Wednesday 17 December 2008
[Mr. Frank Cook in the Chair]
Motion made, and Question proposed, That the sitting be now adjourned.—(Mark Tami.)
The first topic for consideration today is the operation of the libel laws. As I have no specific knowledge of what aspects of the subject are to be put before us, I thought it advisable to refer to “Erskine May”. Its advice is as follows:
“reflections must not be cast in debate upon the conduct of the Sovereign, the heir to the throne, or other members of the royal family, the Lord Chancellor, the Governor-General of an independent territory, the Speaker, the Chairman of Ways and Means, Members of either House of Parliament, or judges of the superior courts of the United Kingdom, including persons holding the position of a judge, such as circuit judges and their deputies, as well as recorders.”
I am not saying that anyone will be so indiscreet as to do that. To do so, the decision must be based on a substantive motion to be placed before the House. We do not have time for that, but I am sure that everyone will bear in mind the advice that I offer. I call Mr. Denis MacShane.
Thank you, Mr. Cook. Believe me, I have no intention of transgressing your wise suggestions.
I start with a short anecdote. I have just returned from Washington. With other Members of this House, I attended a meeting of the NATO Parliamentary Assembly. You, Mr. Cook, will be well aware of its workings, as you are a distinguished member of the assembly. We were invited to a reception at the Congress building on Monday night by Nancy Pelosi, the Speaker of the House and a dear friend of many of us. She took us to Congress and led me to sit in the Speaker’s chair in the House of Representatives.
As a political tourist, I found that most interesting. As I sat there, I reflected on this morning’s debate, because Congress is poised once again to pass a new law to protect its citizens and all who live there—but from what? To protect them from this, our country, Britain. As in the 18th century, the British establishment is seeking to silence Americans who want to reveal the truth about the murkier goings-on in our interdependent world. I speak not, I am glad to say, about the Government but about the English legal system. Lawyers and courts are conspiring to shut down the cold light of independent thinking and writing about what some of the richest and most powerful people in the world are up to.
The practice of libel tourism as it is known—the willingness of British courts to allow wealthy foreigners who do not live here to attack publications that have no connection with Britain—is now an international scandal. It shames Britain and makes a mockery of the idea that Britain is a protector of core democratic freedoms. Libel tourism sounds innocuous, but underneath the banal phrase is a major assault on freedom of information, which in today’s complex world is more necessary than ever if evil, such as the jihad ideology that led to the Mumbai massacres, is not to flourish, and if those who traffic arms, blood diamonds, drugs and money to support Islamist extremist organisations that hide behind charitable status are not to be exposed.
I put it to the House that it is unbelievable that the state legislatures of New York and Illinois, and Congress itself, are having to pass Bills to stop British courts seeking to fine and punish American journalists and writers for publishing books and articles that may be freely read in the United States but which a British judge has decided are offensive to wealthy foreigners who can hire lawyers in Britain to persuade a British court to become a new Soviet-style organ of censorship against freedom of expression.
For a libel action to be successfully mounted in the United Kingdom, there would have to be a libel in the UK. All the laws in the world passed by the United States cannot stop that happening. Would the hon. Gentleman not agree?
That is self-evident, but the US is seeking to protect its citizens and those who reside there who write and publish material that would not be defamatory and that would be protected by the first amendment from facing heavy fines and heavy awards of costs in British courts that would then render it impossible or dangerous for such writers to travel to Britain. That is unacceptable between the two great countries of the Euro-Atlantic alliance.
I wonder whether the hon. Gentleman might make his speech in his own time.
It is worrying that 30 non-governmental organisations recently met human rights lawyers to express concern that libel tourists come to London to prevent the publication of NGO reports on parts of the world and individuals that, of course, rarely get much coverage in our newspapers. NGOs are an important source and conduit of information that is of interest to public policy and to the broader public, telling us what is going on and who is doing what to whom in parts of the world. These things need exposure. The NGOs are meeting lawyers because, thanks to libel tourism, some of the individuals mentioned in their reports can come here and attack those publications, seeking redress against distinguished organisations such as Human Rights Watch.
We all know that the libel laws in Britain have always been the plaything of the rich. Too many editors believe that destroying people by revealing aspects of their private lives helps sell newspapers. I shall not abuse parliamentary privilege—although, Mr. Cook, “Erskine May” does not extend the protection that you quoted to newspapermen—by describing the sexual antics and peccadilloes of newspaper proprietors, editors and journalists. [Hon. Members: “Go on!”] Well, it is Christmas and I shall not be tempted down that path.
If the editors of the Daily Mail or the News of the World, or Mr. Murdoch or Lord Rothermere, ever suffered the invasion of privacy and the pestering of children and family and friends to gain tittle-tattle gossip of the sort that they inflict on others, they would be first in line to demand even stronger laws to protect privacy when no public interest or illegal wrongdoing was involved.
Successive Governments have shied away from reforming libel and privacy laws, for fear of upsetting media friends. Stanley Baldwin was the last Prime Minister to have the courage to denounce the bullying behaviour of newspapers and their ideological crusades masquerading as news reporting, with his famous description of our papers enjoying
“power without responsibility—the prerogative of the harlot throughout the ages.”
The Press Complaints Commission is utterly toothless, and its code of conduct is treated with contempt by the very editors who serve on it. The National Union of Journalists has a better code of conduct, but proprietors and editors refuse to co-operate with the NUJ to uphold high standards. No one wants to dictate who can or cannot be a journalist. As it is, too many decent journalists face unemployment as the economics of publishing printed media become difficult, if not impossible.
We need a small claims libel court, or the defamation equivalent of an employment tribunal for the poor and vulnerable who are traduced by the press. We need limits on what a libel court can award by way of damages.
Yes, I am. The hon. and learned Gentleman, of course, is an adornment to the libel bar. I am sure that we will be given many insights into its operations when he speaks in his capacity as the Opposition spokesman.
There is no possibility of people securing a quick apology and redress. I believe that there should be no conditional fees except for those on modest incomes. Indeed, I would go so far as to say only those eligible for legal aid should be allowed conditional fees.
From a sedentary position, the hon. Gentleman asks why. Conditional fees are now being used to stack up multi-sum costs, with lawyers being completely out of control in what they charge. All that falls on the defendant if a single judge finds in favour of the plaintiff. Perhaps only one or two other countries work like that.
The object of going to court is not to make it a racket for lawyers. The object should be to obtain a correction or an apology with due prominence and not to make mammoth financial gains. A time limit should be put in place for seeking redress, so that after the passage of, say, six months or a year it would no longer be possible to sue a publication or internet site. Newspaper editors and internet comment sites and blogs also have to accept responsibility. Too much is published in too many parts of the world that breaks all the deontological rules of journalism, and too many powerful politicians adopt the late General de Gaulle’s view that news broadcasts and television should always reflect the views of the state.
A particular problem surrounds internet blogs. Even on a well-run site, such as The Guardian comment is free site, the editors allow anonymous hate mailers to defame and insult people in a frightening manner. A simple rule might be to demand the publication of names and addresses, except where for good reason, as in a newspaper letters column, a name and address is withheld. Internet anonymity is now used too much to protect hate speech and defamatory insults.
Much of that, however, cannot be regulated in one country alone, but requires a global sense of responsibility. In the meantime, the purpose of today’s debate is to stress the need for urgent action to stop London being the world centre for assaults on freedom of expression. The US Congress, where I was on Monday night, now proposes to legislate through its Free Speech Protection Act 2008, which is expressly designed to protect Americans from British courts and judges seeking to curtail freedom of expression.
The case arises from the Kafkaesque position of the writer Rachel Ehrenfeld, whose book, entitled “Funding Evil”, examined the flow of money towards extremist organisations that preach the ideology of hate associated with Wahabism and other democracy-denying aspects of fundamentalist Islamic ideology. It is not exactly a secret that a great deal of the money that has financed fundamentalist extremist organisations that support jihad has come from Saudi Arabia. Ms Ehrenfeld’s book, which was published in America, not Britain, named a Saudi billionaire called Mr. Khalid bin Mahfouz. Although the book was published in the United States, and was not on sale in any British bookshop, he found lawyers to sue in Britain. A British judge imposed a fine and costs on Ms Ehrenfeld, and said that her book should be destroyed, even though she was not in the court. No American court would have entertained such overt censorship.
The fullest examination is vital of those raising money, sometimes ostensibly for charitable work, but which ends up promoting fundamentalist ideology that scrambles young men’s and boys’ minds and leads them to become terrorists. There is no freedom of expression in Saudi Arabia, so it is the duty of others to expose what is happening. With the help of British libel lawyers, Mr. Mahfouz has launched 33 suits against those who are investigating this important area of public concern. Cambridge University Press was obliged to pulp its book “Alms for Jihad”, written by Robert Collins and J. Millard Burr, rather than face a libel action in British courts, which seem at the moment to side with those who finance extremism rather than those who seek to curb it. The case of Mr. Nadhmi Auchi also comes to mind. What is happening when Cambridge University Press, not some odd, little, obsessive publishing house, but one of the flowers of British publishing for centuries, has to pulp a book because British courts will not uphold freedom of expression?
A Tunisian has used the British courts to sue the Dubai television network, al-Arabiya, which broadcasts in Arabic. Last November, a British judge awarded the man £165,000 without al-Arabiya being in court. Mr. Mohammed Sawalha attacked this summer’s celebrations of the 60th anniversary of the state of Israel and referred to the “Jewish evil” in Britain. That was reported on the political website, Harry’s place, and immediately Mr. Sawalha threatened to sue. At a time when we need the maximum examination of who is financing ideology that leads to terrorism, we find that British courts, judges and lawyers are acting in the opposite direction to silence investigations. I doubt whether any of the lawyers, the judge or court officials in question can read Arabic or have any real acquaintance with Wahabism or Islamic fundamentalist ideology, and yet they act as defenders of those who promote extremist ideology, not those who try to expose it.
After the scandal of London being the home to many preachers of hate and militant Islamist ideology, in the 1990s and into this century, against whom the British authorities refused to move until July 2005, when the scales were lifted from some, but not all, eyes, another part of the British establishment—judges and lawyers—are protecting those accused of funding anti-democratic ideology and seeking to punish those who expose this evil. Quite rightly, American law-makers have moved to protect their citizens against such extraordinary decisions by the British legal system. Rather than allow the US Congress to pass laws to uphold freedom of speech, the House of Commons should move to outlaw libel tourism.
Moving away from ideology, the surreal nature of libel tourism can be found in the case of the Danish paper, Ekstra Bladet, which found itself being sued by the Iceland-based bank, Kaupthing, after it criticised it. Kaupthing’s default has caused distress to British savers, and every Member will have a constituent who has lost money and is very concerned. The collapse and wrongdoing of Kaupthing might be about to return Iceland to a rural economy. One would have thought, therefore, that exposure of the bank’s practices would have been in the widest public interest, but no. The British libel firm, Schilling and Lom—it certainly made plenty of shillings out of this case—which seems to specialise in touting for business, along with the infamous Carter-Ruck, acted for Kaupthing in London on the grounds that the articles critical of Kaupthing were available on the web. Again, one might have hoped that a British judge would have simply thrown out the case, but of course libel law is a very lucrative business for those small numbers of solicitors and barristers who practise it.
Consideration needs to be given to the role of one particular judge. I shall not name him, because he is an honourable man, but it cannot be right that one area of law is principally in the hands of a single judge. There are not three or four judges discussing this and thereby creating a kind of common law, in which different opinions can be challenged.
I could cite further examples of rich Russian and Ukrainian oligarchs criticised in publications with no, or nugatory, circulation or presence in the UK, mainly through the web, using British courts to seek to close down or attack their critics. I am informed that there will be a ruling today about an article in The New York Times in a case brought by a plaintiff here in London. I do not know what the result will be, but why on earth is a British judge deciding on, or even hearing, a case against one of the world’s great papers, simply because the plaintiff does not have the courage to take his case to, or knows that it would not stand up in, a New York court?
We need to end libel tourism. It would be helpful if the Law Society investigated the behaviour of firms such as Schilling and Lom and Carter-Ruck, because actively touting for business is a serious problem. It will require legislation in our Parliament, not in the US Congress, to bring libel tourism to an end, and I welcome the Culture, Media and Sport Committee’s decision to hold an investigation into libel law. However, will the Minister examine whether the draft Civil Law Reform Bill, which the House will deal with in this Session, could include a small clause on libel tourism? Such a clause could assert that any action for defamation in a British court would require that the publication be based in the UK and that the plaintiff have a strong connection with the UK. The old legal doctrine of forum non conveniens needs to be asserted—people should sue in the country where the publication was issued and of which they are a citizen. Damages should not be greater than £10,000 and costs should have to be met by the plaintiff with conditional fees available only to those who would qualify for legal aid. Furthermore, reference to a link or some other publication would not be grounds for a libel action. Such a clause could go further and enshrine in law the so-called Reynolds ruling, which allows a defence of public interest in reporting on individuals. A plaintiff should have to prove malice and a reckless disregard for the truth, to paraphrase US defamation law. In these times when swindlers have been allowed to create their pyramids of debt, we need stronger journalism and judges who defend the public’s right to know and not the lawyer’s right to use the law to maximise his profit on behalf of causes that are not worthy of consideration by a British court.
I am grateful to have been awarded this debate. I will listen to comments from hon. Members and from the Opposition spokesman, the hon. and learned Member for Harborough (Mr. Garnier), who, as I said, is himself one of the adornments of the libel Bar in Britain. British citizens deserve protection against the lies and invasion of privacy that some of our newspapers indulge in, but Britain should not be a new world centre in which wealthy foreigners can seek redress against writers of publications that have little connection with our country. It is time for libel tourism to be ended, and it is better if the House of Commons and not the US Congress takes in hand the necessary reforms to stop this practice that shames our democracy.
The protocol of 90-minute debates in this Chamber requires us to start the first of the three wind-up speeches at 10.30. That means that we have 39 minutes between now and then, and I have five individuals seeking to catch my eye. I ask those Members to bear the time limitations in mind when they make their speeches, and also when they accept or respond to interventions.
I congratulate the right hon. Member for Rotherham (Mr. MacShane) on securing the debate. The timing is important because English PEN and Index on Censorship are conducting their own public inquiry into the conduct of libel laws. The Culture, Media and Sport Committee looked last year into the issue of privacy intrusion and the prospects of being able to deal with it solely through self-regulation in the media. It will also be going on specifically to consider this issue, so the debate is timely.
I should like to make some declarations of interest. I am a client of the excellent Carter-Ruck and I am currently taking recourse to the libel courts regarding issues relating to the media.
It is important that we recognise the vital role that the press plays in underpinning our liberal democracy—the way in which it endeavours to secure open government and to hold those in the public sector to account. In some ways, we need to ask why it is that the news media has to play such an important role—perhaps it is because the strength of the Executive within our political system is so strong that often Parliament is more neutered in that role compared with the media.
As 1960s’ children, many of us have grown up with an awareness of the importance of the national media’s role. In the US, we all remember the role that Woodward and Bernstein played in Watergate. Moreover, I remember the campaigning way in which The Sunday Times ran story after story on how the parents of children who had taken thalidomide had been so badly let down by both the drug companies and Government.
It is often said that the pen is mightier than the sword. Indeed, the pen is very mighty, which is why we have a legal system that ensures that if the media behave irresponsibly, people have recourse to the libel courts. Very often damage is done to families when kiss-and-tell stories or other revelations take place, and that damage is left behind for many years to come. Many people might well be tempted to tell their own story. Perhaps they might be offered money to tell stories, but they may all live to regret it subsequently.
However, we must be cautious about entering into a situation in which libel laws are greatly restricted, particularly when we remember that it is not necessarily Russian billionaires or those who can buy their way into protection who are affected. We just have to think about what happened to Kate and Gerry McCann. Four newspapers thought it appropriate and responsible to suggest that the McCanns had been responsible for the death of Madeleine and the disposal of her body. It is important to remember that it was the courts that brought the libel to an end, and the newspapers had to publish, on their front pages, in an unprecedented way, apologies to Kate and Gerry McCann.
I admit that I was frightened to come to this debate and to express my views about the media. One could be subjected to unbridled retribution by the media if one were to make comments about the appropriateness of libel laws. I hope that those who report my speech will quote me in full when I say that I feel strongly that it is important for Members of Parliament not to be intimidated by the press in speaking out on this issue.
I have had my own personal experience. A style of cut-and-paste journalism led to a report that suggested that when I was unwell, I had managed to work in the City, but not here. Those allegations were false. After several calls with journalists, I finally came upon a very empathetic female journalist from The Daily Telegraph who realised halfway through her interview that she was dealing with someone who had suffered previously from mental ill health. Unfortunately, very often journalists are looking for the story and not necessarily for the full truth.
We must bear it in mind that it is often particular newspapers from a particular newspaper group that perform the worst. If we look at the number of complaints that go to the Press Complaints Commission, it is clear that one group has far more complaints made against it. We must not cast aspersions across the whole of the media as a result of the behaviour of a very limited number of journalists. I was interested to see that the book “Flat Earth News”—recommended to me by Alastair Campbell in the briefest of chats—referred to a particular newspaper group that acts with unmitigated spite to cripple reputations, and to kill ideas regardless of justice and truth.
I am very mindful of others who wish to speak, so I will bring my remarks to a conclusion after speaking briefly about the operation of conditional fee agreements, which was criticised earlier. CFAs are often wrongly described as a contingency fee agreement. There appears to be the perception that a lawyer in a successful case is entitled to a percentage of the damages won. However, the arrangement does not work in that way. If the case is lost, the lawyer gets nothing. If the case is won, the lawyer is entitled to be paid his basic charges in addition to a success fee, which is a percentage uplift on the basic charges. The winning client is entitled to seek to recover from the losing opponent his reasonable costs, which are assessed by the court if not agreed, and which may include a reasonable success fee and a reasonable after-the-event insurance premium.
Both the level of the success fee and the amount of the premium are also subject to assessment by the court if the costs cannot be agreed. Success fees are typically staggered. If a case is settled before proceedings are issued, the success fee will normally be capped at 25 per cent. It only increases to 100 per cent. if the case looks as though it will progress to trial, where the risks are much higher. The availability of ATE insurance means that if a client loses, the insurance will cover—up to a maximum of the indemnity in the original policy—the newspaper defendant’s cost. It is clear that libel lawyers under CFAs act for many people who are on income support, including individuals who may well have been falsely accused of extremely serious crimes.
There is great danger in how the Government and Parliament act because, in many ways, they always take rights away from those who are in the middle of society. The idea that, somehow, only those who are on income support can have access to CFAs strikes me as being yet another blow against the lower middle class and their ability to access the courts. Complaints are made about the cost of libel courts. Unfortunately, the reality is that the cost of all courts stops many of my constituents having proper access to them to defend their rights, whatever the issue.
I congratulate the right hon. Member for Rotherham (Mr. MacShane) on securing the debate, which is on an incredibly important subject. I look forward to hearing the Minister’s response to the extremely important points that were made on the phenomenon of libel tourism. The hon. Member for Croydon, Central (Mr. Pelling) also made some important points on the protection of individuals against irresponsible journalism, and I absolutely accept his concerns.
I apologise for the fact that I must leave before the end of the debate, but I have a long-standing commitment to meet. I warned you of that earlier, Mr. Cook.
I have two reasons for contributing to the debate. First, I have an interest in, and commitment to, the incredibly important principle of freedom of expression. Secondly, I have an interest in serious and responsible investigative journalism. Those two things are essential to the proper functioning of a liberal, democratic society. It is essential that journalists are able to perform that function, to root out wrongdoing, whether it is by Government officials, politicians or private individuals, and to hold Governments to account. As the right hon. Gentleman indicated, it could protect us from harm.
There are widespread concerns among journalists and others that the UK libel laws, combined with the cost of defamation litigation, act as a constraint on, and an impediment to, the effective and legitimate work of investigative journalists. Those concerns have been heightened by the application of libel law to those who contribute to the internet and those who write blogs. I have no interest in people who make wild allegations that are not supported by facts. They do not deserve the protection of the law.
