that what we have experienced in the past 48 hours is consistent with the effects of climate change, and that the risk of flooding and extreme weather events will only increase. As the Secretary of State knows, climate change scientists have been warning the Government for years of the need to adapt to climate change. How have the Government responded to those warnings? Will the Secretary of State take the opportunity of the forthcoming Climate Change Bill to introduce annual reporting on the measures taken to adapt to climate change as well as those taken to mitigate its effects?
Will the Secretary of State take the opportunity of the forthcoming water price review to issue new advice to Ofwat and the Environment Agency to ensure that adequate investment in adaptation measures is funded in future? Will he also hold urgent discussions with the Secretary of State for Communities and Local Government, or her successor, on the lunacy of continuing to build houses on flood plains?
Does the Secretary of State accept that if his Government fail to respond to the challenges of climate change with a coherent, joined-up approach and a much greater sense of urgency, the terrible events that we have witnessed in the past few days are likely to happen again and again?
If the hon. Gentleman chooses, in the cold light of day tomorrow, to look at the contents of his remarks in Hansard, he will see that, unusually for him, they did not do justice to his knowledge in this area or to the way in which he has approached these issues, certainly in the 15 months that I have been in this post. The people of Sheffield and the other affected areas will have listened with some dismay to the way in which he approached this task.
The hon. Gentleman rightly sent a message of admiration, and I am sure that it was inadvertent that he did not mention the health services. It is important that all the public services should be recognised for the important work that they have been doing. As he said, these are almost unprecedented conditions. We shall have to wait for the historians to tell us whether they were completely unprecedented. The weather warnings are an important part of our local planning system, and the reason why the local system has worked well is that the local people in charge took heed of those weather warnings. In my conversations with people on the ground, they have told me that, where the emergency services have been brought into play and local authorities’ own social services provision has been needed, the systems have worked well. That is testimony to the good preparation that has been done.
The hon. Gentleman referred to the NAO report. The chief executive of the Environment Agency will be speaking to the PAC tomorrow. I do not want to get in the way of her defence of what has happened, but it is important to point out to the House that, between 2003-04 and 2005-06, the agency exceeded its target for protection, achieving flood protection for 100,000 houses, rather than the 80,000 target. Furthermore, there are 24,000 miles of flood defences around the country that are maintained by the Environment Agency. Many people who know this area will have been astonished that the hon. Gentleman—who speaks for a party that left us with a flood budget of £307 million in 1996-97—failed to mention that that budget is now £615 million. It has doubled under this Government. I hasten to add that, on almost every occasion, the Conservatives have voted against the measures designed to raise that budget.
I do not yet have a listing of the uninsured losses, but I am happy to write to the hon. Gentleman with that information in due course. He made the link with climate change, which I am sure is in many people’s thoughts. I want to make two points on that. First, climate change involves not only global warming but extreme weather events. However, it is unwise to seize on one event before the scientists have had a chance to make a full assessment of it, and before I did so, I would want to be sure that they were clear about the links to climate change.
Secondly, the hon. Gentleman raised the question of adaptation, which I am pleased about, and asked for annual reports on that matter. We have made it clear in the Climate Change Bill that there should be regular reports, but we think that a five-yearly basis is the right strategic basis on which to make these judgments. However, I will take into consideration his comments when we consider the draft representations of the Special Committee that is considering these issues.
All Members from the affected areas will welcome the Secretary of State’s statement, and the fact that he has come to the House so quickly today to make it. I reiterate that our hearts go out to those who have been bereaved and to those who have lost so much in terms of their homes and businesses. I also commend the Gold Command for the direction that has taken place over the past 48 hours, and the public and emergency services and the RAF, all of whom have done a phenomenal job.
Will the Secretary of State confirm that he is prepared to cut through the bureaucracy that often surrounds financial intervention on occasions such as this by ensuring that, alongside rapidly dealing with the Bellwin formula once the claims are in, there is assistance, perhaps through emergency loans, to help the families and businesses who are faced with sheer devastation? He mentioned that the armed services were on standby, so will he consider getting them and their engineers in as quickly as possible to ensure that if there is a further deluge, as predicted by the weathermen, we have other emergency measures in place by this weekend, so that there is no repeat of what has happened over the last 48 hours?
My right hon. Friend speaks with considerable authority having played a central role, if not in creating, certainly in upgrading the Gold Command structure that has proved its worth over the past 24 hours. We will certainly look at all suggestions about how we can support local people in coming to terms with this unprecedented event. In respect of a further deluge, the decision-making structure deliberately puts power in the hands of local people so rather than me making the decisions I assure him that all appropriate forces and provisions are at the disposal of local people in preparing for whatever contingencies lie ahead.
I thank the Secretary of State for advance sight of his statement. As he said, our sympathies go very much to the families of the three people who we know have died as a result of the floods and to all the others who have suffered such terrible losses. My admiration, too, goes to the emergency services, the Environment Agency staff and all the other public services doing gruelling work to avert worse calamities.
My admiration, however, does not yet extend to the Secretary of State, who has—it seems to me—mishandled the issue of flood defences ever since he took over the Department. Is it not astonishing at a time of climate change that the Government cut spending on flood defences last year, in-year, by £15 million? Will the Secretary of State confirm that in York and elsewhere those cuts delayed projects by delaying feasibility studies? Is it not even more astonishing that last month the regional flood defence committees were sent a document by the Environment Agency, which said:
“Our planning assumption is that our resource settlement over the next three years will be flat cash in line with our current 2007-8 baseline (a real time reduction in funding) with any growth limited to capital investment”?
Will the Secretary of State confirm that as late as last week the Treasury was continuing to press his Department for real cuts in flood defences? Does not that show a devastating lack of foresight on the part of the Chancellor of the Exchequer, and is it not yet another example of how lamentably he fails to understand the significance of climate change?
I assure the hon. Gentleman that his admiration for me is fully reciprocated. He has confirmed his unenviable reputation for being someone who never misses an opportunity for opportunism and I congratulate him on his consistency.
The hon. Gentleman knows that it is simply not true that capital spending was cut last year—[Interruption.] My hon. Friend the Member for Carlisle (Mr. Martlew) nods because he knows that. The hon. Gentleman will also know that in respect of revenue spending the delays last year to which he referred have been more than made up in 2007-08 already, so in the context of a doubling of spending his point is pretty weak. In respect of the Environment Agency’s planning assumptions, the hon. Gentleman claims a knowledge of economics so I do not know what other basis he thinks the agency should be using to plan for the future. Given that we have not yet made a settlement, it seems prudent to act on that basis, just as it would be prudent for the hon. Gentleman to wait until our comprehensive spending review announcement to see how the Government will continue to do justice to the important issues of flood defence.
I warmly support the remarks made by my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) on the need for urgent action before the weekend. In the longer term, will the Secretary of State agree to review the decision of the Environment Agency to shelve the £100 million scheme that was designed to protect Leeds city centre? Will he also ask the Environment Agency to expedite the Wyke Beck scheme in my constituency, which will help to alleviate flooding in an area that has been flooded three times in three years, to the great distress of hundreds of people?
Does the Secretary of State understand the frustration and anger of people in Ripon, which has had its second bout of major flooding in seven years, not because there are no plans to deal with the flooding, but because the plans have been in existence and ready to go for several years, and have been deferred each year? How many once-in-a-century events must take place before something is done?
The tenor of most of today’s contributions has been to recognise that such events are likely to happen much less frequently than once in a century—they are almost unprecedented events. The right hon. Gentleman, however, makes an important point. Like many other hon. Members, he wants increased spending on flood defence. Perhaps I might gently suggest to him that he persuade some of his colleagues to be as enthusiastic in their support of Government policy as he sometimes is.
I thank my right hon. Friend for his statement. Obviously, I associate myself with the expressions of condolence to the families of those who have lost their lives and sympathy for everyone who has suffered in this appalling tragedy. I thank council officers and all the other workers in Sheffield who strived so hard last night to ensure that an appalling situation did not become even worse.
May I make two financial requests? First, a lot of the damage last night was done in the main industrial area of Sheffield, which has been doing well in recent years. Some businesses, however, will now be out of action for several days, if not weeks, and will have lost a lot of specialist and expensive work in hand. Eventually, that may be recoverable from insurance companies, but in the meantime they will probably need some help through an emergency fund for cash-flow purposes. Will the Secretary of State consider that? Secondly, the public infrastructure of the city has been badly damaged. While the Bellwin formula will help with the clean-up, we will need longer-term help with investment in that public infrastructure, to ensure that the city’s economy can be kept going forward. Can the Secretary of State give assurances on both those points?
From speaking to my hon. Friend last night, I know that he is in close touch with many of his constituents. I echo what he said about the excellent work of council officers in preparing for and responding to the event. He makes an important point in respect of local industry, and I concur completely that Sheffield’s renaissance has been magnificent in the past few years. I will speak this afternoon to my right hon. Friend the Secretary of State for Trade and Industry about the industrial issues raised. In respect of long-term investment, my hon. Friend will know better than I that an extensive plan is in place for upgrading the public infrastructure in the heart of Sheffield. Obviously, we will talk with the city council about how that can be taken forward in the new circumstances.
