House of Commons
Thursday 19 March 2009
The House met at half-past Ten o’clock
[Mr. Speaker in the Chair]
Business Before Questions
Manchester City Council Bill [Lords] and Bournemouth Borough Council Bill [Lords]
Resumption of adjourned debate on Question (15 January),
That the promoters of the Manchester City Council Bill [Lords] and Bournemouth Borough Council Bill [Lords], which were originally introduced in the House of Lords in Session 2006-07 on 22 January 2007, should have leave to proceed with the Bills in the current Session according to the provisions of Standing Order 188B (Revival of bills).
The debate stood adjourned; to be resumed on Thursday 26 March.
Canterbury City Council Bill, Leeds City Council Bill, Nottingham City Council Bill and Reading Borough Council Bill
Resumption of adjourned debate on Question (15 January),
That the promoters of the Canterbury City Council Bill, Leeds City Council Bill, Nottingham City Council Bill and Reading Borough Council Bill, which were originally introduced in this House in Session 2007-08 on 22 January 2008, should have leave to proceed with the Bills in the current Session according to the provisions of Standing Order 188B (Revival of bills).
The debate stood adjourned; to be resumed on Thursday 26 March.
Oral Answers to Questions
Business, Enterprise and Regulatory Reform
The Minister of State was asked—
Royal Mail Pension Scheme
We estimate that the Government will assume total liabilities of £29.5 billion and assets of £23.5 billion. That would mean the Government absorbing a deficit of £6 billion. This assessment of the liabilities in the scheme and the funding position is based on the most recent trustee valuation, from March 2008. However, we anticipate that the funding position of the scheme could well have worsened since that date, so when we have updated figures from the new valuation, beginning this month, we will finalise our assessment of the funding position of the scheme.
Clause 20 of the Postal Services Bill will allow the Government to take the existing assets from the pension fund into the consolidated fund and spend it that very same year. Is it wise as part of addressing the pension funding crisis to take the existing inadequate assets and use them to rescue the Government’s current deficit, making the problem worse in the longer term?
Our motivation is not about the public sector accounting impact. Our motivation is to give greater security to the hard-working men and women who work for Royal Mail, because the pension fund is an increasing burden for Royal Mail. At the same time, however, if we are to ask the taxpayer to take on those liabilities—I have set out what the scale of those liabilities is—it is equally right that we also give the taxpayer some confidence that the company can be transformed and modernised in the future. It is precisely those two things that are set out in the Postal Services Bill, which was published recently.
Postal workers in my constituency will be greatly reassured by the Government’s commitment to rescuing the pension scheme, but could the Minister tell the House to what extent the deficit of £6 billion is due to contributions holidays by previous employers?
The scheme was in surplus as recently as 2001, so I am not sure that the deficit can be ascribed to contributions holidays. Another factor that right hon. and hon. Members should consider is that the Government have not taken a dividend from Royal Mail for some years, so the most important thing is to concentrate on what we do now. As things stand, with a combination of the pension fund deficit and falling mail volumes, the company is in a very serious position. That is precisely why we have brought forward plans to deal both with the pension fund and with the transformation of the company in the future.
The Minister has just said that the Government proposals would provide greater security for postal workers’ pensions, but can he confirm that clause 19(6)(b) of the Postal Services Bill provides that this or a future Government could waive the pension guarantee and vary the terms of the postal workers’ pensions without the approval of the trustees, who will lose their power to protect the pensions under the provisions of the Bill?
The changes that we propose to the pension scheme will mean that the deficit is handled on the same basis as the pension schemes serving teachers, nurses and civil servants. That will indeed give Royal Mail staff far greater pension security than they get at the moment, when the deficit appears to be increasing year on year.
Can my right hon. Friend say whether the income from the selling of equity and shares in Royal Mail will be used either to reduce the pension deficit or to modernise Royal Mail?
Our intention, through a partnership, is to bring in new investment into the company. We intend to bring in not just investment in Royal Mail, but experience from another European postal or network company that has been through a transformation of the kind that Royal Mail needs, but has not yet gone through. The harsh fact is that if we do not get that investment and experience, the decline in mail volumes will decide the issue for us. As things stand, without the transformation of the company, for each decline in mail volumes of 1 per cent., Royal Mail loses around £70 million. There is therefore an urgent need not only to deal with the pension fund, but to modernise Royal Mail.
Financial Assistance (Businesses)
Banks participating in the Government’s recently announced asset protection scheme have committed to making available £27 billion of additional lending to businesses over the coming 12 months. The value of eligible cases for the enterprise finance guarantee has increased tenfold, from £3 million in the first week of operation to more than £31 million last week.
If the Minister were to join me in my meetings with small businesses in Southgate tomorrow, would he be able to tell them how long the crippling effect of credit insurance withdrawal along the supply chain will continue, and when the planned increase in the flow of credit from the Government’s schemes will actually reach the high streets of Southgate?
The hon. Gentleman is perfectly right to point out the severe problems that many companies are facing as a result of the global credit crunch. Our priority as a Government has been to fix the power failure in the banking system, and we have been taking action to do that through the recapitalisation of the banks last October, and through the actions that we took through the asset protection scheme. That will stimulate extra spending in the economy as well. I can tell his firms that the Government are providing real help to businesses through the enterprise finance guarantee, which will cover over 95 per cent. of all companies, and through the asset protection scheme and the measures that we have taken to get lending going again.
My hon. Friend is absolutely right to say that the Government have taken significant steps to open the process up, but does he agree that the banks and other lenders have not yet properly started to play ball? Barclays are asking a company in my constituency for 9.9 per cent. above the base rate for an overdraft, for example, and the car finance corporation is charging a 30 per cent. annual percentage rate on loans. Those rates are not going to get businesses and customers back to where we want them to be, which is buying and selling.
There is certainly a variable picture out there in terms of lending and of the rates being offered on overdrafts and other credit facilities. The most recent Bank of England lending panel report demonstrated that margins were coming down, however, and that lending was now cheaper than in 2007. There has been some progress, with the reduction in the LIBOR rate, although there is probably more to be done. The Government remain committed to ensuring that we have competitive lending available to UK companies and mortgage holders, and we are focused on delivering that.
Money is not getting through. We have said that again and again, but the Government seem not to be listening. In recognising that there is a management element to the Government’s job, will the Minister tell me what the Department is doing to ensure that he is getting out there, monitoring the process and ensuring that the thing works? It is not working at the moment.
There are two points here. The first is about overall lending, and what the Government are trying to do to stimulate lending in the economy through the actions that we are taking with the banks. I hope that the hon. Gentleman realises that, about 12 months ago, 50 per cent. of the lending to the commercial sector in the UK came from foreign banks. Those banks have not gone bust, but they have gone home. That proportion of lending has therefore disappeared from the UK economy, and our banks are having to work even harder to replace some of that lending. That is why we have taken action through the asset protection scheme and other measures.
On the question of specific Government programmes, I have already set out the progress that we are making through the enterprise finance guarantee. This was the old small firms loan guarantee scheme. We have now upped the qualifying limit from £5.6 million to £25 million, which covers the vast majority of companies in the United Kingdom, and we have upped the limit of loans from £250,000 to £1 million. The guarantee stands at 75 per cent., and more than 1,100 companies that are eligible for the scheme are already having their applications assessed. We are monitoring the scheme weekly through the banks and through Capital for Enterprise. It is up and running, and we believe that it is on target to meet its commitment to supporting £1.3 billion of lending to the UK economy.
The “Real help now” package that the Government have put in place shows their determination to help small businesses, but the banks remain stubbornly resistant to co-operating with what has been put in place. Businesses in my area describe interest rates being held stubbornly high or increased, bank charges being imposed without warning and a requirement for 100 per cent. security despite the fact that loans are covered by the guarantee scheme. Is it not time that we had an independent ombudsman or arbiter that businesses could go to when the banks are not carrying out what they should be doing on their behalf?
We are certainly already monitoring the actions and activities of the banks through the lending panel, so there is a level of scrutiny there. Obviously, we cannot stand in the shoes of the banks that have to make commercial lending decisions on the basis of their assessment and pricing of risk. That is what would be expected of any functioning economy. What we can do, however, and here I agree with my hon. Friend, is rigorously monitor the situation. It is right to say that we need to keep a close eye on the banks; we are doing just that.
What are the Government doing about credit guarantee—in other words, what happens when a firm delivers goods to another firm that subsequently becomes insolvent? The Prime Minister assured me during the Gracious Speech debates that something was being done, so will the Minister tell me exactly what is being done to assist small and medium-sized companies?
We are taking a range of measures to support small and medium-sized companies, which we recognise as the backbone of the economy, so we need to help them get through the recession in the best possible shape. I have already mentioned the enterprise finance guarantee scheme. We are also taking actions through the working capital scheme to shore up credit lines. I know that there have been criticisms from Conservative Members that we have not made further announcements on the working capital scheme, but what we are doing there is guaranteeing portfolios of working capital facilities. These are deals that we are doing with the banks rather than individual companies, but they run into hundreds of millions of pounds. As the right hon. and learned Member for Rushcliffe (Mr. Clarke), who speaks for the shadow Chancellor of the Exchequer knows, these deals are not done in five minutes or even days and weeks, as they are the result of complex negotiations, but they are important to shoring up working capital for companies, and they are in addition to the actions that we are already taking.
The actions taken by the Government so far have been largely defined by, and perhaps constrained by, sections 7 and 8 of the Industrial Development Act 1982, which include the provision to expand or sustain the productive capacity of any industry. Is the Minister happy that those provisions are sufficiently broad and flexible because the construction industry, and particularly the buildings material industry in my area that feeds it, is yet to see the real fruits of the Government’s initiatives? Do we not need some more imaginative action; might not some emergency legislation be appropriate?
Yes, I am happy that sections 7 and 8 of the Industrial Development Act remain fit for purpose: section 7 covers regional assistance and section 8 covers industrial support more generally. In the Second Reading debate on the Industry and Exports (Financial Support) Bill on Monday, we explained why we were increasing the limits relating to section 8 expenditure, which are going to go up to £12 billion if the legislation is passed and with a possibility of their going up to £16 billion. That reflects the fact that the more modern way in which we are providing support is through loan guarantees that have to be scored as expenditure even though they are really a contingent liability. We can provide support under that legislation, and the schemes that we have announced will have as their legal vires that industrial development legislation.
At the last DBERR questions, the Minister told me that he expected that lending figures for companies participating in the enterprise finance guarantee scheme
“will quickly start to build strongly”.—[Official Report, 5 February 2009; Vol. 487, c. 957.]
That has simply not happened and, given the scale of the problem, the numbers the Minister has quoted this morning are a pittance. Is he aware that applicants still face considerable difficulty in assessing the scheme, that the banks are still extremely reluctant to grant moneys under it and that the small and medium-sized enterprises that have been clinging on by their fingertips for months now want substantive help and not platitudes? When will the Government get a grip, stop monitoring and actually manage the situation?
