Wednesday 2 December 2009
[Mr. Eric Martlew in the Chair]
Citizens Advice Bureaux
Motion made, and Question proposed, That the sitting be now adjourned.—(Kerry McCarthy.)
I am delighted to have secured this important debate, not only to celebrate the achievements of citizens advice bureaux in the past 70 years, but to look at their current difficulties and the challenges that they face in the future.
The CAB service began life in 1939 as a national wartime emergency service. On 4 September 1939, the day after war was declared, 200 bureaux opened their doors for the first time. From the outset, the service’s twin aims of providing advice to individuals about their problems and using evidence gathered during the advice process to influence policy in practice were evident. In those early days, evidence from the bureaux secured extra clothing rations for pregnant women and extra cheese rations for gardeners involved in “digging for victory”.
As the blitz and flying bombs wreaked havoc on the civilian population, the first CAB advisers were busy dealing with the consequences of air raids. They were tracing missing persons, arranging the evacuation of women, children and elderly people, and helping with war damage claims for people who had lost family members and their homes.
Unexpectedly, by the end of the war there was an increase in demand for the service. Family problems, poor housing and the need to get to grips with the new national health service all presented challenges. In the 1950s, the housing shortage, overcrowding, the end of rent controls and the new availability of hire purchase led to mounting debt problems and a huge hike in CAB case loads.
The 1960s saw no relief to housing problems as rents rocketed, many people lived in slum conditions and homelessness rose. At that time, a quarter of the problems dealt with by CAB were housing-related. In the 1970s, family and personal problems remained the No. 1 issue, but housing inquiries were up 16 per cent. following the Rent Act 1974, which extended protection to furnished tenants. However, inquiries about consumer problems rocketed 46 per cent. following the consumer boom and new consumer protection legislation in 1974.
The two recessions of the 1980s led to a dramatic rise in inequality. Inquiries about debt and benefits doubled, in line with unemployment. However, it was the debt stemming from easy credit that created a major growth area; indeed, it became the single most pressing problem for CAB clients in the late 1980s.
By the 1990s, CAB was dealing with more than 7.5 million inquiries a year. Benefits, including the new child support scheme, became the No. 1 issue and changes to disability benefits and cuts in support for asylum seekers generated a huge number of inquiries. By the turn of the century, freely available credit, combined with a lack of affordable housing, caused debt, bankruptcy and repossessions to soar. Therefore, the demand for specialist advice about money escalated.
So, for 70 years, citizens advice bureaux have been providing a free, confidential, independent and impartial service, face to face and via the telephone, and now they also provide the service online and by e-mail. That is a truly amazing record. Each year, 6 million advice issues are dealt with by CAB and 1.9 million clients are advised by local bureaux. There are also 8.8 million visits to the public information and advice website. Citizens advice bureaux are a lifeline. Furthermore, a remarkable 86 per cent. of service users are satisfied with the service and £86 million is the staggering figure for the estimated value to the economy of people volunteering with the Citizens Advice service.
Debt, benefits and tax credits, employment and housing remain the key issues on which advice is sought. Providing help might involve just assisting people to fill in benefit application forms, supporting them to exercise their statutory rights, negotiating with their creditors or offering financial education.
The Government have long acknowledged the vital role of CAB and 78 per cent. of the national funding for Citizens Advice comes from Government grants, mainly from the Department for Business, Innovation and Skills. In recognition of the increased number of people coming to Citizens Advice for help during the recession, central Government allocated additional resources of £10 million to bureaux this year, to facilitate increased opening hours. That money was very welcome, but the additional hours of advice project did not meet the needs of some of the most hard-pressed bureaux. For instance, my local Moorlands service could not take advantage of that opportunity, because current funding and staff resources were insufficient to support the changes required to expand the service, even with the additional money from the Government.
I congratulate the hon. Lady on securing this important debate. The problem that she has just outlined is crucial. We seem to be getting fewer and larger bureaux, particularly in rural areas. Therefore, does she agree that rural outreach is an issue that local and central Government might want to examine to see how outreach services can offer support in rural areas?
Absolutely. That is particularly important as transport can be so difficult in rural areas; that is where the online and telephone services come into their own. However, clients, particularly elderly clients, often prefer face-to-face contact, so such contact is really important too.
Each local citizens advice bureau is an independent charity. Each relies on the support of a wide range of funders, including central and local Government, charitable trusts, companies and individuals. Although everyone from the Prime Minister to primary care trusts and local councils talks up the important role of the third sector in facing current challenges, there appears to be very little additional money available locally to help the sector to continue to provide existing services or to enable it to be innovative.
My hon. Friend painted the statistical picture of CAB, although they themselves acknowledge that millions of people cannot get a slot to see an adviser and that their phones often go unanswered. At a local level, almost half of the money for CAB comes from the local authorities, which, as we know, will be cash-strapped in the years that lie ahead. Therefore, is there not a risk that those queues to see advisers and those unanswered calls will grow in number, to the extent that they damage the reputation of CAB? Furthermore, the additional hours of advice project that the Government are funding ceases 17 weeks today, on 31 March 2010. Let us hope that the Minister has something good to tell us in his winding-up speech.
I certainly agree with that. It is not just local authority funding that is an issue, but the fact that local authorities are unwilling to provide core funding. Often, local authorities are looking at new projects and innovative arrangements rather than the core funding that they need to provide help to those people coming across the threshold of citizens advice bureaux every single day.
I also commend the hon. Lady for securing this timely debate.
Like the hon. Lady, I have an excellent local Citizens Advice service in east Hertfordshire. In the last year, the advisers, despite being largely voluntary, have helped more than 9,600 people. However, I have a question for her. She talks about the balance of funding. It seems to me that the balance of national funding is skewed heavily to the National Association of Citizens Advice Bureaux, which may have understandable issues, but the real issue for the public—our citizens—is delivery of the service on the ground. The worry is that the split in value is not being shown in the value that people experience on the ground. Does she agree that it is important that that should change, because although we may need an effective centre, the most important element of the service—namely, the front-line volunteers—has to be able to do its job, particularly in troubling times?
The national service and the local service are equally important. At the start of my remarks, I made it clear that citizens advice bureaux have two approaches: to deal with issues on the ground and individual problems, and to gather from that advice service the lessons for policy making and development of programmes. The two approaches are complementary and I would not want to say that one is more important than the other.
My hon. Friend is generous in giving way in this excellent debate. Of course, we all have good bureaux in our constituencies, and Chorley’s is second to none in the service it provides, but ultimately bureaux rely on the national association for specialist advice, such as on insurance and everything they need to ensure their own survival. Both the national association and the local bureaux are important and go hand in hand. Does she agree that we cannot afford to lose one at the expense of the other?
Absolutely, because the bureaux work to very high, nationally specified standards. We are not talking about individual bureaux doing their own thing. Their advisers are trained to a high standard, and that is controlled from the centre.
Citizens advice bureaux are a special case because they cannot charge individuals for their services. Moreover, the wide range of advice they offer to so many different types of client and their local partnership work give them a unique and valuable place in the community. Managers of local services and CAB colleagues are in great demand.
I will focus on Biddulph CAB, but the situation is the same for many other bureaux, including the one in Leek. Staff there regularly attend the local authority homelessness prevention team, community and learning partnership boards, Jobcentre Plus liaison, local community forums, local community and voluntary services, and many other events that raise community awareness of the issues they face. Such information sharing and community involvement are vital, focusing agencies and local authorities on local needs.
Local organisations want more and more input from the bureaux, but for the most part they do not want to pay for it. The exception is Biddulph town council, which increased its grant funding by 50 per cent. this year in recognition of the increased demands the economic situation was placing on its local bureau. That stands in contrast to the actions of Conservative-controlled Staffordshire county council, which has explicitly excluded core running costs from its £100,000 Closing the Gaps for Communities Fund. It is also changing the way it funds CAB so that Moorlands CAB is facing the loss of 36 of its current 54 hours of money advice from next April. That is clearly crazy, when the service is so vital.
The reluctance of funders to provide money to run core services is not confined to county councils. Most funders want to fund new, innovative projects. Biddulph CAB asked one of its current project funders to consider continuing funding the project because it had exceeded its targets and met local needs, but was told that, although an application could be made, it would go to the bottom of the pile unless it had something new to offer.
Funders often want to fund something specific, such as a particular community group or activity in an area of deprivation, but if the bureaux cannot run their core services they cannot support project work properly. For instance, most clients requiring specialist money advice or welfare benefits assistance will have been seen by a volunteer, initially through the core service. Citizens Advice is listed on most Government and other agency publications and publicity material, so the bureaux are frequently a first point of contact, but no one wants to fund those front-line core services.
However, what will happen if bureaux have to close or reduce their services, and who will pick up the pieces? If that happened, I would have a much higher case load as an MP and would lose the expertise of my local bureaux on local community and social policy issues. No organisation is better placed to gather evidence and campaign for change to improve the lives of those most in need. Most importantly, the impact on clients of bureaux closures would be devastating. It is about time we recognised the expert community role of Citizens Advice, rather than just paying it lip service.
One way we can show how much we value Citizens Advice—like other Members, I have an excellent bureau in my constituency—is ensure that those who give their time to volunteer, particularly younger volunteers, are supported in the workplace. Too often people give up volunteering because the pressures of volunteering while working are too great, but we need those people because we cannot rely only on older people to staff bureaux. I am sure my hon. Friend will agree with that.
That is absolutely right. With so many young people adversely affected by the recession, it makes sense for them to be trained in such work to advise fellow young people and also to develop a CV that is impressive to an employer.
When flexible new deal was introduced to Citizens Advice 18 months ago, the Department for Work and Pensions stated that priority would be given to service provider applicants who included third-sector organisations in their delivery plans. Biddulph CAB spent much time raising awareness with all the preferred local bidders of the potential for the bureau to help them to deliver that initiative successfully: helping them to remove barriers to work, such as debt; helping with claiming work-related benefits; understanding employment rights; working out whether they would be better off in or out of work; and understanding the issues that could be barriers. Those are important if people are not only to get work, but to stay in it. However, Serco and Pertemps have now been awarded the contracts for flexible new deal locally, but sadly there is no sign of the third-sector organisation that they are supposed to be using to help to deliver that service, making it much poorer as a result.
No one denies that the bureaux deliver real value for money, and of course they also relieve pressure on local authority services. Statistics for the first six months of this year, locally and nationally, show a significant increase in the number of people seeking advice. Citizens Advice provides evidence to demonstrate both the need for and the positive outcomes of its high-quality service, but the constant struggle to rise to the challenges it faces while confronted by uncertainty over funding is taking its toll on paid staff and on volunteers.
With local authorities and the Government cutting back, and with other organisations faced with increasing demands on their funds, citizens advice bureaux are in peril. We cannot afford to lose them from our high streets or to lose the great pool of skilled volunteers who have been highly trained to carry out the demanding role of bureau adviser. I ask the Minister to assure me that the Citizens Advice service will continue to have funding at least at the current level, in view of the increased demand for its services. I also ask that he consider how we can get central Government’s vision for the role of the third sector fully taken on board and supported by statutory organisations locally. If we do not do that, we will see not only empty premises on our high streets, but many thousands of people left without the support they need to carry on during such challenging times.
In my earlier intervention I referred to the unmet need that Citizens Advice acknowledges there is, even at present. Where people have access to, and familiarity with, information and communications technology, they will get their advice online, but does my hon. Friend agree a large section of the population are digitally excluded and will not take that route to get such advice, leading to their continued social and financial exclusion? We would all be interested to hear in the winding-up speech what the Government intend to do about that problem.
My hon. Friend is absolutely right, particularly as advising on debt is probably the biggest issue the bureaux face. If someone is heavily in debt, they are clearly unlikely to buy expensive computer equipment or hand-held devices that allow them to access the internet. Likewise, they are less likely to pop into an internet café to access services.
The CAB vision is simple—to help even more people than the bureaux do today. Unmet need for their help is estimated to involve more than 3 million people, and each year up to 4 million calls that they cannot answer are made to their services. Demand for the service is not expected to decline before 2014.
Citizens advice bureaux are a lifeline. I urge the Minister to help to develop a strategy to keep local bureaux alive, doing the job that they do best, which they have been doing for 70 years—serving the changing needs of our communities.
I join the congratulations to the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) on securing the debate and introducing it with characteristic clarity. I do not think that I will be out of order if I say that the last time she initiated a debate in this Chamber—which I spoke in, just a few weeks ago—it was on thalidomide. The debate took place on a Wednesday, and by the Sunday the Government had run up the white flag. I hope that we have equal success in this debate.
The core issue is ensuring sustainable funding for citizens advice bureaux. All of us could give examples of the excellent work done by the bureaux in our constituencies. I have two in mine: one in Banbury and one in Bicester. Both do excellent work. As the hon. Lady said, individually they are charities and, as such, they do their best to raise money locally. However, I think that if one did a survey on Sheep street in Bicester or the high street in Banbury, most people would say that they thought that the citizens advice bureau was an extension of the public service. Bureaux therefore find it hard to raise money. A CAB is not a sexy cause in comparison with the local hospice, the young homelessness project or the Banbury branch of the Multiple Sclerosis Society. It is a difficult ask for bureaux.
The next area of funding has generally been local government. We all have to be grown-up about this. All of us know that, irrespective of who wins the next general election, local government’s projected figures for the next few years are very squeezed. Oxfordshire county council has been having to explain to people in our county that it will have to make significant savings on its budget. The position is exactly the same for Cherwell district council.
Local government, of course, is hit by the recession just as much as anyone else. A district council still has to run a planning department, but it does not have the same volume of fees coming in from planning applications, and more people have to be employed to deal with housing benefit. That means that if the council is looking round, what tend to be squeezed are discretionary areas of spending, including grants to organisations such as citizens advice bureaux.
We must take a more adult approach to how the bureaux are funded. There is no dispute; everyone sees them as being of real value. The briefing sent to hon. Members by Citizens Advice before the debate makes the position clear. It states:
“Not surprisingly, the recession has substantially increased the number of people coming to Citizens Advice for help. Bureaux in England and Wales have seen large and rising increases in debt, employment and benefits related enquiries over the last year.
In particular, we are seeing an enormous rise in the number of people turning to us for help because they have lost their job, or are struggling with debts or having problems keeping up with their mortgages.
The most common reasons for debt were low income, over-commitment, illness or disability and job loss. But irresponsible lending, poor financial skills and increases in the cost of living had also played a significant part in people’s debt problems.”
Significantly, figures from Citizens Advice show that bureaux in England and Wales deal with 9,300 new debt problems and 8,000 new benefit problems every working day.
That is reflected in my own constituency. The Banbury CAB tells me that for the first half of this year, it received 7,300 inquiries compared with 11,000 for the whole of the previous year, and the number of individual clients whom it sees is up by 20 per cent. on the same period last year. That is largely because of the recession. There has been a substantial increase in inquiries relating to allowances for jobseekers and redundancies.
Bureaux are constantly having to scrabble around, getting grants from the Legal Services Commission or, as the hon. Member for Staffordshire, Moorlands said, hoping that they can persuade the Big Lottery Fund or someone else that they are doing something unique or innovative, so that they receive grant funding for what is unique or innovative. However, they have considerable difficulties with core funding.
It is time that the Government considered seriously how they manage to ensure decent core funding for citizens advice bureaux up and down the country. I should have thought that it was self-evident to the Government that the £10 million that they gave the bureaux earlier this year to facilitate increased opening hours has been put to extremely good use. An extra session late on a Monday in Banbury has enabled the CAB there to see 370 new clients just since March. Those people might otherwise have found it difficult to get into the bureau during the hours when it was open.
We cannot allow the future of bureaux to be permanently uncertain. That is very debilitating for volunteers, who spend considerable time training so that they can give very good advice. They also spend considerable time giving advice, and then they have to spend considerable time worrying about services and fundraising to keep them going.
May I reiterate that the AHA funding finishes at 5 pm 17 weeks today, on 31 March 2010? The amounts are small, but the continued tracking up of unemployment means that the cases that citizens advice bureaux deal with that relate to debt, benefits and employment will continue to track up. That must be matched by a continuation of the funding, at least for 12 further months.
I agree. Those problems will not disappear in March. Indeed, people will have continuing problems with unemployment and other consequences of the recession for many months to come. My request to the Minister is this. I appreciate that for any Department finding new money is always difficult, but it should be possible for Ministers at least to undertake to work with Citizens Advice at national level to set up a working group or working party to see how all the various pockets of money that different Departments are giving Citizens Advice can be better co-ordinated and made more sustainable.
Such a group could also ascertain how we could ensure that the CAB movement and the core activities of individual bureaux were sustained against a background of local authority funding becoming increasingly difficult. That is because for local authorities it is a discretionary spend, and at a time when their budgets are under pressure, they will inevitably have to give up or reduce discretionary spending. However much they would like to maintain it, they will have to reduce it ahead of mandatory spending.
Irrespective of the Government who are elected in March, April or May of next year, I hope that those of us who aspire to be here after the next general election will not find ourselves having to attend a debate like this next June or July in a situation in which bureaux up and down the country face wholesale difficulties. The bureaux have demonstrated the value that they give the community. They demonstrate that they give good value for money. It is time that the work of the volunteers involved was supported by consistent funding from central Government.
I shall attempt to keep my remarks short, as I know that others wish to contribute. First, I congratulate the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) on securing the debate. We are here to celebrate the 70th birthday of a very important core service. Six political parties are represented in the Chamber today, which underlines the fact that we all agree— [Interruption.] I am coming to the redoubtable independent hon. Member for Blaenau Gwent (Mr. Davies); it is good to see him.
I will not go over the history of Citizens Advice because it has been well covered. Of the initial bureaux, three were in Wales—in Swansea, Abergavenny and Conwy. We now have 31 throughout Wales. They deal with a huge number of problems every day. My concern is about community legal advice centres, and I shall confine myself to those because of the limited time available.
The aim of CLACs was to centralise and standardise provision, but there were unintended consequences of Government attempts to privatise the advice network. For example, when the successful bidder was an outside provision company, such as the American company A4e, it threatened the existence of bureaux that had previously been in receipt of council grants. Remember that each CAB is an individual charity. As the requirements for CLACs are more stringent, if we are not careful other, smaller, third-party advice groups are also likely to lose out, or, at best, to become sub-contractors. The main bidder will salami slice the funding and contract out the work to the people who were doing it before.
There are further concerns about what will happen when the three-year contracts are up and local provision such as the CAB has been lost, but the original preferred bidder does not bid again as the contract is not sufficiently profitable. I understand that there have been problems with the CLAC in Gateshead, the original pilot. One of the main providers hit financial problems and could not get further grant support, as it would have invalidated their original tender. That led to a two-tier service being provided to local advice seekers—defeating the purpose of the new system. I am pleased to say that that does not happen in Wales.
The Welsh Assembly Government and the Legal Services Commission announced in March this year that they were concerned about the possible consequences of CLAC and community legal advice network, or CLAN, developments, and they announced a feasibility study. The Assembly Government have set a funding route, under “Making Legal Rights a Reality in Wales”, without compromising the future of third sector providers, which include not only the CAB but specialist smaller charity organisations, such as debt and benefits organisations—Speakeasy in Cardiff, for example. The original situational study took place in Cardiff, the Vale of Glamorgan and Bridgend. I am pleased to say that the Assembly Government are taking a different route on the CLAC question.
Furthermore, the Assembly Government introduced other initiatives, such as “Better Advice: Better Health”, which placed CAB advisers in primary health care settings. That holistic approach meant that when a patient came in and was diagnosed as suffering from depression caused by personal circumstances, for example, a CAB adviser was able to advise and help, rather than the patient being prescribed drugs or being put on a waiting list to see a counsellor. Even outside that progressive project, CAB advice works, as shown by the study conducted over three years by Bangor university, which showed that advice seekers were less anxious or depressed about their situation after being assisted by Citizens Advice.
