Wednesday 21 January 2009
[Mr. Mike Hancock in the Chair]
Mountain Rescue Teams
Motion made, and Question proposed, That the sitting be now adjourned.—(Mark Tami.)
It is a pleasure to begin this debate under your leadership, Mr. Hancock. I expect that those who expressed surprise when I steered the Marine Safety Bill through in the 2002-03 Session will be equally surprised by the title of this debate. However, those who are not familiar with Bolton probably do not know that we have the west Pennine moors on our doorstep. It is an area of exceptional beauty and a recreation area for many of my constituents. Quite a bit of the area is in the constituency of my hon. Friend the Member for Chorley (Mr. Hoyle), who is unable to be with us today because he is serving on a Select Committee. I have checked the records and cannot find a previous Adjournment debate on this subject, so this might be a first.
When I submitted this debate for consideration, the Government were not sure—at least according to the Vote Office—who would make a response. I am very pleased to see the Under-Secretary of State for Transport, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick) in his seat this morning, and he is very welcome. Some issues related to this subject cross a number of Departments. For example, the Home Office is responsible for some emergency services, especially the police, whom I shall mention quite a bit.
The Bolton mountain rescue team—I will call it the MRT from now on—is one of the finest in the country. I pay tribute today to the hard work of its volunteers and of all mountain rescue volunteers throughout the four parts of the United Kingdom. Bolton MRT has been ably led since March 1989 by Garry Rhodes, who was awarded an MBE last year for his mountain rescue work by Her Majesty the Queen at Buckingham palace.
Bolton MRT was founded in 1968, so it is now in its 40th-anniversary year, and mountain rescue celebrated its 75th anniversary last year. Some 56 mountain rescue teams operate under a central council in England and Wales, of which 11 are located in the Lake district. Although Scotland and Northern Ireland have their own teams and regional bodies, there is dialogue across the United Kingdom. Mountain rescue teams get called out to help with large-scale rescues and searches, especially in mountainous areas. For example, teams from as far away as the Peak district went to assist recovery at the Lockerbie disaster.
Since the emergence of the Search and Rescue Dog Association, the Bolton team is not called out as it used to be to large searches in north Wales and the Lake district. Its bread and butter work involves evacuating casualties from difficult-to-access or remote situations, and searching for missing people in urban, rural and moorland locations, which often have tragic endings. Occasionally, it is involved in body recovery work, too. It regularly works with the Blackpool-based north-west air ambulance helicopter, particularly when its operation is restricted or proscribed in situations such as low visibility, snow or darkness, or when it is unavailable.
Although most of the casualties that Bolton MRT deals with, especially in rural settings, suffer from relatively minor injuries, such as sprains or broken limbs, it often has to deal with more serious incidents involving mountain bikers, hang gliders, parapenters, off-road motor cyclists and other off-road vehicles, horse riders, aircraft, helicopters, hot air balloons and falls from heights.
May I add cave exploration to the hon. Gentleman’s list? In my constituency, which straddles the Pennine dales of Yorkshire, the Cave Rescue Organisation, which is based in Clapham, does what its name suggests as well as the Upper Wharfedale Fell Rescue Association, which is a more classical organisation. Both are very important, and I endorse the hon. Gentleman’s remarks.
I am aware that cave rescue is part of some mountain rescue teams’ work.
Bolton MRT also assists during bad weather. For example, it rescues motorists from snow drifts, and it provides standby rescue cover at fell races, sponsored walks, mountain bike races, orienteering events and moorland fires. It has a comprehensive training schedule and is included in predetermining attendance at rescue incidents involving the Greater Manchester fire and rescue service along with the Oldham team. It is the only service in Greater Manchester capable of bringing down from tower cranes workmen who have collapsed or injured themselves, or rescuing people from other high structures such as pylons, high-rise buildings and even bridges.
Bolton MRT regularly searches alongside and within still and swift water areas, and all its members are adequately trained for such work and equipped with lifejackets. Within its membership is a cadre of well-qualified kayakers, canoeists and divers who are used in such searches and body recoveries. Since its formation in 1968, the organisation has become busier and busier as its reputation has spread. It has attended well over 100 incidents a year since 2003. In fact, 2003 was its busiest year, with a record 206 incidents attended.
Bolton MRT works very closely with the North West ambulance service. Ambulances have soft suspensions and cannot access victims on rough ground or go along farm tracks or moorland mountain roads. The MRT is equipped with stretchers that can be used to carry victims long distances over rough ground, unlike the ambulance service, which is not so well equipped. Despite the excellent relationship that Bolton MRT has with the statutory emergency services of Greater Manchester and the county of Lancashire, there are some problems regarding its operations, which I hope that the Minister will take away for consideration and action.
While MRTs are effectively category 1 responders, they are not classified as such under the Civil Contingencies Act 2004, which puts them at a disadvantage when it comes to debriefings following major emergencies or planning for future emergencies. They use blue lights in attending emergencies, but the legislation is not clear on the legality of that use.
Yes, I agree with that statement.
The Mines Rescue Service, coastguards, bomb disposal and RAF mountain rescue teams are all named services for the use of blue lights and sirens. However, I understand that a statutory instrument will be brought before the House in April this year to correct the anomaly, and I hope that the Minister will confirm that today.
Since the hon. Gentleman has mentioned the RAF mountain rescue service, may I tell him that I worked with such a team way back in the 1960s? I have worked on mountain and cave rescue both in and out of the RAF. The whole point is that people should go down caves and use our mountains more, but they should do so responsibly. They should always go properly equipped and dressed, and they should always leave decent instructions as to what their intentions are, which makes things safer for everyone.
Indeed. I agree with that. Bolton MRT does an enormous amount of work trying to educate young and old people alike on that very point.
When I last met leaders of Bolton MRT, it had 45 volunteer members, of whom 15 are classed as response drivers, who have been trained in high-speed, blue-light and siren driving by the Greater Manchester police and assessed during at least two emergencies on blue light and siren response by a Bolton MRT member who worked for many years as a police traffic inspector. Unfortunately, GMP has now withdrawn this training as it considers that it may be legally liable for the actions of Bolton MRT members who have attended its courses.
High-speed training courses are available commercially, but at a cost of £800 per driver. They require the volunteer to take four or five days off work with a consequent loss of earnings. It is not clear whether such courses meet all the requirements of the current legislation. To increase its profile, promote safety in the hills and raise money, members of the Bolton MRT give many lectures to a variety of organisations, which are attended by people of all ages, and they organise a lot of fundraising events. In addition, they attend a weekly evening training session and frequent weekend training events. A considerable commitment is required from MRT members, which makes recruitment and retention difficult. In the past, volunteers have been recruited from the uniformed youth services, such as the Sea Cadets, and the scouts and guides movements, but there are falling numbers in those services, which is an added problem.
Bolton MRT has the benefit of insurance provided by GMP and the Lancashire constabulary, but there are inconsistencies in the provisions and administrative burdens for all concerned. It would make sense for the Government to consider blanket insurance cover for MRTs in England and Wales, if not the United Kingdom, but the situation is better in Scotland.
On financing, Mountain Rescue England and Wales, which estimates that MRTs save the Government £6 million a year by providing a free emergency service, receives only £33,000 annually. That money comes from the NHS, but little of it can be handed down to individual MRTs. Bolton MRT is fortunate that it is provided, free of charge, with an excellent headquarters and garage by the North West Ambulance Service NHS Trust and with further garage facilities by the Greater Manchester fire and rescue service.
Bolton MRT has four Land Rovers, which are manned when it is snowing heavily in case local ambulances cannot reach some of the addresses to which they are called out, and three trailers, which provide a control room, a catering resource and equipment transport. Each Land Rover needs replacing approximately every 10 years. GMP helps Bolton MRT to replace its vehicles through their fleet purchasing scheme, which results in quite a saving, but the bulk of the vehicles’ costs must be raised from big funding schemes, such as the lottery.
In lieu of its fuel expenses, Bolton MRT receives £1,000 from GMP. I understand that in Scotland, St. John Ambulance supplies one vehicle to each MRT. If the Government decide to go ahead with their new Driver and Vehicle Licensing Agency banding scheme, and unless exemption is given to all rescue services, including MRTs, there will be additional costs to the service.
GMP has taken responsibility for the provision of most of Bolton and Oldham MRTs’ radio equipment, which needs replacing at approximately 10-year intervals at a cost today of about £25,000. Yesterday, I was pleased to receive an e-mail from Ofcom that informed me that it has no plans to impose charges on MRTs for the use of their radio channels, nor do the Government plan to change the funding structures that support the sector.
Bolton MRT has calculated that it saves the police between £2,000 and £3,000 for each search call-out, which are mostly for children or vulnerable adults in urban areas. That is estimated to save GMP £1.2 million in a decade. The running costs of Bolton MRT are, roughly, £20,000 to £25,000 per annum, which is partly covered by small and large donations, often from people who have been rescued, and sometimes from bequests. The cost of weather-proof clothing alone is £15,000. Members of Bolton MRT actually pay a £100 membership fee, which I found astonishing, and they often contribute to the cost of their own uniform clothing. They receive no imbursement for the fuel that they use in their own vehicles when on MRT duties.
When MRTs purchase equipment, they pay VAT. Will the Minister please consider the possibility of waiving VAT for rescue services? There have been discussions on that between Mountain Rescue England and Wales and the Treasury—the hon. Member for Westmorland and Lonsdale (Tim Farron) has been involved in those negotiations, and I am sure he will tell us about them.
In Wales, each MRT is provided with basic equipment. In Scotland, the importance of MRTs in attracting tourists to the country has been recognised, and each MRT receives a grant of £22,000, which is distributed through local police forces. There are therefore regional variations in how MRTs work and how they are funded. Mountain Rescue England and Wales holds the view that it should be granted central funding for distribution to individual MRTs, but that view is not held in all quarters of the movement. MRTs would welcome relief from the burden of fundraising, but the approach needs to be adapted to local circumstances, because, as has been mentioned, some undertake cave rescues, for example. MRTs value their autonomy, because their training and equipment requirements need to be adapted to local needs. Other well known rescue organisations, such as the Royal National Lifeboat Institution, operate nationally from a centrally organised headquarters.
There is also discussion within the MRT movement about its role and that of the national bodies. Obviously, in a mountainous area, an MRT’s primary role is to rescue people who get into difficulty in the mountains. However, even in mountainous areas, MRTs are routinely deployed to other incidents. For example, MRTs, mainly from the Lake district, played a major role at the scene of the Grayrigg derailment in command and control, in marshalling, landing and loading helicopters, in stretcher handling and even in searching for the casualties over quite a wide area, sometimes in the dark. Because of the failure of the normal telecommunications system, Lake district MRTs provided a 999 radio network for days after the Carlisle floods, and MRTs have been involved in dealing with flooding in Sheffield, Gloucester and Boscastle.
There is also discussion among the general public about who should pay for rescues. Should those who engage in dangerous sports or activities be forbidden from taking part without adequate insurance that would cover them not only in case of injury or, worse, death, but in the event that they need rescuing? However, most MRT call-outs involve people whose activities are not regarded as dangerous—they are ordinary people who go out on the fells or moors for a walk.
I hope that the debate has highlighted the excellent and necessary work that MRT volunteers carry out—it is of great benefit to many communities throughout Great Britain. We thank them for their courage and dedication and for the time that they devote to mountain rescue.
I am sure that the debate will demonstrate that the Minister has many questions to answer. If we are to continue to have MRTs, we need to consider proper funding. We need to protect MRT volunteers from prosecution and to ensure that they are properly insured and covered by the appropriate legislation. I look forward to hearing the contributions of other hon. Members.
May I begin by congratulating the hon. Member for Bolton, South-East (Dr. Iddon) on securing this important debate? It is particularly timely in respect of events in my constituency, because we have had a number of incidents. About 12 days ago, not only were people rescued off a mountain, but a number of the team were injured in the process—I will return to that in a moment.
My constituency covers large parts of Snowdonia, or Eryri as I call it, including a large part of Snowdon, or Yr Wyddfa, including the summit itself, a distinction that I share with the hon. Member for Conwy (Mrs. Williams). It also includes a long sea coast from the Menai strait and around the Llyn peninsula. As such, the area provides unrivalled opportunities for outdoor activities of all kinds within a small geographical area. However, therefore we have frequent accidents and emergencies. Thankfully, we also have frequent rescues, because Llanberis MRT is located in my constituency. Many of the team are constituents of mine, and some of my constituents are members of the Ogwen team in the hon. Lady’s constituency.
As has been said, MRTs perform a vital life-saving role. I say that with gratitude, because I am a walker—unfortunately, alas, not as frequent a walker as I was before I was elected. The mountain rescue team in my constituency, as elsewhere, works closely with helicopters, based in RAF Valley—I am glad that the headquarters was moved to Valley recently, by the way—and has a great deal of expertise, gained over many years of rescue work in the mountains. There is also a great deal of expertise in Ysbyty Gwynedd in Bangor, where injured people are regularly treated.
Although mountain rescue teams are voluntary, they deserve support from the public and, to an extent, public support, as the hon. Member for Bolton, South-East pointed out earlier. I say “to an extent” because one of the most striking things about mountain rescue teams is their voluntary nature. They comprise people with a fundamental and passionate love of the mountains and a commitment to helping their fellow walkers and climbers. The voluntary nature of mountain rescue teams means that they are not only of the community but in it, which can only help in their work recruiting new members. I am certain that that should not be compromised by too much public intervention in their funding, but they need and deserve public support, perhaps supplementary public support, so that their energies are not unduly diverted to the secondary task of fundraising to pay for over-burdensome duties and taxes.
The hon. Gentleman is right that fundraising is an important way for teams to connect with their communities, but are his mountain rescue teams finding, as those in the Peak district are, that in the current economic climate, both corporate and personal donations are harder to get hold of in the same quantity? The fall in interest rates means that income on savings is falling as well, putting an extra stretch on team resources.
The hon. Gentleman is entirely correct. It is a dilemma facing so much volunteer activity. Clearly something needs to be done. My first question to the Minister is the one already posed: what consideration is being given to making financial concessions to mountain rescue teams? It seems wrong to me—and, I am sure, to other hon. Members—that the state should cream off a substantial amount of their hard-won funds in taxes and duties. Surely a way could be found to reduce VAT rates. I know that European regulations allow for a reduction to 5 per cent. Some goods, such as children’s clothes, are rated at zero, but 5 per cent. VAT would be a good reduced rate on vital equipment. Fuel duty, which has been mentioned, could also be reduced.
On Monday, I had the pleasure of meeting the Welsh Minister for Culture, Media and Sport, who told me that the Welsh Assembly Government make a small grant to mountain rescue teams in Wales. We should be thankful for that, but we also know that the Scottish Government make a somewhat more substantial grant to mountain rescue teams in Scotland, recognising not only their humanitarian contribution but their vital contribution to safety in the mountains and to the eventual economic good of mountainous regions.
There has been a good deal of publicity in the past few weeks about rescues carried out by the Llanberis team on Yr Wyddfa, or Snowdon, on the Pen y Gwryd track. As a result of those efforts about 12 days ago, not only did the team rescue a large number of people, but eight team members were injured after being blown over by the incredibly high winds up there. I am sure that we are all glad to pay tribute to their grit and bravery. All mountain users owe them a debt of gratitude. Those feats of bravery were accomplished in the teeth of the most severe weather conditions. Indeed, they were necessitated partly by the extremes of weather in Snowdonia, or Eryri.
It is no accident that the 1953 Everest expedition trained in Eryri, where the rain and wind, as well as the snow and ice, provide the most testing of conditions. That, I suspect, is one of the reasons why rescues are such a regular feature of life in my constituency, and that is why fatalities unfortunately occur, although they are, thankfully, much less frequent now. Seemingly benign conditions in the valley floors can suddenly turn into driving rain and penetrating wind higher up, and can even prove fatal. That can easily catch out casual walkers, even in summer and even those with proper equipment. Equipment these days is so much better than when I first took to walking, but even with the best equipment, people can be caught out.
I suspect that people caught out are often those who have travelled quite far to reach the mountains and who may be tempted to think, “Well, since I’ve come this far, I might as well take a bit of a chance and go up.” I understand that a substantial portion of mountain rescue call-outs involves people who are lost or stressed, perhaps after a long day out in unfamiliar circumstances. Often they are not in organised groups and, as the hon. Member for Castle Point (Bob Spink) said, have not given proper information about their intentions. They are often returning home in the late afternoon, perhaps bedraggled and over-tired, often with lower leg injuries. As we all know, coming down is as testing as going up, and possibly more.
What is being done to educate and inform walkers about what precautions they should take? I confess that I do not watch a great deal of television, but I cannot remember the last time I saw public information advertisements or a public information film telling people what care they should take before walking, scrambling or climbing. What public information steps could the Government take?
On the involvement of local people in outdoor activities, the training of others and the eventual provision of new recruits to mountain rescue teams, in the past—at least in our area—many people who participated in mountain activities were not of the area. When I was a student many years ago, I took a day off to walk up Yr Wyddfa—Snowdon—on the interesting Grib Goch route, which some here might know. As I was coming down, the weather was not good and I was very tired, so eventually I turned in to the pub at Nant Peris for a quick pint. [Hon. Members: “Surely not.”] Anyway, in I went, and there was a friend of mine, a fellow student, in the bar. He said to me in Welsh, “What are you doing here?” I said, “I’ve just been up Grib Goch, to the summit of Yr Wyddfa.” He looked at me quizzically and said, “What do you want to do that for?” He could not understand why anyone would want to climb the mountain as a leisure activity. That is not surprising.
In the past, the mountain has all too often been associated with hard, back-breaking work in the quarry or on the farms, so it is not surprising that local people would not be involved with mountain activities. I do not often come here to the workplace on a Saturday, and in the past, neither would they. However, times have changed, and the mountains offer a great deal of business and employment opportunities as well as leisure activities.
I am glad to say that my local authority, Gwynedd county council, has a strategy to involve, inspire and support local people in getting involved in outdoor activities, receiving training and entering the field professionally. Training opportunities should be improved and better tailored to the needs of people who want to become involved, who are, after all, the potential recruits for mountain rescue teams. I hope that I am not straying too far off the subject, Mr. Hancock.
I have a case in point, the Dringo’r Waliau or Climbing the Walls project, whose report I have here. It provides tailored training for unemployed women over a long period so that they can take mountain qualifications, become employed and eventually become potential recruits for mountain rescue teams. The project is supported by the Rank Foundation with substantial amounts of money, and it is accepted by everyone as a worthwhile project. However, it does not fit into Department for Work and Pensions and Jobcentre Plus rules for training, as it is tailored to the women’s individual needs and is a slow project spanning four or five years. I appeal to the Minister to reconsider the opportunities for people through projects such as Dringo’r Waliau, because one of the women involved, unfortunately, must now make herself available for work and therefore will probably not be available for training.
I will close with another little story. Some years ago, I had the unforgettable experience of visiting Yosemite valley in California. As we all know, the valley is a wilderness and the park authorities there work very hard to keep it as a wilderness, because of its unique heritage. I walked with the head ranger and he told me that there are very severe restrictions on the use of modern conveniences, such as four-wheel drive vehicles and helicopters. In fact, he said that there are some supporters of Yosemite who hold the view that, if somebody is injured in the valley, they should be brought out on muleback, as they were in the 19th century. Thankfully, we do not go that far in Snowdonia or any of the other national parks throughout Wales and the rest of the UK.
We have highly committed and well equipped mountain rescue teams, but they come at a cost. I am sure that we would all agree, and I hope that the Government also agree, that more support should be given to this very worthwhile service.
It is a privilege to conduct this debate under your chairmanship, Mr. Hancock.
I congratulate my hon. Friend the Member for Bolton, South-East (Dr. Iddon) on securing the debate and on the manner in which he and others have outlined both the service provided by the many mountain rescue teams in the UK and the difficulties under which that volunteer service operates.
North Wales has some of the most attractive and challenging landscapes in the UK. As a result, it was used to train those involved in the successful 1953 assault on Everest led by John Hunt, who later became Lord Hunt of Llanfair Waterdine. My constituency of Conwy has one of several mountain rescue teams active in that area, the Ogwen Valley Mountain Rescue Organisation, or OVMRO, which is not the easiest of abbreviations to pronounce; it is certainly not as easy as the abbreviation that my hon. Friend mentioned in his speech. I challenge hon. Members to try pronouncing OVMRO.