We are both managing and monitoring the situation. The hon. Gentleman has made a number of assertions; let me explain the facts to him. More than 1,100 companies have shown themselves to be eligible to participate in the enterprise financial guarantee scheme, and £115 million worth of loans can potentially be made to them. It will be up to the banks to assess the applications. About 70 per cent. of cases are going through at present, which is quite normal. There is obviously a difference between the number of eligible cases, the number of loans offered, and the drawdown of those loans.
This is still a new scheme, but it is growing. I have already said that in the first week there were £3 million of eligible cases, and last week the figure was £30 million. A big increase is taking place. As I have said, we will continue to manage the process as well as monitoring it, to ensure that it delivers for small businesses.
Three weeks ago, the Government proudly announced what they claimed was a unique agreement with Royal Bank of Scotland and Lloyds, which apparently guarantees that those banks will lend business a total of £27 billion this year. Given the evident and continuing problems for businesses, how will Ministers guarantee that sum this year and, given that they are part-owners of the banks, what penalties could they actually apply if the banks proceeded to default?
The hon. Gentleman has repeated the figures that I announced in my reply to the hon. Member for Enfield, Southgate (Mr. Burrowes). He is right about the commitment of £27 billion of additional lending—£16 billion from RBS and £11 billion from Lloyds Banking Group. We will monitor their delivery of that commitment, just as we are monitoring their progress in terms of lending under the enterprise finance guarantee.
I would like to think that the Conservative party welcomes the fact that we are introducing legally binding commitments as part of the asset protection scheme. We expect RBS and Lloyds Banking Group, as responsible companies, to deliver on those commitments, and I have no reason to doubt their genuineness in wanting to deliver for small businesses. Rather than carping and moaning, Conservative Members should welcome the fact that we have an active Government who are making commitments and ensuring that they are delivered.
The Secretary of State announced in December that the Government accepted the analysis set out in Richard Hooper’s review of postal services and that, to maintain the universal postal service, the Government intended to implement his recommendations. I repeated that statement in the House of Commons on the same day.
The Postal Services Bill has since been introduced into the House of Lords, and received its Second Reading on 10 March. The Bill proposes a new regulatory framework for postal services, enables the Government to tackle Royal Mail’s pension deficit, and ensures that Royal Mail remains in public ownership, while supporting modernisation through a strategic partnership.
Are the comparisons in the report made on a like-for-like basis in terms of prices and the services provided? Does the report not fail to identify either the cause of the pensions deficit or the devastating effect that unfair competition has had on Royal Mail?
The report covers all the issues relating to pensions, pricing and regulation. It is entitled “Modernise or decline”, which is an accurate description of the choice that we face. If we do not act to turn Royal Mail around, the decline in mail volumes will decide the issue for us. For every 1 per cent. decline, the company loses £70 million. There has already been a decline of 7 per cent., and a further 7 per cent. decline is forecast. That demonstrates the urgent need to transform and modernise the company. If we do not take that action, Royal Mail will end up cutting services, which is not a solution that we want it to apply to its current problems.
In 2007, 637,000 days were lost at Royal Mail as a result of industrial action. That is 60 per cent. of the number of days lost to strikes in the entire United Kingdom. Does the Minister accept that the Communication Workers Union must become far more realistic about modernisation if industrial relations at Royal Mail are to improve?
Richard Hooper identified industrial relations as a significant problem for the company, and it is not just the industrial action and the strikes that have taken place, but the regular threat of industrial action—such as, in recent months, over changes to the pension scheme and the closure of a number of mail centres. A fresh start for industrial relations is, therefore, needed in Royal Mail, and I would say to the CWU that the current relationship is not what it should be and that bringing in a new partner may present a possibility of improving industrial relations, given their current very poor state.
Will the Minister confirm that the argument in previous answers to questions has been that the Government will privatise Royal Mail and a foreign firm will come in? Can he explain to me how it is that now that we have an economic tsunami lapping on every shore, in Holland, let us say, Dutch TNT can find money that nobody else can find? If the economic recession is hitting everybody, where is the magic wand in Holland to find the money that we cannot find here?
I have great respect for my hon. Friend, but he is not right to say that we are privatising the Royal Mail. The Bill clearly says that we will keep Royal Mail in public ownership, so it is simply not true to say that we are privatising it. He questions why the Dutch postal service may be in a better position than Royal Mail; that is precisely because it has carried through the transformation and modernisation that Royal Mail has not yet managed to achieve. I cannot comment on any particular potential partner, because there has to be a proper process to get the best agreement for Royal Mail and the taxpayer, but if there is a partnership with another European postal company, I remind the House that liberalisation of postal services will be introduced in 15 members of the European Union by the end of next year. That will also give Royal Mail the opportunity to be a major European player, and that is not an opportunity that we should shy away from.
I welcome the clauses in the Postal Services Bill that allow a levy to be placed on the large private mail operators that are not fulfilling the universal service obligation to compensate Royal Mail, which is fulfilling the USO. There is an urgent need for those clauses to be implemented, because Royal Mail is facing unfair competition at present. Will the Minister give a commitment to a rapid introduction of those clauses?
Those clauses, like all the other clauses in the Bill, will be implemented if the Bill is passed by Parliament, but the hon. Gentleman raises a very legitimate point with regard to regulation. That has been a subject of considerable controversy in this House and more widely, and we propose in the Bill to put at the heart of the regulatory system the maintenance of the universal service—of the one price goes anywhere, six-days-a-week universal postal service. That is the foundation of our postal system. We want to legislate to maintain that, not to leave Royal Mail alone to have its finances eaten away by the fall in mail volumes, which is costing it £70 million for every 1 per cent. of decline. That is no future for Royal Mail, but the Bill that we have presented is.
The Government seem to have accepted the Hooper review in total. The official Opposition have accepted, and are supporting, the sale of some shares. Are they also supporting other measures in the review, including regulation—
Wholesale broadband is closely regulated, and the market is regularly reviewed by Ofcom. That ensures that the UK broadband market remains competitive at the retail level. I can tell the House that there are more than 400 suppliers of broadband services.
I note the Minister’s reference to retail. Given that people up and down the land are facing great and real financial hardship, is it not time that the broadband telecoms market was opened up to true competition—not fake competition—so that the current pretty poor service levels can be driven up and customer prices can be driven down?
The hon. Gentleman may know that a number of companies offer wholesale broadband products and a series of other companies that are in a position to do so are choosing not to do so for commercial reasons. That is one of the reasons why we have made sure that the industry is closely regulated. In those parts of the country where there is considerable competition some of the price controls that have been in place have been relaxed. In other areas, where competition is not as strong as we might like, we have kept that regulation in place. He will know from the work of Lord Carter that this issue is being closely examined in government, with industry and with a range of other players. An interim report has been published and further work is in hand. The hon. Gentleman will be able to judge, with the rest of the House, the fruits of that further work towards the summer.
Surely my hon. Friend will agree that the problem is not the number of competitors in the market, but the uptake. Surely we should be examining what is happening in cities such as Glasgow, which has the lowest uptake of broadband in the country, rather than the number of people who are in the market.
With respect to my hon. Friend, I think we need to look at both issues: the level of competition in the market; and how we can ensure universal access to broadband services and speed up broadband access. He raises an important point, which deals with one of the issues reflected on in the interim report that was recently published by Lord Carter. The issue is part of the further work that is being done, and my hon. Friend, along with other Members of the House, will be able to judge our progress in that work towards the summer.
Does the Minister agree that whether in telecommunications or, indeed, the banking world, the best form of regulation is open competition?
With due respect to the hon. Gentleman, I think that competition is a good thing but that, as he knows, or ought to know, only too well as a result of the economic difficulties that our country faces, there is, on occasion, a strong role for regulation to play too. On the particular issue that we are discussing, I should say that where there is real competition, we have been able to relax price controls, but where there is not strong competition, we have kept those controls in place.
In his discussions with Ofcom and the providers, will the Minister ensure that the needs of businesses working in rural areas are met? High-quality broadband is essential in rural areas and sparsely populated areas, because people need to compete on a level playing field.
I accept that there is an issue about ensuring broadband access in rural areas, as in the rest of the country. As I have said, the question of universal access is one on which the Government are very much focused in discussions with Ofcom, the industry and other stakeholders. An interim report was published by Lord Carter, further work is under way and the House will be able to judge our progress in that sense towards the summer.
I talk to people in the automotive industry on a regular basis—indeed I have received three texts from companies in the past 30 minutes. The industry-led, BERR-facilitated new automotive innovation and growth team’s report on the future of the UK automotive industry is expected in early May.
People have not stopped driving cars; they have just stopped buying them, because it is difficult to access finance for buying or, indeed, leasing them. Way back, on 27 January, the Secretary of State said that he was setting up a taskforce, to be led by the new trade Minister, Lord Davies. It was supposedly going to work out how consumers could access finance again to buy all these cars and get the car purchase market going. Nothing has been heard of that taskforce, so when are we going to hear the outcome of the work supposedly being done by Lord Davies on this car financing taskforce?
People have not stopped buying cars, but car sales have fallen. February sales were down 22 per cent. in the UK, 48 per cent. in Spain and 24 per cent. in Italy. There is a problem in the automotive sector, and that is one of the reasons why we announced the automotive assistance programme. We are still in discussions with the Bank of England and the Treasury on how car finance arms might be able to access some of the support that is available through Government programmes, but every day newspapers contain good deals on cars, including 0 per cent. finance and cashback in many cases, so finance deals are available. Clearly, we want to ensure that we support a strategically important industry such as the car industry, which is going through a very difficult time. We are doing that and we will continue to look at what further support we might be able to make available.
The Minister must realise that for tens of thousands of people in the automobile industry, the Department is all talk and spin, but no action. He says that Lord Davies is still studying the proposals on car finance that we put forward as a policy suggestion months ago, but when will we get a result? As Lord Mandelson has indicated his sympathy for that policy, is it being blocked by the Bank of England or the Treasury? When will a decision be taken on this important matter?
We all agree about the importance of ensuring that the car industry has support in these difficult times. Along with the construction sector, the automotive sector has borne the brunt of the recession, in addition to what has happened in the banking system. It is difficult to point to other sectors that have seen quite such dramatic falls, but a car is a big discretionary purchase.
The right hon. and learned Gentleman should not pretend that car finance assistance would be a panacea and that if funding is made available through the banks to car finance arms, everyone will go out and buy cars. We will continue to have discussions about whether we can do something that represents value for money for the UK taxpayer that will assist car finance arms. Some of those finance arms are already providing good deals, however, and he knows that.
The focus of our Department is on working with business and employees during these difficult economic times, and on ensuring that British business is as well placed as possible for the future.
