I am pleased to have secured this debate on pensioner poverty, although it is depressing that such a debate should be necessary. It is surely a scandal that, in one of the world’s most developed and prosperous nations, one in five elderly people still live below the breadline. That is a total of more than 2 million individuals.

I wish to discuss some of the causes of pensioner poverty and say what more can be done to help one of the most vulnerable and deserving groups. Today, 1.3 million pensioners rely on the state pension as their sole source of income, but at £97 a week it clearly is not enough to achieve a standard of living that most people would find acceptable. Our state pension is among the lowest in the developed world. Among the 27 OECD countries, only Japan, Ireland and Mexico have a lower state pension measured as a proportion of the national average wage.

Had the link with earnings not been broken in the 1980s, the basic pension would now be £40 a week higher. It is only fair that pensioners should share equally in the growing prosperity of the society that they helped to build. The Government recognise that pensions must be re-linked to earnings but they are not committed to doing so until 2016. Even then, we will be left with a state pension system that Ros Altmann, the pensions expert and former adviser to Tony Blair, described as one of the lowest and most complicated in the developed world.

Women are hugely over-represented among the poorest pensioners. Not only are they far less likely to have savings, but thousands do not receive the full basic state pension. Even after the lowering of the threshold for national insurance contributions later this year, a quarter of women will still not qualify for a full basic state pension, mostly because of gaps in their NI contributions as a result of bringing up their children. To make matters worse, with life expectancy for women exceeding men by more than five years, increasing numbers of women are left living alone. I hope that the Minister agrees that we should be working towards a fairer system—one in which individuals who have lived in this country for their entire lives should be guaranteed at least the full basic state pension.

I draw the Minister’s attention to the outrageous sums that are left unclaimed by some of the UK’s most vulnerable pensioners. One of the main reasons for the unacceptable level of pensioner poverty is the under-claiming of pension credit and housing and council tax benefits; as much as £5 billion is unclaimed every year. That is £13.9 million every day.

I am grateful to my hon. Friend for giving way so early in her speech. Is it not the case that much of the problem is caused by a sense of pride? Many pensioners do not want to make a claim for means-tested benefits. They see it as some sort of personal failure. Pensioners should automatically receive a citizen’s pension that takes account of all the benefits to which they should be entitled, including pension credit, without having to go cap in hand to the state.

My hon. Friend makes a valid point about one reason why many pensioners do not apply for or claim pension credit and therefore do not receive it. That is why I would like to see the basic state pension ultimately raised to such a level that the current system was not needed. For as long as the pension credit system exists, the Government should at least ensure that pensioners receive all the money to which they are entitled. However, Government figures show that that is not happening; the number of eligible pensioners not receiving their full benefits is rising.

I am following the hon. Lady’s remarks closely. May I ask her to clarify precisely her party’s policy on the citizen’s pension? What level would it be fixed at, and how much would it cost over and above what is spent at the moment?

The hon. Gentleman, I am sure, takes a great interest in the policies of the Liberal Democrats. He will doubtless be interested to hear what my hon. Friend the Member for Northavon (Steve Webb) has to say later in the debate.

It was Liberal Democrat policy at previous elections to have a full citizen’s pension at the level of the minimum income guarantee. That is still an aspiration, and we will work towards it, but everybody knows that in these straitened times that may not be immediately achievable. It is important that we should continue to have that aim, but the Government have not yet accepted the principle that a citizen’s pension is the way forward. Frankly, that is something that the Minister ought to be able to do today.

The latest report from the Department for Work and Pensions on the take-up of income related benefits shows that 35 per cent. of people aged over 80 do not claim pension credit despite being eligible. Indeed, the Government’s latest report shows that the amount of unclaimed pension credit rose by 3 per cent. between 2006-07 and 2007-08. The fact that such enormous sums are not being claimed each year indicates that the system is too convoluted for many people to understand.

The hon. Lady is right to bring such an important matter to the House before the election. It is something that people will be considering most carefully, and I congratulate her on bringing it to the attention of the House.

Will the hon. Lady put some meat on the bones? One in three pensioners fail to claim pension credit. They lose an average of £1,477 each year. It is often the poorest people who are disadvantaged, which is why the matter is so important.

I thank the hon. Gentleman for that intervention. He is quite right. Of course, by not claiming pension credit, those people become ineligible for other benefits, thus compounding the problem.

Age Concern Scotland describes as complex the system of calculations that a pensioner has to go through in order to work out their pension credit entitlement. The form to claim pension credit is 18 pages long. Once applicants have secured the guaranteed part of the pension credit, they become eligible for full help with housing and council tax—but to get it, they have to complete another form that is 40 pages long and takes three weeks to process. The Government’s proposals to pilot the automatic payment of pension credit, set out in the Welfare Reform Act 2009, could begin to address the problem. Those proposals are important, and I hope that the Minister will say when secondary legislation will be introduced to allow the pilots to go ahead.

According to Age Concern and Help the Aged in Scotland, the DWP and Her Majesty’s Revenue and Customs already hold the information necessary for such a scheme to be implemented nationally. We should aim to provide those elderly people in most need with simple and accessible methods of claiming. The evidence that I have outlined shows that the Government are failing some of the most vulnerable and disadvantaged pensioners. The Government know that the state pension is too low, and they rely on benefits to provide pensioners with what the Government consider to be a minimum living income. It would be fairer to move away from this flawed system of benefits, and increase the pension to a decent level that would at least meet that minimum level of income.

The hon. Lady puts her case most clearly. Does she agree that it is not just a question of complexity, although that is a real problem, but the fact that the incredibly long and complicated forms that she eloquently described are perceived by many pensioners, including those in my constituency, as being demeaning? They feel that they are unnecessarily and unfairly being obliged to parade their poverty, particularly given that they have paid contributions throughout their working lives. They believe that they should not be put through that. They would far rather go for a restoration of the earnings link at an earlier date. Does the hon. Lady agree that one of the worst outcomes of the current financial crisis is that the Government’s projected date of 2013 is drifting backwards in time, because the Government’s finances are so tight?

The hon. Gentleman makes his point well. It is similar to that raised by my hon. Friend the Member for Solihull (Lorely Burt). Many elderly people feel demeaned by having to go cap in hand to the Government. Having a universal system would be much better. I agree that the earnings link should be restored as a matter of priority.

My hon. Friend made an important point in saying that if people do not claim some benefits they will not qualify for others. We are experiencing the coldest winter for many years, and many pensioners are cutting their heating. In areas such as my constituency, which are particularly cold, many do not get the cold weather payments because they have not applied for benefits to which they would otherwise automatically be entitled. Is it not time that we gave the benefits to those who need them without making them claim?

My right hon. Friend anticipates me and moves me seamlessly on to the issue of fuel poverty. The plight of the poorest pensioners has been worsened recently by rising fuel prices. Pensioners are more likely to be fuel poor than any other group, and, tragically, are also the most vulnerable to the effects of the cold.

Recent research commissioned by Age Concern and Help the Aged in Scotland showed that in the winter of 2009 a third of people aged over 55 turned down their heating because of fears about their finances. Given that we have just experienced one of the coldest winters for many years, surely such a statistic should give us great cause for concern. Indeed, turning down heating can have dire consequences for the health and well-being of the elderly poor. It is estimated that fuel poverty contributed to the deaths of 36,000 people last year.

Last year, 2.7 million pensioner households—one in three—were living in fuel poverty. This year, with energy prices higher than ever and the prolonged cold weather forcing people to heat their homes for longer, the figures are bound to be worse. Meanwhile the Government’s measures to tackle fuel poverty are condemned as “not fit for purpose” by the Institute for Public Policy Research in its report, “The Long Cold Winter: Beating Fuel Poverty”. As has been mentioned, eligibility for cold weather payments depends on having applied for pension credit, so many payments go unclaimed. In my constituency of East Dunbartonshire, nearly 1,500 eligible pensioners have missed out on cold weather payments this winter.

Energy companies have, on the whole, not reduced their tariffs in line with falling wholesale energy prices, allowing them to rake in record profits. The cheapest energy tariffs are often only available online, to be paid by direct debit, which many older people are unable or unwilling to access. Many older people do not have a bank account, but use Post Office card accounts. Extending such accounts to allow direct debit payments would not only support our post offices but enable pensioners to reduce their bills. Although such a move would be a welcome first step, surely the cheapest energy should be available to pensioners with the lowest incomes in the form of social tariffs.

The most sustainable and cost-effective way to tackle fuel poverty is to invest in energy efficiency measures and better insulation and heating systems in people’s homes, because that will cut fuel bills for years to come. The Warm Front programme in England and the energy assistance package, as it is now called in Scotland, could be very welcome interventions. However, many poor pensioners are still not reached by such schemes, and there is scope for both to be radically expanded. I am sure that other hon. Members also feel incredibly frustrated by such schemes. In Scotland, to be eligible for replacement central heating, a person’s existing central heating must be broken beyond repair. At that point—a person will not be eligible if they apply before it is broken beyond repair—a company will agree to send someone out within a couple of weeks to carry out an assessment. Then it will decide whether the person is eligible, and then it can be weeks or months before new central heating is installed. If someone’s central heating breaks beyond repair in November, then this scheme is not much good.

Many pensioners on low incomes rely on the interest they earn from savings to keep them out of poverty, but with interest rates currently near zero such people have seen their incomes decrease drastically over the past few years. Shockingly, the Government currently take no account of lower interest rates when calculating how much council tax benefit or pension credit a person receives. Income from savings is assumed to be 0.2 per cent. a week, which currently bears no relation to reality and means that thousands of pensioners are having their incomes overestimated.

It is hard to express the frustration that is felt by savers, so I want to share a few comments from some of my constituents. Mr. C said:

“I have just retired and planned to use the interest from my savings to live on, however with the latest cut in Bank Base Rate, I will be struggling.”

Mrs. B. said:

“So many pensioners and others rely on small amounts of interest on saving to make the difference between poverty and a reasonable existence… The Government seems to be helping those groups who have failed in business and many people who have made no effort to live a responsible life, and is ignoring those who have made every effort possible.”

That sums up the feelings of many savers in this country.

Furthermore, the compulsory annuitisation of pension funds at the age of 75 is forcing struggling pensioners to accept far lower rates of annuity than they might receive if they could wait for the financial situation to improve. One 74-year-old constituent told me that having saved all his life, he felt that he was now being penalised by having to purchase an annuity at the worst possible time, and that his personal and private savings plan had been “shot to pieces” as a result.

Retirees buying an annuity today are getting pension incomes of almost half that of their counterparts back in 1994. Alternatively secured pensions, the only alternative to annuitisation, are highly taxed and can be withdrawn only at 70 per cent. of an annuity, making them not a financially viable option for the poorest.

The Economic Secretary to the Treasury acknowledged in a letter to me that ASPs are “not suitable for everyone” and advised that people seek independent financial advice before taking one, which is a luxury that many cannot afford. I can see no good reason to continue to require people to annuitise their pension savings by the age of 75.

A culture of inequity in the treatment of our aged, together with discriminatory Government policy, have led to a troubled end to some elderly people’s working lives. Research by the Third Age Employment Network before the recession showed that only 31 per cent. of over 50s made redundant succeed in getting a new job within three months. Only 32 per cent. of those manage to keep their former level of pay, and on average they had to take a pay cut of more than a quarter. In the past year, long-term unemployment among men over 50 has doubled. Such an exit from the job market, coupled with the default retirement age, leaves some pensioners who have worked all their lives in a desperate situation. They are being forced to retire earlier than they had planned, which many cannot afford.

Government policy that disadvantages our elderly community in the workplace plays a major role in exacerbating pensioner poverty. I refer here to the default retirement age of 65 for men and 60 for women.

Does the hon. Lady acknowledge that one of the major problems is that employers obsessively employ younger workers and do not recognise the value of older workers, particularly those with previous experience? There is anti-discrimination legislation and she should at least acknowledge that.

I welcome the hon. Gentleman’s intervention. Part of the problem with the current legislation is that it does not apply to older workers. I agree that often older workers in the workplace are undervalued. A more flexible approach to retirement could benefit older workers and employers. By retaining older people in work, perhaps on a part-time basis and on a sliding scale towards retirement so that they are not facing a cliff edge, employers will ensure that skills and experience are passed on to younger workers.

In its fifth report, the Work and Pensions Committee was pretty damning of the default retirement age, describing it as “discriminatory and unnecessary” and stated that the Committee looked forward to its being abolished. It is still legal to force a worker aged 65 to retire against his or her will purely on the basis of age. It is similarly legal to refuse employment on the same grounds. It is outrageous that only a third of people retire voluntarily, while the rest face an often depressing end to a life of valuable contributions to this country. The anger felt over such a policy is reflected in the fact that almost nine out of 10 people over 50 think that the default retirement age is unfair.

I ask the Minister to consider changing the draconian and wholly unfair law on older people’s right to work. The Equality Bill could be a good vehicle to do that, but given the current discussions, it looks like the Government do not plan to take that step.

Will the hon. Lady at least acknowledge that we brought forward a review of the default retirement age this year? The call for evidence on that has now closed and we are considering the evidence even now. In the interests of fairness, she should at least have acknowledged that. Clearly, there is a great deal of support in general for the idea that we should end the cliff edge of retirement, and we are even, as she speaks, examining the evidence that has come in from both employers and employees on this important matter.

The Minister clearly puts her points on the record, but they are not much consolation to those individuals in the job market who are currently facing discrimination and being told to retire before they wish to do so. We hope that, as a result of the review, people turning 65 will not be discriminated against in such a way. It is worth noting that when the Government were taken to court last October by Age Concern and Help the Aged over the compatibility of this policy with human rights legislation, they were allowed to uphold the law only because of their promises to review the system. In his judgment, Mr. Justice Blake said:

“I cannot presently see how 65 could remain as a default retirement age after the review.”

I very much hope that after the review the default retirement age will change.

I know that there are many right hon. and hon. Members here who wish to speak, so I would like to conclude by saying that if we take these issues together—the pitiful state pension rights, the fact that thousands of elderly people are missing out on money that is rightfully theirs, the concerns about heating homes in the winter and the fact that savers are being hit by plummeting interest rates—it is no wonder that many pensioners feel abandoned by Government. So I will finish with the words of one of my constituents, Mrs. M, who wrote to me to say:

“Elderly people do not seem to have a voice.”

I hope that this debate today goes at least some way to providing that voice.

It is a great pleasure, Mr. Gale, to serve under your chairmanship.

I would very much like to congratulate the hon. Member for East Dunbartonshire (Jo Swinson), who has secured a number of important debates on social issues in Westminster Hall and the main Chamber. I would also like to place on record my thanks to Michael Knight of Croydon Retired Peoples Campaign—a group that I will address next week at Ruskin house—and Malcolm Felberg, who chairs the Croydon local involvement network. Both of them have made a significant input regarding our concerns in Croydon about the situation for the elderly, particularly those in pensioner poverty, and the approach that we must take to address those concerns.

We should place on record, however, the very good work that the Government have done in taking more than a million pensioners out of poverty, albeit against a background of significant deterioration in income and equality generally within society since 1997. As the hon. Lady said, the basic state pension of £95 a week is still—horrendously—below the official poverty measure of £165 a week. That particularly affects female pensioners, who tend to live longer than their spouses. They are especially affected if they have operated as single parents for a good deal of their working lives.

I am also interested in the experience that pensioners have when they encounter the NHS. The way in which ill health is treated can often have a very real effect on pensioners’ income and wealth status. I am particularly exercised by the effect on people’s standard of living when they have a fall on icy or uncleared pavements, and was pleased by the response from Lord Adonis, the Secretary of State for Transport, to the problem. In my local Mayday hospital, the number of fractures went up by a factor of five when pavements remained uncleared. There may well be a very good argument for moneys in the NHS being spent on clearing pavements, as they have been—I know that this is controversial—in Durham, because doing so has a substantial effect.

I had the impression that, when the pavements were bad, people were almost imprisoned in their houses, which meant that they either had to spend more on fuel or sit in the cold. Does the hon. Gentleman agree that that was the case?

The hon. Gentleman makes a very good point, because if people are imprisoned in that way, it has a very significant impact on their mental health. The general issue is one of quality of life for the elderly. Perhaps it is the result of poor public transport—we are probably blessed with better public transport in Croydon than people are in the hon. Gentleman’s constituency, although I know that Scotland invests a great deal in public transport—but it is an important concern.

The most significant illness affecting pensioners is dementia, yet the research funding for dementia is less than 2 per cent. of research funding for cancer. Obviously, I am not quarrelling with the amount that is spent on research funding for cancer, but with an ever ageing population and with more and more NHS funds being used to care for dementia sufferers, research funding for dementia is an issue worthy of consideration.

The hon. Lady and her right hon. and hon. Friends rightly emphasised the importance of the experience of the hardest winter for 30 years. It is estimated that the proportion of pensioners who have found themselves in fuel poverty has gone up from what might be described—rather sadly, perhaps—as the normal 25 per cent. to 40 per cent. this year. It is bad enough that many pensioners have to choose between heating and feeding themselves, while also giving consideration to the fact that they might have to use any spending money they have on care services. It is fair to say that in my local authority—and I am sure that this is true elsewhere—increases in care service prices, if pensioners are not otherwise supported by the public sector, are a matter of great concern.

While we are discussing caring and care services, single women, instead of working, are often carers and they do a superb job—and a very worthwhile job for society at large—for those for whom they are caring. However, does the hon. Gentleman accept that, when they eventually become pensioners, they suffer particularly badly, so the Government must find better ways to reward carers and to recognise the contribution that they make to society before they become pensioners?

I am very grateful for my hon. Friend’s comments—I know that he has raised that issue in the House. To some extent, the Government are listening on this issue, but it is a very important concern.

I hope that all right hon. and hon. Members here today will recognise the changes to carer credits for national insurance contributions, which are due to be introduced in April. Weekly national insurance credits will be granted to those who care for other individuals for more than 20 hours a week. As for those who care for others for 20 to 34 hours a week, but who are not known to the benefits system, we are very anxious that they should apply for their credits, because doing so will ensure that they can make up their own basic state pension when they retire. We need help to identify those carers, and I hope that all right hon. and hon. Members who are here today will note that and go back and work in their own constituencies to help us to find them.

I am very grateful to the Minister for that intervention, and I think that that is a very good example of joined-up government. That approach, as long as we are in the happy situation of having that capacity and making it known to potential recipients, is a very cost-effective, caring and compassionate way of operating Government activity.

Nevertheless, I sometimes feel a sense of frustration—perhaps on behalf of the Minister—at the way in which British politics has progressed. In many ways, the Pensions Minister is not responsible for many pension issues, because of the arm’s length approach that has been adopted. I went to see one of the Minister’s predecessors to discuss my concern about how particular private sector pensioners have suffered as a result of the demise of Allders, the company for which they worked. The response that I received then was very much, “Well, these are not responsibilities for the Minister any longer—they are at arm’s length and they are with the regulator.” Going through that process can be very frustrating.

I wish to declare an interest, as my father recently turned 75, and faced the very difficult situation of having to deal with an annuity, particularly at a time when the financial markets were in serious difficulties. The hon. Member for East Dunbartonshire emphasised the interaction of benefits and the fact that that many pensioners just turn their minds against claiming benefits, because they feel that there is a stigma involved in doing so. I am concerned about constituents who have had to deal with the fact that the interaction of bereavement benefits—obviously that is something that very much affects pensioners—sometimes has an adverse impact on other benefits to which they are entitled.

Several Select Committees have emphasised the good practice demonstrated by Service Canada, which provides a single point for Canadian people to gain advice, and operates in a non-stigmatising way. We can take encouragement from that example. It is extremely difficult to provide such a service, but it is something to which we should aspire.

I mentioned at the outset Croydon’s performance in this area. I am very concerned that a lot of provision for the elderly has been cut back. For example, the Foyer, which is in north Croydon, did a lot of work with senior citizens, but funding for that centre has unfortunately been cut. I suppose that that is a prospect that we will face generally, as public expenditure is reduced. Nevertheless, I congratulate Croydon council particularly for providing disabled pensioners with the AskSARA system, which does a great deal of good internet-based work—admittedly, it is only available in that medium, and I will make a point about that in a moment—that tries to offer a good understanding of their problems. The system is easy to use, and helps pensioners to identify the appropriate services and equipment that Croydon council provides for the frail and disabled. Of course, the internet is not available to all pensioners, so take-up is lower than it is in other groups. I was disquieted by the approach of Southern Railway, whose consultation on rail services is now built wholly around the internet. That is unfair to many pensioners, who are thus excluded.

I am mindful that other Members want to speak. I appreciate that the country faces significant financial difficulties in the coming months. However, in considering macro-economic policy, we must remember that pensioners are likely to spend 100 per cent. of their resources—or perhaps more, making it a dissaving. Money pumped into the economy through pension increases is likely to have a stimulating effect. We need seriously to consider increasing the basic state pension, so that it at least approaches the official poverty level, to £150 a week.

I congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on securing this debate. I thank her for the information that she shared and the Minister for her interventions. It shows the value of having intelligent debates in Westminster Hall about issues such as pensioner poverty.

