House of Commons
Tuesday 16 June 2009
The House met at half-past Two o’clock
Prayers
[Mr. Speaker in the Chair]
Oral Answers to Questions
Justice
The Secretary of State was asked—
Probation Services
Probation funding has increased since 1997 by 70 per cent. in real terms, a faster rate than the increase in case load and almost twice the growth rate of the Prison Service. Staff numbers have increased by 50 per cent., with a 54 per cent. increase in front-line staff.
The budget for this year is £894 million. Taking account of a £17 million underspend in 2008-09, the required efficiency savings will be less than half of 1 per cent. No final decisions have been made about the budgets for 2010-11.
I thank the Secretary of State for that answer, but does he accept that in the past three years more than 300 people on probation have been charged with murder, and 130 with attempted murder? What has caused that, if not a lack of resources?
I wish it was that simple. The hon. Gentleman must take account of the comments of Her Majesty’s chief inspector of probation, who has pointed out a simple truth that would apply even were there ever to be a Liberal Democrat Government: some people who go on to commit the most serious offences have already committed less serious offences and will therefore be on probation at an earlier stage. That is a matter of great regret, but it happens to be a truth. There is no point in misleading the public that there is some promised land where doubling the amount of money available would mean that no one who committed a murder had ever committed previous offences for which they had been punished.
The Justice Secretary seems to be in denial. He keeps harking back to what has happened since 1997, but people involved in the probation service are worried about what is happening this year and next. The budgets for next year and the year after that were set out in the comprehensive spending review have now been withdrawn, and probation trusts do not know what they are dealing with. In my area, West Mercia probation trust, 30 out of 390 posts are being lost. None of the trainees due to complete their training period this year, or of those expected to do so next year, can be sure that there will be a job to go to. What sort of service is the right hon. Gentleman running?
I shall tell the hon. Gentleman what sort of service we are running. In his area, funding has increased by 70 per cent. in cash terms, whereas prices have gone up by less than 25 per cent. The probation service across the country is worried not about stable funding under Labour, but about a 10 per cent. cut under the Conservatives. Moreover, I have heard the shadow Chancellor say time and again that spending would have been much less this year and in previous years. There would have been a lower platform, and lower spending now.
Although funding for the probation service has gone up in recent years, the case load has gone up by even more. In the past four years, the average case load per qualified probation officer has risen by a third. The Centre for Crime and Justice Studies has said:
“With budgets set to shrink in the coming years, the capacity of the Service to respond effectively to the demands”
placed on it
“must be in…question.”
I know that staff at Derbyshire probation service would heartily concur with that.
I wholly disagree. In the hon. Gentleman’s area, Derbyshire, probation funding has gone up by an even greater proportion than it has in West Mercia. It has gone up by 78 per cent., and that is since 2001, not 1997. There has been an astonishing increase in resources that exceeds the case load, and there is every reason to believe that Derbyshire probation service, which is well run, can meet its responsibilities. I hope it gets some backing from the hon. Gentleman in that.
When confronted with the realities of probation overstretch in the case of Daniel Sonnex last week, the Secretary of State claimed that there had been a net increase in the number of probation officers over the previous five years. Will he admit, however, that that figure relies largely on the massive increase in the numbers of probation service officers, who are qualified to a lesser degree and cannot supervise high-risk offenders? Will he confirm that the number of qualified probation officers actually fell over the same period?
The hon. Lady reads too much of the briefing from the National Association of Probation Officers. I shall give her a health warning—it is often inaccurate, as it is in this respect. I can give her the figures since 1997. In 1997, there were 6,827 probation officers and senior probation officers, the latter being, by definition, more qualified than probation officers. By 2007, 10 years later, there were more than 7,000 probation officers. Probation service officers fulfil a very important function and their numbers have gone up. They take loads away from probation officers, and their numbers have gone up from under 2,000 to over 6,400.
May I ask my right hon. Friend whether the good, hard work of probation needs much wider back-up and support, particularly in relation to people who are released from prisons such as Armley prison in my constituency, where 50 people a day come in, and 50 a day come out? The main issues are drugs, alcohol and mental health. Would it not be better if his Department was backed up a bit more substantially by other Departments in providing skills and training, and drug and alcohol rehabilitation services in the community, so that all the burden was not on probation services?
I very strongly agree with my right hon. Friend, and my right hon. Friends the Secretaries of State for Health, and for Children, Schools and Families increasingly recognise that their services, particularly mental health, drug and alcohol treatment services, have an important role to play in diverting offenders from crime.
Does my right hon. Friend agree that part of the problem in assessing the effectiveness or otherwise of the probation service is that there is not a settled view as to what works, in terms of alternatives to custody? Does he agree that there is a case for holding an inquiry along the lines of the Carter review into sentencing, looking specifically at alternatives to custody, and including the probation service, so that we can arrive at a clearer picture of what needs to be done?
My right hon. Friend makes an important point. At one level, it is much easier to assess the effectiveness of prison—provided prisoners are kept locked up—than the effectiveness of probation and other non-custodial sentences, but I agree with him that we need the most rigorous analysis of all methods that are used by probation services and others, so that we can arrive at the best approach for dealing in the community with those offenders who do not need to go to jail.
I hear what my right hon. Friend says about the increase in resources, but I am told that in Northumbria, for example, of the 24 probation officers currently in training, at a cost of £90,000 per course, only half will be offered temporary contracts at the end; the other half will be offered nothing at all. How does he explain the gap between the figures he has quoted, and what we are hearing on the ground?
The budget for Northumbria has increased dramatically in recent years, as has the budget for other services. Last year, there was a £600,000 underspend in Northumbria. The major problem is a mismatch between trainees and vacancies; that has to do with the overall economic downturn, but we are now dealing with it—I agree that this cannot deal with the historical problem of that mismatch—through profound changes in the training system, on which we are consulting. Those changes will mean that trainees will not be offered a traineeship unless there is a guaranteed job for them to go to.
My right hon. Friend will know that in Huddersfield and Kirklees we have an excellent probation service, and its members are very grateful for the Government’s investment over a number of years, but there is a communication problem. They are not happy at the moment, and from Huddersfield to Harry Fletcher, there are feelings of neglect. Can we make communication with the probation service a bit better?
Yes, I think that we do have to improve it. One of the things that I have been doing is holding very regular meetings, at least once a month, with senior officials from Unison and the National Association of Probation Officers to work through a range of issues, not least budgetary problems, where they arise, in an effort to resolve them before they cause serious difficulties locally, and I think that that process is working.
The right hon. Gentleman quoted some global figures, and mentioned increases. What he did not say is that we expect far more from probation officers today than we did 10 years ago. He will know that the young woman who is unfortunately ill now, having tried to do her best to supervise Sonnex, had 127 cases on her work load, whereas 40 would have been more than adequate. She is not unique, and the right hon. Gentleman must realise that if we are pushing for community penalties, and for probation officers to do all the other things that we expect them to do, we need resourcing, and we need officers on the ground.
There has been a significant increase in the number of officers. As became clear in the various reviews of the Sonnex case, all of which I published, the Greenwich and Lewisham division of London Probation was grossly mismanaged. The fact that there was a sickness level of 27.5 days—five and a half weeks’ sickness, on average, for every person working in the Greenwich and Lewisham area—compared with the average across London of about 13 days, which is too many, indicates the outrageously low level of management of that probation area. The senior management of London Probation should have noticed that. That is one of the reasons I agreed the suspension of the then chief officer of London Probation. I have every sympathy with the young woman who was in direct line supervision of Sonnex, which is why I have gone out of my way never to criticise her or her line colleagues; she and her colleagues, on the front line, were not to blame.
On the point that my right hon. Friend just made, sickness levels often reflect staff morale. Virtually every year since 1999, I have met Ministers about London Probation, and although we have received global figures for increases in budgets, they do not seem to be reflected in the front-line staff increases that the staff report. To gain an accurate assessment, the justice unions parliamentary group is holding an evidence session on 15 July, inviting London probation officers to explain what is happening on the ground. I would welcome the Minister’s attendance at that session.
I shall do my best to come. There has been an increase of 63 probation officers in London. Sickness levels are principally a symptom of poor management. If one looks at levels of sickness in schools or local authorities or, for example, police stations in the Metropolitan police area, one sees that similar police divisions have very different levels of sickness. Of course that is a reflection of morale, but fundamentally of management. With decent management at divisional level, levels of sickness almost always go down.
The Justice Secretary might know that there are proposals in relation to Staffordshire, some details of which we received as a result of a meeting today with senior management. In Staffordshire, we believe strongly in local identity and the local community, and we pay tribute to the probation service. Does the right hon. Gentleman accept that there are those of us who are seriously worried about the idea of a merger into a west midlands probation service? What is the rationale behind that, and will he review it?
I am happy to meet the hon. Gentleman, as is my hon. Friend the Minister of State, to discuss the matter. We have—I think there is general approbation for this—established the process of probation trusts. The first initiative on the boundaries to be followed is a matter for local decision, although there is a further decision level.
In the past five years the budget in the west midlands has gone up a lot more than the case load. The number of probation officers has gone up, the number of probation service officers has gone up markedly and the percentage spent on administration has fallen, yet there are redundancies and there are great concerns among probation officers and probation service officers. That seems to be the case around the country. May I suggest that my right hon. Friend consider some inquiry into why there is a mismatch between the figures that he has been given and what seems to be happening on the ground around the country?
I accept, against a background of rising budgets for the past seven years, that budgets this year and next are tight. I established the process with the trade unions and with the Probation Association, which represents probation employers, to ensure that they are helped better to manage their budgets without the need for panic cuts, which are not justified by budgets this year or next year and are not likely to be justified the year after.
Does not the whole debate about the resources available to probation illustrate the point that resources should be targeted ruthlessly on what works to reduce crime? One can go further than the right hon. Member for Knowsley, North and Sefton, East (Mr. Howarth) and say that we know what works in many circumstances—restorative justice, drug and alcohol treatment and mental health treatment. Does not the debate also illustrate the point that we should not waste money on what does not work or on programmes such as bibs, which are aimed more at manipulating public opinion than reducing crime? One can make the same accusation about the vast prison building system, which is based more on penal populism than on a genuine desire to get the crime rate even lower.
I gleaned from that when the hon. Gentleman talks about bibs, he means high-visibility jackets for offenders. If he wants—there is now overwhelming evidence of this—greater public confidence in the less expensive and often more effective community punishments of unpaid work, he must support measures to increase public confidence in those disposals. One of the best means that we have used recently to increase public confidence in those disposals at very low cost has been the introduction of high-visibility jackets. It has worked.