This week, the Federation of Small Businesses, the Communication Workers Union and Unite came together to launch the manifesto for a post bank. At a time when the main commercial banks, with the honourable exception of the Co-operative bank, are held in increasing contempt by their customers, and at a time when the Post Office remains one of the most popular and trusted institutions in the country, is not this an idea whose time has come, and will the Minister support it?
I attended the launch of that pamphlet a few days ago. It is right that if the Post Office is to survive and prosper, it needs to look to new areas of business. It cannot survive on nostalgia or by ignoring the changes in people’s lifestyles, such as using the internet and direct debits. The Post Office is already expanding its banking services: it is the leading supplier of foreign exchange in the country and it supplies credit cards, insurance and savings products. I agree with my hon. Friend that an expansion in banking and financial services is a very important part of the Post Office’s future.
In relation to the European Investment Bank loan scheme, will the Minister take action to ensure that funds coming from the EIB to banks with a presence both in Northern Ireland and the Republic of Ireland will be made available to businesses in Northern Ireland? As he will know, two of the main banks are owned by the Republic, so this is a particular problem for the Province. That money needs to be made available to businesses in Northern Ireland.
The hon. Gentleman is right to point out the action that the Government have taken to get EIB support through the banks for further loans to small and medium-sized enterprises. It is right that those loans should be available throughout the United Kingdom and my understanding is that that will be the case. Of course, EIB loans are at advantageous rates and it is right that they should be available in Northern Ireland, just as they are in the rest of the UK.
My hon. Friend is absolutely right to draw attention to that danger. The recession must not be an excuse to deny employment rights to some of the most vulnerable workers in the country. That is why we have changed the law, bringing in tougher penalties for employers who do not pay the minimum wage and better arrears for employees who are denied the minimum wage. We are also putting in extra resources, including a £1 million campaign that was recently launched to inform agency workers of their basic employment rights, including wages, paid leave and so on. It is very important that we come through this recession not only by helping business but by ensuring that the most vulnerable workers do not pay the price.
Last week, the Minister held a seminar in his Department for businesses in the car industry and for banks to begin to explain how to apply for EIB loans that were first announced by the Government last September. Can he now tell us how many applications have been received and how many more weeks or months it will be before anybody receives any of that support?
Just to correct the right hon. and learned Gentleman, let me say that the purpose of the seminar was to explain the Government’s automotive assistance programme, which covers loan guarantees to companies that are accessing the EIB clean transport facility as well as the Government’s scheme more generally. He knows that, but he is just trying to make a debating point. DBERR has been supporting applications to the EIB. My understanding is that a number of companies are at an advanced stage in discussions with the EIB. I do not think that it would be appropriate for me to name those individual companies, because the negotiations are commercial in confidence, but he will be aware of reports that companies have been making those applications. We hope that next month the EIB will approve applications from a number of companies.
It is true that that is an issue. Many young people want to be famous and there has been a pattern of exploitation, with people setting up in hotels and launching one-day casting sessions. Last year we brought in a new cooling-off period to try to protect people against such activities. We said at the time that if that provision needed to be reviewed we would review it. We have continued to receive complaints, so today we are publishing a consultation document on banning the taking of up-front fees so that young people and their families are not exploited. We do not want to tread on anyone’s dreams and hopes, but we also do not want to see people exploited because of them. That is why we are taking this action today.
It is true that the issue has been raised with us, and of course we will consider anything that we think can help people who are unemployed or in economic difficulty. There is a significant contrast between how this Government will respond to this recession and how the previous Government abandoned the unemployed. The previous Government left the unemployed with only a benefit cheque to keep body and soul together, and gave them no real help to get a second chance. In contrast, this Government will stand by people who are losing their jobs.
I have received a number of complaints recently about mobile phone companies and cashback offers. Is the Minister aware of the problem? If so, is he planning on taking any action?
I can tell my hon. Friend that we are aware, anecdotally, of concerns about the behaviour of some mobile phone companies in that regard. Those concerns have been expressed in letters sent directly to Ministers and in questions raised by Members of Parliament. This is one of the matters that I have discussed with Consumer Focus, the new consumer body, which is doing some work on the problem in tandem with Ofcom. I look forward to discussing with Consumer Focus the results of that work, which we are expecting shortly. We will then consider what else we can do to help.
Are Ministers aware of just how angry businesses are at the Department’s failure to convey information to them? On 12 November, I wrote to the Secretary of State on behalf of a constituent company, asking for information about business loans. It is now 19 March and there has been no answer, despite three further letters, six phone calls to the Department, and a letter to Lord Mandelson last week saying that, if he did not answer, I would raise the issue in the House of Commons. This is the second time in three weeks that I have raised a similar matter. On one occasion, staff at DBERR were not even picking up the phone to answer inquiries because they were in such chaos.
When will something be done? If the Government cannot get information to companies out there, it is no wonder that absolutely nothing is being done. All we are getting is just a lot of talk, and no initiatives are working at all.
With the greatest respect to the hon. Gentleman, I shall look into the specific case that he mentions and come back to him. However, I do not accept his broader point about help not getting through to businesses, and I shall use the region in which his constituency is based, the east of England, as an example. More than 8,000 businesses in that region have been able to defer their business taxes in the past four months, while across the UK as a whole almost 93,000 businesses have been able to have business taxes totalling some £1.6 billion deferred. That is just one example of the real help being given to businesses at the moment, but as I said, I shall look into the specific case that he has raised and come back to him.
My hon. Friend will be aware that we got very close to an agreement. In the words of Pascal Lamy, some 75 per cent. of the conclusions were reached last July, but we have been waiting for a new US Administration to get their new trade negotiators in place. Similarly, we have been waiting for elections to be held in India and elsewhere. We hope to use the G20 summit in three weeks’ time to begin discussions again about how we can finish the negotiations on the Doha round. One thing about which the Prime Minister is absolutely and quite rightly clear is that any descent into protectionism, as happened in the 1930s, will cause further problems for our economy and for the global economy. That is why we are devoting so much attention to trying to make progress in the Doha round. That will be an issue for the G20 and for the G8 too.
Electoral Commission Committee
The hon. Member for Gosport, representing the Speaker's Committee on the Electoral Commission, was asked—
The Electoral Commission’s 2004 report entitled “The Age of Electoral Majority” concluded that there was insufficient justification for reducing the voting age to 16. The commission has since refocused its activities on the objectives of, first, regulating party and electoral finance and, secondly, delivering well-run elections. It believes that issues such as the extent of the franchise are matters for Government and Parliament to decide.
I am grateful to the hon. Gentleman for that answer. He will be aware that the Electoral Commission said that it would look at the matter again within five to seven years, so does he agree that it is time for the commission, independent of political influence, to look at the subject? Now that we have managed to allow young people to use this Chamber, although many Opposition Members wanted that not to happen, is it not time to consider young people a bit more than we have in the past?
It is indeed true that in 2004 the Electoral Commission said that it would revisit within five to seven years the case for lowering the voting age, but as I have just explained, the commission has since refocused its efforts. The refocusing is not in any sense an abrogation of its responsibility, but follows a review of the commission’s activities by the Committee on Standards in Public Life. The refocusing has been welcomed by the Government and the Committee.
Does my hon. Friend accept that the Electoral Commission is right to refocus in that way? Like most Members, I regularly visit schools in my constituency and hold question-and-answer sessions with fifth and sixth formers. They are very interested in a number of subjects, but none of them is the slightest bit interested in having the vote at 16.
I am grateful to my right hon. Friend. Most of the responses to the consultation held in 2004 supported lowering the voting age. However, the commission found that more general opinion polling suggested strong support for keeping the current minimum, and that young people seemed divided on the issue.
The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—
Churches Conservation Trust
In 2009-10, the Churches Conservation Trust will receive just over £4.5 million grant in aid from its co-sponsors, the Department for Culture, Media and Sport and the Church Commissioners.
I am grateful to the hon. Gentleman for that reply. Will he join me in paying tribute to the Churches Conservation Trust, in particular for its work in Shropshire looking after nine churches and also Longford chapel in my constituency, near Newport? While I note the grant, will he also join me in recognising that there are real financial pressures on many churches? Churches help tourism and promote culture and heritage in counties throughout the country, and in Shropshire in particular, so will he speak to the Secretary of State to see whether that grant is sufficient to keep these churches running?
I am grateful to the hon. Gentleman for mentioning the Longford chapel near Newport. He might have added Stirchley St. James and Adderley St. Peter, which are in his constituency, as I understand that they, too, benefit from the trust. His point is perfectly right. The Churches Conservation Trust is 30 per cent. Church and 70 per cent. Government funded, and it is working hard to secure its financial future by widening its funding base. I take his point that the Department for Culture, Media and Sport grant was frozen in 2001 until 2008. There has recently been a small cash increase of 1.8 per cent., but it continues to be reduced in real terms. We welcome that contribution from the state, but it is not sufficient.
Given the continuing cut in DCMS support for heritage, especially for cathedrals and churches, will the hon. Gentleman take great care to ensure that the Church Commissioners maintain their financial aid? The Churches Conservation Trust is an excellent organisation. Does he share my enthusiasm for its 40th anniversary celebrations and its “Birthday bells” appeal, in which more than 70 churches across the country rang their bells to celebrate those 40 years? Does he also agree that people who do not like church bells should not buy a house near a church? “Ring out, wild bells”, Mr. Speaker.
I am grateful to the hon. Gentleman for those comments, and I celebrate with him the 40th anniversary to which he referred. On the Church Commissioners’ involvement, the present financial difficulties do not affect churches’ expenditure plans for the next few years, so the Churches Conservation Trust’s grant from the Church Commissioners is safe in our hands.
Church representatives have been in regular contact with the Treasury on that matter. The latest development is the agreement reached by the European Council of Finance Ministers on 10 March that all member states will have the option to apply permanently reduced VAT rates to a number of goods and services. I very much regret that the repair of places of worship is not on that list of goods and services.
I agree entirely with my hon. Friend. One has to bear in mind that the former Chancellor of the Exchequer, now Prime Minister, agreed effectively to reduce VAT on church repairs to 5 per cent. until 2011. The campaign by Members in this House will be to maintain that derogation well after that date. I am sure that right hon. and hon. Members will add their weight to it. In particular, may I thank the hon. Members for Vale of York (Miss McIntosh) and for The Wrekin (Mark Pritchard), my hon. Friend the Member for Wirral, South (Ben Chapman) and others who are present who have contributed to and supported the campaign? I also thank those in the Church of England who have campaigned so arduously. I invite parishes up and down the land to make use of the derogation scheme already in operation.
I thank the hon. Gentleman for his kind words, and for raising the profile of parish churches in rural areas. Now that we have established the derogation, and the broader principle of lower VAT on other goods and services, can we not all unite behind the campaign to persuade the Prime Minister and the Chancellor of the Exchequer to take the argument to Europe, so that they can ensure that the derogation affects churches across the European Union? We must unite behind that worthwhile cause.
