Tuesday 13 May 2008
[Mrs. Joan Humble in the Chair]
Motion made, and Question proposed, That the sitting be now adjourned.—[Siobhain McDonagh.]
The Competition Commission has just completed its third full-scale inquiry into supermarkets in the last eight years. The Office of Fair Trading continues periodically to delve into some more specific complaints regarding supermarkets. However, this House has not had the opportunity to discuss the OFT’s recommendations or to raise some of the genuine concerns that I am sure many hon. Members’ constituents have about the fast-changing patterns of high street shopping in recent years.
At the outset, I should perhaps say that I am neither here to bury nor unduly praise supermarkets; I certainly will not do the former, which I know is somewhat more favoured than the latter by some Members of Parliament. I say this because I believe that the time is now ripe to have a very broad debate here in Parliament on supermarkets, as well as an open discussion about how best we can balance the concerns of small retailers and suppliers with those of the supermarkets. In my view, that national debate should be conducted without the threat of new or excessive regulation; instead, we should allow supermarkets to recognise and react positively to public concerns.
In recent decades, the British weekly shop has undergone a revolution. One supermarket giant alone, Tesco, controls a quarter of the nation’s massive £128 billion annual grocery budget. Supermarkets now seem willing and able to provide us with everything—from televisions and insurance to clothing and credit cards—as we rummage through the vegetable aisle and pick up our everyday bread and milk.
However, with the rise of Tesco and the rest of the big four supermarkets—Sainsbury, Asda Wal-Mart and Morrisons—talk of our shopping habits seems to have taken on the type of language that is more appropriate to a horror story. People now bemoan the emergence of ghost towns; they decry the death of the local store, and they fear the looming, inexorable power of a monstrous monopoly that swallows land, spits out small businesses, destroys community spirit and ruthlessly subdues suppliers. Nowhere has there been a more effective and outspoken campaign than in the pages of my own “local” newspaper, the Evening Standard.
For my own part, while all is not necessarily rosy in our groceries market—I shall discuss some of my specific concerns later—I believe that supermarkets are all too frequently given a hard time. Their detractors seem to have an irrational and often downright hypocritical hatred of the success of big retailers. However, I myself am inherently mistrustful of a cause that seeks to punish success, hard work and good business practice. Let us make no mistake: supermarkets are one of this country’s great retail success stories. The idea of putting a penalty on such characteristics as success and hard work, borne out of misplaced resentment and unrealistic sentiment, is unhealthy for both the market and the consumer.
The hon. Gentleman rightly says that the supermarkets’ triumphs are often based on “success” and “hard work”, and then he added “good business practice”. However, is it not the case that even the suggestion in the Competition Commission’s report that there should be scope for an ombudsman in dealing with such concerns will not tackle the climate of fear that still exists for small suppliers, who do not wish to alienate their mega-customers, the big supermarkets? That was the problem with late payment legislation; will it not be a problem in this regard, too?
I understand the hon. Gentleman’s point and I will come to the issue that he rightly raised about the disequilibrium between small suppliers and large, almost monopolistic, retailers, whom suppliers are obviously reluctant to do anything about, other than acting entirely as they wish. The ombudsman suggestion would be a retrograde step; it would be an added layer of bureaucracy and a move away from the transparency that is very much in the interests of all parties concerned.
As a young boy, I remember seeing pictures of life on the other side of the iron curtain. As you know, Mrs. Humble, I have forefathers—as I know you do yourself—from the part of Germany that is now in Poland. One of the most profound differences between life in the west and life under communism was the presence of long queues in eastern Europe for basic foodstuffs. To those of my generation, the well-stocked shelves of a supermarket represented the most visible signal of the success of free markets, choice and capitalism.
The Competition Commission’s most recent investigation sought to establish whether consumers are receiving the benefits of vigorous competition. After about 550 submissions, 65 hearings and the receipt of data from 14,000 grocery stores, the commission released its recommendations back in February. Its conclusions indicate an overall “not proven”—indeed, one would argue, “not guilty”—verdict for supermarkets on the charges of pushing competitors out of the market, bullying suppliers and limiting choice.
Some of the tactics adopted against suppliers have rightly been subject to widespread public scrutiny, and the “big four” supermarkets have agreed to make some material changes to their operations. However, many people felt that the commission missed the point. Too often, it obsessed about competition between the big supermarkets, rather than examining ways to protect smaller businesses and to freeze in time the British high street. It is indeed true that the commission’s recommendations have looked primarily at how to stop the domination of one big supermarket chain—Tesco—over the others. However, calls excessively to regulate and punish the success of the market leaders should not be indulged.
Among its recommendations, the commission proposed three main changes. The first is a “competition test”, which is designed to put a stop to new stores if they allow an operator to become overwhelmingly powerful in a particular area. The so-called “60 per cent. rule” would mean that a specific retailer would have a new store blocked if that store resulted in giving the retailer three fifths or more of the large-store floor space in the locality. Of course, the definition of what constitutes a “locality” is the nub of this sort of problem. Also, I fear that the new rule will not necessarily prevent the vast majority of proposed new stores from going ahead. It will simply result in consumers getting to choose between, say, Tesco, Waitrose and Sainsbury, rather than there being a Tesco superstore and a Tesco Extra store within half a mile of each other.
The second significant proposal to come out of the Competition Commission’s inquiry is a plan to combat land banking. This is a practice whereby retailers hold on to land and, indeed, place a restrictive covenant on it to prevent a competitor from joining the local market. Such tactics will now be banned and the “exclusivity” arrangements that have been in place for more than five years will have to be surrendered. In other words, retailers will not be able to retain undeveloped land with the express purpose of keeping out competitors. However, I fear that this proposal will also be a gold mine for lawyers, as the determination of proof of “express purpose” is an extremely high hurdle to overcome.
Thirdly, the Competition Commission has given a nod to the suppliers’ concerns by suggesting that the code of practice for dealing with suppliers should be tightened and incorporated into contracts. A grocery supply code ombudsman will now be appointed by the OFT to monitor that code of practice. However and as I mentioned earlier, I am not convinced that that is necessarily the right way forward.
Does my hon. Friend agree with me that the majority of suppliers to big supermarkets are, by definition—because of the scale of supplies that supermarkets need—big businesses in their own right? Many of them are multinational companies that themselves make huge profits. Therefore, any type of restriction on supermarkets in dealing with their suppliers will lead only to those suppliers making bigger profits and, at the end of the day, customers paying more for their products.
My hon. Friend hits the nail on the head. One of the issues has been that the consumer has had a pretty good deal over the last 10 years. There is also no doubt that, over the last six to nine months, there have been some widespread increases in the prices of basic foodstuffs. However, that has been the exception rather than the rule, and we have all got used to the idea of relatively inexpensive food, but part of that inexpensiveness has been due to the work between suppliers and supermarkets to try to keep their costs down. We all rejoice in the idea of relatively cheap food, and now that we suddenly see food prices and inflation going up, we recognise precisely how the consumer could lose out if, on top of large-scale increases in the prices of basic foodstuffs, we were also to see ever more regulation that tightened the market.
The hon. Gentleman is right to make a note of increased food prices. However, have not supermarkets become the victims of their own bad practices? In using uncompetitive processes to procure their food, they have driven down the amount of food being produced and now there is a shortage. If the supermarkets had only been a bit more far-sighted and worked with their suppliers a bit more productively, perhaps we would not be in this situation.
As the hon. Gentleman is well aware—representing as he does an agricultural and very rural Welsh constituency, compared with my inner-city London seat—I perhaps have a different perspective and have perhaps had less direct lobbying from the farming interests. If I may, however, I will come to that subject in a moment or two.
The commission’s findings caused outrage in certain consumer campaigning quarters, and the investigation was branded a whitewash. Small businesses, environmentalists and even anti-poverty campaigners attacked the commission’s inquiry. They believe that in addressing only competition between big supermarkets, the commission to a large extent ignored smaller shops and the difficulties that they face, and that it did not heed concerns about supermarkets’ relationships with suppliers or the problems of the shops’ environmental impact.
I suspect that Tesco executives, despite mild protestations about the commission’s findings, will, on balance, be breathing a sigh of relief. Given the hostility toward Britain’s biggest retailer, Tesco might have expected more stringent recommendations regarding its future conduct than came to pass. For instance, many of the retailer’s detractors would have been happy to see the enforcement of the sale of stores in areas where it enjoys a particular dominance.
However, the analysis ignores the inescapable fact of the groceries debate: supermarkets are successful primarily not because of unfair or immoral practice but because consumers regard themselves as well served by them. It may be an unpopular view, but, as an inner-city MP without an agriculture lobby to pacify, I can articulate what others in rural seats cannot. By and large, supermarkets have been a positive force in an ever more frenetic world in which consumers increasingly demand convenience. They provide excellent value for money and a phenomenal choice of high-quality produce. They bring to shoppers goods that would not have been heard of only a decade ago.
The hon. Gentleman is making a compelling case, but does he acknowledge that we have to get the balance right, and that perhaps the Competition Commission missed a trick in not dealing with the metro, express and one-stop stores that are springing up in our communities? Perhaps it should have dealt with that, as well. We must get the balance right and preserve high streets, which offer services to vulnerable groups.
The hon. Gentleman is absolutely right. Of course, the reality is that many of those high streets were already dying. In fact, the emergence of a Tesco helps to re-energise them, albeit without necessarily being able to counter some of the concerns about monopoly practice. That is particularly the case in the sort of constituency that he represents. One has only to look at several suburban London high streets that, because they are within a relatively short distance of Bluewater, Lakeside or another big shopping centre, are dying on their feet. What might seem perverse is that when a Tesco or a Sainsbury emerges, things suddenly begin to pick up, to an extent.
Some folk whimsically reminisce about the days when one separately visited the local butcher, fishmonger, baker and greengrocer, but most working people would admit that they have neither the time nor the inclination to queue at a range of stores on a Saturday or even Sunday afternoon. Even if they did, it is unlikely that local stores would have the capacity to serve the needs of our growing consumerist, fast-paced population; nor, too frequently, do such stores appeal to the desire of increasingly discerning consumers for innovation.
In Britain, we have been happy in recent years to perpetuate the myth that small and local equal good. The local store is a place where the quality of goods is high, the relationship between shopkeeper and customer warm and the benefit to the community immense. As Jay Rayner so wonderfully put it in The Observer:
“We love to imagine the rosy-cheeked, melon-bellied butcher who always has time for everyone and the greengrocer helpfully picking out the finest of produce for his customers.”
The supermarket, on the other hand, is portrayed as cold and clinical, and staffed by a down-trodden, unenthusiastic work force, but that parody is simply not true. Yes, some local stores truly offer a brilliant, personalised service. Upper Tachbrook street in my constituency is two minutes away from a flagship Sainsbury market store and three minutes away from Tesco, yet it has a couple of delicatessens and a specialist cheese shop. They do a tremendous job, and I admit that I never buy my cheese at Tesco or Sainsbury. I always go to the specialist shop, and I hope that other consumers do likewise.
It is true that elderly folk and young mothers value the genuine local shop where, in otherwise lonely lives, they may have a personal conversation with someone they know rather than being ushered through a check-out. Yet customer service may come down to individual employees as much as the shop in which they work. I hope that supermarkets will take that on board and try to encourage community spirit, particularly in the smaller express-type stores. Furthermore, we have all been to as many well-stocked, quality corner stores as we have to disappointing mini-markets with a poor range of produce at high prices.
The supermarket may often be the only truly integrated place in a community with an ethnically and socially diverse customer base. Far from being uniform, supermarkets often cater to their unique market and provide a place where everyone in a community feels happy to shop. The aisles in the Sainsbury in Whitechapel, for example, accommodate the needs of the specific ethnic communities in the area and include Afro-Caribbean, Bangladeshi and Jewish produce. In my local Tesco in Pimlico, a small section is dedicated to Polish foodstuffs. As the son of a Silesian mother, such foodstuffs bring back wonderful childhood memories.
Supermarkets understand the intense competition in the groceries market and constantly look for ways to diversify and appeal to new customers to gain an advantage over rivals. As a result, they are generally receptive to the fast-changing desires of the consumer and lead the way in best practice. Marks & Spencer, for example, aims to be one of Britain’s most environmentally responsible retailers. It is phasing in a charge for plastic carrier bags and is beginning to use food waste to power some of its stores. Similarly, Asda Wal-Mart aims to cut its packaging by one quarter in this year alone in response to customer complaints.
Supermarkets are responsible for around one half of all the Fairtrade products sold in this country, and that proportion is rising quickly. Their size gives them the power to drive through positive change that smaller businesses may not be able to initiate but will, I hope, feel inclined to follow.
Despite some of the advantages that supermarkets may have over smaller rivals, the Competition Commission stated:
“Large retailers do not always get the best price from suppliers…convenience and specialist store numbers are not in such a state of decline to suggest that a waterbed effect exists…The evidence is that convenience stores and specialist grocers that provide consumers with a strong retail offer will prosper.”
Yet when supermarkets acted to promote UK milk producers by guaranteeing prices—to the detriment, at the margins, of consumer prices—they promptly found themselves subject to an extensive OFT inquiry that reported earlier this year and resulted in a huge fine for practising a cartel. That was a classic example. Many of the supermarkets involved were understandably sore about that. They felt that in trying to promote British produce in a sector such as milk, which had been in such difficulty in recent decades, they had lost out.
The hon. Gentleman probably misses the point when he concentrates on price and gives the example of the difficulties that the supermarkets got into as a result of their negotiations on the price of milk. The problem for suppliers is not about price at all but about retrospective changes to unwritten contracts: the payment for shelf space, the late payment of bills, the cost of using the supermarkets’ preferred hauliers, and packaging. That set of attached conditions, which are often retrospective, bears down on the viability of suppliers. The issue is not just about price. Will he not accept that?
I will accept that; the commission went into great detail about the precise nature of some of those complaints. Certainly, I would never accept or defend retrospective changes to supplier agreements. That is very unfair.
We are missing some of the excitement around the Finance Bill this morning, and we will be heading to that debate after this one. The reality is that retrospective taxation and, indeed, retrospective arrangements along the lines described by the hon. Gentleman are entirely without justification.
Of key importance, too, is the area of newspaper and magazine distribution, where there are valid concerns about the potential domination of supermarkets over smaller retailers and publishers. One of the great strengths of our newspaper and magazine industry has been the rapid distribution of material to all corners of Britain. Under existing distribution agreements, newspapers and magazines are sent to retailers through a system of exclusive territories. The arrangement encourages a free and diverse press.
I appreciate that absolute territorial protection would normally be banned under competition law, and it is generally against my instincts to support such monopolies. However, I fear that dismantling that almost miraculous distribution system, which means that all our papers and magazines are sent to every corner of the UK and arrive the next morning, could curtail freedom of choice and seriously damage independent newsagents. I live in central London, so it is easy for me never to buy my newspaper from a supermarket, and to use only small, independent shops, as I do.
The breaking-up of the current distribution system will allow supermarkets to broker their own distribution deals. I suspect that distributors will then be tempted to abandon unprofitable arrangements with newsagents and if the supermarkets become the main outlet for buying newspapers and magazines, they are likely to drop a vast proportion of less well known publications in favour of a few big newspaper and magazine names. That would be a retrograde step, and I hope that supermarkets will play their part voluntarily in ensuring that the widespread choice to all consumers in the United Kingdom is maintained.
I return to grocery retail. The popularity of farmers’ markets in my constituency, notably in Marylebone high street and Pimlico green, has proved that smaller suppliers and stores can prosper if they are adaptable and tap into consumer demand. Howard de Walden Estates, which is a large local landowner, has done a tremendously good and well documented job in ensuring that Marylebone residents have access to the widest range of stores, from specialist food shops to delicatessens, and there is both a Waitrose and a Tesco on Marylebone high street. Smaller branches of the more high profile supermarkets could fit into that mix without damaging the prospering local shops that also serve my constituents so well.
Some small store holders in my constituency are anxious about the possibility of smaller, convenience-store-sized outlets being opened by supermarkets in the area. I know that the possibility of another small Tesco store in the Pimlico area has caused concern and it is only fair to say that I have received representations, not least from Mr. Waheed Ali of Standard Foods on Lupus street, who has expressed the worries of small business people in the area that such stores could have a serious impact on their livelihoods. Mr. Ali’s convenience store has served the needs of the local community for 25 years.
I acknowledge the fact that the possibility of large out-of-town developments ruining high streets is not something that central London’s small retailers have to worry about, given that so few large sites are available, and that congestion and less frequent car use mean that many constituents walk or use public transport to do their weekly shop. However, I appreciate that people in other constituencies have such problems, even though they do not necessarily apply in the sort of constituency that I represent.
There are real concerns, for which I have a great deal of sympathy. However, I contend that if the Government have a real desire to help smaller retailers, such as my constituent Mr. Ali, penalising successful, thriving larger businesses and their shareholders is not the way to go about it.
If the hon. Gentleman will excuse me, I will not give way because I know that other hon. Members want to contribute.
I suggest that reforming business rates to allow more small enterprises to set up shop and remain active would be a far better route to intensifying competition and diversifying the high street than heavy-handed restrictions on the bigger players. Smaller employers could perhaps be released from some of the bureaucratic shackles of the employment market if we made way for deregulation. If the Government provided an incentive, local councils could do their bit—I appreciate that they must do their bit—by keeping down the cost to the shopper of town centre parking, in contrast with free out-of-town supermarkets, and regenerating town centres.
Land banking, supplier relationships and competition with small businesses are of course important, and it is right that they are properly addressed. The Government should examine the tax system, employment laws and town planning to give smaller businesses a helping hand. However, despite those who believe that all problems require greater regulation and interference, the grocery issue will always boil down ultimately to consumer choice. Shoppers will vote with their feet and spend their money at the stores that cater for their needs.
On that principle, supermarkets will continue to be rewarded while they offer value, choice, quality and, increasingly, an ethically and environmentally sound approach to their practice. If smaller retailers similarly provide consumers with an array of choice and quality, independent local businesses can be assured and confident of survival.
I am delighted to take part in this debate, Mrs. Humble, and I congratulate the hon. Member for Cities of London and Westminster (Mr. Field) on bringing it forward. I shall try not to reprise the ground we covered in our previous debate on supermarkets when we successfully captured topical debate from discussion of plastic bags and environmental practice to move at least into the area of the then recently published Competition Commission report. We have had time since then to reflect on what the report says.
I have no reason to say anything other than that I was disappointed with what the report came up with, and I do not believe that competition alone will ever sort out the grocery market, let alone wider retailing. There were, nevertheless, some interesting facets to the report, and if what has been reported to me is true—that at least one chief executive officer of a supermarket chain was livid at what the report stated—some small improvements can and should be made to bring back some fairness to such a major area of our lives. With the globalisation of the food chain, we can see some of the political aspects as well as the economic and social aspects.