With unerring accuracy, the Government’s chief scientific adviser, Sir David King, in his foresight report a few years ago, predicted that we were moving into a period of more extreme weather events. With that in mind, will the Secretary of State assure the House that resources will be made available to the Environment Agency to revise its flood prediction computer model so that it can take into account what now appears to be an established change in the nature of our climate and weather and make our predictions on flooding more accurate?
With the small proviso that the change in weather patterns means that there is less of a pattern, and that it is harder and harder for any model to predict with certainty some future patterns, the right hon. Gentleman makes an important point. I am happy to talk to the Environment Agency again about the way in which it works. We are coming up to the beginning of a three-year comprehensive spending review period, and that is a good moment to ensure that the money is being spent in the right places.
I join hon. Members in paying tribute to everyone who is coping so well with the flooding. In particular, I pay tribute to the public services in Hull, which valiantly tried to rescue Michael Barnett yesterday, who sadly died in a drain in Hull. Will my right hon. Friend reassure me that the public health implications of flooding are being addressed?
There is no suggestion that they are not being addressed. I am happy to ensure that either myself or my hon. Friend the Minister for Climate Change and the Environment, who is in south Yorkshire, checks on that. If she has a particular issue to raise, perhaps she could let my office know. She makes an important point. We would certainly want to ensure that all the right measures were in place.
Obviously, I endorse the salute that has been given to the emergency services and specifically to the council officers in Sheffield, including Sir Bob Kerslake, the chief executive, who have done a magnificent job overnight, not least by keeping all Sheffield MPs and others updated on the events. Will the Secretary of State join me in extending special condolences to the family and friends of Ryan Joe Parry, a young 14-year-old boy? He attended King Ecgbert school in my constituency and tragically, at such a tender young age, lost his life when he was swept up by the River Sheaf in Millhouses park.
Much was said in the statement about the need for insurance companies to move quickly, and for health and safety and long-term funding issues to be addressed, but will the Secretary of State address himself to one thing, which I think might be overlooked? It might sound parochial, but my constituents have got in touch with me this morning in large numbers to say that one of the real problems, and one reason why so much water from the hills in Sheffield has swept down with the velocity that it has, is the degraded state of large parts of the road surface and drainage system in Sheffield. That is a familiar problem to all Sheffielders. It cannot, frankly, be dealt with with the resources available to Sheffield city council on its own; it requires central Government long-term assistance.
Before I respond to the hon. Gentleman’s point, I hope that he will forgive me if, in response to the question asked by my hon. Friend the Member for Kingston upon Hull, North (Ms Johnson), I explain to the House that I have been passed a piece of paper which says that public health messages have been issued by primary care trusts.
It is invidious to pick out one victim out of three. I am sure that no one in the House would want me to do that. However, the loss of a 14-year-old life—as I understand it, he was a constituent of the Minister for Sport, my right hon. Friend the Member for Sheffield, Central (Mr. Caborn), and he was at school in the hon. Gentleman’s constituency—is an unimaginable tragedy for any family. Of course, I associate myself entirely with the condolences that the hon. Gentleman offered.
In respect of the roads in Sheffield, I have not heard the particular points that the hon. Gentleman’s constituents have made, but from my briefing I know that a major road improvement plan for, as I understand it, the whole of Sheffield has been prepared, or is in the process of being prepared, for a public-private finance bid. I think that that would speak to the points that he makes. Obviously, we will have to look at the whole issue of urban drainage and whether or not the roads are contributing to flooding in considering any lessons to be learned from this tragedy.
My right hon. Friend may know that the latest reports from the national media in the last hour are that the water levels in the Ulley reservoir in my constituency are now decreasing. However, rain is predicted in the next 24 hours. Hundreds of my constituents have been moved out of their homes and are living in two local schools. The likelihood of them getting back into their homes is doubtful at this stage. Will he contact the local council to see whether it needs any immediate help?
Notwithstanding that, the possible cost of what is happening in Rother Valley and the surrounding areas is unpredictable. We need to ensure that we get help from central Government when that is necessary and sensible in the not-too-distant future. Will my right hon. Friend’s office make itself available to meet Rotherham metropolitan borough council and other councils from south Yorkshire to discuss exactly how help can be given?
My right hon. Friend makes an important point about the Ulley reservoir. It is good news that the water levels are declining, but I reiterate that the situation at the reservoir remains serious. It would be quite wrong to suggest that the potential problems have been resolved. The pumping out that is going on is very welcome, but equally he will have seen on television the discussion of the cracks in the reservoir walls. I take my right hon. Friend’s point that there has been a good response so far. Of course we will look, within the existing established rules, at how we can support local people and councils. We will also find appropriate ways to meet Members, local council officials and leaders, whether bilaterally or all together.
The Secretary of State will know that Shrewsbury regrettably has a long history of flooding. Today, many parts of Shropshire have been flooded. I am grateful to him for raising the Bellwin scheme, and I will certainly request my council to take advantage of it. There is a wet washlands scheme to protect the River Severn from flooding, which the Environment Agency has been looking at for a considerable time and I have secured Westminster Hall debates in the past on that vital scheme. Would the Secretary of State accept an invitation to meet with me and the Environment Agency representatives from Shrewsbury to discuss that scheme?
I thought that the hon. Gentleman was going to invite me to be in the audience for his Westminster Hall debate because he knew something that I did not know in advance of the events of the next few days. I wish him good luck with his debate. The idea of what are known as turquoise belts on the banks of rivers presents a natural way to try to contain flooding and we will certainly be interested in the results of his debate.
Many of the villages around Nottingham have been flooded and are expected to be flooded again if there are further downpours this weekend. I suspect that we are stuck with this change in our weather patterns and I accept that the Environment Agency has a key role to play in flood management. I would like the Secretary of State to address two points. First, virtually the whole of the UK is a beneficiary of Victorian over-engineering of the drains and sewerage systems, and there is now a critical case for revisiting the drainage systems that are appropriate for the 21st century. The water companies have been very good at managing tidal flows of cash into their own pockets, and it would be helpful to place a duty on them to put an equal priority on the tidal movement of water that arrives in downpours.
The second point is that four of the main regions in Germany have already sought to address the change in rainfall patterns and introduced tough new planning requirements, such that almost 40 per cent. of the country is now covered by laws that preclude a planning application even being considered if it does not replace the soak-away land or include reservoir facilities in the structural foundations of buildings. Will my right hon. Friend consider that as a 21st century planning requirement, if this is to be the pattern of weather conditions that we are now to face?
As ever, my hon. Friend speaks with authority on these issues. If I had not been here this afternoon, I would have been at a meeting with all the water companies to consider a water strategy for the next 25 years, as well as some of the issues and possibilities raised by the next water price review, in which many people would like to see environmental considerations built into the system. I am sure that he would agree that there are benefits of being the first industrialised country, but it does mean that we have an old infrastructure in many areas. I agree that we need to consider all ways of upgrading it, on both the demand and the supply side.
In respect of planning, my hon. Friend will know that there are extensive new rules to ensure that sustainable development principles are built in, although I am happy to look at the German model in that area as in others.
It is nearly seven years since the town of Uckfield in my constituency flooded and the sympathy of my constituents will be with those so terribly affected today. However, in the course of those seven years and despite the pledges from the Prime Minister and others, not one pound has been spent to put in place the flood defences that are necessary to stop that sort of flooding happening again. Of course our hearts go out to those so terribly affected today, but can the Secretary of State give us an assurance that, in considering the nation’s needs for improved flood defences, the unmet needs of those affected by the 2000 floods will not continue to be overlooked?
I thank the hon. Gentleman for his words, even though I understand that his constituency has not been affected this time. Of course, all needs must be considered in the appropriate way, including those of his constituents. I am sure that the Environment Agency will want to do that as it plots the priorities for its budget.
May I welcome my right hon. Friend’s response to this emergency, and the success of the contingency plans? Extreme events cannot be planned for properly, and I am sure that he will review what has happened to people who have suffered the misery of flooding in their homes. However, after the last flood event, infrastructure providers such as Network Rail and the Highways Agency were required to look at how adaptations could be made to deal with the likelihood of more frequent extreme events. Has my right hon. Friend seen the reports from that review, and does he think that there should be a close examination of whether it has been implemented properly?
My right hon. Friend was significantly responsible for the response to the Carlisle flood, which for many is a model of how to bounce back from a tragedy of that sort. I have not seen the reports to which he refers, but I shall be happy to look at the matter and to engage with him and other hon. Members about the best way to respond.
Like other areas of the country, parts of my constituency have been flooded this week, and some of them were flooded for more than 100 days over winter. Much of the fens is at or below sea level, so will the Secretary of State give a commitment to the people who live there that proper flood alleviation programmes will be put in place? A lot of the water that accumulates in low-lying parts of my constituency flows from effective flood alleviation programmes upstream, in places such as Milton Keynes and Bedford. Do the people of the fens deserve equal treatment with people elsewhere in the country?
As I said, it was not in the hon. Gentleman’s constituency, but in a neighbouring constituency. He makes a very important point about the knock-on effects of different interventions. I am certainly very happy to tell him that the people of the fens have as much right as people anywhere in the country to expect that their needs are addressed in a way that is fair, transparent and open.