I am grateful to the hon. Lady for her comments, and I would certainly support any campaign that the Prime Minister and the Chancellor might wish to take to Europe, bearing in mind that it took six years to get this far, and that the process was extraordinarily complicated. As my hon. Friend the Member for Wirral, South (Ben Chapman) said, at the last moment, it was decided in Lisbon to throw in toll bridges; they are to be covered, but not VAT on church repairs, which is quite remarkable. I hope that that is not a reflection of how the European Union looks upon the Christian community throughout the Union.
Does the hon. Gentleman accept that many of us are extremely angry at the attitude recently taken in Europe? Does he also accept that at a time of unemployment, it is crucial that church buildings can be repaired, not only because that is intrinsically important, but because that work offers employment to craftsmen and others?
The hon. Gentleman makes a fine point, because the work is artisanal—if that is a word that we can put in Hansard—and helpful for local communities. The essential message that this House should give the parishes is to encourage them to undertake those church repairs, and to collect the VAT reduction. It is important that the scheme is taken up before 2011, so that, with the grace of this House, it can be continued after that date.
Church of England (Disestablishment)
In July 2007, the Church welcomed the Government’s reaffirmation of their commitment to the position of the Church of England, which is by law established with the sovereign as its supreme governor. No assessment of the kind that my hon. Friend mentions has been made.
Archbishop Rowan recently said that it would not be the end of the world if the Church of England was disestablished, although disestablishment should not be on the agenda at the moment. Notwithstanding those wise remarks, would my hon. Friend agree that if an assessment of financial implications were undertaken, it would be highly likely to find that the Church’s inherited financial commitments greatly exceed its inherited financial resources?
I am grateful to my hon. Friend, who raises a pertinent point on the disestablishment of the Church. He referred to the comments made by the Archbishop of Canterbury. I welcome the Archbishop of Canterbury’s intervention on the financial crisis; he added a moral dimension to the debate on the economy, along with the Archbishop of York. Although his comments on disestablishment have been given wide credence, he also said that he would be concerned if there was to be disestablishment.
On the specific point made by my hon. Friend, the financial implications of disestablishment would be a matter of discussion between the Government of the day and the Church of England during the preparation of the necessary legislation. The question of the financing of the Church and its financial outcome would have to be fully debated by the Government of the day, Parliament and the Church of England.
As a supporter of disestablishment, may I ask the hon. Gentleman if he would at least ask the Church Commissioners to undertake the financial assessment to which the hon. Member for North-West Leicestershire (David Taylor) referred, and look at the Churches in Wales and Ireland, which disestablished but which do not appear to have been disadvantaged financially as a result?
I am grateful for the hon. Gentleman’s comments and for his statement that he believes in a disestablished Church. The question that my hon. Friend the Member for North-West Leicestershire (David Taylor) asked related to financial commitments, which far outweigh the total inherited resources of the Church of England. In response to the question about whether we ought to undertake a study, we should not put the cart before the horse. We should await any decisions that the Synod may make before we debate the matter and its financial implications. However, disestablishing the Church would affect every parish in the country, and its allegiance to the Crown and to the Church, and is a step that would be taken only after many years of consideration.
Electoral Commission Committee
The hon. Member for Gosport, representing the Speaker's Committee on the Electoral Commission, was asked—
I thank my hon. Friend for that reply. I am rather disappointed, because I am sure that he is as concerned as I am, and as everyone else in the House who worries about democracy is, about the comments made a few years ago by a judge who said that our standards were those of a banana republic. In particular, will my hon. Friend raise again with the Electoral Commission and with the Government the need for individual registration, rather than household registration, which would go some way towards solving the problem of electoral fraud? In addition, will he raise the fact that postal voting on demand has been shown—this has been commented on on many occasions—to be an easy route to fraud in elections?
Occurrences of electoral malpractice are rare, but it takes only a small number for confidence in the voting system to be seriously damaged. The Electoral Commission takes the view that postal voting should be made more secure, rather than withdrawn, and it very much welcomes the commitment by the Government to introduce provisions to introduce a system of individual electoral registration in Great Britain. The commission has argued for that since 2003, and it believes that the system should be modernised and strengthened by introducing individual electoral registration.
I am sure that the hon. Gentleman will be aware that in certain community groups, there is considerable confusion as to whether people are entitled to vote, particularly because some of them are entitled to vote in local elections, but not in general elections. Is it on the commission’s agenda to do more to educate people about the circumstances, particularly in relation to their immigration status, in which they are allowed to vote?
Business of the House
The business for next week will be as follows:
Monday 23 March—Remaining stages of the Coroners and Justice Bill (Day 1).
Tuesday 24 March—Conclusion of remaining stages of the Coroners and Justice Bill.
Wednesday 25 March—Opposition Day (9th Allotted Day). There will be a debate entitled “The Need for an Inquiry on Iraq”, followed by a debate entitled “The Impact of Business Rates and how Businesses can be Helped Through the Recession”. Both debates will arise on an Opposition motion.
Thursday 26 March—A general debate on defence in the UK.
Friday 27 March—Private Members’ Bills.
The provisional business for the week commencing 30 March will include:
Monday 30 March—A general debate on Africa.
Tuesday 31 March—A general debate on the economy.
Wednesday 1 April—Second Reading of the Geneva Conventions and United Nations Personnel (Protocols) Bill [Lords], followed by a motion relating to the Non-domestic Rating (Collection and Enforcement) (Local Lists) (Amendment) (England) Regulations 2009.
Thursday 2 April—Motion on the Easter recess Adjournment.
I should also like to inform the House that the business in Westminster Hall for 2 April will be a debate on the report from the Science and Technology Committee entitled “Investigating the Oceans”.
I thank the Leader of the House for giving us the forthcoming business. Her response to me last week about the encampment and the harassment by protesters in Parliament square was, I am sorry to say, painfully inadequate. When will she undertake to give a full report to the House so that we can cut through the bureaucratic nonsense governing the issue and remove what has become a permanent embarrassment to British democracy?
May we have an urgent debate on the NHS? Yesterday we heard from the Health Secretary the miserable tale of Stafford hospital. Will the right hon. and learned Lady confirm to the House that the same senior management who were so devastatingly criticised by the Healthcare Commission on Tuesday saw their salaries doubled in 2008, and that one has been appointed to a Government watchdog? Is it not the clearest possible demonstration of Labour’s priorities towards the health service that while they spent their time lining the pockets of a failed management team, there were patients lining the walls of a filthy accident and emergency ward who were dying of neglect?
Lying behind this is, I sense, a growing problem with how health trusts and other public bodies treat correspondence from Members of Parliament. Too often, Members’ letters about a constituent are fobbed off by being sidelined into a complaints procedure designed for another purpose, and also by hiding behind data protection. Can the right hon. and learned Lady confirm that when an MP writes to a chief executive they should receive a letter back from that chief executive, that getting a letter from an MP should be regarded as a priority, and that any failure to treat an MP’s letter properly should be a disciplinary offence, even resulting in dismissal?
We are still waiting for the Government’s long-delayed strategic review of reserve forces. We all have reservists in our constituencies. When will we get an announcement, and can the Leader of the House confirm that it will be a full oral statement?
Today 144 further education colleges have their building programmes frozen, and this morning the Under-Secretary of State for Innovation, Universities and Skills, the hon. Member for Birmingham, Erdington (Mr. Simon), the Minister responsible for further education—or should I say, the Minister requiring further education?—offered no reassurance that the Government would prevent those colleges from going bankrupt. May we have an urgent debate to discuss the future of those institutions, which offer vital training to the rapidly rising number of people facing unemployment?
For the umpteenth time, may we ask for a debate and action on Equitable Life? Today the Public Administration Committee has slammed the Government for their callous betrayal of Equitable Life policyholders. It says that the Government have denied them justice. This is a truly scandalous state of affairs in which an unprincipled Government would rather see them all dead than compensated. When will the Government act properly on what the ombudsman has recommended?
On a number of occasions I have raised the farce of Regional Select Committees. The North East Committee has five Labour members, four of whom are Parliamentary Private Secretaries, and the other a long-serving Back Bencher. I am advised that when they met, they picked one of the PPSs as Chairman, and that the only member not in hock to the Government has now decided to resign. Is this true, and may we have a further debate so that we can give the Leader of the House the opportunity to admit her mistake and abolish those Committees?
Yesterday the scarlet-haired Solicitor-General, who has no experience of economic affairs, claimed that we would soon see “green shoots” in the British economy. As a barrister she was known as the “towering inferno”; yesterday, it seems, she finally went up in flames. Is that not the most crass statement that any politician could have made, on the day when it was announced that more than 2 million people are unemployed?
May we have a statement on the Prime Minister’s recent visit to Washington? It seems that the DVDs that President Obama gave the Prime Minister—rather like the Prime Minister himself—do not work in the UK. We are told that one of them was “Psycho” and the other “Gone with the Wind”.
So those are our requests for debate: there is a rotting encampment outside Parliament; there are failed NHS managers with bloated pay packets; the fate of our reserve forces is left dangling; FE colleges are collapsing; Equitable Life pensioners are betrayed; dysfunctional Select Committees are set up; we have a dysfunctional Government; and the Solicitor-General insults the unemployed. How can the Leader of the House defend any of that, without hanging her head in shame and apologising?
At last week’s business questions, I answered the hon. Gentleman’s question about the encampment of protesters in Parliament square by saying that he or other colleagues could raise the issue at Justice questions. I added that we had said that as part of the legislative programme, there would be consideration of a Bill on constitutional reform that could address the issue. That is very much under consideration, so I endeavoured to answer him fully on the issue.
On the question of the national health service, there was a statement yesterday about the regrettable situation in Stafford hospital. There will be questions next week. The hon. Gentleman asked about our priorities for the NHS. They are simple and straightforward: that there should be more doctors, nurses and other staff in the NHS—and that is what has happened—that those staff should be better paid, because when we came into government they were extremely badly paid; that there should be tough targets, so that nobody should have to wait in accident and emergency or for a referral for cancer treatment; and that there should be tough inspections. We have pressed forward with our NHS priorities, which people who need treatment can expect and deserve.
The hon. Gentleman raised a serious point about responses to Members who write on behalf of their constituents, or of organisations in their constituencies, to NHS authorities—the chief executives of trusts or PCTs. He has raised an important point on behalf of the House. He had mentioned it to me already, so I have spoken to the Minister of State, Department of Health, my hon. Friend the Member for Exeter (Mr. Bradshaw), who has raised it with Sir David Nicholson, the chief executive of the NHS. They have said that they completely agree with the shadow Leader of the House and that if a Member writes to someone in authority in the NHS, that letter should require personal consideration by the chief executive, and a personal response. There is no guidance to that effect at the moment, but my hon. Friend and Sir David are absolutely clear about their view. They are considering whether they should issue guidance, although the matter should have been self-evident. That is the absolutely clear position. If hon. Members have any concerns about the issue, they can take them to the shadow Leader of the House and he can raise them with me, or go directly to my hon. Friend the Health Minister. We do not expect Members’ letters to go into a complaints system that is designed for individual patients, not for accountability, which is what the House’s job is about.