The OVMRO team was founded in 1965, so we beat the team mentioned by my hon. Friend by three years, and it was the first in north Wales to be set up in an organised manner. I was a young councillor then, revelling in the early flush of the Harold Wilson Government, after “13 years of Tory misrule”. So, in 2005, as the Member of Parliament for Conwy, I felt greatly honoured to be invited to the team’s 40th anniversary, which I must acknowledge to be one of the most pleasurable of occasions in my period as MP for the Conwy constituency. I should add that I am also a patron of the support group for the team. Have no doubt: these volunteers are a special breed of citizen. To be with them is to experience something really different. The only comparison that I would offer would be to spend time with another special breed, the slate quarrymen, who were central to my upbringing.
What mountain rescue teams undertake in their rescue work is a mark of respect for those who believe in the value of communing with nature in the mountains. At times, however, that act of communing with nature may offer challenges that some people cannot meet. The members of the teams are not judgmental; they empathise with and recognise the fallibility of the human form. They also respond and do what they can. Mostly, they succeed and help people or rescue them. Of course, sometimes, as we have heard, they fail. However, when that is the case, I believe that they bring to the families of the bereaved the recognition that everything possible was done to save their loved ones.
The mountain rescue teams undertake their activities without financial reward; they are simply volunteers. In England and Wales, they receive very little Government support. Is that right? I think not.
Nevertheless, OVMRO has extended its rescue activities to include water incidents. Those incidents are twofold. First, many of the rivers in the area that the team covers include the most challenging sections of water for canoeists. As we all know, the last decade has seen the team called to an increasing number of incidents involving canoeists. Secondly, in recent years the team has attended a number of flood incidents in the Conwy valley, following heavy rainfall. As a result, it has developed a water response capability, including special clothing, equipment and training, and it is the only team in Wales to do so.
OVMRO responds to the developing interest of the public in challenging outdoor pursuits. I am sure that the Minister will recognise that a Government who seek to develop the good health of the nation across the generations must also recognise that outdoor pursuits can entail risks and that the bodies that enable those Government policies to be developed themselves need to be supported. OVMRO is such a body, as are all the mountain rescue teams in the UK.
I extend an invitation to the Minister to visit my constituency, in particular the Ogwen valley. If he comes, he will see mountains such as Tryfan, the Glyderau and the Carneddau. I believe that such landscapes are far removed from the landscapes of his own constituency. However, I am also aware that the Minister spent his early years in Glasgow, within easy reach of Loch Lomond and the Trossachs, which is another area of outstanding beauty and, of course, challenge. Therefore, I am confident that he will recognise my argument that those who support people who venture into the mountains themselves deserve support from our Government.
This is not the first time we have raised the issue—far from it. As has been mentioned already, in Wales, the mountain rescue teams benefit from a small grant for equipment that is made by the Welsh Assembly Government and I know that the teams are appreciative of that grant. However, I am told that in Scotland an annual grant of up to £500,000 is made by the Scottish Parliament to the Mountain Rescue Committee of Scotland and that that money is used to pay some of the costs of running team bases, vehicles and equipment. I understand that in England there is no money forthcoming from central Government for mountain rescue, apart from a very small amount, as has been mentioned by my hon. Friend the Member for Bolton, South-East.
The Minister will no doubt be aware of the all-party group on mountain rescue and search teams, of which I am the vice-chair. Officers of that group, including myself, met the then Prime Minister, Tony Blair, on 14 March 2007 to pursue the matter of funding, which we are discussing this morning. At Prime Minister’s questions, I asked him:
“My right hon. Friend will recall meeting representatives of Mountain Rescue England and Wales…Will he find time during his final days in office to review its request for public funding similar to that available in Scotland? If he is unable to resolve the issue, will he ensure that the request is in the in-tray of our right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr. Brown)?”
“I can assure my hon. Friend that, as I explained to those representatives when I met them, I will take a close interest in this issue right up to the time of my departure. It is a very live issue that we are considering.”—[Official Report, 20 June 2007; Vol. 461, c. 1373.]
As far as I am aware, there have been no further developments since then. I hope that the Minister will be able to offer reassurance that, in the words of the then Prime Minister, this remains a “live issue”. Perhaps he will also be able to offer information about progress.
There is a further issue on which I hope the Minister will be able to provide assurance. He may be aware that Mountain Rescue England and Wales has had concerns about possible charges for the use of radio frequencies. These concerns have been partially allayed—I choose my words carefully, saying they have been “partially allayed”—by Ofcom, which has indicated that there should be no charges. However, I understand that concerns remain that, as Ofcom charges the Maritime and Coastguard Agency, the MCA may pass on those charges to mountain rescue teams. Clarification on that matter would be most welcome. There is the potential for an additional burden on that volunteer organisation.
In deference to the Minister, who may feel that these are sufficient issues to be raised by one Member, and because I am looking at the clock, I will stop now. Thank you, Mr. Hancock.
That is very good of you, Mrs. Williams. I would be grateful if all Members remembered that we would like to start the wind-ups at around 10.30 am, to give the Minister and the two party spokesmen an opportunity to speak, and that they could keep their comments to about the length of the speech by Mrs. Williams.
It is a pleasure to serve under your chairmanship, Mr. Hancock. I pay tribute to and thank the hon. Member for Bolton, South-East (Dr. Iddon) for securing the debate. In doing so, he does an enormous service to the House and, indeed, to mountain rescue teams and all those who rely on their services throughout the country.
My constituency contains a large chunk of the Lake district, the western part of the Yorkshire dales and many other mountainous areas in between that are not so designated but are still incredibly attractive. Those areas contain challenging terrain, not to mention several inland waterways, including Lake Windermere and Lake Coniston, where there is often a need for rescue services. In my constituency, and in those of many hon. Members who are present, mountain rescue is part of the fabric of society. People who are involved in it are also involved in work and other activities, and word is passed on as a consequence. They are very visible. As one drives into Ambleside, for example, one sees on one’s right the headquarters of the Langdale-Ambleside mountain rescue team. It is something that we are all aware of in our part of the world.
Mountain rescue teams across England and Wales have saved a good 20 lives and have aided a further 2,000 people in recent times. Many of those people—possibly the majority—will not have been from the areas that we represent, although we warmly welcome them, but will have been dwellers of more urban constituencies. Therefore, this matter is relevant not only to the minority of rugged parliamentary constituencies, but to the whole country. I reiterate the point that the hon. Member for Bolton, South-East has made: if those services had to be replicated by the statutory services, it would cost the Government about £6 million a year to provide them. On a hard, financial level, that is what we owe the mountain and cave rescue services. In reality, of course, we owe them much more.
As we have heard, mountain and cave rescue teams deal with an ever-widening range of emergencies. Rescue in the uplands is a major part of what they do, but they also assist the police in looking for missing, vulnerable people. In my part of the world, searching for evidence after a crime is also a major part of what they do, as are rescues on inland waterways. I joined the Langdale-Ambleside mountain rescue team at Waterhead, at the north end of Windermere, not long ago, as it unveiled its new piece of kit for rescuing people on the lake.
The team is involved in a range of different activities and skills, including giving advice about outdoor events, some of which are challenging. I am grateful not to have had to rely on mountain rescue, so far, to be rescued. I am an enthusiastic, although 10th-rate, fell runner, as some hon. Members will know, and I have been grateful for the presence of mountain rescue teams at events to give advice and ensure safety. Last October, I took part in the Coniston trail, the course of which was changed following advice from mountain rescue. Those people know better than anyone else which risks are worth taking and which are not. They are not massively risk averse, and they understand that some people get involved in challenging activities, but they have the expertise to make the call on which risks are worth taking and which are not.
As we have heard, mountain rescue teams are increasingly involved in flood rescue operations and in assisting ambulance services where there is difficulty in accessing patients. I want to make a brief repetition regarding the Grayrigg incident, which happened nearly two years ago in my constituency. Mountain rescue teams were the first on the scene at that tragedy, which was unbelievably bewildering and appalling, and happened without warning in a dark and rural area, to which the nearest village was the best part of half a mile away. People were utterly bewildered, got injured, and there were difficult circumstances. The only people who had the equipment to get there on time and to make a difference were the mountain rescue team. For their troubles, however, the Government take from mountain rescue teams, on average, £143,000 a year in taxes.
Those teams value their independence. To draw an analogy, although not a perfect one, they are comparable to the hospice movement. They want to remain independent, and that is quite right. This is not a call for them to become a statutory service, but it is quite another thing for the Government effectively to fail to provide any support for such an outstanding service.
We have heard that the Scottish Government pay, on average, £400,000 a year in grants to the 26 mountain rescue teams in Scotland, and that the Welsh Assembly Government make a small grant available to the 13 teams in Wales. Many of us have been calling, for some time, on the UK Government to make a serious contribution to our mountain and cave rescue teams, who have been providing essential rescue services across the country for more than 60 years.
Currently, the only way in which the Government assist mountain rescue teams is through the gift aid system, but I give to mountain rescue by chucking coins in the pot when the Kendal mountain rescue team is rattling its bucket outside the birdcage in Kendal, or in the marketplace in Ambleside. Much of its funding is from flag days, tin rattling and the like, and it cannot get gift aid back on that, so that is not much of a concession. It is helpful, but it does not fill the gap that is created. We have a ridiculous situation in which mountain rescue teams are effectively being charged for providing rescue services that they provide free of charge. That is unjustifiable nonsense due to an historical accident. I do not claim that there is malice on the Government’s behalf, but surely it is time that that nonsense was corrected.
The charges incurred by mountain rescue include paying vehicle excise duty on essential 4x4s for reaching stricken climbers, and paying VAT on essential equipment such as ropes, climbing gear, clothing and boots. Given the varying terrain in which team members work, they need three or four pairs of boots and a variety of different clothing and waterproofs, bearing in mind the vast range of weather conditions in which people work between ground level and up to 3,000 ft. As we have heard, vital life-saving communication equipment is not always exempt from taxation. Teams also have to pay, out of voluntary donations, for national personal accident insurance policies for team members. Even lighting and flares, which are essential to rescue operations, can be subject to VAT.
The 56 teams in England and Wales paid at least £75,000 in tax last year alone for the items that I have listed, but when one adds one-off equipment such as vehicles and specialist clothing, the sum is more like £200,000 in a year. Is not it outrageous that we expect a charity that is run by immensely skilled and dedicated volunteers to pay for the privilege of saving lives? I think of the irony of the Kendal mountain rescue team being situated on Busher walk in Kendal, cheek by jowl with the ambulance and fire services and the police—those three statutory services do not have to pay such taxes, while the mountain rescue team does. Mountain rescue’s maritime equivalent—the lifeboat services—are rightly exempt.
On VAT, Treasury Ministers have indicated their sympathy in the past, including the previous Treasury Minister, now the Minister for Local Government, the right hon. Member for Wentworth (John Healey), and the current Exchequer Secretary to the Treasury, the hon. Member for Wallasey (Angela Eagle). The right hon. Member for Wentworth indicated, in a letter to me in 2006, that the Treasury was on the verge of committing to help out, at least with vehicle taxation, which is well within the Government’s powers, but no action has been taken. I confess to being a little frustrated about that.
The Government have allowed themselves to get bogged down in EU rules, saying that there are restrictions to prevent them from waiving VAT rules and other taxes. However, where there is a will, there is a way. I have been working with mountain rescue in England and Wales, and we have approached the Commission to establish what leeway the Government have. I pay tribute to Stewart Hulse from mountain rescue in my constituency—another MBE—who has been leading the way in that matter. In response to our inquiries, Commissioner Kovács’s office has shown that matters are not so clear-cut, because our mountain rescue operation is unique in Europe, which means that there is scope for the Government to make exemptions on VAT. The UK has the only mountain rescue service, in England, that is not statutory, and the only one that does not charge for its services in some way. The Commissioner’s response, which I am happy to share with the Minister, reveals that there is about to be a review of VAT. I request that the Minister intervenes and calls on the Commissioner to allow an exemption.
I request that the Minister supports the bid, through the Commission, to seek an exemption to allow mountain rescue a fair deal—I know that I have to wind up, and I apologise—because that would be pushing an open door. The change would cost the Government only £200,000, which would be a drop in the ocean to them, but would be a massive vote of confidence in our mountain rescue services. That would make sure that we have a service that is committed to saving and rescuing people in the years to come.
I, too, will be brief. In July 2007, I was up in the Peak district hills between Mam Tor and Rushup Edge. I was near the top of a large slope and found myself incapacitated. I was trapped in a gully from where I could see the valley laid out before me, and during the hours that followed, 24 members of Buxton mountain rescue team were mobilised. They set up communication headquarters and catering, and I could see them scouring the valley with their dogs. They were looking in an expert way for clues and using their knowledge to establish where I might be hidden. When they eventually found me, I was given a thorough medical check-up, counselled by people who knew what they were doing and taken out on a stretcher. Fortunately for me, I was a volunteer victim. I had no injuries and I had offered my services for a training session for Buxton mountain rescue team. Fortunately for them, my efforts that morning raised £1,600 in sponsorship and I recommend that every hon. Member in the Chamber follows that example.
However, £1,600 is a drop in the ocean. The Buxton mountain rescue team alone costs £34,500 a year to operate, and along with the team based in Edale, which is next door, it is one of the busiest mountain rescue teams in the country. That is not surprising. The Peak district has 22 million visitors a year and if only a small proportion of them get into trouble on the hills, teams might still be called out several hundred times. The teams are made up of a group of incredibly dedicated and skilful volunteers, and my experience showed that many different types of skills have to be used and co-ordinated. When I was rescued, it was an unearthly hour on a Sunday morning, but sometimes rescues are at night and in poor weather conditions. Even in the Peak district, people sometimes have to deal with death as part of their voluntary activity or help those who are perhaps experiencing the death of a loved one up on the hills—whether from an accident, a heart attack or whatever.
Mountain rescue teams do not just need our respect; they should be shown that respect with a much more generous funding regime. As I hinted in my intervention, those services are being squeezed, and that is not just for taxation reasons, as the hon. Member for Westmorland and Lonsdale (Tim Farron) said. In the words of Ian Hurst, the chairman of the Buxton mountain rescue team:
“Street collections in Buxton and Castleton this Xmas have not been as fruitful as previous years…due to there being less money around and the public being unwilling to give to charity, which as the recession bites, will only worsen. The dramatic reduction in the banks interest rates to savers is also hitting us. Companies we approach are not willing to support us when they are making their own employees redundant, which is understandable. We are managing our financial resources very well and Buxton MRT will continue to provide a first class service to our communities next year, but funding that will become very much more difficult.”
At such a time, we need to redouble our efforts to try to meet some of the demands that other colleagues have made this morning.
I do not want to go into much more detail, apart from to say to the Minister that over the years, I have tabled many parliamentary questions on the subject of mountain rescue. Some of those have gone to the Home Office; some have gone to the Department for Communities and Local Government; and some to the Department for Environment, Food and Rural Affairs. I do not remember tabling any questions for the Department for Transport, but it might well be that I did. Local authorities, police authorities and others are supportive. However, we cannot rely on local authorities because the Peak district, for example, falls under four different Government regions. There is no single region that can take responsibility for the mountain rescue at that level. With all due respect to my Front-Bench colleague, I would like a Minister to have mountain and cave rescue specifically as part of the ministerial remit. I do not care in which Department the Minister is, but it would be nice to know that we had one champion on these issues in the Government.
My colleagues have made powerful points about funding specifically and generally. I am grateful to my hon. Friend the Member for Bolton, South-East (Dr. Iddon) for securing the debate, and I thank him for doing so. I shall let my right hon. Friend the Member for Stirling (Mrs. McGuire) finish the round.
It is fair to say that with the current opinion polls, the hon. Member for High Peak (Tom Levitt) is probably worth considerably more than £1,600 to the Labour party.
I shall make a brief contribution because, as my hon. Friend the Member for Bolton, South-East (Dr. Iddon) has said, there are few occasions when we get the opportunity to discuss mountain rescue teams in the House. Although some of the issues raised are very much to do with the situation in England and Wales, there are some generic issues that I would like to mention.
My constituency is Stirling and, as my hon. Friend the Member for Conwy (Mrs. Williams) said, we have the Loch Lomond and Trossachs national park, the Ochil hills and the Campsie fells, which border my constituency. Within my constituency we have what I would call the lower highland ranges, stretching from Callander to Tyndrum, before we move into the higher mountains of the highland regions. I am sure that the Minister is aware of some of those areas, given where he grew up.
It is fair to say that it is not just Stirling folk who climb the hills in the area; it attracts people from all over the country. Indeed, many mountaineers and hill walkers from Scotland travel to other parts of the United Kingdom to walk hills, which is why it is important that we have a UK perspective on the issue. Hill walking and mountaineering is seen as part of the mainstream of activity in Scotland, so much so that the BBC on a Saturday morning in Scotland issues a weather forecast specifically targeted at hill walkers and mountaineers. I do not know whether that is replicated in other parts of the country—[Interruption.] I see that colleagues from Wales are saying that it is.
We should not lose sight of the fact that mountain rescue teams are made up of volunteers. They safeguard their independence and want to continue to provide the support that is necessary for what is a massive tourist attraction, in my constituency and in other parts of the country.
On safety, it is interesting to note that, in Scotland, research has shown that two thirds of those involved in mountain incidents are experienced climbers and walkers. It is not people who are feckless on the mountains who need to be rescued; it is people who know what they are doing. As the hon. Member for Caernarfon (Hywel Williams) said—he represents the area that takes in Snowdonia—people need to know what they are doing, but if the weather breaks and comes in during difficult circumstances, even the most experienced people can get into difficulty.
I offer my support to colleagues in other parts of the country, because we need to recognise that mountain rescue is part of our emergency services. Although those involved want to maintain their independence, there is a need for elements of core support, and they should not have to raise funds for the specialist equipment that they need. I hope to visit some of my mountain rescue teams from central Scotland in the near future, including the one based at Killin, which covers many of the most difficult and challenging climbs in my constituency.
In making this brief contribution, I hope that the Minister will consider funding in Scotland and whether it is an appropriate model for other parts of the United Kingdom. Although the administration of these funding mechanisms is devolved to the Welsh Assembly Government and to the Scottish Executive, there is general interest across the UK in making our mountains and hills as safe as possible. We can do that by continuing to support those volunteers who give their time and effort and are prepared to put their lives on the line for other people. We should not undervalue that commitment.
It is a pleasure to have the opportunity to contribute to this debate under your chairmanship, Mr. Hancock, and I pay tribute to the hon. Member for Bolton, South-East (Dr. Iddon) for securing it on a very important subject, as other hon. Members have said. Frankly, the spotlight is not shone on it often enough. Hon. Members who visited my constituency in the 2005 by-election, when I was first elected, will know that there are not many mountains in Cheadle. I am not giving away any secrets by saying that, but, of course, the significance of this debate reaches far beyond those of us who live in areas that do have mountains or active mountain rescue teams, because it is quite possible that any of my constituents might need to call on the assistance of a mountain rescue team when they visit other parts of the United Kingdom.
Indeed they are, and I thank the hon. Gentleman for making that intervention.
I am not the first person to point out that the work of mountain rescue teams is not restricted to mountains and hills; they also provide assistance to anyone lost or injured on moorland, fells, or even open countryside. Their services are requested and given in a wide variety of emergencies that are not limited to mountain climbing but include searches for missing children, lost walkers, people who are suddenly taken ill and motorists lost in snowstorms—all kinds of scenarios. In fact, the mountain rescue teams, along with the lowland search and rescue teams, actively serve vast chunks of the United Kingdom, and we should recognise that fact.
During the west country flooding in the summer of 2007, its mountain rescue team helped to recover more than 800 people in north Gloucestershire and Worcestershire, with volunteers working 14-hour shifts. I am told that that was the highest recorded number of persons assisted or lives saved at any one incident in the history of mountain rescue in England and Wales. That example alone shows how important the work of the mountain rescue teams is throughout the country, how closely they work together with the police and other emergency services and how much danger those brave individuals are regularly exposed to. I, like others, pay tribute to the brave and dedicated men and women who invest so much time and energy—often risking personal injury and facing hardship and all kinds of hazards—in providing that very valuable service and in serving the communities as they do.
Mountain rescue teams, like the Royal National Lifeboat Institution, all work as volunteers and have to balance their work with the teams with the need to earn money and support their families. Therefore, it is also appropriate to pay tribute to the families of people involved in mountain rescue teams, who have to put up with the constant strain of knowing that their loved ones are in danger, and who, as the teams run a 24-hour, seven-day-a-week service, all too often lose out on quality time together as a family.
