House of Commons
Tuesday 15 January 2008
The House met at half-past Two o’clock
[Mr. Speaker in the Chair]
Bournemouth Borough Council Bill [Lords] (By Order)
Manchester City Council Bill [Lords] (By Order)
Orders for Second Reading read.
To be read a Second time on Tuesday 22 January.
Oral Answers to Questions
Communities and Local Government
The Secretary of State was asked—
Over the past nine months, through the pathfinder fund, we have supported more than 200 projects in 70 local authorities. During the course of this year we will carry out a formal evaluation of these projects, but so far it is already clear that more women and young people are involved in helping to build stronger and more resilient communities.
The Home Office has estimated that thousands of British Muslims in this country support both the means and the ends of various Islamic terror groups. Can the Minister give a solemn assurance to this House that not one single penny of the money that she has allocated under this scheme has gone to any individual or organisation with any links whatsoever to Islamic terrorism?
Let me first make it absolutely clear that the vast, overwhelming majority of Muslims in this country abhor violence, abhor terrorism and do not support the tiny minority of people involved in violent extremism. The work that my Department is funding, and will be funding in a substantially greater way over the next three years, is directed at building the resilience and strength of local communities to resist that extremism. We will monitor very carefully indeed the groups to which this money is allocated, and I will certainly ensure that we fund groups who absolutely stand up and condemn terrorism and want to participate in tackling it.
When I go to the mosques in my constituency, the red carpet is rolled out, so to speak, and I am sure that the same applies to many other hon. Members. What happens there is that I meet imams and elders of the Muslim community, and perhaps that means that we are not engaging enough with younger members of the Muslim community. Does the Minister agree that it is vital that we open a dialogue with young men and young women from the Muslim community in order to ensure the success of the Government’s programme?
Yes, I entirely agree with my hon. Friend. I am very grateful to hon. Members in all parts of the House who take this responsibility seriously in their constituencies and are involved in that dialogue. Part of the work of the Mosques and Imams National Advisory Board, which is the national organisation from the community itself that is looking at governance in mosques, concerns how we get more young people and women involved in the mosques; that will take us a considerable way forward.
May I associate myself with the Secretary of State’s remarks? I entirely agree that that is what is happening in Rochdale. Does she agree that a key priority needs to be ensuring that we have more imams who are trained and brought up in Rochdale—[Interruption] I mean brought up in Britain; in Rochdale would be even better—and what steps is she taking to assist in that development?
I am grateful for the hon. Gentleman’s kind offer, but I know that there are some extremely good imams in Rochdale. Irfan Chisti works very closely with our Department and makes a great contribution. I agree that we need to have more imams who are trained in this country and who have not only English language skills but community leadership skills. That is why we are funding a programme for imams. In Dudley in the west midlands, 23 imams are currently involved in a leadership development programme that will help them to really engage with Islam in the modern context of living in the 21st century in Britain.
The preventing violent extremism programme is clearly important, and I have seen some of the good work myself, including the work in Dudley to which the Secretary of State referred. However, she really must clear up the point that was raised by my hon. Friend the Member for Monmouth (David T.C. Davies). In November, the Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), wrote to me about the programme, saying:
“The details we hold”—
that is, the Department—
“are…no longer a completely accurate reflection of all the work taking place at a local level.”
If the Department does not have fully accurate details, how can it be sure that none of the money—not a penny, as my hon. Friend said—is falling into the hands of separatists and extremists?
It is important that we monitor very carefully the way in which these funds are being used. At the same time, however, it is essential that local authorities see this as part of their core business and integrate it into their mainstream activities, because local authorities, whether they are in Luton, Leeds or Birmingham, know the situation on the ground and what can work. As the hon. Gentleman knows from our correspondence, we are currently considering all 200 projects. I am ensuring that information about all those projects and the work that is going on will be placed in the Library next week. Monitoring is absolutely essential. We must also allow local authorities to do the things that work in their local neighbourhoods.
London Development Agency/Mayor of London
I am rather surprised by that answer. Will the Minister confirm that there is a code of conduct for the Mayor, assembly members and assembly staff, but no code at all for the Mayor’s political advisers? In light of the controversy over the role of Lee Jasper, who pressurised the LDA into giving grants to his pet organisations, will the Minister think about looking again at the legislation relating to this matter?
I am surprised at the hon. Gentleman’s surprise. The Greater London authority and the LDA are subject to the same local government finance and audit framework, with the Audit Commission and the district auditor having external inspection and audit powers. He knows that the district auditor has been sent the LDA and GLA internal reviews and will be reviewing whether any further action is necessary.
The Mayor’s advisers report directly to the Mayor. The assembly can hold the Mayor to account for their actions, and it is also able to require their presence at meetings. Indeed, it has done so a number of times in public since 2000.
The Minister will know that I asked for the police to be brought in to investigate a number of projects in my area, and he will obviously not want to comment on those, but does he accept that there is growing concern about the cosiness of the relationship between the LDA, the GLA, the Mayor and the Mayor’s office? That could have led to the sort of problems, to put it mildly, that we have seen—the huge abuse of how money is spent. If it is found that there is a serious link between how the LDA has worked and the money that has been misspent, does he agree that the whole way in which the LDA operates will have to be looked at? We may have to go back to renewing legislation and changing the law.
My hon. Friend is right that it would not be right for me to comment on specific allegations, but I do not accept her description of what has gone on. As I have said, the district auditor will be reviewing whether any further action is required as a result of receiving the two internal reviews from the GLA and the LDA.
May I draw the Minister’s attention to a letter from MPs of all three parties, calling for an urgent investigation by the local district auditor? In their words:
“The LDA can no longer be a credible investigator of these allegations.”
Will he confirm that he will take absolutely no further steps to protect the taxpayer in London and the United Kingdom from the wastefulness and cronyism that characterise the expenditure of the LDA?
The hon. Gentleman does not need to tell me because I read the Evening Standard last Friday, as he did. I also read the press release that he put out on that day. It is interesting that he was not on his feet talking about the LDA back in the summer when it delivered the land required for the Olympic park on time—the most complex and largest compulsory purchase order project for the past 20 years. That may have something to do with the elections in May. The fact is that the Mayor we have has been an outstanding leader for London. He has led part of the success of London in recent years, and only today London has won a prestigious international award for the congestion charge—something which the hon. Gentleman opposes.
I hope that the Minister will take time to read the LDA’s report, because the truth is that his washing of his hands is wholly unsatisfactory. Even that report, despite its clear inadequacies, acknowledges the need to review the role of mayoral advisers, based on the limited evidence that resulted in half the instances it investigated being referred to the police. The LDA was criticised in November over some 61 wholly separate grants. It was found that it had not demonstrated that it would get what it expected in return for the funding given, that it had not adequately monitored outcomes, and that it was unable to explain the criteria on which it had based some of its decisions. Government action is needed because the LDA is a serial offender in such matters; it has more form than the Kray brothers.
If the hon. Gentleman says that the scrutiny and holding to account of the LDA have been insufficient, he therefore also says that the operation and conduct of the Greater London assembly has fallen far short of what is required. He remains, of course, a member of that assembly.
The Department does not make assessments of the demand for council housing. However, we encourage local authorities to assess the housing needs of their area as part of their strategic housing role. Stoke-on-Trent city council is working on such an assessment with neighbouring authorities in the west midlands region’s north housing market area. I understand that it will be published in the spring.
I thank my hon. Friend for that reply. However, in Stoke-on-Trent, the numbers on the council housing waiting list have increased from 2,000 in 2003 to 8,000 today. I welcome the Government’s investment in affordable housing, shared ownership and social housing, but will my hon. Friend reconsider what he can do to help local authorities build new council houses, including through access to the social housing grant?
I agree that local authorities have a vital role to play in delivering more social housing. On my hon. Friend’s point about social housing grant, she may be interested to hear that we have changed the process for awarding the grant to make it easier for high-performing councils, through local authority companies or special venture vehicles, to qualify and compete for it. We are also examining the potential to increase the number of new council houses by allowing councils to operate outside the housing revenue account subsidy system. I hope that she will be encouraged by that answer.
Housing Revenue Account Subsidies
There is redistribution within the housing revenue account and I believe that that is right. However, reforms are needed to the housing revenue account and we are already piloting some major changes, which will be supported by the Housing and Regeneration Bill, but we are also conducting a wider, long-term review of the housing revenue account.
I thank the Minister for her reply. She may know that I had a meeting with the Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), during which I highlighted the impact of the housing revenue account on Sutton’s tenants. Thirty-seven per cent. of the rental income there is a negative subsidy. I asked the Under-Secretary a question, which I should now like to repeat to the Minister. Is she willing to freeze those subsidies at the 2007-08 level until her review of HRA is complete so that Sutton’s tenants do not pay a heavy price?
As the hon. Gentleman knows, there is a long tradition of acknowledging that some areas have been better funded in the past than others. Some areas have had their council housing funded through different mechanisms, which has put them at an advantage or a disadvantage, and there is different need in different areas. I believe that it is right that there should be some redistribution in the system.
I do not like the housing revenue account. There is a series of problems with it in enabling councils to manage their assets properly for the long term. However, it is a complex framework and, to reform it, one has to ensure that one is not disadvantaging unfairly other areas and other councils. We have set out the determination for 2008-09, which councils should have received. We will work fast on the housing revenue account review to inform next year’s determination.
I greatly welcome my right hon. Friend’s comments and the review to which she has committed the Department. The housing revenue account is not merely a problem for authorities in negative subsidy. The housing revenue account system is a problem in that an authority can get penalised for building new homes and, if tenants want to opt for improvements, they cannot pay extra rent to cover the cost. There is a fundamental dislocation between the service provided and the rents that are charged. For all those reasons, I am sure that my right hon. Friend agrees that a fundamental change in the system would benefit landlords and tenants.
My hon. Friend is right. Part of the problem with the housing revenue account is that one has to wrap one’s head in a wet towel every time one tries to work out the details. Such a complex system is not in the interests of people who run housing revenue accounts throughout the country. A system that better rewarded long-term planning and long-term decision making by local councils would be preferable. The pilots that we have established are already trying to find one way in which to approach reform, but the review will be wider and examine a range of options.
Local Government Funding
We have received more than 300 representations on the provisional local government settlement. As we expected, many of those asked us to check the data used or made other statistical points.
The Secretary of State will know that colleagues from Southwark on a cross-party basis had a constructive meeting with the Minister for Local Government last week. One of the matters raised in that discussion, but of concern widely, was out-of-date population figures on the basis of which local government settlements are given. I know the difficulties, but would the Secretary of State be willing to give an undertaking that, if not now—that is, before the final vote is taken, before the settlement comes into force in April—then later this year, when the up-to-date figures are available, there will be a chance to review the settlement on the basis of accurate population information? We cannot give out grant on the basis of figures that are fundamentally out of date.
I appreciate the way in which the hon. Gentleman has put his case, and I know that he had a productive meeting. He will know that, in addition to the distribution on the basis of population statistics, we have another mechanism that seeks to protect councils, which is the floor damping mechanism. Southwark will benefit from that over the next three years to the tune of just over £63 million.