The hon. Gentleman asked about reserve forces, and I should say that next week there will be a full day’s debate on defence. He also made comments about the Solicitor-General, with whom I work closely and with whom I will be taking the equality Bill through the House. In her role as Solicitor-General, she is a great champion of victims of crime. She is also a great champion of her constituents and her region in the north-east. She is a fine Member of Parliament who cares about these issues and is a valued member of the Government. I will not hear a word said against her—I hope that I have made myself clear on that one.
The hon. Member for Rutland and Melton (Alan Duncan) also asked about Regional Select Committees. When we passed the resolution to set those up, we determined that they would last just for this Parliament, and be reviewed thereafter, so they have that consideration of review built in. I appreciate that I am not making progress with Opposition Members, but I still take the view that there are important agencies working at regional level, investing hundreds of millions of pounds of taxpayers’ money, and it is a shame if Opposition Members cannot be bothered to hold them to account on behalf of their regions. I hope that they will have a conversion with regard to Regional Committees, although I do not set much store by that expectation. That is a pity, but in the meantime Members who are prepared to hold agencies to account in their regions—Labour Members—are getting on with the job. Until other Members join the Committees, they should not be complaining about them.
As for Equitable Life, when the Chief Secretary to the Treasury made her statement in response to the ombudsman’s report she said that the failures that have affected a large number of people were rooted in the original mismanagement of Equitable Life, which goes back to the ’80s. That was compounded by regulatory failure, for which she has apologised. We have acknowledged that regulatory failure and exceptionally, although there is no legal obligation so to do, we are determined to make ex gratia payments, for which a judge has been asked to set up a scheme. Of course, as one would expect, those in the greatest need will be dealt with first. That is how we are proceeding, and we believe that we have made the position clear to the House. The work is under way, and if the Opposition want to hear about it further or debate it, they can choose it as the subject of an Opposition day debate.
The hon. Gentleman mentioned unemployment. We are very concerned indeed for every person who loses their job, whether they are a man working in the car industry or banking industry, a woman working part time or an older person who is heading towards retirement but whose job is still important to them and to their household budget. Employment in the economy is important for the economy as a whole. That is why we are ensuring that we will not be cutting capital spending, as Opposition Members propose, which would make unemployment even worse. It is why we are providing a fiscal boost and putting more money into the economy to help get it going and help staunch the problem of job loss. That has led to an increase in debt as a percentage of GDP. Hon. Members complain about that, but if they are concerned about unemployment, why do they argue that we should not do all the things that we are doing to try to protect the unemployed and prevent even more people from becoming unemployed?
Of course, one thing that the Opposition simply refuse to acknowledge is that there is an unemployment problem across the country as a whole—[Hon. Members: “Too long!”] I have not taken as long answering as the hon. Member for Rutland and Melton took asking his questions—[Interruption.] All right, I apologise. I shall therefore finish by mentioning FE colleges.
I remind the House that when we came into government in 1997, the capital budget for FE colleges—[Interruption.] I would just like to ask hon. Members whether they can remember what the capital budget for FE colleges was then. It was £0—there was no capital budget. Since then we have invested massively in further education, and rightly so. I reassure hon. Members that there are 261 colleges for which final approval has been given, or at which there is already work on site, and that the capital investments in those 261 colleges will go ahead as planned. Sir Andrew Foster will examine how preliminary approval has been given beyond the programme budget. We acknowledge that that is a problem, and it is being looked into. However, as the Prime Minister said yesterday, we will go ahead with the £2.3 billion in this comprehensive spending review period that we have allocated to further education colleges—and I think that £2.3 billion contrasts favourably with £0.
It was reported yesterday that the disgraced former chairman of RBS was seeking re-election to the board of BP and, surprisingly, was supported in his request by the chairman of BP, who had been a director of RBS. Until we break into the magic circle and old boys’ club, in which the same directors appoint each other to boards, remuneration committees and so on, we will never sort out accountability and the problems that have arisen in the banks and elsewhere. May we have a debate on corporate governance, to ascertain how to address the issue fundamentally, so as to stop problems occurring not only in the banks but in other sectors of our economy?
The question of corporate governance—and of remuneration, which is intrinsic to it—has been part of the Turner review, which was published yesterday. It will be the subject of a Government response, with national action to gear up financial regulation, which will also be taken forward to the G20 international summit to ensure not only that we have good national action but that it is reinforced by international co-operation on regulation and remuneration.
May we have a debate on communications between the Prime Minister’s office and the outside world? A few years ago, I was in Turkmenistan when the Turkmenbashi was the president. I was told that the Karakum canal was leaking disastrously, but that none of his Ministers dared tell the Turkmenbashi, because they were afraid of the consequences. I wonder whether something similar is happening with the Turkmenbashi of No. 10. The hon. Member for Rutland and Melton (Alan Duncan) gave one example—the further education colleges. It is no good talking about what happened 12 years ago; we need to consider what is happening now. Colleges throughout the country are having their capital schemes frozen.
Another example is the mortgage relief scheme, which I raised directly with the Prime Minister a month or so ago, and which others, including the right hon. Member for Witney (Mr. Cameron), have subsequently taken up. It is no good saying that it will happen when I—I am sure that I am not alone in this—have people in my advice surgery in tears because they are going to court next week, when their house will be repossessed, and the mortgage relief scheme is still not in place. May we therefore have a debate to bring the Prime Minister into the real world loop? He is giving orders, which are not being carried out.
Many students will be alarmed this week by universities’ proposals to double fees. Before a further generation is put into deeper debt, may we have a debate on the matter so that we know the Government’s position? They know that many of us will oppose any such proposals bitterly.
We had the sad statement about Stafford hospital, and many of us recall earlier events at Maidstone. I wonder whether it would be appropriate to have a debate on professionals’ duty of care. I understand that administrators appear to have taken an extraordinary view of targets and abused the system at that hospital, but clinicians, doctors and nurses have a duty of care to individual patients and they should be reminded of that. It is not part of their role simply to accept whatever orders they are given, if they are detrimental to patients. May we therefore have a debate on that?
Yesterday, the Prime Minister made a statement about allegations of collusion with torture. That written statement raised more questions than it answered, not least because, as I read it, it confers on the Attorney-General a wider role, which I believe to be entirely unconstitutional, whereby a Minister of the Crown determines—not only in the case referred by the High Court, but in others—not whether Government agents are prosecuted, but whether they are even investigated. That cannot possibly be right constitutionally or legally. May we have a serious, sober debate about that matter, about which hon. Members of all parties will be concerned?
I shall not add anything further to my answer to the shadow Leader of the House about FE colleges, except to say that 261 colleges will go ahead with their capital improvement, and that over three years, £2.3 billion will be invested. An inquiry is being set up under Sir Andrew Foster about the preliminary approvals that were given, but should not have been. It will report shortly.
The mortgage scheme—the help for people to defer their interest payments—was announced in January, but it was made clear when it was announced that because the scheme involved the major mortgage lenders, it would have to be worked up with them. It was not just a Government scheme, like the Her Majesty’s Revenue and Customs scheme, which could be announced and then implemented straight away. It had to be worked up in partnership with the mortgage lenders—and that is happening. In the meantime, we have given more help to those who become unemployed by shortening the amount of time for which they have to be unemployed before they get help with their mortgage payments, and increasing the amount for which they can get help with their payments. We have issued guidance to the county courts to ensure that they enforce the position that repossession is a last resort. We also have a moratorium with the mortgage lenders on moving to repossession. That work is under way, and some has already come on stream.
On higher education fees, the Minister of State, Department for Innovation, Universities and Skills, my right hon. Friend the Member for Tottenham (Mr. Lammy) has said that there will be a review. However, even before the review we know that admissions to further and higher education have increased across the board.
The hon. Member for Somerton and Frome (Mr. Heath) mentioned the duty of care of professionals at Stafford hospital. There will be Health questions next week, and he could raise the matter then.
The hon. Gentleman talked about the Attorney-General and the Prime Minister’s written ministerial statement on detainees. At Prime Minister’s questions, my right hon. Friend spoke of our absolute abhorrence of torture and rendition, and our rejection of anything to do with that. To reinforce that, and to reassure people so that they know that our important security services are not contaminated by such abhorrent malpractice, guidance will be published. A further request has been made to the Intelligence and Security Committee to review recent developments, and Peter Gibson will examine the matter and report annually to the Prime Minister. It is not unusual in complex matters for the Attorney-General to examine the issues first and request the police to investigate. Obviously, the police can investigate of their own volition, but it is not unusual for the Attorney-General to undertake a preliminary review—and that is exactly what she is doing.
When my right hon. and learned Friend responded to the shadow Leader of the House, who requested a debate on the Mid Staffordshire NHS Foundation Trust, she said that there had been a statement yesterday and that there would be Health questions next week. That is not good enough. That hospital is about 12 miles from my constituency and I am intensely concerned about what happened there. The preliminary reports are horrifying and shocking. Please may we have a debate in Government time soon?
Action has been set out following the statement, and my hon. Friend will be able to ask further questions of the Health Secretary. It is important to reinforce to bereaved families who have lost relatives in that hospital the fact that they can individually have a review of their relatives’ cases.
The Leader of the House knows that although the Government have a good-sized majority, the vast majority of the British public voted for Members of Parliament who sit on the Opposition side of the House. May we have a debate on the need for electoral reform, so that the Government of the day have the support of the majority of the people?
When can we have some time set aside to set up a Regional Select Committee for London? The Mayor has cut major infrastructure projects in London, the 50 per cent. target for affordable housing has been cut, and a £75 million revenue black hole has been created in the budget of Transport for London. London Members of Parliament want a voice on those issues and an opportunity to scrutinise the Mayor—or at least, Labour Members want that, even if the Liberals and the Tories do not. When can we set up a Committee for London?
I agree with my hon. Friend. When we debated the regional Committees in the House, we said that because of the different governance arrangements in London, with the Mayor and the Greater London authority, we would have to consider the issue further. However, I agree with the points that my hon. Friend has made. We need to look into the issue and make progress on it.
In the early hours of Sunday morning, mindless and vindictive vandalism was committed in my constituency. When my constituents woke up, they found that every road sign that had the words “Hospital” and “A and E” on it had been sprayed out. That was legal, because the primary care trust had instructed the highways authority to do it. The vindictive and mindless vandalism that took place was the closure of my acute hospital in the middle of the night. The A and E department, intensive care and the stroke, cardiac, maternity and all other acute services were closed on Saturday night. Can we have a Secretary of State come here for a debate about why so many facilities are closing round the country?