It is worth recording that the state pension came about just over 100 years ago after enormous campaigning and pressure by radical organisations, trade unions and Churches and was finally forced into being through Lloyd George’s Budget. The pension had a mixed history for a long time. Although it was designed to alleviate the most appalling poverty, it never succeeded totally in doing so, as it tended to rise and fall depending on how successful or otherwise the economy was. During the deep recession of the 1930s, the pension did not go anywhere near meeting the needs of the poorest. It has always been a sticking plaster rather than a solution to the issue of pensioner poverty, as I am sure my professor colleague the hon. Member for Northavon (Steve Webb) would agree.

The great step forward in pensions came in 1975, with the late Barbara Castle’s heroic legislation. In the teeth of an economic problem, massive inflation rates and huge demands on public spending, she managed through force of personality to persuade the Cabinet to pass groundbreaking pensions legislation that recognised pensioner poverty as well as discrimination against women and those not in any of the then big occupational industrial pension schemes. It introduced the state earnings-related pension scheme to accommodate those who were not in any other supplementary scheme and ensured that the state pension rose year on year in line with inflation or earnings, whichever was larger.

The state pension as a proportion of average earnings rose considerably during the next five years while that link was maintained, despite all the economic problems that this country faced during that period. We should pause for a moment to recognise Barbara Castle’s great work and the heroism surrounding it. It must have been extremely difficult to get such legislation through the Cabinet at the time.

Does the hon. Gentleman share my dismay that this year’s pensions uprating adds 2.5 per cent. to the basic pension but freezes state earnings-related pensions? Will he consider—I will not ask him for a commitment now—joining us in the Division Lobby next Monday when we vote against the decision to freeze the SERPS uprating? We believe that pensioners should not bear the brunt of the cuts.

I am always reluctant to vote independently of my Whip, but I will consider the situation—

After consultation.

After due consultation.

I accept the point made by the hon. Member for Northavon about the current uprating. To return to the link with earnings, we must place responsibility where it is due. The 1980 Conservative Government broke that link, which was a monstrous thing to do. They then moved on to the Social Security Act 1986, on whose Standing Committee I had the misfortune to sit. The Act put into law a continual reduction in the value of the state pension, abolished the state earnings-related pension scheme and set up the principle of a market for private pensions in this country, which is rather at variance with the European tradition and is still playing out today in the level of the state pension. Many people suffered grievously from the mis-selling of pensions and corrupt private pension schemes.

We are still in that bind and cannot seem to get the idea that in a welfare state it is the state’s responsibility to ensure the elimination of poverty among everyone in retirement. That must be a primary responsibility. We accept the welfare state in terms of universal health care and education provision; we should also ensure that we accept the state’s major responsibility to ensure the elimination of all poverty in retirement. However, it would be ridiculous to say that there have not been huge changes over the past 10 years. There was a big debate before the 1997 election, particularly in the Labour party, about whether we should re-link pensions to earnings and make the state pension the basic motor for the provision of income on retirement or go for what has turned out to be pension credits, pension top-ups or whatever nomenclature is put to them. Essentially, that debate was lost by those of us who wanted an immediate restoration of the link between pension and earnings and therefore a much higher basic state pension.

Of course I welcome pension credits in that they put money into the pockets and handbags of people who would not otherwise have it. I regularly attend meetings of the Islington Pensioners Forum, and I always say, “Claim every single thing you can.” However, I recognise, as I am sure does everyone in this Chamber, that under a means-tested system involving a complicated application process, no matter how nice, supportive and helpful the people are on the other end of the phone line or in the local office, many people simply will not claim. Either they feel that they should not, or they are put off by the bureaucratic procedure involved. We must recognise that as one big problem.

The other—I will return to it in a moment—is that occupational pension schemes are disappearing quickly as company after company tries to close final salary schemes to new members and move to earned savings schemes, which are not as beneficial. Such schemes, of course, become less sustainable anyway. A pension system that relies heavily on stock market prices gives a pretty grim outlook for an awful lot of people in work at present. Although they would not thank me for saying so, many among the present pensioner generation are better off than those further down the line are likely to be under the current system. We must think seriously and carefully about that.

My hon. Friend will know and, I am sure, accept that that situation was made much worse by the mania for early retirement during the 1980s, when people were bought off, which put pressure on the funds later. It was also made worse by pension holidays. With the benefit of hindsight, allowing and encouraging them were one of the most disreputable acts of any Government. I am sure that he will agree.

One of the most depressing experiences that I have had in the House was serving on the Select Committee on Social Security in the mid-1990s and investigating the Maxwell pension fund. Robert Maxwell appeared to be on a permanent holiday as far as pension contributions were concerned. Like all permanent holidays, it disappeared, taking the funds with it. My hon. Friend is absolutely right that inequity in the running of pension funds is crucial. I realise that things have moved on a lot since then, but there are still reasons for concern.

To quote some statistics on the current scale of pensioner poverty in Britain, the number of people living in severe poverty—on less than 40 per cent. of the median population income—has increased by 600,000. The incomes of the poorest quarter of pensioner households rose by less than 1 per cent. last year, and the real incomes of the poorest single pensioners dropped by 4 per cent. At least 15 per cent. of pensioners, or more than 1.5 million people, live in persistent poverty, having lived on less than 60 per cent. of the median population income for three of the last four years. We have to recognise that there are significant pockets of pensioner poverty and deprivation.

As a proportion of average working pay, the state pension in Greece is the highest in Europe at 95.7 per cent. and that in the UK is among the lowest at 30.8 per cent. Those are headline figures that do not necessarily include other sources of income from state benefits, but one can see the scale of the issue and the effectiveness and efficiency of a non-means-tested, high-value state pension, compared with any other form of benefit. I think everyone now recognises that means-tested benefits tend to end up with low take-up and with a lot of people missing out.

There are two huge areas of even worse poverty. The hon. Lady rightly drew attention to the problem of the general low level of pensioner income among women. As a union organiser in the 1970s and 1980s, most of the members I represented were women working part time in school meal or school cleaning jobs. Unfortunately—I say unfortunately because of the consequences—they were offered the right to pay a lower rate of national insurance contributions. Understandably, offered the choice between paying A or B, where B is lower than A, most people chose to pay B without much thought for the long-term consequence of smaller pensions. That was a main contributory factor to poverty.

Another major contributory factor was the lack of job security for many women workers. Most men at the time tended to be in occupational pension schemes, whereas women did not. That was what the Barbara Castle legislation tried to fix and what the Conservative Government of the 1980s tried to destroy. The median income for women on retirement is only 57 per cent. of that of men. Only 30 per cent. of women who reach state pension age are entitled to a full basic state pension, compared with 85 per cent. of men. One in five single women pensioners risk being in poverty in retirement. Almost 63 per cent. of divorced and separated older women have no private pension income.

My hon. Friend’s analysis of the gender difference in access to pensions is spot on. I hope he acknowledges that in April there will be an historic change in access to the basic state pension. We are reducing the required number of national insurance contribution years from 39 for women and 44 for men to 30 for everybody. At a stroke, that will mean that 75 per cent. of women qualify by their own right. By the end of the decade, that will eliminate the gap in the access to the basic state pension between men and women.

I welcome that and the fact that the Government recognise the huge problem, in particular the problem of broken careers among women, which usually occur because they have children and stay at home to bring them up. We must recognise that there is a big improvement on the way and I welcome that.

The other area of enormous pensioner poverty is among ethnic minority people. The number of ethnic minority pensioners is small, but it will rise rapidly over the next 10 or 20 years. We are all aware of that from our constituency work. The proportion of ethnic minority elderly people who are in great poverty is much higher than for any other group. They make up only 3 per cent. of people above state pension age, but they are often in considerable poverty because of discrimination in the workplace, for example in promotions and the inability to get a permanent job, particularly, in the past, one that had a pension attached to it. That is another pocket of high levels of poverty that we must recognise and do something about.

I will be brief, Mr. Gale, because I know that other hon. Members wish to speak. I just want to mention other areas of support for pensioner households that tend, unfortunately, to be patchy and sporadic. The travel permit and travel pass systems are welcome if pensioners get free travel on all public transport. London paved the way with the Greater London council bus pass, which was introduced in the early 1970s. That morphed into the freedom pass, which is now universally available across London, and I welcome that. The Government have done a great deal to extend the concept of supported or free bus and rail travel across the country. We must recognise that these are important things and that in this time of recession and pressure on Government spending, they should not even be considered for a cut, but should be fully supported because they provide freedom of movement.

I will be brief because other hon. Members wish to speak. It is important for politicians to defend the freedom pass because many local London councils that are upset about changes in funding and about money being taken away from London and put elsewhere talk rather darkly of compromising the provision of the freedom pass.

I hope that they will not compromise the provision of the freedom pass. There is no threat to the freedom pass in London as long as the local authorities ensure it is provided. Under the Conservative Government of the 1980s, we saved the pass in London only through a consortium of local authorities and last minute changes in the legislation. The freedom pass is important.

We must also look at caring and nursing costs. The provision of care arrangements is often inadequate. The use of agency staff by local authorities for the care of frail elderly people in the home means that there is often a lack of continuity in care. We must look at the quality of care that is provided because it is patchy. There is nothing better than a publicly employed person with a secure job whose responsibility is to look after an elderly person in their home. The same person should go everyday so that a good relationship is built up. That is good support for the community. If that work is done by contractors and agencies with different people going in every day, it is distressing and disturbing for the elderly people and we end up with a less harmonious and less happy society.

I will conclude with the suggestions put forward by the National Pensioners Convention to the Work and Pensions Committee on tackling pensioner poverty in Britain. It outlined many issues concerning the level of the state pension. We should recognise the great work of the National Pensioners Convention, which is an effective campaigning body, in not only mobilising large numbers of elderly people across the country, but bringing to the attention of younger and middle-aged people in work that it is their responsibility to campaign for decent pension provision and to ensure the elimination of poverty in retirement.

I will quote two points made by the National Pensioners Convention:

“The National Insurance Fund remains the most secure way of funding decent pensions in retirement, but its status is being undermined by the government’s policy of using the excessive balance held in the Fund for public expenditure other than that of pensions and benefits for which it is intended”.

There is a serious debate to be had about that. The next point states:

“The basic state pension provides the most obvious and effective method of tackling pensioner poverty, both now and in the future. It should be set above the officially recognised poverty level and paid universally to all pensioners. This could be easily afforded by introducing a number of changes to the national insurance and taxation systems”.

Essentially, the point is that it is the responsibility of us all, through national insurance and taxation systems, to ensure that pensioners receive enough money to live on decently and safely in retirement. It is simply not right that people go through the disfigurements of poverty, borrowing from children or just trying to scrape by. As I said, the welfare state should apply to pensioner income as much as it applies to health and education.

I was going to call the Front Benchers at 10.30, but I am afraid we are running out of time because of the length of the speeches. I urge brevity on hon. Members.

I will try to be reasonably brief and not raise points made already. I congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on obtaining the debate and on being brief in her opening speech. As we are the only two non-Labour MPs in the Greater Glasgow area, I think we have a certain affinity.

The complexity of the benefits system and people not claiming has already been covered, so I shall not spend time on that. However, I wish to underline that it is a huge problem. I recognise—as all hon. Members who have spoken have—that if the system is too complex and uptake is significantly short of where it should be, something is wrong and we need to consider the need to have a much more universal provision, whether that is a citizen’s pension or whatever.

Another area on which I would like to touch is the gap between the rich and poor in our society generally. Clearly that issue does not affect only pensioners, but it certainly includes them. When people reach pension age, how much they have, how much they owe and what their wealth is are key factors. A recent report said that the top 10 per cent. in our society have at least £853,000 of wealth and the bottom 10 per cent. have a maximum of £8,800. So the top 10 per cent. have at least 96 times as much as the bottom 10 per cent. I accept that we cannot all be exactly the same, but it seems that 96 times as much is rather too large a figure. Another comparison on the income side is that since 2000, the ratio of FTSE top 100 bosses’ income compared with that of an employee has risen from 47:1 to 128:1. That has happened under the Government’s regime and shows that there is something seriously wrong. Income during working life clearly has a major impact on one’s income as a pensioner.

That leads me to my next point about company pension schemes, which has already been mentioned, particularly by the hon. Member for Croydon, Central (Mr. Pelling). Almost every day, we hear about the closure of final salary schemes and, as he suggested, such a situation is surely storing up problems for the future. It might be cheaper for people not to save in the short term—that is obviously the case for employers—but, in the longer term, we will be left with more of a problem.

We read complaints in the press and from the private sector that the public sector is far too generous in its pension provision, but the reality is that many ordinary public sector workers get a very modest pension when they retire. It is very much the exception rather than the rule that there are huge pensions either in the public or private sector.

Does the hon. Gentleman agree that in relation to the public sector pension, the average payment is currently around £5,000? It is extremely peculiar to describe that as a gold-plated pension, yet that is what we hear from those who wish to attack public sector provision. Does he agree that the public sector provision needs to be defended?

I completely agree with the Minister on that point. In a constituency such as mine, where people are probably earning a bit less than average, they are possibly getting even less than that. The matter is very important to those people and such a pension is certainly not gold-plated. We should surely bring the private sector up to the public sector, rather than the other way around. I wonder whether employers are getting off too lightly and if there should be much more compulsion regarding employers contributing to employees’ pension schemes. The reality is that that is often why the private sector can undercut the public sector when it comes to contracts in the local authority or elsewhere. The private sector has lower pension costs and is able to win contracts, but, in the long term, such a situation is causing a problem. I accept that it is unlikely we can return all employees to defined benefit schemes and that putting all the risk on employers is perhaps unfair, but to switch to the other extreme of putting all the risk on employees is also unfair. It should be possible to come to some kind of compromise where risk is shared.

There is also clearly an issue regarding spending priorities. When we face tight financial times, we have to choose priorities. We have to choose between nuclear submarines or going around the world fighting wars as if we were still an empire, and putting money into helping pensioners and other vulnerable groups. Surely the reason why Sweden, the Netherlands and such countries have a level of pensioner poverty that is a third of that of the UK is that they are not spending so much on defence and other priorities. Even if the UK has those priorities, can Scotland not be allowed to have a bit more freedom to set its own priorities? I believe that most people in Scotland would want to put more money into pensions and less into nuclear weapons. If we could have fiscal autonomy or accept at least some of Calman’s proposals, we would be moving in the right direction.

I wanted to intervene on the hon. Member for East Dunbartonshire to point out that she had not talked a lot about council tax, but I did not get the chance. I believe that her party—mine certainly does—favours a move away from council tax towards something such as a local income tax, which would be based on ability to pay and, at a stroke, would help pensioners and people on a limited income. Such people would not have to apply for anything because that local tax would be based on their income. I congratulate the hon. Lady on the debate and urge the Government to take the issue more seriously. Surely, this is one subject where the Government could be seriously to the left of the Conservatives.

It is a pleasure to serve under your chairmanship, Mr. Gale. I am grateful to my hon. Friend the Member for East Dunbartonshire (Jo Swinson) for raising the issue and am particularly grateful to the hon. Member for Glasgow, East (John Mason) for the speed at which he made his remarks.

These are critical issues. We have a higher proportion of pensioners in Wales than anywhere in the UK— 21 per cent. compared with 19 per cent. in England and Scotland. In my constituency of Ceredigion that figure rises to 24 per cent. We have heard the statistics: 22.1 million people in the UK are living in poverty and two out of three pensioners rely on benefits. I want to make three quick points. First, the key trend is that older people tend to be worse affected by inflation than the general population because they tend to spend a higher proportion of their income on things that have had particularly large price increases, such as fuel, food and council tax. The National Pensioners Convention has estimated that 40 per cent. of pensioners’ income is spent on those things, which puts pensioners in an acutely vulnerable position.

That is backed up by a 2008 report by the Institute for Fiscal Studies, which talks about food and fuel inflation being at 6.7 per cent. However, for pensioner couples that figure is 7.7 per cent. and for single pensioners it is 9 per cent. Inflation might not be the most pressing problem at the moment—it stands at 3.5 per cent.—but it looks set to increase, so we need to monitor that position very carefully and look out for those food and fuel spikes.

It would be churlish not to welcome the 2.5 per cent. increase in the pension—the £2.40 and the £3.85—but when we put that in the context of the 50p a month charge on phone lines to finance broadband, we realise how minimal that increase is, not least for constituencies such a mine where there is minimal broadband and a large number of my constituents cannot access it.

I have two specific points for the Minister. The last time we had a debate on the subject in this Chamber was in December 2008. One of the clearest points made was that council tax benefit should be renamed the council tax rebate. The Government were receptive to the idea and an amendment was put forward. The amendment was removed on the basis that the Government would bring that issue forward, but the time frame for that is yet to be forthcoming.

The Royal British Legion has particular concerns. The response from the Minister to the legion stated that the Government would be consulting with local authorities and other key stakeholders in due course. We are still unclear about what “due course” means. Renaming council tax benefit would deal with some of the issues about pride and lack of take-up raised by other hon. Members. It is appalling that only up to 61 per cent. of pensioners eligible for council tax benefit claim it. We need to do something to deal with that issue, which was part of the legion’s return to rationing campaign. Research for that campaign revealed that 38 per cent. of older veterans were living on an income less than that required for healthy living.

I reiterate the concerns raised about fuel poverty. Particularly in a rural constituency such as Ceredigion, many people come to me with concerns about the costs of heating their home. They are unable to do so and they are unable to switch between different suppliers because of the monopolistic situation that exists.

Finally, I wish to highlight the work of the voluntary sector in bringing awareness of pension credits and other available benefits. Age Concern Ceredigion has reported a 10 per cent. increase in poverty-related inquiries among the 32,000 over-55s with whom it works. It has helped people access up to £1 million in benefits. It is an independent charity that is combating rural isolation and promoting income maximisation. It has a £100,000 shortfall in its funding for next year—because of the recession, grants are drawing up—so it will have to cut back on some of the invaluable work it does for those people. That work is replicated by citizens advice bureaux, the Royal British Legion and volunteer consultants such as Rif and Ann Winfield in my constituency. They have an important contribution to make in the short term, before we get the full citizens pension that the Liberals Democrats would certainly support.

My final point is this: the spectacle of a retired couple in south Ceredigion who have to reconcile whether it is more provident to put £10 of petrol in the car to do their shopping or to walk cannot be right, and that is why this debate is so important.

I congratulate my hon. Friend the Member for East Dunbartonshire (Jo Swinson) on securing the debate on this important matter. As we have heard, she has a track record of raising such matters, including Equitable Life, and I thought that her contribution was characteristically well researched and comprehensive. She has done the House a service by giving us the chance to debate these vital issues. Various facets of pensioner poverty have been discussed, particularly the position of women, to which I will return.

I also want to thank the Minister. Rather than sitting for an hour twiddling her thumbs before reading out a prepared text, she has intervened on several occasions to make her points, which was entirely welcome. Therefore, I will save her the trouble of reading out her prepared text. In such debates Ministers tell Members all the things the Government have done to improve take-up, for example, or to address all the matters that have been talked about, but the point my hon. Friend the Member for East Dunbartonshire and others have made is that, after all the things the Government have done, such as the take-up campaigns, we still have vast pensioner poverty, rising fuel poverty and very poor take-up. The question is not what the Government have done, but what will they do to address the aspects of poverty that are still very much with us, because pensioner poverty, as the hon. Member for Islington, North (Jeremy Corbyn) said, is a blight on our society. It should be the role of the state, not necessarily to deliver, but certainly to ensure that pensioner poverty is defeated. The fact that successive Governments have failed so lamentably on that is a shame on us all.

The hon. Member for Croydon, Central (Mr. Pelling) and my hon. Friend the Member for East Dunbartonshire referred to the position of women. One facet of the changing pensions landscape that is prejudicial to women has not had the attention it deserves. The hon. Member for Glasgow, East (John Mason) mentioned the demise of final salary pension schemes. Although they tended to reinforce the gap between men and women, because men tended to earn more, when we switched to money purchase schemes we found that they were biased against women because women tend to live longer. Under such schemes, a man and a woman could start the same job at adjacent desks, leave their work at the same age and earn precisely the same amount of money, but the man will get the bigger pension. He will not live as long, so the total pot of money would be the same, but it is not much consolation for someone living in poverty to be told, “Don’t worry. You can have a long period of poverty, rather than a shorter period on a higher income.” Can the Government just watch the shift to defined contribution schemes, which are biased against women, and the introduction of personal accounts, or National Employment Savings Trust pensions, which are part of a whole new system of defined contribution pensions that will also be biased against women, relative to state provision, for example, which is unisex?

The Government cannot stand idly by and watch those things happen. I fully accept that the April 2010 changes are welcome, as the Minister said, but they create a cliff edge that means that women who are born perhaps a day too early will miss out on the whole improvement. I fully accept that there has to be a day when things change, but when the change is so substantial, the onus is on the Government to avoid those cliff edges and phase things in so that those who reached pension age in 2008-09 could have some proportion of the benefit of the changes, which would be a better step.

Will the hon. Gentleman give way?

I hope that the hon. Gentleman will forgive me, but I cannot take an intervention with so little time left.