I am sure that the Secretary of State will want to ensure that the Government’s response is as robust in the vast number of flooded villages and towns in my constituency as it is in the larger cities. Will he give some thought as to how local authorities can be encouraged to ensure that schools and post offices are prioritised, especially in rural areas where alternatives are difficult? Kids must be able to continue to go to school: they must not be expected to take time off with their parents until September, and post offices must be brought back into operation as soon as possible.
Once the initial crisis has abated, will the Secretary of State undertake to review planning policy guidance for building on floodplain areas? I am thinking specifically of the areas affected by the floods, but also of the Thames gateway.
The hon. Gentleman raises an important point. He will know that the Environment Agency is a statutory consultee in all planning applications. In addition, the new planning policy statement on climate change is directly relevant to many of the housing issues about which he is concerned. I commend that statement to him, as it offers a very significant way to address climate change impacts across the planning system.
May I join my colleagues in expressing condolences to the families of those in Sheffield and elsewhere who have lost their lives? I also want to pay tribute to the workers in the emergency services and Sheffield city council, whose response to the crisis has been first rate. There is a sense of profound shock that our wonderful city could be reduced to something resembling a war zone in the space of a few hours. It is obvious that urgent assistance is needed to help those affected rebuild their homes, or to rehouse them while their homes are made fit to live in again. Can my right hon. Friend give comfort to the people of south Yorkshire on that point?
My hon. Friend speaks eloquently—more eloquently than me—about the response of Jan Wilson, the leader of the council, Robert Kerslake, the chief executive, who has already been mentioned, and the whole city council team. I agree that they have responded magnificently and I hope that that is the view of people in Sheffield. I would not want to substitute my judgment for theirs, but everything that I am being told about the response by the city council and the response of people in Sheffield suggests that they have a council in which they should have real confidence and pride. In respect of the latter part of her question, the systems that we have developed have been designed to provide as much comfort as possible in the circumstances. It would not be right for me to pretend that anyone can wish away the terrible damage that has been done. I would not want to suggest in any way that I can do that. However, we are determined to make sure that other communities are able to follow the example of Carlisle and bounce back from this sort of event.
I am grateful to the Secretary of State for acknowledging the seriousness of the situation in Cheltenham and for the prompt response of the emergency services and the Environment Agency. According to the agency, ours was a once-in-80-years flood, which caused chaos despite a brand new £23 million flood defence scheme that was designed to withstand a once-in-100-years flood. Does the Secretary of State agree that more work needs to be done on that and does he agree with us and the National Audit Office that this would be the worst possible time to cut flood defence budgets in real terms?
I am very happy to look at the individual circumstances of the Cheltenham case, which obviously I have not had a chance to consider yet. In discussions of a Government of all the talents, I would very much welcome all the hon. Gentleman’s support for my spending review bid.
May I also welcome my right hon. Friend’s statement and, in particular, his response to my hon. Friend the Member for Leeds, East (Mr. Mudie) in relation to what we need to do in Leeds, which clearly has to be urgently looked at? The insurance industry will be looking at how these new extreme events may extend the nature of the risk that they have to insure. Surely that might lead them to question whether they want to take more households off-risk altogether. Will he have meetings with the Association of British Insurers and others to ensure that more people do not lose their insurance cover?
I am happy to reiterate what I said in my statement: we have a unique partnership in this country between public investment and the private insurance industry. I spoke at the Association of British Insurers conference last November. It is a valuable partnership that calls for responsibility on both sides, and we are determined to fulfil our side of the bargain.
The Secretary of State will know that his Department is considering proposals to transfer locally owned sewerage and drainage systems to the utility companies, such as Anglian Water. Will he please expedite the process and bring forward his proposals as rapidly as possible?
My right hon. Friend will know that this is the second consecutive week that houses and businesses in the Dearne and Dove valley in my constituency have suffered adversely from flooding. In many respects, that is unique, because Barnsley does not always suffer from flooding problems. We never have in the past. Doncaster and the Don valley, in the other part of my constituency, have a history flooding, but Barnsley does not. One point that is of major concern to residents in the flooded area is that there is an outstanding planning application for a further 200 houses, which has recently been turned down by the planning authority and has gone to the planning inspectorate on appeal. Following the point made by my hon. Friend the Member for Nottingham, South (Alan Simpson), does the Minister agree that when the planning inspectorate is looking at appeals such as this one, it needs to give serious consideration to the flooding aspect? I know that he cannot make a statement on a specific planning application.
The end of my hon. Friend’s question was also the answer, which is that I cannot comment on the individual case that is in front of the planning inspectorate, for obvious reasons. His main point, which is that we must build houses in a sustainable way—sustainable in terms of energy consumption, but also in their use of natural resources—is absolutely right, and we must reflect that in our planning system and other parts of Government policy.
As hon. Members on both sides of the House know, the flooding has had an absolutely horrendous effect on those who have suffered. All four towns in my constituency of Beverley and Holderness have suffered from flooding, as have many villages. There have been mass evacuations across the area. When all four towns in such a large rural constituency suffer from flooding at the same time, it is hard to accept that the preparations made by government at whatever level were adequate. Will the Secretary of State reassure my constituents that the Government’s plans for the future will mean that if such a thing were to happen in 10 or 15 years, people across a constituency as large as mine would never again suffer such flooding?
When coming to a judgment on the plans, the most important thing is to study the plans and determine whether they are sensible. Obviously, it is important that we make adequate and appropriate provision for the future throughout the country. However, the hon. Gentleman knows as well as I do that the extreme weather events to which we are being subjected are taking us into new territory, which requires a new degree of preparation.
May I reinforce the Secretary of State’s caution about seeking further analysis of the frequency of such events? In 2000, Hatton and other villages in my constituency that suffered flooding were initially told that that was a one-in-80-year incident, yet further analysis showed that the likelihood was more like one in 40. We should not take comfort from the apparent infrequency of such events cited in initial reports.
I draw attention to the remarks made by the right hon. Member for Fylde (Mr. Jack), who reminded us of the foresight report. We will clearly have to face such events with increasing frequency, which must reinforce my right hon. Friend the Secretary of State’s efforts to gain a favourable result in the comprehensive spending review.
I think that one of my colleagues on the Treasury Bench was mumbling that that was a helpful suggestion and questioning whether my tactics of inveigling the Liberal Democrats to support my spending application were the wisest.
My hon. Friend’s serious point shows that we are required to think about at least the 25-year period that I was due to be discussing today with water companies and the representatives of water consumers. The five-year price review gives us a chance to take stock, but we need to examine the matter over a longer term. I am trying to do that in precisely the way in which my hon. Friend describes.
The Secretary of State knows that the Environment Agency’s budget has recently been under pressure. Does he agree that spending on flood defences can save an awful lot of money in the future and prevent an awful lot of human misery? Will he thus examine the Environment Agency’s budget for Yorkshire, which has suffered disproportionately over the past day? Will he consider especially the situation involving the River Aire across west Yorkshire?
I will certainly be examining with the Environment Agency all the regional budgets that it allocates. The hon. Gentleman will be pleased to know that precisely the logic to which he points has led us to double spending in real terms on flood and coastal defence over the past 10 years. I hope that we can build cross-party support for such investment.
I associate myself with the condolences paid by my right hon. Friend and colleagues to the families of those who were tragically killed yesterday.
In January, I received a letter from the Environment Agency that stated that the flood alleviation scheme in my Wakefield constituency for Ings Beck, which is a tributary of the River Calder, will be delayed indefinitely, although it was supposed to start this year. May I join my hon. Friend the Member for Leeds, East (Mr. Mudie) in asking for an urgent review of the way in which the Environment Agency prioritises such schemes? Wakefield has been flooded for the second time in two weeks. Many A roads have been affected, the east coast main line has been shut, and the M1 and M62 have been greatly affected because they follow the paths of the Calder, the Aire and the Hebble, which run through our city.
My hon. Friend speaks about her constituency with great passion and insight. As I said to my hon. Friend the Member for Leeds, East (Mr. Mudie), it is important that we examine the areas of stress and learn from weather patterns as they develop. I am committed to doing that.
Home owners who suffer flood damage often fear that they will not be able to get insurance cover or that, if they do, it will be at a greatly increased cost. Will the Secretary of State assure me that he will talk with the Association of British Insurers as soon as possible, to give its members the comfort that there will be an increase in flood protection works, so that they can maintain cover at a reasonable cost?
The whole Government are committed to our partnership with the ABI and the insurance industry. It is obviously in the public interest, in the interest of public expenditure and the interest of home owners. I cannot say often enough that we are determined to continue that partnership and to fulfil our side of the bargain.
Speaking from elsewhere, I want to draw my right hon. Friend’s attention to the flooding that occurred in Fazeley and Elford in my constituency and place on the record my thanks to all the public service employees who worked tirelessly round the clock and who had to make decisions such as to let cattle and stock drown, so that people could be saved. That loss of cattle and stock may not be claimable on insurance, because it may be considered the result of an act of God.
I shall not apportion blame until after the inquiry is completed. My difficulty is that, although the Bellwin formula will fund 85 per cent. of the cost, the disproportionate cost that falls on small authorities, such as Lichfield district council, will be heavy. Will my right hon. Friend use his good offices to speak to his colleagues in the Government to see whether the next grant settlement could take into account to some degree the cost of the flooding? The last thing that I want people who have gone through this nightmare to face is an increase in council tax bill next year.