Local government itself wanted a three-year settlement, for the stability, certainty and predictability of its expenditure. The figures that we have used are therefore the best and latest available, and are consistent across local government. It would be wrong to disturb the stability and certainty of the three-year settlement. I therefore cannot give the hon. Gentleman the reassurance that he is looking for—that is, that we will reopen the settlement—because that would inevitably have a huge impact on the stability and certainty that local government has welcomed.
Swindon borough council was disappointed with the award that it received for its growth point grant. Will my right hon. Friend or one of her colleagues meet me to discuss the council’s disappointment and what else it can do? The council did not initially consult Swindon’s MPs, but has done so since, which has been very valuable.
Clearly my hon. Friend is, in her usual way, a champion and advocate for her constituents. She will be pleased to know that there are further moneys to be allocated. I should be delighted to ensure that my hon. Friend the Minister for Local Government meets her to discuss the position in Swindon, and no doubt she will use her usual articulacy to make the case.
Will the right hon. Lady please take action to increase the weighting of the sparsity factor in the calculation of Government grants to rural areas such as Lincolnshire, where, in a very large county, the police grant is the second smallest in the whole of England, and as a result many of my constituents continually complain of under-policing?
Sparsity is one of a number of factors, and is important in reflecting the particular pressures in rural areas. Sparsity is taken into account when we draw up the formula, which is subject to consultation and is regularly reviewed and examined. Clearly it is important that the formula should take into account a wide range of needs and differences, and the truth is that different communities have different needs. That is why my Department is absolutely committed to devolution to local authorities, so that they can tailor their services to meet the kind of pressures that the hon. Gentleman has outlined.
I am grateful for the patience that my right hon. Friend and my hon. Friend the Minister for Local Government have shown in listening to representations on behalf of Slough, whose population has grown massively, but which is not having that change reflected, because of failures in the way that Office for National Statistics figures are calculated. Although I recognise the demands of a three-year settlement, is there any prospect at all of some resources being directed to those places that have coped with sudden, urgent growth and which are very diverse, such as Slough? Extra resources, when our—
Like my hon. Friend the Member for South Swindon (Anne Snelgrove), my hon. Friend is a real champion. I can tell her two things. First, I have agreed to meet the leader of her local authority to look specifically at those pressures. Secondly, and more generally, hon. Members will know that there is £50 million of extra provision for looking at community cohesion. I anticipate that some of those areas will use some of those funds to look at the pressures and impacts of the rapidly changing communities that can now be found throughout Britain.
Is the Secretary of State not aware that there is not only growing concern but growing evidence that Labour-controlled authorities get much more generous grants than those authorities controlled by either the Conservatives or the Liberal Democrats? Is it not about time that the formula for the granting of resources to local government became not only genuinely fairer but a lot more transparent?
Order. I must put it on the record that an hon. Member has left the Chamber after asking a question before we have moved on to the next question. That is a practice that I will not tolerate, and I suggest that the Whip have a word with the hon. Lady concerned.
Thank you, Mr. Speaker.
I was about to remind the hon. Member for Macclesfield (Sir Nicholas Winterton) that it is Labour Governments who are the most generous to local authorities of whatever political persuasion. Under this Government, we will have had a 45 per cent. real-terms increase in local government spending by the end of this spending review period. None of us will forget that, in the last four years of the last Conservative Government, there was a 7 per cent. real-terms cut in spending for local government.
Aylesbury vale is a designated growth area earmarked for substantial additional housing over the next two decades, and I had a very reasonable and constructive exchange on that subject with the Under-Secretary of State for Communities and Local Government, the hon. Member for Hartlepool (Mr. Wright), on 4 December. Will the right hon. Lady tell the House what discussions she has had with her right hon. Friends the Secretary of State for Health and the Secretary of State for Children, Schools and Families to ensure that additional resources are made available on time—that is, concurrently with the housing development—so that health provision and educational facilities are of the standard that my constituents are entitled to expect?
The hon. Gentleman raises an important point about ensuring that the new housing developments are part of thriving, vibrant communities that have schools and health facilities that make them the kind of places in which people want to live. There is a great deal of cross-government working going on as a result of the Green Paper to ensure that we provide exactly that kind of infrastructure, and the community infrastructure levy will help local authorities to ensure that developers and landowners make their contribution to making these communities excellent, high-quality places to live.
My own county of Leicestershire is generally a sea of prosperity surrounding an archipelago of islands of difficulty. The Conservative-controlled county council has said that it believes it has had a reasonable settlement this year. Is the Minister satisfied that, following that decent grant settlement, the extra funds for those islands of disadvantage are actually being spent within those towns and villages in Leicestershire and not on pet projects for the council’s own Conservative areas?
My hon. Friend knows that we are undertaking negotiations on the local area agreements in every local authority area. It is vital that, within those agreements, funds are targeted at the areas where we need to make the greatest progress. In addition, we have the working neighbourhoods fund, and I am absolutely determined that that will enable us to tackle worklessness in the poorest and most deprived communities, where people need extra help to get back into work.
Home Information Packs
HIPs are already cutting costs and delays in delivering searches, as well as providing energy information across the market. The Government also commissioned an independent report by Europe Economics on the impact of HIPs on the housing market, including the impact of the first phase. The report found no evidence of any impact on transactions or prices, and concluded that the predicted impact on listings was short term and marginal compared with the wider factors affecting the market.
Everybody knows that anyone who takes decisions can make mistakes. One of the things that the public do not like about politicians is that they never seem to admit to having made a mistake. A local estate agent told me this morning that the downturn in the housing market was at least partly caused by the introduction of HIPs, and there are many other experts in the field who will line up to criticise them. Will the Minister do her bit to restore people’s trust in politicians by admitting that she got this wrong, scrapping HIPs and stopping defending the indefensible?
May I say to the hon. Gentleman that his local estate agent is out of line with all major commentators on that? That is exactly why we commissioned Europe Economics to do an independent analysis and to seek the additional advice of Peter Williams, a former member of the Council of Mortgage Lenders and also a member of the National Housing and Planning Advice Unit, in order to do a full assessment of the overall impact on the market and of the particular impact of the first phase of introduction. It was very clear about there being no impact on transactions or prices and emphasised that the market was being affected by a much wider range of important factors, including the global credit crunch, which is of course having an impact on the market.
After the initial delays in commencing the home information pack programme, it seems to have rolled out now relatively trouble-free. National Energy Services, which is based in my constituency, has reported that it has registered 85,000 energy performance certificates since 1 August. Home condition surveys are not a mandatory part of HIPs, so what work is the Department doing to secure the views of those who have had those surveys done, perhaps with a view to rolling out the home condition surveys as a mandatory part of HIPs in future?
Will the Minister provide us with specific examples of actual house purchases that have been materially influenced by the content of home information packs? Will she arrange for any such case study examples to be placed in the Library so that we can make an objective analysis of whether they are doing any good?
We have certainly been given anecdotal evidence from particular estate agents. In one case, for example, early information about land title had highlighted a problem with the sale at an early stage; without it, such information might not have emerged until much later in the process. Detailed assessments have been going on in area trials, as I mentioned, and we are also conducting ongoing monitoring. It will be important to link the energy performance certificates with the new green homes service, starting in the spring, which can target people with F and G-rated homes to provide serious financial support as well as clear advice on how to cut carbon emissions and fuel bills.
The Minister has already referred to the Europe Economics study that was conducted prior to rolling out HIPs for one and two-bedroomed homes. However, that study was carried out because the earlier area trials, to which the Minister has also referred, had never been published. Those were £4 million trials, whose results were promised to the House by the end of the year in June and July by the Minister herself and to the other place in October. Yet notwithstanding the £4 million cost, those results have never been published. Perhaps the Minister will tell us when those results will actually be published and how much—in addition to that £4 million—the research by Europe Economics, which told the Minister what she wanted to hear, cost to commission?
The two reports looked into completely different things. The Europe Economics report looked into the wider impact on the housing market and, in particular, at the roll-out to three and four-bedroomed properties. The area trials were conducted by Ipsos MORI in an independent assessment and have been looking into and following through individual cases, including those where a home condition report was involved. That is obviously not part of the three and four-bedroom roll-out, which was assessed by Europe Economics, as I said. We have not yet received a final report from Ipsos MORI. As soon as we do, we will, of course, publish it for scrutiny by the House.
With permission, Mr. Speaker, I will answer questions 7 and 12 together. It is councils that decide the level of council tax. The Department publishes the actual figures each year after all authorities have made their budget returns in March. We will do so again, as usual, this year.
Does the Minister not understand that people are not fools and they know perfectly well that it is not just councils that set council tax? They know that the Prime Minister is introducing another stealth tax here by imposing statutory regulations on local authorities without adequately funding them to carry out their responsibilities.
We have an established system that recognises the net increase in any extra burdens and responsibilities that we place on local authorities, and that is reflected in the settlement. There is no reason why anyone should experience excessive council tax rises this year. The increase that we have made continues the real-terms increase for local government that we have seen over the last 10 years under this Government. It gives all local authorities the certainty of knowing for three years what they will receive, it gives them the greater flexibility and freedoms for which they have asked, and it makes clear that their ability to manage lies, in many ways, in their own hands—in the efficiencies that they should be able to achieve for their council tax payers over the next three years.
The Minister will know that Conservative- controlled Hammersmith and Fulham council is proposing a 3 per cent. cut in council tax for the second successive year. That compares with an average annual increase of 7.7 per cent. under Labour over the previous 12 years. Remarkably, although band D council tax will now be £863 a year rather than the £1,064 that it would be if Labour were still in charge, the Audit Commission’s independent rating for the council’s services has increased from three stars to four. Surely the Minister must join me in congratulating the council on its excellent performance.
Of course it had a very good basis—a Labour basis—on which to build. Residents of Hammersmith and Fulham may well be looking at council tax cuts, as they did in the current year, but they are also looking at library cuts, law centre cuts and cuts in vital voluntary sector groups.
The hon. Gentleman refers to band D council tax figures, but fewer than one in six dwellings across the country are in band D. If he wants to swap figures according to political control, I must tell him that the average council tax level for all dwellings is £260 higher under Conservative authorities than under Labour authorities this year, and rose by more this year than last year.
The Minister’s last statement cannot go unchallenged. As he well knows, that difference is simply because there are more properties in higher bands in Conservative authority areas. I hope he will apologise for misleading the House in such a way.
As the hon. Gentleman represents the City, one would expect him to be good with figures. I repeat that the problem with band D figures is that fewer than one in six properties are in band D. The right figures to use are those for the average council tax on all dwellings. Let me give them to the hon. Gentleman. The average council tax under Labour authorities this year was £938, the average under Conservative authorities was £1,200, and the average under Liberal Democrat authorities was £1,039. There have been higher rates and higher rises under the Tories than under Labour.
Appointment of members to the boards of those bodies and proposed bodies would be made by Ministers, on merit, in accordance with the Commissioner for Public Appointments’ code and guidance. There are no current plans for either Parliament or local authorities to play a direct role in those appointments processes.
I think the hon. Gentleman may have missed the boat. We had a good discussion about that during our deliberations on the Planning Bill. It is a shame that he is not a member of the Bill Committee. The purpose of the Infrastructure Planning Commission will be to streamline and speed up the planning process, and strong safeguards are built into it to ensure that consultation with local communities will be enhanced.