Members have discussed a default retirement age, and the best that the Government could say on that after 13 years is that a review is being undertaken. That is pathetic. Injustice is injustice. Being discriminated against because of one’s age and the idea that one’s fitness for a job depends on the date on one’s birth certificate is nonsense. Are we really in the 21st century? Do we need a review? Should we not get on with it? I joined the hon. Member for Eastbourne (Mr. Waterson), with whom I seem repeatedly to be joined at the hip on these occasions, at a pensions dinner last night, and he announced to an expectant world that the Conservatives have decided to scrap default retirement ages. I am delighted that they followed us in a case that we have been making for years. There is great joy in heaven when a sinner repenteth, so I welcome him to the fold. That is a good step, and hopefully, as in so many areas, the Liberal Democrats lead the way, the Conservatives follow and finally the Government will implement the change. Incidentally, I could not help noticing that there were more ex-Conservative Members in the Chamber this morning than current Conservative Members.

The issue is not just one of retirement age—annuities have been mentioned. My hon. Friend the Member for East Dunbartonshire made the point about compulsory annuitisation, which is something we need to end, but it is a bigger issue than that, as I am sure she would agree. When people reach pension age, roughly one third choose to stay with their current provider, and do it without thinking about it, about one third look at the alternatives but stay with their current provider and about one third switch. The evidence is that many people could simply get a bigger pension by shopping around, and the open-market option should be taken up much more highly. It is not a particularly partisan point, but I think that Governments should do much more, whether through behavioural economics or other means, to nudge people away from the latent assumption that one stays with one’s current provider.

The open-market option is a clear way to go. We are working with some of the insurance companies to ensure that they release the funds more quickly, because there are issues about how fast the funds can be released so that an open-market option can be purchased practically, but I agree with the hon. Gentleman’s point. We are doing things to try to make that easier. Then, of course, we have to persuade people to use it.

I do not doubt that there are small steps in the right direction, but, for example, we are now in a culture in which, when one gets a motor insurance premium, one can shop around and “compare the meerkat”, or whatever it is. There is less of a culture of doing that with annuities, and one proposal is that, however many months out from the date on which someone expects to draw an annuity, they ought to be given, in a digestible format, the information that they need to shop around. If they have access to the internet—I take the point made about internet access by the hon. Member for Croydon, Central—or can go to a library, they will then have the five key pieces of information they need, and the process would be far easier than it is at present. That is an easy win for improving pensions, particularly for women, and something on which much more should be done.

My hon. Friend the Member for Ceredigion (Mark Williams) properly raised the issue of council tax benefit, as opposed to council tax rebate, and the Royal British Legion is rightly concerned about that. With the best will in the world, we can have the best take-up campaigns and can rename benefits as rebates, which would help, but ultimately a decent, secure, guaranteed pension must be the goal. I would be the first to accept that the level of pension that all of us would like to see cannot and never could be delivered overnight, but I believe that any political party must have a vision—a direction of travel. One of the problems in pensioner poverty is that we have seen flip-flops and switches in emphasis, so we need a clear goal and must make progress as rapidly is possible. That is why we think that the earnings link needs to be restored, not by the end of the next Parliament, as the Conservatives have said, or by 2012 but maybe 2015, as the Government have said, but immediately. Earnings or prices, whichever is higher, must be the way to go straight away, but that is a small first step on a long journey.

I will repeat the point I made to the hon. Member for Islington, North: at a time when we should be re-linking the pension to earnings, to have only part of the total basic pension price protected and to freeze SERPS, graduated pensions and the state second pension is an extraordinary thing to do when we all recognise—I speak at enough pension conferences to know—that every single problem in the pensions system would be made better by a decent state pension. Getting private pension incentives on top is easier with a decent state pension. Reducing reliance on non take-up and issues of means-testing is made better with a decent state pension. If we can do only one thing in the whole of pensions policy, it must be to have a decent state pension, which would make all the other problems much less severe.

Personal accounts pensions, or NEST pensions, ought to be a good way of tackling gaps in pension provision, but one of my worries about the future is that we will end up encouraging millions of people to take out relatively small pensions, much of which they will then find to have been means-tested away, and that might discredit private pension saving if we do not tackle means-testing and the adequacy of the basic state pension. I cannot do justice to the wide range of issues that my hon. Friend the Member for East Dunbartonshire and other Members have raised, but the basic state pension is a critical issue. Sorting out the basic state pension is first, second and third on the list of priorities, and it needs to be dealt with not in the distant future, but now.

As always, it is a great pleasure to follow the hon. Member for Northavon (Steve Webb). Indeed, it is becoming routine. I join him in congratulating the hon. Member for East Dunbartonshire (Jo Swinson) on securing this debate, which has been interesting if a bit breathless, given the number of issues that have been raised.

I was grateful for the hon. Lady’s confirmation that her party has downgraded the citizen’s pension, or universal pension, to an aspiration. It joins the list of other policies such as free tuition and free care which have also been downgraded recently. Those downgrades do not yet seem to have found their way into the Liberals’ literature in my constituency, but I am sure that it is only a matter of time before they find their way into mine.

Pensioner poverty has been debated any number of times in recent years, sometimes in Opposition time as well. I believe that it is clear to all of us that the problem is getting worse: at least 2.5 million pensioners are officially living in poverty. On the basis of work in our own constituencies, as we have heard from several hon. Members, the problems faced by many of our older constituents are perfectly plain. I am a vice-president of my local Age Concern and see that very much at first hand.

We are asked to believe that the Government’s slogan for the next election will be, “A future fair for all”. What happened to the past 13 years? That was the future once, if I can misquote somebody. The fact is that all the statistics show that the problem is getting worse. The Government seem to be rightly focused on child poverty to the extent that they have introduced a Bill designed to abolish it, even though it is clear that they will fail to meet their 2020 target on child poverty. Why not a Bill on pensioner poverty? What is the distinction? Of course child poverty is important, but so is pensioner poverty.

The Government often say—I am sure that it is in the Minister’s prepared speech—that pensioners are now less likely to fall into poverty than the rest of the population. Of course, that depends on how one looks at the statistics: including or not including housing costs makes a significant difference to the claim. We still face the grim truth that 2.5 million pensioners live in poverty, and 64 per cent. of pensioner households are dependent on state benefits for at least one half of their income.

One aspect among others that the hon. Member for Croydon, Central (Mr. Pelling) touched on was fuel poverty, which is particularly important at present because of the recent bad weather. The latest Government figures suggest that 3.5 million households are affected, but Energywatch says that actually 5.4 million households, or some 9 million people, live in fuel poverty. Sadly, Help the Aged has estimated that between 20,000 and 50,000 elderly people die each winter because of their freezing homes.

My party intends to continue the winter fuel allowance. We are committed to protecting that vital source of help for older people, but it is clear that this issue will not go away, whoever is in government. We intend to bring in energy efficiency improvements of £6,500 for every household and to require energy companies to provide information on energy bills that clearly shows the cheapest tariff available. We need complete transparency in the energy market if we are to give pensioners and others the opportunity to get the best possible deal to meet their energy requirements.

There has been quite a discussion about benefits and take-up. The hon. Member for Glasgow, East (John Mason) touched on this in his speech. We know that some £5.4 billion a year in benefits goes unclaimed by pensioners—a huge amount which, according to the Institute for Fiscal Studies, could take at least 500,000 pensioners out of poverty at a stroke. The hon. Gentleman was right to touch on the problem of complexity in all of this.

On the earnings link, the hon. Member for Islington, North (Jeremy Corbyn) took us on an interesting trip down memory lane, but I am sure that he is as frustrated as he was when the Conservatives were in government that, after 13 years, this Government have done absolutely nothing to restore it. I can confirm that my party is committed to restoring the earnings link within the next Parliament, exactly mirroring the Government’s current position, which I hope the Minister will confirm.

I am always pleased to hear about sinners who repent. If the Conservatives plan to restore the link, over what time frame will they do it, and when do they think there will be similarity between the pension and average earnings?

Fortunately, those questions are above my pay grade and a matter for the shadow Chancellor, but we are committed to restoring the link within the Parliament.

What does that mean?

It means that when money is available within the next Parliament, we will do it.

I thought that the hon. Gentleman was uncharacteristically churlish about the role of private and occupational pensions in delivering a good standard of living for millions of our fellow citizens. Much of that is due to reforms and encouragement by successive Conservative Governments. It is a measure of this Government’s failure on pensions and pensioner poverty that those pension arrangements have taken such a hit in the past 13 years. We know that the Government stripped more than £100 billion out of pension funds, and my party is committed to reversing the effects of that in time. It was important that the hon. Member for Northavon touched on the future development of personal accounts, or National Employment Savings Trust pensions—NEST, as we must get used to calling them. We also know, following the pre-Budget report, that the Government are already planning to strip out £2.4 billion from those pension savings through delays in implementation.

The default retirement age, which was touched on by several hon. Members, is important. There are already 1.4 million people working beyond normal retirement age, which shows that there is an appetite for doing so. My party supports scrapping the default retirement age in principle, but we are not oblivious to the practical difficulties that that presents—unlike, possibly, the Liberal Democrats. We will work closely with organisations such as the CBI to find solutions to the complications and problems.

The hon. Member for Ceredigion (Mark Williams) raised a concern of the Royal British Legion. Several hon. Members mentioned the complexity of the council tax benefit system and the resulting low take-up. We know that nearly one half of all pensioners are subject to means-tested benefits under this Government and that, of all the benefits, the one with the lowest take-up by far is council tax benefit. Hence, my right hon. Friend the Member for Witney (Mr. Cameron), the Leader of the Opposition, gave his support to the campaign of the Royal British Legion, which was pleased that during the passage of the Welfare Reform Act 2007 there seemed to be a firm commitment that the Government would take action quickly. However, Ministers now seem to have retreated from that position. They gave undertakings and ensured that a particular amendment was withdrawn on the back of such assurances, but they are now talking about consulting local authorities and other key stakeholders.

We know that only 55 per cent. or so of all pensioners who qualify for the benefit actually get round to making a claim. According to polling carried out by ComRes, two thirds of people believe that the benefit is not claimed because people are ashamed to claim it. Conservatives are committed to working with local authorities to have a two-year freeze on council tax levels, and I am sure that that will be welcomed by many pensioners, but it seems to us—I believe that there is cross-party support for this—that the simple change of name from “benefit” to “rebate” would take away a great deal of the shame felt by pensioners who simply do not claim. An Ipsos MORI survey conducted on behalf of the Royal British Legion found that 56 per cent. of respondents believed that eligible veterans would be more likely to make a claim if it were for a rebate rather than a benefit.

May I take the opportunity provided so kindly by the hon. Lady to press the Minister to tell us exactly when that simple administrative change will happen. A simple change it may be, but it could put a great deal of extra money into the pockets of needy pensioners across our country who face poverty. I look forward to hearing what the Minister has to say.

First, we all need to congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on securing the debate. It has been useful and touched, as many of these debates do, on a range of issues that have a bearing on pensioner well-being and poverty. Some are not directly my Department’s area, but that is only right because older people do not live lives according to departmental boundaries. Social care, carers, access to occupational pension schemes, the implications of what happens in the financial markets, and how the financial services sector deals with insurance policies and annuities all have a bearing on the experience of those over retirement age trying to reconcile their savings with their expenses. If I did not realise before I got the job, I know now that, with pension policy, many echoes of the past arrive on the desk of the Pensions Minister. They were germinated and generated in the history books but arrive in the present and give a Minister conundrums, problems and difficulties.

My hon. Friend the Member for Islington, North (Jeremy Corbyn) was right to give a historical review of some of what has happened because the history of pension policy has an acute effect today. Those of us who wish to see a simplified system, and perhaps long for it because some parts are so complex, can think about the history from which our pension policy descends. He was right to recall the contribution that my political heroine, Barbara Castle, made. He was also right to point out that the link between pensions and earnings was broken by the last Conservative Government, and the effect that that had on the overall value of the basic state pension. It is important to remember the history.

The hon. Member for Northavon (Steve Webb) also mentioned some of those issues, particularly women’s exclusion from not only occupational pensions, often due to the structure and shape of the labour market, but the basic state pension. Other hon. Members, not least the doughty feminist the hon. Lady, mentioned in passing that there was a gender issue with pensions. I feel strongly about that as well, which is why I am proud that I will be the Minister when the April changes come into being. They will make a huge difference to women’s access to the basic state pension in their own right. The reduction in the number of years of national insurance contributions required to qualify for a full basic state pension will reverse the historic exclusion of women from the basic state pension over time until the pension is almost completely equalised by 2020.

The Minister makes a good point, but we should not forget those men who live longer and lack support because they are probably less adept at family and friend networking than females in society.

That is right; women tend to be able to deal with their social networks away from work more effectively, perhaps, than men, particularly older men. I have spent many good times in my job, which I am privileged to have, visiting older men’s groups, as well as women’s groups, where some of that social exclusion can be tackled. I know that such groups greatly add to the quality of men’s lives.

There are 900,000 fewer pensioners living in poverty than there were when we came into Government. I am grateful to the hon. Member for Croydon, Central (Mr. Pelling) for having the generosity to point that out. Often these debates, rightly, focus on those areas in which we still need to make progress, but it is important that we also acknowledge the progress made by the policies that the Government have pursued since we came to power. That is not being complacent, but significant work by the Government has taken nearly a million pensioners out of poverty. In 1997, the poorest pensioners received income support and had to live on £69 a week. Ministers were not introducing extra support, such as pension credit, but were advising pensioners to knit hats and woolly jumpers to stay warm.

Pension credit makes a big difference to the lives of the 3.3 million people who receive it each week. There are some not claiming the pension credit that they are entitled to, which is why we are continuing our take-up campaigns. I invite all hon. Members who have participated in the debate to continue to do all that they can to assist us.

What is the Minister’s estimate of the amount of money not taken up by people who are entitled to pension credit?

Off the top of my head, it is several billion, which is why we are spending time on take-up campaigns, focusing particularly on those areas that we think have the lowest take-up. We have developed what is clumsily known as the automaticity pilot, which pilots data matching. That will enable us to pay pension credit, at least for a period, to people who are entitled to it and then invite them to claim once they have realised how effective it is for them.

Evidence shows that peer endorsement, in other words pensioners who have successfully claimed pension credit and endorsed it to their peers, is the most successful way of getting the pension credit claim rate up. We make 13,000 visits a week to the homes of vulnerable pensioners to assist them to claim. There is now a claim process whereby pension credit, housing benefit and council tax benefit can all be claimed with one phone call, which makes the process as simple as possible. We are pressing forward with those different methods of making benefits available and making the process of claiming easy and user-friendly for pensioners.

The hon. Member for Eastbourne (Mr. Waterson) asked about renaming the council tax benefit a rebate. We are anxious to get on with the process as quickly as we can, but I hope that he acknowledges that there are 380 local authorities administering council tax and housing benefit—perhaps we would all rather have seen it nationalised, rather than administered at the current level. Many local authorities have different IT systems; we have been in touch with IT suppliers to see if we can ease the shift from a council tax benefit to a rebate, and are in discussions with software and IT suppliers, as well as local authority administrators, on the practical issues raised by that shift. We remain committed to doing it as quickly as possible. I hope that that reassures him.

On fuel poverty, the hon. Lady commented, mainly I think, on the Scottish system. The English system is slightly different; if people own or rent their home, are 60 or over and claim pension credit, they can be eligible for up to £3,000 help with upgrading their heating, or £6,000 if they use heating oil. I advise her to take up the issue of irretrievable breakdown with the Scottish Executive and the authorities there, rather than bringing the issues here.

It is a pleasure to introduce this debate, Mr. Gale. I declare my interest as vice-chairman of the all-party group on beer, and as a member of the Campaign for Real Ale. I am delighted to see the Minister here, but a little surprised that the Government are not represented by the newly appointed pub supremo. It is an excellent idea to have a pub guru in the Government, although the decision was greeted with some interesting news articles. I am sure that the Minister will pass my message on to the pub supremo, and I am almost certain that he will lose no time in reading what I and other hon. Members have to say.

On 18 February, Paul Charity, editor of the Morning Advertiser wrote an article entitled, “Healey starts with a pub crawl”, in which he said:

“Healey’s appointment was met with the presentational gravitas it deserves by being unveiled in the form of a News of the World exclusive. His trip around Wentworth’s pubs last week did little to dispel the scepticism of those who think the appointment of a pubs minister is a cynical attempt by the Government to win cheap publicity.

This opportunistic grab at positive media coverage has become a defining characteristic of this Government.”

He then wrote that it was “a shame” that the pubs Minister was not given the job some time ago—and so say I, as does The Publican, whose headline, “Right idea, shame about the timing”, says it all. Both magazines are no doubt essential reading for the right hon. Member for Wentworth (John Healey), and he will not be short of ideas for what to do.

Miles Templeman, chairman of Shepherd Name, started the ball rolling on the front page of The Publican, when he said:

“Many of the problems that pubs face are a direct result of the intrusive Government regulation and big increases in duties on drinks.”

Marc Allison, the freeholder of The Artful Dodger in York, summed up the matter best:

“I am sure this is about winning votes but it could potentially be a good thing if he does his job properly.”

The right hon. Gentleman is quoted on the front page as saying:

“While we can’t stop every pub from closing it’s right that we do everything possible to back them. But they need help now so I am determined to have a deal on the table with a package of practical help in the next few weeks.”

I presume that that is where he is today.

The proof of the pie will be in the eating, but past performance from the right hon. Gentleman is not promising. Instead of supporting the massive tax hikes on beer, he should have provided support for an industry suffering from an onslaught of body blows. Never has “punch drunk” been a more appropriate description of an industry attacked from so many sides. It is little surprise that pub closures have been at an all-time high over the past three years, oscillating between 39 and 50 a week.

I will not reiterate the importance of pubs to local communities. I have been vice-chairman of the all-party group for more years than I care to mention, and the hon. Member for Burton (Mrs. Dean) and I produced a report on the importance of community pubs. It took us more than two years to do so, and we took evidence from a number of sources. The right hon. Member for Stalybridge and Hyde (James Purnell) who, regrettably, is leaving the House, stated in the introduction:

“The Government recognises the cultural importance of public houses in the UK, as centres of entertainment, as hubs for local communities, as a diverse and vibrant part of the hospitality industry and as a unique British institution that helps make our country so attractive to overseas visitors”.

My hon. Friend is making a powerful case. Does he agree that his arguments in favour of the British pub apply equally to non-profit-making clubs in the UK, such as Labour clubs, Conservative clubs, working men’s clubs and British Legion clubs?

Absolutely. I agree with my right hon. Friend that such clubs are very much at the heart of communities. The things that make pubs attractive places for people to visit are the same as the things that make people go regularly to clubs in this country.

The community pub inquiry by the all-party group made 17 recommendations, including ending the duty escalator on beer; differential taxation on pump-pulled beer; and an examination of the huge contrast between supermarket prices for beer and prices in the pub. Pub prices used to be twice those of supermarkets, but they are now much greater—sometimes seven times as much—with aggressive pricing by the supermarkets.

I have spoken to many landlords and landladies over the years, and a few more when preparing for this debate. I am particularly grateful for the sage advice of Steve and Chris Dilworth of The Swan with Two Necks in Pendleton, which is a successful free house in the village where I live that offers very good food and excellent real ales from the region. Steve is a CAMRA member, and knows his beer and how look after it.

As a case study, I went to a very different pub in the town of Longridge, which serves pies for locals—that service is aimed at football fans—but relies very much on wet sales. Irene Nuttall is the landlady, but prefers to be called the landlord, and she is chairman of the local pub watch. I sat in the pub with her last Saturday, and listened to her encapsulate the problems. She is tied to Heineken UK, which used to be Scottish and Newcastle, for her beers, and the premises are owned by Trust Inns. I shall show the price differential between what she pays to Heineken and what she might pay if she went to a wholesaler on the free market. An 11-gallon barrel of Fosters costs £127 from Heineken, but from a wholesaler it would cost £92. Cask ales—nine or 10 gallons—cost £96 from Heineken, or £55 from a wholesaler. An 11-gallon barrel of John Smith’s costs £114 from Heineken, or £88 from a wholesaler. Cases of Pils bottles cost £31 from Heineken, or £12.99 from a wholesaler. There is even a big differential between the prices of soft drinks. The tie today has the pub industry over a barrel, and penalises the tied landlord.

The Select Committee on Business, Innovation and Skills and its predecessors have examined the matter several times. The Chairman of the Committee, my hon. Friend the Member for Mid-Worcestershire (Peter Luff), would have been here today had he not been chairing a meeting on a further report on the tie. We look forward to that publication, but a previous report states:

“There are strong indications that the existence of the tie pushes up prices not just to lessees but to consumers…our provisional view is that the tie should be severely limited to ensure there is proper competition in the market.”

Will the hon. Gentleman comment on what has happened to CAMRA’s complaint to the Office of Fair Trading? I am sure that he will be happy with the OFT’s decision to look again at what CAMRA has said.

I am delighted, but we need action. The matter needs to be considered urgently, and I look forward to the report from the Business, Innovation and Skills Committee, which I hope will be finalised today. I am sure that the industry is waiting with bated breath to see what it says. One recommendation was that it should be referred.

