House of Commons
Tuesday 10 February 2009
The House met at half-past Two o’clock
[Mr. Speaker in the Chair]
Business before Questions
Queen’s Speech (Answer to Address)
The Vice-Chamberlain of the Household reported Her Majesty’s Answer to the Address, as follows:
I have received with great satisfaction the dutiful and loyal expression of your thanks for the Speech with which I opened the present Session of Parliament.
Appointment of Chair of Electoral Commission
The Vice-Chamberlain of the Household reported to the House, That the Address of 17 December, praying that Her Majesty will appoint Jennifer Watson to the Office of Chairman of the Electoral Commission with effect from 1 January 2009 for the period ending on 31 December 2012, was presented to Her Majesty who was graciously pleased to comply with the request.
Oral Answers to Questions
The Secretary of State was asked—
District General Hospitals
District general hospitals provide a vital range of services for local people, and the level and range of their activities have expanded significantly in recent years. At the same time, some treatments that used to be provided in hospitals can now be provided in the community and smaller local hospitals, GP practices or even people’s homes, while some specialisms and acute treatments are best provided in specialist centres, which can offer the necessary round-the-clock professional and technical expertise and capacity.
After last year’s scare stories from some quarters about mass closures of district general hospitals, I thank the Minister for a reassuring answer. Does he agree that to be truly effective in serving their public in future, those hospitals need very strong links with their primary health care, social services, housing providers and the third sector, and that that is especially important against the background of an ageing and growing population, if they are to keep to a minimum admissions to hospitals in the first place and re-admissions after discharge into the community?
My hon. Friend is right, although a hospital’s role is, of course, mainly to help deal with people when they fail to prevent an illness for one reason or another. It is important that hospitals work closely with primary care trusts, social services and others on the public health agenda, and one of the things that the next stage review published by my noble Friend Lord Darzi made clear last year is that we now expect every primary care trust in the country to commission comprehensive well-being and prevention services based on local needs, but including delivery on a number of important issues, such as mental health, obesity, alcohol, smoking and sexual health, which I hope are being provided for in my hon. Friend’s constituency.
Can the Minister please explain to my constituents what positive contribution there can be to improving health care from the Mid-Essex Hospital Services NHS Trust receiving about £1 million a year in car park fees, which many of my constituents regard as a tax on health care?
The hon. Gentleman should be aware that the shadow spokesman on health supports the freedom of hospitals in England to levy acceptable charges to help cover the cost of hospitals; if they did not levy those amounts, they would have to take them away from patient care. I often get questions on the subject from hon. Members such as “What about Scotland?” or “What about Wales?” In Scotland and Wales, people wait much, much longer for their operation. If the hon. Gentleman has a particular problem with his local hospital’s policy, he should take that up with the hospital, which is supposed to offer concessions to people who need to visit regularly. If he is suggesting that everyone at his local hospital should be able to park freely, regardless of what they are doing there, that is a very foolish approach and it would take money away from essential medical need.
One of the issues that is affecting district general hospitals such as mine in Barnsley is their inability to attract sufficient numbers of doctors. The postgraduate dean at the Yorkshire and the Humber NHS Deanery has done some work on the issue, which shows that in certain areas of the country, including Yorkshire and Humberside, we are under-provided for in almost every discipline in health. I have written to my right hon. Friend the Secretary of State for a meeting to discuss this, but will my hon. Friend look into the matter to try to determine what we can do to redress the balance between Yorkshire and Humberside and other areas of the country, such as London and the south-east?
We have record numbers of doctors, health care professionals and health services, as my hon. Friend knows. I will certainly look into the concern that he raises about Barnsley and his local area. I would find it surprising, however, if it was even more challenging for Barnsley and the surrounding area to attract good doctors and staff than it is in London, where attracting them can be a particular challenge, for a number of reasons which most hon. Members understand. I will have a word with the strategic health authority covering Barnsley, which is responsible for ensuring that work-force planning is carried out effectively and that the needs of local hospitals, including his own, are fully appreciated.
Does the Minister acknowledge the excellence of our local district general hospital at Macclesfield? It has retained superb maternity and accident and emergency units and is applying for NHS foundation status. Does he recognise that it serves not only the towns of Macclesfield and Congleton, but a huge rural area? Patients come from Derbyshire and Staffordshire as well as Cheshire. Such district general hospitals must be retained for the future health care needs of a very large area.
One under-recognised aspect of the role that district hospitals can play is nutritional standards and food procurement policies. In that context, will the Minister add his own congratulations to those given to the Nottingham University Hospitals NHS Trust on the award that it is to receive from the Soil Association on 20 February in relation to the Food for Life programme? The trust has won the award because it threw out the external food contractors and sourced its food supply from local farms, generating 300 jobs in the local food supply industry. Will the Minister also inquire into how he could assist the hospitals in making the next step to developing a sustainable community kitchen that would put £6 million of investment into raising nutritional standards and supporting the local food infrastructure?
My hon. Friend raises an important point, and I congratulate Nottingham on the work that it has done. Such work is replicated in a number of other hospitals around the country, including the Royal Brompton hospital and including in Cornwall. In those hospitals, good local food procurement policies have not only saved money but—the evidence gives this impression—helped to improve recovery rates and general patient satisfaction. We are working actively in the Department and the NHS to see whether that good practice can be spread. We are also consulting on the registration requirements for NHS providers, including hospitals. It is likely that those requirements will include good performance on nutrition.
Further to the Minister’s initial answer, will he give a little more detail on what is being done to encourage primary care trusts and district general hospitals to work together to provide more services closer to where people live? He will be aware that in my very rural constituency, people live some distance from a district general hospital. What is being done to ensure that people can be treated closer to home?
Rather than reel off a long list, I shall give the hon. Gentleman a concrete example from my own area. Until recently, people in the area needing renal dialysis had to come to the Royal Devon and Exeter hospital in Exeter to have it done. The service has now been devolved out to the community hospitals, including one in Honiton. People who used to have to travel into Exeter no longer have to travel such distances. That is just one example of a range of services, including in Cornwall. People in Cornwall used to have to access such services by going to Plymouth or Torbay; now they can stay in Cornwall and get them. That is the direction of travel in the health service, and it is absolutely right that it should be. Where possible, people should be treated in their home or community, but when a specialist or acute need can best be met in the safety of a specialist and centralised environment, that is where it should happen.
Obesity (Physical Activity)
The Government strategy document “Healthy Weight, Healthy Lives” sets out the steps that we are taking to tackle obesity. In addition, tomorrow the Government will publish a new national plan for the delivery of physical activity alongside sport for the period leading up to the London 2012 Olympic and Paralympic games, and beyond. The plan is part of the wider cross-Government strategy, including the flagship Change4Life campaign, to increase participation in physical activity and to reduce obesity.
I congratulate the Secretary of State on the strategy to be launched tomorrow. It is vital that there should be a co-ordinated approach to the issue locally. As he knows, and as the National Institute for Health and Clinical Excellence clearly explains, physical activity is the best way to tackle obesity in the long term and one of the most cost-effective ways of doing so. There is a great deal of experience in county sports partnerships. Will he ensure that there is a co-ordinated approach with primary care trusts and CSPs locally, so that there is no duplication? Over time, will he ensure that there is an increase in funding from the Department of Health to cross-match what is coming through sport and other physical activity through local government as well?
My hon. Friend is an expert in this area, and he will be delighted to learn that one of the aspects of the plan to be launched tomorrow is energising the existing regional and local delivery structure. He knows about this because he is chair of Leicestershire county sports partnership. He will be pleased to hear that the plan recognises the important role that CSPs can play in local delivery, and that we are investing new money to enable them to continue the seamless co-ordination of physical activity and sport at a local level. To complete his afternoon of happiness, he will also be delighted to hear that crucially, for the first time, we are setting out the financial costs to local authorities of inactivity. That is an important driver in getting the few recalcitrant local authorities—and perhaps, in some rare cases, NHS trusts—to work together to tackle these issues.
I am sure that the Minister agrees that the main way to increase levels of physical activity is to foster and garner a love of sport in the young. Unfortunately, many teachers in my constituency tell me that owing to the number of Government-led educational targets they have to meet, the first subject to give way to allow them to do so is sport and physical activity. Should not the Minister be cross-referencing with the Department for Children, Schools and Families to guarantee that children from a very young age get the love of sport that we, at our age, had in our schools?
I do not know whether we did have it in our schools. The amount of time, money and effort going into school sports is in a different dimension from when we came into government in 1997; we are not just getting to four hours a week of sport and physical activity in every school, but moving towards getting six hours by 2010-12. Another myth that arises concerns school playing fields. Ten thousand school playing fields were sold off between 1979 and 1997. [Interruption.] “Still selling them off”, says an Opposition Member. That compares with 192 sold off since 1997. Ninety-one of those schools had closed, and every one of the rest had to invest the money in better sports and educational facilities. I am very pleased to set the record straight.
The Secretary of State will know that 58 per cent. of type 2 diabetes cases come from obesity. He took a diabetes test when he came to Leicester, and the Minister of State, Department of Health, my hon. Friend the Member for Exeter (Mr. Bradshaw), will take one at 3.30 pm today. Does my right hon. Friend agree that one way of dealing with this issue is to have preventive work, not just exercise—on Sunday, he suggested that people should start dancing more—and that people should have these tests so that they can deal with the issue of diabetes and take the necessary medication?
I pay tribute to my right hon. Friend for the work that he has done in Leicester. I did indeed have the test at the splendid centre in the middle of Leicester. I was fine, by the way; for the record, I scored five. My right hon. Friend did the work to get that centre built in his constituency and to have a mobile testing centre that goes out to workplaces; indeed, it came down to the House of Commons a few months ago, and it is here today. He is absolutely right to talk about the importance of these tests. As he knows, they are part of a concerted effort, backed by Diabetes UK, to ensure that physical activity, proper diagnosis and early treatment are regarded as essential; they should be of the quality that they are in Leicester everywhere else in the country.
I completely agree with the right hon. Gentleman. The Change4Life campaign is encouraging people to take small steps—not necessarily to seek to be Olympic athletes or champion dancers, but to build activity into their lives. It is helping them to make those small steps, such as walking to work or, if they have to get the bus, getting off a stop earlier. He will have seen the London underground map that Change4Life has refocused to say how long it will take someone to get to their destination if they get off the tube a stop earlier. Those small ways of ensuring that people can change their lives include cycling, dancing, of course—my hon. Friend the Member for Loughborough (Mr. Reed) did ask me what steps we were taking—and all aspects of physical activity, with a recognition that according to the statistics, if more people engaged in physical activity, we could reduce the number of premature deaths by about one in 10.
Wakefield PCT has allocated more than £1 million to local and voluntary sector community groups to help them participate in the Change4Life campaign to help people to change their lives. May I press my right hon. Friend on when we can expect the announcement of a final decision on food labelling, which is essential for parents and consumers if they are to make clear decisions in making the choices that they face in supermarkets? May I also press him on the point that, as part of Change4Life, we should educate parents about the dangers of sweet, sugary drinks and the hundreds of calories that they contain, with zero vitamins or benefits for children?
My hon. Friend has done sterling work in this field. I cannot give her a date on which we will make a final statement on food labelling, because the Food Standards Agency has been asked to carry out that work for us, and until it is complete, we cannot make a statement. I will say, however, that this country is well ahead of other countries in the world because retailers have voluntarily adopted food labelling systems. We would like one system, because that would be less baffling and less complex for consumers, but we admire the work that has taken place in this country to put voluntary food labelling at the forefront of these campaigns.
I must say to the Secretary of State that after getting slapped down by Lord Mandelson the week before, it was good to see him get one up on Lord Mandelson this Sunday by having his own “Strictly Come Dancing”. No doubt he will invite the noble Lord Mandelson to be a participant in that.
I welcome the announcement of the Active England strategy, but it has taken a year to get there. I am afraid that the Secretary of State has got it wrong about school sports. The Government are not meeting their commitment to ensure that all pupils get two hours of sport a week in schools. In the school sport survey last October, the number of 11 to 16-year-olds getting two hours of exercise had gone down from 88 per cent. to 83 per cent. in a year. Will the Secretary of State, with his colleagues at the Department for Children, Schools and Families, ensure that the commitment to a minimum of two hours of exercise in schools is achieved, and will he tell us when will it be achieved?