What I have said is not directly related to the hon. Gentleman’s question, but I hope it is helpful to the House.
Further to the question of my hon. Friend the Member for Banbury (Tony Baldry) about the bodies he listed, will the Minister say when the Secretary of State will reply to my letter dated 21 December setting out concerns in my constituency about the proposal to build a new town of up to 50,000 inhabitants on the Co-operative Society’s almost 5,000-acre farming estate in the Harborough district? May I tell the Minister that that massive development, which might well come before the bodies my hon. Friend referred to—
When does the Minister next plan to meet representatives of the East of England Development Agency, my local regional development agency, and can he tell the House of one positive measure or initiative that it has carried out that would not otherwise have taken place?
That has a slightly tenuous relationship with the main question about public appointments. However, I am always happy to meet members of any RDA, and I know from work I have done on the Migration Impacts Forum that they have done some good work in the hon. Gentleman’s region. With regard to the initial question on public appointments, the hon. Gentleman will know that the Department for Business, Enterprise and Regulatory Reform is responsible for the body concerned, in terms of its representation and who is on it, and I think it has a good mix.
We announced the green homes service on 19 November last year. As my right hon. Friend the Minister for Housing said in an earlier answer, the green homes service will offer every householder who gets an energy performance certificate of an F or G rating for their home discounted or free help with energy-efficient measures. That help will come from a range of grants from both Government and industry under the energy efficiency commitment.
Ratings F and G are the poorest, and therefore the most in need of the free help the Minister has outlined, but I understand that one in five of all homes in the country are rated F or G. How many homes does my hon. Friend think this scheme will be able to help over the next few years?
I am grateful to my hon. Friend for that question. We anticipate that over the next three years 5 million more homes will benefit from discounted or free loft and cavity-wall insulation, and another 3 million homes from discounted or free low-energy light bulbs and energy-efficient appliances. The next phase of the energy efficiency commitment, running from 2008 to 2011, is expected to cut carbon emissions by 1.1 million tonnes and will save consumers about £10 billion in energy savings. That is good for home owners, and it is good for the environment.
Being very careful how I pronounce “F and G”, may I ask the Minister what energy efficiency schemes exist to replace single-glazed windows with double-glazed windows in constituencies such as his and my own, where that can make a huge difference both to the comfort and, more especially, the energy efficiency of each individual home?
A range of grants is available. The assistance available under the decent homes programme has meant that, since 2001, the number of non-decent homes in the social housing sector has been reduced. The replacement of single-glazed windows has been an important part of that effort. Warm Front, which has been a success in my constituency, is also a key tool in tackling fuel poverty. I am happy to write to the hon. Lady to provide further information.
New-build Social Housing
We want to make homes more sustainable as well as more affordable. Homes built under the £8 billion affordable housing programme will now have to be built to code level 3 two years earlier than the rest of the market. We think it is important that where Government investment is involved, we lead the way in the work towards zero-carbon homes.
I thank my right hon. Friend for that reply. Does she consider that the EcoHomes certification arrangements, which are set out by the Housing Corporation as a precondition for the funding of new-build by housing associations, will match the anticipated progress of the sustainable buildings code, and will she look into ways that the Housing Corporation might further incentivise more sustainable housing developments by housing associations?
That is certainly something that we are continuing to look at, because we have said that we want all new homes to be zero-carbon rated by 2016. That obviously requires substantial changes to the way we design and build homes, and we want public sector investment to lead the way. The Housing Corporation is now using the code for sustainable homes; it has switched to that from using the EcoHomes certification, and that means that there is an opportunity to look not simply at energy efficiency, but at wider aspects of sustainability.
Although I welcome that, the Minister will have heard my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley) saying that the number of people on the council house waiting list in our city has risen to 8,000 and is rising fast—by several thousand a year. Although I accept the interest in the market and in housing associations, and the better management of council assets that was mentioned in response to an earlier question, does my right hon. Friend understand that those measures are not meeting the need and that we are storing up problems for the future? Bad and unjust housing will lead to social problems and will undermine all the other Government policies in education and social justice unless we can find—
Two significant issues need to be addressed; we need to increase both the amount and the quality of affordable housing in Stoke and in other areas across the country. That is why we introduced the multi-billion pound decent homes programme, which has already lifted 1.8 million children out of poor, cold and damp housing—that is hugely important—and why we are investing £679 million over the next three years in affordable housing for the west midlands, which is a 40 per cent. increase over three years in the amount of such investment. I believe that it will make a significant difference to meeting housing needs across the country.
My Department is dedicated to devolving power to councils, communities and citizens, to building strong, cohesive communities, to delivering the Government’s targets on building new homes and to preventing violent extremism.
Last week, the Secretary of State’s Department announced that it would impose more houses on the west midlands than local councils say they can cope with. It is also deciding the location of eco-towns entirely outside the planning process and, through the Planning Bill, it is removing the role of local communities almost completely from important decisions on major infrastructure projects. Does she understand that, as a result, people are feeling powerless and dangerously cynical about local democracy?
I have to say to the hon. Gentleman that I simply do not agree with his characterisation of the way in which either the housing process or the planning process works. It is important that local communities are involved in deciding what kinds of homes need to be built, and where homes need to be built, in their areas. That is why we have made changes to the planning policy statement for housing. Councils should be using those new powers to support development in their communities, but they also must recognise that we badly need more homes in this country to meet the needs of families in overcrowded accommodation, families on council waiting lists and future first-time buyers. It is irresponsible for Conservative Members to campaign against more affordable housing when it is desperately needed across the country.
My hon. Friend is right about the importance of the scheme. He is also right to say that we should be doing more to recognise and reward local authorities that play a part in expanding the business base, and therefore the jobs and prosperity, of their areas. The short answer to his question is that detailed discussions have taken place for some time with the Treasury. They led to confirmation in the comprehensive spending review that money would be set aside in the second year of this CSR period to incorporate LABGI into the design of the business rate system. It is clear that the trial with the stand-alone scheme has demonstrated its importance. We must make it an integral part of the system for the future. We will then increase, and have provision to increase, the amount of money going through LABGI in the third year of this CSR period. I encourage hon. Members on both sides who support the principle of the scheme to work with us to design a scheme that can last for the long term.
I am sorry that the hon. Gentleman missed what was a sensible discussion of the housing revenue account system and how it works. There is an element of redistribution in the account, and that is important because council housing has been funded in different ways historically and there are huge variations. There are also huge variations in need, so it is right that the system has an element of redistribution. However, there are problems with the system as it stands, and that is why we are conducting a serious long-term review and piloting different approaches. For example, we are piloting ways for councils to opt out of the housing revenue system so that they can better manage their assets in the long term.
I thank my hon. Friend for raising the important issue of the process that will need to be undertaken to implement the proposals. It is important that local people are kept fully informed about the proposals as they are developed and that there is complete openness and transparency in that process. My experience of any big change process is that it is important to get on with it. The sooner it is done the better, but it has to be done rigorously and properly. I have no doubt that my hon. Friend will continue to monitor it, as will I.
I am sure that the Secretary of State will have been saddened by the evidence presented at last week’s inquest into the death of baby Rhianna Hardie, who was scalded in a tragic accident caused by a faulty thermostat. The coroner noted that the Health and Safety Executive thought a similar fatality in 2002 sufficiently serious to bring it to the attention of the predecessor Department, the Office of the Deputy Prime Minister. However, the Department did not pass on that warning to local authorities. Has the Secretary of State been able to ascertain why the ODPM did not pass that information on to local authorities?
This matter is of the utmost concern. It was a terrible tragedy, although thankfully rare, and our sympathies are very much with Rhianna Hardie’s family. The hon. Gentleman is right that there was a similar case in 2002, and consideration was given then to whether a new British standard should be introduced for immersion heaters to ensure that it did not happen again. All new installations now have to have a secondary thermostat to prevent overheating. There is also a full review of building regulations to look at the issue, which started last summer and is an ongoing process. We will consider the comments made by the coroner in the latest case very carefully, because it is important to have clarity between my Department and the Health and Safety Executive on responsibilities and lines of communication. I will personally ensure that we consider the comments and, if there is action to be taken, that we ensure that the right authority takes it.
That is very helpful. It might also be helpful if the Secretary of State would consider placing in the Library the correspondence between the HSE and the ODPM on the issue. In the course of the review, it might be helpful to look at the protocols for her Department on how information from the HSE is treated. I appreciate the point that she makes about the building regulations, but given that we are talking about 3.5 million boilers, can she tell me whether she intends to issue guidance to housing authorities on what checks should be made on those thermostats? Finally, what assessment has been made of the risk of a reoccurrence of such an accident?
I do not want to pre-empt the review of the building regulations that is being undertaken to consider that matter, which will be comprehensive and thorough. One reason why I want to get to the bottom of the relative roles of the HSE and my Department is that it has traditionally been the role of the HSE to communicate directly with housing providers rather than that of the ODPM or, now, of the Department for Communities and Local Government. Housing providers are under a duty of care to their tenants but, as I understand it, they are also under a duty to report to the HSE rather than the Department. I want to have a thorough look at that and am happy to confirm that I will put as much information about the issue as I possibly can into the House of Commons Library. As I said, the coroner said that such tragedies were, thankfully, extremely rare. Obviously, such things are an absolute tragedy for any family to which they happen and we must make every effort to ensure that such an occurrence does not recur.
What success has the Minister had in persuading her ministerial colleagues to look at the introduction of feed-in tariff legislation such as that which is being applied elsewhere in Europe? In Germany, in particular, such legislation has been successful in putting citizens at the heart of driving their sustainable cities agenda and providing sustainable and affordable energy in their own homes.
My hon. Friend has pursued this issue with assiduity—that is probably the best word. [Hon. Members: “Perspicacity.”] Or perhaps perspicacity is—I think I shall say that he has done so with a great deal of energy and commitment. He has raised an important issue that appears to be technical but is quite substantial. An interesting matter to pursue is not simply the feed-in tariff system but the way in which local people, local neighbourhoods and local communities can contribute to that important agenda. If he looks at the recent planning policy statement on climate change, he will see some welcome statements about the role of communities in terms of combined heat and power and on some of the other issues that he has pursued.
The regional spatial strategy will be studied, examined and dealt with in the usual way. The hon. Gentleman will be aware that we have recently tightened up the planning rules on flooding, something that Sir Michael Pitt looked at and reported on just before Christmas. Like the hon. Gentleman, I am conscious of the worries that were felt overnight and have continued this afternoon in Tewkesbury and some other areas, particularly in the west country. He and the House might like to know that as at 14.16 today, 63 flood warnings and no severe flood warnings were in place, while nine all-clears had been given.
The risk of flooding is high in some areas, but, by and large, water levels are generally at about the levels that are considered normal for this time of year. Nevertheless, the hon. Gentleman’s council has rightly been on high alert and has been active overnight, as have a number of other councils. Central Government and the Department stand ready to help if and when they are required.
Can the Secretary of State explain why the nine regional fire control centres are being built on such a huge scale? Is the embarrassing truth that her Department failed to take into account shift working when determining the national requirements that it set for building them?