I share my hon. Friend’s good wishes for his constituents and his desire to place on record both his sorrow for what they have been through and his thanks to the public services in his area. I am happy to find out what point my right hon. Friend the Secretary of State for Communities and Local Government has reached in the local government grant settlement process, but I am glad that my hon. Friend agrees that the Bellwin scheme provides the foundation for an appropriate response.
The Secretary of State will be aware that two rivers, the Severn and the Avon, meet at Tewkesbury and continue the length of my constituency as the River Severn. It is a great attraction, but the downside is that it makes flooding much worse. However, the situation has been exacerbated by far too much building not only on the floodplain, but close to it. Does he therefore share my alarm at the proposals in the regional spatial strategy to build thousands of extra houses in such areas? When those proposals land on his desk, will he look at them very seriously and very carefully?
We look at all proposals very carefully, although technically such proposals do not land on my desk; they land on the desk of my right hon. Friend the Secretary of State for Communities and Local Government. However, I assure the hon. Gentleman that the sustainability criteria are to the forefront of the regional spatial strategies and we shall be keen—indeed, determined—to ensure that flood risk is properly taken into account when planning new housing numbers.
The Secretary of State is clearly aware that Shropshire is one of the areas worst affected by the storms, but he may not be aware that Ludlow has suffered unprecedented flooding, including the sweeping away of one of the bridges and a main access road into the town. He may also not be aware that the Severn valley railway—an historic railway that provides a great tourism and economic boost to the area—has suffered more than £1 million worth of damage to its railway track. Given what he said about the Bellwin formula, will he assure the House that sufficient funding will be available to match the applications from local authorities? Is anything available for bodies that are not local authorities that have suffered major infrastructure damage? If I may, Mr. Speaker, I should like to put my question in the context of the National Audit Office comment that of the £125 million available this year for new or improved flood defences, a mere £15 million is available for urgent works. Will that really be enough under Bellwin?
I am grateful to the hon. Gentleman for filling me on the situation in Ludlow, of which I was not aware in such detail. I think that I am correct in saying that the Bellwin scheme is a demand-led scheme, not a capped scheme. That should provide some degree of comfort, although every case has to be examined individually. I or my hon. Friend the Minister for Climate Change and the Environment will write to the hon. Gentleman, but my understanding is that the Bellwin scheme is restricted to local authorities.
Recent serious flooding in Kettering has led local people to point to the issue of blocked drains, and to the massive increase in the number of new houses being built. It is up to the county council to make sure that the drains are cleared, but will the Secretary of State ensure that in growth areas, where very large numbers of houses are set to be built in the next 15 years, the Environment Agency has the resources that it needs to monitor all the planning applications that come forward?
Criminal Justice and Immigration
Mr. David Hanson, supported by the Prime Minister, Mr. Chancellor of the Exchequer, Mr. Secretary Darling, Secretary John Reid, Ms Secretary Hewitt and Mr. Secretary Hain, presented a Bill to make further provision about criminal justice (including provision about the police) and dealing with offenders and defaulters; to provide for the establishment and functions of Her Majesty’s Commissioner for Offender Management and Prisons and to make further provision about the management of offenders; to amend the criminal law; to make further provision for combating crime and disorder; to make provision about the mutual recognition of financial penalties; to make provision for a new immigration status in certain cases involving criminality; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed. Explanatory notes to be printed [Bill 130].
Julia Goldsworthy, supported by Mr. Douglas Carswell and Mr. David Chaytor, presented a Bill to establish a Citizens’ Convention to facilitate the involvement of people from all sections of society in considering the way in which the United Kingdom is governed; to make provision relating to the implementation of recommendations made by the Convention; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 29 June, and to be printed [Bill 136].
Energy Markets (Carbon Reduction and Warm Homes)
I beg to move,
That leave be given to bring in a Bill to promote sustainable energy and energy efficiency; to make further provision in respect of the regulation of the gas and electricity industries; to provide Ofgem with new environmental and social duties; to make further provision about the role of local authorities in meeting the United Kingdom’s carbon reduction and fuel poverty targets; and for connected purposes.
This debate takes place at an auspicious moment in Parliament’s history. It is the end of one era and the beginning of another. What connects the two eras are the serious challenges of fuel poverty and addressing climate change that will be inherited by the new Prime Minister and the framework of governance that he will bring with him. The truth is that we sit within a policy framework that is not fit for purpose, in terms of our ability to meet the targets that we have set ourselves.
Let me give the House some of the benchmark figures that lead me to say that. First, last week I received a reply from the Minister for Housing and Planning, confirming that there are 2.2 million households in abjectly fuel-poor properties that have a standard assessment procedure rating—an energy efficiency rating—of less than 30. Department of Trade and Industry figures confirm that if there is a steady increase in energy prices, as is predicted, by 2016—the date by which we are legally supposed to have completely eradicated fuel poverty in the UK—there will be more than 3 million fuel-poor households in our country. We also know from the papers that have been produced in support of the Climate Change Bill that on current projections we will not meet our 2020 climate change commitments.
We need a new framework—a step-change framework—that will allow us to address those points, and I have tried to incorporate such a framework in the Bill. It seeks to address four issues. First, it would give towns and cities a duty to produce their own sustainable energy plans that would meet or exceed the national targets. Secondly, it seeks to reform the role of Ofgem. Thirdly, it would introduce the concept of citizens’ allowances, for both electricity and gas, to underpin a shift in the tariff system framework. Those allowances would have to be delivered at the company’s lowest tariffs, and we would then move to a system of higher charging for increased energy consumption. Finally, my Bill seeks to give the Secretary of State the power to introduce feed-in tariff systems, which would have preferential payback frameworks that would give an entitlement to the citizens who provided that feed-in energy. I shall go through those four aims one by one.
We know that by 2016 the Government hope to provide five new eco-towns that are carbon-neutral in their built design. By that time, however, Germany will have 40 to 60 eco-cities, made up of existing properties in which people are living now. That is the challenge for the UK, too. The building of 200,000 new houses a year is important, but the test is what we are going to do with the 25 million properties in which people are living today and in which, in all probability, they will live the majority of their lives. There is therefore a big step change from 200,000 properties a year to the 25 million with which we will have to deal in 10 years. If we are to get there, we must provide a different rules base for our energy system, which is why we must change Ofgem’s framework or terms of reference.
I have spent the past four or five years going round all the major energy companies, asking them what plans they have over the next five years to sell less energy for consumption. Not a single company in the land has any plans to do so. When I ask why, they say that Ofgem requires them to enter into least price competition for the sale of energy, so they are locked into short-term contracts that are suicidal in the race towards a precipice of increased energy consumption that will accelerate the problems of climate change. That must be changed by giving Ofgem a different remit so that it has a duty, first, to promote reduced energy consumption and, secondly, to promote the development of an energy market for the sale of energy services, rather than the sale of energy consumption. It would be helpful, too, if we removed some of the constraints or confines within which energy companies are required to work.
For energy companies themselves, part of the dilemma is the fact that they are locked into the 28-day rule. They are required by the Government to spend about £560 million a year as part of their energy efficiency contribution to alleviate fuel poverty and achieve carbon reduction targets, but they do not know how to do so within 28-day contracts. They want to get out of that lock. I suspect that citizens would say pretty much what every hon. Member would say when asked whether they would sign up to a 10-year contract with an energy supply company: “There’s not a cat in hell’s chance, because before the ink is dry, the company will double or treble the prices, so we would be hooked into a punitively priced contract for 10 years.” We must therefore move to energy services companies that are community owned or municipally owned, just as they are in large parts of Europe. By allowing those 10-year contracts between people and energy companies we can secure long-term partnership contracts that will allow the companies to spend their e-contributions in a much more productive and sustainable way.
The most important aspect of the Bill is the Secretary of State’s powers to introduce feed-in tariffs. A couple of weeks ago, I brought Hermann Scheer to Parliament. In Germany, he is recognised as the father of feed-in tariff legislation. He is a German parliamentarian, and he was responsible for piloting a measure through the German Parliament in 2000. The German Secretary of State is empowered to set tariffs that can be put in place for 20 years and, for the same period, citizens are paid up to four times the market price for clean energy that they put back into the system. That has driven the transformation of the German energy sector, so that in the last year alone it delivered 97 million tonnes of carbon savings, which is 10 times what the UK aspires to but fails to deliver. That has delivered jobs and the lead in the incorporation of renewable technologies, and it has made a radical impact on the concentration of fuel poverty in Germany. That is the core of what I hope the Bill would deliver.
The key features of the Bill are that it would move us into a different conceptual framework for what the next energy era will look like. The Bill is both visionary and practical. It is deliverable and economically viable. It is urgent, possibly more so than anything else in my lifetime. It creates jobs, as the Germans have done—about 240,000 jobs. It takes people out of fuel poverty and cuts carbon emissions like no other single measure has been able to do. It delivers a sense of community ownership of both the climate change agenda and the determination to eradicate fuel poverty.