Citizens advice bureaux have also received money from the Assembly Government for another programme to improve benefit take-up for families, especially those with disabled children. Many families are unaware of which benefits they can claim and do not take the full rate that they should receive. The Assembly Government have also spent £750,000 to create an integrated telephone service in Wales.
However, as others have said there are clearly problems facing bureaux. While the banks have been bailed out, the bureaux have not, apart from the £10 million, which is welcome—it would be wrong of me to say otherwise. Before the credit crunch, we knew that many people had borrowed beyond their ability to repay and, with personal debt estimated at about £1.4 trillion, the country could be said to have been drowning in debt. People need the assistance of organisations such as Citizens Advice, but, as the waiting lists show, it is not able to help everybody who needs assistance. Better funding to some areas is required. Additional central funding for my local CAB has been forthcoming, but the recession has led to huge pressures and there is no way I can see them being alleviated in the near future.
It is a fantasy to think that the need for this type of service will end once the country is back in economic growth. There will be a lag as people who have been made unemployed find their savings running out, and a human crisis as people struggle to avoid losing their homes or being made bankrupt. To deal with all that, proper funding of bureaux services is required.
Briefly, on local authority funding of services, the hon. Member for Banbury (Tony Baldry) made the point well that where pressures on core services appear, discretionary spend will clearly be cut back.
Finally, on a personal note, I should say that my local bureau is vital. We have an energetic, young team who are constantly there to deal with any query. I know for a fact that major issues such as housing, benefits and debt restructuring are sort of Cinderella matters in any lawyer’s practice. To be honest, no lawyer in a rural setting would go into those areas—I speak as a lawyer myself—but bureaux do. They offer a valuable and specialist service. Through the good offices of George Williams and others in Dolgellau, I am kept up to speed on those and several other issues. I appreciate that the current economic climate will be with us for some years, but bureaux provide such a core service that there must be a case for direct central funding. I hope that that will be the direction of travel in due course.
I also commend the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) on securing the debate, which is very worth while, given the 70th anniversary that we are acknowledging. Each hon. Member who preceded me indicated the value and worth of the citizens advice bureaux in their localities and I will be no different. I have found them to be tremendously helpful, particularly in times of economic decline, when I am sure that every constituency suffers.
In Northern Ireland we have had a particularly difficult time. Factories have closed. One closed in East Londonderry and more than 1,000 people were made unemployed in the space of a few short months. The CAB arrived and set up an advice clinic to assist, and it has done so regularly. Because it does that, it is able to provide a safety net to people to ensure that they make the transition back to work. It is a somewhat longer transition, but it none the less provides them with help and assistance that they otherwise would not get.
I will be brief, but I want to dwell for a few moments on the requirement to ensure that, beyond 31 March, as has been outlined, bureaux across the United Kingdom will be able to continue their excellent work. I fully endorse the point made by the hon. Member for North-West Leicestershire (David Taylor) in an earlier intervention. Some of the problems are not about the quality of the service that bureaux provide, but about the fact that they are inundated with clients and so overwhelmed with problems that, on occasion, staff do not answer the phones simply because they are under such pressure and there are queues of people physically trying to get in.
In and of itself, that necessitates further funding. Over the next 12 to 18 months, the economic situation will probably be as bad as it is at the moment, so it is essential that we all support the CAB across the United Kingdom, although different funding arrangements will apply in the different devolved regions.
I have an excellent referral service in my area and I would hope that other hon. Members do too. The CAB does a remarkable job of trying to assist the people who come through its doors. However, it is one thing to offer the CAB advice, help and support, but it wants something more tangible: a continuation of the funding regime and, where possible, an increase in funding to deal with the consequences of the underlying economic problems facing the entire nation.
I close by endorsing what the hon. Member for Staffordshire, Moorlands has done in raising this subject and I hope that the Minister will be able to respond positively.
Like my constituents, I thank the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) for raising this subject. At a time of recession, areas such as Blaenau Gwent suffer as much redundancy, unemployment and debt as anywhere else. The interesting thing is that, after 70 years, we are still talking about basically the same things. Our constituents need virtually the same help that they did in 1939—in some areas, they might need even more.
The most important thing about Citizens Advice is that it cares. People can go to other organisations or bureaux, but they will tend to get five or 10 minutes and then out they go. Citizens advice bureaux take their time. Their people are embedded in their communities, so they care about the people and the area they live in. In places such as Blaenau Gwent that is extremely important. We have heard about contacting individuals over the internet or the phone, but in areas such as mine, with an ageing population, people want personal contact—that is extremely important.
We had four bureaux in Blaenau Gwent, but we are now down to one, with one outreach. Over the years, the bureaux have closed as a result of cash restraints and constraints. Having said that, the service that remains around the country is extremely important, as so many hon. Members have said. If we think about it, we get paid for being councillors, but so many of the volunteers in the CAB do what they do for the love of it, and we must recognise that.
The CAB advisers are experts. Of course, bureaux are grateful for the money that they have had so far, and we hope that that money will continue. However, the Government and other bodies appoint advisers and consultants by the hour to look into things such as benefit reform. We should speak to the experts and pay them—we should consult CAB and pay them for their expertise. The people at the sharp end know where the problems are. We do not need management consultants to tell us where they are—the CAB can do that. Perhaps there is a role there that we can consider.
The Government have pledged that everyone leaving school will have a training or work place. When it comes to getting advice and guidance and learning about the community, there is nowhere better than the CAB, so why do we not use it and pay it for that work? That would be a wonderful opportunity for young people.
Another great thing about the CAB is that it does not matter whether someone is 10 or 90, because the CAB treat everyone the same—there is no age limit. Bureaux are an extremely important contact in our communities.
Another issue that I would ask the Government to consider is shared premises. I have spoken many times to our local authorities, which have huge buildings, but the CAB are forced to pay rents and moneys elsewhere.
I thank the hon. Gentleman for that important point. We have the buildings and the facilities, so let us do things together.
We have looked at the CAB over 70 years. The problem with grant funding is that although it can be given, it can just as easily be taken away. We must find a core fund to make sure that the past 70 years will be not the last for the bureaux, but a growing period and the basis for another 70 years and beyond.
I congratulate the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) on securing the debate. It is a privilege to follow the hon. Member for Blaenau Gwent (Mr. Davies)—I think that I can call him my hon. Friend—and I congratulate him on his contribution. He speaks with great passion, and we all empathise with what he said. This is a timely debate. It is a celebration of 70 years of diligence and hard work, but it is also tinged with the hope that the Minister will be able to help us in a few moments.
My constituency is served by two citizens advice bureaux, one in Cardigan and one in Aberystwyth. I have worked with them on numerous occasions on not only projects and general issues, but specific individual cases, and I can testify to the expertise of their volunteers and paid workers. Cardigan CAB has told me that it has experienced a 29 per cent. increase in inquiries during the recession. As we heard earlier, that is the experience of many bureaux across the country.
Citizens Advice Cymru dealt with 298,000 individual problems in Wales in 2008-09, which is a huge figure. Some 37 per cent. of those problems were debt related and 33 per cent. were benefit related, with an 11 per cent. overall increase in client issues on the previous year. In Aberystwyth, there were 1,300 new clients and 4,100 new cases in one year. Those clients represent about 5 per cent. of the population of the town—a significant figure. The volume of cases is increasing all the time.
Citizens Advice Cymru has calculated that it has put at least £25 million back into the pockets of its clients and that it has raised the income of at least a quarter of them. According to the New Economics Foundation, that would put £75 million back into the Welsh economy. Bureaux in Wales have also assisted with £169 million of personal debt. They have negotiated with creditors, assisted clients and ensured that people can manage their debts. We can all think of the countless individuals who have come to us. Sometimes, we may not have had the expertise or specialism to deal with them, so we have forwarded them to advisers at the CAB.
The message from the debate will be that we need to continue the £10 million increased-hours funding—that is a core message. The Cardigan bureau has received that funding, which has allowed it to see an additional 470 clients by opening for longer hours, five days a week. Again, that is a significant number for a small market town. However, staff at the bureau are concerned that the funding will end on 31 March and they hope that it will be renewed so that they can meet the 29 per cent. increase in demand that they have experienced. That is the point that I hope the Minister will be able to address today.
The Cardigan bureau’s funding has come from a variety of sources. The bureau is scrabbling around for funding from different sources for different projects. Sources include the Ceredigion and Pembrokeshire county councils, the Legal Services Commission, the financial inclusion fund, the National Assembly for Wales and town and community councils. The core funding from the two local authorities has amounted to £35,000 a year.
Local authority funding for bureaux in Wales amounts to about 37 per cent. of the total, compared with a laudable 8 per cent. from the National Assembly Government. However, as the hon. Member for Banbury (Tony Baldry) and others have said, the pressures on local authority budgets mean that just as more people are trying to get through the CAB’s doors, budgets are being squeezed. I had the strange experience of a constituent asking me to complain to the CAB about not being able to get an appointment to see an adviser—that is the bizarre nature of the problem. My constituent was told in no uncertain terms that there was a much broader political funding issue, but we were able to help him none the less.
Ceredigion has had a better funding settlement this year from the Assembly Government, but it still does not match the demand on services. Ceredigion is continuing to provide funding to Aberystwyth, as it did before, despite the fact that the transfer of our housing stock to a new housing association has meant that that housing association has decided not to buy the services of Citizens Advice. It is entitled to make that decision but it is not without implications. However, the reliance on local government funding in Wales has certainly been a problem, and that is true throughout the United Kingdom.
There was until quite recently some uncertainty about the Aberystwyth bureau, and among other things there was a huge wave of feeling in the community. People were collecting signatures on petitions in the street, and there were letters and e-mails urging the county council to make some transitional funding available so that a bureau could carry on in a university town of 20,000 people. Mercifully it now can, as some additional funding has been made available for the next year. I could not countenance a town of that size being without a citizens advice bureau.
The issue goes beyond debt relief, although that is critical in this time of recession. The citizens advice bureau has been co-ordinating a financial education project in the community, looking beyond the immediacy of a crisis into more general service provision. It has also allocated some funding—I think it is Assembly funding— to appoint a worker to look into benefits for children with disabilities. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) alluded to those issues. Perhaps we do not always associate such detailed project work with citizens advice bureaux, but it takes place, and that reminds us of the innovation and expertise of the staff and volunteers.
My hon. Friend the Member for North Cornwall (Dan Rogerson) intervened on the hon. Member for Staffordshire, Moorlands early in the debate, and mentioned the critical issue of rurality and inadequate public transport. It is an illusion to think that people in Ceredigion, or much of rural Wales, can even get to a citizens advice bureau in one of the principal towns, but our bureaux have worked hard to develop outreach facilities in other towns, so that older people, young mums and others can get to the services more readily. That is a huge issue. Departments sometimes find it difficult to develop models of service provision in rural areas, and it is also a big challenge for the third sector.
Citizens Advice Cymru has given advice from 260 locations in Wales, 47 in main offices and 161 in outreach locations. We should recognise that Citizens Advice is taking its services to people, particularly in rural settings, and not necessarily expecting them to get to the services. Citizens Advice Cymru, as the hon. Member for Meirionnydd Nant Conwy mentioned, is developing a single national advice line, to cover the whole of Wales by October 2010. That is important because of the nature of devolution, and the different schemes provided by the Welsh Assembly Government. It is also important linguistically that a service should be provided in both languages in Wales.
The message of the debate should be to celebrate the work of the excellent volunteers who give their time in a spirit of public service. I hope that the Minister can respond to them positively—and the wider community, too.
I congratulate my hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins) on securing this important debate. I am glad of the opportunity to speak. We have heard from hon. Members who represent Welsh and rural constituencies, and constituencies in all parts of the country, and I want to speak for inner-city constituencies, which have their own particular needs, for which Citizens Advice is vital.
I have, in 22 years as the Member of Parliament for Hackney, worked closely with the citizens advice bureau, and I and my constituents have had reason to be grateful for its dedication and the high quality of its legal advice. Such a constituency, with a very diverse community, is often prey—I say this with all due respect to the solicitor among us—to shoddy legal advice from so-called immigration advisers and legal advisers. The citizens advice bureau is the one place where my constituents, some of whom are from highly marginalised communities, and whose first language is not English, can go to get disinterested and high-quality legal advice; that is not always possible on inner-city streets.
The bureau is a particularly valuable resource in Hackney, which is one of the poorest constituencies in the country. We are ranked as the most deprived area in England, according to the indices of deprivation 2007. The demand for the service is always high, and queues or inability to get appointments are an issue. However, that is not caused by the citizens advice bureau. It is a funding problem. The Hackney bureau has done its best to maintain its services. As other hon. Members have said, good advice can change people’s lives. My constituency’s citizens advice bureau gives more than 10,000 Hackney residents a year help that they might not be able to get anywhere else. It has prevented evictions and worked to increase local people’s income through benefit checks. It has helped with claiming benefits and challenging decisions. Clients can also feed back into the service advice that helps with health and well-being, as well as helping to resolve problems and tackle poverty.
Other hon. Members have talked about the importance of the volunteers. Seventy-eight per cent. of workers in citizens advice bureaux are volunteers, and they give more than £85 million of free time a year between them. In a highly materialistic and atomised society, the spirit of volunteering and helping each other, without looking for pay, is one of the most important things about the citizens advice bureaux. It runs counter to the social trends of the past 20 years, in many ways.
Hackney is a very deprived constituency, so one might think it would be the least likely place in which to find people with time to volunteer, but at any one time there are more than 50 local people who volunteer to help the community at the citizens advice bureau; we have a core of 50 volunteers. The bureau has won local victories. It was able to increase the school uniform grant in Hackney from £60 to £100, after surveying local schools and parents and finding out how much it cost to get a uniform. It had that positive input to policy as well as helping individuals.
There are nevertheless funding issues, and systemic issues about some of the problems that citizens advice bureaux are asked to take up. In the few minutes remaining to me I want to flag up the issue of old tax credit overpayment debts. Citizens Advice continues to be concerned nationally about the continuing hardship and stress of people who are still repaying tax credits that were overpaid during the first two years of the system’s operation. Next year’s pre-Budget report will be an opportunity for the Government to deal with the problem of tax credit overpayment. We all know the problems with the system. People who are entitled to tax credits are frightened off from claiming them because they have heard of people who are harassed and burdened with a debt that is not really of their making.
Members of Parliament and Citizens Advice know that the standard of administration of tax credits was very poor in the first two years of the system—a fact that the Government have acknowledged. In addition, the level of support that is now available to help people with their claims was not available in the first two years. It is wrong that claimants with overpayment debts dating back to 2003-04 or 2004-05 should still be struggling to establish the extent of and reason for their debt, and to repay the balance, which forces them further into debt.
The efforts of Her Majesty’s Revenue and Customs to write off more old tax credit overpayment debt are welcome, but more needs to be done.
Yes; but Hackney citizens advice bureau is particularly concerned about long-standing tax credit debt, and so is Citizens Advice nationally, so I wanted to flag it up. The Minister may not be able to respond on the issue today, but I hope that he will consider it.
I value Hackney citizens advice bureau because of the quality of the advice that it offers my constituents, and the care and time it gives, which are not necessarily available elsewhere. I value it because it symbolises the idea that no man is an island in this harsh 21st century. There have been struggles, and issues have arisen at local authority and Government level, but I am very glad that my hon. Friend the Member for Staffordshire, Moorlands secured the debate, and I look forward to the Minister’s response to the many important points that have been raised this morning.
I add my congratulations to the hon. Member for Staffordshire, Moorlands (Charlotte Atkins). I also congratulate the CAB on achieving 70 years of the most fantastic service.
Several hon. Members have talked about the volunteers who make CAB—their team spirit, expertise and training, and everything done on a shoestring, of course. I can probably top the examples of care and dedication that the hon. Member for Blaenau Gwent (Mr. Davies) in particular raised. I went to see one of my constituents, who had an industrial injury problem. His CAB adviser, who had been advising him for years, brought the papers to the guy’s home in a holdall. The number of hours of care and dedication that that volunteer had put in was astounding.
Citizens advice bureaux, a little like MPs, aim to give free advice on any issue to anyone. I work closely with the two bureaux in my constituency, in Solihull and Shirley. We often swap clients—I send them people who need the technical expertise and they often send people to me when they cannot help them any more, saying, “The last-ditch attempt is to go and see your MP.”
I would also like to pick up on the national aspect of the work of Citizens Advice, on consumer and benefits issues in particular. I secured a Westminster Hall debate on will writing and the need for regulation, for which I used Citizens Advice and the expertise of its advisers with their clients to determine their level of concern over unregulated people writing wills.
Dealing with the recession preoccupies everyone at the moment, and the citizens advice bureaux are certainly getting their fair share of the problem. The average debt of a person going to see the CAB has risen from £10,600 to £17,000-worth of unsecured debt. Every day, bureaux deal with 9,300 new debt problems; debt alone constitutes a 27 per cent. increase in case load. Eight thousand new benefit problems are received every day. The hon. Member for Hackney, North and Stoke Newington (Ms Abbott) talked most eloquently about tax credits, which are a huge problem, with inquiries up by 22 per cent. Overall, inquiries and clients are up by 17 per cent. in April to June ’09, compared with the same period last year.
I hate to be the harbinger of doom, but my reading is that, even though the Chancellor says that we shall reach the turning point of the recession at the turn of the year, that will not necessarily mean that things get better. As companies restructure, there will still be increasing job losses, so the problems are not suddenly going to get better and the need for support for people from the CAB and for funding from the Government and other bodies will be even greater.
I am very concerned about the threats to funding. We have heard about local authorities having to deal with a greater increase in demand for their services, such as housing benefit and school meals, yet having less income—from planning applications or any reserves not attracting interest because of low interest rates—to meet that demand. A council tax rise of 3.5 per cent. is suggested as the average to enable local authorities to fund all the additional demands.
My first question to the Minister concerns the £10 million-worth of additional hours funding. Can he confirm that it will be extended when the one-year period expires?
I also want to ask about the new Government legal advice centres. If funding is taken away from Citizens Advice to fund that new service, which I am sure is welcome, the bureaux could lose 70 per cent. of their Government funding. Can the Minister confirm that Citizens Advice funding will be preserved?
I want to ask about the procurement process. Procurement tenders seem to be getting bigger and bigger and less and less local, and they are more complex for small charities to fill in. We have heard the story about Hull CAB, which lost out to A4e, a private contractor. That seems to justify the whole spirit of CAB and other charities. I know that the Government do not want to interfere in the procurement process that is done by local authorities, for example, but I think that guidelines should be issued about procurement, because as we have heard from so many hon. Members this morning, citizens advice bureaux have to worry year to year and live hand to mouth to preserve their funding. They have so many better things to do instead of worrying about whether they will have funding.
I want to echo comments, particularly those of the hon. Member for Staffordshire, Moorlands, about core funding. Will the Minister please look at the possibility of an increase in core funding and some certainty for the future for an organisation that, for the past 70 years—and I am sure for the next 70 years—is doing a fine job for the country?
I congratulate the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) on securing the debate and on the impressive way in which she presented her case on behalf of citizens advice bureaux. I would like to declare my interests, which are in the Register of Members’ Financial Interests.
First, I praise my local bureau, in King’s Lynn, which does a first-class job. It is a vital part of the community and, indeed, a lifeline for many of my constituents. There are countless stories, which have been told to me, about how the permanent staff volunteers in the CAB have helped people get their lives back on track. I also testify to the fact I have referred constituents to the CAB, which has been incredibly responsive. Indeed, the CAB has referred a number of constituents to me, for references to Ministers, local authorities and perhaps to other quangos or utilities, so we work well together. The CAB is a pivotal part of the community, which is a point made by a number of hon. Members this morning.