No, not at all. The reason that we are building these centres—the hon. Lady will be aware of this, because of her experience in her region—is that the current control centres have nothing like the capacity of the new ones. Surely, like me, she would like to see—[Interruption.] If she would listen to me for a moment, I shall explain. Surely she would like to see a system in place whereby the closest fire engine is directed to the scene of the incident, regardless of where it is from, and whereby new technology is available through satellite navigation to get the engine there as quickly as possible.
I accept that the centres are big—I recently visited the ones in the south-west and the east midlands—but they are large because they have to be able to cope with emergencies, and extra capacity and more staff are sometimes needed. I had a meeting with the firm EADS Defence and Security Systems today—
We have had extensive consultation with local councils and other organisations across the Thames Gateway, as part of the overall delivery programme. The HCA is taking over all the Department’s functions on housing and regeneration across the country, including the major growth areas such as the Thames Gateway. The Department will continue to support the cross-departmental work in respect of transport and other functions but, as we have always said, local councils must take the lead in local areas and communities. That will enable us to get the best results in delivering the jobs and homes that are already coming into the Thames Gateway.
The hon. Gentleman said that Gypsy and Traveller accommodation needs were being assessed in his area. That is the right way forward, and the vast majority of local authorities have completed their assessments. The independent task group on site provision and enforcement published its final report to Ministers last month, and it concluded that the Government’s policy on provision of sites for Gypsies and Travellers was sound. The key is that such provision must be enforced properly, and we need more authorised sites to avoid the risk of antisocial behaviour and disruption throughout the larger community.
Planning (Location of Hazardous Sites)
I beg to move,
That leave be given to bring in a Bill to require the introduction of binding guidance regarding minimum distances between developments classified as Control of Major Accident Hazard sites and other specified types of building; and for connected purposes.
This Bill seeks to improve protection for communities across Britain from the new development of potentially dangerous industrial sites. It will ensure increased safety by giving the Health and Safety Executive a framework for COMAH plant siting decisions, thereby improving the consistency of such decisions and affording a predetermined level of protection for communities.
As if we in Castle Point had not had enough, Oikos registered on 21 December a new application for biodiesel and glycerine plants. The plants, which are expected to produce 163,500 tonnes a year, are sited very close to houses. Feed stocks would be imported from ships in the Thames and there would be massive on-site storage of oils, fats, reacting agents and end products. The local council and the HSE will be working closely with me and with the organisation People Against Methane to protect our community, and residents will be fully consulted about the Oikos proposals.
I have fought to defend my constituents from the massive risk posed by Calor’s proposals for a liquefied natural gas facility next door to the Oikos site. Calor wants to import around 5 per cent. of the UK’s total LNG needs and to store about 100,000 tonnes on site. The LNG would be offloaded from ships by means of a boom arm on a jetty on a waterway where activity is increasing massively, thanks to the new Thames Gateway port development just downstream and the Oikos proposal.
Calor’s plans were withdrawn as a result of a strong campaign in this House, inputs from the HSE and the Environment Agency, and local efforts by People Against Methane. The Canvey Island Independent party’s huge petition, which I presented in this House, was also most helpful. We have put politics aside in Castle Point and worked together to defeat the Calor proposals, and we shall do so again, but Calor says that it will reapply this year. I shall continue my fight to protect my constituents.
We were told that the Buncefield depot was totally safe, but it turned into the biggest fire in western Europe since world war two, as my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) explained to the House last week. A similar fire, but involving LNG rather than petrol, would make Buncefield look like a village bonfire night party. I congratulate my hon. Friend the Member for Hemel Hempstead (Mike Penning) on his excellent debate last week—he is doing a superb job of fighting for his constituents. He described one of his constituents’ homes after the explosion as:
“blown to smithereens. It looked like someone had dropped a 1,000 lb bomb next to his house. I have visited the site. The house is gone—it does not exist”.
He went on to say:
“May I also praise him”—
that is, me—
“for his quick response before Christmas when the hydrocracker at the Coryton refinery exploded?…I know the fears that exist, and I am conscious that my hon. Friend did not go in the opposite direction; he went straight down to see the firefighters to ensure that they, too, were looked after.
To answer my hon. Friend’s question, when the first explosion took place at Buncefield, the damage occurred several kilometres away…he will find that because there was nothing structurally to prevent the explosion spreading outwards, or the subsequent suction inwards after the oxygen had been used up, properties…several kilometres away, were subject to serious structural damage. One school in St. Albans had its central heating boiler sucked up through the flue, which blew up boilers throughout the school…That is the sort of damage that occurs in such explosions.”—[Official Report, Westminster Hall, 9 January 2008; Vol. 470, c. 75WH.]
Thus, we see graphically the destruction caused even several kilometres away from such an incident.
George Whatley of PAM, who originally suggested my Bill, used a satellite navigation system to measure the distance separating the Calor site and homes on Canvey. It is precisely 200 yd. That is totally unacceptable, but there are no official separation limits for COMAH plants; hence the Bill that I am introducing today. An escape of LNG would vaporise and form an unstable, unconfined, highly combustible cloud which, on ignition, would explode and burn at extremely high temperatures, destroying everything in its path. According to the fire service, whereas the Buncefield petrol fire was easily contained, there is no way to contain or control an LNG fire; the fire service would just clear up the carnage afterwards.
International evidence on LNG explosions is legion. Tim Riley’s documentary film, “The Risks and Dangers of LNG”, and the 2003 Californian study predicting up to 70,000 casualties from an LNG accident or terrorist attack, graphically set out the implications. The Buncefield inquiry led to an HSE investigation, which concludes:
“Clearly we have a poor scientific understanding of the mechanisms which led to the vapour cloud explosion at Buncefield, and we accept that installations storing other substances could present this type of hazard, for example bulk LPG storage, and other flammable liquid storage.”
The investigation also reveals a fifteenfold increase in unconfined vapour cloud explosions over the past decade, and it challenges the current orthodoxy on the scale of risk to local communities that are adjacent to large petrol, liquid petroleum gas and LNG sites. The HSE is therefore reviewing its safety and planning advice on the siting of such plants.
United States federal regulations for LNG facilities—CFR 193—federal safety standards and the US National Fire Protection Association lay down that vapour gas dispersion distances must be calculated to determine how far downwind natural gas vapours could travel from an onshore LNG facility and still remain flammable. They show that a fire would burn with intense heat, so LNG plants must have thermal exclusion zones.
The Canvey island site involves additional risk, with LNG transfer from tankers on the Thames—on the water. Distinguished professor Jerry Havens and others have serious concerns about the vulnerability of massive LNG tankers, which could be engulfed in a fire and would be unable to fight that fire. The risks of spills on to water are spelled out in the US publication, “Business Briefing: LNG review 2005”:
“there would be little or no control over the extent of liquid spreading and the consequent rapid burning or vaporisation of the gas.”
A 2004 report by Sandia National Laboratories in the United States concluded that
“cascading failure of LNG vessel containments by this mechanism cannot be ruled out”,
which would result in “total loss” of the tankers.
A US fact sheet “Liquified Natural Gas (LNG) Energy Justice.net/natural gas” states that an accident or terrorist attack on an LNG tanker could cause
“major injuries and significant damage to structures a third of a mile away and could cause second-degree burns on people a mile away.”
A congressional panel expressed similar concerns in 2004; Rear-Admiral Gilmour was reported in Factiva as saying that the minimum distance for an offshore LNG terminal ought to be about 10 miles. Castle Point does not have the luxury of 10 miles, several kilometres or even one mile. The distance separating our homes, schools and workplaces from the Calor site is precisely 200 yd. Canvey faces significant additional risks from terrorism—it suffered a terrorist bomb attack in the 1980s. The site is also well below sea level, creating major flood risks and increasing existing ones.
My Bill would increase and formalise the protection afforded to communities and give clarity and certainty to applicants, the HSE and planning authorities, saving time, expense and much community anguish. If the Government listen, they will amend the Planning Bill to accommodate the sensible and necessary provisions in my Bill. As it stands, the Planning Bill will cause more difficulties; under it, the location of a dangerous plant will be decided by an unelected quango, the infrastructure planning commission. The IPC will operate behind closed doors, removing democratic legitimacy as well as involvement by local councils or even the Secretary of State.
The Planning Bill fails conspicuously to give the necessary procedural rigour for the IPC to deal with the location of hazardous sites. That causes great concern to the Campaign to Protect Rural England and other excellent environmental organisations seeking, like me, to defend the public interest. I commend my Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Bob Spink, Mr. Peter Lilley, Dan Rogerson, Patrick Mercer, Mr. Christopher Chope, Mr. Dai Davies, Dr. Evan Harris, Mr. Andrew Love, Mr. David Gauke, James Duddridge and Mr. James Clappison.
Planning (Location of Hazardous Sites)
Bob Spink accordingly presented a Bill to require the introduction of binding guidance regarding minimum distances between developments classified as Control of Major Accident Hazard sites and other specified types of building; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 6 June, and to be printed [Bill 55].
Health and Social Care Bill [Ways and Means]
I beg to move,
That, for the purposes of any Act resulting from the Health and Social Care Bill, it is expedient to authorise the charging of certain fees by the Office of the Health Professions Adjudicator.
The motion is in the name of my right hon. Friend the Financial Secretary to the Treasury. A Ways and Means resolution has been deemed necessary by the House authorities to allow the office of the health professions adjudicator, the new independent adjudicator created by the Health and Social Care Bill, which is currently in Committee, to charge fees to the regulatory bodies whose fitness to practise cases are to be referred to the office for adjudication. The motion is being moved now because the Bill as introduced did not require a Ways and Means resolution.
The office of the health professions adjudicator will adjudicate on fitness to practise cases involving doctors, those in professions regulated by the Opticians Act 1989 and any other professionals whose regulatory body decides to use its services. At present, the General Medical Council and General Optical Council must meet the costs of the adjudication functions exercisable by their respective committees. The Health and Social Care Bill will transfer those functions to the office of the health professions adjudicator, so those two bodies will no longer have to meet those costs. We have therefore tabled a Government amendment to allow the office of the health professions adjudicator to charge fees to the General Medical Council and General Optical Council. We omitted such a clause from the Bill on its introduction so that we could complete detailed discussions with the General Medical Council about how the new adjudication body should be funded.
I am not unduly perturbed by what sounds so far like a wonderfully “Sir Humphrey” statement, but I must say—I suspect that other Members entertain similar concerns—that we do not want an entirely open-ended provision. Can the Minister offer the House any indication of the likely scale of the costs that will be incurred, and in what period they will be incurred?
I certainly can; I had intended to say something about that in a little while. The hon. Gentleman may like to speak to his spokespeople on the Front Bench, who argued loudly in Committee that the independent adjudicator should be even more independent, and freer to do whatever he or she likes, which caused great concern to the GMC and others in relation to the ability of the House or the Secretary of State to ensure that the fee levels are reasonable.
There are two ways in which the aim will be achieved. First, the new adjudicator will have to consult on the level of any fee that he or she wants to levy. Secondly, those fee levels will have to be approved by regulation and in consultation with the Secretary of State. Given those safeguards, I hope the hon. Gentleman is reassured that the costs of the new adjudicator will be broadly similar to the current costs incurred by the GMC and the GOC.