From memory, the proportion of young children getting two hours of exercise in schools was about 24 per cent. when we came into government, so a drop—[Interruption.] Incidentally, I am not sure about the statistics that the hon. Gentleman just quoted. If there has been a slight drop, it should be seen in that context. Sport in our schools is essential to the sort of message that we seek to deliver, which is why we have pledged not just effort and time, but a huge amount of finance to meet those targets. And we will meet the target in 2010, just as I am absolutely sure we will move on to meet the extended target in 2012.
GP-led Health Centres (Battersea)
My hon. Friend’s local NHS, like those in the rest of England, is planning a new GP-led health centre, open from 8 am to 8 pm, seven days a week. I understand that the proposal is to locate it near to Clapham Junction station.
I thank my hon. Friend for recognising the health needs of Battersea in that new proposal, and in various other proposals to extend GP-led health centres. Will he assure my constituents that the range of facilities that can be offered in the new GP-led health centre will be far greater than can currently be provided in the Bolingbroke hospital, which is held in great affection, but is an old and impractical building?
I can assure my hon. Friend that the range of services provided in the new health centres will be big, and will meet the needs of the local population, which is one of the criteria we have laid down. I can also tell him that plans for the expansion of health services in his area are not restricted to this particular GP-led health centre. I understand that there are also plans to expand services at Doddington, Bridge lane and St. John’s, including primary care services.
In Battersea, the provision of primary care is vital to the health of the community, but according to the Royal College of General Practitioners, seeing a doctor who knows the patient and their medical condition personally is important to more than 75 per cent. of patients. Yet the Secretary of State recently said that he “could not care less” which GP he sees. That is totally out of touch with patient needs both in Battersea and elsewhere. Can the Minister confirm that continuity of care is important to the vast majority of patients, particularly those with long-term conditions? If so, why are he and the Secretary of State centrally imposing polyclinics, against patients’ needs and wishes?
Yes, I am happy to confirm what the hon. Gentleman asks me to confirm. However, what he says is another of the myths that were peddled by both the Opposition and the British Medical Association, at the time, in their opposition to new GP health centres. I do not know whether he has now abandoned the Conservative party’s opposition to the centres. I suspect that the Conservatives will quietly abandon that opposition, because where the new centres are opening, they are incredibly popular, not least with local Conservative councillors and Conservative MPs who want theirs to open as quickly as possible.
Of course continuity of care is important for many patients, particularly those with long-term conditions. However, many people, such as professionals who are otherwise healthy and who are juggling work and family life, find it very difficult to see their GP, because of opening times. They warmly welcome the opportunity to see a GP, and they do not particularly mind whether it is always the same GP.
Information on the incidence of influenza-like illnesses is collected by the Royal College of General Practitioners. The rate of influenza-like illness started increasing in late November and peaked at 69 GP consultations per 100,000 people in mid-December. The rate of ILIs decreased to 13 consultations per 100,000 people by early February.
I thank the Minister. Winter-prevalent diseases such as influenza and bronchitis lead to increased morbidity. I am told by two local undertakers in Croydon that that has led to a call on undertakers to take as many bodies as possible from south London mortuaries. I am told also that some south London hospitals have found it necessary to hire extra equipment for the cooling of deceased bodies. Is that a normal situation in the NHS, or is it peculiar to south London hospitals? Does it mean that additional support might be appropriate?
I do not know the exact details that the hon. Gentleman mentions, and I shall certainly examine the situation in his area specifically. The peak rate this year was a quarter of the level experienced in 1999-2000, which was the last severe flu season. The connection that he suggests between flu and early death is not showing up in the statistics at the moment, but I shall certainly give his points closer consideration and write to him.
Can my right hon. Friend tell me what steps her Department takes to encourage primary care trusts to contact all older people—those in the influenza bracket, at over 60—and ensure that they are told about the availability of an influenza jab that would increase their chances of surviving the winter?
I can assure my hon. Friend that all primary care trusts have active policies with their GPs and make information available to those over 65 and others who are entitled to the free flu jab. The rate of patients being immunised with the influenza vaccine is increasing, and it is currently 74.1 per cent. That clearly needs to continue to rise to the 75 per cent. level we aim at.
The criteria are the same as those used by non-foundation trust hospitals. Any changes to be made to services must be for the benefit of patients locally and led by doctors and health care professionals locally.
In Rushden, an out-patients facility is being closed. Some 6,000 constituents have written to me demanding that a replacement facility be built in Rushden. The NHS’s weighted criteria state that it should be built in Rushden, but in fact it is being built in an adjoining constituency, in a small town. That constituency already has a minor injuries unit and is getting a new hospital. What is the difference between the two constituencies? One is the Conservative marginal seat of Wellingborough, and the other is the Labour marginal seat of Corby. Are not this miserable Government making decisions about health facilities based not on need, but on political advantage?
I am advised that no such decision has been made. The hon. Gentleman has been involved in detailed discussions with health care managers on the ground, who are considering the matter. I am sure that he recalls that we had an Adjournment debate on the subject. Kettering hospital and Northamptonshire primary care trust want to expand the out-patient provision in his constituency or for his constituents because they believe that the current provision in Rushden does not cover the numbers that they want to serve. Ultimately, what they are trying to achieve will mean that tens of thousands of people who must currently travel from the hon. Gentleman’s constituency to Kettering hospital for treatment will no longer have to travel so far. I therefore urge him to continue his discussions with his local health service managers. I understand that they have not ruled out alternative locations if one can be found that provides his constituents with the health care that they deserve in the 21st century.
My hon. Friend is right. People who should know better often misunderstand—I hope accidentally—how the system works. Any changes to services, whether to a foundation or a non-foundation trust, are matters for the local health service. If the proposals are sufficiently significant for local authorities’ democratically elected overview and scrutiny committees to think that they should be consulted, they must be consulted. If those committees remain unhappy, they can refer the proposals to the national independent reconfiguration panel. My right hon. Friend the Secretary of State has made it clear that he will respect and has respected all the IRP’s recommendations, which include two recent ones in Conservative areas, where the IRP recommended against the local health service’s proposals and its recommendations were upheld.
Acute Sector Staff (Assaults)
The NHS constitution recognises that staff have the right to work in a safe environment, free from violence. Staff are saying that they will not accept violence or abuse as part of the job, and they are demonstrating that by reporting violence. In 2007-08, the number of criminal sanctions following cases of assault in the acute sector increased by 13 per cent.
The NHS security management service has signed a memorandum of understanding with the Association of Chief Police Officers. It encourages trusts to agree a protocol with their local police on how they can work together. The SMS has also signed a memorandum of understanding with the Crown Prosecution Service to ensure the effective prosecution of cases that involve violence and abuse against NHS staff. This is a matter for local management, but the hon. Lady shows great concern about the issue which I believe is felt across the House. I am happy to supply her with as much information as I can.
We are aware of the concern that alcohol causes staff, especially in accident and emergency units, and of how it infringes on their management of other patients as well as of the patient who has the alcohol problem at the time. Continual work is being done on the matter with the SMS, which continues to consider figures on that troubling subject.
The number of violent attacks on Shropshire ambulance crews continues to increase, as does the number across the west midlands, so much so that Shropshire crews have had to resort to buying their own stab-proof vests. I have written to the chief executive of West Midlands Ambulance Service NHS Trust asking for the vests to be provided by the service. The reply is that the service is currently reviewing the situation. That review has been going on for some months. Is it not time that the Government spoke to West Midlands Ambulance Service NHS Trust and ensured that stab-proof vests are made available, in order that ambulance crews can do their duties and feel safe and their families know that they are safe?
The hon. Gentleman raises a serious issue. It is up to the service to look at that, but I believe that the local and national standards that we, the police and all the agencies concerned are applying in respect of the worrying vulnerability of all our public sector workers will result in the correct policy, which will be managed locally, because that is how all such matters must be looked at in local decision making.
As my hon. Friend knows, the Scottish Parliament introduced the Emergency Workers (Scotland) Act 2005, which offers legal protection to front-line health service staff such as doctors, ambulance personnel and A and E nurses. Do we have any thoughts about introducing similar legislation in this Parliament?
I am sorry to say that the Minister was very selective in her comments about how many assaults on NHS staff there were in 2007-08. The truth is that 12,500 staff who had gone to work to care for the community in this country were assaulted by cowards, and that criminal sanctions—I stress that they were not prosecutions, but sanctions, including some that were just cautions—were applied in fewer than 700 cases. Where is the zero tolerance that this Government promised to protect our emergency services?
The hon. Gentleman raises an issue that concerns the entire House. When increases in violence against our front-line staff continue, it is a matter for us all to address, in order to get the prosecutions, which is why we work with the Crown Prosecution Service and, in particular, with the Association of Chief Police Officers. That is an area for the Crown Prosecution Service, but it is not an area that we dismiss in any shape or form, and it would be wrong to give that impression. We are talking about serious measures for serious times, for our hard-working front-line staff.
The General Medical Council has the statutory responsibility to determine the extent of the knowledge and skill required for the granting of primary medical qualifications in the United Kingdom. The GMC’s document “Tomorrow’s doctors” sets the standards and outcomes for undergraduate medical education. The GMC is currently consulting on the draft of a third edition, which would include a strengthening of the requirements in this area and, consequently, provide the opportunity to address any areas of concern.
Professor Webb of Edinburgh university recently told the Select Committee on Health inquiry into patient safety that the teaching of therapeutics and prescribing had all but disappeared from the undergraduate curriculum. A recent survey of medical students showed that 80 per cent. felt that they were either poorly or very poorly prepared for prescribing by the time they qualified. With drugs becoming more powerful and treatment regimes becoming ever more complex, surely it is important to ensure that medical students are properly equipped. Is there more that the Government can do to ensure that this valuable part of the curriculum is given the priority that it deserves?
I thank my hon. Friend for that. The GMC is currently consulting on the draft of a third edition of “Tomorrow’s doctors”, which, as was noted on 22 January by the Health Committee, of which my hon. Friend is a hard-working member, enshrines the competences drawn up by the safe prescribing working group. Those competences are included in the draft. The consultation concludes on 27 March. The GMC will then consider all the representations received, before publishing the next edition in the summer of 2009. It will be the duty of us all to ensure that all our doctors’ education is safe in its practice.
Does the Minister agree that doctors should look not only at the efficacy of the drugs that they prescribe, but at their cost-effectiveness? Should they perhaps be trained in how to resist the beguiling attentions of the pharmaceutical salesmen who so often visit our GPs’ surgeries?
May I draw my hon. Friend’s attention to the all-party group on drugs misuse’s report on physical dependence on, and addiction to, over-the-counter and prescription medicines? Does she agree with three of the report’s recommendations—that medical staff should be properly trained to recognise these problems; that they should follow the prescribing guidelines laid down by the Department of Health; and that they should be aware of the withdrawal protocols in cases where people have become physically addicted or dependent?
The Department has issued no guidance on this process, because we expect decisions on clinical interventions, whether they involve complementary or alternative treatments, to be made by front-line clinicians. In making such decisions, clinicians will take into account evidence for the safety and clinical and cost-effectiveness of the treatment concerned.
I thank my hon. Friend for his reply. Sussex ME and Chronic Fatigue Society works tirelessly to assist the 6,000 adults and children across the county who suffer from the disease, and several of those people have been contacted about the success of the lightning treatment. Will he assess that treatment, in conjunction with the bodies that he has mentioned, and monitor how successful it is?
It is not for the Department to undertake that activity. The National Institute for Health and Clinical Excellence, the independent body, issues guidance on the use of such treatments, and that guidance is the subject of a judicial review this week. It is to that independent body that those patients and organisations should make their representations, so that it can make the appropriate recommendations on the use of such treatments.
I agree with the Minister that treatments such as these should not be performed on the NHS until independent medical evidence has been obtained to show their efficacy. Will he tell the House how much is spent by the NHS on chronic fatigue syndrome?
I am grateful for the hon. Gentleman’s support for a way of working in the national health service that has widespread support on both sides of the House and throughout the country. I do not have the figures that he requests to hand, but I will write to him in due course.
Is the Minister aware that herbal medicines—[Hon. Members: “Hear, hear!”] I have written to him about the fact that, if he does not introduce statutory regulation of herbal medicine practitioners by the time the herbal medicinal products directive is implemented in 2011, there will be no proper regulation whatever. What is he going to do about that?
Child/Adolescent Psychiatric Services (North-West)
Information from the annual children and adolescent mental health services—CAMHS—mapping exercise, conducted by Durham university for the Department of Health and the Department for Children, Schools and Families, indicates that NHS trusts in the North West Strategic Health Authority have waiting times for CAMHS that are better than average. During 2007-08, 91.6 per cent. of new referrals for CAMHS were seen within 13 weeks in the North West SHA area, compared with 87.4 per cent. in all strategic health authorities.