In the current economic environment, many charities are finding it hard to cope financially, and many teams face dramatically reduced funding because of the downturn in voluntary donations. Mountain Rescue England and Wales says that contributions are down 60 per cent. year on year, which is a worrying trend. The teams themselves cost significant amounts of money to operate. Members need to be trained not only in the latest first aid and emergency medical treatments, but in search techniques, off-road driving, work with search and rescue dogs, and many other facets. The specialist equipment that they need is also expensive. For example, a collapsible stretcher can cost about £2,500, modified 4x4 vehicles do not come cheap, and boots and clothing—all such equipment—is costly. This means that mountain rescue teams, run as they are on voluntary contributions, have large and ongoing expenditure. As we have heard, a team can cost up to £50,000 a year to operate successfully.
The 26 mountain rescue teams in Scotland receive upwards of £400,000 a year towards their costs, and the Welsh Assembly contributes £13,000 to rescue teams in Wales. But, as has been said, the rescue teams in England receive little or no help towards their expenditure. All hon. Members have said that the Government ought to do more to support this vital search and rescue service. Mountain Rescue England and Wales estimates that it would cost the Government £6 million a year to run.
The teams do not ask for all their running costs to be covered, only for certain tax exemptions to be met so that the equipment that is vital to them if they are to fulfil their search and rescue role is made more affordable. Currently, only some of their vehicles—those that can officially be classed as ambulances—are exempt from vehicle excise duty. The rest of their vehicles, carrying men, women and equipment, are not exempt. Making all vehicles exempt, as is the case with the RNLI, would cost the Treasury only a small amount of money, and the teams could then use it to replace or update other equipment, or for other training needs. Perhaps the Minister will refer to that.
The teams also seek a VAT exemption for their equipment, clothing and other vital purchases. Other emergency and health services do not have to pay VAT on their purchases, but mountain rescue services do, and that is unfair and, frankly, unsustainable. Again, the amount of money is relatively small. In 2007, Mountain Rescue England and Wales carried out a VAT survey and discovered that £75,000 was paid in VAT that year. These charities fulfil an important role as emergency and rescue services. Will the Minister confirm whether the Government have considered making mountain rescue equipment purchases exempt from VAT and whether, considering the small cost, they will commit to take action?
Mountain rescue teams throughout the UK provide a emergency service for their communities, whether it is for towns and villages facing snow storms or floods, or for individuals lost on mountains or in remote places. They work with, and support the work of, the police, ambulance and other emergency services, and often venture into places where it would be impossible for ambulances to go. These volunteer teams give much more than just their time, and they fully deserve our support. I very much hope that the Minister will assure the House that they have the Government’s support, too.
It is a pleasure to be in the Chamber under your chairmanship, Mr. Hancock. I join others in congratulating the hon. Member for Bolton, South-East (Dr. Iddon) on obtaining the debate. We have had some excellent contributions, starting with his own. It is a good opportunity not only to pay tribute to a group of volunteers who give of their time freely and, occasionally, risk their lives so that others can enjoy the natural wonders of some of the more interesting parts of this beautiful country in a variety of weathers, but to put across some genuine concerns. The contribution of volunteers in the field of adventure, in particular, is all too often taken for granted.
As well as being the shadow Minister selected at relatively short notice to respond to the debate, I happened to be the sponsor of a private Member’s Bill on the promotion of volunteering, which was aimed specifically at limiting the effects of the compensation culture on adventure and sport volunteers. As a result of the Bill, I am co-founder of the all-party adventure and recreation in society group, so I shall take the liberty of inviting to our next meeting everyone who has contributed to this debate.
My experience of training for the Territorial SAS on the Brecon Beacons left me with huge respect for anybody who operates in such terrain. We have heard a lot about other terrains and, indeed, about several other parts of the country, including the hon. Gentleman’s constituency, and many organisations in the adventure and sport fields face similar dilemmas, many of which have evolved from risk aversion, the compensation culture, insurance problems and Government policy, the unintended but inadvertent consequences of which have been unhelpful.
My party is firmly committed to reintroducing structured risk-taking and adventure to the lives of young people. There are few activities more adventurous and challenging than those listed by the hon. Gentleman as ones that his mountain rescue service supports, from canoeing to rock climbing. Cave rescue has also been mentioned.
In September, my hon. Friend the Member for Surrey Heath (Michael Gove) said that
“we’ll take action to put adventure back into learning. If we are worried about raising a generation of obese children nothing will be as effective as getting them active.”
If we want people of all ages to do adventurous activities and to challenge their physical and mental boundaries, and if we want to tackle obesity and other problems in today’s society that physical challenges can overcome, we need organisations such as mountain rescue teams that are willing to be there when things go wrong. As hon. Members have pointed out, we also need such teams if an ordinary walk in the mountains goes wrong.
Activities in all parts of the adventure and sport world—from cadet units and scout troops to canoeing—are possible only because of such volunteers. In mountaineering, they not only commit time and energy, but put their lives at risk. We must therefore ensure that those organisations and their volunteers are uppermost in our minds as policy and law makers. We must seek to stave off the law of unintended consequences.
I will give an example directly related to my transport brief. A visit to my local coastguard headquarters in Dover was kindly facilitated by the Minister. I saw a photograph of the local cliff rescue team, which is made up of volunteers, although unlike mountain rescue teams it is led by a paid member of staff. In the photograph, the volunteers were abseiling down a cliff to rescue a young woman who had fallen. Miraculously, her fall had been broken after 120 ft by an illegally dumped fridge. There was a good outcome in that case. However, the insurance for such dangerous work is inadequate. As a consequence, a volunteer coastguard who was seriously injured on a rescue mission on a cliff in Pembrokeshire lost his job and received minimal and only temporary compensation that was lower than half his salary for the period that it was paid. While I cannot comment on the strong cases that have been made on a variety of tax and funding issues, because they are beyond my pay grade, on the narrow area of cliff rescue teams, my Treasury team has agreed to review the Maritime and Coastguard Agency in the context of the other emergency services.
There are considerable parallel problems with insurance for mountain rescue teams. One team told my office:
“Many team members are under the impression that they operate under a system that they are adequately insured, sometimes on the pretext of a verbal assurance from Senior Police representatives, only to find that they have not been insured for certain mountain/cave rescue duties they have undertaken”.
I am told that the gold standard of insurance for mountain rescue is the policy in Cumbria, which was achieved with partial funding from the police. That policy has been adopted in north Wales and the Mountain Rescue Association wants it to be adopted nationally. Unlike the pledge that I made on coastguards, I can pledge only to look at that matter.
Although mountain rescue teams feel they have an entitlement to insurance, one member told me:
“Scant regard is made to making sure that team members are adequately covered by insurance ... there is vast evidence of ‘slip shod’ and mis-administration of insurance cover”.
Insurance is a problem throughout the outdoor, sport and adventure activity fields, and it relates not only to money but to other issues. On a related point, I was particularly concerned by the example given by the hon. Gentleman of police withdrawing responsive driving training from the Bolton mountain rescue team because of fears that the police would be legally liable for the subsequent actions of the team’s members.
Two pledges by my party would help with that problem. First, we would abolish negligence claims in adventure training and sport, allowing only reckless disregard claims with a much higher standard of proof. That issue is on the edge of that pledge, but I will press for it to be considered. That change would return Britain to the legal position until the 1950s and bring us in line with the position in most American states, which have introduced the measure one by one.
Secondly, we have pledged to ask courts to take into account the social value of risky activities and to have judges recognise it when making decisions in civil cases. Mountain rescue certainly is a risky activity. I am not too familiar with the responsive driving case, but I hope that Greater Manchester police would review its decision against such a legal background. Such measures would help a risk-averse society properly to assess and revalue risk, as the hon. Member for Conwy (Mrs. Williams) has mentioned. That could produce better outcomes for those seeking insurance, which has been inflated by a series of court judgments. I hope that such measures would lower the price of insurance.
I was glad to hear the hon. Member for Bolton, South-East mention a statutory instrument that will give volunteers a more prominent role under the Civil Contingencies Act 2004, which I spoke in favour of during its passage through Parliament. The Minister nodded, so I take it that it will soon come forward. There should be greater recognition for a string of voluntary organisations from mountain rescue teams to St. John Ambulance, which are currently undervalued in legislation. We must look again at the way in which the Health and Safety Executive pursues some cases.
I will end as I began, by congratulating the hon. Gentleman and all hon. Members who have contributed to this debate. It has been an opportunity to praise the work of mountain rescue teams and to draw attention to their concerns.
I was going to say what a pleasure it is to see you presiding until that little joke, Mr. Hancock. I congratulate my hon. Friend the Member for Bolton, South-East (Dr. Iddon) on securing this debate on the invaluable work of mountain rescue teams in Bolton and throughout the UK. I also congratulate him on securing the unanimity of opinion that has been articulated by all parties this morning.
I, too, pay tribute to the hard work of mountain rescue teams and of all search and rescue volunteers who work in a range of organisations that this country relies on heavily to provide a crucial 24-hour service. As a former professional emergency service worker in the fire service, I feel an instinctive personal solidarity and respect for all such volunteers. Such respect has been articulated by all hon. Members this morning.
Perhaps I should begin by explaining why a Transport Minister is responding to this debate rather than a colleague from the Home Office, the Treasury or any other Department. The provision of search and rescue—SAR—in the UK brings together Departments, Government agencies, the military, emergency services, charities and voluntary organisations such as mountain rescue volunteers. All those organisations contain respected professionals in their fields. The framework within which those organisations operate is overseen by a strategic committee that looks across the piece to achieve an effective and efficient SAR capability for the UK. The committee is chaired by the Department for Transport, because of its responsibility for maritime and civil aeronautical SAR. That is why I am responding to the debate.
The UK search and rescue strategic committee is chaired by the Maritime and Coastguard Agency, and members are drawn from the key SAR organisations—the people who actually do the job. Mountain Rescue England and Wales and the Mountain Rescue Committee of Scotland are both actively represented on the group, which is a forum for sharing best practice and resolving practical issues that affect all aspects of UK SAR capability.
Several colleagues asked about advising and educating walkers and organisations, and getting information out to them. Individual organisations have their own information campaigns, but the strategic committee and the operators group have worked hard to find the best way to address the issue. They have set up a UK SAR website, which contains advice for the public and enthusiasts, and the information can be obtained on the Department for Transport website.
My hon. Friend has been unable to find a previous Adjournment debate on this subject in the Official Report, and I am not aware of one either. However, many of the issues that he has raised were considered by the Transport Committee during its consideration in 2005 of UK SAR provision. In that regard, I am happy to report that some progress has been made on at least one of the issues that he raised—the one that I was nodding about during his opening speech.
The Select Committee’s report contained a recommendation that official mountain rescue and lowland search vehicles, which are operated by trained drivers, should be able to use blue lights to reach incidents in the same way that RAF mountain rescue teams do. Currently, the Road Vehicles Lighting Regulations 1989 restrict the use of blue warning beacons for mountain rescue vehicles to those operated by the RAF. However, I am aware that voluntary rescue organisations often provide a similar service to a broader cross-section of the community, and I agree that they, too, should be allowed to benefit from the use of blue warning beacons. I am pleased that the Government therefore propose to extend the permission enjoyed by the RAF to all mountain rescue services. A public consultation on a package of measures, including an amendment to the road vehicle lighting regulations, was held in summer 2008. Among other things, the package included modifications to permit mountain rescue vehicles to use blue lights. We aim to bring that into force by the end of 2009.
Although the Select Committee recommended that the Government should make funding available to mountain rescue and lowland search teams, responsibility for co-ordinating local inland SAR operations in England and Wales lies with local police authorities. Therefore, it is right that any decision on support for local mountain rescue teams should be a matter for the police authority and chief constable concerned.
My hon. Friend asked about the application of vehicle excise duty to mountain rescue teams. That has already been carefully examined by my hon. Friend the Exchequer Secretary to the Treasury, who has responsibility for vehicle excise duty rate policy. She concluded that because tax policy in respect of charities is based on neutrality of treatment, a focused mountain rescue vehicle exemption might appear to favour a specific charitable cause, which would be contrary to the wider principles of Government tax policy. However, I understand that some rescue teams are equipped with ambulances, which are subject to vehicle excise duty exemption. My hon. Friend asked me to consider the waiver or reimbursement of VAT due on mountain rescue equipment, but that is properly a matter for my right hon. Friend the Chancellor of the Exchequer. I shall ensure that he receives the relevant extracts from this debate.
My hon. Friend also touched on the difficulties of recruiting volunteers for the mountain rescue service in his area and elsewhere. Volunteering in the UK is a traditional way for communities and individuals to respond to needs in our society and, generally, the retention of search and rescue volunteers is highly impressive—turnover is relatively low.
The strategic committee’s volunteering sub-group is looking at generic issues that affect all SAR volunteers, and mountain and cave rescue teams are actively represented on the group. Recruitment and retention is a major topic of discussion. A publicity DVD that will encourage potential volunteers to come forward and to seek support from their employers is under development.
On payment for rescues, I need to make it clear that, in the UK, the general principle is that search and rescue is provided free of charge to anyone who needs it—other than my hon. Friend the Member for High Peak (Tom Levitt), of course, who commendably raised £1,600. It crossed my mind that the price for a Minister might be slightly higher, and perhaps VAT exempt, but that is a matter for the Treasury. Without breaking protocol, Mr. Hancock, I know that Treasury officials are in close proximity and monitoring this debate and that they will take strong messages back to the Treasury in due course.
I used to get paid to take risks, but doing it for fun has never appealed to me. However, I shall speak to my hon. Friend after the debate.
We would not wish anyone in distress to be deterred from seeking assistance because of the cost, particularly as a delay in seeking assistance could further endanger the lives of the individual and the rescuers. Therefore, we have no intention of introducing a charge.
In conclusion, I reiterate the Government’s appreciation of the work of all our SAR operators, including the volunteers, who give much to their local communities and to the wider public through their local knowledge and expertise. They are why the UK has a world-class SAR capability, which the Government remain committed to supporting.
I thank the Minister and everyone who has taken part for their courtesy and good humour, and for allowing everyone to get involved.
As the next Minister and Mr. Robertson are here, we can move straight on to the next debate. As a final courtesy, I ask those Members who are leaving to do so as speedily and quietly as possible.
It is a pleasure to serve under your chairmanship, Mr. Hancock.
I asked for this debate as the chairman of the all-party group on Nigeria, following our recent visit to Nigeria in December. I know that my hon. Friend the Minister visited the country recently, and I am sure that she will confirm my experience—namely, that the UK is held in high regard in Nigeria and that it has a significant role to play as a partner of the country. My question today is whether we wish to fulfil that role.
Nigeria is an incredibly important country, not just in Africa, where it has great influence and is described as one the UK’s two main partners—the other is South Africa—but on a global level. That importance is manifest in its efforts to tackle climate change, crime and corruption, and its role in providing energy, security and regional stability.
Nigeria is a regional superpower, and its strength and influence are set to increase. It is a prospective economic powerhouse with a huge domestic market. It has a potentially bright future and has been described to me on various occasions as another sleeping giant: it could become another China or India. But that bright future seems elusive, and Nigeria’s path towards it seems precarious. Now is not the time for what some in the Foreign Office have privately described as a drift in our relations.
As I said, there is a great deal of good will towards the UK in Nigeria, but my concern is that without long-term vision and the right kind of support, we will lose the opportunity to be a partner in helping Nigeria to progress. At no time has it been more important to ensure that progress for Nigeria is translated into prosperity for its people.
The UK is a friend of Nigeria, but it needs to be cautious in the advice that it offers and the pressures that it brings in order to deepen the friendship. A friendship is not about blind support. It must involve honest criticism. The fact that reform in Nigeria has slowed down considerably in the past year or so may create drift in the relationship, but it is exactly at such a time that the UK needs to be active and step up its engagement. I want to highlight several areas where that is needed.
The Niger delta is a concern for all of us who watch Nigeria. Our anxiety over it is heightened by the fact that two British workers who were kidnapped in the region last September are still being held hostage. As my hon. Friend will no doubt be aware, low-level conflict has been going on in the Niger delta for years. I am deeply frustrated by the lack of progress in the region. It is difficult to comprehend the horrible polluted and impoverished conditions that so many of its inhabitants live in, despite the vast amount of money that has been received in oil revenue.
I understand that the crisis is complex. A number of actors and grievances are in play. However, none of those things should be used as an excuse for paralysis. I know that the UK is not solely responsible for bringing the crisis to an end—much of the responsibility lies with the Government and people of Nigeria—but it could certainly play a strong role if it wanted to. From pressuring companies, to working for international engagement, tools are available to the UK to help to improve the situation.
Being realistic about the UK’s influence should not lead us to underestimate our role with regard to Nigeria or to be pessimistic about ending conflict and alleviating the suffering in the Niger delta. If we are serious about human rights, development, climate change and energy security, we should engage on those issues. What is the UK’s strategy in the Niger delta, and how are the Government working with our United States and European partners to find a solution?
I am sure that my hon. Friend will have seen the recent news about the failure, yet again, of the oil companies to meet the deadline to stop gas flaring in the Niger delta, which was originally set for 2008, then for 2009 and is now set for who knows when. As well as polluting and being a danger to the communities living around them, these flares account for about 14 per cent. of all natural gas flare worldwide. That makes Nigeria the biggest emitter of carbon dioxide in Africa, along with South Africa. We should ask whether we are serious about tackling climate change. If we are, what pressure is being brought to bear on global companies and flaring gas in the Niger delta? I remember the Westminster Hall debate on the Niger delta in 2004, in which the then Member of Parliament for Hamilton, South—Bill Tynan—spoke about such problems, but I know of little change for the better in the region since the issue was raised five years ago.
The problem is that the actors in the Niger delta apportion blame rather than take responsibility. The Nigerian Government have to take responsibility and deal with the oil companies, but there seems little encouragement or enthusiasm for them to do so. We have a duty to bring pressure to bear on all parties to help to end the gas flaring and get people talking together.
It is not a simple task. The conflict and danger in the Niger delta, which is awash with arms, are key factors. The people of the Niger delta live in a constant state of insecurity, not only because they have no access to public services and little hope of gainful employment, but because it is an area where arms are readily available to anyone. The UK can help to improve the situation in the Niger delta by taking on the role of mediator, listening to all groups, even those it may not wish to talk with, and bringing disputing parties together to the table to talk.
I joined my hon. Friend on a visit to Nigeria recently and was amazed at the opportunities there. Does he agree that, as he rightly said, the issue needs to be tackled not only by the UK but by other Governments as well, and that there are immense opportunities in terms of reducing carbon emissions and human rights? There are also opportunities for the business community in the UK and wider afield, and for the local population, if we can sort out these problems. We have a duty to respond to those matters as well.
My hon. Friend is correct. I thank him for his not inconsiderable help on our previous visit and for his interest in Nigeria. I hope that Members of both Houses will take the opportunity, when it arises, to visit Nigeria and see that for themselves.
The lessons that we learned in Northern Ireland were immense. We learned that we had to sit down with those with whom we did not want to sit down. We had to get people together who hated each other so that they would eventually come to a compromise, and that led to the Assembly in Northern Ireland that we have now. That expertise can be used and taken to the negotiating table, but people must be willing to negotiate. The expertise that we have in this country is second to none anywhere else in the world and we should use it, particularly in respect of a country that holds Britain so high in its favour. Does my hon. Friend the Minister agree that the UK can help in that way? Has that option been considered by the Foreign and Commonwealth Office?
From my visits to Nigeria and from discussions with stakeholders, I strongly believe that the Niger delta crisis has roots in corruption and underdevelopment. The question of what the UK is doing for development in the Niger delta is for the Department for International Development, but as insecurity in the delta comes from poverty and underdevelopment, I should like to know whether there is a joint strategy between the FCO and DFID. The all-party group on Nigeria would be happy to assist and point everyone in the right direction on that front. We have a lot of expertise and have met many people from both sides. We would be more than happy to assist DFID and the FCO in helping Nigeria to solve its problems.
I would further like to ask my hon. Friend what the UK is doing in response to requests for support on the Niger delta from the President of Nigeria. In 2008, the Prime Minister agreed to provide military training assistance and advice to help to improve the security situation in the region. Has there been progress on that front? During his visit to London in July last year, President Yar’Adua also expressed a wish that stolen oil from Nigeria be classified as blood oil. Hundreds of thousands of barrels of bunkered oil from Nigeria help to buy the large quantities of arms traded in the Niger delta. Those illegal profits are also channelled into the Nigerian political system, doing nothing to stem the tide of corruption. Estimates put the value of bunkered oil at $10 million daily, at a minimum. Will the UK lead an international effort to end the trade in blood oil? Stopping that will be difficult and will upset people with vested interests in it, but the UK should not be fearful of upsetting such people. In fact, upsetting them may ensure that they come to the negotiating table.