Teesside probation services received significant increases in funding over the years, but I am receiving letters from trainee probation officers who tell me that their chief probation officer has stated that indicative budgets for 2010-13 indicate clearly that they will not be employed after March 2010. Does my right hon. Friend accept that the concern of the young women who have written to me makes it clear that they believe that grass-roots officers are being penalised because there is a financial shortfall?
As I said earlier, all those concerns must be set against a very high base of spending by the probation service, and the service itself will recognise that, I am sure. I have some information detailing that, of a cohort of 42 probation trainees, 18 will be offered probation officer contracts, 12 will be offered probation service officer contracts and 12 will be considered for other junior roles. I have already referred to the problem that has arisen, which is principally to do with the shortage of vacancies due to the economic downturn and the fact that we are changing the whole system. However, a probation service career is still a very good career, and it will remain so as long as there is a Labour Administration who are not going in for blanket 10 per cent. cuts in spending.
The Justice Secretary has told the House that the system cannot be made perfect, and I agree, but he has had an opportunity to hear comments from all parts of the House about the state of the probation service. It is clearly untenable to maintain—I am sure he would not seek to do so—that, in the light of those comments, the Sonnex case is a one-off. Indeed, the statistic that one in seven homicides charged is to a person on probation is appalling. The Justice Secretary has told us about figures, but what is he doing to try to remedy the situation?
We have worked very significantly over the past 12 years to improve the effectiveness of the probation service. The hon. and learned Gentleman’s Government abandoned or abolished the training of probation officers, and we brought it back. We have increased resources by 70 per cent. and increased the effectiveness of the service, so, for example, getting on for 90 per cent. of offenders who breach their probation are recalled quickly to prison, compared with 30 per cent. when his Conservative party was in power. On the issue of funding, let him return to the Dispatch Box and admit that the 10 per cent. cut that the Conservative shadow Chancellor is talking about would mean an £80 million cut in probation funding immediately.
Will the Justice Secretary please confirm that he has given a direction to probation trusts to cut supervision reports on offenders sentenced to life but released on licence from once every three months to once every six? Will halving those reporting requirements strengthen or weaken public protection?
We are clear that, overall, the measures we are putting in place will strengthen public protection, as they have done. We will not take lectures from the Conservative party, which made probation enforcement voluntary when it was in power and would cut probation budgets by at least 10 per cent. over the next two years.
Unless the Front Bench opposite is prepared today to commit to an X per cent. increase in funding for that area, it is so much hypocritical hot air that we are hearing from it. In my constituency, the number of burglaries has reduced from more than 5,000 in 2001 to a little over 3,000 last year. That is through police work and probation officer work, and we should congratulate them. However, will my right hon. Friend write to me to set out the broader picture in south Yorkshire and Rotherham? There are genuine concerns and we must address them, but there are no lessons—no lessons at all—to take from the tax-cutting hypocrites of the party opposite.
Order. Please withdraw the term “hypocrite”. There are no hypocrites in this House.
I thought that I referred to the party as hypocritical. If we cannot say that in the House—
Order. The right hon. Gentleman mentioned Members opposite. It is to be withdrawn.
I am very happy to withdraw that, Sir.
Order. That is fine.
Phew! I shall of course write to my right hon. Friend, pointing out that, although we are profoundly concerned about any failures, overall, in his constituency of Rotherham and throughout the country, including Beaconsfield, there has been a dramatic reduction in crime. We are the first Government since the war to see crime going down significantly rather than up.
Family Division
There has not been a recent assessment and there are not any plans for one. However, the family procedure rule committee has invited the family justice council to consider producing good practice guidance for those cases in which parties lack capacity to give instructions. That is currently being considered by the relevant sub-committee.
I thank the Minister for that answer. More than 100 times a year, mothers are prevented from opposing the adoption or the taking into care of their children as a result of a single expert opinion part-paid for by the local authority. Will the Minister meet me so that I can reveal to her the details of the dossier behind that and demonstrate how many mothers have their right to oppose removed because of mental capacity when in fact they do have the capacity to instruct a solicitor? I hope that a further assessment can be made and that these miscarriages of justice can be stopped.
I will be more than happy to have a meeting with the hon. Gentleman about that, but I should say that the expert witnesses called to court to decide on capacity are not in the pockets of the local authorities. They are appointed with the agreement of both parties and they are there to answer the questions that the courts ask of them. It would be scurrilous to suggest anything other than that. I remind the hon. Gentleman of what Lord Justice Wall said after the hon. Gentleman attacked such an expert recently. He referred to the hon. Gentleman’s allegations as untenable and said that the way in which the hon. Gentleman described the expert psychologist was an abuse of position. I ask the hon. Gentleman to think very carefully about what the Lord Justices have said about his own behaviour in some of these cases.
I fundamentally disagree with the Minister. The hon. Member for Birmingham, Yardley (John Hemming) is doing a great service to justice and the families whose children are unnecessarily, unjustly and wrongly taken from them. I also have such cases, and have liaised with the hon. Gentleman on the subject. Will the Minister accept his request for a meeting so that the dossier that he, I and others have produced can be discussed with her? In that way, she will see the injustice, secrecy and behind-the-door dealing involved in the current situation.
I will be more than happy to meet the hon. Gentleman to discuss individual cases—as long as they are not in the middle of court proceedings, in which case such a discussion would be impossible. I shall be happy to discuss these things in general terms. The hon. Gentleman talks about the secrecy of the family courts, but my right hon. Friend the Lord Chancellor and Secretary of State has only recently addressed those very points in giving the media more opportunity to scrutinise the substance of what happens in the family courts. He has done that for a number of reasons—not least to give back to the public the confidence that the family courts are acting in the best interests of the child. That is what everyone in the House and in the Court Service would want.
Does the Minister agree that since the abolition of the death penalty, the most drastic action that a court can take is the permanent removal of a child against the wishes of the parents? The hon. Member for Birmingham, Yardley (John Hemming) referred to various cases involving mothers with low IQs who have their children put up for adoption; even though they wanted to contest the cases, the Official Solicitor refused to do so. Does she accept that the Official Solicitor’s inaction could be contrary to section 4(6) of the Mental Capacity Act 2005? Will she confirm that from now onwards, the Official Solicitor will contest all cases involving mothers with low IQs who wish to keep their children? Surely anything less would be heartless and wrong.
These are very sensitive cases, and we should be very careful about the way we address them. The Official Solicitor’s job is to act on behalf of someone who lacks capacity. Their job is not to act on behalf of the child or the local authority, but, usually, on behalf of the adult—although occasionally it could be on behalf of the child—who lacks capacity. The Official Solicitor will so act only if there is evidence before the court suggesting that the adult lacks capacity to understand the court proceedings. The Official Solicitor would be acting outwith their responsibility as an officer of the court in doing anything other than acting on behalf of the person who lacks capacity.
Probation Services
Decisions on the size and scope of staffing rest with the 42 areas and trusts that are responsible for managing probation business at a local level. Between 1997 and 2007, the total number of staff was increased from 14,000 to 21,000—an increase of almost 50 per cent.
I thank the Minister for that answer. Following on from what my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) said, Ministers are telling us one thing about the probation service but we get told another when we talk to people employed there. How do the Government intend to improve the probation service, and, more importantly, what has its staff turnover been?
Between 2001-02 and 2008-09, there has been a 57 per cent. increase in resources received by my hon. Friend’s local probation area in the west midlands. I know that in his area there is an issue—a number of other Members have raised it in previous questions—about whether trainees who are due to finish their training will be taken on full time. My understanding is that only a small number in the west midlands know that they will be taken on at this time. The regional training consortiums are there to help, as they have done in previous years, in matching up those who finish their training with jobs available in other parts of the country, and some of the trainees who have not yet been offered jobs may find employment in that way. However, I am more than happy to meet any Member of this House—I may regret saying this—about issues that they have regarding their own probation areas.
It surely must be a factor in probation service staffing levels that a large number of criminals are not reaching the probation service because they are not going to court but are being dealt with as out-of-court disposals. In Berkshire last year, 791 cases of actual bodily harm, 686 cases of common assault, 56 cases of sexual offences and eight cases of grievous bodily harm never even reached the courts. Will the Minister confirm that this is not some cost-cutting exercise that transfers justice to the police instead of taking it through established judicial processes of the courts and the probation service?
It is for the prosecutors and the police who investigate individual instances of crime to decide how best to proceed in any individual case. It is certainly true that some cases are dealt with by disposals instead of being brought to court, but many are brought to court.
I think that my hon. Friend would agree that staffing levels are very important, as this is about keeping the right number of staff in the probation service. However, it is also about ensuring that they have time to deliver properly, because we have seen that a lot of the work has been done through computers rather than face to face. What can we do to ensure that we keep the right numbers of staff, especially in the north-west, and that casework is done better than it is at the moment because of the time scales that are being put on the people who work there?
My hon. Friend has hit on an important point. We want our skilled probation staff to spend as much time as possible supervising those whom they have to deal with to prevent reoffending. We think that too much time is spent in front of computers ticking boxes. We would hope to see improvements over the next couple of years of tougher financial settlements partly through increased efficiencies—for example, streamlining and simplifying processes, reducing overheads, and freeing our skilled probation staff to do what they do best, which is dealing face to face with those they are supervising.
I begin by congratulating the hon. Lady on her promotion within the Department. Despite what she and the Secretary of State have said this afternoon, although the number of probation officers fell between 2001 and 2008, the number of managerial staff increased over the same period by 70 per cent. There was also a 77 per cent. rise in the number of less qualified probation service officers. Work loads have risen by more than a third in the past four years, yet 60 per cent. of all newly qualified and expensively trained people are not becoming probation officers.
If I may say so, the Sonnex case tells us all that we need to know about this Government’s leadership of the probation service. Instead of fiddling the figures, why do they not spend the money on the front line rather than on fattening up NOMS HQ and on constant, morale-sapping administrative changes?
I thank the hon. and learned Gentleman for his welcome before I try swiftly to refute one or two of his points. I do not accept that NOMS HQ is being fattened up. It costs £74 million, which is 1.8 per cent. of the total spend on NOMS. Much of what is listed as spending on NOMS HQ is actually on front-line services, such as private prisons, prisoner escort contracts, electronic monitoring and administering the inspectorates and the Parole Board. That is not, by any definition, fattening up the HQ, so he is wrong about that.
The hon. and learned Gentleman is right to say that case loads have increased by about a third since 2001. A number of Members have referred to that. However, staffing has increased by 35 per cent.—a higher percentage increase than for case loads. Of course, it is for each local area to make the best use of its resourcing to balance the qualifications and types of staff that it has locally. There is therefore bound to be some geographical variation. We need the worst-performing to come up to the standards of the best, and encouraging that is part of what we can do from the centre. I would be more than happy to speak to any Member about how we intend to do that and how it will affect their local probation board.