I have a letter from a whistleblower who alleges a serious scandal in the north-west, citing CAMHS waiting lists of one year for serious and complex tier 3 needs, a lack of resources, a shortage of in-patient beds, and looked-after children being dumped in private homes. May I ask the Minister seriously to look further into the information that he has and to check its accuracy?
I will certainly take away the information that the hon. Gentleman has presented this afternoon and respond to him in due course. I am aware that one of his constituents had to wait 12 months for referral to the children and family services. I understand that Sefton primary care trust is now working with Alder Hey Children’s NHS Foundation Trust to introduce waiting time initiatives to ensure that the PCT in the hon. Gentleman’s constituency meets the waiting-time targets across the borough. That includes extra temporary staff and introducing “choice and partnership”—a new system for the management and referral of patients. The hon. Gentleman has raised a serious point on the Floor of the House; I will take it away and write to him in due course.
The early intervention of child and adolescent mental health services is as serious an issue in the north-west as it is for the rest of the UK, as failure to access child and adolescent mental health services can lead to long-term mental health problems for youngsters. We know that between 10 and 20 per cent. of young people will have such long-term difficulties, which can lead to suicide, long-term mental health problems and self-medication with drugs and alcohol, so will my hon. Friend agree to look seriously at how we can bring about improvements to child and adolescent mental health services across the UK?
My hon. Friend the Member for Bridgend (Mrs. Moon) has raised the concerns in her constituency on many occasions both inside and outside the House. I am grateful and pleased that, so far as I am aware, all of them are not replicated in the north-west. I agree that gaining earlier access to services for children and adolescents with mental health problems is a serious matter. We have undertaken a review of this country’s child and adolescent mental health services; funding went up from £322 million in 2003-04 to £523 million in 2006-07, and there has been a significant fall in the number of people waiting, along with shorter waiting times for CAMHS. However, there is more to be done and the Department will make sure that we press forward on these issues because our children and young people deserve the best mental health service that we can provide.
How can the Minister justify the fact that someone with a physical health condition will have an operation within 18 weeks of referral from a GP, whereas someone suffering from a mental health condition can find themselves waiting—as my hon. Friend the Member for Southport (Dr. Pugh) said, in the north-west and in many other parts of the country—sometimes more than a year for cognitive behaviour therapy and other NICE-approved therapies, particularly when we know that early intervention is very important in aiding recovery? Is it not about time that we ended this discrimination in the health service—for that is what it is—and ensured that people with mental health problems had an entitlement to access treatment?
The hon. Gentleman will know that over the next 12 months we are launching the “new horizons” project, which is our strategy to take mental health services forward. He and I have appeared on many platforms together, celebrating the significant improvements in mental health services, as major investment means that we have many more psychiatrists and psychiatric nurses than we have ever had before. The real challenge in front of us, however, is not only to ensure that we maintain that improvement in mental health services, but to challenge the wider stigma and discrimination attached to people who have mental health problems. That means bringing about a cultural shift so that we not only continue to improve mental health services by putting in investment, as we have over the last 10 years, but move forward towards genuinely healthy communities, which means mentally healthy communities. We need to take away and end the stigma currently attached to people who suffer from mental health problems.
The figures for the north-west are, like those for the rest of the country, truly shocking, with one in 10 five to 16-year-olds having a clinically significant mental health problem, including anorexia, anxiety and depression—one in 10: the numbers are huge. Furthermore the use of anti-depressants on children has increased 38 per cent. over the past 10 years. These shocking figures clearly demonstrate the failure of our child and adolescent mental health services. Although I welcome the Government’s attempts to do something about it, the Minister should, to be fair, admit that children and adolescents have been failed over the past 11 years and that we are now seeing the results in the increase in the mental health problems of young adults.
No, I do not accept that the Government have failed. What I do accept is that there has been a significant increase in funding for children’s and adolescents’ mental health services, from £322 million in 2003-04 to £523 million—half a billion pounds—in 2006-07. That has produced a fall in the number of children and young people waiting to be seen, and it has reduced waiting times. Nevertheless, there is clearly more to be done. That is why we instigated the review, that is why are setting up a new national advisory council, that is why we are setting up a national support programme, and that is why we are driving forward changes up and down the country to ensure that children and adolescents with mental health problems—[Interruption.] The hon. Lady says, from a sedentary position, “Eleven years”. I can remember the 18 years of a Conservative Government who failed to invest a single penny in children’s and adolescents’ health services.
I welcome the Government’s campaign to alert people to the symptoms of stroke and to encourage them urgently to seek medical treatment, but what reassurance can the Secretary of State offer that every hospital in the country will be given adequate resources with which to deal with the increase in demand, especially in scanning departments? What guarantees can he give those who may present at hospitals with stroke symptoms that they will be given the timely treatment that they need to ensure that their future health is not impaired?
I can reassure the hon. Lady that the 20-year stroke strategy that we set out in December 2007 will be completed. However, there comes a point when there must be a drive to increase awareness along the way, and a debate has been held with the Stroke Association and others about when that should happen.
As the hon. Lady implies, we are not at the end of the stroke strategy yet, and not every treatment centre has the best facilities that we want to see throughout the country; but the view expressed in the debate was that now was the time to raise awareness and, in particular, to make people aware of FAST—the face, arm, speech test, which paramedics have used for some time. Strokes, probably more than any other illness or attack, require early treatment and a scan within the first three hours: that is essential. One of the main problems is a lag at the beginning because either the person having the stroke or those around him or her do not realise that it is a stroke.
This is the right time for a public awareness campaign. Meanwhile, we recognise that there is more to be done to ensure that services around the country are uniformly excellent.
I congratulate my hon. Friend on the leadership that he is showing in his city in relation to young people’s opportunities and life chances, and, in particular, on the publication about preventing unplanned teenage pregnancy in Nottingham, of which he gave me a copy last week. In all areas, the important factors are leadership, shared objectives and a clear focus on ensuring that young people are given the sexual health education that crucially influences the choices that they make for the rest of their lives.
The hon. Gentleman raised the issue with me last summer, and I wrote to him about it on 27 June. It is a matter for the local trust. At that time the trust was beginning a consultation, to which I hope the hon. Gentleman contributed, and I understand that it established that there was 75 per cent. public support. The Department does not recommend the banning of flowers other than where they cause particular problems to patients, but we consider that this is an issue for local trusts, and that we should not dictate to them from the centre.
It is essential that we continue to improve the quality of residential care for older people, and I appreciate my hon. Friend’s concerns, but I am pleased to be able to say that the most recent annual report on the state of social care by CSCI inspectors shows the sixth successive year of improvement against the national minimum standards for care homes that we established in 2003. The commission is also taking action to drive up the quality of residential care further. The performance ratings it awards to councils will be affected if those councils only purchase services from care homes rated as poor or adequate. I hope that, together, we will drive up the performance of care homes, so that older people can expect to be looked after with dignity in their retirement.
As often happens in topical questions, we are hearing about things for the first time. I will be very pleased to look into this matter and see whether there is, indeed, a case for Mayday improving its neurological services, and I will also be very pleased to meet the hon. Gentleman to discuss it.
Not if that means withdrawing from the public the choice that I hope my hon. Friend agrees with us they are entitled to.
We might need to take some action. As I understand it, this matter involves a few hospitals, and NHS Blood and Transplant has not been happy with the situation—its correspondence was leaked to the press over the weekend. The organ donation taskforce has been looking at a number of very important elements of organ donation, but we did not ask it to look at this issue because at the time it was not highlighted as a problem. We might need to do so, however, because the hon. Gentleman raises a serious point: we want to increase the number of people on the register, and if people think they are going on the register for their body organs to be part of some export system, that will not do us any favours in achieving that end, so we need to tackle this, and to tackle it quickly.
I would like to know the details of what the hon. Lady is describing. My local acute trust at Castle Hill has purchased the private Nuffield hospital and brought it into the NHS—it says that it had to spend lots of money to bring that hospital up to NHS standards, although that may or may not be true. I shall look at the point she raises, because it sounds like it involves a deeper story.
Yes, I would be happy to meet my hon. Friend.
Is the Secretary of State aware that when I was first elected to this House, almost every GP practice in my constituency offered an out-of-hours service? Despite the dramatic advance in medical treatments and drugs, my constituents receive a much less personal service from their GPs than they did 30 to 35 years ago. Does he agree that that is not progress?
No, I do not, and I shall tell the hon. Gentleman why. At the turn of the century, there was a very serious problem with getting medical students to go into general practice. The forecast, given the demography of general practices then, was that the shortage was bad and would become much worse, so something had to be done. Since the new contract, we have given GPs the option to opt out of 24-hour cover, and the vast majority of them—all bar 10 per cent.—have done so, despite the fact that it has meant a reduction in their pay. We have moved from a system where GPs would look at someone at 9 am having only struggled into bed at about 6.30 am because they had been called out through the night—the situation was similar to the long hours that junior doctors worked, which seemed to be some kind of badge of courage. Tired doctors are not good for our health service, and I am very pleased that we have moved beyond that archaic system.
My local newspaper, The Bolton News, recently reported that a 29-year-old woman in the Royal Bolton hospital was so terrified in a mixed-sex ward with three men that she was forced to sleep in the examination room overnight. Is it not bad enough being ill in hospital without having to deal with the added stress that mixed-sex wards cause men and women? When can we expect to see the end of these wards in Bolton? [Interruption.]
Conservative Members say “After the election”, but, of course, before we came into government nobody kept any statistics on mixed-sex accommodation—the most recent statistics showed that the level of mixed-sex accommodation was about 50 per cent. The Healthcare Commission now reports that nine out of 10 patients have elective care in single-sex accommodation. This is not an easy issue to resolve. We have to be sure that there are good medical grounds—for instance, in intensive care units and emergency accommodation—for not being able to operate single-sex accommodation. Beyond that, what happened to my hon. Friend’s constituent should not have happened—it is unacceptable. It breaches the dignity and respect of the patient, the emphasis on quality—quality relates to more than just quality of care; it relates to the patient’s experience—and our new NHS constitution, which is why I have introduced a £100 million capital fund and I have said that from 2010-11 no acute trust will receive any payment if it gives care unnecessarily in mixed-sex accommodation. I think that will mean the final eradication—I agree that it is taking too long—of mixed-sex accommodation in Bolton and across the country.
Last April, the Secretary of State told the Royal College of Nursing that he was within “touching distance” of abolishing mixed-sex accommodation—nothing happened for nine months. The Conservatives then published the data from hospitals showing the number of people affected by the lack of compliance with the mixed-sex accommodation rules and exposed the Government’s failure—nine days later, the Secretary of State announced a £100 million dignity and respect fund. Will he explain why the Government do nothing unless and until we expose the extent of their failure?
It is not right to say that nothing happened after the Royal College of Nursing conference. In fact, the week after that conference I wrote to every strategic health authority and made it clear that by the time the RCN next meets I want to see progress in this area. It is true that the operating framework that we planned to get out in July did not, in the end, go out until December, and our announcement about what we would do was made on the back of the operating framework.
This issue is too important for party political point scoring, because the care and respect agenda is crucial to Members on both sides of the House. All I would say is that the plans that the hon. Member for South Cambridgeshire (Mr. Lansley) has put forward for an increase in single rooms are hopelessly under-costed. He says that they would cost £1 billion, but they would actually cost about £9.5 billion, and he will not be able to afford it.
As the hon. Lady will know, because I have already told her, North Yorkshire and York PCT recently received one of the biggest increases—[Interruption.] Yes, but the funding comes from the PCT. It received one of the biggest increases for the next two years of any PCT in the country—in the top 30 per cent. of increases.
Point of Order
On a point of order, Mr. Speaker. Given the extraordinary levels of rainfall and the flooding that are occurring today in my constituency and elsewhere, can we expect a statement from Ministers so that we can question them on what immediate action they are taking today and what they can do in the longer term?
Motion for leave to introduce a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to introduce more freedom, flexibility and opportunity for those seeking employment in the public and private sectors.
Two months ago we were celebrating the 60th anniversary of the universal declaration of human rights. Article 23.1 states:
“Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.”
Article 6 of the international covenant on economic, social and cultural rights, to which the United Kingdom is a party, states:
“The State Parties to the present Covenant recognise the right to work which includes the right of everyone to the opportunity to gain his living by work, which he freely chooses or accepts, and will take appropriate steps to safeguard this right.”
It may come as a shock to many Members of this House to know that, currently, many people are not given the rights to work enshrined in those important United Nations articles.