That is an example of where, if the hon. Gentleman had mentioned to me that he was raising that issue, I could have given him a more substantive answer than this, which is simply that he has an opportunity to put that question to the Secretary of State for Health next week.
I do not wish to add to my right hon. and learned Friend’s woes, but could we have an early debate on the problem of FE colleges? A modest college in Rotherham has spent millions of pounds, closed a road and published its plans, but has suddenly been told that it cannot go ahead, having received full authorisation up to that moment. Either the Learning and Skills Council officials who authorised that were wrong and should resign or the senior civil servants who supervised and authorised it should resign. If the matter came across a Minister’s desk, questions have to be asked. The issue is important for the construction industry and for the confidence of some of the weaker economies in our country. Will my right hon. and learned Friend find time for a debate and tell the Prime Minister that we need clarification and for the money set aside to renew our economy to be put into the FE college building programme?
We have acknowledged that there is a problem and Sir Andrew Foster is investigating how it arose. However, my right hon. Friend will acknowledge that, unlike under the previous Administration, Thomas Rotherham college has had considerable investment over the past 10 years.
In announcing the business the right hon. and learned Lady suggested that next week’s defence debate might be used as an opportunity to raise the important issue of the reserves review, which is long awaited and much delayed. Will she confirm that the matter is of sufficient importance and involves so many MPs who have reservists as constituents—a great deal of work has been put into this—that it should be the subject of a proper oral statement by the Defence Secretary? Will she also confirm that that should be done as soon as possible, as the review is now completed?
There will be a full-day’s debate next week on defence, as I have said. There will be an opportunity for hon. Members to raise the question of reservists with the Minister concerned, but if they are not satisfied thereafter, we can look at the situation again.
Many right hon. and hon. Members head back to civilisation on a Thursday to the midlands and the north along the Euston road or through the Euston area. May I counsel them not to go near the 13th floor of Euston tower, 286 Euston road, which houses the central London tax office of Her Majesty’s Revenue and Customs for my constituent the Air Logistics Group, as well as for many hundreds of other businesses. There appears to be a serious black hole there, which is obviously a danger to public safety. Information is not coming out of that Government office, despite faxes, e-mails, telephone calls and requests for refunds from my constituent, who is concerned about a bill for more than £25,000 for corporation tax for 2008. We are told that the office is behind with its post. The Government signed up to the prompt payments code at the end of last year and set a limit of 10 days on all transactions with the private sector in particular, but that is not happening. Can we have a debate on the HMRC, its resources and how it handles—
Order. I say to hon. Members that I am not going to get through all the Back Benchers in this question session if the supplementaries are as long as that. They are not an opportunity to make a speech; it is a question that should be put to the Leader of the House.
Treasury questions are next Thursday and there will be a full-day’s debate on the economy. HMRC is processing promptly all the applications from those businesses that want to defer their tax. I will raise with the Chief Secretary to the Treasury the issues to do with the tax office that my hon. Friend raised.
Does the Leader of the House recognise that Select Committees are one of the most important ways in which we have the opportunity truly to hold the Government to account? However, the Regional Select Committees are a total travesty. Will she become the Leader of the House for once and abandon them, and instead have the regional Grand Committees, to which every Member in the region concerned is entitled to attend?
Derian House, a children’s hospice in my constituency, and St. Catherine’s, which is next door in South Ribble, are doing the good work that the Government rely on. People who are dying, who need that loving care, are dependent on the income of those hospices from charitable donations and the money from the Government. As my right hon. and learned Friend well knows, the children’s hospice is the poor relation for direct funding from the NHS. What can she do through this credit crisis, as charities struggle with the amount of money that they receive, to ensure that the funding gap can be bridged through the NHS? It would be a good idea to have a topical debate on funding for the hospice movement.
I will take that as a suggestion for a topical debate. The Government have put extra money into the strategy for end-of-life care, and £10 million extra into children’s hospices in particular. We have also helped with gift aid. However, some hospices have been hit particularly hard because their reserves were in Icelandic banks, which has added to their problems at a time when charitable giving has fallen. We are acutely aware of the effect that that might have on health services that are incredibly valued by families who need them. I agree with my hon. Friend’s point and will look into the issue for a topical debate.
At the end of another week when significant redundancies have been announced in the knitwear industry in Hawick in my constituency, will the right hon. and learned Lady ensure that when the Chancellor introduces the debate on the economy in due course, he acknowledges the challenges facing that world-class industry and brings forward a set of proposals to support it?
Is my right hon. and learned Friend aware of the article in The Independent today about restaurant owners using the credit crunch as an excuse to ask the Government not to stop the inclusion of tips in the national minimum wage? We fought long and hard to close that loophole, so I hope that she and other members of the Cabinet and the Government do not agree with those restaurant owners, who are bad employers exploiting young people. When will the legislation come forward to this House?
In her rather shrill defence of the catalogue of incompetence that has led to the FE crisis, the one thing that the right hon. and learned Lady did not say was whether Ministers would come to the House to answer to Members from across the House whose FE colleges face such difficulties. The Association of Colleges says today that those FE colleges that were encouraged to devise and develop projects for capital expansion have already spent £150 million in doing so. A Minister says that we should not be in this state and that the programme has not been managed properly, but what Ministers will not do is come to this House and answer for the incompetence that has led to this situation. Will the right hon. and learned Lady bring about the opportunity for Members from across the House to defend their colleges and to make Ministers answer the questions that they seem so reluctant to answer?
Given the risk of being shrill, perhaps I should answer the hon. Gentleman in a very deep voice. I refer him to the written ministerial statement that the Secretary of State for Innovation, Universities and Skills issued on 4 March. The Prime Minister answered questions on this matter yesterday in Prime Minister’s questions, and Sir Andrew Foster’s report will be forthcoming shortly. At that point, it might well be that the Secretary of State comes to the House to make an oral statement.
It is really important that schoolchildren have an opportunity to visit the House, but I am struggling to arrange that for schools in my constituency. I am told that we are completely booked up until at least September or October. It is particularly difficult for schools in the north, because they have to come on a Monday or Tuesday; the other days are no good to them. Could those schools be given some priority, because it is easier for schools in London and the south-east to come later in the week?
My hon. Friend makes an important point. All our constituents find it incredibly valuable that schoolchildren come to the House. If I may, I will ask the Deputy Leader of the House to look into this matter, and possibly issue a written ministerial statement about it. Speaking as a London MP, I am sure that we would all readily understand the idea of making such visits possible for schools from outside London, for which more complex arrangements have to be made, and do what we can to help.
Given that the Prime Minister appeared to be in denial yesterday, that the Minister responsible for further education, the Under-Secretary of State for Innovation, Universities and Skills, the hon. Member for Birmingham, Erdington (Mr. Simon), was embarrassingly hapless when interviewed on the “Today” programme this morning, and that the right hon. Member for Rotherham (Mr. MacShane) has just made it clear that a serious problem exists, surely it would make sense for the Secretary of State, and not a hapless junior Minister, to come to the Dispatch Box early next week to answer questions from Members who are worried about their colleges of further education. If the Leader of the House will give us a simple yes, we will all be happy.
In order that hon. Members should not be unduly alarmed, and that no one should suffer from any confusion about whether the 261 final approvals that have been given will be going ahead, perhaps I will ask the Secretary of State to issue a written ministerial statement containing a list of the 261 final approvals, so that everyone is clear about which is going ahead this year. Sir Andrew Foster’s report will be forthcoming shortly, and it is at that point that the Secretary of State should come to the House with the full facts of the situation at his disposal.
Could we have a debate on the future of the country’s rape crisis centres? My right hon. and learned Friend will be aware of the excellent work done by their staff, most of whom are volunteers, but there is genuine concern about the future funding for the centres. Will she use her good offices to advance the argument for keeping them funded, in order that women, in particular, can use their services?
I agree with my hon. Friend. All local authorities ought to be supporting those local services that help the victims of rape—one of the most traumatic crimes. We set up a £1.1 million fund last year to help the rape crisis centres that were threatened, and none has closed because they were all able to apply to the fund, 100 per cent. of which was spent. Today, we are announcing the second round of the fund, which will be £1.6 million. It is important to support the victims of rape, but it is also important to hold the perpetrators to account. It is therefore welcome that, over the past 10 years, the number of men convicted of rape has increased by 46 per cent. We have a great deal more to do in the criminal justice system, but we are making good progress, and rightly so.
The Leader of the House did not respond to the point raised by the hon. Member for Rutland and Melton (Alan Duncan) about Equitable Life. She will be aware, however, that the latest damning indictment of the Government’s mishandling of the Equitable Life fiasco was delivered only today by the Public Administration Committee, under the chairmanship of the hon. Member for Cannock Chase (Dr. Wright). Given the strident criticisms in the Committee’s report, will the Leader of the House now find time for a debate about the Government’s handling of the whole Equitable Life fiasco, so that people can have their money returned to them?
Is my right hon. and learned Friend aware of the abysmal success rate in tracing employers’ insurance liability certificates in cases of asbestos-related disease? This morning, I received a letter pointing out that last year certificates were traced in only 25 per cent. of pre-1972 cases, and that for post-1972 cases the figure was only 38 per cent. There is an alternative: an employers’ liability insurance bureau. Will she arrange for a topical debate on the concept of such a bureau?
Perhaps there will be an opportunity for my hon. Friend to seek a Westminster Hall debate on that subject. I will bring his comments to the attention of Ministers in the Department for Business, Enterprise and Regulatory Reform. It is another example of where regulation is important to protect people.
May we go back to the reply that the Leader of the House gave to the hon. Member for Cheadle (Mark Hunter) about Equitable Life? In her first response, she referred to the statement by the Chief Secretary to the Treasury last November. That statement has just been dismissed by a Select Committee of the House as
“shabby, constitutionally dubious and procedurally improper”.
May we have not just a debate but a debate with a vote, so that the House can decide whether it supports the Chief Secretary, or the ombudsman and one of its own Select Committees?
In the next few days, the parents of four and five-year-olds will learn which primary school their children will be going to in September. Three weeks ago, the parents of children transferring to secondary school were told which secondary school their children had been allocated. As this is the first year of the new school admissions code, will my right hon. Friend find time for a debate on the working of the code, once we have the full analysis of secondary and primary school admissions?
I know that 87 per cent. of parents got their first choice for their children in the recent admissions allocation. The most important thing is that not only do they get the school that they choose, but that every school is as good as possible. I will raise the question of the monitoring and reviewing of the schools admission code with the Secretary of State for Children, Schools and Families and ask him to write to my hon. Friend.
May I join other hon. Members who have asked for a debate on Stafford hospital? Almost 15 years ago to the day, my mother died in that hospital. She got excellent care there, and there are a number of people who work there who will be horrified at what has happened. For the sake of those people, who have given good, loyal service to the national health service, we need a chance not only to say what has gone wrong in this instance, but to pay tribute to those people who have worked so hard in that hospital.