It was Victor Hugo who said that there was nothing more powerful than an idea whose time had come. I believe that the combination of the four elements in the Bill encapsulates that idea, and I hope the House will determine that its time has come too.
Question put and agreed to.
Bill ordered to be brought in by Alan Simpson, Mr. David Amess, Peter Bottomley, Malcolm Bruce, Mr. Dai Davies, Dr. Ian Gibson, Mrs. Sharon Hodgson, Dr. Brian Iddon, Mrs. Linda Riordan, Sir Robert Smith, Andrew Stunell and Mr. Mike Weir.
Energy Markets (Carbon Reduction and Warm Homes)
Alan Simpson accordingly presented a Bill to promote sustainable energy and energy efficiency; to make further provision in respect of the regulation of the gas and electricity industries; to provide Ofgem with new environmental and social duties; to make further provision about the role of local authorities in meeting the United Kingdom’s carbon reduction and fuel poverty targets; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on 19 October, and to be printed [Bill 131].
Orders of the Day
As amended in the Committee and in the Public Bill Committee, further considered.
rates and rate bands for 2010-11
I beg to move amendment No. 38, page 3, line 15, leave out clause 4.
I raise the matter again because the issue of inheritance tax seems to be exercising ever greater numbers of people, yet the changes announced on Budget day were passed almost without remark. On the face of it, those changes were good news, which one might expect the Chancellor to want to champion. Clause 4 raises the nil rate threshold to £350,000 from 2010-11—another example, perhaps, of the Chancellor trying to keep control of the Treasury long after he leaves it. The Red Book does not tell us what the cost will be to the Exchequer, because we have information only up to 2009-10. The increase comes after several years of successive increases in threshold, which is to be welcomed.
I raise the issue in order to highlight the contrast between the increase in threshold and the rise in house prices. In 2005-06 inheritance tax raised £3.3 billion in revenue to the Treasury, and this year that is set to increase to £4 billion. Let us compare that to the rise in house prices. Between 1995-96 and now, house prices have increased by 199 per cent., according to the Halifax. Over a similar time scale, the inheritance tax threshold has risen by only 95 per cent. It is clear that the number of estates caught by inheritance tax will have increased over that period. In 1996, 15,000 estates paid inheritance tax. In 2006, that figure had increased to 37,000. Will the Minister acknowledge that the nature of inheritance tax and the objective that it is intended to achieve are changing?
Inheritance tax is changing from a charge on the very wealthy to a charge on those who consider themselves to be on middle income, who have benefited from rapidly rising house prices. It recalls to mind an example that came to my attention in my surgery involving a couple who had lived in Cornwall all their life. They were living in two adjoining residences, one of which belonged to their parents. They failed to understand that they could use the allowances of both parents, and they did not realise until the point at which both parents had died. The total value involved was such that they had to move out of the property where they had lived all their married lives, and where their parents had lived all their married lives, in order to pay the inheritance tax bill. If they had used both parents’ allowances, they would not have needed to do that. There are people who are being caught because they do not understand the system. They do not necessarily have very large incomes or live in particularly valuable properties.
The amendment is intended to allow an opportunity for debate on the Floor of the House—a debate that we have not yet had. I have no intention of pressing it to a vote; I wanted to use it as an opportunity to highlight how the nature of the tax is changing, and how what we see in the Bill is very different from the reality of many people’s experiences.
We need to look at the make-up of estates that are paying inheritance tax. Despite property price increases since 1998, the number of estates paying inheritance tax worth more than £2 million has fallen by 8 per cent. In the meantime, among estates worth £300,000 to £500,000, the number has risen by 20 per cent. We are therefore seeing a reduction in the number of estates at the very top end that are paying inheritance tax, while the number at a much lower level paying the tax is increasing disproportionately.
I appreciate that the Government are making efforts to redress that imbalance, as we saw from the changes made last year to the inheritance tax treatment of trusts. There are many arguments to be had about whether the policy was retrospective and its impact on decisions made a long while ago, but there was clearly a feeling that people on much higher incomes were finding a way of getting out of the system and avoiding paying inheritance tax. How many more estates does the Chief Secretary estimate will be caught as a result of those changes?
I raised the key issue during discussion of last year’s Finance Bill. It is where the true inequality lies—a question that relates to lifetime gifts. People who have the benefit of easily disposable or liquid assets can make use of the current seven-year rule that applies to lifetime gifts, but people in the circumstances that I described earlier, whose only significant asset may be tied up in their estate because it is their property, cannot do so in the same way. Of course, I am not suggesting that we get rid of the rule on lifetime gifts, but I wonder whether the Chief Secretary is prepared to look again at the matter. Demographics have changed since the rule was introduced. My understanding was that the seven-year rule was introduced to give parents the opportunity to help their children to make their property purchase and get a foot on the property ladder, but the demographics have changed; people’s life-expectancy is changing, for example, and as a result, people are living longer than might have been expected when the limit was introduced.
Will the hon. Lady say a little more about what change she is proposing to the seven-year rule? Is she suggesting that people should be looking at a whole lifetime? Is that the point, or is she proposing a level somewhere between seven years and a lifetime?
I am coming to that point. I was asking the Chief Secretary to consider whether the Government are prepared to look again at the seven-year limit. I wonder whether a time limit of 15 years would perhaps be more reasonable, taking into account how life expectancy has changed. Of course, I recognise that we must not get rid of lifetime gifts altogether and that, even with the seven-year time limit, there is a need to keep records. Increasing the limit to 15 years, however, might make the system a little bit fairer and would not impose too great a bureaucratic burden; after all, people keep records for capital gains tax purposes and so on.
In conclusion, the point of the amendment was to raise two key questions. Does the Chief Secretary accept that the nature of inheritance tax is changing and that the decline in the number of very large estates paying inheritance tax and the increase at the lower end means that the tax is increasingly impacting on those who would consider themselves to be at middle-income level? Does he agree that unless there is a change either to the threshold or, perhaps, the lifetime gifts rule, as I have suggested, revenues will continue to rise? If house prices continue to rise, more and more people will be caught and the nature of inheritance tax will change fundamentally. Instead of a tax on significant wealth, inheritance tax is a tax that the significantly wealthy seem to be more than capable of avoiding paying, while those who are least able to afford it end up paying a much greater proportion of it.
Like the hon. Member for Falmouth and Camborne (Julia Goldsworthy), the Opposition recognise the concern felt by many across the country about the increase in the number of people caught in the inheritance tax net since the Chancellor took up residence in No. 11 10 years ago. Under this Chancellor, inheritance tax is no longer confined to the wealthy and now impacts on those on middle incomes, too.
The hon. Member for Falmouth and Camborne has already told us some of the figures, and I shall add a few more. The Inland Revenue figures show that the revenue raised by inheritance tax has more than doubled under Labour, rising from £1.6 billion in 1997 to £3.6 billion last year. The Treasury expects the tax take to rise again this year to £4.1 billion. The proportion of estates liable to inheritance tax has tripled from 2 per cent. in 1997 to 6 per cent. on the most recent figures, and, as we have heard, the number of estates paying inheritance tax has more than doubled from 15,000 10 years ago to 35,000 this year.
Many people are anxious about the potential for a further increase in the number of estates affected by IHT with the growth in house prices. Halifax has carried out some extensive research on inheritance tax and has calculated that house prices have increased by 199 per cent. since 1995-96, which is far ahead of the increase in thresholds. It believes that the number of owner-occupied houses valued over the current £300,000 threshold is double what it was five years ago and now stands at 2.3 million or 12 per cent. of owner-occupied homes.
Particular concern is felt about inheritance tax in London and the south-east because of the high property prices. The average London property price went over the IHT threshold at the end of 2006. The Halifax research tells us that one in 10 postcodes have an average property price over the current £300,000 threshold, which is double the number five years ago. Scottish Widows has also published research about the increase in the number of home owners whom it believes now face the prospect of an IHT liability on the basis of their current net worth. A Grant Thornton study has projected an increase in the number of estates paying inheritance tax to 45,000 or 50,000 by 2009, assuming that asset prices continue to grow at their long-term average rate.
As I said in Committee, the Conservative party is not making promises on changes to the inheritance tax rates, bands or thresholds. We are not making uncosted, up-front tax cut promises on IHT or any other tax, because we fear that the public finances will have deteriorated so much by the time of the next general election that the nation will not be able to afford tax cuts. I know that that will disappoint those who want radical changes to, or the abolition of, IHT, but I hope that they recognise that economic stability is even more important than tax cuts and that a Government led by my right hon. Friend the Member for Witney (Mr. Cameron) will not risk that stability.
Nevertheless, we are, of course, happy to examine the options for tax reform. In this area, as in any other, it is important that all parties seek to address the issues in a thoughtful and considered way. With that in mind, I have listened with care to the changes to inheritance tax proposed by the hon. Member for Falmouth and Camborne. Given the Liberal Democrats’ commitment to increasing thresholds for IHT, it is bizarre to table an amendment that would delete a clause that increases those thresholds, which is what amendment No. 38 would do. Then again, the Liberal Democrats are not always known for their consistency.