Citizens advice bureaux also take pressure off other agencies, which is why I would submit that, in the scheme of things, whatever money Government spend on bureaux is more than saved through pressure being taken off other agencies. I wonder if the Minister has ever asked his Department to study that, because the results would be interesting.
I also praise the work of a number of local solicitors, not just in my local CAB but in many other bureaux up and down the country. They generously give up their time pro bono. Without that extra, specialist help, many bureaux would not be able to provide the service that they do.
As other hon. Members have pointed out, the economy is facing huge challenges, which obviously means a great deal of extra pressure on citizens advice bureaux. My hon. Friend the Member for Banbury (Tony Baldry) made that point very clearly, as did the hon. Member for Solihull (Lorely Burt) a moment ago. I understand that over the past year there has been a 51 per cent. increase on the previous year in calls and visits to bureaux involving mortgage and loan arrears. That is staggering. There has also been a 22 per cent. increase in bankruptcy problems. Last year, CABs handled nearly 2 million debt cases.
I think that everyone agrees that CABs’ role in helping our constituents and the citizens of this country find a way around the problems caused by the recession is more important than ever. Now is the worst time for any pressure to be placed on their funding streams, but such pressure is inevitable as local authority budgets come under increasing strain, as I can see in my constituency.
I reiterate to the Minister what the hon. Members for Meirionnydd Nant Conwy (Mr. Llwyd) and for Solihull said about CLACs and CLANs, or community legal advice centres and community legal advice networks. I hope that he is aware of what is going on. The idea behind CLACs is undoubtedly sensible: it makes sense to assist clients with a plurality of problems in a joined-up way. However, I am concerned that no pilot has been done. So far, as I understand it, the Legal Services Commission has jointly commissioned CLACs in Gateshead, Leicester, Derby, Portsmouth and Hull, and five new areas were announced towards the end of last year in Manchester, Stockport, Wakefield, Barking and Dagenham.
Impact on the ground is already a problem. As colleagues have pointed out, the CAB in Hull has lost 76 per cent. of its funding and reduced its staff by a similar amount. It is under a great deal of pressure and may well have to close. Indeed, the law centre in Leicester has closed. The problem is the narrowness of tendering specifications. The tendering is for specialist legal aid and advice work, and the other work carried out by the CAB is not taken into consideration. We have a “winner takes all” system. I am concerned about that, because I do not think that the Government have considered it carefully enough or done enough research. Why has a proper pilot not been done? The system might have been a good idea when the economy was booming, but it is now under great pressure, and for the Government to say that CABs are incredibly important while another Government agency takes money away from them through the tendering process makes no sense.
That is just the CLACs. I am equally concerned about the CLANs, which are the networks that will apply in rural areas. So far, none have been launched, but a number of discussions are taking place with various local authorities. One problem is simply that the Legal Services Commission is bound by statute to spend its money only on specialist-level legal services. It does so through contracts with various solicitors, private companies and organisations such as law centres and CABs.
I have a memo from a county council that is in discussions with the Legal Services Commission. I cannot give the name of the county council, as that would be breaching confidentiality, but it points out—this is probably typical of county councils, and, indeed, some unitaries, across the country—that of about 15 CABs in the county, five do not yet have the specialist-level quality mark necessary to deliver legal aid, so they are out of the equation completely. One particular CAB in the county has never wanted to deliver a specialist service because it has not wanted the restrictions that an LSC contract might place on it.
One question in the county council’s confidential briefing is what would happen if the CABs did not win the open tender for the CLAN. The result would be that if the county council decided to proceed, the £350,000 it spends on CABs would be reallocated, obviously, to the CLAN. The briefing goes on to point out that the CABs that currently hold LSC contracts would lose those contracts. Basically, the bottom line in that particular county is that if the CABs do not win the CLAN contract through the tendering process, there will be mayhem among the CABs. Some will survive and some will carry on doing the 26 per cent. of their work that consists of general advice, but they will not be viable on that basis, as they will have lost local authority funding.
I hope that the Minister will consider that concern, because the Conservatives have been raising it for months now. Is it a classic case of a Department having all the right intentions—a joined-up, one-stop-shop approach to dealing with clients who have a plurality of problems must make sense—but doing it in a ham-fisted way, without a proper pilot. That makes no sense whatever. I hope that he will address that point. We are all concerned about local authority budgets and his Department’s budget, but this is a classic case of unintended consequences. It is something that the Government could do straight away: they could say this morning that the CLAC and CLAN programmes will be put on hold. The programmes will remove vital funding from a lot of CABs.
I have one final point to make on the separate issue of employment tribunal awards. I am concerned that every year, CABs across the country deal with roughly 1,000 unpaid awards— [Interruption.]
I am sure that it is not, Mr. Martlew, as mine is turned off, but I will put it over there for avoidance of doubt. It is always my policy to turn off my mobile.
Roughly £4.5 million in employment tribunal awards that have not been enforced is outstanding at any one time. The problem is that employment tribunal awards must be enforced by the individual who wins them. Employment tribunals have no powers to enforce their awards, so the employer who wins his case must take it through the county court, or through the High Court in due course, if need be. Legislation on the matter was introduced in the Tribunals, Courts and Enforcement Act 2007. Section 27(43) of that Act includes a process for speeding up awards. They need not be registered in a local county court before enforcement action can be initiated, which obviously saves a great deal of money.
I understand that that particular measure has not been commenced, so the Minister might care to consider it. It has a knock-on effect for bureaux, because they must invest a lot of money in employment tribunal cases. When the individual’s award is not enforced, they must go back to the CAB for advice on how to go through the county court system, which costs a substantial extra amount. This would be a good way to save some bureaux money at the margin.
I hope that the Minister will put our minds at rest and tell us that the Government will take action. That action will not cost a great deal; in fact, it will cost no money at all, as it is just a question of talking to other Departments, particularly the Ministry of Justice, and ensuring that the two issues that I flagged up are considered as a matter of priority. I hope he will answer those points, as well as putting our minds at rest that this truly remarkable service will be fit for purpose to help our constituents to deal with their problems during this recession.
I congratulate my hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins) on securing this important debate, and everybody else who has contributed. This has been a wide-ranging and interesting debate. I join others in congratulating the citizens advice bureaux on their 70th birthday and on all the fantastic work they have done during that period.
Given the time available, I will refer briefly to what hon. Members have said and then make some more general remarks. My hon. Friend pointed out the valuable work done in her constituency by her local bureaux and the pressure that they are under. However, I was concerned at what she said about the contracts with the Department for Work and Pensions and the flexible new deal, and the lack of third-sector involvement. I will be happy to talk to DWP colleagues about that, because the Government vision to which my hon. Friend referred is very much that the third sector should be involved in delivering such services.
My hon. Friend referred to additional help from the Government for the third sector. Help for Citizens Advice is being given not only as a result of the recession. For example, since 2001 the income generated for the third sector by the Government has risen to £12 billion—a £3.6 billion increase in recent years.
The Government’s commitment to the third sector is not merely rhetorical, but a genuine financial commitment on the level of support for the third sector, as it will help the Government to deliver their priorities. It will also help the third sector to do what it does best—reach down into those parts of our communities that the Government cannot reach. Indeed, in my former role as Minister for the third sector, I introduced a recession action plan, which in August this year brought in an extra £15 million that went to 558 organisations, and a £16.5 million modernisation fund. Help has been given over and above the help for citizens advice bureaux, to which my hon. Friend referred.
If I may, I shall return later to the question of additional hours raised by my hon. Friend. However, she said that her local CAB was not included in the additional hours project. That decision, of course, was taken by Citizens Advice, rather than the Department. We wanted Citizens Advice to decide where the additional hours should be allocated, but I take the point that the requirements could not be met for her local CAB.
The hon. Member for Banbury (Tony Baldry) called on the Government to provide core funding for local bureaux. The Government provide core funding not for local bureaux, but for the National Association of Citizens Advice Bureaux. However, I welcome the hon. Gentleman’s support for Citizens Advice. Twenty-five years ago, at the heart of another recession, Citizens Advice was attacked by the Government for being critical of their response to the recession. It was accused of being a hotbed of radicals and revolutionaries. In reality, that is not a description of what Citizens Advice is about, so it was refreshing to hear that the hon. Gentleman recognises and supports the importance of Citizens Advice in helping people through the recession.
The hon. Gentleman referred to the Government’s additional funding, which is helping 370 extra clients in Banbury. However, it is for local government to organise the local delivery of services through citizens advice bureaux. Each bureau is an independent charity, as he will know, and they are supported by the network, which is supported by funding.
Given the time constraints, if the hon. Gentleman will forgive me I shall try to answer as many Members as I can. If he wishes, he can contact me later about any other points.
It would be a big thing for the Government to be involved in the funding of individual local citizens advice bureaux. On reflection, I am not sure that that is the right way forward. Yes, local authorities are under pressure, but the provision of good advice services is a priority for local authorities, and they should not retreat to a position of protecting only what they directly deliver. They should consider the value that the third sector can bring to local authority priorities, and in these times advice should be a top priority.
The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) was one of three Back-Bench Members from Wales who contributed to the debate. He made an interesting point about the changes that have been made and the so-called CLAC provisions for community legal advice centres in Wales. We were here last year, as I attended a debate instigated by my hon. Friend the Member for Cardiff, North (Julie Morgan) on that very issue. However, in an interesting contribution, the hon. Gentleman pointed out the other way forward.
The hon. Member for Meirionnydd Nant Conwy criticised the Government for bailing out the banks rather than supporting Citizens Advice. Had the Government not saved the banking system, bureaux would have faced much longer queues of people who had lost their life savings. That is not quite the comparison that he wanted to make.
The hon. Member for East Londonderry (Mr. Campbell) pointed out the good role played by citizens advice bureaux in Northern Ireland, and the different funding streams available there. He also referred to the ongoing need for support.
The hon. Member for Blaenau Gwent (Mr. Davies) spoke of the history of his constituency in the 1930s, when CAB started. Male unemployment in Brynmawr in his constituency in those days was more than 68 per cent. As he knows, my mother was growing up in Nantyglo in his constituency at the time. The Government’s philosophy in trying to support Citizens Advice in dealing with the recession is rather different from the means test that his constituents and my family faced then. However, he made a good point about shared premises. That would be a good way to cut costs, and local authorities could support bureaux in kind.
The hon. Member for Ceredigion (Mark Williams) pointed out the importance of the additional hours project. I shall refer to the project later, but it has helped more than 400 clients in his constituency.
My hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) said that Citizens Advice can offer alternatives to poor-quality legal advice such as in this old joke: “If I give you £100, will you answer two questions?” to which the answer is, “Yes. What is your second question?” The number of cases of bad legal advice referred to Citizens Advice that come to MPs’ constituency offices is a matter of great concern. My hon. Friend made a valid point about bureaux helping people in a real and tangible way to deal with eviction and other problems in her constituency, and spoke of the need for continued funding. She also said that diverse communities need particular help. As part of the face-to-face debt advice project, we have budgeted for such things as translation facilities for all projects, which is important in communities such as those in Hackney in my hon. Friend’s constituency. We have also provided British sign language facilities for other excluded groups such as the deaf and so on.
The hon. Member for Solihull (Lorely Burt) said that she did not want to be a harbinger of doom but went on to be one in her description of the economic outlook. Nevertheless, she passionately pointed out the importance of the services that bureaux provide. She also pointed out how they should be treated in procurement situations. However, advice is available from the National Association of Citizens Advice Bureaux in such situations, and it is supported by the Government. I agree that it is important that the third sector is taken into account in Government procurement. That is why we created the Office of the Third Sector, which can provide support.
The hon. Member for North-West Norfolk (Mr. Bellingham) invited me to make up policy on the hoof. I must disappoint him, but I shall look into what he said about employment tribunal awards. I shall seek advice, although not from NACAB, on his question about the impact of CLAC and CLAN plans. He was not able to name the source of the information that he gave, but he told us how those plans might affect CAB funding for one county. I am happy to investigate that further with officials.
One point was central to the debate: Members wanted to know about funding, and particularly about the additional funding that the Government are providing at a time of recession. This year, the Department for Business, Innovation and Skills allocated £21.47 million of grant in aid to enable NACAB to provide the essential leadership and support to local bureaux. It will seek to monitor and maintain standards, train staff and volunteers, and help to strengthen the bureaux network. It will also provide case data and evidence from bureaux, allowing the Government to inform and communicate policy developments. Central funding is provided through the Department for that reason.
Feedback has been important in building and maintaining a modern regime, ensuring that consumers are treated fairly, empowering people and ensuring that they know their rights, and helping bureaux to cope with the significant increase in demand for local services through measures such as the additional hours project, which give additional support.
The further £10 million of funding, which lasts until 2010, is enabling bureaux to extend their opening hours for generalist advice. That funding was announced in last year’s pre-Budget report. It has been a success, but it was meant to be a temporary measure. I cannot anticipate the forthcoming pre-Budget report. However, the scheme has been highly successful: 324 participating bureaux have been able to advise a huge number of clients in a large number of locations. That is well on the way to beating the Government’s original target of helping 335,000 more local people. Although I cannot say any more today, this being a matter for the Chancellor, I acknowledge the success of the scheme in a time of recession.
Israeli Goods (Labelling)
In this debate, I shall concentrate on the labelling of food products from Israeli settlements in the west bank. Food labelling is the responsibility of the Department for Environment, Food and Rural Affairs, and I will ask the Minister to explain what is happening about the issuing of revised labelling guidance to retailers; why there have been such continued delays; and why the Department is failing, in my view, in its duty of consumer protection.
The labelling of food products is governed by both UK and EU law and serves the purpose of giving clear and complete information to consumers, to allow the customer to exercise choice. It is well established that, as well as needing to know the nutritional content and ingredients of food products, consumers need to be able to exercise ethical choices—for example, to be able to identify if a product is organic or fairly traded and to know its country of origin. A number of key issues may lead consumers to wish to avoid purchasing goods from Israeli settlements, but current labelling practices do not give them that choice.
First, I shall summarise the reasons why settlement goods are a particular case. The official position of the British Government is absolutely clear: Israeli settlements in east Jerusalem and the west bank, plus those in occupied Syrian territory, are illegal under international law and are an obstacle to peace. That view is in line with that of the rest of the international community, including the USA. Currently, most media attention is given to the homes that continue to be built within existing settlements and the new residential settlements that continue to be established, but another important aspect of the illegal settlements is the agricultural produce that is grown within them and the various other goods that are manufactured in industrial enterprises established there. Anyone who has been to the west bank and, indeed, to Gaza before the settlements there were dismantled will have seen that the settlements typically enclose very large tracts of land—much, much bigger than is required to accommodate the housing that is built within them—and that much of that land is used for agricultural production. The sale of that agricultural and other produce from the illegal settlements contributes significantly to their economic viability and thus to their continuation.
For many years, that agricultural produce was deliberately mislabelled by the Israeli authorities as “made in Israel” and exported to the European Union under the EU-Israel trade agreement, thus benefiting from the trade preference and avoiding import duty. The European Union has now started to prevent that practice. Her Majesty’s Revenue and Customs requires the importing authorities to give the postcode of origin, and only goods identified as originating from within the internationally recognised borders of Israel are permitted to enter under preference. Goods identified as from settlements cannot legally be labelled “made in Israel” and should pay full import duty. Ruling in a case involving the German courts and Brita bottled water, the European Court of Justice recently reaffirmed that the trade agreement applies only within the 1967 borders of Israel.
Significant doubts remain, however, as to whether HMRC is policing the process effectively. Written parliamentary questions have shown that HMRC made only two requests for further information on suspect Israeli imports in 2008. It is well known that Agrexco, the major Israeli fruit and vegetable exporter, allows agricultural produce from the settlements to be mixed with produce from within Israel, with the whole then being exported as “made in Israel”. I will pursue Treasury Ministers on the steps that HMRC will take to institute more effective control of imports of Israeli produce to end the admixture of illegal settlement produce, which seeks to flout EU regulations and unlawfully claim the trade preference on produce that is contaminated with settlement goods.
Since the “made in Israel” rules began to be enforced more effectively—albeit still not totally effectively—produce from the settlements that is declared as such to HMRC is permitted to be imported and sold. Such produce is commonly labelled “West Bank” or “Jordan Valley”, but both those descriptions could apply either to goods produced by Palestinians on Palestinian land, or to goods produced in illegal Israeli settlements, and the consumer has no way of knowing which. Significant numbers of British consumers wish to avoid buying produce from illegal settlements.
I congratulate my hon. Friend on securing this extremely important debate and on the forensic and persuasive way in which she is advancing her argument. Does she agree that consumers will reasonably be worried about whether they are being tacitly complicit in an illegal act by buying goods from the occupied territories that are mislabelled “West Bank”?
Indeed, I was just getting to that point. As I know that a number of hon. Members have come to the debate to express their support, and given that I have a detailed argument and do not intend to give way to anybody else, it might be helpful if I list for the record the Members who are present. Apart from my right hon. Friend, there are my hon. Friends the Members for Brighton, Pavilion (David Lepper), for Battersea (Martin Linton), for Birmingham, Northfield (Richard Burden), and for Staffordshire, Moorlands (Charlotte Atkins), and the hon. Member for Orkney and Shetland (Mr. Carmichael).
To return to the debate, the reasons for not buying the produce are multiple. As my right hon. Friend said, the settlements are illegal under international law and many consumers do not wish to collude in illegality by buying the produce, but there are other reasons. Evidence from a number of Israeli human rights groups, including Worker’s Hotline—Kav LaOved—and the Coalition of Women for Peace, shows that workers within the settlements, whether Palestinians or Asian migrant workers, are not paid the Israeli national minimum wage, nor do the employers apply Israeli health and safety regulations. Although the international community does not believe that Israel has sovereignty, Israel obviously takes a different view, and in 2007 the Israeli courts established that for them Israeli standards should apply within the settlements. Israeli law is therefore being flouted by the minimum wage and proper health and safety regulations not being applied to the workers within the settlements. Settlement goods are therefore not only illegal but rely on an exploited, underpaid and under-protected work force.
I am pleased to say that some UK retailers—the Co-operative Group and Marks and Spencer, for example—have stopped sourcing goods from settlements, but some retailers continue to import settlement goods and for them accurate labelling is absolutely crucial. The lack of clarity in the labelling of settlement goods and the consequent confusion for consumers led DEFRA to put guidance for retailers on its website that suggested the description “West Bank”, but that guidance was removed in 2008 without explanation. In March 2009, DEFRA convened a meeting with, among others, various members of the British Retail Consortium. The BRC tells me that its members—more than 90 per cent. of the UK grocery industry—want to give their customers
“the clearest information on the origin of West Bank produce.”
The BRC says:
“We believe clear labelling is essential in letting customers know where products are from, allowing them to make an informed decision whether or not to purchase that product”.
The BRC hoped and expected that the meeting in March would lead to renewed guidance from Government to ensure that labelling was accurate, but despite continued requests from BRC and lobbying by a number of hon. Members, including me, no revised guidance has appeared.
Given that the Foreign and Commonwealth Office made it clear in a letter in April to Lawyers for Palestinian Human Rights that it was
“looking at what practical steps”
it could take
“to discourage settlement expansion such as ensuring that goods in illegal settlements do not benefit from EU trading agreements with Israel”
and that the FCO conceded that labelling “West Bank” may not,
“in the unique circumstances of the West Bank…provide customers with as much information as they would like on who has produced or grown the goods concerned”,
the continued delays in finalising the revised guidance are inexplicable, and the various explanations given by DEFRA and others in Government have been unusually coy. A written parliamentary answer from DEFRA on 16 July—three or four months after the March meeting—said that a consultation would be carried out shortly, but no consultation was carried out. A letter from the Department for Business, Innovation and Skills on 5 November simply said that it had been decided that it was best not to consult over the summer, but it did not explain why the officials had not got on with it once the summer was over.