Electoral Reform
My right hon. Friend the Prime Minister confirmed last week that the Government would shortly be launching a debate on electoral reform.
Having been a supporter of a fair voting system for more than 20 years, I obviously welcome any moves in that direction, and I look forward to that debate reaching a conclusion at a relatively early date. However, does my right hon. Friend accept that the alternative vote system, which appears to have support in some quarters of the Government, can be even more disproportionate in its effects than the first-past-the-post system? Will he ensure that any proposals brought forward provide a genuinely fairer voting system?
I would like very much to recommend to my hon. Friend the review of voting systems that this Department produced last year. It assessed different voting systems, and he will be well aware that we now have a whole range of voting systems in this country—a cornucopia of them—so we can assess the evidence of how they all work. The review assessed them against a number of criteria, including proportionality, voter participation, ease of voting and so on. It found that no system of voting is inherently fairer than any other, and it is certainly not the case that a proportional system is necessarily fairer than any other system.
I emphasise that proportional systems tend inherently to produce coalition Governments. That may be a good thing for some parties, but it might not be a good thing for the country. First-past-the-post systems tend to produce clear majority winners and stable government. Although they tend to hand power to the biggest minority, the practice of forming coalition Governments often tends to hand power to the smallest minority. There is nothing inherently fair about that.
In endorsing that outstandingly good answer from the Minister, may I also remind him that there is no way that the British National party or other poisonous extremists could ever get elected to a democratic Parliament, other than by proportional representation?
I thank the hon. Gentleman, and I commend to him, too, the review of voting systems, which made precisely that point about extreme minority parties.
Does my right hon. Friend recognise that much of the debate is driven by the chattering classes? I can describe some of them no more politely. Parties that introduce sensible policies in the interests of the nation are best served by the voters, who know exactly what they want the outcome of a general election to be. First past the post is the only sensible system—we should do away with the flim-flam of proportional representation, which seems to take up an inordinate amount of time compared with other important matters.
As so often, my hon. Friend makes an important point. In the end, the voting system does not matter—the voters tend to get the sort of Government they want. The issues should therefore be addressed, not on the ground of partisan advantage, but on what provides a legitimate system. The voters of this country will decide that, not party politicians.
It is a great pleasure to agree with every word that the Minister—and the hon. Member for Wolverhampton, North-East (Mr. Purchase) and my hon. Friend the Member for New Forest, East (Dr. Lewis)—said. I am delighted that the Government are delaying reform, but their latest diversionary tactic, of which I approve for the sake of diversion, seems to be setting up the National Council for Democratic Renewal. It sounds grand and full of promise, but what exactly is it? Is it just a bunch of Ministers sitting around, talking about things? To whom is it accountable? How much does it cost the taxpayer and when will it report?
Again, I am grateful for that support. I hope that the hon. Lady agrees that events in recent months have driven home the need for the House urgently to address constitutional reform across the piece. My right hon. Friend the Prime Minister has made it one of his three priorities, and the National Council for Democratic Renewal, as the hon. Lady called it, will ensure that those matters are given the prominence in Government that they deserve, and that they are driven forward to deliver the constitutional reform that the country so urgently needs.
As a supporter of a fairer voting system, I welcome the debate that will take place. What assessment has the Minister made of the systems that are already in place in the devolved bodies? How will that inform the debate?
Again, I am grateful for the welcome for the debate, which is important. For the reasons that I have outlined, it is important that we hold it now. Again, I refer to the excellent review of voting systems, which the Ministry of Justice published in January last year. It clearly sets out an analysis of the way in which the voting systems in the devolved Administrations deliver on the various criteria against which all voting systems are assessed in the document. I think that my hon. Friend will find that it is a mixed picture.
End of Custody Licence Scheme
As I have made clear to the House, I will withdraw the end of custody licence scheme as soon as we have sufficient headroom in the prison system to do that.
Having given 10,102 violent offenders early release, I am sure that it comes as no surprise to the Secretary of State that 1,000 offences, including three murders and two rapes, were committed by end of custody licensees who were released and should have been in prison. Does he need any more evidence to show that the scheme is a shambles, out of date and should be brought to an end as soon as possible?
As it happens, the reoffending rate on the scheme is very low. Of course, I regret any offending by prisoners, but the scheme is much more effective for dealing with the pressure on prison places than the scheme that the previous Conservative Administration adopted. One day—I was in the House when it happened—they let out 3,500 prisoners just like that, without any sort of effective supervision. Prisoners who, among other things, have committed offences of serious violence, are excluded from the scheme. If there were a Conservative Administration, who would cut the prison budget by £200 million, they would have to introduce a grand ECL scheme to cut the number of available prison places. That is what their policy means—they have not excluded Home Office or Ministry of Justice services from their 10 per cent. cuts.
Does my right hon. Friend have an estimate of the number of additional prison places that would be required if the end of custody licence scheme came to an end and what the cost of providing them would be?
We are committed to ending the end of custody licence scheme, because it was a temporary measure, and we are working hard to do that. We have greatly increased capacity, with one of the fastest-ever building programmes, particularly over the past three to four years, and thousands of new places are coming on stream. The average number of prisoners on ECL at any one point is between 1,200 and 1,450, so that is the headroom that we need before we can abolish it, but I am determined to do so.
Secure Accommodation
At 30 April 2009, there were 3,527 places in the under-18 secure estate. Of those, 2,895 places are currently in use.
I thank the Minister for that answer. The young offender programme led by National Grid has done an extremely good job, with young offenders grouped together. One of the problems in my constituency, however, is that the offender substance abuse programme, for people with drug problems, does not segregate on an age basis, so young offenders who have mild drug abuse problems are put with older people who have problems with heroin. That can lead to ruin—and, in one case, it has led to death—so can the Minister look at the programme again and see whether we can segregate on an age basis?
I am certainly happy to look at that issue. With the introduction of youth offender rehabilitation, there will be an opportunity for courts to take into account a number of those issues and look at them as an opportunity not to put young people in custody, but to provide a range of measures that may assist them through drug rehabilitation.
Given that the Government are cutting the number of Youth Justice Board places, which could lead to the closure of four homes, including one that covers London and the south-east, are they backing off from their commitment to children who need secure children’s home places?
On the contrary: what the Youth Justice Board has done is review the number of places and look at demand. As we have already indicated, custody is the Government’s last resort for young people. The Youth Justice Board has looked across all places, and determined that the demand is not there for the number places that exist currently, in order to ensure that contracts are awarded to those establishments that provide the best quality and type of accommodation for young people, as well as taking into account the cost. However, it is certainly not the Youth Justice Board’s intention to deny places that are appropriate for the needs of those young people.
Closing secure care homes will remove the smaller homes from the system that often have better trained staff and are the places where local services can be provided. What will happen is that young offenders will go into custody far away from their families and the communities from which they spring. Is that a great idea as far as rehabilitation is concerned?
I am sure that my hon. Friend will agree, as would many hon. Members, from across the House, that the most appropriate thing is to ensure that we have as few young people in custody as possible. The most appropriate thing is to try to treat those offenders in the community. That is why the number of places has been reduced—because the demand has been reduced, as we look at other alternatives and as we consider the issue that my hon. Friend has raised to ensure that younger people are moved to the most suitable places for their needs. That is what the Youth Justice Board will keep foremost in its mind when it assesses those young people.
Topical Questions
As this is the last Justice questions under your speakership, Mr. Speaker, I should like to express my personal appreciation and that of my colleagues for your years of service and for the many personal kindnesses that you have shown me over the years.
The House will be aware that there has been considerable concern about the starting point for the minimum term for murder involving the use of a firearm, which is 30 years, compared with that for murder involving the use of a knife, which is 15 years. In the light of those concerns, I intend to review the provisions in schedule 21 to the Criminal Justice Act 2003, with a view to deciding whether to amend it, as I can do by order. I will of course consult the senior judiciary and the Sentencing Guidelines Council, and I would be very happy to receive wider representations, including from hon. Members on both sides of the House.
Given that an inquiry into Iraq, however inadequate, has finally been announced, will the Secretary of State tell us whether there will be measures in the Constitutional Renewal Bill to require parliamentary consent for war? If so, will he explain why that could not also be achieved by resolution?
In the consultation document that was published on 3 July 2007, and in documents published alongside the publication of the draft Constitutional Reform Bill, we proposed two alternatives: one involving statute, the other using a resolution. In the event, we now judge that the consensus in both Houses is to proceed by resolution, and a draft of such a resolution has already been published. I hope that it will be approved by both Houses.
My hon. Friend will appreciate that, although I have some responsibilities in respect of the judiciary, it is the Lord Chief Justice, the noble Lord Judge, who is head of the judiciary and has direct responsibility for it. As my hon. Friend will have seen from the press reports, however, there are clear indications that the senior judiciary wishes to ensure that better guidance is made available to trial judges on how to direct juries dealing with rape cases.
Yes, I will confirm that. I agree entirely with the hon. Gentleman. There is a general sentiment across the House that we should encourage the courts to use non-custodial disposals, particularly for younger offenders. That is why, as the Under-Secretary of State for Justice, my hon. Friend the Member for Watford (Claire Ward) has explained, the number of young offenders in custody has gone down by 8 per cent. over the past couple of years. We are seeking all the time to get the most effective disposals from the courts while ensuring the imperative of protecting the public.
Is my right hon. Friend aware that the minimum 19-year sentences passed on the three heartless thugs who murdered Ben Kinsella are not sufficient, and that his family are rightly concerned about that? Can that case be reconsidered by the Appeal Court? Longer minimum sentences of 25 or 30 years would be far more appropriate.
Any reference to the Court of Appeal in respect of those sentences is a matter for my right hon. and noble Friend the Attorney-General, exercising her quasi-judicial discretion on a reference to the Court of Appeal in respect of what she might judge to be an unduly lenient sentence. I will of course ensure that my hon. Friend’s views are passed on to her. That case has raised the wider issue of the starting points for minimum terms provided by section 269 and schedule 21 to the Criminal Justice Act 2003 and, as I have already said, there is a power in section 269 to amend schedule 21 by order. As I have just announced to the House, I intend to review the provisions of that schedule in the light of general concerns, to see whether they still command public approbation or whether they ought to be amended, as I suspect they will need to be.
What will be the Secretary of State’s response to the Government’s resounding defeat yesterday in the House of Lords over political donations by tax exiles? Is he not now regretting that he did not go ahead with the balanced package of proposals put forward by the Constitutional Affairs Committee and developed by Hayden Phillips?