This is an issue of increasing significance with the advent of the economic depression and the soaring numbers of innocent victims of the Government’s gross mishandling of the economy. In Christchurch, unemployment has more than doubled in one year, with very few job vacancies now available. Few would dispute that everything that possibly can be done must be done to create new job opportunities for our fellow citizens. My Bill, by restoring rights to work that have been taken away by this Government, would boost employment.
The first group that would be helped would be refugees who have sought refuge in this country by reason of persecution and are waiting for the Home Office to determine their applications for asylum. Why should those people not have the right to take employment opportunities that have not been taken up by British citizens and thereby enjoy the dignity of having a job? Although it might cause some raised eyebrows among colleagues to hear this, I am pleased to report that the Trades Union Congress is of the same view.
The second and much larger group who will be helped by my Bill are those who are currently out of work but would be willing to work for less than the minimum wage, which is £5.73 an hour or £11,918 a year based on a 40-hour week. Our Government make it illegal for an employer and an employee freely to negotiate the level of remuneration if it is less than £5.73 an hour for an adult, unless, of course, the work involved is unpaid voluntary work.
Before anybody accuses me of wanting to impose poverty wages, let me emphasise that I am talking about arrangements for freely consenting adults. The Government regard an income of £11,918 per year as much in excess of an employee’s personal needs. That is why a single person on that salary is required to pay no less than £1,887 in tax and national insurance, thereby effectively reducing their take-home pay to £4.82 an hour instead of the £5.73 that it is nominally.
Why should it be illegal for someone voluntarily to accept pay of £4.82 an hour? After all, that is all that is left in their pocket if they are paid the minimum wage of £5.73. Giving people the freedom to opt out of the minimum wage would help not only those who are out of work but those in the hard-pressed retail and hospitality sectors where businesses are going down like ninepins. How many such small businesses could be saved if those working in them had the freedom, in conjunction with their employers, to agree to reduce their wages?
The hon. Gentleman says that it would be unfair competition, but we are talking about the marketplace and people should be free to compete in the marketplace without restriction. A reduction to, say, £4.82 would be more than 15 per cent. below the minimum wage and would also save employers national insurance on-costs. It could thereby transform the economic viability of such a small business by substantially reducing overheads.
Voluntary wage reductions are increasingly commonplace in the private sector. I visited a small engineering company in my constituency on Friday where everyone has voluntarily taken a 10 per cent. pay cut. About half the work force have also been made redundant. Workers in other large firms such as JCB and Corus are reported to have done the same to enable their firms to be more competitive and to reduce the overall number of redundancies.
Such changes are not happening purely in the private sector. In Ireland, Members of Parliament and senior civil servants have taken a 10 per cent. pay cut. I am not asking people to support such a proposition if they give me leave to introduce this Bill, but that example shows the mood in the real world. It is ironic that the only people without the freedom to take a pay cut are those on or just above the minimum wage. How can that be fair?
We all know that many people are self-employed and earn far less than the annualised national minimum wage for full-time work. They can escape the constraints of the national minimum wage legislation, but not everyone wishes to become self-employed in order to enjoy the right to work. One of the most effective ways of creating new work, in the service sector in particular, is for services to be offered at a price that is attractive to potential customers, thereby creating a new market. We can all think of examples of people who might offer services such as window cleaning, child care, gardening, car washing and so on. Provided that the price is right, the potential employer may take on those people for employment. In the real world, it is accepted by the Low Pay Commission that more than 1 million people are already working at below the minimum wage. Many of them work in what is described as “the black economy”. How much better would it be if those private arrangements were not criminalised by the state?
The right to work covers not only the issue of remuneration but how many hours are worked. I have received letters from constituents who are worried about the potential impact of the loss of the opt-out from the 48-hour week, which was applauded by Labour Members of the European Parliament only late last year. My constituents argue that they should have the freedom to work whatever hours they decide, in conjunction with their employers. What reasonable man could argue with that? Indeed, that right is recognised by the United Nations, even if not by the European Union.
The final element of my Bill would require all public sector organisations to advertise their job vacancies externally, so that those outside the magic circle would have the freedom to compete for jobs on an equal basis. For example, there are 672 BBC management jobs with salaries of more than £70,000. Are there not many people out there in today’s job market who would give their eye teeth just to have the opportunity to compete for those jobs?
This Bill is about liberalising and deregulating the labour market. It is about removing the barriers to work that have been introduced since the last recession. It is not only an essential supply-side measure; it is also a restoration of that basic human right—the right to work.
Question put and agreed to.
That Mr. Christopher Chope, Mr. Peter Bone, Philip Davies, Mr. Nigel Evans, Mr. Greg Knight, Mr. Edward Leigh, Mr. Ian Liddell-Grainger, Mr. Brian Binley, Mr. William Cash, Mr. Robert Syms and Mr. David Wilshire present the Bill.
Mr. Christopher Chope accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 15 May and to be printed (Bill 60).
Banking Bill (Money)
Queen’s recommendation signified.
I beg to move,
That, for the purposes of any Act resulting from the Banking Bill, it is expedient to authorise—
(1) the payment out of money provided by Parliament of any expenditure of the Secretary of State in respect of, or in connection with, giving financial assistance to or in respect of a bank or other financial institution, and
(2) the payment out of the Consolidated Fund, in urgent cases, of expenditure which would otherwise be paid under the Act out of money provided by Parliament.
As the House will be aware, provision for public expenditure in legislation can be considered only if a money resolution authorising a charge to public funds has been passed. Such a resolution was passed by this House at the end of the Second Reading debate on 14 October last year, in the usual way.
However, as the House will also know from amendments made to the Bill in another place, which we shall debate shortly, the Government found it necessary to have the Bill amended there to provide the necessary statutory cover for expenditure on a wider range of matters than had been thought necessary when the original money resolution was passed.
In particular, as I shall explain in more detail shortly, it was necessary to make provision for a number of schemes operated by Government Departments that had, as their object, the provision of support in these difficult times for bodies that are not banks or other financial institutions, as well as for banks and financial institutions themselves. We therefore require a new money resolution to approve this extension of the financial scope of the Bill before we consider the amendments that the other place has made.
The Minister introduced the money resolution as though it were merely a matter of course and something that should go through without much debate. However, the Bill changed significantly in the House of Lords, which widened the scope of financial assistance beyond what is to be given to banks or other financial institutions. Later, we will discuss the effect that those amendments could have on banks or other financial institutions, on the economy as a whole and on particular industries or sectors, and on actual or potential customers of banks or other financial institutions. Those are broad amendments. They cover a number of packages of aid announced by the Government in recent months. It is important to put on record the estimated cost of those packages, so that the House can understand the scale of the liability that the taxpayer could take on as a consequence of those amendments and the money resolution being agreed to this afternoon.
In the other place, it was said that the changes required to the Bill would give legislative cover for: the first bank bail-out; the equity and preference share investments in the Royal Bank of Scotland, as well as in Lloyds TSB and HBOS, now Lloyds Banking Group; the credit guarantee scheme; the asset-backed securities scheme proposed by Sir James Crosby in his report, which was presented to the Chancellor at the time of the pre-Budget report; the £50 billion asset purchase facility, a scheme that authorises the Bank of England to buy commercial papers; and the asset protection scheme, the details of which we still do not know, although it will ensure a portfolio of bank assets in return for a fee. There were reports at the weekend that there could be up to £400 billion-worth of eligible assets in that scheme.
We could add the schemes announced by the other Department that the Minister represents, the Department for Business, Enterprise and Regulatory Reform. They include: the £10 billion working capital scheme, set up to secure £20 billion of short-term bank lending to companies in the small and medium-sized enterprises sector; the £1.3 billion enterprise finance guarantee scheme; the £1.3 billion that is to be unlocked from the European Investment Bank as part of a package of aid to the motor industry; and £1 billion of direct lending to the motor industry. A large financial commitment is emerging as a consequence of the amendments made in the other place.
Is my hon. Friend of my view, which is that we might be talking about half a trillion—£500 billion—of loans and share capital purchases, and another £500 billion of money guaranteed? We could be talking about guarantees, loans and shares of £1 trillion, and all we get from the Minister is about three sentences.
Indeed; my right hon. Friend makes an important point. The scale of the financial intervention that could be authorised by the Bill is much greater than many people anticipated, even six months ago. It is important to make sure that there is proper scrutiny of it. I will not trespass on the subject of transparency, and the reporting measures on which the Government have conceded; we will talk about that later. There are significant amounts of money involved, and it is important that before we proceed to discussing the amendments, we put on record the amounts of money involved.
I was rather surprised at how quickly the Minister sat down; he did not give us an opportunity to question him. If we pass the measure today, will the funds that we are talking about be consolidated on to the Government’s balance sheet, as is required under international accounting standards?
My hon. Friend, a fellow chartered accountant, asks one of the questions that need to be addressed. As I understand it, there will be different accounting treatments for different types of schemes. Schemes that provide a guarantee will be a contingent liability, whereas in schemes in which we take on debt, that debt will be on the Government’s balance sheet. As a consequence of the Government’s majority shareholding in RBS, the Government have had to recognise a significant proportion of RBS’s liabilities on their balance sheet.
As has been noted, the Minister was swift to resume his seat, whereas my hon. Friend, presumably in a bid to whet our appetites for the debate, has already offered us a litany of statistics. I am all agog: I want to know whether my hon. Friend is advising us to vote against the money resolution.
My hon. Friend tempts me, but we have accepted elements of the banking bail-out package. We feel that parts of the package could have been made much more effective at an earlier stage. We welcome the Government’s working capital scheme, which was announced by Lord Mandelson, although it was a pale imitation of a policy that we proposed in November. So although elements of the package may cause controversy, there are elements on which the Government have followed our lead. The important thing is that we hold the Government to account on how the schemes are introduced and implemented. We will refer to ways in which we can do so in the debate on the first group of amendments.
It is difficult to speak of a backdrop in the first debate on a topic, but it is important that hon. Members who wish to participate in the debate on the Bill recognise the cost of the initiatives that the Government have taken already, the potential exposure that that brings to the taxpayer, and the need to ensure that taxpayers are fully aware of the liabilities that they are likely to bear. I, too, was surprised that the Minister was so quick to resume his seat. He announced in the House at least one of those packages, if not two, and I should have thought that he would be happy to talk about their merits and why they would be effective.
A subject that I have been pursuing since at least 7 October is what is a proper measure of the percentage of gross domestic product represented by the debt—it is somewhat along the lines of the remarks made by my hon. Friend the Member for Wellingborough (Mr. Bone). My hon. Friend the Member for Fareham (Mr. Hoban) correctly referred to contingent liabilities as the proper criteria. However, surely the real criteria should be the financial obligations that are entered into. Nobody could seriously doubt that we are speaking of financial obligations, so whatever the measure that may be imposed by virtue of a theoretical definition, the fact is that the figures are up to £2 trillion to £2.5 trillion, as I said in the most recent debate. Does my hon. Friend agree that we need to work that out carefully so that we get a proper measure, not just a theoretical measure, of what is defined?
My hon. Friend makes an important point about trying to quantify the extent of the liabilities that the taxpayer is taking on. Dredging the recesses of my memory, I recall from my accountancy training that there are accounting standards that examine the extent to which a potential liability could crystallise and therefore how one should account for those liabilities. What is more likely to transpire should be provided for, and what is less likely to transpire should not be provided for.
Part of the challenge that we face is that one of the potentially largest elements of the package is the asset protection scheme, which will insure a portfolio of bank assets. Work is going on to try to quantify the extent of the package and what guarantees the Government will enter into with the banks, so we are yet to find out the true scope of the commitments that we are likely to enter into on behalf of the taxpayer in trying to resolve some of the issues associated with the banking crisis.
It was not a thesis, but it was a very good point about contingent liabilities. Equity accounting rules say that if the Government own more than 50 per cent. of a bank or any institution, they should consolidate not just a portion—that is, 70 per cent. of the debt—but 100 per cent. of the debt. Does my hon. Friend agree that if we want transparency, the Government should consolidate 100 per cent. of the debt of anything that they own over 50 per cent.?
My hon. Friend, who has made a great study of the state of Government finances and their on and off-balance sheet liabilities, tempts me down a course which, if he does not mind, I shall not tread at this point. He makes an important point about the extent to which the Government may wish to recognise the liabilities. We are speaking of the liabilities of not just one bank. The Government have nationalised two banks—Northern Rock and Bradford & Bingley—so their liabilities will need to be taken into account as well. In the interests of transparency, we have heard nothing about the condition of Bradford & Bingley since it was nationalised at the end of September. That will be referred to later, in the debate on Lords amendment 83.