I shall offer one case study—I stress that I do not know all the details or the full story—that illustrates how the threat of defamation proceedings using, primarily but not exclusively, UK libel laws may succeed in closing down legitimate inquiry and reporting. I should also stress that I do not want to use this opportunity to take advantage of the privilege that we enjoy to make fresh allegations against any individual.
The case involves Nadhmi Auchi, whom the right hon. Gentleman mentioned. He is a British citizen—an Iraqi exile—and he is reported to be a multi-billionaire. He was convicted in France in 2003 of fraud in a trial involving the oil company Elf. Importantly, he continues to assert his innocence of the charges—there was a conviction, but he is pursuing routes of appeal against it. He was barred from entering the United States in 2005. My interest in the matter is in his connections to Tony Rezco, who was convicted of fraud, money laundering and bribe-related charges in Illinois, and who is currently in prison pending sentencing. We understand that sentencing has been delayed, and it has been suggested that he should talk to federal prosecutors, especially about allegations against Illinois Governor Blagojevich, which are being investigated. There is political interest in the US because of the connections between Rezko and President-elect Obama. I make no allegation at all relating to the latter.
There have been reports that a company related to Mr. Auchi registered a loan of $3.5 million to Tony Rezko on 23 May 2005. That and other alleged connections are obviously of great interest to investigative journalists and others. More to the point, it is legitimate to investigate such a matter, given that Mr. Auchi is a prominent British citizen with political connections in this country and overseas. As I said, it is not appropriate to go into more detail, but it is alleged that Mr. Auchi and his lawyers, Carter-Ruck, have been making strenuous efforts to close down public debate. Of course, it is absolutely legitimate for any citizen to demand accurate and rigorous investigation and reporting. The question is whether UK libel laws have the disproportionate effect of discouraging legitimate reporting. Many believe that they do.
On 28 June, Private Eye reported Mr. Auchi’s instructions to Carter-Ruck. The article states:
“Carter-Ruck’s first target was a series of revelatory articles”—
concerning Mr. Auchi—
“printed in the Observer in 2003, which American bloggers and journalists were starting to notice.”
Later, however, the article states:
“You will search in vain now, however, to find most of the Observer’s reports.”
Those reports were from five years ago. It has been reported in the US that Carter-Ruck has been writing to US and British newspapers and websites demanding removal of the material that it deems defamatory of its client. Many are concerned about the fact that creating a link on a blog to a newspaper article, which may have been available for several years to anyone searching the internet, can result in action being threatened or taken. Is that legitimate? Alternatively, should a blogger be able to rely on the journalistic integrity of reliable news sources when a story has already been published and when it has existed for several years?
What steps should be taken? A doctrine arising from Reynolds v. Times Newspapers Ltd and others, 1999, seeks to protect serious investigative journalists. Guidance given during that case, as I understand it, included 10 principles that investigative journalists should follow. However, subsequent cases appear not to have applied the principles as intended by the Reynolds guidance, and the protection offered to serious, investigative journalists has not been as great as had been anticipated following the judgment.
Jameel and others v. The Wall Street Journal Europe Sprl, which was heard in the House of Lords, reasserted the importance of the principles enshrined in the Reynolds judgment, and there is some evidence that courts’ interpretation of the principles appears to have improved since. However, the question is whether those principles should be enshrined in statute to give them greater force and clarity. Is there also a case for looking at the burden of proof? I make no judgment about what ultimately should happen. I suggest that this is an appropriate area for consideration by a royal commission.
This is a legitimate area that needs consideration. As the right hon. Gentleman said, it is a long time since libel laws have been looked at and further consideration is long overdue.
I congratulate the right hon. Member for Rotherham (Mr. MacShane) on securing the debate and the hon. Members for Croydon, Central (Mr. Pelling) and for North Norfolk (Norman Lamb) on their speeches, both of which contained much good sense.
I draw attention to my declaration in the Register of Members’ Interests. As a journalist, I write for The Times and have been an executive of that newspaper as news editor. I am committed to the principle of free expression and the freedom of the press. That is not only a consequence of my professional career and vocation, but because I believe that it is only through an effective free press that the exercise and abuse of power can be monitored effectively.
While this country has the police, the courts and a system designed to track down and punish those who do wrong, the press has historically played an invaluable role in bringing such people to the attention of the courts and the police. Sometimes the press is needed to draw our attention to the failure of the authorities in the pursuit of wrongdoing, extremism or other activities that threaten the public interest. Only this week, The Times pointed out that someone who has connections to Islamist extremism that might concern us all has been employed as an adviser to the Metropolitan police’s Muslim contact unit.
Not just newspapers, but other institutions that exercise a journalistic or quasi-journalistic function have exposed extremism in public life. Think-tanks such as Policy Exchange, which I used to chair, and the Centre for Social Cohesion have pointed out the extent of extremist influence—particularly but not exclusively Islamist extremist influence—in British public life. Because of the international nature of the extremist threat, there are examples of the press being more effective than states or international institutions in exposing such dangers. An example is the work of Claudia Rosett at The Wall Street Journal in exposing the failure of the UN effectively to police sanctions against Saddam Hussein. In all those areas, free expression and a free press have been vital in exposing abuses.
The right hon. Member for Rotherham pointed out that it is of particular concern to all of us who are attached to the freedom of the press that individuals who have been alleged to have links to extremism have used British courts to close down the investigation or publication of allegations that are in the public interest. He mentioned the examples of Khalid bin Mahfouz and Mohammed Sawalha, a British resident who tries to close down legitimate investigation into extremism on the internet.
As the right hon. Gentleman and the hon. Member for North Norfolk pointed out, there is in effect a public interest defence in law for the sort of investigative journalism that I am sure we would all applaud. The Reynolds defence offers journalists and newspapers a form of qualified privilege. That is qualitatively different from the sort of privilege enjoyed in courts and by Members of Parliament because it allows newspapers the comfort that it is legitimate for them to publish allegations provided that the process followed demonstrates that the journalism they are engaged in is of high seriousness, that appropriate steps have been taken to ensure that the allegations are in the public interest and that they are being properly investigated. They do not subsequently have to prove justification to the same threshold required in other cases.
A problem with the Reynolds defence is that instead of being an aid to free expression, according to some it has become an obstacle to free expression. The guidance that the courts originally gave newspapers to help them publish material in the public interest has become another set of hurdles that they have to clear. The hon. Member for North Norfolk pointed out that Jameel and others v. Wall Street Journal Europe Sprl made it perfectly clear that the Reynolds defence should help, not hinder, free expression.
There has been only sporadic implementation of that defence and a misunderstanding of it in many courts. That is why at the very least it is worth exploring whether we can enshrine the principles of the Reynolds defence in statute. That would send a clear signal from Parliament to the courts that the Reynolds defence is in effect as a public interest defence that allows the publication of material that should be part of public debate, particularly when serious issues such as extremism and terrorism need to be investigated.
The hon. Gentleman has set out some components of the Reynolds defence. I believe that part of that approach of responsible journalism is to report the denial of the allegations by the accused. That is not a requirement, but I am interested to hear his view on the matter.
The hon. Gentleman is right that broadly 10 principles are outlined in the Reynolds defence, one of which is the strong suggestion that an effort should be made to secure the response of the individual against whom allegations are made. It is a basic principle of good journalism that the other person’s case should be heard.
I would not wish to erect those 10 principles into 10 absolute hurdles. Discretion should be exercised in the courts and any change to the law should acknowledge that. The important points are whether the material that is published is in the public interest, whether the case is urgent and important enough to justify publication and whether overall the journalists, the newspaper or the blog can demonstrate that they have done everything in their power to ascertain the truth and importance of the allegations that are published.
On costs, the point has been made that conditional fee agreements can raise profound questions of a chilling effect on publication. Indeed, Lord Hoffman has pointed out that freedom of expression may be seriously inhibited by conditional fee agreements. The hon. Member for Croydon, Central has pointed out that they can be helpful to individuals without resources who have been defamed. I do not wish to see the end of them, but it is important that an effort is made not to perpetuate the chilling effect on publication in the ongoing review into the costs of civil judgment. In particular, small and independent newspapers, think-tanks, research groups and other organisations that are vital components of a free and rigorous culture of debate and accountability must be protected in any structure that we create.
Finally, it has been pointed out that internet publication can lead to links being created to articles that were published and brought into the public domain four or five years previously because they remain on an internet archive. That may be done to substantiate a point that is being made afresh. An individual who creates such a link to material that is already in the public domain can be sued. At the very least, it is questionable whether we should allow the courts to pursue an individual who in all innocence creates a link to an article that has not been the subject of a defamation action. That individual may be sued because of the desire of another to pick off a weak link who he considers to be rich pickings and a suitably unprotected victim. In those circumstances, it would be appropriate for the court to ask, “Why did you not go for the big boys first?”
I join others in congratulating the right hon. Member for Rotherham (Mr. MacShane) on securing this debate. It has been a particularly high-quality debate, but the battle lines have been drawn. The right hon. Member for Rotherham and my hon. Friend the Member for Surrey Heath (Michael Gove), with their distinguished journalistic backgrounds, veer towards the freedom of expression side of the argument; my neighbour the hon. Member for Croydon, Central (Mr. Pelling) veers towards the protection of the individual, and I will come down on his side in my remarks.
I draw it to the attention of the right hon. Member for Rotherham that at the beginning, Mr. Cook, you sensibly quoted from “Erskine May”, but he has called in public, in the mother of Parliaments, for an investigation of two firms of solicitors. I sincerely hope that he has something with which to back that up, because it is one of the most serious allegations that can be made against a component part of the judiciary.
I should have declared an interest as a former president of the National Union of Journalists; I hope that all of us here declare all our interests. In my region of south Yorkshire, we have taken action against solicitors in connection with moneys and compensation paid to miners. The notion that an ordinary individual, let alone an MP in the House of Commons, cannot ask the Law Society to investigate any solicitors’ firm is quite remarkable. Such outfits tout for business. They boast on their websites that they will obtain redress. The Law Society needs to take the matter into consideration.
There is a world of difference between complaining about the activities of a firm of solicitors in conducting its business and calling on the Law Society to investigate, but I will let the matter rest there. Perhaps I should have declared at the outset my interest as a practising solicitor, although, having had the conduct of libel actions in the past, I no longer have any libel practice.
What we have here is the clash of three conflicting rights against each other: freedom of expression, the right to privacy and the right not to be libelled. There is an important distinction to be made between the right to privacy and the right not to be libelled, or between privacy and libel. If someone engages, for example, in sadomasochistic sex in private and a newspaper publishes that fact, it is open to the people concerned to complain that their right to privacy has been breached. If someone has said, obiter, “Sadomasochistic sex is not the sort of thing I get up to,” the press are quite right to say that that person does not have a right to privacy, because he is, in effect, being a hypocrite. If, however, someone does not engage in sadomasochistic sex but a newspaper says that he is, that is libel. There is a big difference between privacy and libel, and I hope that on another occasion we might have a debate on the right to privacy rather than on libel.
The press focus on the right to freedom of expression. My hon. Friend the Member for Surrey Heath highlighted the fact that the press have done noble service in exposing crimes. However, it is not that that people are complaining about; of course the press have a role in exposing crime, wrongdoing and hypocrisy. They are complaining about individuals’ right to privacy being breached. That is where I suspect my hon. Friend and I interpret the same set of facts differently with regard to what is in the public interest. Is it in the public interest that someone who engages in a private activity on his own property should have that fact published in a newspaper or broadcast?
The right hon. Member for Rotherham discussed the publication of a New York Times article and its worries about libel laws here. The point, which relates to my intervention, is that if The New York Times is published in the United Kingdom, the newspaper must stand by its statements under the jurisdiction of UK laws. If the United States passes a law saying that that cannot happen, that will not affect what goes on here, because the United Kingdom is the jurisdiction to which any publication or statement made in the United Kingdom is subject. That applies to books as well. A book published in the United Kingdom, although it may have been written overseas, is subject to UK laws.
It is very decent of the hon. Gentleman to give way. I do not want to eat into the former Front-Bench spokesman’s time, but is he aware of the consequences of following that path of argument? The libel tourism Act that is now before two US state legislatures, and that may possibly go to Congress, will allow an American citizen to countersue in a US court and for an American court to impose damages and fines on someone who sued in a British court.
No, it is not that. It is British imperialism to think that a British court can stop the publication of a book, order it to be pulped and impose a fine on an American writer for something that has not been sold or displayed in a book shop in this country. We must understand forum non conveniens. We sue in the country where the person is principally based and where the publication is published, not in a country where a few copies may be bought.
The right hon. Gentleman repeats points that he made in his speech. What the Americans do and how they conduct themselves in the courts is entirely a matter for them. The Front-Bench spokesman, my hon. and learned Friend the Member for Harborough (Mr. Garnier), knows far more about the libel laws than I do and will no doubt touch on that. I am making the simple point that a publication in this country is subject to UK laws.
On the question of contingency fees, I think that they are one of the most significant developments in the protection of the individual. Before their introduction, the only people who could run a libel action were those on legal aid and the very rich, not the middle class. I am happy to be a part of the middle class and to stand up for its values—
I congratulate the Government on introducing that measure—I think it was this Government who introduced it—because it allows the individual a chance to fight back if he feels that his privacy has been breached or that he has been libelled.
My hon. Friend the Member for Surrey Heath spoke about Lord Hoffmann’s remarks on contingency fees in the House of Lords. In the same judgment, Lord Hoffmann said that the right to expression does not trump the right to privacy or the right not to be libelled, that there must be a balance and that one was not to exclude the other.
One good suggestion made by the right hon. Member for Rotherham was that of a small claims court for libel action. I had not heard that idea before today. The MP whose local newspaper has misreported him wants some little vehicle to make his point. The Press Complaints Commission still has a long way to go to establish its credibility fully on that front, so such a vehicle has some attraction. If some inquiry goes into it, as the hon. Member for North Norfolk (Norman Lamb) suggested, I hope that it will be on the agenda.
Is the hon. Gentleman aware that there is a form of small claims court in the pre-defamation protocol that must be gone through? Using that, I have settled out of court with a small sum: an immediate apology in the newspaper and £100 paid to my local church. I settled in that way with a number of newspapers that repeated a defamation almost innocently. We should use the large hammer to crack the large nut.
I seem to be in a minority in not being subject or party to a libel action, so I do not speak with any experience. My hon. Friend—excuse me, the hon. Gentleman—makes a useful contribution. [Interruption.] He is now an ex-Friend, but he is still a personal friend.
The media in this country are tremendous. They play an important role. They are, of course, self-appointed and self-selecting, but their contribution to British society is none the less paramount. However, they must realise that at times, some elements of the media can behave irresponsibly. The libel laws exist to protect the citizens of this country, and those laws should not be eroded.
I should also start by declaring interests, in that I have also had to seek recourse to talk to lawyers and indeed pay them in relation to a media attack. However, I did so with a heavy heart and the matter has not yet gone any further into court. That is because I think that there is a real challenge in this country at the moment in respect of threats to free speech. I do not think that that particular right—the right to free expression—receives enough protection in the law or by the police.
My record on this issue personally is one of campaigning generally for more freedom of expression, for example in respect of the abolition of the law on blasphemy. I did not have the opportunity to check if hon. Members who are arguing for free speech in respect of the press voted the right way on all the votes that we had on the abolition of that law, but I certainly welcome the fact that we no longer have it. Indeed, I played a part in defeating the Government’s original proposals on religious hatred, which were a real threat to free expression.
There is also an issue in respect of overuse of section 5 of the Public Order Act 1986, both in terms of its scope and the way that the police actually police it. What we are dealing with now is another area where there needs to be some work done, and I speak on behalf of my party in this respect.
It is important to pay tribute to organisations that are not necessarily sponsoring this debate but are sponsoring calls for a review of the libel laws, such as PEN, the writers’ organisation that has done so much work in campaigning for the civil rights and human rights of writers abroad and indeed for the freedom to author in this country, and Index on Censorship. There is also Article 19, the organisation that is 20 years old this year, which has a fantastic record abroad more than here in seeking to ensure that there is freedom of expression.
One of the questions that needs to be asked, as well as the questions about the libel laws, is whether or not the Government are concerned about other issues that affect the ability of the press and others to speak freely. There is a proposal for a defamation of religion provision at the UN and there is a law against holocaust denial, which emanates from the EU. It is an outrageous thing to deny the holocaust, but I do not think that we should criminalise being wrong.
Also, we have a law in this country on criminal defamation, which relates to this debate. So I would be interested to know if the Government can explain what their proposals are on this issue, because in answer to a question from Lord Lester of Herne Hill on 13 May 2008 about whether or not they planned to abolish the common law offence of criminal libel, the Government said:
“We plan to seek views on the possible abolition of criminal libel in respect of defamatory material as part of a wider consultation on certain other aspects of defamation law. We hope to publish a consultation paper later in the year.”—[Official Report, House of Lords, 13 May 2008; Vol. 701, c. WA120.]
We are coming to the end of the year now and it would be very helpful if the Minister said where that consultation paper is now and whether or not it is going to be forthcoming.
Of course, we also have an offence in this country of seditious libel. It is never used, but it is allowed by other countries to justify their having it and using that law to hold people down and repress them in terms of what they can say.
I do not think that there is any doubt that there is a problem in this country, not just in respect of the way that libel laws work and the problem of libel tourism, but the fact that there is now a chilling effect from this matter. So it is not only the cases that come to court that should concern us and the judgments therein, or the sort of people who are coming to court, but the fact that this matter is now known, it is out there and there must be some restraint being placed on authorship. That sort of restraint, and that chilling effect, is something that we must take into account and regret almost as much as the problems that exist.
As hon. Members have already said in what has been an excellent debate—I do not have time to try to respond to all the points that have been made, nor would it be appropriate for me to do so—it is important to distinguish the problem of libel from the allegation of a problem of privacy law. That is because I think that in this area Paul Dacre, the editor-in-chief of The Daily Mail, was wrong. Ever since we signed up to the European convention on human rights, judges have had to balance article 8 with article 10 and I think that the emerging case law does that appropriately. I also think that Mr. Justice Eady has done it appropriately and if it is claimed that he did not do it appropriately, there is, of course, the right of appeal to the Court of Appeal and to the Law Lords. In particular, my view of the Mosley judgment, having read it, is that it was mature, detailed, balanced and reasonable, and we should separate out that issue—the privacy law—from concerns that the media have about the libel law.
There are several questions raised by the libel law. Is the burden of proof correct? Is it right that the defendant has to prove that a claim is true rather than the claimant having to prove that it is false, and are there sufficient defences? A second question is what should we do about internet sites and internet service providers and about issues related to jurisdiction?
I think that it is appropriate to respond to the interesting, excellent and typically provocative speech by the right hon. Member for Rotherham (Mr. MacShane) who introduced the debate. There is also an interesting issue about a small claims libel court and perhaps that is something that should be pursued. In respect of conditional fee agreements being restricted only to people who qualify for legal aid, I think that that would be too restrictive. That suggestion is more a comment on how restrictive it is to obtain access to legal aid; one does not have to be in any way wealthy or well off not to qualify.
I would refer the right hon. Member for Rotherham and other hon. Members to the excellent report of the Constitutional Affairs Committee—its third report of the 2005-06 Session—that covered some of the issues that have been discussed today around CFAs. The right hon. Gentleman questioned whether there should be more of a time limit; my understanding is that there was a time limit on libel actions.
Indeed; the hon. Gentleman tells me that the time limit is one year.
There is a further point about what we should do about blogs. I am not sure that it is possible to ban anonymity on blogs, because that would just encourage people to give false or incomplete names and addresses, so we must have a more holistic solution to that problem.
The hon. Gentleman is asking what we should do about internet defamation and blogs. Would it be so difficult, in fact, to prevent anonymity? Where newspapers set up sites so that readers can make comments, they never force readers to give their true e-mail addresses, although newspapers would be able to do that; they would be able to force readers to give their true e-mail addresses. Would that not be a jolly good start, to ensure that people who wanted to say something had to identify themselves, either through their e-mail address or some other means, rather than just putting “Mickey Mouse” and saying some rather stupid and awful things, as they do?
It would be possible, but of course it is also possible to set up a temporary hotmail e-mail account, for example, so that would not be the overall solution.
The right hon. Member for Rotherham also questioned whether law firms were behaving appropriately. I am not sure about that issue. To a certain extent, I agree with the hon. Member for Croydon, North on this issue—sorry, the hon. Member for Croydon, Central.