As always, I am indebted to the Association of Convenience Stores, which briefs us widely. Like the Minister, I am a Co-operative Member of Parliament, and I want to put on record the support that we receive from the Co-operative movement, which remains interested in retailing and wholesaling. With other organisations, such as the New Economics Foundation and the Rural Shops Alliance, we have tried to introduce genuine debate on the way forward.
The context of this debate should be not just the Competition Commission report, but the Government’s proposals to change the planning system. I, for one, will not agree with anything that dilutes the current arrangements to bolster planning policy statement 6, to ensure that we have a proper context for the high street and do not water down our allowance for out-of-town shopping, that the needs test remains in place, and that there is a realisation that the high street is so important that we should always be biased towards it rather than the alternatives.
I thank my hon. Friend and fellow Co-operative MP for giving way. Does he agree that the Competition Commission’s suggested competition test is set too high? At 1,000 sq m, it would be easy for the big four to circumvent such a regulation. For example, Tesco would be able to carpet the area with varying formats of stores—local, metro, express and one-stop. Would not the impact be minimal if a competition test of 1,000 sq m were applied?
Yes, and I shall talk about that. One weakness of the report is that it concentrated on the large store end in terms of anti-competitiveness, and more or less ignored the fact that Tesco and Sainsbury in particular, and supermarkets in general, have assimilated many smaller stores and moved into the convenience end of shopping. For some reason, the Competition Commission did not seem to think that was important. However, it is crucial because one should measure not just the effect of large stores, but the overall impact. If my hon. Friend does not mind, I shall say more about that later.
Does the hon. Gentleman agree that supermarkets find themselves in an impossible position? When they try to open an out-of-town supermarket, people complain that they are destroying town centres and high streets. When they then open stores on the high street, they are criticised for creating unfair competition for other shops on the high street. Will he say where he is happy for supermarkets to open, because they seem to be in a no-win situation?
It would be nice to have a level playing field, but we do not. The fact is that supermarkets are so important in our lives that they must be prepared to take such criticism, respond to it and, if they behave as we want them to behave in a moral sense, they may be able to persuade at least some of us that they are more rational in the way in which they respond to such accusations. [Interruption.] The hon. Member for Castle Point (Bob Spink) is shouting at me from a sedentary position.
As the hon. Member for Cities of London and Westminster, who initiated the debate, said, it is about time that we had a proper debate on the issue because things are often not said. It is important that we at least have the opportunity to help.
That is by nature anti-competitive because none of the independents can compete, so it is an important point. I was just about to say that in the original report from 2000, the Competition Commission found some 27 anti-competitive practices. A number of them have been reaffirmed in this report and in other things that the Competition Commission has said. It is interesting that it is possible to find those practices. Accusations are made that such things go on behind closed doors and below the radar, so the fact that those practices have been identified is good in the sense that we can do something about it.
The hon. Member for Cities of London and Westminster referred to land banking. I do not want to say much about that. The emphasis of the report was supposed to be on land banking, and it is significant that it moved from that to considering the wider aspects of the way in which supermarkets behave. The issue of the ombudsman will get most of the publicity, which is not necessarily a bad thing. When the Select Committee on Environment, Food and Rural Affairs looked at the milk industry, some farmer organisations argued strongly for a regulator body—an “Ofmilk”—to be set up in relation to that particular trade. Some of us had misgivings about that because we did not think it would be powerful enough or willing to do the real groundwork. However, the matter is at least worth considering and if regulation is the way forward in dealing with anti-competitive practices, why not have it in that area? Energy and water are regulated so why not have a regulator for something that makes up an even more important part of people’s everyday life—their consumer purchases.
I have misgivings about some of the outcomes of the report because they rely on voluntarism. The idea that a stronger groceries supply code of practice—that phrase slips off the tongue easily—will make a lot of difference is somewhat naïve, although the fact that we now have such a code shows that supermarkets are not completely immune to the wider world and the political process.
I have a number of points that I hope my hon. Friend the Minister will comment on. The fundamental problem with what the Competition Commission has done—and what the Office of Fair Trading did previously—is that it looked at the evidence that it already had or was given. As I said in the earlier debate, there are questions in relation to who gave evidence, the evidence they gave and, more specifically, who did not give evidence and why. Behind the scenes, a lot of evidence shows that even the strongest suppliers are wary of saying anything critical about supermarkets—even in the confidential opportunity they were given as part of the process, and that must be borne in mind. Much of the opposition—somewhat inevitably—was led by the Association of Convenience Stores. However, the association could never match the ability of some of the larger suppliers to dish the dirt if they had wanted to. They chose not to and that is a weakness in what we have been presented with.
We do not have to look far to find accusations of price fixing. The last edition of The Sunday Times considered the effectiveness of the mark-up on some products across the board in supermarkets. Not surprisingly, the accusation is that when discounting takes place, it happens across the board. As I said in our previous debate on the subject, the argument regarding larger suppliers is not that their main brands would be removed from the supermarket shelves—supermarkets would not be stupid enough to do that—but that they put pressure on suppliers with any new or less popular brand. That is something that has been largely ignored and it needs to be examined.
The idea that the high street has not suffered—I know that is a paraphrase of the report—is somewhat tendentious. I heavily criticise the commission for the belief that competition per se compensates for the fact that the high street may have been weakened. I come back to an argument I have made before: it would be useful if the definition of a supermarket’s power was redefined. It is crucial to look at a supermarket’s impact on the smaller convenience market as well as on larger stores. The Competition Commission will have to keep looking at this matter and the next time it does so it should make that redefinition and carry out a more complicated analysis of the real impact. As the hon. Member for Castle Point said, the 15 per cent. advantage and the way in which supermarkets can use the supply chain to get value into their operations are clearly of immense value and put independent operators at a strong disadvantage.
If one good thing has emerged, it is in respect of the power of the ombudsman. If we are to have an ombudsman, he must have teeth. The ombudsman must have sufficient resources to investigate and deal with any anti-competitive practice. He must also be able to report on such practices and do something about them. Since we have been through this process, the OFT has become much more aggressive. I do not know whether that has happened by accident or whether it is a good result, but there is some evidence of the OFT beginning to put the boot into practices that are clearly unacceptable.
I would like to think that this place also has a role to play because too often Parliament is an afterthought in the way in which such reports are considered. We could have an annual debate on the role of supermarkets and their practices. One of the things we could consider is the morality that we expect supermarkets to display. For example, we have had various debates about the selling of cheap alcohol—my hon. Friend the Member for Barnsley, Central (Mr. Illsley) mentioned it on a previous occasion. There ought to be a careful examination of the alcohol policies to which supermarkets adhere. That is worthy of proper investigation if we are genuinely trying to tackle law and order because we all know where the root of such problems lies. Likewise, we need to consider obesity, and what foods should or should not be sold.
Surely the hon. Gentleman will appreciate, as I hope all hon. Members would, that ultimately the customer—the consumer—must be king in relation to many of these matters. However, I entirely agree with his view that Parliament is the right forum to raise consciousness about these issues, although I hope we will not have more and more regulation as I do not think having an ombudsman is an effective way forward. Does he agree that over the past year raising issues such as obesity and alcohol deals has led to supermarkets changing their practice and being aware of those broader concerns? In many ways, Parliament having its say through an informal system is working quite well to the benefit of consumers, suppliers and the supermarkets themselves.
On alcohol pricing, does my hon. Friend agree that it is significant that earlier this year Tesco admitted there would be low-cost selling for the first time? It called on the Government to consider legislation that would allow minimum pricing for alcohol. Does he agree that once the Department of Health study on the effects of low alcohol pricing is published in July it is incumbent on the Government to respond to that call from Tesco?
The answer to that is yes. We look forward to that, and my hon. Friend is right to raise the issue.
A further issue relates to gangmasters. My hon. Friend the Member for North-West Leicestershire (David Taylor) and I are members of the Select Committee on Environment, Food and Rural Affairs, which considered that issue some years ago. It was interesting that the supermarkets’ attitude was basically not to ask questions about how they source their materials. They have since learned that they need to be careful.
Before I conclude, I shall make a point that I mentioned in our previous debate on the subject. How do we use the Sustainable Communities Act 2007 to allow communities to begin to re-empower themselves to deal with the problems of clone towns and ghost towns? I would like us to debate that point properly in this place once the Act is fully in force, later this year. I hope that it will be another way for us to examine the operation of supermarkets and how we may need to curtail some of their market power.
I welcome what the hon. Member for Cities of London and Westminster has done, because it is right to have the debate at this time. Some of us will do more. I know that the hon. Member for St. Ives (Andrew George)—the witchfinder-general, as I lovingly refer to him—will have even more to say than me. I hope that we will begin to move in the direction that I have described and make people realise that there is at least a need for a debate and to hold the supermarkets to account. I hope that this is just one of many debates in which we can all take part.
Thank you, Mrs. Humble; I will certainly be brief. I congratulate my hon. Friend the Member for Cities of London and Westminster (Mr. Field) not only on securing the debate, which we all agree is on an important subject, but on presenting his case in a balanced and very sensible way. I spent the 12 years before I entered Parliament working for Asda, so I perhaps have a vested interest in defending the honour of supermarkets. In my time in Parliament, I have been appalled by how many hon. Members, despite the fact that many of them hold surgeries at their local supermarket and that many of their constituents are employed by and are customers of their local supermarkets, tend to take the option of sticking the boot into supermarkets, perhaps because they see them as an easy hit. They may think that they can court some easy popularity by sticking the boot into big business. The debate that we tend to have in Parliament about supermarkets is very one-sided. That is why I think that my hon. Friend did a great service by restoring some balance to the debate.
It is important to consider why supermarkets have been so successful over the past 30 years. Why they have done so well is no secret: they offer low prices and great convenience to their customers, and they are very good at looking after both their customers and their employees. I was proud when I was at Asda that, for virtually every year, it was rated one of the top 10 employers in the country. It offers some of the best terms and conditions with regard to flexible working and the employment of older people, giving them an opportunity in the workplace that many of them did not think that they would have. Some of the employment practices have led the way and set a shining example to many other people. As my hon. Friend also said, supermarkets offer many free car parking spaces.
We should reflect on what the upshot would be if some hon. Members had their way on, for example, regulating alcohol prices, which the hon. Member for Selby (Mr. Grogan) feels strongly about, and on the issue relating to suppliers. The upshot will be that customers pay more for their shopping. Customers will pay more to buy alcohol at the supermarket. I sometimes wish that hon. Members would be much more honest and open about the upshot of what they are asking for. They are asking for their constituents to go to the supermarket and pay more for their weekly shopping than they otherwise would. It is important to make it abundantly clear that that is what some people are trying to achieve.
If we want to help smaller shops and the high street, one of the best things that we can do is to ensure that there is free parking in town centres and not such restrictive parking, with people told that they can park for only 20 or 30 minutes at a time. How on earth is anyone expected to support local shops when parking restrictions are so tight? One of the best things that we could do is to ease the restrictions on car parking in town centres. That would, in one fell swoop, do more for local shops than anything else, yet many hon. Members who bemoan the death of the high street are those who, supposedly for environmental and climate change reasons, are the ones asking for the highest car park charges to deter people from driving into town centres. Some people should reflect on what their top priority is when deciding these matters. It is no good shedding crocodile tears at the death of high street shops when some of the parking restrictions and car parking charges are putting them out of business.
It is important to make the point clearly that supermarkets do not put small shops out of business. There is only one group of people who put businesses out of business—customers. When a supermarket opens in a high street, an out-of-town area or, indeed, anywhere, it does not use lassoes to grab people round the neck and drag them kicking and squealing into the shop against their wishes. The supermarket simply opens its doors, offers the customers what it thinks they want and sees what happens. If customers wish to maintain their local butcher, baker and greengrocer on the high street, it is entirely within their hands to do so, because all they have to do is keep shopping at their local butcher, baker and greengrocer and those businesses will stay open and continue to thrive. It is always easy to blame someone else; we have a “blame someone else” culture in this country. It is easy to blame other people for the demise of small shops, but the demise of small shops takes place only when customers themselves stop shopping in them. It is important to make that clear.
When I worked for Asda and we proposed opening a store in a particular location, small businesses and small shopkeepers were sometimes the most vociferous supporters of Asda opening in their area. The reason for that was simple: they knew that the supermarket would drive footfall into that area and that they could benefit from that increased footfall. In my constituency, the most dominant part of Shipley town centre is without doubt Asda. I would say to anyone that, without Asda in the town centre as the biggest local retailer, the town centre in Shipley would probably be dead because no one would do their shopping in Shipley at all. Local shops in Shipley benefit from the footfall that Asda brings to their area. In Bingley, another part of my constituency, which we are regenerating, one of the most crucial aspects of that regeneration is getting a supermarket as part of the new shopping centre that will be developed there. Supermarkets can help to regenerate shopping areas; they are not the kiss of death, as many people would have us believe.
It is important to touch on some of the comments in the Competition Commission report, because these things seem never to be mentioned. The report stated:
“UK grocery retailers are, in many respects, delivering a good deal for consumers… In many important respects, consumers are receiving the benefits of competition, such as value, choice, innovation and convenience.”
The commission made it clear that food prices were lower as a result of supermarkets:
“This decline in real food prices is likely to have delivered significant benefits to consumers as shopping bills for the same basket of goods would now be lower in real terms than was the case seven years ago”.
It also said that
“had competition in more local markets been more intense, the decline in UK grocery prices…may well have been greater.”
With regard to dealing with suppliers, the commission said that
“the exercise of buyer power by grocery retailers is likely to have positive implications for consumers.”
We should clarify some of the benefits that consumers have had from their dealings with supermarkets. Not that long ago, there was something in place called the net book agreement whereby publishers could basically set the price that they wanted for a book—and they often set very high prices. Asda challenged the net book agreement in court, with the consequence that books are cheaper now than at any stage in our history. It has delivered those benefits to customers. People would be paying much more for items such as books without supermarkets.
I am mindful of the time and will draw my remarks to a conclusion. I hope that we will end the one-sided argument that we have had in the past about supermarkets and acknowledge the great benefits that they provide both to their employees and to their customers.
It is a pleasure, Mrs. Humble, to have the opportunity to take part in this debate. I congratulate the hon. Members for Cities of London and Westminster (Mr. Field), for Stroud (Mr. Drew) and for Shipley (Philip Davies) on their contributions.
The reason why I am involved in the debate is that, during the Competition Commission inquiry, I chaired a group of non-governmental organisations, lobby groups and others, including the British Brands Group, the National Farmers Union, the National Farmers Union Scotland, the Association of Convenience Stores, Friends of the Earth and ActionAid, which came together to discuss the extent of the inquiry. They wanted the commission to take account of the impact that supermarkets have on suppliers and primary producers in the grocery supply chain, which was not initially included.
The main issue that I wish to raise today is the outcome of the evidence session that I had with Peter Freeman, the chairman of the Competition Commission inquiry, and his team on 13 March, the transcript of which is on its website. In particular, we dealt with the treatment of suppliers—an issue that has been touched upon by all the hon. Members who have spoken this morning.
The hon. Member for Stroud described me as the witch hunter general on this issue. I am sure that he intended that kindly, but I assure him that I am not coming at it from the perspective of the politics of envy or resentment, as the hon. Members for Cities of London and Westminster and Shipley suggested. Like others, I congratulate those in business who are successful; provided that it is done with endeavour, skill, hard work and so on, I share in the applause.
I argue that the supermarkets’ success is not built on being morally bankrupt or ethically unsound. They are not the product of the loins of the devil, and I do not look at them from that perspective. Their approach is entirely rational. If I were a supermarket chief executive, I would behave in precisely the same way. I would squeeze my suppliers for as much as I could, and I would swallow up smaller competitors as far as possible. If I did not and my three fellow competitors did—those left standing after decades of competition—I would clearly lose my market share, and my shareholders would be incredibly disappointed with me.
The hon. Gentleman parodies the way in which avaricious business might operate. Does he not realise that supermarkets do not behave in that way? I realise that, at the margins, they clearly have a duty to maximise shareholder value. However, given the way in which they try to operate and the amount of scrutiny pushed upon supermarkets both here and in the media, they behave very differently from that parody. As for suppliers, there is a recognition that they need to be looked after, not least because of the work that the hon. Gentleman does in Cornwall. This is about getting that balance right. The arguments about milk upset the supermarkets over the past five years, because they were doing their best to try to encourage suppliers.
That is a debating point, and we obviously do not have time to take it further today. I spoke in a straightforward manner to get the point across. I would not describe it as a parody. However, if we had the opportunity, I would be happy to debate the matter with the hon. Gentleman at greater length.
I agree with the hon. Gentleman on the theme that he was drawing out in his speech and on the conclusions that he reached. I agree that we should use regulation only as a last resort. We, as legislators, are conscious of the fact that we do not want to surround businesses with red tape and regulation to the point where they are held back. When considering all the issues, but particularly the relationship between very large supermarkets and their suppliers, many of which are large companies, we must realise that any form of regulation is a matter of last resort.
I had various roles with the Liberal Democrats before chairing the cross-cutting group that gave evidence to the Competition Commission. For instance, I was involved in setting up the party’s policy on establishing a food trade regulator with proactive powers within the Office of Fair Trading, although I have many misgivings about the way in which the OFT operates. None the less, I believe that proactive powers are important when considering future regulation. We need to ensure that regulation has as light a touch as possible.
In 2000, the Competition Commission identified 27 practices that could distort competition. It recommended the introduction of a supermarket code of practice, to which the supermarkets eventually agreed. In its latest inquiry, which was concluded only a few weeks ago, the commission identified a number of practices that continued and extended the total to 43. It found that some practices are more prevalent than before. Those are the kinds of practice that I mentioned in an intervention. They include payments for shelf space, over-riders and late payments, the retrospective invitation given at short notice that suppliers should pay for a promotional campaign such as two for the price of one. Such practices are clearly identified by the commission as being anti-competitive. Those practices need to be driven out, and it will be ultimately to the good of the supermarkets if they are.
I understand, Mrs. Humble, that my hon. Friend the Member for Brent, East (Sarah Teather) is prepared to give some time to my hon. Friend the Member for Southport (Dr. Pugh). I have a question. I have debated the matter with the Competition Commission and raised the issue of how to introduce an ombudsman with proactive powers. Following the evidence session in March, I corresponded with Peter Freeman on the implementation of that policy. He wrote to me on 21 April, saying:
“We indicated during the evidence session that we intend to recommend to the Department for Business, Enterprise and Regulatory Reform (BERR) that, in the event that the Ombudsman cannot be implemented by means of undertakings from the relevant retailers, BERR should take appropriate action for the establishment of the Ombudsman. The fallback option, should this recommendation not be acted upon, would be for the Office of Fair Trading to monitor and enforce the Code, and for suppliers and retailers to have recourse to arbitration of disputes by an independent expert, such as the Centre for Excellence in Dispute Resolution.”