Bunkered oil is only one part of a web of corruption that exists in Nigeria and beyond. Recent years have seen Nigeria making good progress on tackling corruption through its Economic and Financial Crimes Commission. I am pleased that the UK has been able to play a part in that fight. Thanks to the good work of the Metropolitan police, the EFCC has seized £49 million-worth of stolen assets.
Given progress made in the UK on discouraging money-laundering through London, we now need the UK to work with its European counterparts to ensure the end of the laundering of public funds throughout Europe and its tax havens. A change of leadership at the EFCC in 2007 and the subsequent harassment of its former chair, Mr. Ribadu, has caused widespread concern that the anti-corruption fight in Nigeria may falter. I hope that we in the UK will continue to do everything that we can to support anti-corruption efforts, including ensuring that our own banks and the tax havens linked to Britain take responsibility to support those efforts.
The two issues of oil and corruption have had damaging long-term effects on Nigeria and its people. Largely unaccountable government has meant that the Nigerian people endure without public services. That in turn means that many people do not see themselves as having a stake in their own country or in how it is run. Government can seem like a separate sphere from their daily lives. The lack of public service delivery in the country is so severe as to be a human rights issue. In fact, during the all-party group’s visit to Nigeria in December many of the people we met raised concerns about human rights abuses, ranging from the persecution of so-called child witches—Governor Godswill Akpabio of Akwa Ibom state must be commended for taking action on this issue by signing the Child Rights Bill into law—to female genital mutilation.
I congratulate my hon. Friend on securing the debate. Does he agree that one of the most moving and most disturbing discussions that we had on the visit to Nigeria was with the group of people who are very bravely campaigning in their communities against the barbaric practice of female genital mutilation? I would like, through him, to put two points to my hon. Friend the Minister. I do not expect her to answer fully in this debate, but I ask her to go away and consider the matter. First, what can she do in her role to try to discourage that practice and, indeed, outlaw it altogether in Nigeria? Secondly, one of the most worrying aspects of the discussion related to people coming to this country and carrying out that barbaric practice in communities here. Will she comment on that?
I thank my hon. Friend for his intervention. When we went into the room to talk to people, the first thing that we were confronted with was a DVD of a child being mutilated. The child could only have been a few months old. It was an horrific sight and one that will live with us. Can the Minister do something about that practice? I believe that if people go back to places such as Nigeria with young children, those children, when they return to this country, whether it is one, two or three weeks or three months later, should be talked to by somebody. They should be asked what happened to them while they were over there. If a child has been mutilated, they should be taken into care and the parents arrested for what they have done.
That is a very important issue, as is the issue of child witches. I am happy to furnish the Minister with a copy of the Channel 4 television programme on child witches if she would like to see it. Again, what is being done to those young children is horrific. Basically, they are children whom nobody cares about. People just want to get rid of them. They beat them and mutilate them and, in some cases, children have been killed. We must examine that. I hope that the governor of Akwa Ibom state, who signed the Child Rights Bill, will put it into force—that is, of course, a different question from agreeing to it.
A couple of days before the all-party group arrived in Nigeria, there was an outbreak of violence in Jos, Plateau state, in which 300 or 400 people died and many more were displaced. The violence was largely presented as a result of religious differences but, from meetings with people in the area, the group believes that the violence was a result of politicians exploiting fault lines and the frustrations of people who feel that they have been denied equal human rights with others. The catalyst for the violence was the local elections. Good elections are clearly crucial for increasing accountability in Nigeria and will advance democracy. In this case, a Christian councillor was elected in a Muslim area. It was obvious that under no conditions would a Christian councillor have been elected in that area but, because the Christian was part of the ruling People’s Democratic party, he was elected. That cannot be allowed to happen. Nigeria has to consider that seriously.
We have raised the subject many times in our reports, but still nothing has been done. Our Government should be backing up what we are saying, which is that proper, free elections should be conducted. We feel very strongly about that. We asked for the removal of the last head of the electoral commission and we believe that work should already have started for the 2011 elections. That needs to happen and there need to be discussions about the help that we and other countries can give. The European Parliament has been very helpful in highlighting the problems. There is more work that we can and should do. Is that issue on the FCO’s radar? Can the Minister assure me that there is engagement and long-term thinking on Nigeria and its elections in 2011?
Although the UK recognises the critical role that Nigeria plays in peacekeeping and stability in Africa, my impression is that we have been treading water in our relationship for the past year. I am sorry that there were not as many positives from the group’s visit as there usually are, but perhaps this one was more eye-opening. As I said, just before we arrived, 300 to 400 people were killed in an area that we had intended to visit. We had to go to another area just along from it but with a similar make-up. I emphasise that we did meet individuals and groups who were standing up to be counted and trying to bring about improvements for the country, so it is not all negative.
There is no doubt that it is in the UK’s interests to do likewise and support Nigeria’s democracy and development. I know that the FCO’s resources are limited, but given Nigeria’s 150 million people, its influence as a regional power and its strong links to Britain, both positive and negative, the UK needs to put as many resources as it can into the relationship. I expect no less from the UK Government. We need Nigeria to be strong and stable. We have a deep relationship with Nigeria in terms of both our history and our goals for the future, so we have no choice but to ensure the best possible outcomes.
I congratulate my hon. Friend the Member for Glasgow, North-West (John Robertson) on securing the debate and thank him for sharing his impressions from the recent visit by the all-party group, which he chairs. I am delighted that he is supported today by my hon. Friends the Members for Jarrow (Mr. Hepburn) and for Great Yarmouth (Mr. Wright), who also take a great interest in what is a very important country for us. My hon. Friend the Member for Glasgow, North-West introduced the debate with great clarity, but also with real feeling and emphasis on the importance of the relationship between the UK and Nigeria. In addition to making some general points, I will seek to answer the particular questions that he has raised. If he requires further detail, I will be more than happy to provide that outside the debate.
I share the view that we have a long-standing, important and warm relationship with Nigeria, but it also presents substantial challenges. I assure my hon. Friends of the importance that we attach to that relationship and the way in which we seek to develop it. The range of our interests touches all areas of government, which is why we have a cross-departmental Whitehall Nigeria strategy. That strategy drives our work on migration, crime and corruption, energy security, development and regional security, and it brings together all the relevant Departments as my hon. Friend the Member for Glasgow, North-West has asked. Why else is the relationship important? There is a large Nigerian diaspora in the United Kingdom, who play a very important role in this country.
Clearly, whatever happens in Nigeria is important to Africa. Nigeria is home to one in five Africans, so what happens there is crucial to what we are seeking to achieve in Africa and with Africa, which includes the fight against poverty through the achievement of the millennium development goals. Nigeria is the leading contributor to African peacekeeping—my hon. Friend has referred to that—and has considerable influence within such groupings as the African Union and the Economic Community of West African States. We are seeing a welcome increase in the number of Nigerians playing a role in regional affairs. General Agwai heads up the UN-African Union mission in Darfur, and former President Obasanjo is the UN Secretary-General’s special envoy to the Democratic Republic of the Congo. We warmly welcome those contributions.
We have heard today about the importance of Nigeria economically. In that regard, it is second only to South Africa in sub-Saharan Africa. Nigeria’s economy is ranked 40th in the world. It is the world’s 12th-largest producer of oil and ranks seventh in respect of proven gas reserves, thereby establishing itself in the world. The abundance of natural resources means that what happens in Nigeria has a significant effect on global energy and climate security. As my hon. Friend has said, it is vital for Nigeria to ensure a stable supply by improving the security situation in the Niger delta, where kidnapping continues to be a major issue. I assure my hon. Friends that we are working closely with the Nigerian authorities to secure the safe release of the two British nationals currently held captive. I also assure them that we have made clear our absolute readiness and willingness to support Nigeria in the delta. In response to the President’s requests, we are providing training to improve maritime security and working with international partners to address the issue that my hon. Friend described as “blood oil”—the theft of large quantities of oil.
As an illustration, one way in which we are doing that is through our support for a project with the university of Plymouth and the Nigerian petroleum commission to explore ways of identifying stolen oil. The aim is to ensure that, even if stolen oil leaves Nigeria, it does not find its way on to the open market.
In response to the questions raised by my hon. Friend, the UK will provide military training assistance in two areas—improving operational planning processes and inshore small boat operations. Work is progressing on the creation of a joint maritime security training centre near Lagos and training should start in earnest later this year. We have redirected the main focus of the British military advisory and training team in Nigeria from broader peacekeeping to support for maritime security. In October, a naval officer joined the team to enhance its maritime expertise.
I agree with my hon. Friend about the serious effects that gas flaring has on the environment. The UK has urged the Nigerian Government and international oil companies to work together to put an end to that practice. Through the UK-Nigeria officials working group, initiated by the then Minister for Energy in August 2008, we aim to help deliver improvements in methods of capturing and using gas, which we hope will eliminate the need for flaring. I assure my hon. Friend that we will continue to work with international partners, including the United States and the European Union, and with oil companies through the gulf of Guinea energy security strategy, which will continue to support Nigeria’s efforts in all those issues. We also have the Whitehall delta action plan to co-ordinate work across the Government.
As my hon. Friend has said—I know that colleagues will endorse this—poverty is a persistent problem. More than 70 million Nigerians live on less than a dollar a day. I saw for myself the situation faced by so many people in Nigeria when I visited the country as a Minister in the Department for International Development in 2008. The stories that I heard and the evidence that I saw brought home to me the importance of the Government’s work in seeking substantially to increase support to the Nigerian Government, so as to strengthen their ability to tackle key challenges such as those of poverty, governance and electoral reform. There is no quick solution, but it is important to continue to work with the Nigerians to build their capacity to tackle those issues.
Dealing with poverty and inequality will be vital to Nigeria’s efforts to prevent the sort of inter-communal violence that, as my hon. Friend has mentioned, was seen in Jos in November. The ultimate responsibility for tackling conflict lies with the Nigerian Government, but the UK provides support through non-governmental organisations such as ActionAid and Bridgebuilders.
I agree with my hon. Friend that corruption is a deeply serious and corrosive problem that impacts not only on individuals but on economic development. It feeds crime inside Nigeria, as well as in the UK and elsewhere through money laundering. We therefore welcome the Nigerian President’s public commitment to tackle corruption, and we support him in that. How will we do that? That includes co-operating with Nigeria to prosecute high-profile corruption cases, building and maintaining effective institutions, and increasing transparency and accountability in both government and business.
In addition to tackling corruption, we are working with Nigeria to tackle other forms of crime, including drugs trafficking. Those problems do not confine themselves to borders or recognise passports, and they have a significant impact on the UK. That is why our law enforcement agencies, to which my hon. Friend has referred, co-operate so closely with their counterparts in Nigeria to share expertise and information. That is why we welcome our positive relationship regarding the return of illegal migrants and Nigerian prisoners, and we will continue to drive forward our work to increase the flow. I agree with my hon. Friend on the need for electoral reform in preparation for the 2011 elections. The President is now considering the recommendations of the electoral reform committee, and we are ready to support him in taking those forward.
I welcome the comments made by my hon. Friend the Member for Jarrow, who raised the important issue of how to tackle female genital mutilation. The centre in Ibadan, which was visited by the all-party parliamentary group on Nigeria, does very important work to raise awareness of that horrific crime and, crucially, to involve religious and community leaders in the campaign against it. The community speaking out will be a driving force against what can be described only as a truly barbaric practice, and we are pleased to support that centre in its efforts. More broadly, I am sure that my hon. Friends will be glad that we have already made it a crime for any British national to carry out that practice, whether in the UK or abroad. We are working, and will continue to work, with international partners to stamp it out worldwide.
We will continue to drive forward our relationship with Nigeria in a positive direction. I am glad that the President was welcomed to London last summer as a guest of the Government. He had discussions with the Prime Minister and others on a range of UK and Nigerian interests. We look forward to continued ministerial visits both to and from Nigeria.
Reference has been made to the issue of human rights in Nigeria. We have a strong commitment to the promotion of human rights in Nigeria, as elsewhere. Specifically in Nigeria, we have funded projects through the Foreign and Commonwealth Office in a number of areas. Those include combating torture, campaigning for the abolition of the death penalty, strengthening democratic accountability and promoting women’s rights. I assure my hon. Friends that we continue to raise concerns about human rights with senior members of the Nigerian Government, both in the UK and together with EU partners. We monitor reports of human rights abuses and violence, and raise specific issues, such as that of secret executions by Nigerian law enforcement agencies. Nigeria is currently undergoing the UN Human Rights Council’s universal periodic review process, and I am sure that we all look forward to the outcome of that and the advances that can be made.
I hope that my hon. Friends will accept the overriding objective of the UK Government, which is to see a stable, democratic Nigeria that governs its resources and its economy wisely, successfully tackles poverty, promotes human rights within its borders and plays an active and positive role both in Africa and globally. I welcome the extremely valuable contribution played by the all-party parliamentary group. It contributes towards developing the importance of this relationship, about which we are all agreed, and helps us to deliver our UK Government objectives. I look forward to continuing that work and seeing progress made.
Small Business Assistance
I am grateful to Mr. Speaker for granting me this debate. It is perhaps on the most important subject for our country at this time. I wanted to call the debate “Help for small companies during the recession”, but in their wisdom the authorities rightly altered it into parliamentary terminology. Whatever its title, however, the message for the Minister is loud and clear. Small businesses are in real trouble. They form an important part of our national and local economies. The Government’s actions could make a lot of difference to whether they survive.
Every day on television and radio news programmes, Government announcements cite figures of billions, tens of billions and hundreds of billions of pounds. For many small businesses, however, the difference between success and failure, between life and death, can come down to £50 or £100 a week, or a bill for £1,000 not being paid on time. It is important that the Minister and his officials understand that. For many people, figures quoted in billions are almost meaningless when it comes to the front line of business survival at local level.
The Minister may be interested to hear that there are 26,000 jobs in the borough of Kettering. Of those, 10,000 are in small businesses. The borough has 3,377 businesses, of which 2,367 employ between one and four people. An additional 501 businesses employ between five and 10 people. It can be seen that 85 per cent. of businesses in my constituency employ fewer than 10 people. As for the sectors in which those businesses operate, 994 or almost 30 per cent. are in distribution, hotels and restaurants; 441 or 13 per cent. are in construction; and 298 or just under 9 per cent. are in manufacturing.
Putting it bluntly, if the small business sector in Kettering goes under, so will the local economy. Kettering represents the heart of middle England, both geographically and in the sense of being the average at many levels. Our experience in Kettering will be typical of many constituencies. I am grateful to have the chance to make these points today.
My job as a Back-Bench Member is to canvass and to gauge local opinion and to present it as best I can to those who make the decisions. Today, I want to make clear the experiences of a number of businesses in my constituency.
RB Travel, a small coach company, tells me that £5,000 is still owed to it by a far larger coach company. It has tried everything to get the bill settled. The payment terms were 90 days, which was difficult enough, but it still has not been paid. If it remains unpaid, 15 jobs will go. There are at least a dozen similar sized coach companies in and around my constituency, and the experience of RB Travel is not untypical, with difficult payment terms being used.
A local fish and chip shop owner, who has been in business for at least 17 years, contacted me to say that during the recession his weekly income has gone down by £40 a week. Even with 50 per cent. small business rate relief, he pays £45 a month in business rates. His plea is for the Government to offer more flexibility, perhaps providing a six or 12-month holiday. For him, the impact of the recession could be terminal—and for only £40 a week. That puts the Government’s £900 billion cumulative rescue package into perspective. That money would save an awful lot of fish and chip shops.
Brenda Briggs, from the Favours day nursery in Moulton, has contacted me. She says:
“As the owner of a small, family run business in a rural setting I have to say that one of the biggest drains on our resources is the Business Rate. We pay almost £9,000 per annum and for that large sum get very little in return. There is of course the infrastructure to be supported—police, fire, etc.—but we have no street lighting, the roads are always in a bad state of repair and we have to pay extra (approx £2,500) to have our rubbish removed. If the government really are serious in their wish to help us then a reduction in rates (or at least the inclusion of rubbish removal within the amount charged) would be a start!”
I congratulate my hon. Friend on securing this debate and on the manner in which he is introducing it. I apologise to the House, but I shall not be able to stay for the whole debate because of my Select Committee duties.
I draw to my hon. Friend’s attention the private Member’s Bill that I introduced only two hours ago, which would automatically make small business rate relief mandatory. Many small businesses—about half—do not know that such relief exists, and are not claiming it. As he says, that can make a life-or-death difference for many businesses.
I am most grateful to my hon. Friend for that extremely helpful intervention—especially as he has the status of Chairman of the Select Committee on Business and Regulatory Reform. I wish him well with his Bill—at least I think I do, as I would rather it did not need to succeed. I would like the Government to adopt his Bill and to take it through the House in Government time. It would be a marvellous response to the debate if the Minister were to make such an announcement today.
Another local businessman, Mr. Sege Rosella of SCM Construction, has written to me, and I have written to the Treasury about his case. Mr. Rosella tells me:
“I am a Director of a small development company based in Kettering…I have been a director of the company for several years and have specialised in developing small ‘starter’ apartments…aimed at the often disadvantaged first-time buyers. I have completed 5 developments during the last 5 years, creating 48 units and enjoyed the financial support of NatWest…Although our previous banking arrangements have been cordial, with all loans taken out by the company repaid in full and on time, recent events in the housing market, driven…by the near collapse of the UK banking sector and subsequent liquidity freeze, have changed the financial model of my current development. I am a small business with a good track record who provides employment for the local community and much needed house building workforce, creating housing that conforms to stated Government policy and meets the needs of young first time buyers and yet due to circumstances that are not of my making, but as a result of a cavalier approach by the major UK banks to credit and risk management, face potential financial ruin unless the RBS continue to provide financial support in accordance with their original commitment.”
Mr. Martin Lee, the managing director of Foden Ibex in Brixworth in my constituency, contacted me to say:
“The VAT reduction was a complete waste of time and money…where the Retailer was already responding to the lack of sales with significant promotions etc. The key issues to restore consumer confidence revolves around Petrol and Energy Pricing”.
Petrol prices, he said, are a feel-good factor, because if people can afford to get out and about they will buy more. He went on to say that mortgage protection for those who lose their jobs would help. He said:
“Diesel prices must be maintained below £1 litre and the tax take reduced accordingly to maintain stability.”
He also wrote to me on the subject of empty property rate relief:
“this is an iniquitous tax on something that is not earning. We have reduced our working area by 9,000 sq feet in a Modern factory and Office setting since the beginning of 2008 in response to what we saw coming. However, as sensible businessmen, we would give our right arm to let this area at a low rent and remove this overhead. In line with the economic situation no one has even shown the slightest interest yet we have to continue paying full rates for an empty property.”
On banks and cash flow, he says:
“We are now facing the same issues on facility renewals, as stated in the press, where the Bank instead of passing on the Interest Rate reductions to us on renewal wish to charge an extra 1.85% whilst the difference between the LIBOR Rate and Base Rate has only increased by 0.2%. This goes against everything that the Government is supposedly trying to do… Banks must be required to pass on the full effect of any base rate cut and maintain current agreements in place.”
My and the hon. Gentleman’s constituencies share an excellent Federation of Small Businesses branch covering Northamptonshire and Leicestershire. Its survey of members shows that the key problem has been access to finance. However, only a week ago, the enterprise finance guarantee for small businesses was announced. It is on a smallish scale—£1.3 billion—but will help. Perhaps his businesses will have access to that, which will prod the banks into action. That is where action is needed. Is that not correct?
As the hon. Gentleman said, we share a Federation of Small Businesses area and both have a lot of time for Maxine Aldred, the local co-ordinator. As often as I can, I attend the monthly breakfast meetings of the FSB in east Northampton. The message coming across is very much as he states. Let us hope that the Government’s proposals will feed through to these very small businesses. However, it has been a long time coming. An extra week or fortnight can make the world of difference between life and death for many small businesses. I hope very much that his optimism is justified.
I was contacted by John S Ward and Co. in Kettering. It wrote:
“We are a firm of chartered certified accountants who have a client in the building trade. Their tax affairs are up to date. In a difficult economy with loss relief available to extinguish the liability they have no tax to pay. This is because they have no profit! Under the construction industry scheme to receive gross payments from their customers HMRC do not take this into account but still insist that large tax payments on account of tax have to be made and then refunded. Effectively an enforced loan to the Government under threat of legislative action. Even with no tax actually payable this loan can take over a year to be repaid by HMRC. The penalty for not doing so is for a small self employed business to lose its gross payment status and attempt to survive after a 20% deduction is made on its sales and paid to the Government reducing their current cash flow - unlike in any other trade. Senior tax inspectors are involved in pursuing this with incredible enthusiasm and diligence. No consideration is allowed for the firm and its work force during a recession.”