Another written parliamentary answer from DEFRA on 23 November said that the Department
“fully appreciate the strong opinions that people have about this issue. It is because of the sensitive and complex nature of this case that the Government are still carefully considering possible next steps.”—[Official Report, 26 November 2009; Vol. 501, c. 257W.]
It is not clear what the Department means by “strong opinions”. People have strong opinions about GM foods, but that was never used as an argument not to label clearly the GM content—quite the reverse. There is a suspicion that the delay is due to lobbying by the Israeli Government, and Israeli press reports suggest that that is the case. That leads one to wonder whether it is normal for our Government to listen more to foreign Governments with a track record of flouting EU labelling regulations than to UK retailers and consumers.
It is not clear what next steps the Government are considering. There is nothing complex about the fact that the settlements are illegal and that consumers need clear and unambiguous information to exercise choice. The FCO does not think that the matter is complex and since November 2008, it has actively been working at European level to ensure that, across the EU, all member states accurately label settlement goods. BIS also seems not to admit to any problem: it knows that retailers would welcome an end to the confusion, because they do not wish to mislead their customers. Is it DEFRA that is dragging its feet, or does the pressure come from elsewhere?
In the end, this is an issue of compliance with consumer legislation. In March 2009, in an attempt to address the current situation, Palestinian human rights lawyers submitted to the Government legal advice from Kieron Beal, which sets out the possible legal liability of retailers. The advice points out that the label “West Bank” is something that could clearly influence a reasonable consumer—obviously, a legal concept—in the context of his or her transactional decisions. It suggested that retailers may at present be at risk of prosecution under the Food Labelling Regulations 1996 and/or the General Food Regulations 2004. If the product in question is subject to regulation 5(f), retailers run the risk of criminal prosecution if the country of origin designation is either wrong or sufficiently ambiguous that it might mislead a purchaser to a material degree as to the true origin or provenance of the food.
The lawyers further highlighted the Consumer Protection from Unfair Trading Regulations 2008, which are apparently derived from the unfair commercial practices directive 2005. The advice states:
“Certain retailers may also be at risk of finding themselves in breach of Regulations 5 and 6 of the CPUTR 2008. The CPUTR 2008 should be construed in the light of the UCPD on which it is based. Article 6 of that Directive targets a commercial practice which contains false information and which is therefore untruthful…It also covers commercial practices which through their overall presentation are likely to deceive the average consumer, even if the information provided is factually correct. That appears to be apt to cover the situation in which produce is labelled as originating in the West Bank without further clarification being given.”
It goes on to say:
“It follows that if: a)the presentation of material is accurate in itself; b)but is otherwise misleading either in context or through omission of particulars of clarification; c)an average consumer would be likely to be deceived or misled; d)that average consumer would, as a result, have likely entered into a transaction which he or she otherwise would not have done, had he or she known the full facts; then e)there will probably be an infringement of either Articles 6 or 7 of the UCPD.”
Given that the retailers want clarification from DEFRA to ensure that they are compliant with consumer protection legislation, DEFRA must explain clearly why no guidance is being offered. I have the following questions for the Minister, of which I gave him notice beforehand.
First, why was the voluntary labelling guidance suggesting “West Bank” removed from the DEFRA website in 2008? Is it because the Government accept legal advice that “West Bank” is misleading and ambiguous and therefore unlawful? Secondly, what is the real reason for the endless delays in finalising new guidance? Is it pressure from Israel, and if so, why does that outweigh international law, obligations to UK consumers and the wishes of UK retailers? Are there technical problems, and if so, what are they? Will the Minister confirm that his prime responsibility is consumer protection in the UK and that that must take precedence over the opinions of foreign Governments? Fourthly, if the question of labelling is so complex, how many officials are currently working on sorting out the matter and coming to a conclusion?
Fifthly, has the draft guidance gone to Ministers? If it has, to which Ministers has it gone and which Ministers have approved the guidelines so far? Finally, is the Minister aware of labelling guidance in other EU member states? I draw his attention to the example of wine from the Golan heights, which is apparently sold in Swedish Government stores—they control all alcohol sales in Sweden—labelled as “Made in Occupied Syrian land”. That seems to be an extremely good precedent. It is not ambiguous or misleading and it does not recognise the Israeli settlements in Syrian Golan heights.
The delays in enforcing clear and unambiguous labelling of settlement goods is yet another example of the Government’s pusillanimous approach in matters relating to the Israeli occupation. It is not enough to make declaratory statements, as the Foreign Office frequently does, recognising that the occupation is illegal. Those declaratory statement must be backed up by practical policies to give force to that recognition of illegality. Clear labelling of settlement goods is one way in which the Government could do that and, at the same time, fulfil their legal obligations to UK consumers on clarity.
It is a pleasure to see you presiding over the debate today, Mr. Martlew. Let me begin by expressing my gratitude to my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) for requesting this debate, thus drawing further attention to such an important issue. I acknowledge the presence of a number of parliamentary colleagues supporting her contribution. I hope that I will respond to the various issues that she has raised, including the questions that she listed at the end.
The question of the country of origin labelling that should be given to the imports from the occupied Palestinian territories is extremely sensitive, and provokes strong and contrasting views. However, I heard very clearly my hon. Friend saying that strong views are no reason for a Government to decide not to come forward with appropriate conclusions.
My hon. Friend has eloquently drawn attention to the plight of the Palestinians in the occupied territories, and the difficulties that they experience. She has also referred to the resentment that they, and those who support them in this country, feel about the fact that goods originating from illegal Israeli settlements are simply labelled “Produce of the West Bank”. All of that is against a background of deep concern, which we in the wider international community feel about the continued existence of those settlements. I should make it absolutely clear that not only is settlement building on occupied land illegal under international law, as my hon. Friend said, but the construction of Israeli settlements in the west bank and in east Jerusalem makes it increasingly difficult to envisage a contiguous and viable Palestinian state.
The clear position of the UK Government is that we are opposed to boycotts of Israeli or Palestinian goods. We do not believe that boycotts help to engage or influence Israel or that they lead to progress in the middle east peace process.
One thing that I want to respond to is the suggestion that imports originating from illegal settlements are entering the UK described as “Produce of Israel” and are therefore benefiting from the preferential access terms available under the EU-Israel association agreement. If that is indeed happening, an offence is being committed. The EU-Israel association agreement is quite clear that only goods originating from the state of Israel itself, rather than from the occupied territories, are entitled to be imported under those preferential terms. If an importer or retailer is in any doubt about the geographical origins of goods imported from that region, Her Majesty’s Revenue and Customs will be able to help them. I also acknowledge that my hon. Friend has, as she mentioned, taken this matter up with Treasury Ministers.
My hon. Friend referred to the need for consumers to be given more information about the origins of goods imported from the west bank. It is the Government’s responsibility to ensure that consumers have as much information as they need to make informed purchasing decisions. The Government have received a number of representations on this issue, as have retailers. By law, an importer or retailer needs only to give a country or a recognised geographical area by way of an origin declaration. The west bank is a recognised geographical area. Therefore, as far as the Government are concerned, it continues to be perfectly legal to give that description of origin on the labels of goods imported from the west bank.
My hon. Friend has expressed a view different from that, and ultimately the interpretation of legal definitions is a matter for the courts. However, the legal advice that the Government have received does not suggest that using “west bank” as a description of origin would be considered misleading.
I understand that some consumers wish to have access to more detailed labelling information, so that it is clear to them whether the produce that they are purchasing is, in fact, produce of Palestinian growers or produce of Israeli settlements. As consumer demand has grown, supermarkets have been taking a keen interest in this issue. That is why we have been considering how best to address the concerns of importers and retailers in the United Kingdom who wish to respond to consumers who share those concerns.
I want to deal with the specific question that my hon. Friend put at the end of her speech. It related to labelling arrangements that apply in Sweden, for example, to wine imported from the Golan heights. The Golan region is currently under Israeli control and the situation there is quite different from that which prevails in the west bank. The west bank is a mixture of Israeli settlements and Palestinian producers. That is why our guidance will focus on the west bank.
This issue is a complex and sensitive one, and it is important that we do not arrive at an unsatisfactory conclusion. Nevertheless, I acknowledge my hon. Friend’s frustration, and that of other right hon. and hon. Members, at the time that has already been taken to deal with this issue. We aim to give the Government’s position before the Christmas recess.
I am grateful to my hon. Friend for raising this issue today; in doing so, she has helped to inform our position further and helped us to make that commitment.
[Joan Walley in the Chair]
It is a pleasure to speak under your chairmanship, Ms Walley.
In a way, this is an odd subject for me to choose, because I am not an expert in the field of manufacturing industry and I hope to learn quite as much as I assert in the course of the debate, given the exalted company I am among, but I am driven by two motives. The first is to expiate a slight sense of guilt, because I have spent my entire life consumed with affairs such as philosophy, education and politics, but my father’s career was almost entirely in manufacturing industry and he left me in no doubt from boyhood onwards that anything I did was entirely parasitic on the noble tradition of British manufacturing.
I am also driven by reflections on recent events. One event that struck me took place in my constituency. A sweet factory, which had existed for some time, closed down. It is not unusual for a seaside town to have something such as a sweet factory in the midst of it; the economies of seaside towns are quite mixed. The factory was profitable and was investing in new machinery. It was adding to the employment mix in Southport and had a good market for its goods—albeit with dental complications for some consumers of them. I was not especially fond of the product, but I did visit the factory and I had no reason to think that it would not be there for many years.
However, the factory was bought and closed down by a private equity firm. In fact, it was the same private equity firm that took over Halfords and the AA. The land was sold for housing, some of which has started to be built but none has so far been sold, due to the recession. The machinery was sold off to Slovakia—I presume that people are making Chewits out there as we speak. On one hand there was a loss of livelihood and, clearly, of employment, but on the other hand there was a profit for the investors in the private equity company. Some would be very affluent individual investors and some would be organisations such as banks and pension funds. That is, in a sense, how the market works.
Another event that triggered me to apply for the debate was something that I came across in a news broadcast. It was the story of Kemble Pianos—the last big piano manufacturer in the UK making standard, not specialist, pianos—which is being moved by Yamaha to Asia. We have to look at that and ask what has happened to the British piano industry, which at one stage was a major manufacturing industry. Clearly, the home market is not as good as it ought to be. The export market has slumped to some extent. We can blame a range of causes, including the rise of digital keyboards and the lack of decent music teaching in schools. However, the effect of the end of piano production in the UK must be a massively increased carbon footprint for pianos.
The hon. Gentleman is correct. We are talking about a short-term gain for a long-term loss. We have seen production at the sweet factory taken overseas and the closure of the piano factory, yet the pound is now weaker and the euro has strengthened, so the people who made a quick buck ought to be reinvesting in manufacturing in the UK, as the economy is absolutely ripe for that. Does the hon. Gentleman agree?
I do agree, but oh that it were so. I reflected on the enormous transport cost of moving a piano anywhere, let alone across the oceans, and just thought that it was not particularly in the world’s or the UK’s interest. If we add to that the general fact that Britain’s slow emergence from recession is due in part to our difficulty in exporting our way out of recession and in part to our overdependence on financial services and a perceived and deteriorating imbalance in the economy, we have to say that it is an issue for Government in one sense or another.
The Government have a genuine interest in the shape and balance of the economy and the impact of such economic trends. To depend exclusively on the service sector, and particularly the financial sector, is an economic weakness for the country as a whole. It is a weakness in the same sense that dependence on tea was a weakness for Sri Lanka. When that commodity failed, the whole economy failed too. In part, we are in an analogous situation at the moment. Unlike Sri Lanka, which is one of the few places where tea can be grown, we have to accept that financial services can go to other places and, in certain circumstances, will do precisely that.
Since the turn of the century, manufacturing jobs have dropped by 16.6 per cent. in the UK, which I think is the lead drop in Europe. As a result, the balance of payments has worsened because manufacturing still makes up 48 per cent. of our exports, although it makes up only 12 per cent. of the economy. I do not think that anybody would disagree fundamentally with that analysis, but people often respond to it with plain resignation, as if it was simply a state of affairs that we must put up with. The reasons for that are partly ideological and partly historical.
One ideological reason that is strongly promulgated at the moment is that such economic fallout is almost inevitable, and not even a Government can buck the markets. Coupled with that is the belief that an unfettered market delivers, in some sense, the optimum outcome. I have heard arguments that it is acceptable for people to lose their jobs in Southport so that private equity firms can make money and invest somewhere else, because if that happens it will be the most efficient financial outcome so, at the end of the day, it is probably the best outcome for everybody. I see that as treating free trade almost as an article of faith.
I call that ideological because, speaking as a philosopher for a moment, I cannot see that either of those tenets—that people cannot buck the markets and that markets always produce the optimum outcome—can be conclusively verified or for that matter falsified. It is certainly the case that Governments are not particularly or universally good at bringing about the economic effects that they wish for on behalf of their citizens.
That brings me to the historical argument, and a different reason for a sense of resignation. Inscribed on the British psyche are memories of bad manufacturing policy, subsidising companies with a poor research and investment history, useless management, poor labour relations and sometimes no real market. One can think of examples from the past, such as DeLorean and British Leyland, as well as the expression “lame duck”, and unsuccessful and politically motivated economic intervention.
I am enjoying the hon. Gentleman’s contribution. Does he think that there is a great untold story in this recession? The reason why unemployment is not higher is that, unlike in previous recessions, management and trade unions, through partnership working, have negotiated short-time working, pay freezes or, in many cases, even temporary pay cuts. That is a tribute to management leadership and to modern trade unionism, which have both played their part in trying to help us get through the recession.
The hon. Gentleman takes the words out of my mouth. To concur with the remarks that have been made and to make this intervention appropriate, I shall say that if both sides of a company collaborate—and there have been good signs of that in the past year—it is good for British industry and it is to be welcomed. Clearly, it is nice to know that a strong, effective framework was put in place in years past, but I applaud a good attitude on both sides, and I hope that the hon. Gentleman does too.
Indeed, I do.
I was going on to say that this is not a knock-down, all-purpose argument against any kind of intervention by Government. Looking back at history, we always forget the effective Japanese subsidy strategy and product dumping. If we have national interest foremost in our minds, in a sense, the Japanese did it right and we did it wrong. They caused the demise of decent British industries, which could and perhaps, with proper Government nurture, should have survived. I am thinking in particular of Triumph Motorcycles. I do not know how many people know about Triumph motorbikes or motorbikes in general, but they are still considered an aspect of British engineering excellence, unfortunately no longer mass-produced but popular on the second-hand market. We draw our lessons selectively and partially.
May I remind the hon. Gentleman that there has been a renaissance? Not to previous volumes, I acknowledge. The company is owned by a rich constituent of mine, who manufactures not in my constituency but near the town of Hinckley in west Leicestershire. Triumph is slowly on its way back. The hon. Gentleman should not forget that it is possible to have a Lazarus-type return from the grave.
It is a small triumph for Triumph, and I am pleased by it.
Looking at the history or accepting the ideology, we might conclude that saving British manufacturing is as futile as trying to repopulate the jungles with pandas. We cannot stop a trend once it is in place. Government could concentrate on what some people call, and I have learned to call, the horizontal approach, regarding the task of Government as simply creating the environment in which industry may, if it can, thrive. A range of things—all of which I am sure that everyone in the room applauds—is done under that heading, such as encouraging enterprise. One of my earliest activities in the House was to work on the Enterprise Act 2002. Other things include encouraging competitiveness, good regulation, fighting protectionism, providing the right fiscal stimulus for research and development and investment, encouraging cross-industry collaboration—the Government have done a great deal of that recently, in particular in the motor industry—trying to boost skills through industry sector councils and the like, and encouraging science and the development thereof.
No one is against such activity, which is the widely accepted consensus on where we need to be. However, more strategic intervention is questioned, which is partly the reason why some politicians, who can be found on all Benches, question why we need a DTI, a BERR or a BIS, and have called for their disbandment or elimination. Some people propose getting rid of regional development agencies, because they regard them as not fit for purpose, not doing the job or whatever, or as poor pickers of winners in the economic stakes. There is a bar-room view that any firm in need of a state leg-up is ipso facto non-viable and should not get any help, or that anyone who was good at successful intervention in business would not be in a development agency but would be in business intervening and making money for themselves. I pass such views on as the observations they are.
People ask if the European Union does not have a point in inhibiting—if not prohibiting—state aid. Frankly, in this country we are rather good at applying the state aid rules in a ferocious and sometimes rather procrustean way. We could look at the facts about manufacturing at the moment and say, “In any case, hasn’t British manufacturing, buoyed by the falling value of the pound, emerged from the recession leaner and fitter?” Indeed, that is true. Manufacturing is not a disaster story. However, although the sector is leaner and fitter, it is also smaller and continues to be so.
Although I agree that the sector may be leaner and fitter, in some cases that owes nothing to the British banking system. The east midlands is the region of the country with the highest proportion of manufacturing jobs, and car components are part of that. One particular firm looked to its long-term bankers to see it through a difficult period, during which it had gone down from five, to four to three-day weeks, but could continue to trade. Reply was there none. In the end, the firm had to turn to its Indian owners in Mumbai, who saw it through and did a magnificent job in that respect. Foreign ownership is not necessarily always a bad thing and a precursor to an outsourcing of jobs, is it?
I certainly agree with the general point that the banks have not really done their part in resuscitating British industry or keeping it going through the dark days of recession. I am not unkind enough to read it out, but I received an e-mail from someone in manufacturing industry saying that Government schemes have not done a lot more either, and that credit insurance schemes and the like did not really have the teeth that the Government credited them with having.
I counsel the hon. Gentleman not to confuse the number of people employed in manufacturing with the output of manufacturing. We are still the sixth biggest manufacturing economy in the world, and that must not be forgotten.
That is a typically perceptive point from the hon. Gentleman, and one that I had considered enlarging upon, but he must acknowledge that if one claims that industry is just as vibrant but employs fewer people, one would expect to see a big increase in productivity gain across British industry, but I do not think that is there.
There is another thing we need to guard against when looking at jobs. We must accept that in the bad old days of the early 1980s manufacturing jobs would have included the security guard employed on the gate, the lady in the canteen and the cleaner in the factory. Those jobs have now been outsourced. They are totally dependent on the manufacturing economy but are now technically service sector jobs, so we must be careful when talking about employment figures.
That subtlety had eluded me and justifies my opening remark that I will learn as much from the debate as I assert, so I thank the hon. Gentleman.
If Members will bear with me, I want to argue that the Government must do more strategically, meaning that they must do more in the way of having an industrial policy. After all, there must be some explanation why our manufacturing industry has shrunk faster than in other nations, which have all faced the same threat from the Chinas and Indias of the world, and why we may currently be making smaller inroads in the new export markets, such as China. I do not want to argue that the Government must do that, but they are inescapably bound to play a strategic role and cannot avoid doing so. It is inescapable. They must do that either skilfully, or in a ham-fisted fashion.
There are three reasons. The first is that the Government are the sole provider of public infrastructure, which can make a vast contribution to prosperity. Consider the multi-billion pound contribution the Government are currently doomed to make to Crossrail, partly to serve the financial services industry. Consider the protracted delays in projects of a similar ilk in the industrial north and midlands—Members from the north and the midlands present will appreciate that point. I could cite the Olive Mount chord in Liverpool as an example of a small engineering project that, had it been in any other city, would long since have been completed, and I dare say that other Members could cite similar instances from their constituencies.
When dealing with the current public deficit, we should consider the dangers of dramatic and ill-planned reductions in capital spending where that spending actually engineers development and economic growth. Some people believe it does not do that, but there is good empirical evidence to indicate that is exactly what it customarily does.