I am partly reassured by what the Minister has said. I am grateful to him for his clarification, but as he refers to a prospective order-making power, may I ask the obvious supplementary question—whether the order-making power will be subject to the negative procedure or to its affirmative counterpart? It is rather important to know which.
I declare an interest as a part-time panellist for the General Medical Council, appointed by the House some time ago. The question of fees troubles me slightly. Can the Minister confirm specifically that the House will have an opportunity to discuss the level of those fees? Can he say who is to set them, roughly how much they will be—the scale involved—and who, ultimately, will pay? It sounds a little like a stealth tax. Will doctors pay? Will the General Medical Council pay? Where does the bill end up?
The regulatory bodies such as the GMC, the GOC and possibly others that come under the independent adjudicator’s remit will pay the fees, based on the work load of the independent adjudicator in any one year. Individual doctors now pay a levy or a membership fee to the GMC. They will continue to do so, and out of the funds that that raises, the GMC—or the GOC, or other appropriate body—will pay a fee that will be set after consultation with everybody, including Members of Parliament, and approval by the Secretary of State in laid regulations.
We are doing some independent research with the GMC into its current costs. It is rather difficult to disaggregate the cost of the adjudication process from the overall costs that the GMC incurs, but our estimate is about £11.5 million a year. That is the figure that we are working on. That is the current cost, which is met by medical doctors and others who are members of those organisations and pay their annual subscription to those organisations.
The new clause about fees must be authorised by a Ways and Means resolution. The House authorities, I understand, reached this conclusion because the new office of the health professions adjudicator will be for the benefit of the general public, rather than just for the benefit of the professions regulated by the GMC and the GOC. In addition, the fees charged by the OHPA will cover all of the body’s costs, rather than costs incurred before a day to be specified in regulations or costs incurred for a purpose specified in regulations. That is the difference between the fee-charging powers of the Healthcare Commission and the future care quality commission. In other words, the fees will be calculated by reference to the total expenditure of the OHPA, rather then to the individual service that it is providing to an individual organisation.
It has always been our intention that the regulatory bodies in receipt of OHPA’s adjudication services should pay for the adjudication of their cases. As I said, at present the costs are borne by the health care professional regulators, and we see no reason why that should change. The fee will be charged on an annual basis rather than on a case-by-case basis. As I also said, regulations will be made by the Secretary of State, setting out the process through which the level of the fee is to be determined. I am confident that the funding arrangements set out in the new clause are fair and appropriate.
In speaking to this Ways and Means resolution, I am mindful of the words of my late, great colleague on the Conservative Benches and champion of the rights and duties of this House, the former Member for Bromley and Chislehurst, Mr. Eric Forth. He noted:
“It is always a great pity that these apparently innocuous Ways and Means resolutions attract such relatively little attention from colleagues in the House, because they are, of course, a very important part of what remains of the House's influence on the sort of measures that flow from legislation. I should like to think that in some ways Members would be more interested in Ways and Means resolutions than in many other aspects of the Bills themselves.”—[Official Report, 15 November 2004; Vol. 426, c. 1064.]
I pay tribute to the fact that the Conservative Members who sit on the Committee considering this Bill are present for this Ways and Means resolution debate; apart from the Minister, only the Parliamentary Private Secretary and the Whip are on the Government Benches. That is a shame. Furthermore, it is notable that the Minister chose not to answer the direct questions put to him, quite properly, by my hon. Friends the Members for Buckingham (John Bercow) and for Woking (Mr. Malins); my hon. Friend the Member for Woking brings expertise to this subject from his past.
The Minister has just said that the House authorities deemed it necessary to bring this stand-alone, separate Ways and Means resolution to the Floor of the House today. I remind the House, however, that that would not have been necessary had the Government got their act together sufficiently in advance of publication and the commencement of the Bill’s proceeding through the House. They should not have left outstanding a series of open-ended negotiations so that the resolution could not be recognised in the Bill when it was first published.
According to House rules, when the Government table a new clause a Ways and Means resolution is necessary if the new clause would raise a new fee structure or a tax—and I shall argue that new clause 7 does. The Government are responsible for taking up the time of the House on this matter, which is important, given that we are already in Committee and considering the very issues to which it relates.
This debate arises from Government new clause 7. The Committee has not yet debated or voted to amend the Bill through the new clause. It is therefore valid to ask whether we should take up the House’s valuable time at this point of the Committee’s proceedings.
Is my hon. Friend saying that the issue has not yet been fully debated in Committee? That comes as a great surprise, particularly as I understand that many Labour members of the Committee are not here today. Have not Labour and Conservative Committee members already had a full opportunity to debate the new clause and its financial implications? If they have not or are not going to, that is astonishing.
I am sorry to have to confirm to my hon. Friend that he has to be astonished. We have started the Committee’s proceedings and taken the new form of oral evidence, but new clause 7 was tabled at a such a point that it does not even come up for consideration by the Committee for some time.
Irrespective of whether the programme motion will allow for a debate on that new clause, may I raise with my hon. Friend and, through him, the Minister a wider concern that has been a consistent hobby-horse of mine in recent years? If the matter is to be effectively implemented by regulation—and I do not cavil at that—is it not a good idea, and should not Parliament demand, that we as a House have sight of a draft version of the regulations before the final passage of the Bill? Otherwise, we are voting for a pig in a poke.
With his usual clarity and unique way with words, my hon. Friend puts his finger right on a point that I shall come to. I hope to confirm that he is spot on.
Notwithstanding the fact that we have not reached the point in Committee where we even know whether new clause 7 will be voted on and passed, I note that had the Government managed to complete their negotiations with the regulatory bodies before Second Reading, so bringing to the House a Bill in much better order—they have already tabled 53 amendments—this matter could have been dealt with on Second Reading. Given the absence of the clause on Second Reading, we are now in the impossible position of being called to vote on fee-charging powers that we have not had the opportunity to discuss. That is somewhat contemptuous and not in line with the Prime Minister’s assertion, just a few months ago, that he would hold this place in much higher regard than the Prime Minister whom he succeeded. By the Government’s own admission, they found themselves still in late negotiations with the General Medical Council long after the Bill had found its way into the House’s calendar. The resolution has either been proposed too early or proposed too late, but it certainly should not be taking up the House’s time as it is. However, that is what we are faced with, so we must deal with the facts as we find them.
To understand the context in which the resolution is being considered, I remind the House that the office of the health professions adjudicator is a new body that is being set up under the Bill to take over the adjudication of fitness to practise panels from the GMC and the General Optical Council. It is being established in response to Lady Justice Smith’s recommendations in the Shipman inquiry. Under the new procedure, we had the benefit of her being able to give us direct oral evidence, and it was incredibly persuasive and powerful. I dare say that the whole House will join me in agreeing that we, as a legislature, never want a repeat of the appalling Dr. Shipman’s atrocities. There is a question mark over the creation of the OHPA. The GMC noted in its written evidence that, by any objective measure, its adjudication track record is extremely good, and that over the past two years, 2006-07, there had been 2,480 hearings regarding doctors’ fitness to practise, with all decisions challengeable by reference to the High Court.
I am grateful to you, Mr. Speaker. Of course, I will do my very best to ensure that I stay within your ruling. I was simply trying to demonstrate that the current body is not doing a bad job at the moment—indeed, only 0.4 per cent. of its rulings have been challenged in the courts. The successor body, with the functions that the Government are seeking to put in place and for which they want a new form of fee charging, is absolutely dependent on the resolution being passed.
The more I listen to my hon. Friend, the more I feel we should take the view that the proposal to charge fees through this new body should be scrutinised much more carefully before we proceed any further. I can confirm that the performance of the GMC, in terms of its hearings and so on, has been much more efficient recently. Where, therefore, is the argument that we should be giving the Government carte blanche to charge a whole lot of fees through this new body without the matter having been properly debated—
I am grateful to you, Mr. Speaker. The fact that we have to vote on this now means that we must raise the issues about where fee charging is dealt with. I recognise that that is the definition of your ruling. Absolutely germane to what my hon. Friend the Member for Woking (Mr. Malins), with all his experience, rightly says, is the question of whether what two bodies carry out, through two distinct functions, in relation to a matter that was previously dealt with under one body, has a significant bearing on the costs and amounts that may be charged through them as a tax, not necessarily falling on general taxation powers. Perhaps it would have been helpful to have had the benefit of the opinion of the Chairman of the Select Committee on Health; it is a shame that he is not here. [Interruption.] Indeed—as he is a GMC member.
Critical to our decision on the resolution is whether we have resolved an issue of serious contention in Committee—whether the new bodies being set up under the Bill, not just this body but other bodies, are truly independent of Government. As an indicator of the Government’s intent, if those bodies are truly independent, we would expect them to be able to charge a fee. I have to say that based on all the evidence so far in Committee, it has not yet been established that they are truly independent—far from it—and we have criticised them for that. If they are not independent, we are not considering a fee but a substitution of vicarious taxation of the members of professions covered by the new body for recovery of costs.
We have to consider who might be affected by the passing of this resolution. For the doctors, optometrists, dispensing opticians, student opticians and optical businesses of this country, the fees proposed in the resolution will be garnered from the General Medical Council and the General Optical Council, as the Minister has admitted. That will have a direct impact on the fees charged by those bodies to their membership. The full GMC registration fee on the medical register will rise to £390 per annum with effect from April this year, having been frozen at £290 per annum since 2002. GOC registration stands at £169 per year. My hon. Friend the Member for Buckingham (John Bercow), whom I see is still just in the Chamber, raised the essential question of what the costs were, and we heard that there will be a massive increase. According to the Minister, it will be £11.5 million, which, by a quick calculation, means an extra £100 per doctor. It is that sort of detail that my hon. Friend was trying to winkle out of the Minister to find out what extra costs to constituents and the professional community we are truly sanctioning.
I recognise your strictures to stay in order according to the resolution’s narrow definition, Mr. Speaker, but the other serious unanswered question is that we have not seen the secondary legislation upon which the resolution depends, even in draft. As my hon. Friend the Member for Buckingham said, that makes it a bit of a pig in a poke. It certainly means that we are flying blind.
The other thing absent from our consideration of the resolution—the final financial point that needs to be addressed—is the question of VAT. Currently, neither the GMC or GOC is registered for VAT, partly because of their charitable status; I hope that that is not news to hon. Members. However, the new office of the health professions adjudicator will immediately slap a 17.5 per cent. uplift on the fees payable to it, irrecoverable against the fees paid to the GMC or the GOC. The Minister should explain fully how the resolution will affect that arrangement. Where will the VAT loss fall, and upon whom?
We have a serious worry about the costs included in the Bill that are, by virtue of this resolution, yet unknown. In addition to what is currently proposed to ensure that a fee is passed on vicariously to the members of the various professions involved—because it is no longer an independent body in our view, we consider this to be a tax-raising power—the Minister told us in Committee on Thursday that the establishment of the care quality commission as a successor body to the Healthcare Commission, the Commission for Social Care Inspection and the Mental Health Act Commission will cost £7 million, as outlined in the regulatory impact assessment. The transition cost will be £140 million, which includes the costs of redundancies, estate rationalisation and a planned reduction of operating costs. Creating responsible officers will cost between £3.1 million and £16.7 million per year, and extending direct payments will cost £1.5 million to £8 million a year. The social enterprise investment fund will cost £98.1 million and the health in pregnancy grant is a one-off payment.