As a result,
“a business and the incomes of 40 staff and sub contractors are put at risk.”
The message is that HMRC needs to be more flexible when dealing with businesses in such delicate situations.
My hon. Friend is making a very good case. On the construction industry scheme, for which I appreciate that the Minister is not directly responsible, I had a similar case in my constituency. Clearly, there is a conflict between the Government’s policies on the better payments scheme, which is meant to allow the deferral of taxes, and the CIS, which is now automated. There is a growing number of cases concerning this problem, about which I have written to the noble Lord Mandelson. It is a very important matter. Does my hon. Friend agree that this conflict of policy is in danger of leaving the construction industry even worse off against its competitors than we feared?
As always, my hon. Friend is spot on. The extra difficulty with the construction industry is that we need to pump-prime the rest of the economy. If houses and offices are being built, they will need to be furnished and more money will need to be spent on them. That acts as a prompter for the rest of the economy. If we undercut the construction industry, everything else will topple down on top, so it is a very serious situation.
I have received the details of another case, on the same issue, from Mr. Stephen Mucth, who runs SA Mucth, a carpentry contractor employing 10 people. He has been treated similarly unfairly by HMRC, which wants to take away his gross payment card, because of a former late payment—it was only late by two or three weeks and mistakes were made by HMRC as well. It has apologised, but is still threatening to take away his gross payment card. As his MP, I asked him what would happen if he lost his gross payment card. He replied, “Well, all 10 jobs will have to go.” He told me that last year, across the country, 227,000 small businesses had to go to tax commissioners to appeal their gross payment card status. In 195,000 of those cases, the gross payment card was restored. Huge anxiety is being put on construction and construction-related firms over their tax affairs. In the end, it might be sorted out, but the process of being sorted out is putting thousands of jobs at risk.
Mr. Richard Edwards, from the Abington Park veterinary group, contacted me to say:
“Simply the main problem in my business is cash flow. We perform a referral service to local veterinary practices carrying out complex surgical and medical procedures. We have to agree in most cases to do ‘direct’ claims for those clients sent to us by their own practices and who have their animals insured. This then presents enormous cash flow problems when the modern generation of pet insurance companies ie the big supermarkets and insurance groups take up to 10 weeks to settle the claim and thus us waiting ten weeks for cash settlement. I have to pay my suppliers within 30 days. I am sure that I am not by myself in asking that the government does something about the large companies that have a stranglehold on credit terms.”
He adds that a significant improvement would be for such companies to be legally forced to pay small business suppliers within 30 days of goods or services being supplied.
I was also contacted by Cooney Marine, which is a 40-year-old marine-sector business based in Kettering, and is one of the UK’s leading manufacturers of stainless steel yacht equipment and deck fittings. The firm employs a highly specialised work force capable of operating complicated machinery and skilled in the use of three-dimensional design. It recognises the importance of its work force and operates a successful apprenticeship scheme. Along with many other local firms, it has felt the impact of the current recession. There has been a 30 per cent. drop in orders; it has problems with the timely collection of payments from customers, and business running costs are extremely high. As a business, it needs help with debt recovery and insurance, especially regarding larger companies. That would help to ensure more certainty of income and help to safeguard jobs in the future.
The hon. Gentleman is talking about a problem that is a continuing difficulty for small firms. Prior to entering this place, I had a number of small-firm clients. Before his time here, the Government enacted delayed payments legislation, which gave greater powers to small firms further down the feeding chain to speed up payments. The problem is, of course, that they do not want to press clients, or utilise those powers too frequently, because they will damage their relationship often with major customers. The problem is not legislation, but the difficulty in taking a prime customer to court.
That is absolutely right. However, before my time in this place, we were not facing the worst recession that this country has seen since the 1930s. There has been a paradigm shift in the way in which we need to tackle these issues. It is a national emergency, especially at the level of small businesses. The Government need to think up new initiatives to sort it out, before we have almost complete economic collapse.
Mr. Neil Griffin, from the Kettering chamber of trade and commerce, contacted me highlighting the problem of business rates. He also said that self-employed people should be able to pay at the end of each year, as was previously the case, rather than have to guess what they will make the following year. That would help people to get the money in and to balance the books, before paying tax to HMRC.
Mr. Allsop contacted me about the 800,000 empty properties across the country. He sensibly says that they could be upgraded to help provide low-cost affordable housing and states that something must be done about VAT on the repair of existing buildings. That would be a low-carbon footprint solution to getting the construction industry moving again.
The Federation of Master Builders contacted me about a similar matter. It said that according to Oxford university, there is a new market in reviving existing housing stock that has fallen into disrepair, which could be worth between £3.5 billion and £6.5 billion. The federation recommends
“reducing VAT from 17.5 per cent to 5 per cent. for all building repair and maintenance work”
to get empty properties back into home ownership.
Global Surveys, a commercial surveying firm in Moulton, was formed in 1978 and has achieved national recognition with numerous local authority and Government agencies, as well as with the private sector. It said:
“Due to the present recession, 40 per cent. of staff have been made redundant, two members of staff are on a shorter working week and others are using annual holidays when there is a shortfall of work.”
The company said that its staff
“would certainly benefit from financial support for the shorter working week and reduced holidays.”
It went on to say:
“Staged payments of VAT and taxes without interest charges would help, as would a reduction in taxes…Income tax bills are a huge concern as Global Surveys is due to pay a large tax bill for the previous profitable year in the current ‘break even’ period.”
Paul Smith from Blandford Electricals in Kettering has e-mailed me with a number of points, including the withdrawal of credit insurance cover. He said:
“We suffered a large bad debt in the year 2000 and drew up a company policy of insuring our debt for companies for whom we work to a value of over £5,000.”
He went on to say that recently the company has suffered from a number of small bad debts, and that from mid-2008
“we have been having the cover withdrawn from many of our companies who were covered by this insurance”.
The explanation was
“the current challenging conditions prevailing in the UK economy”,
and he stated:
“We have questioned this and the justification for these withdrawals, many of them being for companies for whom we are in the middle of large contract works. This is now causing us much concern and reducing our ability to trade. We would urge the Government to take urgent action on this matter as soon as possible.”
Paul Smith also highlights the issue of slow payments from public and private enterprises, and makes this very good point:
“The Government has made a big thing of encouraging Public bodies to pay within 10 days of invoice receipt. This works where companies can work directly”
for the local authority,
“for example local schools”.
However, many of these contracts are managed by third parties, which are still offering extended payment terms of 60 to 90 days. Therefore, many of its invoices are not being settled on time.
Is it not the case that, wherever possible, we should encourage Government procurement officers to procure directly from small businesses? Where it is not possible, they should pass any advantage on payment dates down the supply chain. That should be a condition of alterations of payment terms by the Government.
That seems a most sensible suggestion. I do not understand why the Government cannot get on with that straight away.
Paul Smith also highlights the benefits of a local working initiative. He says:
“We would like the Government to pro-actively promote local working in every sector, using local companies for works in their own towns and cities. This would build the wealth back into the towns and be sound ecological practice. We feel the Government should put guideline distance restrictions on local authorities and public bodies to encourage this.”
My hon. Friend mentions a number of companies that are having specific problems and concerns. I suspect that all of us in the coming months will be meeting constituents in the same position. I am very conscious that the Minister is the only uncluttered Minister in the Department for Business, Enterprise and Regulatory Reform in the Palace, and as he has no Under-Secretary of State, we will have to keep on dragging him into Westminster Hall for Adjournment debates, which will be difficult for him. Just as the Home Office has surgeries to which we can take our immigration cases, would it not be sensible for him to organise officials from the small businesses department to have surgeries from time to time to which Members of Parliament can take individual constituency cases—
I am most grateful for that very helpful intervention and bright idea from my hon. Friend. I can recall Lord Rooker from the Department for Environment, Food and Rural Affairs offering a similar facility in recent agricultural crises. I hope that my hon. Friend’s initiative is taken up by the Minister, because it would be extremely helpful for many Members of Parliament.
Baroness Vadera is responsible for small businesses, so that would help with the accountability issue, which is of concern to the Select Committee on Business and Enterprise as well. I had a letter this morning from DBERR, dated 14 January, in the name of the previous Secretary of State, now the Secretary of State for Defence, acknowledging receipt of a letter from me, dated 28 October, concerning a small business in my constituency. His letter says that on consideration, the letter was not for that Department, but for the Treasury. It took nearly three months to get a letter from the wrong Minister referring me on to the Treasury. There is a need for urgency when dealing with the problems of small businesses.
I am most grateful for the idea of Baroness Vadera attending such surgeries because she could help each of us to spot the green shoots of recovery in our constituencies.
The Northamptonshire chamber of commerce kindly came back to me with views from its businesses across the country and with many excellent ideas. It said:
“A good number of our Members said that they would like to see tax relief/concessions for firms at this difficult time. Interestingly, a quarter of our respondents said that the lowering of VAT had been of no help to their business whatsoever, indeed had caused more work for some.”
Another sensible suggestion was:
“Tax concessions for businesses providing pension schemes. Increase or reinstatement of Capital Allowances—a couple of businesses mentioned this one, so that they might have the flexibility to sanction investment decisions.”
It also mentioned corporation tax holidays and reductions. As one member said:
“What is the incentive for companies to develop additional business, sales and profits when as it appears now all we will be achieving is to pay an ever-increasing amount of tax.”
Many members want to extend time scales for the payment of VAT and pay-as-you-earn. There is also a big call for a temporary reduction in business rates.
There is an overwhelming call for a reduction in red tape and bureaucracy, and complaints about
“slow and unresponsive government bodies”.
The chamber said that it has heard of a great deal of frustration
“at the ineffectiveness of the Valuation Office Agency who deal with Appeals against the Rateable Values of business premises. The Agency has a new system of programming which they instituted to deal with Appeals more efficiently, which is in a state of disarray with many Appeals not even entered into the programme.”
The chamber wants
“more flexibility in taking on casual labour—at a time when businesses need to be flexible in where and when work is coming in”,
and for the Government offices to stop erroneous red tape requests. It said:
“One Member cited an example of a survey they received from the Office of National Statistics Annual PRODCOM Survey, Products of the European Community, which seemed certainly superfluous to their business commitments…but they have been warned they might be liable to a fine if they do not complete it.”
Again, the collapse of the credit insurance market was mentioned. The chamber said:
“A number of Members highlighted the huge problem of the ready availability and cost of credit insurance, particularly for firms in the construction sector. Apparently, the insurance industry has withdrawn £10bn of cover from the market.”
There were concerns about the bank lending crisis, and a great deal of scepticism that the efforts of the Government’s latest banking rescue packages would feed down to member firms.
Local authorities can also do things to help their local businesses. I am pleased to report that Kettering borough council has one of the best records in the country for paying local invoices on time. There is also an opportunity for local councils to be innovative in getting money back into the local economy. Despite huge scepticism about the VAT cut, Kettering borough council used the opportunity to introduce what it calls a pop-and-shop parking scheme for shoppers in Kettering town centre. The council was set to save £16,000 from the reduction in VAT on revenue it raises from the parking charges in its car parks, but it has decided to plough the money back by providing a number of pop-and-shop parking spaces in the town centre, in which local car owners can park for an hour at only 10p a go. The idea is to encourage more shoppers to come to the town centre to spend their money in the small shops on the high street.
The county council is prioritising capital schemes such as £22 million for Kingswood school in Corby, £31 million for the Isham bypass, and £29 million for schemes in the local transport plan, to inject capital into the local construction industry.
My hon. Friend is making a fine speech on behalf of his constituents, people in Northamptonshire and the whole country, as always. However, should not another public body—the NHS in Northamptonshire—be encouraging capital growth? Does he agree that it should be building a new out-patient facility in my constituency? The NHS has the land, and the facility is needed, but it seems unable to commit to building it.
My hon. Friend is leading a very successful campaign to highlight the wishes of people regarding where that facility should be built, and he makes an extremely sensible suggestion that I hope the local NHS trust considers carefully. One good piece of news from the local NHS trust is that it has also decided to pay its invoices as quickly as possible, especially to local businesses.
May I make a plea to the Minister on the so-called growth areas? Kettering council has applied, with other authorities, for growth-area funding, and it has been given £22 million over a number of years. Easily, £45 million could be spent on schemes that are already designed and ready to go, which would really help the local economy, especially small businesses. Will the Minister get together with people from the Department for Communities and Local Government to look at ways in which local pump-priming initiatives can be got up and running as quickly as possible?
Finally, on the front line, with our local small businesses, the difference between success and failure is often a few pounds a week. If the Government can get down to the nitty-gritty of business survival and get away from the idea that all they have to do is throw £10 billion at this and £100 billion at that, and look instead at targeted, practical help, many thousands more local businesses will survive the recession than would otherwise be the case.
Order. It is my intention to begin the wind-ups at around 3.30 pm to give adequate time to the Front-Bench spokespersons and the Minister. If we are courteous to each other, and if we look at the clock from time to time, everybody will get in. Five Members wish to speak. Mr. Smith has already apologised to me, and through me to you, Mr. Hollobone, for coming late. He was, I think, detained at a sitting of a statutory instrument Committee.
Let me repeat that apology and say that I was detained—mercifully—for only a short while in the Committee.
I congratulate the hon. Member for Kettering (Mr. Hollobone) on raising this important debate, especially at this critical time. In the bits I heard—I am sorry about the part I missed—he made his points well, notably on the important contra-cyclical contribution of small suppliers and sub-contractors in the construction industry. That is critical as an engine of recovery, and I agree with him about VAT on repairs. At this time of environmental challenges, climate change and economic recession, we must be mindful of the contribution that energy conservation measures can make, both to job generation and to combating climate change. I am pleased with Government initiatives on that, but as the hon. Gentleman said, we must be absolutely sure that the smallest businesses and contractors can benefit.
This debate is an opportunity to place on record my appreciation of the work of small businesses and co-ops in my constituency, and their representative bodies such as the chamber of commerce and the Federation of Small Businesses. I owe a debt of thanks to members of those organisations for their comments, and they will inform my remarks.
We are all mindful that as and when recovery comes, and as we look for job generation on the necessary scale, small businesses, as ever, will make the lion’s share of the contribution. Not only that, but they do the lion’s share when it comes to saving jobs in the face of the present challenges. Those things must be uppermost in our minds.
I know that time is short and that other hon. Members wish to speak, so I shall concentrate on four main points. First, as the hon. Gentleman said, the availability of credit is critical to small businesses. It is galling for small businesses that are under the cosh to see the headlines that tell of hundreds of millions and billions going to the banks, especially because they are under the cosh from the banks that are in receipt of that money. Will the Minister continue to do everything that he can to put pressure on the banks to ensure that credit is available?
With 2012 on the horizon, tourism and hospitality is an important sector that is dominated by small businesses. They need support, especially given the attraction to overseas tourists of the weaker pound against the euro and the dollar, yet I have been advised that at least one major bank has made a blanket decision not to invest in hospitality projects, even when the local bank manager thinks that the project and the business is worth investing in. I am still checking which bank that is, and I will let the Minister know. Clearly, the Government need to ensure through their shareholdings in, and influence over, the banks that such ludicrous blanket policies are not applied and that sympathetic and proper consideration is given to every small business project proposal on its merits.
Secondly, I should like to stress the importance of self-employment. In our area, something like 18 per cent. of the private sector work force is self-employed, which puts a premium on the Government, local authorities and agencies being as user-friendly as possible to the self-employed. There are a number of questions to be asked about that. Highly valued apprenticeship schemes, other training and funding are available to small businesses, but is it as accessible as possible to the self-employed? Could more specific training and assistance be developed to ensure that the self-employed can make the most of their business opportunities? Can action be taken on ensuring that schemes are available for unemployed people to get back into work through self-employment when that is a realistic prospect? People are attracted to the idea of self-employment and explore the idea when they get over the immediate shock of redundancy, and many have good ideas, but they need support to make the most of them.
Thirdly, as more small businesses now operate from home—let us remember that there are environmental benefits from that, such as reducing congestion and so on—will we encourage local authorities and other agencies to be as supportive as possible? There is a balance to be struck, and there could be a nuisance to neighbours, but with imagination and sympathy, some things should be considered. Could we allow small quantities of office waste from home-based offices in the domestic recycling rather than over-policing it? Could more grants be made available for the installation of business lines and broadband for home-based businesses? Could more support be made available for local, community-based business networks, so that small businesses are in a position to help each other with advice and marketing opportunities?
My fourth point was mentioned by the hon. Member for Solihull (Lorely Burt). It is crucial that we tackle small business access to public sector procurement, a long-running frustration for many small businesses. I know that the Government and the Department have made efforts in that direction, but more needs to be done, especially now that the Government are planning, quite rightly, to spend £10 billion on contra-cyclical public works projects to provide economic stimulus and drive job creation.
As I said, those jobs will come disproportionately from small businesses. They need a fair slice of the action when it comes to getting contracts. To offer the maximum return for input, procurement contracts must be packaged so that they can be small-scale and short-term where appropriate; they must be easy to access; and they must be marketed to small businesses at the local level. More could be done to avoid protracted procurement schemes, planning issues and gestation periods, which are often a barrier to small businesses’ access to procurement opportunities.
I endorse the idea proposed by my good constituency colleague from Oxfordshire, the hon. Member for Banbury (Tony Baldry), of advice surgeries for Members and small businesses in their constituency. It is a good suggestion that would enjoy all parties’ support, and I hope for a favourable response.
These are unprecedented times; we all know that. The challenge is huge. The Government are doing a great deal, but they need to do still more to ensure that small businesses can survive, keep providing invaluable jobs and play a full part in recovery. I urge the Minister and his colleagues to take a checklist through the Department’s policies and related areas and ensure as much as possible that they are targeted, appropriate and user-friendly for small businesses.
I congratulate my hon. Friend the Member for Kettering (Mr. Hollobone) on securing this important debate. I have great admiration for the men and women in my constituency who have set up their own small firms. I never had the guts to go into business and set up my own company, because I was always worried about paying people at the end of the month, generating enough money to pay for it all and having enough for my mortgage. I always worked for big business, which provided the safety net of knowing that I would always get paid at the end of the month and that I could look after my family. I admire the men and women with the guts and determination to set up their own businesses.
My favourite expression in politics is that business is the workhorse that pulls the social welfare cart. I use that phrase over and over again when talking to my constituents. If we overload that horse and make life too difficult for him, like the horse in “Animal Farm”, he will collapse under the weight of red tape, taxation and everything else. That is why it is imperative for the Government to do everything possible to ensure that the environment for those businesses is healthy and that they can get through these difficult circumstances.
I am disappointed by the lack of attendance at this important debate. Apart from the Minister and his parliamentary assistant, there is only one Labour Member here. That is disconcerting when we know how much our businesses are struggling. In fact, there are more civil servants here than Labour MPs. If the title of the debate were “Support for Trade Unions”, we would not be able to get into the room, because it would be filled with Labour MPs. I worry about the lack of care and interest in small businesses shown by the Labour Government. Very few Ministers have run businesses or have been involved in them.
What will the Minister do to help councils streamline the tendering process? I get frustrated with Shropshire county council’s tendering process. I recently went to see the head teacher of a primary school, who told me that, if the school wants to get a small wall built, it cannot just get quotes from three reputable companies in Shrewsbury but must go through a hugely long-winded tendering process. It can employ the services only of companies on the special preferred list, many of which are not even from Shropshire but from Birmingham, Manchester or Leeds. More should be done to help local companies in Shropshire get through this terrible crisis.
I went recently to Radbrook primary school, where I saw the state of the young children’s toilets, which were totally inappropriate. I would love to help Radbrook primary school employ the services of a reputable local builder to build that vital extension, but I was told that that was simply not possible, because the school must go through an extremely long-winded process. I recently had a meeting with Shropshire county council’s director of finance, Laura Rowley, who promised me a conference at which local businesses could meet the county council’s procurement officers in order to start more effective dialogue, but it is imperative for the Government to do more.
Shrewsbury is the county town of Shropshire. We depend on people coming into our town to shop, but so many shops and small businesses have “To Let” or “For Sale” signs. Too many of our high street businesses have those signs, which have a lot to do with the high rates that businesses pay. Again, Shropshire receives only a fraction of the funding received by other parts of the country—particularly inner-city Labour constituencies—so the council is grappling with a huge deficit. That is one of the reasons why rates are so desperately high. I have talked to Councillor Judith Williams, one of Shrewsbury’s best councillors, about her shop in the centre of town that sells carpets and furniture. She told me how stressful it is to grapple with the rates and overheads at the end of every month, which is one of the reasons why she has closed it.