As with any decision by the other place, we will of course consider it and consult other parties. I sometimes invite this House to take an opposite view and at other times recommend the same view. Some significant practical issues are raised by the right hon. Gentleman’s question, and they require consideration. As for Hayden Phillips’s proposal, unless my memory has totally failed me, there was never any intention for the scheme approved in the other place yesterday to become law.
My right hon. Friend will be aware that the Scottish Assembly recently introduced legislation to make pleural plaques a compensatable condition. Now that the consultation process is completed, when will he make his statement and will he follow the Scottish route?
I understand my hon. Friend’s frustration about the time it has taken to come to a view on this subject, but he will also appreciate that we have to deal with a decision—a unanimous decision—taken by the Law Lords in October 2007 and with subsequent medical evidence. We hope to reach a decision and to announce it as quickly as possible, although I obviously cannot anticipate what it will be.
When I made my statement at the end of April, I announced two sites, neither of which was the Basford marshalling yard, just south of Crewe. I am looking carefully at better ways of involving local communities at an earlier stage when it comes to the siting of prisons. It is a difficult issue of balance because many communities, although not all, are inherently opposed to having a new prison—until they have got it, when they often want to hang on to it. I accept the burden of the hon. Gentleman’s point, which is that there are better ways of involving communities at an earlier stage.
The Calman commission yesterday published its far-reaching proposals for devolution. Given that they have all-party support—from Labour, Liberal Democrats and the Conservatives—will my right hon. Friend introduce proposals to implement the commission’s recommendations as soon as possible?
I will certainly pass on my hon. Friend’s helpful suggestion to my right hon. Friend the Prime Minister.
I welcome the hon. Lady’s support for dedicated drugs courts. We started off with two pilots; we have now extended them to another four, and we are receiving very positive indications from them. We want to evaluate all the models on the six different sites before taking any decision on further implementation. Like her, I believe that what we have seen so far of dedicated drugs courts augurs well for the future in our battle against drug addiction.
The issue of recall is being discussed by the cross-party group which is considering the idea of a parliamentary standards authority and related matters. I have been chairing the group, and it is holding its second meeting this week. As for the wider issue of recall, the hon. Gentleman may be aware that we included in the second Green Paper on Lords reform proposals—which had been broadly agreed with all the parties—for recall for the second and subsequent terms that it is envisaged that the new Members of the second Chamber would serve.
The law itself does not really need to be changed. There are clear prisoner transfer agreements. However, the agreement of the receiving state as well as that of the sentencing state is required.
The proportion of our prisoners who are foreign nationals is low compared with those elsewhere in Europe. It is about 14 per cent., which compares extremely well with 60 per cent. in Austria and well over 30 per cent. in most other major European countries.
First, those figures are inaccurate. Secondly, I do not anticipate but am completely certain that if there were a Conservative Government, there would be a 10 per cent. cut in probation services over the next two years. There would also be a 10 per cent. cut in the prison programme, with £200 million slashed from it, and hundreds of millions of pounds would be slashed from the police service. That is because the Conservative party has not exempted either Home Office or Ministry of Justice services from its cuts, which would undoubtedly lead to an increase in both crime and reoffending.
I shall ignore the hon. Gentleman’s slightly loaded adjectives. I think it entirely appropriate for a fine, upstanding Government, full of vigour, to present these proposals. Let me make a further, even more serious point. It was the House of Commons—including Members in all parts of the House—which allowed this mess on expenses to develop, and it is our responsibility, not that of the next Parliament, to sort it out before the election rather than afterwards.
Digital Britain
With permission, Mr. Speaker, I shall make a statement on the publication of the “Digital Britain” report.
Britain’s digital industries are among the most successful in the world. The global technological revolution means that if we make the right decisions now, they will continue to grow and Britain will continue to prosper from them. The report, which is part of the Government’s active industrial policy, spells out how we can make the most of the opportunities today and in the years to come.
The report covers four broad themes. First, we will make the most of the digital revolution only if we have the right infrastructure. Just as bridges, roads and railways were the foundations of Britain’s 19th-century industrial strength, our digital communications infrastructure will help power our future success. Businesses, other organisations and individuals want access to high-capability, high-speed networks, both fixed and mobile. This is key to Britain’s competitiveness.
As a first step, we are reaffirming our commitment to ensuring universal access to today’s broadband services, delivered through a public fund, including money that has not been used for digital television switchover. But we also need to ensure that Britain has the best next generation fixed broadband. Other countries are already investing heavily in this. Here, we have already seen an energetic market-led roll-out of next generation fixed broadband, but the economics of building what are essentially new networks mean that if it is left to the market, true super-fast broadband will reach only two thirds of homes and businesses over the next decade. The other third would be left behind.
Telecommunications prices for the consumer have fallen significantly in recent years and are expected to fall further as technology advances, so we have concluded that the fairest and most efficient way of ensuring that people and businesses are not left out is to use some of that saving in the form of a small levy on all fixed lines to establish an independent national fund, which will be used to ensure maximum next generation broadband coverage.
To complement improvements to fixed broadband, we also need to modernise our wireless network. This report sets out plans for the structured release of sufficient high-quality spectrum Europe-wide, for the creation of the next generation of mobile networks. This will ensure that the UK is among the earliest countries to deploy these networks and that UK consumers continue to enjoy the benefits of vigorous competition. Today’s report also sets out our intention to upgrade all our national radio stations from analogue to digital by 2015, with DAB firmly placed as the primary platform.
Having the right infrastructure will not, however, be enough unless everyone can use, and benefit from, the opportunities that new technologies offer, so participation is the second big theme in today’s report. Technological progress reduces costs, so affordability is partly addressed by the market. However, we are complementing this with Government action. Our £300 million home access scheme gives children in low-income families access to computers and the internet. As well as the ability to afford the technology, people need capability and skills. We address these in a number of ways in this report. I am pleased to announce today the appointment of the digital entrepreneur Martha Lane Fox as our new digital inclusion champion. We are also publishing today the report by my noble Friend Baroness Morris of Yardley on digital life skills.
The third key theme of “Digital Britain” is content—sustaining and strengthening our creative industries and securing plural provision of key public service content in the digital age. The ease with which digitised content can be copied makes it increasingly hard to convert creativity and rights into financial reward. The Government believe that taking someone else’s property and passing it on to others without consent or payment is tantamount to theft. Developing legal download markets will best serve both consumers and the creative industries. We will also legislate to curb unlawful peer-to-peer file sharing. Ofcom will be given a new duty to reduce this practice significantly, including two specific obligations: the notification of unlawful activity and, for serial infringers, identity release to enable targeted legal action by rights holders. We also propose technical measures by internet service providers, such as bandwidth reduction for serial infringers, if the other measures prove insufficient.
We will also implement a new, more robust system of content classification for the video games industry, building on the pan-European game information system with a strong UK-based statutory layer of regulation; that will ensure the protection of children, now and in the future.
I now turn to the evolving role of the BBC and Channel 4, and the need to protect public service content, particularly in the nations and regions of our country. In the digital age, a strong, confident and independent BBC is more important than ever. The Government support multi-annual licence fee settlements for the BBC, so that it can plan ahead and act independently of day-to-day political pressures, but we also believe that it is in the BBC’s own interests to evolve into more of a public service partner with other media organisations, and to see itself as an enabler of Digital Britain. We have been encouraging discussions about a joint venture between BBC Worldwide and Channel 4, which we believe would benefit both, as well as securing the future of Channel 4. Those talks are ongoing, and we are ready to help in any way we can.
Members of this House have repeatedly said that they believe that strong local and regional news, including a plurality of provision, is essential for the health and vibrancy of our democracy—I agree. The recent public service review by the regulator, Ofcom, also highlighted the importance of news in the regions and nations. We welcomed its report and the BBC’s response supporting partnerships. Partnerships are very welcome, but they may well be insufficient to meet the scale of the challenge. We believe that that will require a secure and sustainable funding stream.
The licence fee is the existing major intervention for content. There is nothing in either the BBC charter or legislation to say the BBC must have exclusive rights to it. Independent of the level at which the licence fee is set after 2013, we will consult on the option of sharing a small element of it post-2013 to help ensure high-quality plural provision, particularly in the regions and the nations. Subject to that consultation, we will use some of the current digital switchover underspend to fund pilots of this model in Scotland, Wales and one English region between now and 2013. We have, however, made it clear to the BBC and others that we are open to alternative proposals, should they wish to make them during the consultation. Alongside “Digital Britain” we are publishing a range of related documents, including the outcome of the review by the Office of Fair Trading of the media merger regime and local and regional media.
The fourth key theme in “Digital Britain” is the continued modernisation of government itself. The digital revolution has huge potential to improve the services of government and public bodies, and to reduce costs. It raises questions of data security and how government, as a major buyer in areas such as health and education, can encourage UK-based research and development, open standards and interoperability. The report sets out how public services will be delivered primarily online and electronically, thus making them quicker and more responsive to the public while saving money for the taxpayer.
This report will help accelerate Britain’s recovery from the biggest economic shock the world has seen since the second world war, and it is a central part of our industrial strategy. It will be key to our economic growth, social cohesion and well-being as a nation, and I commend it to the House.
I thank the Secretary of State for giving me prior notice both of the report and of his statement, and I congratulate him on giving his first statement to the House in his new role. With Lord Carter’s surprising and rather hasty departure from the Government, it is now the Secretary of State, less than a fortnight into the job, who must pick up the baton in an immensely complex but vital area for the economy. I therefore hope that he recognises that I do not mean it personally when I say that today’s report is a colossal disappointment.
The introduction, on page 3, says that the report seeks to achieve seven things. So what are they? The first is an “analysis”, as is the second; the third is a “statement of ambition”; the fourth is a “restatement” of need; the fifth is an “analysis”; the sixth is a “framework”; and the seventh is a “review”. Where in all of that is a single action?
There is one area in which the report has excelled itself, and that is consultation. The interim report published in January announced eight consultations, and this one announces 12, plus one new quango. That is surely government of the management consultants for the management consultants by the management consultants.
Britain has huge competitive strengths in the digital industries, particularly in the production of digital content, but to embrace these opportunities we need a proper digital infrastructure. Will the Secretary of State explain why, when America, France and Japan are laying fibre optic cable to thousands of homes, Britain’s operators have barely started to think about it? Why have the French Government been able to create competition between internet service providers to lay fibre in France Telecom’s ducts while the British Government have stood by as BT makes minimal investment, protected by a monopoly over the local loop?
Today’s solution, according to the Government, is a broadband tax, but rather than taxing, should the Secretary of State not be seeking to stimulate investment through the regulatory structure? The cable revolution happened without a cable tax; the satellite revolution happened without a satellite tax. Everyone recognises that some public investment might be necessary to reach the more remote parts of the country, but simply slapping on an extra tax is an old-economy solution to a new-economy problem. Unfortunately, the numbers do not add up either. The tax will apparently raise about £150 million per annum. Will the Secretary of State confirm that at that rate it will take 20 years to cover the estimated £3 billion cost of the broadband roll-out?