I am sure that many of the people who work in that hospital will appreciate the right hon. Gentleman’s comments. Perhaps I can also remind the House that the Secretary of State for Health has said that there is new leadership in the accident and emergency unit—which had been the major problem—to ensure that all patients can be confident that they will be properly looked after from now on.
Next week, we will consider the massive Coroners and Justice Bill on Report. Mr. Speaker, you will be selecting the amendments and, as there are so many parts to the Bill, they will inevitably fall into at least eight substantive groups. We are grateful to the Leader of the House for providing two days’ debate, but does she recognise that the ability of the House to scrutinise the legislation will be measured, in part, by whether we have time to debate all those groups? Will she take steps to ensure that there is adequate consultation between the parties so that those two days are used effectively to scrutinise all the parts of this important piece of legislation?
I take seriously the points that the hon. Gentleman raises. It was on the insistence of the Secretary of State for Justice that we should have two days of debate for the important remaining stages of this Bill. I will reflect together with my right hon. Friend on the hon. Gentleman’s points about how to ensure that those two days are used in the best possible way for these important measures.
Can we please have a debate in Government time on the Floor of the House on asylum policy? Given that Adam Osman Mohammed, a south Darfurian, who came to this country to seek asylum in 2005 was denied that asylum, was returned to Sudan and subsequently shot dead by Sudanese security officers, does the right hon. and learned Lady accept that it is important that this House should debate the issue of returns—and sooner rather than later—so that we can establish that, while war crimes, crimes against humanity and ethnic cleansing are taking place in that country, Ministers have no plans to return further Darfurians to risk of imprisonment, torture or death?
There will be a debate on Africa the week after next and there are Home Office questions next week. The hon. Gentleman will be aware that in that case, an appeal was made against the decision of the authorities and a court went through all the evidence and decided that the man should return. Obviously, the very sad subsequent circumstances are being looked into, but this happened following a judicial challenge and a judicial process.
I agree with the Leader of the House’s earlier comment that this is a time to put more money into the economy. Could she therefore find time for a debate on the proposed cuts to the budgets of Scotland, Wales and Northern Ireland, which will have an effect on those economies?
There are not cuts to the budget in Scotland. In fact, as my right hon. Friend the Secretary of State for Scotland said yesterday and as other Ministers have made clear, there is increasing investment going into Scotland and Wales, as there is into England. At the same time, as the fiscal situation becomes more difficult as a result of a fall in stamp duty and a fall in other money coming into the Treasury across the board, it is important that we all play our part—whether it be central Government, local government or the devolved Administrations—to make sure that every single pound of public money is properly spent. That is what the First Ministers in Scotland and Wales have agreed to work on with the Chancellor. That is the right process to be going through, but it should not be alleged that these are cuts in the budget. That is not what is happening. Cuts in the budget are being proposed by the Tories, but it is not what we are doing. That is why the public sector debt as a percentage of GDP is rising.
Can we have an urgent debate on the decision of the House of Lords last night to vote down Government proposals for a retrospective business tax for UK ports, which would give the Government an opportunity to review the implications and perhaps review their decision?
Can we have an urgent statement from the Defence Secretary in response to this morning’s report by the Public Accounts Committee on the future of the UK’s nuclear deterrence capacity. The Committee points out that Britain will have to design the new submarines before the United States designs the new missiles that will have go into them. As the Committee points out, it will be difficult to design a missile compartment before knowing the design of the missile, so can we have an urgent response from the Defence Secretary?
We welcome the Public Accounts Committee report. The defence equipment Minister has said:
“Our ability to maintain the Trident nuclear deterrent is not in doubt… Although I recognise the timelines are challenging, I remain very confident that we will deliver a new submarine on time and maintain our continuous at-sea deterrence.”
It is a challenging timetable, but the Minister expressed his confidence, and there will be a defence debate next Thursday.
Can we have a debate as soon as possible on motoring in the United Kingdom, which is one of the most expensive parts of the world in which to be motoring? With the recession, it has got a lot tougher. The Chancellor has an opportunity to repair some of the damage he has done by axing the proposed 2p a litre tax increase, which is about to come about next month. In rural areas, a car is not a luxury, but a necessity. The Chancellor might also like to look at the scheme rolled out in France and Germany, whereby people with old bangers are able to trade them in and get a €2,500 or £2,500 benefit, as that would be environmentally friendly and would help to get rid of some of the clapped-out vehicles on our roads.
The Secretary of State for Business, Enterprise and Regulatory Reform has had extensive meetings, and, indeed, a summit with the automotive industry, which we are determined to support. We continue to invest in public transport so that people have an alternative to relying on their cars—and that means public transport in rural as well as urban areas. In particular, we look ahead to new technology, new design and new manufacture of green cars, which are more environmentally friendly. The Budget is due, I think, on 22 April. The hon. Gentleman is doing what the Prime Minister yesterday accused the Leader of the Opposition of doing—of asking us to do more, while saying that we should spend less. The hon. Gentleman should decide which side he is on.
Can we have a debate on the probation service, so that we can discuss why, at a time when the Government continue to increase numbers at the headquarters, they are cutting services on the front line? In the Thames Valley over the next three years, that means a 20 per cent. cut—of some £6.4 million—with an anticipated loss of some 140 front-line jobs. Why are we increasing the number of bureaucrats while cutting front-line probation officers? What impact will that have on reoffending rates in my constituency?
When the Leader of the House responded to my hon. Friend the Member for Rutland and Melton (Alan Duncan) and tried, not very successfully, to defend the Solicitor-General for her ill-judged comments, she mentioned her role in leading for the Government in the detailed stages of the equality Bill. At oral questions last October, I asked the Parliamentary Secretary, Government Equalities Office, when that Bill would be brought forward and she said that it was in a good state, but that she wanted it to be in the “best possible state” and that it would be introduced “soon”. It is now five months later, and just two weeks ago, the Leader of the House said that we would not see it for a few months. Will she tell the House when we will see that Bill?
Could I take the Leader of the House back to her reply to my hon. Friend the Member for Rochford and Southend, East (James Duddridge) and really urge her and her colleagues to think again about the imposition of retrospective rates on businesses in ports? The fact is that the Treasury Committee had condemned what is going on, and we have had completely different conflicting versions from the Department for Transport and the Department for Communities and Local Government, and now the House of Lords has passed a motion of regret. Meanwhile, back in the real world, one business has gone bust and a whole mass of them are shedding labour in our ports. I urge the Leader of the House to talk to her colleagues to get them to have a fresh think on this matter.
Could we have a debate on the parliamentary ombudsman generally? When our constituents send us cases of alleged maladministration and we pass them on to the Parliamentary Commissioner for Administration, our constituents expect, if the ombudsman finds maladministration, that some remedy will follow the inquiry. If there is no remedy, it doubles the sense of injustice, but also reflects on Parliament as a whole. After all, this is the parliamentary ombudsman. What is the point of having a parliamentary ombudsman if, when she finds some maladministration, absolutely nothing happens? Can the House please have an opportunity to debate the parliamentary ombudsman’s role and powers and how the ombudsman’s reports should be implemented?
What has happened in response to the ombudsman’s reports is not nothing, but three things. We have acknowledged that there was regulatory failure, we have apologised for it and we have set up an ex gratia payments scheme for those who lost out not only through the regulatory failure, but through the management failures in Equitable Life that started it all off.
The Leader of the House will be aware that the Secretary of State for Communities and Local Government has now written to you, Mr. Speaker, to confirm that details of this year’s programme of spending on preventing violent extremism will be published. I raised the matter in business questions last week. However, the letter also confirms that the Department does not currently hold the details. The question that naturally arises is how we can be sure that violent extremists, or at any rate extremists, have not got their hands on some of the money. Does the Secretary of State plan to come to the House to make a statement?
The Traffic Management Act 2004 gives local authorities extra powers to control the proliferation of roadworks in their local areas, yet to date no such permitting schemes have been introduced anywhere in the country. Could the Secretary of State for Transport come to the Dispatch Box to make a statement about this sorry state of affairs?
May we have an urgent debate on human rights in China, and in particular on the case of Shi Weihan, who is currently languishing in a Chinese prison on the basis of what I believe to be trumped-up charges, and will the Leader of the House express a view on whether a British diplomat should be present at the trial, which is to be held tomorrow?
I thank the hon. Gentleman for raising the issue of human rights in China, and for bringing the specific case of Mr. Weihan to the House’s attention. I think we all share his belief that human rights should not be abused in China. Ministers have raised the matter, and I understand that our embassy has asked whether it is possible for someone from the embassy to attend the trial and has raised its concerns about the issue with the Chinese authorities. I will ask the Foreign Secretary to write to the hon. Gentleman informing him of the latest developments.
Points of Order
On a point of order, Mr. Speaker. I wonder whether you have been informed whether the Secretary of State for Health has given any indication that he will come to the House and make a statement about problems in the Royal London Hospital Trust about Dr. Iwegbu, who has been reported to the General Medical Council and against whom there are six interim orders, one of which states that he is not allowed to practise elective or trauma surgery on paediatric patients.
I do not want to involve myself in the GMC’s ruling when it is made, but it was brought to my attention this morning that this doctor has been calling himself a professor for some time. The trust has now decided to stop him doing so. An e-mail states that “discreet changes” should be “made throughout the Trust” so that no “embarrassment” is caused to the “Professor”.
The public, including patients, have seen the doctor in good faith in the belief that he was a professor in the medical profession. Surely it is not right for such information to be sneaked out in e-mails. I fear that a cover-up is taking place in the trust over the question of whether or not this gentleman is a professor in the medical profession, and I think that the Secretary of State should come here to explain what is going on.
On a point of order, Mr. Speaker. Can you tell us how you can defend and enforce the conventions of the House? Yesterday a major debate on the economy took place, initiated by the Opposition. According to convention, the Chancellor of the Exchequer should have responded to that debate. In answer to a question from my hon. Friend the Member for Aldershot (Mr. Howarth), the Chief Secretary to the Treasury said that the Chancellor of the Exchequer had been in the House on Monday and would be in the House again next week. It so happened, however, that the Chancellor of the Exchequer was present during Prime Minister’s questions yesterday, and was also present—and voting—at 7 pm. So he was in the House yesterday, but was refusing to comply with the normal conventions by responding to a major debate initiated by the Opposition.
The Opposition have relatively few powers left to them in the House, but I should hope that one of them is the power to require the Chancellor of the Exchequer to come to the Dispatch Box to respond to a debate.
When right hon. Members, and indeed hon. Members, come into the Chamber at one stage and again at a later stage, that does not mean that they are doing nothing. They are leading very hectic lives.