I will get there in the end, as I head down through Croydon, which is a fascinating place, I am sure.
As I was saying, I am not sure that attacking law firms for touting for business is appropriate. Clearly, it is not an offence to tout for business, nor is it wrong or an offence to invite the Law Society to inquire. However, I think that that suggestion is probably a red herring. We need to deal with the law rather than the practice of solicitors.
In respect of some of the issues that we face, it is important to recognise just how absurd the problem of libel tourism is. The Economist, in an excellent article in May, gave the example of a Ukrainian case, where a small Ukrainian newspaper, which had only a handful of subscribers in this country—perhaps only a double-digit number of subscribers in this country—was sued in this country by a very wealthy Ukrainian. The article continued:
“Even more striking was a second victory won”—
that is, won by the gentleman concerned—
“against…an internet news site that does not even publish in English.”
That is a sign that things are indeed going too far.
There is also the question of the scope of Reynolds. I agree with the hon. Member for Surrey Heath (Michael Gove) who said that it was important that the Reynolds tests must be seen as a whole and not as individual hurdles. In particular, we should be encouraged by the fact that the Jameel case made that clear in the House of Lords. I hope that the development of that case law will be helpful. I am sceptical as to whether or not it provides a permanent solution, because although that case law is developing we still have the problem of people coming to sue here. Maybe the Rome II provisions emanating from the European Union will give protection to internet service providers, but I think that the Government have a task to reassure not just newspapers but bloggers and other individuals in this country that they are appraised of the problem and that they will either give Parliament an opportunity to debate this issue and even legislate on it or have some sort of review to deal with this problem, further than the Culture, Media and Sport Committee inquiry that has just been announced.
Before I declare a number of interests, let me deal with the Rome II point that the hon. Member for Oxford, West and Abingdon (Dr. Harris) made. That deals with the choice of law, rather than the venue or forum. The Brussels regulation that is now being called the judgment regulation is what we need to concentrate on, as it provides a claimant with the right to sue the defendant in the defendant’s jurisdiction. Under the regulation, if the BBC broadcasts something defamatory of someone in Jeddah, to pick a place at random, that citizen from Saudi Arabia is entitled to bring an action within this jurisdiction even if he has no other connection with it. The regulation modifies, to some extent, the forum non conveniens common-law argument that the right hon. Member for Rotherham (Mr. MacShane) mentioned.
I accept what the hon. and learned Gentleman says, but my understanding of the Rome II proposal is that the legislation would be specific to where the damage was done. That might be important, because if the damage was done in a country other than the UK, it would mean that even if the UK courts were entitled to hear the case, they would have to do so in reference to the law of that land.
That is right, but the problem that we face with Rome II—I do not want to get diverted down this line, but it is partly my fault for mentioning this subject—is that the media cannot agree on its application. If they could get their house in order internationally, perhaps we could make some progress.
As has been mentioned, Mr. Cook, I am a member of the defamation Bar, and I have earned my living and paid my mortgage thanks to claimants and media organisations, some of which are represented by right hon. and hon. Members in the Chamber. I have made no value judgments between the rights and attractiveness of my clients, be they defendants or claimants. I have simply given such advice as I was capable of giving. I have won and lost cases, and I have had satisfied and deeply dissatisfied clients in my 35 years at the Bar. I am also a recorder, so I presume that I shall be protected by “Erskine May” if people start hurling abuse at me.
This is too big a subject to deal with in eight minutes, but I want to draw out some threads of the right hon. Member for Rotherham’s speech that were replicated by my hon. Friend the Member for Surrey Heath (Michael Gove) and the absent hon. Member for North Norfolk (Norman Lamb). The right hon. Gentleman might have assisted us by declaring that beyond being a member of the National Union of Journalists and a former officer of it, he was also a paid contributor to a number of newspapers. That fact is set out in the Register of Members’ Interests, but it is appropriate that hon. Members present should not miss out on it.
The right hon. Gentleman drew out certain themes perfectly fairly, but some of his arguments were spoiled by a slightly waspish personal attack on individual solicitors firms and, by implication, on Mr. Justice Eady, whom, I am happy to say, the hon. Member for Oxford, West and Abingdon defended. He is a friend of mine—we used to share a room in chambers—and an extremely bright, careful and sensitive man. It is a pity, when he does no more than apply the law, that he is subjected to personal attacks in this Chamber and elsewhere. Judges cannot answer back, and I hope that when we discuss issues to do with the application and implementation of the law, we can leave aside personalities and deal with the relevant principles.
The principles that the right hon. Gentleman discussed, about libel tourism and the extension into statute of the Reynolds defence, are perfectly reasonable arguments to have. These decisions ought to be made by Parliament, because once the courts reach a certain stage, they cannot develop the law further, and it is up to us, in Parliament, to do that. If the United States Congress or the other US state legislatures that he mentioned wish to limit the ambit of their jurisdiction, or to extend it, that is up to them, but, as my hon. Friend the Member for Croydon, South (Richard Ottaway) said, a US law does not impinge on the jurisdiction of the English courts. If a judge issues an order that a book should be pulped, although I have never heard of such an order, it would apply only to the books that happened to be within that court’s jurisdiction. I do not think that we are going to see British judges ordering the pulping of books in California or New York. I would certainly be surprised if that happened.
It is fair to point out that there has been a rash of foreigners coming to our country and making use of our libel laws regarding quite small publications—for example, if three, four, five or six issues of a foreign newspaper were published here. In order to do that, however, they had to demonstrate some connection with this jurisdiction, otherwise the common law would not have permitted them to do so. The decisions that permitted them to sue in this country in relation to small numbers of publications were always appealable, but in many cases they were not appealed. Indeed, Mr. Justice Eady’s decision in the Ehrenfeld case that has been mentioned was a default judgment, which means that the defendant, Ehrenfeld, did not appear, through either lawyer or letter, to raise any objection to the jurisdictional point or any other. The damages that were awarded in that case were within the summary limits, and there was no fine.
I do not intend to repeat the libels in any of the cases that have been mentioned. Neither do I think it appropriate to defame firms of lawyers—I confess that I have been instructed by both of the firms who have been defamed this morning—who are doing no more than their trade, which is to advise clients on the law of England and to enable them to gain access to the courts.
If the right hon. Gentleman is upset about something, perhaps we could discuss it outside—then we can get on with the debate in here.
Some serious points have been made about internet libel. There have been calls from the judiciary and from practitioners for an international instrument to deal with it. If the current British Government or any future one, encouraged by Parliament, wished to enter any such international agreement, we could get on with negotiating it, but we should not complain when judges apply the law as it stands.
On the Reynolds defence, yes, it was an advance on what previously existed, but the House of Lords did not go as far as the New York jurisdiction and other US jurisdictions on public interest defences. If we want to do something about that, we should do so, rather than whingeing about it. We could do something in Parliament, perhaps by persuading the Government to introduce a law. It is strange that we have within our power, allegedly, the ability to influence Government, but that all we do instead is be rude—if I may use that expression—about lawyers who are applying the current law and about judges who are implementing it. If we are big enough and grown-up enough to praise, as we rightly do, the freedom of the press and the ability of journalists properly to investigate those who need investigation and to expose their inequities, we should also be big enough to admit that it is our fault if we do nothing.
Over the years, we have had any number of inquiries, Government and otherwise, into the state of privacy laws and the relationship between the citizen and the fourth estate, but we have done nothing about it, because we lack the bravery and the political will to influence the press through legislation. We should either do it and get on with it, or stop whingeing and allow the judges and lawyers to do the job that they are perfectly lawfully entitled to do.
I was prevented in 1995 from sitting on the Committee that scrutinised the Defamation Bill, later the Defamation Act 1996, on the basis that I would talk too much and because I knew too—well, too little, actually. That is what the deputy Chief Whip told me at the time. I have learned a lot in the past 35 years about human nature, the desire of newspapers to do their job and the harm that is inflicted on individuals when the newspapers sometimes get it wrong. There is a balance to be found, and it is up to us as parliamentarians to engineer such a balance.
Thank you, Mr. Cook, for your wise advice at the beginning of the debate. I might as well begin by declaring an interest: I am not a lawyer, I am not a journalist and I am not dealing with any libel procedure in the courts at the moment—thank heavens. I hope that during the course of today’s debate, I do not end up in that position either.
First, I congratulate my right hon. Friend the Member for Rotherham (Mr. MacShane) on securing the debate and on jetting in from the United States to open it today. It is, as the hon. and learned Member for Harborough (Mr. Garnier) said, a very complicated, complex and important topic. Clearly, from this morning’s contributions, it is one on which very strong views are held, and I shall very much take on board some of the ideas that people have put forward. However, I must emphasise that this Government firmly support the right to freedom of expression and its protections under article 10 of the European convention on human rights. Freedom of expression and a press that is free from state intervention are a fundamental part of our democracy and our way of life in the United Kingdom, so the hon. and learned Gentleman, who talked about getting the right balance, is absolutely correct: there is always the need to ensure that we have a balanced response.
We believe that we have demonstrated our commitment to freedom of expression by including specific provisions in section 12 of the Human Rights Act 1998, requiring the courts to have particular regard to the convention’s right on freedom of expression when deciding any case brought under the Act which might affect that right. But, of course, article 10 rights are not absolute. The exercise of the right carries with it duties and responsibilities, and it may therefore be subject to restrictions provided by law—for example, the interests of public safety, the prevention of crime, or, the protection of the reputations or rights of others, which is particularly relevant to today’s debate.
In that context, it is important that people have an effective right to redress through the civil law when their reputation has been damaged as a result of the publication of defamatory material. The determination of individual cases is a matter for the courts, and, in each case that arises, the courts must strike an appropriate balance between the competing interests of the parties based on the circumstances of the case. It is important to emphasise that point, because, during today’s debate, there have been occasions when it may have been lost in the heat of the argument.
In the short time that I have, I shall respond to some of the issues that Members have raised. The hon. Member for North Norfolk (Norman Lamb) talked about investigative journalism and its importance, and, were he still here, I would tell him that, for example, my Department only yesterday announced plans to increase the media’s right to report family proceedings cases. The Government are showing that they are committed to the openness and transparency that people want.
I regularly read with great pleasure in The Times the articles by the hon. Member for Surrey Heath (Michael Gove). They are well written and full of enjoyment, at least from my perspective when reading them, and I shall take on board his questions about the Reynolds defence. If, after consideration, there is a suitable piece of legislation and we feel that the defence needs to be put in statute, and I am not saying that we do, I shall certainly look at the issue again.
The civil law on defamation currently provides a range of defences. The hon. Member for Oxford, West and Abingdon (Dr. Harris) was concerned about whether there were sufficient defences, but there are a range of defences: justification, whereby the material is true; fair comment—whether the statements are matters of public interest; absolute privilege, which guarantees immunity from liability in situations such as parliamentary and court proceedings; and qualified privilege. In the case of secondary publishers, the defendant would not be liable where he or she is not the author, editor or publisher of the statement complained of; had taken reasonable care in relation to its publication; and did not know, and had no reason to believe, that what he or she did caused or contributed to the publication of a defamatory statement.
In addition, section 2 of the 1996 Act provides a procedure by which a defendant can make an offer of amends to enable a valid claim to be settled cheaply and quickly without the need for court proceedings. The hon. Member for—
The hon. Member for Castle Point (Bob Spink) referred to that. I beg his pardon.
My right hon. Friend the Member for Rotherham expressed concern about several aspects of current law and procedure. He described “libel tourism”, whereby someone with a tenuous connection to this country uses our courts to bring defamation proceedings. Let me explain in further detail—along the lines that the hon. and learned Member for Harborough took—how the jurisdiction of our courts works. If a court in this country is to hear a defamation case, it must have a ground of jurisdiction, and the rules on jurisdiction vary depending on whether the case is covered by European Community legislation. If it is, as the hon. and learned Gentleman said, the Brussels I regulation provides European-wide rules on jurisdiction in defamation matters. When Brussels I applies, particularly in cases whereby a defendant is domiciled in a member state, it will have precedence over national law, and English courts do not have a capacity to refuse jurisdiction or even to stay proceedings under Brussels I.
Two particular provisions of the regulation are relevant to the debate. The first is article 2, which lays down a general rule that persons domiciled in a member state may be sued in that state. The second relevant provision is article 5(3), which provides an additional rule of jurisdiction for torts, on which the claimant can rely in place of article 2. Article 5(3) allows claimants to sue in the courts of the place where the harmful event occurred, leaving to the laws of the member states the definition of what constitutes a harmful event. Under English law, the harmful event is publication, which is defined as the communication that constitutes the defamation.
I shall briefly turn to the question of the internet. We hope to publish a consultation as soon as possible.
If the Government are proposing to look at the issue of conditional fee agreements, as I think they are, will the Minister ensure that any changes to them permit equality of arms? There are some very rich newspaper organisations that use their financial might to prevent impoverished people from getting to court, but equally, if CFAs are being abused, there needs to be that balance—that equality of arms.
I take very seriously what the hon. and learned Gentleman says, and I agree. We will publish as soon as possible in the new year a consultation paper on defamation and the internet, and later, as part of the proposed consultation, we will also seek views on the abolition of criminal libel in respect of defamatory material. On the issue of conditional fee agreements, some important points have been made about opportunities for people with very little means, and we are therefore very keen to ensure that the current situation continues. We are also concerned about the disproportionate cost of defamation proceedings, we are considering whether additional measures might be necessary to control those costs, and we will consult on that shortly.
My right hon. Friend the Member for Rotherham mentioned the possible use of small claims procedures. We have had a look at that idea, and we think that, because defamation can be complex, the small claims court may not be the most appropriate place for such procedures, so I am not convinced that that is the right way forward. However, we will look at whether civil law reform might be necessary, although I must say that I am not yet convinced. If it is, however, we will certainly look at the issue.
Palestinian Territories (Settlements)
I am glad to have this opportunity to discuss the Israeli settlements in the occupied territories. The object of the debate is not to persuade the Minister that a freeze on settlement building is desirable, as I am sure that that is not necessary. He, and indeed the Foreign Secretary, have repeatedly expressed at the Dispatch Box the Government’s view that all building must cease. Indeed, the Prime Minister said this week not only that settlement building must cease but that existing settlements must be dismantled. He said:
“We have consistently called for Israel to dismantle settlements. I spoke to the Knesset only a few months ago and made it absolutely clear that Israel should freeze settlements and withdraw from settlements…We have consistently said, and I have said to successive Israeli Prime Ministers and Presidents when I have met them, that we have consistently seen them—
“as a barrier to reaching the agreement that everybody thinks is possible”.
When I last asked the Foreign Secretary about a freeze on settlement building, he had just returned from a visit to the west bank and could be in no doubt that settlement building was still going on. He had seen the bulldozers and cranes only a few days before, building new houses at Ma’ale Adumim, on the road between Jerusalem and Jericho. He mentioned that a hopeful sign had been an announcement the previous weekend by the Israeli Prime Minister that the Government would stop the expansion of settlements. On closer examination of the small print, however, it emerged that the Prime Minister was promising only to stop expanding the boundaries of settlements and that building could continue within them. Since many settlements contain large areas already set aside for further development—Ma’ale Adumim, for instance, has the E1 area, on which it is intended to build 5,000 houses—the promise was pretty empty.
Since the Annapolis agreement, in which the Government of Israel accepted an obligation to
“freeze all settlement activity, including the ‘natural growth’ of existing settlements”,
there has actually been an acceleration of house building in settlements in the west bank. Official figures released by the Israeli Ministry of Construction and Housing identify current construction projects in nine settlements in the west bank. They range from one of 106 dwellings in Ariel, which is a big Israeli settlement deep in the northern west bank, to one of 144 units at Alfei Menashe, which is a settlement near the Palestinian town of Qalqilya. Some 642 units are currently being constructed in two different settlements in Bethlehem, and 944 units at Ma’ale Adumim, which I have just mentioned. The Foreign Secretary saw the work going on there. Nearly 2,000 units are being built at Har Homa, a hill in Arab East Jerusalem overlooking Bethlehem. That is a total of 4,554 units.
The hon. Gentleman has not yet mentioned our former Prime Minister, Mr. Blair, who is the head of the Quartet. When he came before us in the Select Committee on International Development, he gave us more of a two-sided appraisal of the issue. The hon. Gentleman has been rather critical of Israel so far, and I hope that he will make a few positive statements about the progress that the Israeli Government are making on this issue.
With respect, the debate is solely about freezing building in settlements in the west bank, and I cannot stray from that subject. I am quite happy to make value judgments about it, but I have not made any yet. I merely point out that building continues apace, despite the promises in the Oslo accord and the Annapolis agreement that building would cease. Since Annapolis, far from a freeze or even a slow-down in settlement building, there has been a dramatic increase. Revealingly, that has been less in privately initiated construction projects than in Government-initiated projects, which are up 33 per cent. on the equivalent period before the conference.
I congratulate my hon. Friend on securing the debate and on reflecting the concerns that many of us feel and that are raised by many of our constituents. Will not the continuation of the legal settlement building programme in the west bank make any just and equitable settlement between Israel and the Palestinians much less likely? In the long run, will that not be to the detriment of Israel’s interests, as well as of the Palestinians affected?
I thank my hon. Friend for that. There are many other subjects about Israel and Palestine to be discussed, including security and humanitarian questions. I am focusing on settlement building, and he is right. Continued settlement building, more than anything else, is putting an obstacle in the way of the peace process that we all want to proceed.
Building permits are up by a factor of three since Annapolis and tenders for settlement construction by a factor of 17. It is difficult to see that as anything other than a race against time to build new settlements before the international community finally wakes up and forces the settlements to stop.
Does the hon. Gentleman agree that much of the problem has been the continual vetoing of United Nations resolutions by the US? Many of them have been about settlements, the building of which is, of course, illegal. Every time a UN resolution comes to the international community, we find the US vetoing it.
The hon. Gentleman thinks along the same lines as me, and I shall come to the UN resolutions when I have presented one or two more facts.
Many of the new settlements that are being built on the west bank are for evacuees from Gaza, so the notion that Israel was giving occupied land back to the Palestinians turns out to be an optical illusion. It gives back one piece of land and takes another. The removal of outposts is also something of an optical illusion. Most of them have not been touched, but the occupants of the ones that have been closed down have been moved to illegal settlements in East Jerusalem. It is just one piece of Palestinian land being swapped for another.
Roadblocks on Palestinian roads are up by 12 per cent. since Annapolis, demolitions by 21 per cent., injuries to Palestinians in clashes with the Israeli army by some 26 per cent. and deaths by some 51 per cent. It is no surprise to me that the Palestinians feel angry, frustrated and above all cynical about peace initiatives, which should be the one beacon of hope to them. The United Nations human rights rapporteur said that the Palestinian population was
“being collectively punished by policies that amount to a crime against humanity.”
To prove that they were not engaged in collective punishment, the Israeli authorities then devised an individual punishment for the rapporteur last week by locking him up at Ben-Gurion airport and refusing him a visa.
As I said, I do not need to convince the Minister that settlement building should be stopped. It is what he regularly says to the Israeli ambassador, and what he or his colleagues said to the Israeli Prime Minister last week and the Israeli President, who visited last month. It is what they have been saying to every representative of the Israeli Government for many years, and it is what people in this country say to me whenever I discuss the issue with them.
I have been collecting signatures in Battersea, Balham and Wandsworth in my constituency—a one-constituency petition—solely calling for an end to settlement building in the west bank. Hundreds of people have already signed it, and I hope that the same thing will be done in other constituencies. This issue strikes the great majority of people in this country as unjust. I am also in the process of helping to launch a new organisation next month called Labour Friends of Palestine, the main campaign of which will be to call for a halt to the expansion of settlements.
The trouble is that the issue is hardly ever discussed in the Israeli press. We huff and we puff, but the Israelis just keep on building. That brings me to the point raised by the hon. Member for South-East Cornwall (Mr. Breed). If we want the Israelis to stop, we will have to find more effective methods of persuasion. The United Nations has passed 429 resolutions against Israel, and the Security Council has passed 88 resolutions condemning, censuring or deploring Israel’s actions. Another 42 Security Council resolutions have been stopped only by the veto of the United States. We must remember that nearly every one of those resolutions was passed under chapter VI of the UN charter that deals with the pacific settlement of disputes, which places duties on both sides in a dispute but has no enforcement mechanism. Many international lawyers regard chapter VI resolutions as outside the scope of international law. They are, in effect, voluntary resolutions.