One has to tie in our poor manufacturing performance—or our relatively poor manufacturing performance, as there are also success stories—with our very poor record on public infrastructure when compared with other European nations. I am not sure where we are in the European league table, but we are certainly far lower than we ought to be. That is the first reason why the Government are doomed to play a strategic role and they just need to play it smarter.
One of the other issues we have failed to address is that our counterparts in France, Germany and even Wales have put in a short-time working subsidy to ensure that manufacturing jobs have not been lost, and that is a decision the Government should have taken. It is still not too late—we have seen France and Germany expand support for manufacturing. Does the hon. Gentleman agree that a way forward would be a short-time working subsidy, rather than Crossrail?
There are difficulties with having an open market in Europe and not having each individual nation subsidising its own industries as it wishes, which would be antithetical to the whole spirit of having a free and open market. However, mechanisms are in use abroad that are well worth inspection by our Government because there are circumstances in which they appear to work.
The second reason why the Government are inescapably part of the strategic plan and cannot but have a strategic economic policy is that they control most of the levers of education and training. That again goes beyond the boost to nanotechnology and bioscience, and events within the golden triangle of Cambridge, Oxford and London. We need a wider range of skills and a wider application of skills to employ people who will not end up as research scientists but who are, none the less, capable of doing a skilled and satisfactory job.
Let me relate an anecdote. I recently attended my local tech college for the opening of a new drama studio by Alexei Sayle. I was delighted to see so many lively youngsters, all of whom could see themselves on “The X Factor”. What slightly worried me was that the same college, excellent though it is, had a very strong reputation for teaching basic apprenticeship skills such as plumbing. I see nothing wrong with people who do one thing also doing another. However, I see something wrong in structuring education for children in such a way that their skills cannot easily be employed in a reliable way in the employment market. To some extent, Government initiatives in education have encouraged quantity rather than quality achievement, but I will not go into that now.
Thirdly, and most importantly, the Government are the principal provider of financial resources to the banks, and they have a right to know where the money is going—how much is going to small and medium-sized enterprises and to manufacturing in the UK, and how far credit lines are being tightened as the banks seek to recapitalise. They have every right to know such information, and they just need to assert themselves to get it from the banks. We are asking not for information about individual contracts with individual manufacturing firms, but for the gross trends to be plotted, analysed and identified and for the banks to be held to account for what they are doing. By and large, we own them, and it is our money that they are using.
Transparency is what it is all about, and a manufacturer, I am sure, would say that they would settle in part for that. However, transparency is not a direction; it falls short of that. Some people have put the case against transparency, but knowing how much the major banks are lending to the manufacturing cause, the SMEs and so on is information that we have the right to know.
The case against direction is also weakening. We have had the spectacle of lame ducks in the City being rescued, but we have decided that lame ducks in the midlands and in manufacturing industry should not to be. We may have done that with a degree of grudging approval because it is necessary, but fundamentally it is being done for economically strategic reasons. My point is simple; there is a major strategic reason for having a sustainable mixed economy. It is what is needed to pull ourselves out of recession. Despite the fact that we are all free marketers, we acknowledge that there is a strategic importance to the defence industry and the agricultural sector. We accept a level of Government intervention in both areas; it is pretty well normal. There is a strategic need for a balanced economy. That should mean, in addition to all the points that I have made so far, having a hard look at the overweening influence of the retail sector, in particular of the big supermarkets, on manufacturing, because it now controls the production chain in ways that make it difficult for large manufacturers to make a decent return on investment. I understand that the Conservative party has recently spoken about breaking up the big supermarkets, and that is something all parties should seriously consider.
Careful listeners will have picked up a northern bias in my remarks, for which I do not repent in the least. It is not only me; the manufacturing industry says that, for too long, the City and manufacturing industry have travelled different roads. Now might be a good time to reflect on where each sector is going, because the Government have a role to play as a marriage broker that influences the banks—perhaps even creating new banking facilities such as an infrastructure bank—penalises short-termism in investment and that ensures, I repeat, transparency.
I am genuinely comforted—even though few people are—by the remarks of Lord Mandelson, who seems to embrace and accept an aspect of strategic economic planning. If he is a convert to my way of thinking, I just hope that the conversion is not too late. I press upon Members the need for a balanced economy for the United Kingdom that involves, for some time to come, a good manufacturing sector.
It is a pleasure to follow the hon. Member for Southport (Dr. Pugh) and I congratulate him on choosing this subject for debate. As all hon. Members will know, my constituency is dominated by significant manufacturing enterprises, many of which have been incredibly successful despite the recession. I shall concentrate my remarks first on Vauxhall, partly on Shell, then on downstream chemicals and finally on small and medium-sized enterprises. I will illustrate by way of example when I agree or disagree with the hon. Gentleman.
To put down one little marker, I wish to remind the hon. Gentleman that it was his party’s economics spokesman, the hon. Member for Twickenham (Dr. Cable), who argued against the Government having involvement in what turned out to be the Vauxhall rescue, and a very successful rescue it has been. That came about as a result of an extraordinary partnership, and my hon. Friend the Member for West Bromwich, East (Mr. Watson) was absolutely right: it was a classic illustration of how new trade unionism—working with the Government, the management and the regional development agency—has transformed what looked like a desperate situation into one of stunning success.
Not only do we now have a commitment to the volume of vehicles that we believe is necessary to maintain job security in the medium term, but it puts us into a very competitive position from which we can launch a bid for next generation vehicles being manufactured in the UK. That really must be a goal that all parties represented in this Chamber acknowledge as worth while. We should not shy away from the fact that action has been the result of close working.
Although some fairly sharp words have been spoken on the subject during the past year, I heard Tony Woodley, general secretary of Unite, who happens to be one of my constituents, praise the role of Lord Mandelson. I also saw the same general secretary with his arm around the Vauxhall chairman, Bill Parfitt—a great man—talking about how the strategy, working together and partnership have been crucial in recovering the situation and turning it to one of UK advantage. We must not forget that. Twenty years ago, that company was in serious trouble. Let us not kid ourselves.
The transformation from the brink of failure to the high quality and high productivity that exist on the site has come about through partnership—not top-down solutions or one-way streets, but close partnership that has involved people being committed to training to the nth degree, achieving skills that have never been known in that industry and the acceptance of technologies never thought of.
My hon. Friend has made absolutely the case for the car industry. Does he not feel a little embarrassed, as I do, that Ministers ride around in Japanese cars involving not one British product or British job? Is it not time to go for the new Astra and ensure a commitment to British manufacturing?
I am grateful to my hon. Friend for allowing me to mention the fact that I am the only Minister in history to argue with the head of the Government car service for a smaller car rather than a larger one. I wanted one made in Britain. Would my hon. Friend like to hear from Members on both Front Benches a commitment that, should they ever find themselves in government, they would be driven in a British-assembled, not an overseas, car? That is an important point: procurement policies in the public sector can further help British manufacturing.
Today, the Home Secretary announced a policing White Paper. His central message was that we can make savings through procurement, but what we need is the transparency that the hon. Member for Southport (Dr. Pugh) discussed. We need to know how much police authorities are paying for their vehicles so that we can be certain that they are not just buying BMWs because the chief constable fancies one.
I could not agree more with my hon. Friend. One would think he would have argued for a larger car, but he took the honourable route, and I congratulate him on that. I would like to hear Members on all three Front Benches give the commitment that he seeks.
I am grateful to the hon. Gentleman for giving way in this interesting and excellent debate. As Northern Ireland’s Finance Minister, I was driven around recently in a Skoda, of all things. I was keen that we should move to UK-manufactured vehicles for Ministers—not only here in Westminster but in the regions.
The hon. Gentleman mentioned partnership, new trade unionism and so on. Will he join me in paying tribute to the work force of Bombardier Shorts in Belfast, the biggest manufacturer in Northern Ireland? They have a fantastic relationship with the management there and have done tremendous work to promote and benefit the company, and to make it what it is now: one of the best sections of Bombardier in the world.
I agree totally. I go back way before the hon. Gentleman to my dear old friend Harry Cavan, who, sadly, died a few years ago, and whom the hon. Gentleman might recall. He was famous for being vice-president of FIFA as well as a great trade unionist. Harry and I often talked about those issues. It is critical to a renaissance of manufacturing in our country that we carry on such partnership work.
My current car is a Rover ’75. It is aging but not quite of scrappage age yet. My wife, a councillor, drives it most of the time. Each weekend when I go home, the most effective way to get around is to hire a car. The car that I am most often given is a Vectra. It is an excellent vehicle. The point that needs underlining is that this is about not ownership of the companies, which is nearly all foreign, but the fact that the cars are made in this country. They are made in this country because we are one of the world leaders in automated technology. That point needs to be underlined far more often.
I do not want to be pedantic, but I remind the hon. Gentleman that his Vectra is almost certainly German-built if it was manufactured after 2007. However, that is neither here nor there, and I take his point. That is two Front Benchers down; perhaps the other two will come in and agree on it.
Training, as I have said, has been a critical part of the Government support that put us into a position to bid for the new Astra, which is just coming on-stream. I think that £8.7 million came into that package in the partnership between central Government and the RDA. The RDA has played a crucial role in keeping the mood music right, not only in the relationship with the company and central Government, but in keeping the network of suppliers supported in the way that was necessary during what was a critical time. I question whether we would have achieved the success we have had without the RDA’s involvement.
Some serious issues are involved, and the hon. Member for Southport referred to the example of his piano. One thing we must realise is just how cheap it is to ship things around the world. A container ship full of cars is now moved around the world for the cost of six Filipino salaries and the bunker fuel necessary to move the ship. It is very cheap to move cars around. They are now global commodities and if we are to succeed in the world that is facing us, we must get a leading edge. For example, we must pitch in for the next generation vehicles, working towards electric vehicles and vehicles powered by fuel cells. I know that my hon. Friend the Minister understands that. Unless we mark out a clear pathway towards those goals, in 20 years we will not have a vehicle industry.
Of course my hon. Friend is completely right, and that work is exactly what the Government are doing with the low-carbon region in the north-east and what has been done with Nissan. For the benefit of the debate, let me say that the last time we had a debate on this subject my hon. Friend the Member for Chorley (Mr. Hoyle) intervened on me and I explained that my ministerial car was a Vauxhall Vectra. I have now changed my car, and following my hon. Friend’s words of just a moment ago, it is perhaps a good thing that it is now a Toyota Avensis, which was assembled, of course, in the UK.
A Toyota Avensis is perfectly acceptable, but we must remember how complex the global car market is and how, in the last 15 years, the pressure on UK manufacturers has been intense because of the globalisation of the industry.
The hon. Member for Southport is right to talk about short-termism; that has been an endemic failure of the British economy. The Prime Minister, when he was Chancellor, set in train events that have started to deal with short-termism, but it is still an underlying problem and I will refer to it briefly in a moment in the context of the banking industry.
I want to make a final comment about Vauxhall. I agree with the hon. Member for Southport about infrastructure; we need to work hard to put ourselves in a competitive situation by getting the infrastructure right. The General Motors plants in mainland Europe make inter-plant transfers entirely by railway. We cannot do that in the UK. Sadly, when the previous Government privatised the railway system, no pressure was put on the rail freight system to create the type of rolling stock necessary to keep the pressure off the motorways. As a consequence, all the inter-plant transfers made in the UK and between the UK and Germany, Belgium and so on are all made by road. That is absurd in this day and age. We ought to have that freight back on the railways.
If my hon. Friend the Minister could lean on his colleagues in the Department for Transport, my plea would be for them to look carefully at the rail lines that go from south of the Mersey and link with the west coast main line, and to examine the freight opportunities that could alleviate the pressure on the northern end of the M6. That is not the subject of the debate, Ms Whalley, but I am sure that you will appreciate from your constituency standpoint the importance of those remarks.
Things have changed dramatically in other industries, too. Massive global enterprises—for example, Shell—are up for sale. Royal Dutch Shell, an Anglo-Dutch company, is up for sale. The preferred bidder is a company called Essar, an Indian conglomerate, which believes that it can transform the manufacturing capacity of the Stanlow refinery and make it a profit centre. That remains to be seen. There are also enormous pressures on the downstream sector.
One result of the recession was that the first companies in the petrochemical sector to take a hit were closely allied to the motor industry. For example, Cabot Carbon went because the demand for tyres fell—carbon black is an essential component in the manufacture of tyres. We will not recover such industries. To replace them, we will have to go for the high-added-value, high-tech end of the market, rather than those basic downstream chemical companies.
A large automotive company in my constituency builds vehicles. It largely Scottish-owned and its Scottish chief executive is Mr. Robertson. ADL, formerly Alexander Dennis Ltd, builds buses. We heard earlier of hybrid vehicles, many of which are built abroad, but ADL’s primary product for the future is the hybrid bus. It could replace buses of the sort that run in London, which are made by the same company.
Does my hon. Friend agree that the Government could do a great deal to encourage buyers? Councils and local authorities throughout the country use buses and might seriously consider investing in hybrid vehicles. Although in the first instance they will be more expensive and may appear an unattractive proposition, they will be much more attractive in the long run.
My hon. Friend is absolutely right. We have seen examples of work being done on hybrid vehicles and alternative transport in the north and in Scotland, down south in Ricardo’s, and in the M25 ring where the Formula 1 market is so strong. Work is continuing with KERS—the kinetic energy recovery system—which worked so well for McLaren, but we need to transfer that technology to vehicles such as London buses. There are huge UK successes, and we must ensure that the Government support them through development and into manufacture.
My final comments will be about small and medium-sized enterprises. The real pressure in my constituency has been on SMEs. There have been problems with the banks, and some of them have promised that they will try to do better. My hon. Friend the Minister needs to use his influence and put pressure on the banking industry—Regional Ministers should do so at regional level—to ensure that small supply chain companies do not lose out. This is a critical part of the equation.
The other day, I visited a company in my constituency that is suffering as a result of the banking crisis; dozens of SMEs that have not approached me are likely to be in a similar situation. However, it is not all doom and gloom, and there are some very successful SMEs. I visited a pharmaceutical business in Neston a couple of weeks ago. Pro-Lab Diagnostics is extraordinarily successful and produces infection testing kits for virtually every NHS trust in the country. Such companies need nurturing, because they are the future of the SME sector, which consists of small specialist companies that have grown from brilliant ideas and been turned into manufacturing operations. It is critical that the Minister’s Department is seen to be supporting such companies, but so should the banking sector.
It is not all doom and gloom. There are some great success stories and we should be proud of them. All of us—Government and Opposition Members—must give our maximum support to manufacturing to ensure that it is around for our children’s benefit.
It is good to see you in the Chair, Ms Walley. It is a pleasure to speak in such an important debate, and I congratulate the hon. Member for Southport (Dr. Pugh) on securing it.
The debate could not have been better timed, as we see that manufacturing continues to struggle. There seems to be a renaissance in government, as the Government now realise that manufacturing is important. If nothing else, the recession should have told us one thing: service industries and finance are important, but in the end it is manufacturing that keeps our head above water.
The reason why we have not come out of the recession as quickly as other countries is that we do not have the manufacturing base. France, Germany and Italy have invested in manufacturing, and so have other countries around the world, because everybody else has recognised the importance of manufacturing. I hope that we have recognised that failure, although I say that not only about this Government, but even more about the previous Government, who dismantled manufacturing—indeed, they made an art of closing manufacturing. All of us here can agree that manufacturing is important, that it is back on the agenda and that it is something that we will build for the future.
In Chorley—great constituency that it is—we are lucky to have Alan Jones as chairman of the local strategic partnership. He is a manufacturer; he owns a company called Porter Lancastrian. He bought a huge site for his company, but he did not say, “This is mine and nobody else’s.” He has encouraged small businesses to come on to the site to develop manufacturing. It is important that we have an entrepreneur who is willing to help others through difficult times and to share problems. I am pleased that we have somebody who is committed to manufacturing in the way in which we have seen in Chorley.
My hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) rightly mentioned the importance of the car industry, but this is about more than the car industry—it is about vehicle manufacturing. The coach, bus, truck and car industries are all important. Britain’s last big truck manufacturer is Leyland Trucks—that brand name is known all around the world—and we cannot afford to turn our backs on it in its hour of need. It has been a successful company, and it is part of the American company PACCAR, but it is important that we make sure that truck manufacturing continues in this country. Leyland has developed a hybrid truck. It has also developed the idea that when someone buys a truck, the company will put on the body and complete the truck to the customer’s requirements, so that the customer does not have to take the truck from A to B to have the bits put on. Leyland is forward thinking. It recognises that the environment and global warming are significant, which is why the hybrid truck that it is developing is so important for the future and for global needs.
It was right for the Government to invest in the car scrappage scheme, which has made a real difference to manufacturing. Although the scheme has helped a lot of overseas manufacturers—that is the price—it is keeping people in jobs in servicing, in sales and in the showrooms. However, we are nearing the end of the scheme. At the Labour party conference, we said that we were committed to putting further money into the scheme, and I am pleased to see that that has happened. However, we are on a countdown, and it is worth putting in more money to make sure that we do not leave a void and undermine the success that we have seen by ensuring that production continues. It is important for UK production that the scheme stays in place, and I hope that the Minister will reflect on that plea.
Cars, trucks and buses rely on components, so we have to invest in that sector, too. The odd thing in relation to Leyland Trucks is that we build the trucks, but we do not build the cabs, which come all the way across from France to go on a truck at Leyland—that is silly. We should be telling the Minister that now is the time to put in the investment to attract component manufacturers back. If those cabs were built in the UK, that would make a real difference. We should be attracting these things back from France because the time is right. People moved away when the pound was strong and the euro was weak, but things have now reversed, so it is time for the UK to take advantage of that. This is about making sure that manufacturing is in all parts of the UK. We should be working even harder than we have done so far.
We talk about research and development, and it is important. We talk about its role in the success of Dyson, but that company does not manufacture in the UK—Malaysia was the answer. Dyson might have been the darling of the Conservative conference, but the bottom line is that I do not want darlings who take manufacturing abroad—I want people to manufacture in the UK. We have given tax breaks and supported R and D, but we want the manufacturing to be carried out in this country. It is important that that happens, and we have to strengthen the manufacturing base using R and D.
I note the importance of the scrappage scheme, but the hon. Gentleman must see that that was only ever really a temporary expedient. None the less, it opens up a new avenue for British industry that the Government need to take very seriously—the remanufacturing industry. The more scrappage there is, the more metal there is that can be used for other purposes and reprocessing. Surely there is a case for making the UK a leader in remanufacturing as well as manufacturing.
Absolutely. We know that the car scrappage scheme will run out, because 10 years is 10 years—there is no way around that. Of course recycling is important and it is not right to send materials all the way to China only for them to come back as a finished product. We ought to develop manufacturing in the UK using that recycling. It would also clean up the environment by ensuring that CO2 emissions were reduced, which is why it is so important.
My hon. Friend makes a very important point about the strength of the pound. However, there is a wider point that I realise might be difficult for both Front-Bench teams to deal with. Manufacturers worry about exchange rate volatility. Many of the big manufacturers—Toyota and others—argue that the solution would be to join the euro. Mr. Dyson, the darling of the Tory conference, is on record as saying that we should join the euro, because our country’s position was a factor in his decision to move jobs abroad.
I am not a great fan of joining the euro—I had better spell that out at the beginning. What I would say to my hon. Friend is that I have not heard Toyota in the last 18 months shouting too loudly about joining the euro. In fact, it has gone very quiet about that. He is absolutely right that we see major companies using a dollar premium in order to project where they will be. Regardless of whether there is a euro, pound or dollar premium, that will always continue for major industry.
Of course, it is right that we still have leaders. I talk about leaders—aerospace with BAE and Shorts—and we must not lose sight of where we are a world leader. We are in danger of turning our backs because we feel embarrassed. We should never be embarrassed about our manufacturing. We have got to continue to invest, whether in military or commercial manufacturing. The fact is that technology transfer will come from military aircraft to develop jobs, quite rightly, in the commercial world. We have got to take advantage of that.