It is imperative to support small local shops. In my village of Shawbury, I always make a point of going to Citadel Farms, which is run by a local farmer, Chris Williamson, and his wife. Their farm shop sells only locally produced food and meat. When supermarkets such as Tesco, Sainsbury’s and others are making huge profits, it is important that we all play our part in supporting our small local shops, rather than always going to supermarkets.
Our farming community is facing epidemic problems. While preparing for this debate, I spoke with many farmers who said that they are struggling with huge amounts of red tape. What with the Rural Payments Agency and the Department for Business, Enterprise and Regulatory Reform, they have reams of paperwork to fill out.
The BBC website has an article today entitled “Small firms fighting the economy blues”, which includes 10 or 12 case studies. I often criticise the BBC—I refer to it as the liberal elite—for being in another world. The case studies show how small firms are persevering and doing extremely well in this economy. The BBC is so detached from reality that it does not comprehend the appalling situation faced by our small businesses, which is, as my hon. Friends have said, unprecedented. I look forward to hearing from the Minister about what direct steps the Government will take to help small businesses.
Thank you, Mr. Hancock, and I will do my best to be very brief.
Support for small businesses is absolutely vital, as everyone here today has said. Before I came into Parliament, I ran two separate small businesses, but I cannot believe that there is one Member in any party in the House who has not been contacted by a business that needs some help at this time.
Recent events should have brought the banks, businesses small and large, finance companies and leasing companies together. However, what has happened has bewildered many people, as banks have received billions of pounds of public funding while at the same time tightening the screws on small businesses. The banks have not been supportive or passed on interest rate cuts. Instead, they have done the opposite by raising charges, withdrawing services and removing facilities.
Many years ago, when I was in the States, the motto of the Fleet Bank of America was that a bank should be more than a source for money; it should be a force for positive good. However, we are seeing the complete opposite of that today. In my constituency, Royal Bank of Scotland and Halifax Bank of Scotland are two of the largest employers, yet, at the same time, I am constantly contacted by businesses that use those two banks saying that their bank is not only failing to support their business but being an absolute hindrance by changing the terms of their loans and pulling back on facilities.
Ironically, the owners of a business based in the Chancellor of the Exchequer’s constituency—Edinburgh, South-West—live in my constituency, and that business has been affected. I have contacted the Chancellor and will be delighted to provide the Minister with the full details today, because what is unfolding in the Chancellor’s constituency is an absolute outrage. The banks are receiving billions of pounds of our money, which includes the employees of that certain company, but unless the banks do something that business is in serious danger.
We have seen public money going into the banks to keep them in business, but those benefits have not been passed on. We cannot continue to pump money into the banking system without an assurance that the banks will take immediate action to support small businesses. Time is of the essence.
Today, record levels of unemployment have been announced, and I fear that many companies north and south of the border and across the width of the country are close to the edge. We have an opportunity to keep a lot of small businesses in business, if the Government get together with the leading lights in the banks to ensure that the money works its way into businesses. Those businesses are not asking for charity; they are asking for a level playing field, so that they can provide work and services, employ their employees and pay their taxes, including their company taxes.
Many of these small businesses are running at a profit, but they face severe cash-flow problems. I would be grateful if the Minister, when he is winding up today, were to assure me that the Government will do everything that they can do to ensure that the banks support these businesses. We are not asking the banks to loan money to businesses that are not good investments. Unfortunately, however, unless things change, very good businesses will not be able to trade, because of the banking system’s lack of co-operation.
In the past, owners of small businesses and self-employed people, as mentioned by the right hon. Member for Oxford, East (Mr. Smith), went to the banks and raised money on the collateral of the equity in their homes. That is clearly not happening; the value of homes is going down and the banks have just not been lending. As has been said throughout this debate, what is actually needed is credit. The Government have come forward with a scheme—the enterprise finance guarantee scheme—but that scheme still requires the banks to guarantee 25 per cent. of the loans involved; the Government will guarantee 75 per cent., but the banks will have to guarantee 25 per cent.
This afternoon’s debate is not the opportunity or the occasion for a general beat-up on Ministers. Over the next few months, as the unemployment figures creep up, we will all encounter individual constituency cases where people have problems. I have the hotline numbers for Jobcentre Plus and Her Majesty’s Revenue and Customs, but what I want to know from the Minister is who, given his Department’s responsibilities, will give me authoritative answers to questions relating to small businesses and small business programmes? In other words, if the owner of a small business in my constituency comes to me and says, “I have been to the bank for the enterprise finance guarantee scheme and it has turned me down,” I do not want to spend two months writing to the Minister, getting a letter back from his private office and so on and so forth. I want someone locally. Is that person in the South East England Development Agency, or are they in Business Link? Who has the authority of the Minister and his Department to talk to Members of Parliament and get such matters sorted, because we are in the business of problem solving?
It would be helpful if the Minister were to take up my idea of having occasional surgeries for small businesses. I appreciate that his Department is pretty stretched at the moment in terms of Ministers, because the Secretary of State is in the House of Lords, one Under-Secretary of State is in the Commons and two other Ministers are shared with other Departments. I understand that quite a heavy work load has fallen on his shoulders. However, rather than feeling that the only way in which Members can get heard is to secure Adjournment debates, if we were to have regular surgeries to bring generic problems to him, it would help us, and I suspect that it would help him and his officials.
It is a great pleasure to serve under your chairmanship, Mr. Hancock. I particularly want to thank the hon. Members for Banbury (Tony Baldry) and for Edinburgh, West (John Barrett) for their courtesy in providing me with the time to speak in the last few minutes before comments from the Front-Bench spokesmen and the Minister.
Debates such as this provide an opportunity to give constructive feedback to Ministers about how their initiatives to provide support for both small businesses and the economy as a whole are having an effect or otherwise. I think that the Government are determined to move as quickly as possible in fast-moving markets to provide effective support. However, it also needs to be borne in mind that the uncertainty that is created for small businesses, which are perhaps awaiting yet further radical action by the Government, often means that such businesses wait before making decisions, which in itself leads to a reduction in economic activity.
It is clear from the feedback that I have received from smaller businesses in Croydon that there is a real welcome for the announcement by the Government on the delay of corporate taxation payments. That announcement is going down very well, and it is certainly helping to oil the wheels of business. However, I have received another important piece of feedback from businesses about the Government’s new loan guarantee scheme. The immediate impression is that the maximum amount of turnover to qualify as a small business under the scheme, which is £25 million, means that many banks are putting an emphasis on those companies that have turnovers between £20 million and £25 million, which means that businesses with lower turnovers are not necessarily seeing the benefit of that important Government initiative. Perhaps further consideration needs to be given to the fine tuning of the operation of the scheme when, in effect, the very generous approach that the Government have taken in providing money is not necessarily delivering the improvement that they would like to see.
For small businesses dealing with financial exigencies in the coming months, because they will no longer have the assets to call upon to provide support for their businesses, it is likely that there will be more company voluntary arrangements, or CVAS, whether those are personal arrangements or some kind of compromise in terms of the business. That is a very real problem.
I am very grateful for the input that I have received from Croydon Business and from other businesses within Croydon. In many ways, Croydon is an useful example to consider in order to gain an immediate view of how the Government’s initiatives are getting on. We have a large public sector and some very large businesses, such as Nestlé, but south London is typified by a huge range of very small businesses and even micro-businesses. It is interesting to see the way in which Government policy is having a positive or negative effect on the performance of all those businesses. I am particularly grateful for the work that is being done by a gentleman called Jeremy Frost, whose business is much busier than many others because it deals with the challenges of potential insolvency, which is unfortunately a growth business in Croydon.
It was suggested earlier that the effect of the VAT cut has been very small, and I think that that is the case in terms of the efficacy of the approach. However, that does not necessarily mean that that approach to helping retailers is a bad policy; it is just a matter of scale. The Government need to remember that a £20 billion stimulus to the economy is in fact very small, when one considers that the effect of the decision to crash Lehmans into an emergency default, rather than a managed default, is estimated to have cost about £70 billion in unexpected losses.
Often, it is a matter of degree. Perhaps Government policy on helping small businesses and the economy as a whole is developing with the realisation that it has to be about scale. However, I do not understand and would be interested to know why the Government did not feel able to pursue the bad bank solution in dealing with this week’s crisis in the financial markets.
I congratulate the hon. Member for Kettering (Mr. Hollobone) on securing this important debate. He has presented a moving and clear picture of the plight of small businesses, as have other hon. Members, so I shall not prolong the agony by describing small businesses in my constituency. Instead, I shall comment on the solutions that hon. Members have suggested and shall give a couple of my own.
The hon. Member for Mid-Worcestershire (Peter Luff) talked about the small business rate relief being paid automatically to small businesses. That was a valuable suggestion, and I should like the Minister to comment on why that would not be possible, because it seems an obvious thing to do. The smallest businesses are often those with the least access to information about the help available to them, so it is incumbent on the Government to help them as much as possible, as they need help the most and are the least likely to know about it.
Empty property rate relief has been mentioned, and I have tabled an early-day motion on that today. The rate relief for rateable values of up to £15,000 is extremely welcome, but one does not get much, in terms of rateable value, for £15,000. If one is in a town centre, or is lucky enough to be in the beautiful constituency of Solihull, that £15,000 really does not cut it. Today, I have asked hon. Members to sign my early-day motion, which says that we should consider extending that upper limit of £15,000. Perfectly good properties are being demolished and other properties are being offered for peppercorn rents by property owners who are unable to afford the rates on properties that are not generating any revenue. A gentleman in my constituency is offering warehouse space at 50p a square foot. That is unbelievable, and we must do something, otherwise there will be no empty properties available, come the upturn, to facilitate all the things that we need.
We have heard some tragic stories about the banks. I shall not single out the particularly guilty ones, but their insensitive and inflexible treatment of some small businesses beggars belief. They are not doing what they have been asked to do and are reducing overdrafts even when they are not being used. They are reducing credit terms and increasing costs. They are withdrawing credit and loans altogether, without even letting people know and without considering what effect those actions will have on jobs and on people’s lives.
The hon. Member for Kettering mentioned cash flow and the lengthening of payment dates. Small businesses are being squeezed in both directions—by the banks and by the companies that they supply, which are increasing how long they take to pay—so they are stuck between a rock and a hard place.
On solutions, the Government have done a number of brave things to try to help business, and we should acknowledge all that they are trying to do. For small businesses, in particular, we have had the enterprise finance guarantee scheme, which will be okay as long as the money flows through. I am worried about how long it often takes for Government-initiative money to reach the individuals who desperately need it. If someone has been in a road accident and is bleeding to death, one would not make them fill in a long questionnaire before applying the tourniquet. It is important to make sure that that money reaches those small businesses as quickly as possible.
The Government’s initiatives support small and medium-sized business, but not large business. I mention large business because every large business has a supply chain of small businesses, and those supply chains are suffering at the moment—none more so than the motor industry. For every job with a car manufacturer, there are about five in the supply chain, so it is of great concern that the Government have not made any announcements about the car industry. That is a particular concern in my constituency, where Land Rover has already laid people off, and we have heard about Honda postponing further production for another two months. The situation could not be more urgent for all employees in the UK.
The Government have said that they will spend £10 million on development, but only 16 per cent. of contracts with Government bodies go to small business. The Federation of Small Businesses has suggested that organisations that spend our taxpayers’ money could make tender contracts smaller. As I said to the hon. Member for Kettering earlier, if the Government intend to pay on time, that must be conditional on a faster payment passing down the supply chain, so that the big fish do not get fatter at the expense of the small individuals who, if I may mix my metaphors, are trying to get the crumbs from the table. Will the Minister tell us how many shovel-ready contracts the Government are in the process of giving the green light to?
On procurement, the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) talked about the barriers to becoming an approved supplier. There is something called the small business concordat, which has been signed up to by a small number of local authorities. In a recent White Paper, the Government expressed the aspiration that 30 per cent. of their procurement should go to small local businesses. Will the Minister report on how they are doing on that target and how that is being measured? They are spending our money, so will the Government consider improving the procurement requirement that often closes the door in the face of small business?
Trade credit insurance has been mentioned, and it is terribly, disproportionately damaging to small businesses that cannot ensure their credit sources. The Government have promised to look at improving the situation, so will the Minister tell us what progress is being made?
On apprenticeships, there is another Government initiative to create more. Some 69 per cent. of all apprenticeships are with small business, but the FSB has found that only 5 per cent. of its members are aware of potential wage contributions toward apprenticeships. We have talked about automatic payments. Could not whatever a business is entitled to when it takes on an apprentice be levied automatically?
On flexible working, it is much easier for a small business to agree flexible, part-time working than to lose people altogether. By doing so, they can keep skilled workers on stream and at least keep people in some work if not in full-time work. The FSB has asked for tax exemptions for people working for up to 15 hours. Will the Minister ask for suggestions for tax relief, especially for small businesses, so that flexible working can easily be facilitated? As we know, administration is five times more time-consuming for a small business than for a larger business.
In conclusion, nothing is going to affect this economy until the banks start lending again. The British taxpayer is now in hock for unspecified millions of pounds, and the Government have written a blank cheque. We already own 70 per cent. of the Royal Bank of Scotland. If we nationalise the weaker banks, it could release the stranglehold on lending that we have in this country. The Government can do lots more, and hon. Members have provided many good suggestions. I will sit down now to allow the final speaker to contribute and the Minister to give, I hope, constructive suggestions in his response.
I also congratulate my hon. Friend the Member for Kettering (Mr. Hollobone) on securing this timely debate. As all of us know, he is an assiduous Member who works comprehensively for his constituents; they are fortunate to have such an effective representative.
A number of contributions have described how many constituents’ small businesses are facing a harsh economic winter and how falling demand and shrinking credit means many fear for their survival. The contributions of my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) and, obviously, my hon. Friend the Member for Kettering brought out the human cost of what a recession really means. No wonder, therefore, that ministerial talk of green shoots was met with such derision last week. The problem is that such comments say to the public that the Government are now detached from their world.
As someone who started my own firm at the bottom of the last recession, I understand the stress and strain that many of the small firms that we have talked about today are facing. That is why last October, my Conservative colleagues and I called for action to help cash flow and action on working capital. That is why last November, we called for a national loan guarantee scheme of £50 billion to underpin bank lending to business. The scheme was simple and open to all businesses in all sectors. Its aim was to support good firms through tough times. My hon. Friend the Member for Banbury (Tony Baldry) rightly highlighted the importance of that issue.
Last week, the Government finally offered us a pale imitation of that scheme. I am pleased that they have finally realised the need for it, but why has it taken so long? The Federation of Small Businesses has told us that 10 businesses go bust every day. Why has it taken Ministers two months to draw the scheme together, and why limit the scheme to cover for £20 billion, not £50 billion? Also, why limit its remit to selected firms, as the hon. Member for Solihull (Lorely Burt) pointed out? Martin Weale of the National Institute of Economic and Social Research has said:
“My guess is that it won’t be enough. After a few months it will look like another of the government’s half measures.”
So, it is clear that more needs to be done, and the right hon. Member for Oxford, East (Mr. Smith) was right to say that. May I say that I strongly support the mention of co-operatives? In this particular instance, they have an important role to play and he was right to touch on that. He was also right to mention home-based businesses.
Action needs to be taken, which is why in October and November we started to set out some practical ideas that could help small business. First, small and medium-sized enterprises need to be able to defer their VAT bills for up to six months. I recently met a logistics firm that is not dissimilar to the one already mentioned. It told me that the ability to defer VAT would be fantastic—after all, its quarterly VAT bill is about £90,000—and would provide immediate flexibility in relation to its bank balance.
Secondly, the smallest of employers—those with up to five employees—should be able to cut their payroll by 1 per cent. for at least six months. A typical firm with, for example, four employees would save about £600 over that period. That is not a huge amount, but as my hon. Friend the Member for Kettering said, for many businesses it is the difference between being in business or not being in business next month.
Thirdly, I have personally helped thousands of eligible small businesses claim the rates relief to which they are entitled. As we have heard, less than half of eligible small businesses claim that relief, yet it is worth up to £1,100 per annum. To help them, I have put on the web a simple online checker that even a technophobe such as myself can handle. It is very easy: someone puts in their details and their postcode, and they can see immediately whether they are eligible. They then print off the form and send it to their council. I am pleased to say that hundreds of firms have already used that service, which can be found at www.conservatives.com/smallshops. The point has been made that business rate relief should be automatic. As has been mentioned by a number of hon. Members, I hope that the Minister will respond to that directly. It is automatic in Wales, but what about England?
The actions I have talked about contrast sharply with what the Government have been doing. They have been talking a lot—there have been lots of announcements and press releases—but not doing much. For example, on funds from the European Investment Bank, which I think has been mentioned, the Prime Minister promised us in a press release of 10 September that he would get EIB funds flowing “as soon as possible”. In October, he said that again at the EU summit and repeated the pledge in November. Our competitors in France, for example, had already given €300 million to their businesses by the end of October. By December, the Italians, the Spanish and, indeed, the Czech Republic had handed more than €550m to their small firms. Yet when I asked the Minister in December how many millions of pounds our businesses had received, he was unable to give any examples. So, four months after that first press release, can the Minister tell me how many businesses have received the money and what proportion of the £1 billion due has been paid to British firms?
I have mentioned how Government dithering has failed to assist small firms, but unfortunately they have also put policies into practice that are actually hurting small firms in our constituencies. Let me offer three simple examples. First, the Government have changed the rules on capital gains tax, which will cost owner-managed businesses £250 million in this tax year alone. Secondly, as mentioned, they have levied business rates on empty properties, which will cost £700 million this year alone. Thirdly, as we have heard, we have, of course, also had the temporary cut in VAT announced in the pre-Budget report. We were told soundly by the Chancellor and, indeed, by the Prime Minister that that would kick-start retail sales and save the high street. Well, the British Retail Consortium has reported that December 2008 sales were the worst since records began—that was after the cut in VAT. Sir Stuart Rose at Marks and Spencer said it made “no material difference”. The cut in VAT not only failed to kick-start the high street, but cost business £300 million to implement. Those three policies—the change in VAT, the change in CGT, the rise and application of business rates to empty properties—mean a £1.25 billion increase in tax bills, just when businesses are facing one of the toughest economic climates that they can possibly imagine. I hope that the Minister will tell us how those policies have helped small firms.
This has been a timely debate and I know that hon. Members are keen to hear the ministerial reply. We have had some excellent contributions, which have highlighted the human aspect of what a recession is all about. I genuinely hope that the Government consider the outstanding suggestion of my hon. Friend the Member for Banbury that they should have a hotline and that Ministers, possibly including the noble Baroness Vadera, should have surgeries. That is important and I hope that the Minister responds to it positively. It might help ministerial work load as well as small firms, so I look forward to his positive reply.
The bitter truth is that Labour’s schemes for small firms are not working. Recapitalisation failed to get credit flowing; the £1 billion that we were promised from the EIB has failed to materialise; and the VAT cut that was meant to help the high street has failed to do its job. Conservatives understand small businesses—often from our own practical experience—and we believe that they deserve better. They need practical help, their costs cut and Government off their back. Given the chance, we, as Conservatives, will help small businesses through the tough times and onward, once again, to prosper and get Britain working.
Thank you for your chairmanship this afternoon, Mr. Hancock. I, too, thank the hon. Member for Kettering (Mr. Hollobone) for successfully applying for this debate. He is absolutely correct to say that this is an issue of huge importance to our constituents and, indeed, to the whole country. He went through a number of examples of problems that individual small firms in his constituency face. If I gaze into my crystal ball, I can see some copies of Hansard being posted to various constituents and small businesses in the Kettering area, and, as Minister with responsibility for postal services, I look forward to that small increase in revenue for a very important national business. I also thank all parliamentary colleagues who have spoken today, raised various issues on behalf of constituents or small businesses and made suggestions. I shall try, in the limited time available to me, to set out the Government’s approach and to answer some of those points.
I must pick up on the onslaught about the number of Members in this debate. There have been, at different points in the debate, four Members on the Government Benches, and I can count four Conservative Members, two Liberal Democrat Members and one Member who sits as an independent. Small businesses are worried not so much about how many Members are sitting in the Chamber, but about their own fate. The hon. Member for Hertford and Stortford (Mr. Prisk) said that the Opposition understood small businesses. Well, that is a claim about which people will make their own judgment. All I can say is that many more small businesses exist now than when the Opposition were in power and that those businesses employ more people and contribute a huge amount to our national income. Some 13.5 million people—up by 1.3 million—are employed in small businesses, and they contribute about one half of our national output.