It is no secret that CAMRA has its headquarters in St. Albans. I met, as I am sure did many other hon. Members, the lobby against the tie. Publicans are expected to squeeze out more beer from a barrel than they are supposed to. CAMRA’s Fair Pint campaign says that publicans are expected to make up money by selling in that way, but publicans are very unhappy about it.

The regulars with whom I drink would certainly not stand for any short measures. If the head on a pint is too big, they let it settle before it is refilled. They do not even have to ask for it to be refilled, because landlords and landladies are very good at ensuring that people do not receive short measures. I congratulate CAMRA on that campaign.

I congratulate the hon. Gentleman on securing this important debate. Will he comment on something that the managing director of Marston’s said yesterday—that the tie protects people in the business?

The best antidote to such comments, which is a generalisation, is that in some cases, the pubco or brewer may take a particular interest in their estate, and in such cases the tie may be a good thing, but clearly it is not brilliant in the instance that I just described. During our community pub inquiry, far too many landlords and landladies said that there is a serious problem and that they are being crippled, because they have been forced to pay so much for the beer from their pubco or brewer. A free house down the road is able to compete more fairly and has more chance of surviving in an economic downturn, when fewer people are going to pubs and drinking beer.

I congratulate the hon. Gentleman on securing the debate and on his excellent speech. Does he think that there is a stark contrast between Wetherspoon, a large managed pub chain that gets huge discounts from brewers which it passes on to customers, and those big pub companies that get the same discounts but take them as profit for their shareholders and do not pass them on to the pub?

That is an issue of muscle in the purchasing of beer, and it also involves supermarkets that are able to sell beer cheaply and buy it more cheaply from brewers than those pubs that are tied to a particular estate. That issue needs to be looked at in its generality, and I hope that the OFT will look hard at the survival and prosperity of the network of pubs throughout the country.

Let me return to Irene Nuttall of The Durham Ox in Longridge. She lists a few points, and perhaps I can quickly rattle through some of the problems faced by landlords and landladies, which I am sure a lot of hon. Members will recognise. First, aggressive supermarket pricing is crippling for a lot of pubs. Secondly, the tie can be oppressive and should be opened up. Thirdly, dry rent is paid, but a lot of publicans also pay residential rent, as they are required to live on the premises, which can be incredibly expensive and insurance on top of that takes a huge chunk of money. Fourthly, the duty on pub-sold beer is too high. Irene Nuttall mentions the sleight of hand in the VAT reduction last year from 17.5 to 15 per cent. However, the Government waved a magic wand, and the duty was increased on beer, so that its price was not reduced when the rate of VAT came down. However, when VAT went back up to 17.5 per cent., so did the price of beer.

My hon. Friend makes a powerful argument. Does he agree that the change in VAT was unhelpful, given the length of time for which it lasted, and the time at which it returned to 17.5 per cent? The rate went back up at midnight on 31 December—a busy time of the year for publicans across the country.

Some publicans did not even bother putting the price up. They took the hit, for the reason mentioned by my hon. Friend. Furthermore, around this time of the year, wholesalers often look at their pricing and start to put up prices for their customers. That means that a publican might have had to reproduce lists twice at a busy time of year. A lot of pubs have not yet put up prices and are waiting to see what their suppliers are going to do. Clearly, it was an awkward situation for them.

Fifthly, business rates are too high. Irene Nuttall is paying £4,617, and although there is a small amount of business rate relief, for her it amounts to only £182, which would hardly contribute to the survival of some small pubs. Sixthly, council tax must be paid on top of that sum for the residential part of the property. Point number seven is that she has a TV in her own flat and a TV downstairs, so she needs two licences for the BBC, even though both sets are in the same building. Eighthly, the water rates cost several hundreds of pounds.

The ninth point concerns Sky TV. The Minister knows that there have been problems with Sky TV—the Government have promised to look at that, but we have seen nothing yet. Irene Nuttall’s pub is relatively small, and she said, “Guess how much I pay for Sky TV?” My mind went wandering, and I said, “£120? £150? £240?” No—it costs £594 a month to have Sky Sports in a relatively small pub. That is based on rateable value. As we know, in a lot of villages and towns, a pub’s rateable value could be extremely high, but the number of people in the pub at any one time might be relatively small. All the profit that a pub makes by getting people in who are attracted by the magnet of Sky Sports is completely lost as a result of the £594 charge. Something desperately needs to be done about the pricing of Sky TV. It is an attractive venture for pubs wishing to get people through the door, but surely they should not be clobbered to such an extent.

The 10th point is the building insurance of £1,500, which must be paid, even though Irene Nuttall does not own the building. Electricity is the 11th point and costs £400 a month. The gas bill is £850 a quarter, and bank charges of £90 a month are charged for paying money in, taking money out and direct debits. It all adds up, and there are staff to pay on top of that. She finished by saying, “I wonder why I’m doing it.” Considering all the pressures on one pub, I think exactly the same thing. She clearly loves the business in which she operates, otherwise she simply would not do it.

Banks have proven to be unco-operative. One landlord I spoke to wished to borrow more money due to investments that he had made in his restaurant and pub trade. The bank said no, then charged a huge amount for the loan that the landlord already has, including an interest rate insurance fee—which I had never heard of before—to insure against fluctuations in the interest rate. It costs him a fortune to insure against those fluctuations. The bank then needed to value the property, and it charged him for that. It wanted his accounts to be audited by its officials, and it charged him for that service. Woe betide him if any cheques are returned, as there are swingeing penalties to be paid. One might think that the bank was working hard to give this landlord the little nudge that he needs to go bust. A number of pubs also have accountancy fees to pay, as well as a music licence if they have music.

There is another issue that my hon. Friend has not yet mentioned but which has been devastating for many pubs and clubs—the smoking ban. It is not the ban per se that is the problem, but the heavy-handed way in which it has been introduced in the United Kingdom. Does my hon. Friend agree that it is ludicrous that the only way in which a licensee can provide an indoor smoking room for his or her customers is if they happen to operate on a boat?

One imaginative pub thought that if it changed itself into an embassy, it might get away with it. Sadly, that did not work. The way in which the smoking ban was introduced was far stricter than in almost any other country. There are 12 million smokers out there, and a lot of them used to go to pubs, but now that is clearly not the case. I know that my right hon. Friend and hon. Members from other parties are trying to get changes in the law, not to lift the smoking ban but to amend it sensibly so that smokers will at least be treated like human beings when they go to pubs and clubs, and be looked after as opposed to being treated like lepers. A friend of my right hon. Friend, Antony Worrall Thompson, stated:

“The smoking ban has had an extraordinary detrimental effect on pubs and clubs. The legislation as it stands is excessive and I would like to see it amended.”

As I have noted, MPs from all parties have co-operated with my right hon. Friend in his campaign. We are all familiar with seeing people standing outside pubs having a cigarette in sub-zero temperatures, in the rain and the snow with all the elements against them. Hypothermia has become a smoking-related disease under this Government.

Mark Hastings, director of the British Beer and Pub Association, commented succinctly on the value of pubs to local communities. On average, pubs inject about £80,000 a year into the local community and pay £107,000 in taxes. Over half a million people a year are directly employed by pubs, with 380,000 people employed in associated trades. Mark Hastings states that beer taxes have risen 20 per cent. since March 2008, with another 2 per cent. above inflation expected in the Budget next month. I hope that when the Minister speaks on behalf of the Government, he will at least give us some good news about the Budget next month and say that that escalator will be taken off and that there will be no duty increase on beer. Research by Oxford Economics suggests that halting the proposed Budget increase of 2 per cent. above inflation could save 7,500 jobs and the Government tax take would increase.

The Government have the opportunity to separate draft beer tariffs from those of normal beer where canned beer is involved. It would need a change in the European legislation, but surely all parties can agree across the board that if we change the draft beer position, that would give an edge to all the pubs and clubs that are involved.

I could not agree more; I am 100 per cent. with the hon. Gentleman. What he describes needs to be done. I have asked Ministers about it and every time, they say, “Brussels won’t allow it. There’s a problem with Brussels.” Let us sort out Brussels. The pub is an iconic British institution. If we want to support pubs and ensure that supermarket pricing does not give supermarkets such a great advantage, the one thing that we need to do is recognise that the product served in a pub is different from the product that people receive when they get 24 cans from a supermarket. Therefore, different taxation on draught beer—pump-pulled beer—needs to be put in place. We need to tell Brussels that that is what we shall do. I do not see how any other part of the European Union would be disadvantaged by our recognising that pump-pulled beer is somewhat different and involves something more than just lifting up 24 cans. I am 100 per cent. behind the hon. Gentleman and I hope that we can take that matter to Brussels and say that it is something that we want to do in this country to support British pubs and that we will do it.

Since March 2008, 4,100 pubs have gone bust. Beer sales are down 16 million pints a day compared with 1979. Turnover on beer in the past 12 months alone is down £650 million. Since 1997, beer duty has gone up 14 per cent. in real terms, yet spirits duty is down by 20 per cent. How about equality of treatment for a product that is so synonymous with Britain? Like almost 200 Members of Parliament, I have backed the “I’m backing the pub” campaign led by the British Beer and Pub Association, and more than 100 MPs have signed the early-day motion on the campaign tabled by the hon. Member for Selby (Mr. Grogan), the chairman of the all-party beer group. I am delighted to see him in his usual place.

Like many other MPs, I shall be in a pub on 19 March, as part of British tourism week, to show my support for pubs. Every year, 13.2 million tourists visit pubs in the United Kingdom. We cannot let the pub die. It is the hub, the social centre, the heart of villages and towns. It is where business deals are done, family occasions are celebrated, and darts teams, pool teams and football teams play, celebrate their wins and drown their sorrows. It is where every problem is discussed and where, as the Minister will know, a Government in waiting drink regularly. It is where the general election will be discussed daily and every evening. It is where we as candidates will banter with the regulars, and on election night it is where we shall have a final tipple, perhaps, to steady our nerves. It is where I have celebrated every election victory since moving into my village, with locals, friends and those who have helped out in the campaign.

The British pub is iconic. It represents the very heart of Britain. We have seen so much of the fabric of our way of life threatened in so many ways over the decades, from post offices to churches and from village schools to small shops and rural bus services. Now is the time to make a stand, so the message for the Minister for pubs is that we are holding him to his word about giving a helping hand now to the great British pub. Now is the time to deliver. I hope that at the end of the debate, this Minister will do just that—stand and deliver for the great British pub.

I am delighted to take part in the debate, albeit briefly, with so many knowledgeable hon. Members present. I congratulate the hon. Member for Ribble Valley (Mr. Evans) on obtaining the debate. I also congratulate my hon. Friend the Member for Selby (Mr. Grogan), who chairs the all-party group on beer with great skill and is held in great esteem, and the hon. Member for Leeds, North-West (Greg Mulholland), who has led the save the pub group, of which I am proud to be part.

I have come to the debate with some trepidation, because I am a long-time teetotaller. One reason why I do not visit pubs as much as I would like is that someone who drinks soft drinks feels particularly exploited currently, because the price differential is so unfair for those who choose not to drink. One argument advanced by the British Beer and Pub Association is that low-alcohol drinks are disproportionately priced, meaning that people feel adversely affected in that way.

I shall make just two points. The first comes out of bitter experience of the way in which friends of mine who have been publicans have been very badly treated by pubcos. That is nothing new. When I was a councillor, I was aware of numerous occasions on which people were encouraged into the trade by—I will name the company—Whitbread. Those people clearly did not have the capability to run a pub properly but were encouraged to invest all their savings, including their house, in a pub, and gradually over time the price of the barrelage was raised until they were driven out and had nowhere else to go but the local council. That was the context to this issue when the breweries were running things. Nowadays, because of the changes made through the beer orders and so on, there are pubcos. I would say that the attitude of pubcos is even more mercenary.

I have one case involving a close friend who was affected by the 2007 floods in Gloucestershire. For the best part of eight months, her pub was inaccessible because the road that took people to it had collapsed. One would have thought that that would be a good reason for the pubco to be fair, reasonable and enterprising—I use that word deliberately. Sadly, it did not seem to think that it was a particular problem for her and was arguing all the way through, despite all the pressure that I and friends were able to bring to bear to try to get it to adjust what it was charging her. It was only through pain and the greatest of anguish that we got the pubco to listen and at least to adjust downwards what it expected her to pay, given that her trade was inevitably going to fail.

I wish that that was a one-off tale. Sadly, from all my experience of talking to publicans, I have to say that it is the norm that people are being driven out. I accept that the Government have a role to play in terms of how they price beer, spirits and all the other things for which they are responsible, but I shall hold fire on them for the moment and concentrate my energies on highlighting the complete unfairness in the way in which pubcos now operate with regard to the people they should hold dearest, who are of course the people who run the pubs that are making money for them. I agree with much that the hon. Member for Ribble Valley said about things such as Sky TV and the way in which all those costs accumulate and make it much more difficult for people to run a pub.

My second point is about what happens when a pub gets into difficulties. I feel strongly that we use expressions such as “The pub is the hub” and “The pub is the centre of the community” glibly, but we are not prepared to do much about that. When a pub is closing in a village, the community does come together and often has the wherewithal to be able to do something about that, but too often, although there is a predisposition against granting planning permission for something else, we go through the game of the pubco trying to do everything within its power to prove that it is an uneconomic business and it cannot remain as a pub. Despite there being a community effort, with people willing to put their hand in their pocket to obtain the property and the means to be able to run it as a pub on a community basis, we are unable to hold the line in terms of planning.

Perhaps this is an appropriate time to mention the task of my right hon. Friend the Minister for Housing in his role as the Minister with responsibility for community pubs. It is exactly that issue of the planning requirements that need to change and of support for community pubs that he will consider, and the hope is that he will come back with proposals in the coming weeks.

I welcome that and I welcome the appointment of my right hon. Friend the Minister for Housing in that role. It is good that he will be working with my hon. Friend the Minister who is here. However, we have heard the words; we now have to see the actions. I can cite cases. I will not go into detail, because many of them involve issues that in a sense have passed on by, but there are some cases in which the community is still totally committed to trying to do something to keep the pub in the community. I want it made absolutely clear that changing the planning permission to allow something other than a pub should be the last resort. When the pub is the last such institution in the community, throwing in the towel should be absolutely the last thing that we do. We have not used the planning rules to encourage local authorities to make it clear that we are not prepared to see that happen.

Let us be honest: too many pubcos have invested badly. They saw their property portfolio as their wealth creator. Following the collapse in property prices, they have caught more than a cold, which is sad, but that is their problem. If it was a question of their losing everything, one could feel sympathetic, but there are acceptable bodies of people who are willing to take institutions on, so why can we not see that as a way forward? We are all co-operators now, and as a co-operator myself, I see co-operative outcomes in communities as genuinely the way forward. Of course, people have to be able to provide a proper business plan, and institutions have to make money, but as we have seen with post offices and village shops, there are voluntary solutions that can work over the long run.

We must make sure that the planners get the message that they must not yield far too easily. I hear what the Minister says and I welcome the recognition of what the Minister for Housing can and should be doing. As I said, however, we have heard the words before; let us now see the action.

It is nice to be under your chairmanship, Mr. Gale. I congratulate my hon. Friend the Member for Ribble Valley (Mr. Evans) on his perceptive and well-informed speech. I am sure that he speaks for many of the publicans from St. Albans who came to me because they were frustrated with the tied pub, the 24-hour licensing, the smoking ban and all the other things that have been piled on them.

Some people dispute this, but St. Albans apparently has the most pubs per square mile of any place in England, and pubs are part of the historic street scene. Anybody who has been to St. Albans will have seen the historic pubs, and there can even be two or three in one short road. Those pubs traditionally supported people on the many pilgrimages to St. Albans, so they go back a long way.

The smaller pubs are finding life hard. The bigger pubs, which can bring in the clubbers and people interested in the dance scene, are not struggling so much and they have benefited from extended licensing. However, the smaller pubs, where people go for a quiet drink and to chew the fat or to debate the issues that my hon. Friend raised, have been struggling.

CAMRA, which is based in my constituency, has a beer festival every year, and I go along to help open it, but I also have my ear pressed very much to the ground so that I can hear about all the issues facing pubs. I am not a beer drinker, which is a shame, but a shandy drinker, which is a heinous crime according to CAMRA. None the less, CAMRA raises some valuable points.

I have been out all night with the police in St. Albans, and one sees young girls and young men going out to the pub. They will be raucous, lively and enjoying themselves. They will already have consumed a significant amount of budget-price alcohol, possibly while they were getting ready to go out. There has been a shift in the way we behave: some people have two, three or four glasses of wine, several pints of beer or half a bottle of vodka before they go out, so they are well oiled before they ever hit the pub.

When I am out with the police late at night, I see that the pubs are picking up the damage from this change in behaviour. They get blamed for people urinating in gardens. I am not saying that people who do not use the toilet before leaving the pub are blameless, but there are no toilet facilities easily available to people going down Fishpool street, Pageant road or some of the other historic streets in the city centre. If people see someone who has come out of The White Hart Tap or The Goat urinating in the street, they may assume that those pubs served them far too much alcohol, and the pubs may be penalised and robustly criticised. I am not saying that there is an issue with those particular pubs, but just giving an example.

Part of the problem is the alcohol that is consumed before people go to pubs. The Waterend Barn in St. Albans is synonymous with some unfortunate incidents, and I have seen people sitting outside it vomiting into the bushes late at night. I have also seen the ambulance crews picking them up. However, the prices that many of our pubs have to charge mean that those people would have to be pretty wealthy to get that drunk in such a pub.

Does my hon. Friend agree that organisations such as Pubwatch do a tremendous job in ensuring that somebody who is ejected from one pub will not be served in any others? My hon. Friend makes the important point that one of the great things about a pub is that it is supervised, while people drinking at home or on the streets are not. The landlord and landlady can ensure that people drink responsibly in a good atmosphere.

My hon. Friend is absolutely right. By and large, our pubs in St. Albans co-operate enormously with the local council and residents. The historic street scene means that they sit cheek by jowl with residents, and most pubs try their best to co-operate and to be good parts of the community. Many employ bouncers and doormen—again, at additional cost—to stop the wayward drunks and to ensure that someone who has been thrown out does not come back in if the pub believes that they are drinking irresponsibly.

It is a real shame that the smoking ban, which many people welcomed, has not only hit some smaller pubs disproportionately, but brought them into conflict with some of their neighbours. Pubs have to create smoking shelters, or people have to stand in the pub garden. As a result, doors are opened, and music drifts over to houses that were not previously bothered by noise. There is chatter, laughter and other noise outside in the garden in the winter, which one would never have expected. That causes conflicts with local residents. The legislation, which was introduced for the best possible reasons, has therefore had some unfortunate consequences.

I pay tribute to pubs for the fact that they are not only the heart of the community, but put things back. I have regularly done the prize draw with Cilla in the Three Hammers pub, and all the funds raised go to our local hospice. Pubs are not just drinking dens. Every time a VAT rise goes on to the price of a pint of beer, the assumption is that it will be on the pint in the pub.

I just want to make an observation. We have The Woolpack in “Emmerdale”, The Rovers Return in “Coronation Street”, The Queen Vic in “Eastenders” and The Tall Ship in “River City”, which is a serial in Scotland. Pubs are central to virtually every serial on television, which clearly shows how the British population works. We do not want to be partisan, but to work across parties to ensure that pubs stay alive throughout the UK.

The hon. Gentleman is absolutely right. I do not watch those particular soap operas, but I am fully aware of them. [Interruption.] I do not have the time.

It is important that we look at the unfair blame that is often shifted on to small local pubs. In St. Albans, it is difficult to finger the pub that made the last irresponsible sale to a young person. If there is only one pub in a village, it is easy to see where people who are causing trouble are coming from, but it is hard to do that in areas such as St. Albans, and we are not alone in that—many historic cities have the same problem.

I have touched on the problems of smoking gardens. Unfortunately, another part of the problem associated with pubs is the vomiting and urinating in front of people’s houses and in their gardens. The Department for Communities and Local Government is looking into whether local authorities should provide more toilets, and some pubs and big businesses have made the useful suggestion that we should have a community toilet scheme. Pubs are willing to offer their premises for charitable events and social events and, indeed, to embrace a community toilet scheme. The National Association for Colitis and Crohn’s Disease, which was launched in St. Albans—the city is its home—recognises that many people cannot wait to use toilets, and that is not the result of drunkenness. The association therefore welcomes the fact that pubs are prepared to embrace a community toilet scheme. Yet again, pubs are showing their willingness to be a part of the community and to contribute.

We should bear that in mind, as well as the fact that pubs can and do offer so much more. I say that because some very large pubs and clubs have caused out-of-hours antisocial behaviour, and the result, unfortunately, has been the demonisation of all pubs, with everyone being tarred with the same brush.

On behalf of the smaller, well run pubs in St. Albans, I welcome the possibility of a rethinking of the tied pub, because damage is being done to young people who are prepared to take on what are in effect historic buildings, in conservation areas. The Boot, in St. Albans, which is a conservation pub, had a problem with a flood. It was closed for ages because it had to do everything through the planning department, in line with the requirements of the conservation officer. That must have been very hard financially.