The only UN resolutions that unequivocally have the force of international law and can be enforced by sanctions or military action are chapter VII resolutions. It was under chapter VII that Iraq was required to disarm after the Gulf war, and it was under chapter VII that the US invoked war against Iraq. Small wonder that Dore Gold, the former Israeli ambassador to the United Nations, said:
“For its entire diplomatic history, Israel has sought to avoid a Chapter 7 resolution dealing with Arab-Israeli disputes.”
There is one exception: resolution 338, which was passed at the end of the Lebanese civil war under chapter VII, and which in turn binds the parties to implement resolution 242, which was passed under chapter VI but is now enforced under chapter VII. One of its provisions is for the withdrawal of Israeli armed forces from territories occupied in the recent conflict, and, as it was passed in 1967, it clearly refers to the west bank and East Jerusalem.
Now that the Palestinian Authority recognizes the territorial integrity of Israel, which is the most important development in recent years and one that I fully support, there is clearly a legal obligation on the Israeli Government to withdraw forces from the west bank and East Jerusalem. I would love to live in a fantasy world where we would just politely ask the Israelis to hand the west bank back to the Palestinians in accordance with the UN resolution, but we have been doing that for years and nothing has happened—actually, something has happened: things have got worse, and because the evacuation of Gaza did not lead to an immediate outbreak of peace, some Israelis have persuaded themselves that giving up the west bank would lead to more violence, not less. I quote Dore Gold again:
“Prevailing wisdom says if Israel gives land back the terrorists will stop. But just the opposite is the case…Terrorism is not based on political grievance. Jihadi terrorism comes from a sense of victory. A withdrawal from Jerusalem would empower radical Islam.”
Such tortured logic would suggest that the solution to the Palestinians’ grievances is to take more land from them, but that is precisely the attitude that plays into the hands of the terrorists, and precisely the attitude that helped to create the jihadis in the first place. Dore Gold was the political adviser to Binyamin Netanyahu and later to Ariel Sharon, and he may be at the heart of Israeli policy making in two months’ time, after elections in Israel.
The sad truth that I come to is that the Israelis show no signs of actually wanting negotiations to succeed. One Israeli official quoted in The Guardian this morning said:
“Negotiations are good, results are bad.”
It is impossible to conduct negotiations with a party that does not have an interest in their success. All Israeli politicians pay lip service to the peace process, but the fact that Israel continues to expand the settlements makes it difficult to believe that they are entirely sincere. How can they expect Palestinians to negotiate when they are taking over more Palestinian land every day? It is not within human nature to enter into negotiations in such circumstances.
It is entirely up to Israelis, of course, to pick their own Government—I would not dream of interfering—but if we believe that the continued expansion of settlements undermines the chances of peace in Israel, in the middle east and in the wider world, we have a responsibility to take action through the international community.
Such action could be through the 23-state solution that the Foreign Secretary spoke about recently—it is important to involve as many countries as possible—or through a chapter VII resolution in the Security Council. But the fact is that the Israelis show no signs of wanting to do it if left to themselves, and the Palestinians cannot do it by themselves. If the rest of the world wants peace, we will have to go out there and get it. First, we will have to persuade the Americans, but with President Obama there may be a chance that the international community will finally show leadership in bringing about a settlement between Israel and Palestine.
It is a pleasure to take part in this important debate. I congratulate my hon. Friend the Member for Battersea (Martin Linton) on securing it, and I welcome him to the role that he has taken on as chairman of Labour Friends of Palestine.
The middle east peace process continues to be one of the highest priorities for this Government, and I know that that priority is shared widely across the House of Commons. We are committed to a comprehensive peace in the middle east and are working constructively with all the parties to offer all possible support to the Annapolis process. Over the past year, the UK has been encouraged by the renewed dialogue between Israeli and Palestinian leaders, by indirect talks between Israel and Syria and by the plans for mutual diplomatic recognition between Syria and Lebanon.
We also very much welcomed the renewed focus on the Arab peace initiative, which offers Israel full normalisation of relations with its Arab neighbours in exchange for withdrawal from occupied land. We are determined to do everything that we possibly can to support the peace process. I say that because we were at the forefront of those arguing last week that the European Council should throw its weight behind the Arab League letter to President-elect Obama. We will continue to encourage the Arab League to demonstrate its willingness to engage with Israel. Indeed, we encouraged members of the Arab League to recommit themselves widely and publicly to the Arab peace initiative, which gives us a real opportunity to move forward.
However, we are also clear that Israel, too, must show its commitment to a two-state solution. The energy that it has devoted to Annapolis is a powerful signal, but, unfortunately, the signal that is seen more clearly around the world is, as my hon. Friend said, increased settlement construction, which undermines the viability of a Palestinian state on 1967 borders and leads Palestinians and the Arab world to doubt Israel’s real intentions.
As my hon. Friend acknowledged, our message has been consistent and robust: Israeli settlement activity anywhere in East Jerusalem and on the west bank is illegal under international law. The road map is clear that Israel should freeze all settlement activity, including the natural growth of existing settlements, and dismantle all outposts erected since March 2001. My right hon. Friend the Foreign Secretary reiterated the UK’s position to Israeli Ministers during his visit to the region in November, and I have acted similarly. We certainly welcome recent attempts by the Israeli security forces to dismantle outposts in parts of Hebron and the west bank, including the successful evacuation of the disputed house in Hebron on 4 December, which, as we should acknowledge, is a step in the right direction. But we should also acknowledge that there is much more to do.
I want the House to be clear that we are not bashing Israel to play to the crowd. We are seeking, rather, to advance the peace process and we genuinely see settlement expansion as a critical factor holding that progress back. Unlike other obstacles in the way of peace, settlement expansion is not a grey area: its continuation is in direct contravention of the spirit and the letter of the road map and the Annapolis commitments.
I am proud of the efforts that we have made, as a Government, to make it clear that we need to work with all sides. I made that clear, previously, when I was at the Department for Education and Skills, in opposing an academic boycott of Israel.
I share that feeling. Genuine friends of Israel ought to have the ability and the space to make that argument clearly.
I was mentioning the stance that I took as Minister of State with responsibility for higher education—and the stance that we took as a Government—in opposing academic boycotts of Israel. I have always taken the view that in both Israel and the occupied territories there are both progressives and reactionaries. The problem with boycotts is that they make the job of the progressives more difficult and they reinforce the position of the reactionaries. That is one reason why they are fundamentally wrong.
I thank the Minister for those robust, clear statements, but does he not agree that the supreme irony is that, when we had the opportunity of Palestinians working in a Government of some unity, that was undermined by the international community through its rather heavy criticism and demonising of Hamas and over-crediting Fatah, and now, when Israel wants some genuine opportunities, we have a fractured Palestinian state?
The path and the way forward for Hamas is clear: it needs to commit to non-violence, to a recognition of the right of the state of Israel to exist and to uptake on previous commitments. If it does that, we are willing to engage with it, but until it does that there is a fundamental stumbling block.
The recent visit of President Peres has showcased our strong bilateral relationship with Israel in its historic 60th year. But settlements are not Israel. So we are working on what effective action we can take actively to discourage settlement expansion, part of which is making sure that the mechanisms we already have in place work. One such mechanism is the EU-Israel association agreement, which does not entitle settlements to the preferential tariffs that we give to Israeli goods. We have heard worrying reports that settlement goods are benefiting, so we are investigating. Some British consumers have told us that they want to know whether they are buying goods from settlements and I believe that we have an obligation to ensure clear labelling.
Building effective Palestinian institutions is fundamentally critical. Although settlements are important, they are not the only issue. We also have to tackle the other impediments to peace. Building effective Palestinian institutions and a vibrant Palestinian economy is critical, both to deliver for Palestinians and to reassure Israel that a Palestinian state would be a stable and peaceful neighbour.
When I met Prime Minister Fayyad earlier this week, I congratulated him on his achievements in reforming the Palestinian Authority, enhancing the effectiveness of its security forces and developing its economy. We are, rightly, providing him with strong support. The United Kingdom Government have committed £243 million in support over three years, linked to political progress—a substantial increase in the Government’s assistance that is absolutely justified. In December last year, the international community pledged a total of $7.7 billion at the Paris donor conference in support of the Palestinians. That was a move in the right direction. The conference that we have hosted here in London this week with the business community, to support economic development in the Palestinian territories, is another step in the right direction.
Of course, Israel’s security measures make the process of economic development more difficult, but that only makes these efforts more necessary. In some areas, notably around Jenin, there are real signs that a positive dynamic can be created where more effective Palestinian security combines with economic investment to give the Israeli security forces some confidence to step back a little, which in turn reinforces political and economic progress. These are the sorts of virtuous circles that we are seeking to create and support. We will certainly continue to do that.
We are painfully aware that the dynamic in Gaza is very different. Israel sees an increasing threat, with rockets fired at its civilians. It sees no partner with which to deal and so no alternative to increasing restrictions. These restrictions and Hamas control mean that the benefits of economic growth and reforming institutions are denied to the population of Gaza. More than that, ordinary Gazans are suffering serious hardship as even relief supplies are restricted because of Israel’s disproportionate and inappropriate response to that security threat. Today, more than 80 per cent. of Palestinians in Gaza are dependent on humanitarian assistance, compared with 63 per cent. in 2006. In less than 10 years, the number of families depending on United Nations food aid has increased tenfold. All of us should be concerned about that.
In exerting continued control over Gaza’s borders, airspace and territorial waters, Israel retains the obligation to co-operate in the passage and distribution of relief supplies. We are pressing Israel to allow more supplies in and support the UN in purchasing supplies. Over the last six months, the ceasefire has brought relative calm for the people of Gaza and southern Israel. I believe strongly that it is in both sides’ interests to recommit to that ceasefire as it comes to its conclusion. But if we are to go beyond alleviating the immediate situation to make Gaza an integral part of peacemaking efforts, Hamas has to engage with President Abbas in the national dialogue negotiations and it must move towards non-violence and the Quartet principles, as I argued earlier. Through its behaviour—firing rockets at Israel, replacing teachers who do not kowtow, attacking rival political parties, smuggling arms, holding Gilad Shalit in captivity, and more—Hamas shows it is not a partner in peace or a constructive force in building a Palestinian state.
Let me deal directly with the comments that my hon. Friend has made about the claimed need for a chapter VII resolution at the UN Security Council. The problem with that—my hon. Friend and I discussed this in the main Chamber a few weeks ago during Foreign Office questions—is that a resolution under chapter VII of the UN charter implies that all movement is necessary on one side: in this case, from Israel. However, I believe strongly that we need to see co-operation from all parties, including Israel freezing all settlement activity and easing restrictions on life in Gaza and Hamas engaging with President Abbas in the national dialogue negotiations and moving towards non-violence and the Quartet principles. There will not be progress without movement and compromise on both sides. I do not think that a chapter VII resolution recognises that. There are chapter VI resolutions calling for actions from and responsibilities on both parties and that is the way forward.
I will be visiting Israel and the occupied Palestinian territories next week and I will seek to develop my first-hand experience of the challenges faced by Israelis and by the Palestinians. The message I will take with me is that we are determined to redouble our efforts to drive the peace process forward in 2009 and to look to all those, in the region and beyond, to join us. I genuinely believe that this is a crucially important issue to people in Israel and the occupied territories and, frankly, it is crucial to people across the world.
We have an opportunity, with the election of Barack Obama in the United States; he comes in with greater expectations placed on him than any democratically elected politician that I can recall in recent decades. We have to ensure that he has an opportunity to use the power and influence of the United States. We will be working alongside him, as an individual nation and through the European Union, to put pressure on all sides to make the necessary compromises to achieve that lasting peace in the middle east, which is long overdue.
I congratulate my hon. Friend once again on securing this debate. Let us hope that, as we move into 2009, we can begin genuinely to take the peace process forward.
I am delighted to have the opportunity to debate this subject. Since applying for the debate, the matter seems to have risen up the political temperature gauge. I was moved to apply for it after intervening on the Chancellor during the three-hour debate on the pre-Budget report, when I asked about support for the British motor industry, and whether we would emulate Europe. His response was that Europe was important, and he then started talking about Scottish whisky. I know that Scottish whisky is important to the Chancellor, but cars cannot run on whisky—[Interruption.] Perhaps they can, but that would be rather a waste. At the time, the subject did not seem to be prominent on the Government’s radar. It may have been on the radar of the Department for Business, Enterprise and Regulatory Reform, but it certainly does not seem to have been on the Treasury’s radar.
As so often, my initial interest arose because of a constituency concern. Many people think that Romsey is leafy Hampshire, but my constituency includes part of Southampton, which is home to the Ford transit, and proud to be so—or was. The factory is at the edge of my constituency, and a number of my constituents work there. It is fair to say that there were a few problems there and concerns about the future before the credit crunch began to hit home.
I was expecting some local Members to be here, and I had not intended to talk at length about Southampton, but Ford is facing specific problems. A planned redesign of the transit involved a potential refitting of the factory when the company’s plant in Kocaeli in Turkey was producing vans at lower cost. That naturally caused the company to rethink what work could be most profitably completed in Southampton. The plans are supposedly not finalised, but all the signs suggest that Southampton will produce only the chassis base, which will mean fewer local jobs for local people. That was going on before the downturn in sales that led to temporary contracts being ended and an increase in the number of down days at the factory.
Today, I want to speak in a more general context. It has become apparent in recent weeks that the problem is not just a little local difficulty. If we continue to sleepwalk towards disaster, vehicle manufacture will be declared the United Kingdom’s latest economic catastrophe. As someone with serious concerns about the decline in Britain’s manufacturing base generally, I suggest that it is important to retain what is left. So how bad is it?
The hon. Lady is right in her outline of the problems and the knock-on effects. A company in my constituency is a supply line manufacturer to the car industry, and the problem is not just what happens in Southampton, but what happens down the supply chain. It is a problem for many of us.
I thank the hon. Lady for that intervention, and I shall return to that point. Most people think just about cars rolling off the production line, and not about everything behind that, or the consequences.
The figures speak for themselves. In November, new car registrations fell by 36.8 per cent., which is the steepest decline in almost 30 years. In October, car production fell by just over 25 per cent. In times of recession, the commercial vehicle market is always hit first and hardest. The downturn in the commercial vehicle market in November was 41.8 per cent. That is having an impact on manufacturers. At the beginning of December, having given notice to all temporary staff and announced an extended Christmas break, Ford announced an extra 17 down days at Southampton in the first quarter of next year. That will have a significant impact on workers’ take-home pay.
The picture is mirrored elsewhere, with a four-week break at Vauxhall’s Ellesmere Port factory, and the offer of a nine-month sabbatical on 30 per cent. pay, although it does not expect many people to take up that offer. Two thousand jobs have been lost at Jaguar, and 600 at Aston Martin. The Japanese car manufacturer, Honda, is halting production at its Swindon plant for two months next year. BMW has announced plans to close its Oxford factory, which produces the Mini, for four weeks to reduce output, and Nissan has extended its production cuts. Only yesterday, Toyota told its workers that its factory will shut for a fortnight in the new year. It is difficult to find any good news, but I tried because it is Christmas.
The most recent scale-down by Nissan in Sunderland is having a serious impact on car components firms, and I raised that at column 665 of Hansard last Thursday. Their cash position is often critical, and no immediate support is being made available centrally or locally. Is the hon. Lady aware that the automotive sector is routinely red-flagged by financial institutions and providers? Businesses are being compressed to very low cash reserves, and are in an untenable position. Many are literally on the brink.
The hon. Gentleman’s intervention is timely, because I was about to say that we are seeing the tip of the iceberg. Components manufacturers are also being badly affected. In The Observer last Sunday, Tony Woodley of Unite said:
“The suppliers of components are a week away from throwing tens of thousands on the dole because they don’t see a plan…There's no guidance. They don’t know if grant aid is being targeted. There's not one single component company that right now isn't looking to jettison labour.
This is a wake-up call. It’s an emergency. Within a month, if”
“doesn’t do anything, between 25,000 and 40,000”
“will be jettisoned from car retailers and suppliers.”
Similarly, the Financial Times claimed on 11 December that more than 1,000 franchise dealerships were threatened with closure. People who sell cars are also having problems.
According to figures released by the Society of Motor Manufacturers and Traders Ltd, the industry currently supports 850,000 jobs. No one working in that industry feels very secure at the moment. So far, the Government have offered only limited support to the car industry, and that merely reiterates the existing channels of lending for businesses. There seems to have been no specialist attention to the problem.
The pre-Budget report measures have not been welcomed in the industry. Car sellers have had to re-price all cars at their own expense, with little return, and will have to repeat the exercise next year when VAT returns to its previous level. Let us compare that with what is happening elsewhere in Europe. As part of the European economic recovery plan agreed at the end of last week, the European Commission has given a commitment to provide €5 billion to the bloc’s car industry through the European Investment Bank. As part of the deal, state aid rules have been relaxed so that national bail-out schemes can proceed. That has enabled the French Government to provide credit guarantees to the financing arms of its car makers with a €779 million payment split between Renault and Peugeot. The body set up to underpin new bank debts will hand over a further €221 million to the two car makers before the end of January. President Sarkozy has shown an active interest in the problem and has met manufacturers. No similar high-level interest is being shown in this country.
Last month, the Spanish announced a package of €800 million to the automotive sector as part of a larger two-year stimulus package. In Sweden, an announcement last week promised the equivalent of just over £2 billion in credit guarantees and emergency loans to its ailing car industry, much of which is directed towards the manufacture of more emission-friendly vehicles. In Germany, all new cars are exempt from annual circulation tax for one year until 30 June 2009, and the Government are considering giving General Motors’ Opel a €1 billion credit guarantee to ensure cash flow. Even the Romanian Government have announced a one-year exemption from pollution tax to stimulate demand. Portugal has committed €70 million of Government support to financing workers during downtime.
The hon. Lady is making a very thoughtful speech. She was present at the last DBERR oral questions when the Minister, who is now in his place, was asked about European Investment Bank funds and why some of the European countries that she mentions have got funds flowing into their automotive industries. His reply was that Britain does not have a history of drawing down on those funds. In other words, the Government are fiddling; they are not getting the funds into the automotive industry. Should they not get moving and get those funds from Europe into the industry as soon as possible?
I congratulate my hon. Friend on securing the debate. I shall put two points to her. First, money is found to fund the activities of the banks to guarantee credit, but not for the manufacturing sector. Secondly, and similarly, under the Banking Bill, which has just gone through the House, a form of chapter 11 protection from bankruptcy, which avoids the fire sale of an administration, is now being made available for banks, but the likelihood is that chapter 11 is not being considered for a sector that would find it very difficult to come out of administration once in it. Does my hon. Friend think that it is worth examining the lessons that perhaps could be learned from America on that?
That is certainly worth considering. I hope that when the Minister sums up the debate, he will make a commitment to assessing how many businesses that go into administration do not come out the other end and whether we can learn lessons from the system used in America. That may be very useful at this time.
Will the hon. Lady also draw attention to the fact that there are some dangers with national rescues? As I understand it, the French support package is based on an undertaking by the car industry not to take any operations abroad. That could have long-term knock-on effects on some of the people who are currently working in the UK. If we become protectionist, we are just beggaring our neighbour.
An important answer to the point made by the hon. Member for Birmingham, Edgbaston (Ms Stuart) about state aid is that the car industry currently faces a serious problem with the extension of credit to potential purchasers. One does not get a dramatic decline in demand of 37 per cent. over the year—that figure applies to vehicle registrations in this country—without the credit system for purchasers seizing up, which is a different point from an ongoing subsidy with the sort of strings attached that she mentions. I hope that the Minister will take that on board, because the car industry faces exactly the same type of problems in that respect as the financial industry and deserves support to ensure that credit is there.
I was about to move on to that, because although I was highlighting what has been done in other European countries and in some non-European countries, a consensus seems to be emerging about what might help the British car industry. Despite the downturn in sales, the market research completed by some of the companies involved—we were told this by Ford when we met—shows that people want to buy vehicles, but the credit lines have dried up and they just cannot get the loans that were once available to do so.