He went on to say:
“In cases such as this, our general view is that the choice of implementation instrument is a matter for government.”
The supermarkets may not be prepared to countenance the establishment of an ombudsman, but I would urge them to accept it, as it will provide some reassurance for consumers, suppliers and all who work in the trade that the supermarkets are prepared to be transparent—something that does not happen now. It would also remove the climate of fear from the marketplace. I hope that the Minister will indicate what response the Government will make if supermarkets are not prepared to accept an ombudsman, which is the clear recommendation of the Competition Commission.
I congratulate the hon. Member for Cities of London and Westminster (Mr. Field) on introducing the debate and on avoiding some of the mis-nostalgia that surrounds it. I can certainly remember being taken to lots of local shops as a small child, when there would be a conversation with every customer at every call, which took an enormous amount of time and caused enormous irritation—the same irritation that I enjoy now in the wrong queue at the supermarket.
It is a principle of democratic socialism that markets can be made to work for the good of communities, not that they necessarily will, hence the case for some sort of state regulation. The British retail market as a whole—not just the grocery market—is dominated by four supermarkets, one of which is especially dominant, so anybody with a watching brief must be aware that there can be problems, as indeed there are. Food is not cheap by European standards—the figures today show a 7.5 per cent. increase in prices—market shares are concentrated, competition is more apparent than real and town centres are genuinely struggling. To those things the UK has a limp-wristed response, in my view.
Such is the power and size of the supermarkets that they can kill competitors fairly and unfairly. One need only look at my constituency for an example of unfair competition, where every local small garage was more or less killed off by Tesco’s selling cut-price petrol. However, a few years later, those sites became Tesco Express shops and the price of petrol at Tesco went up.
Supermarkets have the capacity to destroy to town centres. The problem cannot be resolved by introducing free car parking because town centres need to ration car parking; otherwise, retailers would arrive first thing in the morning and take every slot available and make it impossible for people to park. Supermarkets bully suppliers, make them pay for special offers and, unquestionably, add to the carbon footprint of shopping and retail in general. We must accept that all those things are bad for the community. Supermarkets also do good things, as has been highlighted. They increase the variety and quality of goods, reduce costs and improve the level of convenience for some shoppers, particularly young, mobile car owners who have limited time.
The proposed solutions to the problems are somewhat doubtful. To have an ombudsman to whom one can complain about the most dominant and powerful customer is about as good as asking people in Sicily to complain about Mafia protection rackets—it would have more or less the same impact. Supermarkets are not stupid. They stay close to the Government—we need not talk about Lord Sainsbury, but simply look at the role of the head of Tesco in various taskforces set up by the Prime Minister—but they are perfectly competent and ready to ignore local government because their profits and buying power are so huge, and to fund whatever planning appeals stand in their way.
It was suggested that Tesco is community-minded. I asked my local Tesco to do something to help recycling in the area and perhaps to provide a few more facilities in its enormous car park. However, it was worried by the litter that that would create and refused to spend even one penny on improving the recycling of what was largely its own product packaging.
Alcohol sales were mentioned. I went to my local Tesco the day after the Budget and the furore about reducing binge drinking to find that lagers, ciders and so on were on special offer and heavily discounted. It does not have an unblemished record. There is a case for better Government regulation of fair trading, competition and planning. Far be it from me to recommend democratic socialism to the Government, but I think that intelligent regulation would help.
I congratulate my constituency neighbour, the hon. Member for Cities of London and Westminster (Mr. Field), on securing the debate. The opportunity to debate the Competition Commission’s findings is welcome. It has conducted two inquiries in the past decade into supermarkets. We had a debate only a couple of weeks ago, but that preceded the publication of the report, so the debate today is welcome.
There is no doubt that supermarkets have changed how we shop. Most of us, including me, use them, and I am quite willing to admit that I enjoy using supermarkets. I like the convenience and the fact that I can turn up and get everything that I need in limited time, put it in my car and drive off. I confess to that, as most other Members of Parliament would if they were honest about it. However, I also like the convenience of using my local shop. I can pop out to the shop at the end of my road, which is open late at night, to buy things that I need, and I like the diversity of the high road. Like most other people, I have a kind of schizophrenic attitude to supermarkets. We perhaps need to begin by admitting that we want diversity in the high street, but that we enjoy using supermarkets. There is no point in pretending anything else. That is particularly the case for people with families who find it much easier to strap two kids into a trolley than to negotiate several shops with a couple of toddlers in tow.
The British public spend £130 billion a year on groceries, and the top four supermarkets share 75 per cent. of that market between them—independents are now at less than 3 per cent., and the Co-op at about 4.5 per cent. of the market. That dominance has both negative and positive consequences, which have been discussed in the debate. The negative effects are based on price and the perception of price caused by the ability of supermarkets to drive down the cost of supplies; the undoubted impact that they have on town centres; and the ability to wield huge power over suppliers, which has led to abuse—my hon. Friend the Member for St. Ives (Andrew George) discussed that in some detail. However, as the hon. Member for Shipley (Philip Davies) said, supermarkets can be major employers in an area and they often take flexible approaches to employing people with disabilities and older people, who might find it difficult to gain employment elsewhere. Some supermarkets are involved with their communities, and others are not. We heard examples of bad practice from my hon. Friend the Member for Southport (Dr. Pugh), but I have seen good and bad examples in my constituency.
The relationship between supermarkets and small independent shops is complex. The advent of a new supermarket may drive out local shops, depending on whether free parking in the high street is provided. Like my hon. Friend the Member for Southport, I believe that abolishing all restrictions on parking in town centres is probably a little silly and that it would not, in fact, solve the problem that the hon. Member for Shipley said he was trying to solve.
Huge market dominance also provides opportunities for supermarkets. Their brand recognition and trust would allow them to take a lead on things such as environmental policy, packaging, antisocial behaviour and alcohol, and to incentivise consumers to change their behaviour, but whether they choose to do so is another matter.
The Competition Commission looked at two issues: the impact on suppliers and the impact on consumers where there is a local monopoly. I was extremely disappointed that the commission did not look at competition between supermarkets and local shops, and that it focused exclusively on competition between supermarkets. I feel, as the hon. Member for Cities of London and Westminster said, that the report consequently missed the point. He mentioned the Evening Standard, which has a long-running campaign to protect local shops and high streets, for which I applaud it. The commission missed an opportunity by examining whether there was adequate competition between Tesco and Sainsbury’s, not whether people wanted diversity of shops on their high street.
There is no doubt that there has been an enormous loss of small shops. That is not a new problem and I do not want to say that it arrived in 1997: from 1991 to 1997, 4,000 food shops closed in rural areas; between 1997 and 2002, 50 specialised shops—butchers, fishmongers, newsagents and so on—closed in the UK every week; 25 corner stores close every week now; and almost one in six independent convenience stores has gone in the past three years. They are often the shops that sell local produce. We have seen examples of supermarkets trying to corner the market on farmers’ markets, ensuring that they sell more local produce, but in truth, if local shops go, there is not much chance of sourcing produce locally and following a regime of fewer food miles. Since 2000, a further 4,000 convenience stores have closed down and a further 5,500 have been bought out by major chains, which the hon. Member for Stroud (Mr. Drew) alluded to.
What can be done? I do not have much time left, so I will raise just a few points, to which I hope the Minister will respond. For some time, the Government have been promising to publish their new planning guidance—PPS6. The Competition Commission recommended maintaining the needs test, but other hon. Members and I believe that it is vital that it is not just a competition test and that it allows for some examination of diversity on the high street. I recognise the commission’s point about a supermarket having a monopoly in an area and therefore being able to raise prices, but it is also vital to take diversity into account.
We must also consider the flexibility of local councils with respect to planning issues. I want councils to be able to develop their own use class orders, so that they could, if they wanted to, require a change of use when a local independent shop was replaced by a multiple retailer. Moreover, there is the issue of the cost of appeals, to which my hon. Friend the Member for Southport referred. Making firms pay for their own planning appeals would make a huge difference in that respect.
This is a question of balance. Consumers want choice and like using supermarkets, but they also enjoy using their local shops. It is for central and local government to ensure that that balance is maintained.
Let me say what a pleasure it is to serve under your chairmanship yet again, Mrs. Humble. My only reservation is that I often do so in the morning, and my eyes are sometimes rather blearier than they should be. None the less, it is a particular pleasure to serve under you this morning.
I congratulate my hon. Friend the Member for Cities of London and Westminster (Mr. Field) on gaining the debate and on his balanced view of this situation, whose importance is growing considerably throughout the country. I was particularly delighted when he intimated that attacking one section of the market as against another would do us all a disservice. We need to create a balanced view. I took some exception, however, to his remarks about melon-bellied traders. I noticed that he glanced particularly in my direction when he said that, but I shall take that up with him privately later.
I speak as the chairman of the Conservative party’s commission into small shops in the high street, which has been looking into a number of issues that impact on the problems of our small shops. Increasingly, our conclusion is that balance is the word that we need to keep in our minds when discussing this problem and reaching conclusions. When my commission was gathering evidence, I met representatives of all the major supermarkets, and it is true that there appears to be a real problem of balance between the large supermarkets and independent retailers and between out-of-town and edge-of-town development over 30 years, which is a sizeable period. During that time, there has also been a commensurate decline in many of our community hubs, town centres and edge-of-city centres. It is a very complicated situation, but we must recognise that there is a connection. We must do something about that, not least because our communities’ hearts are just as important to them as our hearts are to our individual bodies—when they function properly, they are the essence of our communities and give them their robustness. It would therefore be silly to ignore the importance of those hubs.
The commission looked at the uneven playing field with regard to out-of-town supermarket car parking and in-town car parking, but many of us are not necessarily sure that the business rating system properly reflects the big business advantage that supermarkets have. Has the commission reached any conclusion on that? It considered the possibility of charging for car parking at supermarkets, but has any other conclusion come from that?
Does the hon. Gentleman accept that Government policy plays a part in preserving our high streets, so that they can serve vulnerable groups and give them access? Does he accept that the move towards centralising GP services and introducing big pharmacies on Canvey Island, for instance, is threatening six pharmacies that serve people there and that that will reduce access for vulnerable groups on Canvey Island, as elsewhere?
The hon. Gentleman raises an important point, which my commission is considering at this very moment. There is a real issue about the availability of pharmacies, particularly in rural areas, and we need to consider that in greater depth. I therefore thank him for his remarks.
Hon. Members will be familiar with the key facts about the growth of supermarkets, so I do not need to rehearse them. I am sure that hon. Members know that the acquisition of land has become a sizeable problem and that the number of big stores owned by the supermarkets has doubled since 2000, which is a major concern. Hon. Members will also know that 2.4 million sq m of additional retail space—it is not all grocery space—will be added to the market between 2008 and 2012, bringing the total to 28.3 million sq m by 2012. However, only 40 per cent. of the new retail space that is planned over the next 10 years is for our town centres. When I say that it will be retail space as opposed to grocery space, hon. Members will see what a hit that will be for small shop provision in our town centres. We need to be very aware of that movement. As I said, this is a question of balance. Let me say to my hon. Friend the Member for Shipley (Philip Davies), who made a vigorous defence of supermarkets, that that balance is important.
We have talked about the other matters that the Competition Commission attempted to address, including the role of the competition test in larger planning decisions; the new strengthened code to extend groceries; a supply code governing supermarkets’ conduct with regard to groceries; action to prevent land agreements, which can restrict competitors’ entry into the market; and an independent ombudsman to enforce the code. I welcome those proposals in part, but we need to look at the issue of ombudsmen very seriously, because they often add to problems by lengthening the time that it takes to arrive at solutions. We must take that into account.
My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) said that the needs test has the most direct relevance to the retail sector and the commercial balance of large and small retailers in any given town or village, and the Competition Commission noted the importance of that in its investigation. The test gives some protection to smaller businesses, particularly in town centres. We need to recognise that, and I ask the Minister about the issue when I conclude.
Small shops are the lifeblood of local economies in many of our small communities and provide a lifeline to local residents, and their survival is vital to the well-being of the community hubs that I mentioned. We must ensure that out-of-town developments work with the needs of local communities, not against them. In the light of the Competition Commission’s recent and final report, will the Government therefore review their position on the needs test? Does the Minister now agree that it should be retained?
The commission also recommended introducing a stronger groceries supply code of practice, which would be enforced by an independent ombudsman. Will the Minister furnish us with further details about that, bearing in mind the concerns that I have expressed?
Given that the burden of regulation that the Government have created over the past 10 years has seriously increased and tends disproportionately to affect small and medium-sized businesses, what do the Government intend to do to support those businesses, which operate mainly in our town centres?
The issue before us is about balance, but it is also about the health of our communities. We are discussing a wider social issue, which is important to many of our constituents, so I look forward to the Minister’s response.
I, too, congratulate the hon. Member for Cities of London and Westminster (Mr. Field) on securing the debate. I welcome the contributions that we have heard from both sides of the Chamber, not least the contribution of my hon. Friend the Member for Stroud (Mr. Drew). Among other things, he praised the continuing, excellent contribution of the Co-op retail sector and the benefits that it brings to consumers and to the strength of the high streets in which it operates.
The hon. Members for Shipley (Philip Davies) and for Southport (Dr. Pugh) made the most robust contributions to the debate, even though from slightly different perspectives. I listened with considerable interest to the concerns of the hon. Member for Shipley about town centre parking and found myself almost agreeing with him. Perhaps that reflects my experience and the experience of businesses in my constituency at the hands of the Conservative-controlled Harrow council, which has consistently failed to listen to the representations of businesses in south Harrow and Rayners Lane about the cost of parking there. That lack of listening might explain why the Audit Commission recently rated it as the worst-run authority in London.
The hon. Member for St. Ives (Andrew George) talked about development and highlighted the important contribution that supermarkets can make to encourage trade from developing countries into UK and European Union markets. I hesitate to provoke disagreement between him and the hon. Member for Brent, East (Sarah Teather), but she raised the debate about food miles—a debate that I find entirely erroneous. Many of those who highlight the need to reduce the number of food miles do not recognise that goods made in many developing countries are produced using fewer carbon dioxide emissions than goods produced elsewhere.
It is a pleasure to follow the hon. Member for Northampton, South (Mr. Binley), whom I congratulate on his elevation to the Front Bench.
I look forward to it being permanent, as that could only improve the quality of the Conservative Front-Bench team.
Notwithstanding her comments about food miles, the hon. Member for Brent, East struck the right note regarding British consumers. We want supermarkets to continue to function effectively, but we also want to benefit from the contribution that small shops make to our high streets. As the hon. Member for Cities of London and Westminster made clear in his opening remarks, supermarkets generate considerable passion in that context. We must separate the behaviour, or not, of supermarkets from the changes that have occurred in the past 10, 15 or 20 years to the way in which we live our lives and the way that we shop as consumers. As the hon. Lady said, as we lead busier lives, we want to do more of our shopping in one place. That has undoubtedly had an impact on markets.
We must recognise a truism that the hon. Member for Shipley discussed and that all hon. Members have picked up in various ways—supermarkets are a thriving and dynamic part of the economy, and their success benefits not only their shareholders, but local communities, their employees, their customers and our regional and national economies. In 2007, an estimated £110 billion-worth of grocery sales were made through nearly 100,000 grocery stores across the UK. It is true that the eight largest grocery retailers accounted for about 85 per cent. of total grocery sales, with the largest four accounting for just over 65 per cent., but it is important to recognise that some supermarkets play a vital, anchoring role in a number of town centres. Occasionally, they also play a crucial role in regenerating town centres. In the community of north Harrow, where I live, businesses and local people are desperate to have a supermarket back on the site of the old Safeway store, to help to generate new business and to create opportunities for vulnerable consumers in the area. Supermarkets provide much-needed employment and help to attract other, smaller retailers to set up shop in their shadow.
We should also acknowledge the contribution that British supermarkets have made in improving their ethical sourcing and environmental performance, whether on climate change or waste. I think it was my hon. Friend the Member for Stroud who talked about plastic bags. We look forward to supermarkets doing further work in that area.
We welcomed the Competition Commission’s thorough report, which was published on 30 April. The commission found that, in general, the groceries market is delivering a good deal for consumers, but it identified two key concerns. First, several grocery retailers have strong positions in a number of local markets, and that could lead to a poorer retail offer to the consumer. Secondly, the commission believes that the transfer of excessive risk and unexpected costs to suppliers has an adverse impact on investment and innovation.
To address those concerns, the commission proposed several remedies, mainly concerning the use of restrictive covenants and exclusivity arrangements on land sites, which it has the power to implement. Large grocery retailers will be required to notify the Office of Fair Trading of all acquisitions of large grocery stores. In addition, the commission has recommended to the Government that a competition test should be adopted and that the OFT should act as a statutory consultee in that process.
The hon. Member for Brent, East asked about the review of planning law, which is due for consultation. I am afraid that, at this stage, I can say only that we will soon publish our proposals for revisions to planning policy statement 6. When we bring our proposals forward, we will take full account of the commission’s recommendation on the competition test.
The commission also proposed that there should be a grocery supply chain code of practice. Such a code would expand the number of supermarkets that are covered by the existing supermarkets code of practice, and certain alleged practices by supermarkets would be prohibited as a result of the code. The commission is seeking voluntary undertakings from grocery retailers to establish an ombudsman to monitor and enforce compliance with the code. The ombudsman would gather information and could proactively investigate retailers’ records in areas in which there had been complaints. Guidance on the provisions of the code would be published, as would an annual report on its operation. I hope that gives my hon. Friend the Member for Stroud some reassurance regarding his worries about whether evidence would be produced to the ombudsman.
Given the time, I am afraid that I will not.
If the commission fails to obtain satisfactory undertakings from retailers within a reasonable period, the Government will be asked to step in and legislate. We are considering the commission’s report in detail, and we anticipate publishing our formal response, with a full plan of action, before the summer recess. I hope that I have dealt with the majority of hon. Members’ concerns on this issue. This has been a useful debate, and I look forward to returning to those concerns in due course.
North East Air Support Unit (Teesside)
This is the second time that I have had the pleasure and privilege of speaking in this Chamber under your chairmanship, Mrs. Humble. I hope that this time will be just as happy as the previous occasion. It is the first time that I have been able to make a submission to the Minister, whom I congratulate on having attained that office. I wish her well in the conduct of her duties.
On 29 November 2005, I initiated a debate in this Chamber on police service restructuring. I was later informed that it was the best-attended debate that this Chamber had ever seen; as I understand it, attendance has never been bettered since. It seems a shame, therefore, that there are only four of us in such splendid isolation today. To my mind, the topic is every bit as important as police service restructuring. In view of what I shall say later, it might be best for me to set out the climate of that debate. The argument concerned whether we should merge the police forces of Northumbria, Durham and Cleveland into one force. It was suggested at the time that the force should be under the leadership of the chief constable of Northumbria, Mr. Craik. The arguments were widespread, because similar proposals were being put throughout the United Kingdom, and it was widely felt that consultation had not been broad or deep enough.