I ask that when historic places such as St. Albans are considered, it will be borne in mind that the pressures involved are not necessarily those that affect a local supermarket. Tesco, which is also based in Hertfordshire, can afford to weather a big storm, but many local pubs cannot, and they are being pushed over the edge by things as small as flooding in an historic conservation area pub, or snow, because if the council does not grit the streets people will not go to the pub, but make their way to Tesco, which has the might to ensure that its car park is user-friendly.

My hon. Friend is speaking from the heart, and we agree with her. I am a lifelong supporter of CAMRA and the Brewers Association. Will my hon. Friend make the point that a pub in the community is a place that encourages responsible drinking, because of the role of the landlord, who is concerned about his or her reputation and the pub’s reputation? Surely the Government would want to encourage that, and rather than imposing regulation, costs and tax on beer they should encourage pubs, where people can learn to drink responsibly the traditional beer we all love.

My hon. Friend makes a valid point. The publicans in my constituency whom I talk to are fully aware about the issue not only of serving too much alcohol to someone who is inebriated, but of serving it to someone who may take it over to that person. They are only too aware that they must be cautious and abide by the rules. I would not encourage people to learn to drink in a pub, but the people we need to be most concerned about are not those sitting sipping a drink and chatting, perhaps playing backgammon or engaged in another pub event. Too often we are using a stick to beat the wrong person. The pub is potentially picking up the reputation of causing antisocial behaviour in the community, but perhaps we should be looking to the supermarkets or small corner shops that sell people alcohol irresponsibly.

The fact that my brief speech follows those of two self-proclaimed non-beer drinkers, who spoke with such passion and insight about the future of the pub, underlines perhaps more than anything the hold that the British pub has on British people. Eighty per cent. of people visit a pub at some time in the year, and very few other institutions, even the Church or the Post Office, have such a reach. Perhaps only our most popular television channels have it in the course of a year. The hon. Member for Ribble Valley (Mr. Evans) has done the nation a great service in obtaining the debate. Our common aim must be to make the pub a general election issue.

The hon. Gentleman chided my right hon. Friend the Minister for Housing as one of the few Members of the House who has survived to tell the tale following a News of the World exclusive. Obviously, as we come into a general election period, parties will seek political advantage. That is only natural. However, I hope that my right hon. Friend’s appointment, together with the Liberal Democrat and Conservative proposals, will mean that there is something to debate. We have heard about leaders’ debates, and I am sure that we shall watch them with interest, but I hope that an organisation such as CAMRA might have a debate on the future of pubs, with the various Ministers and shadow Ministers giving their views.

Time is limited and I want to rattle through one or two suggestions for my right hon. Friend the Minister for Housing, but before that I want to mention managed pubs, which the hon. Member for Leeds, North-West (Greg Mulholland) mentioned. The issue of tied pubs has been well rehearsed and we await with interest the report of the Select Committee on Business, Innovation and Skills, the Government’s response and now, again, the Office of Fair Trading report. However, let us not forget the role played by managed pubs in this country.

One company whose model is under threat is Mitchells and Butlers, which has been taken over in all but name. I am not sure that the takeover panel has done a particularly good job on the issue. The new chairman has said that in 60 days he will produce new proposals for Mitchells and Butlers. An average Mitchells and Butlers pub—they have names such as All Bar One—employs 20 people, and the business employs 40,000 people. It has gone for a model of comparatively low beer prices but high quality, and highly staffed bars and pubs. There is a danger that, perhaps during the general election period, when the House is not sitting, Mitchells and Butlers will come up with proposals for big cost cutting, and the closure of pubs and bars. I urge the so-called independent directors who have been appointed to the board to speak out now, if they are truly independent. Otherwise they will be seen as the patsies for the offshore interests that have taken over Mitchells and Butlers. I just mention that in passing.

I shall rattle through the main issues, and as I do not want to repeat what has been said I shall try to pick one or two other ideas. CAMRA has suggested that rate relief, which has been a big boon to village pubs in recent years, should be extended more widely, to community pubs in suburban areas and small market towns. That needs to be considered. A proper definition of a community pub is obviously needed, but I think that local authorities would be well placed to judge whether a pub is a community pub. That would be a good way forward.

Various hon. Members have discussed putting a lower rate of duty on draught beer. I want to underline the fact that that is a current issue. The European Commission is reviewing the rules on duty now, and I hope that all three Front Benches will unite in what they say about this and that the British Government will argue—although we need allies, and potentially have them in such countries as Germany and the Czech Republic—that the European Commission should allow different nation states to impose a lower rate of duty on draught beer. That could do as much for pubs in the next Parliament as the lower rate of duty on small brewers has done for the expansion of micro-brewers in this Parliament.

I am grateful for the hon. Gentleman’s powerful speech. I read his last column in the Morning Advertiser. I hope that he carries on with it after the general election. The important point is the differential on tax. Not only should the Government not fear that if we made the change the general take would go down—because if we can get more people into pubs the taxation take would increase; in addition, if a pub survives, the £80,000 that it pushes into the community, the more than £100,000 that it pays in taxes, and all the charitable things that it does, can continue.

The hon. Gentleman makes a very good point, which perhaps should bring me on to saying a word about tax. If we are honest, it is unlikely that any Government in the near future will reduce the overall take from alcohol tax, given the pressure on public finances. However, there is a strong and fair case to be made that beer and pubs have lost out in recent years. A rebalancing is needed with spirit tax and duty on cider.

There is a technical issue that the Government could deal with in the Budget. Machines that have been defined as skills-with-prizes machines—the low-stake machines that are in many pubs—are being redefined as games of chance. Her Majesty’s Revenue and Customs is trying to claim three back years of amusement machine licence duty. That will be a big blow. It has already been postponed once, and I hope that the Chancellor will at least examine that detail.

I am delighted that my hon. Friend has given way on this issue of skills with prizes. It has come to me as the Minister with responsibility for gambling, and I have taken it up with the Treasury and my right hon. Friend the Minister for Housing. We hope to be able to make announcements shortly, and are well aware of the issue.

Those words give me great encouragement from the only other Bradford City supporter in the House—as far as I am aware.

The phrase “pub is the hub” has been used in the debate, but it is also the name of an organisation. Under the guidance of John Longden, Pub is the Hub has saved many pubs, by bringing together post offices and shops in pubs. Some consistent funding, perhaps from regional development agencies, is needed for it, because it has probably done more than any other organisation to help save individual pubs.

Sport on TV has been mentioned by a number of hon. Members. Many marginal pubs rely on sport on TV. For example, many are looking forward to the World cup later this year. There is a relationship between this debate and that on listed events. I hope that before Parliament rises Ministers will confirm the new list of sporting events that must be available on free-to-air TV, because some pubs will never be able to afford subscription TV.

I think that it was Hilaire Belloc who said that the pub is the very heart of England. [Interruption.] I say that with sympathy for my Gaelic friends and for my Irish background, but I am sure that Belloc’s comments have wider resonance throughout the United Kingdom.

Many hon. Members mentioned the numerous activities that take place in pubs. Only yesterday, at the Jug Inn at Chapel Haddlesey in my constituency—in the heart of England and the heart of Yorkshire—Councillor Jack Davie made a great presentation for the British Heart Foundation. He has made it part of his life’s work to visit all the pubs in the area to help that charity.

Through the efforts of the hon. Member for Ribble Valley, my good friend, and the responses that we look forward to hearing from the Front Benches, I hope that although the pub will not be centre stage it will certainly play a part in the general election, and that candidates up and down the land will receive letters asking for their proposals and their views on the issues that face the British pub.

It is a pleasure, Mr. Gale, to serve under your chairmanship again this morning. It is interesting to see that a cross-section of those who were here for the pensioner debate are here also for the public house debate. Both debates have been attended by the highest class of Member.

It has been a great pleasure over the past five years to attend debates secured by the hon. Member for Ribble Valley (Mr. Evans) and the various events that he has sponsored. He has been a stout defender—no pun is intended—of British beer and public house business. He looks thin and fit on it. It is important that we debate this subject, given that the British Beer and Pub Association said yesterday in its pre-Budget report that there should be a lower tax rate for beer.

It has been my habit in previous debates to refer to important totemic public houses in Croydon that have been closed. Perhaps today I should refer to those that are thriving—or at least struggling with the burdens of taxation and other requirements put upon them by the Government and still doing reasonably well. I took the opportunity yesterday to speak to a number of public houses. I shall not ascribe particular comments to particular public houses, as it might compromise them, but it will give an illustrative background in support of points made by other hon. Members.

Those public houses are the Half and Half, the Claret Free House in Lower Addiscombe road, The Royal Standard, The Ship, The Builders Arms and The Spreadeagle. I was not able to reach those other excellent pubs, The Surprise and The Sandrock. I would not want to give the impression that I had been running from one public house to another yesterday evening, as I was busy here with the business of the House. However, it was helpful to be able to talk about some of their problems. I previously met the landlady at The Cricketers.

It is hard, given business rates and Government taxation, to keep the public house business going in these difficult times. One publican spoke about the impact of the recession. His public house depends particularly on clients aged between 25 and 30, and he has seen reduced patronage as a result of their loss of employment. Public houses would very much like to see rates and taxation reduced, but the business rate is particularly troublesome.

One interesting comment is that it is impossible to keep up with the supermarkets as their beer and wine is sold at a cheaper price per litre than water. That brings home some of the challenges that are faced. Another independent provider found that duties were too expensive, which caused breweries to cut the alcohol content of some of their drinks. As well as business rates and taxation, another burden is the cost of energy, something that has not been mentioned today. Such burdens make it difficult for independent providers to compete with big chains such as Wetherspoon; indeed, some say about the chain beers that they cannot buy a tin for the same price, let alone the beer itself.

Publicans in Croydon have some interesting reflections on the impact of smoking, but expressing different views. Some felt that it was difficult to ban smoking near doorways for those public houses that do not have gardens, but others felt that the smoking ban had had no impact on the industry, given the attractions that they had to provide as public houses. The response of one provider was that smokers will arrive in rain or snow.

May I make the point about the smoking ban? Most Members will be aware that it started in Scotland long before it did in the rest of the UK. One problem for many clubs is that women often refuse to go outside to smoke, and that has had a major effect on some of the clubs in Scotland.

[Miss Anne Begg in the Chair]

That obviously has an impact; but it has an impact also on those public houses used by families. The hon. Gentleman is right; if women feel that it is not appropriate or unsafe, or that it looks wrong to be smoking outside a public house, that too can have a disturbing effect.

One point made in previous debates on the subject is that the public house acts as the centre of the community—as a place for the family. I spoke to a publican of a pub to which I had only recently been introduced by Croydon citizens advice bureau. I was impressed by its friendly nature; it was very family friendly. However, despite all our troubles, it is often said that even those who are redundant can always find the money for a drink. It is as if the recession has no effect. In some ways, that may seem rather flippant, but it tells of the importance of public houses in difficult times.

Public houses can be a place of respite. They can be places where people will find comfort in difficult times. Some may spend too much time at home trying to find employment, but being able to be part of the community may not only lift their spirits—again, no pun is intended—but may make them better able to find employment through the networking that public houses can provide.

The hon. Gentleman is an independent Member and has spoken forcibly in many debates. Would he not describe the debate initiated by my hon. Friend the Member for Ribble Valley (Mr. Evans) as an emergency debate? The huge number of pubs now closing will create a huge problem for many communities. For many, the village pub or the community pub is the only facility where people can meet. It is important that the Government take the matter seriously, and that the Budget that we are shortly to have announces some relief for those in pubs and the smaller breweries.

It is a great privilege to give way to the hon. Gentleman. I do not know how the House will be able to progress when it no longer has such independent-minded Members to ensure that Parliament thrives.

It is important that public houses thrive. As we heard in the many debates in which the hon. Gentleman and others have taken part, the community can be undermined by the loss of the post office or of local shops. When a parade of shops loses a public house, its size and importance mean that the rest of the shops often end up being under threat.

There are many implications. The real conclusion to throw to the Minister is that the thriving public house community in Croydon that I have described offers many different types of provision. The Bird in the Hand, for example, reaches out to the trans and lesbian community, and The Rose and Crown retails to the vegetarian community. There are many communities that can be catered for. Government talk about diversity and how everyone should be able to take part in a community, so this is a debate of very great importance. I look forward to the Minister’s response.

It is a pleasure to speak in this debate, and I congratulate the hon. Member for Ribble Valley (Mr. Evans) on securing it. The hon. Gentleman and friend is a fellow executive member of the all-party parliamentary beer group and a member of the all-party parliamentary save the pub group, of which I am chairman. Let me make it clear that I am speaking on behalf of both the Liberal Democrats and my all-party parliamentary group. Part of the reason for that is to give other hon. Members a chance to contribute to the debate.

I have a little bit of news for the hon. Member for Selby (Mr. Grogan). CAMRA and the save the pub group are hosting an event to which all three parties are invited. It will either be on 9 March or 16 March, and I hope that all three parties will take part and join other people from the industry and members of CAMRA.

I am pleased to be speaking in this debate, but frustrated to be still talking about the same issues. I am sick of always getting warm words—I prefer my beer cellar cool and not warm—and no action. I warmly welcome the Government’s decision to appoint the right hon. Member for Wentworth (John Healey) as Minister responsible for pubs. I look forward to working with both him and the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Bradford, South (Mr. Sutcliffe) to get some action in the remaining few weeks of this Government. However, I would have preferred it if such an appointment had been made some time ago.

Let me rattle through a few of the important issues. We need to consider the level of beer duty and the way in which it has risen. We want the Minister to tell us that the duty will now be frozen, and we want to see the abolition of the beer duty escalator that has caused so much damage. I also agree that we should consider a lower rate for draught beer, which is something that both all-party parliamentary groups support. I should like to explore the possibility of a lower duty for real ale. Cask-conditioned ale is more costly to produce, store and serve, so I agree that we should take the fight to Europe. We should also consider minimum pricing, which the hon. Member for Selby also champions. However, let me add a note of caution. People talk about putting the level at 50p, but an independent body should assess the level so that responsible drinkers, either at home or in the pub, are not penalised. Such a scheme will help pubs to compete, especially as they offer that uniqueness that we all know about.

We need to consider live music in pubs. The Live Music Bill is going through the other place, but I ask the Government to review their exemption level of 100 people because it is not sufficient. The Bill stipulates 200 people, which would do more to help pubs as well as encouraging more live music.

Rate relief is another area of consideration. The community pub inquiry report stated that there was no recognition of the contribution that pubs make to the community, which was also mentioned by the hon. Member for St. Albans (Anne Main). Pubs make vast contributions to charity and offer a hub to the community, but that is not reflected in the rate system.

The hon. Gentleman will realise from my comments that I am more of a club drinker than a pub drinker. There are a number of clubs in my area, which I actively support. If the hon. Gentleman is talking about rate relief, who will pay it? Local authorities in my area pay 80 per cent. rate relief to all the clubs if they make contributions to the local area. It costs the local authority £500,000 a year. Who will pick up the tab under his proposal?

If we are serious about the matter, we need to value that contribution. I have to say that I do not agree with the hon. Gentleman’s premise. I must move on now to the two main issues that must be tackled if we are serious about saving the British pub. All too often we have an air-brushed debate, which is deliberately manufactured by those in the industry who do not want real change. I refer here to the rather misleading “I’m Backing the Pub” campaign that is being promoted by the British Beer and Pub Association.

If we are serious about saving the pub, two things must happen. First, we must reform planning laws. As the hon. Member for Stroud (Mr. Drew) said, it is all very well to say that we support the pub, but until we give communities the right to stop the closure of the pubs—they have none at the moment—this is all talk. The Minister would have no say about the closure of his local pubs in Wibsey, which is in his constituency. Decisions to close a pub against the wishes of the community could be taken in Solihull, Burton-on-Trent or anywhere else. We need to have pubs in their own use class order so that any change of use to a pub would have to go through a planning process, which should include an independent viability study to see if that pub is, or could be, viable. At the moment, even pubs that are making money are being deliberately closed just to suit shareholders’ interests, and that is a national scandal. We still have the absurd situation in which it is perfectly legal to demolish a free-standing pub overnight without planning permission or to turn it into a restaurant, a shop, a café, or, ludicrously in England and Wales, a financial services office. I have nothing against accountants, but let us face it, they are not hubs of community life.

The second issue is the structure of the industry and the way in which the tied tenant system operates. That is an area that must be tackled. Any solutions that do not tackle such an issue will not stop the closures from happening.

Will the hon. Gentleman give way?

I will not, unless it is very brief, because I am running out of time.

I will be very quick. Does the hon. Gentleman, whom I respect for what he is doing on the issue of pubs and beer, not believe that the tied system is very important for the smaller brewer?

That is an interesting point. One of the problems with this debate is that that argument comes out. The big pub companies say, “You shouldn’t abolish the tie.” No one is talking about abolishing it; we are talking about reforming it to make it fair for the tenant and the customer. The inflated beer prices are bad for pub consumers and the unfair rents are closing pubs. It is not about abolition, but about having a fair and transparent system, which we do not have. The excellent Business and Enterprise Committee report last year highlighted that issue and showed that even when pubs had a turnover of more than £500,000, more than 50 per cent. of lessees earned less than £15,000. That cannot be right, and it is about time that the Government did something about it. That means not waiting for the Office of Fair Trading, which has shown that it does not understand the issue and that it is of little use in this area, but referring the matter to the Competition Commission. The report concluded:

“The time has now come for Government to intervene to ensure a fair and legal framework.”

Will the Minister indicate that the Government will do that, because this is an issue of fairness and of exploitation of workers—the kind of things that one would hope a Labour Government would take seriously.

The British Beer and Pub Association is trying to stall the process. I have nothing against the organisation, and I agree with it on many things, including on beer duty and minimum pricing, but it represents the big pub companies and breweries. It is not the voice of the industry as a whole. It has introduced what it calls a UK industry framework, but it is nothing of the sort because it applies only to its own members. As Greene King has shown, all one has to do if one does not agree is to leave the BBPA. In the meantime, the Independent Pub Confederation has come together with a number of organisations—CAMRA, the Association of Licensed Multiple Retailers, the Federation of Small Businesses, the Guild of Master Victuallers, the Society of Independent Brewers, trade unions and Justice for Licensees—to call for, among other things, reform of the tie.

If we are serious about British pubs, I want to make it clear that what we do not need is yet another debate. I am glad that we have had this opportunity for a debate today, but we do not need another debate to say how important pubs are. I have said that again and again and again—and they are important. However, that importance is not being recognised in planning law. Also, we are not dealing with the fact that more than 50,000 of our pubs are owned by pub companies that, in too many cases, really do not care about the impact of pub closures on communities. We need structural reform and reform of planning law. We also need to give the pub back to the British people.

I simply ask everyone here today to look at the Independent Pub Confederation’s excellent charter “Time for a Change”, and at CAMRA’s beer drinkers and pub goers charter. Those charters are real manifestos for reform and reform is the only thing that we should be talking about today and in the future.

It is a pleasure to work under your leadership, Miss Begg, and it is also a pleasure to participate in a very helpful debate.

I am looking around at some of the faces in Westminster Hall today. It was said that there are some of the “usual characters” here. It is almost like a scene out of that old sitcom “Cheers”, as we are gathered around a horseshoe-shaped table talking about these issues. Unfortunately, the similarities continue, because the very same subjects that came up in episodes of “Cheers” seem to be repeated by us here again and again and again.

My first question to the Minister today is about the appointment, very late in the day, of the Minister for Housing, the right hon. Member for Wentworth (John Healey), as the pubs Minister. I am very sorry that he could not be here today; this debate was an opportunity for him to lay out his stall. I do not understand why the Government have seen fit to appoint a pubs Minister, or pubs tsar as he might be called, so late in the day, with only 90 days or so until the general election. The right hon. Gentleman is Minister for Housing anyway, so his portfolio is already quite busy. He says that he has a few ideas in his locker; today would have been the ideal day to open that locker and let us see what is actually going on. It is a little bit like someone realising that their glasses are in their pocket at the very end of their driving test; it is a bit late to put things into focus and it is certainly a bit late to impress anyone.

Nevertheless, we have the Minister who is here today, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Bradford, South (Mr. Sutcliffe). So perhaps he is able to answer some of the very pertinent questions that have been asked in the debate.

My first question to the Minister is about the co-ordination of Government voices. The Minister for Housing might be able to clarify this issue, but unfortunately I wonder where drinking sits within Parliament and who has responsibility for it within Government. Is it the Department for Culture, Media and Sport that has responsibility for drinking? Well, one could argue yes, and one could argue no. Certainly, licensing is supposed to be the responsibility of DCMS. However, I think that we have heard today that actually the Treasury pretty much has a grasp on what happens from the taxation perspective, without having an awful lot of conversations with the DCMS. Regarding the issues of antisocial behaviour and policing, one could also argue that it is the Home Office that is responsible for drinking, but of course local government, local authorities and so forth are also involved, which means that the Department for Communities and Local Government is involved too. Then, of course, there is the Department for Business, Innovation and Skills, which has produced its own report on pub ties, another issue that we have debated today.