Does my hon. Friend agree that the drive from central Government to maximise the tier 1 ratios is itself drying up credit? We should bear it in mind that a car loan is more like an unsecured loan than a secured loan. The Government should be considering carefully how their actions are influencing the motor business.
I hope for some reassurance later that the Government have been paying attention to that problem and how their actions are affecting the motor business, because there has been precious little evidence so far. We hear a lot about talks taking place, but as yet we have seen no action.
Let me return to the emerging consensus. The SMMT is asking that the manufacturers’ finance companies gain short-term access to the Bank of England’s special liquidity schemes, loan guarantees or direct loans. They need quick access to credit in a way that is simple, flexible and transparent and that overcomes barriers to securing loans for struggling companies across the supply chain. This crisis comes at a time when companies are researching new technology that has a greater focus on low-carbon technology. Investment is threatened but has never been more necessary, and any available funding should be directed towards that aspect of the industry.
The SMMT is also calling on the Government to increase capital allowances for fleet buyers, particularly of commercial vehicles, and to remove expensive-car restrictions under capital allowances. That will help the demand for UK higher-end manufacturers and stimulate demand for newer and greener vehicles.
Paul Everitt, the SMMT’s chief executive, has indicated that if its request for liquidity aid is successful, it will press for further measures in the new year, such as French-style aid for scrapping old cars and training incentives to keep on vital staff in readiness for any upturn in the market. I am not convinced that we need to go that far today, but it is worth bearing in mind. It has been notable during the current crisis that motor manufacturers are bending over backwards to try to keep their retained staff for as long as possible, but there seems to be a limit to how long that situation can be sustained.
A number of people have asked me why this industry is so important and whether it is right to give it special treatment. First, it is worth stating that the industry is in very good shape. It faces a once-in-a-lifetime global collapse in sales. Usually, there is some part of the world where demand is high and the whole of the car industry is not hit badly at the same time. Secondly, nearly every other country has stood squarely behind its domestic plants. Given that there is probably some excess capacity in the system, if the Government fail to help British jobs, the British motor manufacturing plants become particularly vulnerable when the motor industry is examined on a global scale.
Today, we had an update on the number of people out of work. There are 1.86 million, which is a nine-year high, but all the signs are that it is set to rise yet further. Given the large number of jobs dependent on the motor industry, the Government today have a chance to demonstrate that they are willing to provide the short-term assistance necessary to keep the wheels turning and protect as many jobs as possible.
Order. Hon. Members will be alert to the fact that we must start the first of the three winding-up speeches at 3.30 pm. Five hon. Members have informed me that they wish to speak. I hope that those five and any other hon. Member who seeks to intervene will bear the time constraints in mind when they make their contribution and when they accept and respond to interventions.
I congratulate the hon. Member for Romsey (Sandra Gidley) on securing the debate. It is a vital debate nationally, but it is equally important for the west midlands, because as everybody knows, or should know, the west midlands produces about 10 per cent. of the wealth of this country through its manufacturing base. It is vital that we retain that base.
If we consider Coventry in particular, we see that since the 1980s some household names in terms of car manufacture and suppliers have gone out of business. That gives us an idea of the seriousness of the situation. Companies such as Massey Ferguson have left Coventry, which has had a knock-on effect on the west midlands as a whole. Recently—I think it was last year—there was a closure involving Peugeot. In my view, that was badly handled. Two or three years ago, it was the turn of Jaguar’s Browns Lane site. Some hon. Members may remember the demonstrations that took place in Paris outside the showrooms. I am sure that the representatives of Jaguar—it was Ford then—remember that. The problem related to a reduction in Coventry, where we probably have only Whitley left, which is a research and development facility. That is vital for new models for the future. It is equally important because it retains certain levels of skills in the west midlands.
The problem with the auto industry has been around for a long time, but the current crisis has accentuated it in a number of ways. Going back about two years, hon. Members will remember that Ford in America paid off about 80,000 employees. Ford had a major problem at the time, and it closed many of its subsidiaries around the world. It is well known in the trade that there is probably one motor car manufacturer too many, but that may be debatable.
Recently, within the last 18 months, Jaguar was taken over by Tata. We read in today’s newspapers that Tata is selling some of its assets in India because sales are down by something like 20 per cent. That is an indication that somewhere along the line we need to support the motor car industry. For every direct employee, the industry probably employs two or three indirectly, including those employed by small suppliers in the various trades that help to make a motor car. The hon. Lady has initiated an important debate.
In the west midlands in about 2000, we saw the first stage of what I would call the Rover crisis. Some will remember that the Select Committee on Trade and Industry visited the west midlands and took evidence not only from the Secretary of State but from employees and potential buyers. A rescue package and a taskforce were set up to deal with that situation, but we all know that Rover collapsed about three years ago. The rest is history.
In my view, there has been a gradual erosion of the manufacturing base in the west midlands. In Coventry some 100 years ago, 129 companies were involved in the motor car trade. That shows how much the industry has shrunk. Only Whitley is left in the Coventry area, and it does not produce motor cars; it is, as I said, an R and D establishment. We have had the same situation with Rolls-Royce; 15 years ago, it closed its Parkside facility and moved some of its staff to Anstey, but there were also redundancies.
We must bear it in mind that in the west midlands, manufacturing is still vital both nationally and internationally. People may have different ideas about manufacturing, but we must remember that many of our universities, including Coventry university and to a certain extent the university of Warwick, rely on manufacturing—and particularly so for design, development and research. Manufacturing, as much as anything, is vital to our universities. Some think that universities are not really involved in technology and only involved in academic matters, but manufacturing trade sustains universities throughout the country. Indeed, we have some very good universities in the west midlands, but I do not want to list them today because time is precious.
We must remember also that the car trade in our country is worth about £50 billion in export values. We should remember that we sell cars abroad. That trade makes a major contribution to our economy.
Does my hon. Friend agree that there are enormous areas of strength in the UK car industry, of which the Mini plant in Oxford is a good example? The first way to help the industry through the crisis is to give help with short-term credit facilities, which is one aspect of the financial crisis. The second is to help motor manufacturers sustain the good progress that they are already making towards producing more environmentally friendly vehicles.
My right hon. Friend is right. We have to make a special case for manufacturing in general, but for motor cars in particular, because we are famous throughout the world for producing them.
The Government must reconsider credit facilities, and any assistance that they can give should be made available without us having to make it a party-political debate. The matter should be above party politics. It is a serious situation. If we can bail out the banks, we should start bailing out the motor car trade, at least in the short term. It is equally important to remember that dealers will feel the brunt of the crisis. At the end of the day, they have to sell the motor cars.
All in all, something has to be done by the Government. The situation is urgent. If nothing is done, we could lose more than 100,000 jobs—even as many as 200,000.
Does my hon. Friend share my fear that what is happening to the motor industry mirrors what has happened to the pottery industry in north Staffordshire? As he said about the motor trade a moment ago, where there were hundreds of firms, we now have a small, almost non-existent, handful of companies producing pottery and ceramic ware in north Staffordshire. Indeed, Wedgwood has a big threat hanging over it at the moment. Firms in north Staffordshire moved on to supplying the car chains, and they are now under threat again. Does he share my concern that we may see the beginning of the end if we are not careful?
I share my hon. Friend’s concern, and I take his point about the pottery trade. Britain was renowned for its pottery. We tend to forget it, but people should take a good look at what has happened to Stoke-on-Trent. The real danger is that we get into the same situation as the mining industry. The pits were devastated—we could debate that subject till the cows come home—but we need to learn lessons from that in order to help motor car manufacturers. Equally, we should remember that Coventry experienced all that when 10,000 jobs a week were being lost there. Can anyone imagine the effect that such losses could have regionally and nationally—and even internationally, because it has international ramifications?
I strongly urge the Government to do something. I have been speaking to my hon. Friend the Member for Birmingham, Northfield (Richard Burden), and we would like the Minister—or, more importantly, the Chancellor—to meet a small delegation to discuss the situation.
I congratulate the hon. Member for Romsey (Sandra Gidley) on securing the debate. The number of right hon. and hon. Members here today shows the strategic significance of the motor industry to the United Kingdom.
Some statistics have already been alluded to. We are talking about an industry with a turnover of £51 billion and 840,000 jobs, with 180,000 at the manufacturing end and a retail sector supporting thousands more. In the west midlands, turnover is about £13 billion. That includes not only the major manufacturers in the west midlands—Jaguar and Land Rover—but the Fords, the Vauxhalls, the Toyotas, the Nissans, the Hondas, and the BMWs.
Behind those big manufacturers are a range of performance engineering and motor sport industries. There are also niche manufacturers; Aston Martin springs to mind, as do Lotus and Morgan. Britain is home to most Formula 1 teams; it is world-class in motor sport. Behind those is an entire performance engineering industry, with specialist firms such as Prodrive, Mira and Ricardo. We then have the components industry—the supply chain. The big names in the first tier include GKN, Delphi and TRW, and behind them there are second, third and fourth-tier suppliers.
When people talk about the crisis facing the United States motor industry, it is often said that the industry did not keep up with the times—that it did not invest in new products and did not look to the future. That accusation cannot be levelled at the UK automotive industry. If the lead times, technology requirements and the research and development requirements of the UK’s automotive industry are akin to other high-tech industries such as aerospace, its vulnerability to sudden downturns in the market and consumer demand will be that much more acute.
We heard that new car registrations were down by 36.8 per cent. in November. We are in real danger of spiralling problems. If major manufacturers go on downtime for a week or two, or even two months—understandably, given the crisis that they face—it will be a rational business response, but what will it mean for component suppliers that have been told for more than a decade that they must be involved in lean production? They are being told to keep their stocks down and work with just-in-time delivery. Their survival could be at stake.
However, it can also work the other way around. If a component manufacturer goes into administration—we recently saw this in the west midlands with Wagon—it can in turn, by not producing, create major problems for big manufacturers. I have the same fear as my hon. Friend the Member for Coventry, South (Mr. Cunningham), that if we start to lose the critical mass of our automotive industry in the UK, it will not come back; it will not be there to come back when the upturn arrives. I have seen in my own constituency—I am thinking of MG Rover—what it can mean for a local community when a firm goes down. However, through the taskforces, the recovery plan and so on, we responded to that crisis and ensured that it was not as bad as it otherwise could have been—although God knows it was bad enough! When the problem is industry-wide, however, and extends further than just one firm, it is all the more acute.
What responses do we need to consider? I agreed with a lot in the hon. Lady’s speech, but she was a little uncharitable in her references to the Government. She described how President Sarkozy met manufacturers and said that nothing equivalent had happened in Britain, but Lord Mandelson met the majority of major manufacturers—[Interruption.] He is not a President, as far as we know, but that dialogue did go on. My hon. Friend the Minister, who admittedly is not a President either, has also been in regular meetings with major manufacturers, and when those meetings are not taking place, his mobile is usually going off.
As far as the components industry is concerned, in the past week or so, a letter went out to major manufacturers and suppliers about the range of support either available now or in the process of negotiation.
My hon. Friend is an acknowledged parliamentary expert on this subject. He was in the Chamber last week for Business, Enterprise and Regulatory Reform questions. The Minister, who is a man of great intellect, energy and commitment in relation to parts suppliers, said:
“I have written to automotive suppliers, through the lead manufacturers, outlining a range and package of measures that are on the table and available now or will be available very shortly.”—[Official Report, 11 December 2008; Vol. 485, c. 665.]
Sadly, four days later, in an e-mail to me, a significant parts supplier in my constituency said:
“No information regarding what support is available, or is likely to be available shortly, has ever been circulated to us, either from the Lead Manufacturers or any other source. Might I ask that you brief us on what those support mechanisms may be?”
I turn that question to the Minister, and hope that he can respond today or at a later time.
If communication has broken down, it is regrettable. However, if hon. Members will forgive me, I shall not get on to Royal Mail. [Hon. Members: “Or TNT.”] Indeed.
Good things are happening, but more needs to be done, and quickly. Hon. Members have mentioned the need to inject liquidity into the system and to get credit moving. The SMMT and the Finance and Leasing Association have given some pointers on how that could happen, and extending the Bank of England’s special liquidities scheme and the credit guarantee scheme is part of that. We should seriously consider those suggestions as well as scrappage schemes, as is happening in France. Issues around those schemes remain to be addressed, but we must ensure that they are not structured in such a way as simply to suck in imports. There are ways and means of ensuring that that is the case.
The key point about credit needs to be stressed. If purchasers do not have any money, everything else will fail. It is important that the Government take on board that point more than any other. Everything else is just a sticking plaster. Does the hon. Gentleman agree?
I do not think that everything else is just a sticking plaster, but I agree that credit is essential to any plan, both to stimulate demand and to ensure that liquidity and credit is available to manufacturers and the components sector. That is also vital. A number of significant manufacturers are saying precisely that, although I shall not name them, because it would not be appropriate.
The Government should consider what can be done on public sector procurement. Part of the economic fiscal stimulus should involve bringing forward major capital projects. In addition, if a public authority is considering changing or updating its vehicle fleet over the next year or so, it should do so now and get those orders going through. The hon. Member for Romsey mentioned skills training for the future, but now is the time to be thinking about that. Downtime is precisely the moment to upskill. Again, a number of manufacturers are seeking assistance and co-operation on that.
In some cases, we need to have a dialogue with certain manufacturers. For example, Honda has announced its intention to pull out of Formula 1 next season. It has a massive hi-tech facility in Brackley, and it would be a tragedy if that was lost to the UK industrial base. Discussions are ongoing to keep it in existence, but that will take time to come to fruition.
Some 50,000 people are reputed to have worked within a radius of 14 miles of Silverstone. We are very frightened by the situation with regard to the withdrawal of Formula 1 racing at Silverstone and by the work of a certain Mr. Ecclestone. Will the hon. Gentleman get the Government to put some pressure on him, because he is having the most damaging impact?
As with Royal Mail, I shall not venture into a discussion on Bernie Ecclestone, other than to say that the motor sport industry is vital to the UK economy. One of the things holding that industry in place has been the presence of major events such as the British grand prix, whether held at Silverstone or Donington.
Finally, in considering our response to the economic downturn, we must avoid putting up too many boundaries around the motor industry. Motor and vehicle companies exist within communities. In my own area, for example, a number of universities—Birmingham university business school, Warwick manufacturing group, Birmingham City university and Coventry university—are talking about how to ensure that those companies contribute to the regeneration of the local area. The Longbridge site is the biggest redevelopment site in the west midlands, one of the biggest in the country and pretty large on a European scale. China’s first major direct subsidiary is there, in the form of the Shanghai Automotive Industrial Corp and Nanjing production facility. Why not link the regeneration of that site—not just the motor manufacturing side, but regeneration in its entirety—much more to that production facility? Furthermore, Honda could be encouraged to play a much bigger role in the future of Swindon, which has an economy that will no doubt be re-profiling in the coming years.
Those are just a few of the many things that we can do. However, the main message from everyone in today’s debate is that the UK automotive industry is too important for us to allow it to become fatally damaged in this downturn. Action is needed now to address the situation.
I shall be as brief as I can, Mr. Cook. Colleagues will understand if I focus most of my remarks on Vauxhall Motors, which provides vital employment in my constituency. It produces high-quality vehicles, its management has a fantastic relationship with the trade unions, and it has a very real future based on the new Astra coming into production in 2009 as a result of direct intervention by this Government. The hon. Member for Romsey (Sandra Gidley) should understand that the Prime Minister, when he was Chancellor, played a vital role in securing that investment from General Motors Europe.
I follow my hon. Friend the Member for Birmingham, Northfield (Richard Burden), who speaks with great authority on the industry, and my right hon. Friend the Member for Oxford, East (Mr. Smith). In those two speeches, we heard real solutions for the industry. The SMMT has put together an extremely informative briefing for colleagues speaking in this debate, and it has played a pivotal role in some of the discussions over the past few weeks.
Short-term finance is clearly an issue. We cannot get away from that. Inevitably, with a product in the £10,000 to £20,000 bracket, financial arrangements will come into play. The consumer, at any level—be he a fleet buyer at the top or a customer at the bottom—will be looking at liquidity and finance issues. The Government cannot avoid engaging in that dialogue. Some of the issues raised by the SMMT, to which my right hon. Friend referred, are mission critical.
Equally, we need to consider the next generation of vehicles. We will be making a huge mistake if we do not engage with the industry now and ensure that investment comes to the UK for more environmentally friendly vehicles. Such vehicles will not run on internal combustion engines but on other sources, such as bioelectricity or biofuel cells. I thank my hon. Friend the Minister for his response to the letters that I have sent to both him and the Prime Minister. I started to engage with the Government on such issues in September. If we do not bring the matter together in a co-ordinated fashion, we will be doing huge damage to the industry as a whole.
My hon. Friend the Member for Birmingham, Northfield referred to Government procurement. I hope that the Minister will take that point very seriously. I understand that the Department for Work and Pensions is taking a lead in a large-scale Government procurement. If it follows the actions of the Driver and Vehicle Licensing Agency, which put up a Seat as a prize for one of its competitions, it will be doing a huge amount of damage to the industry. I say that with due regard to the distribution industry which distributes and markets products that are made abroad. It is an important part of the economy and we should not underestimate that, but, as a Government, we should support products that are made at home. For example, many police forces use Vauxhall Astras made in Ellesmere Port. We could sell considerably more to other such people, including to Ministers for the Government fleet.
The issue around environmentally friendly vehicles is particularly important. The SMMT has said that companies should be encouraged to invest in new technology and product development using existing research and development programmes, but with greater focus on low-carbon technologies. That will be fundamental to the long-term success of the industry.
Finally, reference has been made to chapter 11 with regard to the three big players in the United States. I do not think that any of those companies will go into chapter 11 in the conventional sense because who would buy any of those products? If we take the General Motors situation, who would buy Hummer as a going concern? I cannot see that as a real issue. We must work with our partners across the pond and ensure that the solution that the White House and Congress come up with protects the interests of European and British workers. After all, for all three companies, it is Europe and Britain that provide something close to a break-even point for them. It is the United States element that is in deep trouble.
I thank my hon. Friend the Minister for contributing to the engagement with the companies. I urge the media to focus on the facts. I am fed up with hearing about secret talks with Vauxhall. As the Minister can confirm, no such secret talks have taken place—they would not be secret if they were in the public domain. Moreover, there are stories about employee sabbaticals to which the hon. Lady referred. As she said, they are something that some people may regard as an interesting option on a personal basis. However, the newspapers have said that such sabbaticals are something that will be imposed on the whole work force. The company is not in that sort of trouble. It has a short-term finance problem, which the Government can help with. The Government can also help with moving towards more environmentally friendly vehicles. It is a strong company within a strong industrial base. I hope that the Minister will leave us with some confidence that the Government will do something to ensure that the industry can see its way through these troubles.
I congratulate the hon. Member for Romsey (Sandra Gidley) on securing this important and timely debate. I recognise the time constraints, Mr. Cook, and I will try to keep my remarks very short.
My constituency has the highest concentration of motor manufacturers of any constituency in Britain. That is because of the Nissan car plant, which is a great source of pride for those who work there and supply it and for the wider community. Clearly, this debate is about not any one particular company, but the entire industry, which has been hit very suddenly by the downturn. In the year up to September, Nissan’s sales had increased by 16 per cent. on the previous year. Yet, we are faced with a very serious downturn. There are some positive aspects. Over the years, there has been good Government support for many of the models that have been developed there. Inevitably, car manufacturers are now having to take action to deal with the downturn.
Like Unite the Union, I want to praise Nissan for the way in which it has dealt with its staff. Since its arrival in the 1980s, the car industry in my constituency has transformed its operations. Who would have believed 30 years ago that we would be talking about the export of cars to Japan? That is the reality, and cars are exported on a regular basis to Japan.
Earlier on, there were some references to protectionism. I would caution against that. In my constituency, and in many others, we export something like 76 per cent. of what we produce to Europe and the rest of the world.