The subject for debate today may be related to that, but it is probably my bad mind thinking that there is a connection. I shall concentrate on a specific aspect of policing: air support. Let me lay out the scene as it is at present. From 1994, the Durham, Cleveland and Northumbria police services were part of a consortium sharing one aircraft, which was held in Northumbria. It was a high-winged monoplane, an Islander—not a Highlander—whose call sign was GPASF, and it was commonly known as Sierra Foxtrot. However, in 1999, it was replaced with a new EC135T1, a blue and yellow helicopter, whose registration number was GNESV and which was commonly called Sierra Victor, although its radio call sign is I99.
A second helicopter purchased on 4 April 2005 is based at the Durham Tees Valley airport. It is an EC135T2, its registration is GNEAU and it is referred to as Alpha Uniform, but its call sign is I55, as opposed to I99. I ask that special attention be paid to the date: 4 April 2005 was about five months before my debate on the restructuring of the police force.
It was felt by Durham, Cleveland and Northumbria police services that the second helicopter was necessary. However, the two models of helicopter are different; I55, the one based at Durham Tees Valley airport, has an autopilot, but I99, situated on Tyneside, does not. As a result, starting in 2010, the I99 will not be able to fly at night without a second pilot, so it will be much more costly to operate. The vehicles normally operate with a jockey—that is, a pilot—and two police constables, though it has been suggested that one of the constables should be replaced by a police community support officer. The helicopters are used by the Northumbria, Durham and Cleveland police forces, as well as those of Cumbria and North Yorkshire, which pay for the use of the vehicles when they need them.
The units provide state of the art support to officers from all the Durham area commands, to other local emergency services and organisations such as ambulance trusts, fire services and the like. They are both equipped with a Nightsun searchlight, a daylight video camera, a thermal imaging camera, digital still cameras and a stretcher. They are used for crime scene searches, suspect vehicle pursuits, missing person searches and casualty evacuations. From April 2007 to January 2008, the air support unit in Cleveland undertook 1,371 tasks in the Cleveland area, including crime scene searches, vehicle pursuits, missing person searches, casualty evacuations and search and rescue operations. During the same period, the unit was involved in incidents leading to 295 arrests in the force area, and recovered property worth more than £191,000.
It is opportune to mention at this stage that during their flights, the helicopters frequently see indications of cannabis being grown. That surprised me, so I would expect you to be surprised too, Mrs Humble. Apparently, growing cannabis requires a fair amount of heat and light, which the thermal imaging cameras on the helicopters pick up, as it stands out like a beacon. The helicopters regularly find indications of where characters are carrying on their nefarious trade.
Why should I be concerned about the two helicopters? I have with me copies of some letters. I remind the Chamber that the second helicopter was purchased on 4 April 2005. At the same time, the Islander—the fixed-wing plane, affectionately called the “plank” because its wing looks very much like a plank—was disposed of. The second helicopter was then obtained, funded by the consortium of the three police forces, which now owns the two helicopters.
On 28 March, however, Northumbria police authority gave 12 months’ formal notice of termination of the agreement to pay for the helicopters. The notice started on the final day of March, so the agreement will terminate in 2009. Three days later, Durham police authority issued formal notification that it, too, was withdrawing from the consortium. Durham and Northumbria have decided to withdraw from the arrangement, and are suggesting that as a result of their withdrawal one of the helicopters be disposed of, leaving only one. Which one is to be disposed of? It would appear to be the one without the autopilot, because come 2010 it would need two pilots to fly it at night. There is a certain amount of fiscal common sense in that. I suggest getting a helicopter with an autopilot to save on manning costs, but that is not what they are disposed to do.
Who says that the police authorities should take that approach? There are a number of advocates. Durham police authority chairman, Peter Thompson, who I understand is not a policeman, said:
“The fact is that purely based on operational need there is only a requirement for one helicopter.”
He argued that current use cannot justify investment in a new aircraft, so it will reduce to one helicopter. He continued:
“There will be no detrimental effect to the people and communities of County Durham and Darlington by the switch to one helicopter. There will be savings and that money can be invested in front line operational policing.”
Both helicopters are available 24 hours a day and cost about £3.5 million a year to run—I can provide specifics if necessary—but Mr. Thompson says that the authority cannot afford them both.
The Durham assistant chief constable, Michael Banks, said that although the helicopters were a good idea when they were first brought in, policing and crimes have changed. When they were first brought in? I remind Members of the date I mentioned earlier—4 April 2005. The second helicopter was purchased only three years ago last month. He says that
“the operational needs of Durham Constabulary can be met by one aircraft”,
“shared use of one helicopter, on call 24 hours a day, will meet our demands without any significant detrimental impact”,
and that the
“air unit still has a vital role to play”—
but with only one aircraft.
Apparently, the decision to use just one helicopter had been made in the best interests of people’s safety after considering how best to spend public funds to support policing. After three years! We will look at that record shortly and consider just how valid those comments are. That view is also advocated by Chief Superintendent Neil McKay of Northumbria police, who has been leading the argument to reduce to one aircraft—I shall refer to him again before I conclude. They are the people suggesting that two aircraft are too many and that one has to go.
A number of people disagree with that view, including the Solicitor-General, my hon. and learned Friend the Member for Redcar (Vera Baird), who appealed to the forces to reconsider. Furthermore, the chairman of Cleveland police authority, Dave McLuckie, has spoken out vehemently on the issue. We should bear it in mind that the area normally to be covered includes 145 miles of coastline, much of it deeply ravined with valleys, and that more than 80 per cent. of the 3,500 square miles to be covered consists of rough moorland, hillside and rural areas. He makes a very valid point:
“A helicopter called out from Newcastle could take half an hour to get to south Cleveland, to places like Loftus and Brotton, by which time it would be too late in the vast majority of incidents.”
If the single aircraft were to be based at Teesside, rather than Tyneside, it would take it more than half an hour to get to Berwick-upon-Tweed. The whole thing is fraught with a lack of logic and has not been thought through properly.
One would expect that view from the chairman of Cleveland police authority, because he is anticipating losing his aircraft from the Durham Tees Valley airport. However, the Berwick borough councillor, Geoff O’Connell, of Belford, said:
“The police helicopter has proved an invaluable tool,”—
I think that we can all agree with that—
“not only in catching criminals but in crime prevention work, and it should not be lost. I would be extremely concerned if the nearest one to us was based at Durham Tees Valley.”
If we have only one aircraft, it can be based only in one area at a time, so there will be an argument over where it should be based anyway. Another person to disagree was, of course, my hon. Friend the Member for North Durham (Mr. Jones), who said:
“If Durham is going to lose its helicopter, there needs to be a public debate and some justification as to why it is being taken away. No decision should be taken behind closed doors.”
I wonder why he made that point. On 28 February, when the matter was being discussed, representatives of the Northumbria and Durham police forces, having met to consider the proposals, abandoned the exchanges and walked out, for no other reason than that they thought the talks should be conducted in secret and that the public should not be made aware of what was under consideration. Such a standard of practice seems rather strange and masonic for the 21st century. It is hardly justified.
It is right, of course, that my hon. Friend the Member for North Durham should take them to task. He took me to task time and time again, in this place, over the police service and restructuring, trying to destabilise my statements—he cannot be present today because he is at a meeting of the Select Committee on Defence. Heaven knows what he might have said about what I am saying today, although of course I disagree entirely with the proposal and I shall explain why.
Part of my disagreement relates to incidents such as those that I am about to describe. On 3 April, a woman of 73, who was in poor health, went missing from the Castle Eden walkway near Stockton. It is a fairly easy walkway, but she had become separated from her husband. The Teesside-based helicopter was summoned and its crew saw the woman walking westbound on the A689. The helicopter was able to land in a nearby field and she was taken to safety. Although she had fallen over several times, she was safely returned to her home. As the chief constable of the police authority said, that example showed how useful the helicopter is in delivering a vital service to members of the public. On that occasion, it quickly helped to reunite a vulnerable missing lady with her husband and prevented her from coming to harm.
On 22 February 2008, the police helicopter helped to scour the River Tees in Stockton after reports came in that a man might have jumped from the Millennium footbridge. On 11 February 2008, the police helicopter airlifted a lorry driver to James Cook university hospital following an accident near the A689 in which 20 tonnes of potatoes spilled on to the road. The helicopter could not do anything about the potatoes, but the crew got the lorry driver to safety.
On 8 February 2008, the police helicopter helped the RAF Sea King helicopter to search the beach at Seaton Carew after reports came in of a man walking into the sea dressed only in boxer shorts. On 28 December 2007, the police helicopter worked with the lifeboat crew to rescue a man who was stranded on rocks off the coast at Redcar. In December 2007, the police helicopter located a group of walkers on the moors who had got lost in the mist. In October, the police helicopter swooped on a Redcar housing estate after reports came in of a man brandishing a samurai sword.
Examples of how the helicopters have been able to assist go on and on. There was an incident in which a young coastguard was dismissed from his job for rescuing a young girl who was lost on the cliffs at night, just below Redcar. The helicopter was able to hover above and shine its floodlight—its Nightsun—which enabled the man to go down and bring back the girl safely. Because he undertook the exercise without the required webbing and lines, he lost his job, even though the girl’s life was saved. In the view of the rescuers, there was no doubt at all that she would have perished if that action had not been taken when it was.
During the floods in Pickering and Malton, about which we have heard so much, people were in serious trouble. The Sea Kings were rescuing people who were in imminent danger of drowning. The police helicopter was able to hover above them and point out where they needed to go to rescue the next group of people. It can work in conjunction with the Sea Kings and the voluntary-funded air ambulance.
Over the past year, stolen goods worth more than £910,000 have been recovered—a 62 per cent. increase on last year. The units were called out nearly 6,000 times in the year, with the helicopters sharing an average of 16 call-outs a day—also a new record. Unit officers attribute the increase in usage to greater understanding among ground forces of how useful air support can be at the scene of an incident.
In the north-east, there has been a 29 per cent. increase in missing person searches, with 832 made in the past year. The unit also made 862 arrests and completed 60 search and rescue operations. Sergeant Dave Clarke, who works for the unit, believes that the most effective use of the aircraft is in high-speed pursuit of stolen vehicles, with 443 call-outs during the year. However, that is with two helicopters. How on earth will the police manage with only one?
It is true to say that twocking—taking without owners’ consent—has almost disappeared. Youngsters now realise that if they decide to twock, they will be detected and apprehended. However, that is when two helicopters are being used. What will happen if the number is reduced to one? It means that the helicopter can be based only in one area, on one field. Will it be based on Tyneside, with a periodic visit up to the Scottish border and Berwick? God knows how long it will take to get down to Robin Hood’s bay in North Yorkshire. Will it be based in Teesside, with a long haul up to Berwick and a substantial haul to Robin Hood’s bay? How will one helicopter maintain the records that have already been established by two? It seems impossible that it will be able to do so. In fact, it is impossible.
I referred earlier to Chief Superintendent Neil McKay, who has been one of the leading proponents of removing one of the helicopters. I find it amazing that he can back such a plan, given that he was the officer in charge of the recent derby football match between Newcastle and the Maccums—Sunderland. The derby matches are usually painted with elements of disorder because what cannot be counted as victorious on the pitch is regularly redressed in the streets in an improper fashion. Chief Superintendent McKay was in charge of police control on that day. I wonder how he would have managed with one helicopter. On the day he needed two and called on them, yet he thinks that they should be reduced to one. Frankly, I have to question his logic, as I had to do with the Home Secretary on 29 November 2005 regarding the reorganisation.
All in, we are faced with a most illogical, insupportable set of proposals based on a need to save money. The police say that the current system is not operational, although it looks fairly operational to me, and it seems to me that they will never be able to conduct their duties properly with only one helicopter.
I should have mentioned earlier another opponent of the proposals: a Durham county councillor—even though Durham is in favour of them—by the name of John Shuttleworth, whom I have never met. He represents rural Weardale, and he said:
“If one of these helicopters is withdrawn, then it is the rural areas which will suffer as usual.”
Some 80 per cent. of the area is rural. He continued:
“Police helicopters don’t only help to catch criminals, they also can help save lives. And with ambulance cover in remote areas already under review, helicopters are needed more than ever before.”
That is just one more of the opinions against the idea of withdrawing one helicopter.
On what basis is the reduction suggested? I remind the House that Peter Thompson, the chairman of Durham police authority, said that the money could be used in other ways. Well, let us see just how much the helicopter service costs. Cleveland police authority makes a contribution of £706,615, which amounts to 0.6 per cent. of its budget. Just over half of 1 per cent. of its budget is spent on the service. Durham police authority spends £705,633 on it. Again, that is 0.6 per cent. of its budget. Northumbria police authority spends £1,862,151, which is 0.69 per cent. of its budget. The police authorities are spending minimal elements of their budget on the service, which is doing so much good in executing arrests, following car pursuits, rescuing people and assisting the military in trying to help us. They want to save on the cost of one person in a night-flying helicopter.
I turn to Policing Today, which is a police magazine. Bernard Hogan-Howe, the chief constable of Merseyside police, makes the following point:
“Although only representing 1-2 per cent. of force budgets, air support is one of the largest discrete items in our budgets.”
It represents 1 to 2 per cent. of budgets, but Cleveland and Durham pay only half of 1 per cent. and Northumbria just slightly more. Across the country, it is 1 to 2 per cent.—two or three times more than those three forces in the north-east pay. The article continues:
“Typically, a helicopter can fly 140 miles in an hour and stay on station for one hour.”
The coastline of the three police areas is more than 145 miles long, with deep ravines and great inlets, so it would take an hour for the helicopter to get from one end to the other. Presumably, it would take half that time to fly from the middle of the coastline to the end. One helicopter will have an awful lot—I nearly swore there—to do to provide any cover at all. Had there been only one helicopter previously, there would presumably have been only half the achievements. The whole thing seems quite preposterous.
Hogan-Howe also made the following point:
“When an aircraft is down for maintenance or repair”,
there are normally arrangements in hand across the country
“to provide reserve aircraft to neighbouring forces.”
But if the helicopter is down at Tyneside, where will the reserve aircraft come from? At the moment, forces can box and cox with their maintenance. One of their arguments is that they fly only seven hours a day. I suppose that if they were flying 24 hours a day, there would be a real danger. The helicopters have to have downtime so that they can be maintained and looked after. Do we complain that a fire engine is out of its garage for only seven hours a day? Is that a basis for complaint? Does the logic appeal to us in any way? It certainly does not appeal to me.
Furthermore, Hogan-Howe went on to say that the increase in the number of aircraft available to the police services was funded by Home Office capital grants and based on two principles. I apologise for my slowness in reading this, but the print is very small and my eyesight is geriatric. He said that the first principle was
“which force made the best operational case to be prioritised to receive 50 per cent. of capital funding”.
Capital funding of 50 per cent. is available to any police force that can justify it. The second principle was
“which force could afford the other 50 per cent. of capital costs and the cash to run the aircraft for every succeeding year.”
So there is an answer. Durham and Northumbria seem to think that if the aircraft required a second jockey to enable it to fly at night, they could readily get funding from the Home Office to provide that alternative. They think that they could put on a sub, take the other one off and send him to hospital.
Hogan-Howe went on to say:
“We need to keep the best of what we have developed”
and improve on it. Would we be improving on it by disposing of half the resources? The whole suggestion is quite preposterous, it really is. I suggest to the Minister in all humility, if I can summon it, that before Northumbria and Durham make bigger fools of themselves than they have already, she persuade them sometime before 2010 to sell I99.
It is a good vehicle—there is nothing wrong with it—with some excellent equipment and it has been functional. I suggest that they sell I99, the one without autopilot, and buy another one identical to I55, which has autopilot; then, we could have total cover throughout.
There is an important piece of information that I must mention. There has been a reduction in efficacy in Tyneside, whereas there has been an improvement and an increase in efficacy in Cleveland. In Cleveland in the past 12 months, there has been an increase of some 11 per cent. in the effective use of the Tees-based vehicle, but there has been a 5 per cent. reduction in Northumbria. However, that does not justify cutting the whole resource in half. In fact, quite the opposite is true.
[John Cummings in the Chair]
According to my information,
“between April 2007 and January 2008 the tasks undertaken in the Cleveland area rose by 11.6 per cent compared to the previous 12 months, while in both Durham and Northumbria they fell by about 5 per cent...the Teesside-based helicopter has flown 13 mercy missions at night, airlifting injured people to hospital since early January this year.”
And this is only the beginning of May. Furthermore:
“Of those flights, five involved casualties with serious injuries and whose lives may well have been saved by speedy airlifts to hospital.
The Northumberland-based helicopter has undertaken four medical flights, with one serious injury, in the same period.”
So they are both performing good work: it is just that we cannot predict when and where we will need them. But that is why they are so useful; that is their whole purpose. It is wrong to suggest that we should cut our resource when it is more necessary than ever, as is borne out by Hogan-Howe’s statements in Policing Today. The case is obvious to me. I do not have any special intelligence to work this out. It is hardly brain surgery.
I hope that the Minister will bear in mind the advice that I am offering. One of the helicopters should be sold in time—it does not have to be done tonight—but in the meantime the police authorities should be asked to reconsider their official notice on terminating an agreement, because the co-operation that followed the arguments about whether the relevant forces should merge has been effective. Cleveland contributed to the consortium, even though it was in serious financial difficulty because of a number of necessary inquiries that proved expensive. Nevertheless, Cleveland police authority saw the wisdom of pursuing the acquisition of a second helicopter in 2005. Three years and one month later, what can be the justification—what has happened in respect of policing need?—for the other authorities saying, “We can now cut the resource in half”?
Was the acquisition of the second helicopter part of the tactic of merging and creating a police empire? I have to pose that question, because it is bound to occur to anybody with half an eye. It does not make sense. We need to retain the cover. The people in the north-east deserve it.
I am disappointed that no other hon. Members are here to make the case, which is obvious. I hope that the Minister can exert her influence on the police in Durham and Northumbria and they withdraw from their course of action. Cleveland made a sacrifice in helping to form the consortium. If Durham and Newcastle withdraw, who can blame Cleveland? It cannot support one helicopter on its own, so why should it contribute when others are dropping them in the cart?
It is a pretty sad situation. I hope that the Minister can redeem it.
It is a pleasure to take part in this debate, especially following such a forensic, comprehensive exposition of the case over three quarters of an hour. I understand why no other hon. Members turned up this morning; even had they done so, I do not think that they would have had an opportunity to contribute to the debate, such was the comprehensive nature of the exposition by the hon. Member for Stockton, North (Frank Cook). There was a certain amount of style and composure in the hon. Gentleman’s presentation, which other hon. Members will find difficult to follow.