I give way to the hon. Member for Thurrock (Andrew Mackinlay).
I do not wish to get in the way of the hon. Gentleman’s making a substantive speech. It will be good to hear comments from Government Back Benchers, but I am sure that the hon. Gentleman will agree that there are significant sums of taxpayers’ money involved and it is right to have a proper debate about it not only now, but as the scale of the liabilities unfolds over the coming months. Not wishing to deprive other hon. Members of the opportunity to speak, I shall conclude my remarks there.
I am pleased to have caught your eye, Mr. Speaker. I am a bit bewildered and concerned that countless Members of Parliament from all political parties will be responding to letters and representations from constituents about the bonuses being paid to people who presided over the banks that have failed. That issue is fully within the footprint of the resolution, which involves Parliament authorising moneys to fulfil the intentions of the Banking Bill, which is designed to bail out and underwrite the banks.
It is inconsistent for us in this Parliament to agree this money resolution when the Prime Minister has failed to ensure that bonuses are not paid to people who have failed both the banks and the wider United Kingdom community. In my view, the money resolution should be contingent on an undertaking that the banks will not pay the bonuses or that the Government will enact legislation to ensure that those payments are not made. I find it bewildering that neither the Opposition spokesperson nor the Government Front Bencher has mentioned the big elephant in the room—that is, the bonuses being paid. At the same time, we are expected to vote this afternoon—
Does the hon. Gentleman agree with me that the consequence of this money resolution is that the House has to supervise a big bank with a medium-sized country attached—a £2 trillion bank and a £1.5 trillion country? That is why the hon. Gentleman is in difficulties.
Maybe. We are being asked to authorise this expenditure by Parliament; it is Parliament’s historic role to make moneys available to the Government. I was inadequately trying to make the point that it would be wrong for me, on behalf of my constituents, to acquiesce, by my silence, in this authorisation of payment just when the Executive branch of the Government, these Ministers, are not ensuring that the rights and interests of our people are protected and promoted to the fullest extent; I am thinking about making sure that the bonuses are not paid to the failed bankers.
I conclude by saying that I am not prepared to let the motion go through without making it clear that it should be a condition of the resolution that the Prime Minister comes to the House to say something about the payments. I am not talking about setting up reviews; reviews that take months are no good—particularly if they are conducted by a man who received bonuses. Working-class people do not receive bonuses, and earlier we debated a Bill about rights to work. It is now time that Parliament exercised its right, and I am tempted to divide the House on the issue. I hope that the Whips are listening in their offices.
This morning, the Treasury Committee spent about three hours interviewing bank executives. Part of the reason for that was our incredulity at how they had made decisions based on information about very complex financial instruments, which we suggested they did not know enough about before they committed huge sums to buying various assets and lending money in a certain way. We suggested to them that perhaps they should have had better training and education so that they could have understood exactly what they were approving.
Now we find ourselves here this afternoon. The Minister has made a statement lasting two or three minutes and is asking us to approve something, although many of us have not got the foggiest idea what it is to fund.
It could well be bonuses. Some of it will be in actual cash, by way of loans; some of it will be by way of guarantees and indemnities; and some of it will be by way of stand-by facilities. However, we do not know what the estimated total exposure at any one time might be. We do not have much idea of what the underlying security might be. We have not been provided with a cash flow forecast to indicate what the peaks of this exposure might be. We do not appear to have any exit routes for how the money will be paid back, in what time scale it will be paid back, or whether it will ever be paid back. There seem to be no dates by when these facilities will no longer be available, how long they will be made available for, or what review periods will be undertaken to ensure that the cash flow forecast is on track, or not on track. Combining all that with the opaqueness of the Government’s own accounts as regards their off-balance sheet items and suchlike, we have no idea whatever of the total exposure that the Government are suggesting we should agree with taxpayers’ money.
To debate all that we have three quarters of an hour, most of which has now gone. We have to decide what could be an unbelievable amount of exposure. As the right hon. Member for Wokingham (Mr. Redwood) said, it could be £1 trillion; we just do not know. I cannot conceive how we could possibly approve it today without a significant amount of additional information so that we have at least some idea of what is involved. If somebody gets us in front of a Committee in a year or so and says, “When you approved it, did you understand what it was all about?”, we are going to look rather foolish.
I am almost tempted to suggest that it is worse than that. One of the component parts of this money resolution is the Government’s insurance for the banks’ excess bad debt, effectively covering the toxic debt, which is a moveable feast—it is completely open-ended. Is it not worse than the hon. Gentleman describes in the sense that debts, or loans, that are good at the moment can become bad as the recession worsens, making this a completely open-ended commitment to an unmeasurable liability?
I thank the hon. Gentleman for that. He is exactly right: it is worse than I was thinking. If we discussed it for another half an hour or hour, we might discover that it is even worse again.
Most money resolutions are relatively straightforward—I think we all accept that—but this is entirely different. We should not just pass it and get on to the Lords amendments, because it is fundamental to the whole question of our bailing out the banking system. Unless we fully understand what the exposures are, this House will not be doing its fundamental task of oversight.
I am following the hon. Gentleman’s remarks with care. Does he agree that there is a marked contrast with the situation in the United States of America, where not so many months ago the Treasury Secretary went on his knees in front of Congress to seek permission for that money?
There is a certain similarity, of course. Althouh I do not want the Minister here, or anybody else necessarily, on their knees, when they come to the Dispatch Box they should at least give us a much fuller understanding of exactly what we are being asked to do.
This is the biggest, most important and most dramatic money resolution I have ever seen in the House of Commons. It has taken 1,000 years to amass a debt that the Government put at around £550 billion. Under this money resolution and the associated actions that the Government might take, they might double the debt by making that amount of money available as loans and share capital to banks or put the same amount again at risk through their loan guarantee scheme. As my hon. Friends have indicated, if we consolidate on the general balance sheet, as we should, all the assets and liabilities of the banks that the Government are buying, we do not just double the debt but quadruple or even quintuple it when one takes into account the full size of RBS, Northern Rock and Bradford and Bingley—no others, we trust, but this is very open-ended and implies that there could be others.
The money resolution takes the form of two different assertions. First, we are invited to give the Secretary of State power to put out money provided by Parliament under these headings, and secondly, in urgent cases, to authorise payments to be made out of the Consolidated Fund. The Bill that backs up the money resolution contains even more wide-ranging powers relating to the central bank, enabling quite a lot of money to be generated by the bank through quantitative easing and the manoeuvres of its own balance sheets, so the process is literally open-ended. We have absolutely no idea how much is involved.
I was disappointed because I wanted to intervene on the Economic Secretary. He gave the impression of a Minister who was going to make a serious and sensible statement about this weighty issue, but he sat down as soon as he saw me trying to intervene and before he had mentioned a single figure. Call me old-fashioned, but if I were moving a money resolution in the House of Commons, even one for a modest sum of money, I would mention the sum involved and explain why I thought it would provide good value. We have a money resolution that could involve half a trillion or a trillion pounds. On a consolidated basis, if we take all the liabilities into account, it could be several trillion. We might think that it was worth giving a few numbers, or at least some kind of ceiling to suggest that the Government understand that we are talking about big banks in a relatively small country.
Does my right hon. Friend share my concern that the Government do not know the answer because they have not had the time to do their own due diligence on the exact amount of risk to which they are exposing the country and taxpayers? That is why we are now on our second bail-out, and my concern is that we may end up having a third two or three months down the road.
I quite agree. I do not know whether the figure of £37 billion is retrospective, or whether the Economic Secretary thinks it was voted for under some other provision. We know, however, that £37 billion of equity capital was put into banks just a few months ago. The money changed hands only comparatively recently because it took quite a long time to get the approvals and do the final detailed negotiation. In the case of RBS, we believe that £20 billion went in one week, and the following week it announced it had lost the lot and a bit more besides. Again, call me old-fashioned, but I do not feel I got a lot of value out of that £20 billion, and I wonder why the Government put it in in the way they did, why they did not ask a few questions about the future results before they chose a price to put in new share capital, or why they put in new share capital at all, instead of using guarantees and short-term cash loans, which would have been quite sufficient.
To give a sense of perspective about the size of the amounts involved and the speed with which figures can change, on 13 October the Chancellor of the Exchequer told us that the assessment made on the money going into the banks at that point was a cautious one—the FSA had made it on a cautious basis—so the amounts involved were rather larger than might otherwise have been the case. Three months later, on 19 January, RBS had to write off £28 billion, which is the largest amount ever written off by a company.
That is right, and some of us have urged the Government in the past to show a little more concern for the public money involved, to ask more questions and do a little of what is called due diligence in the private sector before committing such huge sums of money to get a better deal for the taxpayer, if they feel that they need to do such a deal at all.
I urge the Economic Secretary, when considering the money resolution, to ensure that next time—I fear that there will be a next time because the Government are looking at a second package of banking support measures—the Government at the very least try to find out the scope of the problem. They should ask what the next set of figures might be. They should take that into account before valuing any share capital or loan capital they intend to put into the bank, and they should understand that a medium-sized country with an annual turnover and national income of £1.5 trillion will find it difficult to stand behind all the London-based banks with their combined multi-trillion-pound balance sheets.
If the Government are not careful, they will undermine the credibility and the reputation of their own debt and public finance by linking themselves too strongly and closely to some large banks, three of which we know have been badly run and have committed themselves to big risks and to big bonus and other contingent payments for no good reason, which have landed the taxpayer with a very big bill owing to the Government’s policy.
I know that others wish to speak. It is a pity that we do not have a three-hour debate on the biggest sum of money ever voted on in the history of Parliament, but I do not want to detract from colleagues’ time. I have made my main points: the Government should show more care, they should provide us with some numbers and they should understand that the total sum involved is too big.
My right hon. Friend the Member for Wokingham (Mr. Redwood) said, “Call me old-fashioned”. I am old-fashioned, as I believe most Members probably are, in the sense that I believe it is not unreasonable to want to know what liabilities one is entering into, or leastways to hear figures suggesting what those liabilities might be. “Due diligence” is a phrase that echoes through almost every transaction in the commercial world.
One problem is that due diligence did not happen in the commercial world when it came to our banks. The lesson for the Government is that they need to be much more wary when dealing with the banks.
That is a very fair correction. Of course we all accept the need for due diligence from those who serve us, professionally and otherwise, in the commissioning and undertaking of the tasks ascribed to them.
This country is clearly frightened. What is happening is without precedent in living memory. Unemployment is growing at an alarming rate, and we are watching companies fold. We know that the liquidity of banks lies behind that. We have already had what I believe was a 90-minute debate on a resolution to make available £40 billion and a further £200 billion. The House has been marginalised in the undertaking of its most fundamental duty, which is the supply of money. We do not know how much we are to supply on this occasion.
I go along with my right hon. Friend the Member for Wokingham in saying that the motion is open-ended, and I am surprised he believes that the Government will even need to return to the House with another such motion. It is pretty comprehensive, yet we know nothing of the figures. The hon. Member for Thurrock (Andrew Mackinlay) asked why we are approving the sums that we are, because they must give bankrupt banks the ability to pay bonuses they would otherwise not be able to pay. Last Thursday, the Financial Times set out the Obama programme for convincing the public why the measures being sought through Congress, which will sit at weekends if necessary to discuss them, should apply to the banks. That programme rests on a condition similar to the one that the hon. Gentleman set out.
Yet this Government have set as their condition the holding of an investigation, which will dribble on until the end of time. How can people be confident that the Government know what they are doing, are on the side of the people and can countenance the payment of such sums? Where in their scheme is correction provided for? The Minister must say more about that. It cannot be reasonable to assume that the House will dance to a tune that it does not even understand. The resolution opens our imaginations to the thought that the Government are as lost as all of us. In fact, they are more lost, as they cannot put a sum on anything.
I want to see Parliament at the centre of what this country decides in relation to the Executive. That has happened throughout our history, and we are elected to ask the Executive for certain informations. We have been hollowed out in the great debate that faces each of our constituents, and we have not even had proper debates on the Government’s economic conduct. They do not want to come to the House to discuss that; they just send a little message, a three-minute speech by the Minister explaining why it is essential that we should bounce along to their drumbeat.
No, no—I agree with my hon. Friend the Member for Stone (Mr. Cash) that we should oppose the motion so that the Government take seriously the intent of Parliament. Each one of us must justify such vast sums, which could bankrupt the nation. The bankruptcy of countries is not unknown in history. When one hears of money simply being thrown around, without ascertaining or establishing conditions, it makes one feel that the Government do not know what they are doing apart from pushing money into the economy somehow. We need to be more intelligent about the matter, and so do the Government.