Actually, I think that that description illustrates half the problem here. Is the pub industry well represented in Government? I think that the answer to that question is no. It is because of the confusion that things fall by the wayside, issues do not get confirmed or dealt with, and taxation goes up and down without someone standing up and saying, “Let’s actually check this out—what is it doing for the British pubs?” The consequences of that are what we have seen; the huge numbers of pubs that have been closing week by week, month by month and indeed year by year.

However, let me roll back and congratulate my hon. Friend the Member for Ribble Valley (Mr. Evans) on his work on the Culture, Media and Sport Committee. He is a supporter of the drinks industry and he not only makes his case with humour and gusto but with relevance and detail. I think that the whole House will appreciate his efforts, and indeed those of other Members who are in Westminster Hall today, in ensuring that the drinks industry has a voice, and in particular the pubs.

As shadow tourism Minister, I appreciate the relevance of the role of the pub to British tourism. The pub is one of the reasons why people come to Britain, stay in Britain and enjoy Britain. It is part of our heritage and our culture. It is also unique. As much as people may want to try and replicate a pub in Dubai or Thailand, they cannot create a pub as good as those on our high streets and in our towns and villages here in Britain.

The contribution that brewing and pubs make to our economy is huge—£28 billion a year. From a tourism perspective, our pubs receive more than 13 million visits by tourists every single year. Also, one in four of us here in Britain drinks in a pub every week. Those are very positive statistics and the Government should certainly pay attention to them. Furthermore, from the perspective of employment, more than 500,000 people are employed in the industry directly and more than 250,000 people are employed in associated trades. Also, 90 per cent. of all alcoholic drink in Britain is brewed domestically, which is another very positive statistic that was cited by other Members earlier.

The issue of the pub tie does not go away; I think that it was the hon. Member for Leeds, North-West (Greg Mulholland) who made that point earlier. The pub tie needs to be reviewed. It has been examined by the Business, Innovation and Skills Committee. The pub tie has been around in different forms for a number of years. It has largely worked well, by providing an opportunity and support for people who want to run their own pub. However, the business model has come under scrutiny during this recession and tenants of tied pubs complain that the pub companies are demanding higher rents in order to pay back their debts.

So I ask the Minister to respond to the Business, Innovation and Skills Committee’s report on the drinks industry and some of the changes that have been proposed in that report. I am certainly glad to hear that the pub sector itself is responding positively to that report, by trying to establish an industry-wide code of practice and by trying to ensure that would-be publicans are better informed and better qualified, and that there is an ability for tenants to appeal in circumstances where there is an unresolved dispute in a rent review.

I think that the mandatory code of conduct, which is being introduced in the Policing and Crime Bill, has been referred to by a couple of Members. I myself am not keen on a mandatory code; I would prefer a more voluntary approach. More intelligent policies are needed, with more of a touch of localism too, because what applies, for example, to my constituency in Bournemouth is not necessarily relevant in other areas. There should be freedom for local authorities and the pubs to work together to work out what is best for their particular area.

Sky television was mentioned earlier. I have had meetings with Sky and I am pleased to say that it is reviewing its rates system, to ensure that it is fair, because there might be only one corner of a pub with a TV, in which only 15 people—not a huge audience—can stand, and yet the pub gets rated for its entire capacity, which might be up to 400 people because the pub has a lot of seating. My hon. Friend the Member for Ribble Valley made that valid point and Sky has responded to it positively.

Indeed, Sky has gone a step further, in talking about the debates in the upcoming general election. Sky would like to show those national debates between the party leaders and then get the local candidates in each area inside their local pub to continue the debate after the national debate has been shown on Sky. I would encourage all parliamentary candidates and indeed all current MPs to take up that opportunity.

The issue of rates, including business rates, was also raised. I am glad that the Conservative party came out some time ago with the idea that a Conservative Government will give the flexibility to local authorities to reduce the local rates on pubs, or indeed on post offices, or any other of those community assets that might be struggling through these difficult times. That is very positive. Labour Members shouted, “Where will the money come from?” The other dimension to this issue is that the local authorities will be able to keep the business rates for any new businesses that are created in a particular area, providing a link between business and the local authority, and encouraging small and medium-sized enterprises. At the moment, rates are simply collected and the money is sent to the coffers up in London.

I want to pay tribute quickly to some of the initiatives that pubs themselves have taken on board: Pubwatch; crime and disorder partnerships; Best Bar None; Purple Flag; the Campaign for Smarter Drinking, and Drinkaware. I have visited a number of pubs in Bournemouth and indeed elsewhere that are involved in some of these initiatives, and I was very pleased to see that they are local initiatives that are not led by the Government in any way, showing that the pubs themselves have a sense of responsibility. That point echoed around Westminster Hall today; that inside the pubs is where responsible drinking takes place and that is where the landlords and landladies take care of those who are inside. Unfortunately, pubs do get a bad name. We are occasionally seen as the drunk man of Europe, but that is not the fault of our pubs—absolutely not—and that point needs to be underlined.

There are other initiatives that I would like to see developed in the future. Certainly the issue of preloading needs to be addressed; my hon. Friend the Member for St. Albans (Anne Main) made that point. It is a disgrace that when Labour came to power the price of beer in a pub was twice that of beer in the supermarket but now the price of beer in a pub is seven times that of beer in the supermarket. Is it any wonder that people are loading up on alcohol before going to the pub, or buying alcohol in the supermarket and avoiding the pub? That issue needs to be addressed. We will place a cap on the price of loss leaders in supermarkets and I hope that that will work.

Time is tight, so I will conclude by saying that far too many pubs have shut; 4,000 pubs have shut since the Budget of 2008. There was a tax break—the VAT reduction that my hon. Friend the Member for Ribble Valley talked about, very acutely. However, the duties went up in response. That is not a way to look after our pub industry. Unfortunately, the Treasury is failing us, more so than the DCMS. The Treasury will lose about £250 million in receipts by 2010 if the present rate is maintained.

My final point involves what are called stakes without prizes machines, on which people in pubs can play The Weakest Link, Monopoly, Cluedo or Scrabble. They are not considered gambling machines; they are considered quiz machines. Yet a joint statement on 12 December said that there would be a three-year retrospective tax payment for such machines. That is disgraceful and will cost the industry about £90 million a year during its toughest moment. The Minister gave us no guarantee in his earlier intervention that the tax would be removed. It is still on the cards, unless he corrects himself in his statement.

I am afraid that the Government simply do not get it. They do not understand that by looking after the pub industry, they can make more money for the Exchequer, help defend our communities and preserve the glue that holds our society together. Instead, they are trying to turn a nation of quizzers into gamblers, which is simply wrong. It is time to say goodbye to this Government unless they can come up with something far more imaginative, which I do not think will be the case.

It is a great pleasure to respond to this excellent debate and to serve under your chairmanship, Miss Begg. I congratulate the hon. Member for Ribble Valley (Mr. Evans), whom I call a friend. We have shared a number of pints in a number of pubs while attending a variety of events. I know that he speaks with passion on the issue. It is not just something that has come up today; he has been consistent over his many years in Parliament about the role of the pub, and has been a loyal member of the all-party beer group, many members of which are here today. I congratulate the all-party group on its work.

One thing that this Government cannot be accused of is not having, listening to and responding to a number of debates about pubs and their future. The passion of many of the hon. Members who have contributed to this debate does not hide the context of the issues facing pubs. Anybody who stood up and said that every pub in the land could be saved would be completely wrong. The pub industry is facing great change, and many of the issues must be seen within that context. It must also be accepted that people’s drinking habits have changed dramatically, which has had an impact on the number of pubs that have closed. I will try to respond to the issues raised that are Government issues, but some are for local government, some are for Europe and some are for the industry itself.

I understand what the hon. Member for Leeds, North-West (Greg Mulholland) said about the tie. It is a competition issue. I have been closely involved with it not only as licensing Minister but previously, as consumer Minister and competition Minister. There are problems that must be addressed. I think that the route that the Campaign for Real Ale has taken is the right one, and I know that colleagues in other Departments have concerns. We need to ensure that we address the issues.

It is right that the British Beer and Pub Association has a view on tied pubs. The BBPA was trying to say that that is not an issue, and it has claimed the same thing in deliberations with me. We need to get to the core. The fact that the Office of Fair Trading is considering what CAMRA said is a step in the right direction.

Some big pub companies say that bad tenants are the only problem. I bring the Minister’s attention to a leaflet delivered by Enterprise Inns in Otley, in my constituency, where Enterprise Inns has been involved in a number of high-profile disputes. The leaflet says:

“Have you ever sat in a pub and wondered what makes it great and thought…. I could do that!”,

yet Enterprise is seriously suggesting that it is not deliberately trying to attract people who cannot run pubs in the first place. That is an issue that needs to be dealt with.

I accept what the hon. Gentleman says. I know that he will continue to work with the various bodies in the House that see that as an issue, and I will work with him to ensure that we do what we can to influence serious consideration of the issue.

Lots of hon. Members have spoken of the role of my right hon. Friend the Member for Wentworth (John Healey), who was named as pubs Minister in the News of the World. He is one of a number of pubs Ministers, as the issue has effects across government. However, he is specifically considering the issue mentioned by my hon. Friend the Member for Stroud (Mr. Drew), which is how planning can be changed to support community pubs and whether we might consider community ownership in finding ways to deal with the problem. My right hon. Friend has been tasked to do so quickly, and I hope that he will introduce proposals in the next few weeks.

Will the Minister give way?

Very quickly, as I need to respond to other issues.

It is an important point on the new appointment. To whom does the pubs Minister answer, when will he report and how will we scrutinise what he is doing?

He answers to the Prime Minister, as all Ministers do. I think that the hon. Gentleman was at the event organised by the all-party beer group last year or the year before last on the publication of its report. Five Ministers attended that debate to discuss our roles in supporting pubs. I am slightly confused. He says that one Department should deal with—

I did not say that.

Well, I apologise if the hon. Gentleman did not, but he tried to indicate that it should not be the role of many Departments to consider the issue. Alcohol is obviously of great concern in terms of health—

I said that there needs to be co-ordination.

To return to the point that this is a general election issue, I am highly in favour of that. It is right that issues close to our communities should be discussed in public, especially at general election time. However, I find it interesting that the hon. Gentleman did not mention what an incoming Conservative Government would do about beer duty. I put that on the table for those who will be considering the issues—

rose—

rose—

I will give way briefly to the hon. Member for Ribble Valley.

The Minister is in power. He can say something about taxation. What is he going to do?

I will deal with that question. I just thought that it was interesting that the Opposition did not deal with it when we touched on it.

I echo my hon. Friend’s point. The Minister is under scrutiny, not us. When the election is called, he will understand in more detail what our plans are. However, for the record, we have made it clear that we will increase taxation levels on alcopops and spirits. Beer drinkers will undergo a net reduction, as they will not be affected. We have made those announcements; they are in the public domain.

We will look with interest at the budgets and the Opposition parties’ responses to what the Chancellor has to say. Taxation is a matter for the Chancellor, but he listens to representations from the different sectors. His deliberations will be set against the public finances when the Budget is decided in the not-too-distant future.

I am sure that the hon. Gentleman is aware of the great concern in the House about beer duty and the effect on pubs. I am glad that the hon. Member for St. Albans (Anne Main) mentioned irresponsible publicans and alcohol sales. I believe that the Licensing Act 2003 has helped local authorities and communities deal with irresponsibility. The vast majority of publicans act responsibly. She is right that the fact that they can show that they act responsibly is one important contribution of the Licensing Act to supporting measures to address problem drinking.

Pre-loading is an issue that needs to be faced. It is a cultural thing. We need to educate people about how it affects youngsters and their health; it affects youngsters in particular.

It is about price.

Price is an issue. We have been considering a variety of the issues. The Department of Health is considering minimum pricing. I understand that it is an issue in Scotland.

It is a hot debate in Scotland at present. I realise that we have only a few minutes to go, but surely we do not want to reinvent the wheel. I encourage the Minister to talk to his colleagues and look at the debates taking place in Scotland so that we do not need to repeat them down here. Let us learn from what is happening up there.

I am grateful to my hon. Friend for his experience. We will have those discussions. I understand that the Scottish Government are having difficulties introducing minimum pricing. We will wait to see what happens.

The British pub is important. Earlier, we discussed the definition of a community pub. From my perspective, that definition includes members’ clubs, not-for-profit clubs and other clubs that affect our communities and offer sport, cultural and community activities. The smoking ban has been mentioned. Do hon. Members forget that the overwhelming majority of Members of this House voted for the smoking ban? I understand that there have been issues with its implementation, but we have considered best practice to ensure that the ban has been applied so as to meet policy objectives, as well as to find ways of supporting those who want to smoke. It was the Government who introduced the amendment for the smoking ban to include clubs, which some hon. Members voted against. I lay that on the table. Sometimes memories are selective.

Some of us voted for it.

Indeed, but the overwhelming majority voted for the ban.

Sky TV is important, particularly to me in my role as sports Minister. Like the hon. Member for Bournemouth, East, I have met Sky and been told that it will change how it handles rateable value. We think that that will be a step in the right direction. We are aware of the issues relating to community pubs in particular—

Order. We must move on to the next debate.

I am grateful to Mr. Speaker for the opportunity to raise these important issues this afternoon.

This is the third time in the past year that I have drawn attention to the critical issues affecting manufacturing and other businesses in my constituency. I believe patterns can be seen across the country. Most of the issues I raised in the previous debates remain valid. As the Minister would expect, I will emphasise particular issues this afternoon.

Manufacturing matters, as the Engineering Employers Federation campaign “We Love Manufacturing” makes clear. It has designated next week as manufacturing week, in anticipation of which it has asked why manufacturing matters. Its answer is that it accounts for 14 per cent. of the British economy, 2.5 million jobs and 50 per cent. of British exports. As it says:

“Manufacturers make real things. Everything around us in fact—like the medicines that save lives, the food on our tables, and the technology we’re going to need to tackle huge problems like climate change.”

It states that:

“Manufacturers are critical to a better balanced economy. If we’re going to pay our own way in the world, we need to put manufacturing at the heart of a healthy economy.”

I agree with that, as I expect does the Minister.

Before coming to the House, I spent almost 10 years as a chartered accountant and had many manufacturing clients. Over the past 12 years as an MP, I have known many manufacturers in my constituency. That has re-emphasised my commitment to the manufacturing cause. My constituency is a rural one that covers a vast, beautiful area of 1,500 square miles, but appearances can be deceptive. Agriculture and fisheries are of course important sectors from the Berwickshire coast and arable areas through to the hills of Selkirkshire, but manufacturing is hugely significant and is more important in the borders than in other parts of Scotland and the UK. The latest statistics from the Office for National Statistics estimate that there are 5,800 jobs in manufacturing in the borders, which represents 13.3 per cent. of the work force. That compares with 8.7 per cent. in Scotland and 10.2 per cent. in the UK.

The borders are closely identified with textiles, which was the subject of a debate I was lucky enough to secure in the autumn. Many of the companies in that sector have been around for centuries. There is a long list including Peter Scott & Co., Hawick Cashmere, Lochcarron of Scotland, House of Cheviot, Barrie Knitwear and Shorts of Hawick. Those companies have been synonymous internationally with tartan, knitwear and hosiery for decades, if not centuries. In the same year as the founding fathers declared the independence of the United States of America, 10 mill owners came together to form what is now the Scottish Borders Manufacturers’ Corporation, which to this day plays a key part in the local economy of south-east Scotland.

Our manufacturing base is much broader than the textiles sector. In electronics we have Plexus in Kelso and Tweedbank, which specialises in electronic manufacturing services; in tool making we have the world-leading LS Starrett Co. in Jedburgh; in food processing we have Farne Salmon and Trout in Duns and John Hogarth in Kelso; in software, Sykes still has a significant presence in Galashiels; in timber frame manufacturing for house building, Oregon in Selkirk is one of the country’s leading manufacturers; and in the exciting future industry of fibre optic cable, one of the country’s leading companies is Emtelle, which is based in Hawick in my constituency. I am bound to be in trouble for missing out many important and significant local businesses, but I hope the Minister gets the message about the diversity of the local manufacturing economy, how impressive the businesses are and the fact that they are surviving and remaining internationally competitive.

I wish to see those businesses continue to be internationally competitive and they have no choice but to be so. They are dependent on world markets for their sources of supply, whether it is Chinese cashmere fibre or north American timber. When they have turned those raw materials into manufactured goods, they are exposed to all that the globalised markets of the 21st century can throw at them, including competition for investment. People are entitled to ask why a group would make coat hangers in south-east Scotland when it has factories in Morocco and Bangladesh or why Ahlstrom recently invested £20 million in an 18th-century paper mill to develop glue-free teabags, the main market for which is Japan, when it has facilities in India, China and Thailand. All of those businesses compete with the best; internally to ensure that they secure investment for the future and externally to win market share.

There are plenty of smaller businesses, such as Berwickshire Electronic Manufacturing Ltd in Duns, which is one of a range of niche players that specialise in tiny markets. Many businesses come together under the banner of the Scottish Borders Exporters Association, which covers everything from industrial heat exchangers and cleaning chemicals to giftware and food. We are proud in the borders to have some of the finest primary produce in the country and are beginning to add value to it through manufacturing. Groups such as the Scottish Agricultural Organisation Society and the Food and Drink Federation have many members in the borders and rightly highlight the importance and great potential of food manufacturing in the area.

Understandably, confidence in the future is currently a precious commodity that is in limited supply. The recession that lasted for six successive quarters has been followed by anaemic growth at best. I understand that the figures might be revised on Friday. Unemployment levels in the borders are at their highest since the Viasystems debacle and collapse a decade ago. There has been an increase of 31 per cent. in claimants for jobseeker’s allowance over the past year.

The UK trade deficit in manufactured goods was nearly £13 billion in the last quarter, which is part of a sadly familiar pattern. I emphasise that we must not use that deficit to signal that we are giving up on manufacturing. If we address the key issues and provide the right kind of support, there is much to play for.

It is critical that we boost economic activity across the country. We have had the private sector recession, but we face the prospect of a public sector recession that will engulf the economy as we tackle the country’s enormous budget deficit. While we are in such fragile circumstances, manufacturing, like other sectors of the economy, needs Government spending to be maintained. I do not want to see any rush to cut spending, although like everybody else I recognise that a serious programme will have to be introduced at the appropriate moment.

Liquidity and bank finance remain a serious issue. A recent report by the Public Accounts Committee indicated that the part-nationalised banks will fall short of the legal requirement to lend £39 billion by the end of this month. As the Committee Chairman, the hon. Member for Gainsborough (Mr. Leigh), said:

“The Treasury does not seem to know why the banks are not lending and has few sanctions available to make them change their minds”.

As the Minister will recall from responding to the debate I secured on textiles in the autumn, that is a theme I have covered before.

One of my constituents got in touch with me in anticipation of this debate. He has a successful manufacturing business and has had a year of growth and improved profitability. Despite that, when he sought to renew his overdraft facility at the same level as before, he was told by his bank that he could do so, but that the new rate would be 7.5 points over the base rate. I do not know what the Minister thinks of that, but it is a scandal. My constituent is right when he says in his e-mail to me:

“I ask you how any business can see any support for growth.”

As the Minister will recall, I raised that issue last year, particularly in the context of the enterprise finance guarantee. I have subsequently asked a number of people what they make of the guarantee and many simply dismiss it as a political stroke that seems to have underpinned the banks without increasing their appetite for risk.

On skills, I hope that we might soon get some clarity about how the new sector skills council will take on the textile industry—I understand that it will be done through Skillset rather than Skillfast, which is another vast meaningless name that does not tell us much about the organisation itself. A fortnight ago in Hawick in my constituency, I was at a meeting convened by my colleague, Jim Hume, in the Scottish Parliament. The Scottish Skills Minister, Keith Brown, attended and, because of the mess over the demise of Skillfast, he was able to blame Westminster for the fact that the Scottish Government are not doing anything about training in textiles. Disappointed as I am about the demise of Skillfast, I hope that the Minister will now remove that excuse and give us some assurance that Skillset will do what it needs to.

Many of the issues relating to infrastructure have been devolved, so I will not mention roads and trains, although the east coast main line is of major importance to my constituents. I hope that I will be able to have a meeting—one has been postponed—with Transport Ministers to discuss that. On digital, we were promised a rosy future and, frankly, the difference between success or failure may lie in the quality of the digital infrastructure. I repeat a plea I made to the Secretary of State for Culture, Media and Sport: let us get to that future—although it is still doubtful how we do so—but let us not forget about the here and now. Mobile phone coverage in the south of Scotland is still patchy, the 3G data network is a joke and broadband remains inadequate. It is ironic that Emtelle is creating some of the finest high-tech cabling products in the world, yet none of it can be used in my constituency.

Finally, I want to raise the serious issue of competition. I hope that the Minister is on top of the issue that has been brought to the attention of the US trade representative, Ron Kirk, by the American National Textile Association about how the Chinese appear to be playing around with their export value added tax arrangements to subsidise the cashmere industry in China. In my constituency, people have long memories and remember the problems of international trade battles in relation to the banana war. That issue is very direct and important to them, and they are concerned that the actions of the Chinese might seriously unbalance the competitive playing field and threaten their future.