I should like to follow up on some of the hon. Gentleman’s observations and rehearse some of the key factors. There are three police authorities in hand, and it is 130 miles from one end of the region to the other, from Berwick down to Staithes. Some 750,000 people live in the central conurbation of Middlesbrough, Stockton, Hartlepool, Darlington and Redcar and, crucially, the petrochemical industry is concentrated in that area, which also contains a nuclear power station. Northumberland is a massive geographical area, with Newcastle, its largest city, at the foot of the region. The two helicopters cost £3.5 million to run and, as has been mentioned, only one of them is operational for seven hours out of a possible 48 man-hours a day. The police classify only 5 per cent. of that use as critical.
The police have said in numerous statements that crime and the methods of crime detection and prevention have changed. I was fortunate enough to participate recently in an event at the Scottish police driver training centre in my constituency and was impressed by the new techniques that it has developed to detect and control cars during chases. The police are well-trained and able to cope with dangerous situations. Therefore, helicopters are no longer required in such circumstances. We have to recognise that sometimes things change slowly and at other times they change a wee bit faster. It is difficult to believe that things have changed that dramatically since 2005, but this issue has been recognised for some time.
There is no getting away from the fact that this matter has been divisive. A well-run consortium, involving three police authorities, has been riven apart. Effectively, the consensus approach that would have been adopted prior to this occasion has been replaced by out-voting or withdrawal from the consortium. I assume that the situation has caused divisions among the police officers, who are arguing against each other about the needs of their police authorities at a time when we need them to co-operate to tackle crime. It is undesirable and unacceptable that the situation has got to this stage.
The situation also makes the Government’s previous desire to have merged police authorities even more difficult to achieve; if police authorities lose trust in one another in such circumstances, it will be even harder to bring them together in some formal arrangement.
I do not want to get into a position of arguing where the helicopter should be based, if there is only going to be one helicopter. That is far too invidious a position to put ourselves in. That decision is ultimately a local one that must be made in the short term.
Perhaps I never made my view on that point sufficiently clear. I am not arguing for one helicopter; I am arguing for two. If we are reduced to having only one helicopter, wherever it is placed, the situation will be inadequate. There should not be a choice; the only option should be to obtain a replacement helicopter.
I heard what the hon. Gentleman said in his contribution. However, the fact of the matter is that councillors from different parts of the region are arguing against one another, because they have conceded that there will be only one helicopter. That situation is extremely unfortunate, especially when we need all the councils, police authorities and the police themselves to work together. It has been a very difficult period, which I hope we can emerge from, and I will make some suggestions about how we can do so.
I suppose that it is little surprise that we are in this circumstance when police authorities are facing increasing financial pressure. The comprehensive spending review was not as lucrative on this occasion as in the past, so it is no surprise that police authorities are looking to make savings wherever possible.
The fire service has adopted a new approach of integrated risk management, whereby it examines all service provision across the board, so that it can make an assessment and a comparison between the different types of provision available. It has made some very difficult decisions that are extremely unpopular, not only with local people in some areas but with the members of the fire service itself. However, that integrated approach is how we need to look at this situation, so that we compare one sort of service provision with another and do not go for a gold-plated service in one area and an inadequate service in another. Nevertheless, adopting that approach will pose some difficult questions.
If we look at helicopters versus ground forces, we would say that helicopters are perhaps relatively expensive per head. They are premium items that have a small number of big successes; their presence is fleeting but dramatic. By contrast, officers on the beat are ever-present—at least, we hope so. Perhaps they are not as ever-present as they should be, but they are more ever-present than a helicopter would be. They have a larger number of smaller successes and that must be recognised; we need to balance the two, helicopters and officers on the ground. However, this is not an either/or situation; it is a matter of ensuring that there is appropriate provision. The helicopters provide a service that simply cannot be delivered by other forms or other tools of service provision.
Ministers are very good at promoting positive initiatives locally and working with police authorities to share in their success. However, a very important principle seems to come into play when difficult decisions are made, when Ministers say, “We believe in local decision making. We can’t have Government Ministers interfering every other day. That’s why we have police authorities and chief constables.” But this is an instance where ministerial direction and governmental support would be beneficial, because we need to develop best practice across the country, rather than the haphazard approach that seems to have been inflicted on the local region of the hon. Member for Stockton, North.
On a couple of occasions, the hon. Gentleman has mentioned the chief constable of Merseyside police, Mr. Bernard Hogan-Howe. Hon. Members may have read an article by Mr. Hogan-Howe in Policing Today, in which he set out the case for a more structured and co-ordinated arrangement to ensure that a countrywide system could be established to extract maximum cover at a cost-effective price. He also envisaged cross-police authority co-ordination, rather than the helicopters working only within one authority area or within an area covered by a consortium of authorities.
The hon. Gentleman laughs, and I think that I understand why. There is co-operation across borders just now, such that the Cumbria and North Yorkshire police authorities pay on a pay-as-you-go basis. However, I am not sure whether that is a common feature throughout the United Kingdom. Certainly, in my part of the world—in Fife—we have no helicopters. I do not know what extra support is provided for Fife when helicopter cover is required, but the system seems to be rather haphazard just now and perhaps a more co-ordinated approach could be provided.
I am not sure what that co-ordinated approach would mean for the hon. Gentleman’s region. We would need to see the detail of how that approach would work out, and perhaps there is a need for two helicopters. However, I am not sure whether there has been a UK-wide study to establish what the appropriate helicopter provision is for each part of the country.
The hon. Gentleman makes a valid point, in agreement with Mr. Hogan-Howe. In fact, the two helicopters are serving not three county services but five, because when North Yorkshire or Cumbria require a helicopter, those authorities simply rent it in. So the helicopter has to cover a substantial area.
Perhaps Cumbria and North Yorkshire have got a very good deal. If they only use a pay-as-you-go service, perhaps they are getting quite a good bargain in the process.
Traditionally, helicopters have been used for surveillance, but they have developed further capability over the years. Reference has been made to the identification of cannabis farms. To try to tackle the drug problem in our communities by carrying out infrared searches is a very interesting use of helicopters.
The chief constable, Mr. Hogan-Howe, also made some important points about cross-service co-operation. For example, there could be greater utilisation of resources for the air ambulance, search and rescue teams and the fire service. Again, reference was made earlier to the air ambulance. When I used to live down in the south-west, in Cornwall, people were very passionate about the air ambulance and raised thousands of pounds every year to support that service. However, it always seemed to me that that was a rather haphazard approach to service provision. I am not saying that the state should always provide every bit of service support; there is a role for charity and other financial donations at times. Nevertheless, it seems to me that we are leaving an awful lot of the system to chance.
There are hurdles to progressing towards a more structured approach. The possible increase in cost may be a factor to consider, and the removal of a certain amount of autonomy from each police authority must also be taken into consideration.
There is also the lack of interoperability. As a defence spokesman, I know that it is really important that US forces and British forces can communicate and utilise the full potential of their resources in times of difficulty. So interoperability between the different helicopters and different equipment is absolutely essential.
There will be competing demands from different regions. There will always be a feeling that perhaps Northumbria, Cleveland or Cornwall is missing out on a UK-wide—or rather an England and Wales-wide—service. So there will be tensions and hurdles to overcome to develop a more comprehensive service.
However, I strongly believe that the approach that I have outlined is the way forward and that the Government and the Minister should provide some guidance and support. This should be not top-down provision, but provision in partnership with the police authorities and local councils, so that a bottom-up need or dependency is created. Therefore, I hope that the Association of Chief Police Officers follows the advice of Mr. Bernard Hogan-Howe and starts some kind of discussion. Such discussions might be under way already, but we are not aware of them.
What does all this mean for the north-east? It may sound as though I have gone off-track in talking about the rest of the country, rather than the north-east. However, there are important consequences for the north-east from the adoption of a more comprehensive approach. Potentially, we have about two years in which to try to catch up with this issue, so that we have a system in place that allows the whole of the north-east region to get the service that it needs and deserves.
I hope that the Minister, having heard my short contribution this morning, will consider kick-starting some discussions between the police authorities and ACPO, to ensure that we have a more comprehensive system in place. The need for that system is quite urgent; we need it so that the people of the north-east can be confident that they have the service in place that they require and deserve. I hope that the Minister will consider that point.
I have two reasons for congratulating the hon. Member for Stockton, North (Frank Cook) on securing this debate. First, we heard him speak passionately in defence of his constituents and, more broadly, the people of the north-east. Secondly, he raises an issue that goes to the very heart of the reform of the police service and, indeed, police authorities. In short, what is the balance to be between prescription from Home Office Ministers in London and the accountability of local police authorities in the north-east and other regions? This debate goes to the very heart of that national question. I will listen with interest to the Minister’s comments, but I want to take some time in what has been a detailed debate to give some indication of what Her Majesty’s Opposition think is the answer to that question.
The north-east forces of Cleveland, Durham and Northumbria have a reasonably good history of effective collaboration, of which the issue that we are discussing is a classic example. I hope that the disagreements that we heard about from the hon. Member for Stockton, North do not sour future collaborative arrangements in other areas in the north-east, because effective collaboration is important if households in the north-east are to get the effective law and order services that they need.
Effective collaboration was one of the key drivers in some of the excellent ratings that those three forces received in the police performance assessment framework for efficiency savings. They and the police authorities that supported their work should be congratulated on delivering those good ratings. Whatever people think about PPAF, if the framework can demonstrate that collaboration works well for certain forces, the Opposition are keen to see it continue. Why? Because effective collaboration can deliver efficiency savings. That does not mean that we want cuts in the police budget—far from it—but making efficiency saving in one part of the budget frees up resources for transfer to other areas of police priority. I am sure that the Minister and Her Majesty’s Government would not disagree with that point. Where the official Opposition disagree with Ministers is on whether enough has been done from the centre to promote more effective collaboration.
In the north-east, the three forces and authorities in question formed a consortium in 1995 that collaboratively provides air support services for their force areas. We heard from the hon. Member for Stockton, North that such services go beyond the three force areas. Other forces are able to access the helicopters.
As we heard, the aircraft are equipped with proper kit. A serious operation is run from the two sites. Each aircraft has a Nightsun searchlight, a daylight video camera, a thermal imaging camera, which we heard about, digital still cameras and a stretcher. The aircraft are used for crime scene searches, suspect vehicle pursuits, missing person searches, casualty evacuation and surveillance when the two proud teams in the north-east play derby matches. I understand the Solicitor-General made those points in her capacity as a local Member of Parliament, particularly in that regard.
As we heard, the authorities are considering the future of the service, in particular whether the two helicopters should be reduced to one. The review concluded that there should be one. I understand that it was carried out by officers from Northumbria, Durham and Cleveland, and that the recommendation was an operational one. I would be grateful to the Minister if she clarified whether it was an operational recommendation that one helicopter could provide an adequate service across the three areas. Clearly, that question is at the heart of this debate. The hon. Member for Stockton, North passionately described in forensic detail and with some logic that going to one helicopter would not make operational sense, but it would be useful to get the nitty-gritty on what the police operational side said. I am sure that the Minister and her officials took the trouble to find out in advance of this debate what the answer to that question is.
In short, I would be interested to hear in the Minister’s winding-up speech whether any knock-down arguments of cost or operational effectiveness meet some of the powerful questions posed by the hon. Member for Stockton, North. I shall make a strange confession for a politician: I do not yet know the answers to that question.
We heard that the talks between the three authorities resulted in a failure to agree on a common position and that the Northumbria police authority gave formal notice to withdraw from the consortium with effect from April 2009. I understand that the consortium members have decided to continue formal negotiations, irrespective of that notice, and to try to reach agreement.
I shall not rehearse all the arguments against grounding one of the helicopters, although I believe that those arguments, which we have not yet heard enough about, need to be put on the record. Northumbria police have argued that crime, particularly vehicle-related crime, has changed in recent years. They seem to be saying that the helicopters were particularly effective at tackling vehicle-related crime in the past, but that changes in policing techniques mean that there are different ways for officers on the ground to deal with incidents such as car pursuits, for which a helicopter might traditionally have been used.
The north-east air support unit costs nearly £3.5 million a year. Questions have been asked about the number of daily flying hours and the amount of time spent on stand-by. Those arguments seem to come from Northumbria, which has calculated that about 50 per cent. of the tasks undertaken by NEASU involve maximising existing resources, rather than reflecting the risk-assessed and proportionate use of the helicopter. The argument is that the money could be used more efficiently.
As I said earlier, collaboration in the north-east raises questions about the kind of collaboration the Home Office should be driving. My sense is that, if we are to close the gap, particularly in protective services—level 2 services—we need faster, better and deeper collaboration, but not at a regional level, following the boundaries of Government offices for the regions. There are plenty of arguments for collaborative agreements between forces that fall slightly outside those regional lines. However, there should be more collaboration, and there is a logical follow-on from that.
In a nutshell, it is not immediately obvious to me that a Home Office Minister should be intervening to decide whether a part of the country should have one helicopter or two. The best answer for the people of the north-west and the three force areas and beyond may be to have two helicopters. I do not know the answer, but my feeling is that accountability for essentially operational decisions on what is the best crime-fighting set of tools—in this case, air support—related to their cost compared with alternatives such as efficiency savings in one part of the budget can be moved across—
I want to supplement the hon. Gentleman’s line of argument. On the Home Office’s attitude and the points about intervention, London has police cells that are specially equipped and provided for the detention of terrorists, and Glasgow has similar provision. There is such provision in only one other place in the United Kingdom—on Teesside. Another factor, which I have not raised, is that aerial cover may prove necessary. We are trying to provide for every eventuality in that regard.
I am grateful to the hon. Gentleman for that interesting point, to which I hope the Minister will respond. It is not one that I have pondered.
This debate is hugely important and illustrates a national question with particular reference to the north-east air support unit, and the hon. Gentleman has done us a great service. On the specific question whether there should be one or two helicopters, I look forward to the Minister’s reply. It seems to me that operational decisions should have more to do with local police authorities, however they are configured. My party believes that there should be more than an indirectly elected police authority. We believe that there should be directly elected lay police commissioners who should be able to make judgments on the best mix between what police forces do and whether there should be lead police force for activity X or activity Y. I thank the hon. Gentleman for raising the issue, and look forward to the Minister’s comments.
I congratulate my hon. Friend the Member for Stockton, North (Frank Cook) on securing this debate, and on his eloquent exposition of the detailed case for retaining two helicopters in the north-east. As many hon. Members know, he is a strong advocate for policing in Cleveland and was one of the most effective Members in lobbying on the merging of forces. His successful track record lies before him, and perhaps he will be successful on this issue. He asked me whether I could press the forces to change their mind, but I think he has already done that eloquently. I shall come to the Home Office’s role, but it is worth going into why aircraft need two pilots, and I shall give a little more detail in addition to what my hon. Friend has said.
Two EC135 aircraft are based in the north-east, and notice has been given to Cleveland police by the Northumbria and Durham forces that they want to withdraw from that informal consortium arrangement—they do not have a legal agreement—on 31 March next year. One concern that my hon. Friend raised is that at that point the sole remaining aircraft would move from Durham Tees Valley airport to Newcastle airport. He explained clearly the geographical problems that he and his constituents might have with that move.
The reason for withdrawing the aircraft is ostensibly because of changes in Civil Aviation Authority requirements for air transport. I am sure that my hon. Friend appreciates that some of the decisions he talked about are matters for police authorities and forces to determine, so I shall go into the balance of Home Office and police relations.
Police helicopter operations in the United Kingdom have been useful and important in key operational policing. My hon. Friend referred to the work on targeting particular criminal activity and to the important issue of cannabis farms. My right hon. Friend the Home Secretary made a statement about cannabis to the House on 7 May. It is a top priority for the Home Office to tackle not just cannabis use, but its supply. As my hon. Friend rightly said, airborne policing is important in identifying cannabis farms and tackling them. The matter has been raised on the Floor of the House. Perhaps we shall see some change in practice, but let us hope not.
As my hon. Friend said, the resource is well used in Cleveland and is important, but it is worth explaining the background. Following a number of helicopter accidents involving controlled flight at night, the Civil Aviation Authority amended the air navigation order to increase compliancy requirements for public transport at night. It stipulated that to fly at night the aircraft had to have two pilots with appropriate instruments, or be fitted with a functioning autopilot providing at least height and heading hold to keep it in a particular position.
Due to the composition of the police fleet, and the nature of its task and training, that was a big challenge for the police to meet within the right time, so an exemption was granted so that they could continue to operate under the old rules. However, in 2006 events caught up with them and the Civil Aviation Authority, in consultation with the Home Office because of the implications for the police, decided to remove the exemption and to bring aircraft owned and run by the police into line with other public transport operations. The target date for compliance is significant—31 March 2010, about a year after the proposed withdrawal of the aircraft in the north-east.
The Civil Aviation Authority informed all police forces of the intention to amend the air navigation order. Currently, police aircraft covering 16 forces are affected. Two aircraft, shared by five forces, have already been replaced with compliant types and five of the remaining six are in the course of changing. The one remaining aircraft where there is a difficulty is the one operated by the north-east consortium, which my hon. Friend has identified and which is the subject of this debate.
It is important that standards are harmonised for police helicopters so that the same equipment and crew requirements apply as to other public transport. I do not believe that any hon. Member in the Chamber would gainsay the positive benefits in improving safety. However, we are seeing unintended consequences of that in the north-east. Of the other police helicopter operators likely to be affected by the legislative change, about three quarters are already compliant with the equipment requirement.
I want to draw my hon. Friend’s attention to the existence of a national strategy underpinning police air operations, which dates back to January 1993. I first became aware of the issue when I was alerted to a discussion about whether the Home Office would fund the new aircraft or changes to aircraft needed as a result of the change. I spoke to my right hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing about how the Home Office works with forces to procure and provide aircraft.
Perhaps I should explain on the record that the Government allocate specific capital funding of £5 million a year to support aviation. Under the 1993 strategy, the Home Office contributes 40 per cent. and the police authority contributes 60 per cent. That strategy was developed by the Association of Chief Police Officers, the Home Office and the then Association of County Councils.
As hon. Members have rightly said, since 1993 there have been significant changes in policing and air operations. They included the need to provide value for money without the loss of operational performance, the need for a clear link between expenditure and performance delivery—we would all no doubt agree with that—and the change in capability as a result of the air navigation order that I have outlined.
The strategy has served us well, but it has been in place for 14 years. If we compare 1993 with now, at that time only 16 forces nationally had any form of air support. Today, 39 forces—we have 43, of course, in England and Wales—have direct access to aircraft, and 34 helicopters and 4 fixed-wing planes are available to the police nationally. The initial process to update the strategy began in 2003 but lost impetus and stalled because of the proposals to merge certain police forces in 2006. It is clear that there is a real variance in the way air support is delivered locally and regionally. Across air support units and consortiums there are widely differing performance indicators and approaches, including in relation to operating hours, system capabilities and supply agreements. That is one of the issues with which I have been involved as one of the Ministers responsible for procurement in the Home Office.