We heard in the debate that small businesses face significant problems due to the global credit crunch. First, we must remind ourselves of its extent and scope: the international banking system has been shaken to its very foundations in the past year; 1 million jobs have been lost in the United States in the past two months; Chinese exports are down; and the International Monetary Fund predicts that world output will fall this year—for the first time since the end of the second world war. The global economy has not experienced such shocks in modern times, and they are unprecedented in their scope, scale and confluence, which is why Governments throughout the world are having to act to support banking systems, credit and their economies.
I turn to some of the measures that we have taken. In October 2008, we recapitalised the banks. There is an important point to make, because the hon. Member for Kettering talked about the large sums involved. It can be confusing to our constituents to hear sums that involve tens or hundreds of billions of pounds. First, however, it is not all direct Government expenditure but money that has been injected into the system in return for assets, charged at commercial rates, or taken the form of temporary loans. We should not give the public the impression that the huge sums announced represent normal Government expenditure that is spent once and never returned either to the Government or to the taxpayer.
Secondly, the recapitalisation was about intervening to save the banks not just for banks’ sake, but for the whole economy’s sake, because banks serve as the foundation of an efficient market economy and as the oil that allows the wheels to move. Without a stable banking system, I dread to think what the consequences would be for the small businesses about which the hon. Gentleman is quite rightly concerned.
The Ernst and Young ITEM Club’s chief economist noted recently:
“It is easy to criticise…the Government’s policies… However, we must not lose sight of the fact that they have prevented the collapse of the monetary system as we know it”.
That is the action that we took in October. We announced further measures in the pre-Budget report. I shall not go through them again here, but colleagues will know what they are: introducing empty property relief for properties with rateable values up to £15,000; and allowing businesses to apply for flexibility when paying tax bills. So far, more than 20,000 businesses that contacted the business payment support line have been given agreements to delay payment of tax, amounting to more than £350 million of tax. I thank the hon. Member for Croydon, Central (Mr. Pelling) for reflecting the positive impact that that has had on some businesses. As the Chancellor said at the time, it is important that Her Majesty’s Revenue and Customs shows some flexibility towards hard-pressed small businesses, and those figures show that that is happening and that there is some understanding of their difficulties.
I turn to the package that my noble Friend the Secretary of State for Business, Enterprise and Regulatory Reform announced last week.
I am grateful to the Minister, who is being generous with his time. He touched on rates, but will he respond to the question that several Members have asked—namely, are the Government minded to make business rate relief for small businesses automatic in England as it is in Wales?
I am always interested when the hon. Gentleman raises the issue of small business rate relief. I gently remind the House that the Opposition voted against the introduction of that relief, and that, when the vote took place, the hon. Gentleman was present in the Lobby trying to stop its introduction. I am interested in his conversion, which is always welcome, and, of course, we will consider representations on all those matters. I am sure that my colleagues at the Treasury and at the Department for Communities and Local Government will consider representations on the issue, but now, I shall return to the package that we announced last week.
We announced three measures, but I shall mention just two. First, there is the working capital scheme, which is about sharing risk between the Government and banks to free up lending. It is not a scheme to which individual companies apply, but it allows banks to put together portfolios of lending in which the Government can share the risk, freeing up lending to companies with turnovers of up to £500 million. Secondly, there is the enterprise finance guarantee, which will support up to £1.3 billion worth of bank loans to companies with a turnover of up to £25 million. That is a scheme to which companies can apply directly. Through all that, we are trying to free up lending to small businesses without replacing the proper banking function of judging who is entitled to a loan and who is not. We introduced those measures precisely because we understand the difficulties that small businesses face.
Turning to the issue of information and help for ordinary businesses and for hon. Members, I am quite happy to discuss with my colleague, Baroness Vadera—a Minister in the Department that covers small businesses— the suggestion that the hon. Member for Banbury (Tony Baldry) made. I agree that Members should be able to approach the Department, and I hope that it is clear that I am always available to Members of whatever political stripe if they wish to approach me about a constituency issue. That has always been the case, and we will do what we can on that front. Businesses should go to Business Link to check for information on the schemes. There is a website, businesslink.gov.uk, and a helpline, 0845 600 9006.
I have been able to respond only to some points, as is always the case with these debates, but, suffice it to say that we understand the importance of small businesses; we have taken action to support and to help them; and we will continue to do so in these difficult economic times.
Sitting suspended for a Division in the House.
I am grateful for the opportunity to report to the House on my recent visit to Gaza. Also, I wish to press the Government to do more to uphold international law.
It is my view, and that of many others, that if international law were upheld, there could and would be two states in Palestine, and we could look forward realistically to peace, but Israel constantly flouts international law, and the United States, the United Kingdom and the whole of the European Union collude in that. Thus, Israel concludes that might is right and uses its massive armaments to kill and bombard any who resist the constant expansion of its borders and land.
Currently, we face the prospect of decades of bloodshed, conflict and bitterness in the middle east. We also see the authority of international law and the moral authority of the United Nations being eroded. That, alongside growing environmental strains and population growth in the poorest countries, promises a grim and disorderly future if we continue on the path that we are on.
I reported briefly in the topical debate on Thursday 15 January on my visit to Gaza with a group of European parliamentarians in early November. I and other Back Benchers had six minutes to speak in the debate. Given that the Conservative and Labour leadership agree on the policy towards Israel but are out of tune with the views in the country, such limited time for Back-Bench dissent is unhealthy, but it is the reality that the House of Commons has experienced during the terrible crisis in Gaza.
I had a letter from a member of the public who was much distressed by events in Gaza. He watched the whole of the topical debate and was shocked that it ended with no vote and no action. I agree with him that the debate on Gaza demonstrated the weak and increasingly feeble state of the House of Commons.
During our visit to Gaza, we witnessed the shortages of food, paper and pens in the United Nations Relief and Works Agency schools, and shortages of water, pharmaceuticals and other medical necessities. Even more dreadful, the sewage systems are not adequate. Raw sewage is pumped into the sea. There are plans for new sewage treatment plants, civil engineers are available and donors’ funds have been committed, but Israel will not permit the materials to be imported. When it rains, sewage floods into people’s homes, and because the Israeli navy fire on the fishermen if they go beyond a five-mile limit, hungry people eat polluted fish and are constantly ill. Half the children of Gaza are anaemic, and, even before the recent bombardment, large numbers were severely traumatised by the endless threat of violent attack.
Israel also controls the import of EU-provided fuel for the power plant that gives light and power to Gaza. As everyone knows, Israel has partly bombed the power plant, but, as we left, it blocked all imports of fuel, and Gaza was cast into almost total darkness. The hospitals were run-down and lacking materials even before the terrible strains of coping with the injured from the three weeks of bombardment that have just ended.
Gaza is a prison. It is a large, crowded Bantustan of 1.5 million people on a strip of land 25 miles by six or seven. Seventy per cent. of them are refugees who were ethnically cleansed by the Israelis from other parts of Palestine. Half of them are children. Israel withdrew its settlements in September 2005, but it controls the borders and access to the sea and air. It has bombed the airfield, which therefore cannot be used. Young people with scholarships cannot get out to take up their places, and sick people who cannot be treated locally cannot get out for medical care.
Gaza is a prison—and that, of course, is why the tunnels exist. We went to Rafah to see them. Yes, some explosives may come through, but mostly what comes through are the necessities of life. British prisoners in Nazi prisoner-of-war camps built tunnels; Sarajevo built a tunnel—imprisoned people build tunnels. Now Israel has destroyed Rafah and the tunnels. It wants complete control of Gaza and for the people to lie down abjectly and accept their imprisonment.
The tightening of the siege with full support from the EU, the UK and the US was the result of the Palestinian people daring to vote in internationally scrutinised elections for a majority of Hamas parliamentarians in January 2006. Following that, the Palestinians formed a Government of national unity, but Israel, supported by the US, did not want that. It is a matter of record that the policy supported by the UK was to incite division between Fatah and Hamas and to support fighting in Gaza. I understand that Britain supplied arms to the Fatah forces—that comes from authoritative sources.
In response, Hamas took over Gaza. UNRWA staff told us how much safer life was without the conflict and roadblocks, but then the world besieged Gaza, imposing collective punishment on the people. That is an offence in international law, which lays down how people should be treated in occupied territories, but, as I said, none of the high contracting parties to the Geneva convention, including the UK, stand up for international law in the occupied Palestinian territories.
I have listened with great interest to the description of the awful humanitarian situation in Gaza. Is it the case that the readiness to ensure that breaches of international law and alleged war crimes are investigated and prosecuted is critical not only to the future of the middle east, obviously, but to our many constituents who care about the matter, especially those in the Muslim community, and much more widely as well? The perception of double standards damages the prospects for international peace and can also sour relations between the Islamic world in general and the rest of the community. Building bridges by ending those double standards is critical for the way forward internationally and for solidarity at home.
I agree absolutely with my right hon. Friend. I will come to that point and make that argument. It is the duty of parliamentarians and the public in the UK, and across Europe, to hold our Governments to account. The fact that they do nothing to enforce international law is a green light to Israel to keep breaking international law. The people of this country, particularly young Muslims, are angry about that and see our Government as engaged in double standards. That causes rage everywhere.
We are told that the bombardment of Gaza was necessary because Israel has a right of defence against Hamas rockets. That justification of the attack is deeply dishonest. It is as big an untruth as were the claims about the need for war in Iraq. Two sets of facts are important when we assess Israel’s excuse for its attack. For the past seven years, from when rocket attacks began up to 27 December when Israel attacked Gaza, those rockets killed 13 innocent Israelis and one foreigner. In that time, Israel killed 2,990 Palestinians in the Gaza strip, 634 of them children. Large numbers of those killed were innocent civilians, including many women and children. Those figures are provided by the Israeli human rights organisation, B’Tselem. There is no possible justification for us to say that Gaza was attacking Israel and Israel was not doing anything. The balance of attack and killing was that Israel was doing more harm to Gaza than the other way around.
A way to stop rocket attacks was available without the bombardment. Negotiations had led to a halt to them. Egypt negotiated a six-month ceasefire from June 2008, which Hamas held to, and the rocket attacks stopped. But then, breaching the terms of the ceasefire, Israel tightened the siege and, in early November, it broke the ceasefire with a bombing attack that killed six Hamas members. Let us be clear: Israel kills massively more innocent Gazans than vice versa and negotiations had stopped the rockets. There was no case for Israel’s attack, which was clearly long-planned.
What is to be done about this dreadful situation that we are now in? All who defend Israel’s position say that we must get back to the peace process, but the truth is that there is no peace process. Western policy is to divide and rule the Palestinians and, even though President Abbas and his Fatah faction do all that is asked of them, no concessions are made and the situation of the Palestinians on the ground gets worse still. It is clear, from the facts on the ground, that Israel has no intention of allowing the Palestinians their state on the lands that belong to them under international law and were occupied by Israel in 1967.
In the Jordan valley, in East Jerusalem and on the west bank, massive settlements and small settlements established by extremists but protected by Israeli forces stand alongside the wall, which takes an illegal route. In addition, the closures and the Israeli-only roads show that Israel is taking still more land and confining the Palestinians to a series of Bantustans, where they are locked in and constantly humiliated if they try to move, and economic activity is steadily crushed.
Prime Minister Olmert said that without two states there would be an international demand for an end to this apartheid system. Indeed, many South Africans, including Archbishop Tutu, have said that the situation is like apartheid in South Africa, only more brutal. Therefore, there are ever more calls for one state for all the people of Palestine, in which Jews and Palestinians, Israelis, Arabs and Christians would live side by side. But of course the demography shows, as Prime Minister Olmert pointed out, that Israelis would soon be in a minority. He said that there should be two states, but he does nothing to bring about two states.
I conclude, with many others, that the two-state possibility is almost certainly dead. That means a long period of conflict and that, internationally, we must mount another boycott, divestment and sanctions campaign across the world. That will take time and create great division, but if our Governments will not stand up for decency and international law, then the people must do so.
I have a great deal of respect for the right hon. Lady, but does she not agree that all the international community has now more or less agreed that there should be a two-state solution? Is it not now up to the international community? It is up to Americans to pressurise the Israelis and whoever has influence with the Arabs, particularly Iran, to talk to them and make sure that this never happens again. Then we can get back to the peace process, put in the aid that is needed to rebuild Gaza, and, hopefully, we will not have this situation again.
I agree with the hon. Gentleman that the two-states idea is the answer, but it is eroding on the ground and no one is doing anything—including our Government and the hon. Gentleman’s party’s Front Bench. No one is standing by international law, which says that the lands occupied in 1967 cannot be incorporated into Israel and should be the basis for a Palestinian state. That is the answer, but it is disappearing. The world should be more troubled by that and should take more action to restrain Israel. That is the argument that I am trying to make.
Those who are briefed by Israeli sources tell us, as do the Government and the Opposition Front Benches, that Hamas is a terrorist organisation that refuses to recognise Israel, refuses to accept previous agreements that have been negotiated and refuses to end violence. Our delegation met Prime Minister Haniya when we were in Gaza and he said that Hamas had answered each of those demands. It had ended violence by agreeing to and standing by the ceasefire, as I have described. It recognises that the Palestine Liberation Organisation had made agreements—notably, Oslo—and thought that, although it was a bad agreement, it was properly made. I agree that that is a bad agreement and that the Palestinians have lost out on it, because it has not been completed. Hamas also said that it would recognise a long-term peace if Israel would recognise a Palestinian state on 1967 boundaries. It has met the demands of the international community, but the international community is not interested, will not meet and discuss the matter, and will do nothing to restrain Israel and hold it to account under international law.
I am afraid that the truth is that Israel does not recognise the Palestinian right to a state, as their reservations on the road map make clear. It is on the record that Israel certainly has not renounced violence and does not comply with Oslo or the road map, in that it will not allow a Palestinian state to be established.
My request to the Government is that they cease their unbalanced policy and stand up for international law, on the basis of which we could achieve peace. I ask the Government, first, to halt all arms sales to Israel immediately. There is little doubt that British-supplied arms helped to kill people, including children, in Gaza. Arms sales should be halted.
Secondly, the Government have said that the allegations of war crimes during the attack on Gaza must be investigated. There are serious allegations from very authoritative sources. I have taken legal advice on this matter, along with Baroness Tonge in the other place, which I am sending to all Members of Parliament in the UK. We will also circulate it across Europe. Briefly, that advice is that, because Israel did not sign up to the jurisdiction of the International Criminal Court, it is necessary for the Security Council to fulfil the role envisaged for it when the Rome statute of the ICC was concluded in 1998. That statute provided that, when some suspects were not from states that were parties to the treaty, instead of a special ad hoc tribunal, as in Rwanda and Yugoslavia, the Security Council should refer the case to the ICC, as in the case of Darfur.
There have been serious allegations of war crimes, so it is right that all such allegations against all sides should be thoroughly investigated. I challenge the Government to refer the case to the ICC through the Security Council. Then we will see whether President Obama is going to stand up for international law and for the prospects for peace in the middle east, and abandon the US policy of vetoing all resolutions that in any way criticise Israel. An honourable Britain would do that.
Following on from that point, sadly, although the Foreign Secretary and Lord Malloch-Brown have said that all allegations of war crimes must be investigated, Amnesty International informs me that it is widely believed that the UK, in the European Council of Ministers, is not being supportive of proposals for investigations into violations of international law because that would set a dangerous precedent for UK military operations across the world. That is shocking. Are UK Ministers saying one thing in Parliament and another in Brussels? If the Minister cannot answer fully now, I hope that she will ensure that the Government’s explanation is made available quickly.
In addition, the European Union has a trade treaty with Israel that gives it privileged access to EU markets. That treaty contains human rights conditionalities. Israel, even before the attack on Gaza, was in constant breach of the Geneva convention in its behaviour in the occupied territories, as the International Court of Justice spelled out in its 2004 advisory opinion. The route of the wall, the settlements, the closures and much else are a litany of breaches of international law, about which nothing is done.
I want to know why the Government and the rest of the European Union do not invoke the conditionalities in the treaty to require Israel to abide by international law. Instead, the EU proposes enhancing its relationship with Israel. The message is clear—that Israel can go on gravely breaching international law and no action will be taken.
Then we have the Geneva convention. It imposes duties on all high contracting parties to take action to impose its provisions for the treatment of people in occupied territories, yet the UK does nothing.
My conclusion is that UK policy is completely unbalanced, fails to uphold international law and therefore sends a constant green light to Israel to do as it wishes. As my right hon. Friend the Member for Oxford, East (Mr. Smith) said, that is a shocking example of double standards and hypocrisy. It is also a recipe for continuing conflict in the middle east and the erosion of international order.
I and others have been consulting lawyers about whether we can take action to require our Government to comply with international law and to require the EU to invoke the human rights conditionalities in the trade treaty. I am told that the tradition of our courts is that they do not interfere in foreign policy, but I suggest that we must take this further. If the Government will not uphold their duties under international treaties and the Geneva convention, and as Parliament has no power in this matter, surely it is time for the courts to act.
I welcome the debate and congratulate the right hon. Member for Birmingham, Ladywood (Clare Short) on securing it, because it provides a further opportunity for hon. Members to discuss the situation following the ceasefire. I should like to pick up on some general points and, if time permits, to refer to some of the specific points that she made.
Thank you, Mr. Hancock.
The UK was active both in private and in public in working for a ceasefire. With our support, the UN Security Council, on 27 December, called for an immediate halt to the fighting. That was followed by intensive work by my right hon. Friends the Prime Minister and the Foreign Secretary with their international counterparts to deliver the ceasefire. The focus of international efforts now, rightly, is to ensure that the ceasefire holds.
Without doubt the end of the hostilities will be welcomed most by the people of Gaza. We see day in, day out on our television screens the extent of the humanitarian tragedy caused by the fighting. To meet the urgent and profound humanitarian needs of the Palestinian people, on Monday the Prime Minister announced the trebling of the UK’s humanitarian budget for Gaza, with an additional £20 million in aid to support the International Committee of the Red Cross to supply medical services. It will also deliver food, fuel and vehicles, and support desperately traumatised children. The UK is acting to stabilise unexploded bombs and, in the longer term, to help to rebuild destroyed homes. The UK also provides long-term support to the Palestinian people. In December 2007, we announced £243 million in aid over three years.
It is without doubt early days, but the ceasefires declared by Israel on Saturday and Hamas on Sunday, although fragile, appear to be holding. We welcome the announcement by Israel in the past 24 hours that its troops have now completely withdrawn from Gaza. The Hamas ceasefire must be accompanied by immediate action to ensure that there are no further rocket attacks into Israel. More than 300 rockets and mortars were fired into Israel between June and December, and a further 300 rockets were fired at civilian Israeli targets over an eight-day period.
I think that the figures that the Minister has just given about rockets between June and December are wrong and, as I said in my speech, my source is an Israeli human rights group. I have also seen an exchange in which the spokesman for the Israeli Government agreed that the rockets stopped between June and December. I ask the Minister to re-examine her assertion. I think that she will find that it is false.
Of course, we can debate what is right and what is not. I respect the fact that the right hon. Lady disagrees with me, but the figures that I have given are the figures on which we have constantly relied and they are from what I believe is a reliable source. I will be happy to give further details of that, but for today we must, unfortunately, agree to disagree.
The right hon. Lady spoke about the status of Hamas. I think it wise that I refer to what the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Harlow (Bill Rammell), who has responsibility for the middle east, told the House on Thursday:
“We should be absolutely clear that Hamas is not a benign organisation. It commits acts of terrorism, it is committed to the obliteration of the state of Israel and its statement last week that it was legitimate to kill Jewish children anywhere in the world was utterly chilling and beyond any kind of civilised, humanitarian norm.”—[Official Report, 15 January 2009; Vol. 486, c. 399.]
We recognise Israel’s right to self-defence. It is also the case that the use of force must be proportionate. We have made clear our view that the Israeli reaction was disproportionate, and we are gravely concerned at the allegations of breaches of international law made by credible organisations such as the ICRC and the UN. I remind the right hon. Lady and other hon. Members that just yesterday the UN Secretary-General called for a full investigation. That has our full support. Those allegations must be closely and speedily investigated under international law, with the three key parties to that being the UN, the ICRC and the Israeli Government. We are in touch with all of them.
I apologise to the right hon. Member for Birmingham, Ladywood (Clare Short) and to my hon. Friend the Minister for not being present earlier because of business upstairs. Will the Minister assure me that, if it is found that the allegations of war crimes are correct, every effort will be made by the British Government to ensure that those responsible for such crimes and atrocities, the victims of which include very young children, are brought to justice?