Our debate today has to be far removed from what goes on in the United States, or from the sorts of debate that we had about state intervention in industry 30 years ago, because we face a wholly different ball game. As my hon. Friend the Member for Birmingham, Northfield (Richard Burden) said, the British motor industry has transformed and modernised itself beyond all recognition. In the United States, where this debate is reflected both in the Congress and the Senate, there is a divide between some of the new car plants in the south and some of the older and more traditional plants in the north. We can be pretty proud that we do not have that divide in the United Kingdom. We have an efficient car manufacturing base that is often the envy of many other countries in the world. Members have stressed its importance because of the jobs that it produces and the £50 billion turnover that it generates for UK manufacturing.
The problems that car companies face at the moment are nothing to do with how they operate or with their efficiency. They are to do with the global turmoil that we all face. I welcome the Government’s engagement with the industry, and it is right that we examine how we can assist. This is not about a huge bung to the industry. The industry, trade unions, manufacturers and the supply chains are considering sensible measures to assist. The SMMT has one proposal to open up the fiscal situation for car credit, which should be separated from the manufacturing side because it is more of a fiscal stimulus. Many of the finance houses that are involved in the motor industry operate like banks and are multi-billion pound operations. They should be treated similarly to those companies that have benefited from the fiscal easing within the financial sector, so that we can increase liquidity.
Reference has been made to the Train to Gain budget, which I should like to praise, because it is working very well in my area. It means that people are using this down time in production to reskill, so that they are ready when the turnaround comes. Many of my constituents would face Christmas on short-term earnings if there was no Train to Gain budget. The budget makes sense, because it ensures that we can upskill the work force.
Whatever happens with the global crisis, it will end at some point. Inevitably, there will be a reduction in global capacity, but we in the UK must ensure that we come through strong when the global turmoil ends. Hon. Members may disagree on when it will end, but it will end, and losing vehicle manufacturing capacity in the UK, the skills that we have developed, technologies, or the dedicated work force, would be a real tragedy.
Many companies are thinking about how to position themselves to take advantage in domestic and global markets—we must ensure those things. We must ensure that we do not lose the advantage that we have in skills and capacity. That is why I think that many of the practical suggestions need to be seriously considered by the Government, and quickly.
The town of Leyland, in which there is a long tradition of commercial vehicle manufacturing, in particular of trucks—Leyland Trucks is one of the biggest truck manufacturers in the UK—is in my constituency. When I was elected in 1997, 600 people worked there. When I visited the plant in August, at the start of a night shift, it had record levels of production and a big order book, and the work force was up to 1,600 people. I remember asking the managing director, Jim Sumner, whether there were signs of recession. At that point, there were no signs. Haulage companies were still placing orders and were in the queue for receiving their orders, and everything seemed well.
Within six weeks, it had gone off the cliff. Haulage companies that had planned programmes of regular orders suddenly backed off, either because they could not get finance, or because they were concerned about their cash flows. They were asking, “Can you delay it a few months?” again and again. There has been a reduction in orders of about 40 per cent., and one round of redundancies has gone through and another is due in the next couple of months.
It is not that the company is asking for financial help—it is strong. Eleven years ago, there was a management buy-out after the collapse of the old Leyland Truck and Bus company in the 1980s and early 1990s, and the company is now owned by Paccar, an American company, which is very sound and which has a lot of money behind it. Paccar has invested a lot of money, and it is a very good company. However, if haulage companies cannot afford to go through with their orders, we in Parliament need to look at what can be done to enable them to do so.
Several hon. Members mentioned extending the various financial guarantees to leasing and finance companies, which is key to allowing companies to go ahead with orders. Often, such companies have plenty of work and regular routes by which to deliver goods, and for years have had programmes to replace a percentage of their fleets. However, they are now being told by their finance companies and banks that they cannot have the money that they need. In 18 months’ or two years’ time, those orders will need to be met. The existing fleet will be falling apart and it will need to be replaced.
The truck industry is always hit by the peaks and troughs of the business cycle; it is affected as much as, if not more than, anybody else. The industry is used to that, and companies build it into their plans, so that if a recession comes, they can cope with a 10 or 15 per cent. reduction in output—that happens. This time, we are talking about a huge drop in orders, even if they will come through in two years.
This year, Leyland is taking 40 per cent. of the UK market—its best ever share. It is a good company, so what can the Government do to enable the orders to come through early—they will come—to allow the production to continue, so that my constituents can continue in work, and so that the company is kept strong? Finance, whether it is through high street banks lending to small companies or leasing, is crucial, and something must happen on that.
A couple of other things have been thrown in the pot in my discussions with the company, which have occurred frequently in the past couple of months. They are not the biggest things that need to be done because finance is the key, but they might make a difference when it comes to allowing and encouraging haulage companies to continue bringing their orders forward. First, we could look at capital allowances for corporation tax and a 12 or 18-month window in which companies would get 100 per cent. tax relief to encourage them to bring orders through early rather than delay them for a couple of years. That could have some effect.
Secondly—again, this is at the margin, but it could make a difference to companies’ ability to go through with orders—the changes that the Chancellor made in the VAT and duty regime in the pre-Budget statement has affected the UK haulage industry. For those of us who drive cars, it has made no difference to what we pay for diesel or petrol, but the amount that haulage companies can claim in VAT has gone down, and the amount that they pay in duty has gone up, so their running costs have increased. Those are relatively minor things, but they could make a difference and help orders to come through.
Thirdly, we could look at public procurement. One of the big Government organisations that buys trucks from Leyland is Royal Mail. We should see what can be done to bring orders through early via public procurement, to enable companies such as Leyland Trucks to go ahead. The orders would come in any case, but such a measure would bring them forward. Let us keep people in work and ensure that, when the recession ends and work picks up, we have an industry that is capable of dealing with the inevitably increased work load.
I am sorry that I turned up late, Mr. Cook—I was detained on other House business. I apologise if I mention points that were made earlier.
What lessons can we learn? The No. 1 issue, as far as I see it, is the poverty of understanding and expertise in our boardrooms—it is a massive problem. The words “retained profits” never pass the lips of industrialists in this country; rather, it is always borrow, borrow, borrow, and retained profits are distributed as income to shareholders. Now we have massive over-leverage in a lot of companies, from prime users all the way down the supply chain. That lesson has to be learned.
Proper borrowing is sensible and prudential, but borrowing on the scale that British industry and motor manufacturing undertook in the past 20 years is close to suicidal. We no longer have a competitive currency; we have an import-export, balance of payments problem that will get worse, not better; and, regrettably, our competitiveness agenda has not been fully developed, despite the best efforts of the Government to push it along. We have ignored it in my constituency, which is related to the motor industry in a big way.
Goodyear was facing massive problems. It worked hard and used other agencies to help and advise it—this is an American company, by the way—and improved productivity by almost 30 per cent. It can be done. However, because we are not competitive, we are having worse problems in this recession than many other countries, especially those that put long-term factors in front of short-term gains. In this country, money that should have been retained was distributed as profits for investment.
We have problems with the exchange rate and, although it is helpful overall to have a lower, more realistically valued pound, we are facing reverse premiums in dollar markets, which will cause us even more problems.
I appreciate that you have allowed me to speak for a moment, Mr. Cook, and I can see that you are looking for me to conclude. We need training and more training but, most of all, we need to get those ideas into the boardrooms of the motor and other industries, such as aerospace, in this country. Let us ensure, when we come out of this, competitiveness, and a proper understanding in boardrooms of the need to retain and invest profits rather than overreaching through borrowing.
I congratulate my hon. Friend the Member for Romsey (Sandra Gidley). I, too, was in the ballot for this debate, so I am delighted that she was successful in bringing this matter forward.
We are living in times of a double whammy with tumbling demand and scarce credit. There is huge difficulty and I would argue that car manufacturing and construction are among the worst affected industries in this country. Land Rover is based in my constituency so I understand the problems closely. Jaguar Land Rover had record sales last year. Of its vehicles, 63 per cent. are exported, so hopefully the weak pound will at least help in that respect and overseas markets will recover. The UK car market represents 11 per cent. of this country’s exports, so it is hugely important.
Jaguar Land Rover provides 15,000 jobs and there are 50,000 indirect jobs. We must think of the families of all those people. The company is doing all it can. We have spoken of the things companies are doing such as scaling back production and cutting shifts. Jaguar Land Rover has released 850 agency staff and allowed people to take sabbaticals. Employees of Jaguar Land Rover are on 80 per cent. of their pay so they are being less generously dealt with than Ford employees. There have been 600 voluntary redundancies already. The company is doing all that it can and there is great camaraderie. However, it needs urgent financial help. Next year will not do because it is vital. I spoke to Land Rover this morning and that is the message that it wants to give the Minister today.
My hon. Friend mentioned what some other countries are doing so I will not dwell on it. The US Senate rejected a $14 billion package of loans because unions refused to accept a pay drop. However, a replacement package is being worked on and an announcement is expected any day. In Europe, France is providing €400 million for the development of electronic and hybrid cars along with a €300 million investment for restructuring. Spain has a €800 million package for the automotive industry, which is part of a €9 billion stimulus package over two years. In Sweden, there is a £2.35 billion increase in research and development investment and state credit guarantees. Other countries are helping their car industries. This country must do the same and we must do it urgently.
I hope that in his speech the Minister will not just reiterate the information in the letter he sent to vehicle manufacturers for their suppliers. The measures in that letter are very welcome, among them the small business finance scheme and the £1 billion guarantee facility for exporters. We want to hear what the Government will do specifically to help vehicle manufacturers. Small manufacturers will fall like a row of dominoes if nothing is done. Such action is urgent and important.
My hon. Friend mentioned stimulating responsible spending on vehicle renewal. Last year, Land Rover spent £800 million on green technologies. This year, the new stop-start Freelander is coming out, which has a reduction in emissions of 18 per cent. Will the Government introduce measures to stimulate responsible spending on vehicle renewal, such as a vehicle scrappage system for older vehicles to encourage take-up of fuel efficient technologies and to renew the vehicle fleet on our roads?
The Society of Motor Manufacturers and Traders urgently wants short-term access to Bank of England special liquidity schemes; loan guarantees or direct loans; a speeding up of the allocation of existing funding; R and D investment, including investment in blue-sky thinking; and an increase in capital allowance for fleet buyers. Another suggestion I put to the Minister is to introduce measures on trade credit insurance, which would be welcome not only to the supplier base, but to companies all over the country. Such measures would protect companies from the risk of default or insolvency among their customers.
We have all been shocked by the demise of Woolworths and MFI and their coming disappearance from the high street. Both had their trade credit insurance cancelled and were not able to find new insurance. That has been a body blow to many companies. Baroness Vadera has intimated that the Government may be prepared to look at a guarantee scheme. If they do not, this industry and many others will suffer needlessly. Such a scheme would not be a huge expense for the Government compared with the investment they have made already.
In conclusion, I reiterate the urgency of this matter. The Government say they are listening and Lord Mandelson has met with motor manufacturers. However, they must do more than listen. They must do something and they must do it urgently. It cannot wait until after Christmas. Please will the Minister indicate what the Government will do now?
I am grateful to serve under your chairmanship, Mr. Cook. I pay tribute to the hon. Member for Romsey (Sandra Gidley) for securing this important debate.
We all agree that this afternoon we are trying to ensure that the automotive industry survives so that when the recession ends and the upturn comes, we are in the best and most competitive state possible. As a word of caution, although this is an extremely important sector that accounts for 11 per cent. of our exports, manufacturing as a whole makes up more than half our exports. We are looking to the Government to see how the manufacturing sector as a whole can survive the recession and move towards the upturn, not only the automotive sector.
As the hon. Lady has said, the automotive sector is extremely important. It provides 200,000 jobs in manufacturing and 600,000 in associated industries such as the garage industry, the parts industry and Formula 1, which has been mentioned. As has been mentioned by Labour Members, for every one job directly in the automotive industry that is affected, about two or three indirect jobs will also be affected. Any downturn in the industry is hugely important.
We are looking to hear from the Government what sort of package they are likely to come up with. In particular, we would like to hear how that will relate to what our friends across the pond are doing for their automotive sector. What they do will affect us. The automotive industries across the world are interrelated. I have seen how competitive Hyundai is in South Korea. I was in China the other day and saw its emerging automotive industry, which is also very competitive. One thing that we must do is produce higher and higher-tech vehicles. As was mentioned by Labour Members, we must maintain our spending on R and D and our university research. It is critical to our future.
I think that everybody here can unite in agreeing that we need to ensure that we keep credit flowing to both the major manufacturers and the second and third-tier supply chain components. If we lose the skills in those supply chain components, it will be difficult to get them back. That is why the Government’s role is critical.
The hon. Member for Coventry, South (Mr. Cunningham) made a good speech about how critical the industry is to his constituency, and the 193 firms involved. He also made the point that critical mass is important. We have critical mass in this country at the moment. If we lose it, it will be much more difficult to get the industry back when the upturn comes.
The hon. Member for Ellesmere Port and Neston (Andrew Miller) made the most important point that I have ever heard him make. We must look to the next generation of vehicles. If we are not looking for high-tech vehicles, we will not be competitive globally. The hon. Member for Houghton and Washington, East (Mr. Kemp) has a high concentration of Nissan manufacturing in his constituency. It is an important part of the automotive chain. The hon. Member for Birmingham, Northfield (Richard Burden) also spoke. The automotive sector is very important to the Birmingham area. My hon. Friend the Member for Bromsgrove (Miss Kirkbride) and other Members from Birmingham are also here.
What has gone wrong, what can be done and what will the Government do about it? Unfortunately, so far, the Government have moved in the wrong direction. The pre-Budget report increased vehicle excise duty regulations to reclaim £100 million more in unused car tax discs. The Government take £33 billion in VAT, road fuel tax and fuel duty but give back only £8 billion to the transport sector. The rate of corporation tax for small firms went up from 19 per cent. in 2006 to 20 per cent. in 2007 and 21 per cent. in 2008. That is going in the wrong direction.
Several other changes in tax policy included in the PBR will have a negative effect on manufacturers. For example, individual firms face up to £2,250 in costs to relabel all their stock as a result of a pitiful change in VAT from 17.5 to 15 per cent., which will be reversed in a year’s time. I have received numerous representations from firms getting ready for Christmas about the cost and difficulty involved. That money could be much better spent in other directions, as I will explain in a moment.
Many Members will be concerned to hear that the reduction in VAT is pitiful. When it comes to car manufacturing it represents hundreds and hundreds of pounds. It is not a pitiful amount to people looking to buy a new car. I can understand that it will be pitiful for small items, but not when it is worth hundreds of pounds.
I am grateful to my hon. Friend. That is the way to do it. If car retailers can give really good deals, that is the way that we ought to go. Somebody mentioned a scrappage package suggested by the Society of Motor Manufacturers and Traders and the Retail Motor Industry Federation. That is a thoroughly good idea: get rid of the old polluting cars and encourage people to buy new clean technology cars. Incentives for people to do so could be offset by VAT on the new cars. It is a thoroughly good and worthwhile package to consider.
What would the Conservatives do about it? We would introduce a national loan guarantee scheme to underwrite debts and ensure that banks lend to small businesses. [Interruption.] Hon. Members may groan, but everybody in this debate has agreed.
No. I said that I would give way only once. Everybody in this debate has agreed. We do not need to be political about it; we need to ensure that the banks lend to businesses so that they are there when the upturn comes.
The Conservatives would give tax breaks to businesses that hire workers who have been unemployed for three months or more, which would be revenue-neutral, as it would be funded by lower spending on unemployment benefits. We would cut corporation tax rates, reducing large corporation tax from 28p to 25p and small corporation tax from 22p to 20p. Those measures would help business to get more cash flow now. We would allow businesses to defer VAT for up to a year. We want to get cash flow into small businesses in particular, here and now.
I have one question for the Minister before I finish. The noble Lord Mandelson has been in serious talks with the automotive industry. We need to know what package is likely to emerge from those talks so that we can help safeguard those 800,000 jobs. When it comes, we will evaluate it to see whether we can support it, but we want some real information from the Minister.
It is a pleasure to serve under your chairmanship, Mr. Cook. I congratulate the hon. Member for Romsey (Sandra Gidley) on securing this important debate. From the strength of feeling expressed today, nobody can be under any illusion that hon. Members do not value and appreciate the automotive industry in the UK and recognise it to be of strategic importance to the UK economy.
Hon. Members will be aware that I have form. Those who know me are aware that I have been a passionate advocate for the manufacturing industry throughout my parliamentary career, and I can assure hon. Members that that has not changed now that I have become an economics and business Minister at the Department for Business, Enterprise and Regulatory Reform. We as a Government need to consider what more we can sensibly do to help the automotive industry through these difficult times, but we should not forget what action has already been taken by the Government and what help is available or will become available shortly.
Reference was made to the letter that I sent through the automotive manufacturers to supply chain companies, detailing a range of existing support mechanisms. I will say a bit more about that in a few minutes. My hon. Friend the Member for North-West Leicestershire (David Taylor) said that some companies did not get it. If he has the details, we will try to ensure that word gets out to all the companies in the automotive supply chain, because it is important.
It is clear that there is a strong feeling among Labour Members about the importance of the automotive sector. We have heard contributions from my hon. Friends the Members for Coventry, South (Mr. Cunningham), for Birmingham, Northfield (Richard Burden), for Ellesmere Port and Neston (Andrew Miller), for Houghton and Washington, East (Mr. Kemp), for South Ribble (Mr. Borrow) and for Wolverhampton, North-East (Mr. Purchase), as well as interventions by my right hon. Friend the Member for Oxford, East (Mr. Smith) and my hon. Friend the Member for North-West Leicestershire.
I note that my hon. Friends the Members for West Bromwich, West (Mr. Bailey), for Birmingham, Selly Oak (Lynne Jones), for Birmingham, Hall Green (Steve McCabe), for Birmingham, Edgbaston (Ms Stuart) and for Gateshead, East and Washington, West (Mrs. Hodgson) are also here but have not had the opportunity to speak, as this is only a one-and-a-half hour debate. I have no doubt that if they had spoken, they would have expressed the same concerns as other hon. Friends.
It is a bit disappointing, to say the least, that for most of this debate, there has been only one Back-Bench Member from the official Opposition. I hope that that does not reflect the Conservative party’s lack of interest in the automotive industry in the United Kingdom. The UK values the automotive industry, and the Labour Government value it. We are doing what we can sensibly to provide it with support.
I hope that the Minister will include the Liberal Democrats in his encomium to Labour Members. We have motor industries in our constituencies as well —in Romsey, Eastleigh and Solihull—and we are, proportionately, the most highly represented group in this debate.
I will not be drawn into mathematics, but I acknowledge the largely constructive way in which the hon. Member for Romsey made her points.
Last year, the United Kingdom produced 1.7 million vehicles, about three quarters of them for export. We produced about 3 million engines and a record 39,000 pieces of construction equipment. This is an industry that employs almost 1 million people in the United Kingdom. It is of immense value to our economy.
Much was made of actions that were being taken by other countries with regard to the automotive industry. In particular, my hon. Friend the Member for Ellesmere Port and Neston talked about the US automotive manufacturers and the discussions that have been taking place in Congress about a package of support for them. I want to assure him and the House that we are continuing to monitor that situation very closely indeed and we will examine the implications that any such package may have for the UK plants of those automotive companies.
My hon. Friend also stressed, very validly indeed, the role of the Prime Minister in securing investment in the new Astra at Ellesmere Port. I could point to many other examples of where the Government have been intervening to provide support, whether it has been selective financial assistance to help companies with new products or new projects; support through the Technology Strategy Board; green carbon research and development expenditure; or Train to Gain and other training packages. A significant amount of support is already being made available through this Government.
I recognise the time constraints, but can I impress on the Minister that businesses, particularly those within the supply chain of the motor manufacturing sector, are crying out for working capital—for cash? It is widening the guarantee scheme with the banks that provides a real answer. I am not bothered how he does that, but will he give us some hope today that he will do that?
Let me reply to that point in a moment. First, I want to talk about three areas where the Government are taking action. The first is the action that we are taking to encourage demand in the United Kingdom economy, to create consumer confidence and provide a fiscal stimulus. That is a vital area. We want people to have the confidence to go back to buying cars. In response to the points that my hon. Friend the Member for South Ribble made, we also want them to have the ability to make commercial decisions to buy commercial vehicles. That is why the £20 billion fiscal stimulus is important. It is why the agreement that was reached by European Heads of State for a European-wide fiscal stimulus is another key measure that needs to be introduced.