Let me say in defence of the Chancellor of the Exchequer that, in my experience, he is a regular attender at the House, and he does make statements. We must ensure that we do not criticise unfairly. I know that the hon. Gentleman does not want to do that.
It is up to Ministers to decide which Minister should take the lead in certain debates. Knowing the Chancellor of the Exchequer as I do, I do not think that he would do anything that would constitute any disrespect to the House.
I beg to move,
That this House disagrees with the Regulatory Reform Committee in its recommendation that the draft Legislative Reform (Insolvency) (Advertising Requirements) Order 2009 should not be approved.
The House regularly debates the need for regulatory reform and the need to reduce unnecessary red tape. Part of the backdrop to those discussions is the responsibility of all of us to ensure that rules that may have been cast a long time ago have not become outdated or been overtaken by the way in which people lead their lives, trade and do business, or obtain information.
It is incumbent on Government to take that responsibility seriously. Regulation is a legitimate part of the modern world—we live in a world with rules—but we do not want business, or creditors when insolvency is involved, to be burdened with rules when they no longer serve the purpose for which they were designed, or when it may be possible to do the job in a better way and, perhaps, at a lower cost. The order that we propose would give further help to creditors by reducing the bureaucratic burdens and costs imposed by one of the current elements of our insolvency arrangements.
I acknowledge that insolvency can be a complicated business, and that having to deal with a failing business is stressful enough, particularly during the current economic difficulties. I therefore feel that it is incumbent on us to do as much as we can to make the system simple and streamlined, bearing in mind the duty that we owe creditors in such circumstances. The order is part of that streamlining process.
Let me explain what the change means in practice. When a company finds itself unable to pay its debts, a liquidator is appointed to find and distribute the company’s assets. That can be done through compulsory liquidation, members’ liquidation or creditors’ voluntary liquidation. I shall not go into the details of the differences between those types of liquidation, but this order deals with voluntary liquidations.
Before the Minister gives us the background, can he explain succinctly why he does not believe that the judgment of the Regulatory Reform Committee is correct? Why is he second-guessing the judgment of a Committee that was set up by the House specifically to deal with circumstances of this kind?
If the hon. Gentleman will exercise just a little patience, I shall come to that in a couple of minutes.
In the case of a voluntary liquidation, a meeting of the company’s creditors must be called under sections 95 and 98 of the Insolvency Act 1986. Notice of the time and venue of the meeting must be sent directly to all known creditors, advertised in the London Gazette and, at least once, in two local newspapers that are circulated in the areas where the company has its principal place of business. The Government propose to remove the obligation to advertise in two local newspapers. That means that it will be up to liquidators, under section 95, or the company, under section 98, to decide whether advertising is needed, and, if it is, to choose the most appropriate method. I stress that it will still be open to liquidators and companies to use local newspapers if they consider that to be the most appropriate mechanism in the circumstances.
The Minister is always immensely kind to me. I am most grateful to him. As he will know, insolvency notices provide a sizeable part of the income of many of our local newspapers—he will see the irony in the fact that those newspapers are the subject of the topical debate to follow. Indeed, the Government have expressed considerable concern about the solvency of the local press. Has the Minister taken that into account? I hope to speak in the topical debate, but I would like to hear his answer to that question.
I am sure that it is more in order for me to concern myself with this debate, rather than the next one, in which I will not be seeking to speak, but I will say that we want to ensure that the advertising in terms of the insolvency process is the most effective. That is our concern and why we have proposed the order.
The hon. Member for Christchurch (Mr. Chope) asked why I disagreed with the Committee’s verdict. The Delegated Powers and Regulatory Reform Committee in another place was satisfied with the order; it gave it the thumbs-up, to use the colloquial phrase. The House of Commons Committee also stated that all the preconditions in the Legislative and Regulatory Reform Act 2006 and the Standing Order tests had been met, but it expressed several reservations and stated that, in its view, the order should not be approved. Those reservations are set out in the report, and I am sure that my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller), the Committee Chairman, will explain them, but, in brief, the Committee felt the order was too “narrow in its focus” and that its effects would be “minor”. It felt it may be unlikely to result in further dividends for creditors and would not provide them with enough protection.
We have two main reasons for wanting to introduce this order. First, it has the potential to save business and creditors money, by reducing costs. Each advert costs an estimated £300 a time, and since there is a requirement to place two adverts, that cost is obviously doubled. That £600 charge may not be a life-or-death sum in each individual case, but when one adds up the sums involved throughout the process, it can increase the costs of insolvency. For creditors who have already lost money, it is important to ensure that their money is spent usefully during an insolvency process, so that as much as possible can be returned to them at the end of that process. The savings from the proposals, together with parallel changes that we propose to the insolvency rules, will combine to mean estimated savings of some £17 million a year. This is not a “narrow” measure.
I am pleased to hear that the Minister is concerned about the cost of insolvency practitioners. Is he therefore saying this proposed change is consistent with a narrative that will put pressure on insolvency practitioners to charge less? I have been appalled by the amount of money that has been absorbed by insolvency practitioners in some cases, and I am just seeking an assurance, without going into details that take us beyond today’s debate, that other measures will be introduced to make sure insolvency practitioners do not take a disproportionately large amount of the funds when they are disbursing to creditors.
There are rules governing charges, which I will come on to, but certainly the motivation behind the order is to increase the pot of money that is available to creditors. As I was saying before the hon. Gentleman intervened, the savings from the proposals, together with parallel changes that we propose in the insolvency rules, will mean estimated savings of £17 million per year. That is part of a wider package of proposals to streamline the process.
The £17 million figure is the savings from both the order we have proposed, which has been considered by the Committee, and the parallel changes to the insolvency rules, which are dealt with in a separate order under the negative resolution procedure. The reason we have to do it this way lies in the origins of the insolvency legislation. There will be estimated savings of £17 million a year from the changes.
That is only part of a much wider package of proposals to streamline and modernise the insolvency rules and other relevant provisions—part of which, I should inform the House, will include a further legislative reform order—which should save a total of about £40 million per year. Huge sums may not be involved in each individual case, but over the piece the savings gained for the insolvency process are certainly worth having. We believe the costs of introducing the order are minimal, and there is no reason why we should not introduce the changes.
The Committee expressed concern about the money going to liquidators rather than to creditors, but protection against that is already built into the legislation. The terms governing the liquidator’s remuneration will be fixed by the creditors and the creditors can apply to the court if they consider the amount of the liquidator’s remuneration to be excessive. Any liquidator taking remuneration that was not justified could find themselves subject to the scrutiny of the courts. I understand that the Committee—this is reflected in its report—was concerned that the savings would not be passed on, so let me make it clear to the House that I want them to be passed on. There is absolutely no reason why what we propose today, and what we propose in the other connected changes to come, should increase fees charged by insolvency practitioners. This is not about increasing fees; it is about avoiding unnecessary expenditure.
Insolvency fees may be managed through the creditors’ committee, but does my right hon. Friend the Minister agree that it is often very difficult to get creditors to serve on those committees and therefore to provide the adequate scrutiny?
I am very encouraged by the tone of the Minister’s comments, but is he aware that some of the insolvency practitioners at the higher level of management charge more than £700 an hour for their time? That means that the £600 saving he cited is negated in about 55 minutes when certain practitioners are employed. Can he therefore assure us that, as well as discussing the measure today, he will consider whether we have adequate protection against the charging of such enormously high costs in circumstances when, by definition, the companies involved do not have much money?
I paid particular attention to my right hon. Friend the Minister’s last statement about his expectations. For the avoidance of doubt, I want to be clear that he is saying that he, as a Minister of the Crown, expects this saving to be passed on to creditors and not to be held by insolvency practitioners.
I am very happy to repeat that. There is no reason why anything we are proposing in the order before the House, and the Committee’s report on it, should increase fees for practitioners. On the wider subject, I should inform the House that changes that are intended to come into force next year as part of the wider process of change in the insolvency rules will increase the transparency and accountability of insolvency practitioners.
This is not just about cost; it is about ensuring that where money has to be spent, that is done in the most effective way. The requirement to use local newspapers goes back to the beginning of the last century and the business practices at that time, when it was more likely that a company would be dealing with customers from its immediate local area. That is sometimes still the case in today’s business world, but it sometimes is not, and trading patterns are more widespread than they once were.
The point about the order is that it gives both the companies involved and the insolvency practitioners the flexibility to choose the best medium for reaching the people whom they wish to reach. Obviously, in the age of digital communication and wider trade patterns, the local paper may not always be the best way of reaching creditors. For example, where a business that was trading all over the country goes bust and we are seeking to identify unidentified creditors, how confident can we be that an advert in the local people is the best way to achieve that, given that all the customers may have been from hundreds of miles away? We are talking about a flexibility that simply reflects that reality.
That is a perfectly valid point. I stress that nothing in the order prevents an insolvency practitioner from using the local paper—and its website—if they think that that is the best route by which to reach people. We are changing the requirement in legislation that they must place such adverts in the local press in every case, regardless of the trading patterns involved. That flexibility makes sense; it makes sense to be less prescriptive and to take into account the greater variety of media that are available today compared with when the rules were first instituted about a century ago. In about 98 per cent. of cases the advertising does not result in an unidentified creditor coming forward, so it is perhaps worth asking ourselves whether there is a more effective way to operate. That is what we have done in this order. It is about giving people the flexibility to choose the most appropriate media available and to use whatever sums are spent on that in the most effective way to try to identify unknown creditors; as I say, that may be done through a variety of media. There is also a misconception that the advertisements are about a wider public aim of bringing information about the liquidation into the public domain—that is not the case. Their purpose is to reach unknown creditors—that is the purpose set down in the legislation. The adverts are also not intended as general public announcements.
People have also asked about companies that might wish to conceal their insolvency from their creditors and whether our changes might enable them to do so. We think that that is very unlikely, because notice of the liquidation must be given to creditors personally; as we have heard about online publications, I should say that it is also placed in the London Gazette, which is available online. Companies are also under a legal obligation to maintain accounting records from which it should be possible to compile a list of creditors. They are required to provide that list for the purposes of the liquidation and to surrender the accounting records to the liquidator—a failure to comply with those requirements is a criminal offence. Liquidators must report to the Secretary of State on the conduct of the directors, and failure to comply with those requirements can lead to disqualification. So it would be both wrong and unwise of a director to conceal a creditor from the liquidator.
As I say, this is about using the most appropriate form of communication for the particular circumstances. Companies or liquidators can still choose to advertise in a local newspaper if they feel that that is appropriate. Some people have argued—this was reflected in the Committee’s report—that this is perhaps too minor a measure and that it is not worth introducing.
I am the longest-serving member of the Regulatory Reform Committee and its predecessors in the House. I was one of those who thought this was a trivial measure. I suspect that had the Minister and his civil servants spelt out, in the documentation that came before the Committee when we considered the measure, the much larger sum that can be saved with other measures that are coming along, we would not be discussing this matter this afternoon.