There are some things that we welcome. We welcome the decision on DAB. We welcome the moves to tackle piracy. However, having heard promises to tackle that problem four times in four years, we have today been promised only a consultation. Will the Secretary of State make a commitment that any required legislation will be laid before the House before the next election, so that it can be sorted out once and for all? We also support the roll-out of a universal 2 megabits broadband connection by 2012—probably the single most important practical outcome of today’s statement. That is all supposed to be funded by the money not used for digital switchover, but given that only 5 per cent. of transmitters have switched over—none of which covers a major urban area—will the Secretary of State tell us what will happen if costs are higher when the other 95 per cent. of transmitters are switched over?
Let me turn to regional news. Does the Secretary of State accept that the traditional model for regional news—based on the old ITV transmitter regions—has failed, and that what people really want is not regional news but local news? Why does Birmingham, Alabama have eight local TV stations when Birmingham in the UK, four times its size, has none? Why is the Secretary of State using the public’s money to prop up a failed system when people in his Exeter constituency have to watch the news from Plymouth, and people in my constituency in Surrey have to watch news from Southampton? In America, much smaller cities have not just one but a whole clutch of local news channels, greatly enhancing a sense of community and vibrant local democracy. None has access to a licence fee. Instead of putting yet more of a burden on taxpayers, why are the Government not embracing a digital era version of syndicated local TV—something that could also be a lifeline to our local newspaper industry?
On the licence fee, this afternoon’s statement shows breathtaking inconsistency on the part of the Government. Less than a month ago, the Secretary of State’s predecessor insisted at the Dispatch Box that the BBC needed an inflation-busting £68 million per annum rise in the licence fee to fulfil its core purposes. So, why is the Secretary of State saying today that it has a spare £100 million a year to give to other broadcasters? If that money really is spare, should we not first consider giving it back to licence fee payers, which is what nearly three quarters of them have said that they want?
There are some bright spots in the report, but overall it does not feel like an agenda for a new digital economy. It reads more like a top-down attempt to protect and prop up old business models using yet more public cash. The Conservative Government deregulated telecoms and launched Channels 4 and 5. They unleashed the cable and satellite revolution. Instead of digital dithering from a dated Government, we need new-economy dynamism from a new Conservative Government.
I am glad that the hon. Gentleman mentioned the role that Lord Carter of Barnes has played in this report, because I omitted to thank and commend Lord Barnes on his excellent piece of work.
Contrary to what the hon. Gentleman said, the report contains 78 action points. In the main, we are consulting only on matters that require primary legislation, and I hope that hon. Members on all sides will think that that is generally good practice. However, we are consulting on one thing that does not require primary legislation, and that is the idea of sharing some of the BBC’s licence fee. I acknowledge that we have decided to do that, because it is quite a big move of principle—but if the hon. Gentleman does not think that we need to consult on it, he can just send me a letter saying that he agrees with the proposal. That would be very helpful indeed.
The hon. Gentleman implied that there was no need for public investment in the next generation of broadband roll-out. I appreciate that he has not had time to read all 250-odd pages of the report yet, but when he looks at it more closely he will see that virtually every other country in the world is using public funds to help ensure the provision of good-quality next generation broadband. Australia is using £22 billion sterling of taxpayers’ money to that end. By no means are we saying that the amount of money that we intend to use from the digital underspend and the levy on fixed lines will be sufficient in itself, but we do believe that it will be enough to pump-prime as the market would not otherwise do—that is, to complete the final third of provision for homes and businesses. That final stage of provision will cover many people in the rural constituencies of Opposition Members.
The hon. Gentleman asked about the timing of legislation. As he will appreciate, I am not going to comment on the next Session in Parliament: suffice it to say that this Government have made it clear that the digital revolution is one of our main priorities. As I said in my statement, it is a major part of our industrial strategy. He was wrong to say that not one urban area in the country has so far enjoyed digital switchover, because Exeter has. [Interruption.] My constituents would be very offended if their city were to be described as anything other than a major urban centre. Exeter recently became the first digital city in the country, and very successful the switchover was too.
Contrary to what the hon. Gentleman says, we anticipate that the rest of the digital switchover will go very smoothly. We are confident about that. We think that we are likely to be able to make the savings from the underspend that we have projected, and in fact believe that that may even be a conservative estimate.
The hon. Gentleman also said that we are ignoring local news in favour of regional news. Far from it: the model that I have just outlined would enable exactly the sort of local news provision that he described, and not just by the independent television providers who will be invited to bid for this new pot of money. The introduction of digital radio will free up radio spectrum for local and community radio stations, which will be able to provide exactly the sort of very local news and content that he advocates.
The hon. Gentleman said that instead of spending the digital underspend on the vital protection of the public service content of news in the nations and the regions, he would rather give the 75p a week back to the licence fee payer. All the way through his response, however, where he agreed with us about outcomes, he was prepared to will the ends but not the means.
May I thank you personally, Mr. Speaker, for the courtesy and kindness that you have shown me over the years that you have occupied your post? I also congratulate my right hon. Friend the Secretary of State on his new appointment.
Does my right hon. Friend agree that for the digital highway, as for the physical highway, people need a vehicle, they need training, and they need to know the rules of the road—and that above all, they need awareness of risk? The money left over from the digital switchover appears to be dwindling, but given the need to keep children safe and to protect individuals and companies from crime, fraud and the dangers of cyber attack, does he agree that we could give some of it to the new digital champion, local authorities and educational institutions? The money could be used to raise awareness of the risks and to educate the population as a whole, because the opportunities being opened up must be matched by tackling the risks that undoubtedly exist in this new digital age.
Yes, I entirely agree with my right hon. Friend. Again, he may not have had time to look at the report yet, but when he does he will see that we have committed up to £12 million of the surplus from digital switchover to be used for a communications programme and targeted outreach as part of the national plan for digital participation.
Ensuring the success of our creative economies will be critical in rebuilding our economy, as the Secretary of State says. I hope that he will accept that we have a lot of ground to make up. His statement is a step in the right direction, but too many issues remain unresolved, such as the possible merger of Channel 4 and BBC Worldwide, and the inclusion of a return path in digital boxes. Why, for example, has he not even addressed the issue of the governance of the BBC? Surely we need an independent body, not a regulator that remains within the BBC. However, it is welcome that we now know who is to classify video games, that tax breaks for that industry are now on the agenda, and that we at last have a date for switchover to digital radio.
As the Secretary of State said, protecting intellectual property, such as that in films or music, is vital. Millions of pounds are lost through illegal file sharing, and it must end. New commercial models, such as yesterday’s welcome announcement of the deal between Universal and Virgin, will help, but I believe that the proposed statutory measures are needed, too. However, can he explain whether internet service providers will have legal indemnification for taking the action that they will be required to take, and who will bear the costs? Does he at least acknowledge that, now that they have delayed action in that area, there is very little chance that the Government will meet their 2008 promise to cut illegal file sharing by 70 per cent. within two or three years?
Overall, the proposals for broadband have a far greater reach than many people expected, but I hope that the Secretary of State will accept that those in remote rural areas will be disappointed, as they will have to wait until at least 2017 before they get the benefits of super-fast broadband. Should not far more be done to drive forward initiatives such as smart metering, e-democracy and digital health care, to stimulate end user demand, and hence investment? Given the real fall in the cost of telecommunications, the proposed levy on all fixed lines to pay for near universal super-fast broadband is imaginative and broadly welcome, but even though it is a small sum, it is still a poll tax, so I hope that he will consider possible exemptions, not least for pensioners.
Finally, I strongly welcome the plans to support regional and local news. I have no problem with the BBC’s involvement in that, any more than with its role in helping with the roll-out of broadband, but I am deeply concerned about how that is to happen. The Secretary of State has avoided calling it top-slicing of the licence fee, but that is what it is. Whatever the language used, top-slicing sets a precedent that undermines the BBC’s independence. What guarantees can we have that in future the Government of the day, especially when they are unhappy with something that the BBC is doing, will not take money from the licence fee to fund their pet projects? Surely the BBC should be involved at all stages, through the establishment of a partnership fund within the BBC, and a clear remit for the BBC to engage in such partnerships. Overall, there has been some good progress, but with 11 or 12 more consultations still to come, there is clearly much still to do.
There was a lot in that question. Let me begin with the hon. Gentleman’s last point, because it was related to his first, about the governance structure of the BBC. His idea of a partnership fund is interesting, and is related to the point that he made at the beginning about the governance framework for the BBC, which is only two and a half years old; we have had an exchange in the Chamber about that previously. It is certainly a proposal that I invite and encourage him to make as part of his party’s response to the consultation.
The reason I do not like the term top-slicing is that I think that most people out there cannot picture in their head what it means. If we talk about sharing something, it is more obvious what is meant; I think that that is a better way of describing the proposal. We will, through legislation if necessary, ensure that the proposal relates to a contained percentage of any future licence fee settlement.
I welcome the hon. Gentleman’s welcome for the measures to protect regional and local news. I note that he describes the levy as “imaginative”, and I also welcome his welcome for that. I can assure him that we are considering exemptions for vulnerable people; again, he and other hon. Members may wish to make that suggestion clear in their response to the consultation.
It is not just people who live in rural areas who are disadvantaged now and will be in future when the roll-out of next generation broadband happens. There are clusters in some urban areas and in quite a lot of market towns of people who are equally disadvantaged. They will be helped in the meantime by what we have announced today about the mobile phone spectrum, so I hope they will not have to wait until 2017 for the comprehensive improvement in the service that the hon. Gentleman describes. They will certainly be in a much better place, thanks to the announcement that we have made today about using the fund to help support the spread of broadband elsewhere.
The hon. Gentleman made one other point, which I am afraid I have forgotten, but I will write to him about it.
I, too, welcome what the Secretary of State has said about support for local and regional news. I know that it will be greatly welcomed in my constituency. He mentioned that there would be three pilots, one of which would be in an English region. May I urge him seriously to consider the north-west region, given its record of commitment to and delivery of good quality local news coverage?
I expect that competition among the English regions to be part of the pilot will be very stiff indeed, but I note the representations that my hon. Friend has made and I am sure that others will, too.