The Executive are trying to achieve what all hon. Members want—the stabilisation of an economic crisis and beginning of life again. However, that should be done in partnership, so we should oppose the motion.
It is a great pleasure to follow my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), who speaks with immense sense and with whom I entirely agree.
I had the great pleasure of attending every Committee sitting, where the Economic Secretary, who is also at the Dispatch Box today, would spend five, 10 or 15 minutes discussing some sentence in the Bill. However, when it comes to spending so much money that we do not even know the size of the sum, with the danger of bankrupting the British economy, we get a very short speech. I do not believe for one moment that that was by the Minister’s design—I think he was sat on from on high. The theory is, “Whatever happens, let’s not discuss the Bill but simply get it through quietly; let’s spend billions and billions of pounds, and nobody will notice.” I spoke in a debate in which we spent £42 billion in 90 minutes. The larger the amount of money, the less time we have to discuss it.
I am grateful for the intervention because I intend to be brief to allow the Economic Secretary time to say at least something about the matter. Perhaps he has no idea about the figure, but he has got to do better. He must come to the Dispatch Box and explain the money resolution in greater detail, otherwise I will not support it. I know that that creates some difficulty for my hon. Friend the Member for Fareham (Mr. Hoban). He made many of the points that hon. Members of all parties have raised, but he wants to get the Bill through, as we all do. However, if we continue to allow the Government to railroad Parliament, they will be encouraged to do it again and again.
Will my hon. Friend take into account the fact that our presence here today to discuss the money resolution must be in accordance with the rules laid down in “Erskine May” and in Standing Orders? We are discussing a proposal for new or increased expenditure, which is not already covered by legislative authorisation. We are therefore in a de novo situation. My right hon. Friend the Member for Wokingham (Mr. Redwood), and my hon. Friends the Members for Aldridge-Brownhills (Mr. Shepherd), for Braintree (Mr. Newmark) and for Gosport (Sir Peter Viggers) have already shown that there is deep concern about the fact that the amount is new and increased, and, as my right hon. Friend the Member for Wokingham said, its implications are stupendous.
My hon. Friend speaks with great clarity and is, of course, correct. Time and again, the Executive have performed the same trick. They add things to Bills late in their passage. In this case, they are adding the most massive sum of money.
I realise that I am short of time if I want the Economic Secretary to speak again, and he must make it clear whether we are considering approving expenditure of not only billions but trillions. Will that be incorporated into the Government’s balance sheet? If so, we will be a little country run by a big bank. The Economic Secretary must be clear: will the money be consolidated or not?
The proposal that the Government have put before us is profoundly worrying. It would allow an unlimited amount of expenditure, by authorising
“the payment out of money provided by Parliament of any expenditure of the Secretary of State in respect of, or in connection with, giving financial assistance to or in respect of a bank or other financial institution”.
That is, in fact, a blank cheque.
In January, the Prime Minister expressed surprise and anger that the Royal Bank of Scotland had invested in derivatives—“invested” being a pejorative—and that it had become necessary to write off £2.5 billion of taxpayers’ money, which was irrecoverable from a Russian oligarch. What on earth are we doing surrendering taxpayers’ hard-earned money to a Russian? The Prime Minister expressed anger, but how much more angry should we be that he spent taxpayers’ money on that basis and that he then expressed surprise?
The only way ahead must surely be to tie down the Government, so that they are not so profligate in the expenditure of our money, and to reject the motion. Having said that, I was present when my hon. Friend the Member for Tatton (Mr. Osborne) gave an undertaking that the Bill would go through with our support in February, and on that basis I will not be voting against it.
With the leave of the House, I would like to respond to some of the points that have been raised in this debate, although I appreciate that this gives hon. Members an opportunity to range relatively widely over Government expenditure.
A number of the issues could have been raised in connection with the money resolution on 14 October, which was passed without debate. Indeed, hon. Members will be aware of the convention with regard to money resolutions. Like the hon. Member for Aldridge-Brownhills (Mr. Shepherd), I, too, am old-fashioned.
If the hon. Gentleman will let me reply first, I will then give way.
I am old-fashioned enough to believe that a money resolution is about providing the cover for expenditure. We are not debating or voting on the expenditure itself. That will happen through the normal process of supply estimates and votes where appropriate. There will be opportunities to discuss the expenditure that the Government are committed to, but we are asking for cover for expenditure, just as we do for other Bills in normal circumstances.
Let me make just a little more progress and answer some of the substantive points that have been made. Then I will give way to the hon. Gentleman.
The schemes covered by the resolution will be subject to the standard arrangements for parliamentary control and for the reporting of expenditure to Committees as appropriate. The Bill makes that happen and will also put in place additional requirements, in line with amendments made in the other place. Hon. Members will be aware that amendments made in the other place imposed a requirement on the Government to report on expenditure and liabilities made or assumed under the Bill. We have accepted the principle behind that amendment and we will debate it in due course, so there will be no lack of transparency on the Government’s part.
Does the Minister not understand his and my constituents’ bewilderment that we should be giving the banks a blank cheque, as other hon. Members have said? We understand the gravity of the situation but, at the same time, he and the Prime Minister are not insisting that bonuses should not be paid. I ask him again: will he cut away the nonsense about a review and say, “It shall not happen”?
I hear what my hon. Friend says. We all share the public outrage about bonuses that are rewards for failure. Let me say to him that it is not a blank cheque that we are asking people to support today; it is a money resolution that is prepared in the normal way. There will be scrutiny through estimates and votes in the normal way. It is also important to recognise that there are a number of measures in the Bill that are important to people and businesses in his constituency. That is why I hope he will not want to vote against the money resolution, because not passing it would prevent people and businesses in his constituency from receiving substantial support.
In a moment. I just want to address the point about contingent liabilities.
As hon. Members will be aware, Departments are required to note contingent liabilities in their annual resource accounts. In exceptional circumstances, this may be done confidentially to the Chairs of the Public Accounts Committee and departmental Select Committees. In a moment, I hope we will go on to discuss the transparency and reporting amendment that I have tabled in response to the amendment made in the Lords. It proposes six-monthly reporting requirements. We are not hiding away from wanting to report on our liabilities and the actions that we are taking on this matter; we want to get it right, but we also want to do whatever it takes to maintain stability and support for the economy in this difficult time.
I am pleased with the cross-party consensus that we have had during the passage of the Bill, and I ask hon. Members seriously to consider that there is a difference between a money resolution that provides cover for expenditure and a debate on the expenditure itself, which will be held in the normal way.
We have explained this, in our previous statements to the House on bank recapitalisation, and in our announcements on the asset purchase scheme. We also explained in detail the fact that we were providing £10 billion in contingent liabilities for supporting the working capital scheme, which will allow £20 billion of lending. However, we do not know what the exact figures will be because, in many cases, we are providing loan guarantees, and our final liabilities will depend on the ability of companies to get through the recession and on whether those guarantees are called. The sooner we act, and the sooner we can get more support to businesses, the more likely the businesses will be to survive at this time—
Three quarters of an hour having elapsed since the commencement of proceedings on the motion, the Speaker put the Question (Standing Order No. 52).
Banking Bill (Programme) (No. 4)
Motion made, and Question put forthwith (Standing Order No. 83A),
That the following provisions shall apply to the Banking Bill for the purpose of supplementing the Orders of 14 October 2008, 26 November 2008 and 17 December 2008 (Banking Bill (Programme), Banking Bill (Programme) (No. 2) and Banking Bill (Programme) (No. 3)):
Consideration of Lords Amendments
1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption at this day’s sitting.
2. The Lords Amendments shall be considered in the following order, namely Nos. 83, 1 to 82, 84 to 97.
3. Any further Message from the Lords may be considered forthwith without any Question being put.
4. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Mr. Blizzard.)
Question agreed to.
Consideration of Lords amendments
I must draw the House’s attention to the fact that privilege is involved in Lords amendments 20, 51 to 53, 59 and 75 to 84. If the House agrees to any of these amendments, I shall ensure that the appropriate entry is made in the Journal.
After Clause 226
Transparency: financial assistance
I beg to move, That this House disagrees with Lords amendment 83.
Before addressing in detail the amendments made in the other place and the amendment the Government are now proposing, it might help if I summarise the purpose and history of clauses 228 and 229 in the latest print of the Bill. Their purpose is to put the use of public money in the proposed bank resolution arrangements, or in the provision of financial assistance to banks and their customers more generally, on to a proper statutory footing. Clause 228 does that by providing the statutory cover for expenditure in Supply estimates. That is required under a long-established convention, commonly called the PAC concordat of 1932, that there should always be specific enabling legislation to enable the finance for a new service to be provided from public funds. We amended the clause in Committee in this House to give statutory cover for financial assistance where the institution concerned was not a UK deposit taker or a financial institution that was not a deposit taker—for example, a bank holding company—but further issues came to light that had to be dealt with by Government amendments in the other place. I briefly commented on them in the money resolution debate, and I shall turn to them shortly.
Clause 229 provides statutory cover for drawing money from the national loans fund to make loans urgently where that is necessary to protect financial stability. We also amended the clause in Committee to extend the types of person to whom loans could be given to cover financial institutions other than UK deposit takers. I shall also talk about the Government amendments made in the other place after discussing clause 230. This clause, the result of the passing of amendment 83 in the other place, provides for more rapid detailed reporting of financial assistance given to banks, financial institutions and their customers. It provides for quarterly reporting of expenditure, and of guarantees and similar commitments that might result in expenditure, met with money voted by Parliament under the authority of clause 228(1). Clause 230 also provides for the same reporting arrangements for loans made under clause 229. It requires the Treasury to lay sufficiently detailed reports before both Houses of Parliament, but allows for the disclosure of the information to be delayed as long as there is a public interest in not disclosing it.
The Government have always appreciated the concerns that many people have about transparency and reporting. Those are important issues for the whole Bill, and not just in relation to public expenditure, and we discussed them at great length in Committee and they were discussed at great length in the other place. The Government’s view is that it is necessary to balance the desirable objective of transparency against the need for confidentiality in a number of contexts. There will be cases where action to tackle financial crisis, taken under the Bill or otherwise, can be effective only if it can be kept confidential.
If we approve the Bill as it stands, is there a danger that because there will no longer be a weekly report from the Bank of England, some of this assistance could be provided on the Bank of England’s balance sheet to avoid all scrutiny and accountability?
I shall discuss those points, but basically the answer is that we have the balance right in what we are proposing today.
The right hon. Gentleman will remember that there were concerns about this precise issue when the news about Northern Rock first broke. There were concerns that the provision of financial assistance by the Bank of England had to be disclosed by the recipient firm—as is the case for listed companies—under Financial Services Authority rules. There were also concerns about the way in which the publication of the weekly Bank of England return could be used to work out that such support was being given. Indeed, clause 244, which removes the obligation on the Bank to produce a weekly return—the right hon. Gentleman referred to that—was included in the Bill precisely because of those concerns.
So there must be a balance between the need for transparency and the need to protect confidentiality where it is clearly in the public interest to do so. The Government feel that the original clause 230, although a noble effort, does not quite get the balance right. We simply feel that there is too big a risk that it could be possible to identify the beneficiaries of financial assistance under some schemes or the amounts that they could receive. I am sure the House will appreciate the risk, therefore, of damaging speculation about the identity of the institution concerned. That could be bad for confidence and it could even lead to the kind of situation that we are all trying to avoid.
These issues were debated in Committee in another place, and the version of the clause accepted on Report in the other place has gone some way to recognising these difficulties. For example, clause 230 does allow the Treasury some leeway to delay the disclosure when it is in the public interest to do so—for as long as that remains the case. That is sensible, but because of the risks and concerns that I have just described, the Government might well end up relying on this public interest exemption rather too often.
That is bad for two reasons. The first is that it increases the chance that the Government may not be able to make a disclosure—that is clearly bad for transparency and we ideally want to avoid it. The second is that the frequent delay or omission of information could, itself, lead to destabilising and damaging speculation of the kind that we all want to avoid. So we have been considering ways in which regular reports of the kind provided for by clause 230 could be made while minimising the problems that I have described.
Does the Minister accept that normally the money resolution authorises, in general terms, the expenditure and that subsequently, as he said, there is an estimate, but it is not, in itself, a reason for accepting the money resolution? Does he also understand that much of the reason for the Bill’s being discussed and voted upon by an unelected Chamber—the other place—is the fact that the Government imposed restrictions on the amount of debate to take place in this House and abrogated to the upper House matters that should properly be dealt with only in this House, because we are elected on behalf of the people?