I also recognise, however, that there is some concern about the fact that the potentially exempt transfer system, which deals with lifetime gifts, gives the wealthy opportunities for reducing their IHT bill that are not open to many people on middle incomes whose major asset is the home in which they live. We are certainly open to considering reform of the PET rules, but we would approach that with caution. It is suggested that it would be possible to fund lifting the IHT threshold via an extension of the seven-year rule for potentially exempt transfers, but that would be risky.
It is not clear how the change would work in practice, as we do not have a Liberal Democrat amendment to consider. Even more importantly, it would be difficult to predict what, if any, additional revenue would be raised simply by extending the relevant period. It would be impossible to guarantee that enough extra revenue would be raised to fund a significant increase in the threshold. An extension would have an impact on behaviour that would not be easy to predict. In many cases, extending the PET period might well simply prompt people to shift back their lifetime gifts, and the result would not be a huge additional revenue accruing to the Exchequer.
I am also concerned about the practical constraints that we would have to address to ensure that such a reform worked. The further back the rules permitted the Revenue to go in looking at lifetime transfers, the more difficult it would be to prove that they occurred and to establish what happened. Moving to a 15-year period would make it difficult for HMRC to keep track of records sufficiently and to be able to enforce the change effectively. I understand that in the past the Treasury and HMRC have given some consideration to a change along the lines of that suggested by the hon. Member for Falmouth and Camborne, but have dropped it on the grounds that it would give rise to several administrative difficulties and costs and yield uncertain returns. If reform of the PET rules were used to fund changes or increases in thresholds, it would have to be borne in mind that any additional revenue would not accrue to the Exchequer for at least seven years, so any changes to the threshold that were to be funded by that method would have to be postponed as well.
There is a broader point to make, and I value the opportunity that the Liberal Democrats have given us to consider these issues. It would be a mistake to tinker with just one aspect of how IHT works. If workable reform is to be seriously considered, we need to examine how the IHT rules work as a whole and consider all the options rather than just the PET regime in isolation. The Institute for Fiscal Studies is working on the Mirrlees report, which will include a study on IHT in its project to increase efficiency and fairness in the tax system.
In view of the importance of considering a range of issues to do with how IHT works, I mention one further matter that I drew to hon. Members’ attention in Committee, where it was dubbed “the sister problem”. It relates to long-term cohabitees. Some categories of people cannot use the exemption that exists for transfers between husbands and wives or civil partners. Examples might include people who have lived with and cared for an elderly parent for many years, people with learning disabilities who might similarly have lived with parents over a long period in the same home, or two siblings sharing a home. I drew the Committee’s attention to the case of my constituent, Ann James, who lives with her sister in a house that they have jointly owned for many years. She is very worried that the house will have to be sold should she die before her sister or vice versa. In assessing the options for IHT reform, the House should bear in mind the situation in which Miss James finds herself.
This debate has given the House a useful opportunity to examine and highlight the anxiety and resentment that many people feel about the expansion in the scope of inheritance tax during the Chancellor’s years at No. 11 Downing street. It has also given us a chance to explore important issues to do with the operation of the tax and the options for reform. The Opposition will continue to work for a wide-ranging reform of our tax system as a whole to make it fairer, simpler and more efficient, and will of course include in that process consideration of IHT.
I drew the Committee’s attention to the fact that inheritance duties on large estates have existed in one form or another since 1694, when a tax of five shillings on all estates over £20 was introduced. The principle of such a tax is therefore well established in the United Kingdom. It yielded £3.6 billion last year and makes an important contribution to funding public services. I underline the Government’s view that it is right and fair for such a contribution to come from the largest estates.
The nil rate band is set at £300,000 for the current year and, as my right hon. Friend the Chancellor announced last year, that figure will rise faster than forecast inflation in the coming years. Clause 4 provides for a further above-inflation increase in the band to £350,000 in 2010-11.
Like the hon. Member for Chipping Barnet (Mrs. Villiers), I was puzzled about the reason for the amendment, but the hon. Member for Falmouth and Camborne (Julia Goldsworthy) explained that it was tabled simply so that we could have a debate. However, if the Liberal Democrats have proposals on the matter—I note that the hon. Member for Twickenham (Dr. Cable) presented some ideas in a speech last week—the House should have an opportunity to discuss them.
It is worth outlining the twofold effect of the nil rate band allowance. First, it ensures that every individual can leave a substantial sum to whomever they choose— including, for example, a sister—entirely free of inheritance tax. Secondly, it ensures that the tax is progressive because, for estates above the nil rate band, the effective rate of tax increases with the size of the estate.
The number of estates that are liable for inheritance tax was mentioned. As has rightly been said, of approximately 600,000 estates a little under 6 per cent. attracted an inheritance tax liability in the past year. That means that the proportion of estates liable for inheritance tax is about 6 per cent. The remaining 94 per cent. paid no inheritance tax. That may come as a surprise to those who believe what they read in the newspapers, from which one gets the impression that the numbers are rather different.
The hon. Member for Chipping Barnet mentioned the proportion 10 years ago, but if one goes back 20 years, to the height of Thatcherism, one finds that the proportion was 5 per cent. The proportion has therefore gone up and down over the years. The consequence of the changes that we have set out for the next few years is that the proportion will stay roughly at the current figure of approximately 6 per cent. of estates.
In the last quarter of 2006, the mean house price in the UK was £199,000. The median price—the best measure of the “typical” property—was £175,000. The median prices for the south-east and London were £220,000 and £250,000 respectively. All those figures are within this year’s nil rate band. Of course, when a home is owned with a mortgage, that debt will reduce the size of the estate on death The vast majority of property ownership falls well within the inheritance tax nil rate band. It is important to underline those points when the newspapers often give the impression that a large proportion of estates is becoming liable for inheritance tax. That is not the case.
I am grateful to the Chief Secretary for the way in which he is dealing with the issue. Surely the biggest problem is that the number of very large estates that pay inheritance tax is declining. There is concern about the lack of a level playing field as well as fear at a lower level that people’s estates will ultimately become liable for inheritance tax.
Again, if the hon. Lady has proposals that might address that, I would be happy to consider them. However, as she said earlier, we have introduced changes to deal with the matter and ensure that the wealthy pay their fair share of inheritance tax. We will not hesitate to take further steps if we consider them appropriate. I agree with the hon. Lady that fairness needs to be seen to be applied to these arrangements, as with every other part of the tax system.
I want to underline a few more points that I think are appropriate, given the discussion that we have had. Not everyone is a home owner, and not every estate includes a house. In fact, housing makes up only 40 per cent. of the assets that are charged to inheritance tax, and it is important to acknowledge the other elements that make up the majority of such assets. Property values are a substantial contribution, however, and that is why we have had a period—and will have a further period—during which the nil rate threshold has been raised faster than the rate of inflation.
Following the suggestion made by the hon. Member for Twickenham last week, the hon. Lady has suggested that the seven-year period could be extended, perhaps to 15 years. I suggest that the present system strikes the right balance between ensuring that the tax is not open to abuse and minimising the administrative burden on taxpayers and the operational costs involved. Taxing gifts made 20 or 25 years before death would involve people retaining a record of their finances over a long period. We need to strike the right balance between the complexity and difficulty of such record keeping and ensuring that we block loopholes where they arise. Assets gifted many years before death could be difficult to trace.
I am grateful to the hon. Lady for explaining that she simply wanted to air this issue. I hope that the House will take the view that the balance we have set out in clause 4 and other announcements is the right one, and I am pleased that the hon. Lady has confirmed that she will not be pressing her amendment to a vote.
I welcome the opportunity to discuss this issue, and we have had a constructive debate. The hon. Member for Chipping Barnet (Mrs. Villiers) was right to highlight the constraints on raising issues in the Finance Bill, in regard to which issues may be raised and whether we may discuss matters that might have an impact on revenue raising. I welcome the generally constructive tone of the debate.
The hon. Lady was also right to say that, if such changes were introduced to lifetime gifts, we would not see an immediate impact on revenue and it would be difficult to judge the impact of such measures on behaviour. I refer her back to the comments made by the Minister last year, however, when we were discussing the inheritance tax treatment of trusts. The debate revolved around the fact that problems were being caused by individuals who were seeking to get round the inheritance tax rules but who did not want to give up control of their assets. That is the key point that I want to raise in talking about extending the time limit for lifetime gifts. Such an extension would still allow people to make a lifetime gift, but it would raise the issue of their having to give up full control of the asset at the time.
I gave an example of a couple who lived with their parents, and the hon. Lady gave another example of people who might fall foul of the existing legislation. Part of the problem is that they possibly do not even realise that they have done so until it is too late to do anything about it. Similarly, I am sure that some people who are caring for elderly parents will be caught by the changes to pre-owned asset taxes. They might have had the house given to them, but a parent could then move back in when they became too old. These problems are likely to raise their head at difficult times in people’s lives.
The Minister talked about the above-inflation increase in the threshold for inheritance tax, but I must point out that house price inflation is very different from retail prices index inflation. There have been hot spots in which there have been massive increases. The hon. Lady mentioned the south-east where there are historical pressures, but parts of the south-west have also had massive house price increases. Combined with the fact that incomes are low there will be significant difficulty, in particular in some of the coastal villages in my part of the world where individuals know that they do not have a hope in hell of affording a property in the place where they were born and bred.