Although I share some of the reservations expressed by my hon. Friend the Member for South-West Surrey (Mr. Hunt), I welcome a number of measures proposed in the report, in particular support for regional news programming, for tackling illegal file sharing, for assisting commercial radio and for relaxing the restrictions on newspaper mergers. Does the Secretary of State agree that all these matters are already very urgent? If we move to a world with ever-increasing broadband speeds reaching more and more households, that will increase still further the economic pressure on traditional media and will make the problem of online piracy even greater, so does he acknowledge that the players in the industry—all those involved—have been discussing these issues for months, and that any consultations that are to take place need to happen very quickly indeed? If there is to be legislation, and I believe there should be, we need to get that on to the statute book as fast as possible and before the general election.
Yes, I certainly agree with that. The time between now and the next parliamentary Session gives us a chance for proper consultation, as hon. Members in all parts of the House would expect when considering legislating on some of these aspects. As I say, the only aspects on which we are proposing consultation, with the exception of the sharing of the licence fee for regional and local news, are those for which we require primary legislation. We want to get on with that as quickly as possible. We hope to publish a consultation document within the next two weeks, and hope that the consultation will be over in the middle of the summer recess, which will give us plenty of time, assuming we get a Bill in the next Session, to make sure that it is on the statute book before the election.
I welcome our support for regional and local news, but my question is about mathematics. As I understand it, 95 per cent. of the nation has switched over to digital. Given the £600 million in the initial digital switchover fund, £560 million could be unspent. How much of that does my right hon. Friend intend to use for the measures that he announced today?
I am not a mathematician—I got only as far as GCSE—but I do not think my hon. Friend’s figures are right. Whereas the hon. Member for South-West Surrey (Mr. Hunt) underestimated what was likely to be left over from the digital underspend, my hon. Friend’s estimate sounds rather high to me. The figures that we intend to spend on both the roll-out of current generation broadband and on the pilots for regional and local news, assuming that they go ahead, are in the report. From memory, they are about £200,000 for the first and the rest for the second.
Is the Minister aware that Michael Grade has said in the past four years that
“the idea of contestability, of top-slicing the licence fee . . . would break the clear and well-understood line of accountability between the BBC and the licence-fee payer. . . It would pose a threat to the political independence of the BBC, handing a punitive fiscal sword of Damocles to any unscrupulous government”.
If the former head of the BBC and current head of ITV has publicly and passionately opposed top-slicing in the past four years, why on earth do the Government take a different view?
I do not agree with him.
Is that it already?
rose—
I call Dr. Gavin Strang.
Does my right hon. Friend agree that the BBC is a truly great British institution and achievement, funded by the licence fee? There is bound to be real apprehension, therefore, at putting in place an arrangement post-2013 whereby an element of the licence fee—albeit small, as he said—goes to other organisations. It could be an arrangement that ultimately weakens the BBC itself.
As a former BBC employee, I agree with my right hon. Friend. The BBC is the best broadcasting organisation in the world, and it is one of this country’s institutions, along with the national health service, of which the British people are most proud—in all surveys, whenever they are asked. However, I sincerely suggest to my right hon. Friend that the BBC has a far stronger argument for retaining the licence fee in the long run if it is prepared to share it with organisations and to help us address the problem, which many Members from all parts of the House have raised, about the non-viability of any plurality in local and regional news coverage without that level of support.
If my right hon. Friend is worried about a principle being broken, he could have made that argument three years ago, when we decided to use a portion of the licence fee to help fund digital switchover. The BBC did not fight a battle over that; it was a very sensible thing for us to do, and Members from all parties signed up to it. I do not accept his argument, but I am a great defender of the BBC. It is in the BBC’s interests to share some of the licence fee and to see itself as an enabler, rather than to feel that it and only it should have exclusive recourse to the licence fee.
I say a provisional thank you to the Secretary of State for what appears to be a commitment—buried deep in the document—to fund the cost of the programme-making and special events sectors during the spectrum reallocation process. I am grateful for that. However, I am sceptical about imposing a tax on an old technology to fund a new technology, and there are some important questions to be asked about the process that is used to achieve the objective, which we share, on increasing speed and access to broadband. I am sure that he will welcome the decision, taken provisionally this morning and to be confirmed shortly, of the Select Committee that I chair to launch an inquiry into that aspect of “Digital Britain”.
I warmly welcome that, and I warmly invite anyone in the House to come up with a better idea of how we can fund the roll-out. The issue has been given considerable thought over the past few months by some of the best brains in the sector, and this is the solution that we have come up with. If the hon. Gentleman and his Committee or, indeed, any other Member would like to come up with a better solution, we would be very interested to hear it.
I welcome my right hon. Friend’s reference to the safety and well-being of children through the proposals on the classification of video games, but will he take the time to meet the Children’s Charities Coalition on Internet Safety, which on Monday launched its digital manifesto, to see how that might tie in with our proposals on a digital Britain, particularly to create a safe and exciting environment on the internet for children and young people? The coalition looks at issues such as child abuse images, dangers to children online, online access to age-restricted goods, advertising and the use of social networking sites. If there is to be an exciting future, we need to take on board all those issues, so I hope that my right hon. Friend will take the opportunity to talk to CHIS about its manifesto and how we can implement that, too.
Either I or the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Stevenage (Barbara Follett), would be very happy to meet my hon. Friend and a delegation if she would like to bring one. She will find that its members will welcome the measures that we have announced today. They implement the recommendations of Professor Tanya Byron’s report last year, and they have been widely supported by the sort of interest groups that my hon. Friend has mentioned. I should be happy to meet the coalition to discuss the issues further.
On the copyright tribunal, there are some very interesting recommendations—hidden away in the report—on orphaned works and collecting organisations’ ability to re-license them. Will the Secretary of State tell the House, first, where that re-licensing money will go and, secondly, why he has gone for a self-regulating ombudsman rather than a statutory body?
I shall have to write to the hon. Gentleman with the answers to those two questions.
In congratulating my right hon. Friend on his appointment, may I point out to him that in an era when all commercial broadcasting is fragmenting into niche broadcasting and will continue to do so, top-slicing the BBC licence fee will neither ensure the long-term viability of commercial services nor solve the important problem of regional news provision on ITV? Indeed, it will impair and undermine the stability of the BBC, which in that area is even more important than ever. That being so, many Government Members will oppose top-slicing.
I am sorry that my right hon. Friend takes that approach; I hope to be able to convince him over the next few weeks.
Does the Secretary of State agree that his statement leaves a question mark over the funding of Channel 4 in view of its contribution to the diversity of television and public service broadcasting in particular? Does he also agree that ensuring that Channel 4 has a reliable, independent income is an important aim? If the talks between Channel 4 and BBC Worldwide break down, or do not come to a satisfactory and early conclusion, will he intervene to make sure that Channel 4 is protected?
As we make clear in the report, we are keen to see a solution. We think it important that Channel 4 should survive as an alternative public service broadcaster. We also believe that the joint venture with BBC Worldwide represents the best model of a partnership that could help preserve Channel 4, but not the only one. We think that Channel 4’s remit will have to change; we have made that clear, and it has accepted that. However, if the joint venture with BBC Worldwide does not come off, we will be supportive and active in trying to secure an alternative solution for Channel 4. That will guarantee what the hon. Gentleman is looking for.
I would like to put on record my personal thanks to you, Mr. Speaker, for the generosity of spirit that you have shown while you have occupied that Chair.
Does my right hon. Friend agree that in view of the internet’s importance to everything that we will do in the future, and given its international ramifications, traditional legislation and bureaucratic institutions cannot meet the challenge of its governance? Does he agree that an agile partnership that involves Parliament as well as the Government and the industry is necessary if we are to succeed in making the UK the safest place in which to do business online?
Yes, I do—and that is exactly what the document seeks to do.
We can all support the intention to improve the UK’s digital infrastructure, but surely we should be doing more to protect and support creators, artists and the creative industries—particularly those on the front line of digital innovation. On piracy, does the Secretary of State really think it sufficient to ask reluctant ISPs to write to serial offenders and then perhaps threaten them with slower internet rates? Surely we should be looking for bolder, innovative solutions. When will we do something to challenge the culture in this “something for nothing” digital Britain?
That is not a fair reflection of what is in the report, and when the hon. Gentleman has time to read the piracy section in detail, he will accept that it is not. One always has to strike a balance between over-regulation—using a sledgehammer to crack a nut—and introducing effective measures. We believe that the measures in the report are proportionate and will be effective. The evidence from other countries is that notification and identification have a dramatic impact on the amount of illegal file sharing.
However, as I said in my statement, we are not ending things there. We are introducing legislation; we intend to introduce legislation that will enable internet service providers to suspend or narrow bandwidth for serial offenders. We are not going down the route that France has taken. As I am sure the hon. Gentleman knows, that has not worked; it is being challenged in the courts and the French are having to look at the issue again. Furthermore, we address such issues through the civil law, not the criminal law. The hon. Gentleman would not want us unnecessarily to criminalise a large number of young people.
Ofcom, the regulator, has estimated that the residual value of the ITV licence will be £45 million after the digital switchover, because of the use of the spectrum and ITV’s position at No. 3 on the electronic programme guide. Furthermore, the value of advertising in the regional news slot is estimated at about £25 million. Why cannot that £70 million be used to fund regional and local news, and partnerships with local newspapers, after the digital switchover? If the money is not to be used for that purpose, for what purpose will it be used?
We are certainly looking at the role that advertising could play to help supplement the support that the model will give to alternative local and regional news provision, as part of a plurality including the BBC provision. However, if my hon. Friend is suggesting that in the current—or even future—climate of digital Britain, ITV will be able to afford to sustain the level and quality of news provision that it has hitherto, I should tell him that not many people share that view. Nevertheless, if he can show, through evidence, a viable alternative or an addition to the measures that I have outlined today, we will of course be happy to consider it as part of the consultation.
In making a bid for East Anglia, may I ask whether the Secretary of State accepts that in very rural areas such as south-west Norfolk, broadband is not readily available, which makes people second-class citizens in this digital revolution? Will he make a special case for constituents such as mine, who need a level playing field if they are to compete in this technological world, given that mobile telephony is no alternative for many of them?
I entirely agree that there are particular challenges in rural areas; as somebody who was brought up in Norfolk and now lives in Devon, I very much appreciate that. That is why I am all the more surprised that the hon. Gentleman’s Front Benchers are not prepared to will the means to deliver exactly what, I think, both he and I want to achieve.
My right hon. Friend touched on social exclusion. I raised this at the time of the interim report, and it is very important. Glasgow has the lowest uptake of broadband of any city in the country. Does he agree that deprived areas, in particular, need extra help? What does he promise to do for areas such as Glasgow?
The new champion, Martha Lane Fox, will examine that issue, with the support of a considerable amount of money from the digital switchover. I suggest that my hon. Friend seeks an early meeting with her; I am sure that they will get on very well.