In the Home Office, we believe that such variance leads to a piecemeal approach that does not take into account the necessary economies of scale or provide the best service. There is no clear structure for the current organisation of police air support units. They are primarily based on individual forces, and as we have heard eloquently from all hon. Members, air support for just one force may miss the point about how it can be used because the types of crime that can be tackled do not respect bureaucratic borders. Such a method of organising air cover is clearly not the most efficient.
The Association of Chief Police Officers, in the form of the ACPO air operations working group, is, therefore, undertaking a fundamental review of police air operations in England and Wales. The group is working with the National Policing Improvement Agency and the police service to provide a better framework for the consistent development and procurement of police air support over the next 10 years and to provide greater air capability to enhance the protective services across England and Wales that my hon. Friend outlined. As part of the review, ACPO will establish what the forces and the public need air support to deliver and what the policing priorities are. The recommendations will flow from that.
Returning to the Teesside question, the decision to change how air support is delivered in the north-east is made by the local police authorities and the forces concerned; it is not the role of the Home Office to direct operational priorities. However, hon. Members have raised the issue of police funding and the hon. Member for Dunfermline and West Fife (Willie Rennie) suggested that funding is tight for the police. It is worth reminding hon. Members that in the last settlement—this year’s settlement—we set floors for grants so no authorities lost out. The Government have invested a great deal of money in policing during the past 10 years. In fact, in the settlement last year, for 2010-11, there was 2.7 per cent. over the 2009-10 settlement, which is £9.7 billion. It is not in any respect fair to say that the Government have not put money into the police. The Government grant for the police will have increased by more than 60 per cent.—more than £3.7 billion—between 1997-98 and 2010-11.
On helicopters and air cover, the Civil Aviation Authority, which is in contact with my right hon. Friend the Secretary of State for Transport, recognises that there needs to be a degree of flexibility regarding achieving compliance with the air navigation order. My hon. Friend the Member for Stockton, North might be interested to know that I am advised that it would be prepared to consider individual representations for short-term alleviations to allow new equipment to be procured. Under the timetable for the procurement of helicopters, it takes about 18 months from procurement to delivery to provide a new helicopter. Fully worked-up bids for the next round of Home Office funding of £5 million in total for the England and Wales pot need to be in by December this year.
Happily, we have the excellent services of the Hansard reporters whose skills, together with those of my hon. Friend, who is a champion for Teesside, and of our friends in the press—honourable or not—will no doubt ensure that this will be heard.
As I said, fully worked-up bids for the £5 million pot of money need to be in by December this year. That allocation will be made available in April next year. The changes in the air navigation rules mean that much of the money available in the budget so far is already tied up with other affected forces. However, the Home Office is prepared to look flexibly at the issue of the one remaining helicopter—although I make no firm promises. Clearly, there must be a worked-up bid and it must be operationally achievable. Cleveland police must be prepared to pay their share into the pot, too.
I have mentioned that the operational requirements of the police are dominant. However, the national strategy for air cover recommends that target attendance time is 15 minutes for major urban areas. Clearly, there are differences in target times, but if my hon. Friend would like me to send him more detail about that part of the strategy or on the strategy as a whole, I am happy to do so.
On the brass tacks of funding, I have mentioned the £5 million pot available. A new aircraft at today’s prices would be about £4.6 million, which is the top figure—although perhaps my hon. Friend has a chief constable who is a good negotiator. Trading in the aircraft—if my hon. Friend’s suggestion of selling a helicopter and buying one was taken up by his chief constable—would net around £1 million. I am not a second-hand car or helicopter sales person so I rely on other expertise in that matter, but that is the ballpark figure. If there was a total 40 per cent. capital grant, £1.4 million would be available from the Home Office. If it was funded at that figure or anything up to that, it would leave at the minimum a remainder of £2.2 million to be split three ways if the aircraft was bought by the consortium or funded by Cleveland police, if they were to go it alone.
Earlier, I said that it would take 18 months to deliver an aircraft. I should correct that figure as it can take between 18 and 24 months, and up to two years in some cases. That is why the flexibility of the Department for Transport and the Civil Aviation Authority is important.
I shall briefly mention the issue raised by the hon. Member for Dunfermline and West Fife about merging forces. I wish to make it clear that merging forces is off the agenda at the moment. However, Sir Ronnie Flanagan’s independent review of policing, which was published only in February, recommended that if forces wanted to join together voluntarily, the Home Office should assist them to do so. It is a matter of a bottom-up, rather than a top-down approach. That is the current position.
The hon. Gentleman also talked about charitable funding. The police use only one helicopter that has any form of charitable funding and that is in Wiltshire and Sussex. That is because the Wiltshire and Sussex police helicopter is also the air ambulance, so it is a combined facility. I want to make it clear that there is no routine charitable funding of police helicopters.
The hon. Member for Bury St. Edmunds (Mr. Ruffley) rightly mentioned the balance between local and central Government decision making. I have made the Government’s position clear on that. It is important to let chief constables and police authorities make the appropriate operational decisions. Clearly, the Home Office has an overarching role, particularly through the National Policing Improvement Agency, which has just been set up. The agency is an important body and will ensure that the 43 forces do not take a too divergent an approach to operational delivery. I agree—I am happy when we can agree across the Chamber—that every pound of public money saved is a pound that can be spent elsewhere. Clearly, efficiencies are important because they allow for further investment in the Home Office’s important top priority of tackling crime.
Thank you, Mr. Cummings, for chairing the debate. I hope that I have reassured my hon. Friend the Member for Stockton, North that there may be some leeway. Clearly, it is not a matter for the Home Office to direct, but I am sure that with the information he has obtained and his passion for the issue, he may be able to have a useful conversation with his chief constable.
Worker Registration Scheme
It is an honour and a pleasure to appear under your aegis, Mr. Cummings. For the record, I am not opposing the abolition of the worker registration scheme; I am seeking to advance its abolition—indeed, if it were up to me, I would take it out into the street and kick it to death now. I hope to make the case for why I propose that course of action.
I am delighted and considerably honoured that my hon. Friend the Minister will speak for the Government on this matter. It is important to place a couple of points on the record. First, very few Ministers in the history of this Government, let alone this place, have had a better record on combining the need for accurate statistical data and the strength and security of our borders with the human rights and civil rights for which he has become so well known. I pay a warm tribute to him.
Secondly, we are, I accept, in an area that is intentionally contentious. Emigration to this country is an issue that is constantly misrepresented, which leads to an absence or the opposite of social cohesion in many ways. It is crucial to have accurate data when we talk about people working in this country. Wrong statistics can be interpreted in whichever way they will by people of ill will, and I fear that the worker registration scheme is grist to that mill.
Many if not all hon. Members will know the basis of the worker registration scheme, which was initiated on 1 May 2004. The idea was to facilitate the then accession 8 countries—Slovenia, Slovakia, Poland, Lithuania, Latvia, Hungary, Estonia and the Czech Republic—giving them immediate access to the UK labour market. That decision by the UK Government, along with the Governments of Ireland and Sweden, has turned out to be immensely beneficial to this country.
It is mandatory to register if a person wishes to work for an employer in the UK for more than one month and they are normally a resident of one of the A8 countries. However, the minute we start to look down into the interstices of this legislation, we discover that exemptions exist, which seem quite dizzying in their breadth. The most important one is that a person does not have to register if they are self-employed. They do not have to register if they have worked legally in the UK for 12 months. They do not have to register if they provide services in the UK on behalf of an employer who is not established in this country.
Things then get rather interesting. A person does not have to register if they have dual citizenship of the UK and another country within the European economic area that I have not listed, or, as is always the case in these matters, Switzerland. They do not have to register if they are a family member of a Swiss—yet again, the exceptionally treated Swiss—or an EEA citizen, excluding of course the A8 countries, and that person is working in the UK. Finally, a person is exempt if they are a family member of—guess what?—a Swiss or an EEA citizen who is living in the UK as a student or as a retired or self-sufficient person.
Employers have a considerable list of obligations, mostly to do with keeping a copy of the application form, receiving and keeping a copy of the valid registration certificate and generally administering the system. Most importantly, registration originally cost a lesser sum but now costs the employee £90. One reason why I am raising this matter is that a number of my constituents have said to me, “What are we getting for the £90?” I have found it very difficult to give them an answer. If Her Majesty’s Government were obtaining valid data, if we had a controlled system whereby we were obtaining important information, I would think that the £90 was well spent. However, I cannot see that any of the aims and intentions of the worker registration scheme are met by it in its present form.
Among the flaws is the one that I mentioned relating to self-employed people. They clearly argue that registration is not compulsory, but there is an argument to say that it should be. There is also, bizarrely, no penalty for failing to register. Registration is required if the worker changes employers, but many simply do not register. There is no requirement to de-register from the scheme on leaving the country, so we are dealing with base data all the time. We will never know the accuracy of the data unless we measure the people leaving the register as well as those coming on to it. The £90 fee is certainly a disincentive and will discourage some people on low incomes from registering.
The registration form is complex. Unlike many hon. Members, with their glittering double firsts from Oxford, I left school at 15 and am largely self-educated—and not very effectively, either—but I have studied the four pages of questions and the seven pages of guidelines involved in filling in the form for the worker registration scheme. Fortunately, all the instructions are in English, which is, although some may be surprised to hear it, my first language. If it were not, I would find it immensely difficult to fill in the form.
In addition, the number of emigrants to the UK was considerably larger than originally anticipated, mostly because of the benign economic circumstances in these fortunate islands. As a result, the processing time for the worker registration scheme has been a great deal longer. Between May 2004 and June 2006, 427,000 central Europeans registered to work. It is reasonable to assume that that figure is more like 600,000 once self-employed workers are included.
I am not a voice crying in the wilderness, either in English or in Polish. The TUC wants to see the immediate end of the worker registration scheme. The union formerly known as the Transport and General Workers Union wants to see the end of it. Even Mark Boleat, the chairman of the Association of Labour Providers, said in a recent statement—in rather stronger language than someone as supportive of the Government as I am would ever use—that the Government may be “deceiving” migrant workers from the European Union into paying £90 to register under the accession states worker registration scheme, because they get virtually nothing for it.
We know that the worker registration scheme will end in the spring of next year anyway, so it could be asked why I am seeking to advance its abolition. We should have a proper system of registration in this country. I personally think that identity cards are an excellent idea and I like the work that the Minister has done on electronic borders and border control, but this scheme is cumbersome, bureaucratic, inefficient and, above all, dangerous, in that it provides data that are open to misinterpretation.
I, or rather my office, delved deep into the subject and we are grateful for the Institute for Public Policy Research statement published in April 2008, “Floodgates or turnstiles”. We have the very useful Department for Work and Pensions report authored by Gilpin, Henty and others entitled “The impact of free movement of workers from Central and Eastern Europe on the UK labour market”. We have the Library brief. We have a range of documents. The one thing they have in common is that we can draw a different conclusion from every single one of them.
My personal concern and interest, as I mentioned, is as a Member of Parliament for the glorious London borough of Ealing and for the Polish community in particular. Ealing is an area that, for excellent reasons, has had a very long, amiable and cordial relationship with the Polish. I am referring to the relationship with, originally, the Polish combatants who came to fight with us between 1939 and 1945, particularly at RAF Northolt, and the Polish people who have put down deep roots in our part of west London. In fact, the Polish community form the bulk of the A8 nationals who have come to this country in large numbers since 2004. I would say that most of them see themselves, as anybody with access to an atlas or a globe could confirm, as central Europeans, not, as they are frequently referred to, eastern Europeans, and as EU citizens or EU workers with their families moving within the EU, rather than migrants.
If you looked at the data available, Mr. Cummings, perhaps you would ask yourself the same question I did. Would astrology, bibliomancy, necromancy or peering into the entrails of sacrificed beasts provide a more valid source of data than the worker registration scheme? I think it probably would, because the WRS has the imprimatur of legitimacy but the end-product is virtually irrelevant.
The data that we use on the people working in this country come from four major sources. The labour force survey and the international passenger survey—two of the sources frequently prayed in aid—are flawed because they are based on random samples, not on solid total figures. Although the labour force survey gives an interesting sociological glimpse of possible trends in the Polish community in Britain, it is not a valid source of data for the number of people working here. The international passenger survey is useless as it fails to record anything except arrivals through the major London airports and the Channel tunnel. It takes no account of arrivals and departures from provincial airports, and as I said it allows a skewed picture of immigration to provide ammunition for political parties of ill will.
The third source, the worker registration scheme, was seen as a useful tool for the Government, who were seen to have acted sensibly and responsibly in the face of a large influx of new workers, estimated to be about 13,000 a year. It was thought that it would be useful also for new arrivals; it was argued that it would help them to acclimatise to a regulated work force, and enable them to regulate their employment as an official part of our work force.
According to the WRS statistics administered by the Home Office, 327,538 Poles registered for work between May 2004 and December 2006. The number has decreased since then. In 2007, it was 150,000, with 38,000 in the last quarter. Those statistics were seized upon by The Times, which noted an apparent drop in the number and declared that Pavel the plumber was heading back to Wroclaw and that the Poles were leaving. At the time, I received a letter from a constituent complaining, “One cannot get a Polish plumber nowadays,” and asking. “What are the Government doing about it?”.
In reality, statistics based on the WRS do not provide the answer. The scheme is expensive and bureaucratic, and it has never covered the thousands of Poles who declared themselves to be self-employed. Few Poles bothered to record changes in employment after one year. When newly arrived or formerly self-employed Poles sought to register later, Home Office advice was that it was no longer a requirement. It was subsequently discovered that not registering made people ineligible for all benefits except child benefit.
Regional statistics based on the WRS are extraordinarily unreliable. I have a WRS list of every council area in the United Kingdom that shows the number of people registered. Camden and Westminster are shown as the London boroughs with the highest population of Poles, when evidence to which I shall refer in a moment shows that the largest concentrations in London were demonstrably in Ealing, Brent and Haringey.
The fourth statistical source—the national insurance registration figures—is the one that I recommend to my hon. Friend the Minister. I consider them the most reliable source of information not only on Poles but on all workers covered by the worker registration scheme, although imperfections remain. National insurance figures are more trustworthy because they correlate with other important local statistics, such as the number of children speaking Polish, the number of Polish births and the number of Polish citizens on the electoral register.
I pay tribute to Victor Moszczynski of the Federation of Poles in Great Britain for the work that he has done over the past couple of years in listing every person on the electoral register who can be identified by a Polish surname. I shall refer to that again in a moment. I realise that Polish names like Miller may not obviously be Polish, but if the first name is Stanislav or Piotr one can make a fairly good guess that the person is Polish. I give credit to Victor Moszczynski. I also thank Her Excellency Barbara Tuge-Erecinska, the Polish ambassador, for the work that she and the embassy have done.
Between 2001 and 2006, 333,000 Poles registered for national insurance. In 2006-07, a further 223,000 were registered, making a total of 556,000. The figure for last year shows an increase in registration, not a decrease. In other words, it is completely contra-indicative to the WRS information. That might confuse The Times, if no one else.
It is generally accepted that more Poles have not registered for work but are working none the less, although many are seasonal workers. I mentioned the work undertaken by the embassy. It has good reason for knowing that 600,000 or more Poles come here during the summer, and it can correlate that with data from within the Republic of Poland. The situation is slightly confused, however, in that the 2001 census shows that 57,000 are recorded as being of Polish origin, but that could go back four or five generations, with 100,000 or so being from inter-generational groups. Nevertheless, they would still be Polish.
The work done by Victor Moszczynski and the Federation of Poles lists every constituency in the United Kingdom in which more than 1,000 new Polish names were entered on the electoral register last year. The list starts with Ealing, Acton and Shepherd’s Bush. It continues with Bedford; Birmingham, Ladywood; Birmingham, Perry Bar; Boston and Skegness; Brent, East; Brent, South; Brentford and Isleworth; Crewe and Nantwich; Doncaster, Central; Hackney, North and Stoke Newington; Hornsey and Wood Green; Leeds, Central; Leicester, West; Mitcham and Morden; Northampton, South; Nottingham, East; Oxford, East; Peterborough; Salford; Ealing, Southall; Southampton, Test; Streatham; Walthamstow; West Ham; Aberdeen, North; Edinburgh, East; Glasgow, Central; and Inverness, Nairn, Badenoch and Strathspey. Five constituencies recorded more than 2,000 new Poles registered for national insurance in the current electoral register as against last year’s. They were Edinburgh, North and Leith; Tottenham; Slough; Luton, South; and Ealing, North. And a few hours ago, when leaving Belfast, I saw evidence of the 8,900 Poles who registered in Northern Ireland last year.
The Department for Work and Pensions has provided some important and useful data. It says that one third of the Poles who came here before 2006 are employed in administration, business and management. It also says that 22 per cent. work in hospitality and catering, 10 per cent. in agriculture, 8 per cent. in manufacturing, 6 per cent. in the health service, 5 per cent. in food processing, just under 5 per cent. in the retail trade and the same again in the construction industry.
We therefore have a great deal more than the stereotypical Polish plumber or builder. It could be said that our fresh food production has been saved by central European migration. The movement of people, particularly Poles, Lithuanians and Latvians, to places in Scotland and the rural areas of Wales and Lincolnshire has been the saviour of rural fresh food production.
It may not be the most accurate statistic, although I can understand why people might have said so, but when the Institute of Directors surveyed 500 employers, 61 per cent. said that they hire Poles because of their superior skills; only 16 per cent. said it was because they were cheaper.
There are also some extraordinary statistics about the value added by Poles. According to the National Bank of Poland, each year about £4 billion is sent by Polish workers in the UK to their families at home. However, according to the National Institute of Economic and Social Research, the Polish work force contributed £12 billion to the British economy between 2004 and 2006. A great deal of work has been done by Piotr Grzeszkiewicz, the director of Sara-Int, the recruitment agency. He concludes that about £1.9 billion a year is contributed to the British Exchequer by the Polish diaspora.
Changes in the exchange rate, from 7.2 zloty to the pound in 2004 to between 4.83 and 4.9 this month, have contributed to a slowing down of immigration—just like the “Auf Wiedersehen, Pet” generation who went to Germany in the 1980s to flee the dark, doomy days of Thatcherite recession, and who, as soon as trade turned in the opposite direction, came back home. Here, we have the pull-effect of a strong and vibrant economy. However, that is being slightly counteracted by the growth in the Polish economy, particularly because of the 2012 UEFA championships. Indeed, the deputy mayor of Gdansk said just before Christmas that he was glad that the Poles were starting to return now; he did not want them all to return at once.
The Minister is a man of good will and I have paid tribute to him before. It is fairly unusual for a humble, insignificant and almost irrelevant Back Bencher to stand up and propose something that will save the Government money and may make life a little easier for all of us, but that is what I am doing. By bringing forward the abolition of the WRS, which will happen anyway, we will save money, and by moving to a national insurance based register or even by building on the work of organisations such as the Federation of Poles in Great Britain, we can come up with a far more accurate picture. Without accurate data, prejudice will flourish in the darkness, which no one wants.