There is widespread fear of inheritance tax, which may actually be greater among people who do not come within the tax’s threshold at present. However, they fear the tax because they see that the threshold is not keeping pace with house price inflation, which in most cases is their main asset. The issue needs to be addressed, but it has not been, even by the increases that have been made so far. The increase in the Bill is welcome, but it is unlikely to be sufficient. Unless something is done, more and more people will continue to be caught by inheritance tax.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
SDLT relief for new zero-carbon homes
With this it will be convenient to discuss the following:
Amendment No. 7, page 14, line 35, at end insert—
‘(8) Regulations under section 58B shall expire one year after coming into force, but, subject to subsection (9) below, without prejudice to the making of further regulations under that section.
(9) Further regulations under section 58B may not be made unless they contain a provision specifying that they expire one year after coming into force.’.
Government amendment No. 1
First, we welcome Government amendment No. 1, on the regulations referred to in the clause. The Economic Secretary wrote about them to my hon. Friend the shadow Chief Secretary and the hon. Gentleman will doubtless address them in a moment.
Our amendment No. 6 makes a relatively minor inquiry about a small part of the clause. It is not entirely clear why it is necessary to write it in the Bill that the regulations referred to in subsection 58C(2) may
“refer to a scheme or process”.
I understand why it is necessary to include provisions in the regulations for the establishment of a “process of certification”, in paragraph (b), and for the establishment of a process of “certifying energy efficiency” in paragraph (c). However, it is not clear why the fact that the regulations may refer to something needs to be on the face of the Bill, so we would be grateful for clarification on that point.
By proposing that the regulations lapse after a year, amendment No. 7 allows us to make further inquiries about the scheme that the clause proposes. It is clear that the scheme will provide for a number of zero-carbon—or more properly speaking, energy efficient—homes, which is why we welcomed it in Committee. What is not clear is whether it will provide the number that the Government claim it will provide eventually. After hearing the Economic Secretary’s reply to the debate in Committee, we were more doubtful about whether the scheme would provide that number than we had been before he stood up to speak. Anticipating his response that that reflects more on us than on him, I shall share with the House the causes of some of the difficulties encountered by the Committee.
I shall not linger long over the mystery of the current number of energy-efficient homes. At column 139 of the Committee report, the Economic Secretary said that there were
“few or no zero-carbon homes”;
but by column 141, when he had been asked to choose between two estimates, he conceded:
“I do not know the answer”.––[Official Report, Finance Public Bill Committee, 15 May 2007; c. 139-41.]
I accept that the point is relatively minor, although the Chief Secretary had previously told that supreme constitutional authority—Jeremy Paxman of “Newsnight”—that he thought there were “a couple of dozen”. On Second Reading, he said:
“a development of zero-carbon homes is going forward at Galleons Park in my constituency”.—[Official Report, 23 April 2007; Vol. 459, c. 661.]
A reasonable observer might assume that “going forward” meant that planning permission had been granted, but the Economic Secretary confirmed on 15 May that it had not yet been granted, so those with an interest in London planning matters should note that when Ministers say a development is “going forward”, they presumably mean—to quote the Economic Secretary—
“The London Development Agency has earmarked the site.”
At any rate, the Economic Secretary was unambiguous about the target. He said:
“we intend to get to the point where 200,000 such homes are built each year by 2016—that is the ambition.”—––[Official Report, Finance Public Bill Committee, 15 May 2007; c. 138-39.]
We also know, because it was announced last May, and re-announced this May, that the Chancellor wishes five eco-towns to be built containing 100,000 energy-efficient—or if the Economic Secretary would prefer, zero-carbon—homes in total.
That returns us to whether the Government are likely to achieve those goals. My hon. Friend the Member for Braintree (Mr. Newmark), who is in his place, announced a rough calculation in Committee. Assuming that each new energy-efficient house went on the market at £200,000, he argued, the Treasury would lose a total of £200 million in stamp duty if 100,000 of those houses were built. He then drew our attention to paragraph A2.10, on page 230 of the Red Book, which says:
“The Exchequer cost is expected to rise to around £15 million by 2011-12.”
As he said, that suggests that by 2012 only 7,500 energy-efficient homes will have been built, and by his calculation it will take 13 years in total to build the Chancellor’s 100,000 homes. My hon. Friend’s figures may be rough, but on the basis of the figure that he dug out of the Red Book, it is hard to see how there can be an acceleration from about 7,500 in 2012 to 200,000 only four years later.
Given my hon. Friend’s comments, does he believe that the proposal is simply a publicity stunt? If the Government were serious about taking action, would they not concentrate on tax measures to increase energy efficiency in everybody’s homes, and not simply go for headline-catching zero-carbon homes?
Certainly, the interest groups, whether house builders or green groups, have on the whole been pretty unenthusiastic in their responses to the proposals. Perhaps the Economic Secretary will be able to enlighten us on that point.
In Committee, the Economic Secretary said:
“He asked me what my forecast was for 2012. We do not have a forecast”.
He also said:
“the build-up will not be linear, or like a straight line, but … there will be a progressive acceleration over that period”,
“we do not know what the pace of build-up will be.” ––[Official Report, Finance Public Bill Committee, 15 May 2007; c. 142-43.]
In summary, on the basis of the figure in the Red Book, the only reasonable conclusion to be drawn is that if we imagine the rate of building such homes as a line on a graph, the Treasury anticipates a slowly rising line until 2012, after which the line will dramatically and suddenly soar upwards until it almost ascends from the page.
The Government are vague in their legislation, as they point out that it may not relieve all the tax—they reserve the right only to reduce the amount of tax chargeable—and that the regulations will not continue after 2012. They are then left with the perverse situation that when the incentive is taken away, more such homes are to be built.
My right hon. Friend makes a vital point about the stability and certainty that any such scheme could reasonably be expected to provide and that those who might seek to invest in it would surely look for. I shall return to that in a moment.
The Economic Secretary also said:
“It may well be that the target will be reached faster than in that non-linear projection; it may well be that that happens more slowly.”––[Official Report, Finance Public Bill Committee, 15 May 2007; c. 142-43.]
However, I have not risen to my feet today just to point to inconsistencies in statements by the Economic Secretary. The key point is the one that my right hon. Friend the Member for Wokingham (Mr. Redwood) has just raised. For the scheme to work, investors in energy-efficient or zero-carbon homes will look for stability, certainty and predictability as a basis for planning and investment. They will look for some sign that by 2012, when the relief is planned to expire, it will have taken the Government towards their proclaimed target of building 200,000 energy-efficient homes a year by 2016. If those investors or interest groups look at the small print in the Red Book, however, they will find that, on any reasonable calculation, only a relatively small number of such homes will have been built. That in turn would lead any reasonable inquirer to question whether the Government are serious about their proclaimed targets and whether they are serious about extending the relief after 2012 if the targets do not look like being met. On the basis of what we heard in Committee, it is up to the Economic Secretary to persuade the House that the Government have a coherent plan for reaching their target for the scheme and for the future of the relief.
My hon. Friend made a powerful case about the lacunae and missing elements in the Government’s proposals. I look forward to hearing the Economic Secretary explain a little more about the extent of the relief and how he sees the profile of construction under the proposals.
It is a great pity that such a good opportunity has been missed in the Government’s modest amendment and the current text. Many of us believe that one of the most important things that we could do to encourage energy conservation and reduce carbon dioxide emissions is to give people more incentives to save energy in the home. It is a crucial area, where so much energy goes to waste. I am sure that the way to do to it is not to penalise, hit and tax people more, but to give them tax incentives. I admire the way in which the Government are proposing a tax incentive for the construction of new homes, but it is a pity that it is limited to new homes and cannot be extended to the many people who would like to make their home more fuel efficient, but do not wish to move and buy a new property.
I hope that when the Economic Secretary thinks about how the Government might do more to promote zero-carbon homes among the general number of homes already constructed, he will also deal with the crucial question of what they mean by saying that the relief specified in the clause may be an exemption from the charge or it may be a reduction in the amount of the tax chargeable. As my hon. Friend said, it is terribly important that if the proposal is to work, there must be a strong and clear message from the Government about the exact nature of the exemption. That will require early and fuller statements from them about what a zero-carbon home is, how it can be measured, how a home can qualify, how much the tax relief will be and for how long it will be in place in practice. All those things are left in some doubt by the text as drafted.
In the meantime, I will support my hon. Friend’s proposals, because he is probing in the right way to get more certainty and sense into this strangely contentious area. I say strangely contentious because, as I understand it, all parties applaud the aim and wish more homes to be more fuel efficient. I assume that all parties are united in believing that tax incentives, rather than tax penalty and regulatory penalty, are a better way of doing that and more likely to succeed. I hope that the Economic Secretary will explain more of the detail and perhaps be more ambitious, because we have a great opportunity to do something very positive, which will also help to tackle the problems of fuel poverty and the difficulties experienced by the elderly and those on low incomes, who often live in the least fuel-efficient homes.
The most difficult part of the proposal is that it is likely to increase demand rather than deal specifically with those who supply housing. We need incentives for the people who develop property as well as for those who want to purchase it. The incentive will have an indirect effect if we go straight to the demand side. A significant number of new properties will be built in my constituency. We already have difficulty convincing the developers that there is a demand for energy-efficient properties. Although the proposal provides an incentive, I am not sure how much it will do to convince property developers of the case. There is so much unmet demand that they could simply build unenvironmentally friendly houses and still have no problem selling them. That is the core of the difficulty for me.