Given the rapid speed of technological progress, the goal of 2 megabits per second, although it would be manna from heaven today, is likely to look obsolete in three years’ time, especially if two thirds of the country is getting 20 or 25 times that speed. Should not the universal service goal be much more ambitious given not where we are now but where we are likely to be in three years’ time?
We have gone for 2 megabits per second because we had to decide what was the best value for money in terms of the investment that is required for today’s technology. What we will achieve by 2012 will be at or near the level of the best in Europe, but, as is acknowledged in the report, at the same time we need to get a move on with next generation broadband to ensure that that is universal. The two developments will be running in parallel. There will always be a trade-off in the amount of resources that we commit to ensuring a better, more capable service for today’s broadband, and we think that that is about the right level. It is probably sensible to aim at the level at which one can, for example, download iPlayer.
Does the report recognise the importance of ensuring that all our schools and colleges can not only access the next generation of broadband but can afford to do so on behalf of the children they teach?
I think I can give my hon. Friend that assurance, but I will write to her, perhaps jointly with my right hon. Friend the Secretary of State for Children, Schools and Families, with clarification. She will be aware that the recent review of the primary school curriculum recommended that IT become part of the core curriculum, along with literacy and numeracy. Where the £200 million fund that I mentioned has been piloted, it has been very successful in providing access for children from less well-off families, at home and in school. However, schools themselves will of course have to be a priority.
The Secretary of State rightly said that if it were left to the market, a third of the country would not receive super-fast broadband; I rather suspect that my part of the world would be part of that third. Is he aware that many remote rural economies have been built on new age connectivity, with call centres, ISDN links and so forth? Can he therefore give an assurance that the last third will not be left until last, since those fragile economies depend on competitive connectivity for their economic future?
We will have to wait to see what bids we get from the consortiums who will be opening up the bidding for the work. However, there is no reason why the hon. Gentleman’s part of the world will be left until very last; that will very much depend on the quality and intention of the bids that we receive. As I have emphasised several times, without our willing the means to fund this, he would be left with a problem, and so would his constituents.
I am a member of the Business and Enterprise Committee, and as we have heard, we are going to look into digital access and broadband as well. I welcome my right hon. Friend’s statement and thank him for ensuring that low-income families will benefit from funding for new access, but will he also ensure that rural parts of Lancashire gain access to the new broadband?
On a broader scale, I welcome my right hon. Friend’s commitment to regional television and media, which is very important in Granadaland. As my hon. Friend the Member for Rossendale and Darwen (Janet Anderson) asked, will he ensure that the trial is in the Granada area? That is very important. Will he also ensure that local and community radio stations such as the world-famous Chorley FM also receive the funding that they need, along with our local newspapers the Lancashire Evening Post, the Chorley Guardian and the Chorley Citizen? It is important that we have a broad mix and that there is true competition for the BBC. That will come only if we have regional news and current affairs programmes.
What we have announced today will, I believe, help lead to a real thriving of local and community radio stations of the type that my hon. Friend supports and advocates. It will also help the regional and local newspaper market, because we are not only taking the action that I outlined on mergers legislation, but asking the Audit Commission to examine the practice of local authorities spending quite a lot of council tax payers’ money putting out free newspapers and, in the process, swallowing up a lot of local advertising that might otherwise go to local papers.
We in this place may be accused of being self-serving in our support for regional and local news organisations, because they tend to talk to us and we pontificate and give interviews to them, but the viewing figures for evening regional news programmes on both the BBC and ITV are among the highest for any news programming on television. The recognition of regional and local radio and TV presenters is another sign of how popular they are with our constituents. We are on the right side of this argument—the side of our constituents, standing up for what they value in local and regional news provision.
rose—
Order. There are a few hon. Members still to ask questions, and if questions are brief—brief questions usually lead to brief replies—I can get everyone in.
In view of the concerns expressed by ITV about its financial viability, why is the Secretary of State delaying until 2013 the sharing of the licence fee to ensure plurality of news?
We are not doing nothing before then to help regional and local news provision. We have said that we will look at piloting the model that I outlined between now and 2013, but that depends on a viable continuation of that model after 2013. I think that the piloting will help. We have the digital underspend to use on that and on the broadband roll-out, but we need a mechanism after 2013 to continue that funding through sharing some of the BBC licence fee, and for that we need primary legislation.
My right hon. Friend’s statement was strong on improving the infrastructure, but he was less explicit about how we are going to drive forward the services that sit on top of that infrastructure. May I highlight to him telecare and assisted technology? There is no reason why people who have a social care need—older people and those with chronic illnesses—cannot be made more comfortable and safer by using those services. Will he ensure that the forthcoming social care Green Paper takes advantage of the infrastructure that he has laid out to the House today?
Yes. If my hon. Friend looks at the section at the end of my statement about the implications for Government and for public organisations, he will see that there is a great deal of detail, including obligations on all Government Departments to show how they will digitalise their own services.
My hon. Friend mentions social and health care. It is often assumed that elderly people are not very keen on using digital technology, but in any library in the country there are pensioners navigating their way through NHS Choices, choosing which hospital to go to, examining details about complaints that they might have and trying to find out what treatments are available to them. There is huge potential not just to make public services much more responsive and quicker for the consumer but to save the taxpayer a lot of money.
Will the budget for the new Welsh pilot on public content be close to the £25 million annually that the Welsh Assembly said last week was the bare minimum necessary? Will it be channelled through an independent commissioning body, based and made in Wales?
If the hon. Gentleman will forgive me, I will have to write to him with the details of funding for the pilots—I assume that he was asking me about the pilots.
I congratulate the new Secretary of State on his willingness to take on the vested interests of the BBC. Given his announcement on top-slicing for local news, could that be extended to other public sector broadcasting, which could bid to be shown on channels other than the BBC?
We have specifically been careful with the wording in the document. I think that we say “primarily” for news because we did not want to shut the door to other provision—for example, children’s programming, about which people feel strongly and which is also currently the victim of market failure. We also did not want to close the door in case of an underspend in future, which we might want to share with others to do the things that the public want us to do. We should not shy away from that principle.
I welcome two aspects of today’s report: the principle of a universal service obligation for broadband, albeit limited to 2 megabits, and the recognition of the link between economic prosperity and broadband provision. If the Government are serious about that link, why is the Secretary of State prepared to leave some of the most economically fragile communities until 2017 before they are allowed to get a piece of the action?
We are not doing that. As I made clear, we will ensure that the guarantee for today’s technology is rolled out to everybody by 2012, and the next generation will start concurrently. Our proposals for mobile spectrum should also help many of the hon. Gentleman’s constituents. Bearing in mind the remote nature of the constituencies that he and some other hon. Members represent, he will find that our ambition and time scale is at the top rather than the bottom end of international expectation.
I am in favour of the gouging of the licence fee—it is not sharing, but top-slicing. It concedes that the recent inflation-busting increase in the licence fee was totally unnecessary and has led to huge pay for the director-general, Mark Thompson, of more than £800,000 a year and bloated pay deals for the BBC’s so-called top talent, such as Jonathan Ross, of more than £6 million a year. Doubtless, other so-called stars earn mega sums of money. If the BBC starts bleating, the Minister should ask it to examine some of the pay deals that it has done in the past two to three years—that is where the fat can be cut from the land. On the pilots, I ask the Minister to look at the north-west. Granada is a superb news-delivery organisation, but it needs support now, not in two or three years. The support needs to be brought forward if it is to be effective.
The hon. Gentleman was always fonder of brutalist language than me. He says top-slicing, I say sharing—I think that reflects our different characters.
The Secretary of State said that digital radio would be the primary platform by 2015. What reassurance can he give the many constituents who rely on the analogue signal about how long it will remain for their use?
It will remain on FM for some of the new local and community radio provision that I outlined. We will consider providing help in the same way in which we did for the digital television switchover. However, when we take into account the way the prices for digital radios are decreasing, and people’s behaviour in the past with digital switchover for television and the change from black and white to colour television, I suspect that we will find that many people are already listening to digital radio. May I suggest to the hon. Gentleman that, rather than a lot of useless jumpers for his family at Christmas, he buy them a digital radio each? That will help along the way.
A number of hon. Members believe that rural communities will be at the end of the queue when it comes to sharing the benefits of IT. However, in Scotland, a new technology is being tested called broadband extension technology, which would mean that people living 17 km from an exchange could achieve the minimum guarantee. Will the Minister ensure that that technology is developed as fully as possible and rolled out as soon as possible?
I will happily look at the technology that the hon. Gentleman has mentioned and reflect that as part of the consultation.
After 12 years of this Government’s broadcasting policy, my constituents are still left with a second-class mobile phone network and, having switched over to digital television, half of them are now getting the second-class “Freeview Lite” service. Although I, too, welcome the new commitment to super-fast broadband across the whole country, will the Secretary of State give us an assurance that he will not lose sight of the existing problems in rural areas?
Yes, certainly. I will undertake to write to the hon. Gentleman about the specific problems that he has just raised.
Point of Order
On a point of order, Mr. Speaker. I should advise the House that I have notified the hon. Member to whom my point of order refers. I know that you take a dim view of the practice of one MP visiting another MP’s constituency without the courtesy of giving advance notification, Mr. Speaker, so you can imagine my surprise on opening the Stockport Express recently to discover that the hon. Member for Chipping Barnet (Mrs. Villiers) had made a campaign visit to my constituency. Can you reaffirm that clear protocols for such visits exist, that they cover Front-Bench Members and that we are all expected to abide by them?
May I say to the hon. Gentleman that it is a convention? Courtesy should always be foremost in every hon. Member’s mind when they go to another constituency, but I have to be careful, because there are official visits and there are private Conservative or Labour party meetings, which are a wee bit different. However, if there was an official visit to the hon. Gentleman’s constituency, I would urge all those on the Front Bench in all parts of the House to observe the convention. That is the best that I can do in this matter.
European Affairs
I beg to move,
That this House has considered the matter of European affairs.
I am pleased to open this traditional pre-European Council debate. The heavy European Council agenda shows why the UK needs a pro-European Government fully engaged with the European mainstream. On the range of issues that the Heads of Government will discuss in Brussels on Thursday and Friday—from economic supervision to climate change financing or strategic engagement with Pakistan—the decisions the EU takes will directly affect the security and prosperity of British citizens. If we want influence, we cannot be on the margins.