As hon. Members will be aware, with three quarters of the cars that we manufacture being exported, it is vital that European countries and the US, which are key markets for us, look to provide a fiscal stimulus and take measures to boost the confidence of their consumers, so that those consumers can continue to buy cars in the future. I think that the Conservative party needs a lesson in economics and how aggregate monetary demand works, if its members say that the fiscal stimulus is not an appropriate policy issue; it very much is. As my hon. Friend the Member for Houghton and Washington, East clearly pointed out, the effect of that stimulus on a car can amount to several hundred pounds and can be a significant additional incentive. Of course, as the hon. Member for Bromsgrove (Miss Kirkbride), who has flitted off again, mentioned, discounts that are being made available at the moment by the car manufacturers mean that there are some very good deals for those people who want to buy cars.
In order to get something positive out of this debate for all those businesses that are struggling on a day-to-day basis and all those people who are likely to lose their jobs, can the Minister give this House any idea this afternoon when some of that European money is likely to flow into the automotive businesses?
I will talk in a moment about some of the support mechanisms that are already available or are just about to become available.
The second point that I wanted to make is that this issue is not about just having a fiscal stimulus for the economy; it is also about ensuring that banks continue to lend. Right hon. and hon. Members will be aware of the pressure that the Government have been putting on banks to continue to make lending available, not just to small businesses but to larger businesses as well.
There have been several announcements in the last few weeks. For example, on 23 November NatWest RBS said that it will maintain existing overdraft pricing for small businesses, and it has also pledged to continue to provide committed overdrafts for business. There is an issue about some overdrafts not being committed overdrafts and consequently they could be withdrawn without notice. Lloyds TSB has also been taking action, with its charter for small business. Separately, HSBC is delivering a £1 billion business support fund. I believe that it is only as a result of the significant dialogue that there has been between the Government and the banking system that some of these measures have been announced. I am sure that the whole House will welcome those measures, and we need to continue to ensure that we keep banks in the spotlight, so that they continue to lend at appropriate rates to businesses.
The third area that I want to address is the Government support mechanisms that are available. Hon. Members mentioned Government procurement. We need to look around the Government more widely to see whether there is more that we can do to provide assistance at this point in time.
Packages of measures are available or becoming available, such as the small business finance scheme that was announced in the pre-Budget report. There is £1 billion in extra support to companies. We hope that the scheme will be up and running early in the new year. Similarly, we hope that the export credit insurance to small companies will also be available early in the new year. Obviously, there are legal requirements that must be met to get these schemes up and running in a proper way, but we are doing everything that we can to move as quickly as possible to ensure that that funding also becomes available.
In addition to taking measures on export credit insurance, we are actively working as a Government to see whether there is something sensible that we can do on domestic credit insurance.
A decision has been taken by the European Investment Bank today that £1 billion of new lending will be available immediately to the banks through the European Investment Board, confirming an announcement in the pre-Budget report. Again, the House will welcome that decision. As a Government, we have been pressing very strongly to double the amount of money coming from the European Investment bank for green cars in the next few years. There will be an €8 billion fund and I believe that it will be very important to our industry, to help it with the R and D that it is doing to take carbon out of its new product ranges. We will continue to apply pressure in that area. We are taking other measures to support R and D expenditure through the Technology Strategy Board, and I am sure that those measures will continue to bear fruit.
We continue to have a dialogue with the large automotive manufacturers that came to see Lord Mandelson and myself very recently.
As has been said, we have seen the collapse of big household names such as Woolworths and MFI. Clearly we cannot rule out other companies being at risk, and that is one reason why we need to continue to have a dialogue. However, I want to stress that any Government support that would be provided needs to be regarded as exceptional. These are exceptional times and we are having to contemplate doing exceptional things. Loans from Government should always be seen as very much a last resort. In the first instance, we should be looking to companies and their parent companies to provide the funds that are required for the future. We should also look to companies to restructure. However, in certain instances, we will possibly need to go further. That is why we continue to have dialogue, as appropriate, with companies during these difficult times.
Dartford River Crossing Tolls
I am grateful for this opportunity to discuss the new charging arrangements at the Dartford river crossing, particularly the recent increases. This subject is very relevant to my current constituents in Hornchurch and those whom I hope to represent, after the next general election, in Old Bexley and Sidcup. As a user of the crossing, I declare an interest.
There were tolls at the crossing before the construction of the Queen Elizabeth II bridge, which opened in 1991. As part of the private finance arrangements for the construction of the bridge, the then Conservative Government promised that when construction costs had been met and an adequate maintenance fund had been established the tolls would cease. That position was reached in April 2003, but the Labour Government decided that a charge should be retained to ease congestion. They promised that the profits raised would be used to fund transport infrastructure improvements, although they did not specify where those improvements would be.
I congratulate my hon. Friend on securing the debate. Does he understand the frustration of my constituents that although Essex helped to pay for the original Dartford tunnel, which was constructed in the 1960s, out of local taxation, local residents are still paying bills? My correspondence with the Government has failed to explain why the charges are increasing, with even more profits flowing to the Government, even though the costs had been covered by April 2003, as he says. Can he explain that?
My hon. Friend makes some relevant points on which I shall expand in my comments. His point about profit is quite relevant because the annual profit since the point at which the costs of the bridge had been paid off has been between £47 million and £52 million. Up until last month, Kent county council received £1 million in extra spending permissions for local transport infrastructure, and Thurrock borough council received £750,000. That has now come to an end.
Was not it a principle of the original tolling charge that everyone paid the same? It is outrageous that my constituents in Swanley should pay an increased charge while those who live in Dartford and Thurrock, which happen to be Labour marginal areas, have most of their journeys completely free.
The hon. Gentleman will know that many of my constituents live much closer to the Dartford crossing than many of the residents of Thurrock or Dartford. Is he aware that until recently, when the discount scheme was introduced, Dartford was receiving, through Kent county council, £1 million a year, and Thurrock was receiving £750,000 a year from the tolls for local transport? Would not it have been more equitable for some of those resources to come to Bexley as well?
The hon. Gentleman makes a valid point about the use of the £1.75 million that was previously available, which seems to have been traded away for the local discount concession. As I shall go on to explain, I am not sure that a particularly fair trade-off is being created. On 15 November, the revised charging structure was introduced, the impact of which was that the daily cash charge for cars and vans was increased by 50 per cent. from £1 to £1.50, with other increases in cash charges for larger vehicles.
My constituency is Dartford, as the hon. Gentleman knows, but I am not at all in favour of the increased charges, which is why I proposed a reduction for local residents. However, will he clarify one point? He mentioned that the tolls should have been free once the bridge had been paid for; what is his party’s policy on the toll should it come to Government in the future?
I do not speak on behalf of my party on transport issues, so unfortunately I cannot give the hon. Gentleman the answer that he seeks. What we need to hear is the Minister’s answer, because it has been difficult to understand what is the Government’s position on this issue moving forward, on investment in the crossing and on the public spending review.
Sitting suspended for a Division in the House.
In a letter to me of 22 May 2008, the then Minister of State at the Department for Transport, the right hon. Member for Doncaster, Central (Ms Winterton), confirmed to me that the intention had been to remove the tolls that we were discussing before we crossed from one half of this debate to the other, when the costs of the bridge had been recovered. She added:
“However, traffic levels have risen far faster than projected and work carried out by the Highways Agency has indicated that removal of the toll charges would increase traffic levels by 17 per cent. on 2003 levels.”
I am yet to be convinced that the removal of the tolls would have the impact stated, and I invite the Minister to set out why other solutions could not address the problem. My starting point is that a promise was given when the tolls were introduced, and that without compelling evidence that promise should be honoured.
My hon. Friend will be well aware that I have campaigned for quite some time to get the Government to reconsider the matter. He is making a powerful point about how they have reneged on the understanding that the tolls would be removed when the bridge had been paid for. Of course, the environmental consequences of the build-up of people waiting to pay the toll should also be considered.
Does my hon. Friend agree that it is unfair that my constituents in Slade Green, Crayford and Bexleyheath, who live much closer to the Dartford crossing than residents in parts of Thurrock, are discriminated against by not getting a discount?
My hon. Friend points out about the need for basic fairness, in which I believe equally. When considering the charges levied, it is relevant that rather than increase, traffic levels at the crossing have actually fallen in recent years. According to information published on the Highways Agency’s website, the total number of vehicles using the crossing in the 2007-08 financial year was 53.2 million—nearly 400,000 fewer than the previous year and 1.2 million fewer than two years previously. In fact, it was the lowest number for five years. If the number of vehicles is falling, and likely to fall further with the economic slow-down, what justification can the Minister give for increasing the charge now of all times? Vehicle numbers were being reduced under the previous charging arrangements.
The hon. Gentleman is being most generous in giving way. In fact, the removal of the tolls when the bridge was paid for was included in the Dartford-Thurrock Crossing Act 1988 itself. It was a very strong promise.
The hon. Gentleman will have received information from the Federation of Small Businesses, and I am sure that he is supporting its campaign in Essex. Does he share its concern and mine that the Government are being less than forthright in providing evidence to show that the toll is anything other than yet another Labour stealth tax?
We will need to hear from the Minister on that point, but certainly the anecdotal evidence is that congestion at the toll booths has got worse, not better, as drivers scrabble around to find the correct change. I was recently told a story about a driver who was struggling to find the correct money for the toll. The motorist behind got out of his car in a slightly aggressive manner, and the driver thought that he would end up in an angry exchange with him, or worse. Instead, the man grumpily gave him 50p and said, “I’m in a hurry.” We could probably all relay stories of similar things happening.
As a sop to residents in the area of the crossing, the Government have introduced a scheme for residents of the Thurrock and Dartford council areas to receive discounts when using the crossing. However, the scheme hardly seems a rip-roaring success, with some reports that as of a month ago, only 6,000 people had registered for it since July. Will the Minister confirm how many people have registered for the benefits of the discount scheme?
More significantly, as we have heard, the discount scheme is arbitrary in its application. A person can live nearly 13 miles away from the bridge in some parts of Thurrock and receive the benefit of the discount scheme, yet a Havering or Bexley resident living much closer simply has to put up with being charged more. As Boris Johnson, the Mayor of London, noted in his representation on the plans for the revised charges in the area covered by the discount:
“It is clearly unfair that communities in, for example, Crayford in Bexley (only three miles from the Crossing) are not included within the proposed local discount area, when the residents in Coryton in Thurrock, over ten miles to the east of the crossing are included.”
I could make exactly the same point about people living in Rainham village or Wennington village in my constituency. Tracey Crouch, the Conservative candidate for Chatham and Aylesford, contacted me to point out that if the same distance test were applied, a large part of Medway, on the doorstep of the Minister’s constituency in Gillingham, would be covered.
The tax money will have to come from somewhere if the toll is taken away. Obviously I would like that to happen, but my main concern is the crazy operations management. Why should people from Gravesham or any of the other constituencies represented in the debate have to spend minutes, or large proportions of an hour, waiting? I would say that in the three years that I have been the Member for Gravesham, I have spent at least 20 hours waiting to cross that bridge. Why cannot we have the toll booths on just one side, or something? The Government’s operations management is absolutely appalling, and it is time that something was done about it.
Like my hon. Friend, I have been stuck in the traffic there. Creative ways around that could be thought of, and I know that the FSB has advocated the overhead camera technology used in the London congestion charge. That or other technology could be used more creatively to allow the traffic to flow. I hope that the Minister will take that on board and listen to those representations, and consider whether there are ways to deal more effectively with the charge, if it has to be retained.
I have given way to the hon. Gentleman already, and I would like to make some progress.
We have heard about the lack of ring-fenced funding and the fact that the £1.75 million that had been ring-fenced for certain areas is now to be spread across the country. The Government therefore cannot even argue that that money is being spent to encourage people to use other forms of local transport, which is an argument that has been used in support of other such schemes. Instead of guaranteed funding for local roads and infrastructure, we have a discount scheme that appears to be limited to a small group of people, potentially living up to 20 km away from the bridge. The scheme relates to specific vehicles, meaning that someone with two cars has to pay two registration fees, and its take-up to date appears to have been limited. I say to the Minister that that does not look like much of a concession—it looks more like some sort of con.
We must also consider the impact of the increased charge on small businesses, which are struggling in these increasingly challenging economic times. An Essex-based courier company that I spoke to estimated that the additional charges at the crossing could cost it as much as an extra £5,000 a year. Surely this time of economic downturn and local businesses struggling to keep their heads above water is absolutely the worst time for the Government to give them a further slap in the face by increasing the costs.
In a letter to me of 27 November, the Minister wrote:
“In the longer term we expect demand for the Crossing to continue to grow. The Department for Transport is therefore commissioning a study to look at options for addressing traffic issues in the future. It is due to report around the turn of the year.”
As we are fast approaching the turn of the year, will the Minister provide an update on the nature and progress of that study and tell us what is its brief, who is conducting it, who is giving evidence to it and when it will be published?
The Minister will be aware of current discussions about the long-term future. Essex and Kent county councils have been working on the potential impacts and economic advantages that additional capacity could unlock for the people of those counties, particularly in the context of the Thames Gateway, in which I know he has taken a close interest. Will he commit to work closely with Essex and Kent county councils on the future of the existing river crossing, as well as on considering where any new crossing might be located?
If the Minister is not prepared to remove the toll and believes that some form of charge should be retained, can he confirm that he is prepared to investigate removing the toll booth plaza and introducing a system similar to the one used to enforce the congestion charge zone in central London, with overhead automatic number plate recognition cameras, thus removing the need for vehicles to stop at payment booths and wait for the barrier to rise?
Another question is what other plans the Government might have to realise even more funds from motorists using the crossing. In the recent pre-Budget report, details were provided of the working of the operational efficiency programme. It was stated that it would be
“widening the scope of the study of capacity requirements at the Dartford Crossing to include the potential to realise value for the taxpayers”.
Can the Minister confirm what was meant by that statement, as it gives the unfortunate impression that the Government see the crossing as a cash cow to generate even more revenue for the Exchequer?
In conclusion, Jon Holmes writing in The Sunday Times summed up the current mood well:
“Even the three billy goats gruff didn’t have this sort of hassle when they wanted to get to the other side of their river. Granted, they had to deal with a troll, but he wasn’t demanding £1.50 every time. In fact, when he tried it on once too often, he got butted firmly into the river. Think on that, Dartford Crossing authorities.”
I hope that the Minister will think on that and give hard-pressed motorists, shoppers and small businesses an early Christmas present by scrapping the toll increase and by going back to the drawing board on the charging arrangements at the Dartford river crossing.
I congratulate the hon. Member for Hornchurch (James Brokenshire) on securing this debate.
As all hon. Members in the Chamber are aware, the Dartford crossing is a vital part of our strategic road network and brings huge benefits to users. However, its success has created some real challenges over the years, and I am conscious that as we have addressed those challenges, some of the complex considerations that we have had to wrestle with have not always been made clear. Therefore, I am delighted at this opportunity to explain the position and to answer questions that have been raised in the debate.
Several Members will be able to remember the early days. The first crossing was a single tunnel built in November 1963. That project was promoted by Kent and Essex county councils. A second tunnel was opened in May 1980, but, in the 1980s, the levels of traffic that we would have to deal with and the substantial increase in capacity that would be needed were becoming clear. Hence, with the building of the M25, the crossing became a key part of the strategic road network, and the Government decided to promote the construction of the Queen Elizabeth II bridge. Control then passed from Kent county council to the Government, and a concession was let for the building of the bridge, which opened in 1991. Under the concession, tolls were charged to pay for the costs of building the bridge, as Members have rightly pointed out.
We also saw a substantial growth in the volume of traffic in the 1990s, which had two effects. First, it increased the revenues that were collected, meaning that the bridge would be paid for sooner than had been expected. Secondly, it raised concerns about what would happen if the tolls were removed, given the increasing volume of traffic.
I wish to mention two issues briefly. What about the promise that the tolls would be abolished once the costs had been recovered? Secondly, there is little doubt that the increase in the tolls has created greater congestion. I use that tunnel crossing many times each week, and the increase has added to congestion—it is not helping at all.
I will come to the issue of the charges that were put in place as of 15 November—four weeks ago.
On the position once the bridge had been paid for through the toll, the hon. Gentleman is absolutely right, but would it have been possible in the 1980s to predict the volume of traffic that we have today? Some 53 million people make that crossing each year. Would he have been able to predict at that time the state of the economy, in particular the success and continual growth that we have had, particularly in the regions that we are discussing? I will come to the current downturn in a moment.
We had to make difficult decisions. That is why I said at the beginning of my comments that the consequence of the growth in traffic in the 1980s was a realisation that we needed a further crossing, and that is exactly why the QEII bridge was built.
Following on from that, let me deal with the issue of removing the tolls. All the profiling that we did in 2000 to 2001 showed that if the tolls were removed, there would be an increase of about 17 per cent. in the number of people attempting to use the crossing. Therefore, if one thinks about the approach to the tunnels and the difficulties that occur even now if a vehicle breaks down, they will admit that delay and the congestion that it causes are substantial. If there were no tolls and no plaza, the pollution caused by the number of vehicles trying to get into the entrance would be even greater than it is currently.
I hope that the Minister will acknowledge to the Chamber that, under European directives, riparian crossings can be tolled only if they diminish congestion. That is the only mandate; otherwise, tolls are unlawful. If the present congestion were to endure, presumably the Ministry would have to accommodate that or not be in compliance with European directives.
There is much that I would have liked to say, but my final point is that my hon. Friend the Member for Dartford (Dr. Stoate) and I learned about the proposal to increase the tolls at the same time as everybody else, from our local press. We did not go ballistic—we went nuclear. Don’t mess with us.
One thing I can certainly agree with is that my hon. Friends the Members for Thurrock (Andrew Mackinlay) and for Dartford have been the most consistent in arguing their case. In part, that resulted in the discussions that followed and the consultations with residents which led to the residents’ scheme being introduced.
The Minister may recall that I raised the matter in a speech in this House about seven years ago, and that I have campaigned on it ever since. Why should the people of Essex and north Kent be discriminated against? Why should they be singled out from all the people in this country to collect tolls in order to solve congestion problems or to raise stealth taxes? Surely, if the argument applies there, it should apply for all the similar road areas around the country. We are being discriminated against.
With due respect, the hon. Gentleman and, unfortunately, others seem to assume that the road is used by local people only, but it is not. In the first few paragraphs that I had a chance to deliver, I said that it is part of the strategic road network. The hon. Gentleman is well aware that with the M25 on either side, it is part of a critical route. It is not just the people of Kent and Essex who pay for the crossing.
I suspect that most of the people who use the crossing day in and day out would not want the additional delays that undoubtedly would follow if there were a free-for-all. Safety in the tunnel would also be impaired, because another matter that hon. and right hon. Members will be well aware of— [Interruption.] It would be a free-for-all, given the substantial tankers that need to be escorted through the tunnel. That is another management issue that has to be considered for the safety of all drivers and motorists going through the tunnel.
Let me remind Members that the arrangements that were introduced in the Transport Act 2000 and discussed by Parliament gave powers to introduce a charge on the tunnel and the crossing at Dartford. The Act gave us that ability, and it said clearly that any surplus revenues after the costs had been met would go into transport schemes. I accept that transport schemes have benefited on both sides of the river, as have those in other places as well, but that is part of the £2 billion that is going in every year to local transport and regional funding allocations. Kent and Essex have certainly benefited directly.
When the Transport Bill was going through Parliament, the hon. Member for Thurrock and I were assured by the then Office of the Deputy Prime Minister, which was responsible, that although this was a congestion charge the revenue that arose from it would be used for investment in local transport infrastructure. We heard earlier that some investment went to Dartford and some went to Thurrock, but not beyond there.
The Minister will know that the Mayor of London has scuppered phase 2 of the Greenwich waterfront transit, which puts in doubt any possibility of phase 3 ever happening—its extension into Bexley, Belvedere, Erith and, perhaps, on to Dartford. Would the Minister consider making some of this revenue available for public transport improvements in the London borough of Bexley?