My hon. Friend will know that all of this is subject to international law, but he does allow me to raise the important point that before anyone talks in the House or elsewhere about the reporting of war crimes, it has first to be established under international law whether war crimes have been committed. There has to be an investigation. That is why I believe that today we are in a new place, in that the UN Secretary-General has called for such an investigation. I re-emphasise to right hon. and hon. Members that we thoroughly endorse that investigation, whatever the outcome may be.
Under the ICC—it was the new Labour Government who signed up to it in 1998—a state that has not signed up to the authority of the ICC can be dealt with by a reference to the international court and the prosecutor then makes inquiries. That is the way in which Sudan and Darfur were dealt with, and that is the right procedure, but the Government appear to be ignoring that and waiting for some other authority that does not have the same capacity in the international system to bring forward evidence. Please, will the Minister consider referring the case to the ICC in the proper way so that the prosecutor there can make his inquiries?
Again, I regret that I have to disagree with the right hon. Lady. I have just outlined the process. Obligations under international law are clearly set out. As I said, first, there has to be an investigation to establish whether war crimes have been committed. We all know the process that will be followed if that is so. The obligation under international law is that the primary burden for investigation rests on the authority against whose forces allegations of war crimes are made. The due and appropriate process will be followed.
The next step in delivering a sustainable ceasefire is to see an immediate end to the flow of arms into Gaza. The UK is ready to play its part in ensuring that that happens. Along with our EU partners, we stand ready to reactivate the EU border assistance mission at the Rafah crossing with Egypt and are willing to consider extending that assistance to other crossing points. I say to the hon. Member for Cotswold (Mr. Clifton-Brown) that, last week, the Prime Minister confirmed that we are prepared to provide British naval support to stop the arms trafficking. Of course Egypt has a fundamental role to play in ensuring an end to arms smuggling through its border with Gaza, and we will work with it to establish border security.
Success in stemming the flow of arms into Gaza will have a direct effect on the reopening of the border crossings. We will continue to convey the need to open those crossings to the Israeli Government—they are vital to facilitate the free and unhindered passage of emergency humanitarian aid and to ensure the supply of goods needed for longer-term reconstruction. The two issues of arms smuggling and open border crossings will be at the heart of discussions this week. This evening, our Foreign Secretary will join 26 other EU Foreign Ministers to meet Israel’s Foreign Minister. On Sunday they will meet their Palestinian, Jordanian and Turkish counterparts.
The biggest challenge now faced by the international community is to find a way to deliver a lasting resolution in the middle east. The crisis has undoubtedly highlighted the urgent need to make political progress in the peace process. There is only one way forward and that is a comprehensive approach with a two-state solution in Israel and Palestine, underpinned by a broader peace agreement between Israel and the whole Arab world, about which the Arab League has shown itself to be extremely serious. In other words, we seek a 23-state solution—the 22 states of the Arab League, and Israel.
The Palestinian President recently described the Arab peace initiative as the most significant initiative of the last 60 years. Israeli leaders have also indicated that they view this peace initiative as a basis for negotiations. With a new Government in Israel, a new President in the United States and our commitment as a Government, we must seize this chance and reinject urgency into the middle east peace process. That must include a unified Palestinian Government.
The Foreign Secretary has already assured the House that the middle east peace process will be top of the agenda when he speaks to Secretary of State Clinton this week. The UK will remain active in providing humanitarian assistance in the short term and will be unstinting in its efforts to find a permanent peace between Israel and Palestine.
In the short time that I have available, I will refer to some of the comments made. The right hon. Member for Birmingham, Ladywood referred to international obligations. The UK has consistently called on Israel to fulfil its obligations under the fourth Geneva convention. That includes giving permission for the delivery of aid and supplies to Gaza. As the Foreign Secretary told the House, he raised that matter with Israeli leaders in his November visit.
Legal Services Commission (Cardiff)
I am pleased to have the opportunity to have this short debate today.
The Legal Services Commission is a non-departmental public body sponsored by the Ministry of Justice and responsible for running the legal aid scheme throughout England and Wales. It lets and manages contracts to legal service suppliers, who come from private practice solicitors and not-for-profit agencies. It also decides whether individuals should get full legal representation in civil court proceedings paid for out of public funds through legal aid certificates and assesses how much legal aid lawyers are paid in certain certificated cases. The LSC calls this last category “business support” and that is what I want to discuss.
I secured the debate because of my serious concern over a decision announced out of the blue to staff at the Wales Legal Services Commission office in Cardiff on 4 November 2008. The announcement stated that, as part of a refocus of financial resources and reorganisation into five business support centres for civil legal aid work, business support will be transferred out of Wales to one or more business centres in England by the middle of this year. That is in six months’ time.
The decision does not mean that there will be no Legal Services Commission presence in Wales. Between 15 and 20 staff will remain to handle the letting of legal aid contracts to Welsh suppliers and liaise with them in managing contracts. However, in my judgment it represents a downgrading of the office at a time when most other national organisations have upgraded their representation in Wales in recognition of the political direction evident over the past 10 years. I am extremely concerned about the decision and about the fact that it was imposed on staff in November with only eight months’ notice before the planned move.
Let me state briefly that the hon. Lady has all-party support in her efforts and I praise her for all that she is doing. The decision flies in the face of the fact that Cardiff is now a very important centre for civil justice. Civil cases are dealt with there and the Court of Appeal sits in a civil capacity.
I thank the hon. Gentleman for his intervention. I was going to elaborate on his last point later in my speech and I thank him for his support.
I am concerned about this decision on several counts. First, the Legal Service Commission did not consult the Welsh Assembly Government before it made its decision. Secondly, the decision will result in a great loss of experience and expertise to the LSC, and to Cardiff and Wales. Thirdly, it is estimated that the decision will lead to the loss of 40 quality jobs across south Wales. Fourthly, the decision has failed to have any proper regard to the effect of schedule 5 to the Government of Wales Act 2006, which paves the way for the Welsh Assembly to seek primary law-making powers in 20 fields of law.
My hon. Friend claims that there has been a failure to consult the Welsh Assembly. Was there also a failure to consult the Wales Office? Sadly, there is often an illiteracy in some Whitehall Departments about the nature of the settlement. That does not mean that Wales has drifted offshore by 100 miles; it means that we need a more joined-up approach by Government Departments and their agencies regarding those responsibilities that remain with central Government, and those that are devolved.
I welcome the intervention of right hon. Friend and constituency neighbour. This is certainly an example of non-joined-up Government thinking, and it illustrates the lack of understanding about the nature of devolution by some of the Departments responsible for non-devolved matters in Wales.
I congratulate my hon. Friend on securing the debate. She makes an important point that the decision affects the whole of south Wales. It will certainly affect some of my constituents, who have written to me about it. Many of those staff are long-serving and have built up a considerable amount of knowledge and experience that will be lost to Wales if those jobs go. I am sure that she will make that point later in her speech.
I, too, congratulate my hon. Friend on securing this debate. As Chair of the Welsh Affairs Committee, I will listen closely to the debate and to the Government response. Can she confirm that there is also a concern in the context of wider consultation? For example, in my constituency there have been questions about the matter from citizens advice bureaux, and it is important for them and other appropriate bodies. The Select Committee on Welsh Affairs might decide to have an inquiry into it.
I thank my hon. Friend for that. I would certainly welcome an inquiry by his Committee.
The decision will result in a diminished service for my constituents and those of other Welsh Members, together with legal aid practitioners in Wales. Finally, the decision seems to run completely counter to the direction of devolution, which has been agreed by the House.
I shall return to those points shortly, but first I should explain things. Help available under legal aid can be broadly subdivided into two categories—legal help and help at court, and legal aid certificated work. Today, I want to speak about certificated work.
Civil legal aid certificates are a vital tool to legal aid practitioners and clients alike. They allow practitioners to obtain evidence, instruct barristers, obtain expert opinions and represent clients at hearings. When making decisions about the granting of certificates, or their amendment or termination, the legal aid office carries out a most important balancing function. On one hand, it seeks to establish whether the client has an arguable case, whether there are prospects of success, whether there is a benefit to be derived and the importance of the issue to the client. On the other, it seeks to establish the likely cost of the case, the amount to be recovered if there is a money claim, whether it is proportionate to spend public funds in pursuing the case and the client’s means and the extent of any contribution. In this respect, the legal aid office is acting as a guardian of public funds.
Business support teams are generally led by solicitors, and Cardiff has two. The word “support” is a misnomer; it disguises the fact that it is highly skilled work, operating at the coal face of people’s problems. Those people go to the heart of legal aid, delivering quality services to legal aid clients. If decision makers get it wrong, they can frustrate or quench the legitimate legal claims of our constituents or waste taxpayers’ money.
It is bound to have an affect on Welsh language provision if the entire service is run from outside Wales. Perhaps the Minister will respond to that point. The Legal Services Commission underestimates and undervalues the importance of its work.
I return to my list of concerns. First, I restate the fact that the Assembly is a voice for Wales and that it has the right to be consulted. The commission cannot cherry-pick, consulting with the Assembly and Welsh local authorities when its wants their money to help launch community legal advice networks in Wales, but forgetting to undertake consultation when it is inconvenient for its administrative plans. Consultation involves publishing a proposal in draft, asking a body for its views, giving it time to consult within its organisation, taking an informed view and responding. That did not happen in this instance. If it had, the commission would have been alerted to the dangers of the course that it has now taken, and the distress for its staff and our constituents affected could have been avoided.
Secondly, in relation to the loss of experience and expertise to the LSC and Wales, it is important to note that 40 per cent. of those in the Cardiff office have worked there for more than 20 years, and 50 per cent. for more than 15 years. Even if the commission feels that it can afford to lose that wealth of experience and expertise as we move into a new era where functions are being incrementally passed over to Wales’s control, we in Wales cannot. If the Wales office in Cardiff were a poorly performing office, I might begin to understand the basis of that decision, but the reality is quite different. Over the past three years, the Cardiff office has consistently achieved performance ratings above the national average, and it also deals with imported casework from other legal aid offices.
My third concern is about the loss of quality jobs in south Wales. I understand that the trade unions have estimated this loss at 40, but the commission says that only 33 roles are at risk of redundancy. That will be an enormous blow, coming, as it will, at a time when we hope to be recovering from the downturn in the economy. I am told that it is not only the Cardiff constituencies that will be affected; indeed, we know that some of the valley constituencies will suffer and that highly skilled employees who work at the Cardiff office also live far to the east and the west. The Legal Services Commission decision certainly runs counter to the Prime Minister’s view, expressed on 9 January 2009, that it is important to keep Welsh jobs in Wales. I believe that the staff at the Cardiff office have been badly treated. There have been rumours for years about change. The staff were then told that nothing would happen. Suddenly, on 8 November, this decision was landed on them. [Interruption.]
Order. I remind the Minister’s team of civil servants that they do not have the right to come into the Chamber. It is important that the Minister should report to his colleagues that they should supply him with a Parliamentary Private Secretary, and not have his staff continually entering the Chamber.
My fourth concern relates to emerging Welsh law under the Government of Wales Act 2006, which enables the Assembly to seek legislation competence orders to pass primary legislation in 23 fields through Assembly measures. Those include, for example, aspects of social welfare, education and health. If the decision is allowed to stand, legal aid decision making on claims and challenges based on new Welsh law will have to be made in offices in England. It is no answer for the commission to say that practitioners will be able to exercise devolved powers—to stand in the shoes of the LSC’s Wales office and grant certificates to their clients. Devolved powers are designed essentially for emergency cases and are heavily circumscribed. The commission has said that it does not intend to alter the rules in the light of Assembly measures. Even when devolved powers are exercised, the legal aid certificate must still be reviewed by an officer in a legal aid office, and under the existing plans that officer will be in England. He will be unfamiliar with Welsh law, the context in which it was enacted, any guidance issued under it, or experience in implementing it.
The LSC has told me that is sees no problem in dealing with Welsh law. It says that the staff who remain in Cardiff will ensure that the differing aspects of Welsh law and culture are understood and that they will be built into the commission’s plans for Wales. The commission says that its Welsh policy experts will ensure that changes in Welsh law are reflected in the guidance issued to decision makers.
Who are these Welsh policy experts? With the greatest of respect, the staff who remain in Cardiff will not include lawyers and will not be qualified to identify the detailed changes made by Welsh law or to analyse their impact. Those best equipped to perform that task are the members of the current Cardiff business support team that handles Welsh cases day in and day out—staff who are likely to be made redundant unless they are offered the possibility of uprooting their families, to move to wherever the commission ultimately decides Welsh work must go. In the circumstances, we all know that most people will not go because their roots are deep within Wales.
My fifth concern is about the diminished standard of service for Welsh clients and those practitioners who visit the Cardiff office to speak personally to members of the business support team. Although the LSC says that those relationship managers who stay in Cardiff will be the point of contact for all Welsh solicitors and third sector agencies, they are not qualified to deal with business support queries. Once business support work is transferred to England, all contact will have to be by telephone. As my hon. Friend the Member for Conwy (Mrs. Williams) suggested, new and different arrangements will need to be made for those clients who wish to speak through the medium of Welsh. Inadequate or poor decision making on matters relating to Welsh law is also likely to give rise to delays and increase appeals, causing frustration to practitioners and clients alike.
My final point is that the decision is against the spirit of devolution. It is now generally accepted that devolution has released a new-found confidence and a sense of pride in Wales. I do not know of any other organisation that is reducing its Welsh presence, or its operation. Quite the opposite is the case. A Welsh claimant has the right to issue judicial review proceedings in the Cardiff Civil Justice Centre, in a public law challenge against a Welsh public body. From time to time, the Court of Appeal sits in Cardiff. Even Her Majesty’s Court Service recognises that Wales has distinct legal issues that are likely to be better dealt with in Wales, or at least that claimants should have the choice of having challenges heard in Wales.
I am frankly astonished that, at a time when Wales is beginning to exercise more control over its affairs than it has for many years, the LSC should choose to start dismantling and reducing its presence in Wales. I have the impression that Wales, as a distinct nation with its own distinct needs, was not considered by the LSC when it reached that decision and that the paramount concern was achieving a good geographical spread of sites over England and Wales.
I do not doubt that the LSC must live within its budget, and I sympathise with the chief executive and the executive board, who have to find administrative savings to keep within budget. I also understand that the LSC, like other organisations, needs to modernise the delivery of legal aid for the benefit of legal aid clients, suppliers and taxpayers, which might entail rationalising the delivery into larger units, where increased efficiency can be achieved from new technologies. However, I do not understand why the LSC has not decided that one of those five business centres must be in Wales. It is the logical solution and by far the easiest to justify. The decision has been made in principle and is subject to the making of a business case to establish what work will move to where and when. I appeal to the Minister to look into that matter in detail and ensure that the LSC reconsiders its stance carefully. The answers that I have received from the LSC—I have held meetings with the chief executive and Cardiff members on more than one occasion—have not given me any satisfaction. I urge the LSC to continue with the fully functioning legal aid office that Wales deserves.
It is a pleasure to respond to this debate under your stewardship, Mr. Hancock, and I apologise for being without a Parliamentary Private Secretary this afternoon.
I congratulate my hon. Friend the Member for Cardiff, North (Julie Morgan) on securing this important debate. I am pleased to discuss what is happening in Cardiff and across the Legal Services Commission more widely. I recognise that she has natural concerns about the changes taking place in Cardiff, and it is to her credit that she is using all reasonable avenues to discuss that matter and to ensure that all that should be done is being done. That does not surprise me, however, having witnessed at first hand, when in Cardiff, the passion that she has shown to ensure that she gets the very best for people in her constituency and, indeed, in Wales. I am pleased that, last Friday, she was able to meet Carolyn Regan, the chief executive of the LSC, and Paul Davies, the LSC director for Wales, to discuss her concerns.
What is happening in Cardiff needs considering in the context of wider legal aid reform and the current economic climate. The legal aid reform strategy aims to ensure that the £2 billion-plus annual budget for legal aid services is focused on helping those most in need who are least able to afford essential support. In a similar vein, the LSC was asked to re-examine its internal administration to ensure best value for the taxpayer, taking account of the impact of the wider legal aid reforms flowing from Lord Carter’s 2006 review. All LSC staff and providers have been aware of the proposed cuts in the LSC administrative budget and posts since 2006. That year, the LSC announced that it would achieve the required reduction through an improvement in electronic working with providers and a reduction in staff numbers across England and Wales from 1,700 to 1,100. On 4 November 2008, the LSC announced more detailed plans for reducing the number of staff in business support areas, moving from 13 to five business support centres between mid-2009 and 2012-13.
Cardiff has one of the relatively small LSC offices, so it has never been one of the likely centres for centralising business support work. That was clear in 2006, when LSC staff were told that there would be only three business centres—the decision to increase to five came later. It is also important to keep in mind that the LSC already transfers work across other LSC offices in England and Wales to deal with peaks and troughs. The LSC is looking to centralise the operational work from Cardiff during the latter half of 2009. Concerning the posts at risk, the LSC has an agreed redundancy policy with its recognised trade unions to explore all possible alternative employment opportunities and relocations for any impacted staff and to exhaust those possibilities prior to a decision on redundancy.
While the five business support centres will carry out operational processing work, the LSC will continue to maintain a presence of relationship managers, plus policy staff, business analysts and some other functions in Cardiff, as in all areas. That will mean the continuation of a close working relationship with local providers and stakeholders, with local LSC staff focusing on commissioning the best possible services for Welsh legal aid clients.
In 2007, the Cardiff office did 793 extra hours of work for other LSC offices throughout the country. Furthermore, before November 2008, the staff were told that the plan to move to three offices had been abandoned and that it was likely that the office would stay as it was.
I was not aware of that last point, but I have noted it and thank my hon. Friend for bringing it to my attention.
It is important to emphasise that most clients access legal aid services through local providers and increasingly through the Community Legal Advice telephone service and website. The LSC itself currently deals with very few legal aid clients on a face-to-face basis in Wales or in England. The vast majority of its interactions with clients take place by telephone, e-mail and letter. My hon. Friend has mentioned consultation, and I am aware that we spoke with both the Wales Office and the Welsh Assembly—whether that constitutes consultation is another matter. Only yesterday, I received representations from the Under-Secretary of State for Wales.
The relationship managers in Cardiff will be the point of contact for all Welsh—
I specifically said that we spoke to the Wales Office and the Welsh Assembly. We offered to have a meeting in April to look at progress on the issue. I have said that I am not sure whether that constitutes formal consultation, but contact has been made.
The LSC will continue to have an important presence in Wales. That is demonstrated by the LSC’s recent appointment of a senior director for Wales—
I am merely reflecting the facts on the ground.
That appointment will maintain the strong links with the Welsh Assembly Government, local criminal justice boards, family justice councils and other key stakeholders, including local government.
As my hon. Friend the Member for Conwy (Mrs. Williams) has said, the Welsh language is vital. I confirm that the LSC remains firmly committed to its statutory obligations under the Welsh Language Act 1993. Its plans will ensure that clients will be able to contact the LSC by telephone, letter or e-mail in Welsh and receive a reply in Welsh. The Cardiff LSC office will also retain a local policy presence to ensure that the different aspects of Welsh law and culture are not only understood by the LSC but built into its plans in Wales.
The LSC has undertaken a programme of jointly commissioning community legal advice services with local authorities, either in a community legal advice centre or through a community legal advice network. It aims to offer a wide range of joined-up legal advice services to clients. In 2008, as part of the agreement between the LSC, the Ministry of Justice and the Law Society, which followed the unified contract judicial review, possible future services were identified up to April 2010. The Law Society deed identified Cardiff, the Vale of Glamorgan and Bridgend as areas in which a CLAN should be developed, and it would be a jointly commissioned service with local authorities.
As with other CLACs and CLANs, the plan is for the Cardiff, Vale of Glamorgan and Bridgend CLAN to be commissioned—
I am sorry to interrupt the Minister again, but I deliberately did not focus this debate on CLACs and CLANs. My major concern is that decisions about who gets legal aid and laws that have been developed in Wales will be made outside Wales, where the knowledge will not be available.
I am happy to skip CLACs and CLANs. Some concerns, based largely on anecdote, are that some local advice providers have been adversely affected by the CLACs and CLANs, but I will skip over that. My noble Friend Lord Bach has asked officials to lead a short study that will gather evidence on current funding and provision of legal advice at the local level.
My hon. Friend said at the start of the debate that only 20 jobs will be left. My understanding is that between 30 and 40 jobs will remain in Cardiff. She also talked about “rumours for many years”. As I have said, my understanding is that staff were made aware that changes were on the horizon in 2006.
Sitting adjourned without Question put (Standing Order No. 10(11)).