BAE is important. We ought not to allow Woodford, Samlesbury or Warton—any of those sites—to close. Aerospace matters, just like transport matters. It was a bad and silly mistake for the Government to buy Japanese trains—Hitachi express trains. Would it not have been better to develop trains in the UK? People say, “What is the advantage?” I will tell hon. Members what the advantage is: it would not be short-term gain for a little bit of financial expenditure, but the fact that we could build trains for the future. We could export trains, because they would be the trains required around Europe and throughout the world. The fact is that if we do not build them, we cannot export them. A bad mistake was made, and we must learn from such mistakes when it comes to procurement. We can have great times by getting things right.
I hope that the Minister has taken on board what all hon. Members have said, because it is important that we all stand together for the future of UK jobs. I believe that the time is now right to call for a national job summit. It is important that we have a national job summit with the trade unions, industry bosses and the Government getting together and asking what we need to be best placed as we come out of the recession. That is what we, as a Government, should be doing. I hope that we will have a national job summit that brings the best together for the future.
The Government have an excellent record on investing in apprentices, but that investment must not lead to something like the youth opportunities programme under the Conservatives. This must be a real apprenticeship scheme with real jobs at the end of it, and that is why we must invest in manufacturing. That is why I say to the Minister that it is not too late to put in a short-time working subsidy. Such a working subsidy would make a real difference by keeping people employed in their working area—in their environ. We could retrain people and subsidise that retraining, rather leaving people to go on to a dole queue, because I see no benefit in subsidising somebody at a jobcentre who will be retrained only six months later, although they already have the skills. That is absolute nonsense. I hope that we can recognise what such a subsidy has done for France, Germany and, more particularly, for Wales, where it has made a real difference to their manufacturing. We can do this—we must do this—so I appeal to the Minister for a national job summit and short-time working subsidy so that we ensure that we have a strong manufacturing base for the future.
Of course, we still have great names in pharmaceuticals, and we have Rolls-Royce. I say to the likes of Rolls-Royce, “You claim to be a British company; prove your pedigree and your credentials.” Of course it has sites around the world, but we see more and more transfer overseas. It is a retrograde step for Rolls-Royce to say on the one hand, “We are British,” but on the other hand to be investing abroad.
Rolls-Royce is an extremely important employer in my constituency, as it does all the work at the Royal Navy training establishment, Vulcan, which is a reactor testing site. Vulcan is being decommissioned and Rolls-Royce has decided to maintain all the work force and base its civil nuclear industry there, on the sensible grounds that the human resource is most important thing that it has. The human resource lives there, so it is moving the office to the people, rather than the other way round. That is a very forward-looking decision, and I hope the hon. Gentleman will congratulate the company on that.
I do congratulate the company on that. It is a sensible business decision to stand by loyal employees who have helped make the company. I will, however, give the hon. Gentleman an example of where the company did fail the people. Rolls-Royce Energy, which produces engines to move gas around, had a plant in America and a plant in Liverpool. Guess which one it closed? The one in Liverpool. That is what I say about Rolls-Royce. Of course, R and D has been moved to Germany, as has the European end of the deep maintenance of engines. I think that all that should be done in the UK. The company might say that its approach gives a financial gain to shareholders, but there are times when shareholders ought to look a little bit further than the 12-month dividend and towards a long-term future in the UK.
I understand the point the hon. Gentleman is making. However, I read that Rolls-Royce executives gave the following reason for the move to Germany:
“The Germans value manufacturing. There is better productivity and they have a better education system. Government [here] has chosen not to be competitive. Britain has caused this industry to export its capabilities.”
Is not the hon. Gentleman disappointed with his own Government?
I am sorry that the hon. Gentleman believes what he has just read. If we are truthful, the German question was about money. It was about how much of a carrot was being dangled in front of Rolls-Royce, and the carrot just happened to be bigger in Germany than it was in the UK, because otherwise the choice would have been the UK. I say to the company that short-term gain is long-term loss to the UK. Unfortunately, it went for the bigger carrot at that time.
That is the problem with global companies. They have no responsibility, or no morals about the people who made that company great. It was this Government and this party, along with others, that made sure that Rolls-Royce existed and it ought to remember that. When it went bankrupt, it was a British Government who bailed it out, yet now it goes for the bigger carrot. We can all pick different reasons. The company has also invested heavily in Singapore. In fact, Singapore and the UK are the only places that can build a complete new Trent engine. It cannot be built in Germany, but it can in Derby. Singapore and Derby are the only places where the company can build those big engines. What does that say about education, work skills and manufacturing? As I said, we can all cite different reasons but, unfortunately, the truth is that firms go with whoever dangles the biggest carrot, which is a retrograde step.
I hope that Rolls-Royce will remember that when it says it is British, it means it is British. Rolls-Royce is the second biggest jet engine company in the world and has a fantastic name. I am proud of British manufacturing. I hope that we ensure that this country continues to manufacture—but greater and bigger—and that it invests in the new ships that are required. We ought to be building a manufacturing future in this country.
It is a great pleasure to appear under your chairmanship, Ms Walley.
I congratulate my hon. Friend the Member for Southport (Dr. Pugh) on securing the debate. I shall come back to his remarks in a moment, but first I must say that it is always a great pleasure to follow the hon. Member for Chorley (Mr. Hoyle). I vividly recall his debate in this Chamber on 9 June, when many of the same points were made. He mentioned at the beginning of his interesting speech his constituent’s willingness to collaborate and to welcome others on to his site. He might be interested to read a recent CBI publication about the shape of business in 2020—a think-tank work aimed at showing how business will change. One of the most interesting points in it is that business will become collaborative: rather than having, as now, a big blob that deals at arm’s length with all the little blobs, there will be a cross over, and some financing will come from the bigger commissioning companies through the suppliers. What the hon. Gentleman said is early evidence of that.
I also congratulate the hon. Member for Ellesmere Port and Neston (Andrew Miller) on his remarks. I am most grateful to him for the compliment that he paid me in suggesting that I may one day have the power to make a decision about a ministerial car—a decision I look forward to eagerly. More important, his remarks on small and medium-sized enterprises were apposite and good.
Ah, it is the festive season, when one knows there are invitations one must decline.
The hon. Member for West Bromwich, East (Mr. Watson) made some important points about the relationships in modern industry, including the fact that unions have radically changed in the past 20 years and approach most of their dealings in a highly constructive manner. He would probably agree with me that management has also changed—it is a jolly good thing that it has—and is far less confrontational, understanding the importance of people, and the need to work in partnership.
To return to the remarks of my hon. Friend the Member for Southport, I thank him for raising this important debate. Those of us who are keen on manufacturing and think that it is important to this country are right to keep turning up at debates—it is often the same people who turn up—to make that argument. My hon. Friend spoke about the need for Government to act on a more strategic level, and I agree completely. To a certain extent, to be fair to the First Secretary of State, it is true that he has a strategy, which has seven drivers—I am sure that the Minister will talk more about that—but it seems to me that we should consider the fundamental role of Government and how it touches on all business, including manufacturing.
The need for regulation is obvious: we must have sensible regulation and a level playing field. We must have fair taxation, and the direction of travel must be set out clearly. The aspect of Government’s role that is not often picked up, although several hon. Members did mention it today, is what I call the common infrastructure—the infrastructure of roads, rail, sewers and utilities. That can in some instances be provided by the private sector, but it is really down to Government to ensure that provision. I hugely regret the fact that, as the hon. Member for Ellesmere Port and Neston said, we have not used the opportunity to increase rail freight; we have neglected that aspect of infrastructure. I hope that all future Governments will consider rail and what can be done to move goods by rail.
I think that my hon. Friend was just a touch pessimistic, because I think that manufacturing is at heart a good-news story—or should be. It is a very British characteristic to talk about doom and gloom and to say that it is all mucky people in overalls and nothing gets done. Nothing could be further from the truth. We are the leaders in many areas of manufacturing industry and technology. In my part of the world we have world-leading companies in the civil nuclear field and marine and tidal energy. We have fantastic facilities for subsea—Aberdeen is the subsea capital of the world and just outside Wick, Subsea 7 has an important base. Believe it or not, we also have the leading European manufacturer of nail varnish in Invergordon, which, interestingly, has seen a great improvement in its trading conditions this year. All the supplies that were coming from China and took six weeks to deliver by sea have lost out, because that company can deliver in three days from Invergordon. In managing stock and cash flow, it is more important to be able to order in three days and know that there will be a delivery than have a six-week lead time. That is important and makes one think about some of the received wisdoms, which are not necessarily true.
This country has the sixth largest manufacturing industry in the world, accounting for just over £150 billion in 2008. Depending on whose figures we believe, manufacturing employs between 2.7 million and 3 million people. It is absolutely right to say that there has been growth in real terms, but in relative terms, there has been a decline, particularly in the number of people employed, down from more than 4 million a decade ago. Part of that is because industry has become more productive: there have been huge productivity gains throughout much of manufacturing industry. Part of it, I am sure, as the hon. Member for West Bromwich, East said, is because outsourcing and the definitions therefore becoming narrower. However, part of it is because there has been a decline—a decline that I would like to see reversed.
I would also like to see the world-leading industries that we have maximised. At the Society of Motor Manufacturers and Traders dinner last week, I sat next to a gentleman who started a company making electric trucks. I am sure that many other hon. Members will remember his name, but it escapes me at the moment. The interesting thing he told me was that he had developed the prototype in the UK but, having done all the work, he was going manufacture in the US, because that was where he had found a market and where he had been given the grants to go. That is where the Government should be looking—the reasons why that is happening and why great British innovation is not being captured here to become great British enterprise.
There are three drivers for the future: finance, innovation and skills. In the couple of minutes left to me, I shall touch briefly on each. First, the banking crisis has shown us clearly that we should not, and cannot, depend on financial services to be the bedrock of our industry. We need proper, mixed and sustainable industry, of which manufacturing will be a critical part. Secondly, we have learnt that capital is a scarce resource, and if it is being consumed in never-ending circle of speculation in the City, it is not available for investment. What we need is investment in commerce and industry. The third lesson that we have learnt is that the days of large debt for everything are over. We need more equity at every level. There is a whole debate on that subject, so I will leave it at that and move on.
On innovation, we have superb R and D in this country, whether it is on the work bench or in the universities, or the guy working down the bottom of the garden in his shed. What we do not do nearly so successfully is convert that innovation into small and medium-sized businesses. That is partly about finance, but partly about ensuring that the right skills are there. We need to support R and D and innovation, and we need to do more about moving companies from that early stage to the next one.
Yesterday, here in the House of Commons, I attended an event for the Engineering and Technology Board being renamed Engineering UK. The people there told me things that I think I already knew to a certain extent. They claimed that manufacturing is responsible for 55 per cent. of British exports—my hon. Friend the Member for Southport said it is 46 per cent., but whichever it is, it is still a very big number. What struck me, however, was their estimate that by 2017, we will need 587,000 more engineers—roughly 80,000 a year—whereas, on the other side of the equation, we are losing 30 per cent. of our further education lecturers, who are retiring and are not being replaced, and we have a 17 per cent. drop in the number of students. There are tremendous opportunities—for example, the green economy is estimated to be worth something like £3 trillion in the world as a whole. The UK is well placed to have a slice of that, but I believe that, unless we take proactive decisions—on financial support, for example—to encourage people into engineering and technology, we will simply not have the well trained people who will be the bedrock and raw material of our future progress. That is the single biggest challenge that we face.
I am, and always like to be, optimistic. We have great people and skills in this country. We also have, as I have briefly outlined, some great challenges. We need a secure manufacturing base, and, in my view, we need it more than we need a financial services industry. The sooner we get that, the better.
May I share in the congratulations to the hon. Member for Southport (Dr. Pugh), who secured this debate? He gave a very thoughtful analysis—he always does, but this one was particularly thoughtful. Although his father may not necessarily support his vocation, I am sure that he would have been very proud of the hon. Gentleman’s helpful analysis of the manufacturing sector’s needs and challenges.
As we have heard, British manufacturing has faced a turbulent time in the past year: investment has been cut, production is down and productivity has weakened in a number of sectors. Moreover, more than 280,000 people in manufacturing have lost their jobs in the past year alone. The problem, however, did not start just 12 months ago. Since 1997, 10 per cent. of manufacturing businesses have closed and more than 1.5 million manufacturing jobs have been lost. There has been some frustration among leading industrial businesses about the current Government’s policies.
I believe, as most participants in this debate have said, that manufacturing has a future in the UK. It represents more than 12 per cent. of our gross domestic product and produces more than half of our exports, so it helps us pay our way in the world. This country also remains, as we have heard, the sixth largest manufacturing nation. I totally endorse the arguments about partnership between employers and employees. That is a good sign that we should all encourage.
It is clear, however, that we must not now believe that we can return to the period before the recession and simply rely on financial services alone. I think that we have all learnt that lesson. For my party, that means putting manufacturing back at the heart of the economy. It is time we made more, and it is time we exported more. I also want us to be willing to be more challenging to make this country more competitive. For some time, Germany has been the leading European exporter of high-tech goods and services. It is time that that changed. That is why we took a decision at our conference—we had been mulling it over for a period—to set ourselves the goal, should we be elected to office, of setting a target for this country to overtake Germany and become Europe’s leading exporter of high-tech products. Rather than being third or second under whichever party has been in office in the past, we should now aim to be first. To fulfil that goal, we need a clear, long-term strategy based on increased investment, technological innovation and raising our skills base. Those changes are going to be vital if we are to ensure that manufacturing can turn from recession to a sustained recovery.
Let me begin by talking about finance. Several hon. Members have mentioned the importance of access to finance. Despite the claims of the leading banks, I think that there remains a gap between their rhetoric and the reality for many firms, especially smaller businesses in industrial supply chains. As the hon. Member for Southport rightly pointed out, the current Government’s response with a number of schemes has failed to overcome the problem for many of those firms. We have argued that the schemes are too complex, too many and too narrow. Time and again, businesses tell me that they are too small for one and too large for another. The £1 billion portion of the automotive assistance programme, for example, was announced on 27 January 2009 and, as we head towards Christmas, only one company has been offered any money to date. Indeed, there are now reports that that company, Jaguar Land Rover, may have actually decided to decline that money, because it can get better terms elsewhere. Perhaps the Minister will confirm whether that is true in his response.
I am grateful to the hon. Gentleman for giving way, but does he not think that a company’s being able to secure finance external to the state is a good thing and that we should congratulate Jaguar Land Rover on being in a position to do that? It means that the Government’s limited resources can be invested in other strategically important sectors.
I am always delighted to see businesses secure finance, but why have the French and German Governments been able to deliver that money while our own Government have failed to deliver to even one company? That is my point. During a recession, it would have been far better to have a single national loan guarantee scheme—we and others have argued for that—worth £50 billion, which would provide the opportunity to underpin bank lending, for whatever size of viable firm in whatever sector. As we move towards recovery, other problems with the schemes emerge. We have learnt that the top-up credit insurance scheme has failed. The capital for enterprise fund has so far—11 months on—helped seven companies, and I gather from business that there is a concern that the future of the enterprise finance guarantee scheme is uncertain. We know that the scheme is due to finish in March, but what happens then? Perhaps the Minister can tell us what exactly is planned for the scheme after March. Industry needs to know.
As the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) rightly pointed out, long-term debt finance is not the only issue; equity is crucial. That is why I happily welcomed the principles that underscore the national innovation investment fund, with which the Government are now moving forward, and why we have worked with the stock exchange and others to establish a new environmental opportunities index so that we can make London the global centre for green technology, which in turn helps manufacturers as well.
That leads me to the broader question of how we encourage technological innovation. We can all see that manufacturing is changing, and a critical issue is how the globalisation of production—especially of components —changes the nature of what is and what is not British, and changes how we ensure that industrial policy is effective. For small manufacturers, the challenge of accessing global value chains in emerging high value markets is a problem, and I think that the Government can help in that area. Conservative Members agree with the emphasis on strengthening the supply chains in the automotive sector, which has recently been proposed by the new automotive innovation and growth team. That is a good idea, and we want to collaborate to ensure that it happens.
Skills have been mentioned already, and they are important because they concern the longer term. The Government have taken many initiatives, but, despite the flurry of activity, we have seen the decline of real apprenticeships based in the workplace. That is why the Conservatives, if elected, intend to provide £775 million to expand workplace apprenticeships significantly. They would apply to all ages and assist companies in helping their staff adapt and change for the future. In practice, we would be able to create an extra 100,000 apprenticeships in any one year. As part of that, and crucial to the supply chain we mentioned earlier, we want to ensure that we can help small companies, and will therefore provide a £2,000 bonus for every workplace apprenticeship that a small business creates. To help clusters of such firms, which often say to me, “How do we then manage those apprenticeships?”, we will provide an additional £5 million so that they can create their own group training associations. All those steps are practical and will make a real difference.
A number of apprenticeships were established as part of the contract for building my further education college, but unfortunately local Conservatives argued against that because they regarded it as an interference in the market. The hon. Gentleman must stop local Conservatives doing that.
I am not going to get into a debate with the hon. Gentleman about what does or does not happen locally. I do not have the background. I have set out clearly where we intend to go nationally, and that is the direction we will follow.
The past year has been traumatic for many manufacturers. We have seen thousands of jobs and hundreds of good firms lost, but British industry can pull through. I started my business at the bottom of the previous recession, and I have learned that firms that come through this period will emerge—the phrase was used earlier—leaner and stronger. The Conservatives want to help. We want to improve industry’s ability to access the finance it needs, to create the best environment for turning bright ideas into profitable ventures, and to provide industry with the skilled work force it requires to adapt and grow. Those are the Conservative plans for the future; let us now hear from the Government how they intend to unpick the mess that they have created.
As usual, we have had a partisan contribution from the hon. Member for Hertford and Stortford (Mr. Prisk). However, I will reply to the hon. Member for Southport (Dr. Pugh), who secured this debate, rather than dance to the tune of the hon. Member for Hertford and Stortford.
We have heard a characteristically partisan contribution from the hon. Member for Hertford and Stortford (Mr. Prisk) in what has been a great debate. One thing that he did not commit himself to—in the unlikely event of becoming a Minister—was being driven in a British-assembled car. There are British-assembled Minis in the fleet. Would he like to commit to that now?
I am glad that the hon. Member for West Bromwich, East (Mr. Watson) is keen for me to take office when in government, and I certainly look forward to the day when I do. I am visiting Aston Martin, Mini and Jaguar Land Rover in the next couple of days—[Interruption.] The hon. Gentleman is tempting me. All I will say—if I can keep in order—is that the broader and serious point about Government procurement is right. If I am elected—I welcome the hon. Gentleman’s support for such an event—and if I have a Front-Bench role on such issues, I will talk to the Government car service to see whether we can change the approach in future.
We now know that the hon. Gentleman has an image of himself in an Aston Martin. Perhaps he is thinking of a position in the security services, rather than a position as Minister. I had better move on before you stop me, Ms Walley.
I congratulate the hon. Member for Southport on securing the debate and on his thoughtful—might I say Socratic?—contribution. He laid out his arguments in a dialogue, rather than in the standard partisan fashion that we have heard in other parts of the debate. It was a very thoughtful contribution.
The hon. Gentleman admitted, very honestly, that he had had to do research to acquaint himself more deeply with the particular subject. The only thing that I would say to him is that he might have missed some of the more recent developments in Government to do with the industrial activism that he called for in his contribution. We have to find a happy medium between the free marketeers on the one hand—we are not all marketeers now—given the damage that going too far in that direction has done to our manufacturing economy, and, on the other hand, the kind of command economy that we do not want, which would simply produce all left shoes from the same factory. If he looks at the “New Industry, New Jobs” White Paper and the skills strategy, which the Government recently issued, he will see that the philosophical approach to manufacturing industry that he advocated is quite central to Government thinking.
My hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) made an extremely informed contribution to the debate, as ever. He displayed his deep understanding of industry, particularly the motor industry, and also called on the Government to maintain pressure on the banking sector. The Government are still doing a lot to ensure that that sector comes up to the mark. He said that it is not all doom and gloom, and I think that he is right. Confidence is important at this point in the economic cycle. We should have confidence; there are signs that we are moving in the right direction and there is certainly a bright future for British manufacturing.
When we last debated the subject, my hon. Friend the Member for Chorley (Mr. Hoyle) slapped a preservation notice on me because I was in a British car. Thanks to his efforts, I am still here. I thank him for that. He was right to point out the renaissance in Government of the idea of industrial activism and of a positive manufacturing strategy. He made some powerful points about Rolls-Royce, the obligations of companies and the need to take the longer view. We are learning that lesson in Government. The rush to divest ourselves of assets in the ’80s and ’90s may have left the Government without the levers that they need to be able to pursue the industrial activism that we have been discussing. We rue that selling of the family silver, as a former Conservative Prime Minister once put it. I note my hon. Friend’s call for a national jobs summit, and his call for a jobs subsidy; he made such a call last time, too. I cannot currently guarantee that, but I heard his observations.
The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) made an extremely perceptive and thoughtful contribution. He has a great deal of business experience. He made perceptive observations about world-leading British manufacturing, the importance of the green economy and the importance of the sort of proactive decisions that have to be taken—the sort that we have taken through our skills strategy. If he looks at the skills strategy, he will find that he is able to support the development of the new technician class, which the Government seek to develop through that strategy.
I should like to refer to the other hon. Members who contributed to the debate, including my hon. Friend the Member for Falkirk (Mr. Joyce). My hon. Friend the Member for West Bromwich, East (Mr. Watson), informed us of some of the reasons why, statistically, we should not be so pessimistic about jobs in manufacturing. Some of the jobs that have been outsourced might previously have been counted as manufacturing jobs, but although they were important, they were, in fact, ancillary to the direct activity of manufacturing.
I should give the hon. Member for Hertford and Stortford credit for recognising the importance of apprenticeships, which his party left to wither on the vine, so that they were almost at the point of extinction by 1997. Rather than apprenticeships declining, as he suggested, they have been rescued by the Government. Only 75,000 apprenticeships were in place in 1997, and two thirds of them were not even completed. The completion rate for apprenticeships was a third. There are now three times that many apprenticeships, and there is a two-thirds completion rate. On top of that, we have also invested very heavily in skills training in the workplace through policies such as unionlearn, which the hon. Gentleman’s party vigorously opposed, and Train to Gain. I think that he wants to abolish Train to Gain to fund his party’s policies, so he is not talking about any new investment in skills.
The automotive assistance programme has been in contact with more than two thirds of the eligible companies, and there is still a potential pipeline of projects worth £2 billion. The hon. Gentleman should not rush to judge us on that matter. He also asked about the enterprise finance guarantee scheme. There is a £1.3 billion facility in place. As of 20 November, more than 1,100 businesses from the manufacturing sector have been offered loans totalling nearly £144 million. Much as he tempts me, I will not oblige him by making up any policy on the hoof.
In recent times, manufacturing has been hit by the global recession. We all know from our constituencies—many constituency examples were given during the debate—of the impact that that has had. The Government are acutely aware of the difficulties that the sector has faced and have taken a very activist approach in this recession, as hon. Members have said. That is why the level of unemployment in the UK is much lower in this recession, which has been lengthy, than it was in the recessions in the 1990s and 1980s. That is not a coincidence. The Government’s attitude is in marked contrast to the Conservative Government’s philosophy in previous recessions. There is also a marked contrast with our competitors; they are now beginning to come out of recession, as we will, but unemployment is much lower in our economy than in competitor countries.
Our job in Government is not just to look at the short term, but to think of the long term, and that is what we have been doing. There are huge opportunities for the manufacturing sector in this second industrial revolution. There are opportunities in the new technologies, including carbon technologies, nuclear, wind and wave technologies, and carbon capture and storage, all of which will have a profound impact on how we generate our energy in the future.
As I mentioned earlier, our industrial policy, which covers those new industry jobs, is exactly the kind of activist policy that the hon. Member for Southport called for. Our key industries need a national capability, and support from Government, so that they can take advantage of those opportunities. We need to look ahead at the opportunities that will be presented by the new economy.
HM Prison Bullingdon
I am grateful for the opportunity to raise this issue, which is really about what we think prisons are for. In an answer to a recent parliamentary question, the Minister of State, Ministry of Justice, the hon. Member for Liverpool, Garston (Maria Eagle), said:
“The National Offender Management Service is undertaking a budget review process… to determine the budget for prisons in 2010-11.”
She added that
“prisons are using indicative guidelines of a 5 per cent. budget reduction but their final budgets will not be determined until the review process is complete, later this year.”—[Official Report, 30 November 2009; Vol. 501, c. 448W.]
Let me make it clear to the House that I readily acknowledge that, given both main parties have said that they will ring-fence spending on health and international development, consequential spending reductions in other Departments are inevitable whoever wins the general election next year. We all have to be sufficiently grown up to acknowledge that. We certainly need to acknowledge it in the presence of my colleague, the right hon. Member for Oxford, East (Mr. Smith), who is a former Chief Secretary to the Treasury.
The thrust of what I want to get across to the House this afternoon is that cutting prison budgets per se is the wrong approach. We send people to prison because society believes it an appropriate punishment and to deter others from committing similar offences. However, the punishment is the deprivation of liberty for a period of time. We should be using prison and the time that people spend there to ensure that when they leave they have the skills, competences and qualifications to ensure that they do not reoffend.
There are two truly depressing things in this. First, when I visit HM prison Bullingdon, which is a local prison for Oxfordshire and the Thames valley, I meet a large number of men—a huge proportion—who are involved in some form of substance abuse, which means alcohol, drugs or both, as well as a huge number who are functionally illiterate. That is fundamentally depressing. The second depressing thing is the number of people in prison who have reoffended. Reducing reoffending rates would not only be beneficial for society, because there would be fewer victims of crime, but cost-effective, as there would be fewer people in prison.
The official parliamentary answer is that the 5 per cent. cut is just for this coming year and one does not know what will happen in future, but it presents governors with the prospect of 5 per cent. year-on-year reductions in prison budgets. I understand that most governors are working on the basis that they will have rolling cuts of 5 per cent. a year for the next three years. Where in a prison does one make those cuts? There seem to be only two areas: one cuts either opportunities for training, education or access to substance and drug abuse programmes, or the number of prison officers.
A 5 per cent. reduction in Bullingdon’s budget is about £1.3 million on a budget of £17 million. Some £1.3 million is the equivalent of having to make 120 prison officers at Bullingdon redundant. As prison officers have explained, all they will be able to do is keep prisoners locked up longer—for more hours—because officers will not be available to escort prisoners or supervise them in education and training. They will be warehousing men and doing little else.
Bullingdon has been built since I have been the Member of Parliament for north Oxfordshire. Before that, the local prison was Oxford jail in the heart of Oxford. That status came to Bullingdon in the early 1990s. I hope the Prison Officers Association will excuse my saying so, but at that time it was a pretty neanderthal trade union. On one occasion way back in the 1990s—some 15 or so years ago—it refused to allow me to attend a meeting because I might influence what its members thought, and that was that.
Over the past 15 years, from my perspective the POA has moved phenomenally from being truculent and difficult to wanting to engage in training programmes and education programmes and wanting to help with substance abuse programmes. The POA branch at Bullingdon has built a training facility outside the prison walls for prison officers, which it is sharing with the rest of the community because the officers want to encourage the community to engage more with them and their work at Bullingdon.
The prison officers now find fundamentally depressing the thought that they will simply be engaged in keeping people under lock and key for longer periods. That would be a great pity, given that we have started to get a culture moving in the prison with people involved in the Prison Service. We are seeing that officers have a role in ensuring that people who leave prison are better equipped to deal with the outside world and have more skills than when they came in, but things might just go back to the rather Victorian notion of prison.
I hear it said on the grapevine that the Secretary of State for Justice believes that layers of middle management in the Prison Service can be stripped out and that the 5 per cent. can be achieved there. If he genuinely believes that prisons are over-managed or that there are too many layers of management, I suggest that he make that clear. I am sure that, if he believes prisons are over-managed in some way, he can strip out the over-management. However, even if we took out all the managers, apart from the governor, I doubt whether we could meet the 5 per cent. target at Bullingdon.
A lot of work is being done in Oxfordshire with charities such as SMART and in trying to get people who leave prison to integrate into the community more speedily and ensure that they do not go back on drugs, all of which requires work being done inside and outside the prison.
I have come here cross-party and cross-county to support the hon. Gentleman’s argument. He has made a powerful case for the importance of rehabilitative work, to which I add the importance of restorative justice. Some work on that is being done locally. Within the broad cost-benefit analysis, does he agree that, humanitarian considerations apart, if prisoners are locked up for longer, receive less education and have less attention paid to literacy and training, they will be more likely to reoffend and be back inside, incurring further costs in future? So, the proposal might be a false economy in any case.
I agree. That is a powerful comment, coming from a former Chief Secretary. If we simply bang people up for a time and do not help them to obtain the skills, competences and qualifications that make them more employable and less likely to offend when they leave prison—if they leave prison simply having served their time—the corollary will be that they are more dysfunctional, less able to integrate into the community, particularly at times of higher unemployment, and more likely to reoffend. We will keep going round in that circle.
Statistically, this country, I think, locks up more people than any other in Europe, other than Turkey. I appreciate that the Minister and her colleagues in the Ministry of Justice face a challenge, in that the UK prison population is growing inexorably. However, we are considering the issue in completely the wrong way. Instead of cutting the budgets of individual prisons and the opportunities for training, recreation and other things—cutting either those or the number of prison officers, which makes it more difficult to provide them—we should be seriously thinking about those whom we send to prison and the period for which we send them.
We have a criminal justice system that is entirely tariff based, but I do not think that anyone could convince any of us that sending someone to prison for six years would necessarily be more effective than sending someone to prison for four years. We have quite a lot of cases at the Crown court and there are some particularly lengthy tariffs. I have prosecuted and defended men and women who have been before the Crown court for serious offices, and my experience is that the period of punishment that has the greatest impact on them is usually the first year or 18 months in prison.
At one end, it seems that, other than for the most heinous offences, lengthy prison sentences do not necessarily benefit society or act as a greater deterrent; at the other, we must collectively convince society that programmes of restorative justice—non-custodial sentences—can work and have an impact. Often, such sentences are much more cost-effective for the community as a whole and can be just as effective as punishment and a deterrent. If we simply continue to send ever more people to prison and back to prison because they are reoffending, all that will happen is that the prison population will continue to increase, those in prison will continue to become increasingly dysfunctional and the likelihood of them offending on release from prison will grow inexorably.
We all need to draw breath and have a different argument with the Treasury. The Ministry of Justice also needs to have discussions with those who are responsible for sentencing. It needs to see whether it is possible to make the savings that it feels it needs to make—not by making prisons more Victorian, but by trying to ensure that fewer people are sent to prison and that those who are sent have the opportunities while in prison to acquire competences that will better enable them to lead decent, honest and non-offending lives when they leave.
I hope the Treasury would have as one of the targets for the Ministry of Justice an attempt to reduce reoffending rates. That is an important target for us all, because otherwise we see more and more victims and more and more crime—it is a continuing circle. Therefore, although I acknowledge that the Ministry of Justice, like other Departments, may be obliged to make reductions in its overall spending because of the financial black hole, I sincerely believe that reducing the budgets of prisons such as Bullingdon day to day is misguided, mistaken and a retrograde step. It will take penal policy backwards, not forwards.
I am grateful to the hon. Member for Banbury (Tony Baldry) for securing the debate and for his sustained interest in Bullingdon prison. I suspect that it would be of some interest if he were to send a copy of his speech to his party’s Front-Bench team. He takes a rather more refreshing look at policy on this issue, and what he says clearly does not chime very well with his party’s views.
It is always good to explore and clarify issues relating to the National Offender Management Service in general and to prisons in particular. Parliamentary scrutiny is especially important because of the closed nature of the prison system. The opportunity to achieve much greater accountability to the public for the work that goes on in prisons on behalf of the public and the taxpayer is also important. The Government are acutely aware that imprisonment involves two stories: that of the offender in custody, with his or her experiences and opportunities for reform, and that of the victim or potential victim of crime, whose safety must be paramount.
In recent years, Bullingdon has become renowned as a prison that provides decent conditions and care for prisoners. It offers an exceptional range of programmes to help reduce the risk of reoffending and therefore also the risk of harm being done to victims and communities after people are released. I am sure that prison officers and other staff at Bullingdon will be pleased to hear the hon. Gentleman’s kind comments about their work. That progress has not, however, happened in a vacuum. Bullingdon has received close managerial attention from NOMS and has benefited from sizeable investment in activities, programmes and treatment services.
One of the most rewarding aspects of my role as a Minister has been to see the passion and determination of prison and probation professionals at every level in protecting the public and helping offenders to lead decent and law-abiding lives after release. When prison officers go home after work, they return to the communities in which they live, and they certainly want to be able to protect their families, friends and neighbours from the risk of becoming victims of crime. In every prison that I have visited, I have been struck by the desire of staff to see offenders change their lives, to leave prison with hope and opportunity, to go on to a much better life in the community and to do things that ensure that they do not return to prison life.
I acknowledge that the hon. Gentleman shares those views on behalf of his constituents. I am also aware of his enthusiasm for rehabilitation and the work that Bullingdon does; as a Minister, I share that enthusiasm. If we do not take that view, the alternative for individuals is a life of continuing offending that will continue to damage communities. That will affect victims and offenders’ families and ensure that the fear of crime continues, ruining the quality of so many of our constituents’ lives.
As successive Governments have found, there is no quick fix to cut crime or reoffending; individual prisons or probation teams working in isolation have not managed to have the beneficial impact that they would all have hoped for. For that reason, the Government created NOMS, which brings together the probation service and the Prison Service for England and Wales. The primary purpose of NOMS is to reduce reoffending, making the public safer and earning greater confidence in the criminal justice system.
Most crime takes place in local communities, and the forces that shape offending are best understood at a local level. Patterns of deprivation, the poor educational attainment that the hon. Gentleman mentioned, housing shortages, substance misuse, which he also mentioned, and unemployment will vary from place to place and will contribute to a greater or lesser extent to social exclusion and criminality. For that reason, local and regional solutions are likely to be much more effective in targeting support, challenge and intervention where they are most needed.
NOMS is formed of 10 regions for England and Wales, each with a single director of offender management who is responsible for both prisons and probation and whose primary task is to reduce reoffending in his or her region. By developing regional structures and understanding the realities of real people in real communities, directors of offender management can, for the first time, target resources where they are needed most. At a practical level, that could mean understanding, for example, that for an individual prison, unemployment is likely to be a more critical factor than availability of settled accommodation and investing proportionately more in work skills and job seeking than in housing services.
When money is tight, it is more important than ever to spend wisely. Region by region, NOMS is undertaking needs analyses of local communities, identifying which localities generate the most crime and analysing the underlying causes. By commissioning the right interventions for offenders in the right places and co-commissioning the right support in the community for ex-offenders, directors of offender management are in a position to make a difference to rates of offending.
NOMS, like other public sector bodies, will be required to make savings over the coming years, reflecting the reality of the circumstances in which we have all operated since the global economic crisis, as the hon. Gentleman mentioned. Bullingdon prison, as part of NOMS, will have to play its role in finding savings, but that does not necessarily mean cutting services. On the contrary, it is more about identifying how it can operate more efficiently.
Major organisational change is not achieved overnight. NOMS has been supporting projects to release resources across the prison estate, and the results will be used to reduce the need for local regime reductions. For example, all prison establishments in England and Wales have been working to identify flatter management structures to reduce management overheads and optimise resources for front-line staff. NOMS central and regional headquarters have been reduced significantly in size and head count to ensure that the maximum possible proportion of resource is devoted to prison establishments and probation teams in the community.
In his report, “Securing the Future”, published in December 2007 and accepted by the Government, my noble Friend Lord Carter of Coles recommended that an operational specification that adequately reflects the characteristics of individual prisons should be produced for each category of prison. He also recommended that such specifications should be costed and operated through a framework of service-level agreements.
In response, NOMS has undertaken a programme of specifications, benchmarking and costing that will ensure that the recommendations are met for all prisons in England and Wales by 2011-12. To achieve that goal, NOMS is undertaking a major programme of benchmarking and costing its processes in public sector prisons to identify the most efficient practices and establish those “best in class” examples for wider adoption. Significant savings have already been released, and it is anticipated that over the next three years, every aspect of imprisonment and offender management will be subjected to the same rigorous approach, to eliminate wasteful and unnecessary processes without affecting the quality of experience or rehabilitative opportunities for offenders.
Good financial planning is every bit as important at times of resource reduction as it is when additional money is available. NOMS regions in particular are closely involved not only in monitoring current spending but in planning how resources should be allocated for future years. In the NOMS south-east region, in which Bullingdon is a key prison establishment, governors have been asked to make savings plans to meet a range of possible planning assumptions.
Because prison governors are best placed to form judgments about where resources can be saved as well as what the impacts are likely to be, the governor of Bullingdon prison, along with his colleagues elsewhere, was asked to identify a financial planning exercise showing how he would make savings at 5 per cent. of his 2009-10 budget. The plans were to include an assessment of difficulty, impact and risk for each item proposed. They were collated and considered by the regional custodial manager, herself an experienced former prison governor, and the regional manager for finance and performance.
The actual savings planned for Bullingdon are significantly less severe than the full range of savings proposals; they are nearer to the average reduction of 3.5 per cent. across the region and contain no requirement to make savings that have been assessed as having significant impact, negative impact or high risk.
In contrast to some of the very high figures that have been cited—indeed, the hon. Gentleman cited some of them in this debate—we anticipate that the likely reduction in staff posts at Bullingdon as a result of the required savings in 2010-11 will involve just 16 uniformed staff and a further two managers. Equally importantly, the prison is not being asked to make savings that run counter to the commissioning priorities of NOMS for the south-east region.
Specifically, the hon. Gentleman will be very glad to know that at Bullingdon prison there will be no reduction in education provision, drug treatment services, sex offender treatment programmes, accredited offending behaviour programmes, health services for prisoners, offender management provision or public protection provision. That underlines the importance that we place upon those services, even in difficult financial times.
Our spending reductions are inevitable in Bullingdon prison and across the NOMS. In making their choices, it is apparent that the governor and director of offender management at the prison are actively seeking to ensure that they do not adversely affect the quality of life or the quality of rehabilitation services for prisoners. That approach is mirrored across the south-east region, of which Bullingdon is a part, and across the wider NOMS estate.
The hon. Gentleman went on to talk a little more widely about the purpose of prison and sentencing policy. A number of interested groups argue that the prison population is too high. I am not sure that that view is shared by the main political parties; it is certainly not shared by the hon. Gentleman’s Conservative colleagues, who suggest that we should have even greater capacity in the prison estate than that being provided at the moment by the Government.
We imprison a relatively high proportion of offenders. Clearly, Governments can choose to operate cheap criminal justice by declining to imprison even those people who pose a real danger to the public. However, it is the right of each democratic country to determine for itself what is and what is not acceptable behaviour on the part of its citizens, and the penalties that will be exacted for crime.
The Government have a very clear sentencing framework. We promote community-based penalties for low-risk offenders, and we have done that through the extension of out-of-court disposals. Those disposals are not only for those over the age of 18. Indeed, we have launched a new range of out-of-court disposals—some were even launched this week—with the youth rehabilitation orders and the opportunities for greater use by the courts, in some circumstances, of methods to move young people away from imprisonment. There are also other forms of disposals, whereby people are not hitting the courts at all.