My hon. Friend will be well aware of substantial funds that are made available through the Department for Transport and of various funding allocations, including through Transport for London and elsewhere—in terms of regional funding—through local transport plans for substantial investment in a number of ways and through various funding streams for those areas falling within the Thames Gateway, which hon. Members have already mentioned. Of course, the Mayor has the powers to make those decisions and he has made them under the powers that we gave through devolved administration.
Anyone who is unaware of the scheme would believe that everyone is paying an increase of 50p on every trip all the time and that they have to do that and have no choice. Hon. Members will know, if they are serious about this matter, that people can obtain the Dart-Tag, with which they can travel across the bridge for the same price as on 14 November, and not have to pay the increase. We want to move far more to people paying less in cash and using a cashless payment system. That is why we have made sure that there are generous concessions and no price increase at all.
In the few minutes remaining, let me say that I too heard the courier who said that it would cost him £5,000 more a year. I do not know the ins and outs of his business in total. He was talking about small vans and so on, the cost for which would have increased to £2. However, if he bought the Dart-Tag for his vehicles that cross regularly it would cost £1.75, which is 5p less for those very vans than on 14 November. It is unrealistic to suggest that everyone is being clobbered by serious increases.
In terms of residents, the hon. Member for Erith and Thamesmead has just widened the boundary for free travel to the people of Billericay, Sevenoaks, Erith and Thamesmead, Gravesham, Bexleyheath and Castle Point. The point is that this is a congestion charge in place to ensure that the crossing flows as reasonably as possible. Extending the concession further would not be a practical way of dealing with the congestion.
No, I have been very generous in giving way.
Let me deal with one further point relating to the future. It would be wrong for us as a Government to bury our heads in the sand in respect of congestion on the Dartford crossing or wherever. That is why I am more than happy that we work with Essex and Kent, along with our own study in the Department on the possibilities of further crossings, and see how we can manage things in future. That is a long-term programme. It is right that we consider how best to ensure that the people who need to cross at that point can do so in the best and safest way possible. However, we recognise that removing the plaza and tolls and so on, would only lead to further congestion, which would not be good for the constituents of all hon. Members in this Chamber or the people who need to use it as a strategic network.
I give way to the hon. Member for Bexleyheath and Crayford (Mr. Evennett).
Single and Double Summer Time
It is a pleasure to debate the subject of time under your watchful eye, Mr. Cook.
I am grateful to the Minister for Trade, Investment and Consumer Affairs for being present to reply to the debate. The Minister for Employment Relations and Postal Affairs was good enough, a fortnight ago, to meet me and Colin Dawson, from the British Association of Leisure Parks, Piers and Attractions and Tom Mullarkey, the chief executive of the Royal Society for the Prevention of Accidents. We debated this subject with him and his ministerial colleague, the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Stevenage (Barbara Follett). We made a number of points that day, which I am pleased to have the opportunity to make to the wider audience of all hon. Members and, hopefully, the public outside.
Probably the greatest holder of knowledge on the subject of daylight saving in the world at the moment is an American scholar named David Prerau, who wrote the book, “Saving the Daylight”. I was lucky enough to meet him last time he visited this country a couple of years ago. On Monday, I spoke to him on the telephone about this debate. He would agree that the basic goal of daylight saving time is to change the hours of human activity to make the best use of the available daylight. Sadly, it is not within Parliament’s power to increase the number of daylight hours in each day—that is a matter of nature—but we can allocate the daylight hours each day to provide more usable hours of daylight.
In this country, the first champion of daylight saving time was a British builder called William Willett, who wrote a pamphlet in 1907 called “The Waste of Daylight”. The following year, daylight saving time’s first parliamentary champion was Robert Pearce, the Member of Parliament for Leek—he has a Staffordshire connection—who introduced the first daylight saving time Bill in 1908. Today, more than 70 countries around the world now change their clocks each year to make the best use of available daylight.
David Prerau shows in his book that most countries change their clocks to achieve energy savings. To provide an historical illustration, during both the first world war and the second world war, all the main participating countries changed their hours of daylight to focus on their war effort, reduce domestic energy consumption and get the most out of their work force during usable hours of daylight. In 1973, with the first of the oil shocks in the middle east, the United States of America’s instant response to that energy crisis was to change, almost overnight, their daylight saving law to make the most of daytime.
The practice of daylight saving is now common throughout the world and it is still going on today. The USA decided to extend its daylight saving time, and that was done—get this, Minister!—in the Energy Policy Act 2005. That underlines the point that energy saving is the main purpose behind such provisions. That Act changed the start date for daylight saving time in America from the first Sunday in April to the second Sunday in March—three weeks earlier—and changed the end date in autumn from the last Sunday in October to the first Sunday in November.
The hon. Gentleman mentions the time of change in respect of daylight. Currently, the change happens on the last Sunday in October and the last Sunday in March, which is seven weeks before midwinter and 15 weeks after midwinter, respectively. Does he agree that a more balanced time, either side of midwinter, might be advantageous to everybody of all shades in this debate?
I thank the hon. Gentleman for that helpful intervention. As a member of the European Union, we change our clocks at a time agreed with the rest of Europe, albeit that it is mostly in a different time zone. Co-ordinated action would be required to make the change, and I am open-minded about that, but my argument today is about single/double summer time only.
I want to pursue the point about energy saving in America. When it passed the 2005 Act, it charged the Department with evaluating the change to discover whether there were energy savings. The change was made in 2007, and the Department of Energy produced its first report to Congress in October 2008. It confirms that extended daylight saving time has resulted in a further saving in electricity, and states:
“The total electricity savings of Extended Daylight Saving Time”
just the extra four weeks—
“were about 1.3 Tera Watt-hour...This corresponds to 0.5 percent per each day of Extended Daylight Saving Time”.
That is a significant saving.
A point to balance the argument is that the Department of Energy’s report explains:
“During Extended Daylight Saving Time, electricity savings generally occurred over a three- to five-hour period in the evening with small increases in usage during the early morning hours.”
The crucial point is that because it is darker in the mornings, energy consumption rises a little, but because it is lighter in the evenings, energy consumption overall noticeably falls. That is relevant in this country, because those of us who are keen on the change to single/double summer time asked for evidence of energy saving. Elizabeth Garnsey of Cambridge university has done some research on that, and concludes that there would be savings in energy consumption in this country and reductions in carbon emissions if we moved to single/double summertime. She makes the point that one reason for the savings is that during the evening peak between 1600 and 2100 hours, virtually all our energy production is thrown into meeting that peak, and that includes this country’s most expensive and most carbon-emitting sources of energy. Anything we can do to flatten the evening peak would produce savings. Elizabeth Garnsey concludes that there would be a saving of about 2 per cent. of electricity usage during the year and a reduction in carbon emissions of about 1.2 million tonnes.
Anyone who has seen the recent first report from the new Committee on Climate Change about how we will achieve an 80 per cent. reduction in carbon emissions by 2050 knows that that is a great challenge. To have a starting point of saving 1.2 million tonnes of carbon emissions simply by changing the clocks is not to be sniffed at. Energy saving is a dominant reason for changing our clocks to a different scale.
Another reason, which is particularly important when the Minister responding is from the Department for Business, Enterprise and Regulatory Reform, is the jobs boost for the tourism industry. Tourism has developed enormously and now generates revenue of about £85 billion a year, and is one of our biggest employers, directly responsible for 1.4 million jobs for one in every 20 people in work in this country. It would flourish even more if evenings were lighter so that attractions could stay open later.
Research by the Policy Studies Institute in October 2008 forecast an increase in earnings of between £2.5 billion and £3.5 billion a year, and up to between 60,000 and 80,000 new jobs in tourism. Those statistics are incredibly important for this debate, and I am fortified in saying that that is a good reason to make the change by the strong response from that sector to today’s debate. For example, the Tourism Alliance, which represents 50 tourism industry organisations and some 200,000 businesses of all sizes throughout the United Kingdom, strongly supports the change, and says:
“Considering the poor economic climate and the size and scale of the UK’s tourism industry, we consider a move to Daylight Saving to be an excellent initiative for providing growth over the next few years.”
I shall not read out the 50 members of the alliance, but I draw attention to the Association of British Travel Agents, the Association of Leading Visitor Attractions, the British Association of Leisure Parks, Piers and Attractions, the British Beer and Pub Association, the British Hospitality Association, the British Holiday and Home Parks Association, the Confederation of British Industry, the Confederation of Passenger Transport UK and the National Trust. They are significant players in tourism in this country, as are the Heart of England tourist board, which covers the area of the country that I represent in the west midlands, and the associate members of the Tourism Alliance, including the Local Government Association and Visit Britain. That is a substantial body of opinion.
The hon. Gentleman is making a powerful argument. I do not fully agree with it, but it has some merits. Does he agree that a move to a winter period that is perhaps five weeks either side of midwinter might go some way towards achieving what he is calling for, while recognising that if he gets his way and moves us to European time all year round, there would be practical difficulties for people living in certain latitudes? In areas north of Manchester, sunrise this morning would have been at 9.23.
Again, the hon. Gentleman makes the point about changing the time when we put the clocks forwards and backwards. It is a valuable point, and I am sure that the Minister heard it. I was interested to hear the hon. Gentleman say that he has some reservations, rather than complete reservations. There is a traditional view in this place that Scotland opposes changes to the clocks, and he makes it clear that he has an open mind, even if he has some reservations.
I do not minimise the fact that it would be darker in the mornings if we made the changes, and measures would be required to address the dangers, particularly for children going to school in the dark and people travelling to work in the dark. I do not minimise those issues, but I want to drive home the point that there are jobs to be had and earnings to be made in this country if we change the clocks as I suggest.
I have also received support from the British Resorts and Destinations Association, which represents some 60 local authorities with major coastal tourism interests in England and Northern Ireland, the trade association for the Heritage and Tourist Railways in the UK, which represents nearly 100 members, the Heritage Railways Association, the Business Visits and Events Partnership, which represents the interests of more than 20 organisations and associations in the conference, meetings, exhibitions, corporate hospitality, cultural, leisure and sporting festival sectors. Those sectors represent £22 billion to the UK economy and visitor spend, and account for 28 per cent. of all inbound visits to Britain. Furthermore, more than £100 billion of trade is transacted at business events in the United Kingdom. That is a powerful voice for the change. All those organisations support my argument.
A third argument, in addition to energy savings and jobs in tourism, is a reduction in the carnage on our roads. When we had an experiment in this country for three years between 1968 and 1971 with British summer time all year round, there were 2,000 fewer deaths and serious injuries on the roads. Since then, the Transport Research Laboratory has updated the figures for its estimate of today’s savings if we adopted single/double summer time. The last published report from the TRL on that subject was in 2004 and said that deaths would be reduced by adopting single/double summer time in the whole of the United Kingdom by between 104 and 134, and that there would be 400 fewer serious injuries on our roads.
This week, I asked TRL to confirm that that figure is still relevant, and it is not. Because of improvement in reducing road casualties since 2004, it estimates that today there would be 82 fewer fatal casualties per year on the roads, and 202 fewer serious casualties. Those figures do not come from a published report, so there may be some question about them, but even with those lower figures, and six years after I chaired the Parliamentary Advisory Council for Transport Safety, I cannot think of another single initiative on road safety that would save as many as 82 lives every year. There is a very powerful argument for saving lives on our roads every year by making this change.
Other people argue that the change would help in the battle against obesity. On the radio this morning, I heard the chief medical officer describing obesity as a “national crisis”. He recommends that there should be more attention to the issue of breastfeeding babies, more information about the nutrition of the food that we consume and more support for cooking. All those are beyond the remit of this debate, but he moved on to say that people should get more regular physical exercise, and one argument for lighter evenings is that people would have time to stroll in the light, to go out, to play sport in outdoor arenas and to get the regular exercise that they do not get at present. There is a very strong public health argument for having lighter evenings in this country to help with that national crisis.
Some people argue that elderly people feel more vulnerable after dusk each day and are fearful of going out of their homes, so lighter evenings would give them the reassurance that they could go out at night. That is why Age Concern and most police forces also support the case for lighter evenings.
As I mentioned, back in 1968 this country undertook a trial of having British summer time all year round. That is not my proposal today, although it has the advantage of not having to fiddle with the clocks twice a year. Nevertheless, there was an experiment for three years.
The experiment in 1968 to 1971 was BST all year round. The hon. Gentleman is not suggesting that; he is suggesting a move to European time. Again, I ask for consideration of a shorter winter period. We live at a certain latitude and we will have shorter days, but his argument might be more palatable in certain areas if it was proved on an incremental basis. I do not see the logic of seven weeks before midwinter and 15 weeks after it, which is 22 weeks of the year under Greenwich mean time. We perhaps would be able to move to five weeks before and five weeks after and have that period of wintertime. I ask the hon. Gentleman to think of supporting that and getting European directives to change, because after all it is only a European directive.
I agree with the hon. Gentleman that we should take things a step at a time. I have said to him that my answer is not no in respect of when we put the clocks forward and back in this country, and I have explained that there is an issue about doing the same as the rest of Europe if we were to go down that road. My point is that we had an experiment for three years, from 1968 to 1971. Why do we not have a three-year experiment of single/double summer time in this country now to see whether I am right in saying that we would make savings on energy and carbon emissions, create more jobs in tourism and save lives on our roads? It is quite a compelling argument.
If we think back to 1968, those were the days of cheap energy, so people did not even ask for an evaluation of whether there were energy savings, but I am pretty certain from the evidence that I have cited that there would be today. Back then, the tourism industry did not have the significance that it has today. There is a much more powerful case now. With regard to the argument about road safety, it was ridiculous that Parliament made its decision to abandon the trial before it had evaluated what had happened on the roads. It never took into account the fact that 100 lives a year could be saved. Give us the chance of showing over three years that this change would make a difference, because I think that it would be quite significant.
This is a minor point to me, but the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) kept mentioning European time. If we adopted single/double summer time, we would be in the same time zone as Europe, which is convenient for transacting business, I suppose. If we started next year with the three-year experiment, it would cover the period of the Olympics being held in the United Kingdom. Considering the boost in tourism in this country during the Olympics that we are hoping for, it would be an added bonus if we were to do the experiment now.
I am interested to know whether the Minister is at all enthused and would give a lead to the country on such an experiment.
I welcome the chance to respond to the debate on this topic. I congratulate my hon. Friend the Member for Stafford (Mr. Kidney) on securing it and on the way in which he launched it. I recognise that he is a considerable enthusiast on the issue. He sponsored the Lighter Evenings (Experiment) Bill and makes the case for a shift to single/double summer time. I recognise, too, his advocacy of Ministers reading the “Saving the Daylight” book. I will happily bring that to the attention again of my right hon. Friend the Minister for Employment Relations and Postal Affairs. I have noted, in listening to my hon. Friend’s remarks, the considerable history of Stafford Members in this area. I have also noticed the burgeoning alliance between the people of Stafford and the people of the highlands of Scotland. Again, I will certainly draw that point to my right hon. Friend’s attention.
I suspect that my hon. Friend will not be surprised by some of the less positive, from his perspective, comments that I shall place on the record, but I hope that I can offer him a chink of optimism for the future. He will know that the issue that we are debating now has been debated many times in the past and it will no doubt be the subject of many lively debates in the future. It often comes to the fore in the run-up to the clocks going back each year. On 29 March next year, the clocks will once again go forward, and many people will be looking forward to that change. However, opinion remains divided: some people prefer lighter mornings and some prefer lighter evenings. In reality, we will not be able to please everybody.
We need to look back, as hon. Members have sought to do, at the evidential case for change and to recognise that the British people will have opinions on this question and, indeed, have demonstrated their opinions. The most recent poll, by YouGov for The Daily Telegraph two years ago, asked voters whether Britain should operate double summer time as, it was claimed, that would mean longer evenings, save lives, reduce energy consumption and align Britain with its continental neighbours—all points that my hon. Friend the Member for Stafford made in advancing his case. Unsurprisingly, that sounded a pretty attractive proposition, so a majority of people in the poll, except in Scotland, were in favour of switching to double summer time. I suspect that if the question had been couched in different terms and had proposed darker mornings, the result would have been slightly different.
Just to support the Minister’s point, I would like to inform him that I was on the Nicky Campbell show on Radio 5 recently, when Jersey was having its vote a month or two ago, and the Jersey politician who was on with me was in favour of the change to European time because he wanted more light in the morning. Of course, the change that he was supporting would have achieved the exact opposite.
May I put a supplementary question to the Minister? Can he give any explanation—I have asked this question and searched for the answer many times—why we have asymmetrical periods around midwinter? Why is it seven weeks before midwinter and 15 weeks after it? I will not be surprised if he does not have the answer, because it is hard to find.
I am very interested in the hon. Gentleman’s performance in the media. I was not entirely sure whether he was supporting the Government’s position and moving away from the people of Stafford on this question. I will have to take away his question and see whether the Minister for Employment Relations and Postal Affairs, who leads in this area for the Department, wishes to respond to him once he has read the book that my hon. Friend the Member for Stafford mentioned.
Let me return to the issue of the British standard time experiment, to which my hon. Friend referred. From 27 October 1968 through to 31 October 1971, we experimented with darker winter mornings, harmonising British clocks with those of other western European countries. The consultations that took place in the run up to that decision revealed a considerable divergence of opinion between the majority in England and Wales, who favoured British standard time all year round, and those in Scotland and the north of England who were opposed.
My hon. Friend will be aware that a review of the experiment found it impossible to quantify a great many of the more important advantages and disadvantages of British standard time. He may be aware also that practical objections were raised by the farming and construction industries, and by others involved in outdoor work, such as road maintenance workers, postal workers and dairy workers—particularly those in the north of England and Scotland, who were caused discomfort and inconvenience because of the late sunrise in winter and who could not change their working hours because of the public demand for early services.
As a result of deliberations in Parliament, there was a free vote in 1970, and the experiment was abandoned in the autumn of 1971. Although there may have been some positive benefits with the road accident rate, another factor referred to by my hon. Friend, the House voted by a decisive margin—366 to 81—to revert to the current arrangements.
My hon. Friend alluded to the experiment in Portugal. Again, there was a change to central European time in 1992, but the Portuguese reverted to GMT in 1996 because of the substantial disturbances for the population. The Government’s new ally, the hon. Member for the Highlands—
I hope that the hon. Gentleman will forgive me for not naming his constituency. He rightly raised the question of Jersey, where a referendum was held on the question of adopting central European time. Again, there was a decisive vote against.
Numerous studies have been made on the particular factors to do with energy savings and climate change upon which my hon. Friend based his case. I note the particular example of the recent United States Department of Energy statistics, which is interesting, as is the recent Cambridge university paper. My hon. Friend may be aware of other surveys, including the Building Research Establishment study of 2005, which suggested that a change would lead to an increase in energy consumption in buildings in the UK rather than realising savings. Although the Cambridge university paper argued that there would be a small saving in the use of electricity, it did not refer to any other modes of energy delivery.
My hon. Friend ought to know that the BRE study has been comprehensively discredited. Where is the leadership from Government? This is an option that will create jobs, has virtually no capital cost and requires no Government borrowing, and it comes at a time of serious and worrying economic news in our country and around the world. Where is the leadership? Rather than waiting for the opinion polls and the surveys to satisfy them that everyone is in favour, why do the Government not set the mood of the country? They should do it because it is important, rather than waiting for someone else to tell them that it is a good idea.
My hon. Friend will know from the pre-Budget report and various other statements that if there is a decisive case for change, the Government will move. At this stage, we remain unconvinced of the case for change. I have given him some sense of our concerns on energy consumption. He pointed to one study from the US. It is the most recent. However, other studies suggest that the level of change would not be significant.
I recognise that there is an argument for change for the tourism and leisure industry, and my hon. Friend prayed in aid support from a considerable number of the relevant industry bodies. However, we remain less convinced of the case on road safety grounds. When one compares casualty rates at different times of the day and at different times of the year, there is surprisingly little difference between the summer and winter months. I therefore suggest to my hon. Friend that the case for change based on road safety is not as strong as he suggested.
I know that my hon. Friend has met colleagues in other Departments. We do not think that there is a case for change. If my hon. Friend has evidence, we will be happy to hear it—
Sitting adjourned without Question put (Standing Order No. 10(11)).