So, in addition, we have the ways and means resolution, which is the only means whereby the Government can press ahead with insisting that the fees chargeable by the OHPA are recoverable. It effectively constitutes a new tax on members of the professions I have listed. The resolution appears ill prepared and panicky, and has been tabled after the Bill was introduced.
The Bill also presents a significant worry because the money for pregnant women is to be paid at the end of the second trimester. All the evidence that we have established shows that, despite the Prime Minister’s assertions, the only benefit to be derived for better diet is before conception and in the early weeks of pregnancy. That contrasts with the Prime Minister’s comments. Notwithstanding that we are discussing £175 million in the first year—
Certainly, Mr. Speaker.
Let me put the resolution in context to understand the way in which it would work. The Government have not yet set out the rationale for establishing the body to which the resolution relates. We have a problem with timing as well as the substantive problem.
I am grateful to my hon. Friend and glad to have the opportunity to point out that, unlike the Government and the Liberal Democrats, despite their assertions, Conservative Members are proud that we have ensured that someone who represents a Welsh constituency will serve in Committee, given that the Bill relates to so many powers that Welsh Ministers exercise in relation to the Mental Health Commission. I am glad to say that my hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) will be looking out for his constituents and everyone in Wales in Committee. No other party chose to nominate Welsh Members of Parliament to the Committee.
My hon. Friend’s question about consulting the professions is crucial to whether we should pass the resolution and whether we should be called upon at this stage to debate it. Such consultation does not apply only to England but to Wales. Has consultation been properly framed and passed on to Welsh Ministers, who will make decisions that replicate, to some extent, those made in England, to apply to the medical profession in Wales? My hon. Friend asked a germane question and I hope that the Minister will tell us the extent to which consultation has taken place with professional bodies, especially the GMC, to establish whether the resolution is the right way forward and whether the professional bodies are looking forward to being a proxy, vicarious tax collector for the Government to recover fees for the new OHPA, the establishment of which has not yet even been agreed.
I have a final series of questions for the Minister to enable us to make a decision on the resolution and maintain the proper challenge that my former colleague the former right hon. Member for Bromley and Chislehurst issued on such resolutions. Why were matters not sorted out in time for Second Reading? Why is it suitable for the House to table a Ways and Means resolution on an aspect of the OHPA that neither it nor the Committee has had an opportunity to debate? What assurances can the Minister give that the resolution is not a blank cheque, given the OHPA’s lack of independence, which we have already observed in Committee by reference to another body—the care quality commission, which is also being set up—the absence of draft regulations on new clause 7 and of cost control measures in the Bill? The Minister did not mention cost measures when he outlined at the outset of our short debate what he believed to be appropriate.
Will the Minister also reassure the House that, in accepting the resolution, we are not creating a huge liability for doctors, optometrists, dispensing opticians, student opticians and optical businesses? How will the resolution operate given the different VAT status of the bodies involved? Why does not the money resolution cover at least part of the resolution that we are discussing?
We have an opportunity to test the Government. Are we to be disappointed or are we in for the parliamentary shock of getting genuine answers to key questions, without which the House should not be contemptuously steamrollered into supporting the resolution?
I can assure those who are waiting patiently for the next debate that I will be very brief. Participating in my first debate on a Ways and Means resolution, I have to confess that I am left feeling completely confused, particularly after the wide-ranging speech of the Conservative spokesman. However, I share the questions that he put to the Minister, particularly those seeking the justification for why we are in this situation. Despite the Minister’s best efforts and what the hon. Member for Buckingham (John Bercow) said, Sir Humphrey liked to put his case across in a calm and measured way. The situation smacks of chaos and confusion.
The Minister said that the provisions were not dealt with originally because of detailed discussions with the GMC. Is that really the beginning and end of the matter? Did he anticipate that he would be required to come to the House with the resolution in order to satisfy proper procedures? Reference has also been made to the need for the Committee to see the draft resolutions during the Committee stage. Will the Minister ensure that they are available, so that the Committee and the House know exactly what they are voting to permit?
Although it is true that the Committee has not yet dealt with new clause 7, reference has been made to fees and costs in relation to the regulatory impact assessment, which the Minister has made available to the Committee. The figures for the savings from merging the three regulatory bodies into one that the Minister has produced for the Committee are extremely wide ranging—I do not have them with me, although we touched on them in Committee and I am sure that he would admit that. The Minister was asked in Committee whether he could identify how much in those figures represented economy of scale savings from bringing three bodies into one and how much represented contributions from fees earned. At that point, however, the Minister could not clarify what percentage would be contributed by the scale of the fees that he is proposing in this Ways and Means resolution.
In fairness to him, the Minister offered to send a letter setting out some of the financial parameters. I want to ensure that my hon. Friend thinks that he covered that and that it is adequate for the purposes of passing the resolution that we should not have received those details until after we have challenged the Government on whether it is the appropriate way forward.
My hon. Friend is exactly right. Notwithstanding the promise that the Minister made in Committee to give more clarification on the figures, it is difficult to make head or tail of them if we cannot disaggregate the fee contribution in the calculations that the Minister has offered. When he replies to my contribution, will he be so good as to elaborate on exactly how the fee-bearing side of the regulations will contribute to the broader figures in the regulatory impact assessment?
I am sure that the hon. Member for Tiverton and Honiton (Angela Browning) will know that the fees to which she referred are connected to the establishment of the new care quality commission. That is outwith the remit of this resolution, which deals with the independent adjudication of the medical professions. As the hon. Member for Eddisbury (Mr. O'Brien) reminded her, I promised to write to members of the Committee with more details of those costs, and I shall do so, but they are nothing to do with the resolution that we are debating today.
Given the amount of time that we have spent discussing this matter, I do not intend to detain the House further by responding to the many and, I have to say, mainly extraneous and inaccurate points made by the hon. Member for Eddisbury. I shall simply point out to him that we cannot debate them under new clause 7 in Committee until this resolution has been authorised.
I beg to move,
That the draft Payments into the Olympic Lottery Distribution Fund etc. Order 2007, which was laid before this House on 25th October, in the last Session of Parliament, be approved.
I recently met two young Olympic hopefuls. One was an incredibly impressive young woman who gets up every morning and does two hours of swimming before school and two hours after school in pursuit of her dream of competing at the London Olympic games in 2012. The second is a young disabled athlete who is hoping to compete at table tennis, and whose father told me that even before there was the possibility of his son’s going to the Olympics, the very fact of training transformed his confidence to such an extent that he now goes on training weekends without his carer—something he would never have done before. Those are just two young people, but our Olympics will be an inspiration to a whole generation. It will be one of those events where hyperbole is justified. It will be a once-in-a-lifetime experience. It will bring the country together. It can transform Britain’s reputation overseas.
The Olympics can be all those things, but we have set ourselves a bigger goal: we want it to be the best Olympics ever. My right hon. Friend the Minister for the Olympics has put in place the best preparations ever seen for an Olympics at this stage; those are not my words, but those of Jacques Rogge, president of the International Olympic Committee. There are three building blocks to those preparations. First is a clear organisation with the right structure and world-class leadership—we have that. Secondly, like any team, our success will depend on our cohesiveness and support—and with 76 per cent. of the population backing the 2012 games, rising to 90 per cent. among young adults, we have that, too. The third element is a robust funding package, and that is exactly what we have. Last March, my right hon. Friend announced a £9.325 billion public sector funding package for the games, including contingency funding to manage risks. Of that total, £6.09 billion was identified for Olympic Delivery Authority costs. The remaining contingency funding will be released only if needed.
Cross-party consensus is undoubtedly important to speed our progress towards the best ever Olympics, but there is also, of course, a legitimate space for scrutiny and challenge. That is why my right hon. Friend provided Parliament with details of the ODA baseline budget in December, as soon as it was confirmed, and why she has agreed to provide every six months a full update of progress of the Olympic spend against the budget and the breakdown provided in December. The motion puts in place an important part of the funding package. It allows for £1.085 billion from the national lottery distribution fund to be transferred to the Olympic lottery distribution fund.
That is a diversion of funds from the national lottery to the Olympics, and while the Olympics is an important part of our culture and will be very important in the run-up to 2012, will the Secretary of State guarantee that there will be no more diversion of funds away from good causes after this announcement?
My hon. Friend makes an important point, which has also been made by a number of stakeholders, including the National Council for Voluntary Organisations, Heritage Link and the Voluntary Arts Network, which I met over the past week, and the National Campaign for the Arts as well. I hope that my hon. Friend will be happy to hear that I can confirm today that there will be no further diversion from lottery good causes to fund the Olympics.
I intervene on the Secretary of State merely to strengthen his hand. Should events not turn out as he plans, might he remind those who come back with a begging bowl that while his Department ensured that the Olympics has in excess of £9 billion, it found only £5 million for Liverpool as city of culture?
Actually, that is not correct: we found £11.2 million, I think, which is more than we were required to find by the bid for the capital of culture, which asked for £10 million. In addition, there has been a significant contribution—I think more than £25 million—from the Heritage Lottery Fund towards galleries and projects in Liverpool, and a significant contribution from European moneys as well. I was there on Saturday for the opening night, and I know that the Liverpool capital of culture will be a fantastic success and that people are looking forward to it across the country.
Liverpool is, of course, the unofficial capital of north Wales.
How can the Secretary of State justify the further diversion of lottery funds before the House this afternoon? How can it be right that the poorest communities in the UK have to finance the regeneration of London?
I am glad the that hon. Gentleman thinks that Liverpool is the unofficial capital of north Wales—the nationalist influence of being in coalition with the Labour party in Wales is obviously starting to rub off, even now. If he waits for the rest of my speech, he will hear a clear argument on the point he has made.
Given this diversion of resources—I say this as a strong supporter of the Olympics—is there not a case for changing the taxation system of the lottery to a gross profits tax, following the example of most of the gambling industry, which some estimates suggest could mean up to £400 million for good causes over the next decade? [Interruption.]
The hon. Member for Bath (Mr. Foster), who has also raised this complex issue—he did so at the previous oral questions—makes a loud cheer from a sedentary position. I thank my hon. Friend for his support for the Olympics and for raising that question. I am happy to announce that my Department and the Treasury will re-examine the issue. The House will understand that tax policy is a matter for the Chancellor and would be covered in the Budget, but I hope that I have given my hon. Friend the assurance that he was after.
Will the Secretary of State clarify what he has just said? Has he said that as well as trying to announce another raid on the lottery this afternoon, his Treasury colleagues will examine the question of taxation in respect of the national lottery?
The hon. Gentleman raises the point of the tax regime for the lottery. Some people, including Camelot, have argued that moving to a gross profits tax regime could mean further money for good causes. The issue is complex, but we are announcing today that we and the Treasury will examine it again. I hope that that assurance will be welcomed by the House.
As I was saying, the order puts in place the funding package from the lottery. It allows for £1.085 billion to be transferred in 15 instalments, starting on or after 1 February 2009 and ending on or after 1 August 2012.