We have imposed tougher custodial sentences for higher-risk and dangerous criminals. Furthermore, the Government have consistently taken the view that, for some offenders, community punishment can deliver better outcomes than short custodial sentences. To support that, we have made available to the courts a wide range of tough non-custodial sentences and we encourage the use of those sentences whenever possible. Community-based penalties are a core part of the criminal justice service. In 2007, 196,400 such penalties were imposed, which was 40 per cent. more than in 1997. That shows the importance of having a tough sentencing policy that is also fair and deals with the range of criminality.
In conclusion, I remain grateful to the hon. Gentleman for his interest in Bullingdon prison, both as a single establishment and as part of the wider prison estate. Like other parts of the public sector, Bullingdon will face financial challenges and must find ways to work at lowering its costs without putting public safety at risk. I believe that the prison, working together with NOMS, will be able to do that.
Asbestos-related Illness (Plymouth)
I welcome the opportunity to speak on this subject; sadly, it is of great importance to many of my constituents. In recent years, asbestos-related illness has been the subject of debates in the House, legal challenges, and ongoing demands from victims for understanding of their plight and for financial support to help them face the challenge of having been diagnosed with the illness. Let us not forget that Plymouth is a hot spot for asbestos-related disease—the third in the country.
During the summer, I was invited to attend a detailed briefing run by Bond Pearce solicitors, a firm based in Plymouth, to discuss with health professionals and victims what more needs to be done. I was joined at that briefing by the hon. Member for South-West Devon (Mr. Streeter), who I am pleased to see here today. Unfortunately, my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) was not able to attend, although over many years she has been a fighter on behalf of the victims who live in her constituency.
Asbestos-related disease takes many forms. They include pleural plaques, which is scarring of the lung tissue; it is a real physical injury, visible and identifiable by X-ray. It is caused by exposure to asbestos over a long period, and it is avoidable. In most cases, it was caused by the negligence of the employer. Many people, including those in my constituency, suffer the condition through no fault of their own. The only people to gain from it are those in the insurance industry.
Given that the disease was for the previous 20 years clearly acknowledged as a compensatory condition caused by employers’ negligence, the Law Lords ruling of 2007 remains an unexplainable and unjustifiable mystery to my constituents. Most employers and their insurers were aware of the dangers of exposure to asbestos. Such knowledge has been around since the end of the 19th century, but employers still chose to do nothing to protect their work forces. They seemed callously to rely on the fact that the latency period of such a disease could be anything from 10 to 20 or even 40 years.
The result is that many people are now diagnosed, and suffer constant fear and uncertainty about their future. I fully appreciate that the condition is said by some to be completely benign, and that it will lead to something more sinister in only 5 per cent. or 10 per cent. of diagnosed cases. However, there is a serious underlying issue. Pleural plaques is a clear indicator of long-term exposure to asbestos. Those diagnosed therefore have an increased risk of developing more serious asbestos-related diseases, resulting not only from pleural plaques but from the exposure to asbestos itself.
It is hard, therefore, to expect someone who has been diagnosed with pleural plaques not to be distressed and anxious about the fact. According to the excellent and well-supported GMB campaign, that anxiety has already led to one suicide. I was appalled to learn of the comments of Dr. Abernethy, of the Forum of Insurance Lawyers. She stated that pleural plaques were harmless and therefore a good thing. I assure the House—and Dr. Abernethy if she is watching or listening to this debate—that they are not. I invite Dr. Abernethy to speak to those of my constituents who have been diagnosed, and seek their reaction to her comments.
Concern has also been raised that some insurance lawyers would take advantage of the situation should compensation be allowed—that they would lure and encourage people to make a claim based in part on their anxiety. Is that not inconsistent? On one hand, the insurers have acknowledged the danger of asbestos and the anxiety caused, taking it so seriously that they say the matter should be pursued by them. On the other hand, they argue that anxiety is not serious enough to warrant compensation. If one listens to or reads stories of individuals, as I and other MPs have done, one quickly realises what such anxiety means to them and their families. They cannot escape it, because most of those diagnosed may well have seen former colleagues dying from mesothelioma, lung cancer or asbestosis.
Anxiety also encroaches on other areas of people’s lives. One of my constituents told me of a friend who was diagnosed with pleural plaques. When he applied for travel insurance, he provided information about his health and was charged a higher premium because of his condition. My constituent said it was a case of double standards, and I cannot think of a more appropriate term—other than financial opportunism. It is hypocritical of the insurance industry to suggest that there is nothing to worry about, and not to recognise pleural plaques as a disease, yet at the same time whacking up the insurance premium if they know that someone is a victim.
I will move on to mesothelioma. It is estimated that between 2006 and 2020, 30,000 people in the UK will die from mesothelioma, and that 90,000 will have died by 2050. The number of deaths is expected to peak in the next five to 10 years, although a whole new tranche of people are currently being diagnosed with the illness—people like my constituent, Debbie Brewer, a young woman who contracted the disease from her dockyard worker father. She is only 50 and a mother of three, and she believes that there is a significant number of young people who, like her, had contact with someone working with asbestos and will contract the disease, and who are currently not included in official estimates.
Debbie is a very brave woman who is fighting for a trial of a specialised treatment called chemoembolism, which appears to be holding back the disease significantly in her case. The treatment is not currently available in the UK, so she has to travel to Germany and pay for it privately. I would hate to describe Debbie as fortunate, but she was able to agree a settlement, and a payout from her father’s employer, the Ministry of Defence, which is paying for the treatment. Although it does not fall within the Minister’s remit, I hope that she will pass that concern on to her colleagues in the Department of Health.
I have been listening carefully to the powerful case my hon. Friend is making, particularly the human stories. I am not sure whether her constituent, Debbie Brewer, knows the daughter of Roger Lowe, who has set up a campaign in memory of her father. It goes from one generation to another, and it is as much about the angst caused for the families as it is about the victims themselves when they are diagnosed with pleural plaques.
I am that pleased that my hon. Friend is in the Chamber today and thank her for her comments and for highlighting the campaign being run by her constituent.
Another issue raised at the Bond Pearce seminar was funding for Macmillan nurses and the need to ensure that it continues. They are undoubtedly providing some fantastic support for my constituents and, I am sure, for others across the country.
Although much has been achieved by the Government with the introduction of the Child Maintenance and Other Payments Act 2008, more needs to be done. We need to speed up the system for those who have been diagnosed to ensure that they or their solicitors do not have to spend valuable time trying to trace their employers and insurers. One of the solutions could be the establishment of an employers’ liability insurance bureau. Many people, as the Minister will know, cannot trace their former employers because they have gone out of business. If the firm had no insurance in place at the time, or if the insurance cannot be traced, the victim cannot make a civil claim against anyone for compensation. If a bureau was set up, it could act as a fund of last resort, paying out claims in cases where no defendant or insurer can be found.
My hon. Friend the Member for Hendon (Mr. Dismore) introduced a private Member’s Bill in the last Session that would have addressed that issue, but like many good pieces of private Members’ legislation, it foundered, although only after completing its passage through the House of Commons. An identical Bill has been introduced by Baroness Quin in the other place, and I can only hope that it will receive Government support and, with a fair wind, reach the statute book before a general election is called. My hon. Friend’s Bill proposed a fund that could be paid for by insurers, rather than the taxpayer, using a similar model to that used by the Motor Insurance Bureau, which pays victims of uninsured drivers. He had extensive discussions with the Ministry of Justice and there was a good measure of support for his proposals.
I know that my hon. Friend has expressed a hope that the Bill will be taken to a successful conclusion in the House of Lords, but will she urge everybody to continue to put pressure on the Government to support it? We have been here before on several occasions—we are just so close.
My hon. Friend, with her wealth of experience of this place, knows just how difficult it has been to make progress, but I am sure the Minister has been listening to her comments.
Bond Pearce in Plymouth deals with many people who currently can make no claim in this country, and they often have to rely on payments via a convoluted route from the United States trust, which will pay out. Not everyone can benefit through that route, and we really need a scheme that will apply in the UK. I would be grateful if the Minister could let us have her views of the proposal being brought forward in the Lords, because it cannot be right that the Government should pay lump sums to sufferers, funded by the public purse, because insurers do not want to pay compensation. Insurers have to be liable and pay up. That is why they receive their premiums in the first place. I therefore welcome the commitment of the Justice Secretary and the Minister—which I hope will be repeated today—that consideration will be given to reviewing the current process of tracing insurance records.
I also support the Government’s idea that the UK should be made a global leader in research on asbestos-related diseases. However, that must be speeded up. We have also been waiting rather too long for a decision from the Government about compensation. I urge the Minister to make the Government’s intentions clear sooner rather than later, because for some of my constituents it could be too late.
I support the arguments put forward by the hon. Member for Plymouth, Devonport (Alison Seabeck). We both attended the conference in the summer, and we work closely together in Plymouth, in a cross-party way. I do not want to repeat her arguments, but I want to support them and her description of the difficulty in obtaining justice for sufferers of asbestos-related diseases.
Rather than repeating the arguments that she put more eloquently than I ever could, I want to add one further point, which draws partly on my background as a lawyer—the application to the issue of the Crown Proceedings (Armed Forces) Act 1987, on which I know the Minister is something of an expert. That Act, which prevents Crown personnel from suing the Crown in relation to matters prior to the date in question, effectively means that ex-service personnel can claim civil damages from the Ministry of Defence for asbestos-related illnesses, or any other injury, only if the exposure occurred after 1987. In cases involving asbestos, exposure will usually have occurred in the 1960s and 1970s, before the world woke up fully to the perils of asbestos. The people in question therefore cannot make a civil claim for compensation against the Ministry of Defence.
That situation is in contrast to what applies to civilians, who can make a civil claim against the Ministry of Defence irrespective of when the exposure occurred. The situation is very unjust for ex-forces members, of whom there are of course many in Plymouth. In the dockyard and the naval base, civilians and service people, men and women, have for many generations worked side by side. They have done almost the same jobs, some in uniform and some as civilians. Is it not grossly unfair that, of two people doing the same job during the 1970s, both of whom contracted a serious lung disease, one would have the right to compensation from the Ministry of Defence, but the other would not? I see officials looking quizzically at me. If the Minister can say that I am wrong in what I am saying, we shall be jubilant and excited, and many legal actions will follow.
We hear much about the postcode lottery, but the situation I am describing is a pay-as-you-earn lottery, and the Government must surely be concerned about it.
I am very pleased that the hon. Gentleman has raised that aspect of the issue, and am grateful to him. He has referred to the cross-party basis on which this matter has for many years been pursued. The point that seems to be made in this context is that the pensions of service personnel somehow rule out their making a claim. It does not add up or make sense.
I agree on that point. I have considered what reasons there may be for people being treated differently, and I cannot think that any such reasons would prevail for people who have acquired their injuries during a period of work in a domestic situation at home as opposed to in the trenches overseas.
Lawyers in Plymouth deal with many victims of asbestos-related problems each year, but instead of obtaining justice from the Ministry of Defence they must resort to relying on payments from United States trusts set up by the companies that manufactured many of the asbestos products, which saw their liability and put money aside. People in the UK can draw down on that, but it is nothing like the amount of compensation to be obtained from suing the Ministry of Defence, as many civilians can. The idea of compensation is to put someone back in the place they would have been in had they not fallen ill or been injured. At the moment that does not happen to ex-servicemen who contract the crippling diseases in question. Many of them must rely on state benefits or a war or disability pension, instead of proper compensation that would help them to live the lives they would have lived had they not been contaminated, through no fault of their own.
I recognise that Governments of both colours have hidden behind the 1987 Act—and the hon. Member for Plymouth, Devonport is right to say that this issue has continued for a long time under Labour and Conservative Governments. There may be reasons of public policy for that, which the Minister may want to set out. However, I ask him to review the application of the Act in relation to claims of this kind, where there is a real injustice. I am sure it is not the Government’s strategy to delay matters until time takes its toll and people go the way of all flesh. I am sure that is not the Government’s thinking, but of course there is an element of urgency because many of the sufferers are of a certain age and we want them to receive compensation in due time. I hope the Minister can make a helpful response.
I congratulate my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck) on securing this important debate. The fact that this is the fifth debate that we have had on pleural plaques demonstrates the importance of the issue, not just to hon. Members across the political parties but, more importantly, to their constituents and those whose lives are impacted by this state of affairs. We recognise that pleural plaques are a major issue for many people, particularly those who have worked in traditional manufacturing industries where exposure to asbestos was an all too common danger.
As my hon. Friend mentioned, our consultation on pleural plaques closed at the beginning of October last year. I understand hon. Members’ concerns about the time that it has taken to reach conclusions in the light of the consultation. The decision by the House of Lords raised extremely complex and difficult issues that have required careful consideration within Government. It has also been important to look beyond the issue of pleural plaques to consider how people who have been exposed to asbestos can be supported more widely. We have made it clear throughout that it is important to ensure that any decisions taken are reached on the basis of the best available medical evidence on the nature of pleural plaques. For that reason, we have commissioned and published reviews of the medical evidence carried out on behalf of the chief medical officer for England and Wales and by the Industrial Injuries Advisory Council to help to inform consideration of the issue. The reports indicate that consensus appears to exist on a range of key points relating to the medical nature of pleural plaques.
However, in response to representations from asbestos campaigners and a request by my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham), the Secretary of State for Justice undertook to facilitate a final meeting between key medical experts in the field to consider the medical reports together with new evidence that has emerged since the reports were published. That was to make sure that any areas of disagreement over the evidence and conclusions in the reports could be identified and fully considered. The meeting took place on 15 October and was extremely helpful and informative. The Government are giving careful consideration to the outcome of the discussion and the views expressed before publishing their response on pleural plaques.
The Government have been consistent in their commitment to give those suffering from mesothelioma and other serious asbestos-related diseases the help and support that they deserve. With that in mind, the Secretary of State for Justice confirmed that the Government are actively considering measures to make the UK a global leader in research for the alleviation, prevention and cure of asbestos-related diseases, and also to help speed up compensation claims for those who develop serious asbestos-related diseases such as mesothelioma. That includes examination of the process for tracking and tracing employment and insurance records, as my hon. Friend the Member for Plymouth, Devonport mentioned, as well as looking into the support given to individuals who are unable to trace such records. We fully accept that the current arrangements for tracing employers’ liability and insurance policies are not satisfactory. Too many individuals are not able to access the compensation that they deserve. The situation is not acceptable and we are determined to do more. We are looking seriously at options such as setting up a mandatory tracing database and whether we might establish an employers’ liability insurance bureau as a fund of last resort, as recommended by several hon. Members. Further details of the Government’s plans on these extremely important issues will be announced shortly.
Provisions in the Child Maintenance and Other Payments Act 2008 were brought into effect on 1 October last year by colleagues in the Department for Work and Pensions. They provide up-front financial support to mesothelioma sufferers who were previously not eligible for help from the Government, including those, such as the constituent of my hon. Friend, who were exposed to asbestos as the result of contact with a relative. Someone’s exposure could have taken place, for example, by washing the work clothes of their father or husband. Where sufferers have not been able to make a claim during their lifetime, a payment under the scheme can be made to their dependants.
The provisions demonstrate the Government’s commitment to help people who suffer from the effects of this terrible disease, which includes many people in my hon. Friend’s constituency. The hon. Member for South-West Devon (Mr. Streeter) and my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) have raised this issue, not just on this occasion, but on many occasions, with Government Ministers. The latest available analysis by local and unitary area of mesothelioma deaths in Britain shows that there were 373 male mesothelioma deaths in Plymouth during the 25-year period from 1981 to 2005, which is more than three times the average death rate for the whole of Britain. Based on that analysis, Plymouth has the third highest rate in Britain. Most of the areas with the highest mortality rates in the analysis are associated with the shipbuilding industry, in which asbestos was widely used for insulation in the past. Female mesothelioma deaths in Plymouth over the period were in line with expected numbers based on the average rate for Great Britain.
We have continued to raise awareness of the risks of asbestos through the Health and Safety Executive’s campaign, “Asbestos the Hidden Killer”, which was relaunched on 2 November 2009. It aims to raise awareness among tradesmen, pointing out that they are more at risk than they think from asbestos and prompting them to find out more about asbestos and the precautions they should take. National press and radio adverts will run for four weeks, supported by public relations activity. Partner organisations, including the TUC, unions, trade associations, trade stores and charities have distributed about half a million campaign packs to trade and maintenance workers. It is extremely important that we raise awareness among a group who, proportionally, face a much higher risk than the greater population.
A number of people who work where asbestos is likely to be in the vicinity may well be people who have come across from Europe and whose first language might not be English. What is the Minister doing to ensure that the trade unions and others are putting out information in other languages?
My hon. Friend raises a very interesting point. From my own experience—my family are very engaged in the building and construction trades and my father established an institute for asbestos management—I am acutely aware of the impact that it can have on other construction trades. In this day and age, when we have much greater European engagement, she is right to raise that point. I will ensure that my colleagues—not in the Ministry of Justice, but in the business department of the Department for Work and Pensions, which is responsible for health and safety—write to her to make sure that she has copies of the information packs and any details about what else we are doing to promote awareness across the language barrier.
In addition to considering the needs of people who have difficulties with the language, we must look at the nature of the construction industry. Many people are sole traders and perhaps do not have access to trade union support or to much greater levels of activity through larger organisations. The Health and Safety Executive has sent a direct mail of 50,000 packs to the harder-to-reach micro-firms and sole traders.
My hon. Friend raised the issue of chemoembolism treatment for mesothelioma. I express my sympathy to her constituent, Debbie Brewer, who is suffering from this terrible condition. Chemoembolisation is available for the treatment of liver cancer, but the risks and benefits of using it to treat patients with mesothelioma are not yet known. We are not aware of any trials of chemoembolisation for patients with mesothelioma under way in the UK, which is no doubt why her constituent sought treatment abroad. It is for clinicians, using their expert judgment, to decide on the most effective treatment for patients, based on their individual circumstances. Primary care trusts are responsible for commissioning services to meet the health care needs of their local populations, so it is for them to decide whether to fund any proposed treatment, taking into account any available evidence of its effectiveness. I am sure that my hon. Friend will want to ensure that any information about the success of the treatment for her constituent is passed back to local commissioning services.
My hon. Friend also referred to the private Member’s Bill sponsored by our hon. Friend the Member for Hendon (Mr. Dismore). The Bill passed through the Commons in the previous parliamentary Session, but did not manage to complete its stages in the Lords before the end of the Session. However, the Government note that the Bill has been reintroduced in the House of Lords by Baroness Quin of Gateshead in the County of Tyne and Wear. The Bill has to be considered in the wider context. It represents one possible approach to the issue of pleural plaques, but there may be a number of other appropriate approaches to the condition and to the wider issues arising from asbestos-related diseases. Unfortunately, it is not possible for me to give a firm indication today of the Government’s position on the Bill, but we will continue to monitor its progress with interest.
I assure hon. Members that we remain firmly committed to helping people who have suffered as a result of exposure to asbestos, and that our considerations are taking place with that commitment in mind. The hon. Member for South-West Devon raised the issue of the Crown Proceedings Act 1947 and the distinction between those who have been in the services and civilians. I thank him for raising an interesting point. I cannot comment on it, but I will make sure that it is passed to my colleagues in the Ministry of Defence, and I would expect them to write to him with further relevant information.
I apologise again to hon. Members for the time that it is taking to deal with the difficult and complex issues. I am well aware, as indeed all my colleagues are, that the time taken in such circumstances is not simply an administrative process, but has an impact on the constituents of my hon. Friend the Member for Plymouth, Devonport and of other hon. Members. I hope that we will be in a position to publish the Government’s response, setting out the way forward, as soon as possible.
Question put and agreed to.