We currently make a lot about sustainability, and rightly so. At a time when we are increasingly concerned about our carbon footprints, people are looking to see what we are doing about our manufactured products and asking if it is sustainable for so many of them to be sourced in China and the far parts of Asia. In development and human rights terms, people are becoming more interested in the quality of life of the people who make the products we buy so cheaply in the UK. It is important to ensure we have a manufacturing sector here, so that when the tide has turned, we can respond to people’s concerns about sustainability.

Outside bodies recognise the need for a clear focus on manufacturing and to deal with regulation, red tape and many of the traditional concerns. In the south of Scotland, through the local councils and economic development agencies, we are implementing the competitiveness strategy, which focuses on many of the key issues I have raised in the debate. Those officials and the thousands in my constituency who work in manufacturing want to see their efforts backed up robustly by the UK Government. The EEF puts it neatly:

“Manufacturing is the real business. Critical to the UK economy. Critical to our future.”

Manufacturing needs to be supported in a way that indicates the Government agree with that sentiment.

It is a pleasure to serve under your chairmanship, Miss Begg, and to hear from the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore) about manufacturing. I can assure him that the Government have not given up on manufacturing and, as someone who represents a strong manufacturing constituency, it has been my commitment since being elected to Parliament in 2001 to ensure that manufacturing is central to Government policy.

I am delighted to serve in a Government who have put manufacturing at the core of the activity of the Department for Business, Innovation and Skills. We fully recognise, as the Engineering Employers Federation has said, that manufacturing is a vital sector that needs intensive support and co-operation from Government, employers, trade unions, regional development agencies and, in the devolved authorities, from bodies such as Scottish Enterprise. That element of co-operation is vital to the future of manufacturing.

I was interested to hear about the range of companies in the hon. Gentleman’s constituency. Although he is right that the traditional view of the borders is that it is a beautiful area—I am familiar with it, as I have relations there—I am not surprised that there is a range of manufacturing activity there, because Scotland has a proud manufacturing tradition and history. It also has a profound history of innovation from the days of the industrial revolution onwards. That is a characteristic of the textile industry, which I know is important in his constituency.

Innovation is central to my Department’s work at the present time, and the assistance that the Government are able to offer in the realm of innovation to businesses of all kinds in the UK is very important indeed. Innovation does not just come from large companies; in fact, some of the most impressive companies I have met and dealt with since I have been in post are smaller companies with keen ideas that add greatly to the UK’s manufacturing capability and to the steps taken to maintain our manufacturing industry. It is extremely important that we work to support those companies. Support for employment in manufacturing is very important indeed.

It has clearly been a very difficult two years, and the pressures of the international situation have impacted heavily on business across the UK in all our constituencies. My Department has offered specific support for individual businesses through the help for business scheme, which I used before I became a Minister and have used since to assist particular companies with difficulties they have had in dealing with, for example, access to finance.

In my experience, there has been some success in pursuing, for example, discussions with banks through that scheme. If the hon. Gentleman has specific cases he wishes to raise, I invite him to bring them forward. My Department stands ready to assist if it can with all those cases by engaging with banks and providing assistance in securing access to finance if at all possible. I have done that in the past and it has been successful in certain cases I have encountered. I am pleased to offer that facility to the hon. Gentleman if he or his constituents wish to take it up.

The hon. Gentleman referred to the enterprise finance guarantee in a rather disparaging way, I am sorry to say, and I would take him to task slightly on that point. The enterprise finance guarantee has offered real help to businesses in Scotland, as 81 loans have been drawn for Scottish companies worth £16 million, so assistance has been provided in those cases.

To be clear, I am not disputing that money has been lent through the EFG, but I would like to understand whether that is money that the banks should have been lending anyway, which the EFG now presents with a nice little risk cover, or whether it is available for genuinely new ventures that the banks would not have touched with a barge pole. Where is the independent analysis of the quality of that lending?

We consider and assess individual applications, and provide assistance where we believe taxpayer support is needed. The Government came under a great deal of pressure as a result of the recession, and mechanisms were put in place to assist business and provide support at a difficult time. That is the purpose of the EFG, which has provided assistance. We believe that the assessments that have been made have supported that assistance.

The Government also stepped in to provide financial support for the economy as a whole. We brought forward £30 billion of spending from the public sector to support business, enterprise and industry in the UK. I believe that that has been absolutely crucial to securing what is still, I fully accept, a slow and difficult recovery, but it was vital that the Government took that step. This morning I visited a construction company, Laing O’Rourke, and I know that the public sector has been very important in the construction sector.

With regard to the hon. Gentleman’s point on infrastructure, I come from the north-east of England, so I know that the connections through that region to Scotland were in the past not the best, but the infrastructure projects and the links to Scotland along the east coast, not only by rail, but by road, too, have improved immeasurably since the Government came to power, and I have personal experience of that. I am pleased to say that when I visited the north-east last week, there was still substantial infrastructure work going on, providing jobs and employment in the construction sector that would not be there if the Government had not committed themselves to carrying out that work by bringing forward the public funding.

The hon. Gentleman made a good point on broadband infrastructure. It is important that we have the infrastructure to create a digital Britain and improve our existing connections in both the mobile phone and internet sectors. We have put forward clear proposals through “Digital Britain” to roll out broadband across rural areas. They are opposed in some areas by some political parties, but we believe that it is extremely important to provide a strong infrastructure to compete in the innovative sphere of the digital economy, and that is why we are introducing legislation in that regard.

We are also strongly committed to upskilling in our economy, providing training and strong support for work force development. In an innovative sphere, it is important that individuals upskill throughout life, both when they leave school and move into the work force and throughout their employment. It is only by doing so that we can contend at the highest level with competition across the world. We recognise the importance of skills and training. Skills are a devolved issue in Scotland, so the primary responsibility for support rests with the Scottish Government. Although I am not surprised that they perhaps attribute any difficulties in delivering skills in the Scottish context to the UK Government, I do not think that that is particularly fair.

I am of course aware that since the hon. Gentleman and I last debated the matter, the decision has been taken to disband Skillfast and replace it with Skillset. It is important that skills are developed in the textiles industry because of the innovative context in which it operates. We have a high-quality product from Scotland in the textiles sphere, and he is well aware that we compete across the world successfully because of the quality of the product, particularly that which comes from the borders. We need to concentrate on skills to make that product sustainable and even more competitive so that we can ensure that there will be a positive sector in the textile industry in Scotland for a long time to come. That depends on our continuing to upskill, to improve the product and perform in a positive way. That also means that we need to attract high-quality talent, not only to the textile manufacturing industry, but to manufacturing generally.

We need to change the perception of manufacturing, so I welcome the campaign by the Engineering Employers Federation and the three-day event in Manchester next week called the Big Bang, which is for young people and is intended to encourage interest in science, engineering and manufacturing. The hon. Gentleman is an accountant, and I am a lawyer—[Interruption.] Indeed, that is a first. I must confess that when I was looking at careers in the late 1970s and 1980s, my knowledge of manufacturing was extremely limited, but in my work, I have been extremely impressed by the quality of the industry as a whole, by the intellect and intellectual challenge within the industry, by the capabilities of the management and by the great challenges the industry needs to face.

We all know that in future, we will operate in a low-carbon world, which poses huge intellectual challenges to those who work in manufacturing, and it will be today’s young people who will have to meet those challenges. The Big Bang event in Manchester is about that challenge. It is about showing younger people how exciting manufacturing is, how we have a huge capability already in the UK, how we operate in a globalised industry, and how many of our major manufacturers are global players, which of course offers great incentives to individuals to work in those spheres. I am a great proponent of manufacturing as a career for young people. We have a proud history and tradition of manufacturing in the UK, and in Scotland, and I think that in recent decades, we have not shouted loudly enough about its importance. I strongly welcome the fact that the EEF is promoting manufacturing, and welcome the Big Bang event in Manchester, and I encourage younger people to get involved in it.

The hon. Gentleman raised a couple of points, one of which related to VAT, and I am aware of the concerns in that regard. VAT rebates on exports are legal under World Trade Organisation rules. That is a normal part of global trading, but the allegation of manipulation of the rebates is an issue of real concern, because it can lead to trade distortions. I can assure him that DBIS officials are consulting the UK textiles trade association and individual companies to see whether China’s export VAT rebates are a widespread concern and to obtain any evidence of export rebate manipulation. We are considering that issue, and any information he has that would assist further with that would be gladly received.

I am grateful for this opportunity to raise the issue of the increasing number of foreign lorries using our crowded, over-used and, to some degree, crumbling road system and taking an increasing share of business from British hauliers. They are grabbing an increasing share of the cabotage—domestic business—and constituting a threat to our British haulage industry. The number of British vehicles fell by 30 per cent. between 2005 and 2007, and it has fallen more since then, yet foreign lorries operate tax-free here while British lorries face in Europe an increasing burden of tolls and charges which are driving them out of European business.

I want today to ask the Government to assert the principle of British lorries for British business by creating what one might call a level motorway, and by taxing the foreign lorries using our roads to ensure that they pay their dues. This is a plea to Ministers to end the kind of defensive complacency that has characterised our approach to the increasing number and proportion of foreign lorries up to this stage.

The problem has been growing for some time, and it has been amplified by the entry of new eastern European countries to the European Union, particularly Poland, whence many lorries come, and, since May 2009, by access of foreign lorries to the UK domestic market. Increasing numbers are coming and using our roads. The Vehicle and Operator Services Agency tells us that such lorries are three times more likely to have mechanical defects than British lorries. They are also more likely to be involved in serious accidents. Indeed, the Department of Trade and Industry as was—may it rest in peace—estimated in 2008 that they were eight times more likely to be involved in a serious accident. They are less likely to pay fines imposed by VOSA. Indeed, until last year, it seems that they did not much bother to pay fines. Now fines are mandatory and are being paid, but not at the same level as British operators.

Foreign lorries now have 80 per cent. of the roll-on/roll-off business to Europe, whereas, 10 years ago, British firms had just over one half of that business. That is an indication of the increasing share of the market that foreign lorries are getting. They are also doing domestic business. Trailers are shipped to UK ports, coupled with foreign trucks which are here already and delivered to UK destinations under that system.

I often go out to Immingham to get a breath of fresh dock air from the North sea and to view the charming docks scenery. There we have a huge lorry park provided by North East Lincolnshire council. It does not give anything away to the residents of north-east Lincolnshire, of whom I am one, but is free to foreign lorries which appear to be the main users—they are the large proportion of users. On a weekend, there are usually about a dozen Walter Koop lorries there waiting to be coupled up to trailers coming in across the North sea for delivery in this country, and those Koop lorries appear to me, a casual driver driving past, to stay in this country.

There are also on any given weekend about 20 or more other foreign lorries: German, Dutch and Polish. There is a large lorry population that appears to be resident in this country and allowed to use our roads yet cannot be paying taxes in this country, because we do not levy tax on them. I want the Minister to have a look at the Immingham lorry park and tell us whether those vehicles in fact go home. Do they pay road taxes and dues anywhere? They are not paying them here, yet they appear to be permanently stationed here.

Foreign hauliers start out with a huge competitive advantage over our hauliers. When the lorries first come in, they have full tanks that hold up to 1,200 litres of diesel. Despite the devaluation of sterling, diesel is still half the price in Europe that we pay here. Also, many hauliers use cheaper drivers. I do not understand the language of the drivers in the Immingham lorry park who invite me to go forth and multiply after taking photographs of them. They appear to be eastern European and have little English. I suppose that they are reliant on satellite navigation for getting around the country. The drivers of those foreign vehicles are certainly paid less than British drivers.

We allow foreign lorries, with those competitive advantages, to operate here free of tax and charges. They make no contribution to our roads, despite the damage that they do to them. They make no contribution to our health costs, yet they emit large quantities of health-giving diesel fumes across our countryside. They cause accidents but, unless they are fined, they make no contribution.

Meanwhile, our lorries are heavily taxed. The standard rate for large articulated goods vehicles is, at its highest, £1,850 for 12 months. British lorries are highly taxed, but their European competitors are allowed to operate for free in this country. That is an unfair and unreasonable competitive advantage to them and an imposition on the British industry.

It is no wonder, in that situation, that the British lorry fleet is declining in numbers. Governments of both parties have been content for a long time to tax lorries heavily in the hope of transferring business to the railways, where it can be efficiently dealt with. Unfortunately, the heavy pressure of taxation has succeeded in transferring business not to the railways but to foreign lorries delivering in this country. That is a total failure of the policy of heavy taxation of road transport.

Yet British lorries face substantial charges when they go to Europe. First, they face heavy toll charges on the motorways, certainly in France; charges are slightly lower in Spain and Italy. It is not that such charges are a voluntary tax on those who use the motorway, because the increasing use of weight restrictions forces drivers off the secondary roads and on to the motorways where they have to pay charges which we do not impose in this country. Those huge toll charges can increase the cost of delivering goods to Spain or Italy by £100 or more.

The Government might say that if we had toll charges here—we have a few miles on the M6, I gather, and there is the iniquitous Humber bridge charge, which is the highest estuarial charge in the country—we could equal those charges. But we cannot; we do not impose such charges here.

Secondly, British lorries face vignette charges. I have a vignette here. It is a complicated little document which was purchased on the ferry going over to Europe. It applies in Belgium and Holland. It costs €8 per day to operate in those countries and the charge could, I gather, go up to €11. The one I have here is for €8. That is a charge on British industry that foreign lorries coming here do not have to pay.

Thirdly, there is the elaborate and very expensive system of road user charges in Germany, which are charged per kilometre and depend on the emissions level of the lorry. Those charges must be paid on entry, so a lorry drives over the border into Germany and it has to stop at the nearest available filling station to buy tickets. I have some tickets here, which were paid by Grimsby vehicles going into Germany. These are some of the charges: for a Euro 2 vehicle for 119 miles it is £53 for a single journey to the point of delivery. That is a hefty charge on a British lorry. There would be another charge, payable at another filling station, coming back. For a Euro 3 vehicle for 93 miles the charge is £30. The figures are in euros, of course, but I have converted them. For a Euro 3 vehicle for 128 miles it is £40.

How is it legitimate for our vehicles to face those heavy charges in Germany? Although the motorways are free, the vehicles are charged for their one-way journey and then face another charge for the journey back. There is no time to hang around in the hope of collecting a return load, because a charge is payable for that time as well and for driving to collect the load. It is a heavy burden on British lorries, and if they do not pay or do not have a ticket, they are stopped and dragged off to a cash point to raise the money with a credit card—as our former Prime Minister, Mr. Blair, would have done with hooligans. The fines can be up to €1,000. The German authorities seem very flexible and sometimes commute the fines, but they are heavy. When drivers ring the British embassy, they are advised to cough up and claim it back later—that is helpful advice. It solves nothing if they have not got a credit card. That is the situation.

The German system is called Toll Collect and is run by a central computer. There are 300 vehicles patrolling the autobahns, with 550 staff from the Federal Office of Freight and 300 overhead gantries monitoring the vehicles. The system cost €700 million to install. German vehicles are required to carry an on-board unit, because they have to pay charges as well, although I am not sure that they pay them on this scale. It would be horrendous if the charges levied on our lorries were exercised on German vehicles. The unit clocks up the charges. British vehicles have to buy tickets instead.

That scale of charges through tolls and vignettes in the German system is in sad contrast to the situation here, where European lorries operate for free and get a warm welcome in our free car park in Immingham, which is well placed for pizza and the pub. They get a good deal in this country. My question for the Minister is, what are we going to do about it? The Government have tried; they have spent £40 million on consulting for a system of dealing with the problem. In 2002, they proposed legislation for what was variously called a British road infrastructure tax disc or a vignette, but they dropped that idea to look at road charging more generally, which they then dropped to do nothing. The vehicles are still not being charged and the situation gets worse.

I have put forward proposals from my constituent, Mr. Alan Overton, for a control system less elaborate and expensive than Germany’s. People would be charged on entry and the system would be monitored by 40 vehicles and a central computer. I put that to the Ministry, and it has shown no interest. We have an increasing problem with foreign lorries, which are making no contribution, and our Treasury is desperate for tax contributions and to levy taxes. If imposed, the system would produce serious revenue for the Government. Why are we ignoring the opportunity to do something, when industry is crying out for something to be done? The foreign lorries are making no contribution and exploiting our good will. The proposal would raise tax revenues to deal with the current economic difficulties.

In conclusion, why is nothing happening? Why is there a complacent belief that the water around the coast is a sufficient barrier to protect our industry when it has been so badly hit in Europe? Will the Minister meet me and Mr. Overton to discuss the issue? Will he act urgently to see that foreign lorries pay their share and will he accept the view that I offer today? If the Conservatives win the election, and I devoutly hope that they will not, they, and the Liberals, are committed to acting, so why are the Government not acting?

Surely, it is not beyond the wit and ability of officials in the Department for Transport and the Treasury to devise a tax structure for foreign vehicles that ensures that they pay the same kind of heavy taxes, proportionate to their briefer stays in the country, that British lorries pay. Why should they not pay their share of the vehicle duties that we impose? At a minimum, why should they not pay the €11 a day vignette charges, which are allowed? Why should they pay nothing? Surely, the brains at the Department for Transport, if applied to the matter in conjunction with the supreme intelligence at the Treasury, can devise a system that works, is acceptable in Europe and produces revenue, which we desperately need, to deal with the problem.

It is a privilege to serve under your chairmanship, Miss Begg. I thank my hon. Friend the Member for Great Grimsby (Mr. Mitchell) for securing the debate. I recognise, as do the brains of the Department, that the issue gives rise to a great deal of heated feeling. However, he will be aware that this is not a new debate. It has probably raged for at least a decade, with various statements appearing to become fact, when that is not the case.

In the time available, I would like to run through some of the issues, including all of those that my hon. Friend raised, and set out the history. There is no complacency on the part of Ministers in the Department for Transport, the Government or other officials. It is absolutely right that the brains of the Department and of Ministers could come up with a scheme, but it would have to achieve what he wants, provide value for money, bring money in to the Exchequer and make balanced adjustments for UK-registered vehicles, which would have to be charged the levy to which he refers. Complexities arise, which is why I would like at the outset to refer to the history of how we charge for roads. I want to come on to deal with cabotage, the number of accidents, the certificate of professional competence, and foreign driving standards.

Due to the complexities of the subject, and because it gives rise to strong feelings, it is important to look at the history of lorry charging policy development. In 2000, the Government announced plans to consult on a vignette, which some hon. Members may remember as the BRIT disc. What emerged from that consultation with many interested parties and stakeholders across the board was the fact that we should look at a more sophisticated distance-based scheme rather than a straightforward one-off vignette payment.

Between 2002 and 2005, we investigated proposals for a lorry road-user charge, and considered options based on microwave and satellite technology to track goods vehicles and to impose distance-based charges, such as those in some of the countries to which my hon. Friend referred. However, in 2005, the then Secretary of State for Transport told the House that although a distance-based lorry charging scheme showed potential, it was more sensible on our shores to focus on a broader road-pricing strategy. My hon. Friend will be aware that matters have moved on, and that the current Secretary of State has ruled out national road pricing during the life of the next Parliament.

That process led the Government to revisit alternative and simpler options for charging foreign lorries, and that work culminated in the freight data feasibility study, which considered a wide range of options between 2006 and 2008. It soon became clear that the most promising option in terms of value for money was an electronic vignette system. If that system had come into operation, UK hauliers would have paid a six or 12-month vignette alongside vehicle excise duty. Meanwhile, foreign hauliers would have bought a vignette for a specific vehicle for a specific time. Enforcement for UK hauliers would have been an extension of VED enforcement.

Clearly, we would have had to take steps to work with that scheme, but the freight data feasibility study analysis showed that even that electronic vignette system would not be good value for money. In his 2008 Budget statement, the Chancellor confirmed that because the electronic vignette would have delivered only limited safety, congestion and environmental benefits, the Government decided not to introduce it. However, I emphasise that that does not mean that work cannot be done inside and beyond government on charging foreign vehicles. Work can continue to examine enforcement procedures, including a range of issues raised by my hon. Friend. The work that was done has not been wasted.

Will the Minister confirm or deny that the problem with an increased charge on British hauliers through the vignette system is that it would have to be eased by a reduction in fuel duty, which is very high in this country? Is it true that without a reduction in fuel duty, the industry did not want the vignette system?

There were a number of reasons, and value for money was one complexity. Another was managing the necessary reduction for UK-registered vehicles without introducing a heavy bureaucratic and costly exercise that would not achieve in reality what I believe my hon. Friend wants.

The Eurovignette directive, which governs the whole lorry-charging policy throughout the European Union, is complex, and it would be rather dry to read it out, so I am sure that you would not want me to, Miss Begg. However, it stops member states imposing a charge on foreign hauliers without their imposing the same charge on domestic hauliers. It also stops member states imposing a time-based charge of more than €11 a day. There is more flexibility, but it only reflects the cost of the infrastructure when moving to a distance-based charge.