The explanatory memorandum helpfully gives details of the net effect of the order on each distributor—it will be about £99 million on Sport England, some £4 million on Sport Northern Ireland and so on. Will the Secretary of State tell me whether his Department has done an analysis in conjunction with those bodies of exactly what the order will mean in terms of cuts at grass roots level and money that those many community groups might have expected over the next few years?
I shall come to that matter later in my speech. An impact assessment has been published to accompany the order. It is obviously slightly counterfactual, because one does not know what grants would have otherwise been made. I shall make some announcements later in my speech that I hope will reassure my hon. Friend.
I shall try to finish the paragraph of my speech that I am currently in, as I have been on it for a while. The £1.085 billion is made up of £410 million, as previously confirmed, and an additional £675 million as announced in March 2007. We have been open about the fact that that will mean that there is less money for the lottery between 2009 and 2012, and of course we recognise that concerns have been expressed about that. I am keen to respond to them as strongly as I can.
When my right hon. Friend the Minister for the Olympics announced this funding package, she agreed with the Mayor of London that lottery distributors would be repaid the additional £675 million from the profits arising from the sale of land in the Olympic park after the games. Hon. Members will have seen stories in the press this morning reporting pessimistic forecasts for growth in land values. The headline in this morning’s story is highly misleading, because the Olympic budget does not rely on land sales—there is no black hole in the Olympic budget. What has been said—the Mayor said this as early as April last year—is that we have to make estimates about the increase in land values. The prudent basis on which the London Development Agency has always made its assumptions is that values would grow at the rate of 6 per cent. But the Mayor also said in April that, given past trends in growth, it was possible to estimate much higher growth, up to 19 or 20 per cent. We are therefore confident that we would be able to repay the lottery if those levels of growth were achieved, but that does not create a black hole in the funding and there is nothing new about the story in the papers today. Those figures have been in the public domain for some time.
The Secretary of State suggests that the Olympic budget somehow remains intact, but the public at large see an overall package for the cost of the Olympics. It is not simply a matter of the budgetary figures; there is also the notion of repaying the lottery in the way that he has described. If land values fail to go up, the lottery will not be fully reimbursed. Therefore, our concern is that the financial package is incomplete. The budget may be intact, but that is not to say that the lottery will not be raided.
We have the same goal, which is to repay the lottery from the increase in land values. The amount is in line with growth over the past 20 years and it is not an optimistic forecast. It will also be realised over the next 10 to 20 years, and regardless of market conditions at present, it is right to have confidence that we will be able to deliver on the memorandum of understanding between my right hon. Friend and the Mayor.
I share the concern about the additional raid on the national lottery money, but I recognise that the Government have moved to repay the proceeds in this way. It would be more comfort, in terms of incentives in the future, if my right hon. Friend looked more carefully at who will handle those land sales and whether it should be the London Development Agency or an independent body.
That is a matter for the Mayor and the LDA. We have a high level of confidence in the LDA’s ability, and it has been a key partner in delivering the Olympics. I welcome my hon. Friend’s support for the proposal.
The second commitment that we have made, in listening to people’s concerns, is to look carefully at grant in aid funding and to secure increases in the current spending review for the good causes that will be affected. The Arts Council will receive an extra £50 million, an increase of 3.3 per cent. above inflation over three years. Sport England will receive an increase of 2.1 per cent. above inflation—an increase since 1997 of more than 170 per cent. English Heritage will receive an increase of £7 million in cash terms by 2010-11, which was welcomed as good news by Sandy Bruce-Lockhart, its chairman.
The third commitment that we have is to protect voluntary groups. We have agreed with the Big Lottery Fund that, first, no existing projects will be affected, and secondly and importantly, that we will honour the Big Lottery Fund’s commitment that at least £2 billion will be available for the voluntary and community sector over the next five years. I understand from the papers that the Conservatives—
The other lottery distributors will operate at arm’s length and make their decisions. They do fund voluntary organisations, and indeed a large part of their money goes to such organisations. I am glad that the hon. Gentleman intervened, because I understand that the Conservative party is considering not supporting the order and instead taking the money from the Big Lottery Fund and the so-called pet projects. I hope that the Conservatives will not do that, because there are no pet projects. Lottery policy has moved on since the New Opportunities Fund, which has been abolished, and everything is delivered through the Big Lottery Fund.
If the proposal were to take all of the £675 million from the BLF, it would involve a significant raid on the voluntary sector. Existing projects would be cancelled and the full £2 billion guaranteed to the voluntary and community sector could not be delivered. It could also mean some £250 million of cuts to that sector. I trust that the Conservative party will not make that proposal later in this debate.
While the Secretary of State is talking about existing commitments being cancelled, can I remind him of the Stonehenge fiasco? The heritage sector has lost hundreds of millions of pounds in value through the Government’s decision to cancel the project—including the cancellation of the visitor centre. Not one penny has been promised to provide a new visitor centre or to substitute for the grand plan that has now been shattered by the Government. The heritage sector always seems to lose out whereas the Olympic sector gets bigger and bigger. I hope that he will not forget that when he cites the recognition by Lord Bruce-Lockhart that the £7 million or whatever is welcome. It is not doing the cultural heritage of our country any good to see money leaking away from the lottery all the time.
The hon. Gentleman has been a resolute campaigner for Stonehenge, and he makes his point clearly and forcefully, as always. He might want to talk to his own Front-Bench spokesmen. The hon. Member for Tunbridge Wells (Greg Clark) has promised that at least as much funding will go to charities, while the shadow spokesmen for the Department for Culture, Media and Sport have promised to go back to the old good causes. That all adds up to more than 100 per cent. of the lottery. The Conservatives say different things to different audiences and have ended up double-counting the funding.
So is the hon. Gentleman saying that the Conservative party would not stick to the £2 billion guarantee? Is that his commitment? I know that he and the hon. Member for South-West Surrey (Mr. Hunt) like to write policy pamphlets together; perhaps they would like to focus on policy next time, before they start to widen their approach.
A concern was also expressed that the Government would continue to collect funding from the planned Olympic lottery game after the target of £750 million is reached. I can confirm that that is not the case.
In our last discussion on the subject, the hon. Member for Bath highlighted an issue about grey lotteries, which are opportunities to bet on the numbers or outcomes of overseas lotteries. I shall ask the Gambling Commission and the National Lottery Commission to explore the cases that give rise to concern. I know that the hon. Gentleman has such concerns, and he is welcome to make them known to both organisations.
I believe that the commitments that I have made today should form the basis of cross-party consensus. I hope that that is what will be delivered. Both main Opposition parties supported the Olympic bid and the subsequent Bill. I trust that that will continue to be the case. One of the lottery’s founding purposes was to support such big national projects, as the Conservative Government did with the Millennium Commission, which funded a similar event. Both Opposition parties supported the approach to the Olympics, and I hope that that will continue.
No, I know that time is limited and I want to wind up.
In the original funding package, the lottery made up 44 per cent of the total. The new funding package provides an extra £5 billion from the Exchequer. The lottery will contribute an extra £675 million, and its share of the total will therefore fall to 23 per cent.
I can also finally report that the National Lottery Commission has informed me that under the third licence recently awarded to Camelot, which will run from 2009, returns to good causes are likely to increase by between £600 million and £1 billion over the 10-year period of the licence, based on constant levels of sales at £5 billion per annum. I am depositing in the Libraries of both Houses today a letter from the chair of the commission to set that out.
The order is intended to secure the best Olympics ever for this country and to inspire a generation of young people to aim to be the best they can be. Our task is to deliver the political consensus to make that a reality.
Perhaps the best example of the Olympic spirit was shown by someone who never competed in the Olympics, although his sport is recognised by the International Olympic Committee: Sir Edmund Hillary, who died last week. He did one of the most competitive things ever by being the first man to set foot on the highest peak in the world, but he combined it with remarkable modesty—so much so that, apparently, when he reached the peak he took photographs of Sherpa Tenzing, but forgot to ask Sherpa Tenzing to take photographs of him. For most of his life, in the spirit of not wanting to be one up, he refused to confirm which of them had reached the peak first. That combination of competitiveness and decency—the desire to win, but to do so with honour—is what we want 2012 to bring to London.
It is therefore right that we approach the Olympics in a spirit of bipartisanship, with as much cross-party support as possible. In that spirit, we on the Conservative Benches are happy to pay tribute to the Government’s achievement in winning the 2012 bid. It was a personal victory for Tony Blair and Lord Coe. The Opposition’s redoubtable shadow Sports Minister was in Singapore at the time and, although he does not claim to have swung the bid, his presence was important, as it demonstrated cross-party support. When he was Leader of the Opposition, my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) spoke to the International Olympic Committee to confirm our support for the Olympics and, as the Secretary of State said, we supported the London Olympic Games and Paralympic Games Bill at every stage.
My hon. Friend makes an important point. I was about to say that the spirit of cross-party support has been sorely tested at regular intervals, mainly over budgetary issues.
The budget was raised last March. It was not raised by 20 or 50 per cent., or even doubled: instead, it was nearly tripled, to £9.3 billion. Did the Opposition withdraw our support for the Olympics, or say that it was a mistake to spend the extra money or to have bid for the games in the first place? No, we did none of that. Our support for the Olympics has been rock solid—rather more so than the Secretary of State’s. When the bid was being assembled, he was leading the charge against it, so we will take no lessons from him about the need for an Olympics consensus.
However, the Secretary of State will appreciate that our commitment to the success of 2012 means that we have a duty to speak up when we think that the Government are managing the project badly. We have a responsibility to scrutinise the use of taxpayer’s money, to protect the good causes for which the lottery was set up and to ensure that the games are on a sound financial footing.
In the spirit of bipartisanship, I spoke to the Secretary of State in the Lobby last week, and I also wrote to him last Thursday. I said that the Opposition would be prepared not to vote against the statutory instrument—even though it is in large measure due to the Government’s financial incompetence—if the Government could reassure us on two matters.
The first reassurance that we seek is that the Government will publish proper cash flow figures for the project. Those figures should set out the money that has been spent and contain cash flow forecasts. The Secretary of State will know that, if accounts are to be scrutinised properly, they must contain a profit and loss balance sheet and a cash flow analysis. With a project of this size, however, we can determine whether it is under proper financial control only if we are able to measure the rate at which cash is going out of the door and to compare that with the rate that was predicted. That is why the cash flow forecasts and outcomes are so important.
In response to my request, the Secretary of State said that he was prepared to make available any figures that the Department had, but that he did not want to construct figures especially for us because that would involve a cost. He said nothing in his speech about cash flow forecasts for the way in which the Olympic budget will be spent, so are we to take it that no such forecasts have been prepared? If they do exist, will he publish them so that we can scrutinise the progress being made and the rate at which money is being spent?
I can tell the hon. Gentleman that that information is available, and that my right hon. Friend the Minister for the Olympics will be happy to have quarterly meetings with both Opposition parties to go through it. The information will be subject to commercial confidentiality, but it will be available for scrutiny.
I am very grateful for that concession, as it will greatly improve our ability to scrutinise the progress of the Olympics budget. Most importantly, it will mean that there will be no repeat of what happened last March, when the budget had to be tripled.