I welcome the Government amendment, because it means that we will be able to move on from the hypothetical and extended debate that we had in Committee, and are reliving today, to a more tangible one about what a zero-carbon property will be. I look forward to seeing the regulations, because—given my experience in my constituency—the Bill raises some key questions about what a zero-carbon property means. Does it mean zero-carbon in terms of running costs or the energy required to build the property in the first place?
The Mount Pleasant ecopark just outside my constituency undertook to try to build workspace with as minimal an impact on site as possible. It was constructed with materials already on the site, instead of by bringing in cement and other building materials. That was a brilliant initiative and the resulting workspace has been taken up quickly, but it met with huge difficulties, including in securing the permissions and in developing the technologies to do it. For example, the walls of the property are made out of rammed earth from the site, and the result is a beautifully coloured surface, but some bizarre tests had to be carried out to prove that it was strong and durable enough. The tests included dropping a piece of the earth from shoulder height and if it broke into between three and seven pieces, it was appropriate for rammed earth construction. The expertise and techniques involved could bring huge benefits, but it is not clear whether the Minister intends to develop it that far. That will need to be made clear in regulations, because if the proposal is to be truly ambitious it should include not only the energy use of the building after it has been built, but minimising the impact that new build has on the environment, not least because some ambitious targets have been set for meeting the demand for homes.
On the Opposition amendments, I agree that the regulations should include the method for claiming stamp duty relief, and I understand that that is the intent of amendment No. 6. I wonder whether the methods that have been mentioned will be affected by the Government’s change in policy on home information packs. In Committee, it was pointed out that Cornwall is an objective 1 area, so there was an opportunity for new workspace to be part funded by that programme. Because of the huge demand, the opportunity was taken to set higher environmental standards. The problem was that there was no one within a 300-mile radius who was able to assess whether that workspace met those criteria. So we must not only set high aspirations but ensure that there is a way of delivering them. The obvious way would be through the home information pack process, but that has now been seriously undermined. We already know about the difficulties of finding the capacity to deliver that.
Amendment No. 7 would introduce a sunset clause of one year. I wonder whether it might have been more practical to have a mechanism for reporting back, so that we could judge the effectiveness. Key questions remain, including how many people will benefit. We have had contradictory information from the Red Book and what Ministers have said. Fundamentally, the issue is that if we are serious about making homes more energy efficient, we have to tackle the existing housing stock, because the majority of it will still be standing in 50 years’ time.
Unless we tackle that issue, people will find it difficult to make their own individual effort to tackle climate change. There are some good practical examples, such as social housing stock in my constituency that has been retro-fitted with a ground source heat pump which has reduced the environmental impact of those properties and is also saving the people who live in them hundreds of pounds a year in heating bills. If we do not look at existing housing stock, what we can achieve through this mechanism will be severely constrained.
I rise to speak briefly in support of amendment No. 7, which would introduce a requirement that the regulations on zero-carbon homes expire annually. We dealt with the proposal at some length in Committee, but I for one am not able to say that the debate caused the scales to fall from my eyes.
The Economic Secretary is fond of berating Conservative Members for cynicism. I am not a cynic, but I hope that the proposals in the Bill are realistic. It is for that reason that I support the proposed requirement that the regulations be reviewed every year.
In Committee, the Economic Secretary became a little discombobulated when he replied to a perfectly reasonable question from my hon. Friend the Member for Wycombe (Mr. Goodman) about such minor details as how many zero-carbon homes might be expected to make use of the tax relief on them. The Economic Secretary also had difficulty with the number of existing eco-homes. He said, staccato, that there were “few or no” zero-carbon homes today, then admitted that there were “none”. Then he softened again, and said that there “may well be” none. I think that his final offer was that the true number was “low or zero”. That is not a reassuring background to the introduction of the regulations.
The hon. Lady’s question makes my very point: the problem is that the Government do not create any definitions. They have grand schemes but do not define what we need to do or where we are going.
As I said, the background to the regulations’ introduction is not reassuring. We do not seem to know where we are now, let alone where we will be in 2012 or 2016. The Deputy Prime Minister once said, in an immortal phrase, that the green belt was a
“Labour achievement and the Government intend to build on it.”
In a similar vein, the Economic Secretary accused Opposition Members of being
“consistent in their opposition to taking forward concrete action on the environment”—––[Official Report, Finance Public Bill Committee, 15 May 2007; c. 134.]
Clearly, there was no irony there.
My hon. Friend the Member for Tunbridge Wells (Greg Clark) has exposed how successful the Government have been at concreting over the environment. They are at the top of the class in that respect, but the foundations of their proposals on eco-homes are a little less concrete.
Such homes involve technology that is new and untested. Either it does not yet exist, or it is experimental and somewhat uncommon. The choice depends largely on the mood of the Economic Secretary. We are justified in feeling a little suspicious of the Government’s record on using taxation to effect behaviour change.
I was concerned in Committee, and I remain concerned now, that the Government have proposed a tax relief that will chug along for several years without regular monitoring, and then simply stop. In addition, the relief is founded on the paradoxical assumption that it will contribute in some way to the Chancellor’s thrice-announced 100,000 new eco-homes for a magical total of—and I do not get the maths here— 200,000 by 2016. According to the Red Book, those houses will come in at a cost of only £15 million by 2102. Either the incentive will be used widely, in which case it will cost more than the £15 million predicted by the Government, or it will not work and will need to be rethought.
I pointed out in Committee, and it is worth reiterating now, that some £130 million has been spent on seven millennium communities, delivering homes to the “excellent” standard. I was amused to see—I made this point in Committee—that one of the seven communities, in east Manchester, was, in true new Labour fashion, named New Islington. It is a wonder that the Chancellor did not go the whole hog and call a street there Granita or New Granita.
The fact remains that, after 10 years, the homes have not been delivered, so the idea that a large number of homes will be built in time to take advantage of clause 19 is optimistic—or indeed over-optimistic. The Economic Secretary talked of a non-linear projection for uptake, but was unable to provide figures for the uptake of eco-homes by the 2012 cut-off point for the regulations. Even using a curve rather than a straight line, it ought to be possible to extrapolate back from the aspiration of 200,000 eco-homes in 2016 and give us at least a ball-park figure for uptake by 2012—it could even be a Galleons Park figure. In the absence of that figure, my hon. Friends have proposed the only workable answer to the Treasury’s remarkable opacity and confusion on eco-homes by requiring an annual review of the policy to see whether it is having the intended effect.
The Economic Secretary offered the Committee a vague and open-ended commitment to review the regulations in or around 2012, if he is still around. That is not really a commitment at all, because it seems to depend on the prevailing circumstances. He also contends that this is a bold, innovative and radical policy, but let us hope that the Government have paid enough attention to his fourth adjective of choice and ensured that it is also coherent and that eco-homes will in future receive annual scrutiny.
I hope that I will be able to give some reassurance while speaking about the Government amendment and responding to the Opposition amendments, and provide some more detail for the right hon. Member for Wokingham (Mr. Redwood), including detail on the definition of zero-carbon homes, which I hope will reassure the hon. Member for Falmouth and Camborne (Julia Goldsworthy).
With the permission of the House, I do not intend to spend too much time repeating the debate in Committee about the costing and the number of zero-carbon homes. However, I want to set the record straight, because I have never been quoted as many times in the House as I have been quoted by the hon. Member for Wycombe (Mr. Goodman). This is exactly what I said:
“we start from zero and will get to 200,000 in 2016, and…the build-up will not be linear, or like a straight line, but…there will be a progressive acceleration over that period. On the basis of that, from nought today to 200,000 a year by 2016, and on the basis of the stamp duty relief that we have set out today, we will produce a costing…On the basis of the costing, as set out in the Red Book, for the build-up that we have estimated or projected, the costing by 2012 will be around £15 million.”––[Official Report, Finance Public Bill Committee, 15 May 2007; c. 142.]
That seems pretty clear.
The Economic Secretary has not at any point claimed that my hon. Friend the Member for Braintree (Mr. Newmark) was mistaken to suggest that if the expenditure by 2012 will be £15 million, that means that approximately 7,500 homes will have been built by then. If that is the case, it is hard to see how the Government can get up to 200,000 by 2016.
I fear that the hon. Gentleman wants to repeat the debate that we had in Committee. I set out the position entirely clearly: there will be a non-linear, progressive, accelerating build-up over time on the basis of which we will get to a figure of 200,000 by 2016. The costing is correct for 2012. However, as the hon. Member for Braintree (Mr. Newmark) probably knows, given that he has studied these matters, things are dependent on the pace of the acceleration. As I said in Committee, the acceleration might be quick or slow, but we will still get to the same place in the end. This depends entirely on the definition, and, as the hon. Member for Falmouth and Camborne effectively pointed out to the hon. Member for Braintree, given that we are still consulting on the definition, it is hard to provide a completely detailed estimate at this stage. That was exactly why the projection that was set out in Committee was made in such a way. I do not think that we will make any more progress on the matter. The position is very clear.