I have every confidence that the Minister will resolve the matter one way or the other, but I want to place on the record my appreciation of the work done by the Polish community in this country. I hope that we can develop a valid set of statistics and some valid, solid data that will meet Britain’s need to secure its borders. I hope that we recognise the need for accuracy in the data on those who work in our nation.
I congratulate my hon. Friend the Member for Ealing, North (Stephen Pound) on securing this important debate. I should first like to take a brief detour through his virtues. He has raised the issue in the House this afternoon, but he has also lobbied me consistently in the past few months. I do not believe that the House of Commons has as doughty a defender, as strong an advocate or as keen an analyst of the contribution made to this country by the Polish community. He woke up extremely early this morning to participate in the debate this afternoon, which is an expression of his commitment to putting those arguments forward.
I have a couple of points to make in response to my hon. Friend’s remarks. It is typical of his style that he has made a very early strike on the rethinking of the policy. As he knows, the Government said that we would review the policy towards the end of the year, yet even though it is only May he has laid out an alternative approach for us to consider. His words will weigh all the more heavily with me for the fact that he got them in first, as it were.
I echo my hon. Friend’s celebration of the contribution made to our country and economy by A8 nationals. As he said, A8-born nationals in the UK have an employment rate among the highest of any immigrant group in Britain. They are more likely to be in employment and they make a tremendous contribution in some vital sectors of our economy, including administration, business and management, hospitality and catering, and agriculture. They also make a significant contribution to the provision of public services throughout Britain. When we look at the available figures and information for 2004 to 2006, we see that about 84 per cent. of people from A8 countries say that they came to the UK for work-related reasons or that they were coming to look for work. That is an extraordinarily high proportion. My hon. Friend quoted some figures, and his constituency has among the highest numbers of new national insurance number registrations issued to people from A8 countries. He speaks with a great deal of personal experience, as well as wisdom, because he sees at first hand in his constituency the contribution made by A8 nationals.
There is an enormous amount of nonsense in the debate, to which my hon. Friend alluded in rather polite language. Sometimes one hears arguments such as, “Migrants are coming over, taking jobs, driving down wages and consuming more in public services than they pay in taxes.” Overwhelmingly, such arguments are complete nonsense. On the contrary, the migration of recent years, particularly from eastern Europe, has profited our economy and the Exchequer. Indeed, the Treasury estimates that new migration added about £6 billion to our national output in 2006, which is worth having. Migrants add to our national wealth because they complement the skills of resident workers and therefore help to make the economy more productive, which is important because in the long term, there is pretty much a one-to-one relationship between increased productivity and increased wage growth.
When we look at Britain’s economic performance in the past 10 years, we see that productivity, wages and wage growth have gone up. That triple is rare—I do not think that we have seen it in any period since records began in the 1970s. Migration has been central to that economic performance. On top of that, migrants contribute about 10 per cent. of the taxes received by Government, but have consumed only 9.1 per cent. of Government spending. That is based on what is probably the best study of the issue, which was published some time around 2003-04. My hon. Friend was right to say that there is great deal of rubbish talked in the debate and it is important that we nail it when it rears its ugly head.
My hon. Friend asked whether it makes sense to continue with the worker registration scheme. Of course, it was a transitional measure put in place by the Government a few years ago to regulate A8 nationals’ access to the labour market. In essence, it requires A8 nationals to be registered for 12 months’ continuous employment. It helps to regulate access to the market but, importantly, it helps us to see clearly whether somebody has been working long enough to become eligible in due course for in-work support and benefits provided by Government. Ensuring that those safeguards are in place is an important part of building public confidence in our immigration system. There are exceptions, as my hon. Friend said, which are generally created by EU legislation, some of which, I fear, may be imperfect, but they are none the less in place. However, we felt that it made most sense to use the available controls.
The restrictions need to be reviewed—indeed, there are rules on when they should be lifted. Under the accession treaty, the second phase of transitional controls, which is what we have in place, must end five years from the date of accession. The Government are allowed to continue to use those controls, but any case that we make to the European Commission for retaining them must be based on guarding against any serious disturbance to our labour market or threat thereof. We have not yet begun to study that. If we could prove that there is a risk, we would be allowed to keep restrictions for another two years—in other words, until 30 April 2011. We need to get stuck into that work in the latter half of this year.
We will have one eye on the behaviour of other EU states, only five of which maintain tougher restrictions than the UK on A8 workers. The lifting of those restrictions would have an impact on where people from A8 countries, particularly from Poland, chose to go. If Germany lifted its restrictions, it would doubtless be an attractive place for many people from Poland to go and work.
The truth is that we can already see dramatically changing patterns of A8 and Polish migration. We will publish next week the new WRS statistics, which I suspect will show a slower rate of movement to the UK from Poland.
My hon. Friend made a number of important points this afternoon. I was particularly interested by his idea of a national insurance based system as an alternative means of achieving the Government’s objectives, which, alongside our plans for the introduction of new electronic border controls, would give with far better accuracy a sense of who is coming in and leaving. Alongside our plans for identity cards for foreign nationals, which will come in later this year, there are a number of different moving parts that we must put together to achieve our objectives. As we go about that analysis, I shall pay close attention to what my hon. Friend said this afternoon.
Eaga Warm Front Scheme (West Dorset)
It was indeed about six months ago that I first thought that it worth raising the issue in public, rather than merely dealing with my constituents’ complaints.
As the Minister will clearly remember, the origins of the debate lie in a series of complaints that I received from constituents about the service they received under the Warm Front scheme over which Eaga presides. He will also recall that some other hon. Members, including several Labour Members, raised similar points in a recent debate, and they continue to pursue the issue.
That is very generous of the Minister. He and I have had long discussions in Committee on various matters, and I am conscious of his general disposition to be generous. I am grateful for his comments.
As a result of appearances on various obscure radio and TV programmes, I received considerable correspondence from people outside West Dorset. At one stage, I had thought of troubling hon. Members with a retelling of the various things that I had heard, but I decided on reflection that it would not be a productive line of action. Instead, I shall describe the conclusions that I have reached following conversations with various experts, people who have been involved with Warm Front over the years, constituents and others who have corresponded with me. Those conclusions relate to the possible character of the problem and how we might test that it is indeed the character of the problem in an effort to arrive at a constructive medium and long-term solution.
Let me start with the issues that have arisen, with which the Minister will be entirely familiar. First, there is the question of the prices that people pay—partly themselves and partly with the assistance of the taxpayer—for the equipment and for its installation in their homes. Are those prices in line with the best prices available in the market? The second issue is the speed of responsiveness and the degree to which the customer—typically an elderly person in need of better heating and insulation—receives what they need when they use the Warm Front process.
Finally, alongside the question of price and speed, there is the question of responsiveness. As many of us have being saying for some while, we live in a post-bureaucratic age. As a result of the net, open networks in general and the changing conception of people’s relationship with public services, people increasingly feel that they are, or at least should be, in control of their own lives to a much greater degree. Part of the frustration that I sense among many of those who have written to me from West Dorset and elsewhere arises from the fact that the scheme seems to put the customer in the position of a supplicant. The customer is offered something, but feels from then on that they are in the position of a dependant who has been lucky to receive something from on high, even though they have relatively little control over what they receive or how and when they receive it. Alongside the questions of pricing and the speed of responsiveness, therefore, there is the question of the degree to which the customer feels empowered or, rather, disempowered.
Let me deal first with the question of price. In West Dorset, I have tried to identify the truth behind the considerable allegations about the difference between the gross price for an installation under the Warm Front scheme, which includes the customer’s contribution and the grant, and the lowest price available locally for doing the same work. I received assistance from Eaga—I am grateful to it for its considerable co-operation—in the form of a confidential account of its labour rates for specified jobs. I then wrote to all the contractors whom I could identify in West Dorset to ask them precisely what they would quote for the same jobs. I did not reveal the Eaga amount to them and I promised that I would not reveal to Eaga or anybody else the amounts that they quoted. I sit in the middle as an opaque recipient of pieces of information and I do not reveal to either side what the other side’s answers are.
Unfortunately, I must admit that few of the local contractors have replied and I am trying to investigate why not. In general, my constituents are not shy about writing to me. I receive about 15,000 letters a year, so I doubt that there is a lack of postal inclination on the part of those of my constituents who are contractors. They might not have been sure that I would indeed observe their confidence—I hope that is not the case, but it might be. They might not have wanted to spend their time engaging in a theoretical exercise that had no effect on their business, when they were busy trying to get on with it—quite a likely explanation, given that many of those contractors are one-man or one-woman operations. Indeed, one or two contractors have rung me up to say that is the case and that they do not really know how to quote for a job until they have seen it. In any case, they said that they do not much like quoting, that they preferred getting on with the business and that they were very sorry, but they did not want to spend their time answering my questions. In other cases, people might have been reluctant, for one reason or another, to divulge precisely what their prices were, even to me. I do not know what the explanation is, but in any event I have had only a small selection of responses. As of yesterday, I had received four; by this morning, I had received five. That is not a large sample.
Nevertheless, as far as I can make out, the five quotes are below the Eaga price for the same work, which I had not disclosed—one is slightly lower, three are rather further below it and one is considerably below it. Of course, I have no means of telling whether the work would be of a better or worse quality. Eaga and those defending it have maintained that the Warm Front scheme delivers superb quality on the whole, and it is true that the scheme is inspected. On the other hand, critics have written to me in considerable abundance to assert that the materials used are often substandard and do not last long, and that some of the work is not good. I do not know the quality of the work of the contractors who have written to me, because none of them happens to have installed any central heating for me, and I do not know any of their customers and I have not managed to conduct a customer survey.
I cannot, therefore, offer a view of the comparative quality of the work involved. However, if the quality is similar, I can at least assert that such relatively slight evidence as I have been able to accumulate so far suggests that some of the prices available in the market for the same work are a little or considerably lower than the Eaga price. Interestingly, I have also observed—the Minister and his officials will be well aware of this feature of the market, but I had not understood it—that there is a wide discrepancy between the quotes that one receives from different local contractors for a precisely defined job. That points to an interesting feature of the market, to which I shall return.
In light of that information, I have a suggestion about how we might proceed if the Minister is willing to do so, although I accept that it is not something that he will be able to do overnight. Perhaps the Government could achieve the same or better results as with the current scheme, with the same or lower expenditure, while making the system more responsive to customers and giving them a sense of being empowered—at least more so than now. My proposal relates to West Dorset, but it would be possible to do what I suggest in another part of the country. I would be delighted, on the part of the people of West Dorset, to host it there, but if the Minister wanted to try different areas, that would be almost as good.
My proposal relates to what happens with a wide range of similar grants that are provided through the Department for Environment, Food and Rural Affairs and other Ministries. Examples include grants for the installation of low-carbon energy equipment and for heritage tiling on roofs. Such improvements to houses are subsidised by the Government in one way or another. In almost all such cases, instead of a large superstructure of national tendering and a company that both organises the tenders and has a subsidiary that wins a lot of the tenders, or is exempt from the tenders and carries out the action and then further subcontracts to others, the norm is for the customer to apply to a Department, or someone who acts on behalf of a Department, and to be given a voucher or cheque that enables them to do whatever they are trying to do.
Such systems empower customers, as they can choose what they want to do, and the speed of response within such systems relies on how long it takes to get through the paperwork and send the cheque. Of course, that is also a feature of the current scheme; the paperwork will be there one way or the other. With such systems, there is no need for the superstructure of national tendering and the many rules that I am told by Eaga and others have to be applied. In the superstructure system, a vast part of the marketplace is excluded because many contractors and subcontractors do not fit the specifications of the tendering regime that Eaga is compelled to observe. All that is swept away if the customers simply receive vouchers or cheques and choose the equipment from whom ever they can get it cheapest and most quickly. Under such an arrangement, suppliers would have to be certified in some way—perhaps the CORGI—the Council for Registered Gas Installers—scheme could provide certification. We could discuss the appropriate form of certification, but beyond that there would no need to worry.
Such a scheme would trade on the wide discrepancies in the marketplace between the prices quoted by different contractors for the same job. I have identified discrepancies through my amateur work, and all the experts assure me that it is a general feature of the marketplace. The scheme would reveal to customers what the quotes were, as they would ask local contractors for quotes—presumably, most customers would ask for two or three. Contractors would have to be certified, but, other than that, customers would simply be looking for the nearest and cheapest providers. I suspect that there would be a vigorous market, as there is in non-subsidised installations. I do not know whether the quality of work would be as good as it is now or better, or whether the price would be as low as it is now or lower. I do not know whether the speed would be as great or greater, or whether people would be happy to be empowered in that way, but those are empirical questions that are subject to empirical methods of verification.
The Minister could launch a small pilot scheme in West Dorset, or some other area or areas. The same scheme could be run, but the block of spending that is to be devoted to the scheme in that area for the following year, or the year after, could be used to run a voucher scheme. After about a year, it would be possible to come up with an extremely robust analysis, because we would know all the people who had been involved. It could be a condition of the scheme that the Department could send in inspectors to find out whether the quality was as good as, or better than, the quality of Eaga installations, which is already being measured. We could find out whether there were any complaints and what the pricing was. We would then know the answers, and could stop having debates on this issue.
My hunch is that under such a scheme, prices would be lower, speeds faster and customers as satisfied. Furthermore, inspections would show that the materials used were as long lasting or better than those used by Eaga. Presumably, if my hunch were right, the Minister—or his successor when he moves to greater things, as I confidently expect that he will, despite the current problems with the Government—would opt for the Letwin scheme. If, on the contrary, the prices were higher, the quality was lower and the system was slower, no great damage would have been done, because West Dorset, which is already suffering from some problems, as I can testify, would simply have been through a period in which the scheme had not been improved or had been made slightly worse, but not for long and not for many people. In such circumstances, the Minister or his successor would revert to the current arrangements.
In short, a small-scale pilot would provide us with real evidence as to whether those of us who think that there is real room for improvement are right, or whether we are dreaming and should stick with the current arrangements. I hope that I can induce the Minister to consider that possibility, although I do not naively anticipate that he will do so now, or firmly. I hope that he will run a pilot, so that we can find out the truth of the matter.
I offer the right hon. Member for West Dorset (Mr. Letwin) the traditional congratulations on securing the debate, and I wish to re-emphasise the point that I made earlier in my intervention. The debate shows two things. First, it shows the value of having constituency Members of Parliament as policy makers, because the right hon. Gentleman has drawn from his constituency experiences and not just from policy theories. Secondly, it shows that he is one of Parliament’s leading thinkers, although he is not in my party. The combination of those two factors has brought about a sharp scrutiny of the Eaga scheme and the Government’s policy on it. If nothing else, I can assure him that his work and that of other hon. Members has prompted much activity and thought within the Department and across the Government about whether the scheme should be changed.
I am grateful to the right hon. Gentleman for acknowledging the value of the scheme. None of us is debating whether we should have the scheme at all. The scheme is aimed primarily at addressing fuel poverty, which has increased in recent months because fuel prices have gone up. It is also a major fuel efficiency scheme. It is a paradox of the scheme that eligibility is assessed in relation to householders, but that retrofitting is by the house. At some point, we will have done our job and completed the task, notwithstanding the lifetime of boilers and heating systems.
The right hon. Gentleman’s remarks have prompted a review of not only the way in which the scheme works, as discussed in my meetings with Eaga, but of where it fits into energy efficiency schemes—most significantly, the carbon emission reduction target scheme. The way in which that obligation on energy suppliers, which has a vulnerable groups category, works provides lessons for this scheme.
Let me put on record a few statistics to back up our support of the scheme. It began in 2000, since when 1,700 households in the right hon. Gentleman’s constituency have received either a main heating system, an insulation measure or both. Across the country, 1.7 million people have benefited from Warm Front, and half a million have been assisted in the past two years alone. That is a huge achievement, and we must not lose sight of it. Mr. Cummings, I think that the figures for your constituency are even greater than those for the right hon. Gentleman’s and mine.
The challenge is huge. Have we got it right? I am pleased to be able to tell hon. Members that the National Audit Office—off its own bat; I have no influence or powers over it—has announced a study to review whether the scheme offers value for money. Areas of particular focus will include eligibility criteria, grant levels and the performance of Warm Front contractors. The report will be published by Christmas and will back up work that we have done with our own contractors. I welcome the study. By good coincidence, Warm Front’s annual report will be launched tomorrow in the Palace of Westminster at 10 am by my colleagues and me. The report will address some of the issues raised by the right hon. Gentleman on this occasion and others.
The issue of price is central to the debate. I refer the right hon. Gentleman to the Adjournment debate held on 3 March 2008 for an outline of Government policy. I reiterate that I understand his concerns. As he knows, there is a cap on how much cash can be contributed to each household, which raises another dilemma of policy choice. By capping the money and asking householders to make contributions, we can help more households across the country, but we also do two things. First, we change the relationship between the customer and the provider. As he says, the customer is then paying for part of the service, which might give rise to a different relationship. Secondly, we provide a different question to the contractor. Rather than being top-down, the scheme introduces an element of consumer choice.
We have considered the right hon. Gentleman’s point. There is a decision to be made about the cap: whether there should be one and what it should be. We are also considering the value for money aspects. The Department’s independent quality assurors oversaw the price-setting process to ensure that it was competitive and delivered best value to the public. Since then, two independent price reviews have taken place, both of which are on the DEFRA website and discuss Warm Front prices. The assessments are independent. I listened with great interest to the findings of his constituency research. I am minded to do something similar, perhaps. I suspect that the reasons for the non-response are as he outlined; such is the busy world in which people operate.
The assessments made for us show a favourable picture of Warm Front prices. Excess payments made for costs over the cap might change people’s attitudes, but the question that matters to me is whether dissatisfaction with Warm Front provision is greater than with provision in the non-Warm Front sector. That is an important question to ask. I do not want to cast any aspersions on the industry as a whole, but we all hear stories, and we try to establish whether they are true. That is the first question.
The second question is the right hon. Gentleman’s. Would a different, non-tendering system provide a better result for the customer and, implicitly, the taxpayer? I am grateful to him for not pushing me for a response, and I give him a commitment to consider his suggestion. Perhaps I should throw into the debate the fact that Warm Front already provides for non-eligible pensioner households a £300 voucher towards heating measures, so the idea is already there. I suspect that, because the value is a lot lower than the £2,700 or £4,000 figures, the idea is different, but it is there.
The right hon. Gentleman referred to other schemes as well. I do not want to pick holes in his argument, but any scheme must pass the pragmatic test of whether it works. Would it be advantageous not to have the contracting phase for the scheme? Would Eaga, as the appointed scheme manager, not have to go through an appointment procurement scheme? Would it just rely on CORGI or some other suitable registration scheme? I suspect that CORGI is the one that we would look to. If so, what would be the implications for quality and price, for customer empowerment and for the relationship between the scheme and other partners, such as local authorities?