We sought one other concession, however. It was, as the Secretary of State says, a commitment that there would be no more raids on good causes. Why should good causes, which the lottery was set up to protect, suffer from Government financial miscalculations? We have to recognise that the good causes have suffered a triple whammy as a result of the Olympics. There was the original £410 million; then the £750 million from the special Olympics lottery games, which, it now transpires, will cannibalise much of the revenue that would have been raised through the normal lottery games that raise money for the good causes; and then the additional £675 million.
My hon. Friend is quite right in what he has just said. He is also right to say that none of us should be demonised if we question the amounts of money being spent on the Olympic games— particularly those of us who are not from metropolitan London and who will not feel quite the same benefit as Londoners from the legacy. There are already swingeing cuts in the arts. Lichfield Garrick theatre is no longer to receive its funding, nor is the Birmingham repertory theatre, and that situation is replicated throughout the United Kingdom. What assurance do we have that the situation will not get worse?
Earlier, the hon. Gentleman rightly mentioned that the cost of the Olympics has already tripled. He accepts the Secretary of State’s assurance that there will be no more raids on the lottery, but what happens if the cost continues to climb? Where will the money come from? At what point will the Conservative party say, “Enough is enough”?
May I make a little more progress before giving way to the hon. Lady?
What the Secretary of State said about the headline in The Times today was inaccurate. He said that there is no new information, but of course there is very serious new information. The article states that
“Land agents contacted by The Times”
say that the sale of land is unlikely to make the amounts predicted because of
“the current flattening of the housing market.”
The ability to meet the commitment to help lottery good causes from land sales has changed materially because of the change in housing price conditions.
What I am saying is that there is nothing new about the Government information and the Mayor’s information that has been provided. We cannot control everything that estate agents say. However, as early as April last year, the Mayor said:
“In the last 20 years land prices in London on average have increased 19 per cent. a year. Take the last 10 years, where we have had a more consistent margin, it’s averaged 20 per cent. and the lowest increase in any one year was 6 per cent.”
Those figures have been in the public domain for a long time.
They have been in the public domain for quite some time. The Mayor said that a month after the budget tripled and he was trying to reassure good causes that, according to that scenario, they might make up £1.8 billion. Looking at the state of the market now, we realise that the amount raised is likely to be £1 billion less than that, which is another whammy for good causes.
Will the hon. Gentleman give way?
I would like to make a little more progress; I will give way later.
We fought hard for the concession that the Secretary of State has made—the commitment not to take any more money from good causes. That is a victory for our fight and it is a victory for the hundreds of thousands of people who work for charities and voluntary organisations, arts and heritage groups and sports clubs up and down the country, because their big concern was that, given the Government’s appalling record of financial incompetence on the Olympics budget, they would be stung not only today, but many times in the future.
The Secretary of State talked about bipartisanship, but if he intended to make that pledge today, why did he not tell me that when we met at 9 o’clock last night? He asked to meet me then to discuss today’s debate. If we are to maintain cross-party support—assuming that he did not make that decision after our meeting last night—he might at least have had the courtesy to tell me then. I suggest that that would be a better way to create a spirit of cross-party support than playing party political games.
With respect, that is exactly what I want to do. I am just saying that if the Secretary of State was going to make a concession as major as the one that he has just made, why did he not tell me at our meeting at 9 o’clock last night?
The Secretary of State mentioned an additional £600 million to £1 billion in lottery income under the new Camelot licence. Those numbers are based on items in the Camelot bid document. He will know that they are very speculative. They depend on the Treasury’s agreeing to move to a gross profits tax, which he said has not been confirmed—he is simply prepared to consider it again. They depend on the introduction of restrictions on lottery-style games in adult gaming centres. Again, he said that he would ask the Gambling Commission and the National Lottery Commission to consider it, but there is no undertaking that it will happen. They also depend on the approval of the National Lottery Commission. We have a commitment from the Secretary of State to examine ways to increase the returns to good causes, versus what is written in black and white in the statutory instrument, which is that there is to be a raid of £90 million on the arts and heritage budget and of £70 million on the grass-roots sports budget.
I wonder whether the hon. Gentleman could help me and the House by confirming what he has just said. He said that the figure given by the Secretary of State—the £600 million to £1 billion in increased money that Camelot would effectively give to good causes over 10 years—was predicated on the introduction of GPT, the closing down of the grey areas of lotteries and so on. I had a discussion this afternoon with Camelot, and what it told me was rather different. It assured me that the figure depended entirely on the new agreement about how it will operate. None of the three factors that he mentioned was referred to at all. Will he help me on that point?
I am delighted to do so. We must have been speaking to different people at Camelot; my office had a discussion with Camelot this afternoon, in which it told us that the additional increase in money to good causes was clearly predicated on those three things.
The concessions are important, but they do not undo the main damage caused by the order. It is extraordinary to fund a £9.3 billion Olympics budget by cutting the budgets for grass-roots sports—the very budgets that could provide the sporting legacy that was the big promise of 2012. Derek Mapp, who resigned as chairman of Sport England, described it as “a cut too far”. He is, or was, a strong Labour supporter. In 2004, he gave £3,000 to his constituency Labour party, because he presumed that widening participation in sport was a central plank of the Government’s 2012 strategy. Like us, he has no doubt read the London plan, part of the London 2012 candidate file, which said that the games would succeed in
“leaving a legacy to be valued by future generations”.
In fairness, the Secretary of State used to take a rather different view, saying:
“The Olympics would inevitably deprive other schools of new pitches and extra coaches. Why? Because we won’t be able to raise the extra lottery money, and because the costs will overrun.”
It seems that he knew better what his own Government would do than either Derek Mapp or we did—the sad truth is that his predictions have turned out to be spot on.
I am afraid that that was said before a 170 per cent. increase in the Sport England budget, a sevenfold increase in the contributions of the Department for Children, Schools and Families and the Department for Culture, Media and Sport, a five-hour offer for children doing sport in schools and a huge increase in the number of playing fields as a result of the building schools for the future programme, which will refurbish or rebuild schools during the next few years. Grass-roots sport is thriving thanks to our investment. By contrast, the Conservatives did not invest in it at all.
I suggest that the Secretary of State do the math, as they say in the United States. If one adds up the amount put into grass-roots sport this year from both Government spending and the lottery, it comes to £135 million less than in 1997. Grass-roots sport has suffered, and it will suffer even more. The impact of the cuts in additional spending made this afternoon alone—£70 million—is £108,000 per constituency, which is equivalent to one floodlit multi-use games area or 100 m grass pitch in the constituency of every single Member of this House.
Let me save the hon. Gentleman from having to correct the record himself. The combined grant in aid and lottery funding has gone up from £174.9 million to £465 million in 2006-07, which I think is the figure that he quoted. From £174 million to £465 million is more than a doubling of the amount of money.
My hon. Friend will well remember when the former Minister for Sport, the right hon. Member for Sheffield, Central (Mr. Caborn), came back from Sydney and said, quoting someone he had met out there:
“‘Do not underestimate the budget. If you have to go higher, it will be seen as a failure so make sure your calculations are realistic.’”——[Official Report, 21 July 2005; Vol. 436, c. 1505.]
From this afternoon’s announcements, what on earth makes anyone in the Chamber, other than those on the Labour Front Bench and possibly some Back Benchers, believe that the new figures are realistic? How can we sell them to our constituents, who are suffering from the cuts in grass-roots sports and in our local theatres—the Northcott theatre in Exeter and others throughout the country? Why are the new figures any more realistic? What is to prevent the Minister from asking for more money again in a few months? Surely it is the duty of every Member of the House to protect those causes, which are already suffering so badly.
I am grateful to my hon. Friend for his comments, which are extremely well put.
If the Secretary of State does not want to listen to figures from us, why does he not talk to people in the industry? Tim Lamb, the former chief executive of the England and Wales Cricket Board, who now runs the Central Council of Physical Recreation, said:
“What’s the use of getting more kids involved in sport at school if they don’t have decent facilities to play with when they leave? The Lottery must not be used as a piggy bank for ministers to pay for the games.”
If the choice is made between funding lottery good causes or funding the Olympics, we will fail in our commitment to the Olympic legacy, because it is the lottery commitment to grass-roots sport that is the means whereby we will provide that legacy.
Why have all these problems arisen? The construction budget went up by 29 per cent. last March; the regeneration budget went up by 70 per cent.; and the security budget nearly tripled to nearly £600 million, despite the fact that the original security budget at £220 million was less than the Greeks paid for the Athens Olympics. Why we thought it would be cheaper to make the London Olympics secure, I do not know.
There were two items in the revised budget that, inexplicably, did not appear in the original budget. The revision included a contingency budget of £2.7 billion. We now know that it was against explicit Treasury guidelines not to have a contingency budget in a project of that size, yet the Treasury approved the original budget. There was a VAT bill of £840 million in the new budget. If the Treasury approved the original budget, why did it decide that it did not need VAT then, but that it needed nearly £1 billion of VAT the second time? Since then, the news has got worse, not better. In June we heard that the security budget may go up to £1 billion. In October the Olympic Delivery Authority said that the cost of the stadium would go up 77 per cent.—by another £216 million.
Let us return to the lottery. In order to secure the bid, the bid team made great play of London’s cultural heritage—they talked about the 300 museums and galleries and the five symphony orchestras—but because of today’s measure, arts and heritage distributors will lose £90 million each. The Secretary of State spoke about English Heritage. Dr. Simon Thurley, the chief executive of English Heritage, stated:
“Inevitably the additional reduction in Lottery funding will reduce opportunities for the cost of inspirational projects which have transformed the historic environment…and made it accessible to millions more people”.
Peter Hewitt, chief executive of the Arts Council of England until the end of this month, said:
“The reduction in budget . . . will hit smaller arts organisations at grassroots level very hard”.
The Olympics will be in London, but of course we want it to benefit the whole country, so it is particularly depressing to read the remarks of the chief executives of the Arts Councils of Wales and Scotland. Peter Tyndall of the Arts Council of Wales commented:
“Many projects will be unable to go ahead and individual artists will not have their work funded.”
Jim Tough, the acting chief executive of the Scottish Arts Council, said:
“The Scottish Arts Council is disappointed by this decision . . . the plans will undoubtedly also have a serious impact on general participatory activity and programmes for future years.”
It is worse than that for us in Scotland. We are holding the Commonwealth games in 2014, but SportScotland has said that it will be deprived of £13 million of spending. How on earth are we supposed to pay for the Commonwealth games when we are deprived of that kind of money?
The hon. Gentleman makes a reasonable point.
“We don’t believe it would be right to use Lottery money to pay for things which are the Government’s responsibilities.”
Those words are not ours, but those of Tony Blair in 1997; as ever, unfortunately, his actions did not live up to his rhetoric. We urge the Government to examine whether it is possible to fund the shortfall, not by the cuts outlined in this measure, but by using the funds that the Big Lottery Fund would have spent on projects that should be funded by central Government Departments.
Will the hon. Gentleman acknowledge that Members from across the House have grave concerns about good causes? That is why I asked the Minister my question. In the spirit of moving forward together, will the hon. Gentleman acknowledge that it would be an excellent idea for us all, including Members of his party, to recognise the importance of the Olympics as well as that of the good causes? I hope that he and his party will vote for the motion.