The first item on the Council’s agenda later this week is the economic recovery. Over the past year, the EU has been at the forefront of the global response to the economic crisis. Last October, all 27 member states acted together to restore confidence in the financial system, agreeing to raise deposit protection thresholds to a minimum of €50,000. In December, we agreed an economic recovery plan, committing to provide a fiscal stimulus worth €200 billion, a figure that we have since met many times over. Indeed, according to President Barroso, the total fiscal boost now stands at 1.8 per cent. of the EU’s GDP. If we include the automatic stabilisers, the net boost was somewhere around 5 per cent. At the spring Council in March, member states unanimously endorsed the goals of the London summit, providing a €75 billion injection to the International Monetary Fund, to enable it better to support the world’s most fragile economies.
This week’s European Council will do two things on the economic front. The first is to take stock of the European economic situation since the London summit and consider measures to support the economy. With the Commission predicting a 4 per cent. decline in output across the EU, and with 60 per cent. of all our exports, 700,000 of our companies and 3 million British jobs dependent on trade with the EU, the Prime Minister is right that a strengthened European growth strategy is a vital component in the move out of global recession.
We have already increased the resources available to the European institutions. Through its balance of payments facility, which was doubled to €50 billion, the EU has provided sizeable loans to Romania, Hungary and Latvia. However, further increasing the remit of the European Investment Bank and the European Bank for Reconstruction and Development will be important if we are to reignite the engine of growth. The Prime Minister has recently set out concrete proposals for the EIB to provide greater support to those in difficulty, through lending more, lending it faster and taking on more risk, to help stimulate a European recovery while commercial bank lending remains low. He will discuss those ideas with his counterparts in Brussels later this week.
Angela Merkel has been critical of the way in which Britain has addressed the crisis, yet the economies in the eurozone, and Germany in particular, have contracted more quickly that that of Britain. What is my right hon. Friend’s response to Angela Merkel?
It certainly is not schadenfreude; we should be careful about that in these circumstances. Germany is the world’s second largest export economy, and it has therefore suffered from the drop in global trade and the collapse of demand in some parts of the world. That is why German gross domestic product looks likely to fall by about 6 per cent. As we discussed in this debate in December, the German fiscal stimulus as a share of GDP is actually larger than ours, so we should be careful not to believe that some of the alleged divisions are as great as they are said to be.
The right hon. Gentleman has made an important point about exports and imports. Germany is quite dependent on the automotive industry, as are we. Will he address that question specifically with his German and other counterparts? Many of the job losses in my area have been a direct result of job losses in the supply chain for the automotive industry, and I have no doubt that Germany and other countries will have a strategic interest in working collectively to restart the supply chain for the automotive industry and to boost sales.
The hon. Gentleman makes an important point about the headline figures on jobs in the car industry, which often neglect to show the effect on jobs in the supply chain. I am sure that that issue will be discussed on Thursday and Friday.
The second economic priority is to take preliminary decisions on the supervision and regulation of the financial sector. Regulation means setting the rules; supervision means checking that they are implemented properly. This requires the right balance of national and international powers. The Government have already made it clear that the de Larosière report and subsequent Commission proposals are a good starting point. There is much that we welcome, particularly in regard to improvement in regulatory standards and supervisory co-operation, and the establishment of a new European body—the European systemic risk board—to monitor emerging systemic risks.
Does the Foreign Secretary accept that the United Kingdom faces some extremely unwelcome proposals on financial and banking regulation? The Minister responsible in what was then the Department for Business, Enterprise and Regulatory Reform, the hon. Member for Dudley, South (Ian Pearson), has written to the European Scrutiny Committee to say that we are now isolated on those measures. Will the Foreign Secretary confirm that we face being outvoted on these unwelcome and damaging proposals, which will regulate the City of London in a way that Parliament and the British Government do not want?
I do not accept that we are isolated, certainly not on the basis of the discussion that I had at the European General Affairs Council yesterday. There might be some confusion in the right hon. Gentleman’s mind. What I am talking about here are the de Larosière regulatory and supervisory proposals. There are separate proposals in respect of so-called hedge funds, which are being discussed on a different track and will not be discussed this week. They are at a rather more preliminary stage.
It might help the House if I just make the following point about the balance between international and national regulation and supervision. Improved regulation is essential if we are to keep up with the increased dynamism of international capital markets. That means introducing improved regulatory standards across Europe—an agreed rule book for financial regulation. However, this Government believe that micro-prudential supervision—in other words, supervision of individual companies—must remain at nation state level.
Does my right hon. Friend agree that, in relation to the European economic recovery package, Britain has already shown that if we use the right arguments and they are ably prosecuted, Europe will follow suit, and that that principle is likely to prevail on regulation and supervision as well?
My hon. Friend makes a good point. It is important not to believe the fallacy that is sometimes promoted in some quarters—namely, that it is Britain against the rest. There is a recognition across Europe of the need to improve regulation and supervision, for example, and Britain is in good company in regard to the arguments that we are making. I very much hope that the proposals that are discussed on Thursday and finally adopted on Friday will recognise the need for a balance between the national and the international level, because that is very important.
I give way to the hon. Member for Kingston and Surbiton (Mr. Davey).
Will the right hon. Gentleman explain why the British Government are so against the proposals from the European Commission on the regulation of hedge funds and private equity? Surely there is a debate to be had about greater transparency and capital adequacy in those organisations; and if we have learned anything from the recent problems in the City, it is surely that there is a case for good regulation to make those markets work more effectively.
I hope I do not disappoint the hon. Gentleman if I say that the Government also believe that whereas the old debate was about having more or less regulation, the debate we should have is about the details of the regulation that is needed. We think it is right, for example, to look at how to improve the regulation of the so-called hedge funds that the hon. Gentleman mentioned, but the details must be got right, and we are at a preliminary stage of discussions about hedge funds. Many detailed arguments, for example about funds coming from outside the European Union, need properly to be taken into account in the development of any detailed regulatory proposals. That has not yet happened, so that is what we will try to ensure over the rest of this year.
As the Foreign Secretary knows, President Barroso has made the EU’s position crystal clear, as he strongly believes that all these matters should be enveloped within the EU legislative structure. On 27 February, I wrote a letter to the Financial Times, saying that we have to insist on the supremacy of Westminster legislation in accordance with the formula I put forward, of which the right hon. Gentleman is well aware—namely, that we would override any such European legislation if it were in our vital national interest to do so. Does he agree that, otherwise, through majority voting and co-decision, we will end up with the supremacy of this House being overridden? Does he accept that the formula I have suggested is the only way around the problem; otherwise we will be subjected to the European Court of Justice rather than to the democratic decision of the people of this country?
I think we will come to that a little later. I can assure the hon. Gentleman, however, that there will be no majority voting at the European Council this week, that the proposals that we make will not represent Britain acting on its own and that we will be able to exercise our own democratic rights in a way that I think he would approve of.
The second issue concerns climate change. It is vital that the EU continues to show leadership in achieving an ambitious global deal at the Copenhagen summit in December, and this Council provides an opportunity to push things forward. The green revolution is not just about avoiding devastating damage to our planet; it is also about avoiding another commodity price spike, which would be a major impediment to economic recovery. With the oil price now having hit the $70 a barrel mark, there is a real fear that, unchecked, it could choke off growth, just as we are working so hard to try to restore it. So tackling climate change is not a distraction from economic recovery, but a contribution to it.
The Council must therefore build on the agreements reached in March and indicate its willingness to contribute financially to help secure an ambitious deal at Copenhagen, because we are now firmly on the path towards that December conference. The EU needs to reaffirm its leadership in advance of the Major Economies Forum in July—given new momentum by the new American Administration—at which questions concerning developed country financing towards mitigation, adaptation, technology support and capacity building will be a top priority.
At their dinner on Thursday night, Heads of Government are expected to discuss the nomination of the next Commission President, which I hope is a matter of interest to the hon. Member for Stone (Mr. Cash)—[Interruption.] I was not thinking of putting him forward as a nominee, I am sorry to say; I just thought I would get his attention, as I did not want him to doze off at this point and I had a nasty feeling that he might.
From the UK perspective, and certainly from the Government’s perspective, Mr. Barroso has been an excellent President, who has prioritised economic reform and better regulation, and pressed for EU leadership on climate change. So we fully support Mr Barroso’s decision to run for a second term, and will continue to work with him to ensure the EU delivers on the UK’s agenda for an outward-facing, globally competitive Europe.
Another pressing issue for the Council is illegal migration across the Mediterranean.
Before my right hon. Friend moves on to looking towards the autumn and the new Commission President, will he say something about how the British Government intend to work with the two new British National party MEPs in the new European Parliament?
There is a minimal level of service that is the entitlement of all Members of the European Parliament, and that minimal level of service will be provided, but we will not go beyond it.
Following the crushing defeats experienced by the Government on 7 June, when the results of the European elections placed Labour even below the United Kingdom Independence party, what moral authority do they consider that they have to discuss any issue on behalf of the people of this country?
I am sure I do not need to remind the hon. Gentleman that general elections are the way in which we decide the Government of this country. He will not have that long to wait—a maximum of 11 months, according to any timetable—and I suggest that he contain his enthusiasm. [Interruption.] That is very unlikely, says my hon. Friend the Under-Secretary of State from a sedentary position.
We are currently witnessing the passing on of many members of the generations who saw Europe torn apart 70 years ago, and who worked so hard to put Europe back together. Do we not all have a responsibility to ensure that the pro-European message—that Britain needs to be engaged in Europe—is delivered over and over again?
I certainly agree with that. As I shall make clear later, I think it incumbent on those of us who did lose the elections not only to try to understand why, but to stick to what we believe and try to advocate it with full passion and drive. I think that that is what my hon. Friend meant. [Interruption.] Let me say to the hon. Member for Ribble Valley (Mr. Evans) that it is not a matter of blaming the electorate; it is a matter of saying that we should stand up for what we believe in, and then allow the electorate to make their choice.
They did make their choice.
They did, and for the next five years they will have the MEPs for whom they voted. That is the way in which the system works.
I am blessed with too many interventions.
While the Foreign Secretary reflects on the fact that if he walks down the street he is unlikely to meet more than one in 20 who voted Labour in the European elections, may I ask to what he ascribes the declining turnouts in European elections? Why are all the people of Europe more and more disillusioned about participating in elections to the European Parliament? Is it because they are feeling more and more disconnected from institutions which are taking more and more of their power?
The answer to that question is that the European Union has spent the last seven or eight years debating institutional questions which people do not feel have addressed their concerns, and the sooner it puts such institutional navel-gazing behind it, the better.
Let me point out to Opposition Members who are nodding and agreeing that they want to put institutional sclerosis behind them that the proposals that they are advocating are designed precisely to introduce yet another decade of institutional navel-gazing. I suggest that if they are serious about wanting to allow the European Union to address the real issues, they should understand that it is a major mistake to try to unpick the Lisbon treaty after it has been passed in the House of Commons. We shall have to wait and see what happens in the Irish referendum, although I shall have some words to say about that later.