The directive also requires member states to impose tolls and charges in ways that

“cause as little hindrance as possible to the free flow of traffic and avoid any mandatory controls or checks at the Community’s internal borders.”

We could not stop every truck coming through Dover or Immingham, and ask the drivers to pay up. However, it is true that the directive is being reviewed.

That would mean more bother in Immingham, where more than 6,000 foreign vehicles come in daily, than in Dover. Is my hon. Friend saying that we cannot impose on foreign vehicles for the period that they are in this country a proportionate share of the heavy tax burden that is imposed on our vehicles?

I am setting out the complexities of finding a scheme that would be fair, meet my hon. Friend’s objectives, not tie us up in litigation, and achieve what we both want without being unfair to our domestic hauliers. The Eurovignette directive is being reviewed, and we are strongly backing amendments that would allow member states to charge more for externalities, and to include, for example, issues such as congestion in the calculation. However, I need not tell my hon. Friend that that work is not easy because, not surprisingly, many member states oppose it. The Spanish presidency has said that it does not want to take that work forward at this stage, but that does not stop us trying to do so.

Will my hon. Friend give way?

I will give way once more, but I want to cover some other issues.

Is my hon. Friend saying that we will not have charging for foreign vehicles until we get general road-user charging? Is it being postponed for ever?

My hon. Friend knows that a Minister will never rule out anything for ever, but clearly I want to ensure that if we had such a system at some stage—as I said, work on that continues—we would want it to be robust and to provide exactly the objectives that we both want.

I want to deal with some other issues that my hon. Friend raised. On cabotage, he will be aware that stringent changes that come into force on 14 May will limit the number of journeys to three in no more than seven days subsequent to a loaded international delivery coming into this country. Previously, the vehicle coming in might not be loaded, and there could be unlimited jobs during a 30-day period. The new limit is much tighter. In addition—this is significant—the onus is on hauliers to prove that they are operating within the rules, instead of the other way round when the enforcement agency had to prove that hauliers were operating outside those rules.

On the safety of foreign-registered vehicles, in 2008, 1,651 accidents occurred involving foreign registered vehicles, which was 1 per cent. of all accidents recorded in the UK. Of those, 53 per cent. involved good vehicles. However, we are not complacent, and we have given £24 million extra over three years to the Vehicle and Operator Services Agency to look into high-risk vehicles on international journeys. That has resulted in increased safety. The graduated fixed penalty and deposit scheme is having an effect on finding those who contravene rules and regulations in this country and, when there is no acceptable UK-registered address, allowing us to immobilise those vehicles. We are working closely with the UK Border Agency to agree access to its freight-targeting system for VOSA so that we can identify and highlight companies that are causing concern, not only in the UK—we already have a traffic light system—but foreign visitors.

It is a pleasure to serve under your chairmanship, Miss Begg. I am also pleased to have secured this important debate on road traffic accident compensation and sentencing. I accept that the title is broad, but I hope to raise several different but interconnected issues on the subject. Specifically, I would like to take the opportunity to discuss two constituency cases, those of Mr. Jim Alston and Mrs. Sandra Hudson, who are both watching the debate today. As is often the case, it is those cases that involve real people and their lives which point to the defects in our man-made and too often process-driven justice system. I believe that both these cases raise serious issues about the general state of sentencing and Government policy.

I will begin with the case of Mr. Robert Hudson, and I will try to deal only with the facts as they are known. Mr. Hudson died of brain injuries after being hit by an unlicensed driver, Mandy Lewis, in December 2008. He was crossing the road close to his home, I believe to post a letter. His wife, Sandra, was nearby. Lewis was a 28-year-old single mother of two, who had come to Reading to meet a man at a local hotel after arranging it via the internet. She drove all the way from Essex to Reading for that night, and was on her way home at approximately 11 am the following morning after stopping at a petrol station. Lewis held only a provisional licence, and was therefore driving without proper insurance. She sped off knowing that she had hit Mr. Hudson, leaving him fatally injured. The judge in the case, Stephen John, said that Lewis had evaded her responsibility and prolonged the agony of the Hudson family.

Mandy Lewis was eventually identified by the police via CCTV footage from the petrol station. However, despite her obvious guilt, she steadfastly refused to answer police questions. In defence of her actions, her counsel highlighted the recent death of her mother from cancer. The judge said:

“This was an accident; no-one suggests that you intended it to occur, nor that your driving was poor, but once it happened you drove off and spent months trying to get away with it. You knew the pain of the recent loss of your mother but gave no thought to the pain your actions caused to another family.”

What so shocked Sandra Hudson is what happened with the sentencing. Mrs. Hudson attended the court with her family only to discover that, after initially protesting her innocence, Lewis pleaded guilty. Mandy Lewis’s original sentence of 36 weeks’ imprisonment was immediately reduced by a third to just 24 weeks after she changed her plea to guilty. Along with many others in her situation, Mrs. Hudson has had to face the sad reality of the sentencing guidelines, particularly for the new offence of causing death while unlicensed, disqualified or uninsured. The new offence differs from the usual bad or dangerous driving offences in that the culpability arises only from the offender driving a vehicle on a road when, by law, they are not allowed to do so. Because the offence does not require proof of any fault in the standard of driving, the emphasis is on the decision to drive taken by the offender, rather than on the standard of driving. The offence carries a lower maximum penalty of two years’ imprisonment. Most people would find it astonishing to hear that somebody without a licence and proper insurance cannot be judged by a court on how safely they were driving following a hit-and-run accident.

I fully appreciate that the courts have complete judicial discretion to pass the sentence that they believe is appropriate in individual cases, after taking into consideration all the circumstances of the offence and the offender. However, not only was the defendant driving illegally in the first place, it is my understanding that leaving the scene of an accident is an additional factor that should add to the sentencing tariff. When both those factors are combined, is 24 weeks in custody a fair punishment for Lewis’s actions when taking Robert Hudson’s life? Has justice really been served by passing such an extraordinarily low sentence? Lewis even appealed against the 24-week sentence, but thankfully I understand that that appeal was quashed. Mrs. Hudson is left with strong feelings that Mandy Lewis will not serve even those 24 weeks of her sentence. Perhaps the Minister will confirm, either today or later in writing, whether the short 24-week sentence will be served in full.

When Mrs. Hudson inquired about the sentence discount given to Lewis because she entered that guilty plea, the Ministry of Justice informed her:

“The justification for such ‘sentence discounts’ is that early guilty pleas are beneficial to victims and other witnesses, who no longer need to worry about having to go to court to give evidence.”

I think it is safe to argue that the sentence discount in this case was by no means beneficial to the family of Robert Hudson, and it is perhaps disrespectful to imply otherwise. If anything, the statement from the Ministry of Justice merely highlights the impersonal, sausage-machine nature of the justice system, which takes little or no account of individual circumstances.

The current sentencing policy is certainly not proving a deterrent for hit-and-run drivers. In Reading, East we have seen hit-and-run offences nearly double since 1999, and in Berkshire they have risen by almost a third over the past 10 years. At the very least, does not that suggest that sentencing is perhaps overly lenient?

Another issue in this case was the delay in the release of Robert Hudson’s body; a delay that meant that his widow could not be allowed to make important funeral arrangements. I understand that the defence has the right to ask for a second post-mortem examination when the police are investigating a fatality case, and I also understand that that is established practice in the courts. However, surely we must be more sensitive to the impact that that has on the victim’s family. The unrepentant Ms Lewis originally left Mrs. Hudson’s husband to die by the roadside; one can imagine Mrs. Hudson’s heartbreak and despair when Lewis added further to the delay to his burial. Under the Coroners and Justice Act 2009, the Secretary of State has powers to make new regulations to govern this area. I sincerely hope that he will use those powers to stop this sort of abuse, which adds considerably to the grief of the family.

I would now like to turn to the case of Bobby Alston. Bobby was tragically killed, aged just 25, in June 2008 when his motorbike smashed into the side of a car driven by a foreign national, Bozhidar Iliev. After initially claiming that his car had suffered a burst tyre, Iliev was found guilty of causing death by dangerous driving in July 2009 and sentenced to a mere 18 months in prison with a three-year driving ban.

Bobby’s father, Jim Alston, is obviously extremely upset by the leniency of that sentence. After the sentencing at Reading Crown court in September 2009, he told the press:

“Sentencing for crimes like this is farcical, very unfair and not at all just. The sentence is an insult to Bobby.”

I fear that few would disagree with those sentiments.

As the Minister probably knows, Jim Alston is a card-carrying member of the Labour party, and feels that the Government have let him and his family down. It is his view, as told to me, that Government policy on sentencing is out of step with the Labour party’s own commitment to be

“tough on crime, tough on the causes of crime.”

As the Minister may know, Mr. Alston has been in correspondence with both the Prime Minister and the Justice Secretary on this matter.

We all know that there is complexity in sentencing. The offence of causing death by dangerous driving causes difficulty for the sentencers, let alone anyone else. On one hand, an offence involving a person’s death is always serious and understandably leads to calls for severe sentences. On the other hand, an offender convicted of that offence most likely did not deliberately cause death or serious injury. In some cases, the driver may have had a momentary lapse in judgment, but in the worst type of case, he or she may be very much to blame, having driven with complete disregard for the safety of others.

In the case of Iliev, he was doing a U-turn on a dangerous bend. He pleaded not guilty and had to be found guilty at Reading Crown court. Although Jim Alston has had to accept that the judge was simply following the guidelines issued by the Sentencing Guidelines Council, I should be grateful if the Minister took this opportunity to explain, in a more general context, whether she thinks it acceptable to give such low sentences when accidents result in loss of life. One has only to open a newspaper to see other families devastated by the loss of a loved one killed on the roads.

Let me also mention the case of Ryan Batt, who was killed by Timon Douglin while walking on a pavement in Reading’s Shinfield road. The killer got a sentence of three years and three months that even the judge said was inadequate. Douglin denied knowing that he had hit Ryan Batt, claiming that he had got out of the car and picked up a damaged bumper without realising that Mr. Batt was dying in the garden of 156 Shinfield road. Of course that was an absolutely absurd defence and was dismissed by the judge at Reading Crown court, who said that there was no way that Douglin would not have known that he had hit his victim. The evidence proved that Mr. Batt’s head hit the windscreen in front of the driver of the car before he was propelled into the garden.

The judge made it clear that although the sentence was inadequate, he had to follow guidelines when sentencing. That suggests that even judges feel that the Government sentencing guidelines are inadequate. In this case, the sentence was reviewed by the Attorney-General, as I understand it, due to popular outrage, but it was still left unchanged.

In preparing for the debate, I have spent time examining the sentencing guidelines, and they are a quagmire. At the most basic level, they assess how valuable a life is against assessment criteria with aggravating and mitigating factors. It is cold, impersonal and extremely complex. I can understand why judges feel exasperated by the complexity, but it is utterly unfathomable to the ordinary man and woman. On no level can the sentences handed out to Iliev and Mandy Lewis be considered fair, appropriate or just.

I also find it absurd that causing death while unlicensed carries a lesser penalty, with the emphasis on the decision to drive by the offender rather than the standard of driving. Surely one is unlicensed for a reason. Why is it that because such incidents happened on the road, such reckless individuals do not pay the full price for their misdemeanours and crimes? It is not hard to understand why in such cases families feel so blatantly wronged by the criminal justice system in this country.

Due to my involvement in these cases, it is my understanding that following a number of extremely serious cases put before the MOJ over the past year, it has announced its intention to extend the minimum sentence for dangerous driving to five years when there is the appropriate legislative opportunity. I sincerely hope, for the sake of all families that are living through such tragic circumstances, that stiffer sentences come sooner rather than later, although with the sentencing discounts available to the guilty, it is hard to see what the overall impact will eventually be.

Continuing my comments about the case of Bobby Alston, I shall now say a few words about the compensation that families are eligible to receive following the death of a loved one. Jim Alston works as a private hire driver in west Berkshire and part time for a security company. Time is money in those occupations—if people are not on the road, they cannot gain an income. With the unexpected tragedy of his son’s death and still grieving, Mr. Alston set about arranging a funeral and memorial service and attending the court proceedings. That is an expensive business, and insurance goes only part of the way towards covering the costs. The word “compensation” in this case should mean covering costs. Jim Alston spent more than £9,000 and received insurance for just under £5,000. That does not even begin to count his lost income from his employment.

I believe that Iliev should have had to cover any difference in costs, yet road traffic accidents—RTAs, as they are called—are specifically excluded from the Powers of Criminal Courts (Sentencing) Act 2000, which gives a judge the authority to order that compensation, including funeral expenses, be paid by a convicted criminal. Section 130 states that a court may make an order requiring the person convicted of an offence to

“make payments for funeral expenses or bereavement in respect of a death resulting from any such offence”—

this is the key part—

“other than a death due to an accident arising out of the presence of a motor vehicle on a road”.

Because the criminal courts cannot help Mr. Alston, his option would be to fight a civil case, but he has been informed that that costs about £2,000 and it would hardly be worth it to chase £4,000. I think that the Minister should take the opportunity to review this system. A simple amendment to the Act could allow RTAs to be included in criminals covering the costs of bereaved families—for example, where insurance does not. If the Minister is not prepared to commit to that today, we need to understand why. I hope that the Government are on the side of the families affected, rather than the criminals.

The Government often point families affected by RTAs in the direction of the charity Brake. I place on the record my admiration and support for the important work that that road safety charity does, but I worry that the Government are using a charity to obscure their wider obligations to bereaved families.

The complexity of the issues involved means in this case that Mr. Alston has yet to receive the closure that he and his family deserve. After many months of correspondence on the matter and a great deal of frustration on Mr Alston’s part, the Secretary of State has finally agreed to meet Mr Alston and me tomorrow. I had hoped to be able to report on the outcome of that meeting during today’s debate. However, we must be patient and wait with anticipation for what he has to say at tomorrow’s meeting. Needless to say, I shall be supporting Jim Alston and repeating what I have said today, but I will listen with interest to what the Secretary of State has to say about increasing the sentencing tariff and amending the legislation on compensation. In the meantime, I should be grateful if the Minister responded to the particular points that I have raised during the debate today.

First, I congratulate the hon. Member for Reading, East (Mr. Wilson) on securing the debate. I realise that it is a very important debate for his constituents. Given the presence of his constituents today, I should like to extend my sincere sympathy to the Hudson family and to the Alston family for their loss. Any death or serious injury that occurs as a result of a road traffic accident is a tragedy, and the impact on the families of victims is immeasurable. The hon. Gentleman tried hard to give some examples of the impact on his constituents and their families.

Sadly, sentencing cannot bring anyone back. However, this is also about getting justice for the families and a sense of closure. Sentencing for road traffic offences where a fatal accident occurs is a very difficult exercise, because with road traffic accidents—the hon. Gentleman referred to this—there can be a huge difference between the harm done and the level of blameworthiness of the driver. I hope that it will assist if I set out what the law says about sentencing in such cases and describe what has been done through the statutory framework. I will also refer to the compensation issues that the hon. Gentleman raised.

The hon. Gentleman referred to the specific circumstances in his constituents’ cases, but I hope that he and his constituents will understand that I cannot comment on individual sentencing decisions, because the courts are independent of the Government. It would not be appropriate, on the basis of the information that the hon. Gentleman has presented, for me to comment specifically on the details of those cases.

Parliament’s role is to ensure that there is an appropriate framework of offences and penalties. In recent years, we have enacted a number of measures designed to deal more effectively with those whose driving puts others at serious risk. As the hon. Gentleman said, we have introduced the new offences of causing death by careless driving and causing death while driving unlicensed or uninsured. Those offences carry maximum penalties of five years’ and two years’ imprisonment respectively. We have also increased the maximum penalty for serious driving offences, including causing death by dangerous driving and causing death by careless driving while under the influence of drink or drugs, from 10 to 14 years’ imprisonment.

However, there is always more to do. Dangerous driving is still too prevalent, and we should not underestimate the devastating effect that bad driving can have on people’s lives. We have listened to those who have campaigned for an increase in the maximum penalty for dangerous driving. When I first took up my post, I met the family of Cerys Edwards, a young child who had received very serious, nearly fatal injuries as a result of the actions of a dangerous driver. The family had been campaigning hard for a change in the legislation on dangerous driving. As a result of listening to those representations, we have announced that we intend to increase the maximum penalty for dangerous driving from two years’ to five years’ imprisonment. That will, of course, require primary legislation, and we will look to include an appropriate provision in a suitable Bill at the earliest possible opportunity in the parliamentary timetable.

One thing that concerns my constituents is that when the Minister talks about a maximum sentence, it does not mean much, because someone pleading guilty automatically gets a third of the sentence off. Will the Minister make it clear to my constituents what a minimum sentence means?

In many cases, these are minimum sentences rather than maximum sentences. The minimum sentence essentially becomes a starting point for the court to consider. As the hon. Gentleman said, the court must then look at the aggravating circumstances and any mitigating circumstances. One factor that a court will take into account in sentencing is whether the defendant has pleaded guilty and, if they have, at what stage they did so. There is a sliding scale of reductions. The Sentencing Guidelines Council has issued guidance to the courts on the level of discount to be applied. The sliding scale effectively means that the earlier the plea is changed to one of guilty, the greater the discount that the defendant should get. That is obviously to encourage defendants to come forward and enter a guilty plea, where it is appropriate for them to do so. That is intended to save victims and their families the ordeal of a trial and to reduce the cost to the justice system.

Will the Minister clarify what that means in practical terms in relation to a two-year minimum sentence? Mitigating circumstances may have to be taken into account, which could mean a reduction in the minimum sentence. Furthermore, if someone pleads guilty, there will also be a third off. In fact, therefore, the two-year minimum sentence is not a minimum sentence at all, is it?

That depends on the court’s sentencing and on whether it has taken into account the period for which a guilty plea has stood and how long the discount will be. The court will take such things into account before determining the sentence. One of the most important things about the Sentencing Guidelines Council is that it does not operate in a vacuum or in isolation; it consults the public to review the guidelines that it issues to the courts. The hon. Gentleman will be aware that the Coroners and Justice Act 2009 is also due to replace the Sentencing Guidelines Council with the Sentencing Council, one of whose duties will be to have a much greater regard to the impact that sentences will have on victims and their families.

Sentencing guidelines must, of course, provide detailed guidance to courts on the level of sentencing that they should consider in respect of individual offences. We established the Sentencing Guidelines Council in the Criminal Justice Act 2003 to promote consistency in sentencing. All courts must have regard to the council’s guidelines. As I said, the most important change in the 2009 Act for many victims will be the requirement on the Sentencing Council to have regard to the impact that sentencing may have on victims.

None of those points about the Sentencing Council can, however, alter the fact that road traffic cases can be particularly difficult for the courts. That is because it is not always the worst transgression by a driver that has the most tragic consequences. Sometimes the consequences of a collision may be entirely disproportionate to the culpability of the offender. A relatively minor misdemeanour by a driver may have tragic consequences, whereas thoroughly reckless behaviour on the road may fortuitously result in little, if any, harm. The law therefore seeks to punish those who cause death or injury on the road in a way that is appropriate to the degree of blameworthiness on the part of the driver. Ultimately, it is for the prosecuting authorities to decide on the appropriate charge in each individual case and for the courts to set the sentence they believe to be appropriate in all the circumstances.

The hon. Gentleman also raised the issue of compensation in road traffic accidents. He is right that the criminal injuries compensation scheme does not compensate for bereavement caused as a result of culpable road traffic accidents. That is because the scheme’s remit was never designed to cover such cases. The purpose of the CICS is to provide compensation to blameless persons who have sustained criminal injury. Overwhelmingly, it provides support to victims of crimes of violence. The scheme states that a personal injury is not a criminal injury where the injury is attributable to the use of a vehicle, except where the vehicle was used so as deliberately to inflict, or attempt to inflict, injury on any person.

It is also true that the courts do not generally have powers to make compensation orders in respect of road traffic accidents. Compensation orders were first introduced in 1972 and have been an important sentencing option for the courts. However, compensation in criminal cases is not provided primarily as a means of making good the losses of the victim, but as an element in the overall punishment of the offender and to provide a degree of financial recompense to the victim. A compensation order is a sentence of the court, like a fine, albeit one that brings home to the offender the impact of their offence against the victim and which provides at least some recompense.

Road traffic accidents, however, are generally excluded by statute from the scope of compensation orders. The courts can make an order in respect of injury or loss following a road traffic accident only if the loss involves damage to the victim’s property when it was not in their possession or if the offender was uninsured and no compensation is payable under any arrangements to which the Secretary of State is a party. In practice, the Crown Prosecution Service will not ask for a compensation order if the Motor Insurers Bureau will meet the claim. The MIB is a non-profit-making organisation set up by the motor insurance industry to compensate victims of motor accidents that involve uninsured and untraced drivers. It is a required scheme under European regulations.

That statutory exclusion has existed since 1972. It probably arises from a need to make it clear that third-party insurance is the first port of call for any compensation claim arising from a motor accident and from the fact that many road traffic accidents involve complex quantum and liability issues, which would not necessarily have been settled by parallel criminal proceedings.