Unfortunately, I do not agree with hon. Gentleman. Exceptional events have been taking place in money markets worldwide, and the Government have had to act quickly to ensure financial stability. We did that through recapitalisation, and the authorisation for that was in the money resolution that we passed in October. We have had to take further action since, and we need legislative cover for the action that we have taken, which is why we were discussing the money resolution. But we also want to ensure transparency and accountability to Parliament. I share with the hon. Gentleman the strong view that accountability for these matters should be to this House, and we are trying to achieve a reasonable balance between the need for transparency and the need for confidentiality. That is why we have tabled an amendment containing a new clause to take the place of clause 230.
The new clause would provide that reports should be submitted half-yearly rather than quarterly. In itself, that would significantly reduce the risk of identification as expenditure incurred or guarantees given over a longer period would be covered in any one report. The new clause would require the Treasury to ensure that individual recipients and the amounts that they have been paid or guaranteed cannot be identified. That will usually mean aggregation, and we expect that in practice each scheme would be reported on separately, but that, if necessary, data on schemes could be aggregated up to the level of the sponsoring department. The Government believe that that is the intention behind subsection (2) when taken with the recognition of the public interest in subsection (3), and our amendments are, therefore, in line with the clause as it stands, but make improvements in clarity and technical effect.
There are also some smaller points on which the Government propose changes to clause 230. First, the amendment provides that the reports should not include the loans made under clause 229. A Government amendment in the other place, which we will come to shortly, made the loans from the national loans fund under clause 229, which can also only be made when needed urgently to protect financial stability, subject to an ad hoc reporting procedure similar to that provided in clause 228 when money is taken directly from the Consolidated Fund in urgent cases. But there is no mechanism analogous to estimates for approving loans from the national loans fund, so there is no need to include them in reports under clause 230. Of course, those payments and loans will be included in the annual accounts of the national loans fund.
Finally, the amendment provides for reports to be laid only before the House of Commons. That is entirely normal, and follows the usual processes for reporting on public expenditure, in line with long established constitutional precedents in relation to public finances. As set out each year in the Queen’s Speech, Supply estimates for the public services are laid before this House only. The reports that this amendment will introduce relate to money voted in those estimates, and it is proper, therefore, that they should be formally laid in this House. But the reports will of course be published so copies will be available to members of both Houses—and indeed the general public—in the normal way.
I hope that the House will agree that these proposals strike the right balance between the objective of transparency and the need for the appropriate level of confidentiality. I hope that the additional arguments that I have been able to make will enable those who expressed concerns in the debate on the money resolution to be reassured about the accountability mechanisms that will be built into the process.
My hon. Friend makes an important point. There is great outrage about bonuses being paid by banks, and it is felt that we should do more about that, given the amount of money being put into the banking system. The key is transparency. While I understand the thrust of the amendments, there is a conflict between transparency and the confidentiality that is needed for the reasons that my hon. Friend has outlined. Does he agree that we must make it clear to our constituents that transparency is a key part of the proposals?
I agree strongly: it is right that we should be as transparent as we reasonably can, while recognising that certain public policy objectives require some degree of confidentiality. The last thing that we would want to do is create a run on a financial institution by being too transparent and disclosing problems when by taking action as we propose, we could solve such problems.
I remember the debates in Committee over this point. One of the dangers of not having transparency is that someone might invest in an organisation, only to lose a lot of money later because it went down, and they would not have known that the Government had been bailing it out in between those times. However, I want to ask the Minister whether we will have an extraordinary Supply day to cover the estimates that we have just approved in the money resolution. If so, will he guarantee that the time allowed for that will not be three hours but will be enough to ensure that the subject is properly debated?
I cannot speak for the business managers of the House, obviously. However, as part of the normal reporting procedures there will be an opportunity to debate these matters. The hon. Gentleman has raised his point and he will have ample opportunities to raise the Government’s programmes in debates on the Floor of the House and in Westminster Hall.
May I put three examples to my hon. Friend? Let us say that the Bank of England were to start buying Government debt; that the Treasury were to start issuing debt directly to businesses, institutions or arms of local government; or that the Government were to decide that they had to support credit insurers and created a new credit insurance facility in order to keep business moving. Those matters would all be covered by this new clause. How would Parliament be kept informed about these matters?
As a Government, we always want to be open and transparent. As an experienced Member of this House, my hon. Friend will know that when we make major decisions as a Government it is normal practice that we report them to Parliament either through an oral statement or a written ministerial statement. The normal financial accountability mechanisms will be considered and will be debated in due course. I assure him that the Government want to be absolutely clear about what we are doing and to explain why we are taking action. We think that it is vital that we should continue to do all we can to ensure the stability of the financial system in the UK. That is why the announcements that the Chancellor made in an oral statement to the House a few Mondays ago showed the normal practice that we would follow. That does not negate the need for other reporting mechanisms to be put in place. As I outlined earlier, the estimates and votes process is long established in this House and provides a means of financial accountability.
Let me turn to Lords amendments 75 to 80, which provide statutory cover for expenditure incurred in connection with schemes run by Departments other than the Treasury. They do that by providing statutory cover for schemes where the financial assistance being provided will both facilitate the activities of the bank or financial institution and provide a benefit to a third party, such as customers of banks or other financial institutions, or to the wider economy. Expenditure incurred in connection with schemes such as the home owners mortgage support scheme announced by the Prime Minister on 3 December and the working capital scheme that I announced to the House on 14 January in my capacity as Under-Secretary of State for Business, Enterprise and Regulatory Reform are covered by the provisions.
Lords amendment 81 addresses a different issue regarding the provision of financial assistance. As the House will know, the Treasury has made a number of arrangements to support the UK banking sector. They include the credit guarantee scheme for new inter-bank lending introduced in October 2008, as well as the asset protection scheme and guarantee scheme for asset-backed security that were announced on Monday 19 January. Those schemes involve the provision of guarantees or similar financial commitments by the Treasury. Although we hope that there will be no need to make any payments, the Treasury must be in a position to settle promptly any liabilities that arise. Normally, that would be effected by securing parliamentary approval for an estimate, but clearly a need for expenditure might arise at any time, including during a recess when estimates could not be obtained. The amendment addresses that by providing for direct access to the consolidated fund without an estimate in cases where the funds are required urgently. It also provides for parliamentary reporting with suitable safeguards in respect of commercial confidentiality and the maintenance of market confidence.
Does that not undo what the Minister said earlier in the debate? He said that there would always be an estimate so that the House could decide whether or not to approve the expenditure of money, but it appears that money can be spent without any approval during a recess. I assume that we will not be able to come back afterwards and unspend it, so did not what we voted on earlier in fact commit us to spending it?
No, the money resolution that we voted on earlier will not do what the hon. Gentleman suggests. Where funds are needed urgently and it is not possible to have estimates, that money can be provided. However, it will still be subject to the same accountability systems when Parliament returns after a recess.
May I follow that up? My hon. Friend has made it clear that the facility will be available only to UK banks, but an important point that should not be overlooked is that much of the exposure that will be supported could be outside the UK. In fact, I can think of one or two big financial institutions that will carry most of their exposure outside the UK. Is that also covered by the loan facility?
We are trying, through the working capital scheme, to progress our discussions with UK banks about their credit lines to UK companies. The policy intention is not that the Government should underwrite the loans of non-UK companies or investments made by UK companies in assets outside the UK. We need to be clear that the purpose of the working capital scheme is to help UK companies that need access to credit. Some have had their credit lines withdrawn, and the Government want to give a reassurance that credit will be there in the future. I can assure the right hon. Gentleman that the policy is UK focused and that the intention is not to fund projects internationally in the way that he describes.
Finally, I turn to amendment 82 to clause 229. Clause 229 provides for loans to be made urgently from the national loans fund where that is necessary to protect financial stability. Of course, loans can be made with money voted by Parliament but, again, an estimate will have to be obtained first. However, loans can be provided from the national loans fund without an estimate, provided that the relevant requirements are met. That means that they can be used in urgent cases for which no estimate is available.
After further reflection, the Government felt that the same kind of reporting arrangements that apply to the urgent payments under clause 228(5) should also apply to individual urgent loans under clause 229. As I have just explained, Lords amendment 82 does that with the same kind of anonymity and public interest conditions as those used in subsections (6) and (7) of clause 228.
These Lords amendments are detailed. For what we believe are good reasons, the Government disagree with one of them, although we accept its general principle and thrust. We think that the balance between transparency and confidentiality that their lordships proposed needs to be changed slightly, and I have explained our thinking. I hope that the House will agree to our amendment in due course.
I will deal with the amendments in a different order from the Minister and start off with Lords amendment 79, which is important. It triggered much of the debate that we had on the money resolution, in the sense that it would broaden the way in which the Government can use public money to support the banking sector or other financial institutions. When we debated clause 225 in Committee, it was more narrowly focused, but the amendment would widen its scope. I want to test with the Minister my understanding of how broad the amendment is in practice.
My understanding is that the Bank of England’s asset purchase facility would fall within the ambit of the clause, because the scheme permits the Bank to purchase commercial paper, and that indirectly benefits banks by reducing the potential demand for funding, so any financial commitment that arises from the asset purchase scheme would be covered by Lords amendment 79. The Minister mentioned Lords amendment 81; I am trying to understand where the Government have broadened the nature of the assistance that can be given. I am thinking of how new subsection (1A)(a) and (b)—particularly (b)—which is inserted into clause 225 by Lords amendment 79, will relate to a range of schemes. I assume that the funding package for the motor industry that the Minister announced in the House last month would come within the ambit of new subsection (1A)(b).
I wonder if I might push the Minister a bit further to see how elastic the provision is. Last week, at the CBI’s manufacturing dinner, Lord Mandelson floated the idea of a scrappage allowance. The intention was that it would restart car purchases in the UK by encouraging people to trade in an old car for a new car. A number of people in the industry proposed the idea. I would have thought that it was within the realms of the Government’s creativity to claim that any expenditure on such a scheme would be covered by the subsection, because new subsection (1A)(b)(iii) refers to
“its effect on a particular industry or sector of the economy”.
Clearly, a scrappage allowance would stimulate the demand for consumer credit, kick-start the motoring sector and potentially reduce the demand for working capital finance from the banks. That may seem a far-fetched example of a scheme that could fall within the scope of the amendment, but it is not clear how Lords amendment 79 would be applied, or what schemes would fall within its remit. I would be grateful if the Minister clarified that.
When the clause was originally discussed in Committee, it referred just to banks. An amendment was made in Committee to extend coverage to other financial institutions, so arguably under the clause financial support could be provided to insurers, fund managers and independent financial advisers—a whole gamut of financial institutions. It would be down to the Government to determine which financial institutions could benefit.
I again ask the Minister about the scope of the provision. If the Government decided to fund free contents insurance for tenants in the social rented sector, it would clearly help the insurance sector. Would that be covered by Lords amendment 79? It would be helpful for the Minister to give us an idea of the areas that he believes fall within the scope of the amendment before the House decides to accept it. Clearly, as was demonstrated earlier, there is widespread concern across the House about the potential level of financial assistance and the commitments to be undertaken by taxpayers that could flow from the amendments.
Lords Amendments 81 and 82 deal with the process of granting financial assistance through the Consolidated Fund or the national loans fund. As the Minister said, an increase in transparency emerges from the two amendments, which state that a report should be laid before Parliament specifying the amount paid or loaned under the schemes, but will he be more specific about how he anticipates the House approving amounts lent under the scheme? In his exchanges earlier with my hon. Friend the Member for Wellingborough (Mr. Bone), he referred to the normal process for approving estimates. Will the Minister set out more clearly how he anticipates the House approving commitments made under the financial assistance provisions of the Bill?
Does my hon. Friend share my reading of the amendments? Under Lords amendment 82, if the Treasury decided that it did not want to report to the House or anyone else, it need never tell us anything about the amount paid. The amendments state that it may dispense with the requirement, which is extremely worrying.
My right hon. Friend makes an important point. My interpretation is that although at the time the Government might decide for reasons of confidentiality not to lay a report before Parliament, that would be swept up in what was Lords amendment 83, which we pressed in the Lords. I hope that would be covered in the new amendment tabled by the Government in lieu, so there would be a report. It may not be as timely as we would like, but there would be reporting at six-monthly intervals.