By a happy coincidence, I was in Easington in the north-east recently, at the invitation of Mr Cummings. I witnessed what is, in my view, one of the strongest schemes in the country. The relationship between the contractor and the contracted other partners brings greater added value to the scheme. I do not know whether that would be possible under the right hon. Gentleman’s idea, but as I said, I have an open mind.
I should like to defend the reputation of Eaga and the Warm Front scheme. To answer a point that has featured in previous debates, although not today’s, Eaga has subsidiaries that deliver some parts of the scheme. Proper tendering and procurement processes are of course in place, as well as independent assessment. Eaga, as the scheme deliverer, is paid an administration fee based on the number of houses, so it is not in its financial interest to interfere in the market in any way. I hope that those two assurances will be publicised. I am keen to send a message to Eaga employees and contractors that we think that the scheme is doing a good job. That is not to say that it cannot improve. The right hon. Gentleman has shown us one way forward—a pilot in his area—to which I will of course give due consideration.
The other issue that the right hon. Gentleman has raised in various debates and on BBC programmes relates to timetables. It is okay for me to say that Warm Front is not an emergency service, because it is not, but clearly, as a Member of Parliament, I do not want constituents not to have heat or hot water. That is an appalling situation. If it happened under my local authority, I would be furious, so I need to be furious if it happens under Warm Front as well. We must ensure that timetables are kept to. I have met Eaga to discuss that point, and it has responded positively, but we must build into policy some guarantees and assurances to prevent the sort of thing that happened to the right hon. Gentleman’s constituent, whose name has fallen from my memory, I am afraid, although I should not publicise individual cases anyway. We considered the case that he raised with me, not just specifically but as an example of a generality.
We are debating how to improve the scheme. I am pleased to hear that Eaga has responded positively to the right hon. Gentleman’s investigations. Other Members echo that, and I have met Eaga representatives and been reassured by their commitments. They have also put to me the other side of the story, which involves the many thousands of grateful consumers who have written to thank them and, through them, the Government and the taxpayer. I am determined to ensure that the scheme is the best that it can possibly be, and I thank the right hon. Gentleman for his positive approach in putting forward his ideas without seeking to score cheap political points. That is not his way of doing things, and he should be commended for it. My obligation in response is to take his ideas seriously.
Business Improvement District (Coventry)
I should like to thank you, Mr. Cummings, and through you, Mr. Speaker, of course, for granting this Adjournment debate on the business improvement district programme under way in Coventry. It is a very important topic to big and small companies in Coventry—particularly to the medium to small ones.
The matter was brought to my attention at a meeting in early March by three small companies operating in the Coventry business park. I was then contacted by the university of Warwick and a company on the Warwick science park, representing many more companies, which brought to my attention similar dissatisfaction. I have been very active locally in expressing their disquiet about the expense that the process has involved them in, and I have let it be known that I intend to probe the Department for Communities and Local Government on the matter—I thank the Minister for attending this debate on behalf of the Department. We have tried to take the matter further and to get answers to a number of questions.
To my knowledge, neither in my office in Coventry, nor down here, have we been contacted by a single company in the whole of Coventry in support of the BID. In their five-year plan, the BID promoters laud themselves for their Herculean efforts to contact everybody who needed to be contacted. It struck me as strange, therefore, that three quite important companies—they might be small, but in the context of a small business park, two of them are certainly quite large—had no knowledge of being contacted, in writing or in person, by the BID company.
Out of interest, I checked at the reception of Eu-Matic—one of those companies—and asked whether anyone remembered seeing a letter to that effect, and was told that they did not. Neither the managing director, the general manager nor the finance officer had any recollection of it. The first that they knew of the matter was when a bill came through the door for £16,000—if you please—which is an awful lot of money. It represents an additional 1.5 per cent. supplementary business rate for a small company that exports about 60 or 70 per cent. of its products, which are, believe it or not, components for the automotive industry.
In this day and age, that is an achievement, given that the UK has become less and less a centre for the manufacture of component parts—we still do quite a lot of assembly—which are increasingly manufactured outside the UK. That company has survived through making huge investment in very good product development and manufacturing technologies, and it has remained competitive when the world is going global and when such metal-based door components are increasingly sourced out to the low-cost economies. Those at that company said that they knew nothing about the new rates; as far as they were concerned, they had not been contacted by the BID promoters. As Members can imagine, therefore, it was a bitter blow to learn about the £16,000 supplementary rates bill from the BID promoters, the idea of which is to ensure that Coventry continues to be seen as the best place from which to do business.
I told the chief executive of the BID company that the best thing to do to ensure that Coventry is seen as a good place to do business from is to reduce the business rate, which would be welcomed all round. People would flock to Coventry if the rate was significantly reduced; otherwise, it will become increasingly difficult to sell. However, the BID company claims to have contacted everybody. On 18 March, the chief executive, Mr. Stephen Welch, assured me not only that the three companies with which I had the first meeting—Eu-Matic, McBride and Palmer and Harvey—were contacted in writing, but that they all received an individual visit. That is consonant with the sort of claims that it makes in its five-year plan about the depth and breadth of the consultation.
The companies, however, have no record of such contact—certainly, the managing directors and finance directors of each of the three companies could find no trace of it. I replied to Mr. Welch, “You must have an audit trail. A note must be made of every visit, and it must be dated. You must know who went, whom they saw and for how long.” That was some two months ago, but I still have not received anything from him. One begins to wonder, “Where is this paper trail? Where is this evidence? Are they quite sure that they did carry out this consultation to the extent that they claim?”
I turn my attention to another company that came to see me in the second wave. It is based on Warwick science park, which works very closely with the university. Dr. Colin Fink is medical director of the company, which deals with diagnostic medical equipment of the highest technical quality. His calculation of the participation in the vote—I shall leave a copy of this quote with the Minister for him to consider—is that
“2,520 ballot papers were issued. 7 per cent. (177) were returned by the Post Office. So 2,343 were believed delivered and 49 were re-issued. So 2,392 papers were apparently issued. The Council records 833 were returned as 33 per cent. return. (Why such a poor return I wonder?) In fact of the total business properties”—
“that is 10.85 of the total. The Council reports 54 per cent. were ‘in favour’. I estimate that to be 450 ‘in favour’ results. 450/7693 = 5.8 per cent. of the total business properties. The maximum mandate therefore…was 5.8 per cent. of businesses in Coventry.”
Even if we calculate that percentage using the restricted level of properties that the BID company, rightly or wrongly, wants to use, it still comes out at only 18 per cent. in favour.
I put it to every Member of Parliament, the Minister, the Department, the BID company and the council that 18 per cent. is no basis on which to proceed with a 1.5 per cent. increase in business rate. One could argue that that is where the BID has set the bar. However, if it wants to push through a 1.5 per cent. increase, the bar for participation must be set a lot higher than 18 per cent. of the businesses eligible to vote.
Other companies that I have met and those speaking alongside the university—they are very much on the ball—make no bones about it: they were contacted and told all about it, and they voted against it. The whole of the university voted against it. Everyone on the science park voted against it. Indeed, not only did they vote against it, but they cannot accept the so-called improvements or additional services being offered by the BID company, because standards have been lowered so much that they would not be allowed to continue to train.
The medical equipment company is being told that it cannot have its full-time receptionist. It has to have a van going around every so often, but it does not know how often. It has to have a single camera replacing its fully fledged, proven, tested and accepted system of individual reception for every item that comes in. Given the business of the company concerned, one imagines that such items would include viruses and other pathological goods.
Those people have contacted me. No one has come forward to support the BID. The whole process leaves a great deal to be desired. One cannot set a bar so low that 5.8 per cent. or even 18 per cent. of those voting, not those eligible to vote, is acceptable. People should not claim that they have carried out an effective and extensive survey or consultation—all those words are in the five-year plan—if only 5.8 per cent., or even 18 per cent, vote in favour, and that is after putting through a real selling document. The process has not been conducted on the basis of what people would like, although the BID company pretends that it has. However, anyone who reads the five-year plan can see that it is a document of pretty slick salesmanship—to put it quite bluntly. I wish in no sense to impugn the integrity of any member of the BID team, the council or any of the organisations involved. However, this is not a consultative document. It is a business plan proposed, as the BID team says, on the basis of deep, intensive consultation with the companies concerned. There is no need for me to belabour the point; we know that participation was minimal and that only a minimum of the majority voted in favour of it.
Anyone who reads the document will find that its advertising is subliminal. It suggests that everyone is madly in favour of the plan. The document claims that circulars and junk mail communications were not used to let people know about the ballot. However, when I tried to find out what was used for the ballot, I found a four-sided document with the details of the ballot tucked away on page three of four. It was written in small print and took up only a quarter of the page, and that is all there was about the ballot.
A proper timetable was laid out. I have the document here. It says, “BID ballot” on about a third of the page. It then says:
“We’re supporting Coventry Best For Business…are you?”
On the front page, it says that Jaguar is all up for it. It has the feel of a selling document. I do not want this to be taken further than this Chamber, but it reminded me of the mis-selling of pensions, which had to be cleared up in 1997 by one of our former colleagues, Helen Liddell, who is now high commissioner to Australia. The same sort of technique was used. People were trying to sell something for much more than it was really worth. All that customers were really being sold was puff and smoke.
My hon. Friend and I often collaborate on a number of issues that affect people in Coventry. One of the things that worries me is the fact that we are trying to reduce the amount of so-called red tape on small businesses. About 20 years ago, when we had the big recession in Coventry, there were lots of efforts to establish the business parks, which is the background to our concerns. This plan may have good intentions, but it could quite easily deter investment from coming into Coventry given the present economic climate. Those matters should be considered when we look at the levies mentioned. I can remember the justification for stopping local authorities levelling a business rate. The argument was that the rate was about 3 per cent. of the overheads. In fact, it was about 1.5 per cent, and here is an increase of 1.5 per cent. Therefore, without impinging on the integrity of the company, the plan alarms me. Given the economic situation, the matter must be taken very seriously.
As my hon. Friend has said, we have worked closely on many such issues, and I am very pleased that he has come today and contributed to the debate. Some of the companies are in my hon. Friend’s constituency. This is not a constituency issue; it is a Coventry-wide issue, and he has lent his full support to it. A 1.5 per cent. increase on the business rate is huge, especially as everything else is going up. What a time to do it!
Time is marching on, and I must give the Minister some time to reply. I think that the real reason for the increase is that the city and its organisations, such as the chambers of commerce and CV One, are losing Business Link funding. They are losing funding from the European regional development fund and from a number of other sources. They want to keep themselves going. The chamber of commerce may even be losing the support of its members and needs new funds. The city and its organisations are trying to get a 1.5 per cent. increase in the business rate—I cannot believe that they think that they can get that through—to make good all the things that they are losing. They then ask, “What sort of basis shall we sell it on? What sort of positive benefit shall we offer to these people?” They then come up with two ideas. One is security, and we have seen what that means for one firm—the company on Warwick business park. If it adopts that security, it goes out of business. We know what it means for the others as well. They have perfectly good security already. One of them is part of the Canadian group, Eu-Matic. They will not get investment. Some £16,000 has gone out of their income at the drop of a hat. So the measure will have the opposite effect to the one desired. That is why we are bound to question it.
Therefore, I do not think that the process has been successful. The representations made in the document about what the BID company is going to do need to be considered from a legal point of view. I am not sure that it is not on the very verge of illegality in a number of respects. Have the Department or the BID company taken legal advice? There are several respects in which I think that the company needs to take legal advice, one of which is in respect of UK law—it is probably all right there. I am no lawyer, but I have some experience of the implication of legality in taxation matters. However, I am not so sure about EU law. Imposing a tax on one group of companies but not on another could be open to challenge. Have we had legal advice on that? If we have, I would be very interested to see it. What about the European Court of Human Rights? Are we sure that there is not too great an imposition on one company as opposed to another? That is a separate point. I think that the whole process could be susceptible to challenges on both those fronts. I should like to know that the proposal has been considered and is watertight in both those regards.
My third point relates to the representations. Are we sure that they are capable of being fulfilled, that they have not been oversold and that we are not committed to doing things that we are not able to deliver? Are we sure that the legality in those three respects is in good order? It is mentioned that reductions can be negotiated with the landlords of existing estates. Have we negotiated those reductions and will they be of the order claimed in the document, which is 40 to 60 per cent.? Has that been done?
The BID has been up and running for 10 months now. Outside the city centre, which I understand is covered by CV One, why is it that sports, recreation and leisure facilities are excluded? A lot of the promotional money is directed precisely to their benefit. For example, it is directed at hotels and sports facilities. People coming into the town from outside benefit from everything that is being done there. Despite that, we are making another class of company pay for it. That class is defined very carefully in the document.
I do not wish to take up all the time, and I am conscious that my hon. Friend the Minister will not be able to answer all the points that I have raised today. I will let him have a series of question that I would like answered. He will no doubt tell me that we are launched on the BID now and that it will take at least three years. If Advantage West Midlands does not come in with its money, it will take at least five years. He might say that it is too late to do anything about it now and let us see how we go. My reply to that would be simply that we should not go headlong into it. We should re-test it seriously. It is in the open now, and companies know about it and have received their first bills. We know how it is with a tax reduction—we do not notice it until it arrives on the doorstep. It is the same with a tax increase. People did not realise about the 10p tax increase that was announced a year ago until it landed on their doorstep, although some of us tried to mention it. So it is in this case.
Small companies are competing and do not have time to study the matter. Universities are used to dealing with forms, and I can see why they cottoned on much earlier. The matter is out in the open now, and we should test the water in a non-binding way. We should reissue the offer and say, “This is what is now being offered to you. Do you still wish to continue with the BID?” Let us see what response we get. If we get a favourable response, I shall withdraw and say, “Well, despite all my worst misgivings and the representations made to me by these few companies, of course I will let it go ahead.”
However, if we were to get an overwhelming majority, with a high turnout this time, saying, “No, we really didn’t realise what it was, and we don’t want it,” perhaps we could find something else to do with the money. It is pointless to have money going in that nobody gets any benefit from except the people who are not paying anything towards the BID, such as Coventry chamber of commerce, who are getting back Business Link money, and some of the hotels.
We need to call a halt to further commitments, and it will take a matter of three months to test the water and say, “This is what it’s really about. This is how much you’ve got to pay, and this is what you’re going to get. Do you wish to proceed, or are there alternative ways in which we could proceed?” That does not mean undoing everything, but it would mean people being much happier about a situation that they are currently deeply dissatisfied with.
It is a pleasure to work under your stewardship, Mr. Cummings.
I congratulate my hon. Friend the Member for Coventry, North-West (Mr. Robinson) on securing the debate. He will know even better than me, from his days as a Minister, the power of such debates and the power of Westminster Hall and the spoken and written word here. I am sure that that will echo in Coventry this evening. I also congratulate my hon. Friend the Member for Coventry, South (Mr. Cunningham). Hearing one colleague espouse an issue often makes it a matter for concern, but when a couple of them make their constituents’ case together, that amplifies its importance to local people.
My hon. Friend the Member for Coventry, North-West, said that he knew of no companies that supported the business improvement district programme. I have been talking to my officials about the issue, and they tell me that 54 per cent. of businesses that voted were in favour of the BID, although my hon. Friend made some interesting remarks about the number that voted.
My hon. Friend made an interesting point about turnout. As I am sure he is aware, a vote requires not only an overall majority but an overall majority of the rateable value of companies voting. He mentioned the turnouts for the votes on the BIDs in Coventry—38 36 and 33 per cent. He is right that we need to get better turnouts. Having said that, many wards in local elections in my constituency had lower turnouts than that, with more than two options to choose from. The system that we use for elected representation means that even a lower proportion of people voting can result in people being elected and decisions being made. That is not unusual to us in this country, but my hon. Friend made a pertinent point about the need to have a high turnout in ballots. I agree wholeheartedly that the higher the turnout, the better.
My hon. Friend asked about legal advice, and I undertake to write to him to give more clarity on that. He also mentioned the European Court of Human Rights. From my experience, legislation is ECHR-proofed before it goes through the House. Again, I shall write to him to provide more clarity.
I can understand why my hon. Friend has an interest in this area of policy, as there are two BIDs in Coventry, one in the town centre and one covering the whole of Coventry, as he mentioned. I know that he supports BIDs as a policy, even though he has anxieties about one of the Coventry ones. There are about 71 of them now, and that is the only one that has caused such local difficulties.
Absolutely. I appreciate that, and I thank my hon. Friend for supporting this important change, which has allowed local authorities and BID companies to raise money for good causes in their localities. The purpose of BIDs is to encourage local authorities and businesses to work together for the benefit of their local communities. I can think of examples, although I do not have a BID in my own community. The Peel centre in Gloucester is popular with shoppers, but we have had huge problems with car crime in the area. People have parked their cars, gone to the cinema and been burgled. Perhaps a BID would be the answer for my local council and local companies to raise money for CCTV cameras. Such innovative approaches have borne fruit and been successful across the country.
Improvements to an area via a BID are funded by a levy on non-domestic ratepayers or on a defined class of ratepayers in the area covered. The levy varies by district, as legislation does not prescribe how it should be set or its amount. As my hon. Friend said, in this case it is 1.5 per cent. of the rateable value of a property, plus £200.
There has been widespread interest in and enthusiasm for BIDs and the opportunities that they can offer. As I have said, there are about 71 BIDs, with very successful ones in places such as Kingston, Blackburn and Derby, but there is no template setting out what a BID should or should not include.
The process of implementing a BID, which is the key to the questions that both my hon. Friends asked, is entirely a local initiative. Although the Government have set out the legal framework for the process, we do not take a role in identifying the purpose of initiating a local BID. It is for local businesses and local authorities to work together to determine the requirements of their area and develop a project. However, a number of safeguards are set out in BID legislation to protect ratepayers who are potentially affected and ensure that all ratepayers can have their say.
My hon. Friend the Member for Coventry, North-West, made an interesting point about ballot papers being tucked away on page 3 of a document, and my view is that such things need to be prominent. We need to encourage turnout. We want people to be a part of BIDs and to support them, but that has to happen from a position of knowledge. I take on board my hon. Friend’s concerns about the BID in Coventry, but as I have said, 54 per cent. of businesses that returned the paperwork said that they were in favour of it. I will be happy to discuss that with him elsewhere.
The legislation governing BIDs ensures that before any proposal goes ahead, the businesses concerned must have the opportunity to vote. In identifying who will be liable for the additional levy, and therefore who will be entitled to vote, those developing BID proposals are entitled to ask the local authority to provide the names and addresses of non-domestic ratepayers from its local rating list, and the rateable values of the businesses in the area to be covered by the proposed BIDs.
It is up to businesses themselves to be satisfied that they have arrangements in place to ensure that a BID ballot paper reaches the person who will sign it on behalf of their business—
It being Two o’clock, the motion for the Adjournment of the sitting lapsed, without Question put.