The Minister made an important point about the balance to be struck between confidentiality and public scrutiny. Clearly, the transparency of information provided was a barrier to giving covert assistance to Northern Rock. We need to have that debate in mind, but I hope that the six-monthly reporting will act as a sweeper, so to speak, to pick up all those instances where financial assistance has been given but no report has been laid before Parliament.
When the Government decided, in the first phase of the bank bail-out, to take stakes in RBS, what was then Lloyds TSB and HBOS, we had a debate on the Floor of the House in which the Financial Secretary to the Treasury and my hon. Friends the Members for South-West Hertfordshire (Mr. Gauke) and for Wellingborough participated. Specific approval was given for an estimate to pay for that investment. Will we have the same opportunity to vote on the elements set out in the second bail-out package? It was not clear from the Minister’s remarks whether we would have a specific vote on those elements, or whether they would go through the normal estimates procedure, where individual items are not voted on.
Not only have we seen the second phase of the bank bail-out, but money has been lent to the financial services compensation scheme in respect of the rescue of the Icelandic banks in the UK, and we should ensure proper scrutiny of that in the House. I would welcome greater clarity from this Minister as to how items would be voted on and whether there would be stand-alone debates on the various aspects of financial assistance envisaged in Lords amendment 79.
The Minister also drew the House’s attention to the words “too urgent” in Lords amendment 81, which relate to when there was a pressing need to provide money from the Consolidated Fund, the issue being whether money could be granted before there was a vote on it. He gave the specific example of there being a crisis during a recess and Ministers having to act urgently without the approval of the House. Will he confirm that when the House is sitting, the Government’s first preference will be to go through the estimates procedure, rather than rely on the powers set out in Lords amendment 81?
Lords amendment 83 was tabled by my noble Friend Baroness Noakes and Lord Turnbull in the other place. One of the important themes in the debate is transparency and understanding the scale of the taxpayers’ liability. We touched on that in different contexts during our debates on the Bill in this place. I felt at times that there was a bias towards secrecy as a way of enhancing financial stability, so I welcome the increased level of scrutiny that comes from the amendments made in the other place. It is important that the tripartite authorities are accountable to Parliament and others for the use of their powers under the Bill. The report envisaged in Lords amendment 83 went a long way towards increasing that transparency. It set out the requirement for a quarterly report to be made to Parliament on sums actually and potentially committed under the financial assistance powers in clauses 228 and 229.
During our earlier debate on the money resolution, I set out a number of the schemes that the Government have announced in the past three or four months, and I have no intention of repeating them. Clearly, however, there is a range of schemes that involve significant financial commitments. I have talked about the asset protection scheme; one estimate this weekend suggested an amount of up to £400 billion. The Minister referred to the working capital scheme, and there is the scheme proposed by Sir James Crosby in relation to asset-backed securities. There is also the asset purchase facility, under which the Bank of England has been authorised to acquire commercial paper. So there is a range of schemes with significant price tags. It is important that taxpayers should understand the extent to which they are exposed to the financial assistance given under the schemes, and that Parliament and the taxpayer should hold the Government to account for the money involved in them.
One of the points made in the other place was that the schemes are put forward by a range of Departments: the Treasury is responsible for some, the Department for Business, Enterprise and Regulatory Reform for others and the Department for Communities and Local Government for the homeowners’ scheme. It is important that the Treasury acts as the focal point for drawing the schemes together and ensuring that a proper report is made to Parliament.
When Lords amendment 83 was debated in the Lords, there was significant support from the Liberal Democrats, the Conservatives and a number of Cross Benchers. The majority of 35 in the vote on it demonstrated the strength of feeling about the welcome move to increase transparency. During the debate, Lord Davies of Oldham, speaking for the Government, opposed the amendment as he felt that it was unnecessary and that there were sufficient existing powers within the legislative programme to ensure that there was proper scrutiny. He prayed in aid the Exchequer and Audit Departments Act 1866 and the various Consolidation Acts and Appropriation Acts. Frankly, his arguments did not wash with the House of Lords; it did not feel that they would ensure sufficient transparency. Lords amendment 83 was backed so that there could be proper reporting of the amounts involved.
In their amendment, my noble Friend Baroness Noakes and Lord Turnbull reflected some of the concerns that the Minister mentioned. They referred to summarising data so that individual obligations were not necessarily seen and pointed out that there may be situations where information could be withheld as a matter of public interest.
What I take from the Minister’s remarks is that the Government have listened to the well-argued points that were made in the other place. Lord Davies said that the current mechanisms of accountability are sufficient. Conservative Members would like the Government’s conversion to the recognition that given the sums involved there must be greater transparency and accountability in the financial assistance that is given. We welcome the Treasury’s willingness to be as open as possible in disclosing information on exposure, subject to the caveat in new subsection (4) in the Government’s amendment. That represents a significant move by the Treasury and a recognition of the strength of the arguments made in the other place, and it is an important advance for transparency in how these matters are dealt with. Taxpayers have a right to know how much a bank bail-out is costing them. We therefore welcome the fact that the Government have tabled their amendment in lieu and we will not divide the House on it.
I, too, am happy to support the amendments. The balance between transparency and accountability is very difficult to achieve in these areas. Trying to ensure that we get as much information as we can without undermining the whole purpose of what we are trying to do is a delicate balance. The original amendment was a useful contribution, and I welcome the Government’s slight amendment to it while nevertheless agreeing the principle.
I welcome the inclusion of other financial institutions. I have always felt that a significant number of financial institutions are doing a good job in that they do not receive deposits but take wholesale money, they have lent responsibly, and they have been a genuine provider of consumer credit to an important market that we would not want to be diminished in any way.
However, there is a problem with confidentiality. We seem to have got ourselves into a situation where the leaking of information is becoming more prevalent. Given the ingenuity of financial journalists, in particular, in phoning around various institutions and individuals, I suspect that, whatever we do to try to ensure otherwise, it will not be too long before these bits of information will regrettably be coming out in the press, possibly undermining our actions.
That is absolutely right. It is a bit of a conundrum, and it will be difficult. I am assuming that institutions that receive Government support will have to make the appropriate note in their audited accounts, so if they take it late on in their financial year it may not be long before they have to report it anyway.
When I mentioned the banks’ audited accounts, it occurred to me that they might have to make a market announcement if they took large amounts, so I suspect that the information will come into the public realm anyway. I hope that the public, through an educational process, will be able to assimilate this knowledge in a much more balanced way, following what they were subjected to at the front end of Northern Rock, and will begin to understand how organisations are availing themselves of facilities.
Overall, the amendments are worthy of support, but they may not quite achieve all that the Minister expects them to.
It is typical of the whole debate about banks that we are in this miasma of nonsense. I do not know whether Ministers and those who drafted the legislation have ever operated under company law, or know any company law, but the simple truth is that if the Government are to inject equity capital into a bank, they not only need to make a prompt announcement to the stock market, but they need to table the details and get the approval of its shareholders before the transaction can be completed. If a large amount of longer-term loan capital or other priority capital is to be injected into a bank, that bank would be duty bound under company law to make an announcement as soon as it had an agreed deal with the Government.
If we are trying to shield nationalised banks, the purpose of the amendments is wholly damaging. Where we have nationalised banks, we know that the Government stand behind them. Presumably, the point of nationalising them was to transfer all the credit risk and difficult risks in the bank to the Government’s account so that the bank’s credit is as good as the Government’s. Once we are in that position—short of the Government themselves getting into an uncreditworthy position, which we pray they will not—it is the duty of the Government to come to the House immediately when they wish to inject subsidy, loan capital, share capital or whatever it may be into a bank in public ownership. There can be no harm in telling us that immediately because the bank is nationalised and the public can take reassurance from the fact that the bank effectively has a claim on the Consolidated Fund of the United Kingdom, or on good will and votes in Parliament on the initiative of Ministers.
I find both the original amendment, well-intentioned though it was, and the Government’s amendment in lieu, far too weak and feeble with respect to nationalised banks, where we have a right to know soon or immediately what they are putting in and why. When it comes to private sector banks, where we are dealing with longer-term share capital and loan capital, we find out details promptly, and so we should, because there are good rules to ensure that there are not dishonest or false markets. Those are relevant considerations for the trading position of the banks.
Why has this situation arisen? Because the authorities got into difficulty when it was rumoured that they were trying to find a shotgun marriage for Northern Rock after it first hit difficulties. We were then told that they were not able to do that under time pressure because a combination of British rules and European legislation meant that they would have to disclose details before they had done a deal, which was very embarrassing for them. If that is the case, they ought to fix those rules and that legislation, because the bank or the other authorities need the power, in extremis, to act as an honest broker to a deal if one of the commercial banks or other financial institutions is in such trouble and there are buyers out there. That always used to happen without any problem. The problem seems to be based on a British lawyer’s interpretation of a European law—an interpretation that does not seem to be shared by other Community lawyers or other Community Governments, where they have been able to do such deals without the same difficulties. I hope that we can address the underlying issue because these proposals do not address it.
The other possibility is that the proposals are designed to deal with short-term assistance, given in the normal way, with a central bank acting when there are extraordinary stresses and strains on the market as a whole or on individual banks. The Economic Secretary is nodding his head, showing that that is what the proposals relate to. If he reads the clause in question, he will find that it relates to all the things that I have already spoken about, which is why I think it is clumsily drafted.
Let us examine how much secrecy there needs to be for short-term assistance for an individual bank, and how that relates to the rules of company law. These are all difficult cases, but there could be a situation—there certainly was in August and September 2007, which the authorities did not respond to in a timely way—where an institution such as Northern Rock is in immediate need of cash to replace borrowings that it can no longer access from the private market. In such a case, we would hope for the central bank to be responsive, and that it would make loans against good security. If they are made as short-term loans against security within the normal borrowing powers of the bank and within what it has already reported to its shareholders, that could be done in secret, and it is best done in secret. It always used to be done in secret, and if there was any danger of the market finding out that a bank needed such assistance, the Bank of England used to say to several banks, “We want you all to take a bit of money from us this week, so that we can let the market know that quite a few banks need us, because the market is a bit stressed.” The finger of doubt would therefore not be pointed at one particular institution. Other techniques could also be used. My concern about the amendments is that they imply that we are talking about longer-term finance that should be properly reported and completely transparent.
One would hope that under the six-month provision suggested in the Government’s amendment, any temporary assistance would be lent and repaid in that period. The idea of temporary assistance is that it should meet a short-term shortage in the market, or that a bank could replace it in other ways, in the normal course of business and reasonably promptly. The reporting requirements would not then need to apply. My concern is that the Government’s amendment sets out an effective override so that we would never know which individual bank or arrangement was involved. We have a right to know about many arrangements, particularly in relation to nationalised banks.
The hon. Member for South-East Cornwall (Mr. Breed) made the extremely good point that if we look back on the sorry story of the past few months, we see that the various attempts to prop up or support banks have been conducted through the media. One of the most unpleasant things about the injection of shotgun money into the banks—£37 billion of share capital over that fateful weekend—was that we had a running commentary on it. We should not have been told about it. The banks should have gone into the Treasury by the back door or done things by a video conference link. We should not have been told that there were crisis talks, that the banks were in trouble and that there had to be a deal by the opening of business on Monday. All that added to the crisis atmosphere.
We have never known who was responsible for that. I do not blame the journalist who got wonderful stories out of it and provided us all with a running commentary, as any journalist who got such information would obviously see it as public information and want to use it. However, that was not the way to mount a rescue if the banks in question really needed it. Personally, I do not believe that they were in desperate need of such a rescue at that point, and there would have many easier and cheaper ways of helping them. Of course, I would not have wanted any of them to go under, but the high drama was not required, and there certainly did not need to be such public exposure over that weekend.
If it was necessary for public capital to be injected into those banks—I remain to be persuaded—it should have been done after proper reflection, evaluation and valuation. Of course it had to be made public, but only when the participants knew the details and had something reassuring and confidence-building to present to the market. The commentary during the run-up to the deal undermined confidence by suggesting that the banks were in crisis, and indeed by naming one bank that turned out not to need any public money, which was not terribly helpful to that bank.
I therefore do not believe that the Lords amendment goes far enough, and I do not believe that the Government’s proposed revision goes nearly far enough. It is a cover-up amendment rather than a transparency amendment. Fortunately, we will get more transparency in the private sector through other rules, regulations and laws, but I am concerned about the complete absence of transparency that will yet again exist in the public sector. I hope that the Economic Secretary will think again, and that he agrees that every penny going into a state-owned bank should be reported to Parliament promptly, with its full terms, so that we know what is going on.